Investcorp Eyeing U.S. Growth, Falling Euro For Buys

The firm is best known in the global space for listing luxury goods brands, such as Gucci and Tiffany & Co, but has been increasingly branching out into other sectors.



Alternative investment fund Investcorp will continue making investments in the U.S. services and consumption-related sectors and real estate on the back of the country’s improving economy, a top executive said on Monday.

Investcorp is also interested in European companies, which could benefit from the falling euro, Chief Financial Officer Rishi Kapoor said.

The firm is best known in the global space for listing luxury goods brands, such as Gucci and Tiffany & Co, but has been increasingly branching out into other sectors.

In the last 12 months, it has bought into accessories firm Totes Isotoner and software and services firm PRO Unlimited in the United States, and Italian protective clothing maker Dainese.

“Europe is a good destination for investment in firms which can harness cost advantages from oil prices and the falling euro, especially in export-driven markets or where they have a global footprint that can benefit from the decline of the euro,” Kapoor told reporters on a conference call, adding it was targeting no specific sectors on the continent.

The improving economic picture in the United States would also stimulate further real-estate investments by the fund, with its main target being suburban offices and multi-family residential units in the top 30 metropolitan areas, Kapoor said.

Investcorp also has a “handful” of companies in its portfolio of around 25 investments which were ready for a sale to another company or private equity house or a stock market flotation over the next 12-18 months, Kapoor said.

However, he declined to elaborate on names and how much Investcorp hoped to raise from sales in the coming period.

Investcorp generated $985 million from exits in the first half of its fiscal year, which concluded on Dec. 31, it said in an earlier statement, with proceeds from the $1.43 billion sale of Berlin Packaging to Oak Hill Capital Partners in October the main driver of this figure.

Investcorp posted a five per cent rise in net income for the first half to $45.3 million, following the restatement of its prior-period results after the adoption of a new accounting standard.

The shift to IFRS 15 meant Investcorp’s fee income was now booked over the lifetime of the client activity, as opposed to upfront, Kapoor said.

This led to its net income for the six-month period to Dec. 31, 2013 being restated to $43.34 million from $60.1 million.

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