12/08/2016 10:00 AST
Bahrain-based Investcorp, a global manager of alternative investment products, has posted a net income of $90.1 million for the year ended June 30 compared with $116.7 million in the previous year, marking a decline of 23 per cent.
The company attributed the drop to an increase in operating expenses from its investment in the requisite resources and infrastructure to support its medium term growth strategy. Net income for the second half of the fiscal year (H2 FY16) was $39.2 million versus $71.4 million in H2 FY15.
Investcorp has increased ordinary shareholder dividends to 24 cents per share, from 15 cents per share last year, marking a 60 per cent rise.
Over the period, Investcorp made a series of strategic hires with an 8 percent increase in its global headcount across the Gulf, Europe and the US in all its core businesses to provide the foundations for executing upon its medium-term strategy. Fully diluted earnings were $0.94 per ordinary share, and return on average ordinary shareholders’ equity was a solid 10 per cent.
Mohammed Mahfoodh Alardhi, executive chairman, said: “We are in a particularly exciting phase of development as we see tangible results of putting our ambitious growth strategy in action, with a purposeful investment across the business.”
“We’ve added headcount in all areas of the business and strengthened our balance sheet through two significant strategic partners over the last two years, which will help drive growth of the business organically and through acquisitions across all product areas. The substantial increase in shareholder dividends further underscores the Firm’s confidence in the continued growth and prospects of the business.
“Despite challenging markets this year we have demonstrated the resilience of our business model and delivered a robust performance. The performance of our corporate investments portfolio, the fundraising pipeline in our Alternative Investment Solutions business and our continued strength in US real estate has led to another year of solid performance for Investcorp and our shareholders and clients while staying committed to navigating a prudent course through these volatile conditions,” he added.
Total assets at June 30, 2016, were $2.5 billion, up from $2.2 billion as at June 30, 2015. The firm’s balance sheet is in a solid position with equity over $1.0 billion, a capital adequacy ratio at 30.3 per cent and strong liquidity which substantially covers all outstanding medium term debt maturing over the next three years.
Reuters adds: Investcorp is aiming to make one to two new investments in the next year in each of its regions of the US, Europe and the Gulf, co-chief executive Rishi Kapoor said.
The investments will help contribute to Investcorp's goal of more than doubling its assets under management in the next five to seven years from the current level of $10.8 billion, Kapoor told reporters on a conference call.
"We tend to be opportunistic and look at hundreds of opportunities each year," Kapoor said on Thursday, adding that it only executed roughly a handful of those deals.
Under a new strategy aimed at propelling it into the top tier of global investment companies, the company announced a plan in November last year, to more than double its assets under management in the medium term.
That goal will be aided by Abu Dhabi state investment fund Mubadala, which will become the largest shareholder of Investcorp after agreeing a deal announced last month to acquire a 20 percent stake.
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