Intermediate Capital reports strong first half growth

Intermediate Capital Group reported a positive first half on Wednesday, with total assets under management reaching $81bn, up 3% from the start of the period.

The FTSE 250 company said fee-earning assets under management also saw a healthy uptick, rising to $64.2bn by 30 September, representing a 4% increase from the previous quarter-end.

Additionally, $14.3bn of assets under management still needed to generate fees.

ICG reported fundraising in line with expectations, totalling $5bn, with solid demand for its flagship strategies at $3.2bn and scaling strategies at $1.8 billion.

The company said it remained on track to meet its medium-term fundraising guidance.

Management fee income for the period totalled £234m, reflecting 5% year-on-year growth, excluding catch-up fees.

Performance fee income reached £29m, representing a notable improvement from the previous year.

ICG’s fund management company (FMC) profit before tax stood at £162.7m - an increase from the first half of 2023 figure of £143.7m.

The company achieved an operating margin of 55%.

It said its balance sheet investment performance showed an annualised net investment return of 11%, maintaining a consistent five-year average performance.

Group profit before tax reached £241.9m, a significant improvement from the £35.6m it recorded in the same period last year, while group earnings per share improved to 71.5p from 13.5p year-on-year.

ICG’s net asset value per share as of 30 September was 714p, compared to 694p on 31 March.

The company said it maintained a robust capitalisation, with a net gearing ratio of 0.48x and total available liquidity of £1bn.

In line with its dividend policy, ICG declared an interim dividend of 25.8p per share, consistent with 25.3p per share for the first half of last year.

“ICG had a strategically and financially successful first half - we are executing on our strategy of ‘scaling up’ and ‘scaling out’, and are investing in our people and platform,” said chief executive and investment officer Benoît Durteste.

“Our broad waterfront of products today, built on our 35 years of experience managing credit, positions us well to succeed across cycles.

“During the period, we made progress across flagship, scaling and seeding strategies.”

Durteste said fee-earning assets under management, profits from its fund management activities, and the value of its balance sheet all grew, adding that visibility on its future growth and earnings prospects increased.

“Key funds generated value for our clients and shareholders, with low default rates, resilient net asset values, and $1.9bn of realisations.

“This is underpinned by portfolio companies being appropriately capitalised and growing their earnings.

“Today, clients in our debt funds are enjoying historically high returns, and our teams in more equity-oriented funds are successfully navigating the impact of rising rates on those portfolios.”

ICG was continuing to invest in further diversification, Benoît Durteste explained, making seed investments during the period for strategies including LP Secondaries, Real Estate Equity, Life Sciences, and Infrastructure Asia.

“We are also exploring ways to leverage the breadth of ICG’s platform to distribute products to the HNW and UHNW market, building on the success of Strategic Equity.

“In a fast-changing macro background, our long-term business model is performing.

“We have the right strategic and financial resources to execute on the substantial growth potential embedded in ICG today, and we expect to make further strategic and financial progress in the second half of the year and beyond.”

At 1101 GMT, shares in Intermediate Capital Group were up 3.4% at 1,504p.

Reporting by Josh White for Sharecast.com.