Following the court blues of its founder, the Abraaj Group could be finally finding some peace.
Its business and funds are being divvied up and allocated to external firms to handle, given Abraaj’s folly with a $1 billion healthcare fund.
The latest of these is US private equity firm TPG, which according to the Financial Times is in exclusive talks to take over management of Abraaj’s infamous healthcare fund.
Could the healthcare fund be finally separated from Abraaj?
Last month, investors had appointed US global consulting firm AlixPartners to oversee the separation of the Abraaj Group Healthcare Fund (AGHF) from the private equity firm to ensure the long-term success of the Fund in delivering accessible, affordable and quality health care in developing countries, a statement by the American firm had announced.
“TPG’s Rise Fund, described as the world’s biggest impact investing fund with $2.1bn assets under management, is in talks to replace Abraaj as general partner and manager, according to a letter sent to employees by AlixPartners, the healthcare fund’s interim manager,” the Financial Times reported.
“We are excited to build on the important work commenced by Evercare (the healthcare fund’s platform) to build an integrated healthcare delivery network in growth markets across Africa and South Asia that will help communities thrive,” Bill McGlashan, chief executive of The Rise Fund, said in a statement in response to the letter.
The AGHF has assets in South Asia and Africa.
The healthcare fund’s rotation of management will require the approval of investors as well as Cayman court approval (where the firm has filed for liquidation).
Abraaj seriously considering a $1 bid?
Earlier this month, Abraaj received a $1 offer for its Abraaj Fund Unit (AFU). At the time, we ventured that Actis could be looking to offer Abraaj a way out from its debts, in return for the assets of the AFU, taking over both Abraaj’s AFU and its liabilities at the same time.
Last week, Bloomberg reported that Actis’ $1 bid was in fact favored by investors in the funds.
According to Bloomberg: “Investors in the Abraaj funds would prefer to see the assets sold to an international private equity firm as part of a liquidation of the company, the people said.”
“Actis’s expertise in running emerging-market funds appeals to the investors in Abraaj’s funds, who are more interested in a credible operational partner than receiving more money, the people said.”
Turkey and Latin America funds already assigned
Canada’s Brookfield Asset Management Inc. is expected to acquire Abraaj’s Turkey private equity funds, sources told Reuters.
On the other hand, US-based Colony Capital Inc. is favored to buy Abraaj’s Latin America funds.
The rest of the funds have yet to be allocated.
The founder of Abraaj dodged a 3-year prison sentence
Ariq Naqvi, the man behind the rise and success of Abraaj, was caught in legal battle after legal battle as his $300 million creditor came knocking. Naqvi had issued Hamid Jaafar, the claimant, 3 checks to repay his debt, and two of those had bounced.
Jafar was not pleased, taking the case to court. Naqvi barely dodged a prison sentence after coming to a settlement with Jafar.
The day Abraaj started its decline
All of Abraaj’s troubles started in February when 4 investors had hired auditors to examine a $1 billion health care fund they had a stake in. The audit found Abraaj to be guilty of mishandling the fund, and they filed for liquidation soon after.