Investcorp lays out grand plans

Bahrain-listed private equity firm Investcorp is aiming to double its assets under management to $25 billion in the next five to seven years.

In an exclusive interview with Private Equity International, Investcorp executive chairman Mohammed Al Ardhi said he is seeking growth across all business segments.

The firm’s current $11 billion of AUM is split between $5 billion of hedge funds, $4 billion of private equity with the remainder in real estate.

“Obviously some are more scalable faster than others,” Al Ardhi said of the different assets it invests in. In November, the firm expanded its hedge fund segment through the acquisition of hedge fund of funds business SSARIS Advisors and is looking at more acquisitions.

In private equity, the firm, which invests on a deal-by-deal basis, plans to almost double the size of the equity cheques it writes from $150 million to $300 million. In real estate, it will move beyond the US to start investing in Europe, as well as experiment in club deals.

“After 30 years we thought, ‘We have the whole infrastructure built, but we need to leverage more of the things that we currently do not,’” Al Ardhi said.

In private equity, where the firm typically acquires an asset and then asks its largely retail investor base if they wish to take a slice of the deal, is also looking at undertaking more traditional co-investing and partner with institutional investors on a deal.

“It allows you to do bigger deals,” Al Ardhi said. “Instead of perhaps a retail guy who can [invest] anything from $250,000 to $10 million, this guy can put in $150 million.”

The firm is also looking to expand its investor base. “We also cannot ignore that there are institutions that maybe don’t have the time to look at deal-by-deal as the retail guys have time and flexibility. But we also find that even those big investors would like some kind of transparency rather than just the old blind fund pool, so we’re starting to think of how we can serve those people.”

Look out for PEI’s May issue to read more of our exclusive interview with Mohammed Al Ardhi and Investcorp’s European head of corporate investments Hazem Ben-Gacem.