Bahrain's Investcorp agrees to buy Marble Point Credit to expand its portfolio

Investcorp, an alternative asset manager with Mubadala Investment Company as its biggest shareholder, has agreed to buy US-based Marble Point Credit Management as the company continues to expand its global portfolio.

Marble Point, owned by US credit investor Eagle Point Credit Management, is a specialist asset manager focused exclusively on managing CLOs (collateralised loan obligation) and portfolios of broadly syndicated leveraged loans. It manages assets worth $7.8 billion.

Investcorp did not disclose financial details of the transaction, however the Financial Times reported the Bahrain-based asset manager is buying Marble Point for about $200 million.

CLOs are corporate loans taken out by private equity firms to conduct leveraged buy-outs.

“The proposed acquisition of Marble Point is a significant milestone in Investcorp’s 40-year journey of growth through diversification, geographic expansion and building scale,” said Mohammed Alardhi, executive chairman of Investcorp.

“With $50 billion in total firm assets under management after completion of this acquisition, Investcorp is well poised for the next phase of its evolution and development.”

Last month, the company led an investment totalling 5.4 billion Indian rupees ($67 million) in Global Dental Services, Asia’s largest dental chain and one of the top 15 dental services organisations in the world.

It also bought a majority stake in fresh produce distributor Sunrise Produce in the US to expand its presence in the world’s largest economy.

Marble Point's “acquisition reaffirms our commitment to continue to grow and expand Investcorp’s credit management platform and be a leading global provider of an array of credit-focused products and solutions to our clients”, said Rishi Kapoor, co-chief executive of Investcorp.

The transaction is expected to close in the first quarter of 2023, subject to regulatory requirements and closing conditions, Investcorp said, without providing financial details of the deal.

Once the deal is closed, Marble Point will be combined with Investcorp Credit Management, a global credit platform with $14.2 billion in assets under management and an 18-year history of investing in credit markets worldwide.

The combined platform will manage $22 billion in assets and rank among the top 15 CLO managers globally by assets under management, according to the company.

“Our combined platforms represent a formidable player in the credit markets, significantly enhancing our profile in the eyes of capital markets participants,” said Corey Geis, who will serve as director of capital markets, head trader and portfolio manager at Investcorp.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Bahrain's Investcorp agrees to buy Marble Point Credit to expand its portfolio

US asset manager will combine with Investcorp Credit Management, a global credit platform with $14.2bn in assets under management

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