Mark Richmond, Intermediate Capital Group (ICG)

Welcome to Lender Lens, our series for profiling leaders in the Lender community.

With private credit playing an increasingly important role in the financial system, we wanted to find out how lenders are navigating the evolving landscape and how they assess the market in the coming years.

In a market defined by fierce competition, Intermediate Capital Group (ICG) stands out as one of the original pioneers in European direct lending. Since launching its Senior Debt Partners strategy in 2012, ICG has raised five vintages, most recently closing at $17 billion.

What is your house strategy? 

ICG Senior Debt Partners is a pureplay direct lending strategy targeting predominantly European mid-market and upper mid-market corporate borrowers. The strategy was launched in 2012, with five vintages raised to date. We announced the final close for Senior Debt Partners fund 5 and associated vehicles at $17 billion, significantly above target. 

What is your sector / deal size preference? 

We are looking to deploy €100-800 million commitments into sponsor-backed Western European corporates with a sweet spot of €200-600 million. We are looking for diversification across geographies and industries, with a focus on non-cyclical defensive sectors such as Business Services, Software, Healthcare, Financial Services and Education. 

How do you differentiate in a competitive market? 

We observe the market to be incredibly competitive driven by a demand / supply imbalance. Not only are we competing against other private credit firms with significant amounts of dry powder but also the broadly syndicated market, which despite a widening of spreads in the last couple of weeks, remains very hot. Sponsor driven M&A volumes are likely to remain subdued and all market participants are waiting for the promised uptick in sell side activity though it is difficult to see a catalyst in the short term.

Given our track record as one of the first movers in the European Direct Lending market, we aim to differentiate by focusing on bigger, better businesses. We can speak for an entire transaction that might in the past have required several lenders. We believe that our ability to provide follow-on capital to support sponsors and their portfolio companies, particularly in providing buy-and-build financing, is a key differentiator in reducing market risk and management time spent on marketing materials, rating agency meetings, roadshow presentations and so on. 

Tell us about a deal where you have supported a company through multiple financing rounds. 

We have supported several companies through multiple financing rounds. In fact, some of our largest positions today are in buy-and-build transactions that we have supported for years through different ownership cycles. With the more uncertain M&A backdrop, we aim to also provide portable refinancings to our clients to address short term maturity issues and replenish acquisition facilities, at the same time as helping sponsors to position those companies for sale in short order. 

What is your favourite country in the world? 

Paying homage to Anthony Sage, Termgrid’s Head of Private Credit and Bank Coverage, I would have to say Wales! My grandparents met on the Isle of Anglesey shortly before the outbreak of the Second World War and I have spent every summer there since I was born, including when we moved to Tokyo for my dad’s job. There are beautiful sandy beaches and coves, and one of the best sailing areas in the UK in Trearddur Bay. We still sail my great-grandfather’s 20ft wooden boat, Seamew, a Seabird Half Rater, built in 1920 and part of the oldest one design fleet still racing in the world. 

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