The Middle East’s largest private equity firm, Abraaj Capital, on Monday announced the acquisition of UK-based specialist fund manager Aureos Capital that will create an entity with $7.5 billion in assets.
Aureos is a global private equity fund management group investing in small and medium-sized enterprises, or SMEs, across Asia, Africa and Latin America.
The deal, which is expected to be completed next month, will create the world’s largest SME-focused private equity group targeting SME investment opportunities across the high growth markets of those areas.
Abraaj declined to disclose the value of the acquisition, but chief executive officer Mustafa Abdel Wadood told reporters at a news conference that Abraaj is using its balance sheet for this deal. The company will not raise fresh debt for the deal, he added.
The acquisition of Aureos strengthens Abraaj Capital’s position in the emerging markets private equity landscape and enhances its global scale.
The combined entity will have approximately $7.5 billion in assets under management a presence in over 30 countries across all global emerging markets, and 153 investments managed by a seasoned team of over 150 professionals.
The acquisition also brings Aureos together with Abraaj’s existing $650 million SME platform, Riyada Enterprise Development, or RED, which is focused on the Mena. While Aureos and RED will benefit from being part of a common platform and operate under the single brand Aureos, all Aureos and RED funds will continue according to their existing fund mandates and investment guidelines. The expanded Aureos platform will retain its inherent structure and team within the Abraaj Group.
“This is a very exciting opportunity for Abraaj Capital and enables us to further extend our leadership position in emerging markets,” Abraaj Capital founder and CEO Arif Naqvi said.
Both Abraaj Capital and Aureos are “home-grown” emerging markets private equity firms with a similar philosophy and shared values. “This acquisition is an important step in our expansion into Latin America, South East Asia and Sub-Saharan Africa,” Naqvi said.