Emerging markets private equity player Abraaj Capital has widened its footprint in the East African region with its recent acquisition of Aureos Capital.

Towards the end of last year, Aureos Capital had made two investments through its Africa Healthcare Fund — $2.75 million in Revital Healthcare EPZ Ltd, a Mombasa-based syringe manufacturer and $2.5 million in Avenue Group, a Kenyan hospital and health insurance firm.

These are now part of Abraaj Capital Group’s investments.

In a statement, Abraaj said the transaction has strengthened its position in the private equity landscape and created “the world’s largest emerging markets small and medium enterprises focused private equity platform” through Aureos Capital, together with its $650 million Riyada Enterprise Development platform, a fund dedicated to SMEs in the Middle East.

“The combined entity will have approximately $7.5 billion in assets under management, a presence in over 30 countries across all global emerging markets, and 153 investments managed by a seasoned team of over 150 investment professionals with unmatched local expertise,” the statement read.

Aureos Capital has operations in Asia, Africa and Latin America, $1.3 billion in funds under management and has sealed over 250 deals in the SME segment in the past two decades.

Abraaj Capital Group manages eight Funds: Four private equity funds; Riyada Enterprise Development; Kantara, a fund dedicated to small and midcap enterprises in North Africa; ASAS, an income-generating, real estate Fund and a 2004 vintage real estate fund.

Aureos, on the other hand, has established 17 regional private equity funds since its establishment in 2001.

Under the new arrangement, the now expanded Aureos platform is expected to retain its structure and team within the larger Abraaj Group.

While retaining their existing individual fund mandates and investment guidelines, the two entities will draw from the synergies of being part of a common platform, and operating under a single brand.

“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,” noted Arif Naqvi, the founder and group chief executive of Abraaj Capital.

The chief executive officer of Aureos, Sev Vettivetpillai, said the development is not just a testament of its success, but also makes it a stronger player in the private equity industry.

“It further validates and strengthens our business model and will provide us with access to greater resources, tremendous synergies in the back office, new markets, and compelling investment opportunities,” said Mr Vettivetpillai.

The acquisition now awaits approvals not only from relevant authorities, but also one group of fund investors.

It is expected to be completed in the first quarter of 2012.