Sunday, 24 October, 2021

Investcorp bullish on US economy

Investcorp bullish on US economy

Popular News

NEW YORK: Investcorp, the alternative asset manager that counts Mubadala Investment Company as its biggest shareholder, is upbeat on the growth prospects of the US economy, despite global headwinds, and remains confident that China can resolve the $300 billion debt-crisis of its second-largest property developer Evergrande, its executive chairman said on Sunday.

“We are very bullish on the US economy,” Mohammed Alardhi told Bloomberg. “We all know what’s happening in the world, [and that] may be dampening growth, but we see good growth coming [in the US].”

The US Federal Reserve is set to start slowing its Covid-19 support to the US economy and could begin scaling back its asset purchase programme this year. However, the tapering by the Fed will be “gradual” and will give the US central bank the opportunity to discuss its “average inflation policy going forward”, which will help in minimising volatility, Mr Alardhi said, report agencies.

“I think the Fed has been very careful about this right from the beginning,” he added.

The Bahrain-based company is looking for more investments in the US, which – along with Europe – currently make up about 80 per cent of Investcorp’s global investment portfolio. It is on the lookout for private equity deals through its North America PE Fund, which has grown to over $1bn. The company is also looking to acquire more real estate assets in the world’s biggest economy.

“We are in the top five foreign investors in the US real estate [sector]. We have been doing that for a very long time [and] our investors have been very happy with us,” Mr Alardhi said.

Investcorp is focusing on investing in multifamily and industrial real estate assets in the US, which, Mr Alardhi said, are resilient to crises and different economic cycles.

“America continues to be our biggest market,” he said. “Real estate business in Europe and the US has done tremendously well.”

The company is open to exploring investment opportunities in China’s real estate sector in the wake of the Evergrande crisis that has shaken markets across Asia in recent weeks.

“We are there for the opportunities, we are there for the long term,” he said of Investcorp’s investment plans in China. The company has no direct exposure to China’s real estate sector.

“Obviously, the sectors that we have focused on at the moment are what we see as the best sectors: technology, healthcare and food businesses.”

Mr Alardhi said he does not believe the $300bn debt-crisis of China’s second largest property developer Evergrande is equivalent to the bankruptcy of Lehman Brothers during the 2008-2009 global financial crisis.