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Investcorp’s Nemir Kirdar Looks to the Future

The Iraqi-born executive is busy plotting the next 30 years for his firm — including his vision to see it turn into the Gulf region’s premier investment bank.

PARIS — Having published his memoirs last summer, Investcorp founder, executive chairman and chief executive officer Nemir Kirdar could be forgiven for resting on his laurels.

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But the Iraqi-born businessman is busy plotting the next 30 years for the company he founded in Bahrain in 1982 — including his ambitious vision to see it turn into the Gulf region’s premier investment bank.

In “Need Respect Trust,” published by Weidenfeld & Nicolson in the U.K. in July, Kirdar details his inspiring journey from entrepreneur in Iraq in the Sixties to the launch of Investcorp, the company that would go on to buy and sell industry jewels including Gucci, Tiffany and Saks Fifth Avenue.

Kirdar is keen to point out that although those are the deals it is best known for, Investcorp today has most of its investments in midsize firms outside the luxury sector — with the exception of Danish brand Georg Jensen, which it bought in 2012 for $140 million. “Being luxury is not the central factor, but recognizing the potential of a company and saying there is a locked potential here, and it needs to be unlocked — that’s our role,” he said.

And even if the global economic crisis has made bank financing harder to come by, Kirdar is confident there is always another deal around the corner.

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“I really feel that the industry of acquisition of companies is not going to slow down. I mean, there will always be some company which is ready for change of ownership,” he said. “We do about four deals a year, but we cannot say we’re going to gear ourselves for four deals a year. We have to look at 100 [opportunities] and sift through and see which ones make sense to us, and what makes sense to us is not the name of the company, but really, what is the opportunity there of a turnaround? What is the role needed from an investor?”

Kirdar’s book provides a glimpse of the feverish deal-making and outsized personalities involved in those flagship Eighties transactions, as well as an unsparing account of how the company struggled in the decade leading up to the global financial crisis of 2008 and 2009.

Since what he termed its “disappointing” exit from Saks in 1998, the investment bank has not been active on the retail front. But Savio Tung, Investcorp’s ceo, North America, said that is about to change.

“We see a lot of specialty retail opportunities as we speak. Our pipeline is quite good, both from the London side and from the New York side. I’m pretty bullish that we can find interesting opportunities,” he revealed, adding, “You’ll hear more from us.”

Tung noted there are more players chasing deals these days, with the likes of LVMH Moët Hennessy Louis Vuitton and Kering competing with a host of large private equity funds.

“I think in our business we do have to work pretty hard, but I do see opportunities in the middle-sized transactions. There’s certainly many more emerging Loro Piana-type companies around, and to some extent we look at Georg Jensen the same way,” he said.

He also welcomes the emergence of players from Asia, saying ones to watch include private equity firms Trust Bridge Partners, Citic Private Equity Funds Management Co. Ltd., PAG Capital Partners, Fountainvest Partners, Chinese conglomerate Fosun and investment fund Hopu.

“There are several very blue-chip groups that are emerging, and I think they’ll do more. They like consumer brand names, and they like what they call ‘stepping out.’ They are now more eager to invest outside, and I’m looking forward to being in partnerships with some of them. I am regularly talking to them,” Tung said.

“Overall, they are still testing the waters. They’re keen to do more in China, so anything they do outside, there has to be a China angle for them,” he added.

Tung is also keeping an eye on large conglomerates that he thinks are looking bloated.

“I think they are reaching a point that they cannot maximize the value of all the brands in their stables,” he said. “My own prediction is that within the next 10 years or so, you’re going to see more changes and a sort of de-conglomerization of some of the brand-name collectives. I think that will be very interesting.”

In the immediate future, Investcorp plans to leverage its history of doing business in the Gulf to bolster its presence in the region, which is keen to develop its financial services activity.

Kirdar’s original vision for Investcorp was to create a brand new financial institution to provide nontraditional investment opportunities to private-sector players in the cash-rich zone. But with sovereign wealth funds like the Qatar Investment Authority increasingly active on the international stage, Investcorp is looking at many of these as coinvestors on future deals.

“Investcorp never had the objective of servicing government-owned agencies,” said Kirdar. “Now we have a track record, and we have capability that has been established, so we are considered among the best names in the world. So there is room, if the architecture of the company is redesigned again, [for] sovereign wealth funds [to] be participants in ownership and beneficiaries of Investcorp products.”

Kirdar noted that Investcorp recently opened an office in Riyadh, Saudi Arabia, and has others in the works in Abu Dhabi and in Doha, Qatar.

“Relationships count a lot in this part of the world, and what we want to do is to nurture those relationships,” he said. “To parachute in from California or from Illinois or from somewhere, from France or from Italy, and say there is money there, so let’s go and access it — it’s a bit naïve and simplistic.”