Abraaj investors prefer $1 Actis bid

Investors are more interested in a credible operational partner than receiving more money

Actis’s $1 (Dh3.67) 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 Arabian Gulf-based firms, according to people familiar with the matter.

Investors in the Abraaj funds would prefer to see the assets sold to an international private equity firm as part of a liquidation of the company, the people said. The bid by London-based Actis is ranked ahead of offers from Abu Dhabi Financial Group and Kuwaiti logistics firm Agility, which is making a joint bid with Centerbridge Partners, the people said, asking not to be identified as the information is private.

Actis’s expertise 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, the people said.

Final bids

Separately, Brookfield Asset Management Inc is expected to acquire Abraaj’s Turkey private equity funds, and Colony Capital Inc is the favourite to buy Abraaj’s Latin America funds, the people said. Final bids for Abraaj’s assets were made on September 14, the people said.

Representatives for Brookfield, Actis and Colony declined to comment.

Once one of the most influential emerging-market investors, Abraaj was accused of misusing investor funds, and liquidators are now selling assets to repay creditors owed more than $1 billion. Previous attempts to sell the fund-management business had collapsed after investors rejected the proposals, people familiar with the matter have said.

Ahead of its collapse earlier this year, Abraaj 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.

Actis, which invests in Africa, Asia and Latin America, was spun out of CDC Group, the UK government’s development-finance institution, in 2004. It has raised $13 billion and currently has 54 portfolio companies, according to its website. CDC was one of the investors that hired a forensic accountant to examine what happened to some of their money in Abraaj’s funds.