Regional private equity group Abraaj Capital says that none of its assets were damaged during the recent events in Egypt, and that it only experienced disruption in business operations, which are now back on track.
“In Egypt, we have many investments such as Spinney’s, Orascom and Al Borg Laboratories and have been pleased that none of our assets saw any damage during the recent uprising, only business disruption,” said Mustafa Abdel-Wadood, Abraaj Capital managing director and CEO of Abraaj Investment Management.
As for the current situation for the company through the regional unrest, “it is prudent to put investments on hold currently, but we will be investing again soon,” he told Daily News Egypt in a phone interview.
Abdel-Wadood added that their grade-A commercial office building in the Fifth District, acquired through its income generating sale and leaseback fund ASAS, had remained untouched as well.
ASAS was announced on Dec. 21, 2010 as the company’s first acquisition by its new income generating fund that also complies with the principles of Sharia.
ASAS, meaning foundation in Arabic, is said by the company to “capitalize on the opportunity resulting from the lack of institutional ownership of commercial real estate in the Gulf and wider Middle East and North Africa region, as well as the asset heavy balance sheets of many regional companies and the severe undersupply in certain real estate sectors.”
“The ASAS private equity real estate platform is a demonstration of Abraaj Capital’s commitment to its holistic alternative asset management strategy, leveraging the firm’s expertise in the region with the support of a dedicated real estate investment team,” Abdel-Wadood was previously quoted as saying.
The company attributed the merging of quarterly returns and sustained capital stability to be appealing to investors, who are currently focused on cash flow management.
Abdel-Wadood explained that the past month’s events would impact new investments throughout the region due to the level of the uncertainty.
“There is short term volatility currently and everyone is in a transitional phase until the dust settles. …I’m concerned that business has dropped off the agenda and that is something that should be a top priority during this reform,” he said.
He reiterated economic reform cannot be forgotten during this time.
In late December 2010, the company delisted Al Borg Laboratories from the Egyptian Stock Exchange in a transition from public to private.
Al Borg Laboratories is the Middle East’s largest privately owned medical testing company. “We are a company that is about long term investments and growing this business,” Abdel-Wadood said.
“When it makes sense in the future, we will take it public once again,” he added.
The delisting of minority shareholders, approximately 15 percent of shares outstanding at a price of LE149.44 per share, cost about LE 33.5 million and was financed by company excess cash balances. Only about 5.5 percent of shares responded and participated in the offer.
Even though the company does not have any obligation legally to reach out to remaining minority shareholders, it has said it will do so from time to time and provide those that would like to exit the ability to do so with a liquidity event through privately negotiated transactions.
With the Egyptian Stock Exchange remaining closed currently until further notice, Abdel-Wadood said he was pleased with their decision at this point.
While the company’s headquarters is based in Dubai, the group operates out of seven offices in the Middle East, North Africa and South Asia region, including Egypt, Saudi Arabia, Pakistan and Turkey.
Abraaj Capital, founded in 2002, currently manages seven funds, which include four buyout funds, Riyada Enterprise Development Fund, a fund dedicated to small and medium enterprises, ASAS, and a real estate fund.
“We are about fundamental growth and sustainability in our decisions,” Abdel-Wadood said.
The company currently has assets totaling an estimated $6.6 billion and has stakes in about 24 companies, including Acibadem Healthcare Group, Turkey’s operator of premium privately owned hospitals and GEMS, a privately owned operator of schools in the Middle East as well as Air Arabia, a low cost carrier in the region.
Abraaj Capital boasts an internal rate of return averaging at about 80 percent, while raising about $7 billion and distributing approximately $3 billion back to investors.
The company’s assets include 36 investments in 11 countries and more 20 exits.
Abraaj boasts through its mission statement its business practice “to deliver superior risk adjusted returns to investors.”
“We want to avoid empty business policies and have a stable business responsibility,” Abdel-Wadood said in response to future investments, adding that the company is always looking into new investments.
