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Abraaj in Talks to Sell Fund Unit Stake to Colony NorthStar

  • Dubai firm is restructuring amid reports of misused funds
  • Founder Arif Naqvi ceded control of fund-management unit

Abraaj Group, the Middle East buyout firm roiled by allegations of misused funds, is in talks to sell a majority stake in its fund-management unit to Colony NorthStar Inc. to help stabilize the business, according to people with knowledge of the matter.

Discussions between the Dubai-based firm and U.S. asset manager about the newly-separated investment unit are preliminary and may not result in a sale, given the complex structure of the underlying holding company and funds, said the people, asking not to be identified because the talks are private. Abraaj’s business may also draw interest from other investors, the people said.