ICG closes flagship mezz fund on €3bn

The London-headquartered investment specialist has surpassed €20 billion in assets under management as a result of fundraising over the past quarter.

Intermediate Capital Group (ICG) has finished fundraising for its latest mezzanine and equity strategy, Europe Fund VI, closing on €3 billion, the investment manager said.

The London-headquartered firm announced that it raised €2.8 billion of new third-party money in the three months to 30 June. Of that, €1.2 billion was raised for ICG Europe Fund VI.

Fundraising took seven months and drew support from existing and new investors, leading to an oversubscription and the firm surpassing its €2.5 billion target. Pension funds make up 40 percent of the investor base, followed by sovereign wealth funds (29 percent), insurance companies (25 percent) and asset managers (9 percent).

Investors came from Asia Pacific, Europe, North America, the Middle East and Latin America, ICG said.

ICG committed €500 million to the fund, which has a five-year investment period and is currently 8 percent invested.

Benoît Durteste, managing director, said: “Investment conditions in Europe remain attractive; we continue to see a strong demand from mid-market companies for flexible financing solutions. Similarly, the European investment thesis is well understood by global institutional investors and demand for the strategy far exceeded supply, leading to an oversubscription of the fund.”

ICG also held a first close of $422 million on its Asia-focused mezzanine fund, Asia Pacific Fund III, including $200 million from ICG, and closed its fourth US CLO of $411 million.

Meanwhile, ICG’s direct lending fund, Senior Debt Partners II, is fully allocated but has an official balance of €2.2 billion so far. The firm raised €918 million for the strategy in the quarter to 30 June and is expected to close on or above its €3 billion hard-cap. Nine percent of the fund has been invested via warehouse investments.

The firm said it expects the pace of fundraising to slow because of a focus on new strategies, which typically have longer lead times, such as an alternative credit fund and a secondaries strategy.

Third-party fee-earning assets under management at ICG increased by 17 percent from €15.7 billion to €17.9 billion between 31 March and 30 June. Total AUM increased by 12 percent and stands at €20.2 billion.