ICG raises €5.2bn as European non-bank lending surges

Intermediate Capital Group has raised €5.2bn, becoming the largest debt fund raised in Europe this year as a surge in European non-bank lending continues.
The fundraising, which took place over five months, is the biggest direct fundraising closed this year according to data provider Preqin.

The London-listed private debt manager said its senior direct lending strategy, Senior Debt Partners (SDP) III, would invest primarily in directly originated senior secured loans to European mid-market companies.

ICG is set to invest in a diversified portfolio of loans to established corporate borrowers, it said in a statement.

Benoît Durteste, ICG’s chief executive officer, who has led the group since July when Christophe Evain retired, said the fundraising will have the company “take full advantage of the attractive European direct lending market”.

So-called “direct lending” has boomed in recent years as investment firms rushed to fill a gap created after banks, under pressure from new capital rules, pulled back from making loans to smaller or midsized companies. Private debt fundraisings have raised $39bn so far this year according to Preqin, already well ahead of the $25.8bn raised last year.

The vehicles help businesses who may be too small to tap bond markets and offer attractive returns to asset managers, private equity firms and hedge funds. Recent deals included HPS Investment Partners’s $4.5bn raising last month which the $39bn investment group will use to lend to smaller companies. Elsewhere Hayfin Capital raised $3.8bn and BlueBay Asset Management closed a $3.4bn fund earlier this year.

ICG entered the direct lending market six years ago and the latest fundraising takes its total assets under management to €27.2bn. Its other direct lending fund, SDP II, closed at €3bn in 2015

The news came as ICG’s fund management company reported a 30 per cent increase in profits to £44.3m for the first half of 2017, compared to £34m during the same period a year earlier. But ICG’s overall group profit before tax came at £95.5m, down from £126.2m a year earlier.