Investcorp to delist from Bahrain Exchange after nearly 40 years

Investcorp Holdings, the Middle East’s biggest alternative asset manager, will delist from the Bahrain stock exchange after almost four decades in response to low trading volumes, the latest in a string of companies in the region to go back into private ownership.

The firm, which manages assets of more than $35bn, got approval from investors to delist at a shareholder meeting in Bahrain on Wednesday. Investcorp shareholders will have the option either to let the company buy back the stock or to remain as investors in a private entity.

“Looking at our future strategy and growth plans, Investcorp is better off for its shareholders as a private company,” co-chief executive officer Hazem Ben-Gacem said in an interview. “That’s where we feel we can generate the best returns, and execute on our strategy without having to worry about quarterly results or certain other requirements of public markets.”

The company will continue to be headquartered in Manama, with the Central Bank of Bahrain as its primary regulator, Ben-Gacem said.

Investcorp is one of the biggest international financial firms in Bahrain, which used to be the Middle East’s financial center until the rise of Dubai as a business and banking hub in the late 1990s and early 2000s. Yet trading on Bahrain’s bourse has languished in recent years. On some days less than a million shares change hands, and Investcorp’s stock was rarely traded at all.

Sluggish trading, a slump in prices and liquidity, and a desire by companies to escape investor scrutiny have been driving delistings in Dubai. Emaar Properties said in March it will effectively delist one of its units for about two-thirds of its original public-offering price.

Late last year, government-controlled Meraas Holding proposed taking DXB Entertainments private at a 33 per cent discount.

Going global
Founded by Nemir Kirdar in 1982, Investcorp’s shareholders include some of the Middle East’s wealthiest royals and business moguls.

Originally established to raise money from the Gulf and invest it in the US and Europe, the firm has pivoted to become more global in the past few years. Investcorp recently opened its first office in Beijing as it pursues a plan of expanding in Asia, and is also currently raising a $1bn North American private equity fund to do bigger buyouts there, people familiar with the matter told Bloomberg in March.

The money manager is already the Gulf’s largest private investor in US real estate and has said it wants to boost its assets under management to $50bn in the coming years. Abu Dhabi sovereign fund Mubadala Investment Co. in 2017 acquired a 20 per cent stake in Investcorp, which has backed companies including Tiffany & Co. and Gucci Ltd.

The delisting, which is still subject to regulatory approvals, is expected to be completed in the next month, Ben-Gacem said.