Abraaj shutting down London office, as woes mount

Earlier this week, Bloomberg reported Abraaj’s fund unit had received an offer of $1 from private equity firm Actis, sources aware of the development disclosed

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LAHORE: Embattled private equity firm Abraaj Group is shutting down its office in London, UK as it struggles to remain afloat before the planned sale of its fund management unit.

According to a report by Private Equity News, a spokesman for PricewaterhouseCoopers LLP, which is overseeing the liquidation of Abraaj Holdings said the shutting down of the London office was a normal cost-cutting measure in case of insolvencies.

Abraaj Group’s lease of its London office situated in Grafton Street in Mayfair will be taken over by Paris-based private equity firm Ardian, a source familiar with the developments told.

Ardian, already has its London headquarters in the building and will take over the floor occupied by Abraaj over the course of next week two weeks, the source revealed.

Abraaj’s London premises was one of twenty listed on its website and have offices in financial hubs like New York, Hong Kong and Singapore and various other locations including from Peru to Kazakhstan.

Earlier this week, Bloomberg reported Abraaj’s fund unit had received an offer of $1 from private equity firm Actis, sources aware of the development disclosed.

According to sources who preferred anonymity said Chicago-based Vistria Group, Rohatyn Group, Kuwait’s Agility Public Warehousing Co. and Abu Dhabi Financial Group also made offers for Abraaj’s fund unit.

In July, the Wall Street Journal reported Abraaj was facing challenges to meet its costs as per a document produced by PWC.

As per PWC’s findings, Abraaj’s $3 million monthly payroll exceeded its fee income by around $800,000.

At its zenith, Abraaj had managed over $14 billion in emerging market investments and was the largest private equity firm in the MENAF region.

However, the journey of smashing success hit roadblocks in February when the company was accused by its leading investors; the Bill and Melinda Gates Foundation, the World Bank’s International Finance Corporation (IFC) unit, and government-backed development finance organisation’s CDC Group PLC of misusing $200 million from its $1 billion healthcare funds intended for use in developing economies of Pakistan, India and Nigeria.

The group was broken into Abraaj Investment Management Ltd (AIML) and Abraaj Holdings in late February.

An internal audit conducted by KPMG gave a clean chit to the company but Abraaj was compelled to return capital to a new fund and stopped fresh investments in wake of organizational restructuring and geared up to introduce new robust internal controls.

How Arif Naqvi’s fall from grace put Abraaj on brink of bankruptcy