Abraaj founder steps back as part of governance review

Omar Lodhi, most recently head of Abraaj’s Asia business, has become co-CEO alongside Selcuk Yorgancioglu. They have replaced Naqvi, who remains CEO of parent company Abraaj Holdings but is now a non-executive member of Abraaj Investment Management’s (AIML) global investment committee, which has overall responsibility for the deployment of funds across emerging markets.

AIML will be separated from Abraaj Holdings and have an independent board of directors. Third-party consultants have also been retained to conduct a comprehensive review of AIML’s corporate structure, focusing on governance and control functions. New investment activity has been put on hold until the reorganization is complete.

“My journey started with a clear-eyed view of the role of private capital in creating economic and social change for the markets and communities that we serve. Sixteen years on, I remain more convinced than ever of that belief and this transition allows me to dedicate more time to developing new platforms that can strengthen the compact between business and society,” Naqvi said in a statement.

Four investors – The Bill & Melinda Gates Foundation, the International Finance Corporation (IFC), CDC Group, and Proparco Group – reportedly asked a consultant to audit the $1 billion Abraaj Growth Markets Health Fund because capital was drawn down and not deployed within the agreed timeframe. They had already asked Abraaj for an explanation but were not satisfied with the response.

Abraaj described the reports as inaccurate and misleading. It said that some capital was not used as quickly as anticipated due to unforeseen political and regulatory developments in several markets. It also noted that deployment in general had been less predictable than that of standard PE funds, owing to the lack of mature healthcare assets in growth markets.

Abraaj said it had not violated the terms of the limited partnership agreement. This agreement allowed for called capital to be retained in situations where an investment is delayed but not canceled, although following discussions with LPs, unused capital was returned in December 2017. The firm appointed KPMG to review all receipts and payments made by the fund. It found no irregularities.

Founded in 2002, Abraaj has $13.6 billion in assets under management and has deployed approximately $8.1 billion across more than 200 investments. Healthcare investments in Asia include India-based CARE Hospitals, which was bought from Advent International in 2016 for around $266 million.

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• Topics
• South Asia
• MENA
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• GPs
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• Abraaj Capital
• India