DUBAI - Bahrain-based investment firm Investcorp said its net profit dropped 17% in the six months ending on Dec. 31, mainly because of a decline in fair value of private equity investments in the U.S. retail sector and a writedown on a legacy telecom asset.
Investcorp reported a net profit of $47.6 million, down from $58.2 million from the same period a year earlier.
Investcorp sold U.S TelePacific Holdings Corp (TPx) last year, which was a legacy investment it had kept for over two decades, said Investcorp's chief financial officer Jan Erik Back on an earnings call.
"It's a firm that was acquired some twenty years ago and it's obviously something that's very out of the ordinary for us to keep as an investment on the balance sheet for that long," he said, adding a normal holding period is five years.
Siris Capital Group, a private equity firm, last year acquired TPx Communications, from investors including affiliates of Investcorp and Clarity Partners.
Investcorp's total assets grew by $3 billion to $31.1 billion, as the firm moves toward a medium-term target of hitting $50 billion in assets under management.
Late last year, Investcorp joined forces with Chinese partners to spend up to $500 million buying food brands and manufacturing sites in Asia, aiming to tap into China's emerging middle classes and their growing taste for foreign foods.
Last month, Investcorp had announced it has raised $130 million for funding real estate projects in India.
"There will be more coming out of China and India," Back said.
(Reporting by Saeed Azhar, editing by Davide Barbuscia) ((Saeed.Azhar@thomsonreuters.com; +971 44536787; Reuters Messaging: email@example.com))