Bahrain-based Investcorp, an alternative investment company, has announced the first exit from its Gulf Opportunity Fund I.
Investcorp has agreed to sell information technology and telecoms distributor Redington International Holdings. Investcorp had initially invested $65m for a 26 per cent stake in the company.
The sale will generate $114.8m, which includes $2.1m in dividends. This represents a gross capital gain of $49.8m and a net internal rate of return of 17 per cent.
Parent company Redington India acquired the shares to regain control and ownership of the subsidiary.
Investcorp’s net profit for 2011 fell 90 per cent to $5.3m as a result of negative returns on hedge funds due to eurozone debt crisis.
“This period has seen our headline results inevitably impacted by the eurozone debt crisis, which dramatically worsened market conditions in the short-term for all asset classes, including the hedge fund industry,” says Nemir Kirdar, executive chairman and chief executive officer of Investcorp.
The company’s business in the Gulf fared better. In the second half of the 2011, Investcorp’s Gulf businesses raised $735m, up 67 per cent from the first half of the year.
Assets under management stood at $8.7bn with total liquidity at $1bn.