Who Are Investcorp? The New Owners of Dainese

Today it was announced that Lino Dainese, founder of the Italian powersport clothing manufacturer Dainese, has sold 80 per cent of the company to private equity firm Investcorp. That’s probably not great news if you’re a fan of the company, as private equity firms aren’t renowned for keeping company values or being overly altruistic in their business practices.

So who are Investcorp? Their Wikipedia entry describes them as such:

Investcorp is a manager of alternative investment products, for private and institutional clients. Its principal client base is in the six countries of the Gulf Co-operation Council, but it also has institutional clients in North America and Europe.

The company offers investments in corporate investment, real estate and hedge funds, and has arranged investments with a combined value of approximately $44 billion. It typically places the private equity of companies and real estate properties it acquires directly with investors on a deal-by-deal basis, rather than through a fund structure.

The modus operandi of Investcorp is to purchase a firm, streamline it, do whatever it can to make it more profitable and then sell it, either directly or on the stock market. Now, that doesn’t mean all bad news, but I would hardly consider it good for the end consumer. I’m certainly not anti-capitalist, but for for Investcorp to make a quick return on their investment, costs will be reduced wherever possible which will normally lead to reduced product quality.

Lino Dainese, founder and President of Dainese, said: “It was hugely important to us to find the right partner in this period of strong development for the company. I believe that Investcorp’s proven track record, global presence and network will support the Company’s continued international expansion and product innovation. I also believe that their support will enable me to refocus on my passion, driving forward technological advances in our product line and, in particular, the D-Air system.”

Given that he has sold 80% of the business for €130 million ($162.9 million), it’s fairly evident it’s more about cashing out then requiring cash funds to advance the product range. And good on him – he’s created probably the most recognized motorcycle clothing brand in existence. But unfortunately, the Dainese we all know has today been lost.

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