“It’s seismic; we will rewrite the history books.”
So said a former senior executive at Abraaj Group on the impact of the firm’s collapse on private equity, speaking to Private Equity International on condition of anonymity.
Abraaj’s collapse will remain in the industry’s collective memory for some time. What this means for the employability of its alums varies greatly depending on their role.
Abraaj employed several hundred professionals when reports emerged in February last year that limited partners in its $1 billion healthcare impact fund had hired an auditor to trace money. The team is now understood to stand at roughly one-third that figure, with some personnel terminated for fiscal reasons due to the firm’s unchecked expansion in recent years, the source noted.
Africa specialist Actis, which is acquiring four of Abraaj’s regional funds, plans to bring across dozens of Abraaj personnel if LPs approve the respective deals, a source familiar with the matter told PEI. It is expected to steer clear of Abraaj’s top brass though, the source noted.
Actis and Deloitte both declined to comment for this piece.
The firm’s interest in Abraaj’s investment professionals is natural. Such personnel would have an intimate knowledge of the underlying portfolio companies and regional dealflow.
At the same time, ESG is fast-becoming top of the agenda for LPs, and Abraaj’s top staff may, in the eyes of some, be inexorably tainted by the alleged actions of founder Arif Naqvi. Public pensions, which answer to their trustees, and government bodies such as development finance institutions are unlikely to take a sympathetic view of Abraaj’s former investment committee.
“As we go elsewhere, people will question us on what we knew,” the Abraaj executive noted. “If we knew, that’s bad news and if we didn’t know, that’s bad news too.”
Many of Abraaj’s lower and mid-level staff appear to have landed on their feet. Allianz Global Investors, for example, tapped Sumit Bhandari and Weizhong Yun, former directors in Abraaj’s Singapore business, to head its Asian private credit arm in November. London-headquartered placement agent Rede Partners hired former investor relations principal Chris Miller in August.
“Anyone up to a certain level is totally immune and most people have a chance of being snapped up,” a London-based private equity recruiter tells PEI. “It’s when they start to get partner in the title that questions will be asked.”
Friends in dry places
A small number of Abraaj’s most senior personnel have already secured new roles. Ex-managing partner Sev Vettivetpillai joined LGT Capital Partners to lead its newly formed impact team last year. The appointment was short lived and he has since left the firm due to a leadership reshuffle. Miguel Angel Olea, region head for Latin America, was part of the senior management team taken across to Colony LatAm Partners following Colony’s acquisition of Abraaj’s LatAm operations this year.
The future is less certain for those who remain at Abraaj to assist the joint provisional liquidators, Deloitte and PwC, with the sale processes. Staff based in Dubai may find it particularly tricky to win new friends as it was the region most associated with Abraaj, though that sentiment is weakening, the executive noted.
Geography could be key to any future employment: Abraaj’s regional spread means senior personnel could be tapped by firms wanting to expand into new markets.
“If there’s a moral and physical distance from what happened it’s going to affect you less,” the recruiter said. “They may not be hired for a general role but the regional specialists have a very particular and attractive skill set.”
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