Investcorp says conditions feel like recession

By Megan Davies

DUBAI (Reuters) - Bahrain and London-listed investment firm Investcorp's chief operating officer Gary Long said on Monday that its portfolio companies were under stress, getting leverage for deals was difficult and investors were nervous.

"Certainly alternative investment firms like Investcorp are being negatively impacted" by the financial turmoil, Long said, speaking at the Super Return private equity conference in Dubai, noting this was particularly being felt in its business in the West.

"For example, dealflow is down, leverage is a lot more difficult... and returns are under pressure," Long said. "That's true for private equity, that's true for hedge funds, and that's true for real estate investing."

Long said that the companies Investcorp has in its private equity portfolio are under pressure as they try to maintain their top line revenues and cashflows.

"So it definitely feels like a recession to us and has felt like a recession for many months now," Long said.

But he said while the Western private equity environment is very difficult, in the Gulf, it "continues to grow and mature and prosper".

"It is the golden age for private equity in the Gulf," he said.

He added that investing in the Gulf had a lot of differences to the West, particularly in the financing of deals.  Continued...