Changes to recognition of performance fees, increasing guidance

Core Viewpoint - ICG plc is changing its performance fee recognition method to enhance visibility and reduce management judgment, with the new approach expected to be implemented in H1 FY26, leading to a one-off gain and increased guidance for future performance fees [2][3][8]. Financial Impact - The company has grown equity-like fee-earning AUM by 3.0x over the last five years, which has the potential to generate higher performance fees [2]. - A one-off gain of £65 – 75 million is expected in H1 FY26 results, with total performance fees anticipated to be between £90 – 95 million [3]. - The recognition of performance fees will be more visible in future periods, particularly in the early years of a fund's life, without affecting the total amount of performance fees over the fund's life [4][6]. Accounting Changes - The new performance fee recognition will be reflected in both the company's Alternative Performance Measures (APM) and statutory (IFRS) accounts, with minimal differences expected [5]. - Performance fee recognition will begin when the successor vintage holds a first close and the investment period of the current vintage ends, removing management judgment regarding timing [9]. Guidance Update - The medium-term guidance for performance fees has been increased, now expected to represent 10-20% of total fee income, up from the previous 10-15% [8]. - The FMC operating margin is projected to exceed 54%, an increase from the previous expectation of 52% [10]. Company Overview - ICG is a global alternative asset manager with $123 billion in AUM, operating from over 20 locations and investing in various asset classes [13][14].