- Abraaj appointed Mark Bourgeois in November 2016 as global head of investor engagement and CEO of Abraaj North America to lead fundraising and investor relations.
- In 2018, investor complaints triggered DFSA scrutiny of Abraaj’s healthcare fund, and the firm entered provisional liquidation amid liquidity stress.
- In 2019, the DFSA fined Abraaj entities about USD 315 million for misleading investors, unauthorized DIFC activity, misuse of funds, and governance failures.
- In 2023, the Financial Markets Tribunal upheld a USD 135.6 million fine and DIFC ban on founder Arif Naqvi for involvement in fund misuse and misleading financial reporting.
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The 2016 appointment of Mark Bourgeois as global head of investor engagement and CEO for North America came during a period when Abraaj was seen as one of the most dynamic emerging markets private equity firms. His role was strategic: leading global fundraising, investor relations, and expanding the firm’s credibility outside traditional markets.
However, only about two years later, major concerns emerged around Abraaj’s governance, particularly in relation to its healthcare fund, leading investors to commission audits and regulators to investigate. The firm’s structure, internal controls and ability to meet liquidity needs came into question.
The magnitude of regulatory penalties in 2019—USD 315 million by the DFSA—reflected not only alleged financial misdeeds including misuse of investor funds but also systemic failures in transparency and governance.
Most recently, in January 2023, the Financial Markets Tribunal upheld long-term regulatory findings, holding founder Arif Naqvi personally responsible for a range of misconduct, including diverting fund proceeds, misleading investors over financial statements, and covering up a USD 400 million shortfall. Naqvi is also prohibited from performing any function in or from the DIFC.
Strategically, these developments shed light on the importance of strict governance, transparency, and oversight in emerging markets PE; the Abraaj case is now a cautionary model for LPs, regulators, and fund managers. Open questions remain around fund-specific losses, the full scale of creditor recoveries, the status of litigation in various jurisdictions, and what the long-term reputational impact has been on investors that were exposed.
Supporting Notes
- Mark Bourgeois was appointed Global Head of Investor Engagement and CEO of Abraaj North America in Nov 2016; he was previously president/CEO of Atlantic-Pacific Capital, and had senior roles at Credit Suisse, Lehman Brothers, UBS Private Funds Group.
- Investor scrutiny began in early 2018, led by Gates Foundation and IFC, over alleged misallocation of cash in the Abraaj Growth Markets Health Fund; DFSA initiated investigations into mismanagement and financial reporting.
- A Deloitte review in mid-2018 found no conclusive embezzlement but flagged significant governance failures and that Abraaj had dipped into investor funds to cover cash shortages.
- In July 2019, DFSA fined Abraaj Investment Management Limited USD 299.3 million and Abraaj Capital Limited USD 15.28 million, for misleading investors, unauthorized DIFC operations, misuse of funds, and compliance failures.
- On January 27, 2022, DFSA fined founder Arif Naqvi USD 135.566 million and banned him from functions in or from the DIFC; in December 2022 the FMT reaffirmed the ruling.
- The misconduct upheld against Naqvi included authorizing misleading financial statements, covering up approximately USD 400 million shortfalls, diverting sale proceeds, changing fund year-ends to avoid disclosures, assessing liquidity concerns, and arranging loans to appear solvent.