Abraaj Capital buys Aureos to boost emerging markets exposure

Aureos has $1.3 billion in funds under management and targets small- and medium-sized enterprises (SMEs) in Asia, Africa and Latin America. According to AVCJ Research, it has 10 Asia funds, including vehicles pursuing deals in China, India, Central Asia, Brunei, South Asia and Southeast Asia. It has completed 250 transactions in the past two decades.

Abraaj has over $6 billion in assets, of which $650 million is held by the firm's SME platform, Riyada Enterprise Development. Abraaj opened an office in Singapore in January 2011 and launched standalone India operations two months later. The private equity firm has been investing in India since 2006 through a joint venture with Sabre Capital Worldwide.

Once combined, Abraaj and Aureos' SME investment activities will be carried out under the Aureos brand. Existing fund mandates and investment guidelines will be unchanged, with Aureos retaining its inherent structure and team within the Abraaj group.

"Aureos is a globally respected private equity firm with a dedicated team of investment professionals who have extensive experience and knowledge of the markets they invest in, with a geographical footprint totally complementary to Abraaj with no overlap," said Arif Naqvi (pictured), Abraaj's founder and group chief executive. "This acquisition is an important step in our expansion into Latin America, South East Asia and Sub-Saharan Africa and a new chapter in the Abraaj Capital story".

Sev Vettivetpillai, CEO of Aureos, noted that the acquisition validates and strengthens the firm's business model and will provide access to greater resources and back office synergies, as well as new markets and investment opportunities.

Aureos was founded in 2001 as a joint venture between CDC Group and Norfund, and its initial mandate was to manage a portfolio established by CDC, the UK government's development finance arm. Over the course of a two-year period culminating in December 2008, company management bought out the original shareholders.

CDC remains a core investor in Aureos' funds. Rod Evison, managing director of CDC, said Abraaj's acquisition would mean increased access to capital and local expertise for entrepreneurs in emerging markets.

The deal, which is subject to approval from regulators and one group of fund investors, is expected to be completed in the first quarter of 2012.

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• Topics
• GPs
• Buyouts
• Southeast Asia
• South Asia
• Greater China
• MENA
• Aureos Advisers (Aureos Capital)
• Asia
• buyout
• GPs
• M&A
• The Abraaj Group