ICG Targets Zero Net Debt as Earnings Rise

ICG (LON: ICG) shares rose about 3% in early trading today after the alternative asset manager reported 18% growth in fee-related earnings per share and set a target of zero net debt. The interim results, for the six months to the 30th of September, were published before the London open.

The shares stood at 2012p at 9.37am, up 59p from yesterday’s close of 1953p, after opening at 1951p and touching 2032p. Volume of 253,618 shares compares with 602,177 for all of yesterday. The quote is delayed and the session is still running.

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Fee-related earnings, the profit ICG makes from management fees before performance fees, rose to £199m, or 68p a share, from £168m and 58p a year earlier. Management fees rose 12% to £374m, and the fee-related margin improved to 53.1% from 50.4%.

Fee-earning assets under management reached $90bn, up 9% over twelve months at constant currency. ICG closed its Europe IX fund at €12bn, materially oversubscribed. Chief executive Benoît Durteste said the fund was part of a run of successful closes.

Over the last two years we have had seven funds close at or above their target, including most recently Europe IX at €12bn, the largest structured capital fund ever raised globally.

Benoît Durteste, chief executive, ICG

Other lines were weaker. Performance fees fell to £24m from £98m, a year-earlier figure that included a £72m one-off. Profit before tax on ICG’s adjusted measure fell 18% to £287.3m, earnings per share dropped to 80p from 102p, and group operating cash flow was £219m against £467m.

On capital, the board targets zero net debt over the medium term; net debt was £93m, down from £113m at the end of March. Excess capital, after funding growth in fee-related earnings per share, would be returned to shareholders, with acquisitions prioritised over buybacks. The interim dividend rises 5% to 29.0p, with the shares going ex-dividend on the 3rd of December and payment on the 8th of January.

Even after the rise, the shares sit 5.1% below their 52-week closing high of 2120p. The next scheduled update is a third-quarter trading statement on the 20th of January.