Intermediate Capital sees record AuM but profits drop

FTSE 250-listed asset manager Intermediate Capital, otherwise known as ICG, has unveiled record assets under management (AuM) for 2012/13 but profits dropped sharply as the company didn't exit as many investments during the year.

AuM reached a record €12.93bn (£10.91bn) in the year ended March 31st, up 13% from €11.41bn (£9.51bn) previously, following what it labelled as a "strong fundraising year, with increased geographical and institutionally diverse investors".

The movement in exchange rates also positive affected sterling-denominated AuM by 2.0% compared with the year before.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

While ICG said that its investment portfolio remained "resilient", a low level of realisations during the year meant that adjusted profit before tax dropped from £198.8m to £148.3m.

However, the company said that since the year-end, the pace of realisations has "materially increased". As well as repaying its investment in French healthcare firm Medi Partenaires and the agreement to sell its investment in UK livestock technology group Allflex (these were ICG's two biggest assets during the last year), the company said that a number of other processes are ongoing as sponsors look to exit their older assets.

"Therefore, subject to the economic backdrop remaining favourable, this could be a year of high realisations and refinancing."

The firm recommended a final dividend of 13.7p per share, bringing the full-year payout to 20p per share, up 5.0% on the year.

"This has been a very good year for the Fund Management Company while the Investment Company was held back by a temporary lull in realisations during the financial year," said Chief Executive Officer Christophe Evain.

"Assets under management have reached a record €12.9bn, testament to our strong investment performance, successful fund raising and our strategy to build a product suite that appeals to today's yield conscious investor."