AlixPartners brought in by Abraaj health fund investors to oversee split

20 August 2018 Consultancy-me.com

Global management firm AlixPartners is the latest to be added to a growing list of consultancies brought in to sift through the wreckage of the Abraaj collapse, with Deloitte meanwhile tapped by regulators in Dubai.

Investors in the $1 billion Abraaj healthcare fund have hired global consulting firm and turnaround specialists AlixPartners to oversee the fund’s separation from the troubled Abraaj Group. The news follows the appointment of Deloitte by the Dubai International Financial Centre (DIFC) courts to wind-up the UAE arm of the private equity group, and the move earlier this month by investors to bring in Alvarez & Marsal to help recover nearly $100 million in outstanding debt.

On behalf of investors said to include the Bill & Melinda Gates Foundation and the World Bank’s International Finance Corporation, AlixPartners will oversee the fund’s separation from the group while working with its senior operations team and Cayman court-appointed provisional group and investment liquidators (PwC and Deloitte) to seek out a permanent investment manager in replacement. Colony Capital, TPG and Cerberus Capital Management were previously reported to be among those in the running.

AlixPartners brought in by Abraaj health fund investors to oversee split

Initially slated last month to step in as interim fund manager after a period of earlier consultation with investors, the AlixPartners appointment had been delayed due to the liquidation order, but the firm will now according to a statement from the fund seek to “ensure continuity and build a stable platform for the future.” Simon Appell, Managing Director for AlixPartners in London, said the firm was keen to see the good work of the emerging markets health fund continue.

“The Abraaj Growth Markets Health Fund is helping to deliver accessible, affordable and quality care for low and middle-income people in 10 of the largest cities in Sub Saharan Africa and South Asia, and we want to see that continue,” Appell stated. “We are delighted that investors continue to support and finance the fund as it goes through this transition and thank management, portfolio company founders, and advisors for their assistance and support of the Fund’s mission.”

The news coincides with the appointment of David Soden and Phil Bowers from Deloitte by the DIFC Courts to oversee the winding up of Abraaj Capital, the UAE arm Abraaj Investment Management Limited, and to prevent it from moving money. Local regulatory body the Dubai Financial Services Authority (DFSA) said of the order: “Given the onset of financial difficulties of the wider Abraaj Group, the DFSA has been closely monitoring the activities of its regulated entity ACL. The DFSA has taken regulatory actions over the past few months in order to safeguard the interests of investors and the DIFC.”

The long-running saga has now seen the involvement of a large number of international consultancies, kicking off in full after suspicious investors rejected an Abraaj-initiated audit by KPMG, disputing the expeditious nature of its one-month completion and bringing in Ankura Consulting in response. Abraaj in turn hired Deloitte to carry out a second audit and broader review, with the Big Four firm ultimately determining accounting irregularities and the commingling of funds – ultimately triggering the voluntary liquidation.