VENTURES AFRICA – The MENASA region has never had it so good. With a predicted nine percent growth contribution to the world’s GDP and 29 percent stake in world’s total oil production, 15 percent of global gas production, 45 percent of the world’s proven oil reserves, and 28 percent of the proven gas reserves, the region is on the verge of a massive economic explosion. And with private equity groups being more active than ever before in the region, their total Foreign Direct Investments (FDI) was reported to have skyrocketed from US$16 billion in 2002 to a whooping $128 billion the following year. In addition, the financial sector has recorded an average growth rate of 25 percent per year since 2002, when the first private equity company (Abraaj Capital) was founded.
For Abraaj Capital, business goes beyond economic entrepreneurship. In adding value to their shareholders, clients and investors, the company has advanced from just being the premier investment firm, specialising in equity investments in the Middle East, North Africa, and South Asia (MENASA) region, to revolutionising the whole concept of economic entrepreneurship.
By helping the management of whatever company it buys to realise the full potential of their business, improving their operating processes, governance and systems, Abraaj Capital helps companies to perform better in the marketplace, whilst also doubling as an agent of economic change in the process.
The commitment of Abraaj Capital to corporate governance that adheres to global best practices and transparency plays a great role in determining what company it invests in. “We will only invest in a company that meets our strict criteria – which we assess through rigorous due diligence and an exhaustive screening process,” the company stated.
History and team spirit
Arif Masood Naqvi, who started his career at Arthur Andersen in London, founded Abraaj Capital in 2002. He later went to Pakistan to work at the American Express Bank. While there, Naqvi helped to create Pakistan’s first investment bank and launched a private equity firm called Cupola. He then proceeded to start Abraaj Capital where he is currently the executive vice-chairman and CEO. The company has since become a topmost PE firm in the region with ownership of business portfolio including airlines, banks, process manufacturing plants, ship manufacturers, supermarkets, hospitals, schools, high street retail outlets, amongst others.
Apart from its management team, other shareholders of Abraaj Capital include prominent institutions, family groups, business groups, leading entrepreneurs, and business people in the region. Headquartered in Dubai, with four other offices in Cairo, Istanbul, Karachi, and London, Abraaj boasts of 167 employees from 28 different nations, including 60 investment professionals and 25 industry executives across several sectors and disciplines.
This global pool of talent has helped Abraaj to close some landmark private equity deals in the region, such as the acquisition of Aramex International and the Egyptian Fertilizers Company, reputed to be the largest private equity-led leveraged buyout transaction in the history of the Middle East and North Africa.
Moreover, with the appointment of Mustafa Abdel-Wadood as Managing Director and Member of the Board of Directors in June 2006, the horizon further expanded for Abraaj. Abdel-Wadood has more than 16 years working experience in the region and his primary role at Abraaj includes overseeing investments and acquisitions. Before Abraaj, he was at Egyptian Investment Bank EFG-Hermes as the CEO of the United Arab Emirates, overseeing the bank’s expansion in the lower Gulf. He was co-founder and managing director of Sigma Capital, managing the company’s investment banking and corporate finance activities, including Egypt’s first management buyout. He is also cofounder and member of the Dubai-based ‘Young Arab Leaders’ apart from being on the boards of several companies, including Air Arabia, JorAMCo and Pakistan’s BMA Capital.
In 2002, the World Economic Forum honoured Abdel-Wadood as one of the 100 Global Leaders for tomorrow. He was also recognised as a Young Global Leader in 2007.
Foremost achievements and the MENASA phenomenon
The quality of its staff made it possible for Abraaj to have executed some of the most impressive transactions in the history of leveraged acquisitions across the MENASA region. Its primary strengths are private equity buyouts, strategic minority block positions in public enterprises and real estate investments within the Middle East, North and South Africa. With management assets of over US $5 billion, the firm has pioneered the institutionalisation of the private equity practice in the region and is setting trends and benchmarks for other industry players.
It has also received a number of industry awards, including Middle East Private Equity Firm of the Year from Private Equity International (2005, 2006 & 2007); theBanker Middle East Award for Best Private Equities Institution in 2006; and for Outstanding Contribution to Financial Services in the Middle East in 2007; and Best Private Equity House at the World Private Equity Awards, MENA in 2007.
Arabian Business recognised Abraaj among the 50 Most Admired Companies in the GCC in 2007. Abraaj is also the first pure private equity firm licensed by DFSA to operate out of Dubai International Financial Centre.
Plans and current investments
Some immediate plans of Abraaj Capital include investing in the refinery company of Bosicor Pakistan Limited. The group started its major expansion in Pakistan by acquiring a Steel Powerhouse, Manan Shahid Forgings Limited. It is also building the Karachi Financial Towers, which will be Pakistan’s tallest building, estimated at 37-storey. The company also hopes to invest over US$1 billion on different projects in selected sectors in Pakistan, including oil and gas; finance, power, tourism; telecom and construction related industries, all within the next five years.
Abraaj’s current investment portfolio spans different industries and countries in the MENASA region. Some of them are: Acibadem Healthcare Services in Turkey; Air Arabia in the UA; Al Borg Laboratory and Al Nouran in Egypt; BMA Capital Management Ltd and Bosicor in Pakistan; ECI Engineering & Construction Limited in India; Emirates Heights Development Company, ENSHAA PSC, Global Education Management Systems and Gulf Marine Maintenance & Offshore Company in the UAE; Jordan Aircraft Maintenance Ltd in Jordan; Man Infraconstruction Limited in India; Mannan Shahid Forgings (MSF).
In Pakistan, Marine Hospitality Holdings, Marine and Leisure Services; MediaQuest in UAE; Numarine in Turkey; Orascom Construction Industries in Egypt; Osian’s country and Ramky infrastructure limited in India; Saudi Tadawi Health Care Company in Saudi Arabia; Seraii Holdings Limited and Signature Clubs International in UAE; Spinneys Holdings in Lebanon; and the Karachi Electric supply Company in Pakistan. The list is by no means exhausted.