Thursday 21 September 2023

Investcorp in profit for third consecutive year

Manama, September 19, 2012

Bahrain-based investment firm Investcorp has achieved profitability for the third consecutive year since the financial crisis, raising $1.3 billion from investors with $900 million coming from the US and the rest from the Gulf, said its top official.

That showcases the robustness of the investment bank's business model and network and the investor appetite for attractive alternative investment opportunities, stated bank executive chairman and chief executive Nemir A Kirdar after the company's annual general meeting on Tuesday.

"We saw a significant increase in acquisition and placement activity which resulted in a growth of 20 per cent year-on-year in our fee income," he remarked.

"We have also completed a new $529 million forward start loan facility to refinance debt maturing in March and April 2013 which received strong support from leading international and Gulf banks," he added.

The annual meeting approved a dividend of $7.5 per share and a preference share dividend of 12 per cent.

"We saw strong upward movement in fee income which increased by 20 per cent to $236 million," he told shareholders.

"This was the result of a significant increase in acquisition and placement activity," said the company chief.

"On the other hand, the asset-based income declined to $31 million largely due to negative returns on our hedge fund co-investment portfolio which in turn was the result of extreme levels of uncertainty and negative sentiment in global markets that affected returns throughout the industry," he added.

Kirdar pointed out that in light of the economic slowdown, the company took a conservative view towards marketing its corporate investments, particularly in Europe.

"During the year, the bank had raised $1.3 billion from investors with $900 million coming from the US and $400 million from the Gulf," he said. The company's two most recent investments have been in the US and Spain.

Kirdar said the investments were based on the fact that the companies in question held productive assets with potential growth for investors in spite of any macroeconomic problems their countries faced.

Chief financial officer Rishi Kapoor said, at present, the bank had outstanding debt of $1.1 billion. "Of this, $600 million is due next year but we have already raised $529 million and have enough liquidity within the bank to cover these loans when they come due," Kapoor stated.

The rest of its debt portfolio did not fall due for 20 years, he added.-TradeArabia News Service

Tags: Bahrain | Gulf | US | Investcorp | profit | investors | economic crisis |

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