Investcorp bets on MENA jewellery market

A group led by Bahrain-based private equity firm Investcorp will take a 70 percent stake in Saudi Arabian gold and jewellery brand L’Azurde, planning to use the firm as a platform to create “a truly international brand”.

Investcorp will take a 51 percent stake in L’Azurde, which is valued at around $300 million, while Eastgate Capital Group, and Abu Dhabi investment banking group The National Investor will take a combined 19 percent stake.

Jewellery: providing  glittering returns?

The luxury jewellery maker L’Azurde is one of the best known brands in the Arab world, according to a recent Forbes Arabia study. It has manufacturing facilities in Riyadh and Cairo, employing more than 2,000 people across 18 retail stores, servicing the Middle East and North America. MENA is one of the largest and fastest growing jewellery markets, representing 12 percent of the world consumption, according to Investcorp.

“The Middle East jewellery market is underpinned by a growing middle class, strong demographics, cultural affinity with gold and increasing fashion consciousness,” Azmat Taufique, co-head of Investcorp’s Gulf Growth Capital business, said in a statement. The investor group is planning to grow L’Azurde into an internationally recognised brand, he said.

Bahrain- and London-listed Investcorp is no stranger to luxury retail, having formerly owned stakes in luxury brands such as Tiffany’s, Gucci and Saks Fifth Avenue. The firm, which was founded in 1982 and has assets of approximately $13 billion, recently suffered a net loss for the first time in its history with unrealised losses of $95 million on its private equity portfolio for the six months ended December 2008.

Eastgate, which is the private equity arm of Gulf-based NBC group, yesterday revealed it paid $40 million for an “influential minority stake” in Egyptian firm Sigma Pharmaceutical Industries. It currently has more than $650 million in commitments under management across three funds.