...

Evergrande Not Enough to Deter Investcorp From China Expansion




  • In Business
  • 2021-09-26 07:58:25Z
  • By Bloomberg
 

(Bloomberg) -- Investcorp Holdings BSC, one of the largest foreign buyers of U.S. real estate, remains bullish on the world's biggest economy and expects the crisis enveloping China Evergrande Group to offer fresh opportunities for the biggest private equity and alternative asset manager as it seeks to expand in Asia.

Most Read from Bloomberg

  • How Los Angeles Became the City of Dingbats

  • School Reopenings Falter as U.S. Kids Near 1 Million Covid Cases

  • A Jewish Tradition Makes Room for Unconventional Design

  • The Rise of the Pandemic Dashboard

  • Berlin Referendum Could Determine the Future of the City's Housing

The top executive at the Bahrain-based firm described the problems at the Chinese developer as temporary and likely to be contained within Asia, and said the situation could even have "a calming effect on the prices of real estate that are really ballooning in parts of China."

Investcorp, which already has an office in Beijing and launched a health-care investment platform last year, plans to keep its focus in China on the technology, health-care and food sectors, according to Executive Chairman Mohammed Alardhi.

"We're there for the opportunities, we're there for the long term," he said in an interview with Bloomberg Television on Sunday.

Global financial markets are bracing for a potential collapse of Evergrande, which is buckling under more than $300 billion in liabilities. The company is China's largest issuer of high-yield dollar-denominated bonds, and bills are coming due to an array of banks and suppliers.

Evergrande's stock and bonds have tumbled in recent months on concern that the massive debt pile will lead to one of the largest restructurings ever in China. Investcorp has no "direct investment" in China's real estate, Alardhi said.

Not Lehman

"It's not a Lehman moment for sure for China," he said. "The Chinese government has a lot of tools to deal with this if they decided to do that."

The money manager is pursuing a plan of expanding in Asia, where its assets under management increased by 17% to $1.1 billion for the financial year ending June 30. It made a total of 11 new private equity investments during the year across India, China and southeast Asia.

Investcorp has for more than two decades invested billions of dollars -- mostly from wealthy Gulf families and sovereign funds -- into U.S. property. It has a New York office and currently oversees a real estate portfolio worth $7.4 billion, including leverage, in the U.S. and Europe, according to its website.

"We're very bullish on the U.S. economy, we know all that's happening in the world may dampen growth but we see good growth coming," Alardhi said.

Property Focus

Investcorp will continue to target sectors such as multi-family residences and industry-related realty, industries Alardhi described as resilient to crises and that earned its investors an 18% internal rate of return in the last 10 years.

In multi-family and industrial properties, "we still see strong fundamentals and lot of capital going into them," Alardhi said. "Good growth of rent, good occupancy, resilient during Covid and we continue to do more of that," he said, adding there's need for more warehouses not just in big but also smaller cities.

Investcorp, which has delisted from the Bahrain stock exchange after almost four decades, now has the agility it needs to expand by going back into private ownership, Alardhi said. Abu Dhabi sovereign fund Mubadala Investment Co. in 2017 acquired a 20% stake in Investcorp, which has backed companies including Tiffany & Co. and Gucci Ltd.

The money manager can amass $100 billion in about seven years, Alardhi said. It currently manages nearly $40 billion, he said.

"The structure of going private is the right thing for us to do now as we prepare the company for the next stage of its growth," he said. "For many years we have served the retail investors in a deal-by-deal model. We would like to change that so we target sustainable capital, institutional capital."

Most Read from Bloomberg Businessweek

  • A Tiny Piece of Plastic Is Helping Farmers Use Far Less Water

  • Evergrande Debt Crisis Is Financial Stress Test No One Wanted

  • The Energy Future Needs Cleaner Batteries

  • Microsoft and an Army of Tiny Telecoms Are Part of a Plan to Wire Rural America

  • In Amazon's Flagship Fulfillment Center, the Machines Run the Show

©2021 Bloomberg L.P.

COMMENTS

More Related News

Apple takes down Quran app in China
Apple takes down Quran app in China

The popular Islamic app was removed in the country, after an official request.

Argentina
Argentina 'Absolutely' Committed to New IMF Deal, Fernandez Says

(Bloomberg) -- President Alberto Fernandez said Argentina is "absolutely" committed to reaching a deal with the International Monetary Fund. Most Read from...

Nuclear Quants Say Watch China to Predict Iran Talks Outcome
Nuclear Quants Say Watch China to Predict Iran Talks Outcome

(Bloomberg) -- Energy traders weighing the probability of a revived nuclear accord between Iran and world powers might do better to train their gaze on...

First U.S. Bitcoin Futures ETF May Debut Monday, Filing Says
First U.S. Bitcoin Futures ETF May Debut Monday, Filing Says

(Bloomberg) -- Asset manager ProShares signaled plans to launch a Bitcoin futures exchange-traded fund as soon as Monday, an action that would end an eight...

UN extends Haiti mission by nine months
UN extends Haiti mission by nine months
  • World
  • 2021-10-15 22:22:03Z

The United Nations Security Council extended the UN mission in Haiti by nine months on Friday after an 11th-hour compromise was struck between western powers...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

  • tang
    (2021-09-26 09:19:11Z)

    MAF sensor China manufacturer, using high precision and high Reliability, low power consumption, no noise, speed up to ±0.2%, can be customized according to customer needs, to achieve a miniaturized, miniaturized intelligent control system
    wholesale 3 seater sofa, the overall design is reasonable, the quality is very good, and its seating The depth, the height of the armrest and the angle of the backrest are all scientifically designed to give people the most comfortable enjoyment, which can release the pressure deeply and make you fall in love with going home.
    wholesale shelf LED Light, a kind of led shelf light, which is characterized in that: A lamp housing, a first mounting cavity with a bottom opening is provided in the middle of the lamp housing, second mounting cavities are respectively provided on the left and right sides of the lamp housing, and downlights are installed on the bottom wall of the second mounting cavity.
    Solid-insulated switchgear exporter, which includes an insulating shell, The front end of the insulating housing is embedded with input connectors and output connectors. Three switch rooms are formed from top to bottom in the insulating housing. The front parts of the three switch rooms are separated from each other and the rear part is open.
    wholesale touchscreen meat thermometer It helps to ensure that the harmful bacteria's meat has reached a safe enough temperature to be destroyed, avoiding food poisoning for everyone.

    REPLY

Top News: Business