ICG targets €4bn for seventh subordinated fund

The firm had €27.2bn in assets under management as of September 2017, of which €6.9bn was allocated to its subordinated debt strategy.

Like its predecessor, ICG VII will target subordinated debt investments in European mid-market companies.

ICG Europe Fund VI held a final close on €3bn in July 2015 and was 60% invested as of September 2017, at which point it reported a net IRR of 52.6%, according to Unquote Data. Fund V held a final close on €2bn in January 2013, was fully invested by September 2017 and reported a net IRR of 12.3% at the time.

The vehicle is domiciled in Luxembourg and will be denominated in euros but may make some investments in other currencies. ICG intends to hedge the fund's exposure to foreign currency fluctuations using fixed forwards or swap arrangements.

Investors
ICG will make a €500m contribution from its own balance sheet. The fund has already attracted a €150m commitment from the Pennsylvania Public School Employees' Retirement Board and a $75m commitment from the Teachers Retirement System of Louisiana.

Fund VI also received commitments from New York State Teachers' Retirement System and the Australian Tasplan Superannuation Fund.

Investments
ICG VII will invest between 30-80% of its capital in sponsorless corporate deals, 20-50% in PE-backed LBOs and 20-50% in other opportunities such as recapitalisations and minority stake purchases.

ICG expects to invest in a range of debt and equity-like instruments including senior and subordinated debt, preferred stocks and other similar securities. It will target investments of €60-600m in companies with an enterprise value between €100m-1.5bn.

The fund will invest across all key European markets, but this series of funds has historically been geared towards the UK and France.

People
Intermediate Capital Group – Benoît Durteste (CIO, CEO).

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