Intermediate Capital Intermediate Capital Group Plc : Q3 Trading Statement For The Period To 31 December 2018
January 29 2019 - 2:00AM
UK Regulatory
TIDMICP
Highlights
-- Inflows in the third quarter were EUR1.9bn; of which EUR1.0bn has been
raised across our capital markets funds and EUR0.5bn raised for Strategic
Equity III. Year to date inflows amount to EUR8.0bn
-- Total AUM 5% higher at EUR35.2bn and third party fee earning AUM 7%
higher at EUR27.9bn, compared to 30 September 2018
-- Fund deployment remains strong across strategies
-- All funds on course to meet or exceed their return hurdle rates; recent
capital markets volatility has not impacted valuations and fund
performance remains strong.
Benoit Durteste, CEO, said:
"Strong investment performance, underpinned by steady demand for
alternative asset classes, continues to drive positive inflows, despite
the challenging macro-economic environment.
"It is pleasing to see this demand benefiting a broad range of our fund
strategies -- most notably in the third quarter for Strategic Equity III
and our open-ended capital market funds. Our local teams continue to
find attractive investment opportunities and where appropriate, they are
capitalising on market liquidity to realise existing assets, lock in
performance and return capital to investors.
"We continue to have confidence in our ability to grow despite
geopolitical uncertainties, building our capabilities in newer asset
classes to complement our more mature businesses and enhance our longer
term growth prospects. We remain alert to the opportunities that any
market dislocation may present to us."
Business review
Total AUM increased 5% over the three months to 31 December 2018 to
EUR35.2bn, including our EUR2.4bn balance sheet investment portfolio. We
have raised over EUR1bn for our capital markets strategies, including a
EUR0.5bn segregated mandate, our largest ever. This brings the total
raised in the last two years for this scalable asset class to over
EUR2.5bn (excluding CLOs).
Fundraising for Strategic Equity III is underway, targeting a fund
significantly larger than its predecessor which raised $0.9bn of third
party money. Strategic Equity III raised EUR546m in the period and,
with fees on committed capital from first close, fundraising is having
an immediate positive impact on our profits. We also completed
Fundraising for Europe Fund VII and saw further inflows for ICG Longbow
Development Fund.
Third party AUM by strategic asset class at 31 December 2018 was as
follows:
Total
Corporate Investments Capital Market Investments Real Asset Investments Secondary Investments Third Party AUM
EURm EURm EURm EURm EURm
------------- ----------------------- -------------------------- ------------------------ --------------------- ------------------
At 30
September
2018 17,200 8,835 3,631 1,562 31,228
------------- ------------ --------- -------------------------- ------------ ---------- --------------------- ---------- ------
Additions 132 1,010 118 599 1,859
------------- ------------ --------- -------------------------- ------------ ---------- --------------------- ---------- ------
Realisations (152) - (162) - (314)
------------- ------------ -------- -------------------------- ------------ --------- --------------------- ---------- -----
FX and other 2 38 (18) 15 37
------------- ------------ --------- -------------------------- ------------ --------- --------------------- ---------- ------
At 31
December
2018 17,182 9,883 3,569 2,176 32,810
------------- ------------ --------- -------------------------- ------------ ---------- --------------------- ---------- ------
Fee earning
AUM - at 31
December
2018 13,059 9,883 2,927 2,012 27,881
------------- ------------ --------- -------------------------- ------------ ---------- --------------------- ---------- ------
We have continued to source attractive investments and deployed capital
in the quarter while maintaining our disciplined investment culture in a
competitive investment market. The total amount of capital deployed on
behalf of our direct investment funds was GBP880m in the quarter (three
months to 31 December 2017: GBP1,253m). The direct investment funds are
investing as follows, based on third party funds raised at 31 December
2018:
Strategic % invested at % invested at Assets in fund at Deals completed
asset class Fund 31 December 2018 30 September 2018 31 December 2018 in Q3
------------ ------------ ------------------- -------------------- ----------------- ---------------
Corporate ICG Europe
Investments Fund VII 30% 28% 4 1
Senior Debt
Corporate Partners
Investments III(1) 36% 25% 17 6
Corporate Asia Pacific
Investments Fund III 93% 91% 8 1
ICG Longbow
Real Asset Real Estate
Investments Fund V 41% 34% 7 1
Strategic
Secondary Secondaries
Investments II 77% 75% 10 0
------------ ------------ ----- ----------- ----- ------------ ----------------- ---------------
(1) Co-mingled fund, excluding mandates and undrawn commitments
During the quarter we have also signed, subject to completion, a
pioneering transaction for our Strategic Equity funds with their first
transaction in Asia. This makes our Strategic Equity business truly
global and highlights its significant growth potential.
90% of our AUM is in closed end funds where outflows occur with the
realisation of the underlying portfolio companies. The pace of
realisations remained healthy as companies continue to take advantage of
market liquidity to sell assets and lock in performance.
The balance sheet investment portfolio was GBP2,118m at 31 December 2018
(30 September 2018: GBP2,110m) with new investments offsetting the
realisation of older assets. As the balance sheet solely invests to
support our fund management activities, its portfolio has become
increasingly diversified by geography and product with its performance
reflecting that of the funds in which it invests.
The balance sheet remains well funded with available cash and unutilised
bank lines of GBP428.4m at 31 December 2018 (30 September 2018:
GBP390.8m) and no material refinancing requirements in the next 12
months.
Result of audit tender
As disclosed in the Group's 2018 Annual Report and accounts, ICG must
appoint a new auditor for its year ending 31 March 2021. The tender
process was conducted during 2018 to allow as wide a group of
participants as possible sufficient time to be able to become
independent.
Following a competitive tender process led by the Audit Committee, ICG
announces its intention to propose the appointment of Ernst & Young LLP
as its external auditor for the financial year ending 31 March 2021. A
resolution to approve their appointment will be proposed to shareholders
at the Company's AGM in July 2020.
The Board expects Deloitte LLP will remain the Group's auditors until
the year ending 31 March 2020. To facilitate an orderly transition,
Ernst & Young LLP will also observe the FY20 audit.
Enquiries
Analyst / Investor enquiries:
Philip Keller, CFOO, ICG +44 (0) 20 3201 7700
Ian Stanlake, Investor Relations, ICG +44 (0) 20 3201 7880
Media enquiries:
Alicia Wyllie, Corporate Communications, ICG
+44 (0) 20 3201 7994
Neil Bennett, Sam Turvey, Maitland +44 (0) 20 7379 5151
This trading statement has been prepared solely to provide additional
information to shareholders and meets the relevant requirements of the
UK Listing Authority's Disclosure and Transparency Rules. The trading
statement should not be relied on by any other party or for any other
purpose.
This trading statement may contain forward looking statements. These
statements have been made by the Directors in good faith based on the
information available to them up to the time of their approval of this
report and should be treated with caution due to the inherent
uncertainties, including both economic and business risk factors,
underlying such forward looking information.
These written materials are not an offer of securities for sale in the
United States. Securities may not be offered or sold in the United
States absent registration under the US Securities Act of 1933, as
amended, or an exemption therefrom. The issuer has not and does not
intend to register any securities under the US Securities Act of 1933,
as amended, and does not intend to offer any securities to the public in
the United States. No money, securities or other consideration from any
person inside the United States is being solicited and, if sent in
response to the information contained in these written materials, will
not be accepted.
This Trading Statement contains information which, prior to this
announcement was inside information.
About ICG
ICG is a specialist asset manager with over 29 years' history. We manage
EUR35.2bn of assets in third party funds and proprietary capital,
principally in closed end funds. Our strategy is to grow our specialist
asset management activities to deliver increased shareholder value. Our
goal is to generate income and consistently high returns whilst
protecting against investment downside for our fund investors. We seek
to achieve this through our expertise in investing across the capital
structure. We combine flexible capital solutions, local access and
insight with an entrepreneurial approach to give us a competitive edge
in our markets. We operate across four asset classes - corporate,
capital market, real asset and secondary investments. In addition to
growing existing strategies, we are committed to innovation and
pioneering new strategies across these asset classes where the market
opportunity exists to deliver value to our fund investors and increase
shareholder value.
We are listed on the London Stock Exchange (ticker symbol: ICP) and
provide investment management and advisory services in support of our
strategy and goal through a number of regulated subsidiaries, further
details of which are available at: www.icgam.com.
(END) Dow Jones Newswires
January 29, 2019 02:00 ET (07:00 GMT)
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