Abraaj gears up for IPO next year-CEO

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By Mirna Sleiman / Reuters

DUBAI: Dubai-based Abraaj Capital, the Middle East’s largest private equity firm, is gearing up for an initial public offering (IPO) as early as next year following its recent acquisition of emerging market fund manager Aureos Capital, the company’s Group Chief Executive Arif Naqvi said on Tuesday.

“Inevitably we have to. It’s not a 2012 event. It could be 2013,” Naqvi told Reuters in an interview.

“The Aureos acquisition was a crucial stepping stone on Abraaj’s path to IPO,” he added, without giving more details on the stake to be offered or the market where shares will list.

A flotation by a company like Abraaj Capital will potentially help revive the Middle Eastern market for IPOs that has been slowed by the global debt crisis and political uprising across the Arab World.

Naqvi, who founded Abraaj in 2002 and has raised $7 billion since then, believes an IPO will provide the company with a currency to continue to grow.

“The plan is there. It’s a combination of financial markets, having us preparing the suite of products that caters to investor needs and providing profitability post integration with Aureos,” he said.

Abraaj, which owns stakes in Orascom Construction, budget carrier Air Arabia and supermarket chain Spinneys, agreed last month to buy UK-based specialist fund manager Aureos, creating an entity with $7.5 billion in assets.

The deal will obtain all necessary regulatory approvals and be completed within two to three weeks.

“It was a combination of the management team getting shares in Abraaj and cash being paid to the previous owners,” he said, adding that the Aureos brand will be the umbrella for all SME activities at the company.

Biggest pipeline ever

Abraaj has had a busy year already, recently investing $125 million in a Moroccan insurance holding firm and tying up with the top shareholder of TransAtlantic Petroleum to buy the Canadian company’s oilfield services unit.

Naqvi, one of the region’s most influential financiers, believes that there is a huge number of investment opportunities available in the Middle East and North Africa.

“I’ve never seen a number of available deals in the pipeline as much as I’m seeing now,” he said.

The Middle East and North Africa regions are important investment areas for private equity firms, which have raised $22.7 billion to invest into the area in the past five years, according to figures from London-based research firm Preqin.

Deal activity in the region is showing signs of a rebound after a period of slowdown following the global financial crisis.

Abraaj, which a few years ago raised $2 billion for a buyout fund, will close two new private equity deals in the first half of 2012 and hopes to close another 4-5 deals before year end.

“By the end of 2012, we expect to reach two thirds of the fund deployed,” Naqvi said.

“Almost half of the 10 deals this year will be targeting companies in Southeast Asia and Africa,” he said.

The company also plans to sell up to four of its investments in the next 18 months. It sold its stake in Turkey’s Acibadem to Integrated Healthcare Holdings (IHH), a healthcare unit of Malaysia’s Khazanah Nasional. The deal valued Acibadem at around $1.68 billion.

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