Bahrain's Investcorp teams up with Coller Capital to create $1bn buyout fund

The investment firm has signed a secondary market deal transaction with Coller for some of its European private equity portfolio assets

Since 2001, Investcorp has invested more than $1.5bn in technology businesses worldwide. Courtesy Investcorp

Investcorp, the Bahrain-based alternative investment management firm, signed a deal with London-headquartered Coller Capital for some of its European private equity portfolio assets that will help to create a new $1 billion (Dh3.67bn) buyout fund.

Coller Capital, which invests in private equity secondary market, will use its current fund, Coller International Partners VII, to underwrite the new investment vehicle, Investcorp said in a statement on Monday. Investcorp didn't say which of the assets are included in the deal or what they are worth.

The signing of the deal "is the latest step in our global growth strategy," Mohammed Alardhi, executive chairman of Investcorp, said. “It demonstrates the continued desire by institutional investors to back Investcorp’s investment platform.”

The deal is part of the company’s goal to more than double its assets under management to $50bn from $22bn as of June 2018. It follows the 2017 acquisition of a credit business with $12 billion in assets under management and a minority investment in Banque Paris Bertrand in Geneva last year.

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The Coller Capital deal also includes fresh capital for any follow-on investments, future investments and co-investments, the Bahraini company said.

Investcorp’s European Private Equity team will manage both the assets acquired through the transaction and the fund’s new capital, as it continues to invest in mid-market buyout deals across Europe.

Investcorp, in which Abu-Dhabi-based Mubadala Investment Company is the largest shareholder with a 20 per cent stake, has been on an acquisition spree in the last few months.

Investcorp last week said its technology unit transferred two of its portfolio companies with enterprise value of $185 million to an investment fund.

The company joined hands with of HarbourVest, a private markets investment specialist that supports the Investcorp Secondary Fund 2018, it said in a January 7 statement. Investcorp Technology Partners recently announced the close of its fourth Technology Fund, ITP Fund IV, a $400m pool. It closed in excess of its target and received strong support from a diverse group of global blue-chip institutional investors.

In September last year, the company said it is investing as much as $250m in the Chinese market, its first foray into the world's second-biggest economy as it looks to expand its portfolio of investments globally.

The company has invested across a range of sectors including more than 600 commercial and residential real estate investments in the US, with transaction values exceeding $57bn.

Since its inception in 1982, Investcorp has made over 175 corporate investments in the United States, Europe and the broader Middle East and North Africa region, including Turkey.

Investcorp 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 $125m. 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.

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.