Investcorp 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 GulfThe Persian Gulf, in the Southwest Asian region, is an extension of the Indian Ocean located between Iran and the Arabian Peninsula. Historically and commonly known as the Persian Gulf, this body of water is sometimes controversially referred to as the Arabian Gulf by most Arab states or simply The...
into investments in the United States and Europe.
Investcorp has five lines of business:
private equityIn finance, private equity is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange. Investments in private equity most often involve either an investment of capital into an operating company or the acquisition of an operating company...
, hedge funds,
real estateReal estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings, specifically property that is fixed in location.
"Real estate" The American Heritage Dictionary of the English Language, Fourth Edition. Houghton Mifflin...
, 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-investsAn equity co-investment is a minority investment, made directly into an operating company, alongside a financial sponsor or other private equity investor, in a leveraged buyout, recapitalization or growth capital transaction. In certain circumstances, venture capital firms may also seek...
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 YorkNew York is the most populous city in the United States, and the center of the New York metropolitan area, which is among the most populous urban areas in the world. A leading global city, New York exerts a powerful influence over worldwide commerce, finance, culture, fashion and entertainment...
and
London[]London is the capital of England and the United Kingdom. It has been a major settlement for two millennia, and the history of London goes back to its founding by the Romans, when it was named Londinium. London's core, the ancient City of London, the 'square mile', retains its medieval boundaries...
offices identifying investment opportunities, and the
BahrainThe Kingdom of Bahrain is a small island country in the Persian Gulf ruled by the Al Khalifa royal family. Saudi Arabia lies to the west and is connected to Bahrain via the King Fahd Causeway, which was officially opened on the 25th of November 1986. Qatar is to the southeast across the Gulf of...
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 GulfThe Cooperation Council for the Arab States of the Gulf , also known as the Gulf Cooperation Council is a trade bloc involving the six Arab states of the Persian Gulf with many economic and social objectives.-Members:
-History:Created on May 25, 1981, the ...
.
Investment areas
Investcorp was conceived as, and remains, a firm that is global in its outlook, attitude and culture. It operates out of three centers:
New YorkNew York is a state in the Mid-Atlantic and Northeastern regions of the United States and is the nation's third most populous. The state is bordered by New Jersey and Pennsylvania to the south, and Connecticut, Massachusetts and Vermont to the east...
,
London[]London is the capital of England and the United Kingdom. It has been a major settlement for two millennia, and the history of London goes back to its founding by the Romans, when it was named Londinium. London's core, the ancient City of London, the 'square mile', retains its medieval boundaries...
, and
BahrainThe Kingdom of Bahrain is a small island country in the Persian Gulf ruled by the Al Khalifa royal family. Saudi Arabia lies to the west and is connected to Bahrain via the King Fahd Causeway, which was officially opened on the 25th of November 1986. Qatar is to the southeast across the Gulf of...
. The company is active in five primary areas:
- Private equity, which target leveraged buyout
A leveraged buyout occurs when a financial sponsor acquires a controlling interest in a company's equity and where a significant percentage of the purchase price is financed through leverage...
investments in North America and Western Europe;
- Technology Investments, which target venture capital
Venture capital is a type of private equity capital typically provided for early-stage, high-potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company...
investments in in North America and Western Europe;
- Real Estate Investments in North America, with properties ranging from hotels to shopping malls, as well as residential and office buildings;
- Hedge Funds;
- Gulf Growth Capital.
Private equity
The
private equityIn finance, private equity is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange. Investments in private equity most often involve either an investment of capital into an operating company or the acquisition of an operating company...
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
GucciThe House of Gucci mane, better known as Gucci , is a Florentine fashion and leather goods label, part of the Gucci Group, which is owned by French company Pinault-Printemps-Redoute...
,
Saks Fifth AvenueSaks Fifth Avenue is a luxury American specialty store owned and operated by Saks Fifth Avenue Enterprises , a subsidiary of Saks Incorporated. It competes in the high-end specialty store market with Barneys New York, Bergdorf Goodman, Lord & Taylor and Neiman Marcus...
and
Tiffany & Co.Tiffany & Co. is a U.S. jewelry and silverware company founded by Charles Lewis Tiffany and Teddy Young in New York City in 1837 as a "stationery and fancy goods emporium."...
.
Hedge funds
Investcorp'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 fundsA "fund of funds" is an investment fund that uses an investment strategy of holding a portfolio of other investment funds rather than investing directly in shares, bonds or other securities...
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.
Real estate
The
real estateReal estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings, specifically property that is fixed in location.
"Real estate" The American Heritage Dictionary of the English Language, Fourth Edition. Houghton Mifflin...
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.
Technology investment
Investcorp's
venture capitalVenture capital is a type of private equity capital typically provided for early-stage, high-potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company...
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.
Gulf Growth Capital
On 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 CouncilThe Cooperation Council for the Arab States of the Gulf , also known as the Gulf Cooperation Council is a trade bloc involving the six Arab states of the Persian Gulf with many economic and social objectives.-Members:
-History:Created on May 25, 1981, the ...
region. Through its first fund, Investcorp Gulf Opportunity Fund I, Investcorp invests in greenfield “build” projects, as well as making
leveraged buyoutA leveraged buyout occurs when a financial sponsor acquires a controlling interest in a company's equity and where a significant percentage of the purchase price is financed through leverage...
and
growth capitalGrowth capital is a type of private equity investment, most often a minority investment, in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets or finance a significant acquisition without a change of control of the business.Companies...
investments.
The timing of this initiative exploits the current economic outlook for the region as well as a maturing investment climate.
History
The concept behind the creation of Investcorp was devised and implemented at the
Arab Monetary FundThe Arab Monetary Fund is a regional Arab organization, founded 1976, and operational from 1977, it is a working sub-organization to the Arab League.-Objectives:...
during the period 1980-1982, when Dr. Jawad Hashim was its President. In July 1980 Hashim employed Nemir Kirdar as one of his advisors on one-year secondment from
Chase Manhattan BankChase is the consumer and commercial banking division of JPMorgan Chase. The bank was known as Chase Manhattan Bank until it merged with JPMorgan in 2000. Chase Manhattan Bank was formed by the merger of the Chase National Bank and the Bank of the Manhattan Company in 1955...
. 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. 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.. To pay for his share subscription in Investcorp, Kirdar requested a second loan for US$600,000 from Dr. Hashim in March 1981.
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 HusseinSaddam Hussein Abd al-Majid al-Tikriti was the President of Iraq from 16 July 1979 until 9 April 2003...
to the then President of
United Arab EmiratesThe United Arab Emirates is a federation of seven emirates situated in the southeast of the Arabian Peninsula in Southwest Asia on the Persian Gulf, bordering Oman and Saudi Arabia. The UAE consists of seven states, termed emirates, which are Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Quwain, Ras...
, 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 GulfThe Persian Gulf, in the Southwest Asian region, is an extension of the Indian Ocean located between Iran and the Arabian Peninsula. Historically and commonly known as the Persian Gulf, this body of water is sometimes controversially referred to as the Arabian Gulf by most Arab states or simply The...
region through a viable investment entity.
In the Summer of 1979, Dr. Hashim paid an official visit to
BahrainThe Kingdom of Bahrain is a small island country in the Persian Gulf ruled by the Al Khalifa royal family. Saudi Arabia lies to the west and is connected to Bahrain via the King Fahd Causeway, which was officially opened on the 25th of November 1986. Qatar is to the southeast across the Gulf of...
. 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 RockefellerDavid Rockefeller Sr. is an American banker, statesman, globalist, and the current patriarch of the Rockefeller family. He is the youngest and only surviving child of John D. Rockefeller Jr. and the only surviving grandchild of billionaire oil tycoon John D. Rockefeller, founder of Standard Oil. ...
, 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.
Initial investors
To 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. 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.
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:
- National Bank of Bahrain
- Bank of Bahrain and Kuwait
- Commercial Bank of Kuwait
- Qatar National Bank
- Saudi-Cairo Bank
- Gulf Union Insurance Co.
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.
Pursuant to the understanding between Kirdar and Dr. Hashim at an earlier meeting in the Summer of 1981, Kirdar left the
AMFThe Arab Monetary Fund is a regional Arab organization, founded 1976, and operational from 1977, it is a working sub-organization to the Arab League.-Objectives:...
, resigned from
Chase Manhattan BankChase is the consumer and commercial banking division of JPMorgan Chase. The bank was known as Chase Manhattan Bank until it merged with JPMorgan in 2000. Chase Manhattan Bank was formed by the merger of the Chase National Bank and the Bank of the Manhattan Company in 1955...
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 FundThe Arab Monetary Fund is a regional Arab organization, founded 1976, and operational from 1977, it is a working sub-organization to the Arab League.-Objectives:...
ended in May 1982, and because of political differences with
Saddam HusseinSaddam Hussein Abd al-Majid al-Tikriti was the President of Iraq from 16 July 1979 until 9 April 2003...
, he did not go back to
IraqIraq , officially the Republic of Iraq , also known as Mesopotamia, is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert.Iraq shares borders with Jordan to the west, Syria...
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.
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