Berenberg initiates coverage of ICG at ‘buy’

"We view ICG as a long-term earnings growth story," it said. "We think the private markets industry will continue to grow, and that ICG is well positioned to benefit from this growth given its established brand, diversified business model, and scale."

Berenberg said that originally a mezzanine finance lender, ICG has demonstrated its ability to develop and scale new investment strategies and now runs around $70bn of fee-earning assets under management (AuM).

"We like ICG’s focus on organic growth and think that the company will continue to develop new strategies across asset classes and geographies," it said.

Berenberg said there is headroom for growth and that ICG should be able to deliver around 8% per annum growth in third party fee income from FY24 (year ended March 2024) to FY27.

"We expect this to be driven by the expansion of ICG’s institutional client base as well as a greater average share of wallet," it said.

It also said that the company has an impressive track record of fundraising and has increased its fee-paying AuM at about a 20% compound annual growth rate over FY15-24.

"We also believe that a pick-up in deal activity (which should be enabled by base rate cuts) could be a tailwind for performance fee growth."