Dubai-based Abraaj was Middle East's biggest private equity fund until last year
Tell Group SA is bidding on funds managed by the collapsed Abraaj Group, Bloomberg has reported.
The boutique investment firm is offering $25 million to transfer the management of seven Abraaj funds to a new entity, 20 percent of which would be owned by Tell and 80 percent by Abraaj’s creditors, Bloomberg reported, citing a letter it has seen as well as several individuals involved who asked not to be identified.
Tell Group was founded in 2015 by Yassine Bouhara, who was co-head of global equities at UBS and also worked at Deutsche Bank AG for 13 years. Tell is regulated by Dubai Financial Services Authority in UAE, Swiss Financial Market Supervisory Authority in Switzerland and COSOB (Commission d'organisation et de surveillance des opérations de bourse) in Algeria.
According to the proposal, Abraaj management will not be part of the new firm. Unsecured creditors, including Air Arabia and a Kuwaiti pension fund, would become shareholders in the new company through a debt-for-equity swap, according to the letter cited by the report.
“Solutions considered to date are not in our opinion viable: they are value-destructive for both the funds’ limited partners (LPs) and the Abraaj Holding (AH)/Abraaj Investment Manager (AIML) creditors, while creating significant legal tail risks and complexities for the LPs and JPLs to navigate,” The National newspaper reported, quoting from an executive summary accompanying the proposal.
Based in Dubai, Abraaj was the Middle East’s biggest private equity fund until last year and claimed to have managed almost $14 billion in assets. However, the group was forced into liquidation last June after a group of investors, including the World Bank’s International Finance Corporation and the Bill & Melinda Gates Foundation, commissioned an audit to investigate alleged mismanagement of money in its healthcare fund.
Abraaj’s founder, Arif Naqvi, was released from custody in London last month after a conditional bail of $19 million. Six former executives of Abraaj also have been charged so far by US prosecutors on various counts, including conspiracy and fraud.
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