Intermediate Capital third quarter assets up one percent, lifts fundraising target

By Simon Jessop

LONDON (Reuters) - Fund manager Intermediate Capital Group (ICP.L) said on Thursday total assets grew 1 percent in the third quarter of its financial year and strong demand meant it was raising its fundraising target to 6 billion euros (5.25 billion pounds) a year.

The company, which invests in a range of private debt, credit and equity markets, said total assets at the end of December were 27.4 billion euros and it was trading in line with its expectations.

Stripping out the money it invests in its own funds, however, third-party fee earning assets rose 7 percent to 19.9 billion euros, it said in a statement.

Demand by institutional investors to increase exposure to the more illiquid strategies favoured by Intermediate Capital Group (ICG) has increased strongly in recent years as returns in some more traditional markets have waned.

After raising a record 5.7 billion euros in the first half of the year, inflows slowed to 600 million euros in the third-quarter and the second half of the year would likely be in line with its previous target of 4 billion euros, it said.

Over the quarter, the company deployed 1.3 billion euros on behalf of its direct investment funds and it expected demand to invest in its funds to be strong over the next year.

As a result, ICG said it would up its fundraising target from 4 billion to 6 billion euros a year, on a rolling three-year basis, and increase the fund management company's operating margin target to above 43 percent from above 40 percent.

"Capital deployment for our larger strategies remains ahead of plan giving us good visibility of strong fundraising momentum through the next 12 months," Chief Executive Benoit Durteste said.

(Reporting by Simon Jessop; Editing by Mark Potter)