Wednesday 27 September 2023

Mohammed Alardhi

Investcorp posts record AUM at $37.6bn in fiscal 2021

MANAMA, August 4, 2021

Bahrain-based Investcorp, a leader in alternative investment, continues to show resilience to Covid-19 impact with 17% growth in assets under management (AUM) to a record high of $37.6 billion in the fiscal year ended June 30, 2021.

Investcorp’s FY21 results were driven by good levels of activity across the core businesses of private equity, real estate, credit management and absolute return investments. This resulted in delivering a net profit attributable to the equity holders of the parent of $124 million compared to a loss of $165 million in FY20 and diluted earnings per share of $1.34 compared to a loss of$2.57 per share in FY20. Total comprehensive income attributable to the equity holders of the parent was $132 million compared to a loss of$210 million in FY20.

Total shareholders’ equity (excluding non-controlling interest) as of June 30, 2021, increased 46% to $1,270 million (FY20: $867 million) and total assets increased 13% to $2,391 million (FY20: $2,123million). The FY21recommendation for distribution of preferred and ordinary dividends is $44 million in aggregate, with the proposed ordinary dividend beingUS$0.30 per share versus $0.10 per share for FY20.

Mohammed Alardhi, Executive Chairman, said: “We are delighted to report strong financial and operational performance in what has been an incredibly challenging period for businesses globally.  Whilst the coronavirus pandemic continues to present significant headwinds for many, we are making good progress on our growth journey and diversifying our investor, product and geographic base, which has not only helped us weather the pandemic but emerge from it in a robust position, well placed for our future long-term plan.”

“The business delivered 17% growth in AUM to a record high of $37.6billion and strong performance across all business lines. This is a testament to the resilience of Investcorp’s business model and heightened demand for sophisticated and tailored solutions that meet the needs of our growing and global client base.

“I am particularly pleased with the external recognition we gained for our Diversity, Equity and Inclusion efforts and for the strengthened adherence we have made to our ESG policies. We look to this next chapter at Investcorp with confidence and excitement. Whilst challenges remain, we are committed to our long-term strategy of driving sustainable growth and value enhancement for our clients and shareholders,” he added.

Financial and operational highlights:

•    Fee income increased by 24% to $356 million during the fiscal year (FY20: $288 million), whilst deal fees increased by 39% to $139 million (FY20: $100 million in FY20), driven primarily by good levels of transactional and fundraising activity. Recurring AUM fees also increased by 15% to $217 million from $188 million in FY20.
•    The continued recovery in asset values, driven by improved operating results of underlying portfolio companies as well as healthy financial markets, resulted in asset-based income of $107 million compared to a loss of $110 million in FY20.
•    The firm’s diversification strategy by geography, client and product type translated into broad-based growth in AUM to a record high of $37.6 billion, representing an increase of 17% from $32.2 billion in June 2020.
•    Activity metrics were solid with investment activity of $3.3 billion (FY 20: $3.1 billion), placement and fundraising of $4.3 billion (FY 20: $4.9 billion) and distributions of $3.0 billion (FY20: $2.6 billion).
•    Placement and fundraising reached $4.3 billion, deal-by-deal placement activity stood at approximately $1.3 billion across thirteen new products, and fundraising was $0.9 billion across seven closed-end funds and $0.5 billion for open-end funds. In addition, fundraising across three new CLOs totalled $1.3 billion. Fundraising also includes the $252 million of preference share capital raised.
•    Investment activity of $3.3 billion includes $1.2 billion for private equity and strategic capital, $0.7 billion for real estate and $1.4 billion for five CLOs. Private equity investments included five new investments in the US and Europe and two add-on acquisitions in addition to 11 investments in businesses across Asia. Exit activities included the realization of six private equity investments and the sale of multiple real estate properties in the US and Europe.
•    As of June 30, 2021, total equity (excluding non-controlling interests) was $1,270 million and total accessible liquidity was $1.5 billion. The increase in equity (excluding non-controlling interests) from $867 million as of 30 June 2020 resulted from the strong rebound in profitability in FY21, the successful issuance of $252 million of preference shares and the sale of $76 million of treasury shares to the management and employees. The increase in total accessible liquidity from $1.2 billion as of 30 June 2020 is largely also due to the preference share issuance.
•    The size of the balance sheet expanded by 13% to $2.4 billion as a result of stronger business activity which translated into increased underwriting and higher valuations for the co-investment portfolio, although co-investment exposure actually declined by $179 million as a result of exit activity during the year. Total co-investments and underwriting of US $1.2 billion is fully covered by total equity capital of approximately US $1.3 billion.
•    Net debt declined to $443 million in FY21 from $672 million in FY20. The improved net debt position together with a higher level of equity and liquidity puts the balance sheet in a strong position heading into the next fiscal year. – TradeArabia News Service


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