Investcorp surpasses fund-raising and asset targets despite regional conflict

Bahrain’s Investcorp has exceeded both its fund-raising and assets under management targets for the 2026 financial year, despite months of war that have disrupted investment activity across the Gulf region, the company’s chief investment officer said.

Rishi Kapoor, who also serves as vice chairman of the firm, told The National that Investcorp — backed by Abu Dhabi’s sovereign investor Mubadala Investment Company — raised “north of $7 billion” in financing for the fiscal year ending 30 June. A substantial portion of that capital came from investors based outside the region.

For the current fiscal year, the company aims to again secure $7 billion or more in new financing, despite ongoing uncertainty.

“It will be a very, very similar pace of fund-raising … as in our business there is cadence,” Mr Kapoor said. “Investcorp is a large enough and diversified enough platform. If it’s not going to be North American private equity this year [for example], it’s going to be something else.”

Global firm with regional roots

Although Investcorp has deep ties to the Gulf, Mr Kapoor described it as a global firm “first and foremost”, a profile the company intends to strengthen further to shield itself from episodic geopolitical or energy-market-driven economic uncertainties in the region.

“What I mean by being a global firm is that 90 per cent of our investing activity is between the US and Europe,” he said. “We have more than three quarters of our fund-raising activity outside the Gulf.”

Investcorp, known for its early investments in Tiffany & Co and Gucci, reached $64 billion in assets at the end of June, “slightly ahead” of its $63 billion target. However, Mr Kapoor said the growth in the company’s asset base during the 2027 fiscal year is “a bit hard to pin down”.

“The net increase in AUMs is heavily influenced by the exits and calls, and that is very episodic,” he added, noting that the company remains on track to achieve its goal of $100 billion in assets under management.

The Bahrain-headquartered alternative asset manager is “effectively playing the role of a conduit for both capital and investment opportunities into the Gulf and out of the Gulf”, acting as a two-way street, Mr Kapoor said.

Undeterred by short-term volatility

Investcorp plans to continue that role and is not deterred by short-term war-driven volatility, which Mr Kapoor described as temporary hiccups for long-term investors like the firm.

A permanent agreement to end the Iran war remains elusive despite several rounds of diplomatic efforts. US President Donald Trump last week warned of a possible new military operation against Iran, with US media reporting that a fresh offensive could begin after the 3 November midterm elections.

Tehran has warned it would attack US interests and allies in the region and widen the scope of the war if the US launches fresh attacks on its territory.

Despite the economic disruption and geopolitical headwinds caused by the conflict, investment and fund-raising activity in the Gulf region has held up relatively well.

In July, global private equity player Brookfield announced the first close of its new Saudi and wider Middle East-focused private equity fund. The $2 billion first close was anchored by investors including Saudi Arabia’s sovereign wealth fund, the Public Investment Fund.

That same month, Blackstone, Brookfield and KKR signed a $16 billion lease and leaseback deal with Kuwait Oil Company, taking a combined 49 per cent stake in its crude oil pipeline network. In March, Blackstone, the $1.3 trillion alternative investment manager, also announced a $250 million investment in Abu Dhabi’s Advanced Digital Gaming Technology. It followed that with another partnership in April, teaming up with Dubai Aerospace Enterprise to invest about $1.6 billion annually in aircraft leasing.

Regional appetite remains strong

Investcorp’s own appetite for investment in the Middle East region — which, along with its broader Asian assets, accounts for 10 per cent of its total portfolio — remains robust.

Earlier this week, the company’s Saudi Pre-IPO Growth Fund joined a consortium led by AlTouq Group and Thara Future Investments to acquire Saudi Arabia’s Reda Gulf Holding.

Although the continuing conflict has affected some of Investcorp’s exits from its existing regional investments, Mr Kapoor described the disruption as nothing but a “bump on the road” in the broader global investing context.

The push across the Gulf to invest in expanding infrastructure means the region remains an attractive investment destination, he said.

“The prospects for the region from an investment perspective are still pretty much the same, if not stronger, and I’m not minimising the short-term disruption of the conflict here,” Mr Kapoor said.

“Any conflict is sad and frankly distressing,” he added, but it has had little impact on the primary economic diversification visions driving regional economies.

“If anything, these countries and the leadership are now even more convinced around the need for them to build greater resilience” in infrastructure, supply chains, logistics and transportation, energy, utilities, defence and food security sectors, he said.

“We see this whole episode … as laying down effectively a second foundational layer, building upon the original vision of economic diversification,” Mr Kapoor said. “That will drive much more thoughtful spending and capex by governments alongside private capital.”

Founded in 1982, Investcorp has grown into a global investor deploying capital through six business lines: private equity, real estate, absolute return investments, infrastructure, credit management and strategic capital.

The company, which maintained a brisk pace of acquisitions during the Covid-19 pandemic to capitalise on lower asset valuations, has continued its aggressive portfolio expansion since and aims to grow its asset base in markets such as the US, India and China.