ICG PLC "Growth vs. Value - Time to Switch?" (Buy) Tam

Research evidence excerpt

ICG PLC "Growth vs. Value - Time to Switch?" (Buy) Tam

eporting a total balance sheet return (including CLO dividends),

ICG has both de-emphasised and reduced the volatility of those returns, which should help reduce its

valuation discount.

UBS VIEW ICG is inexpensive vs. private asset peers, with scope for further upward re-rating. As market

sentiment on PE deal volumes and achievable returns remains negative, the resilience of ICG

fundraising and longer term FRE outlook should become increasingly attractive, in our view. Larger

raises for flagship funds, new investment classes, and increased cross selling to existing clients should

support FRE growth at ICG, without significant performance fee gearing. Buy.

EVIDENCE Our view is informed by our analysis of fund raising cycles at ICG, outlook for secondaries private

equity, real estate and private debt capital raising and deployment, and our Sum of the Parts valuation

treatment of the Fee and Performance Related Earnings streams, balance sheet investment portfolio

and net cash position.

WHAT´S PRICED IN? At its 3Y average NTM PE multiple of 11.8x, the current share price of ICG implies NTM EPS of 146p.

This compares to FY26 UBSe EPS of 164.5p, suggesting market is pricing in 11% fall in EPS this year.

Upside/Downside

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FY25-28E FRE (FY26-29E BS return (FY26- FRE Margin Long-term growth

Value drivers

Fundraising ($m) CAGR) 29E Avg) (FY29E) (%)

2950p upside 71,000 2.7% 16.8% 46.5% 2.5%

2150p base 68,000 1.9% 8.9% 45.3% 2.5%

1350p downside 60,200 -1.3% 8.2% 40.7% 1.0%

Source: UBS estimates

Company Description ICG is a global alternative asset manager providing a range of capital solutions for corporates, in