Private equity firm, Actis LLP, has completed its takeover of two Abraaj funds run by now defunct buyout firm, Abraaj, in a deal that will boost Actis’ footprint across Africa and the Middle East.
Actis is taking over the management rights of the $1.6 billion Abraaj Private Equity Fund IV and Abraaj Africa Fund III, the deal includes investments in 14 portfolio companies across the two funds, bolstering Actis’ operations in Africa and the Middle East.
Actis has been in talks since January to take over Abraaj’s funds and it currently manages $12 billion in assets, According to Abraaj, it was invited to step in and provide a solution that was acceptable to investors, known as Limited Partners (LPs), of the two funds and liquidators of Abraaj.
Abraaj Africa Fund III focuses on investment in sub-Saharan Africa. Abraaj’s APEF IV, also known as Fund 4 or Fund IV was set up to invest in greenfield projects, privatisations, growth capital opportunities and buyouts in the Middle East, North Africa, South Asia and the Levant region.
Abraaj, which claimed to have managed almost $14bn in funds, was forced into liquidation in June of last year after a group of investors, including the Bill & Melinda Gates Foundation, the World Bank’s International Finance Corporation and The Overseas Private Investment Corporation (Opic), a US government agency, commissioned an audit to investigate the alleged mismanagement of money in its $1bn healthcare fund.
The investigation increased scrutiny of the firm and the alleged misappropriation of funds of US investors and a US government agency attracted the attention of the Securities and Exchange Commission and other US authorities.
Arif Naqvi, the founder of Abraaj and five other senior executives of the firm are alleged to have raided Fund 4 to plug shortfalls, obligations and meet due payments. Investors in Fund IV included members of royal families in the Arab world, high-net-worth individuals, pension funds, US banks, Hamilton Lane and Falcon Flight among others.
Abraaj had invested in Nigeria’s Mouka foam and Eleme Fertilizer under its Sub-Saharan Africa fund III in 2015 and 2016 respectively. It also has 20.25percent stake in CWG Plc also has a 5.92percent stake in Custodian & Allied Insurance Plc, others include Bridge Clinic, Therapia Health Limited, and AOS Orwell Limited.
Abraaj, which founded in 2002 and managed almost $14 billion, was the Middle East’s biggest private equity fund and one of the world’s most influential emerging-market investors with stakes in health care, clean energy, lending and real estate across Africa, Asia, Latin America and Turkey.
OLUFIKAYO OWOEYE
