Bahrain's Investcorp, the biggest alternative asset manager in the Middle East, has acquired properties in two US cities for more than $335 million, capitalising on its optimism about US growth.
The two portfolios feature 27 properties, totalling more than 2.7 million square feet (about 250,000 square metres), in Minneapolis and Baltimore, the Manama-based firm said on Wednesday.
They consist of 17 buildings over 1.9 million square feet in Minneapolis, and 10 buildings over 881,000 square feet in Baltimore, giving Investcorp access to major thoroughfares, employment centres and residential neighbourhoods, it said.
Market rent growth over the past three years averaged 11.4 per cent in Minneapolis and 13.4 per cent in Baltimore, outpacing the average of 9.3 per cent in the top 50 US metropolitan areas, data from California-based Green Street Advisors shows.
“The evolution of supply chain logistics over the past several years has continued to support demand in the US industrial sector, which has retained its strong fundamentals throughout market cycles despite broader economic volatility,” Yusef Al Yusef, global head of distribution at Investcorp, said.
“With e-commerce showing no sign of slowing and a lack of new supply for infill and urban products, we continue to believe in the long-term viability of the asset class.”
Investcorp's latest investment is a testament to its confident view of the world's largest economy under Donald Trump’s second stint in the White House. Executive chairman Mohammed Alardhi told The National at the World Economic Forum in Davos that he expects the US economy to “do much better” in 2025.
America's investment environment has improved in the past two years, with better market activity, private equity investments rising, initial public offerings bouncing back and the chances of a global recession sharply dropping from 70 per cent to 30 per cent.
The investment is also part of Investcorp's portfolio expansion strategy. Its assets under management have grown to $55 billion and it aims to boost it to $100 billion by investing in areas including the Americas, Europe and the broader Asia region, including the Middle East. It maintained a brisk pace of acquisitions through the Covid-19 pandemic.
Among its major acquisitions in 2024 are a “strategic growth investment” in US tax advisory company PKF O’Connor Davies and its purchase of Stowe Family Law, the largest specialist family law firm in the UK.
“We look forward to continuing to seek attractive industrial investment opportunities in fundamentally strong markets with proximity to established population bases across the US,” said Michael Moriarty, managing director and head of commercial acquisitions at Investcorp.
Established in 1982, Investcorp invests across asset classes through its six business lines: private equity, real estate, absolute return investments, infrastructure, credit management and strategic capital.
Last year, Investcorp reorganised its business verticals and made top-management changes to ensure profitability and growth. It is now present in the right markets, invests in the right asset classes and has streamlined its strategy to eliminate silos from all its businesses, Mr Alardhi had said.
In November, vice chairman Rishi Kapoor told The National that Investcorp had raised $5.4 billion in funding from global investors during its last fiscal year and expects to reach a similar level this year, despite a sharp increase in geopolitical volatility in the Middle East.
