Icg Plc · LSE:ICG
Icg — Intermediate Capital Group — H1 FY24 Earnings Presentation
24 slides from Icg's earnings presentation, Nov 15, 2023
Slide 1: Delivering growth today, visibility on future opportunities
Delivering growth today, visibility on future opportunities Results for six months to 30 September 2023 15 November 2023 All data as at 30 September 2023 and on an APM basis unless otherwise stated; see RNS for more details PRIVATE AND CONFIDENTIAL
Slide 2: Key messages
Key messages ICG had a strategically and financially successful first half; visibility on future growth prospects increased Broad waterfront of products, built on our ~35 years of experience in managing credit through cycles Financial performance reflects the strength of our business model: growing
Slide 3: Broad waterfront of products, built on our ~35 years of experience
Broad waterfront of products, built on our ~35 years of experience in managing credit through cycles INVESTMENT ENVIRONMENT WHERE WE SEE OPPORTUNITY TODAY Slower growth, higher inflation, European Corporate European Mid-Market higher rates for longer? Structured capital Asia Pacific Corporate Availa
Slide 4: Direct lending: “golden age” and structural growth
Direct lending: “golden age” and structural growth Borrower demand Client returns $288bn of dry powder available for European buyout funds1 Leverage Protections $21bn AUM Largest senior secured direct lender Today focused on upper and mid-market Short-term direct lending in Europe • 9x times more pr
Slide 5: H1 FY24: strategically and financially successful
H1 FY24: strategically and financially successful AUM AND BUSINESS ACTIVITY MEASURES PERFORMANCE OF KEY FUNDS STRATEGIC PROGRESS Total AUM Fee-earning AUM • Progress across flagship, scaling and seeding strategies $81bn $64bn Underlying earnings growth • Deepening our talent bench, including COO and
Slide 6: Long-term growth: client capital and fee income driving our business
Long-term growth: client capital and fee income driving our business B/S as % of AUM 17.9% 4.0% £263m 90 600 £236m 2 $81bn Third party AUM1 5.3x H1 FY23 H1 FY24 Third party 6.3x fee income1 450 Third-party fee income (£m) 60 AUM ($bn) 300 30 150 0 0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Slide 7: Increasing visibility of future growth: executing on “scaling up” and “scaling out”
Increasing visibility of future growth: executing on “scaling up” and “scaling out” SCALING TOWARDS FRE-CENTRIC VALUE, REDUCED CAPITAL INTENSITY Strategies being seeded Scaling strategies Flagship strategies from balance sheet £170m seed investments $1.8bn raised in ~63% of H1 FY24 made in H1 FY24 H
Slide 8: Business performance
Business performance PRIVATE AND CONFIDENTIAL
Slide 9: Breadth of ICG evident in business activity
Breadth of ICG evident in business activity BUSINESS ACTIVITY Fundraising Strategic Equity $1.8bn SDP $1.0bn CLOs $0.4bn Total flagship $3.2bn Mid-Market II $0.8bn • Fundraising in line with 8% Real Estate Equity $0.3bn our expectations 51% Infrastructure $0.2bn 12% Other $0.6bn Total scaling $1.8bn
Slide 10: Funds generating value for clients
Funds generating value for clients LIFE-TO-DATE IRR1 GROSS MOIC 42% DPI Europe VI (2018) Europe VII (2021) 1.7x 1.7x 1.8x 1.8x European 2.1x 2.1x 2.2x 2.2x 19% 179% DPI Corporate Mar-22 Sep-22 Mar-23 Sep-23 Mar-22 Sep-22 Mar-23 Sep-23 Strategic Equity III (2021) Strategic Equity IV (2023) 1.7x 2.4x
Slide 11: Large, blue-chip client franchise
Large, blue-chip client franchise 2 CLIENT NUMBER GROWTH DIVERSIFICATION 15% 647 662 37% 28% 32% Geography Type 331 22% 11% 14% 15% 26% EMEA (excl. UK and Ireland) Pension funds FY18 FY23 H1 FY24 Americas Insurance companies Asia Pacific Asset managers UK and Ireland Family office 3% 9% Net benefici
Slide 12: Looking ahead: strategic and financial resources to win
Looking ahead: strategic and financial resources to win Investment Scale and Financial Distribution Platform excellence breadth resources Deep client Track record Relevance to clients Substantial, resilient fee relationships Scalability and efficiency through cycles stream Focus on returns Broadenin
Slide 13: Financial results
Financial results PRIVATE AND CONFIDENTIAL
Slide 14: Performance in current environment demonstrates durability of our economic model
Performance in current environment demonstrates durability of our economic model Visible and recurring management fee revenues High FMC operating margin Strategically and financially valuable balance sheet Robustly capitalised, substantial liquidity PRIVATE AND CONFIDENTIAL Past performance is not a
Slide 15: Visible and recurring management fee income
Visible and recurring management fee income EMBEDDED MANAGEMENT FEE GENERATION POTENTIAL $64.2bn $14.3bn fee-earning AUM not-yet-earning fees AUM ~£480m Potential annual ~£110m management fees1 Potential annual management fees2 0.91bps fee rate Management fees generally on committed or invested cost
Slide 16: Continued business activity drove fee-earning AUM 4% higher during the period
Continued business activity drove fee-earning AUM 4%1 higher during the period FEE-EARNING AUM IN THE PERIOD $2.9bn $2.8bn $64bn $63bn $(3.2)bn $(1.2)bn FY23 Fundraising Deployment Realisations FX and other H1 FY24 Raising funds that Deploying funds that Slower realisations charge fees on charge fee
Slide 17: Growing underlying fee income
Growing underlying fee income FEE INCOME YEAR-ON-YEAR £266m £15m £263m £11m £(29)m +5% y-o-y1 H1 FY23 Impact of catch up fees in H1 FY23 Underlying management fees Performance fees H1 FY24 Structured and Private Equity Private Debt Real Assets Credit Performance fee Growing, increasingly diverse fee
Slide 18: FMC PBT up 13% y-o-y
FMC PBT up 13% y-o-y FMC PBT LTM FY £330m £311m FY £286m Headcount growth, investments in people and platform FY FY £202m £45.6m £(4.4)m £183m £(20.1)m FY H1 £144m £144m £(2.1)m H1 H1 £121m £163m +13% H1 H1 £85m £90m H1 55% operating £64m margin FY19 FY20 FY21 FY22 FY23 Third-party fee Movement in F
Slide 19: Well-capitalised and valuable balance sheet
Well-capitalised and valuable balance sheet BALANCE SHEET LIQUIDITY PROFILE £3.9bn £3.9bn 100% undrawn Cash £0.5bn Shareholder Substantial shareholder equity: £485m equity NAV per share of 714p £550m Cash and cash equivalents + RCF £2.1bn TERM DEBT PROFILE £1bn available liquidity 100% fixed rate £3
Slide 20: Balance sheet delivering strategic and financial value
Balance sheet delivering strategic and financial value LONG-TERM EARNINGS POWER CASH ACTIVITY DURING THE PERIOD 5YR AVG. NIR Aligning Group 11% interests £102m deployed alongside clients2 with clients Structured and 16% Seeding Private Equity new £170m invested strategies Private Debt 10% Real Asset
Slide 21: Proven track record of profitable growth
Proven track record of profitable growth SCALE TODAY Y-O-Y GROWTH 1 FIVE-YEAR GROWTH $81bn 7%2 2.3x2 Total AUM £464m 5%3 2.8x LTM management fees £330m 13% 2.9x LTM FMC PBT 714p 9% 1.5x NAV / SHARE 1YoY growth based on H1 FY24 vs. H1 FY23 figures. 2Fee-earning AUM growth rate. 3 Excluding catch-up f
Slide 22: Looking ahead: re-confirming financial guidance
Looking ahead: re-confirming financial guidance FUNDRAISING FMC OPERATING MARGIN At least $40bn fundraising in aggregate In excess of 50% between 1 April 2021 and 31 March 2024 PERFORMANCE FEES NET INVESTMENT RETURNS To represent 10 - 15% of third-party fee Low double-digit percentage points over in
Slide 23: Q&A
Q&A PRIVATE AND CONFIDENTIAL
Slide 24: Disclaimer
Disclaimer The materials being provided to you are intended only for informational purposes and convenient reference and may not be relied upon for any purpose. This information is not intended to provide, and should not be relied upon, for accounting, legal, tax advice or investment recommendations
Intermediate Capital Group — H1 FY24 Earnings Presentation on 6ix