FINANCE: Intermediate Capital Group has reported a record fundraising year across all products in the 12 months to 31 March 2014.
The group’s third-party AUM rose by 8% to €10.7bn (£8.7bn), although a record period of realisations left total AUM broadly flat at €13bn.
ICG said historically low interest rates induced investors to search for higher-yielding assets, leading to the €3.8bn third-party raise, up by 69% compared with its previous highest fundraising effort.
First-time funds and new strategies represented 45% of the total raised, spearheaded by Senior Debt Partners, its European direct lending strategy, and the group’s first US CLO.
The group said it closed two funds at their hard cap – the maximum permitted size. These were the ICG Longbow III mezzanine fund at £700m and its Senior Debt Partners fund at €1.7bn.
During the year ICG realised more than £1.1bn of cash for its balance sheet and £2.7bn for its fund investors.
Despite the buoyant fundraising market, ICG said the investment market was competitive “and generating attractive opportunities”. However, it said that “maintaining our historical credit discipline has become more challenging”.
During the year it invested a record £630.8m on behalf of its mezzanine funds, £524.3m on behalf of its Senior Debt Partners strategy and £330.0m on behalf of its real estate funds.
In addition, ICG co-invested £212.4m alongside its mezzanine funds and committed £181.1m of capital to its credit and real estate funds.
It added that new funds were investing on target, with ICG Europe Fund V 58% invested, ICG Longbow III 37% invested and Senior Debt Partners 42% invested.
Group profit before tax was up by 11% to £158.7m compared with £142.6m, while the fund management company’s profit was £35m compared to £40.4m a year earlier.
Chief executive Christophe Evain said: “ICG has delivered a good set of results, with steady overall growth in group profits up 11% and a strong increase in third-party AUM at a time when assets have exited our portfolios at a record rate due to favourable market conditions.
“We continue to fund raise well and develop new opportunities for investors in line with our strategy to develop our third party fund management business.”
bridget.oconnell@estatesgazette.com
