US firm to manage Abraaj’s $1bn Global Healthcare Fund - The East African

US firm to manage Abraaj’s $1bn Global Healthcare Fund

Monday May 13 2019

Abraaj founder Arif Naqvi in a past event.

Abraaj founder Arif Naqvi in a past event. Abraaj filed for provisional liquidation in June 2018 following a dispute with its investors. PHOTO | FILE | NATION MEDIA GROUP 

JAMES ANYANZWA
By JAMES ANYANZWA
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US private equity fund TPG has agreed to take over the management of a $1 billion healthcare fund in the latest move to protect investors’ interest after the collapse of the Dubai-based private equity fund Abraaj.

The Global healthcare fund, formerly managed by Abraaj, will now be renamed Evercare Health Fund as the $2.1 billion TPG’s Rise fund seeks to maintain healthcare delivery network in growth markets across Africa and South Asia.

Abraaj filed for provisional liquidation in June 2018 following a dispute with its investors, including the Bill & Melinda Gates Foundation and the International Finance Corporation (IFC), over the alleged misuse of the $1 billion healthcare fund.

According to Reuters Abraaj’s founder Arif Naqvi was arrested in Britain in April and is awaiting potential extradition to the United States where he faces charges of defrauding investors.

He has however maintained his innocence.

DEBTS AND ASSETS

Last year, provisional liquidators started looking for ways to pay off Abraaj’s debts estimated at more than $1 billion in the wake of turmoil and crisis of confidence that had engulfed the firm.

Amongst these included the sale of assets to pay off creditors.

It is estimated that by the time of its collapse Abraaj had invested over Ksh320 billion ($3.2 billion) in 80 transactions across Africa, with an estimated $13.6 billion worth of assets under management across Africa, Middle East and South Asia.

Liquidators are trying to reach deals for some of the private equity funds managed by the collapsed firm.

For instance, they have granted exclusivity to the British Private equity fund Actis to acquire Abraaj’s Africa funds.

This is after Abraaj’s investors voted in favour of the UK-based firm to take charge of its operations in the Middle East and North Africa.

The Abraaj Growth Markets Health (Africa) Fund, was used to finance the acquisition of healthcare projects in Kenya, Pakistan and Niger.

Colony Capital Inc. agreed to buy Abraaj’s private equity business in Latin America, while Actis is the frontrunner for the $1 billion Abraaj Private Equity Fund IV, but it still needs to convince investors in the fund to vote for the deal.

In October last year Actis revealed its intentions to acquire Abraaj Holdings’ Kenyan assets including Java House operations and a 10 per cent stake in Brookside Dairy Africa.

Abraaj Group acquired 100 per cent of East Africa’s leading coffee chain Java House for more than $100 million from Emerging Capital Partners in September 2017.

Java House has over 60 stores across East Africa.

Abraaj has also been a long time investor in Kenya’s Brookside Dairy where it invested close to $19 million in 2009.

In January this year the Competition Authority of Kenya (CAK) approved a proposal by Actis to acquire Abraaj’s interest Java House.

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