The Abu Dhabi Securities Exchange. Investcorp Capital, part of Bahrain's Investcorp Group, is selling 643 million ordinary shares to the public. Photo: ADX
The Abu Dhabi Securities Exchange. Investcorp Capital, part of Bahrain's Investcorp Group, is selling 643 million ordinary shares to the public. Photo: ADX
The Abu Dhabi Securities Exchange. Investcorp Capital, part of Bahrain's Investcorp Group, is selling 643 million ordinary shares to the public. Photo: ADX
The Abu Dhabi Securities Exchange. Investcorp Capital, part of Bahrain's Investcorp Group, is selling 643 million ordinary shares to the public. Photo: ADX

Investcorp Capital IPO: Company to sell 29% stake and list on ADX


Aarti Nagraj
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Investcorp Capital, which offers capital financing services in the alternative investments space, plans to sell 29.34 per cent of its shares in an initial public offering on the Abu Dhabi Securities Exchange.

The company, part of Bahrain's Investcorp Group, will sell 643 million ordinary shares, including 321.5 million newly issued shares, with a nominal value of $0.50 (Dh1.84) each, it said on Tuesday.

The company is planning to list November 17, 2023, subject to satisfactory market conditions and obtaining the relevant regulatory approvals in the UAE.

Investcorp Capital intends to use the net proceeds of the offering to further develop its capital financing services business and increase its investments into the capital deployment business of about $100 million.

It also plans to use the funds for financing strategic growth opportunities, as well as for general corporate purposes.

“With the support of our four decades of alternative asset management expertise that have allowed Investcorp to grow to approximately $50 billion AUM [assets under management] including assets managed by third parties and our global presence, Investcorp Capital is well positioned to provide a unique investment opportunity and attractive risk adjusted returns,” its executive chairman Mohammed Alardhi said.

Investcorp Capital ploughs capital either into funds managed or controlled by its clients or directly into alternative investments, including private corporations, property assets and collateralised loan obligations.

It has investments in private equity, real estate, credit and general partner positions in North America, Europe, the Middle East and Asia.

The company also provides capital financing services, generating fee-based income through the charging of underwriting and commitment fees to its clients, it said.

While the geopolitical tensions in the Middle East, with the Israel-Gaza conflict, have affected investors and markets globally, the company is positioning the IPO as a “long-term” initiative, Hazem Ben-Gacem, vice chairman, non-executive director and co-chief executive of Investcorp Holdings, told The National.

“What we are doing is not about a certain transaction at one point in time. This is not about the IPO. This is about evolving Invescorp to be a big part of the UAE public markets, the financial ecosystem,” he said.

“The important thing is that this is an initiative for the long term, as opposed to the listing in November or just timing it right. And hopefully, our stock price will trade as a function of how we perform as a business as opposed to anything else.”

Investcorp Capital also provides a safe haven to investors in the Gulf for two main reasons, he said.

While the company will be listed in Abu Dhabi, 75 per cent of its exposure is in the West, in Europe and the US.

“It is a natural hedge in that you are investing locally, so it's part of your local portfolio. However, its exposure is very much correlated with the West, with the more mature markets of the US,” Mr Ben-Gacem said.

“Second of all, Invest Capital will offer its investors a guaranteed minimum 8 per cent dividend for each of the next three years. What does that mean? Me as an investor, during turbulent times, what I likely want to do is perhaps shift my money into more stable investments and … Invesco capital, in a way, would act as an attractive safe haven during these turbulent capital market times.”

The company has already recorded strong demand in the past two months from regional and international institutional investors, he added.

As part of the offering, 5 per cent will be allocated in the first tranche and 95 per cent will be allocated in the second tranche.

The first tranche subscription period is expected to run from November 2 to November 8, while the second tranche will start on November 2 and is expected to end on November 9.

There is a minimum application size of Dh50,000 in the first tranche and Dh5 million in the second.

The indicative price range will be determined “in due course” and published on the opening date of the subscription period, the company said.

The move comes amid a listings boom in the GCC. Abu Dhabi accounted for 14 per cent of all listings worldwide in the first quarter of 2023, an indication of the strength of its capital markets amid a challenging global IPO market, according to consultancy EY.

The UAE capital attracted $3 billion worth of listing proceeds in the first quarter of this year, placing it third worldwide, with Adnoc Gas raising about Dh9.1 billion from the sale of a 5 per cent stake.

The ADX also hosted the largest Mena IPO in the second quarter, with Adnoc L & raising $769.5 million.

“The IPO saw the largest demand globally for a transaction so far in 2023, with an oversubscription level of 163 times in aggregate – the highest oversubscription for a UAE book-build IPO,” EY said in a separate report.

As a Gulf company, Investcorp Capital was keen to list in the local markets, Mr Ben-Gacem said.

“Abu Dhabi itself or ADX, specifically, I think, offered a lot of terrific attributes. We enjoyed dealing with the regulators there … It's a decision we also made as our 20 per cent shareholder is Mubadala, which is also in Abu Dhabi,” he said.

“So it felt as an appropriate place, but also to be one of the very first alternative asset managers to offer this unique structure to ADX felt kind of right.”

Moelis & Company UK DIFC Branch has been appointed as the independent financial adviser for the listing.

Emirates NBD Capital, First Abu Dhabi Bank and HSBC Bank Middle East have been appointed as joint global co-ordinators and joint bookrunners.

Emirates NBD Bank and First Abu Dhabi Bank have been appointed as the joint lead receiving banks. Al Maryah Community Bank and Mashreqbank have been appointed as the receiving banks.

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Updated: October 24, 2023, 12:42 PM`