Dubai’s TVM Capital refocuses fund in wake of Abraaj

Dubai-based private equity firm TVM Capital Healthcare hopes to close a $250 million (Dh918.1 million) global fund next year after the collapse of Abraaj, one of the Middle East’s biggest buyout firms, hurt investor confidence in the region.

Fund-raising, which started last December, has been delayed by about a year and the fund will target companies in developed markets seeking to grow in the Middle East North Africa, Turkey, South East Asia and India, as well as investing directly in emerging market firms, Chairman and Chief Executive Officer Helmut Schuehsler said in an interview.

“We had good fundraising in the first quarter but then things pretty much came to a stand still and it was difficult to have conversations with investors,” he said. “Obviously the problem in Abraaj hasn’t done the industry at large any service, but things are beginning to get better now.”

Abraaj was one of the most high-profile private equity companies in the Middle East until its dramatic collapse earlier this year. The firm is now undergoing a court-supervised restructuring after it was found to have borrowed money from some of its own funds to meet operating expenses without investors’ consent, people with knowledge of the matter have said.

“Although Abraaj by definition was seen as a global emerging market player, its headquarters are in the Dubai International Financial Center so it is largely seen as a Dubai and UAE-based business and that has not been helpful,” Schuehsler said.

TVM Capital Healthcare has shortlisted 12 to 14 companies in countries including Canada, US, Germany, England, Switzerland and Austria to invest in, as well as fast-growing markets in Southeast Asia and MENAT. If fund-raising is successful in the first half, the firm plans to invest about $100 million in 2019 and a further $100 million in 2020, he said.