NBK Capital Partners, owned by Kuwait's biggest lender, has walked away from advanced talks to buy a global credit fund previously managed by collapsed Dubai buyout firm Abraaj Capital Ltd, two sources familiar with the matter said.
The move came as U.S. prosecutors last week charged several senior executives of Abraaj with criminal charges, accusing them of taking part in a massive international scheme to defraud investors.
NBK Capital Partners "is not engaging with them," a source with direct knowledge of the matter told Reuters, referring to the liquidators for Abraaj, who are seeking a new manager for the fund.
NBK Capital Partners had been seen as the frontrunner to manage the fund and had been close to a deal, sources have previously said.
Abraaj, which managed $13.6 billion at its peak, had been the largest buyout fund in the Middle East and North Africa until it collapsed last year in the aftermath of a row with investors, including the Gates Foundation, over a $1 billion healthcare fund.
Abraaj filed for provisional liquidation in the Cayman Islands in June last year.
Its global credit fund, which had raised over $250 million, was an emerging markets fund offering private debt to medium-sized and growth-oriented companies.
Investors in the credit fund also could not agree on a valuation for a potential deal with NBK, the source with direct knowledge of the matter said. The fund had invested over $100 million, less than half of what it had raised.
"There is a U.S. lawsuit... and you have LPs (limited partners) that can't get coordinated," the source said, referring to an agreement on the value of a deal.
NBK Capital Partners declined to comment. Deloitte and PwC, joint liquidators for Abraaj, did not immediately respond to a Reuters request for comment.
NBK Capital Partners focuses on mid-sized companies in the Middle East, North Africa and Turkey. It is based in Dubai and manages $920 million in assets. It is a unit of NBK Capital, a subsidiary of the National Bank of Kuwait.
NBK Capital Partners itself is in the process of separately raising a credit fund with a potential size of $200 million, the same source said.
The sale of Abraaj-linked funds has been challenging for liquidators since the private equity firm imploded last year.
Only two deals have been finalised - the transfer of management of the $1 billion healthcare fund to U.S. buyout fund TPG and the sale of Abraaj's Latin America fund to Colony Capital.
British private equity firm Actis has been seeking support from investors to finalise a deal to buy one of Abraaj's biggest funds.
