Investcorp ‘negatively impacted’ by financial instability, report

Real estate investors have been affected by recent turbulence in the global financial markets, including the alternative investment firm Investcorp.

Gary Long, president and chief operating officer of the Bahrain-based firm, told Reuters firms, like itself, were being “negatively impacted” by the financial turbulence. Its private equity business in the US and Europe were being particularly affected, he added.

Speaking at the Super Return private equity conference in Dubai, Long said deal flow was down and getting leverage was “a lot more difficult”. Returns were also “under pressure,” he added, with the effects being felt across private equity, hedge funds and real estate investments. “It definitely feels like a recession to us and has felt like a recession for many months now,” Long said.

Last month, Investcorp revealed it was launching a $1 billion investment vehicle to target real estate loans and commercial mortgage backed securities in the US. An unnamed sovereign wealth fund from the Gulf region committed $850 million to the vehicle, it said, with Investcorp committing $150 million to the fund. 

At around the same time, the firm hired Christopher Hoeffel, a former managing director at JP Morgan, as managing director in the firm’s US based real estate team to expand Investcorp’s debt investments, including deploying capital for its newly launched vehicle. 

Despite setbacks for private equity in the West, Long said investment opportunities in the Gulf region continued to “grow and mature and prosper”.