Intermediate Capital Earnings Benefit From Diversification, Payout Up

(Alliance News) - Intermediate Capital Group PLC on Tuesday said its diversification strategy has resulted in continued asset growth and a 32% interim profit rise in its fund management business.

Shares in the asset manager were up 7.2% at 1,602.00 pence each in London.

The company's assets under management amounted to EUR41.07 billion at September 30, up 11% from EUR37.08 billion as at March 31, with EUR4.61 billion of new money raised across 14 strategies.

For the six months to September-end, Intermediate Capital recorded group pretax profit of GBP153.4 million, up 24% from GBP124.0 million a year ago, helped by a 15% increase in profit in the company's investments business to GBP68.4 million.

The fund management business saw a 32% year-on-year rise in interim profit to GBP85.0 million from GBP64.4 million, benefiting from increase in assets under management, increased fee income and a slower increase in operating costs.

Intermediate Capital Chief Executive Benoit Durteste said: "These strong results demonstrate our ability to attract assets to a broad range of new fund strategies that are adjacent to our existing portfolios. Our diversification has resulted in continued healthy fundraising results and the 32% growth in Fund Management Company profits."

"We are well-positioned to deliver sustainable growth. Unlike traditional asset managers, we do not suffer short term outflows as a consequence of the movement in financial markets; we are maintaining or increasing average fee rates on an underlying fund basis," Durteste added.

Intermediate Capital expects its annual operating margin to be in excess of 50%, up from 43% previously, supported by a positive outlook.

The company has raised its interim dividend by 50% to 15.0 pence per share.

By Tapan Panchal; tapanpanchal@alliancenews.com

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