Investcorp appoints Gulf head

Investcorp, which is listed on the Bahrain and London stock exchanges, has named Mohammed Al-Shroogi as head of its activities in the Gulf region.

Al-Shroogi is a 30-year Citi veteran, who recently resigned as its managing director for the Middle East and its chief executive office in the UAE. The Bahraini national was responsible for the setting up of Citi’s regional operations, for which he relocated to Dubai for in 2006, as well as its expansion into markets including Kuwait and Qatar. He will leave the financial conglomerate after 31 August 2009, however he remains a member of its Middle East Advisory Council, which it is presently setting up.

At Investcorp, Al-Shroogi will report to Nemir Kirdar, Investcorp’s executive chairman and chief executive officer.

Earlier this month, Investcorp axed the role of chief operating officer to “streamline its management structure”. Gary Long, who was at the firm for 15 years, stepped down from his role, the firm said. Kirdar is now responsible for former business areas previously handled by Long.

Investcorp made a $511 million net loss in the second half of 2008, booking an overall loss for the first time. In the same period, the firm’s net asset income fell by $526 million. It also suffered unrealised losses of $95 million on its private equity portfolio for the six months ended 31 December 2008.

This January, Standard & Poor’s Rating Services downgraded Investcorp’s credit ratings by two notches, from 'BBB/A-2' to 'BB+/B'. The downgrade reflected the falling valuations of the firm’s investments due to its high leverage and narrow business diversification as well as the financial crisis, S&P said.

In December 2008, Investcorp retrenched 20 percent of its staff across offices in Bahrain, London and New York in a bid to reduce costs. 

Other firms in the Middle East have also restructured in a bid to cut costs and reduce debt. This March, Kuwait’s Global Investment House reshuffled its management teams and streamlined reporting lines in a move to reduce its debt burden. The firm defaulted on a $200 million loan in the second half of December.

To “realise efficiencies” and cut down its back office over head, government-backed Dubai Holding brought Dubai International Capital and Dubai Group together under the same holding company. Dubai Holding Investment Group this February. The firm also brought together the back office functions of three real estate entities, Dubai Properties Group, Sama Dubai and Mizin.