Bahrain's Mumtalakat and Investcorp consider partnership for joint UK investments

Mumtalakat Holding Company, Bahrain’s sovereign wealth fund, and alternative investment company Investcorp are considering plans to set up a joint platform to invest in and manage student housing assets in the UK.

The announcement is part of a series of initiatives led by Bahraini Crown Prince and Prime Minister Salman bin Hamad, who is currently visiting the UK to deepen trade and investment ties between the two countries, Investcorp said in a statement on Tuesday.

Bahrain and the UK committed to a £1 billion ($1.3 billion) round of investments in Britain on Monday at a meeting between Prince Salman and British Prime Minister Rishi Sunak.

The agreement signed at Downing Street aims to take the historic ties between the two countries to new levels.

Under the planned deal, Mumtalakat, which has stakes in companies including British car maker McLaren, aims to become a joint owner of Investcorp’s UK student housing-focused operating platform.

The dedicated platform currently manages the refurbishment and leasing of Investcorp’s “Houses in Multiple Occupation (HMO) assets” in the UK. It also helps in acquisitions and underwriting and currently manages a portfolio of about 1,200 beds across Nottingham, Bristol, Exeter and Leeds.

With growing demand for housing from both domestic and international students in the UK, the platform plans to acquire an additional 700 to 1,000 beds annually over the next several years, growing into one of the largest operators of HMO student housing in the UK, Investcorp said.

“We continue to explore investment opportunities that will add value and grow our portfolio through strategic partnerships,” Abdulla Al Khalifa, chief executive of Mumtalakat, said.

“By joining hands with Investcorp, we believe that we would be able to further establish a best-in-class investment platform that focuses on fulfilling the increasing demand in the UK for student housing.”

The potential partnership between Mumtalakat and Investcorp, which counts Abu Dhabi’s sovereign fund Mubadala Investment Company as its biggest shareholder, will help in building a portfolio of assets that benefits students and parents, as well as the entire university ecosystem, Investcorp said.

“We believe that there is a shortage of well-managed, well-maintained, and affordable student HMO assets in major UK university cities,” Rishi Kapoor, co-chief executive at Investcorp, said.

“A major component of our investment thesis is a significant upgrade of the asset fabric and improving on the ESG credentials of these assets.”

Set up in 1982, Investcorp has grown to become one of the leading alternative asset management companies in the region.

It oversees $50 billion in assets, including those managed by third parties, and has 14 offices in the US, Europe, the Middle East and elsewhere in Asia, including India, China, Japan and Singapore.

The company went on an acquisition spree after the onset of the Covid-19 pandemic, to capitalise on lower asset valuations, and continued its aggressive portfolio expansion in 2022.

Investcorp has carried its deal-making momentum into 2023 and said in January that it plans to invest up to $1 billion in the GCC property market over the next five years.

Its recent deals include acquiring a controlling stake in China-based Shandong Jianuo Electronics as well as a stake in Shearer Supply, a US-based distributor of heating, ventilation and air conditioning equipment.

The company aims to more than double its assets under management to $100 billion by the end of this decade, its executive chairman Mohammed Alardhi said in September.