ICG invests £165m in second quarter

Intermediate Capital Group has invested £165 million in 12 deals in the last quarter, saying it expects a record month in the mezzanine markets as cheap senior debt dries up.

Mezzanine capital provider Intermediate Capital Group has invested £165 million ($340 million; €246 million) in 12 deals in the last quarter. It included funding for three acquisitions for existing portfolio companies, according to an interim management statement to the end of June.

The deal volumes compares to 31 investments for the last financial year.

Growth of the company’s balance sheet was offset by £209 million of repayments, including some of the mezzanine provider’s larger loans such as AVR, Mach, and the Automobile Association. Intermediate Capital Group’s loan book decreased by 4 percent to £1,681 million during the quarter.

The company’s board said in its statement its short term prospects have improved in response to recent turmoil in the credit markets around the world.

Tom Atwood, managing director of Intermediate Capital Group, said “The problems in the debt markets is good news for traditional providers as our competitors have headed for the hills.” The weakness of the markets will lead to a reduction in the rate of loan prepayments, he added.

The company is expecting a record month in July. Its favourable outlook compares with that of other mezzanine providers such as Swiss asset manager Partners Group, which also said the market was improving for mezz lenders, as reported on PEO last week.

Intermediate Capital Group received £36 million in capital gains through exiting six deals and restructuring one investment. £8 million of this gain was recognised last year.

ICG has opened its first office in the US, in New York City in the last month. It closed a €2.25 billion European mezzanine fund in March this year.