Manama: Abu Dhabi state investment fund Mubadala will become the largest shareholder of Investcorp after agreeing a deal to acquire 20 per cent of the Bahrain-based alternative investment firm, it was announced yesterday.
The purchase comes as Investcorp, with around $11 billion of assets under management, is implementing a new strategy aimed at catapulting it into the top tier of global investment firms by doubling its assets by 2022.
The firm has been busy in recent months, buying into Italian menswear company Corneliani and cyber security firm Coresec Systems, as well as numerous real estate assets in the US.
Now, it has brought in Mubadala – itself going through a transformation as it merges with fellow Abu Dhabi state fund International Petroleum Investment Company – to help strengthen its investor base with institutional support, having traditionally been owned by wealthy Gulf families.
“Once we were clear in our mind on the vision that we want to take this firm to, and we decided what kind of partners we want to have, it became clear that Mubadala was one of the most important investors that we could work with,” executive chairman Mohammed Al Ardhi said.
Mubadala will buy 9.99pc of Investcorp immediately, and a further 10.01pc following regulatory approvals, which Mr Al Ardhi expected would take around two months. He added Mubadala bought mostly treasury shares held by Investcorp and no existing shareholders sold stock.
The statement did not disclose the transaction’s value, but co-chief executive Rishi Kapoor said the valuation was “consistent” with when an undisclosed Gulf institution paid $138 million for a 9.9pc stake in September.
Talks were also happening with other potential institutional investors and further stake sales could take place as soon as next year, Mr Al Ardhi said.
He also placed doubt on its future on the Bahrain stock exchange, when asked if the company could go private, saying as Investcorp grows, “the question of listing” will be approached at the right time.
Mubadala will get a seat on Investcorp’s board, while the pair could pursue joint investment opportunities going forward, Mr Al Ardhi said.
When asked about future deals, Mr Kapoor said Investcorp was working on a few opportunities in the US and Europe, including a business services company, one in retail distribution, a consumer goods firm and a company that dealt with staple goods.
An investment in Saudi was also being studied, Mr Kapoor added. Sources said in June that Investcorp was one of three bidders for a minority stake in Al Borg Medical Laboratories.
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