What’s going on at the top at Bahraini private equity and alternative investment firm Investcorp? Just days after scrapping its chief operating officer role in order to "streamline its management" it’s tapped Citigroup’s Middle East MD for a new senior role. Clearly, a change of strategy is afoot.

The firm posted a first ever loss of $511m for the six months ending 31 December 2008, and was forced to make 20% of its staff (or 90 people) redundant. It seems to have continued into 2009 in a similar vein, with Fitch downgrading its credit rating to BBB-.

Last week, Investcorp scrapped its COO role and parted ways Gary Long, who had been with the firm for over 14 years. It’s now brought in Mohammed Al-Shroogi as head of its Gulf activities. He was previously managing director at Citigroup, as well as chairman of its Islamic banking unit – roles he resigned from on Wednesday.

With over 30 years’ experience in the Middle East, most recently in Bahrain, Al-Shroogi brings a formidable reputation for building relationships in the region – spanning key regulators, central banks, financial institutions corporations and government officials and is clearly a bit of a coup for Investcorp, which needs to get back on track.

Whether this means hiring is on the agenda at Investcorp is a different matter. Although it’s planning to invest $650m into the MENA region over the next two years, and has been moving into new areas such as US discounted debt and MENA luxury goods companies, ratings agency Moody’s remains bearish on the company.

“It could take several months for Investcorp’s private equity origination and placement activity to recover to pre-crisis levels," it said.