ICG boosts assets by 29%, profits by 51%

Last year’s €4.5bn debt fund raise has boosted the firm as it ponders launching new strategies.

Intermediate Capital Group has increased its assets under management by almost 30 percent in the past year, according to its full-year results.

In the 12 months to the end of March, the firm raised €10 billion, bringing its total assets under management to €37.1 billion, a 29 percent increase. A major part of this was its ICG Europe Fund VII, which closed at €4.5 billion in November.

The fund management company increased profits by 51 percent to £144 million ($182 million; €163 million). Its adjusted group profit before tax grew by 65 percent to £278 million.

ICG’s chief executive, Benoît Durteste, said disciplined investment processes and consistent performance had helped generate demand for the firm’s funds. However, he added that the company would continue to innovate.

“While our most successful strategies continue to attract higher asset flows, we are putting in place the foundations for future growth, incubating new strategies and building out our pool of talent, and remaining alert for the opportunities any market dislocation may present,” he said.

It is thought ICG is preparing to launch a follow-up to its 2008 special situations vehicle, ICG Recovery Fund. This month, the firm announced it had appointed Alan Ross, formerly of Cerberus Capital, as a managing director in its special situations team.

ICG said its deployment over the past year has been disciplined but strong, and total funds deployed had increased by 23 percent to €6 billion. It added that weighted average fee rates remained consistent at 0.86 percent and that all funds were on course to exceed their return hurdle rates. According to its full-year results, average fee rates on Europe Fund VII increased from 1.34 percent in the predecessor fund to 1.43 percent of commitments.

ICG said its fundraising has been helped by strong demand for alternative assets driven by a structurally low interest rate environment, which affects the returns from conventional debt asset classes.

Although the fund manager expects global economic growth to slow in 2019, with more moderate revenue and earnings growth in the US and Europe, it believes recession and systemic default risks are low.

The firm also announced that 2019 will be the last year in which Kevin Parry sits on its board as chairman. Parry has served on the board since 2009, longer than the nine-year limit specified in its updated corporate governance code. ICG is now actively looking for a successor.