Abraaj suspends private equity funds as founder steps down

Naqvi passed his fund management responsibilities to two co-chief executives and froze investments from the GP's private equity funds in order to review the structure of the business, Abraaj said in a statement.

Omar Lodhi and Selcuk Yorgancioglu, partners for the group's Asia and Turkey businesses, were appointed as co-chief executive officers of the fund management business, and will take over with immediate effect.

Naqvi will retain a non-executive role as a member of the global investment committee of Abraaj Investment Management Limited (AIML).

A comprehensive review of the firm's corporate structure will focus on governance and control functions, according to the statement. AIML will have an independent board of directors to whom internal audit and compliance will report directly.

Naqvi had announced his intention to step down a year ago, but a dispute with investors in recent weeks put the firm in the spotlight over claims of delays in receiving fund returns. Abraaj had suspended media interviews in mid-February, though it arranged meetings with local correspondents in Dubai, according to a spokesperson.

Earlier in January, Abraaj stated that it had hired KPMG to verify receipts and payments of its emerging markets vehicle Abraaj Healthcare Fund. The move was in response to four investors that had separately hired a forensic accountant to investigate where their money was deployed, claiming it was not all used to build clinics and hospitals, according to press reports at the time.

The reports claimed that the investors included the Bill & Melinda Gates Foundation and the World Bank's IFC division. In an update on 7 February, Abraaj stated that the auditor had completed findings and verified the fund's finances were in line with agreed procedures.

The private equity firm launched its latest vehicle, Abraaj Private Equity Fund VI, in the first half of 2017, targeting $6bn. The fund will invest in emerging market businesses with enterprise values between $75m-2.5bn, making equity investments of $100-500m.

The fund's primary focus is on markets where domestic consumption is the key demand driver of the economy, principally as a result of young populations, urbanisation, rising incomes and catch-up dynamics.

Founded in 2002, Abraaj provides a range of financing solutions to small and medium-sized enterprises in emerging markets. The firm typically invests between $100-300m in companies operating in the Middle East, North Africa and South Asia regions in sectors as diverse as healthcare, education, energy, aviation and logistics.

Headquartered in Dubai, Abraaj has additional offices in Algiers, Amman, Beirut, Cairo, Casablanca, Istanbul, Karachi, London, Mumbai, Ramallah, Riyadh, Singapore and Tunis and manages $13.6bn worth of assets.

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