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.