Sturdy Boots On Unsteady Ground
Political turmoil? Corruption? Civil unrest? Meet the honey badger of global private equity, Dubai’s Abraaj Group.
Arif Naqvi, chief executive of Dubai’s Abraaj Group, hates the way Westerners speak about his part of the world. His private equity frm, he says, does not operate in emerging markets or, worse, frontier markets.
“We have taken the risk out of investing in what the West mistakenly calls ‘emerging markets,’ ” he says in elegant, Pakistani-accented English from a Madison Avenue outpost. “They’re growth markets,” he insists.
While his remarks contain a healthy dose of marketing, Naqvi has a point. His $9 billion private equity frm—currently the largest investor in emerging markets outside of Brazil, Russia, India and China—has a track record many developed-world money managers would kill for. Despite operating in places where the rule of law often comes into question, limited partners report an impressive 17% annual return since inception in 2002.
Naqvi, 55, considers the notion of risky emerging markets a myth—part of what he calls “universally practiced hypocrisies.” He reminds a visitor that in 2008 the biggest risk on the planet came not from the developing world but from the fnancial capital of the modern era, New York City. Why, he asks pointedly, “have you not attached a risk premium to doing business with Wall Street banks?”
In a clubby world of global dealmakers, Blackstone, KKR and Carlyle get most of the headlines, but Abraaj is the undisputed private equity king of investing in the seemingly dangerous markets of Asia, Africa and Latin America. There is no shortage of big investors wanting to get into its newest funds. So far in 2015 the frm has sucked in $1.4 billion in fresh capital, giving Abraaj the largest pool of institutional money now pointed at sub-saharan Africa in the world.
The frm currently has 300 limited partners,
abraaj Group chief executive arif Naqvi, profting thanks to “universally practiced hypocrisies.”