Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on the day's biggest business stories
Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Sign up for Axios NW Arkansas
Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters
Source: Giphy
Abraaj Capital is one of private equity's most active and influential investors in emerging markets like the Middle East, with $13.6 billion in capital under management and a portfolio of more than 200 companies. It also appears to be falling apart.
Why it matters: Private equity firms promise to help grow businesses via operational expertise. But if a firm doesn't even have its own house in order, how can it credibly make its case to prospective portfolio companies?
Here's the chronological rundown, all from the past two months:
- Several LPs in a $1 billion Abraaj healthcare fund — including the Bill & Melinda Gates Foundation — felt some called capital had been misappropriated and hired a forensic accountant.
- Abraaj itself hired KMPG to investigate, and claimed the auditing firm found no evidence of wrongdoing.
- Abraaj founder and CEO Arif Naqvi said he would separate the firm's fund management business from its holding company (i.e., balance sheet), and step down from the former. No explanation for why he would resign if Abraaj had been absolved of wrongdoing.
- Abraaj named three managing partners who would remain with the firm in full-time capacities and as members of the global investment committee. At least one had already resigned at the time of that statement, while another is said to be leaving. Also out is the firm's CFO.
- The "team page" on Abraaj's website has been empty for weeks.
- Abraaj suspended fundraising for a its latest flagship fund, which already had closed on $3 billion of its $6 billion target. Those early commitments won't be called.
- The firm canceled its annual Abraaj Week event.
- Yesterday came reports that Abraaj may seek buyers for all or part of its fund business.
- A source says that Abraaj continues to work on a reorganization, and that it expects to make final decisions about next steps within the next month.
Bottom line: Limited partners rarely raise a stink over accounting issues but, if they do, it reflects that the general partner's problems likely go a lot deeper than calculations.