Investcorp cuts staff by 20%

Investcorp has become the latest firm to take cost-cutting measures as it plans to lose 90 staff across its real estate, private equity, hedge fund and technology businesses. Earlier this week the firm invested in UK debt management company TDX Group.

Bahrain-headquartered alternatives group Investcorp is to reduce its headcount by 20 percent in a bid to cut costs. The move follows similar steps taken last week by The Carlyle Group, 3i and American Capital.

Job cuts will affect Investcorp’s three offices, which are based in Bahrain, London and New York and are likely to cut across the group’s various business lines of private equity, real estate, hedge funds and technology, according to a source close to the situation.

In the last week structured job cuts have hit the private equity industry in earnest. In the week prior to Investcorp’s staff reductions, 310 private equity jobs were axed.

In related news, Investcorp Technology Partners this week paid £28 million (€32 million; $41 million) for a 40 percent stake in consumer debt management firm TDX Group. UK-based TDX manages arrears debt portfolios for clients. TDX accounts for 40 percent of all UK sales of defaulted unsecured consumer debt.

The acquisition of TDX is an example of private equity investment into counter-cyclical businesses as many of the world’s developed economies head into downturn. Last month, US firm Stone Point Capital bought 50 percent of the Real Estate Disposition Corporation, a US property auction house specialising in reclaimed houses and new builds that developers cannot sell.

In August, the US real estate division of Investcorp launched a $1 billion debt fund. The firm said at the time it had completed six deals for the fund, Investcorp Real Estate Credit Fund, valued at $210 million. In a statement, the firm said the transactions involves junior and senior mezzanine loans secured against single asset properties and hotel portfolios across the country.