Abraaj breaks silence with creditors meeting

The firm has called a private meeting in Dubai with shareholders, creditors and advisors to discuss the potential sale of its fund management business.

Abraaj has issued its first public statement in more than three months as it meets with shareholders, lenders and “other invited parties” to discuss the potential sale of its fund management business.

The private meeting on 4 June is being held in Dubai, with other parties dialling in from London, a spokesman for the firm told PEI. The group’s stakeholders will be updated by senior management, including group chief executive Arif Naqvi, and its advisors, on the progress of discussions with potential acquirers of Abraaj Investment Management Limited, ongoing transactions and “other matters that have been the subject of considerable media speculation”, according to a statement.

No limited partners are in attendance, the spokesman said.

AIML was split from Abraaj Holdings in February. New co-chiefs Omar Lodhi and Selcuk Yorgancioglu, former partners in Abraaj’s Asia and Turkey businesses respectively, now run the company’s funds and portfolio. Lodhi and Yorgancioglu will also participate in Monday’s meeting.

“The purpose of the meeting is to maintain a constructive dialogue with the group’s creditors and make further orderly progress, in the interests of all stakeholders, towards a consensual resolution of all outstanding issues,” the statement said.

Abraaj is being advised on matters including the AIML sale process by Houlihan Lokey.

The gathering follows months of turmoil at the firm, which halted fundraising and capital deployment in February after a dispute with four investors in its $1 billion 2015-vintage Abraaj Growth Markets Health Fund over the treatment of capital that had been drawn down but not invested.

Abraaj responded by appointing KPMG to audit the vehicle, which concluded all payments and receipts had been verified and unused capital had been returned to investors. The audit did little to allay concerns, with the following months seeing its CFO, several senior executives and energy team depart the firm. It cancelled its annual investor meeting in Dubai, and as of early May was understood to be seeking buyers for some or all of its assets, including the firm as a whole.

Private equity giant TPG is reportedly in talks regarding the management of Abraaj’s $1 billion healthcare fund, according to Reuters. Colony Northstar is also reported to be among those who have bid for AIML as part of a separate process.

Abraaj declined to comment on the sale process.

The firm was reportedly around halfway towards its $6 billion target on its sixth global fund in February. The firm has voluntarily released investors from their commitments in Abraaj Private Equity Fund VI, and no longer intends to proceed with this fund in its current form, Abraaj said in a written statement to Private Equity International in April.

Such a move has had ramifications for MENA fundraising, which is already on the decline. MENA-focused private equity vehicles collected $711 million last year, down 64 percent from the roughly $2 billion raised a year earlier.

“Has it harmed the region? Unquestionably yes,” one veteran fundraiser who has raised capital for vehicles there told PEI. Abraaj is the biggest player in MENA and the face of emerging markets private equity. GPs there would do well to wait until after the summer or even as late as early 2019 for the air to clear before seeking capital from global LPs, he says.

– Adam Le, Rod James & Isobel Markham contributed to this report.