Abraaj scandal frightens investors off emerging market private equity

EDINBURGH — The failure of the Abraaj Group has sent ripples through emerging market private equity investment circles. It took almost 16 years to build Abraaj Group into one of the most influential emerging-market investors and the Middle East's biggest private equity dealmaker, but the Dubai-based firm's dramatic collapse took just four months, says Bloomberg news agency. The problems for the buyout firm and its founder, Arif Naqvi, began in February with allegations that money in the company's health fund had been misused, it notes. Now liquidators need to settle about $1bn in debt. Dubai-based Abraaj had $14bn of assets under management and was behind some of the biggest takeovers in the Middle East, according to the Financial Times, which provides an update on the fall-out from the Abraaj scandal. – Jackie Cameron

By Thulasizwe Sithole

Investing in emerging market private equity is about to become that bit tougher, warns the Financial Times. Abraaj, once the largest private equity firm specialising in regions such as Africa and the Middle East, has been accused by investors including the Bill & Melinda Gates Foundation and the World Bank of mishandling millions of dollars of their investments, it reports.

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