Actis takes control of Abraaj funds

The emerging markets firm has assumed management rights for global buyout fund APEF IV and Abraaj's third sub-Saharan Africa fund.

Actis has taken the reins of two funds formerly managed by collapsed private equity firm Abraaj Group.

The London-headquartered emerging markets manager has assumed the management rights on Abraaj Private Equity Fund IV and Abraaj Africa Fund III following an “extremely complex” process, it said in a statement. The move gained official approval from limited partners in July.

PEI reported in December that Actis was in exclusive negotiations to take control of the $2 billion, 2011-vintage APEF IV and the $990 million, 2013-vintage Abraaj Africa Fund III.

Andrew Newington, Actis’s chief investment officer, said in the statement: “When a number of investors asked us to step in to be part of a solution in mid-2018, we sought to respond constructively. A dedicated team from the Actis platform put forward a comprehensive and flexible proposal. We are pleased that investors have entrusted us with the stewardship of their portfolio and our focus is now on delivering on our plan to drive value on their behalf.”

The transaction brings 14 companies into Actis’s portfolio. Abraaj professionals have joined at its London, Singapore, Nairobi, Johannesburg and Lagos offices and a new Dubai office has been added to its network. Around 25 former Abraaj employees are joining, none of whom are director level or above, PEI understands.

The news comes after Actis’s 2018 acquisition of Standard Chartered’s Principal Finance Real Estate business in Asia, which added 20 people to its business.

According to an updated indictment filed on 13 June, from mid-2017 Abraaj provided investors and potential investors with “materially inflated” valuations, under the direction of founder and former chief executive Arif Naqvi. It is also alleged that from 2014 onward he misappropriated or directed others to misappropriate funds from Abraaj’s global healthcare fund, some of which was used for the enrichment of himself and associates.

Naqvi, managing partners Mustafa Abdel-Wadood, Sev Vettivetpillai and Waqar Siddique, chief financial officer Ashish Dave and managing director Rafique Lakhani are subject to the indictment.