DUBAI/MANAMA: Bahrain’s Investcorp said yesterday it planned to buy stakes in homegrown Middle Eastern luxury goods companies as part of a wider plan to invest $650 million in the region in the next two years.
Investcorp, previously an investor in high-end brands Gucci and Tiffany, is in talks with families and businesses in the Gulf, North Africa and Turkey, said Azmat Taufique, co-head of the bank’s Gulf Growth Capital business.
New investments under its $1 billion Gulf Opportunity Fund would strive to mirror a 70 percent acquisition last year of the Middle East’s largest gold and jewelry maker, L’Azurde, which Investcorp made along with partners, Taufique said. “We are looking at other businesses in the region with similar dynamics, not necessarily jewelry but broadly in mass luxury,” Taufique told the Reuters Global Luxury Summit, adding he estimated the mass luxury market would grow about 10 percent a year in the region.
“We want to build brands that will resonate. The market is evolving, the region is growing up, and our business people and entrepreneurs have built brands,” he said in Dubai.
L’Azurde was a strong investment because its products appeal to a wide section of the population, cater to a demographic of 16-40 year olds, are regarded as fashionable and play on a Middle Eastern cultural affinity for owning gold, Taufique said. Investcorp was in talks for acquisitions of companies with similar strategic characteristics in the broader mass luxury field, where some companies are seeking alternative funding sources, he said.
Investcorp also announced yesterday that it had purchased loans with a face value of $170.9 million at discounted rates in the US commercial real estate debt market. Investcorp said that its real estate team has completed a series of transactions to acquire a senior mortgage loan, a B-Note for a senior mortgage and two mezzanine loans, all secured by commercial property assets, located in the United States.