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Investcorp (LSE: IVC) is a provider and manager of alternative investment products, serving high-net-worth private and institutional clients. Principally, Investcorp is an investment intermediary, acting as a vehicle to channel the wealth of its clients in the Persian Gulf into investments in the United States and Europe. It also owns the business-to-business publisher SourceMedia. Investcorp has five lines of business: private equity, hedge funds, real estate, technology investment and Gulf growth capital. The ability to provide multiple product offerings to its clients is one of its key competitive strengths. Founded in 1982, has arranged investments with a combined value of approximately $41 billion. The company has grown to become one of the largest and most diverse alternative investment managers in terms of both product offerings and geography, and currently has over $13 billion in invested assets under management. The firm co-invests significantly with its clients across its lines of business to ensure a strong alignment of interests. Investcorp’s three offices act in tandem, with the New York and London offices identifying investment opportunities, and the Bahrain office placing investment among a pool of Arab clients. Investcorp's placement capability is focused in the six nations of the Cooperation Council for the Arab States of the Gulf.
[edit] Investment areasInvestcorp was conceived as, and remains, a firm that is global in its outlook, attitude and culture. It operates out of three centers: New York, London, and Bahrain. The company is active in five primary areas:
[edit] Private equityThe private equity teams, based in London, New York and Bahrain, selects and arranges private equity investments. It looks for investment opportunities in mid-size companies with capable managers, prominent positions in their industries, a strong track record and potential for growth. These are the types of businesses where Investcorp's approach, which involves supporting management teams with a range of in house strategic and operational, as well as financial, resources, can most effectively increase value during the target three to seven year holding period. The past and present portfolio includes more than 80 corporate investments, totaling $29 billion in acquisition value, in a broad range of industries and markets in North America and Western Europe. Investcorp has become best known through a number of high-profile investments, including its purchase and resale of luxury brands including Gucci, Saks Fifth Avenue and Tiffany & Co.. [edit] Hedge fundsInvestcorp's hedge funds business was established in 1996 and today has approximately $4 billion of capital under management, of which $900 million is reserved for proprietary investments. The fund of funds program offers clients a selection of funds of hedge funds with varying risk/return profiles. These are invested across different strategies through approximately 45 hedge fund managers. [edit] Real estateThe real estate team, based in New York, sources and performs due diligence, and arranges financing and the acquisition of US properties. The properties are typically aggregated into a series of multi-property portfolios for equity placement to Investcorp's clients. Since 1995, Investcorp has acquired around 200 properties, totaling approximately $10 billion in value. Investcorp currently has $6 billion of property under management. The team also advises on the real estate aspects of Investcorp's private equity investments. [edit] Technology investmentInvestcorp's venture capital team, known as Investcorp Technology Partners focuses on growth-oriented control investments in the technology sector. It invests in small to medium-sized technology-driven businesses in the US and Europe and utilize a variety of transaction types. Currently, the team manages three funds with total commitments of over $1 billion. Over the last six years, the team has undertaken more than 30 investments in the US and Europe. [edit] Gulf Growth CapitalOn 20 November, 2006 Investcorp, announced that it was launching a new line of business, Gulf Growth Capital, that will provide investment opportunities primarily in the Gulf Cooperation Council region. Through its first fund, Investcorp Gulf Opportunity Fund I, Investcorp invests in greenfield “build” projects, as well as making leveraged buyout and growth capital investments. The timing of this initiative exploits the current economic outlook for the region as well as a maturing investment climate. [edit] History
The concept behind the creation of Investcorp was devised and implemented at the Arab Monetary Fund during the period 1980-1982, when Dr. Jawad Hashim was its President.[citation needed] In July 1980 Hashim employed Nemir Kirdar as one of his advisors on one-year secondment from Chase Manhattan Bank. Initially, Kirdar’s task was to prepare certain feasibility studies in connection with the development of Arab financial markets, promotion of Arab monetary and economic integration and the quest for investment opportunities for the surplus of the oil-exporting Arab countries. Kirdar delivered a report entitled: ARAB MONETARY FUND PROJECT: ESTABLISHMENT OF A PRIVATE INVESTMENT COMPANY.[1] Under the auspices of AMF and on its expense, a new financial institution, Investcorp, was created in 1981/1982. Kirdar would later assert that Investcorp was his “brainchild” without reference to the AMF's role in its creation.[2]. To pay for his share subscription in Investcorp, Kirdar requested a second loan for US$600,000 from Dr. Hashim in March 1981.[3]  The establishment of Investcorp commenced in May 1981 with the first founding shareholders subscribing and affecting payments on May 13, 1981. By March 31, 1982, all committed founding shareholders had subscribed and paid their funds. In May 1982, the public subscription was conducted and in June 1982, a general shareholders meeting was convened and the shareholders elected the first Board of Directors. In July 1982, the final incorporation process was completed and Investcorp started to develop its policies and procedures manuals, background material and logistical requirements and had begun to hire its staff. In January 1983, Investcorp commenced business operations. On an official visit to Abu Dhabi in early 1977 (in his capacity as Presidential Advisor) to deliver a letter from Saddam Hussein to the then President of United Arab Emirates, Dr. Hashim met Nemir Kirdar at a dinner party. When Hashim assumed his post as President of AMF, Nemir Kirdar, as the representative of Chase Manhattan Bank discussed mainly the banking relationship between AMF and Chase Manhattan. Hashim also used to outline the objectives of the AMF in relation to the promotion of Arab capital markets and best ways of utilizing the financial surpluses of the Persian Gulf region through a viable investment entity. In the Summer of 1979, Dr. Hashim paid an official visit to Bahrain. During this visit, he met with Nemir Kirdar at Chase Manhattan Bank. On this occasion Dr. Hashim again discussed his “dream investment vehicle” with Mr. Kirdar, asking if he would join the AMF staff to undertake a detailed feasibility study on the matter. Dr. Hashim approached the chairman of Chase Manhattan, David Rockefeller, to second Kirdar for a period of one year. Again, Kirdar politely declined. Instead, he suggested that when his assignment in the Persian Gulf came to an end, and before moving to another post with Chase, he might consider taking a long leave of absence to join the AMF on secondment basis from Chase Manhattan.[4]   [edit] Initial investorsTo give credibility to the concept which the AMF developed, Hashim, in his capacity as President of the AMF, sought to solicit first the participation of institutional investors, mainly the national banks of each Persian Gulf state. Beginning in November 1980, he first wrote to the Chairman of the Board of National Bank of Abu Dhabi (NBAD) Ahmed Khalifa Al-Suwaidi.[5] Similar letters were sent to the National Bank of Bahrain, Bank of Oman, The Dubai Bank, National Bank of Sharjah, Qatar National Bank and Commercial Bank of Qatar. Some of these letters were signed by Dr. Hashim while others were signed by Nemir Kirdar in his capacity as Advisor to the President of AMF. In all those letters, it was clearly indicated that the project was undertaken by the Arab Monetary Fund. For example, by a letter dated January 17, 1981, to the Chairman of National Bank of Bahrain, it was unambiguously stated that the AMF invites the said bank to contribute in the proposed investment company’s capital. [6] In soliciting investors, whether institutional or individuals, the AMF indicated emphatically and clearly that Investcorp was the AMF’s creation and upon which it had spent substantial sums of money in the form of salaries, accommodation, travel and legal expenses. Investcorp was not the creation of anybody other than the AMF. It was conceived pursuant to the interpretation of AMF’s Treaty by the then President of the Fund, Dr. Jawad Hashim. By May 1981 (Nemir Kirdar was still an employee of AMF), the AMF “project” attracted many individuals and institutions to participate in the capital of the proposed company: Investcorp. Approximately US$55 million were committed by the participants. Institutional participants whom Dr. Hashim, as President of AMF, solicited included:
The first individuals to participate in Investcorp’s capital were Dr. Hashim and few of his friends under an entity called Gulf International Investment Network (GINET) with 12% shareholdings. Others included wealthy businessmen from various Persian Gulf states. On May 24, 1981, an application was made to Bahrain Ministry of Commerce and Agriculture for the incorporation of Investcorp as a Bahrain Exempt Company. While the application was pending approval, the founder shareholders held their first meeting on August 12, 1981, at the Hilton Hotel, Manama, Bahrain.[7][8] Pursuant to the understanding between Kirdar and Dr. Hashim at an earlier meeting in the Summer of 1981, Kirdar left the AMF, resigned from Chase Manhattan Bank and assumed the post of Project Coordinator in Manama, Bahrain. As there were no budget to cover the project’s expenses from this point, Dr. Hashim advanced US$50,000 from his personal account as a short-term loan. The loan was paid back at a later stage from fees generated by Investcorp. On April 12, 1982 (nearly eleven months after the application), Bahrain Ministry of Commerce and Agriculture approved the incorporation of Investcorp. Thus Investcorp (the AMF’s brainchild) came into legal existence with its official name being Arab Investment banking Corporation. On Sunday, June 20, 1982, Investcorp held its first meeting of the Board of Directors at the Holiday Inn, Manama, Bahrain. Nemir Kirdar was elected as President and CEO of Investcorp for a three year term. Kirdar however opposed a similar three year term for the Chairman position to be held by Dr. Hashim. When Dr. Hashim’s term of office as President of the Arab Monetary Fund ended in May 1982, and because of political differences with Saddam Hussein, he did not go back to Iraq but went to live in London, England. In early June 1982, he sent his written resignation as Presidential Advisor to President Saddam Hussein but his resignation was ignored. Between June 1982 and July 1983, Dr. Hashim received numerous threats from Iraqi intelligence. Due to the issues with the Iraqi government, Dr. Hashim was unable to perform his functions with Investcorp and attend its Board of Directors and Executive Committee meetings. On December 7, 1983, Dr. Hashim resigned from Investcorp’s Board of Directors and its Executive Committee. His resignation was accepted on February 16, 1984.[9] [edit] References
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