TIMELINE: The rise and fall of Abraaj Group
Founded in 2002, Abraaj Group, the Middle East’s biggest private equity company, was at its peak in the beginning of 2018. The company, which was started by fifty-seven-year-old Pakistani financier Arif Naqvi, had more than $13.6 billion of assets under management during the company’s peak time, also partnering with top groups in the Middle East.
However, in February 2018, the group made headlines centering on investment concerns and diminishing lender confidence, resulting, on Tuesday (June 19), with Abraaj securing approval from the Cayman Islands Court for a provisional liquidation and restructuring of its business.
This liquidation is expected to help the buyout firm negotiate a possible sale for its fund management business in a methodical manner, safeguarding the interests of various stakeholders.
AMEinfo takes a look back over the past five months and takes a closer look at key events that involved the Abraaj Group and, ultimately, led to its downfall.
Independent investigators are appointed by four investors, including the Bill & Melinda Gates Foundation, to find out what went wrong with the money in Abraaj’s healthcare fund. The $1bn Abraaj Growth Markets Health Fund deployed capital from investors including the Bill & Melinda Gates Foundation, the World Bank’s International Finance Corporation, Proparco Group of France and the UK’s CDC Group.
Abraaj hires KPMG to prove there was no wrongdoing in its healthcare fund. The private equity firm claimed that all money drawn from the fund was meant for approved investments. On February 8, Abraaj announced that KPMG found no misuse of money.
Undergoing a restructuring process, Naqvi announced abandoning the control of the fund management business. He remained the CEO of Abraaj Holdings.
Reports were published about Abraaj contemplating the sale of a stake in its fund management business to raise funds.
Abraaj hires Houlihan Lokey, a US-based independent investment bank, to prepare a roadmap for coordinated negotiations with investors.
As investors questioned the earlier clean chit given by KPMG, Abraaj appoints another consultancy firm Deloitte to probe its business, including the healthcare fund.
Abraaj considers selling a major stake in its fund-management unit to New York-listed Colony NorthStar, Inc. This was an initiative to win the confidence of investors and stabilize the business.
Discrepancies, indicating toward mishandling of funds, were highlighted in two independent probes (including Deloitte’s investigation). These wrongdoings went beyond the healthcare fund.
Public Institution for Social Security, Kuwait, filed a petition in the courts of the Cayman Islands, seeking liquidation of Abraaj Holdings. There were reports about the defaulting on a loan worth $100 million.
Abraaj Holdings plans to file for provisional liquidation in the Cayman Islands before June 29, when a court hearing of a petition by Kuwait’s Public Institution for Social Security is scheduled.
Abraaj raises $52 million from the sale of its stake in Egypt’s Orascom Construction Ltd.
Abraaj Group announces that a Cayman Islands court approved a request by the tormented buyout firm for a provisional liquidation of the business. This will enable a court-supervised restructuring and protection of stakeholders’ rights.
Abraaj Group inks a pact with New York-listed Colony Capital, Inc., reaching an agreement for the sale and purchase of the Group’s Latin America, Sub Saharan Africa, North Africa and Turkey Funds management business and the group’s limited partnership interests in the underlying funds.