Bahrain’s Investcorp says market volatility won’t hit business

The Bahrain-based investment fund posted a 13 per cent increase in net income for the 12 months to June 30

Investcorp expects its business to sail through the volatility in global and local markets, its co-chief executive said on Sunday after the alternative investment fund posted a 13 per cent increase in full-year net income.

Gulf investors are still looking to deploy their existing wealth into new investments, especially to diversify outside of the region, Rishi Kapoor told reporters on a conference call.

“We have had similar situations in the past, either led by oil price declines or regional geopolitical tensions, but Investcorp has positioned itself as a conduit for investors to allocate a position of their current wealth to attractive investment opportunities in the U.S. and Europe.

“That resonates better in an environment of greater uncertainty,” said Kapoor, who was elevated to co-CEO along with Mohammed al-Shroogi after long-standing head Nemir Kirdar stepped down on June 30.

The Bahrain-based firm’s net income for the 12 months to June 30 was $116.7m, up from $103.1m a year earlier, according to a bourse statement, with a return on equity of 16 per cent – in line with the previous year.

It was boosted by earnings from its investments, including exits of which the most prominent was Berlin Packaging, but tempered by a 68.7 per cent drop in hedge fund income.

Fully diluted annual earnings per share jumped 70 per cent over the same time period to $129 per ordinary share, which Kapoor attributed to higher income and Investcorp buying back preference shares.

It bought back $166m of preference shares in the 2014-15 financial year, leaving it with around $225m outstanding as of June 30. Kapoor added it would continue buying until this figure was between $150m and $200m.

Investcorp said its board had proposed paying a dividend of $15 per ordinary share, matching the previous year’s payout.

The firm could look to raise debt, either through a new dollar-denominated bond or a refinancing of existing loans, but this would be dependent on market conditions and not likely to happen until the second half of its financial year, Kapoor said.