Abraaj fund investors said to hire advisers for debt recovery

Abraaj founder Arif Naqvi attends the annual meeting of the World Economic Forum in Davos, Switzerland on January 17, 2017. Abraaj and Naqvi face cases in the Cayman Islands and the UAE for defaulting on loan payments.

Investors in a $1.6bn-Abraaj Group fund have hired advisory firm Alvarez & Marsal Holdings to help recover money owed by the floundering Middle Eastern private equity firm, people with knowledge of the matter said. The New York-based company will represent Abraaj Private Equity Fund IV’s backers in talks with liquidators as they seek to recover more than $99mn owed by the Dubai-based buyout firm, said the people, asking not to be identified because the information is confidential. The stakeholders have formed an investor committee led by Boston-based HarbourVest Partners, two of the people said.

Alvarez will also represent the fund if it’s elected to a liquidators’ committee for Abraaj Investment Management Ltd, which is the buyout firm’s asset management business, two of the people said.Representatives for Alvarez and HarbourVest declined to comment. Court-appointed liquidators Deloitte LLP and PricewaterhouseCoopers LLP are trying to settle more than $1bn of debt owed by Abraaj, once one of the most influential emerging-market investors until its dramatic collapse this year. The private equity firm is undergoing a court-supervised restructuring after it was found to have borrowed money from some of its own funds to meet operating expenses without investors’ consent, people with knowledge of the matter have said.

A representative for Deloitte didn’t respond to requests for comment. PwC declined to comment. Other large creditors may also join the liquidators’ committee, the people said. They include Grant Thornton LLP as a representative of Hamid Jafar, who lent Abraaj about $300mn, as well as Dubai lenders Mashreqbank and Noor Bank and discount carrier Air Arabia, they said. Representatives for Grant Thornton, Mashreqbank, Noor Bank and Air Arabia also didn’t respond to requests for comment. A court in the Cayman Islands appointed provisional liquidators for the holdings and investment management units of Abraaj in June, months after investors, including the Bill & Melinda Gates Foundation, commissioned an audit to investigate alleged mismanagement of money.

Abraaj and its founder Arif Naqvi face cases in the Cayman Islands and the UAE for defaulting on loan payments. The liquidators are also seeking more bidders for the firm’s fund-management unit after investors rejected earlier offers, people with knowledge of the matter said. Past suitors have included York Capital Management, Cerberus Capital Management, a unit of Abu Dhabi Financial Group and Tom Barrack’s Colony Capital Inc.

Sources and photo-credits: Bloomberg, Gulf Times