Bahrain’s Investcorp Sees Jump In Profit As Private Equity Drives Deal Flow

Bahrain-based alternative investment fund Investcorp posted a 25 per cent gain in annual net profit on Monday, boosted by a resurgence in private equity activity in the region.

Net profit rose to $131.2 million in the year ended June 30, Investcorp said, citing higher activity in acquisitions, sales of investments and the raising of new funds.

The activity reflects a return to deal-making by Middle Eastern private equity firms after the global financial crisis, when many were stuck with investments made at high premiums during the preceeding boom and the trading of companies dried up.

Investcorp said it returned around $1.3 billion to investors from sales in eight firms, including stakes in German insulation materials company Armacell and online payments business Skrill Group – which it sold to CVC Capital Partners for 600 million euros in August.

It also made a number of new investments totalling $609 million, including in U.S.-based accessories brand Totes Isotoner Corp and U.K.-based snack food maker Tyrrells, and was linked to high-profile deals for Italian fashion brands Versace – in which it lost out to Blackstone – and Roberto Cavalli, which it walked away from in June.

Funds raised by Investcorp totalled more than $1.9 billion in the last financial year, it said, up 21 per cent on the previous year.

Investcorp said fully diluted earnings per ordinary share jumped 84 percent over the prior-year period to $129, while the return on equity was 16 per cent – up from an average 11.4 per cent per annum over the last five years.

Investcorp said its board had proposed paying a dividend of $15 per ordinary share, with a full dividend of 12 per cent on preference shares.

The payout for ordinary shareholders is in line with the previous financial year, according to Thomson Reuters data.