ICG reports slow quarter due to virus but expects strong recovery

Lockdown restricted both fundraising and deal activity but the fund manager expects a swift recovery in the coming months.

London-based fund manager Intermediate Capital Group said it has seen a rapid rebound in portfolio companies during the covid-19 crisis.

In its latest quarterly report, ICG’s CEO, Benoît Durteste, said: “The start of the financial year has been encouraging. Our portfolios are showing signs of improved performance, noticeably better than expected at year-end, indicating a recovery in valuations from their end-of-March lows.

“We have also seen an early rebound in investment activity as lockdown measures have eased and business activity resumes.”

The firm reported that its AUM increased by 1 percent to €45.6 billion in the first quarter of its financial year, which ended on 30 June. It reported that it was able to raise €1.2 billion of new money despite a longer onboarding process as a result of the pandemic.

However, ICG said it expects fundraising will be slower during the current financial year because of disruption caused by covid-19 as well as the natural fundraising cycle of its larger funds. It is currently raising for its Senior Debt Partners IV vehicle but has no other large funds in market.

Its report also shows investment activity has slowed down severely as a result of the crisis, with only two deals completed in the three months to the end of June – one each in the North American Private Debt Fund II and ICG Longbow Real Estate Fund V. The firm expects investment activity to rebound rapidly as coronavirus restrictions are eased and said it has €2.4 billion of deals in exclusivity.

ICG’s figures give some insight into the extent that the coronavirus has affected investment activity and fundraising in private markets.