ICG finds opportunity in credit crunch(3)

The UK finance provider’s full-year fiscal profits climbed 8 percent as banks continue to suffer from the credit troubles.

Intermediate Capital Group, the UK provider of loans and bonds for leveraged buyouts, announced Wednesday that its full-year fiscal profits climbed 8 percent for the year just ended, while net income in the past 12 months rose to £154.8 million (€195 million; $306 million) from £143.2 million a year earlier.

In a video interview following the release of the results, managing director Tom Atwood said the credit crunch is opening up opportunities for specialist providers of subordinate debt, as banks find themselves unable to lend.

“The thing about volatility of this sort is it creates inefficiencies in markets,” he said. “And inefficiency means opportunity. So, for investors with cash and with patience and a bit of wisdom, this is a really good time.”

Attwood added that he is sticking to his plan of doubling ICG's size every five years. “The competitive landscape has changed so much in our favour, frankly we could double the size of the loan book and therefore double the size of the core income in the space of a month,” he said. “That's not the right thing to do. The right thing is to really get out there, get the best deals, be patient, invest wisely, and if we do that then we will double the size of this business over five years.”

Attwood added that the firm would be highly selective about choosing new investments given the current outlook.

The results also showed that gains on investments fell to £135 million, down from record gains of £197 million last year, reflecting much lower levels of early repayments. ICG, which has been active in the UK for 19 years, opened an office in New York last year.