Acibadem sale by year-end?

Abraaj Capital, the Middle East's largest private equity firm, expects to complete the sale of its stake in Turkish hospital group Acibadem by the end of 2011, its chief executive said on Monday.

Abraaj, which manages assets of around $6 billion, has a 46 per cent stake in a joint venture company Almond Holding, which controls 92 per cent of Acibadem.

Bank of America-Merrill Lynch and Goldman Sachs have been advising Abraaj on the sale.

Malaysian state fund Khazanah Nasional is in talks to buy a stake in Acibadem, in a deal worth at least $500 million, two sources with direct knowledge of the deal told Reuters.

"We received a couple of strategic approaches and also considered other strategic offers for the Turkish asset," Mustafa Abdel-Wadood, CEO of Abraaj Capital said, speaking at the Reuters Middle East Investment Summit.

When asked if Abraaj would complete the Turkey deal by the end of the year, Abdel-Wadood said "that is the intention we're working towards".

The private equity firm is also looking to partially exit another investment by the end of the year and is evaluating initial public offerings for two others in 2012, the executive said without providing additional details.

"There might be a couple (of IPOs) we could consider for 2012," said Abdel-Wadood.

Abraaj plans to sell up to four of its investments in the next 18 months, a senior executive said earlier this month.

The Middle East and North Africa regions are important investment areas for private equity firms, which have raised $22.7 billion to invest into the area in the past five years, according to figures from London-based research firm Preqin.

Yet private equity funds have found it increasingly challenging to exit portfolio investments amid a virtual shutdown of the IPO markets and stark valuation disparities between buyers and sellers.

Abraaj will look at more investments in which to deploy money from its $2 billion buyout fund and the $500 million small and medium enterprises fund, the executive said, adding no fund launches were planned for 2012.

"Abraaj Buyout Fund Four that is actively investing, so that will take some time to deploy," said Wadood. "We have the SME fund that is having its first close soon and is also actively investing, so probably in terms of launching new funds it will be beyond 2012." 

EGYPT OPPORTUNITIES

Abraaj's Egyptian investments are prospering, Wadood said, despite the country's political turmoil eroding 4.2 per cent of gross domestic product, according to an October report from the International Monetary Fund (IMF), and sending equity valuations tumbling. Cairo's main share index is down 40 per cent in 2011.

"We look at our businesses there and how they're operating," Wadood said. "Do they have short-term challenges? Yes, but we're in sectors that are defensive and resilient. Year-on-year, we're up substantially post-revolution."

Abraaj owns stakes in companies such as supermarket chain Spinneys, school operator GEMS Education and payment processing company Network International.

In July, the firm said it was ending acquisition talks with Egyptian private equity firm Citadel Capital.

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