Investcorp plans to delist its shares from the Bahrain Bourse as it charts the next phase of its growth.
The alternative asset manager, which counts Mubadala Investment Company as its biggest shareholder and manages $35.4 billion of assets, has received shareholders’ approval for a board recommendation to delist and convert the company into a closed shareholding entity, Investcorp said in a statement on Wednesday.
The delisting plan remains subject to regulatory approval and completion of the required legal process, which Investcorp expects to complete during the third quarter of this year.
“Delisting and becoming a private company is the most appropriate ownership structure at this stage in the continuing journey of Investcorp,” Mohammed Alardhi, the company's executive chairman, said.
“It will allow us to be agile, focused on investing for our long-term strategy and enables our senior leadership team to be dedicated to driving growth.”
Bahrain and the GCC region are part of the “historical fabric” of the company and will continue to be key markets for Investcorp both in terms of investment activity, whether in private equity or infrastructure, as well as with the company's clients, investors and other stakeholders, Mr Alardhi said.
Established more than four decades ago, Investcorp has grown to become one of the leading alternative asset management companies in the region, investing across assets classes and geographies.
Investcorp’s shareholders in Bahrain and the broader region will benefit from its delisting by virtue of the company's “longer term plans”, which are expected to create future value for all stakeholders, the company said.
The company has no plans to change its shareholderbase post-delisting as it has been "immensely supportive to us through this journey", Hazem Ben-Gacem, Investcorp's co-chief executive told The National on Wednesday.
Investcorp's balance sheet is in a "very healthy and robust state" with available liquidity in excess of $1.3bn.
However, in future, the company may expand its balance sheet, "our available liquidity and our access to capital and that is best suited and done within the confines of private markets”, Mr Ben-Gacem said.
Investcorp is also on track to expand its AUMs to $50bn by the end of its fiscal 2026 but Mr Ben-Gacem hopes to achieve this sooner.
"We should be in good shape to comfortably meet our target," he said. "Our business is growing very nicely. The majority of that AUM growth will come from locked up capital … in the form of institutional commitments to fund [investment] vehicles."
In February, Investcorp reported a 33 per cent jump in first-half net profit on the back of higher asset-based income. Profit at the end of the six-month period to December 31, 2020 jumped to $63 million.
Asset-based income for the period increased more than three-fold to $45m. AUM fees also rose 16 per cent year-on-year to $101m, it said in a bourse filing at the time.
Alternative asset managers invest in asset classes outside public markets, such as private equity, private credit, venture capital, hedge funds, commodities, real estate and infrastructure.
Investcorp's investment activity of $1.4bn during the first half of its financial year was driven by two new private equity investments in the US and Europe and two add-on acquisitions. It also made eight investments in businesses across Asia.
The company has stepped up investments during the pandemic to capitalise on lower asset valuations and is bullish on the prospects of industrial and multi-family residential properties in the US, it said in March.
Its investment in real estate in the US and Europe was above $300m during the first quarter, according to its market disclosure in February.
"Investcorp has done very well over the past few years,” Mr Ben-Gacem said. “We will continue that journey of utilising both organic and inorganic means to expand our business. As of today, we feel that we have the right resources."
India, China and some of the other South East Asian markets also form a important "anchor part" of the company's growth strategy. Investcorp has invested $500m in India and a similar amount in China and South East Asian markets. Mr Ben-Gacem sees the company pouring more investments into Asia.
Over the next three months, Investcorp also plans to exit four Chinese companies in healthcare and technology sectors through initial public offerings, he added.
The company has reached the first close of its $300m technology private equity fund and there are "at least one or two other first close announcements [that are] coming in the next week or two", he said.
Investcorp is also looking to launch a Saudi Arabia Private Equity Pre-IPO Fund that will focus on investing in privately-owned local businesses and preparing them for a listing on the kingdom's Tadawul exchange.
"I hope we will be able to launch it by Q3. We are quite excited about our contribution through this vehicle to the Vision 2030," he said.
Investcorp holds stakes in companies such as ticketing services provider Vivaticket, a Nordic provider of eHealth services known as Cambio, European telematics company Abax and US-based cyber security company Securelink. The company's investments across the industrial services sector include American Tire Distributors, Berlin Packaging, FleetPride and Wrench Group.