2 Feb 2015
Investcorp, a global provider and manager of alternative investment products, today announced its first half fiscal 2015 (H1 FY2015) results.
Investcorp maintained its profitability momentum with net income for the period up 5% to $45.3 million (H1 FY2014: $43.3 million). Fee income increased to $156.7 million (H1 FY2014: $154.3 million), driven by sustained growth in investment and placement activity despite a challenging market backdrop.
Total deal-by-deal fundraising in the Gulf was $490 million in H1 FY2015, an increase of 10% from the $446 million raised in H1 FY2014. The Firm’s expanding regional office network in the Gulf is delivering positive results as new investors were added to the Investcorp client base during the period.
Total realization proceeds and other distributions to Investcorp and its clients were $985 million in H1 FY2015, primarily due to the successful realization of Berlin Packaging.
Nemir A. Kirdar, Executive Chairman & CEO, commented: “Our stable growth trajectory continues to deliver results for our investors. We have experienced strong levels of client interest in our products, underscoring the importance investors place on Investcorp’s ability to provide attractive internationally diversified investment opportunities. We continue to see good opportunities in the US as well as Europe as highlighted by our recent investments in Pro Unlimited and Dainese. Looking ahead, we will continue to seek to identify and secure a steady flow of investment opportunities worldwide, and provide the investment bridge between the Gulf and Western markets that our clients have come to rely on for more than 30 years.”
Highlights for the period:
- Realization activity for the period included completion of the sale of SourceMedia, a diversified business-to-business media company, to Observer Capital; the sale of Berlin Packaging to Oak Hill Capital Partners for $1.43 billion; the partial realization of FishNet Security through a merger agreement with Accuvant, Inc.; and the partial realization of Asiakastieto, the leader in the Finnish credit information market.
- Aggregate equity deployed in new corporate investments during H1 FY2015 was $249 million across two deals: PRO Unlimited, the leading US-based provider of software and services for the contingent workforce market; and Dainese, a founder managed and globally renowned Italian brand for motorcycle and other dynamic sports markets.
- Corporate investment placement was $321 million which represented a 13% increase over the $285 million placed in H1 FY2014. This included placement of the remaining amount of Totes, a deal acquired in the last quarter of FY2014, and the full placement of SPGPrints, a deal signed in June 2014, and PRO Unlimited, a new deal acquired in FY2015. Dainese, the most recent investment, was also offered for placement during the second half of December 2014.
- Aggregate equity of $217 million was deployed in new real estate investments in H1 FY2015 across two new portfolios and two new properties to be formed into a new portfolio.
- Real estate placement, across two new portfolios, was $169 million, a 32% increase over $128 million placed in H1 FY2014. This included the full placement of the 2014 Office and Industrial portfolio and the Canal Center portfolio. Investors continue to have a strong appetite for investment opportunities in US real estate as a way to gain exposure to the solid growth of the US economy.
- New subscriptions into hedge funds from institutional investors were $150 million against a backdrop of a challenging investment environment in the second half of calendar 2014.
- Total balance sheet assets as at December 31, 2014 were $2.1 billion with a strong capital adequacy ratio of 27.9% (pro forma Basel III: 27.2%), comfortably in excess of the Central Bank of Bahrain’s requirement of 12%.
- Investcorp continues to utilize surplus capital resources to redeem preference shares, thereby boosting earnings per share for ordinary shareholders, while at the same time maintaining its capital adequacy ratio supplemented by prudent financial management and the de-risking and strengthening of the Firm’s balance sheet.
- In August 2014, the Central Bank of Bahrain confirmed Investcorp’s designation as a Domestic Systemically Important Bank (‘DSIB’), underlining the importance of Investcorp’s franchise and the significant position it occupies in Bahrain, the wider Gulf region, and globally.
- In October 2014, Investcorp announced details of its executive management succession plan. Following Nemir Kirdar’s decision to retire as Executive Chairman and CEO at the end of the current fiscal year on 30 June 2015, current board member Mohammed Al Ardhi will become Executive Chairman, while Mohammed Al-Shroogi, President, Gulf Business, and Rishi Kapoor, Chief Financial Officer, will take over as Co-CEOs.