ICG has accomplished a lot in the twelve months covered in this report.
FY25 was a milestone year for us, both in terms of the results achieved and in securing visibility on future growth. We are delivering on our ambition of having breadth at scale, which is underpinned by our belief that clients are concentrating their resources on GPs with whom they can deploy significant amounts of capital into a range of private markets strategies, with top-tier investment performance. Managers such as ICG who are able to meet those demands are clearly benefiting and are seeing an increasing proportion of client business.
As I reflect on the year, a number of highlights stand out: We attracted $24bn of client capital; We launched our first US evergreen strategy (Core Private Equity) and our first Asian Infrastructure fund; We opened offices in three new locations; and We made a number of important hires across our platform, in particular into our Client Solutions Group and key investment strategies.
Our waterfront of products today enables our clients to access a number of attractive, large and growing private markets asset classes. We have organically built leading positions in structured capital, secondaries and debt, and have a real assets platform that is positioned for growth. This is reflected in our AUM, with Structured Capital and Secondaries accounting for ~46%, Real Assets for ~12% and Debt strategies account for ~42%.
We are proud of the platform that this has created:
- Our flagship strategies (European Corporate, Strategic Equity and Senior Debt Partners) have leading positions in their markets
- Our scaling strategies (Mid-Market, Infrastructure, Real Assets, LP Secondaries and North America Credit Partners) are successfully attracting capital from clients and originating attractive investment opportunities
As a result, in a challenging market environment we are raising more capital from more clients into more strategies. This is visible in our fundraising for FY25, where we attracted 122 new institutional clients and raised 35% of the capital from the Americas. We had a number of final closes during the year including:
- SDP V ($17bn[1] fund size, $4.9bn raised in FY25): the largest ever direct lending fund in Europe[2]
- SE V ($11bn[1] fund size, $5.8bn raised in FY25): the world’s largest GP-led secondaries fund focused on single asset continuation vehicles
- Europe Mid-Market II (€3bn[1] fund size, €1.3bn raised in FY25): ICG’s largest ever vintage-to-vintage upsize, 3x larger than Europe Mid-Market I
- NACP III ($1.9bn[1] fund size, $0.3bn raised in FY25): 50% increase in client capital compared to predecessor fund
From a shareholder perspective, this breadth at scale results in increasingly large and diverse management fees, and significant operating leverage.
Management fees have grown at an annualised rate of 19% in the last five years, and were £604m in FY25. Over the same time period, our group operating expenses grew at an annualised rate of 12%. Transaction levels in the buyout market remained subdued in the year. Against that backdrop, we saw deployment and realisations notably higher than our average over the prior four years. In part this is a reflection of our size, and in part due to the nature of our investment strategies. Structured Capital and Secondaries drove deployment[3], accounting for $11.6bn out the total $17.5bn, while Real Assets enjoyed its largest ever year of deployment at $2.4bn. Realisations[3] were driven by Private Debt, which accounted for $5.2bn of the total $8.9bn.
Competitive leveraged loan markets over the last 12 months along with subdued buyout levels have impacted the private debt landscape. We view this as a natural ebb-and-flow of the credit cycle, and it follows a very attractive period for direct lending in recent years.
ICG is clearly a manager of choice for clients. Our broad waterfront of products, investment track record, and financial strength position us for many years of growth.
Looking ahead, FY26 has started with notably higher levels of volatility and uncertainty. In the face of this we can remain measured and thoughtful, but never complacent, as we reflect on our positioning as a firm. Our fundraising over the last twelve months has anchored our management fees and dry powder for this fundraising cycle; FY26 and potentially FY27 were always going to be low points in our fundraising cycle irrespective of the market environment.
The current geopolitical environment may result in a meaningful long-term shift in economic policy and capital flows. In the short-term, transaction activity is likely to remain relatively low by historical standards, although debt strategies, structured capital and secondaries may be relative bright spots. We will remain very disciplined in our investment process, and are in the fortunate position that none of our strategies are under pressure to deploy capital.
Taking a longer perspective, the range of possible outcomes is wide and I believe the best-positioned private markets managers are those who prioritise investment performance, have strong origination capabilities, and have a range of strategies across asset classes and geographies.
We are proud of our European heritage and of our global presence. We manage capital on behalf of clients from Asia, America and Europe, and today approximately 25% of our capital is deployed in North America and 70% in Europe. Our global footprint combined with our focus on services-centric businesses and our breadth of differentiated investment strategies combine to make ICG an attractive proposition for clients seeking exposure to private markets and for portfolio companies seeking private capital.
I therefore see significant opportunity to grow all our investment strategies in the coming years while maintaining strong investment performance. We are also actively exploring product innovations and other strategic opportunities to enhance our client offering and to generate attractive returns for our shareholders.
Periods of volatility during our 36-year history have always served to prove our ability to raise, invest and deploy capital successfully. In future years, when we look back on today’s environment, I am confident we will be able to say that ICG emerged with its reputation enhanced, its client franchise strengthened, and its competitive positioning reinforced.
Thank you for your continued support.
Notes
- Refers to the total programme, including co-mingled fund, other associated vehicles such as SMAs and annex sidecar vehicles, and the GP and ICG plc commitments.
- At time of closing.
- See page 17.
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