Abraaj new credit fund will target MENA

Just 1% of the private debt capital raised in the first half of the year went to Africa-focused funds.

The Abraaj Group is seeking $500 million to help fuel the growth of consumer-based businesses in areas outside of North America and Western Europe.

The Dubai-based asset manager plans is raising its Abraaj Global Credit Fund to lend mezzanine debt to consumer-driven companies in Africa, Asia, Latin America, the Middle East and Turkey, according to a disclosure from the International Finance Corporation, which plans to commit $20 million to the vehicle.

The Middle East and North Africa region continues to be a difficult spot for many private equity firms to do deals, as Private Debt Investor sister publication Private Equity International previously reported, giving alternative lenders fewer opportunities to invest in the continent.

“Nobody has a strategy for the Middle East, so many investors don’t even know who to talk to. It always seems to fall between the cracks because it’s not really Asia, it’s not really Africa and it’s very small,” Helmut Schuehsler, chief executive officer of TVM Healthcare Partners, told PEI.

In North Africa, just 139 deals were reported from 2010 to the first half of 2016, according to the latest Spotlight on North Africa Private Equity compiled by the Africa Private Equity and Venture Capital Association. Morocco and Egypt attracted the most and second-most investment interest, respectively.

PDI fundraising statistics reflect that reticence toward the Middle East and Africa. In the first half of 2017, a plurality of the capital, 44 percent, was raised for North America, with only 1 percent, or just $616 million, going to Africa-focused funds.

Abraaj continues to find opportunities in MENA, however, closing a North African healthcare initial public offering in June and raising a $526 million private equity fund for investments in Turkish companies last year. The company also acquired Indorama Fertilizers, sub-Saharan Africa’s largest urea fertilizer manufacturer, in October.

Adam Koppeser contributed to this report.