ICG: FTSE 100 giant’s shares rocket as fee income soars
Shares in global alternative asset manager Intermediate Capital Group (ICG) soared on Tuesday morning after the firm recorded a dramatic jump in profit for the first half of the year.
The FTSE 100 giant’s stock was up over eight per cent to 2,046.26p when markets opened, which came after the group revealed a 77 per cent jump in profit.
For the first half of the financial year, pre-tax profit reached £352m, up from £198m 12 months prior.
Total assets under management swell to $124bn (£94.2bn), whilst fee earning from the division grew six per cent to $84bn (£63.8bn).
ICG raised its dividend five per cent to 27.7p in line with its policy to increase the dividend by at least a mid-single digit percentage point on an annualised basis over the long term.
Earnings per share shot up 78 per cent to 102.8p.
The FTSE 100 titan increased its medium-term titans after the bumper performance, expecting performance fees to represent 10 to 20 per cent of total fee income, up from 10 to 15 per cent previously.
Performance fees – which refer to a form of compensation earned by investment managers for generating investment returns above an agreed-upon benchmark – increased to £98m for the period.
This included a £72m one-off “transition impact” due to a change in the firm’s accounting process. ICG said the change will make it “highly probable” to recognise fees earlier in a fund.
ICG bulks up war chest
As of 30 September, the group’s dry powder – referring to capital that has not yet been invested – topped $35bn giving the business a hefty war chest to pursue new investments.
It comes as ICG kicks off its long-term strategic and equity partnership with French asset manager Amundi to distribute private market products to wealth investors.
Amundi intends to acquire a 9.9 per cent “economic interest” in ICG by June 2027, which will achieved through a non-dilutive structure – a combination of market purchases and new non-voting shares supported by an ICG share buyback.
Chief executive Benoit Durteste said: “Looking ahead, transaction pipelines appear to be encouraging for many of our investment teams, and discipline remains crucial in the face of a very uncertain environment.”
Asset managers have endured volatile trading over the last 12 months after firms suffered double digit share price drops in the aftermath of President Donald Trump’s tariff regime.
Losses on the market ranged from £250m for Premier Miton, to £702m for Liontrust, and a whopping £2.3bn for Polar Capital.
Shares in ICG reached 1,569p at their lowest. For the year-to-date, the firm’s stock is still down two per cent.