Actis takes over two more buyout funds of Abraaj
Former rival Actis struck a deal to take over management of two more buyout funds raised by Abraaj, according to a document produced by the firm’s liquidators and dated August 28. The funds are focused on Africa and Asia.
Investors in Abraaj North Africa Fund II and Abraaj South East Asia Fund II removed the firm as manager in late July and then placed Actis in charge, the document shows.
The breakup of Abraaj Group’s emerging-markets funds empire is nearly complete.
Representatives of Deloitte Touche Tohmatsu, one of the liquidators installed last year to oversee the firm’s wind down, have sought to sell parts of Abraaj’s fund management business to pay off some of its $1bn of debt and return money allegedly taken from some of its funds without the consent of investors. The firm managed more than 40 funds and over $14bn at its peak, the document said.
The collapse of Abraaj, once the world’s largest emerging markets private-equity firm, has provided opportunities for its former rivals to expand into new markets by assuming management of its assets.
The firm ran into trouble last year when investors in its $1bn healthcare fund claimed that the firm had mismanaged some of their money. Abraaj founder Arif Naqvi and other senior executives now face criminal charges including racketeering and fraud from US prosecutors. Naqvi has denied any wrongdoing.
In July, Actis completed its takeover of two other Abraaj funds in a deal which boosted the firm’s footprint across Africa and the Middle East.
That transaction saw Actis assume management of a portfolio of 14 companies held across a $1.6bn Abraaj fund focused on Africa and the Middle East and a $990m Africa-focused buyout fund, The Wall Street Journal previously reported. Earlier this year, US private equity firm Colony Capital struck a deal to take over Abraaj’s Latin American operations and TPG picked up Abraaj’s $1bn healthcare platform, Evercare.
The latest deal sees Actis take control of a portfolio of companies across North Africa and Southeast Asia. The two funds invested in companies including Cleopatra Hospitals Group, Egypt’s largest hospital chain, and Ninja Van, a tech-enabled logistics provider in countries including Singapore, Malaysia and Indonesia.
Actis confirmed that it has taken over the two additional Abraaj funds. Deloitte declined to comment.
A document code-named “Project Alpha,” which Actis presented to investors last year, showed how the firm’s takeover of some of Abraaj’s assets would help Actis add new offices in Singapore, Dubai and Tunisia to the 16 then listed on its website.
Meanwhile, efforts to find new managers for Abraaj’s Turkey fund, which owns stakes in companies including e-commerce platform Hepsiburada, have hit a stumbling block, the document shows.
The firm had previously been in talks to sell the fund to US asset management firm Franklin Templeton Investments, The Wall Street Journal reported earlier this year.
Sale attempts have been complicated by some investors last month calling for a meeting of their peers to remove Abraaj as the manager “for fault,” the Deloitte document shows. Investors rarely seek to remove investment firms as managers of a fund as the process can be complicated and expensive, even when there is clear evidence of wrongdoing or mismanagement.
The document states that liquidators are currently, “assessing the impact of the meeting requisition on the proposed Franklin Templeton transaction.”
Franklin Templeton declined to comment.
Other funds Abraaj manages are unlikely to be sold off and will be wound down, the document shows.
A court hearing in the Cayman Islands is scheduled for Wednesday to discuss progress on winding down the remnants of the firm, a separate court document shows.
