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Abu Dhabi, UAEMonday 17 December 2018

Abraaj bullish on Saudi Arabia, eyes future acquisitions, CEO says

The buyout firm has over a $1 billion invested in the Arab world's largest economy

Arif Naqvi, founder of Abraaj. The company is facing legal action in the Cayman Islands. Sarah Dea/The National
Arif Naqvi, founder of Abraaj. The company is facing legal action in the Cayman Islands. Sarah Dea/The National

Abraaj Group, the Dubai buyout firm that manages about US$10 billion in assets, is bullish on prospects of investing in Saudi Arabia and may acquire assets in the Arab world’s biggest economy, as the kingdom continues to encourage foreign investments, its chief executive said.

“We have been bullish about the kingdom for a very long time,” Arif Naqvi said on the sidelines of the Future Investment Initiative summit in Riy­adh last week.

“If you ask me if we are looking at stuff in the kingdom, we are always looking at stuff in the kingdom… we have over the past decade invested close to $1bn in various businesses in this country.”

When asked if the firm has any acquisitions coming up over the coming 18 months, Naqvi replied “always.”

Saudi Arabia, the world’s top crude exporter, still relies heavily on the sale of hydrocarbons for revenues and is trying to wean its economy off oil. Riy­adh aims to open up various sectors and state-controlled entities for foreign direct investment in a push to boost the economy, create jobs and increase private sector’s contribution to GDP.

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Last week, the kingdom hosted policymakers and top echelons of global finance in Riyadh, where it launched several big investment initiatives including Neom, a $500bn specialised investment city.

Abraaj has previously invested in Saudi food group Kudu, which has more than 290 ­outlets across the kingdom. The private equity firm also has stakes in Air Arabia and Spinneys.

Earlier this year, the firm sold its 7.1 per cent stake in ride-hailing company Careem, which competes with Uber for $62 million to Prince Alwaleed bin Talal’s Kingdom Holding.

Outside the Middle East, Abraaj has focused on emerging markets, investing in Turkey, India, Pakistan, Latin America and Africa with a focus on health care, energy, logistics, e-commerce and consumer oriented businesses. In 2015, the company bought a 25 per cent stake in Turkey’s largest online retailer Hepsiburada for a reported $100m.

“We always have pools of capital that are available for investing. We invest in businesses from as little as $50 million; we have done many times to as much as a $1bn.

“So the pool of capital is always there and its always ­depends on the investing opportunity,” Mr Naqvi said when asked if the company was setting aside a specified amount for acquisitions.