It has been all change at Abraaj in recent weeks as the Dubai-based investment firm altered its management structure amid a dispute with investors over the treatment of capital in its 2015-vintage Growth Markets Health Fund.
Chief executive Arif Naqvi handed over the reins of the firm’s fund management business in February to Omar Lodhi and Selcuk Yorgancioglu, partners in the Asia and Turkey units respectively. The pair will take over operations of Abraaj’s funds and portfolio, which has split from Abraaj Holdings.
The choice of Lodhi and Yorgancioglu may come as a surprise when global investment committee members Mustafa Abdel-Wadood, Wahid Hamid and Sev Vettivetpillai would seem the most likely successors. The trio will continue in their roles to ensure the new management structure and governance systems are implemented, according to a 23 February statement announcing the changes.
So who are the two newly appointed co-heads of the biggest emerging markets-focused investment firm?
Lodhi is an almost two-decade veteran of the firm and led the firm’s three investment management teams with a main focus on Turkey and the Gulf until 2009. In 2013 he moved to Singapore to establish Abraaj’s operation there as chief executive of Abraaj Capital Asia. He was also responsible for investor relations coverage across the Asia-Pacific region and oversaw the opening of Abraaj’s Indonesia office.
He is an old Asia hand, and explained Abraaj’s geographic expansion strategy to Private Equity International in 2013: “Having grown up operating in the broader MENA region, and working with family offices and entrepreneurs, we felt our strategy was portable to other geographies which shared business and cultural similarities. Countries like Singapore, Malaysia and Indonesia, and even other [Association of South East Asian Nations] block countries, offer significant growth potential.”
Yorgancioglu was Abraaj’s Turkey and central Asia head. He joined the firm in 2008 and led investments including the acquisition of Turkish bank Fibabanka. He and Lodhi worked together on one of Abraaj’s biggest exits, the sale of Acibadem Healthcare to IHH and Khazanah Nasional, Malaysia’s sovereign wealth fund. Yorgancioglu was Deutsche Bank’s chief executive for Turkey before joining Abraaj and spent seven years in London where he was a managing director in the bank’s emerging markets team.
In a 2016 interview with PEI Yorgancioglu highlighted Abraaj’s success in emerging markets fundraising amid a challenging environment, including the $526 million haul for its debut Turkey-dedicated fund.
“[W]e went out to raise $500 million to deploy in mid-cap, which is where we feel the money is to be made, where the returns are. We followed the due process and right after the first close we started investing, our investors saw that we were delivering what we promised,” he said. “Clearly it wasn’t very easy, but it wasn’t difficult either.”
What will be difficult is to bring Abraaj back into shape – the firm has stopped fundraising and capital deployment while independent consultants undertake a “comprehensive review” of the fund management business’s corporate structure, focusing on areas such as governance and control functions.
It is understood that the pause on investment and fundraising could take until May. Yorgancioglu and Lodhi have their work cut out for them.