Investcorp sets 60pc rise in dividends

Manama : Bahrain-based alternative investment fund Investcorp has announced its full year results for the year ending June 30, 2016, with a 60 per cent increase in dividends to shareholders.

Strong results across all its core business operations (comprising new investment acquisitions, realisations and fundraising), and a resulting growing cushion of surplus capital and liquidity, has enabled the firm to increase ordinary shareholder dividends to 24 cents per share, from 15 cents per share last year. 

Over the period, Investcorp saw near record levels of activity across the business, driven by a series of significant transactions and solid fundraising activity in the US and the Gulf. This includes $810 million in AuM acquired through the acquisition of SSARIS Advisors’ Hedge Fund of Funds business in November 2015.

“This continued fundraising momentum underlines the strong appetite of the firm’s clients for attractive diversified alternative investment opportunities. The firm’s investment in broadening its Gulf office network to be closer to its investors has been a key-driving factor of its performance and has helped the firm in becoming one of the most active private investment institutions in the GCC,”  Investcorp stated.

“Net income was $90.1 million compared with $116.7 million in the previous year, which represents a decline of 23pc in net income from the previous year, predominantly attributable to an increase in operating expenses from Investcorp’s investment in the requisite resources and infrastructure to support the firm’s medium term growth strategy. Net income for the second half of the fiscal year (H2 FY16) was $39.2 million versus $71.4 million in H2 FY15,” it added.

Fee income for the full year was $307.5 million and asset-based income was $76 million, driven by increased transactional activity and strong operating performance of the corporate investment portfolio. The firm saw near record levels of new investment activity with $1.5 billion of capital deployment in aggregate for corporate investment and real estate, an increase of 47pc year on year. Asset-based income for corporate investment more than doubled on the back of strong EBITDA growth in the firm’s corporate investment portfolio companies.

Mohammed Mahfoodh Alardhi, Executive Chairman, said: “We are in a particularly exciting phase of development as we see tangible results of putting our ambitious growth strategy in action, with a purposeful investment across the business. We’ve added headcount in all areas of the business and strengthened our balance sheet through two significant strategic partners over the last two years, which will help drive growth of the business organically and through acquisitions across all product areas. The substantial increase in shareholder dividends further underscores the firm’s confidence in the continued growth and prospects of the business.”

“Despite challenging markets this year we have demonstrated the resilience of our business model and delivered a robust performance. The performance of our corporate investments portfolio, the fundraising pipeline in our Alternative Investment Solutions business and our continued strength in US real estate has led to another year of solid performance for Investcorp and our shareholders and clients while staying committed to navigating a prudent course through these volatile conditions,” he said.

Total assets at June 30, 2016, were $2.5 billion, up from $2.2 billion as at June 30, 2015. The firm’s balance sheet is in a solid position with equity over $1 billion, a capital adequacy ratio at 30.3pc and strong liquidity, which substantially covers all outstanding medium term debt maturing over the next three years.