Abraaj buys North African private equity firm

Abraaj buys North African private equity firm

Abraaj to manage Amundi's $161 mln Kantara fund; PE firm to absorb Amundi's 11-member investment team; Deal also includes buying Amundi's stake in the fund; Abraaj called off merger talks with Citadel last month

August 28, 2011 2:52 by Reuters

Dubai’s Abraaj Capital acquired the North African private equity operations of French asset manager Amundi, it said on Sunday, aiming to beef up its presence in the fast-growing region.

Abraaj, the largest Middle East private equity firm with assets under management of $6.2 billion, will manage the $161 million SGAM Al Kantara Fund and absorb the 11-member Amundi investment team as part of the deal, it said. The company also acquired Amundi’s stake in the Kantara Fund.

It did not disclose the total value for the transaction.

The Kantara fund has five existing investments in Morocco and Tunisia and is primarily focused on small and mid-cap investment opportunities in North Africa. The acquisition complements Abraaj’s existing investment platform for small and medium enterprise (SME), the company said.

“We are firm believers in using local knowledge and top tier expertise in all the markets in which we invest to ensure that our deal flow is as good as it possibly can be,” Abraaj’s Chief Executive Mustafa Abdel-Wadood said in the statement.

Last month Abraaj said it ended acquisition talks with Egyptian private equity firm Citadel Capital following a review.

Amundi, which has around 690 billion euros in total assets, is jointly owned by Société Générale and Credit Agricole .

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.

However, private equity investments saw a sharp drop in the last couple of years with investors backing out of capital calls, sellers demanding higher prices than buyers were willing to pay and increasing competition from family groups hampering growth. (Reporting by Dinesh Nair, Editing by Shaheen Pasha)

image from dealbook.nytimes.com