Abu Dhabi, UAESunday 26 May 2019

Investcorp on track to nearly double assets to $50bn in three years, executive says

Bahrain-based alternative investment firm is partnering on a $1bn GCC infrastructure fund

Hazem Ben-Gacem, co-chief executive of Investcorp, says the company has raised $2 billion in the first half of its fiscal year to fund its ambitious plans. Courtesy Investcorp
Hazem Ben-Gacem, co-chief executive of Investcorp, says the company has raised $2 billion in the first half of its fiscal year to fund its ambitious plans. Courtesy Investcorp

Investcorp, the Bahrain-based firm which counts Mubadala Investment Company as its biggest shareholder, is on track to double its assets under management to around $50 billion in three years through acquisitions and growing its existing portfolio, it co-chief executive said.

The Manama-listed company is launching new businesses, including a $1bn GCC infrastructure fund, which is a 50-50 joint venture with asset manager Aberdeen Standard Investments and its first foray into the infrastructure field, Hazem Ben-Gacem told The National. The company, in which Mubadala has a 20 per cent stake, is securing enough funds for its ambitious plans, with $2 billion alone raised in the first half of its fiscal year that ends in June.

“The first half of our fiscal year has been the most active with the highest capital we have had in the last ten years,” said Mr Ben-Gacem. “That momentum is terrific in being able to attract capital from both Gulf and Western investors to invest alongside us.”

Investcorp has been on an acquisition spree, snapping up various assets in the US and Europe, while venturing into new territories such as India and China. The company had $22.5bn in assets under management at the end of December.

The firm is counting on reaching $50bn by growing its existing businesses and adding new ones.

First, the $1bn GCC infrastructure fund will help it expand its GCC business and tap into a field that is attracting government attention.

“Today, there is the will by all agencies and ministries at all levels throughout the Gulf to partner with the private sector into infrastructure initiatives,” said Mr Ben-Gacem.

Investcorp expects to conclude the first fund-raising round by summer by raising $250 million and conducting two more rounds to close the infrastructure fund by 2020.

“We have received a lot of interest particularly from Asian institutional investors,” he said. “Obviously we will offer this fund to our existing clients and investors.”

The fund will focus on social infrastructure, housing, healthcare, education, roads and rail with a view to concluding the first deal in the coming months and deploying all of the fund over three years. The ticket size of each deal will range between $50m to $100m and the main focus will be on Saudi Arabia and the UAE.

“I hope this will be the first of many and our infrastructure aspirations go beyond the GCC,” said Mr Ben-Gacem. “Taking a ten-year perspective, I won’t be surprised to see Investcorp as an investor active in most emerging markets in Africa to Asia to the Middle East.”

The company is also planning to boost its presence in India and China, which it recently entered, tapping into the rapidly growing economies, the size of their populations and the shift from rural to urban life, he said.

“India, China and Southeast Asia are three of the most exciting and promising fields for investments,” said Mr Gen-Gacem.

The other focus is growing the company’s wealth management business through its minority stake in Swiss-regulated Banque Paris Bertrand.

“I hope that will open our global wealth management platform to ultra-high net worth individuals not just in the Gulf but also in other parts of world … first of all Europe, and then Asia,” he said.

Investcorp posted a 5 per cent rise in its first half-year profit to $58m, boosted by an increase in fee income from assets under management and lower operating expenses.

Since its inception in 1982, the company has made more than 185 investments in the US, Europe and the broader Middle East and North Africa region, including Turkey. Investcorp has invested across a range of sectors with the total transaction value exceeding $59bn.

Updated: February 16, 2019 07:42 PM

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