Investcorp makes largest US real estate acquisition in a decade

Bahrain alternative investment manager in a deal valued at $370m

Investcorp. Courtesy Investcorp
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Investcorp, the Bahrain-based alternative investment manager, purchased US property totalling $370 million (Dh1.4 billion), making it the company's largest acquisition of US real estate in a decade.

The Manama-listed company bought 11 new properties with 2,615 units in metro areas across five states, Investcorp said in a statement on Monday. Investcorp partnered with Madison Apartment Group, an affiliate of Philadelphia-based property fund operator Equus Capital Partners, as the on-site property manager.

"We continue to see significant investment opportunities in US multifamily given it is a well-performing, highly liquid asset class that draws upon the current strength of the overall US economy and labour market,” Michael Moriarty, principal in real estate investment at Investcorp, said.

Investcorp, in which Abu Dhabi's Mubadala Investment Company holds a 20 per cent stake, has been on an acquisition spree as the firm aims to double assets under management in the next three years. The firm, established in 1982, is one of the oldest Middle Eastern private equity firms and is targeting $50bn of assets under management, up from $22.5bn at the end of December 2018.  It sees its real estate investment business as a major driver of its long-term global growth strategy, it said.

The US properties are located in Orlando and Tampa, Florida; Raleigh, North Carolina; Atlanta, Georgia; Philadelphia, Pennsylvania and St. Louis, Missouri.

"The assets in this portfolio are appealing because they are located in metro areas that are either key growth markets or population-dense areas with new supply constraints," Mr Moriarty said. "Each property offers strong existing occupancy levels and we believe also offers the opportunity for value-add renovations.”

Over the last 12 months, Investcorp ranked among the top 10 buyers of US multifamily units, after purchasing 7,700 units, the company said, citing Real Capital Analytics. Since its inception, Investcorp has made more than 185 investments in the US, Europe and the broader Middle East and North Africa, with the total transaction value exceeding $59bn.

The private equity firm is looking to raise in excess of $7bn this year for acquisitions in the Arabian Gulf and Asia.