Source: Sharecast
Berenberg noted that there was currently "a significant amount of negativity surrounding the sector", but said ICG was continuing to take share in "the right corners of this vast market", while it had also limited exposure to wealth investors unlike some of its peers and been unfairly caught up in readacross from the US - a market in which ICG has been cautious about deploying capital.
While Berenberg cut its earnings estimates on account of net balance sheet returns, it also said this was "already more than reflected" in the current price of the shares, and that an implied fee-related earnings multiple of 6.1x was "too low given the earnings growth on offer".
"There is significant negativity surrounding the sector and ICG has been unfairly caught up in the readacross. The company has no exposure to retail investors, limited exposure to high-net-worth money, and has been cautious about deploying capital in the US market," said the German bank.
"We think that an implied multiple of 6.1x for its FRE, based on our estimates and holding all else constant, is too low. Alternatively, applying 1x NAV to the balance sheet implies a P/E of only 7.4x for the asset management earnings stream, which is too cheap considering the three-year EPS CAGR of 11%."
Reporting by Iain Gilbert at Sharecast.com