Trading Statement for the period to 27 January ...
Highlights
- Fundraising momentum continues with €3.1bn of third party money raised in the nine months to 31 December 2014. A full product pipeline is expected to result in very strong fundraising over the coming months
- New third party money raised in the quarter to 31 December 2014 totalled €1.4bn, with €0.2bn of realisations in older funds
- AUM increased by 8% in the quarter to 31 December 2014 to €14.9bn; third party fee earning AUM increased 12% to €10.8bn
- Investment pace for direct investment funds maintained in competitive market and healthy pipeline of investment opportunities across products
- Private equity secondaries business launched, as previously announced, with hire of specialist team and first investment
Commenting, Christophe Evain, CEO, said:
"ICG has maintained strong momentum, both in investor demand for our funds, and in the deployment of capital. In an era of diminished returns for institutional investors, investor demand continues to be strong for alternative credit strategies due to increasing awareness and an understanding of the role these strategies play in a portfolio. We see attractive opportunities and expect the momentum we have reported so far this financial year to continue."
Grow assets under management
Our fundraising momentum continues with €1.4bn of new third party money raised in the quarter to 31 December 2014. As expected, the level of realisations has slowed resulting in total assets under management increasing 8% over the three months to 31 December 2014 to €14.9bn. The third party AUM bridge is as follows:
| Mezzanine and equity Funds €m | Real estate Funds €m | Credit Funds €m | Total Third Party AUM €m | Total Third Party Fee Earning AUM €m | |
| At 30 September 2014 | 3,658 | 1,653 | 6,048 | 11,359 | 9,686 |
| Additions | 489 | 545 | 322 | 1,356 | |
| Realisations | (23) | - | (207) | (230) | |
| FX and other | 42 | 10 | (10) | 42 | |
| At 31 December 2014 | 4,166 | 2,208 | 6,153 | 12,527 | 10,817 |
As anticipated, fundraising in the quarter was dominated by our newly established strategies. A year after launching our 50:50 partnership with Nomura, we had a first close of €190m in our domestic Japanese mezzanine fund, including €47m each from ICG and Nomura. A further close is expected shortly and fees are being charged on a committed capital basis. Elsewhere, we have raised £225m from two further mandates for our ICG Longbow Senior Debt Fund and launched a UK Real Estate Development Fund with a £202m mandate, for which fees will be charged on an invested capital basis. We have also closed our third US CLO (Collateralised Loan Obligation) of $411m, including $22m from ICG.
We have an extensive product pipeline and expect this to lead to a period of very strong fundraising. Whilst we do not expect to close any further CLOs during the current financial year, we anticipate first closes across a range of products and further closes on both our US and Japanese mezzanine funds.
Invest selectively
We have maintained our selective and disciplined approach to investing despite the highly competitive investment market and continued the investment pace of our direct investment funds, being those funds where we originate deals, during the quarter to 31 December 2014. The total amount of capital deployed on behalf of our direct investment funds was £814m in the quarter and £2,104m in the year to date (nine months to 31 December 2013: £1,035m). In addition, our Investment Company invested a total of £116.6m in the quarter and £387.5m in the year to date, (nine months to 31 December 2013: £214.6m).
During the quarter we closed one investment in Europe which takes ICG Europe Fund V to 88% invested. Our ICG Longbow Real Estate Fund III was 92% invested at the end of its investment period and our Senior Debt Partners' strategy has committed 76% of its capital, contributing to our fee earning AUM. Our success at investing these funds has enabled us to commence marketing successor funds.
Elsewhere, we made one investment in Asia Pacific and two in the US during the quarter.
Manage portfolios to maximise value
The performance of our mezzanine portfolio, including the weaker companies, remains stable and our credit funds continue to perform either in line with, or ahead, of our expectations.
The first half of the financial year saw a strong level of realisations which has, as expected, slowed subsequently. In the quarter to 31 December 2014 our Investment Company received £126.7m principal repayments, crystallised £29.7m of rolled up interest and £4.9m of realised cash capital gains.
Balance Sheet
The balance sheet is well funded with available cash and unutilised bank lines of £367m at 31 December 2014. This has reduced from £637m at 30 September 2014 with an increase in assets held in anticipation of new funds being raised, including our investment in a private equity secondaries portfolio.
The Group has returned £69m (as at 27 January 2015) to shareholders through the current £100m share buyback programme, which is expected to be completed ahead of the full year results announcement. Work is ongoing to improve our return on equity and re-gear the balance sheet and, as previously communicated, we will update the market on the actions being taken with the full year results.
Enquiries
Analyst / Investor enquiries:
Christophe Evain, CEO, ICG +44 (0) 20 3201 7700
Philip Keller, CFO, ICG +44 (0) 20 3201 7700
Ian Stanlake, Investor Relations, ICG +44 (0) 20 3201 7880
Media enquiries:
Neil Bennett, Tom Eckersley, Maitland +44 (0) 20 7379 5151 Helen Gustard, Corporate Communications, ICG +44 (0) 20 3201 7760
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.
About ICG
ICG is a specialist asset manager providing subordinated structured lending, private debt, leveraged credit and minority equity, managing €14.9bn of assets in third party funds and proprietary capital. ICG has a large and experienced investment team operating from its head office in London with a strong local network of offices in Paris, Madrid, Stockholm, Frankfurt, Amsterdam, Hong Kong, Sydney, New York, Tokyo and Singapore. Its stock (ticker symbol: ICP) is listed on the London Stock Exchange. ICG is regulated in the UK by the Financial Conduct Authority (FCA). Further information is available at: www.icgam.com.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Intermediate Capital Group plc via Globenewswire
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