Investcorp net income rises 4% to $125 million

Muscat: Investcorp, a global provider and manager of alternative investment products, on Wednesday announced its results for the year ending June 30, 2018 (FY 2018), showing a continued growth momentum and healthy levels of activity in all dimensions across business lines.
The aggregate net income increased four per cent year-on-year to $125 million (FY2017: $120 million), with fully diluted earnings per share increasing by four per cent to $1.30 (FY17: $1.25). The income for the second half of FY18 was $70 million (FY17: $72 million). The board is proposing a full year dividend of $0.24 per ordinary share (FY17: $0.24 per share).
Investcorp continues to make good progress in relation to its growth strategy. Continued geographical diversification of the firm’s investor base and product set has helped support record levels of activity in terms of distributions to clients, investment activity and fundraising across all markets. The strong performance is set against the backdrop of uncertain macroeconomic and geopolitical conditions, particularly in the Gulf.
Marking a strong performance across the business, investment activity in the period rose 36 per cent to $2.8 billion (FY17: $2.1 billion), while total placement and fundraising activities rose by 77 per cent to $7.3 billion (FY17: $4.1 billion) reflecting, in part, a full year’s contribution from Investcorp Credit Management (ICM) and the firm’s broadening and active client base. Distributions more than doubled to $7.0 billion (FY17: $3.4 billion).
Continued growth in assets under management (AUM), which increased by 6 per cent to $22.6 billion during the period, has also, as a consequence of the ICM business, resulted in a higher recurring income derived from AUM fees, with AUM fees growing by 27 per cent to $173 million (FY17: $136 million). Asset-based income also grew by 30 per cent to $133 million (FY17: $102 million), primarily driven by successful corporate investment realisations. This drove an increase in the gross operating income of eight per cent to $454 million (FY17: $422 million).
Strong performance
Underlying performance in the corporate investment business remained solid, with healthy levels of investment activity resulting in three new deals totalling $406 million, two follow on fundings, $75 million invested through and alongside Investcorp’s Technology Funds III and IV and a further $48 million invested in two special opportunities. Some $580 million was raised from investors during the full year period, with $789 million returned in distributions.
In the United States, Investcorp acquired KSI, a leading distributor of replacement auto body parts and ICR, a leading strategic communications and advisory firm. In Europe, Investcorp acquired Kee Safety, a global supplier of safety solutions and products, and established a platform to enter the highly fragmented German dental sector, with its first acquisition being Privatzahnarztklinik Schloss Schellenstein GmbH, one of the leading centres for implantology and dental surgery in Germany. Investcorp also exited the CEME Group, a global manufacturer of fluid control solutions serving critical functions; it partially exited SPG Prints, a leading global provider of integrated solutions for rotary screen and digital printing for textiles and industrial applications; and it exited Nobel Learning Communities, one of the leading providers of private education in the United States (from pre-school up to high school) in June 2018.
In the Middle East and North Africa (Mena), Investcorp made its third healthcare investment to construct a new landmark hospital in Abu Dhabi in partnership with VAMED, a leading global provider of rehabilitation and other services for hospitals.
Mohammed Alardhi, Executive Chairman, said: “As we continue our growth momentum across the business, we are pleased that the firm has continued to report strong performance across a range of our key indicators, delivering high quality earnings."
"Following the successful integration of Investcorp Credit Management, I am pleased to see the delivery of the anticipated strategic benefits of the acquisition in terms of diversification of both products and clients. Our real estate division produced strong results this year, while our corporate investment and alternative investment solutions teams continued to deliver," he added.