Lynda's Reviews > The Key Man

A well-researched and well-written account explaining the rise and fall of one of the largest private equity funds in the world, Abraaj, founded by Arif Navqi, in the heyday of globalization in the 2000's and early 2010's all the way to its undoing and the recent London court ruling in 2021. As of this writing, Arif Navqi is sitting at his home in Kensington, London, with an ankle monitor, awaiting extradition to the United States.

Simon Clark and Will Louch, two British journalists, have written an engrossing page-turner, though at times it is hard to keep up with all of the relationships that Arif 'cultivated' for his own purposes. Then there's also the numerous accounting tricks, loan requests, etc. that Arif and his finance team managed to pull off to camouflage gaping holes in the funds at key moments as when for example, financial auditors came to audit the books.

One of the things the book managed to do was it made me look at the annual World Economic Forum event at Davos differently: the authors do not hold back in harping on the fact that this gathering of the global elite meet to discuss pressing world issues when most of the time those directly affected (the poor, the disadvantaged, for eg) are not even in attendance. They liken it to a bunch of men meeting to discuss how to improve gender equality. It is hard to disagree with that analogy.

But the annual Davos event was a favorite of Arif. He paid millions of dollars each year to be at the Forum so that he could hobnob with the elite. And he was quite excellent in networking and building relationships. He had a strong stage presence, and often managed to land himself high-profile spots sitting next to the likes of Richard Branson and Bill Gates onstage as keynote speakers, thereby further burnishing his image. He was smart and highly educated. But he funded his billionaire lifestyle with the money that investors poured into his private equity fund.

He repeatedly touted the importance of 'doing good while making a profit' and that it was possible to strive for this; this repeated mantra of his at Davos and other global summits shook the global elite and roused them to give his company millions of dollars to manage and it worked because it spoke to the innate desire (or perhaps guilt) of the rich and powerful to feel good about doing good while making a profit. Arif was adamant that the Western elite should not call many parts of Africa and the Middle East as 'emerging markets', which was patronizing, but as 'global growth markets' and that the world should start paying more attention to these important markets which have millions of consumers and would provide great returns to investors. He managed to brush aside deep-seated (and not unfounded) concerns from the media, academia or investors, around political instability or endemic corruption in many countries in the Middle East and Africa. Arif was well-positioned to talk about this part of the world as he was educated at the London School of Economics, was from Pakistan and set up his business in Dubai; he was the bridge between the West and the 'global growth markets' as he liked to call the part of the world that he wanted to help in concrete ways.

He did have a good and noteworthy vision of marrying money from the rich world to benefit the parts of the world that needed it like hospitals in Kenya or Ghana, for example. But he suffered from severe self-delusion and narcissistic personality disorder (it does not take a psychologist to see this) and a few of his acquaintances/friends mentioned in the beginning of the book eventually severed ties with him, having recognized Arif's darker and more disturbing side. And of course, several ex-employees of Abraaj did not want to be identified in the book for fear of reprisal: one example is of a young Indian analyst who joined Abraaj only to quit soon after because he was humiliated in front of the rest of the staff at a company party when Arif told him to take off his shirt, undershirt and tie and threw those pieces over the balcony of a high-rise, sort of like testing the loyalty of this poor newcomer. It was a truly disturbing account to read.

High-profile, well-known investors in the fund included the Bill and Melinda Gates Foundation, (which invested $100 million in Abraaj), the Washington State Investment Board (apparently "one of the world's largest and most experienced investors in private equity fund" which made a $250 million investment in Abraaj), the CDC (the Colonial Development Corporation founded in 1948 by the Labour party in Britain), etc.

A seminal moment in the book occurs when Andrew Farnum, who managed $2 billion at the Gates Foundation smelled something fishy in late 2017 as he was puzzled by Abraaj's repeated requests for money for the fund "when the firm didn't appear to be using the cash he'd already sent them." I view Farnum as the hero in this whole story because he seemed to be the only one (well, at least the only one mentioned as such in the book) who took the extra time to ask Abraaj just a few more questions, make a few more phone calls, and to prod just a bit more than the other investors into how their money was being used and to ask for something as simple as Abraaj's bank statements over a time period (not rocket science, right?). Farnum was conducing basic due diligence, something that should have been done more thoroughly BEFORE putting money down, but by the time Gates Foundation had made the investment, Arif had acquired a perfect veneer of credibility, integrity, reliability, and an 'excellent track record' that it became impossible to believe any wrongdoing was going on behind the scenes at Abraaj. And from here the unraveling begins.

If you like what I call "non-fiction white collar crime thrillers" such as Dark Towers (by David Enrich, about Deutsche Bank); Bad Blood (about Theranos/Elizabeth Holmes; I have not read it yet but I know a few people who finished it in a day or two because they just couldn't put it down); Billion Dollar Whale (about the Malaysia 1MDB scandal); or Black Edge (about SAC and Steven Cohen, and which I have read and thought it quite good), then you probably will like this book also.