Well, no, not really

The place was Dubai. The star was Tina Turner. “As the American pop legend belted out Simply the Best,” write authors Simon Clark and Will Louch, “guests sipped vintage champagne served from an ice bar that was melting slowly into the Arabian sand on the beach, fire dancers performed and cigar rollers flown in from Cuba handed out their aromatic wares.”

The host of the party was Arif Naqvi, founder of Abraaj, a private equity fund that managed nearly $14bn and had stakes in a hundred companies. Its investors were treated to oratory from Bill Clinton, the former US president, and dinner with Buzz Aldrin, the second man on the moon. Arif’s promise to give capitalism a conscience seduced western governments and billionaire Bill Gates.

But it was all a lie, a fairy tale. In their gripping new book, The Key Man, British journalists Clark and Louch tell how Arif helped himself to the private equity group’s money, pocketing $780m, half of which is still missing. The account raises questions over whether “impact investing” and “stakeholder capitalism” are less about poverty alleviation for the world than guilt alleviation for the Davos elite.

It’s nothing to do with impact investing, Davos or stakeholder capitalism. It’s to do with criminality. To echo Willie Sutton, “So Mr. Naqvi, why’d you start a private equity fund?” “Because that’s where the money is”.

Drawing wider economic lessons from this is ridiculous.

5 thoughts on “Well, no, not really”

  1. Actually, thinking that ‘impact investing’ is a scam which will attract wrong’uns is eminently sensible.

    Generally, however, the fraud is one perpetuated by pension fund managers on their clients (who want to be looked after in retirement, not indulge middle class guilt-wanking) rather than by PE fund managers on their pension fund clients.

    Although if Naqvi fleeced Bill Gates, it would amuse me. I bet Rapey Bill had his fee up front though. Can’t kid a kidder.

  2. Drawing wider economic lessons from this is ridiculous.

    Smith doesn’t seem to be drawing economic lessons, just accentuating a Guardianista narrative in the story (more inclusion!).

    “The account raises questions over whether “impact investing” and “stakeholder capitalism” are less about poverty alleviation for the world than guilt alleviation for the Davos elite.”

    Yes, “guilt wanking” (cheers, MC) is exactly what’s going on. Naqvi exploited it nicely, if not entirely successfully.

    “In order to get a reality check and ground this conversation about impact, there is a need for the people who are supposed to be the beneficiaries of impact investing to be included in the discussion about how, where and when to deploy capital to produce these outcomes.”

    Ha ha, yes, add the Africans to the Pakistanis and the money will be safer. Lolz

  3. I’ve never heard of Impact Investing but it seems consistent with my observation that anyone who uses “impact” outside the confines of physics is probably a crook or a wanker. It’s about as good an indicator of preposterousness as the use of “significant” outside the confines of statistics.

  4. 2%-2.5% off the top and the guy is being pilloried. He’s a piker compared to most of these frauds.

Leave a Reply

Your email address will not be published. Required fields are marked *