After the Rate Rise: Why Are Emerging Markets Up When Everybody Said They Would Go Down?
21 December, 2015
GCC Liquidity: Islamic Advantage
1 January, 2016Euromoney, January 2016
Read it at Euromoney.com here
Warburg Pincus and General Atlantic’s purchase of 49% of Network International, the Middle East payment solutions provider, made a few headlines in the trade press in November, but perhaps the more interesting angle to the deal is behind the scenes.
The two private equity heavyweights bought the stake from Abraaj Group, the Middle East’s pre-eminent homegrown name in private equity, which itself bought the stake through one of its funds in 2011. (The rest is owned by Emirates NBD, which will continue to own 51% for the forseeable future.) Abraaj professed itself as delighted with its exit, which at almost five years is exactly the sort of time horizon it typically looks to. But a sale to other private equity houses was not originally the plan.
The expectation had been that Abraaj would monetize its investment through an IPO: Bank of America Merrill Lynch, Goldman Sachs and JP Morgan Chase had all been linked with a float. But the idea was apparently shelved because of the moribund environment in GCC equities, which have fallen on the back of low commodity prices and broader concerns about emerging markets. Dubai Financial Market’s general index, for example, was down 21.97% year to date at the time of writing: a miserable market to try to raise new equity capital in. And, sources say, neither the company, its shareholders nor its bankers saw much likelihood of the situation improving any time soon.
