Investcorp, a Bahrain-based provider of alternative investment products, said it planned to buy stakes in homegrown Mideast luxury goods companies as part of a plan to invest $650 million in the region in the next two years.

Investcorp, previously an investor in high-end brands Gucci and Tiffany, is in talks with families and businesses in the Gulf, North Africa and Turkey, said Azmat Taufique, co-head of the bank's Gulf Growth Capital business.

New investments under its $1 billion Gulf Opportunity Fund would strive to mirror a 70 per cent acquisition last year of the Middle East's largest gold and jewellery maker, L'Azurde, which Investcorp made along with partners, Taufique was quoted as saying by our sister publication, the Gulf Daily News..

'We are looking at other businesses in the region with similar dynamics, not necessarily jewellery but broadly in mass luxury,' Taufique said on sidelines of a global luxury summit, adding he estimated the mass luxury market would grow about 10 per cent a year in the region.

'We want to build brands that will resonate. The market is evolving, the region is growing up, and our business people and entrepreneurs have built brands,' he said in Dubai.

L'Azurde was a strong investment because its products appeal to a wide section of the population, cater to a demographic of 16-40-year-olds, are regarded as fashionable and play on a Middle Eastern cultural affinity for owning gold, Taufique said.

Bahrain-based Investcorp was in talks for acquisitions of companies with similar strategic characteristics in the broader mass luxury field, where some companies are seeking alternative funding sources, he said.

About a quarter of the eight to 10 acquisitions Investcorp intends to complete in the region in the next two years will be in the luxury goods segment, Taufique said. The private equity firm is also exploring investments in European or Asian companies whose brands it could move to the Middle East, he added.

The Middle East has about 5 per cent market share of the $300 billion global luxury business, Taufique said.

Taufique added that luxury goods companies in the UAE and markets like Saudi Arabia and Egypt exhibit strong medium-term growth prospects. – TradeArabia News Service