22nd May 2019 10:03
LONDON (Alliance News) - Asset manager Intermediate Capital Group PLC on Wednesday said financial 2018 was an "excellent year", one in which its two business saw strong underlying growth.
At March 31, Intermediate Capital's assets under management stood at EUR37.08 billion compared to EUR28.70 billion the year prior, a 29% jump. Closing third-party fee-earning assets under management were up 41% at EUR29.6 billion, resulting in a 32% increase in third-party fee income.
The company reported EUR10.0 billion of inflows, which represents a record high for the company in an "exceptionally strong year". Europe Fund VII, one of Intermediate Capital's largest, contributed EUR4.0 billion to inflows - which represents a 60% increase on its predecessor fund.
"Our investment performance has enabled us to scale up our successor funds where we believe the investment market opportunity exists, while maintaining or increasing average fee rates on an underlying fund basis," the company added.
The company's net asset value per share at the end of its financial year stood at GBP4.93 compared to GBP4.66 the year before, a 5.8% increase.
Intermediate Capital saw GBP225.9 million in net investment gains in the period.
The private debt, credit and equity asset manager hiked its total dividend by 50% to 45.0 pence from 30.0p the year before.
"This has been an excellent year for ICG. Our disciplined investment processes and consistent investment performance have generated strong demand across a broad range of our investment strategies. Our local teams continue to originate attractive investment opportunities, while locking in returns by realising existing assets where appropriate," said Chief Executive Benoit Durteste.
Intermediate Capital's fund management company reported a 51% increase in pretax profit to GBP143.8 million from GBP95.3 million the year before.
Conversely, Intermediate Capital's investment company suffered a 62% decrease in pretax profit to GBP39.1 million from GBP103.8 million the prior year. The decrease is accounted for by a consolidation of 16 collateralized loan obligations as the company moved to a new accounting method. Adjusted for the structured entity fund consolidation, the Intermediate Capital's investment business saw an 84% rise in pretax profit to GBP134.5 million from GBP73.0 million the prior year.
Intermediate Capital's group pretax profit decreased 8.1% to GBP182.9 million from GBP199.1 million the year before.
The company said it remains focused on "steadily building" its existing fund strategies, with its closed end focus "locking in client commitments" allowing Intermediate Capital to manage its portfolio through economic cycles.
"We will continue to use our balance sheet capital solely to enable and accelerate the growth of our specialist asset management strategies. We have completed the structural steps necessary to rearrange our affairs for Brexit and are continuing to monitor political developments," the company added.
Intermediate Capital also said it will review its current operating profit margin target of 43%. "The board have initiated a review of this target, with an expectation that it will be increased, reinforcing our positive outlook for the business. The outcome of this review will be announced with the half year results in November."
In financial 2019, the company's operating profit margin was 52.3%.
Intermediate Capital said: "Our strong fund raising, capital deployment and portfolio performance, have allowed us to invest in our business, while at the same time increasing the fund management operating profit margin significantly ahead of our target."
Shares in Intermediate Capital were up 6.6% Wednesday at 1,276.00 pence each.
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