Simon Clark is frustrated. The Wall Street Journal reporter is five months removed from the publication of his well-received book on Abraaj Group, a private equity pioneer turned Ponzi scheme, but tells me the industry has turned a blind eye to the cautionary tale he co-authored with Will Louch.
What he’s saying: “The book has been widely read. I’ve been invited by academic institutions to talk about the issues raised, and one of the major limited partners has privately asked for a conversation. But, largely, the private equity and impact investing industries still don’t want to even utter the word ‘Abraaj,’ … ostriches with their heads in the sand, hoping to whole thing will go away.”
Backstory: Abraaj was one of the world’s most celebrated PE firms. Backers included the U.S. and U.K. governments. Its leader, Arif Naqvi, was a Davos regular who preached the gospel of impact investing in emerging markets; almost always with a mention of his own rags-to-riches bio, a jet-setting billionaire born of very modest means in Pakistan.
- Naqvi also appears to have been a crook, allegedly stealing money from Abraaj and its investors. He’d fill the holes he created by raising new capital, with fundraising bolstered by falsified valuations. If that failed, he’d surreptitiously borrow money so that Abraaj’s bank accounts looked “full” in quarterly statements sent to LPs.
- Naqvi’s con was first called by an investment officer named Andrew Farnum at the Bill and Melinda Gates Foundation,…
