New book on the biggest private equity collapse in history
I have written a book which I thought would be interesting to this forum...
The Key Man: How the Global Elite was Duped by a Capitalist Fairy Tale tells the story of Arif Naqvi, the founder of Dubai-based private equity firm Abraaj Group.
Arif was a pioneering impact investor who raised billions of dollars from investors by vowing to end global poverty through capitalism. He ended up arrested on fraud charges and faces up to 291 years in jail.
At its peak, Abraaj managed $14bn and its investors included the Bill & Melinda Gates Foundation, the World Bank, as well as the U.S., French and British governments. Other big investment consultants like Hamilton Lane recommended Abraaj and Deutsche Bank was a shareholder in the holding company.
Arif, the founder, now stands accused of stealing hundreds of millions of dollars and the firm collapsed with $1bn of debt (impressive for a PE firm earning the management fees that they do).
Did anyone ever apply to work at Abraaj? And what do you think the firm's collapse tells us about PE/the impact investing movement/or anything at all?
The link to the book is here if you want to read: https://amz.run/4aah or https://amz.run/4aai
I'll check this out
Thanks. Do you know the firm?
Not familiar with the firm but I've heard the name but I'm definitely going to be pre-ordering, its fascinating! How long did this take you to write?
Lol, I remember these guys. Fucking crazy.
how did you come across them?
Was at one of the firms / firms' peer group that you mentioned in your post back when they were fundraising (just a junior though, so no stories unfortunately) and reviewed their deck. IIRC back then people were looking for increased exposure to MENA and they were the biggest name among a handful of groups.
I'll be reading this!
I remember reading about this when the story broke, but have forgotten most of the details. Thanks for sharing, great topic to write about.
No problem, glad you are interested.
Thanks for sharing this, definitely going to pick this up.
Anyone working in the Asia scene would have heard of the implosion - and would be certainly more interesting to the guys who were on the sidelines. Not many people knew of the impending situation leading up to the collapse, and even lesser knew the ins-and-outs. In Asia, Abraaj was up there with the MFs.
Worked with Arif and a few of his guys on several occasions - Arif always seemed crystal clear with what, why and how he wanted to make his investments. And yes - even had the opportunity to interview with them years ago (didn't get hired though!).
Investing with an ESG/impact angle in developing countries is always extremely challenging when you look at it from a governance perspective in developed countries. Whilst there is plenty of impact work to be done - the opaque and intertwining nature of politics, business and familial relationships in this part of the world muddy the ecosystem to a point where LPs often dread treading because of varying fiduciary requirements. In the end, most of the capital often gets allocated to the same few funds because of the LP's get increasingly comfortable with them. And when there's money to be made, there will always be the temptation to underwrite unethical levels of risk.
Really interesting... thanks for that. Who interviewed you?
Interviewed for the Southeast Asia PE business and private credit as well. This was probably somewhere in 2015/2016? Spoke with a multitude different people across the teams including senior guys like Omar.
Enjoyed the process quite a bit - the people I interacted with were genuinely nice/friendly and even offered quite a fair bit of constructive advice. Made a few friends along the way and I'm glad that they've managed to move on to great opportunities post collapse.
This book was finally published last week (available on Amazon) and wow. There is something Shakespearean about the downfall of Arif Naqvi. There is a chapter titled "Peak Abraaj" and that is now my new phrase for every time I come across something particularly 'aggressive' in this industry. Has anyone else read the book yet?
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