Investcorp, the Bahrain-based company which counts Mubadala Investment Company as its biggest shareholder, is looking to raise in excess of $7 billion (Dh25.7bn) this year for acquisitions in the Arabian Gulf and Asia, its co-chief executive said.
"Last year we raised north of $7bn [and] our fundraising plans will be building upon that recent trajectory," Rishi Kapoor, told The National. "That's the baseline and we would like to grow from that."
The Manama-listed company has now entered China and India. It invested as much as $250 million in China Everbright, a sovereign-backed asset manager, and acquired private equity and real estate investment management businesses of IDFC Alternatives in India for $500m, Mr Kapoor said.
China, the world's second-biggest economy, and India, Asia's third-largest economy, will remain the two biggest single markets for Investcorp in Asia. However, the company also sees investment potential in export-oriented manufacturing sectors in some of the East Asian countries.
“Scale is important as you want to do business in the markets where you can pick and choose, as well as [have] the ability to monetise,” Mr Kapoor said. “On opportunistic basis, we think the Asean complex will offer opportunities case by case.”
The company, which has historically invested in the US and Western Europe, expects its GCC portfolio of $1bn to rise to $1.5bn to $2bn in the next five years as it eyes acquisitions in social infrastructure including health care, education and entertainment. Investcorp has already set up a $1bn GCC infrastructure fund, which is a 50-50 joint venture with asset manager Aberdeen Standard Investments. Formal fundraising for the venture will start soon, Mr Kapoor said.
“It’s a three-pronged investment strategy: US and Europe, GCC and Asia,” he added. The recent moves reflect the company's “strong belief that the growth story in Asia and the growth story in the GCC are perfect complements to our well established investment strategy”.
Investcorp, in which Mubadala holds a 20 per cent stake, has been on an acquisition spree in recent quarters. The company, which had $22.5bn in assets under management at the end of December, aims to double them to around $50bn in the next three years. It is securing enough funds for its ambitious plans, with $2bn already raised in the first half of its fiscal year that ends in June, its other co-chief executive Hazem Ben-Gacem told The National in February.
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, including Turkey. Investcorp has invested across a range of sectors with the total transaction value exceeding $59bn.
In its private equity portfolio, the company on average makes one to two investments in each region every year and “by definition” looks to exit anywhere from five to eight investments, Mr Kapoor said.
In real estate in any given year, Investcorp acquires between 15 to 25 properties across the US and Europe – where it is most active – and looks to sell as many properties as well.
“The relative pace of new investments and realisation activity, we see that continuing in 2019,” he said.
However, the looming slowdown in the global economy over the next 18 months may change the balance of exits and new investments for the company.
“If it [economic slowdown] comes, we want to be opportunistic in terms of accelerating the pace of our new acquisitions and slowing down the pace of exits,” he said. “The buying and selling will be dictated by opportune market conditions and as things stand today, the pace of acquisitions and exits has been roughly in sync with each other.”