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Intermediate Capital AuM rise amid strong inflows

By Michele Maatouk

Date: Thursday 15 Nov 2018

(Sharecast News) - FTSE 250 asset manager Intermediate Capital Group surged on Thursday as it posted a rise in first-half assets under management, driven by strong inflows.
In the six months to 30 September, AuM rose 17% to €33.6bn, with €6.1bn of new money raised compared with €5.7bn in the same period a year ago. This was a new high for the company's fundraising, with one of its largest funds, Europe Fund VII, contributing €3.9bn to inflows.

Group pre-tax profit was up 30% to £124m and the company lifted its dividend to 10p per share from 9p.

Chairman Kevin Parry said: "Our business model of deploying closed end funds, with their locked in fees, gives shareholders good medium term visibility of the group's performance while offering protection against short term macroeconomic events. Unlike traditional asset managers, we do not suffer short term outflows related to the level of markets.

"Our business is more robust than at any time in its history. It is sustained by our diverse range of fund strategies, resilience of fee rates, conservatively geared balance sheet and excellent portfolio performance."

Shore Capital analyst Gary Greenwood said ICG has been operating in almost perfect market conditions, reflecting strong demand for alternative high yield assets in a low interest rate environment.

"However, we think a combination of the end of quantitative easing and broader market weakness, has driven recent share price weakness. This has brought the shares back to a more sensible valuation level in our view when compared to our last published fair value estimate of 965p (4% upside).

"With a strong H1 performance we would expect the shares to bounce. We therefore place our sell recommendation under review, pending the extent of this morning's share price movement and the impact of forecast upgrades on our valuation (likely to be positive)."

At 0935 GMT, the shares were up 6.7% to 985.50p.

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