The Middle East’s Abraaj Group, shaken by allegations of misuse of funds, has hired investment bank Houlihan Lokey Inc to assist in negotiations with investors in its $1 billion health fund.
Last week the Dubai-based firm me with some of the investors who had raised concerns that the money wasn’t being used for its stated purpose, according to people with knowledge of the matter, though the outcome remains unclear.
Houlihan Lokey is helping Abraaj “with issues pertaining to the Abraaj Growth Markets Health Fund,” the bank’s Managing Director Jeff Hammer said in response to queries. “We believe Houlihan Lokey’s expertise in helping investment managers and investors bridge differences and align interests will facilitate a mutually beneficial solution for all stakeholders,” according to Arabian Business.
The firm is in the process of restructuring, which includes founder Arif Naqvi ceding control of the fund management business and new internal controls will be implemented.
"Abraaj has voluntarily released investors from their commitments in Abraaj Private Equity Fund VI, and no longer intends to proceed with this Fund in its current form. In light of our ongoing re-organization, we believe this is a prudent step and is aligned with our longstanding commitment to investors. Abraaj will restart fundraising discussions with investors once the re-organization and strategic review are complete," the company said in a statement.
The firm also recently cut about 15 per cent of its total workforce and seeks to sell a stake in the funds division to raise cash amid heightened regulatory scrutiny and the departure of key executives.