The True Story Behind The Creation Of INVESTCORP
INVESTCORP – (01) Introduction
Dr. Jawad Hashim was the President of the Arab Monetary Fund during the period 1977-1982. In July 1980 he employed Nemir Kirdar as one of his advisors on one-year secondment from Chase Manhattan Bank. Mr. Kirdar’s task was to prepare certain feasibility studies in connection with the development of Arab financial markets, promotion of Arab monetary and economic integration and the quest for investment opportunities for the surplus of the oil-exporting Arab countries as part of the medium and long-term objectives of the Arab Monetary Fund (AMF).
Under the auspices of AMF and on its expense, a new financial institution was created in 1981/1982. This entity is called INVESTCORP, short for: Arab Investment Banking Corporation.
In 1982 Dr. Hashim encouraged Mr. Kirdar to resign from Chase Manhattan Bank to become INVESTCORP’s Chief Executive Officer which he agreed to do. After assuming this new post, Mr. Kirdar began to assert, in press interviews and websites, that INVESTCORP was his “brainchild” without any reference to the AMF having initiated the concept and paying its initial creation-expenses including Mr. Kirdar’s salary and allowances from July 1980 to August 15, 1981.
Therefore, this document is prepared for the record, to provide the historical background of Investcorp creation. Before going any further, it is important to provide brief background information about: The Arab Monetary Fund, INVESTCORP, Jawad Hashim and Nemir Kirdar.
Arab Monetary Fund (AMF)
The AMF is a regional Arab organization established by a treaty in 1976 among 22 member countries and commenced operation in 1977. The member countries are:
Jordan, United Arab Emirates, Bahrain, Tunisia, Algeria, Djibouti, Saudi Arabia, Sudan, Syria, Somalia, Iraq, Oman, Palestine, Qatar, Kuwait, Lebanon, Libya, Egypt, Morocco, Mauritania, Yemen, Comoros.
The Fund aims at contributing to the achievement of the following objectives:
- The correction of disequilibria in the balance of payments of member States.
- The removal of restriction on current payments between member States.
- The establishment of policies and modes of Arab monetary cooperation.
- The rendering of advice, whenever called upon to do so, concerning policies relating to the investment of the financial resources of member
- States in foreign markets.
- The promotion of the development of Arab financial markets.
- The paving of the way towards the creation of a unified Arab currency.
- The promotion of trade among member States.
For the realization of its goals, the Fund shall employ the following means:
- Providing short-term and medium-term credit facilities to member States with a view to assisting in financing their overall balance of payments deficits.
- Liberalizing and promoting trade and the resulting current payments and encouraging capital movements between member States.
- Allocating from its resources, paid in the currencies of the member States, sufficient funds to provide the necessary credits to settle their current payments among them, in accordance withe the rules and regulations to be laid down by the Board of Governors and within the framework of a special account to be opened by the Fund for that purpose.
- Managing any funds placed under the charge of the Fund by a member State or States.
- Holding periodic consultations with member States on their economic conditions and the policies they pursue in support of the realization of the goals of the Fund and States concerned.
- Conducting the research required to achieve the goals of the Fund.
- Providing technical assistance to banking and monetary institutions in member States.
INVESTCORP is a banking institution incorporated in Bahrain and operating globally with offices in Bahrain, London and New York.
INVESTCORP is an investment intermediary, acting as a vehicle to channel the wealth of its Arabian Gulf clients into investments in the United States and Europe. INVESTCORP’s three offices act in tandem, with New York and London offices identifying investment opportunities, and the Bahrain office placing investment among a pool of clients.
The company is active in four primary areas: Corporate Investments and Technology Investments, which each target the North American and Western European markets; Real Estate Investments in North America, with properties ranging from hotels to shopping malls, as well as residential and office buildings; and Global Asset Management.
INVESTCORP has become best known through a number of high-profile investments, including its purchase and resale of Gucci, Saks Fifth Avenue, Tiffany and others. INVESTCORP typically acquires 100% control of a company, then works with existing management to expand the business before reselling the company at a premium. Throughout its more than 25 years in business, INVESTCORP has achieved an average return on investments of 26% per year.
The company is listed on the Bahrain stock exchange.
The concept behind the creation of INVESTCORP was devised and implemented at the Arab Monetary Fund during the period 1980-1982, when Dr. Jawad Hashim was its President. The establishment of INVESTCORP commenced in May 1981 with the first founding shareholders subscribing and affecting payments on May 13, 1981.
By March 31, 1982, all committed founding shareholders had subscribed and paid their funds.
In May 1982, the public subscription was conducted in June 1982, General Shareholders Meeting was convened and the shareholders elected the first Board of Directors.
In July 1982, the final incorporation process was completed and INVESTCORP started to develop its policies and procedures manuals, background material and logistical requirements and had began to hire its staff.
In January 1983, INVESTCORP commenced business operations.
- Iraq’s Minister of Planning and Presidential Advisor (1968-1977).
- President of the Arab Monetary Fund (1977-1982).
- An employee of Chase Manhattan Bank (1974-1982).
- An employee of Arab Monetary Fund (July 1980 – July 1981).
- Executive Chairman and CEO of Investcorp (1982-present).