ICG: FY26: A robust update that we think will be considered favourably by the market

Research evidence excerpt

ICG: FY26: A robust update that we think will be considered favourably by the market

21 May 2026

Specialty Financials

ICG

Industry issues discussed

Management made a number of points in the statement re the general industry

issues: 1) ICG does not operate any evergreen funds so is not directly exposed to the

current liquidity challenges faced by some peers. 2) Re AI disruption risks,

aggregate software company exposures are quantified at c.10% across the group's

portfolios (generally below peers, and these are noted as being "highly cash

generative companies"). 3) Management are cautious on the equity valuation

environment / credit conditions favouring borrowers over lenders / second order AI

concerns / geopolitical issues, so they will continue to be slow / disciplined in

deployment. 4) Management believe the high DPI nature of their funds

differentiates them vs. peers (i.e. investments that return high levels of cash to LPs,

not just theoretical NAV growth). 5) Management believe they remain big enough

to matter to all LPs but small enough to have adequate capacity to grow in

institutional alone.

Improved disclosures should make shareholder value drivers more visible

The company has also evolved its reporting disclosure to a full FRE / PRE / balance

sheet separated basis, more in line with peers. We think this will be a favourable

development for shareholder transparency, and will make clearer the key drivers of

shareholder value, which we believe to be significantly FRE biased. Whilst this also

entails less disclosure on balance sheet related items, we think this is consistent

with the group becoming a less balance sheet intensive business, and this making

up a smaller component of shareholder value.

Improved capital position = future capital returns?