Abu Dhabi’s Mubadala halts Abraaj investment deal talks

Abu Dhabi state investor Mubadala has halted talks to buy Abraaj’s investment business. (AFP)
Updated 23 April 2018
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Abu Dhabi’s Mubadala halts Abraaj investment deal talks

ABU DHABI: Abu Dhabi state investor Mubadala has halted talks to buy Abraaj’s investment business, two sources said, in a blow to the private equity firm which is facing an investigation by investors into how it used some of their money.
Dubai-based Abraaj, which denies any wrongdoing, is considering selling some or all of the unit following a row with four investors, including the Bill & Melinda Gates Foundation and the World Bank’s International Finance Corporation, over how it used their money in a $1 billion health care fund.
Mubadala, which has more than $200 billion in assets, and Abraaj held initial talks a month ago, but these did not progress, one of the sources said.
Abraaj said it does not comment on market speculation, while Mubadala declined to comment on Monday.
“We remain focused on working collaboratively with our investors and continuing to execute on the re-organization of our firm to pave the way for continued long-term growth and value creation,” Abraaj said in an email to Reuters.
Investment banks have also approached international private equity firms to look at Abraaj’s investment arm, but some are holding off until after an investigation by forensic accounting experts Ankura Consulting, which has been commissioned by the investors, two other sources said.
Other potential buyers include Abu Dhabi Financial Group (ADFG), sources said last month.
ADFG, which manages $6.5 billion in assets, declined to comment about its interest in Abraaj’s investment business. The Gates Foundation and the IFC, the World Bank’s private finance arm, have both declined to comment on the row.
SHAKE-UP
The fund dispute, which erupted this year has jolted Abraaj, a top investor in the developing world founded in 2002 by Arif Naqvi, who in late February handed the running of the fund to two co-chief executives.
Abraaj has also shaken up its management, suspended new investments, freed up large investors from millions of dollars in capital commitments and is reviewing its corporate structure.
It was managing $13.6 billion before deciding to return $3 billion to investors and putting a new $6 billion fund on hold.
Naqvi remains CEO of Abraaj Holdings, a significant shareholder of Abraaj Investment Management Ltd, the fund management business. Sources say he has spoken to senior bankers about various options for the firm, although Abraaj has not formally hired an adviser to sell the business.


World’s biggest sovereign fund worried about trade wars

Updated 21 August 2018
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World’s biggest sovereign fund worried about trade wars

  • The fund posted a positive return of 1.8 percent, or 167 billion kroner ($19.8 billion), in the second quarter
  • Markets are worried about a trade dispute between the United States and China

OSLO: The managers of Norway’s sovereign wealth fund, the world’s biggest, expressed concern Tuesday about global trade tensions, which could heavily impact its value.
The fund posted a positive return of 1.8 percent, or 167 billion kroner ($19.8 billion), in the second quarter, helping erase a loss of 171 billion kroner in January-March that was attributed to a volatile stock market.
The Government Pension Fund Global, which saw its total value swell to 8.33 trillion kroner by the end of June, manages the country’s oil revenues in order to finance Norway’s generous welfare state when its oil and gas wells run dry.
But Norway’s central bank, which runs the fund, said geopolitical and trade tensions presented a risk.
“It’s fair to say that increased trade barriers or even trade wars will not be beneficial for the fund as a long-term global investor,” Trond Grande, the deputy chief of Norges Bank Investment Management, told reporters.
Markets are worried about a trade dispute between the United States and China. Accusing Beijing of unfair competition, the US administration is considering slapping a new round of levies worth $200 billion on Chinese goods.
Talks between the two slated for Wednesday and Thursday aimed at resolving the dispute have however eased concerns somewhat.
Following US-Turkey tensions that sent the Turkish lira and the Istanbul stock market tumbling, the Norwegian fund said its assets there were worth less than the 23 billion kroner they were at the beginning of the year.
“We’ve seen the market rise for a long time, that there are different political and geopolitical events in the world that can affect the market, and we have to be prepared for the fact that (the value of) the fund can go down a lot,” Grande concluded.
The fund’s strong second quarter was attributed primarily to its share portfolio, which accounts for 66.8 percent of its investments and which rose by 2.7 percent.
Real estate holdings, which account for 2.6 percent of its holdings, rose by 1.9 percent, while bond investments, which represent 30.6 percent, remained flat.
Faced with falling oil revenues in recent years, the Norwegian government has been tapping the fund to finance public spending since 2015. But with oil prices recovering, the fund registered its first inflow in three years in June.