ICG to shake up performance fee recognition

(Sharecast News) - ICG is changing how it recognises performance fees, the alternative asset manager confirmed on Thursday.

The London-listed firm said that over the last five years, it had grown equity-like fee-earning assets under management, which had the potential of generating 3.0x higher levels of performance fees.

It therefore wants to make fees more visible, as well as remove certain elements of management judgement.

That will include recognising fees earlier, while discounts applied will be based on an assumed fund life of 12 years, compared to ten previously.

The changes to the way fee revenues are recognised in its financial statements will be effective from next month's interim numbers, which will include a one-off gain of between �65m and �75m as a result.

Interim total performance fees expected to be in the range of �90m to �95m.

In the medium-term, performance fees are now set to represent between 10% and 20% of total fee income, up from between 10% and 15% previously. The fund management charge (FMC) operating margin is expected to be in excess of 54%, up two basis points.

As at 30 June, ICG - which invests across structured capital, private equity secondaries, private debt, credit and real assets - had AUM of $123bn.

Shares in ICG had put on 2% at 2,258.4p as a 1030 BST.

ICG, which is due to publish interim results on 18 November, officially changed its name from Intermediate Capital Group earlier this year.