Abu Dhabi’s ADFG makes bid for Abraaj’s Middle East funds

Pedro Gonçalves
Abu Dhabi’s ADFG makes bid for Abraaj’s Middle East funds

The Abu Dhabi Financial Group (ADFG) has entered the race to buy part of embattled Abraaj’s business operations with a new bid to acquire the management rights for the Middle East funds, according to media reports.

ADFG is one of more than a dozen bidders hoping to buy the majority of Abraaj’s private equity firms.

Citing a letter reportedly sent to investors, however, Reuters reports that ADFG believes the bid will likely not be successful due to the “convolution” of the situation.

The revised bid, Reuters said, will include up to $6m for the audit and litigation financing, as well as a $10m credit facility to fund the operations of the regional funds and a separate $10m earmarked for liabilities.

“Such a dedicated budget is crucial not only to seek damages from previous management but also to ensure recoverability of funds for investors in the Middle East funds,” the letter said.

“This means there is a zero capital call requirement from all the 200 unique investors in the Middle East funds which will clear one of the major hurdles going forward for the protection of the assets.”

Abraaj has 10 Middle East funds with approximately 200 investors from around the world.

Actis’s $1 bid for the Middle East and North Africa private equity operations of Abraaj Group is favoured by investors in the funds, despite higher offers linked to Persian Gulf-based firms, according to people familiar with the matter.

Actis’s track record in running emerging-market funds appeals to the investors in Abraaj’s funds, who are more interested in a credible operational partner than receiving more money, Bloomberg reported.