A creditor of Dubai-based Abraaj has started legal proceedings in the Cayman Islands seeking the restructuring of the private equity firm’s liabilities.
Auctus is the second creditor, after Kuwait's Public Institution for Social Security (PIFSS), to start legal action in the Cayman Islands, where Abraaj Holdings is registered.
In a statement to Reuters from its representatives, legal firm Kobre & Kim, Auctus Fund said it has filed an application that seeks the appointment of "court-approved professionals in the Cayman Islands" to manage the restructuring process.
Auctus said it holds a large credit position in Abraaj Holdings and its investment arm, Abraaj Investment Management Limited.
The moves by the two creditors come amid Abraaj's own plan to file for provisional liquidation in the Cayman Islands before a hearing on a petition to wind up a company.
This followed the Kuwaiti fund's refusal this month to agree to a proposed debt freeze, complicating Abraaj's efforts to sell its investment management business to New York-based Cerberus Capital Management.
Abraaj declined to comment.
Abraaj has been trying to stem the fallout from a row with four of its investors, including the Bill & Melinda Gates Foundation and the International Finance Corp (IFC), over how it used their money in a $1 billion healthcare fund.
Abraaj, the Middle East and North Africa's largest private equity firm, denies any wrongdoing.
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Read more:
UAE's securities regulator working with DFSA on Abraaj impact on investors
Deloitte releases review of Abraaj $1bn fund
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Summary findings of a review carried out by Deloitte, which was hired by Abraaj to examine its business, showed that a cash shortage led the firm to "commingle" investor money with its own money, according to a document seen by Reuters.
Abraaj, with debts estimated at over $1bn, met its creditors earlier this month to reach a standstill deal, which the firm said was backed by the vast majority of its lenders, to facilitate the sale of its investment management business to Cerberus.
However the Kuwaiti fund, an unsecured creditor, refused to join secured creditors in the proposed debt freeze agreement.
PIFSS said it would see through "till the end" a petition filed in the Cayman Islands for the liquidation and winding up of Abraaj Holdings after it defaulted on a $100 million loan.
In its statement, Auctus Fund said it was seeking an orderly restructuring "in order to avoid value destruction that would likely occur in the kind of process sought by PIFSS”.
The fund said it "urgently" filed its application in response to the PIFSS’s winding up petition and “in an attempt to protect the interests of the broadest possible stakeholder base of the Abraaj entities in the UAE and elsewhere.”
Auctus said it is aware that Abraaj’s creditors are having discussions with the parties interested in acquiring Abraaj’s investment platform and that it hoped such an “arrangement, under the oversight of the Cayman courts, will encourage and allow for a speedy, constructive and consensual conclusion of these matters.”
One source said a draft of Abraaj's application for provisional liquidation has been prepared and must be filed before June 29, when the next hearing of the PIFSS case is scheduled at the Grand Court of the Cayman Islands.
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BIO
Favourite holiday destination: Turkey - because the government look after animals so well there.
Favourite film: I love scary movies. I have so many favourites but The Ring stands out.
Favourite book: The Lord of the Rings. I didn’t like the movies but I loved the books.
Favourite colour: Black.
Favourite music: Hard rock. I actually also perform as a rock DJ in Dubai.
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
COMPANY%20PROFILE%20
%3Cp%3EName%3A%20DarDoc%3Cbr%3EBased%3A%20Abu%20Dhabi%3Cbr%3EFounders%3A%20Samer%20Masri%2C%20Keswin%20Suresh%3Cbr%3ESector%3A%20HealthTech%3Cbr%3ETotal%20funding%3A%20%24800%2C000%3Cbr%3EInvestors%3A%20Flat6Labs%2C%20angel%20investors%20%2B%20Incubated%20by%20Hub71%2C%20Abu%20Dhabi's%20Department%20of%20Health%3Cbr%3ENumber%20of%20employees%3A%2010%3C%2Fp%3E%0A
At Eternity’s Gate
Director: Julian Schnabel
Starring: Willem Dafoe, Oscar Isaacs, Mads Mikkelsen
Three stars
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Scoreline
Swansea 2
Grimes 20' (pen), Celina, 29'
Man City 3
Silva 69', Nordfeldt 78' (og), Aguero 88'
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
