In case anyone has the same issue I’ve settled with changing the 3 instances of bp_moderate in the core file bp-groups/bp-groups-admin.php to a custom cap edit_groups which allows users to see & edit groups in the backend. You have to pass the user_id into the bp_has_groups loop in the prepare_items() function too at the bottom of the same file.
Ugly hacking but it works…
If anyone has a better solution please let me know. Don’t know why bp doesn’t come with these kind of capabilities…