Investcorp takings fall 90%

Investcorp Bank, a Bahrain alternative asset manager, said profit fell 90 per cent in the second half of last year amid declining hedge fund revenues.

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Falling hedge-und revenue triggered a 90 per cent decline in half-year profit at Investcorp Bank, a buyout company based in Bahrain that manages more than US$11 billion (Dh40.4bn).

Net income reached $5.3 million in the second half of last year compared with $56.2m in the same period a year earlier.

Investcorp blamed the profit decline on "negative returns on hedge funds" as a result of "drawdowns due to the turbulence caused by the euro-zone crisis".

Investcorp manages funds of high-net-worth individuals and companies from the Gulf region, routing their wealth into investments in Europe, the US and the Middle East.

The company was also behind the flotation of the luxury brands Gucci and Tiffany & Co.

Investcorp also said it signed an agreement to sell Redington International Holdings, a regional distributor of IT and telecommunications products, back to its parent company, Redington India. The sale, expected to be finalised next month, should generate a capital gain of $49.8m.

Investcorp bought a 26 per cent stake in Redington International through its Gulf Opportunity Fund 1 for $65m in 2008.

The company in November made three US property investments totalling $100m, taking its total investments in the US to eight, worth $300m.

Investcorp is one of the 10 largest foreign investors in US property. It focuses on commercial and office space.

Foreign investment in US property has been steadily picking up in the past year as investors look to take advantage of a steep decline in values after the global financial crisis.

Investcorp is looking for properties that are "performing well, have strong anchor tenants and are located in regions with favourable long-term demographic trends", Mazen Al Khatib, the company's managing director, said in an interview with The Nationallast April.

Investcorp has shifted its strategy in recent years to include distressed equity and debt. The company hired John Paulson, who overtook George Soros as the world's top hedge-fund earner in 2007, to establish its Credit Opportunity fund.