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

uring the course of 2014, we are ingredient for success, it is the ability to seeing improved confidence from listen to our clients, and to understand Dour clients, our investors and our what they want and how to deliver it. investee companies. In conversations To that end, we continue to deliver on across the region, from Turkey to Saudi our promise to get even closer to our Arabia and everywhere in between, clients. We have invested in our people are telling us that a broadly relationship teams to ensure that improving macro environment, the return whenever we are needed we can be there. of growth and a clear turnaround in We are delighted with the results as our consumer, corporate and investor clients regularly tell us that they are confidence have contributed to a shift seeing the benefit of being able to spend towards risk-on mode once more. more time with us, more often, at a time As we enter our fourth decade as a firm, that is convenient to them. we are honoured to have been trusted We aim to continue strengthening our with the responsibility of preserving and Gulf relationships and network, growing our clients’ wealth throughout generation to generation, and with the the cycle. The relationships we have built objective of delivering strong optimal over the years are, at its core, based on returns to our clients. This is in our DNA trust and consistent delivery - whether we and what excites us most. are talking about an individual, a family office, a business or a Government entity. Mohammed Al-Shroogi If there is one thing that stands out as an President, Gulf Business Contents Guest Feature New Abu Dhabi office Page 9 Page 12-13 Eurozone Recovery, New office opens in the prestigious by Lord Mark Malloch-Brown. Sowwah Square.

Corporate Investments Pages 4-8 A leading international wet and cold weather brand and a Turkish meat producer are Investors conference Bankers receptions among our latest acquisitions. Page 10-11 Page 14 Real Estate Page 8 Berlin Investors conference Investcorp hosts Bankers receptions Acquisitions in Dallas, featuring distinguished in Abu Dhabi and Riyadh. and South Florida. speakers and guests. UN visit and New Joiners Page 15 Investcorp welcomes Franklyn Chang and David Walsh.

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Letter from Nemir A. Kirdar Growth of our global franchise

elcome, once again, to The Review. I would like Wto 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 Secretary- General 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 In terms of our financial performance, was able to perform the opening Foreign Affairs Minister of Spain; and the business excelled in the first half ceremony. His Highness’ involvement His Excellency Wolfgang Schüssel, the of the 2014 financial year with a underlines our close relationship with the former Chancellor of Austria. During 53% increase in net income. This Emirate of Abu Dhabi over many years the conference, our European Advisory was driven by successful fundraising, and our strong commitment to our loyal Board members shared their views on exits and deal activity in Europe, investors across the UAE and the wider the critical issues affecting European the US and the MENA region with Gulf. Continuing investment in our Gulf and global economies. Later, at our investments in companies that included expansion strategy will consolidate our gala dinner, we were honoured with Leejam Sports Company and Al Yusr reputation for excellent client service. the presence of Bundesminister Sigmar Industrial Contracting Company in Gabriel, MdB, Vice Chancellor of To conclude, I would like to thank . To date, Investcorp and Germany and Federal Minister of the the entire Investcorp family for their Investors received over US$ 1 billion in Economy and Energy Affairs. contribution, recognising that we owe our proceeds from investment realizations success to their talent, their expertise and Our management team addressed this and distributions. The second half of their on-going commitment to making distinguished audience with a series of the financial year began well with an our business a true industry leader. insightful presentations which showcased investment in Turkey and the sale of We believe we are uniquely positioned the strength of our firm as a ‘smooth- TDX Group for approximately US$ 327 for steady and sustained growth in the running’, worldwide business and one of million. years ahead. which we can all be very proud. Building on this success and as part of Thank you all. The success of this conference and the our on-going Gulf expansion strategy to positive press coverage it generated be even closer to our clients, we formally highlighted once again our commitment opened our new representative office to acting not only as a bridge between in Abu Dhabi in April 2014. This is the Gulf and investment opportunities located in the heart of the world’s newest in the West, but also as a facilitator for financial centre and we were honoured wider business and economic discussions that His Highness Sheikh Nahyan on matters affecting our investors and Bin Mubarak Al Nahyan, Minister of Nemir A. Kirdar shareholders. Culture, Youth and Social Development, 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.

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Corporate Investments

ounded in 1923 and headquartered in Cincinnati, Ohio, the totes Fand Isotoner brands are among the most recognizable and trusted rain and cold weather accessory brands in the U.S. and Europe. Within the multi- billion 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.”

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Corporate Investments

Investcorp acquires Namet

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Corporate Investments

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

amet is the leading Turkish producer of fresh cut and Npackaged 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 Meetings with Portfolio Companies in Turkey 2010 in a state of the art meat processing facility located in Istanbul, and the recent Investcorp hosted a dinner in Istanbul chairman and CEO Suleyman Orakcioglu acquisition of a second production facility on 28 April 2014 at the Ciragan Palace and board member Halidun Orakcioglu; located in Antalya. bringing together family owners in members of the Kayar family (Namet), Investcorp’s three portfolio companies in including Namet’s chairman and CEO Namet is Investcorp’s fourth investment Turkey. Tarik Kayar, Group President Haluk in Turkey to date and, post the acquisition Kayar and vice chairman Faruk Kayar Participants included members of of Tyrrells, represents its second global as well as Mohammed Al-Shroogi, Jim the Tirykioglu family (Tiryaki Agro), investment in the defensive yet high Tanner, Tristan de Boysson, Ceyhun Eren including Tiryaki’s board member growth branded food sector in the last and Murat Tasci from CI-MENA. 12 months. Mehmet Tiryakioglu, chairman Ahmed Tiryakioglu and CEO Suleyman The dinner was followed by meetings at Commenting on the acquisition, Tarik Tiryakioglu; members of the Orakcioglu the headquarters of the three companies Kayar, Chairman and CEO of Namet, family (Orka group) including Orka’s in Istanbul. 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 Dinner at the Ciragan palace with Mohammed Al-Shroogi and members of the domestically as well as assess potential Tiryakioglu (Tiryaki Agro), Orakcioglu (Orka) and Kayar (Namet) families” revenue opportunities beyond Turkey.”

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Corporate Investments Agreed sale of TDX to Equifax Inc. for £200 million

TDX is the United Kingdom’s largest debt company has attracted the interest of a In January 2014, Investcorp placement services and debt management strong trade buyer in Equifax is testament platform company. to the quality of solutions and services agreed the sale of TDX to TDX offers to its clients in recovering Through its technology fund, Investcorp Equifax Inc., (NYSE:EFX), delinquent debt.” Technology Partners III, Investcorp a global information acquired a substantial minority stake in The transaction is Investcorp’s third TDX in 2008, becoming the largest and successful exit of its technology portfolio solutions provider, for only institutional shareholder alongside in 12 months following its agreement to £200 million (approximately TDX’s three founders. sell the Skrill Group, one of Europe’s US$ 327 million). largest online payment systems, to CVC Gilbert Kamieniecky, Principal at Capital and the flotation of Fleetmatics, Investcorp, said: “With our support, the Irish-based leading global provider TDX has been able to realise its potential of fleet management solutions for and has evolved from being a UK- commercial fleet vehicles, on the focused operation to one with a growing New York Stock Exchange. international footprint. The fact that the

Real Estate Acquisitions in Dallas and South Florida

2811 McKinney Avenue - Dallas, Texas In May, Investcorp acquired a portfolio One Allen Center, Allen, Texas which of commercial and residential properties is adjacent to a 1.5 million square foot in Dallas, Texas and South Florida open air retail centre and near one of for approximately $105 million. The the largest school systems in the area. properties have an average occupancy San Remo, Coral Springs, Florida which rate of 95 percent and consist of over is situated in a strong school district, 500,000 sq. ft and reflect Investcorp’s less than three miles away from major focus on targeting high quality assets retail centers and in close proximity to with attractive yields. significant employment centers in South 3400 Carlisle Street - Dallas, Texas They include:- Florida. 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 One Allen Center - Allen, Texas

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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 But there is not yet a sustained stampede FTI Chairman for Europe Middle East and Africa rather these are straws in the wind. In the meantime, the structural problem of a Figures from a recent recently announced that it plans to return two speed Eurozone remains unsolved. to markets by selling €2 billion of bonds. Europe’s better than expected growth in business survey produced the fourth quarter of 2013 was largely by Markit imply further This easing of pressure creates a virtuous driven by Germany and France’s 0.4% circle. Falls in yields correspond to rises and 0.3% growth, which make up half of acceleration which could in bond prices improving bank balance the bloc’s GDP, as well as even stronger lead to a fairly respectable sheets and solvency, which in turn figures from countries like the UK and improves government credit quality Sweden. Output continued to shrink annualized growth rate leading to further falls in yields. from in the south to Finland in of 1-2%. But this process is not necessarily entirely the north. driven by a golden view of Europe’s So there are opportunities out there t looks like Europe’s recovery may future. Much of it might simply be a but skill will be required to navigate be gaining momentum. Output reallocation of capital from emerging them. A particular challenge will be the Igrew by 0.3% in the fourth quarter markets to developed markets by investors ECB’s upcoming Asset Quality Review, of 2013, up from 0.1% in the quarter spooked by the crisis in the Crimea as a probe of €3.7 trillion worth of bank before. Hardly explosive growth but a well as the wider risk of emerging market assets intended to ensure riskier assets lot better than the six quarters of decline capital flight provoked by the QE taper. are valued properly and that banks that preceded it. Figures from a recent While emerging markets equities funds are adequately capitalised. As ever, business survey produced by Markit imply have experienced heavy capital outflows, determining where the duff loans are further acceleration which could lead to a according to EPFR Global, since the and which banks are holdings them will fairly respectable annualized growth rate beginning of 2014 over $20 billion has foretell which countries and sectors may of 1-2%. flowed into European credit funds. prosper in the coming European recovery. Yet these flows are probably not like for Investors are noticing and the sovereign like and it is undeniable that the past few debt crisis now seems well behind us. Mark Malloch-Brown served as a Minister months have seen a change in sentiment Portuguese 10-year bond yields fell in Prime Minister Gordon Brown’s cabinet, on Europe, independent of any global below 4% for the first time in four where he had particular responsibility for capital flows. years recently, a far cry from the 17.4% strengthening relationships with Africa reached at the peak of the crisis. Even Indeed this incipient recovery, together and Asia. last summer, yields were as high as 7.5% with some remaining crisis-level asset He has also served as Deputy Secretary driven by a political crisis. Spanish and values, has spurred interest from bargain General and Chief of Staff of the United Italian 10-year bonds are also trading hunter investors. Deals in the Spanish, Nations under Kofi Annan and, for six well below 4%. Even the equivalent Portuguese, Italian and Greek real estate years prior, as Administrator of the UN Greek bond yields have halved since markets doubled from a year earlier to Development Programme, where he led UN a year ago and the Greek government €3 billion in the fourth quarter of 2013 development efforts around the world.

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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 Conference and the Adlon Hotel

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Investors conference - Berlin 2014

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

n March 2014, Investcorp organized hosted at the Deutsches Historisches and hosted its International Investors Museum. conference in Berlin which included I The Investors conference invited critical addresses from distinguished speakers discussions on several geopolitical and including His Excellency Amre Moussa, economic insights from the Gulf, Europe the former Secretary-General of the Arab and the United States. Speakers and guests League, and Dr. Tamara Cofman Wittes, shared opinion and thought on the most Director of the Saban Center for Middle pressing issues that are affecting the global East Policy at the Brookings Institution economy and businesses. and former Deputy Assistant Secretary for Near Eastern Affairs at the United States Nemir Kirdar, commented: “Hosting Department of State. this conference in Berlin demonstrates Nemir Kirdar Investcorp’s continued commitment to Members of Investcorp’s European acting not only as a bridge to investment Advisory Board, including His Excellency opportunities between the Gulf and Kofi Annan, former Secretary-General of the West, but also promoting better the United Nations, Dr. Ana Palacio, the understanding on critical issues influencing former Foreign Affairs Minister of Spain the world and maintaining an open and His Excellency Wolfgang Schüssel, the dialogue with investors and shareholders. former Chancellor of Austria, discussed The presence of so many of Investcorp’s the critical issues impacting European and long-standing investors, esteemed thought- global economies. leaders and politicians, demonstrates Bundesminister Sigmar Gabriel, MdB, the continued success of Investcorp’s Vice Chancellor of Germany and Federal global franchise and its reputation as a Minister of the Economy and Energy highly respected pioneer in alternative Affairs also attended the Gala dinner investments.” Mohammed Al-Shroogi

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New Abu Dhabi office Abu Dhabi office opening

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New Abu Dhabi office

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

is Excellency Sheikh Nahayan “We are honored to have the support Mabarak Al-Nahayan, of H.E. Sheikh Nahyan, who has made HMinister of Culture, Youth tremendous contributions to Abu Dhabi’s and Community Development officially business community and Vision 2030. inaugurated the new office which is Our new office, in the heart of the world’s headed by Mr. Mohamed Sammakia. newest financial centre on Sowwah Square, reinforces our close relationship Nemir Kirdar, Investcorp’s Executive with the Emirate over many years and our Chairman and Chief Executive Officer, total commitment to our loyal investors welcomed His Excellency Sheikh Nahyan across the wider UAE. As a business, to the new office and thanked him for we will ensure our clients receive a ‘best honoring the firm. He also welcomed H.E. in class’ service both regionally and Abdulrahman Salim Al-Ateeqi, Chairman internationally as we continue to strive to of the Board and the Board members of do what we do best - deliver strong optimal Investcorp as well as distinguished guests and well balanced investment returns.” from the government, business and media His Excellency Sheikh Nahayan Mabarak communities and said: Al-Nahayan and Nemir Kirdar, Investcorp’s Executive Chairman and Chief Executive Officer

Investcorp Board Members and Coordinators Committee Members

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Bankers receptions

nvestcorp recently hosted a reception Bankers receptions evening at both its Abu Dhabi and IRiyadh offices for key representatives of leading international and local banks. Invited guests had the opportunity to in Abu Dhabi 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 and Riyadh 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 (center) Timothy Mattar, Managing Director and Head of Saudi team with guests in Abu Dhabi with guests in Riyadh office

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UN visit

uring February 2014, Investcorp United Nations Pension hosted a meeting of the United DNations Pension Fund Board of Directors at its New York headquarters. Fund Board meeting in UN Secretary-General Ban Ki-moon also visited the Investcorp offices and joined New York 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 Secretary- General 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

Lionel Erdely, Head and Chief Investment fund talent early in their life cycle. Officer of the Hedge Funds Group said: His addition is a boost to our seeding and New Joiners “We are very pleased to welcome a person emerging manager program as we work to of Franklyn’s experience and caliber to execute on our plans to significantly grow Franklyn Chang our team. His wide ranging experience our investment universe.” n May, industry veteran Franklyn and capabilities within the alternative Prior to joining Investcorp, David served Chang joined the firm as a Managing investment industry will allow us to expand as a senior member at UBS as part Director bringing nearly 20 years I our product offerings to further meet our of their Capital Introduction Group, of experience in institutional sales, clients’ needs as we significantly grow our where he was actively involved in all placements and distribution of alternative hedge funds platform.” aspects of the prime brokerage business – investments. His key responsibility will including originating prospects, sales, and be to help grow Investcorp’s Hedge David Walsh relationship management. Fund Group’s assets under management In May, David Walsh joined our Hedge through strategic and targeted business Funds business reporting directly to Nick development efforts. Vamvakas, Head of Single Manager Business. He joins from Eaton Partners, LLC, where he was responsible for global distribution Commenting on his appointment, Lionel of alternative investment funds and served Erdely, Head and Chief Investment as both Partner for US Distribution and Officer of the Hedge Funds Group said: Managing Partner for the European and “David has been identifying and working Middle East Distribution. During his eight with early stage hedge fund managers years with the company, Mr. Chang was for years in his prior roles. We believe his involved in successfully placing over $12 background will enhance our capabilities billion in limited partner assets. in identifying and sourcing new hedge Franklyn Chang

The Review | May 2014 INVESTCORP BANK B.S.C. Investcorp House P.O. Box 5340 Manama Kingdom of 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