Dubai’s Abraaj in talks to sell fund management unit to Colony Northstar

The news comes following reports last month that Mubadala pulled out of talks to buy Abraaj’s investment business

Dubai-based Abraaj group is reportedly in talks to sell a majority stake in its fund management business to US asset manager Colony Northstar Inc.

The news comes following reports last month that Abu Dhabi state fund Mubadala had pulled out of talks to buy Abraaj’s investment business amid allegations the company misused funds.

Read: Abu Dhabi’s Mubadala halts Abraaj investment deal talks

Bloomberg reports that the talks with Colony are preliminary and may not result in a sale given the complex structure of the underlying holding company.

The sale of the stake is said to be intended to raise cash as Abraaj faces regulatory scrutiny and the departure of key executives following a row with four of its investors, including the Bill & Melinda Gates Foundation and the International Finance Corp (IFC), over the use of their money in a $1bn healthcare fund.

Abraaj reportedly hired Deloitte last month to review its governance and control mechanisms after investors questioned an earlier inspection by KPMG.

Read: Dubai’s Abraaj hires Deloitte for business review

Representatives from Abraaj and Colony NorthStar declined to comment to Bloomberg.

Abraaj has been looking to sell assets in the wake of the scandal. Reuters reported on Sunday that the company is in talks to sell its investment in Middlesex University’s overseas campus in Dubai.

Read: Abraaj to sell Middlesex University in Dubai

It also recently sold its stake in Dubai-based hospitality app The Entertainer to Bahrain’s GFH Financial Group.

Read: Bahrain’s GFH acquires majority stake in UAE discount firm The Entertainer