DUBAI, Aug 7 (Reuters) – Bahrain-based Investcorp said on Wednesday its net profit rose 5% in its latest financial year, helped by higher fee income, but the asset manager cut private equity co-investments by almost a fifth to reduce risk on its balance sheet.
The move was aimed at allowing the firm to navigate the current economic cycle amid trade and geopolitical tensions, said Jan Erik, chief financial officer of Investcorp in a conference call with reporters.
The creation of a European private equity fund with Coller Capital, a secondary private equity transaction with HarbourVest on a mature technology fund and other private equity exits reduced co-investments in its private equity business by 19% to $505 million, the firm said.
Erik said the firm has access to $1.1 billion of liquidity, while the capital adequacy ratio of the firm has also risen to 33.8% for the year ended June 30, up from 31.5%.
“The balance sheet is carrying less risk now than last year,” said Erik. “That is another way of saying we have more dry powder.”
Investcorp said its net profit rose 5% to $131 million, as fee income climbed 17%. Assets under management rose $1.9 billion to $28.2 billion in its last financial year.
Reporting by Saeed Azhar, editing by Deepa Babington