Bahrain's Investcorp reports 4% rise in net income for financial year 2018

Investcorp's net income for the 12-month period ending June 30 climbed to $125m

Saudi Arabia and its allies said they were in discussions in June to offer Bahrain an economic package. Getty Images

Investcorp, an alternative investment manager that counts Abu Dhabi’s Mubadala Investment Company as its biggest shareholder, reported a 4 per cent year-on-year rise in its full-year 2018 profit boosted by realisation of investments in the United States and Europe, and a rise in fee income from assets under management.

Aggregate net income for the 12-month period ending June 30, climbed to $125 million, with fully diluted earnings per share also rising 4 per cent to $1.30, the company said in a statement on Wednesday. Net income for the second half of financial year 2018 came in at $70m, slightly lower than $72m reported for the same period a year earlier, it said.

Investcorp's board proposed a full-year dividend of $0.24 per ordinary share, the Bahrain-headquartered company noted.

As the company maintains the growth momentum, it continues to report "strong performance across a range of our key indicators", said Mohammed Alardhi, Investcorp executive chairman. "Our robust balance sheet, experience and expertise will enable us to take advantage of interesting investment opportunities globally and allow us to continue the growth trajectory that we have set."

The firm's assets under management, increased 6 per cent to $22.6 billion in the period. Since its inception in 1982, Investcorp has made over 170 corporate investments in the US, Europe and the broader Middle East and North Africa region, including Turkey. The firm has invested across a range of sectors including more than 450 commercial and residential real estate investments in the US, with transaction values exceeding $55bn. Mubadala, a strategic investment arm of Abu Dhabi, owns a 20 per cent stake in Investcorp.

The company is now exploring investment opportunities in China, India and Saudi Arabia as it expects assets under management to reach $50bn within the next five to seven years, its co-chief executive, Rishi Kapoor said, according to Reuters.

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Investcorp's Credit Management business, during the last financial year, helped push a 27 per cent rise in recurring income derived from AuM to $173m. Asset based income also grew by 30 per cent to $133m, primarily driven by successful corporate investment realisations.

Investment activity during the financial year 2018 climbed 36 per cent to $2.8bn, while total placement and fundraising activities rose by 77 per cent $7.3bn as distributions to clients more than doubled to $7bn.

“2018 has presented a number of geopolitical and economic challenges, particularly in the Gulf region, yet fundraising activity remains high," Mr Alardhi noted, adding "there is an impressive pace of capital being deployed, and we have significantly expanded our global investor base.”

The company raised $580m from investors during the full-year with $789m returned in distributions. Its corporate investments business remained solid with three new deals totaling $406m, two follow on funding deals, $75m invested through and alongside Investcorp’s Technology Funds III and IV and a further $48m invested in two special opportunities, it said without specifying the opportunities or the follow on funding deals.

The real estate division in the last financial year raised $569m for real estate investments, 10 per cent more than last year, including from Asian based investors for the first time. In the US, the company made investments totaling $419m in a diverse set of properties across the residential, office and industrial sectors. In Europe, the team completed the acquisition of its first two UK real estate portfolios as well as a substantial office property acquisition in Germany, making investments of $147m in aggregate, the company said.