Icg Plc · LSE:ICG
Icg — Intermediate Capital Group — H1 FY2021 Earnings Presentation
24 slides from Icg's earnings presentation, Nov 17, 2020
Slide 1: First half results presentation
First half results presentation 17 November 2020
Slide 2: Key highlights
2 Key highlights Strong fundraising in an off-cycle year and accelerating pace of deployment €2.6bn €2.1bn €10.8bn Fundraising Deployed Dry powder Results reflect embedded growth and increasing diversification of business model €46.1bn £90m £103m AUM up 2% on March ‘20 FMC profit up 6% IC profit up
Slide 3: Powerful model combining predictable fee income and growth
3 Powerful model combining predictable fee income and growth We are building a leading global private markets business Exceptional long term track record is our key asset and differentiator Closed end and long duration funds provide excellent visibility of future growth Balance sheet capital is a co
Slide 4: Continuing to strengthen our ESG commitments through the pandemic
4 Continuing to strengthen our ESG commitments through the pandemic Responsible investing Joinedrecognition Industry the Societal role #100blackinterns initiative 100% of AUM covered by Significant Covid-19 response responsible investing policy initiatives across ICG portfolio companies including: S
Slide 5: Long-term industry tailwinds
5 Long-term industry tailwinds Sentiment towards alternatives remains positive Deal activity rebounding in Europe 260 40 240 35 7% 220 30 Aggregate deal value ($bn) 200 25 Number of deals 180 20 160 15 93% 140 10 Will invest the same or more Will invest less 120 5 100 0 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20
Slide 6: Covid resilient portfolios supporting long-term fund performance
6 Covid resilient portfolios supporting long-term fund performance Regular portfolio impact assessment from March onwards alongside management, with frequent client updates Performance recovered more quickly than expected with most companies trading at, or ahead of, pre-Covid levels Significant dry
Slide 7: Disciplined approach to realisations anchors performance
7 Disciplined approach to realisations anchors performance H1 21 realised assets; performance against hurdle Gross distributions relative to paid in capital 180% 174% 160% 2 140% 150% 10-20% above hurdle 120% 100% 80% 1 5-10% above hurdle 79% 60% 65% 40% 20% 2 0% 0-5% above hurdle Europe Europe Stra
Slide 8: Strong deployment bodes well for future fundraising
8 Strong deployment bodes well for future fundraising Deployment trend Fund investment pace versus linear profile Deployment Fund invested at 30 €m September 2020 6,120 5,991 5,934 4,876 Note: Amounts invested include third party and balance sheet capital Note: SDP IV represents the co-mingled fund
Slide 9: Fundraising ahead of expectations in an off-cycle year
9 Fundraising ahead of expectations in an off-cycle year Fundraising trend Funds raised in H1 21 by strategy (€m) 6 31 80 Australian Senior Debt 133 218 Real Estate Funds 227 Sale & Leaseback 372 Infrastructure Equity Target Recovery Fund 497 Asia Pacific Corporate CLOs 990 Credit Funds European Sen
Slide 10: Accelerated fundraising plan provides positive momentum for continued profit growth
10 Accelerated fundraising plan provides positive momentum for continued profit growth Corporate Capital Market Real Asset Secondary Investments Investments Investments Investments Senior Debt Partners IV to complete US CLO closed in November Established Europe Fund VIII to Strategic Equity IV launc
Slide 11: Financial Review
Financial Review iCG
Slide 12: Strong performance underpins growth
12 Strong performance underpins growth Average LTM Fee earning AUM Management fees FMC profit before tax 26% 21% 18% CAGR CAGR CAGR €22bn €30bn €36bn £95m £120m £139m £64m £85m £90m H1 19 H1 20 H1 21 H1 19 H1 20 H1 21 H1 19 H1 20 H1 21 Committed Invested
Slide 13: Closed end fund model provides excellent fee visibility
13 Closed end fund model provides excellent fee visibility Cumulative management fee visibility £3.1bn Steady state £1.8bn Run-off Note: Assumes fee rates remain constant and deployment and realisations are in line with our standard assumptions. Steady state assumes that successor funds raised are t
Slide 14: Other income
14 Other income Performance fees CLO dividends £15.5m, representing 10% of H1 21 total £11.7m, representing 7% of H1 21 total third party fee income; in line with our income long-term guidance As expected, temporarily lower in FY21 Europe Fund VI performance fees due to Covid related credit rating r
Slide 15: Operating margin remains above target
15 Operating margin remains above target Operating margin trend Operating costs waterfall 60% £m 90 (2.1) 50% 3.2 Target (1.0) 85 40% 6.6 30% 80 86.1 20% 75 79.4 10% 0% 70 FY17 FY18 FY19 FY20 H1 21 H1 20 Staff Occupancy Travel & Other H1 21 Costs Costs Entertaining Costs
Slide 16: Diversified and robust balance sheet
16 Diversified and robust balance sheet Diversification Net gearing Liquidity 22 STRATEGIES 0.67x £1.0bn
Slide 17: Net investment returns rebound from March '20 lows
17 Net investment returns rebound from March ‘20 lows Net investment returns trend £240m £275m £49m £186m FY18 FY19 FY20 H1 21
Slide 18: Recovery of portfolio valuations
18 Recovery of portfolio valuations £150m / +6.8% Balance sheet portfolio Unrealised gains £m 2,300 Liquids 4 3 2,200 26 (9) 126 CLOs ( 187 ) 2,100 36 2,000 1,900 2,210 2,209 1,800 1,700 1,600 FY20 balance Net realisations, Accrued interest Corporate Capital Market Real Asset Secondary H1 21 balance
Slide 19: Well diversified investment portfolio
19 Well diversified investment portfolio Capital market funds Direct investment funds 13% 300+ Companies Risk retention investments £2.2bn* 37 Sectors 8% Investment in liquid strategies 33 Countries Corporate Investments Capital Market Investments Real Asset Investments Secondary Investments *Includ
Slide 20: Low exposure to sectors directly impacted by Covid-19
20 Low exposure to sectors directly impacted by Covid-19 Balance sheet split by sector1 5% Directly impacted by Covid-192 Top 10 sectors Healthcare IT Services Real Estate 37 Diversified Services Fire Products Manufacturing Sectors Education Financial Services Software Food Products 68% Top 10 secto
Slide 21: Guidance
21 Guidance Fundraising: We now expect to raise c€6bn in FY21, in line with our well established long-term fundraising plan FY22 expected to be materially higher as fundraising for flagship European and Strategic Equity funds brought forward Long-term guidance of €6bn per annum over a three year rol
Slide 22: Wrap up
Wrap up iCG
Slide 23: Positioned for significant long-term growth and shareholder value creation
23 Positioned for significant long-term growth and shareholder value creation 1 30 year track record of consistent, exceptional performance through Performance cycles and a history of launching successful new strategies 2 Recent fundraising and significant dry powder enables us to pursue Deployment
Slide 24: Disclaimer
24 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 recommendati
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