Abraaj pauses fundraising as Naqvi steps aside

The firm has halted fundraising and capital deployment as Arif Naqvi hands over leadership to two co-heads.

Abraaj has stopped fundraising and capital deployment as founder and chief executive Arif Naqvi passes leadership of its fund management business to two co-chief executives.

Omar Lodhi and Selcuk Yorgancioglu, former partners in Abraaj’s Asia and Turkey businesses respectively, will take over leadership of Abraaj Investment Management Limited, its fund management business, with immediate effect, according to a statement. The pair will take over operations of its funds and portfolio, which have split from Abraaj Holdings. Naqvi remains chief executive of the latter and a non-executive member of AIML’s global investment committee.

Managing partners and investment committee members Mustafa Abdel-Wadood, Wahid Hamid and Sev Vettivetpillai will stay on at AIML “to ensure an orderly implementation of the new management structure and governance systems”, the statement noted.

AIML has commissioned a “comprehensive review” of its corporate structure that will focus on areas such as governance and control functions, the statement said. The firm will have an independent board of directors to which internal audit and compliance will directly report.

It is understood that the pause on investment and fundraising could take as long as three months as the review is completed.

“Given the breadth of structural and management changes and ongoing review, Abraaj has decided to pause its deployment activities temporarily, other than on transactions for which commitments are already final, until the re-organisation is complete,” the statement said. “This has in no way slowed Abraaj’s momentum in deal sourcing and transaction negotiations that are performed by investment teams across its markets.”

The news comes following a tumultuous few weeks for the firm, which has become one of the most significant investors in emerging markets since it was established in 2002. It was caught up in a dispute with four investors in its $1 billion 2015-vintage Abraaj Growth Markets Health Fund, which centres on the treatment of capital that had been drawn down but not invested. Our coverage and Abraaj’s response in full is here.

Abraaj is trying to raise a $6 billion global fund and had already attracted sizeable commitments from the likes of  Washington State Investment BoardTeacher Retirement System of Texas and Teachers’ Retirement System of Louisiana. Progress on the fundraise is difficult to ascertain, though recent reports say the firm has attracted $3 billion in commitments. The firm declined to comment on fundraising when PEI spoke with them in late July.

 – Toby Mitchenall and Adam Le contributed to this report.