LONDON (Reuters) - Asset manager Intermediate Capital Group ICG.L on Tuesday posted a 14 percent rise in first-half assets after surging demand to join a fund lending money to corporates helped it raise a record amount of new client money.
The bulk of the 5.7 billion euros (5.08 billion pounds) in new capital - 4.2 billion euros - was for its Senior Debt Partners Strategy, ICG said in a statement, helping take total assets to 27.2 billion euros at the end of September.
Investor demand to lend directly to companies has increased in the years since the financial crisis as banks have cut their lending books in an attempt to shore up their balance sheets.
“These results continue to demonstrate our transformation to a specialist asset manager. Fundraising has been excellent as investors have trusted us with their funds due to our sustained strong investment performance,” said Chairman Kevin Parry.
The pipeline of investor interest remained strong, with a number of its larger strategies expected to begin raising new funds over the next 12 months, ICG said, as low interest rates and bond yields weigh on returns in more traditional markets.
Despite its strong fundraising, fee income from money it has already invested fell 1 percent 18.5 billion euros during the period as a result of currency moves. Fees are only earned once the money is invested, a process that can take some time.
Group pretax profit was 95.5 million pounds, down 24 percent from 126.2 million pounds in the year-earlier period, impacted by lower profits at its investment company, in part because of the company’s investments being weighted to lower risk assets.
Profits at the fund management company, however, were up 30 percent to 44.3 million pounds, helped by a 24 percent rise in fee income generated from third party investors.
That, in turn, helped underpin a 20 percent rise in the interim dividend to 9 pence a share and sent its shares up 4.3 percent in early trade.
Reporting by Simon Jessop; Editing by Mark Potter