INVESTCORP TEAMS UP WITH COLLER CAPITAL TO CREATE $1bn BUYOUT FUND

▶ Latest development in growth strategy as the Bahrain alternative investment company seeks to more than double assets under management to $50bn

Bahrain’s Investcorp has signed a deal with Coller Capital of London for some of its European private equity portfolio assets that will enable the creation of a new $1 billion buyout fund.

Coller, which invests in private equity secondary markets, will use its current fund, Coller International Partners VII, to underwrite the new investment vehicle, Investcorp said yesterday.

The company did not reveal the assets that are included in the agreement or what they are worth.

The signing of the deal “is the latest step in our global growth strategy,” said Mohammed Alardhi, executive chairman of Investcorp.

“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 $12bn in assets under management and a minority investment in Banque Paris Bertrand in Geneva last year.

The Coller deal also includes 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 that have been 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 Mubadala Investment Company of Abu Dhabi is the largest shareholder with a 20 per cent stake, has been on an acquisition spree in the past several months.

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

The company teamed up with HarbourVest, a private markets investment specialist that supports the Investcorp Secondary Fund 2018, it said earlier this month.

Investcorp Technology Partners recently announced the closure of its fourth Technology Fund, ITP Fund IV, a $400 million pool.

It closed in excess of its target and received strong support from a diverse group of global blue-chip institutional investors.

Last September, the company said it was 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 more than 175 corporate investments in the US, 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 the realisation of investments in the US and Europe, together with an increase 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 to $7.3bn as distributions to clients more than doubled to $7bn.

The deal demonstrates the continued desire by institutional investors to back Investcorp’s investment platform