By Noor Zainab Hussain and Simon Jessop
LONDON (Reuters) - Asset manager Intermediate Capital Group (L:ICP) reported a 10 percent jump in full-year assets on Thursday, boosted by investment gains and new client inflows, sending its shares up by 10 percent.
ICG, which invests across a range of private equity, fixed income and real estate markets, said total assets at the end of March were 23.8 billion euros (20.61 billion pounds), up from 21.6 billion a year earlier.
Cash inflows, meanwhile, rose 19 percent to 18.8 billion euros, helping to drive a 27 percent jump in total fee income.
Investors are increasingly looking for diversified sources of income, eschewing debt markets offering low returns and stock markets they consider fully valued, which ICG said would help it to achieve a 4 billion euro fundraising target this year.
"The market environment continues to be supportive of both our existing and new strategies and we see strong, ongoing demand from investors for diversified sources of higher yield," outgoing Chief Executive Christophe Evain said in the statement.
Benoit Durteste, who takes over from Evain in July, said there was continued strong demand for alternative asset classes from pension schemes and insurers open to locking up their money for longer in search of higher returns.
Shares in ICG were up 10.1 percent at 888.5 pence by 0851 GMT, the top gainer on the FTSE midcap index (FTMC) by some margin.
The investment performance and cash inflows helped to lift group pretax profit by 58.9 percent year on year to 252.4 million pounds, allowing it to increase the final dividend by 23 percent to 19.5 pence a share.
The group also said it will adopt a new dividend policy to return more of its profits to shareholders and would look to increase its payout at a rate of 6-8 percent a year.
JPMorgan (NYSE:JPM) Cazenove analyst Gurjit Kambo described the results as "strong", reiterating an "overweight" rating on the stock with a raised target price of 950 pence.