Investcorp, the alternative asset manager that counts Mubadala Investment Company as its biggest shareholder, swung to full-year profit as assets under management grew and investment activity improved despite Covid-19 headwinds.
Net profit attributable to the equity holders of the parent for the financial year ended June 30 rose to $124 million, from a loss of $165m a year earlier, Investcorp said on Wednesday.
Total comprehensive income for the Bahrain-based alternative asset manager rose to $132m, from a loss of $210m in the previous financial year.
Increased investment activity across the company's core businesses of private equity, property, credit management and absolute return investments boosted Investcorp's earnings.
The company has reported “strong financial and operational performance in what has been an incredibly challenging period for businesses globally”, said Mohammed Alardhi, executive chairman at Investcorp.
“While the coronavirus pandemic continues to present significant headwinds for many, we are making good progress on our growth journey and diversifying our investor, product and geographic base, which has not only helped us to weather the pandemic but emerge from it in a robust position, well-placed for our future long-term plan.”
Assets under management rose by 17 per cent annually to a record high of $37.6 billion at the end of June, on the back of Investcorp’s broad-based growth strategy.
“This is a testament to the resilience of Investcorp’s business model and heightened demand for sophisticated and tailored solutions that meet the needs of our growing and global client base,” said Mr Alardhi.
The company aims to double its AUMs to about $75bn over the next five to seven years, with Asia accounting for up to a fifth of its total portfolio, co-chief executive Rishi Kapoor told The National in July.
Investcorp said its fee income increased by 24 per cent to $356m at the end of June 2021. Fees from deals rose by 39 per cent to $139m, driven primarily by “good levels of transactional and fund-raising activity”, while recurring AUM fees also climbed 15 per cent to $217m in the reporting period.
The continued recovery in asset values, driven by the improved performance of portfolio companies and healthy financial markets, boosted Investcorp’s asset-based income to $107m at the end of June, from $110m loss in the previous financial year.
Investcorp’s investments stood at $3.3bn in 2021 financial year, slightly higher than $3.1bn in the previous financial year, while placement and fund-raising for the period was $4.3bn.
Investment activity included $1.2bn in private equity deals and strategic capital, $700m in property transactions and $1.4bn for five collateralised loan obligation deals.
The company, which has been on a deal-making spree in recent quarters, said it made five new private equity investments in the US and Europe, two add-on acquisitions and 11 investments in businesses across Asia.
It also spun off six private equity investments and sold several property assets in the US and Europe during the past financial year.
Investcorp is pushing to expand its footprint in Asia and has made 11 new private equity investments across India, China and other South-East Asian markets.
Its AUMs in Asia rose by 17 per cent to $1.1bn during the fiscal year as it opened an office in the Chinese capital of Beijing and unveiled its first China healthcare investment platform.
The asset manager, which delisted its shares from Bahrain Bourse in July, said its assets grew by 13 per cent to $2.4bn in the fiscal year. Net debt at the end of the financial year 2021 declined to $443m, from $672m at the end of June 2020.
The improved net debt position, together with a higher level of equity and liquidity, puts the balance sheet in a strong position heading into the next fiscal year, the company said.
“While challenges remain, we are committed to our long-term strategy of driving sustainable growth and value enhancement for our clients and shareholders,” Mr Alardhi said.