Private equity firm Abraaj Capital, which focuses on investments in Asia, Africa, the Middle East and Turkey, has acquired Aureos Capital, a global private equity fund management group investing in small and medium-sized enterprises across Asia, Africa and Latin America.
The acquisition of Aureos strengthens Abraaj Capital’s position in the emerging market’s private equity space besides enhancing its global scale. The combined entity will have approximately $7.5 billion in assets under management, a presence in over 30 countries across the global emerging markets and 153 investments managed by a team of over 150 investment professionals.
Aureos brings operational presence in more than 20 countries, $1.3 billion in funds under management and over 250 deals completed in the SME segment in the past two decades. The acquisition also brings Aureos together with Abraaj’s existing $650 million SME platform, Riyada Enterprise Development (RED), thus creating one of the world’s largest SME-focused private equity groups.
Aureos and RED will operate under the single brand ‘Aureos’ although all Aureos and RED funds will continue according to their existing fund mandates and investment guidelines.
Omar Lodhi, CEO of Abraaj Capital Asia, said, “This is a very exciting opportunity for Abraaj Capital and enables us to further extend our leadership position in emerging markets. In Asia, in particular, Aureos brings deep expertise and networks with over 35 investment professionals operating out of 10 offices across East Asia and the Indian sub-continent, with a successful track record of having invested in over 45 SME businesses.”
Aureos’ CEO Sev Vettivetpillai said, “The integration with the Abraaj Group is a testament to Aureos’ success and investment proposition in the high-growth economies of Asia, Africa and Latin America. It further validates and strengthens our business model, and will provide us with access to greater resources, tremendous synergies in the back office, new markets, and compelling investment opportunities.”
Three weeks ago, Aureos South Asia Fund had invested $7 million or Rs 35 crore in Sai Security Printers Pvt Ltd, a paper packaging company based in Faridabad and Bangalore. In July 2011, it had also invested in Chennai-based publishing services provider Newgen Knowledge Works Pvt Ltd.
The proposed transaction between Abraaj and Aureos has been supported by Aureos’ core investors, including CDC. Rod Evison, managing director at CDC, the UK’s development finance institution, said, “Aureos has been able to build its investment business on a track record of careful and market-orientated investment in SMEs. So today’s announcement is good news for entrepreneurs in emerging markets. It will mean increased access to capital and local expertise for businesses to help them grow and reach their potential.”
The acquisition, which is subject to necessary approvals from the relevant authorities and one group of fund investors, is expected to be complete by March 31, 2012.
Dubai-headquartered Abraaj Capital was founded in 2002 and employs over 170 people, with presence in Riyadh, Istanbul, Cairo, Singapore, Mumbai, London, Karachi, Beirut, Ramallah, Amman, Casablanca, Algiers and Tunis. The group has invested in sectors like healthcare, education, energy, aviation and logistics. It manages eight funds including four PE funds, an SME-focused fund for the Middle East, an SME fund dedicated to North Africa, an income-generating real estate fund and a 2004 vintage real estate fund.
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