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February 5, 2018,   5:00 PM

Abraaj Group Denies It Misused Healthcare Funds

Samuel Wendel

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Dubai-based private equity investor Abraaj Group has denied reports that it misused funds intended for healthcare projects in South Asia and Sub-Saharan Africa.

Recently, The Wall Street Journal reported investors in the Abraaj Growth Markets Health Fund (AGHF) hired forensic accountants to investigate what happened to some of their money, citing people familiar with the situation. 

Several investors, including the World Bank and the Bill and Melinda Gates Foundation, reportedly wanted to know why funds worth more than $200 million that they and others had provided were not spent and are concerned Abraaj may have used the money for its own purposes, according to The New York Times.

On February 4, Abraaj countered with a statement labelling the reports as “inaccurate and misleading,” and revealed it had hired the auditing firm KPMG to verify receipts and payments made by the AGHF. “We are confident that the exercise being conducted by KPMG will confirm that all the funds were accounted for and used appropriately,” Abraaj said in a statement.

The Dubai-based private equity firm says that some of the AGHF’s capital was not used as quickly as anticipated due to unforeseen political and regulatory developments in several of the fund’s operating markets and that these delays were communicated to investors through quarterly General Partner reports and other investor communications.

“Given the lack of mature healthcare assets in growth markets and the need to develop greenfield as well as brownfield projects, capital deployment is less predictable than that of a standard private equity fund,” said Abraaj.

It added that following discussions with investors, Abraaj returned the unused capital to all AGHF’s investors at the end of December 2017.

Abraaj says that across 18 months, the AGHF has served almost two million people through 24 hospitals, 30 diagnostic centers and 17 clinics.

Founded in 2002 by Arif Naqvi, Abraaj currently manages $13.6 billion in assets. It has 20 offices worldwide and has deployed $8.1 billion across more than 200 investments to date.



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