Abraaj releases LPs from commitments to latest fund
The Abraaj Group is releasing investors from commitments made to its latest flagship fund – which targets growth markets in Asia and other regions – having previously decided to suspend the fundraising process in the wake of governance concerns.
“Abraaj has voluntarily released investors from their commitments in Abraaj Private Equity Fund VI, and no longer intends to proceed with this fund in its current form,” the firm told Reuters. Washington State Investment Board and Teachers’ Retirement System of Louisiana confirmed they had received notifications from Abraaj that the commitments would not be called. The fund achieved a first close of $3 billion last year.
The move comes after Arif Naqvi, the firm’s founder, stepped back from the fund management business – Abraaj Investment Management (AIML) – as part of governance and operating model reforms. This was triggered by several investors reportedly asking a consultant to audit the $1 billion Abraaj Growth Markets Health Fund because capital was drawn down and not deployed within the agreed timeframe.
Abraaj said it had not violated the terms of the limited partnership agreement, 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.
Last month, Abraaj announced that AIML would be separated from Abraaj Holdings and have an independent board of directors. Third-party consultants were retained to conduct a comprehensive review of AIML’s corporate structure, focusing on governance and control functions. New investment activity was put on hold until the reorganization is complete.
Founded in 2002, Abraaj has $13.6 billion in assets under management and has deployed approximately $8.1 billion across more than 200 investments. Recent Asia-based activity includes an investment in Pakistan-based cinema operator Cinepax and a re-up for Indian online grocer Bigbasket.
Naqvi was replaced as CEO of AIML by Omar Lodhi and Selcuk Yorgancioglu. Lodhi was most recently head of Abraaj's Asia business.
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