Investcorp announces 50% increase in profits for 2003

Investcorp, the Bahrain listed investment group, announced yesterday (July 16) a net profit for the fiscal period ending June 30, 2003 of US $75.1 million, a 50% increase over the same period in the previous year.

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By  Massoud Derhally Published  July 16, 2003

Investcorp, the Bahrain listed investment group, announced yesterday (July 16) a net profit for the fiscal period ending June 30, 2003 of US $75.1 million, a 50% increase over the same period in the previous year.

In a statement, the firm said its board of directors recommended a dividend payment of $40 million on ordinary shares. Additionally, a dividend at the prescribed rate of 10% per annum will be paid on Investcorp’s preference share capital.

“Against a background of highly depressed global market conditions and a war in the Gulf, Investcorp has had an excellent performance in fiscal 2003,” said Nemir A. Kirdar, Investcorp’s president and chief executive. “This has been Investcorp’s twentieth operating year — a year of enormous achievements, both in terms of strategic initiatives and business as usual activities. These strong financial results are testament to the resilience of this Firm and of its business model,” Kirdar added.

Kirdar said the firm grown 60 times in terms of its total assets and 20 times in terms of its equity capital since it was founded in 1982, executing transactions worth more than $25 billion and generating a 24% in realized annual return for its clients.

Gross shareholders’ funds were $1.5 billion. Total assets at June 30, 2003 were $3.8 billion.

In 2003, the company’s corporate investment business completed three exits and will have returned to clients more than $360 million, including realized profits with the partial sales of investments in Neptune Technology Group and Werner Holding Company, the former after just 17 months ownership, and a full realization of Jostens Inc.

There were four acquisitions, an investment in Germany, Minimax Holding GmbH, and three US investments: Aero Products International, PlayPower and MW Manufacturers.

In the real estate line of business, 18 properties were realized returning $112 million to investors and the firm acquired some $870 million of U.S. real estate.

The company said its technology investment business, made its first two exits; both of which made profits for its investors.

The marketing team, covering all four lines of business, raised more than $1.3 billion in new funds through placement of the company’s investment products and additional capital. Investcorp currently manages total investments in alternative assets of around $8.4 billion.

A rights issue at the end of 2002 added an additional $254 million of tier 1 capital and this further strengthened its financial position and provided incremental financial flexibility.

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