Investcorp first half fiscal year net income increases 16 per cent

Bahrain-based alternative asset manager Investcorp reported a 16 per cent net income increase in the first half of its fiscal year that ends June 2018 as the firm’s global diversification acted as a buffer against a slowdown in regional deals.

Net income increased to $55.3 million in the six months ended December 31 from $47.7m in the year earlier period. Fully diluted earnings per share increased 8 per cent to $0.70 per share compared to $0.65 per share in the same period a year ago.

“We are pleased to report strong growth in profitability during the period, driven by the positive underlying performance across all asset classes and supportive market conditions in the US and Europe,” said Mohammed Alardhi, the firm’s executive chairman.

“Whilst potential pockets of risk remain, mainly stemming from geopolitical factors, our robust balance sheet, experience and expertise enables us to take advantage of interesting investment opportunities globally.”

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The investment house known for buying and turning around businesses like Gucci, Saks Fifth Avenue and jewellery firm Tiffany & Co, said its fee income for the period rose 7 per cent to $137.5m from $128m last year as fees from assets under management surged 45 per cent. The gains in asset management fees were offset by lower deal fees due to uncertain market conditions in the Arabian Gulf the firm said. The asset manager believes however there will be a pick-up in fee income in the coming period as clients resume normal levels of investments.

Among the asset manager’s diversification strategies, the firm has invested in US real estate. In September, the asset manager said it invested US$350m in six multi-family properties in Florida and Arizona.

Three of the properties are in Florida and three are in Arizona. Of the three properties in Florida, two are in Orlando and one is in Jacksonville. The properties in Orlando, Highpoint Club and Montevista at Windermere, have a combined 708 units. Orlando, best known for being the home of Disneyland, is expected to see growth in the next five years.

Investcorp, in which Abu Dhabi’s Mubadala Investment Company is the largest shareholder with a 20 per cent stake, saw a 34 per cent year-on-year increase in net profit to $120.3 million from $90.1m in the financial year that ended in June 2017.

Aside from its real estate holdings, the company's portfolio includes luxury Italian menswear specialist Corneliani, Danish luxury retailer Georg Jensen and European small and medium enterprise marketplace Ageras.