The case against Abraaj has widened with three more senior executives charged. On Thursday the US Attorney’s Office for the Southern District of New York filed charges against CFO Ashish Dave, Rafique Lakhani and Waqar Siddique. The 70-page updated indictment contains new revelations – Abraaj executives are alleged to have used LP capital to cover payroll, borrowed capital from an unnamed airline to cover missing funds and bribed Pakistani officials, according to the charges.
The document describes wiretapped conversations between Naqvi and other executives, as well as partner-level meetings. Here’s one exchange between Naqvi and an Abraaj exec in 2016 after Naqvi approved a $20 million payment to a Pakistani official regarding portfolio company K-Electric:
“Please remove references to KES, KE and Abraaj… Send it to him from your gmail. This document is explosive in the wrong hands.”
Here are some other key points:
- Abraaj executives allegedly embezzled money from employee welfare and pension benefit funds, including a pension fund for professional musicians in Manhattan.
- The charges have been widened to include money laundering.
- As early as 2014 Abraaj solicited funds from the clients of a Pennsylvania-headquartered asset manager. At a meeting with the manager Abraaj made “false and misleading” statements and omitted to mention that it was facing a liquidity crisis. The investment advisor agreed to invest at least $150 million of its clients’ money with Abraaj.
We also thought the below alleged email exchange between Naqvi and Lakhani, the former VP responsible for day-to-day cashflow, was particularly striking.
New fund launch
Two former execs from Warburg Pincus and TCV and an ex-Weil Gotshal & Manges partner have teamed up to launch a fund focusing on European finance and tech companies. Farview Equity Partners is seeking €300 million for the fund, which has already made its first investment.
The smartest families in the room. Private equity kept family offices’ portfolios afloat last year. The asset class returned 16.8 percent from direct investments and 11.1 percent via fund commitments, according to a survey from Family Office Exchange. The average overall portfolio returned -0.2 percent thanks to disappointing results from stocks and bonds. Non-US families had the best overall returns, beating their non-US counterparts by almost 6 percentage points (inside tip: they also had almost twice the allocation to PE).
HQ bids adieu. HQ Capital’s two co-heads of secondaries have become the latest in a string of departures at the German family office’s investment arm. Managing directors Chris Lawrence and Christian Munafo, who joined in 2008 and 2015 respectively, left the firm within the last two weeks, per sister publication Secondaries Investor.
LP meetings. It’s Monday, so here are some LP meetings to watch out for this week.
- 17 June – Orange County Employees Retirement System is holding a regular board meeting; Arizona State Retirement System is holding a board meeting
- 18 June – Maryland State Retirement and Pension System is holding a board meeting; Oklahoma Teachers’ Retirement System is holding an investment committee meeting
- 19 June – Illinois State Board of Investment is holding a board meeting; Tulare County Employees Retirement Association is holding an investment committee meeting; Marin County Employees’ Retirement Association is holding a board meeting; Chicago Policemen’s Annuity & Benefits Fund is holding a board meeting.
- 20 June – Los Angeles Fire & Police Pension System is holding a board and investment committee meeting
- 21 June – Colorado Public Employees’ Retirement Association is holding a board meeting
Badger state. State of Wisconsin Investment Board has approved €45 million to Gilde Buy-Out Fund VI, according to its June meeting minutes report. Here’s a breakdown of the $119 billion pension plan’s investment portfolio. For more information on SWIB, as well as more than 6,700 other institutions, check out the PEI database.
He said it
“It’s a bit like playing poker.”
Arif Naqvi writes to a fellow Abraaj executive about a particular “deceptive transaction”, according to the SEC’s latest deposition.
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