Equity investment in the Abraaj Growth Markets Healthcare Fund to develop healthcare provision for the poorest

Multi-country Global Kenya Morocco
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Projet AGHF-1
Proparco is participating in the Abraaj Growth Markets Healthcare Fund, set up to develop healthcare provision for the poorest populations. This USD 1bn fund focuses on Nigeria, Kenya, Ethiopia, India and Pakistan.
Client presentation

Abraaj Group is a leading equity investor in emerging markets on mid and large-cap transactions. It was set up in 2002 by Arif Naqvi, a Pakistani businessman who previously worked for Arthur Andersen and American Express. Abraaj employs over 300 people worldwide (25 offices covering Asia, Africa, Latin America and the Middle East). The group has already raised over USD 9bn via25 funds invested in 140 companies in 50 countries, which together employ over 200,000 people in 10 different sectors. The current portfolio stands at USD 4.5bn, divided between Africa (USD 2bn), the Middle East (USD 912m), South Asia (USD 841m), Turkey and Central Asia (USD 517m), Latin America (USD 138m) and Southeast Asia (USD 74m). The group has historically operated in the large-cap segment in the Middle East and Asia and has diversified into the mid-cap segment in Africa, by taking over the management company Kantara in 2011 and, in 2012, by taking over all the management activities of Aureos Capital. Abraaj has invested in a number of health-related activities in Sub-Saharan Africa and in emerging markets, in particular via AHF (Africa Health Fund, in which FISEA is a shareholder). This latest fund was raised in 2010 and has just completed its investment period. It is preparing the first disbursements.
Abraaj Holdings (fund sponsor) and Abraaj Investment Management Limited (fund manager) entered into provisional liquidation in 2018. A transaction for the takeover of the fund by TPG was conducted in June 2019. Following this transaction, the fund and its assets are no longer linked to Abraaj. The existing assets and new investments are now managed by TPG, which has set up a new operational management team for the portfolio.

Project description

The fund has a target size of USD 1,000m and plans to develop healthcare services for BOP/MOP people earning between USD 3 and USD 10 per person per day, mainly in Africa (Nigeria, Kenya and Ethiopia) and South Asia (India and Pakistan). The manager ABRAAJ will invest USD 100m, i.e. 10% of the fund size, ensuring de facto that interests will be closely aligned with investors. The manager has identified entrepreneurs seeking to create this healthcare provision from scratch, or who have developed models making it possible to envisage increased access to high-quality healthcare for a less well-off patient base. AGHF's role will be to act as a catalyst for scaling up these economic models via i) capacity building financing and ii) the creation of a global platform. The platform will allow exchanges of best medical practices, as well as on the organization system, staff training, and making savings on bulk medical equipment procurement. It will also have a comprehensive information collection system, which will allow effective prevention policies against non-communicable diseases to be set up.

Project impact

This project will have a number of development impacts. Firstly, it will contribute to developing the hospital sector in geographical areas which suffer from a lack of services, in order to meet strong and rapidly growing demand and improve the general level of healthcare quality (creation of 3,150 beds and 1.6 million beneficiary patients expected every year). The project will provide access to medical care for middle-class or more disadvantaged people (earning between USD 3 and USD 10 per person per day), living in underserved areas. Finally, this project will create or maintain jobs for 7,500 people in all the portfolio companies and train over 5,200 health workers. 

Date of signature of the project
Multi-country Global Kenya Morocco
Financing tool
9 278 661 Euros
Amount of funding
Equity investment of USD 10m
Financing details
Abraaj Growth Markets Healthcare Fund