Slide 1: Full year results presentation
Full year results presentation 22 May 2018
Slide 2: Operational highlights
2 Operational highlights Fundraising and capital deployment at record levels Total AUM up 20% to €28.7bn, with €7.8bn of new money raised Fundraising driven by our Senior Debt Partners strategy raising €4.2bn and growing momentum across our European capital markets strategies Third party fee e
Slide 3: Financial highlights
3 Financial highlights Fund management profits up 29%; driving dividend growth Fund Management Company profits up 29% to £95.3m (2017: £74.0m), with third party fee¹ income up 21% Investment Company profits¹ lower at £79.5m (2017: £163.5m), due to lower investment income Group profit before ta
Slide 4: Strategic priorities
4 Strategic priorities FY10 – FY18 FY19 – FY23 Strategic transition Recognised as the leading European specialist asset manager Enhanced brand and client base Increased fundraising target of three year rolling average €6.0bn per annum Developed new strategies to deliver gross fundraising targe
Slide 5: Financial Review
Financial Review iCG
Slide 6: Financial highlights
6 Financial highlights FMC profits exceed those of the IC for the first time 12 months to 12 months to £m 31 March 2018 31 March 2017 Fund Third party fee income 167.1 138.6 Management IC management fee 17.8 18.1 Company Other income 25.2 23.0 Operating costs (114.8) (105.7) FMC profit 95.3 74.0 Inv
Slide 7: Balance sheet and capital strategy
7 Balance sheet and capital strategy Balance sheet flexibility supports growth 31 March 2018 31 March 2017 £m Assets Loans and investments 1,899 1,712 Assets for syndication 107 90 Cash 248 490 Other 273 209 Total assets 2,527 2,501 Liabilities Borrowings 1,021 1,119 Other 188 209 Shareholders funds
Slide 8: Fund Management Company
Fund Management Company iCG
Slide 9: Third party assets under management
9 Third party assets under management Record third party AUM of €26.5bn up 22% in the year FY18 AUM inflows/outflows by strategy Third party AUM up €4.7bn in the period; inflows €7.8bn; outflows €2.3bn and €0.8bn FX and other €bn 5.0 Realisations in Corporate Investments arising on the older Eur
Slide 10: Fee income
10 Fee income Fee rates maintained across asset classes Weighted average fee rate¹ by strategy – FY18 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% Corporate Investments - Corporate Investments - Capital Market Real Asset Investments Secondary Investments Group Private Debt SDP Investments FY16 FY
Slide 11: Fee income
11 Fee income Evolution of product mix marginally reduces average fee rates Fee Earning AUM movement and fee rates by strategy Net movement in Fee Earning AUM (€m) 1,200 SDP Group – 0.86% 1,000 Liquids / Loans 800 600 US CLOs 400 200 European CLOs Longbow Senior Debt PEFI - Weighted avg. Strategic E
Slide 12: FMC operating margin
12 FMC operating margin Operating margin above target £m Operating m argin 250 50% 45% Target 200 40% 35% 150 30% 25% 100 20% 15% 50 10% 5% 0 0% FY14 FY15 FY16 FY17 FY18 Costs (lhs) Income (lhs) Operating margin (rhs)
Slide 13: FMC operating costs
13 FMC operating costs Costs in line with expectations 12 months to 12 months to % FMC % FMC £m 31 March 2018 revenue 31 March 2017 revenue Investment team staff costs 28.0 13% 25.7 14% Marketing staff costs 5.2 3% 4.6 3% Infrastructure staff costs 8.9 4% 8.7 5% Staff costs 42.1 20% 39.0 22% Cash in
Slide 14: Investment Company
Investment Company iCG 14
Slide 15: Net investment return
15 Net investment return Returns in line with long term trends; guidance 11-12% Net investment return trend £m 2,500 1,980 1,958 2,000 1,891 1,903 1,500 12.1% 12.1% 13.7%* 12.6% 1,000 500 240 237 258 240 - FY15 FY16 FY17 FY18 Average Balance Sheet Portfolio (inc. AFS) Net Investment Return * Net Inv
Slide 16: Net investment return
16 Net investment return Balance sheet portfolio weighted to higher return strategies Net investment return by fund Net Investment Return % of total NIR FY18 NIR % £m Europe Fund VI 103.8 43 % 28 % Europe Fund V 68.5 29 % 20 % Strategic Secondaries II 22.8 9% 36 % ICAP III 13.2 6% 13 % North America
Slide 17: Investment Company costs
17 Investment Company costs Costs in line with expectations 12 months to *12 months to £m 31 March 2018 31 March 2017 Staff costs 11.1 12.2 Cash incentives 24.7 26.0 Deferred aw ards 39.3 30.4 Incentive schem es 64.0 56.4 Amortisation 2.3 2.3 Other non staff costs 8.8 6.4 Total 86.2 77.3 Business de
Slide 18: FY19 guidance
18 FY19 guidance Performance fee guidance upgraded Fundraising – average €6bn per annum over 3 year rolling period; FY19 expected to exceed this FMC operating margin – above 43% Performance fees to average £20-25m per annum Net investment return – averaging 11.5% Balance sheet portfolio –
Slide 19: Operating Review
Operating Review iCG
Slide 20: Our strategy
20 Our strategy To grow our specialist asset management activities Invest selectively Grow assets Manage under portfolios to management maximise value Generate strong shareholder returns to invest in growth and pay sustainable dividends
Slide 21: Investing
Investing iCG 21
Slide 22: Investment markets
22 Investment markets European private companies are growing strongly Europe revenue and EBITDA growth 14% 12% 10% 8% 6% 4% 2% 0% 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 -2% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 -4% EBITDA Growth Rate Revenue Growt
Slide 23: Investment markets
23 Investment markets Credit fundamentals are on a strong footing Europe leverage and interest coverage 7.00x 6.50x 6.00x 5.50x 5.00x 4.50x 4.00x 3.50x 3.00x 2.50x 2.00x 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 24: Investing our direct investment funds
24 Investing our direct investment funds Capital deployment strong for all our larger strategies Direct investment funds¹ €m Fund invested at 31 March 2018 5,000 4,876 120% 411 4,500 SDP II Longbow IV 4,046 678 4,000 140 100% 3,551 North America I 579 3,500 63 80% Europe Fund VI 3,000 1,064 Asia Pac
Slide 25: Managing Investments
Managing Investments iCG 25
Slide 26: Fund performance
26 Fund performance Portfolio performance provides platform for future fundraising Target Realised Fund IRR on realised assets MM MM ICG Europe Fund IV 2006 (fully realised March 2015) 1.5x 1.6x ICG Minority Partners Fund 2008 (fully realised January 2016) 1.9x 2.0x ICG Recovery Fund 2008 (fully rea
Slide 27: Fund performance
27 Fund performance Realising assets locks in investment returns and track record Percentage of realised assets exceeding hurdle rate FY18 realised assets; performance against hurdle 100% 98% 95% 92% 3 +20% above hurdle 90% 80% 80% 4 70% 70% 10-20% above hurdle 60% 4 50% 5-10% above hurdle 40% 30% 0
Slide 28: Fundraising
Fundraising iCG 28
Slide 29: Fundraising
29 Fundraising Record fundraising year driven by Senior Debt Partners €bn Funds raised in FY18 by strategy (€m) 9 69 Australian Senior Loans 392 8 581 European CLOs 7 Fundraising expectations Non US 1,053 c€6bn pa* strategies Real Estate Funds 6 €5.1bn 5 Credit Funds 4 3,003 SDP - Europe sleeve 7.8
Slide 30: Fundraising – Capital Markets
30 Fundraising – Capital Markets Fundraising gathering pace reflecting recent investment Funds raised over the last 5 years by strategy (€m) €m 1,200 Investing in diversified portfolios capturing inherent inefficiencies in alternative credit. Targeting management fees of 150bps 1,000 195 52 800 Mult
Slide 31: Fundraising outlook
31 Fundraising outlook Excellent start to FY19 and strong fundraising pipeline FY 19 FY 20 Australian Senior Loans Europe Fund VII Corporate Investments North America Private Debt Fund II Asia Pacific Fund IV European Loans, High Yield & Multi-Asset Credit Capital Market Global Loans & Structured Cr
Slide 32: Fundraising – Europe Fund VII
32 Fundraising – Europe Fund VII Market leading strategy upsized to meet investment demand Fundraising history €m Co-invest ratio % 4,500 70% 4,000 60% 3,500 50% 3,000 2,500 40% 2,000 30% 1,500 2,500 2,627 20% 1,000 2,006 1,750 1,420 10% 500 - 0% ICG Mezzanine Fund 2003 ICG European Fund 2006 ICG Eu
Slide 33: Fundraising – Europe Fund VII
33 Fundraising – Europe Fund VII Reduction in discounts increasing fee rates fund on fund Europe Fund VI investment trajectory Fee rate progression Fund invested 1.45% 120% 1.40%+ Today 1.40% 100% 31 March 2018 1.35% 1.34% 80% 30 September 2017 1.30% 60% 1.25% 40% 31 March 2017 1.25% 30 September 20
Slide 34: Potential new strategies
34 Potential new strategies Substantial opportunity to expand in private markets Real Asset Sale & Leaseback Real Estate Euro Mezzanine Global Senior Europe Fund of Funds Small Cap Debt Real Estate Infrastructure Private Equity Secondaries Solutions Asia Private Rented Sector Real Estate Asia Real E
Slide 35: Wrap Up
Wrap Up iCG
Slide 36: Wrap up
36 Wrap up Well positioned for further growth Grow assets under Record fundraising year, with €7.8bn raised management Excellent start to new fundraising year with Europe Fund VII targeting record raise Larger strategies investing strongly Invest selectively Maintaining investment discipline
Slide 37: Q&A
Q&A iCG
Slide 38: Appendix
Appendix iCG
Slide 39: ICG operating model
39 ICG operating model INVESTING FUNDRAISING • Fund deployment • Gross fundraising to average €6.0bn on a 3 year rolling basis • Fund performance and track record • Maintain fee level • Selective product expansion INVESTMENT IN NEW FUNDS IC PROFITABILITY FMC PROFITABILITY • IC gross return on assets
Slide 40: Disclaimer
40 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