ICG to Freeze Investment in France If Le Pen Wins Presidency

  • National Front leader’s win ‘cannot be positive’: CEO Evain
  • ICG currently has 29 percent of its portfolio in France

Intermediate Capital Group Plc will suspend further investment in France if National Front leader Marine Le Pen becomes president in this year’s elections, according to the company’s chief executive officer.

“It cannot be positive,” Christophe Evain, whose London-based firm has 22 billion euros ($23 billion) of assets under management, said in an interview at his offices. “We would certainly freeze investments for some time and see what happens.”

ICG, a specialist in private debt, has 29 percent of its portfolio in France. Evain cited Le Pen’s economic policies, which include backing protectionism, as a cause for concern, and said her proposal to take France out of the euro would add to the political instability in Europe.

Le Pen, who has spent years trying to detoxify her anti-immigration party in the minds of the electorate, is a front-runner in the presidential elections, which start in April and conclude in a possible run-off the following month.

An Elabe poll for Les Echos last week suggested Le Pen would get through the first round of voting, though Evain doesn’t think she’ll win the presidency. Still, the Paris-born ICG chief cited the risk of political upheaval as one of the biggest challenges facing his firm in 2017.

“At this stage I think it’s highly unlikely she’ll win,” Evain said. “But I got it wrong on Brexit and I got it wrong on Trump. I’m worried about jinxing the whole process.”

Institutional Allure

ICG invests in French firms including Groupe Charlois SAS, a manufacturer of oak barrels for wine and cognac production, and DomusVI, which operates about 200 nursing homes across the country.

The money manager’s assets have swelled from 12.1 billion euros in September 2013, fueled by institutional investors seeking higher returns as traditional assets like government bonds yield close to zero. Its stock has risen to 710 pence as of 8:25 a.m. in London on Wednesday, after sliding to as low as 501 pence in the wake of the U.K.’s June decision to quit the European Union.

The company plans to do more direct lending in the U.S. this year and to bring two of its established funds involved in products including U.S. mezzanine and European direct lending back to the market, Evain said. It’s also looking to acquire new teams.

ICG is tightening the criteria for deploying capital in the U.K., where it has about 11 percent of its portfolio, due to concerns over the nation leaving the world’s biggest single market. Companies vulnerable to rising import costs or a decline in consumer spending are now less attractive, he said.

“We’d rather invest in companies that are not going to suffer as much from a difficult Brexit,” Evain said.

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