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Investcorp reports 53 per cent increase in net income for the second half of 2013

February 1, 2014

Investcorp announced its first half fiscal 2014 (H1 FY14) results for the six months ended December 31, 2013 . Investcorp's net income for the period was up 53 per cent to $60.1 million (H1 FY13: $39.2 million ). The total enterprise value of the companies and the real estate properties acquired in the period exceeded $1.5 billion , including two investments that were signed in FY13 and closed during H1 FY14. Gross operating income increased by 14 per cent to $174.9 million (H1 FY13: $152.9 million ) with fee income increasing by 16 per cent to $171.0 million (H1 FY13: $147.6 million ). The significant growth in fee income is also partly reflective of an improved macro-economic environment, with recovery in the US markets and more stability in Europe . Net income from the Group's fee business showed a very strong performance, rising by 24 per cent in H1 FY14 to $74.3 million (H1 FY13: $59.8 million ). Asset-based income declined by $1.4 million to $3.9 million (H1 FY13: $5.3 million ), reflecting a few valuation markdowns in corporate investment and real estate, which offset higher hedge fund returns. Total deals by deal fundraising in the Gulf during the period was $446 million , an increase of 61 per cent from the $277 million raised in H1 FY13. This was driven by continued client appetite for alternative investment opportunities. Furthermore in hedge funds, market demand from new investors and increasing allocations from existing institutional investors enabled Investcorp to raise $440 million , net of redemptions. Investcorp's hedge fund co-investment portfolio delivered solid returns of 4.1 per cent in the period (annualized: 8.2 per cent). Investcorp returned $0.9 billion in proceeds to its investors from investment realizations and distributions with further significant realization proceeds pending from the sale of Skrill Group , subject to regulatory approvals, and TDX Group , both of which are expected to close in H2 FY14. Nemir A. Kirdar , Executive Chairman & CEO, commented: " Investcorp has reaffirmed the strength of its global franchise with a performance trajectory that continues to deliver consistently positive results for our investors. We continue to identify and secure a steady flow of attractive investment opportunities worldwide. In the last six months, we raised significant funds and completed deals in Europe , the US, the Gulf and most recently in Turkey , while launching new real estate and special opportunity portfolios. This investment activity has been balanced with a series of successful realizations, which have generated premium returns for our investors. We will continue to invest in our business and in our Gulf office network in particular, as we consolidate our position as the region's key investment bridge between the Gulf and Western markets." Exits for the period included completion of the sale of Armacell to Charterhouse for more than 500 million; the sale of Skrill Group to funds advised by CVC Capital Partners for a total value of 600 million; partial realization of Randall-Reilly following a refinancing; and secondary sales of additional tranches of Fleetmatics . TDX Group has also been sold to Equifax Inc. in January 2014 for 200 million. The aggregate equity deployed in new corporate investments during H1 FY14 was $445 million across three deals: Tyrrells English Crisps in the UK , Paper Source, Inc. in the US and Namet Gida Sanayi ve Ticareti A.S. ("Namet") in Turkey . Total balance sheet assets as at December 31, 2013 were $2.4 billion with a capital adequacy ratio of 28.3 per cent, comfortably in excess of the Central Bank of Bahrain's regulatory minimum requirement of 12 per cent. Balance sheet cash liquidity covers all outstanding medium and long term debt maturing through FY17.

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Source: CPI Financial

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