Abraaj gets $50 mln Abu Dhabi bid for investment management business

An Abu Dhabi Financial Group company has made a conditional $50 million offer to buy private equity firm Abraaj’s investment management business, a document reviewed by Reuters shows.

Abu Dhabi Capital Management’s (ADCM) bid is well below the $125 million offered by New York-based Cerberus Capital Management before Dubai-based Abraaj filed for provisional liquidation in the Cayman Islands last week.

It was unclear whether the terms of the offer that Cerberus made were different from the one made by ADCM.

ADCM stated its terms in a letter to Abraaj’s financial adviser Houlihan Lokey dated June 17, which said it will not buy any companies owned by Abraaj and its affiliates and will not assume any liabilities.

Abraaj has been bruised by a row with four of its investors, including the Bill & Melinda Gates Foundation and International Finance Corp (IFC), in a $1 billion healthcare fund.

It has denied it misused the funds.

Provisional liquidators

Abraaj Holdings said on Tuesday a court in the Cayman Islands ordered the appointment of PwC as provisional liquidators of Abraaj Holdings and Deloitte as provisional liquidators of Abraaj Investment Management Ltd., Abraaj’s fund management business.

ADCM, an ADFG entity based in Cayman Islands, wants to become the General Partner of the limited partnerships, which have committed money to Abraaj’s various private equity funds.

Abraaj acts as the general partner for these limited partnerships.

Some Gulf limited partners - ranging from financial institutions to pension funds and family businesses - in funds of Abraaj had asked ADFG to explore a buyout of Abraaj’s investments business as they were concerned about their holdings, two sources familiar with the talks told Reuters.

Abraaj, which declined to comment on ADCM’s offer, has debt estimated at more than $1 billion, sources have told Reuters.

Since the dispute went public early this year, Abraaj has split its investment management business and holding company, while its founder Arif Naqvi stepped aside from the day-to-day running of its private equity fund unit and the firm halted its investment activities.