ICG plc

Good morning. Thank you for joining this webcast covering ICG's results for six months and the 30th of September 2025 and the strategic partnership with Amundi we've announced this morning. The slides are available on our website along with both accompanying announcements. As a reminder, unless otherwise stated, all financial information discussed today is based on alternative performance measures which exclude the consolidation of some of our fund structures required under IFRS. This morning, I'm joined by our CEO and CIO, Benoit Duteste, and our CFO, David Bigoreggi. They will give an overview of our performance during the period, and we will then take questions. You can submit these through the webcast message function or by telephone, details of which are on the portal. And with that, I'll hand over to Benoit.

Thank you, Chris, and good morning, everyone. It's a pleasure to reflect today on the progress ICG has made during the first half, And this is an even more exciting than usual results announcement. We're not only reporting impressive H1 results, we're also announcing a major distribution agreement and strategic partnership with Amundi. From a group perspective, our growing breadth and scale is continuing to drive visible benefits for our clients and shareholders. And our deliberate tilt over the last decade towards higher returning strategies is clearly bearing fruit. Our track record and reputation for an unwavering focus on risk and investment performance are key factors in our recent success. Institutional clients are increasingly scrutinizing performance, and in particular, realized performance, or DPI. In a market where a number of players' pursuit of AUM and volume is leading to some unreasonable risk-taking in our view, predominantly but not exclusively in credit and private debt, our clients recognize that we remain at heart investors squarely focused on consistency of performance through cycles. All of which means that we see substantial opportunity to grow our existing strategies and our institutional client base. This will drive significant organic growth in the coming years. And we are also well positioned strategically and financially to continue to innovate new strategies and products where we see opportunities. These strong growth prospects are further enhanced by the announcement today of our strategic partnership with Amundi, which is a meaningful step forward in the development of our wealth strategy and will help shape appropriate product offerings for that market. It's an incredibly exciting opportunity, potentially very additive to both parties, and I'll speak about it further later in this presentation. I'll start with a few highlights on the last six months. Fundraising of $9 billion surpassed our expectations coming into the year, with Europe 9 raising more quickly than we had anticipated, and infrastructure 2 having a very strong run into its final close, achieving a hard cap at more than double the size of the previous vintage. Our secondaries franchise continues to excite us in the area we have built entirely organically and which is now our third largest asset class by AUM. We are in the market with the subsequent vintage of LP secondaries, so Vintage 2. We are launching a European Evergreen secondaries vehicle and we are also launching a mid-market version of our strategic equity fund, which is our GP-led secondary strategy, in order to further cement our global leadership position in that asset class. On the financial side, fee-earning AUM now stands at $84 billion, up 6% in the last six months on a constant currency basis. And we have substantial dry powder to continue our investment programs. Management fees for the six months were up 16% at £334 million, while expenses are being well managed and demonstrating operating leverage. At a group level, our operating cash flow was up meaningfully at £450 million. So in short, we're enjoying significant growth and cash flow generation. Putting that into a longer-term perspective, you can see how our business has evolved rapidly over the last five years and the financial impact that's having. On the left-hand side of this chart, we set out our growth by asset class, which has been diversified, but really driven by higher return strategies in structured capital, secondaries, and real assets equity. Private debt in comparison has grown, but at a slower pace and remains an area where we continue to be highly disciplined, prioritizing long-term performance over aggressive deployment. We have attracted substantial capital into these higher returning strategies, leading to almost doubling our fee-earning AUM over the past five years entirely organically. And we have grown our weighted average management fee rate from 85 BID at March 21 to just under 1% today. As a result, we are larger, more diversified, more resilient, and more profitable. A key theme of our strategy has been scaling our higher return strategies, specifically private equity secondaries, structured capital, real assets equity. That's real estate equity and infrastructure equity. This takes time, but the successful execution of this is clearly visible in the middle of this page. In March 21, these strategies represented a third of our fee earning. Since then, They have grown by 3.2 times. That's compared to doubling of fee-earning AUM at the group level. And today, they represent 57% of our fee-earning AUM. From a purely financial perspective, this has been the key driver of the growth in our management fee rate I just spoke about, and of course, our operating margin. But the broader rationale is arguably more important. These strategies are inherently more complex with higher barriers to entry. And this allows us to differentiate, generate outperformance for our clients, demonstrate our investment excellence, and in the process, charge higher management fees on committed capital, as well as generate over time more performance fees. These strategies are also harder to commoditize, which will help protect management fee rates and is reinforcing ICG's brand equity with our clients. These are not volume vanilla products. And what is particularly exciting is that all of these funds or strategies have significant room to grow organically for years to come. As a result of the shift, the future value of our fee-earning AUM is materially higher than five years ago. It is earning higher fees and is more relevant to clients' wider markets portfolios. Today, we are proud of our European heritage and of our global reach. We have presence in 18 countries, attract capital from clients around the world, and invest in all the largest geographies for private markets, including a quarter of our deployed capital being invested in the US. From a product perspective, we have a number of leading positions in structured capital, GP led secondaries, European direct lending, as well as an exciting array of earlier stage strategies, including in real assets. This has not been by chance. It is anchored in some very basic beliefs about what it takes to succeed in the long term. One, a focus on investment performance, always. Two, a waterfront of strategies that provide something different to clients. And three, a platform that is scalable to be relevant to the largest investors globally. I'm proud that today's results show how we are continuing to build that at ICG, how they help underline the success of that execution to date, and how they help demonstrate the opportunity ahead of us. Turning now to the current environment, fundraising across the wider market remains challenging. Global private capital raised this year is likely to be lower for the fourth consecutive year. And to quote a recent Bain report, fundraising has never been so hard. The statistic that there's about $3 of demand for every dollar likely to be raised is remarkable. It has existential consequences for many managers, some of whom simply are not and will not be able to raise capital. We're already seeing some firms effectively going into a runoff or shrinking substantially, and I expect to see more of that. This will incidentally create some opportunities, at the very least, for hiring new talent and we are already benefiting. One of the consequences of this is that LPs are increasingly selective, with many looking to diversify towards Europe and focusing both on certain strategies, such as structured capital and real assets, as well as being very focused on investment performance and DPI in particular. For firms such as ICG, who have a range of products and were able to raise capital, doing so is reinforcing our position with clients. Stepping back, the real takeaway from this is that Although the market has been challenging for a few years now, for firms such as ICG who have a range of products and are successfully raising capital, this is a very good time to differentiate, gain market share, and it is allowing us to set the firm up for even greater long-term success and growth. I mentioned the strong focus of investors on realized performance or DPI, how quickly you return cash to clients. And here's a slide that I showed at our investor days in London, New York, and Tokyo this past September and October. And this slide really resonates with our clients. To have this number of strategies as top decile or at the very least top quartile from a DPI perspective is highly unusual. It's very impressive. It's a track record we're incredibly proud of, and a quantitative validation of how our focus on investment performance is delivering for clients. Importantly, this is not by chance. It is not new to ICG. Our investors know this well. Those of you who have known us for some time will have heard me speak about it many times in the past, how discipline and realizing assets, de-risking funds, is key to consistency of performance over a long period. Discipline, a consistent focus on risk return performance, not just return. This is what makes a real difference with investors today. The result of all this is that we are continuing to see strong client demand, and that's reflected in our fundraising. We have raised $9 billion in the last six months, which is particularly noteworthy, not just because we have surpassed our expectations, but because, as we have previously indicated, we are this year and next at a structurally lower point of our own fundraising cycle. So Europe 9 continues to raise well, with $2.8 billion raised in the period, and the fund now standing at $7.5 billion, the well on the way to meeting or exceeding the previous vintage, which was just over 8 billion euros. Infrastructure 2 held its final close in the period at 3.15%. billion euros, so that's over two times larger than the prior vintage, it has been a standout success. We had a re-up rate of 85% and attracted capital from a wide range of clients. A quarter of the capital came from North America, reinforcing the growing strength of our brand there and the appeal of high-performing European products for certain North American investors. From a shareholder perspective, we reduced the balance sheet commitment from €200 million in Fund 1 to €150 million in Fund 2, so moving from 13% of total fund size in the first vintage to under 5% in Fund 2. More broadly, over the past 15 months, we have had five funds close at or above their hard cap. And not just flagships, scaling strategies as well. In any environment, that would be remarkable. But in this environment with fundraising under such pressure, as we discussed earlier, that's a real achievement. All of which comes from and supports our client growth. We have continued to attract new institutional clients during the period. Since we announced our fundraising guidance in May 24, 43% of new LPs came from North America and 9% from the Middle East. And looking ahead, we will continue to broaden our reach through innovating new products and diversifying our sources of capital, always with an absolute focus on developing products that are appropriate to those channels where we can deliver attractive investment returns. Today, as part of that continued broadening of our client base, we're excited to announce a long-term strategic partnership with Amundi. This partnership significantly accelerates our ambitions in the private wealth space and combines ICG's investment expertise and track record of product innovation with Amundi's global distribution capabilities and structuring know-how. We have historically taken a much more cautious approach to the wealth channel than most of our peers. While there is obviously an enormous potential for capital raising, we have also seen how it can shift investment priorities of GPs towards a more volume-driven approach to the detriment of performance. which is precisely at the opposite end of the spectrum of what ICG is about and what we want to be, uncompromisingly focused on investment quality, risk, and performance. And this is where the partnership with Amundi is incredibly exciting. We have found that we have a like-minded approach to investment, to delivering the best results for end clients. We share key values, and this is essential for the success of our collaboration. Our common goal is to be an important force in shaping access for individuals to private markets investments while maintaining an unflinching focus on generating attractive risk-adjusted investment performance. We see a significant long-term opportunity to develop a range of products appropriate to the wealth market and believe that together we have the right complementary capabilities to execute on that. I'm convinced that by working together in this way, we can create significant value for our clients and respective shareholders. As you're well aware, Mundi is the largest European traditional asset manager, one of the largest globally with some 2.3 trillion euros of assets under management and access through its distribution network to over 200 million individual clients. It is the ideal partner for ICG in this transaction, bringing scale, access and expertise that are highly complementary to our own existing capabilities. Looking at the two components of the partnership in a bit more detail, the commercial agreement, which covers distribution and product structuring, will have an initial term of 10 years. Our immediate focus will be on developing and launching two evergreen funds, one for LP secondaries and one for private credit. Globally, outside of the US and Australia and New Zealand, Amundi will be the exclusive distributor in the wealth channel for ICG's Evergreen and certain other products, with ICG being Amundi's exclusive provider for those products to Amundi's distribution business. Over time, we will seek to develop more products and strategies that are well-suited to the wealth market, and this is a very exciting long-term prospect of this partnership. We see a real opportunity to shape the market to ensure that products are appropriate and deliver what investors are looking for, structured in ways that enable returns to be generated over the long term. To align our interests and reinforce the long-term nature of this partnership, Umundi will acquire a 9.9% economic interest in ICG in a way that is non-dilutive to our current shareholders. The structure is set out in brief here and in more detail in the appendix and in the R&S we released this morning on this partnership. As part of this, Amundi will be entitled to nominate one non-executive director to our board, and I look forward to working with that individual and the wider Amundi team to make a success of what I consider to be a meaningful alignment of two leading European-based firms to help shape the wealth market for private investments in the years to come. So looking ahead, our future growth has a number of encouraging tailwinds. Our waterfront of strategies is significantly exposed to some of the fastest growing asset classes in private markets, providing a constructive backdrop for our strategies. I'm very positive on the long-term opportunity ahead of us and our ability to execute on that. a trajectory that is reinforced by the results we are reporting today and the partnership with Amundi. And with that, I'll pass over to David.

Thank you, Benoit, and thank you all for joining us today. I'm pleased to report that we have published strong results this morning with growth across key financial metrics. Fee earning AUM grew 6% on a constant currency basis, ending at $84 billion. It has grown every year in the last five years in dollar terms, and over that period has increased an annualized rate of 14%. In the past six months, we have raised $5 billion for strategies that charge fees on committee capital and deployed $6 billion in strategies that charge fees on invested capital. We also have $19 billion of AUM not-yet-earning fees, largely in private debt, which has the potential to generate approximately £130 million in additional management fees. Our visible recurring management fees remain the key driver of revenue growth. As of 30 September, management fees reached £334 million, for the last six months, an increase of 16% year on year. As we discussed in October, performance fees are becoming an important contributor to our revenue mix, reflecting the growth of higher return strategies that Benoit described earlier. In the period, we recognized total performance fee revenue of 98 million pounds, including the one-off impact of 72 million pounds due to the change in recognition method. we received £62 million of cash from performance fees, up from £40 million in H1 of last year. Our total balance sheet returns for the period were £112 million, up 57% compared to the previous year. And preempting the inevitable question on first brands, the impact was minimal, less than £5 million, and the assumptions on our CLO valuations provided by third-party valuation agents are broadly unchanged compared to March. Stepping back, the revenue profile in the period underlines the trajectory that Benoit spoke about earlier. These results reinforce our continued successful long-term execution. Over 60% of our revenue in the last six months is from management fees, which have grown at an annualized rate of 19% over the last five years, and over 80% of our revenue was fee-based. As we continue to scale up and scale out our investment strategies, I expect this trajectory to continue, with the balance sheet remaining an important asset to enable this growth, while becoming less meaningful to our revenue mix. Group operating expenses have grown 1% year on year. Over the medium term, we would still expect these to grow at mid to high single digit percentage. We are clearly seeing operating leverage come through as our funds get bigger and we raise subsequent vintages, benefiting from the compounding fees on fees profile. This is a theme we've spoken about a lot in recent years, and it's very visible when you compare the 11% annualized growth rate of OPEX over the last five years to the 19% annualized growth of our management fees. The combination of management fee centricity and operating leverage is even clearer if we look at it on an FRE or fee-related earnings basis. This metric takes our management fees and deducts all of our group cash costs. The precise methodology is in the appendix. There's no entirely consistent market approach, and the team can certainly talk you through this offline. But over the last five years, our FRE has grown at an annualized rate of 26%. What this serves to highlight is the visible growing earnings power of our management fees, the operating leverage we achieve as management fees grow, and given its cash, is a highly valuable earning stream for shareholders. Over time, FRE growth is an important indicator of how successfully we are executing our strategy of scaling up and scaling out. The Amundi partnership we announced this morning is a great example of scaling up our credit and LP secondaries platforms. Management fees generated as a result of this partnership should have strong flow through to FRE given our high embedded operating leverage. And over the long term, our combined ability to develop new products that are suitable for the wealth market will help to further diversify and grow our management fee base. which again should be visible in our FRE growth. All of which underlines why we think this might be an interesting metric to look at and of course we welcome feedback. As well as our higher earnings, our growing fee income is generating increased amounts of cash and our balance sheet is structurally cash flow positive. In the last six months, we generated operating cash flow of 450 million pounds, up 143% year on year, driven by higher management fees, realized performance fees, and total balance sheet returns. We ended the period with total available liquidity of 1.3 billion pounds, net debt of 401 million pounds, and net gearing of 0.15X. During the period, Fitch upgraded our credit outlook to triple B plus stable And we are now rated triple B plus stable from both agencies. NAV per share as of the 30th of September was nine pounds. We have ample liquidity and financial resources, which we can use through market cycles to pursue our strategic ambitions of reinforcing our relevance to clients by scaling new strategies and new products. The current market backdrop is a great opportunity to reinforce our position as a global leader. And we're doing just that. So drawing this all together, our ability to deliver breadth at scale is having clear benefits, which are visible in our financial results. Since September 2020, ICG has generated over £2.3 billion of cumulative earnings, with nearly half returned to shareholders via dividends. We have a clear and disciplined approach to capital allocation, focused on generating recurring and sustainable growth for shareholders, And I look forward to discussing these results and our outlook with many of you in the coming weeks. So with that, I'll hand it back to Chris for questions.

Thank you, David. Thank you, Benoit. And to keep things moving, we do ask that you please try and limit your questions to a maximum of two each, if possible. As a reminder, you can ask questions in writing through the portal by clicking the messaging icon or if you're connected by telephone, pressing star one to join the question queue. And we have a few questions already on the phone. So should we go first of all to Oliver Caruthers from Goldman Sachs? Ollie, your line should be open.

Morning, team. Thanks for the results presentation. I've got two questions from my side. The first one on the Amundi partnership. When you think of the scope and depth of private markets for Amundi's 200 million wealth clients, what level of penetration do you think this partnership could be taken to? Particularly, Benoit, given your comments on product appropriateness, but also the Direction of travel, the industry seems to be – it looks like it could be kind of moving towards in terms of potentially combining public and private investment content into a single product. So that's the first question. And then the second question, maybe two-part question on private equity secondaries. Obviously, an asset class with a lot of growth. First part, did you talk to the – mid-market strategic equity launch in terms of both the timing and the scale of the opportunity. I think this probably has a potential to be pretty accretive to FMC economics because it's investment capabilities and deal flow that lines up with your existing strategic equity franchise. And then the second part of the secondaries question, your comment, Benoit, on industry consolidation in fundraising and the potential for some GPs to go into runoff. LPs will obviously be quite sensitive to this. So how do you think about that comment as you're growing your LP secondaries franchise? And do you expect this will create investment opportunities on the LP-led secondary side? Thank you.

Thank you. I think that was three questions. practically put into two. And the first one is quite broad. So your first question on the scope and depth of the wealth market for private assets, I mean, it's early days. And so no one really knows, but in theory, the potential is considerable because up until now, Wealth and more broadly retail clients have not had access or very limited access to private assets, which has created a very meaningful divergence between between the portfolio composition of institutional investors and that of the wealth channel, or more broadly, the retail channel. So the potential there is undeniably very significant, but as you rightly pointed out, you mentioned the potential need to structure a product by potentially mixing some private and public. I think a lot of the growth will be dependent on our ability to structure those products, which is why I'm so excited by the partnership with Amundi, because they're thinking exactly along the same lines. I think by and large today, what the market has done is try to shoehorn illiquid private products into the channel. And there are significant limitations and perhaps risks as well to that. But it can be structured in a right way where you're providing some liquidity without losing some of the key advantages of private asset investments. And so that's clearly what we're going to be focusing on. In a sense, initially, we're going for the relatively low-hanging fruits, the easy wins in areas that are, you know, structurally more liquid or offer more liquidity, such as credit and LP secondaries. But there's much more that can be done and that we've already started discussing. So I'm very excited. But, you know, I mean, you know us. We never want to overpromise. And these things can also take time. But if I think long-term, I think this partnership has enormous potential. And for us, it's really important that we're not just part and benefiting from this shift because there are many ways in which we could have benefited from this long-term shift. But then, you know, with the money, we'll be able to actually influence it, to actually craft or, you know, steer the market in a direction that we think is the most sensible. Your second question was on P secondaries, and we don't talk about potential size of funds, but yes, you're right that this should be very accretive because it's not very difficult for us. to roll out a mid-market version of our strategic equity strategy, very much in the way we've done that for European corporate. But having said that, I'm always a word of caution, even though we are the global leader in the space and we benefit from a very strong track record, it's still in a way a first-time fund. So we always have to be a bit cautious about the speed of fundraise for that. But, yes, medium term makes a lot of sense. It should be very creative. And for us, strategically, it matters a lot as well because it enables us to essentially occupy the whole space in terms of size and so that we keep maintaining the first mover advantage that we have in that asset class. So, yes, very promising. And finally, you squeezed in a third question on – industry with some players will clearly struggle or are already struggling. Will that generate opportunities in the secondary space? Perhaps. I'd be somewhat cautious there because if you think about it, we operate in two segments of secondaries. One which is the more traditional LP secondaries and typically there, you want to be You want to be looking at strong managers with strong assets. Can you develop a more distressed play as part of that? Perhaps, but I'd be wary of that. I mean, if a manager has underperformed and gone into runoff, there's probably a good reason. not so sure for LP secondaries. And likewise, in GP-led secondaries, you clearly want to be backing only very strong assets with very strong managers. So if there are opportunities that come out of some pain in the market, I think it might be a more direct investment potentially in our structured capital strategy. This is where potentially we could see some opportunities. And depending on how you know, broad-based this phenomenon is, you know, we might revive our recovery fund, which we, you know, which we dust off every time there is a bit of a, you know, market crisis, but we're not there yet, right? So this is, you know, this is, you know, maybe in the future.

Thank you, Olli. Thank you, Benoit. Shall we keep on the phones for now? And should we go to David McCann at Deutsche Bank, please?

Morning, everyone. Congratulations on the results and the deal. So sticking with the theme largely of Amundi for the first questions, really. Amundi on their own slides are talking about 5% EPS accretion linked to the ICG deal from 2028. Is this purely just their share of the profit from their anticipated 9.9% ownership? Or can we read anything into that in terms of the partnership ambition with that? And also linked to Amundi, Noting that this is excluding the U.S., would you be looking for a similar partnership in the U.S., or how do you anticipate to address the U.S. market? That's really the first question. Second question is a more technical one, probably for David. Can you just help us understand, you know, the CLA dividend income is obviously very strong in the period, much more so than normal, but that contrasted obviously with some mark-to-market credit losses. How can we kind of square the circle? Why are we seeing sort of good news on one side, but then sort of values on the other side of what is obviously related peace. Thank you.

Thanks, David. That was, again, three questions under pretending to be two. I'll take the first one very briefly. No, you can read nothing into that number. That's a question. That's a question from me. But there's there's there's there's there's nothing you can read into that figure as regards to partnership at all. But what do you want to pick up the sort of the wealth strategy in the US? And then, David, maybe you talk about the CLO question.

Sure. So a couple of things. One is, you know, even though we've generally been more cautious, we haven't been standing still. So, you know, we have been addressing the wealth channel in the U.S. for a number of years. You may remember that we were an early investors in in in case, which is a distributor. We still are, by the way. And, you know, that that's been in itself. That's been a very, very good investment for us. But obviously, that's one way for us to deploy, particularly in secondaries, both GP-led and LP secondaries. But also, I mean, we've had relationship with a number of banks, of large banks, distributing a number of our strategies in the U.S., and that will continue. I think the exclusion here reflects the fact that this is not a geography where has significant presence. So yeah, so that's the answer on the US part of our strategy.

Yeah. And then, David, on your more technical question about CLOs, I mean, as you said, I think you have to look at this in the round. The total returns across all the asset classes on the balance sheet were positive, including the credit business stripe. As you say, dividends were actually a little higher than where they've run. Historically, that tells you more about the performance of the underlying funds being good and performing in line with expectations, hence the generation of dividends. And we'll continue to mark the book in accordance with the third party model. And there's nothing certainly in the data that gives us any broader concern at this point.

Thank you. Hubert Lamb from B of A. I think your line should be open, please.

Great. Thank you. Thanks for taking my questions. I've got two of them. Firstly, on Wendy again. So how much could the immediate partnership bring, do you think, in terms of flows over the next few years? How should we think about the opportunity here and when you think we should start seeing meaningful and defensive flows starting to come through? First question. The second question is on, again, the balance sheet and the net investment return. Again, it was pretty – it was 5%, I think, for the period. So when do you think we can start getting back to, you know, the high single digit or low double digit rock, which you're targeting over the midterm? Thank you.

Well, I'll take the first question, but I think that's the same question as from Oliver and Goldman Sachs. So I'll make the same answer. I think, you know, the long-term potential is very significant. but I'm always cautious about over-promising in the short to medium term, particularly since in a number of areas, essentially we're going to be creating the market. I mentioned there are some easy wins, and yes, we'll benefit from that, but the biggest surprise is what we'll do in the longer term. That's where you'll see some very significant potentially see some very significant impact. But yeah, I think that's all. At this point, that's all that we can say.

On the balance sheet, Hubert, I mean, you know this, but the balance sheet is an outcome. of how the funds are performing over periods of time. And again, we don't manage the balance sheet as an independent exercise. It's going to be what the funds perform over time. If you look at the NIR over time, five years, about 9% now, and total balance sheet returns about 11%. So clearly, over the medium to long term, it's reflecting fund performance as you'd expect it to.

And I think it might be worth reminding everyone, David, that, I mean, as you've said, I mean, you know, the performance of the balance sheet has to be looked at over the long run. Because over short periods of time, what's mostly influencing it is our pace of deployment. Because, you know, increased deployment, because we keep the valuations flat for typically for a year, when we increase deployment, it has a short-term negative impact on the, or perceived negative impact on the balance sheet performance. But obviously that evens out over time.

I'm changing tack slightly. We've had a quick question online around the status of fundraising for real estate equity. So as a reminder, we raised just over a billion dollars in real estate equity in Europe during this half. But do you have any broader observations or comments around the real estate fundraising market at the moment?

Sure. It's been incredibly difficult these past few years because that is it is one of the asset class where the pain has been taken. Valuations have come down. And so LPs have suffered some significant losses. losses or at least underperformance in their existing real estate portfolio. So generally, that creates a pause in the fundraising appetite. For us, that creates an opportunity because we did not have legacy real estate equity strategies or funds, which means that, you know, we don't have to be firefighting on older vintages. Essentially, we're starting from a clean slate. So it's a very, you know, our timing is is very good in terms of establishing ourselves in the market. It's creating a window, but obviously it takes a bit longer because the fundraising environment has been more difficult. It's starting to reopen. I think I mentioned during the presentation that some of the asset classes strategies that LPs are looking at right now, that includes real assets. There is increased appetite for real assets and real estate. We're starting to see that. It takes time and it's early days for us, but I'm very confident that for us, the real estate asset class is going to be an area of significant growth in the next five to 10 years. We're taking the cycle exactly at the right time. We're starting to progressively see that it's speeding up. We're raising more. But I think, you know, fast forward five years from now, I mean, you'll see that our real estate franchise will be a bigger part of what we do.

Thank you. Well, a question lying around the economics of the emergency partnership and how that will work. I'll take that. It will obviously vary by product. We obviously don't disclose terms of individual funds and strategies. But as David alluded to or mentioned earlier, we think over the medium term, this is a very exciting opportunity. And there's a lot of value to be created for all of the stakeholders involved in this, including the end clients. That's how we're thinking about it. about the economics of that partnership. Another on the partnership, and this may be one for you, David. Look, the structure looks clear. The end outcome, 9.9% economic share, 4.9% voting rights looks clear. Would you mind just running through briefly the steps of how we're getting there from today to by the 30th of June, 2027, please?

Yeah, sure, happy to do that. So actually, the best page, if you have it, to refer to is probably page 25 of our presentation, where we lay out a little bit more detail on the steps that will take place. As you can see, as we've discussed, through the steps, Amundi is going to acquire 9.9% economic stake. The key point here, though, is that there's no dilution to ICG shareholders. And Amundi is going to be paying for all the voting and non-voting shares using their own cash reserves. So the first step is for Amundi to acquire 4.64% ordinary shares in a secondary market. Then ICG has agreed to repurchase 5.26% of ordinary shares to be cancelled, with Amundi then subscribing to non-voting shares that basically have the same economic ownership. So it'll happen in tranches over time. As Chris mentioned, it'll be completed by the 30th of June, 2027. So ownership stakes, share buyback activities will be disclosed in the normal way as all of these steps progress. But I also just want to emphasise the structure ensures no dilution to existing shareholders and no change to the ICG balance sheet, P&L or cash position.

Great. Thank you. A couple of, another question on the phone from Angeliki at JP Morgan. Angeliki, your line should be open.

Hi, and thank you for taking my questions. Just a couple from myself as well, please. First of all, with regards to the M&E partnership, can you explain the rationale behind the exclusivity in distribution? We know that many of your peers in private markets actually distribute at the moment in Europe across several different distributors. So are you not limiting yourselves a little bit by just going exclusive with only one partner? And second question on Europe 9. You mentioned that the fund is now at 7.5 billion. Can it exceed the 10 billion euro target? And can you give us an update on when we should be expecting the final close of this strategy, please? Thank you.

Yeah, thanks, Angeliki. On the exclusivity, I mean, you know, the important part is that this is mutually exclusive. So, you know, are we limiting ourselves? Yes, you could say we could also distribute through others, but, you know, Mundi is by far the largest asset manager, traditional asset manager in Europe, and they're going exclusive with us as well. So, I mean, I think it's incredibly valuable for both parties and should enable us to accelerate our position in the wealth market in a way that we would not have been able to had we just normal commercial agreements on a fund-by-fund basis. And by the way, the way typically these agreements work is those distributors always ask for exclusivity at least for a period of time when they're distributing a fund. So even if you're going fund-by-fund, you're still giving exclusivity to JP Morgan, for instance, you've been distributing some of our products for a period of time. So, no, I think it's only on that point, I think it's only positive. I think it's very, very positive for both parties. On Europe 9, we don't comment on ultimate targets. The one thing I would say is that, as always, we're not obsessed with size. I mean, for me, the key criteria on the size of a fund is ability to deploy it well in a three- to four-year period. And so, as always, when we're sizing a fund, we – We take a look at the speed of deployment in the first year or the first 18 months of the life of the fund. So in parallel with the fundraising effort, and we're right in the middle of that right now. And depending on that and our own assessment of the market, we either push the size up or we remain more cautious. It's too early to say.

And just to build on, Angelique, just to build on Don's answer to the first question, This isn't going exclusive with one person. Amundi have got a network of more than 600 distributors and over 200 million individual clients. So this doesn't limit us. This opens up a significant, significant opportunity. So I think definitely we're thinking about it in that way. There's another question now online around private credit and how we see the deployment pipeline in private credit. Bernard, do you want to make some comments around that market as a whole?

Sure. So broad context is that the buyout market remains slow, slightly slower than it was four or five years ago. And that has an impact on the credit and the private debt market because these markets are essentially aligned with the private equity buyout space. So that's for the general environment. Within that, it's obviously easier if you benefit from a long history and a large existing portfolio because Those existing portfolios generate their own financing opportunities. If I look at where we deploy quite significantly in Europe, we deploy three, four billion euros per year. Actually, this year, we're on track to be at the upper end. But a significant portion of that, call it two-thirds to three-quarters, is by taking advantage of mining our existing portfolio. So that has a very big impact. That has a very big impact on our ability to deploy and deploy well. So that's a competitive advantage, if you will. Overall, we are cautious in this market environment. I mean, there are areas of the market where we feel it's overheating. It's probably much more pronounced in the US than Europe, but Europe is not immune to So we remain cautious in the way we deploy and particularly we remain very cautious on the quality of legal protections and legal documentations where we're seeing in some instances things that we find are unsatisfactory and so we stay away.

And then two final questions online, both of which sound like possibly if you knew, David. First of all, FMC costs were flat year on year in H1. before? How should we think about growth in the medium term and cost base as a whole?

Yeah, so as I said in my sort of prepared remarks, I wouldn't read too much into a 1% change in cost base. There has been, as we mentioned in the presentation, quite a lot of cost discipline in the system. Our headcount's actually slightly down period on period. As we continue to scale the business up, we've made a lot of investments in the past that we've spoken about, and actually a lot of that is now in place. So that's a good and positive backdrop for But I'd still guide people to cost-based increase more between the 5% and 10% range at this point, because there'll be some seasonal effects anyway when you're looking at this over six months. So that's how I'd guide for the future.

And then what looks like the final question, FRE seems new disclosure this half. Could you sort of talk for a bit about the rationale and why now?

Yeah. So FRE, as I said, I think is another way to think about our business. It's obviously one that many others use to compare asset management companies and their growth potential. So actually having a comparable metric, I think, in the public domain is helpful. Many analysts obviously do it already. So here's us explaining how we think about it internally. It brings together also a number of the themes I touched on in the presentation. If you think about our management fee growth of 19% over five years, our cost growth of 11% over five years, it comes together into a very powerful FRE outcome. It's grown 26%. So for now and for the future, this is probably another one that we should watch and monitor. And we'll continue to evolve our financial disclosure as always and appreciate the feedback.

Absolutely. And just for clarity, that's 26 percent annualized growth over the last five years. With that, we have come to the end of the questions. So thanks ever so much for joining us. And this concludes the presentation. Thank you.