Investcorp Capital Plc and the Middle East’s biggest alternative asset manager, its parent, are looking to raise as much as 1.49 billion dirhams ($403 million) in an Abu Dhabi initial public offering.
The price range for the investment vehicle was set at 1.90 dirhams to 2.30 dirhams per share, according to a statement on Thursday. Investcorp Holdings is selling 321.5 million shares in Investcorp Capital, which is offering another 321.5 million new shares in the IPO. Together, that represents about a 29.3% stake.
The IPO had enough orders to fill the total size within an hour of opening books, and it’s now covered across the price range, according to terms for the deal obtained by Bloomberg News. Over 60% of the offering is being bought by a special purpose vehicle as a cornerstone investor.
IVC Strategic Investment Co. has agreed to buy about $250 million of the IPO, but the statement did not specify which investors are behind the vehicle, describing it as an aggregator of orders from certain wealth management investors and a prominent Abu Dhabi-based institution.
The vehicle includes about 160 investors from across the Gulf, some of whom are existing clients of Investcorp, according to people familiar with the matter. A representative for Investcorp declined to comment on the number of investors.
Investcorp Capital’s IPO comes at a time of heightened geopolitical tension in the Middle East with the ongoing conflict between Israel and militant group Hamas keeping investors on edge. Abu Dhabi’s benchmark index has shed 3% since the Oct. 7 attack on Israel by Hamas, although IPOs in the region have so far traded well.
The offering will be broken into two tranches, both for professional investors, with one closing Nov. 8 and the other Nov. 9. The company will price the shares on Nov. 10. Listing in Abu Dhabi is expected on Nov. 17.
Investcorp Capital invests in private equity, real estate, credit and general partner positions in North America, Europe, the Middle East and Asia. The company plans to use proceeds from the IPO to further develop its capital financing services business line and increase investments in capital deployment, and fund strategic growth opportunities.
It plans to pay an annual cash dividend equivalent to 8% of net asset exposure, which was $1.24 billion as of July 1, 2023. The price range implies a dividend yield of 8.4% to 9.9% for the financial year ending June 30, 2024.
Investcorp, which has backed luxury firms such as Tiffany & Co. and Gucci Ltd., delisted from the Bahrain stock exchange in 2021 after almost four decades due to low trading volumes and a desire to expand faster. Abu Dhabi’s Mubadala Investment Co. acquired a 20% stake in the company in 2017.
Originally set up to raise money from the Gulf to invest in the US and Europe, Investcorp has become more global in recent years. It has opened offices in Beijing, Singapore, Japan and India as it seeks to expand in Asia.
The firm has $50 billion in assets under management and counts some of the Middle East’s wealthiest royals and business moguls as its shareholders. Its businesses include private equity, real estate, infrastructure, credit management, strategic capital and absolute return investments.
Investcorp is working with Emirates NBD PJSC, First Abu Dhabi Bank PJSC and HSBC Holdings Plc as joint global coordinators and joint bookrunners. Moelis & Co. has been appointed independent financial advisor.
Goldman Sachs Group Inc. and Citigroup Inc. earlier dropped off the IPO because they couldn’t get internal approval for the IPO’s price stabilization mechanism, which has never been attempted before in a United Arab Emirates listing, Bloomberg News reported last week.
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