DUBAI: Dubai-based private equity firm Abraaj has hired US investment bank, Houlihan Lokey, to help it try to stem the fallout from a dispute with investors over its healthcare fund.
Disagreements came to light earlier this year over how Abraaj had used the money of some of its investors, including the Bill & Melinda Gates Foundation and International Finance Corp (IFC), a member of the World Bank Group.
Houlihan Lokey has been retained to help Abraaj with issues pertaining to the Abraaj Growth Markets Health Fund,” Jeff Hammer, managing director and co-head of illiquid financial assets at Houlihan Lokey, said in a statement to Reuters.
“We believe Houlihan Lokeys expertise in helping investment managers and investors bridge differences and align interests will facilitate a mutually beneficial solution for all stakeholders.
Abraaj declined to comment.
Abraaj, founded in 2002 by Pakistan-born Arif Naqvi, has shaken up its management, suspended new investments and undertaken a review of its corporate structure in the aftermath of the dispute.
It also decided to free up large investors from millions of dollars in capital commitments after deciding to suspend its new fund, which had its first close of $3 billion last year.
Abraaj is also considering selling part of its investment management business, three sources familiar with the matter told Reuters last month.
The Gates Foundation, IFC and other investors are working with Ankura Consulting, a forensic expert, to find out how Abraaj used their money in the $1 billion healthcare fund, sources have told Reuters earlier.
Abraaj has denied the money was misused and said unused capital was returned to investors. It said KPMG also gave the healthcare fund a clean bill of health after a review.
The Gates Foundation and IFC have declined to comment on the row.--Reuters
Our reporter adds: The announcement comes days after the Wall Street Journal reported that the World Bank is widening its inquiry to other funds at Abraaj in which it is an investor. According to the Journal report, the World Bank was preparing to send its own people to the offices of Abraaj in Dubai to carry out an audit.
The same report also said that the CDC Group Plc, the development finance arm of the UK government, which is also an investor at Abraaj, will also be sending its own people for an audit into those funds in which it has invested its resources.
Dubai based Abraaj Capital, which has large investments in Pakistan including management control of the country’s largest power utility, K Electric, has been battling investor concerns that funds entrusted to it were misused.
Published in Dawn, April 10th, 2018
