ICG touts ‘resilience’ in difficult market

The firm has raised an additional €300m for its latest debt vehicle and grown profits before tax despite a challenging environment in Europe.

Intermediate Capital Group has weathered a difficult environment in Europe by growing profits before tax and making fundraising progress on its latest debt vehicle.

ICG grew profits from £186 million (€230 million; $294 million) to £199 million during the 12-month period ending 31 March 2012, excluding previously accrued costs of £45 million, demonstrating the “resilience” of the firm’s portfolio, ICG chief financial officer Philip Keller told Private Equity International.

On the fundraising side, after holding a first close on €1.1 billion last September for its fifth European fund, which is targeting €2 billion for mezzanine investments in Europe, the firm has closed on an additional €300 million. ICG has also been building up a pipeline of new products tailored for the increased demand for debt.

“At the moment what we’re seeing is a huge demand for yield and a lack of availability of debt,” Keller said.

“There is plenty of equity around, there is just not a lot of debt,” ICG chief executive officer Christophe Evain told Private Equity International. “The CLOs are more or less gone and there is a wide open space for new lenders…this is one of the things that we find really attractive.”

ICG has been active on the investment front in recent months. The firm made two investments in May, purchasing €26 million of discounted debt in a number of French assets and acquiring a separate portfolio of European LBO debt assets. The firm has been paying particular attention to the Asia-Pacific region, where it closed a A$155 million mezzanine loan in Australia in January.

“Asia-Pacific is pretty busy,” Evain said. “There’s quite a lot going on there across Australia, New Zealand and China as well. There’s quite attractive deal flow coming out of the region.”

ICG was founded in 1989 and controls €11.4 billion in third party capital and proprietary funds.