Abu Dhabi sovereign wealth fund Mubadala Development Co. will acquire a 20% stake in alternative investment firm Investcorp Bank BSC, which has backed companies including Tiffany & Co. and Gucci Ltd. under founder Nemir Kirdar.
Mubadala will secure a 9.99% stake immediately and a further 10.01% after gaining regulatory approval, Investcorp said in a statement on Thursday. The Bahrain-based bank will consider co-investing with Mubadala on deals and is also looking for other institutional investors, Investcorp Executive Chairman Mohammed Al Ardhi said on a call with journalists.
“Our vision is to grow our assets under management by more than double over the medium term and that vision has a few building blocks,” Mr. Al Ardhi said. The strategy includes seeking new institutional investors, “doing bigger deals, co-investing and things that allow us to leverage our infrastructure and reach between the Gulf and the West,” he said.
The Bahrain-based money manager, the Gulf's largest private investor in U.S. real estate, is charting a new growth plan under Mr. Al Ardhi, after a generational shift in the company's management last year. Mohammed Al-Shroogi and Rishi Kapoor were appointed co-CEOs in April 2015 after the retirement of Abdul-Rahman Salim Al-Ateeqi, who had been chairman since Investcorp was founded in 1982. Mr. Kirdar became chairman that same year.
Investcorp, which has offices in London, New York and the Middle East, manages about $11 billion in capital, chiefly on behalf of wealthy Middle Easterners. It aims to increase that to $25 billion over the next five to seven years, Mr. Al Ardhi said.
Under the new management team, Investcorp also aims to expand investment products, rebuild its hedge fund business and do larger transactions in the U.S. through its private equity arm.
Investcorp did not disclose the value of the deal with Mubadala, which is buying treasury shares. Another 9.9% stake sold to an undisclosed Gulf-based institutional investor in September last year was valued around $138 million, Investcorp said at the time. The Abu Dhabi fund will also get a seat on Investcorp's board as a result of the deal, Al Ardhi said on Thursday.
Abu Dhabi announced a plan last month to merge Mubadala with International Petroleum Investment Co., known as IPIC. The two funds had a combined $129 billion in assets as of Dec. 31, 2014. The combination follows the decision to combine Abu Dhabi's two largest banks, National Bank of Abu Dhabi PJSC and First Gulf Bank PJSC, to create a lender with assets of $175 billion.