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Investcorp reports third quarter results for the period ended 31 March 2021

May 6, 2021
finance & economy

Investcorp (symbol: INVCORP) today announced its financial results for the three month and nine-month periods ending 31 March 2021 (Q3 FY21 and Q3 YTD FY21).

Financial results for Q3 FY21 were driven by good levels of activity across the core businesses of private equity, real estate and credit management. Net profit attributable to the shareholders of the parent was US $29 million compared to a loss of US $2 million in Q3 FY20. Diluted earnings per share were US $0.29 in Q3 FY21 compared to a loss of US $0.03 per share in Q3 FY20. Total comprehensive income attributable to the shareholders of the parent was US $28 million in Q3 FY21 compared to a loss of US $8 million in Q3 FY20.

Net profit attributable to the shareholders of the parent for the current nine-month period Q3 YTD FY21 of US $92 million was double that of US $46 million for Q3 YTD FY20, a 100% increase. Diluted earnings per share were US $1.17, up 89% compared to US $0.62 in Q3 YTD FY20. Total comprehensive income attributable to the shareholder of the parent grew by 150% from US $38 million in Q3 YTD FY20 to US $95 million in Q3 YTD FY21.

Total shareholders’ equity (excluding non-controlling interests) as of 31 March 2021 was US $1,240 million, a 43% increase compared to US $867 million as of June 30, 2020. Total assets at the end of Q3 FY21 were US $2,518 million compared to US $2,123 million as of the end of FY20, representing a 19% increase.

Q3 FY21 Financial and Operational Highlights

  • Fee income increased by 54% from US $57 million in Q3 FY20 to US $88 million in Q3 FY21. The increase was driven primarily by a good level of transactional and fundraising activity which resulted in improved deal fees of US $42 million compared to US $16 million in the same period last year. Recurring AUM fees also increased by 12% from US $41 million to US $46 million.
  • The continued recovery in asset values, driven by improved operating results of underlying portfolio companies as well as buoyant financial markets, resulted in asset-based income of US $23 million for Q3 FY21, up 156% compared to US $9 million in Q3 FY20.
  • Activity metrics were solid with investment activity in Q3 FY21 of US$ 0.6 billion (US $0.9 billion in Q3 FY20), placement and fundraising of US $1.0 billion (US $1.4 billion in Q3 FY20) and distributions of US $1.2 billion (US $0.8 billion in Q3 FY20).
  • Placement and fundraising reached US $1.0 billion in Q3 FY21. Deal-by-deal placement was approximately US $300 million across one credit, six private equity and three real estate products. Over US $450 million was raised for fund products including the launch of Technology Fund V and the North American Private Equity Fund. US $ 252 million of preference shares were also raised.
  • Investment activity during the quarter of US $0.6 billion was driven by two new private equity investments in the US and Europe and a new real estate portfolio in the US. Exit activities included the realization of Kee Safety, a private equity investment in Europe, and the successful IPO of Theeb, a portfolio company of the Gulf Opportunity Fund.
  • The size of the balance sheet increased slightly by 3% to US $2.5 billion at 31 March 2021 from US $2.4 billion at 31 December 2020 driven by small increases in the level of working capital and cash.
  • Net debt decreased to US $440 million in Q3 FY21 from a temporarily higher level of US $936 million at 31 December 2020 which resulted from the completion of two private equity transactions during that month. The net debt level is now below the US $672 million level reported as at 30 June 2020.
  • As of 31 March 2021, total equity (excluding non-controlling interests) was approximately US $1.2 billion and total accessible liquidity was approximately US $2.0 billion. The increase in equity from US $957 million as of 31 December 2020 resulted from the continued strong profitability in Q3 FY21 as well as the successful issuance of US $252 million of preference shares during the quarter. The increase in total accessible liquidity from US $1.1 billion as of 31 December 2020 is due to the preference share issuance as well as the good pace of exit-related distributions received during the quarter.
  • Total AUM increased slightly by 1% from US $34.9 billion at 31 December 2020 to US $35.4 billion at 31 March 2021 with exits largely offsetting new fundraising.

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