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LONDON - ICG plc (LSE:ICG) announced Thursday it will implement changes to its performance fee recognition method, resulting in a one-off gain of £65-75 million in its upcoming half-year results.
The global alternative asset manager, which has $123 billion in assets under management, will modify its approach to make performance fees more visible and reduce management judgment elements in financial statements. The changes will take effect in the company’s H1 FY26 results, expected on November 18.
Under the new methodology, ICG will begin recognizing performance fees for a fund when the successor vintage holds a first close and the investment period of the current vintage ends. The company will also extend its assumed fund life calculation from 10 to 12 years when applying discounts.
Total performance fees for H1 FY26 are expected to reach £90-95 million, according to the press release. The company emphasized that these accounting changes will not impact the total amount of performance fees received over a fund’s life or the timing of cash receipts.
ICG has also raised its medium-term guidance, now expecting performance fees to represent 10-20% of total fee income, up from the previous 10-15% target. The Fund Management Company operating margin guidance has been increased to "in excess of 54%" from the previous 52%.
The company cited its growth in equity-like fee-earning assets under management as a key factor behind these changes, noting this segment has tripled over the past five years and has potential to generate higher levels of performance fees.
ICG will hold a presentation for analysts and investors to discuss the updated performance fee accounting approach.
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