Intermediate Capital Group (LON:ICG) reported an 18% rise in fee-related earnings for the six months ended Sept. 30, 2026, and set a medium-term target of zero net financial debt as it weighs returning excess capital to shareholders.
The alternative asset manager said fee-related earnings rose to £199 million for the half-year, while management fees increased 12% to £374 million. Fee-earning assets under management reached $90 billion, up 9% from a year earlier.
Chief Financial Officer David Bicarregui said the company expects to return excess capital to shareholders if it cannot find alternative uses that would deliver superior growth. Such returns are likely to include a buyback in due course, he said, without specifying its size or timing.
The financial figures discussed on the call were based on alternative performance measures unless otherwise stated, excluding the consolidation of some fund structures required under IFRS.
Fee growth outpaces costs
Costs rose 6% during the six-month period, below the rate of management fee growth. The fee-related earnings margin, excluding catch-up fees, increased by 3 percentage points to 47%.
For the preceding 12 months, fee-related earnings reached £380 million, up 18%, or £1.31 per share. Group operating cash flow was £613 million over the same period.
Performance fee income was £24 million in the half-year. Excluding a £72 million one-off item in the first half of the prior year, Bicarregui said the figure was broadly in line with each half of fiscal 2026.
Bicarregui declined to provide short-term guidance for performance fees, saying their timing was difficult to predict. He noted that the recent run rate had been in the mid-£20 million range per half-year.
Capital returns and balance sheet
ICG ended September with £93 million in net financial debt and almost £1.5 billion in available liquidity. Bicarregui said the company could reach its zero-net-debt target during 2027 under a reasonable set of assumptions, although the balance may vary from period to period.
The company intends to maintain its progressive dividend policy and continue investing organically. It will also explore acquisitions, but Bicarregui said the threshold for deals remains high.
ICG is seeking to reduce the balance sheet capital required to support its funds. Its second collateralized loan obligation risk-retention fund has held a first close, and Bicarregui said it and future vehicles could reduce the capital needed to support new CLOs by about 80% over time.
He cautioned that cash generation from the co-investment portfolio would be uneven and that the timing and scale of excess capital returns were difficult to predict.
Fundraising and deployment
Chief Investment Officer and CEO Benoît Durteste said ICG is likely to reach its four-year fundraising target a year early. The company closed its Europe IX structured capital fund at €12 billion during the period after it was significantly oversubscribed.
Durteste said the fund was capped because of deployment considerations, even though it could have raised more. Europe IX was already 25% committed, he said, with deals in exclusivity providing visibility for further deployment.
ICG has also launched Strategic Equity VI, its next fund focused on GP-led secondaries. Durteste said a first close was expected sometime during 2027, with timing dependent partly on completing investment of the prior vintage. He did not disclose a target size for the new fund; the previous vintage totaled $11 billion.
Although he described the secondary market opportunity as substantial, Durteste said ICG was rejecting most deals it reviewed. He warned that some private equity sponsors were seeking liquidity at valuations they could not achieve in the primary market.
Durteste also expects muted buyout activity to continue, citing a persistent gap between buyer and seller valuations. He said reopening of the buyout market would benefit ICG’s direct lending business, but he did not see a clear catalyst for that to happen in 2027.
New products and AI exposure
ICG hired a European infrastructure debt team and plans to launch a fund next year. It also recently launched an evergreen limited-partner secondaries product with Amundi. Durteste said it was early in the fundraising process but expressed confidence that the product could become a meaningful contributor over time.
Durteste said ICG has avoided direct investment in artificial intelligence because of the risks and lack of visibility. That position could change, he said, and the company has pursued indirect opportunities, including real estate with significant access to power that could potentially be valuable for data centers.
About Intermediate Capital Group (LON:ICG)
ICG (LSE: ICG) is a global alternative asset manager with $126bn* in AUM and more than three decades of experience generating attractive returns. We operate from over 20 locations globally and invest our clients’ capital across Structured Capital; Private Equity Secondaries; Private Debt; Credit; and Real Assets. Our exceptional people originate differentiated opportunities, invest responsibly, and deliver long-term value. We partner with management teams, founders, and business owners in a creative and solutions-focused approach, supporting them with our expertise and flexible capital.
