Investors in a $1.6 billion-Abraaj Group fund have hired advisory firm Alvarez & Marsal Holdings LLC to help recover money owed by the floundering Middle Eastern private equity firm, people with knowledge of the matter said. The New York-based company will represent Abraaj Private Equity Fund IV’s backers in talks with liquidators as they seek to recover more than $99 million owed by the Dubai-based buyout firm, said the people, asking not to be identified because the information is confidential, Bloomberg News reported.

Buyout firms TPG and KKR & Co have emerged as leading contenders to run Dubai-based private equity firm Abraaj’s troubled $1 billion healthcare fund, three sources familiar with the matter said, Reuters reported. The two firms have access to the healthcare fund’s virtual data room and are about to start due diligence, with offers expected in the next few weeks, two of the three sources said.

In a related story, Bloomberg News reported that investors in a $1.6 billion-Abraaj Group fund have hired advisory firm Alvarez & Marsal Holdings LLC to help recover money owed by the floundering Middle Eastern private equity firm, people with knowledge of the matter said. The New York-based company will represent Abraaj Private Equity Fund IV’s backers in talks with liquidators as they seek to recover more than $99 million owed by the Dubai-based buyout firm, said the people, asking not to be identified because the information is confidential.

When the pressure intensified on Abraaj over allegations that it had mishandled investors’ funds, Arif Naqvi, the private equity group’s founder, handed over the reins of the company’s fund business to “drive the necessary operational and governance changes,” the Financial Times reported. The Dubai-based buyout house said the move would “ensure that the firm continues to perform at the highest levels”.

Veteran fixed-income investor Abdul Kadir Hussain sees unsettling similarities between the 1997 Asian crisis and the present that spell trouble for emerging markets, Bloomberg News reported. Default rates on emerging-market debt will climb next year as the ending of a decade of easy money by central banks hits weaker companies the most, said Hussain, the head of fixed income at Arqaam Capital, a Dubai-based investment bank.

Holders of $500m defaulted Etihad-linked bonds learnt on a restructuring call on Tuesday that an auction aimed at saving the structured debt yielded a bid of just a fraction of their assets’ value, the Financial Times reported. The fate of $1.2bn bonds at the two special-purpose vehicles tied to Etihad has been in the balance since last summer, after the collapse of Italian airline Alitalia and Germany’s Air Berlin.

Two United Arab Emirates airlines have held talks with South African Airways about a partnership that it says is needed to revive its business, City Press reported, citing the U.A.E. ambassador to South Africa. Talks between Emirates Airline and SAA, which have been going on for some months, are being facilitated by the U.A.E.’s embassy in Pretoria, the Johannesburg-based newspaper cited Mahash Alhameli as saying, Bloomberg News reported. Etihad Airways has also been holding separate negotiations with SAA, he said.

In Dubai's posh Jumeirah Beach Residence district, luxury apartment rents are down about 15 percent from a year ago - a sign, some fear, that the wealthy emirate's recipe for economic success is getting stale, the International New York Times reported on a Reuters story. For over two decades, Dubai prospered as one of the world's most international cities, attracting people and capital from across the globe. Nine years ago, it needed a $20 billion bailout from oil-rich Abu Dhabi to escape a debt crisis caused by collapsing property prices.

Abraaj Group Ltd. is being sued by one of the founders of a Turkish dairy maker that the embattled buyout firm is trying to sell, according to people familiar with the matter. The legal action comes as liquidators of Dubai-based Abraaj seek to dispose of assets in developing nations around the world to help repay more than $1 billion in debt, Bloomberg News reported.

Bondholders’ relief over a Gulf pledge to prop up Bahrain’s struggling economy has given way to anxiety now that three weeks have passed without any sign aid is on the way, Bloomberg News reported. Saudi Arabia, Kuwait and the United Arab Emirates are waiting for Bahrain to submit its proposal for economic reforms before giving any money to the cash-strapped nation, according to three people familiar with the issue, who declined to be identified because of the sensitivity of the discussions.