Investcorp, the asset management firm specializing in alternative investments, today announced a record net profit for the fiscal year ended June 30, 2006 of $130.8 million, an increase of 18.6 percent over the previous year’s reported net income of $110.3 million. Income before operating expenses was at $370.2 million.
Investcorp’s Board of Directors has recommended a dividend payment of $40 million on ordinary shares, maintaining the level paid for the past three years. Additionally, a dividend at the prescribed rate of 10 percent per annum will be paid on Investcorp’s preference shares. Total assets at June 30, 2006 were $4.17 billion, and total shareholders’ funds were $1.06 billion.
Nemir A. Kirdar, Investcorp’s President and Chief Executive Officer, said: “This record year was achieved through strong performance underpinned by the strength of Investcorp’s brand name with all its four lines of business generating outstanding results and returning to clients $1.4 billion from investment realizations.”
Highlights of the year were:
• In private equity, Investcorp completed five realizations, Minimax, Saks, SI Corporation, Stahl and US Unwired, and one partial realization, Stratus, returning $1.2 billion in proceeds to investors. There were five new acquisitions, Autodistribution and Orefi in France, Time Partner in Germany, and CCC and FleetPride in the United States, that had an aggregate transaction value of $2.4 billion and deployed $796 million in equity.
• Real estate had another good year. We realized 15 properties, returning $153.7 million to investors. We acquired 46 new properties, deploying a record $306 million in equity. These included both ‘core plus’ and ‘opportunistic’ investments across all property types and geographic sectors in the US. Four new portfolios were placed with investors, whose demand for our real estate product remains very high.• Investcorp’s hedge funds business produced excellent results, providing a highly attractive average spread over LIBOR of 7.0 percent on Investcorp’s own proprietary co-investment. $314 million was added by clients, taking the total client assets under management to more than $2.6 billion.
• Venture capital completed four very profitable realizations, including the first one from Technology Fund II and made seven new investments in Fund II. The strong exits included PortalPlayer and Trema.
• Investcorp itself continued to be financially robust with a fortress balance sheet, supported by high liquidity, strong capital and diversified funding with long maturities and conservative leverage.
• Investcorp’s distribution team continued its strong record by placing $1.7 billion of Investcorp products this year with $1.4 billion placed with investors in the Gulf.
Investcorp is a global asset management firm specializing in alternative investments with offices in the Kingdom of Bahrain, New York and London. The firm offers four products: private equity, hedge funds, real estate investment and venture capital. It was established in 1982 and currently manages total investments in alternative assets of $9.9 billion.