News Column

Investcorp posts 25pc increase in net income

August 5, 2014

MANAMA: Bahrain-based alternative investment manager Investcorp has reported 25 per cent growth in net income and 84pc growth in earnings per share for the financial year (FY) ended June 30, when compared with the prior year period.

Net income in FY2014 was $131.2 million, compared with $104.9m for the same period last year, representing EPS of $129 per share (FY13: $70 per share) and a return on average equity of 16pc.

FY14 saw high levels of activity on all fronts - acquisitions, realisations and fundraising - which have been a key driver of this strong performance, and reflect the continued appetite from investors for attractive alternative investments around the world, the investment bank said in a statement.

The fiscal year marks five consecutive years of strong performance for Investcorp.

Since the end of FY09, Investcorp has seen its book value per share grow by 64pc, while delivering aggregate earnings of $401 per share and an average return on equity of 11.4pc per annum.

Relative to the beginning of FY09, balance sheet leverage has come down by more than 50pc and capital adequacy has gone up by more than 60pc to 30.4pc.

Aggregate realisation proceeds in the five-year period exceeded $5.7 billion, with total fundraising of over $7bn.

Total capital deployed in new investments over the period reached $3bn with deal-by-deal placements totalling over $2.5bn.

Total fee income in FY14 grew to $343.9m, up 4pc over the prior year.

Investcorp raised more than $1.9bn in new funds from clients during the year, 21pc higher than last year, and marking a continued increase in fund raising since FY08.

Gulf fundraising for the period was $971m, representing a 29pc increase over FY13 ($751m).

Corporate investment placement activity totalled $571m, a 16pc increase over FY13.

Real estate placement reached $285m, representing a 42pc increase.

New hedge fund subscriptions from institutional investors reached $1bn with total hedge fund assets under management reaching the key milestone of $5bn.

Asset-based income of $47.6m represented a 48pc increase over the prior year, driven by realisations and growth in value of the corporate investment portfolio.

Asset-based income was also buoyed by hedge fund returns, which generated $28.2m and continued to benefit from a more positive macroeconomic environment compared with FY13.

Overall, gross operating income for FY14 was up 8pc to $391.5m.

Net income for the second half of FY14 was $71.1m versus $65.7m over the same period in FY13, an 8.3pc increase.

The board has proposed a dividend of $15 per share, and 12pc on preference shares.

"Our strong performance once again confirms the success of our model and is indicative of the high level of activity in all geographies in which we operate," Investcorp executive chairman and chief executive Nemir A Kirdar said.

"We continue to invest in our business and in the on-going expansion of our office network across the Gulf, thereby strengthening our franchise's ability to expand our client base and drive attractive returns for our shareholders and investors.

"Underpinned by our strong placement capability, we will continue to identify attractive global investment opportunities that we believe have the potential to deliver superior risk adjusted returns for our investors.

"With a fifth consecutive year of profitability, we are confident of our skill and talent base, solid foundation as well as the quality of our performance and upward momentum," Mr Kirdar added.

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Source: Gulf Daily News (Bahrain)

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