Deutsche Bank looks to sell stake in Abraaj

German lender’s move may be prompted by MEA equity fund’s dispute with investors

Deutsche Bank is looking to sell its small stake in Dubai-based Abraaj, the embattled private equity firm involved in a row over alleged misuse of investor money, two sources familiar with the matter said.

The potential sale, which the German bank has been considering for some time, has become more urgent since Abraaj, the Middle East and Africa’s (MEA) biggest private equity fund, has been locked in a dispute with investors, said the sources.

Deutsche, which is undergoing a restructuring and said last week it plans to cut at least 7,000 jobs worldwide, has an 8.8 per cent stake in Abraaj Holdings, according to the bank’s latest annual report.

Deutsche Bank declined to comment on the planned stake sale. An Abraaj spokeswoman said Abraaj Holdings could not comment on a matter related to its shareholders.

Deutsche considers its share in Abraaj as a non-core asset.

One of the sources said the bank asked for a valuation of its shareholding about two years ago, but the valuation was not as strong as hoped.

As part of a global scaling back of its equities business, Germany’s largest lender has cut eight positions within its equities research team in Dubai as it moves to close the unit, sources familiar with the matter said this week.

The restructuring process added more urgency to the plan to get rid of its stake in Abraaj, the sources said.

“There was never an active pitching process before, maybe they are regretting it now. Any sale now will be at a big discount,” said one of the sources, speaking on condition of anonymity because the matter is private.

According to Abraaj’s 2014-15 annual review — the latest available on its website — Deutsche Bank had a representative on Abraaj’s board. A source close to the matter said that was no longer the case.

Reuters