Intermediate Capital Group H2 Earnings Call Highlights

Intermediate Capital Group LON: ICG reported stronger full-year results for the 12 months ended March 31, 2026, with management pointing to above-target fundraising, growth in fee-earning assets under management and record group operating cash flow.

Chris Hunt, managing director and head of investor relations, said the financial information discussed on the call was based on Alternative Performance Measures, excluding the consolidation of some fund structures required under IFRS. Chief Investment Officer and Chief Executive Officer Benoît Durteste said fiscal 2026 was “a good year for ICG,” highlighting the firm’s expanded competitive position, fundraising performance and a new strategic relationship with Amundi.

Durteste said ICG managed $126 billion of assets globally as of March 31, 2026. Fundraising for the year totaled $17 billion, which he said “materially surpassed” expectations. Fee-earning AUM rose 11% during the year, while the firm added 83 new institutional limited partners, bringing its total client base to more than 870.

Fundraising Beats Expectations

ICG’s strongest fundraising came from both established and scaling strategies. Durteste said the firm had its best year ever for real assets, raising $5.5 billion, while scaling strategies overall attracted $8.4 billion. North America accounted for 34% of capital raised, a trend Durteste attributed to investor interest in diversifying into Europe and to ICG’s investment in U.S. marketing capabilities.

The company’s Europe Fund IX had raised more than €10 billion at the time of the call. Durteste said the fund was likely to be oversubscribed and expected a final close by the summer, ahead of its initial fundraising deadline. He described it as ICG’s first commingled fund above €10 billion and said he believed it would be the largest structured capital fund of its kind globally.

Durteste also pointed to final closes for Infrastructure II and Metro II, both within real assets, saying they closed at or above targets with high re-up rates and strong cross-selling from existing ICG clients. He said successful second vintages were an important milestone in establishing a strategy’s reputation and positioning.

Looking ahead, Durteste said LP secondaries are expected to be in the market during fiscal 2027. The company may also launch sixth vintages of Strategic Equity and Senior Debt Partners later in fiscal 2027, although timing remains uncertain. He said fundraising in fiscal 2027 is expected to be below fiscal 2026 because of the firm’s fundraising cycle and which funds are in market.

Fee-Related Earnings Rise 23%

Chief Financial Officer David Bicarregui said ICG’s fee-earning AUM has doubled over the past five years to $87 billion, entirely through organic growth. He said the management fee rate has expanded by 13 basis points over that period to 98 basis points, supported by growth in higher-return, higher-fee strategies.

For fiscal 2026, ICG reported fee-related earnings, or FRE, of £350 million, up 23% year over year. Management fees were £685 million, up 13% in absolute terms and 17% excluding catch-up fees. Bicarregui said FRE operating expenses rose 5% year over year, reflecting cost control while the business continued to scale.

Performance fee income was £127 million, including a £72 million transitional gain related to a change in recognition methodology announced in October 2025. Realized performance fees, meaning cash received, were £96 million for the year.

ICG’s balance sheet portfolio stood at £2.6 billion at the end of March. Bicarregui said the portfolio exists to support fee-earning AUM growth through co-investments alongside funds and seeding new products and strategies. The portfolio generated a 5% return for the financial year, compared with an average annual return of 10% over the past five years.

Cash Flow and Balance Sheet Strengthen

Group operating cash flow rose to £861 million, compared with £533 million last year. Bicarregui said the result reflected cash received from FRE, performance fees and the balance sheet portfolio. Net debt fell to £113 million from £629 million in March 2025, leaving net debt at 0.3 times FRE. Total available liquidity was £1.5 billion.

Bicarregui said the company’s financial position “has never been stronger” and reiterated a progressive dividend policy. ICG declared an ordinary dividend of £0.87 per share for fiscal 2026, marking the 16th consecutive year of dividend growth.

The company also updated its medium-term financial guidance. Bicarregui said ICG is replacing guidance on FMC margin with guidance that FRE margin, excluding catch-up fees, is expected to expand over the medium term. He also said the company continues to expect performance fee income to represent 10% to 20% of total fee income over the medium term.

Deployment Remains Disciplined

Durteste said transaction activity remained healthy during the year, with $14 billion deployed across direct investment strategies and almost $7 billion realized. The company ended the year with $36 billion of dry powder.

He said ICG has remained disciplined in deployment, noting that investment committee discussions have been among the hardest in his memory because of the macroeconomic, geopolitical and technological environment. In direct lending, he said ICG has been cautious in recent years but deployed close to $4 billion in fiscal 2026, largely through financing opportunities in its existing portfolio.

Durteste also sought to distinguish ICG’s Senior Debt Partners strategy from riskier forms of direct lending. He said 100% of SDP loans are senior secured cash-flow-based lending, with no payment-in-kind or subordinated debt, minimal software exposure and no direct loans written in the U.S. over the past two years by choice.

In secondaries, Durteste said the opportunity set remains large, but ICG is being “incredibly and increasingly selective,” particularly around valuations. He said clients are increasingly focused on realized performance and cash returns, especially in higher-return strategies.

Q&A Highlights Capital Allocation and Wealth Strategy

In response to a question from Oliver Carruthers of Goldman Sachs about buybacks and capital deployment, Bicarregui said ICG’s near-term priorities remain the progressive dividend and reaching zero net debt. He said management is not in an “undue hurry” and values strategic optionality in the current environment. Durteste added that distress in parts of the alternative asset management industry could create opportunities for ICG to accelerate growth in specific areas.

Asked by Hubert Lam of Bank of America about costs, Bicarregui said investors should not assume fiscal 2026’s 3% cost growth is the new normal. He said he had previously guided toward a 5% to 10% range, noting ICG is still growing and expects to make selective hires.

On the Amundi partnership, Durteste said ICG and Amundi share a similar view on approaching alternative assets for wealth clients. He said the firm will take time to design products it believes adequately protect end investors and cautioned that evergreen structures are not appropriate for many alternative asset classes. He said ICG had filed in Luxembourg to create a SICAV structure that will serve as an umbrella for various products.

Durteste closed the discussion by saying he was more confident about the long-term potential of real assets after successful second vintages in infrastructure and real estate. He said those strategies could provide significant growth opportunities over time, including possible expansion into Asia for infrastructure and the U.S. for real estate.

About Intermediate Capital Group LON: ICG

ICG LSE: ICG is a global alternative asset manager with $127bn* in AUM and more than three decades of experience generating attractive returns. We operate from over 20 locations globally and invest our clients' capital across Structured Capital; Private Equity Secondaries; Private Debt; Credit; and Real Assets. Our exceptional people originate differentiated opportunities, invest responsibly, and deliver long-term value. We partner with management teams, founders, and business owners in a creative and solutions-focused approach, supporting them with our expertise and flexible capital.

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