The Review - May 2014

The Investcorp Newsletter

Investcorp acquires Totes

Plus: Investors Conference - Berlin 2014 Distinguished speakers and guests attend Corporate Investments Investcorp acquire Totes and Namet Real Estate New Portfolio in Dallas and South Florida Abu Dhabi office opening New Investcorp office opens in Abu Dhabi Guest Feature Eurozone recovery by Lord Mark Malloch-Brown

The Review | May 2014

2 Welcome

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uring the course of 2014, we are seeing improved confidence from our clients, our investors and our investee companies. In conversations across the region, from Turkey to Saudi Arabia and everywhere in between, people are telling us that a broadly improving macro environment, the return of growth and a clear turnaround in consumer, corporate and investor confidence have contributed to a shift towards risk-on mode once more. As we enter our fourth decade as a firm, we are honoured to have been trusted with the responsibility of preserving and growing our clients’ wealth throughout the cycle. The relationships we have built over the years are, at its core, based on trust and consistent delivery - whether we are talking about an individual, a family office, a business or a Government entity. If there is one thing that stands out as an

ingredient for success, it is the ability to listen to our clients, and to understand what they want and how to deliver it. To that end, we continue to deliver on our promise to get even closer to our clients. We have invested in our relationship teams to ensure that whenever we are needed we can be there. We are delighted with the results as our clients regularly tell us that they are seeing the benefit of being able to spend more time with us, more often, at a time that is convenient to them. We aim to continue strengthening our Gulf relationships and network, generation to generation, and with the objective of delivering strong optimal returns to our clients. This is in our DNA and what excites us most. Mohammed Al-Shroogi President, Gulf Business

Contents Guest Feature Page 9

New Abu Dhabi office Page 12-13

Eurozone Recovery, by Lord Mark Malloch-Brown.

New office opens in the prestigious Sowwah Square.

Investors conference Page 10-11

Bankers receptions Page 14

Berlin Investors conference featuring distinguished speakers and guests.

Investcorp hosts Bankers receptions in Abu Dhabi and Riyadh.

Corporate Investments Pages 4-8 A leading international wet and cold weather brand and a Turkish meat producer are among our latest acquisitions.

Real Estate Page 8 Acquisitions in Dallas, and South Florida.

UN visit and New Joiners Page 15 Investcorp welcomes Franklyn Chang and David Walsh.

The Review | May 2014

3 Letter from Nemir A. Kirdar

Growth

of our global franchise

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elcome, once again, to The Review. I would like to start with a recap on an exceptionally busy period for our firm as we continue our growth as a successful global franchise. On this theme, we recently hosted our International Investors’ Conference in Berlin for investors and select guests. These included senior political, government, business and media leaders with a key address from His Excellency Amre Moussa, the former SecretaryGeneral of the Arab League. Also present were members of our European Advisory Board including His Excellency Kofi Annan, former Secretary-General of the United Nations; Dr Ana Palacio, the former Foreign Affairs Minister of Spain; and His Excellency Wolfgang Schüssel, the former Chancellor of Austria. During the conference, our European Advisory Board members shared their views on the critical issues affecting European and global economies. Later, at our gala dinner, we were honoured with the presence of Bundesminister Sigmar Gabriel, MdB, Vice Chancellor of Germany and Federal Minister of the Economy and Energy Affairs. Our management team addressed this distinguished audience with a series of insightful presentations which showcased the strength of our firm as a ‘smoothrunning’, worldwide business and one of which we can all be very proud. The success of this conference and the positive press coverage it generated highlighted once again our commitment to acting not only as a bridge between the Gulf and investment opportunities in the West, but also as a facilitator for wider business and economic discussions on matters affecting our investors and shareholders.

In terms of our financial performance, the business excelled in the first half of the 2014 financial year with a 53% increase in net income. This was driven by successful fundraising, exits and deal activity in Europe, the US and the MENA region with investments in companies that included Leejam Sports Company and Al Yusr Industrial Contracting Company in Saudi Arabia. To date, Investcorp and Investors received over US$ 1 billion in proceeds from investment realizations and distributions. The second half of the financial year began well with an investment in Turkey and the sale of TDX Group for approximately US$ 327 million. Building on this success and as part of our on-going Gulf expansion strategy to be even closer to our clients, we formally opened our new representative office in Abu Dhabi in April 2014. This is located in the heart of the world’s newest financial centre and we were honoured that His Highness Sheikh Nahyan Bin Mubarak Al Nahyan, Minister of Culture, Youth and Social Development,

was able to perform the opening ceremony. His Highness’ involvement underlines our close relationship with the Emirate of Abu Dhabi over many years and our strong commitment to our loyal investors across the UAE and the wider Gulf. Continuing investment in our Gulf expansion strategy will consolidate our reputation for excellent client service. To conclude, I would like to thank the entire Investcorp family for their contribution, recognising that we owe our success to their talent, their expertise and their on-going commitment to making our business a true industry leader. We believe we are uniquely positioned for steady and sustained growth in the years ahead. Thank you all.

Nemir A. Kirdar Executive Chairman and CEO The Review | May 2014

4 Corporate Investment

Acquisition of totes»Isotoner Corporation In April, Investcorp and Freeman Spogli & Co., announced an agreement to acquire totes»Isotoner Corporation, the world’s leading designer, marketer and distributor of functional accessories in the rain, cold weather and footwear categories.

The Review | May 2014

5 Corporate Investments

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ounded in 1923 and headquartered in Cincinnati, Ohio, the totes and Isotoner brands are among the most recognizable and trusted rain and cold weather accessory brands in the U.S. and Europe. Within the multibillion dollar functional accessories category, totes»Isotoner enjoys a market leadership position in all of its served markets. The Company has a broad and diverse distribution footprint, enabling it to partner with marquee retail customers to sell its products across a variety of channels. The Company has a significant international presence, selling its products throughout Europe with an emerging business in Asia. Mohammed Al-Shroogi, President for Gulf Business at Investcorp commented: “We are excited about acquiring a globally recognized brand which is a leader within a growing functional accessories market. We look forward to working closely with the totes’s management team as they seek to grow through further international expansion and the introduction of new, high-quality products.”

The Review | May 2014

6 Corporate Investments

Investcorp acquires

Namet

The Review | May 2014

7 Corporate Investments

Investcorp and other related Investcorp entities acquired a significant minority stake in Namet Gida Sanayi ve Ticareti A.S. in January 2014.

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amet is the leading Turkish producer of fresh cut and packaged processed red meat products such as soujouk, pastrami, salami, sausages, smoked meats and frozen and ready to eat burgers. The Company sells its products to retailers as well as hotels, restaurants and catering companies. All of its products are certified Halal. Namet has invested extensively in the past few years to expand its production capacity and improve the quality of its products, including the investment in 2010 in a state of the art meat processing facility located in Istanbul, and the recent acquisition of a second production facility located in Antalya. Namet is Investcorp’s fourth investment in Turkey to date and, post the acquisition of Tyrrells, represents its second global investment in the defensive yet high growth branded food sector in the last 12 months. Commenting on the acquisition, Tarik Kayar, Chairman and CEO of Namet, said: “We have invested heavily in the Company in the past few years and became the #1 vertically integrated meat business in Turkey. We believe we are well positioned for steady expansion underpinned by solid market demand. This investment demonstrates confidence in the future prospects of our Company and our country and we look forward in partnering with Investcorp.” Mohammed Al-Shroogi, Investcorp’s President, Gulf Business, commented: “We are delighted to be partnering with another successful family business, which has a rich heritage in Turkey for providing quality food products. Investcorp will work closely with the team and together we will seek to continue to grow the business domestically as well as assess potential revenue opportunities beyond Turkey.”

Meetings with Portfolio Companies in Turkey Investcorp hosted a dinner in Istanbul on 28 April 2014 at the Ciragan Palace bringing together family owners in Investcorp’s three portfolio companies in Turkey. Participants included members of the Tirykioglu family (Tiryaki Agro), including Tiryaki’s board member Mehmet Tiryakioglu, chairman Ahmed Tiryakioglu and CEO Suleyman Tiryakioglu; members of the Orakcioglu family (Orka group) including Orka’s

chairman and CEO Suleyman Orakcioglu and board member Halidun Orakcioglu; members of the Kayar family (Namet), including Namet’s chairman and CEO Tarik Kayar, Group President Haluk Kayar and vice chairman Faruk Kayar as well as Mohammed Al-Shroogi, Jim Tanner, Tristan de Boysson, Ceyhun Eren and Murat Tasci from CI-MENA. The dinner was followed by meetings at the headquarters of the three companies in Istanbul.

Dinner at the Ciragan palace with Mohammed Al-Shroogi and members of the Tiryakioglu (Tiryaki Agro), Orakcioglu (Orka) and Kayar (Namet) families”

The Review | May 2014

8 Corporate Investments

Agreed sale of TDX to Equifax Inc. for £200 million TDX is the United Kingdom’s largest debt placement services and debt management platform company. Through its technology fund, Investcorp Technology Partners III, Investcorp acquired a substantial minority stake in TDX in 2008, becoming the largest and only institutional shareholder alongside TDX’s three founders. Gilbert Kamieniecky, Principal at Investcorp, said: “With our support, TDX has been able to realise its potential and has evolved from being a UKfocused operation to one with a growing international footprint. The fact that the

company has attracted the interest of a strong trade buyer in Equifax is testament to the quality of solutions and services TDX offers to its clients in recovering delinquent debt.” The transaction is Investcorp’s third successful exit of its technology portfolio in 12 months following its agreement to sell the Skrill Group, one of Europe’s largest online payment systems, to CVC Capital and the flotation of Fleetmatics, the Irish-based leading global provider of fleet management solutions for commercial fleet vehicles, on the New York Stock Exchange.

In January 2014, Investcorp agreed the sale of TDX to Equifax Inc., (NYSE:EFX), a global information solutions provider, for £200 million (approximately US$ 327 million).

Real Estate

Acquisitions in Dallas and South Florida In May, Investcorp acquired a portfolio of commercial and residential properties in Dallas, Texas and South Florida for approximately $105 million. The properties have an average occupancy rate of 95 percent and consist of over 500,000 sq. ft and reflect Investcorp’s focus on targeting high quality assets with attractive yields. They include:-

One Allen Center, Allen, Texas which is adjacent to a 1.5 million square foot open air retail centre and near one of the largest school systems in the area. San Remo, Coral Springs, Florida which is situated in a strong school district, less than three miles away from major retail centers and in close proximity to significant employment centers in South Florida.

2811 McKinney Avenue - Dallas, Texas

3400 Carlisle Street - Dallas, Texas

The Uptown Office Portfolio (3400 Carlisle Street & 2811 McKinney Avenue), Dallas, Texas which enjoys close proximity to some of the most affluent residential neighborhoods in the state of Texas in addition to excellent transportation outlets. San Remo, South Florida

The Review | May 2014

One Allen Center - Allen, Texas

9 Guest Feature

Eurozone recovery and a number of large Europe-only property funds have recently been raised in record time. It looks like Europe’s manufacturers may be leading the way with the Markit survey showing very strong expansion by Eurozone metals manufacturers – their index reads 58.3, where above 50 implies growth, well above the 16 year average. Some European banks also now look very compelling with the Eurostoxx banks index having steadily climbed in since the beginning of the year. Lord Mark Malloch-Brown FTI Chairman for Europe Middle East and Africa

Figures from a recent business survey produced by Markit imply further acceleration which could lead to a fairly respectable annualized growth rate of 1-2%.

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t looks like Europe’s recovery may be gaining momentum. Output grew by 0.3% in the fourth quarter of 2013, up from 0.1% in the quarter before. Hardly explosive growth but a lot better than the six quarters of decline that preceded it. Figures from a recent business survey produced by Markit imply further acceleration which could lead to a fairly respectable annualized growth rate of 1-2%. Investors are noticing and the sovereign debt crisis now seems well behind us. Portuguese 10-year bond yields fell below 4% for the first time in four years recently, a far cry from the 17.4% reached at the peak of the crisis. Even last summer, yields were as high as 7.5% driven by a political crisis. Spanish and Italian 10-year bonds are also trading well below 4%. Even the equivalent Greek bond yields have halved since a year ago and the Greek government

recently announced that it plans to return to markets by selling €2 billion of bonds. This easing of pressure creates a virtuous circle. Falls in yields correspond to rises in bond prices improving bank balance sheets and solvency, which in turn improves government credit quality leading to further falls in yields. But this process is not necessarily entirely driven by a golden view of Europe’s future. Much of it might simply be a reallocation of capital from emerging markets to developed markets by investors spooked by the crisis in the Crimea as well as the wider risk of emerging market capital flight provoked by the QE taper. While emerging markets equities funds have experienced heavy capital outflows, according to EPFR Global, since the beginning of 2014 over $20 billion has flowed into European credit funds. Yet these flows are probably not like for like and it is undeniable that the past few months have seen a change in sentiment on Europe, independent of any global capital flows. Indeed this incipient recovery, together with some remaining crisis-level asset values, has spurred interest from bargain hunter investors. Deals in the Spanish, Portuguese, Italian and Greek real estate markets doubled from a year earlier to €3 billion in the fourth quarter of 2013

But there is not yet a sustained stampede rather these are straws in the wind. In the meantime, the structural problem of a two speed Eurozone remains unsolved. Europe’s better than expected growth in the fourth quarter of 2013 was largely driven by Germany and France’s 0.4% and 0.3% growth, which make up half of the bloc’s GDP, as well as even stronger figures from countries like the UK and Sweden. Output continued to shrink from Cyprus in the south to Finland in the north. So there are opportunities out there but skill will be required to navigate them. A particular challenge will be the ECB’s upcoming Asset Quality Review, a probe of €3.7 trillion worth of bank assets intended to ensure riskier assets are valued properly and that banks are adequately capitalised. As ever, determining where the duff loans are and which banks are holdings them will foretell which countries and sectors may prosper in the coming European recovery. Mark Malloch-Brown served as a Minister in Prime Minister Gordon Brown’s cabinet, where he had particular responsibility for strengthening relationships with Africa and Asia. He has also served as Deputy Secretary General and Chief of Staff of the United Nations under Kofi Annan and, for six years prior, as Administrator of the UN Development Programme, where he led UN development efforts around the world.

The Review | May 2014

10 Investors conference - Berlin 2014

International Investors conference in Berlin

The Investcorp European Advisory Board and His Excellency Amre Moussa

The Investors conference invited critical discussions on several geopolitical and economic insights from the Gulf, Europe and the United States.

Dinner at Bärensaal

The Review | May 2014

Conference and the Adlon Hotel

11 Investors conference - Berlin 2014

Amre Moussa

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n March 2014, Investcorp organized and hosted its International Investors conference in Berlin which included addresses from distinguished speakers including His Excellency Amre Moussa, the former Secretary-General of the Arab League, and Dr. Tamara Cofman Wittes, Director of the Saban Center for Middle East Policy at the Brookings Institution and former Deputy Assistant Secretary for Near Eastern Affairs at the United States Department of State. Members of Investcorp’s European Advisory Board, including His Excellency Kofi Annan, former Secretary-General of the United Nations, Dr. Ana Palacio, the former Foreign Affairs Minister of Spain and His Excellency Wolfgang Schüssel, the former Chancellor of Austria, discussed the critical issues impacting European and global economies. Bundesminister Sigmar Gabriel, MdB, Vice Chancellor of Germany and Federal Minister of the Economy and Energy Affairs also attended the Gala dinner

From left to right: His Excellency Wolfgang Schüssel, His Excellency Kofi Annan, Dr. Otto Schily, Mr. Pierre Keller and Dr. Ana Palacio

hosted at the Deutsches Historisches Museum. The Investors conference invited critical discussions on several geopolitical and economic insights from the Gulf, Europe and the United States. Speakers and guests shared opinion and thought on the most pressing issues that are affecting the global economy and businesses. Nemir Kirdar, commented: “Hosting this conference in Berlin demonstrates Investcorp’s continued commitment to acting not only as a bridge to investment opportunities between the Gulf and the West, but also promoting better understanding on critical issues influencing the world and maintaining an open dialogue with investors and shareholders. The presence of so many of Investcorp’s long-standing investors, esteemed thoughtleaders and politicians, demonstrates the continued success of Investcorp’s global franchise and its reputation as a highly respected pioneer in alternative investments.”

Nemir Kirdar

Mohammed Al-Shroogi

The Review | May 2014

12 New Abu Dhabi office

Abu Dhabi office opening

The Review | May 2014

13 New Abu Dhabi office

On 22nd April, Investcorp formally opened its new representative office in Abu Dhabi located in the prestigious Central Business district.

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is Excellency Sheikh Nahayan Mabarak Al-Nahayan, Minister of Culture, Youth and Community Development officially inaugurated the new office which is headed by Mr. Mohamed Sammakia.

His Excellency Sheikh Nahayan Mabarak Al-Nahayan and Nemir Kirdar, Investcorp’s Executive Chairman and Chief Executive Officer

Nemir Kirdar, Investcorp’s Executive Chairman and Chief Executive Officer, welcomed His Excellency Sheikh Nahyan to the new office and thanked him for honoring the firm. He also welcomed H.E. Abdulrahman Salim Al-Ateeqi, Chairman of the Board and the Board members of Investcorp as well as distinguished guests from the government, business and media communities and said:

“We are honored to have the support of H.E. Sheikh Nahyan, who has made tremendous contributions to Abu Dhabi’s business community and Vision 2030. Our new office, in the heart of the world’s newest financial centre on Sowwah Square, reinforces our close relationship with the Emirate over many years and our total commitment to our loyal investors across the wider UAE. As a business, we will ensure our clients receive a ‘best in class’ service both regionally and internationally as we continue to strive to do what we do best - deliver strong optimal and well balanced investment returns.”

Investcorp Board Members and Coordinators Committee Members

The Review | May 2014

14 Bankers receptions

Bankers receptions I in Abu Dhabi and Riyadh

nvestcorp recently hosted a reception evening at both its Abu Dhabi and Riyadh offices for key representatives of leading international and local banks. Invited guests had the opportunity to speak to Investcorp’s management team and share views on the region’s business and economic drivers. Both evenings concluded with a tour of Investcorp’s offices.

Rishi Kapoor, Chief Financial Officer welcoming guests in Abu Dhabi office

Mohammed Al-Shroogi, President Gulf business and Jonathan Minor, Head of Financial Management welcoming guests in Riyadh office

Mohamed Sammakia, CEO United Arab Emirates (center) with guests in Abu Dhabi

Timothy Mattar, Managing Director and Head of Saudi team with guests in Riyadh office

The Review | May 2014

15 UN visit

United Nations Pension Fund Board meeting in New York

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uring February 2014, Investcorp hosted a meeting of the United Nations Pension Fund Board of Directors at its New York headquarters. UN Secretary-General Ban Ki-moon also visited the Investcorp offices and joined the members of the Board for lunch. He was welcomed by Investcorp’s Executive Chairman and CEO, Nemir Kirdar, who himself serves on the Pension Fund Board and is one of nine members of the UN Investments Committee. Nemir Kirdar commented: “It has been an honor to serve on the UN Pension Fund Board and the Investments Committee for the past eight years and a privilege for Investcorp to host the meeting of the Pension Fund Board. We were delighted to welcome SecretaryGeneral Ban Ki-moon to our New York headquarters and we look forward to continuing our good relationship with the UN.”

Nemir Kirdar welcomes UN Secretary General Ban Ki-moon to Investcorp’s New York headquarters

New Joiners Franklyn Chang

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n May, industry veteran Franklyn Chang joined the firm as a Managing Director bringing nearly 20 years of experience in institutional sales, placements and distribution of alternative investments. His key responsibility will be to help grow Investcorp’s Hedge Fund Group’s assets under management through strategic and targeted business development efforts. He joins from Eaton Partners, LLC, where he was responsible for global distribution of alternative investment funds and served as both Partner for US Distribution and Managing Partner for the European and Middle East Distribution. During his eight years with the company, Mr. Chang was involved in successfully placing over $12 billion in limited partner assets.

Lionel Erdely, Head and Chief Investment Officer of the Hedge Funds Group said: “We are very pleased to welcome a person of Franklyn’s experience and caliber to our team. His wide ranging experience and capabilities within the alternative investment industry will allow us to expand our product offerings to further meet our clients’ needs as we significantly grow our hedge funds platform.”

David Walsh In May, David Walsh joined our Hedge Funds business reporting directly to Nick Vamvakas, Head of Single Manager Business. Commenting on his appointment, Lionel Erdely, Head and Chief Investment Officer of the Hedge Funds Group said: “David has been identifying and working with early stage hedge fund managers for years in his prior roles. We believe his background will enhance our capabilities in identifying and sourcing new hedge

fund talent early in their life cycle. His addition is a boost to our seeding and emerging manager program as we work to execute on our plans to significantly grow our investment universe.” Prior to joining Investcorp, David served as a senior member at UBS as part of their Capital Introduction Group, where he was actively involved in all aspects of the prime brokerage business – including originating prospects, sales, and relationship management.

Franklyn Chang

The Review | May 2014

INVESTCORP BANK B.S.C. Investcorp House P.O. Box 5340 Manama Kingdom of Bahrain Telephone: +973 17 532 000 Facsimile: +973 17 530 816 INVESTCORP INTERNATIONAL LTD. Investcorp House 48 Grosvenor Street London W1K 3HW United Kingdom Telephone: +44 (0) 20 7629 6600 Facsimile: +44 (0) 20 7499 0371 INVESTCORP INTERNATIONAL INC. 280 Park Avenue New York, NY 10017 United States of America Telephone: +1 212 599 4700 Facsimile: +1 212 983 7073 INVESTCORP SAUDI ARABIA FINANICAL INVESTMENTS CO. Al Faisaliah Tower, 29th Floor P.O. Box 61992 Riyadh 11575, Kingdom of Saudi Arabia Telephone: +966 11 484 7600 Facsimile: +966 11 273 0771 INVESTCORP BANK B.S.C – ABU DHABI Al Sila Tower, 8th Floor, Sowwah Square Al Maryah Island, P.O. Box No. 36961 Abu Dhabi, United Arab Emirates Telephone: +971 2 501 8900 Facsimile: +971 2 644 1566

www.investcorp.com