When The Abraaj Group filed for provisional liquidation in the Cayman Islands in June 2018, it marked the beginning of a complicated unwinding process for a private equity firm that once managed nearly $14 billion.
That process took a significant step forward Monday when
Actis, a London-based buyout shop known for making activist investments, completed a deal to take over a pair of Abraaj funds totaling nearly $2.6 billion. As part of the exchange, Actis will assume management rights for Abraaj Private Equity Fund IV, which oversees about $1.6 billion for deals in Africa and the Middle East, and Abraaj Africa Fund III, which has around $990 million for making deals in sub-Saharan Africa. Overall, the two vehicles include 14 portfolio companies spread across Africa and the Middle East.
Actis isn't the first private equity shop to scoop up Abraaj assets since that firm collapsed after the Bill and Melinda Gates Foundation, the IFC and other LPs accused it of mismanaging a $1 billion healthcare fund in late 2017. In May,
TPG Capital assumed control of the $1 billion healthcare fund, with the $2 billion Rise Fund expected to make investments alongside the vehicle. In addition, Thomas Barrack's Colony Capital has agreed to acquire the firm's Latin American operations, while
Franklin Templeton Investments has engaged liquidators about taking over the Abraaj's operations in Turkey.
Actis, in particular, seems uniquely positioned to assume control of Abraaj's latest divestitures. Since 2009,
more than 37% of its private equity investments have occurred in Africa, per the PitchBook Platform. The firm has also added investment professionals in Johannesburg; Nairobi, Kenya; and Lagos, Nigeria, as well as a new office in Dubai, where Abraaj was based before folding. Actis now has $12 billion in AUM and 250 people in 16 offices worldwide.
Matters are grim for those once associated with Abraaj, as founder Arif Naqvi and five former associates face fraud, racketeering, money-laundering and theft charges in the US. Late last month, Mustafa Abdel-Wadood, the former head of the firm's private equity division, pleaded guilty in New York to racketeering and fraud charges. He could receive up to 125 years in prison. Meanwhile, Naqvi awaits extradition to the US on similar charges after posting bail of £15 million (about $18.8 million ) to be released by UK authorities.
Featured image of Nairobi, Kenya, via derejeb/iStock/Getty Images Plus