TIDMICGT
ICG Enterprise Trust plc
Preliminary Results for the twelve months ended 31
January 2023
11 May 2023
Delivering defensive growth
Highlights
-- NAV per Share of 1,903p at 31 January 2023 (31
January 2022: 1,690p)
-- FY23 NAV per Share Total Return of 14.5% (5 year
annualised: 16.9%)
-- 14th consecutive year of double-digit Portfolio
growth: Portfolio Return on a Local Currency Basis of
10.5% (Sterling return 17.0%)
-- Strong year for primary commitments, building
pipeline for future years' investment programme
-- Investment and realisation activity in line with
historical averages
-- 54 Full Exits during the year, realised at a weighted
average Uplift To Carrying Value of 23.9% and a
weighted average Multiple to Cost of 2.7x
-- Final dividend of 9p brings FY23 total dividend per
share to 30p (+11.1% YoY); progressive policy
maintained
-- GBP5.2m of shares bought back at weighted average
discount to last reported NAV of 41.2% since
programme initiated in October 20221; buyback
programme continuing
-- Updated Management Fee Agreement and improved
cost-sharing with the Manager, effective from 1
February 2023
(1) Up to and including 2 May 2023
Oliver Gardey
Head of Private Equity Fund Investments, ICG
The defensive growth characteristics of our actively
managed Portfolio are increasingly apparent in our
financial results. As a listed private equity investment
trust focused exclusively on buyouts in North America
and Europe, we offer investors access to a differentiated
Portfolio that has delivered high levels of revenue
and earnings growth over the last twelve months and
which has increased in value by 17.0% in Sterling
terms. We have not invested in more speculative parts
of private markets such as venture capital or growth
equity.
Our Portfolio is delivering growth over the long-term:
FY23 marks the 14(th) consecutive year of double-digit
portfolio returns on a local currency basis, and our
annualised NAV per Share Total Return over the last
five years has been 16.9%.
Portfolio activity continued through the year. Investments
and realisations as a proportion of our opening Portfolio
value were broadly in line with historical averages,
and the Full Exits being executed at a 23.9% Uplift
to Carrying Value helps support our confidence in
our valuations. We made new fund commitments totalling
GBP203.2m, which we expect to be invested over the
coming three to four years. These commitments have
sown the seeds of our primary and direct investment
program in the coming years, in what could be a very
attractive vintage for private equity.
The current market is creating some attractive conditions
for investing our shareholders' capital, and our strong
capitalisation and dedicated team with experience
of investing through market cycles enable us to capture
these opportunities. We continue to believe that ICG
Enterprise Trust is well-positioned to execute on
its strategy and to generate resilient returns.
PERFORMANCE OVERVIEW
Annualised
-------------- -------------- --------------
Performance
to 31
January
2023 3 months 6 months 1 year 3 years 5 years 10 years
------------ --------------- --------------- --------------- -------------- -------------- --------------
Portfolio
Return on a
Local
Currency
Basis 2.3 % 2.6 % 10.5 % 21.3 % 19.1 % 17.0 %
NAV per
Share Total
Return (0.3) % 3.3 % 14.5 % 20.4 % 16.9 % 13.8 %
Share Price
Total
Return 15.3 % (0.7) % (2.3) % 8.5 % 9.7 % 11.6 %
FTSE
All-Share
Index Total
Return 10.4 % 5.3 % 5.2 % 5.0 % 4.2 % 6.3 %
Portfolio
activity
overview for
FY23 Primary Direct Secondary Total ICG-managed
------------ ------------------ -------------- -------------- --------------- --------------
Local
currency
return 8.0% 15.5% 11.5% 10.5% 11.8%
Sterling
return 14.0% 22.5% 19.0% 17.0% 18.8%
New
Investments GBP138.6m GBP70.1m GBP78.5m GBP287.2m GBP137.3m
Total
Proceeds GBP137.3m GBP47.8m GBP66.9m GBP252.0m GBP101.3m
New Fund
Commitments GBP137.3m -- GBP65.9m GBP203.2m GBP65.9m
------------ ------------------ -------------- -------------- --------------- --------------
Closing
Portfolio
value GBP761.7m GBP383.9m GBP260.9m GBP1,406.4m GBP410.3m
% Total
Portfolio 54.1 % 27.3 % 18.6 % 100.0 % 29.2 %
ENQUIRIES
Institutional investors and analysts:
Oliver Gardey, Head of Private Equity Fund Investments, ICG: +44
(0) 20 3545 2000
Colm Walsh, Managing Director, Private Equity Fund Investments,
ICG
Chris Hunt, Head of Shareholder Relations, ICG
Livia Bridgman Baker, Shareholder Relations, ICG
Media:
Clare Glynn, Corporate Communications, ICG: +44 (0) 20 3545
1395
Website:
www.icg-enterprise.co.uk
EVENTS AND COMPANY TIMETABLE
A presentation for investors and analysts will be held at 14:30
BST today. A link for the presentation can be found on the
https://www.globenewswire.com/Tracker?data=N2W-7mRPTfJRPJ_kVhmM64hPDLwBP_aev2mskQnsnQ3_j84bKwqZInv7dyCLbIj1lgC_u6KbPNn5SziO2s6YGh62ZrgJo3831llJwe3IN-dEcr9IdBWfs4CnWmgSyWm6SgZjApp8K4BQiGdDOzoQCqyA6XqQFCkViq4VTtLKwIc=
Results & Reports page of the Company website. A recording of
the presentation will be made available on the Company website
after the event.
Annual General Meeting: 27 June 2023
Q1 trading update: 27 June 2023
Ex-dividend date: 06 July 2023
Record date: 07 July 2023
Dividend payment date: 21 July 2023
ABOUT ICG ENTERPRISE TRUST
ICG Enterprise Trust is a leading listed private equity investor
focused on creating long-term growth by delivering consistently
strong returns through selectively investing in profitable,
cash-generative private companies, primarily in Europe and the US,
while offering the added benefit to shareholders of daily
liquidity.
We invest in companies directly as well as through funds managed
by Intermediate Capital Group ('ICG') and other leading private
equity managers who focus on creating long-term value and building
sustainable growth through active management and strategic
change.
We have a long track record of delivering strong returns through
a flexible mandate and selective approach that strikes the right
balance between concentration and diversification, risk and
reward.
NOTES
Included in this document are Alternative Performance Measures
("APMs"). APMs have been used if considered by the Board and the
Manager to be the most relevant basis for shareholders in assessing
the overall performance of the Company, and for comparing the
performance of the Company to its peers and its previously reported
results. The Glossary includes further details of APMs and
reconciliations to International Financial Reporting Standards
("IFRS") measures, where appropriate.
In the Chair's Foreword, Manager's Review and Supplementary
Information, all performance figures are stated on a Total Return
basis (i.e., including the effect of re-invested dividends). ICG
Alternative Investment Limited, a regulated subsidiary of
Intermediate Capital Group plc, acts as the Manager of the
Company.
DISCLAIMER
The information contained herein and on the pages that follow
does not constitute an offer to sell, or the solicitation of an
offer to acquire or subscribe for, any securities in any
jurisdiction where such an offer or solicitation is unlawful or
would impose any unfulfilled registration, qualification,
publication or approval requirements on ICG Enterprise Trust PLC
(the "Company") or its affiliates or agents. Equity securities in
the Company have not been and will not be registered under the
applicable securities laws of the United States, Australia, Canada,
Japan or South Africa (each an "Excluded Jurisdiction"). The equity
securities in the Company referred to herein and on the pages that
follow may not be offered or sold within an Excluded Jurisdiction,
or to any U.S. person ("U.S. Person") as defined in Regulation S
under the U.S. Securities Act of 1933, as amended (the "U.S.
Securities Act"), or to any national, resident or citizen of an
Excluded Jurisdiction.
The information on the pages that follow may contain forward
looking statements. Any statement other than a statement of
historical fact is a forward looking statement. Actual results may
differ materially from those expressed or implied by any forward
looking statement. The Company does not undertake any obligation to
update or revise any forward looking statements. You should not
place undue reliance on any forward looking statement, which speaks
only as of the date of its issuance.
CHAIR'S STATEMENT
I am pleased to report that your Company has continued to grow
and invest for the future during the last financial year. In a
period characterised by geopolitical and macro-economic
uncertainty, ICG Enterprise Trust's performance reinforces the
Board's confidence in the resilience of the Portfolio and the
benefits through economic cycles of our strategic focus on
'defensive growth'.
ICG Enterprise Trust's NAV at 31 January 2023 was GBP1.3bn,
equating to 1,903p NAV per Share. The Company has delivered 14.5%
NAV per Share Total Return for the financial year, and 16.9% on a
five-year annualised basis, net of all fees. Further details on the
composition and performance of the Portfolio and NAV can be found
in the Manager's review.
In public markets the macroeconomic uncertainty in 2022 was
reflected in amplified volatility, downward pressure on earnings
estimates and lower valuations placed on earnings. Understandably
there have been questions about the seemingly less volatile nature
of private valuations compared to public valuations. The Portfolio
of ICG Enterprise Trust is notably different from that of
frequently-cited public indices and is not weighted towards
consumer, financials and energy companies (in the case of the FTSE
100) or towards a narrow group of technology companies (in the case
of the S&P500). In addition, private market valuations have not
typically seen the same levels of exuberance as public markets
during periods when valuations have expanded dramatically.
When reviewing the valuation of the Portfolio, there are a
number of factors to consider; but the ultimate validation is how
an investment is realised, and whether at exit a buyer is willing
to pay the value that we had it marked at. During FY23 the
Portfolio experienced 54 Full Exits, generating GBP133.2m of cash
proceeds (representing 11.4% of the opening Portfolio value for the
year). These were executed at a weighted average Uplift to Carrying
Value of 23.9% - slightly lower than recent years, but still a
significant uplift. I believe our track record of Full Exits being
at an Uplift to Carrying Value should give shareholders comfort
that the valuations in our Portfolio are generally robust, and this
is an area the Board continues to discuss in detail with the
Manager.
Despite this consistent and strong track record, our share price
has been impacted by widening discounts across the listed private
equity investment trust sector. During this financial year our
shareholders endured a negative Share Price Total Return of (2.3)%
and on 31 January 2023 our shares traded at a 40.1% discount to the
last published NAV of 1,918p (as at 31 October 2022). The Board
considers that the Company's performance and the value of its
Portfolio and strategy are not appropriately recognised in its
share price, and has implemented several additional measures this
year to optimise shareholder returns. These include a long-term
buyback program, running alongside our existing progressive
dividend policy, and an improved management fee agreement that
introduces a cap on the fee rate payable to our Manager and the
Manager assuming a greater proportion of the Company's ongoing
costs.
ACCESS TO PRIVATE EQUITY
Private equity can play a valuable role in generating
differentiated returns for investors with a long-term perspective.
It is, however, a fundamentally illiquid asset class. The
closed-end nature of investment trusts solves the potential
liquidity mismatch for investors by creating traded shares that can
be bought and sold on a stock exchange. As a result, the portfolio
can be managed for long-term value creation without the risk of
having to sell assets to fund redemptions. By investing in vehicles
such as ICG Enterprise Trust, shareholders gain access to a mature
and actively managed portfolio of private equity investments, with
the added benefit of daily liquidity.
A consequence of the investment trust structure, however, is
that shares can trade at discounts to the published NAVs, and
currently the sector as a whole -- including ICG Enterprise Trust
-- is trading at quite notable discounts. As discussed elsewhere,
your Board continues to work with the Manager to make shares in ICG
Enterprise Trust more attractive to a wider range of investors.
I continue to believe that investment trusts such as ICG
Enterprise Trust serve a useful purpose in helping provide access
to private equity to a more diverse range of investors who are
seeking to commit capital to this asset class.
HOW ICG ENTERPRISE TRUST IS MANAGED - UPDATING OUR
OBJECTIVES
Six years ago, ICG Enterprise Trust outlined three objectives.
We are pleased to have delivered against each of these since they
were introduced:
Former objectives Medium-term target FY16 FY23
------------------------------------------- ------------------ ----- ------
Portfolio / net assets 100% 82.1% 108.1%
North America as percentage of Portfolio 40-50% 14.1% 46.6%
High Conviction Investments as percentage
of deployment 50% 33.0% 57.6%
The Company has evolved since these objectives were introduced,
and to reflect this the Board has revised these objectives to the
following, which focus on 1) Target Portfolio composition and 2)
Balance sheet:
New objectives Medium-term target Five-year average FY23
-------------------------------- ------------------ ----------------- -----
1. Target Portfolio composition
(1)
Investment category
--------------------------------
Primary 50% 59.2% 54.1%
Direct 25% 27.3% 27.3%
Secondary 25% 13.5% 18.6%
Geography(2)
--------------------------------
North America 50% 37.2% 46.6%
Europe (inc. UK) 50% 62.8% 47%
2. Balance sheet
(Net cash)/debt(3) 0% (3.0)% 3.4%
1 As percentage of Portfolio; 2 FY23 excludes 6.3%
Other geographical exposure; 3 (Net cash)/debt as
a percentage of NAV
Importantly this does not indicate a change in the composition
of the Portfolio; it merely more completely reflects how the
Portfolio and our balance sheet are being managed, and how they are
expected to be constructed over the medium term.
I believe that today we have a very high quality investment team
through our Manager, and that these objectives will enable us to
maximise the value they generate for our shareholders.
DIVID AND SHARE BUYBACK
During the financial year, the Board gave careful consideration
to the level, form and mechanism of shareholder returns.
The nature of private equity investments means that compounding
capital appreciation is likely to be the largest single component
of shareholder returns over the long term.
The progressive dividend is an important component of
shareholder returns, and the Board remains committed to this
policy. In line with this, the Board is proposing a final dividend
of 9p per share. Together with the three interim dividends of 7p
per share each, this will result in total dividends for the year of
30p per share, representing an 11.1% increase on the prior year
dividend and the seventh consecutive year of dividend
increases.
In October 2022, the Board introduced a long-term share buyback
programme. The Board believes this programme demonstrates the
Manager's discipline around capital allocation; underlines the
Board's confidence in the long-term prospects of the Company, its
cash flows and NAV; will enhance the NAV per Share; and over time
may reduce the volatility of the Company's discount and increase
its trading liquidity. At 2 May 2023 the Company has repurchased
472,178 shares since this programme was initiated, at an estimated
weighted average discount to the last reported NAV of 41.2%. In
aggregate these buybacks represent a capital return of GBP5.2m.
IMPROVED MANAGEMENT FEE AND COST SHARING WITH THE MANAGER
During the year we negotiated a revised fee agreement with the
Manager, effective from 1 February 2023. This agreement caps the
maximum fee rate payable to the Manager, and allows our
shareholders to benefit from economies of scale as our NAV grows.
Had the revised agreement been in place during FY23, the management
fee paid would have been reduced by approximately 6.5%
(GBP1.1m).
It was also agreed that the Manager will absorb a number of
ongoing costs previously paid for by ICG Enterprise Trust. The
Board estimates that these are equivalent to approximately 25-30%
of the general expenses (which exclude management fees and finance
costs) that would have been paid by ICG Enterprise Trust prior to
this agreement being reached.
I am grateful to ICG for their co-operation during these
negotiations and am pleased with the outcome.
BOARD EVOLUTION
Following the retirement of Sandra Parajola in June 2022, we
were delighted to strengthen our Board with the appointment of two
new non-executive directors, Adiba Ighodaro and Janine Nicholls.
Adiba and Janine each bring a depth and breadth of knowledge which
is complementary to the Board's existing skillset.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held on 27 June 2023. The
Board will be formally communicating with shareholders outlining
the format of the meeting separately in the Notice of Meeting. This
will include details of how shareholders may register their
interest in attending the Annual General Meeting, either in person
or via video conference.
I am confident that our Company is well-positioned to
successfully execute on its strategy. We have historically
generated significant value over the long term, and I believe we
will continue to do so. Our ability to continue to commit, deploy
and realise capital through uncertain economic times means that our
Portfolio is not exposed to particular vintage risk.
We have a distinctive strategy, a Portfolio managed by an
experienced and well-networked team, and our Board has demonstrated
its disciplined approach to capital allocation. Taken as a whole I
believe this results in a differentiated and attractive offering to
shareholders.
Finally, I want to thank you for the continued trust and support
you give to ICG Enterprise Trust.
Jane Tufnell
Chair
10 May 2023
MANAGER'S REVIEW
Alternative Performance Measures
The Board and the Manager monitor the financial performance of
the Company on the basis of Alternative Performance Measures (APM),
which are non-IFRS measures. The APM predominantly form the basis
of the financial measures discussed in this review, which the Board
believes assists shareholders in assessing their investment and the
delivery of the investment strategy.
The Company holds certain investments in subsidiary entities.
The substantive difference between APM and IFRS is the treatment of
the assets and liabilities of these subsidiaries. The APM basis
"looks through" these subsidiaries to the underlying assets and
liabilities they hold, and it reports the investments as the
Portfolio APM. Under IFRS, the Company and its subsidiaries are
reported separately. The assets and liabilities of the subsidiaries
are presented on the face of the IFRS balance sheet as a single
carrying value. The same is true for the IFRS and APM basis of the
Cash flow statement.
The following table sets out IFRS metrics and the APM
equivalents:
31 January 31 January 31 January 31 January
IFRS (GBPm) 2023 2022 APM (GBPm) 2023 2022
------------ ----------- ----------- ----------- ----------- ------------
Investments 1,349.1 1,123.7 Portfolio 1,406.4 1,172.2
------------ ----------- -----------
NAV 1,300.6 1,158.0
------------ ----------- ----------- ----------- ----------- ------------
Cash flows
from the
sale of
portfolio Total
investments 32.1 101.0 Proceeds 252.0 333.5
------------ ----------- ----------- ----------- ----------- ------------
Cash flows
related to
the
purchase of
Portfolio Total New
investments 62.2 75.1 Investment 287.2 303.7
------------ ----------- ----------- ----------- ----------- ------------
The Glossary includes definitions for all APM and, where
appropriate, a reconciliation between APM and IFRS.
Our investment strategy
We focus on investing in buyouts of profitable, cash-generative
businesses in developed markets that exhibit defensive growth
characteristics which might support strong and resilient returns
across economic cycles. There are a number of themes that
contribute to a business having, in our view, such characteristics.
These include (among others) attractive market positioning,
providing mission-critical services to their clients and customers,
ability to pass on price increases, and structurally high
margins.
We take an active approach to portfolio construction, with a
flexible mandate that enables us to deploy capital in Primary,
Secondary and Direct investments. We believe our investment
strategy results in a differentiated Portfolio with attractive
growth characteristics. Our Portfolio composition is shown
below:
31 January 2023 31 January 2023
Investment category GBPm % of Portfolio
-------------------- --------------- ---------------
Primary 761.7 54.1%
-------------------- --------------- ---------------
Direct 383.8 27.3%
-------------------- --------------- ---------------
Secondary 260.9 18.6%
-------------------- --------------- ---------------
Total 1,406.4 100.0 %
-------------------- --------------- ---------------
Investments managed by ICG accounted for 29.2% of the
Portfolio.
Geographically we focus on the developed markets of North
America and Europe, including the UK, which have deep and mature
private equity markets supported by a robust corporate governance
framework. The geographic profile of the Portfolio is shown
below:
31 January 2023
Geography(1) % of Portfolio
--------------------------------- -----------------------------
North America 46.6 %
--------------------------------- -----------------------------
Europe (inc. UK) 47.1 %
--------------------------------- -----------------------------
Other 6.3 %
--------------------------------- -----------------------------
Total 100.0 %
--------------------------------- -----------------------------
1 Calculated by reference to the location of the headquarters
of the underlying Portfolio companies on a value-weighted
basis
Implementing our investment strategy during the year
In a year of elevated macroeconomic and geopolitical volatility,
we remained consistent in our investment approach, seeking to
identify attractive investments that align to our focus on
defensive growth. Our flexible investment mandate enabled us to
react efficiently to changing market dynamics in order to
capitalise on opportunities across Primary, Secondary and Direct
investments.
During the year we were able to take advantage of favourable
market conditions to make 14 new fund commitments to a range of
leading managers. These commitments, which we expect to be invested
over the next 3-4 years, ensure that we will remain appropriately
invested through the cycle.
Our dedicated investment team has concentrated on identifying
investment opportunities where they believe they have good
visibility on the likely performance of the underlying assets and
on transactions with potentially lower volatility of returns than
the broader market. Reflecting this, Direct Investment activity
during the period included three Direct investments alongside our
Manager, benefiting from their expertise in structured
transactions. We also made a number of follow-on investments into
existing portfolio holdings where we have greater visibility of,
and confidence in, the performance of the underlying company.
Performance overview
At 31 January 2023, our Portfolio was valued at GBP1,406.4m, and
the Portfolio Return on a Local Currency Basis for the financial
year was 10.5% (FY22: 29.4%). This performance extends our track
record of generating double-digit Portfolio returns on a Local
Currency basis to 14 consecutive years.
The Portfolio returns during FY23 were seen across Primary,
Direct and Secondary investments:
-- Primary investments generated a local currency return of 8.0%. Valuation
increases are primarily driven by operational performance. There was
notably strong performance from a number of funds including those managed
by PAI, Graphite, and Gridiron
-- Direct Investments generated a return of 15.5%, reflecting resilient
operational performance, as well as a number of meaningful realisations
agreed during the year, including Endeavor Schools (exit agreed during
FY23 and completed post period end), and IRI (which completed its merger
with NPD on 1 August 2022)
-- Secondary investments generated a return of 11.5%, driven by strong
performance from underlying investments within ICG LP Secondaries and ICG
Strategic Equity
Over the last five years, our Portfolio has generated an
annualised Portfolio Return on a Local Currency Basis of 19.1%.
Due to the geographic diversification of our Portfolio, the
reported value is impacted by changes in foreign exchange rates.
During the period, the Portfolio increased by GBP76.4m (+6.5%) due
to FX movements, driven primarily by the US Dollar strengthening
against Sterling. Portfolio growth during the period was 17.0% in
Sterling terms.
The net result was that ICG Enterprise Trust generated a NAV per
Share Total Return of 14.5% during FY23, ending the period with a
NAV per Share of 1,903p. The NAV per Share Total Return during Q4
was (0.3%), driven predominantly by negative FX movements more than
offsetting a positive underlying return at the Portfolio level.
Over the last five years, ICG Enterprise Trust has generated an
annualised NAV per Share Total Return of 16.9%.
Movement in the Portfolio Twelve months to Twelve months to
GBPm 31 January 2023 31 January 2022
------------------------------------------ ---------------- ----------------
Opening Portfolio1 1,172.2 949.2
---------------- ----------------
Total New Investments 287.2 303.7
Total Proceeds (252.0) (342.9)
---------------- ----------------
Net (proceeds)/investments 35.2 (39.2)
Valuation movement2 122.6 279.4
Currency movement 76.4 (17.2)
------------------------------------------ ---------------- ----------------
Closing Portfolio 1,406.4 1,172.2
------------------------------------------ ---------------- ----------------
% Portfolio growth (local currency) 10.5 % 29.4 %
% currency movement 6.5 % (1.8) %
------------------------------------------ ---------------- ----------------
% Portfolio growth (Sterling) 17.0 % 27.6 %
Impact of (net cash)/net debt 0.2 % (0.1) %
Expenses and other income (1.8) % (1.5) %
Co-investment Incentive Scheme Accrual (1.2) % (1.8) %
Impact of share buybacks and dividend
reinvestment 0.3 % 0.2 %
------------------------------------------ ---------------- ----------------
NAV per Share Total Return 14.5 % 24.4 %
------------------------------------------ ---------------- ----------------
1. Refer to the Glossary
2. 93% of the Portfolio is valued using 31 December 2022 (or later)
valuations (2022: 98%)
Performance of Portfolio companies
Our largest 30 underlying companies ("Top 30 companies")
represented 38.3% of the Portfolio by value at 31 January 2023 (31
January 2022: 39.0%). There were four new entrants to our Top 30
companies within the period: Newton (#15); ECA Group (#23),
KronosNet (#24) and Vistage (#30).
The Top 30 companies delivered impressive operational
performance during the year, generating LTM revenue growth of
21.9%. The weighted-average valuation of the Top 30 companies, as
measured by EV/EBITDA multiple, reduced from 14.6x to 14.3x. Over
the same period, Net Debt / EBITDA increased from 4.3x to 4.8x,
which is largely due to differences in the composition of the Top
30 companies between the two dates and re-financings undertaken
during the period.
Top 30 companies performance overview 31 January 2023 31 January 2022
-------------------------------------- --------------- ---------------
LTM revenue growth(1) 21.9 % 27.1 %
-------------------------------------- --------------- ---------------
LTM EBITDA growth(1) 21.5 % 29.6 %
-------------------------------------- --------------- ---------------
LTM EBITDA margin(2) 25.8 % 26.6 %
-------------------------------------- --------------- ---------------
Net Debt / EBITDA(3) 4.7x 4.3x
-------------------------------------- --------------- ---------------
Enterprise Value / EBITDA(3) 14.3x 14.6x
-------------------------------------- --------------- ---------------
Total % of Portfolio 38.3 % 39.0 %
-------------------------------------- --------------- ---------------
1 Growth rates exclude PetSmart; Ambassador Theatre
Group; MoMo Online Mobile Services (#1; #14; #28 /30
respectively), for which prior year comparators are
not meaningful
2 Excludes MoMo Online Mobile Services (#28/30), for
which EBITDA is not a relevant metric
3 Excludes PetSmart and MoMo Online Mobile Services
(#1 and #28 /30 respectively) for which EBITDA multiple
is not an appropriate valuation metric
Quoted company exposure
We do not actively invest in publicly quoted companies but gain
listed investment exposure when IPOs are used as a route to exit an
investment. In these cases, exit timing typically lies with the
manager with whom we have invested.
At 31 January 2023, ICG Enterprise Trust's exposure to quoted
companies was valued at GBP109.4m, equivalent to 7.8% of the
Portfolio value (FY22: 10.3%). The share price of our largest
listed exposure, Chewy, increased 4.5% in local currency (USD)
during the year. ICG Enterprise Trust's investment in PetSmart
(which includes Chewy) has delivered a strong return on investment
for our shareholders and remains our largest underlying exposure.
Across the Portfolio, local currency losses from declines in public
market valuations were largely offset in Sterling terms by positive
FX gains.
At 31 January 2023 there was one quoted investment that
individually accounted for 0.5% or more of the Portfolio value:
31 January 2023 % of
Company Ticker Portfolio value
----------------------------------------- --------------- ---------------------
Chewy (part of PetSmart)(1) CHWY-US 3.6 %
Other companies 4.2 %
---------------------------------------------------------- ---------------------
Total 7.8 %
---------------------------------------------------------- ---------------------
1 Value includes entire holding of PetSmart and Chewy.
Majority of value is within Chewy
Realisation activity
Realisation Proceeds during the year amounted to GBP252.0m,
equivalent to 21.5% of our opening Portfolio value (five year
average: 23.9%).
There were 54 Full Exits of Portfolio holdings during the
period, generating proceeds of GBP133.2m. These were completed at a
weighted average Uplift to Carrying Value of 23.9% and weighted
average Multiple to Cost of 2.7x. We believe that the ability to
continue to sell assets at an uplift to NAV reflects the sustained
demand for high-quality assets and underpins our confidence in the
valuation of our Portfolio.
The 10 largest underlying realisations in the period, which
represent 33.9% of Total Realisation Proceeds, are set out in the
table below:
Proceeds
Investment Description Manager Country GBPm
----------- ----------------------------------------------------------- --------- -------- ------------
DOC
Generici Manufacturer of generic pharmaceutical products ICG Italy 24.3
New
Provider of mission-critical data and predictive analytics Mountain United
IRI to consumer goods manufacturers Capital States 22.8
Graphite United
Random42 Provider of medical animation and digital media services Capital Kingdom 5.6
proALPHA Provider of application software services ICG Germany 5.1
YSC Provider of leadership consultancy and assessment Graphite United
Consulting services Capital Kingdom 4.9
Park
Holidays United
UK Operator of UK campsites and holiday parks ICG Kingdom 4.9
Konecta Provider of business process outsourcing ICG Spain 4.8
The Groucho Graphite United
Club Operator of members' club Capital Kingdom 4.4
United
Romans Provider of residential sales & letting services Bowmark Kingdom 4.3
Pirum United
Systems Provider of financial services technology Bowmark Kingdom 4.2
----------- ----------------------------------------------------------- --------- -------- ------------
Total of 10 largest underlying realisations 85.4
----------------------------------------------------------------------------------- -------- ------------
New investment activity
Total new investment of GBP287.2m for the financial year, with
new investment by category detailed in the table below. Within our
Primary investments during the period, GBP131.5m was to Third Party
managers and the remainder (GBP7.1m) was to ICG-managed funds.
31 January 2023 31 January 2023
Investment Category Cost GBPm % of new investments
-------------------- --------------- ---------------------
Primary 138.6 48.3 %
-------------------- --------------- ---------------------
Direct 70.1 24.4 %
-------------------- --------------- ---------------------
Secondary 78.5 27.3 %
-------------------- --------------- ---------------------
Total 287.2 100.0 %
-------------------- --------------- ---------------------
During the year we made nine new Direct Investments for a
combined value of GBP68.3m: The balance of Direct Investments is
comprised of GBP1.8m of incremental drawdowns across existing
Direct Investments.
In total, 47.8% (GBP137.3m) of our new investments were
alongside ICG.
The 10 largest underlying new investments in the period were as
follows:
Cost
Investment Description Manager Country GBPm(1)
----------- ---------------------------------------------------------- ---------- ------------ -------
Clearlake United
Precisely Provider of enterprise software Capital States 15.5
Provider of autonomous systems for the aerospace and
ECA Group maritime sectors ICG France 13.0
Provider of tech-enabled customer engagement and business
KronosNet solutions ICG Spain 12.5
United
Newton Provider of management consulting services ICG Kingdom 12.4
Provider of CEO leadership and coaching for small United
Vistage and midsize businesses in the US ICG States 8.6
Provider of business management software to mid-market United
Access companies HgCapital Kingdom 6.4
Zips Car United
Wash Provider of car washing services ICG States 4.2
Gateway
Services Provider of pet aftercare and cremation services ICG Canada 3.9
Partou Operator of kindergartens in the Netherlands ICG Netherlands 3.2
Pro Alpha
II Provider of application software services ICG Germany 2.9
----------- ---------------------------------------------------------- ---------- ------------ -------
Top 10 largest underlying new investments 82.4
------------------------------------------------------------------------------------------------- -------
1 Represents ICG Enterprise Trust's indirect investment (share
of fund cost) plus any direct investments in the period.
Commitments
During the year, we made new fund Commitments of GBP203.2m,
including GBP65.9m to funds managed by ICG.
We maintained our diligence in identifying leading managers who
complement our long-term strategic objectives, are committed to
values aligned to our Responsible Investing framework, and have an
investment approach that suits our defensive growth focus. A number
of commitments were made to managers with whom we have longstanding
relationships and who have a strong track record of offering us
attractive co-investment opportunities, such as PAI and Gridiron.
At the same time, we continued to originate new manager
relationships, making commitments to three new managers during the
financial year, Leonard Green & Partners, Thoma Bravo and
Integrum.
The breakdown of new Commitments to funds was as follows:
Fund Manager Focus Commitment during the
period
--------------- --------------- --------------- ---------------------------
Local currency GBPm
ICG LP ICG LP-led $60.0m GBP45.5m
Secondaries secondary
Fund I transactions
ICG Ludgate ICG Secondary $25.0m GBP20.4m
Hill III portfolio
PAI Europe VIII PAI Mid-market and EUR25.0m GBP20.9m
large buyouts
Green Equity Leonard Green & Large buyouts $20.0m GBP17.2m
Investors Side Partners
IX
Advent X Advent Large buyouts EUR20.0m GBP16.8m
Gridiron V Gridiron Mid-market $20.0m GBP15.0m
buyouts
CDR XII Clayton, Mid-market and $15.0m GBP13.4m
Dubilier & large buyouts
Rice
Permira VIII Permira Large buyouts EUR15.0m GBP12.6m
Bain Capital Bain Capital Mid-market and EUR15.0m GBP12.6m
Europe VI large buyouts
Integrum I Integrum Mid-market $10.0m GBP8.5m
buyouts
Thoma Bravo XV Thoma Bravo Mid-market and $10.0m GBP8.0m
large buyouts
Hg Genesis X Hg Capital Mid-market EUR5.0m GBP4.2m
buyouts
Bain Tech Bain Capital Mid-market $5.0m GBP4.1m
Opportunities buyouts
II
Hg Saturn III Hg Capital Mid-market and $5.0m GBP4.0m
large buyouts
At 31 January 2023 we had Total Undrawn Commitments of
GBP496.7m, of which GBP367.0m were to funds within their investment
period:
31 January 2023 31 January 2022
GBPm GBPm GBPm
-------------------------------------------- --------------- ---------------
Undrawn Commitments -- funds in Investment
Period 367.0 323.0
Undrawn Commitments -- funds outside
Investment Period 129.7 96.0
-------------------------------------------- --------------- ---------------
Total Undrawn Commitments 496.7 419.0
Total available liquidity (including
facility) (167.0) (208.0)
-------------------------------------------- --------------- ---------------
Overcommitment net of total available
liquidity 329.7 211.0
-------------------------------------------- --------------- ---------------
Overcommitment % of net asset value 25.3 % 18.0 %
-------------------------------------------- --------------- ---------------
The increase in Total Undrawn Commitments during the year was
due to the large number of funds seeking investors during the year,
which ICG Enterprise Trust had anticipated and which allowed us to
make a number of attractive Primary commitments. These commitments
help lay the foundations of our investment program for the coming
years.
Our commitments are made in the funds' underlying currencies,
and the currency split of the outstanding commitments at 31 January
2023 was as follows:
Outstanding 31 January 2023 31 January 2023 31 January 2022 31 January 2022
Commitments GBPm % GBPm %
------------ --------------- --------------- --------------- ---------------
-- Sterling 16.9 3.4 % 28.7 6.8 %
-- Euro 226.1 45.5 % 200.4 47.9 %
-- US Dollar 253.7 51.1 % 189.5 45.3 %
------------ --------------- --------------- --------------- ---------------
Total 496.7 100.0 % 418.6 100.0 %
------------ --------------- --------------- --------------- ---------------
Liquidity
At 31 January 2023 we had a cash balance of GBP20.7m (31 January
2022: GBP41.3m) and total available liquidity of GBP167.0m. At 31
January 2023, the drawn debt was GBP65.4m (31 January 2022: nil).
As a result we had a net debt position of GBP44.7m.
GBPm
-------------------------------------------------- -------
Cash at 31 January 2022 41.3
Realisation Proceeds 252.0
New investments (287.2)
Debt drawn down 65.4
Shareholder returns (21.9)
Management fees (21.2)
FX and other expenses (7.7)
-------------------------------------------------- -------
Cash at 31 January 2023 20.7
-------------------------------------------------- -------
Available undrawn debt facilities 146.3
-------------------------------------------------- -------
Cash and undrawn debt facilities (total available
liquidity) 167.0
-------------------------------------------------- -------
At 31 January 2023 the Portfolio represented 108.1% of net
assets (31 January 2022: 101.2%).
GBPm % of net assets
--------------------------------------- ------- ---------------
Portfolio 1,406.4 108.1 %
Cash 20.7 1.6 %
Drawn debt (65.4) (5.0) %
Co-investment Incentive Scheme Accrual (58.1) (4.5) %
Other net current liabilities (3.0) (0.2) %
--------------------------------------- ------- ---------------
Net assets 1,300.6 100.0 %
--------------------------------------- ------- ---------------
Our objective is to be fully invested through the cycle, while
ensuring that we have sufficient financial resources to be able to
take advantage of attractive investment opportunities as they
arise. Drawdowns of commitments are funded from Total Proceeds and,
where appropriate, the debt facility.
Dividend and share buyback
In line with ICG Enterprise Trust's progressive dividend policy,
the Board has declared a final dividend of 9p per share, taking
total dividends for the period to 30p (FY22: 27p), which represents
an increase of 11.1% on the previous financial year.
As part of its ongoing focus on optimising the returns the
Company delivers for its shareholders, in October the Board
announced the introduction of a long-term program of share
buybacks, which may be executed at any discount to NAV. Details of
share repurchases made under this programme up to 31 January 2023
are provided below:
FY23
----------------------------------------------- --------------
Number of shares purchased 191,480
----------------------------------------------- --------------
Aggregate consideration GBP2.1m
----------------------------------------------- --------------
Weighted average discount to last reported NAV 40.0 %
----------------------------------------------- --------------
The Board believes the buyback programme demonstrates the
Manager's discipline around capital allocation; underlines the
Board's confidence in the long-term prospects of the Company, its
cashflows and NAV; will enhance the NAV per share; and, over time,
may positively influence the volatility of the Company's discount
and its trading liquidity.
The Board reviews the size, mandate and efficacy of the buyback
programme on a quarterly basis, to ensure it is working in the
long-term interests of shareholders and in line with the objectives
outlined above.
The Board retains absolute discretion as to the execution,
pricing and timing of any share buybacks, subject to the conditions
set out in the authority to execute share buybacks approved at the
Company's 2022 Annual General Meeting. Any shares repurchased by
the Company will be held in treasury.
Both the progressive dividend policy and the buyback programme
are being maintained.
Changes to management fees and costs
As announced at our Q3 FY23 trading update, the ICG Enterprise
Trust Board and the Manager have agreed a revised management fee
rate, effective from 1 February 2023. While the management fee
arrangement will remain unchanged, a tiered cap as a proportion of
NAV has been introduced at the following thresholds:
ICG Enterprise Trust NAV Management Fee Cap
------------------------- ------------------
< GBP1.5bn 1.25 %
------------------------- ------------------
>= GBP1.5bn <= GBP2.0bn 1.10 %
------------------------- ------------------
> GBP2.0bn 1.00 %
------------------------- ------------------
The Board believes that this arrangement fairly compensates the
Manager, while ensuring that ICG Enterprise Trust shareholders
benefit from the economies of scale generated from growth in the
Company's NAV.
In FY23, management fees were equivalent to 1.34% of NAV. As an
illustration, had the revised agreement been in place during this
period, management fees would have been capped at 1.25%. This would
have reduced the management fee by approximately 6.5%
(approximately GBP1.1m).
The Manager has also agreed to absorb a number of ongoing costs
previously paid for by ICG Enterprise Trust, in particular a
material share of Sales and Marketing costs. The Board estimates
that these are equivalent to approximately 25-30% of the General
Expenses (which exclude management fees and finance costs) that
would have been paid by ICG Enterprise Trust prior to this
agreement being reached.
Foreign exchange rates
The details of relevant FX rates applied in this report are
provided in the table below:
Average rate for Average rate for 31 January 2023 31 January 2022
FY23 FY22 year end year end
-------- ---------------- ---------------- --------------- ---------------
GBP:EUR 1.1680 1.1696 1.1341 1.1971
GBP:USD 1.2257 1.3749 1.2320 1.3447
EUR:USD 1.0491 1.1758 1.0863 1.1229
Activity since the period end
Notable activity between 1 February 2023 and 31 March 2023 has
included:
-- Realisation Proceeds of GBP49.4m, including initial proceeds from the
sale of Endeavor Schools, announced on 2 February 2023
-- New investments of GBP19.8m, which included one follow-on Direct
Investment of GBP0.5m
-- 3 new Fund Commitments for a combined value of GBP55.6m
-- GBP3.1m shares bought back at a weighted average discount to NAV of
42.0%1
Outlook
We remain alert to continued macroeconomic headwinds such as
increased input costs, rising rates, and capital constraints in the
wider financial markets. These factors continue to have the
potential to impact the performance of our Portfolio companies, the
valuation of our Portfolio and the rate of deployments and
realisations our Portfolio experiences. We are continuing to
monitor the environment closely and are in regular dialogue with
our Managers.
As outlined in our updated objectives, we are targeting a
long-term Portfolio composition of approximately 50% Primary, 25%
Direct and 25% Secondary investments, and evenly split between
North America and Europe.
We are encouraged by the continued momentum of transaction
activity within our portfolio throughout FY23. Our financial and
operational ability to capitalise on the very attractive market for
primary commitments has sown the seeds for our future primary and
direct investment programme in the coming years, in what could be
an attractive vintage for private equity investments.
As we reflect on a year characterised by uncertainty, we remain
confident in our defensive growth strategy and are encouraged by
the robust operating performance of our Portfolio.
ICG Private Equity Fund Investments Team
10 May 2023
SUPPLEMENTARY INFORMATION
This section presents supplementary information regarding the
Portfolio (see Manager's Review and the Glossary for further
details and definitions).
Portfolio composition
We have a flexible mandate that enables us to deploy capital in
primary, secondary and Direct Investments. Investments managed by
ICG account for 29.2% of the Portfolio.
Portfolio
by calendar
year of % of value of underlying investments % of value of underlying investments
investment 31 January 2023 31 January 2022
----------- ------------------------------------ ------------------------------------
2022 19.6 % 0.1 %
2021 25.1 % 25.1 %
2020 10.3 % 12.3 %
2019 12.0 % 15.4 %
2018 12.0 % 17.9 %
2017 6.7 % 9.6 %
2016 4.1 % 5.9 %
2015 4.1 % 6.6 %
2014 and
older 6.1 % 7.1 %
----------- ------------------------------------ ------------------------------------
Total 100.0 % 100.0 %
----------- ------------------------------------ ------------------------------------
Portfolio by % of value of underlying investments % of value of underlying investments
sector 31 January 2023 31 January 2022
------------ ------------------------------------ ------------------------------------
TMT 22.5 % 24.1 %
Consumer
goods and
services 20.9 % 20.8 %
Healthcare 13.3 % 16.6 %
Business
services 12.6 % 11.0 %
Industrials 8.4 % 8.3 %
Education 7.0 % 5.1 %
Financials 5.0 % 5.5 %
Leisure 3.9 % 3.9 %
Other 6.4 % 4.7 %
------------ ------------------------------------ ------------------------------------
Total 100.0 % 100.0 %
------------ ------------------------------------ ------------------------------------
Portfolio by
fund 31 January 2023 31 January 2023 31 January 2022 31 January 2022
currency(1) GBPm % GBPm %
------------ --------------- --------------- --------------- ---------------
US Dollar 690.1 49.1 % 508.7 43.4 %
Euro 602.9 42.9 % 558.5 47.6 %
Sterling 113.0 8.0 % 104.7 9.0 %
Other 0.4 -- % 0.3 -- %
------------ --------------- --------------- --------------- ---------------
Total 1,406.4 100.0 % 1,172.2 100.0 %
------------ --------------- --------------- --------------- ---------------
(1) Currency exposure by reference to the reporting
currency of each fund .
Top 30 companies Portfolio Dashboard
The Top 30 companies represented 41.8% of the Portfolio value at
31 January 2023. The tables below provide enhanced disclosure on
the dispersion of financial and operational performance among the
Top 30 on a value-weighted basis.
% of value of Top 30
Sector exposure 31 January 2023
---------------------------- --------------------
TMT 26.8 %
Consumer goods and services 19.2 %
Business services 14.6 %
Healthcare 8.0 %
Education 10.8 %
Industrials 14.1 %
Leisure 6.5 %
---------------------------- --------------------
Total 100.0 %
---------------------------- --------------------
% of value of Top 30
Geographic exposure(1) 31 January 2023
---------------------------- ------------------------
North America 45.7 %
Europe 45.9 %
Other 8.4 %
---------------------------- ------------------------
Total 100.0 %
---------------------------- ------------------------
1 Geographic exposure is calculated by reference to
the location of the headquarters of the underlying
Portfolio companies
% of value of Top 30
LTM revenue growth 31 January 2023
--------------------------- ----------------------------
<0% 12.8 %
0-10% 12.1 %
10-20% 26.1 %
20-30% 14.8 %
>30% 20.3 %
n.a.(1) 13.9 %
--------------------------- ----------------------------
Total 100.0 %
--------------------------- ----------------------------
1 Reflects Petsmart (#1/30), Ambassador Theatre Group
(#14/30) and MoMo Online Mobile Services (#28/30),
for which EBITDA multiple or YoY comp is not relevant.
For consistency, any excluded investments are excluded
for all dispersion analysis
Top 30 average LTM revenue growth: 21.9% (weighted average,
based on contribution to Portfolio value at 31 January 2023; any
exclusions from average calculation are detailed in the footnotes
to the table).
% of value of Top 30
LTM EBITDA growth 31 January 2023
--------------------------- ------------------------------
<0% 17.1 %
0-10% 28.1 %
10-20% 21.2 %
20-30% 5.4 %
>30% 14.3 %
n.a(1) 13.9 %
--------------------------- ------------------------------
Total 100.0 %
--------------------------- ------------------------------
1 n.a reflects Petsmart (#1/30), Ambassador Theatre
Group (#14/30) and MoMo Online Mobile Services (#28/30),
for which EBITDA multiple or YoY comp is not relevant.
For consistency, any excluded investments are excluded
for all dispersion analysis
Top 30 average LTM EBITDA growth: 21.6% (weighted average, based
on contribution to Portfolio value at 31 January 2023; any
exclusions from average calculation are detailed in the footnotes
to the table).
% of value of Top 30
LTM EBITDA margin 31 January 2023
--------------------------- ------------------------------
<10% -- %
10-20% 27.8 %
20-30% 21.4 %
30-40% 22.8 %
>40% 14.1 %
n.a.(1) 13.9 %
--------------------------- ------------------------------
Total 100.0 %
--------------------------- ------------------------------
1 n.a reflects Petsmart (#1/30), Ambassador Theatre
Group (#14/30) and MoMo Online Mobile Services (#28/30),
for which EBITDA multiple or YoY comp is not relevant.
For consistency, any excluded investments are excluded
for all dispersion analysis
Top 30 average LTM EBITDA margin: 27.7% (weighted average, based
on contribution to Portfolio value at 31 January 2023; any
exclusions from average calculation are detailed in the footnotes
to the table).
% of value of Top 30
EV/EBITDA multiple 31 January 2023
---------------------------- ------------------------------
0-10x 8.0 %
10-12x 10.3 %
12-13x 22.6 %
13-15x 19.2 %
15-17x 12.0 %
17-20x 6.4 %
>20x 7.5 %
n.a.(1) 13.9 %
---------------------------- ------------------------------
Total 100.0 %
---------------------------- ------------------------------
1 n.a reflects Petsmart (#1/30), Ambassador Theatre
Group (#14/30) and MoMo Online Mobile Services (#28/30),
for which EBITDA multiple or YoY comp is not relevant.
For consistency, any excluded investments are excluded
for all dispersion analysis
Top 30 average EV/EBITDA multiple: 14.3x (weighted average,
based on contribution to Portfolio value at 31 January 2023; any
exclusions from average calculation are detailed in the footnotes
to the table).
% of value of Top 30
Net Debt / EBITDA 31 January 2023
---------------------------- ------------------------------
<2x 9.8 %
2-4x 12.7 %
4-5x 19.2 %
5-6x 18.2 %
6-7x 14.3 %
>7x 11.9 %
n.a.(1) 13.9 %
---------------------------- ------------------------------
Total 100.0 %
---------------------------- ------------------------------
1 n.a reflects Petsmart (#1/30), Ambassador Theatre
Group (#14/30) and MoMo Online Mobile Services (#28/30),
for which EBITDA multiple or YoY comp is not relevant.
For consistency, any excluded investments are excluded
for all dispersion analysis
Top 30 average Net Debt/EBITDA multiple: 4.7x (weighted average,
based on contribution to Portfolio value at 31 January 2023; any
exclusions from average calculation are detailed in the footnotes
to the table).
Top 30 companies
The table below presents the 30 companies in which ICG
Enterprise Trust had the largest investments by value at 31 January
2023. The valuations are gross of underlying managers fees and
carried interest.
Year of Value as a %
Company Manager investment Country of Portfolio
----------------------------------------------------------- ------------ ----------- ------------ --------------
1 PetSmart / Chewy
Retailer of pet products and services BC Partners 2015 United States 3.6 %
2 Minimax
Supplier of fire protection systems and services ICG 2018 Germany 2.8 %
3 Endeavor Schools
Provider of paid private schooling Leeds Equity 2018 United States 2.2 %
4 Froneri
Manufacturer and distributor of ice cream products PAI 2013 / 2019 United Kingdom 2.0 %
5 Leaf Home Solutions
Provider of home maintenance services Gridiron 2016 United States 1.8 %
6 Yudo
Designer and manufacturer of hot runner systems ICG 2017 / 2018 South Korea 1.6 %
7 Precisely
Provider of enterprise software Clearlake 2021 / 2022 United States 1.4 %
8 AML RightSource
Provider of compliance and regulatory services and
solutions Gridiron 2020 United States 1.3 %
9 European Camping Group
Operator of premium campsites and holiday parks PAI 2021 France 1.3 %
10 Curium Pharma
Supplier of nuclear medicine diagnostic pharmaceuticals ICG 2020 United Kingdom 1.2 %
11 DomusVi
Operator of retirement homes ICG 2017 / 2021 France 1.2 %
12 DigiCert
Provider of enterprise security solutions ICG 2021 United States 1.2 %
13 David Lloyd Leisure
Operator of premium health clubs TDR 2013 / 2020 United Kingdom 1.2 %
14 Ambassador Theatre Group
ICG /
Operator of theatres and ticketing platforms Providence 2021 United Kingdom 1.2 %
15 Newton
Provider of management consulting services ICG 2021 / 2022 United Kingdom 1.1 %
16 IRI/NPD
Provider of mission-critical data and predictive analytics
to consumer goods manufacturers New Mountain 2022 United States 1.1 %
17 Visma
Provider of business management software and outsourcing HgCapital /
services ICG 2017 / 2020 Norway 1.1 %
18 Planet Payment
Provider of integrated payments services focused on Advent /
hospitality and luxury retail Eurazeo 2021 Ireland 1.1 %
19 Ivanti
Charlesbank
Provider of IT management solutions / ICG 2021 United States 1.1 %
20 PSB Academy
Provider of private tertiary education ICG 2018 Singapore 1.0 %
21 Crucial Learning
Provider of corporate training courses focused on
communication skills and leadership development Leeds Equity 2019 United States 0.9 %
22 Brooks Automation
Provider of semiconductor manufacturing solutions THL 2021 / 2022 United States 0.9 %
23 ECA Group
Provider of autonomous systems for the aerospace and
maritime sectors ICG 2022 France 0.9 %
24 KronosNet
Provider of tech-enabled customer engagement and business
solutions ICG 2022 Spain 0.9 %
25 Davies Group
Provider of speciality business process outsourcing
services BC Partners 2021 United Kingdom 0.9 %
26 Class Valuation
Provider of residential mortgage appraisal management
services Gridiron 2021 United States 0.8 %
27 AMEOS Group
Operator of private hospitals ICG 2021 Switzerland 0.7 %
28 MoMo Online Mobile Services
Operator of remittance and payment services via mobile
e-wallet ICG 2019 Vietnam 0.6 %
29 RegEd
Provider of SaaS-based governance, risk and compliance
enterprise solutions Gryphon 2018 / 2019 United States 0.6 %
30 Vistage
Provider of CEO leadership and coaching for small
and mid-size businesses in the US Gridiron 2022 United States 0.6 %
----------------------------------------------------------- ------------ ----------- ---------------- --------------
Total of the 30 largest underlying investments 38.3 %
---------------------------------------------------------------------------------------------------- --------------
The 30 largest fund investments
The table below presents the 30 largest funds by value at 31
January 2023. The valuations are net of underlying managers' fees
and Carried interest.
Value Outstanding
Fund Year of commitment GBPm commitment GBPm
------------------ ------------------ -------------- -----------------
ICG Strategic
1 Equity Fund III
GP-led secondary
transactions 2018 35.6 11.3
2 ICG Ludgate Hill I
Secondary
portfolio 2021 34.4 14.4
3 ICG Europe VII
Mezzanine and
equity in
mid-market
buyouts 2018 33.4 6.8
CVC European
Equity Partners
4 VII
Large buyouts 2017 32.2 1.8
Gridiron Capital
5 Fund III
Mid-market buyouts 2016 31.2 4.4
ICG LP Secondaries
6 Fund I
LP-led secondary
transactions 2022 30.8 27.4
PAI Strategic
7 Partnerships
Mid-market and
large buyouts 2019 27.0 0.5
Graphite Capital
8 Partners VIII
Mid-market buyouts 2013 26.0 2.2
Gridiron Capital
9 Fund IV
Mid-market buyouts 2019 24.3 1.4
CVC European
Equity Partners
10 VI
Large buyouts 2013 23.8 1.9
ICG Ludgate Hill
11 III
Secondary
portfolio 2022 23.4 1.8
12 PAI Europe VII
Mid-market and
large buyouts 2017 23.0 4.5
ICG Strategic
13 Equity Fund IV
GP-led secondary
transactions 2021 22.1 15.9
14 Sixth Cinven Fund
Large buyouts 2016 21.4 1.4
New Mountain
15 Partners V
Mid-market buyouts 2017 20.6 1.1
BC European
16 Capital IX
Large buyouts 2011 19.3 0.7
17 Oak Hill V
Mid-market buyouts 2019 18.7 1.0
18 Resolute IV
Mid-market buyouts 2018 18.3 1.5
Advent Global
Private Equity
19 VIII
Large buyouts 2016 17.3 0.0
Advent Global
20 Private Equity IX
Large buyouts 2019 17.2 1.7
BC European
21 Capital X
Large buyouts 2016 16.6 1.4
Thomas H Lee
22 Equity Fund VIII
Mid-market and
large buyouts 2017 15.6 2.4
ICG Augusta
Partners
23 Co-Investor
Secondary fund
restructurings 2018 15.4 18.9
24 Resolute V
Mid-market
buy-outs 2021 15.0 2.3
25 Gryphon V
Mid-market buyouts 2019 14.2 2.6
26 AEA VII
Mid-market buyouts 2019 13.9 3.0
Graphite Capital
27 Partners IX
Mid-market buyouts 2018 13.9 5.8
28 TDR Capital III
Mid-market and
large buyouts 2013 13.8 1.5
Seventh Cinven
29 Fund
Large buyouts 2019 13.8 6.4
30 PAI Europe VI
Mid-market and
large buyouts 2013 12.9 1.1
------------------ ---------------------- -------------- -----------------
Total of the largest 30 fund
investments 645.1 147.0
Percentage of total investment
Portfolio 45.9 %
-------------------------------------- -------------- -----------------
PRINCIPAL RISKS AND UNCERTAINTIES
Risk management
The execution of the Company's investment strategy is subject to
a variety of risks and uncertainties, and the Board and Manager
have identified several principal risks to the Company's business.
As part of this process, the Board has put in place an ongoing
process to identify, assess and monitor the principal and emerging
risks facing the Company, including those that would threaten its
business model, future performance, solvency or liquidity.
Risk management framework
The Board is responsible for risk management and determining the
Company's overall risk appetite. The Audit Committee assesses and
monitors the risk management framework and specifically reviews the
controls and assurance programmes in place.
Principal risks
The Company's principal risks are individual risks, or a
combination of risks, that could threaten the Company's business
model, future performance, solvency or liquidity.
Details of the Company's principal risks, potential impact,
controls and mitigating factors are set out on pages 24 to 28.
Other risks
Other risks, including reputational risk, are potential outcomes
of the principal risks materialising. These risks are actively
managed and mitigated as part of the wider risk management
framework of the Company and the Manager.
Emerging Risks
Emerging risks are considered by the Board as they come into
view and are regularly assessed to identify any potential impact on
the Company and to determine whether any actions are required.
Emerging risks often include those related to
regulatory/legislative change and macro-economic and political
change.
The Company depends upon the experience, skill and reputation of
the employees of the Manager. The Manager's ability to retain the
service of these individuals, who are not obligated to remain
employed by the Manager, and recruit successfully, is a significant
factor in the success of the Company.
Principal risks and uncertainties
The Company considers its principal risks (as well as several
underlying risks comprising each principal risk) in four
categories:
Investment risks: the risk to performance resulting from
ineffective or inappropriate investment selection, execution or
monitoring.
External risks: the risk of failing to deliver the Company's
investment objective and strategic goals due to external factors
beyond the Company's control.
Operational risks: the risk of loss resulting from inadequate or
failed internal processes, people or systems and external event,
including regulatory risk.
Financial risks: the risks of adverse impact on the Company due
to having insufficient resources to meet its obligations or
counterparty failure and the impact any material movement in
foreign exchange rates may have on underlying valuations.
A comprehensive risk assessment process is undertaken regularly
to re-evaluate the impact and probability of each risk
materialising and the strategic, financial and operational impact
of the risk. Where the residual risk is determined to be outside of
appetite, appropriate action is taken. Further information on risk
factors is set out within the financial statements.
Risk appetite and tolerance
The Board acknowledges and recognises that in the normal course
of business, the Company is exposed to risk and that it is willing
to accept a certain level of risk in managing the business to
achieve its targeted returns. The Board's risk appetite framework
provides a basis for the ongoing monitoring of risks and enables
dialogue with respect to the Company's current and evolving risk
profile, allowing strategic and financial decisions to be made on
an informed basis.
The Board considers several factors to determine its acceptance
for each principal risk and categorises acceptance for each risk as
low, moderate and high. Where a risk is approaching or is outside
the tolerance set, the Board will consider the appropriateness of
actions being taken to manage the risk. In particular, the Board
has a lower tolerance for financing
risk with the aim to ensure that even under a stress scenario,
the Company is likely to meet its funding requirements and
financial obligations. Similarly, the Board has a low risk
tolerance concerning operational risks including legal, tax and
regulatory compliance and business process and continuity risk.
How we manage and mitigate our key risks
RISK IMPACT MITIGATION CHANGE IN THE YEAR
Investment Risks
-----------------------------------------------------------
Investment performance Poor origination, investment selection and monitoring The Manager has a strong track record of investing in private Stable
The Manager selects the fund investments and Direct by the Manager and/or third-party managers which may equity through multiple economic cycles. The Manager has a The Board is responsible for ensuring that the investment
Investments for the Company's Portfolio. The underlying have a negative impact on Portfolio performance. highly selective investment approach and disciplined process, policy is met. The day-to-day management of the Company's
managers of those funds in turn select individual which is overseen by ICG Enterprise Trust's Investment assets is delegated to the Manager under investment
investee companies. The origination, investment selection Committee within the Manager, which comprises a balance of guidelines determined by the Board. The Board regularly
and management capabilities of both the Manager and skills and perspectives. Further, the Company's Portfolio is reviews these guidelines to ensure they remain appropriate
the third-party managers are key to the performance diversified, reducing the likelihood of a single investment and monitors compliance with the guidelines through
of the Company. decision impacting Portfolio performance. regular reports from the Manager, including performance
reporting. The Board also reviews the investment strategy
at least annually.
Following this assessment and other considerations,
the Board concluded that performance risk has remained
stable during the year.
Valuation Incorrect valuations being provided would lead to The Manager carries out a formal Stable
In valuing its investments in private equity funds an incorrect overall NAV. valuation process involving a quarterly review of The Board regularly reviews and discusses the valuation
and unquoted companies and publishing its NAV, the third-party valuations. process in detail with the Manager, including the
Company relies to a significant extent on the accuracy This includes a comparison of unaudited valuations sources of valuation information and methodologies
of financial and other information provided by the to latest audited reports, as well as a review of used.
underlying managers to the Manager. There is the potential any potential adjustments that are required to ensure Following this assessment and other considerations,
for inconsistency in the valuation methods adopted the valuation of the underlying investments are in the Board concluded that there was no material change
by the managers of these funds and companies and for accordance with the fair market value principles required in valuation risk during the year.
valuations to be misstated. under International Financial Reporting Standards
('IFRS').
External risks
-----------------------------------------------------------
Political and macro-economic uncertainty Changes in the political or macro-economic environment The Manager uses a range of complementary approaches Increasing
Political and macro-economic uncertainty and other could significantly affect the performance of existing to inform strategic planning and risk mitigation, The Board monitors and reviews the potential impact
global events, such as pandemics, that are outside investments (and valuations) and prospects for realisations. including active investment management, profitability on the Company from political and economic developments
of the Company's control could adversely impact the In addition, they could impact the number of credible and balance sheet scenario planning and stress testing on an ongoing basis, including input and discussions
environment in which the Company and its investment investment opportunities the Company can originate. to ensure resilience across a range of outcomes. with the Manager. Incorporating these views and other
portfolio companies operate. The process is supported by a dedicated in-house economist considerations, the Board concluded that there was
and professional advisers where appropriate. an increase in political and macroeconomic uncertainty
risk as a result of the economic uncertainty.
Climate change Climate-related transition risks, driven in particular The Manager has a well-defined, Stable
The underlying managers of the fund investments and by abrupt shifts in the political and technological firm-wide Responsible Investing Policy and ESG framework The Board monitors and reviews the potential impact
Direct Investments in the Company's Portfolio fail landscape, impact the value of the Company's Portfolio. in place. to the Company from failures by underlying managers
to ensure that their portfolio companies respond to A tailored ESG framework applies across all stages to mitigate the impact of climate change on portfolio
the emerging threats from climate change. of the Company's investment process. This includes company valuation.
ongoing monitoring of the underlying manager's ESG During the year the Board received reports on the
reporting. implementation of the Manager's Responsible Investing
Policy.
Listed private equity sector A change in sentiment to the sector has the potential Private equity continues to outperform public markets Stable
The listed private equity sector could fall out of to damage the Company's reputation and impact the over the long term and has proved to be an attractive The Board receives regular updates from the Company's
favour with investors leading to a reduction in demand performance of the Company's share price and widen asset class through various cycles. The Manager is broker and is kept informed of all material discussions
for the Company's shares. the discount the shares trade at relative to NAV per active in marketing the Company's shares to a wide with investors and analysts.
Share, causing shareholder dissatisfaction. variety of investors to ensure the market is informed
about the Company's performance and investment proposition.
The Board monitors the discount to NAV and considers
appropriate solutions to address any ongoing or substantial
discount to NAV, including share buybacks.
Foreign exchange At present, the Company does not hedge its foreign The Board regularly reviews the Stable
The Company has continued to expand its geographic exchange exposure. Therefore, movements in exchange Company's exposure to currency risk and reconsiders The Board reviewed the Company's exposure to currency
diversity by making investments in different countries. rates between these currencies may have a material possible hedging strategies on at least an annual risk and possible hedging strategies and concluded
Accordingly, several investments are denominated in effect on the underlying valuations of the investments basis. Furthermore, the Company's multicurrency bank that there was no material change in foreign exchange
US dollars, euros and currencies other than sterling. and performance of the Company. facility permits the borrowings to be drawn in euros risk during the year and that it remains appropriate
and US dollars, if required. for the Company not to hedge its foreign exchange
exposure.
Operational Risks
-----------------------------------------------------------
Regulatory, legislative and taxation compliance The failure of the Manager and the Company to comply The Board is responsible for ensuring the Company's Stable
Failure by the Manager to comply with relevant regulation with the rules of professional conduct and relevant compliance with all applicable regulatory, legal and The Company remains responsive to a wide range of
and legislation could have an adverse impact on the laws and regulations could expose the Company to regulatory tax requirements. Monitoring of this compliance has developing regulatory areas; and will continue to
Company. Additionally, adherence to changes in the sanction and penalties as well as significant damage been delegated to the Manager, of which the in-house enhance its processes and controls in order to remain
legal, regulatory and tax framework applicable to to its reputation. Legal, Compliance and Risk functions provide regular compliant with current and expected legislation.
the Manager could become onerous, lessening competitive updates to the Board covering relevant changes to
or market opportunities. regulation and legislation.
The Board and the Manager continually monitor regulatory,
legislative and tax developments to ensure early engagement
in any areas of potential change.
Key professionals If the Manager's team is not able to deliver its objectives, The Manager regularly updates the Board on team developments Stable
Loss of key professionals at the Manager could impair investment opportunities could be missed or misevaluated, and succession planning. The Manager places significant The Board reviewed the Company's exposure to people
the Company's ability to deliver its investment strategy while existing investment performance may suffer. focus on: risk and concluded that the Manager continues to operate
and meet its external obligations if replacements -- Developing key individuals to ensure that there sustainable succession, competitive remuneration and
are not found in a timely manner. is a pipeline of potential succession candidates internally. retention plans.
External appointments are considered if that best The Board believes that the risk in respect of people
satisfies the business needs. remains stable.
-- A team-based approach to investment decision making
i.e. no one investment professional has sole responsibility
for an investment or fund manager relationship.
-- Sharing insights and knowledge widely across the
investment team, including discussing all potential
new investments and the overall performance of the
Portfolio.
-- Designing and implementing a compensation policy
that helps to minimise turnover of key people.
Information security The failure of the Manager and Administrator to deliver Application of the Manager's and Administrator's information Increasing
The Company is dependent on effective information an appropriate information security platform for critical security policies is supported by a governance structure and a In order to gain a more comprehensive understanding
technology systems at both the Manager and Administrator. technology systems could result in unauthorised access risk framework that allow for the identification, control and of the Manager's internal controls and risk management
These systems support key business functions and are by malicious third parties, breaching the confidentiality, mitigation of technology risks. The effectiveness of the systems the Board carries out a formal annual assessment
an important means of securing data and sensitive integrity and availability of Company data, negatively framework is periodically assessed. Additionally, the Manager's (supported by the Manager's internal audit function).
information. impacting the Company's reputation. and Administrator's technology environments are continually Following this review and other considerations, the
maintained and subject to regular testing, such as penetration Board concluded that there was an increase in information
testing, vulnerability scans and patch management. security risk during the year.
The Manager and third-party providers (including business Failure by a third-party provider to deliver services The performance of the Manager, the Administrator, the Stable
processes and continuity) in accordance with its contractual obligations could Depositary and other third-party providers is subject to In order to gain a more comprehensive understanding
The Company is dependent on third parties for the disrupt or compromise the functioning of the Company. regular review and reported to the Board. The Manager, the of the Manager's internal controls and risk management
provision of services and systems, especially those A material loss of service could result in, among Administrator and the Depositary produce internal control systems the Board carries out a formal annual assessment
of the Manager, the Administrator and the Depositary. other things, an inability to perform business critical reports to provide assurance regarding the effective operation (supported by the Manager's internal audit function).
functions, financial loss, legal liability, regulatory of internal controls. These reports are provided to the Audit The Board also received regular reporting from the
censure and reputational damage. Committee for review. The Committee would seek further Manager and other third parties.
representations from service providers if not satisfied with Following this review and other considerations, the
the effectiveness of their control environment. The Audit Board concluded that there was no material change
Committee formally assesses the internal controls of the in the Manager and other third-party advisers' risk
Manager, the Administrator and Depositary on an annual basis to during the year.
ensure adequate controls are in place. The assessment in
respect of the current year is discussed in the Report of the
Audit Committee within the Annual Report. The Management
Agreement and agreements with other third-party service
providers are subject to notice periods that are designed to
provide the Board with adequate time to put in place
alternative arrangements.
Financial Risks
-----------------------------------------------------------
Financing If the Company encountered difficulties in meeting The Manager monitors the Company's liquidity, overcommitment Increasing
The Company has outstanding commitments that may be its outstanding commitments, there would be significant ratio and covenants on a frequent basis, and undertakes A reduction in the number of potential lenders to
drawn down at any time in excess of total liquidity reputational damage as well as risk of damages being cash flow monitoring, and provides regular updates the Company has increased the risk that the existing
to private equity funds. The ability to fund this claimed from managers and other counterparties. on these activities to the Board. financing facility cannot be extended or replaced
difference is dependent on receiving cash proceeds at its maturity date of February 2026 on the same
from investments (the timing of which are unpredictable) terms. This is an area of focus for the Board and
and the availability of financing facilities. the Manager.
Audited Financial Statements for the year ended 31 January
2023
Income statement
Year to 31 January 2023 Year to 31 January 2022
Revenue Capital Revenue Capital
return return Total return return Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ----- -------- -------- -------- -------- -------- --------
Investment
returns
Income, gains
and losses on
investments 2, 10 2,224 185,201 187,425 5,501 240,030 245,531
Deposit
interest 2 1 -- 1 2 -- 2
Other income 2 46 -- 46 -- -- --
Foreign
exchange
gains and
losses -- 337 337 -- (980) (980)
-------------- ----- -------- -------- -------- -------- -------- --------
2,271 185,538 187,809 5,503 239,050 244,553
-------------- ----- -------- -------- -------- -------- -------- --------
Expenses
Investment
management
charges 3 (1,701) (15,312) (17,013) (1,342) (12,075) (13,417)
Other expenses
including
finance
costs 4 (2,387) (3,884) (6,271) (2,383) (2,263) (4,646)
-------------- ----- -------- -------- -------- -------- -------- --------
(4,088) (19,196) (23,284) (3,725) (14,338) (18,063)
-------------- ----- -------- -------- -------- -------- -------- --------
Profit/(loss)
before tax (1,817) 166,342 164,525 1,778 224,712 226,490
-------------- ----- -------- -------- -------- -------- -------- --------
Taxation 6 345 (345) -- -- -- --
-------------- ----- -------- -------- -------- -------- -------- --------
Profit/(loss)
for the
period (1,472) 165,997 164,525 1,778 224,712 226,490
-------------- ----- -------- -------- -------- -------- -------- --------
Attributable
to:
Equity
shareholders (1,472) 165,997 164,525 1,778 224,712 226,490
-------------- ----- -------- -------- -------- -------- -------- --------
Basic and 7 240.19p 329.97p
diluted
earnings per
share
-------------- ----- -------- -------- -------- -------- -------- --------
The columns headed 'Total' represent the income statement for
the relevant financial years and the columns headed 'Revenue
return' and 'Capital return' are supplementary information in line
with guidance published by the AIC. There is no Other Comprehensive
Income.
All profits are from continuing operations.
The notes on pages 34 to 50 form an integral part of the
financial statements.
Balance sheet
31 January 31 January
2023 2022
Notes GBP'000 GBP'000
------------------------------------------- --------- ---------- ----------
Non-current assets
Investments held at fair value 9, 10, 17 1,349,075 1,123,747
------------------------------------------- --------- ---------- ----------
Current assets
Cash and cash equivalents 11 20,694 41,328
Receivables 12 2,416 2,205
------------------------------------------- --------- ---------- ----------
23,110 43,533
------------------------------------------- --------- ---------- ----------
Current liabilities
Borrowings (65,293) --
Payables 13 (6,274) (9,303)
Net current assets/(liabilities) (48,457) 34,230
------------------------------------------- --------- ---------- ----------
Total assets less current liabilities 1,300,619 1,157,977
------------------------------------------- --------- ---------- ----------
Capital and reserves
Share capital 14 7,292 7,292
Capital redemption reserve 2,112 2,112
Share premium 12,936 12,936
Capital reserve 1,279,751 1,135,637
Revenue reserve (1,472) --
------------------------------------------- --------- ---------- ----------
Total equity 1,300,619 1,157,977
------------------------------------------- --------- ---------- ----------
Net Asset Value per Share (basic and 15 1,903.3p 1,690.1p
diluted)
------------------------------------------- --------- ---------- ----------
The notes on pages 34 to 50 form an integral part of the
financial statements.
The financial statements on pages 30 to 50 were approved by the
Board of Directors on 10 May 2023 and signed on its behalf by:
Jane Tufnell Alastair Bruce
Director Director
Cash flow statement
Year to Year to
31 January 31 January
2023 2022 (restated)
Notes GBP'000 GBP'000
---------------------------------------- ----- ----------- ----------------
Operating activities
Sale of portfolio investments 32,143 100,982
Purchase of portfolio investments (62,245) (75,125)
Cash flow to subsidiaries'
investments(1) (238,692) (247,035)
Cash flow from subsidiaries'
investments(1) 228,530 244,511
Interest income received from portfolio
investments 1,829 3,647
Dividend income received from portfolio
investments 394 1,854
Other income received 46 2
Investment management charges paid(2) (21,218) (6,207)
Other expenses paid (1,567) (1,570)
---------------------------------------- ----- ----------- ----------------
Net cash (outflow)/inflow from operating
activities (60,780) 21,059
Financing activities
Bank facility fee (1,728) (3,318)
Interest paid (1,963) (50)
Credit facility utilised 86,659 --
Credit facility repaid (21,367) --
Purchase of shares into treasury (2,016) (2,679)
Equity dividends paid 8 (19,866) (17,849)
---------------------------------------- ----- ----------- ----------------
Net cash inflow/(outflow) from financing
activities 39,719 (23,896)
---------------------------------------- ----- ----------- ----------------
Net increase/(decrease) in cash and cash
equivalents (21,061) (2,837)
---------------------------------------- ----- ----------- ----------------
Cash and cash equivalents at beginning
of year 11 41,328 45,143
Net (decrease) in cash and cash
equivalents (21,058) (2,837)
Effect of changes in foreign exchange
rates 424 (978)
---------------------------------------- ----- ----------- ----------------
Cash and cash equivalents at end of year 11 20,694 41,328
---------------------------------------- ----- ----------- ----------------
(1) In the prior year financial statements, 'Cash outflows to
subsidiaries' and 'Cash inflows from subsidiaries' were netted
within 'Net cash flows to subsidiary investments'. The netted items
have been presented gross to display the individual inflows and
outflows to provide better clarity for readers of the financial
statements in line with IAS 7 with a nil impact on the overall Cash
Flow Statement.
(2) Includes settlement of unbilled management fees relating to
the prior year (see note 13).
The notes on pages 34 to 50 form an integral part of the
financial statements.
Statement of changes in equity
Realised Total
Capital capital Unrealised Revenue shareholders'
Share capital redemption reserve Share premium reserve(1) capital reserve reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ------------- ------------------- ------------- ----------- ---------------- -------- --------------
Year to 31
January 2023
Opening
balance at 1
February
2022 7,292 2,112 12,936 482,867 652,770 -- 1,157,977
Profit for the
year and
total
comprehensive
income -- -- -- (10,431) 176,428 (1,473) 164,524
Capital
distribution
by
subsidiary(1) -- -- -- 17,500 (17,500) -- --
Dividends paid
or approved -- -- -- (19,866) -- -- (19,866)
Purchase of
shares into
treasury -- -- -- (2,016) -- -- (2,016)
-------------- ------------- ------------------- ------------- ----------- ---------------- -------- --------------
Closing
balance at 31
January 2023 7,292 2,112 12,936 468,053 811,698 (1,473) 1,300,618
-------------- ------------- ------------------- ------------- ----------- ---------------- -------- --------------
Realised Total
Capital capital Unrealised Revenue shareholders'
Share capital redemption reserve Share premium reserve(1) capital reserve reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ------------- ------------------- ------------- ----------- ---------------- -------- --------------
Year to 31
January 2022
Opening
balance at 1
February
2021 7,292 2,112 12,936 442,063 487,613 -- 952,016
Profit for the
year and
total
comprehensive
income -- -- -- 59,554 165,158 1,778 226,490
Dividends paid
or approved -- -- -- (16,071) -- (1,778) (17,849)
Purchase of
shares into
treasury -- -- -- (2,679) -- -- (2,679)
-------------- ------------- ------------------- ------------- ----------- ---------------- -------- --------------
Closing
balance at 31
January 2022 7,292 2,112 12,936 482,867 652,770 -- 1,157,977
-------------- ------------- ------------------- ------------- ----------- ---------------- -------- --------------
(1) Distributable reserves.
(2) During the reporting period ICG Enterprise Trust Limited
Partnership made a distribution of realised profits totalling
GBP17.5m to the Company.
The notes on pages 34 to 50 form an integral part of the
financial statements.
Notes to the financial statements
1 ACCOUNTING POLICIES
General information
These financial statements relate to ICG Enterprise Trust Plc
('the Company'). ICG Enterprise Trust Plc is registered in England
and Wales and is incorporated in the United Kingdom. The Company is
domiciled in the United Kingdom and its registered office is
Procession House, 55 Ludgate Hill, London EC4M 7JW. The Company's
objective is to provide long-term growth by investing in private
companies managed by leading private equity managers.
(a) Basis of preparation
The financial information for the year ended 31 January 2023 has
been prepared in accordance with UK-adopted International
Accounting Standards ('UK-IAS') and the Statement of Recommended
Practice ('SORP') for investment trusts issued by the Association
of Investment Companies in July 2022.
UK-IAS comprises standards and interpretations approved by the
International Accounting Standards Board ('IASB') and the IFRS
Interpretations Committee.
These financial statements have been prepared on a going concern
basis and on the historical cost basis of accounting, modified for
the revaluation of certain assets at fair value. The directors have
concluded that the preparation of the financial statements on a
going concern basis continues to be appropriate.
Going concern
In assessing the appropriateness of continuing to adopt the
going concern basis of accounting, the Board has assessed the
financial position and prospects of the Company. The Company's
business activities, together with factors likely to affect its
future development, performance, position and cash flows, are set
out in the Chair's statement on pages 4 to 6, and the Manager's
review on pages 7 to 16.
As part of this review, the Board assessed the potential impact
of principal risks and the COVID-19 pandemic on the Company's
business activities, the Company's cash position, the availability
of the Company's credit facility and compliance with its covenants,
and the Company's cash flow projections.
Based on this assessment, the Board expects that the Company
will be able to continue in operation and meet its liabilities as
they fall due until, at least, 31 May 2024, a period of more than
12 months from the signing of the financial statements. Therefore
it is appropriate to continue to adopt the going concern basis of
preparation of the Company's financial statements.
Climate change
In preparing the financial statements, the directors have
considered the impact of climate change, particularly in the
context of the climate change risks identified in the Principal
risks and uncertainties section of the Strategic Report, and the
impact of climate change risk on the valuation of investments.
These considerations did not have a material impact on the
financial reporting judgements and estimates in the current year,
nor were they expected to have a significant impact on the Group's
going concern or viability.
Accounting policies
The principal accounting policies adopted are set out below.
These policies have been applied consistently throughout the
current and prior year. In order to reflect the activities of an
investment trust company, supplementary information which analyses
the income statement between items of revenue and capital nature
has been presented alongside the income statement. In analysing
total income between capital and revenue returns, the directors
have followed the guidance contained in the SORP as follows:
-- Capital gains and losses on investments sold and on investments held
arising on the revaluation or disposal of investments classified as held
at fair value through profit or loss should be shown in the capital
column of the income statement.
-- Returns on any share or debt security for a fixed amount (whether in
respect of dividends, interest or otherwise) should be shown in the
revenue column of the income statement.
-- The Board should determine whether the indirect costs of generating
capital gains should also be shown in the capital column of the income
statement. If the Board decides that this should be so, the management
fee should be allocated between revenue and capital in accordance with
the Board's expected long-term split of returns, and other expenses
should be charged to capital only to the extent that a clear connection
with the maintenance or enhancement of the value of investments can be
demonstrated.
The accounting policy regarding the allocation of expenses is
set out in note 1(i).
In accordance with IFRS 10 (amended), the Company is deemed to
be an investment entity on the basis that:
(a) it obtains funds from one or more investors for the purpose
of providing investors with investment management services;
(b) it commits to its investors that its business purpose is to
invest funds for both returns from capital appreciation and
investment income; and
(c) it measures and evaluates the performance of substantially
all of its investments on a fair value basis.
As a result, the Company's controlled structured entities
('subsidiaries') are deemed to be investment entities and are
included in subsidiary investments classified as held at fair value
through profit and loss.
(b) Financial assets
The Company classifies its financial assets in the following
categories: at fair value through profit or loss; and at amortised
cost. The classification depends on the purpose for which the
financial assets were acquired. The classification of financial
assets is determined at initial recognition.
Financial assets at fair value through profit or loss
The Company classifies its quoted and unquoted investments as
financial assets at fair value through profit or loss. These assets
are measured at subsequent reporting dates at fair value and
further details of the accounting policy are disclosed in note
1(c).
Financial assets at amortised cost
Financial assets at amortised cost are non-derivative financial
assets which pass the contractual cash flow test and are held to
receive contractual cash flows. These are classified as current
assets and measured at amortised cost using the effective interest
rate method. The Company's financial assets at amortised cost
comprise cash and cash equivalents and trade and other receivables
in the balance sheet.
(c) Investments
Investments comprise fund investments and portfolio company
investments held by the Company directly, together with the fair
value of the Company's interest in controlled structured entities
(see note 9) which themselves invest in fund investments and
portfolio company investments. All investments are classified upon
initial recognition as held at fair value through profit or loss
(described in these financial statements as investments held at
fair value) and are measured at subsequent reporting dates at fair
value. All investments are fair valued in line with IFRS 13 'Fair
Value Measurement', using industry standard valuation guidelines
such as the International Private Equity and Venture Capital
('IPEV') valuation guidelines. Changes in the value of all
investments held at fair value, which include returns on those
investments such as dividends and interest, are recognised in the
income statement and are allocated to the revenue column or the
capital column in accordance with the SORP (see note 1(a)). More
detail on certain categories of investment is set out below. Given
that the subsidiaries and associates are held at fair value and are
exposed to materially similar risks as the Company, we do not
expect the risks to materially differ from those disclosed in note
17.
Unquoted investments
Fund investments and Co-investments (collectively 'unquoted
investments') are fair valued using the net asset value of those
unquoted investments as determined by the third-party investment
manager of those funds. The third-party investment manager performs
periodic valuations of the underlying investments in their funds,
typically using earnings multiple or discounted cash flow
methodologies to determine enterprise value in line with IPEV
Guidelines. In the absence of contrary information, these net asset
valuations received from the third-party investment managers are
deemed to be appropriate by the Manager, for the purposes of the
Manager's determination of the fair values of the unquoted
investments. A robust assessment is performed by the Manager's
experienced Investment Committee to determine the capability and
track record of the investment manager. All investment managers are
scrutinised by the Investment Committee and an approval process is
recorded before any new investment manager is approved and an
investment made. This level of scrutiny provides reasonable comfort
that the investment manager's valuation will be consistent with the
requirement to use fair value.
Adjustments may be made to the net asset values provided or an
alternative valuation method may be adopted if deemed to be more
appropriate. The most common reason for adjustments to the value
provided by an underlying manager is to take account of events
occurring between the date of the manager's valuation and the
reporting date, for example, subsequent cash flows or notification
of an agreed sale.
Quoted investments
Quoted investments are held at the last traded bid price on the
balance sheet date. When a purchase or sale is made under contract,
the terms of which require delivery within the timeframe of the
relevant market, the contract is reflected on the trade date.
Subsidiary undertakings
The investments in the controlled structured entities
('subsidiaries') are recognised at fair value through profit and
loss.
The valuation of the subsidiaries takes into account an accrual
for the estimated value of interests in the Co-investment Incentive
Scheme. Under these arrangements, ICG (the 'Manager') and certain
of its executives and, in respect of certain historic investments,
the executives and connected parties of Graphite Capital Management
LLP (the 'Former Manager') (together 'the Co-investors'), are
required to co-invest alongside the Company, for which they are
entitled to a share of investment profits if certain performance
hurdles are met. At 31 January 2023, the accrual was estimated as
the theoretical value of the interests if the Portfolio had been
sold at the carrying value at that date.
Associates
The Company holds an interest (including indirectly through its
subsidiaries) of more than 20% in a small number of investments
that may normally be classified as subsidiaries or associates.
These investments are not considered subsidiaries or associates as
the Company does not exert control or significant influence over
the activities of these companies/structured entities as they are
managed by other third parties.
(d) Receivables
Receivables include unamortised fees which were incurred
directly in relation to the agreement of a financing facility.
These fees will be amortised over the life of the facility on a
straight-line basis.
(e) Payables
Other payables are non-interest bearing and are stated at their
amortised cost, which is not materially different from fair
value.
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash and short-term bank
deposits with an original maturity of three months or less.
(g) Dividend distributions
Dividend distributions to shareholders are recognised in the
period in which they are paid.
(h) Income
When it is probable that economic benefits will flow to the
Company and the amount can be measured reliably, interest is
recognised on a time apportionment basis.
Dividends receivable on quoted equity shares are brought into
account on the ex-dividend date. Dividends receivable on equity
shares where no ex-dividend date is applicable are brought into
account when the Company's right to receive payment is
established.
UK dividend income is recorded at the amount receivable.
Overseas dividend income is shown net of withholding tax. Income
distributions from funds are recognised when the right to
distributions is established.
(i) Expenses
All expenses are accounted for on an accruals basis. Expenses
are allocated to the revenue column in the income statement,
consistent with the SORP, with the following exceptions:
-- Expenses which are incidental to the acquisition or disposal of
investments (transaction costs) are allocated to the capital column.
-- The Board expects the majority of long-term returns from the Portfolio to
be generated from capital gains. Expenses are allocated 90% to the
capital column and 10% to the revenue column, reflecting the Company's
current and future return profile. Other expenses are allocated to the
capital column where a clear connection with the maintenance or
enhancement of the value of investments can be demonstrated.
-- All expenses allocated to the capital column are treated as realised
capital losses (see note 1(l)).
(j) Taxation
Investment trusts which have approval as such under Section 1158
of the Corporation Tax Act 2010 are not liable for taxation on
capital gains.
Tax recognised in the income statement represents the sum of
current tax and deferred tax charged or credited in the year. The
tax effect of different items of expenditure is allocated between
capital and revenue on the same basis as the particular item to
which it relates.
Deferred tax is the tax expected to be payable or recoverable on
the difference between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit, and is accounted
for using the balance sheet liability method.
Deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised.
Deferred tax assets are not recognised in respect of tax losses
carried forward to future periods.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the assets are
realised. Deferred tax is charged or credited in the income
statement, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt
with in equity.
(k) Foreign currency translation
The functional and presentation currency of the Company is
sterling, reflecting the primary economic environment in which the
Company operates.
Transactions in currencies other than sterling are recorded at
the rates of exchange prevailing on the dates of the transactions.
At each balance sheet date, financial assets and liabilities
denominated in foreign currencies are translated at the rates
prevailing on the balance sheet date.
Gains and losses arising on the translation of investments held
at fair value are included within gains and losses on investments
held at fair value in the income statement. Gains and losses
arising on the translation of other financial assets and
liabilities are included within foreign exchange gains and losses
in the income statement.
(l) Revenue and capital reserves
The revenue return component of total income is taken to the
revenue reserve within the statement of changes in equity. The
capital return component of total income is taken to the capital
reserve within the statement of changes in equity.
Gains and losses on the realisation of investments including
realised exchange gains and losses and expenses of a capital nature
are taken to the realised capital reserve (see note 1(i)). Changes
in the valuations of investments which are held at the year end and
unrealised exchange differences are accounted for in the unrealised
capital reserve.
Net gains on the realisation of investments in the controlled
structured entities (see note 9) are transferred to the Company by
way of profit distributions.
The revenue reserve is distributable by way of dividends to
shareholders. The realised capital reserve is distributable by way
of dividends and share buybacks. The capital redemption reserve is
not distributable and represents the nominal value of shares bought
back for cancellation.
(m) Treasury shares
Shares that have been repurchased into treasury remain included
in the share capital balance, unless they are cancelled.
(n) Critical estimates and assumptions
Estimates and judgements used in preparing the financial
information are continually evaluated and are based on historic
experience and other factors, including expectations of future
events that are believed to be reasonable. The resulting estimates
will, by definition, seldom equal the related actual results.
In preparing the financial statements, the directors have
considered the impact of climate change on the key estimates within
the financial statements.
The only estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying values of assets
and liabilities in the next financial year relate to the valuation
of unquoted investments. Unquoted investments are primarily the
Company's investments in unlisted funds, managed by third-party
investment fund managers and ICG. As such there is significant
estimation in the valuation of the unlisted fund at a point in
time. Note 1(c) sets out the accounting policy for unquoted
investments. The carrying amount of unquoted investments at the
year end is disclosed within note 10.
(o) Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker who is responsible for
allocating resources and assessing performance of the segments has
been identified as the Board. It is considered that the Company's
operations comprise a single operating segment.
(p) Company Restatement
The Company has restated its cash flow statement in the prior
year to include the following presentational changes:
-- The adjusting item in respect of 'Net cashflows to subsidiary
investments' has been replaced with two separate line items representing
gross cashflows to and from subsidiaries
-- In order to maintain consistency, the Company has also amended the
description used in Note 10 to describe investment transactions with
subsidiary undertakings
2 INVESTMENT RETURNS
Year ended Year ended
31 January 31 January
2023 2022
GBP'000 GBP'000
------------------------------------ ----------- -----------
Income from investments
UK investment income -- --
Overseas interest and dividends 2,224 5,501
------------------------------------ ----------- -----------
2,224 5,501
------------------------------------ ----------- -----------
Deposit interest on cash 1 2
Other 46 --
------------------------------------ ----------- -----------
47 2
------------------------------------ ----------- -----------
Total income 2,271 5,503
------------------------------------ ----------- -----------
Analysis of income from investments
Quoted overseas -- --
Unquoted 2,224 5,501
------------------------------------ ----------- -----------
2,224 5,501
------------------------------------ ----------- -----------
3 INVESTMENT MANAGEMENT CHARGES
Management fees paid to ICG for managing the Enterprise Trust
amounted to 1.34% (2022: 1.25%) of the average net assets in the
year. This movement is due to an increase in the relative value of
fee-bearing assets and commitments compared to non-fee bearing
assets and commitments. The management fee charged for managing the
Company remains at 1.4% (2022: 1.4%) of the fair value of invested
assets and 0.5% (2022: 0.5%) of outstanding commitments, in both
cases excluding funds managed by Graphite Capital (the Former
Manager) and ICG. From 1 February 2023 the management fee is
subject to a cap of 1.25% of net asset value. No fee is charged on
cash or liquid asset balances.
The amounts charged during the year are set out below.
Year ended 31 January 2023 Year ended 31 January 2022
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- --------- --------- -------- --------- --------- --------
Investment
management
charge 1,701 15,312 17,013 1,342 12,075 13,417
-------------- --------- --------- -------- --------- --------- --------
The Company and its subsidiaries also incur management fees in
respect of its investment in funds managed by members of ICG on an
arms-length basis.
Year ended Year ended
31 January 31 January
2023 2022
GBP'000 GBP'000
----------------------------------- ----------- -----------
ICG Strategic Equity IV 999 389
ICG Strategic Secondaries II 80 --
ICG Strategic Equity III 284 320
ICG Europe VII 126 318
ICG Europe Mid-Market 111 84
ICG Europe VIII 568 266
ICG Europe VI 43 71
ICG Recover Fund 2008B 32 31
ICG North American Private Debt II 26 --
ICG Asia Pacific III 25 38
ICG Europe V 8 20
ICG Recovery Fund 2006B -- --
----------------------------------- ----------- -----------
Total 2,302 1,537
----------------------------------- ----------- -----------
4 OTHER EXPENSES
The Company did not employ any staff in the year to 31 January
2023 (2022: none).
Year ended 31 Year ended 31
January 2023 January 2022
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------------- ------- ------- ------- -------
Directors' fees (see note 5) 288 262
Fees payable to the Company's auditors for the audit
of the Company's annual accounts 156 156
Fees payable to the Company's auditors and its associates
for other services:
-- Audit of the accounts of the subsidiaries 135 122
-- Audit-related assurance services 55 39
---------------------------------------------------------- ------- ------- ------- -------
Total auditors' remuneration(1) 346 317
Administrative expenses 1,322 1,503
---------------------------------------------------------- ------- ------- ------- -------
1,956 2,082
Bank facility costs allocated to revenue 235 252
Interest expense allocated to revenue 196 50
---------------------------------------------------------- ------- ------- ------- -------
Expenses allocated to revenue 2,387 2,383
Bank facility costs allocated to capital 3,884 2,263
---------------------------------------------------------- ------- ------- ------- -------
Total other expenses 6,271 4,646
---------------------------------------------------------- ------- ------- ------- -------
(1) The auditors of the Company have additionally provided
GBP14k (2022: GBP13k) of non-audit related services permitted under
the Financial Reporting Council's ('FRC') Revised Ethical
Standards. The service related to agreed upon procedures over the
Company's carried interest scheme. These expenses have been charged
to the Manager of the Company.
Included within Total other expenses above are GBP4.3m (2022:
GBP2.6m) of costs related to financing and GBP0.1m (2022: GBP0.3m)
of other expenses which are non-recurring and are excluded from the
Ongoing Charges as detailed in the Glossary on page 54.
Professional fees of GBP0.2m (2022: GBP0.1m) incidental to the
acquisition or disposal of investments are included within
gains/(losses) on investments held at fair value.
5 DIRECTORS' REMUNERATION AND INTERESTS
The fees paid by the Company to the directors and the directors'
interests in the share capital of the Company are shown in the
Directors' Remuneration Report in the Annual Report. No income was
received or receivable by the directors from any other subsidiary
of the Company.
6 TAXATION
In both the current and prior years the tax charge was lower
than the standard rate of corporation tax of 19%, principally due
to the Company's status as an investment trust, which means that
capital gains are not subject to corporation tax. The effect of
this and other items affecting the tax charge are shown in note
6(b) below.
The UK Government has announced an increase to the standard rate
of corporation tax from 19% to 25% with effect from 1 April 2023.
This is not expected to have a material impact on the Company.
Year ended Year ended
31 January 31 January
2023 2022
GBP'000 GBP'000
------------------------------------------------------ ----------- -----------
a) Analysis of charge in the year
Tax charge on items allocated to revenue (345) --
Tax credit on items allocated to capital 345 --
------------------------------------------------------ ----------- -----------
Corporation tax -- --
------------------------------------------------------ ----------- -----------
b) Factors affecting tax charge for the year
Profit on ordinary activities before tax 164,524 226,490
------------------------------------------------------ ----------- -----------
Profit on ordinary activities multiplied by standard
rate of corporation tax in the UK of 19% (2022: 19%) 31,260 43,033
Effect of:
-- Net investment returns not subject to corporation
tax (35,252) (45,419)
-- Dividends not subject to corporation tax (75) (295)
-- Current year management expenses not
utilised/(utilised) 4067 655
-- Other movements in respect of subsidiary
investments -- 2,026
------------------------------------------------------ ----------- -----------
Total tax charge -- --
------------------------------------------------------ ----------- -----------
The Company has GBP29.5m excess management expenses carried
forward (2022: GBP28.7m). No deferred tax assets or liabilities
(2022: nil) have been recognised in respect of the carried forward
management expenses due to the uncertainty that future taxable
profit will be generated that these losses can be offset against.
For all investments the tax base is equal to the carrying amount.
There was no deferred tax expense relating to the origination and
reversal of timing differences in the year (2022: nil).
7 EARNINGS PER SHARE
Year ended Year ended
31 January 31 January
2023 2022
----------------------------------------------- ----------- -----------
Revenue return per ordinary share (2.15) 2.59p
Capital return per ordinary share 242.34p 327.38p
Earnings per ordinary share (basic and diluted) 240.19p 329.97p
----------------------------------------------- ----------- -----------
Revenue return per ordinary share is calculated by dividing the
revenue return attributable to equity shareholders of GBP(1.5)m
(2022: GBP1.8m) by the weighted average number of ordinary shares
outstanding during the year.
Capital return per ordinary share is calculated by dividing the
capital return attributable to equity shareholders of GBP166.0m
(2022: GBP224.7m) by the weighted average number of ordinary shares
outstanding during the year.
Basic and diluted earnings per ordinary share are calculated by
dividing the earnings attributable to equity shareholders of
GBP164.5m (2022: GBP226.5m) by the weighted average number of
ordinary shares outstanding during the year.
The weighted average number of ordinary shares outstanding
(excluding those held in treasury) during the year was 68,496,802
(2022: 66,638,288). There were no potentially dilutive shares, such
as options or warrants, in either year.
8 DIVIDS
Year ended Year ended
31 January 31 January
2023 2022
GBP'000 GBP'000
--------------------------------------------------- ----------- -----------
Third quarterly dividend in respect of year ended
31 January 2022: 6p per share (2021: 5.0p) 4,111 3,438
Final dividend in respect of year ended 31 January
2022: 9p per share (2021: 9.0p) 6,167 6,189
First quarterly dividend in respect of year ended
31 January 2023: 7p per share (2022: 6.0p) 4,796 4,111
Second quarterly dividend in respect of year ended
31 January 2023: 7p per share (2022: 6.0p) 4,792 4,111
--------------------------------------------------- ----------- -----------
Total 19,866 17,849
--------------------------------------------------- ----------- -----------
The Company paid a third quarterly dividend of 7.0p per share in
March 2022. The Board has proposed a final dividend of 9p per share
in respect of the year ended 31 January 2023 which, if approved by
shareholders, will be paid on 21 July 2023 to shareholders on the
Register of Members at the close of business on 6 July 2023.
9 SUBSIDIARY UNDERTAKINGS AND UNCONSOLIDATED STRUCTURED
ENTITIES
Subsidiary undertakings (controlled structured entities)
Subsidiaries of the Company as at 31 January 2023 comprise the
following controlled structured entities, which are registered in
England and Wales. Subsidiaries of the Company's direct
subsidiaries are reported as indirect subsidiaries.
Direct subsidiaries Ownership interest 2023 Ownership interest 2022
------------------------- ----------------------- -----------------------
ICG Enterprise Trust
Limited Partnership 97.5% 97.5%
ICG Enterprise Trust (2)
Limited Partnership 97.5% 97.5%
ICG Enterprise Trust
Co-investment Limited
Partnership 99.0% 99.0%
-------------------------- ----------------------- -----------------------
Indirect subsidiaries Ownership interest 2023 Ownership interest 2022
------------------------- ----------------------- -----------------------
ET Holdings LP 99.5% 99.5%
ICG Morse Partnership LP 99.5% 99.5%
ICG Lewis Partnership LP 99.5% 99.5%
-------------------------- ----------------------- -----------------------
In accordance with IFRS 10 (amended), the subsidiaries are not
consolidated and are instead included in unquoted investments at
fair value.
The value of the subsidiaries is shown net of an accrual for the
interests of the Co-investors (ICG and certain of its executives,
and, in respect of certain historical investments, the executives
and connected parties of Graphite Capital, the Former Manager) in
the Co-investment Incentive Scheme. As at 31 January 2023, a total
of GBP58.1m (2022: GBP49.2m) was accrued in respect of these
interests. During the year the Co-investors invested GBP1.8 (2022:
GBP0.2m) into ICG Enterprise Trust Co-investment Limited
Partnership. Payments received by the Co-investors amounted to
GBP8.2m or 3.3% of GBP252.0m Total Proceeds received in the year
(2022: GBP9.2m or 0.3% of GBP342.9m proceeds received).
Unconsolidated structured entities
The Company's principal activity is investing in private equity
funds and directly into private companies. Such investments may be
made and held via a subsidiary. The majority of these investments
are unconsolidated structured entities as defined in IFRS 12.
The Company holds interests in closed-ended limited partnerships
which invest in underlying companies for the purposes of capital
appreciation. The Company and the other limited partners make
commitments to finance the investment programme of the relevant
manager, who will typically draw down the amount committed by the
limited partners over a period of four to six years (see note
16).
The table below disaggregates the Company's interests in
unconsolidated structured entities. The table presents for each
category the related balances and the maximum exposure to loss.
Unquoted
Total investments Co-investment Incentive Scheme Accrual Maximum loss exposure
investments GBP'000 GBP'000 GBP'000
------------ ------------ -------------------------------------- ---------------------
As at 31
January
2023 1,404,293 (58,098) 1,346,195
As at 31
January
2022 1,171,302 (49,157) 1,122,145
------------ ------------ -------------------------------------- ---------------------
The Company also holds investments of GBP2.9m (2022: GBP1.6m)
that are not unconsolidated structured entities. Further details of
the Company's investment Portfolio are included in the
Supplementary information section on page 17.
10 INVESTMENTS
The tables below analyse the movement in the carrying value of
the Company's investment assets in the year. In accordance with
accounting standards, subsidiary undertakings of the Company are
reported at fair value rather than on a 'look-through' basis.
An investee fund is considered to generate realised gains or
losses if it is more than 85% drawn and has returned at least the
amount invested by the Company. All gains and losses arising from
the underlying investments of such funds are presented as realised.
All gains and losses in respect of fund investments that have not
satisfied the above criteria are presented as unrealised.
Direct Investments are considered to generate realised gains or
losses when they are sold.
Investments are held by both the Company and through its
subsidiaries. An analysis of gains and losses on an underlying
investment look-through basis is presented on page xx within the
Other information section.
Subsidiary
Quoted Unquoted undertakings Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------------------- -------- --------- ------------------------ ---------
Cost at 1 February 2022 -- 164,996 368,264 533,260
Net unrealised appreciation at 1 February 2022 -- 37,013 553,474 590,487
------------------------------------------------------- -------- --------- ------------------------ ---------
Valuation at 1 February 2022 -- 202,009 921,738 1,123,747
Movements in the year:
-- Purchases -- 62,245 62,245
-- Net movement of investments with subsidiary
undertakings(2) 10,162 10,162
-- Sales
-- Capital proceeds -- (32,137) (32,137)
-- Realised gains/(losses) based on carrying value
at previous balance sheet date -- 9,311 9,311
-- Movement in unrealised appreciation 27,750 147,997 175,747
Valuation at 31 January 2023 -- 269,178 1,079,897 1,349,075
------------------------------------------------------- -------- --------- ------------------------ ---------
Cost at 31 January 2023 -- 195,104 378,426 573,531
Net unrealised appreciation for the year to 31 January
2023 -- 74,074 701,471 775,544
------------------------------------------------------- -------- --------- ------------------------ ---------
Valuation at 31 January 2023 -- 269,178 1,079,897 1,349,075
------------------------------------------------------- -------- --------- ------------------------ ---------
Subsidiary
Quoted Unquoted undertakings (restated) Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------------------- -------- --------- ------------------------ ---------
Cost at 1 February 2021 1,410 394,393 136,393 532,196
Net unrealised appreciation at 1 February 2021 34,292 200,116 140,958 375,366
------------------------------------------------------- -------- --------- ------------------------ ---------
Valuation at 1 February 2021 35,702 594,509 277,351 907,562
Movements in the year:
-- Transfer to subsidiary undertakings -- Cost(1) -- (232,126) 232,126 --
-- Transfer to subsidiary undertakings -- Unrealised
appreciation(1) -- (210,875) 210,875 --
-- Purchases -- 75,125 75,125
-- Net movement of investments with subsidiary
undertakings(2) 2,524 2,524
-- Sales
-- Capital proceeds (35,702) (65,280) -- (100,982)
-- Realised gains/(losses) based on carrying value
at previous balance sheet date -- 1,968 -- 1,968
-- Movement in unrealised appreciation -- 38,687 198,862 237,550
------------------------------------------------------- -------- --------- ------------------------ ---------
Valuation at 31 January 2022 -- 202,009 921,738 1,123,747
------------------------------------------------------- -------- --------- ------------------------ ---------
Cost at 31 January 2022 -- 164,996 368,264 533,260
Net unrealised appreciation for the year to 31 January
2022 -- 37,013 553,474 590,487
------------------------------------------------------- -------- --------- ------------------------ ---------
Valuation at 31 January 2022 -- 202,009 921,738 1,123,747
------------------------------------------------------- -------- --------- ------------------------ ---------
(1) On 26 February 2021, the Company finalised a new bank
facility of EUR200m (GBP177m, translated at the rate prevailing on
the day the facility became available for use) with Credit Suisse.
The facility was agreed to strengthen the Company's financial
position and replace the previous facility that was in place at the
year end. The new facility requires at least GBP500m of investments
be held in a single entity in order to provide security for the
facility. To meet this criteria, a new subsidiary of the Company,
ET Holdings LP, was incorporated on 15 December 2020. During
February and March 2021 the Company completed a number of transfers
of its investments, as well as transfers of investments from the
Company's subsidiary ICG Enterprise Trust Co-investment LP, to ET
Holdings LP. In addition, during the year to 31 January 2023, ET
Holdings LP entered into a number of new investments in its own
right. The fair value of investments held in ET Holdings LP as at
31 January 2023 is GBP837.8m.
(2) In the prior year financial statements, net investment
movements with subsidiary undertakings were presented as
'Purchases'. The presentation has been updated in the prior year to
'Net movement of investments with subsidiary undertakings'
31 January 31 January
2023 2022
GBP'000 GBP'000
---------------------------------------------------- ---------- ----------
Realised gains based on cost 9,311 79,908
Amounts recognised as unrealised in previous years -- (77,940)
---------------------------------------------------- ---------- ----------
Realised gains based on carrying values at previous
balance sheet date 9,311 1,968
Increase in unrealised appreciation 175,747 237,550
---------------------------------------------------- ---------- ----------
Gains on investments 185,058 239,518
---------------------------------------------------- ---------- ----------
'Realised gains based on cost' represents the total increase in
value, compared to cost, of those funds which meet the criteria set
out in page X. These gains are adjusted for amounts previously
reported as unrealised (and included within the fair value at the
previous balance sheet date) to determine the 'Realised gains based
on carrying values at previous balance sheet date'.
Gains on investments includes the 'Realised gains based on
carrying values at previous balance sheet date' together with the
net fair value movement on the balance of the investee funds.
Related undertakings
At 31 January 2023, the Company held direct and indirect
interests in six limited partnership subsidiaries. These interests,
net of the incentive accrual as described in note 9, were:
Investment 31 January 2023 31 January 20022
------------------------------------------- --------------- ----------------
ICG Enterprise Trust Limited Partnership 99.9% 99.9%
ICG Enterprise Trust (2) Limited
Partnership 66.5% 66.5%
ICG Enterprise Trust Co-investment Limited
Partnership 66.0% 66.0%
ICG Enterprise Holdings LP 99.5% 99.5%
ICG Morse Partnership LP 99.5% 99.5%
ICG Lewis Partnership LP 99.5% 99.5%
------------------------------------------- --------------- ----------------
The registered address and principal place of business of the
subsidiary partnerships is Procession House, 55 Ludgate Hill,
London EC4M 7JW.
In addition the Company held an interest (including indirectly
through its subsidiaries) of more than 20% in the following
entities. These investments are not considered subsidiaries or
associates as the Company does not exert control or have
significant influence over the activities of these
companies/partnerships.
As at 31 January 2023
Investment Instrument % interest(1)
------------------------------- ------------------------------ -------------
Graphite Capital Partners VII
Top Up Plus(3) Limited partnership interests 20.0%
Graphite Capital Partners VIII
Top Up(3) Limited partnership interests 41.1%
ICG LP Secondaries Fund(4) Limited partnership interests 33.0%
------------------------------- ------------------------------ -------------
As at 31 January 2022
Investment Instrument % interest(1)
------------------------------- ------------------------------ -------------
Cognito IQ Limited(2) Preference shares 44.0%
Cognito IQ Limited(2) Ordinary shares 34.5%
Graphite Capital Partners VII
Top Up Plus(3) Limited partnership interests 20.0%
Graphite Capital Partners VIII
Top Up(3) Limited partnership interests 41.1%
------------------------------- ------------------------------ -------------
1. The percentage shown for limited partnership interests represents the
proportion of total commitments to the relevant fund. The percentage
shown for shares represents the proportion of total shares in issue.
2. Address of principal place of business is Rivergate House, Newbury
Business Park, London Road, Newbury RG14 2PZ.
3. Address of principal place of business is 7 Air Street, Soho, London W1B
5AD.
4. Address of principal place of business is Procession House, 55 Ludgate
Hill, London, EC4M 7JW
11 CASH AND CASH EQUIVALENTS
31 January 31 January
2023 2022
GBP'000 GBP'000
------------------------- ---------- ----------
Cash at bank and in hand 20,694 41,328
------------------------- ---------- ----------
12 RECEIVABLES
31 January 31 January
2023 2022
GBP'000 GBP'000
------------------------------- ---------- ----------
Prepayments and accrued income 2,416 2,205
------------------------------- ---------- ----------
As at 31 January 2023, prepayments and accrued income included
GBP2.3m (2022: GBP2.2m) of unamortised costs in relation to the
bank facility. Of this amount GBP0.5m (2022: GBP0.7m) is expected
to be amortised in less than one year.
13 PAYABLES -- CURRENT
31 January 31 January
2023 2022
GBP'000 GBP'000
-------------------- ---------- ----------
Accruals 6,274 9,303
Bank facility drawn 65,293 --
-------------------- ---------- ----------
Payables -- current 71,567 9,303
-------------------- ---------- ----------
Accruals in the prior year included unbilled management fees in
respect of that year which were settled in the current year.
14 SHARE CAPITAL
Authorised Issued and fully paid
------------------------------
Nominal Nominal
Equity share capital Number GBP'000 Number GBP'000
------------------------------ ----------- -------- ------------ ---------
Balance at 31 January 2023 and
31 January 2022 120,000,000 12,000 72,913,000 7,292
------------------------------ ----------- -------- ------------ ---------
All ordinary shares have a nominal value of 10.0p. At 31 January
2023 and 31 January 2022, 72,913,000 shares had been allocated,
called up and fully paid. During the year 191,480 shares were
bought back in the market and held in treasury (2022: 250,000
shares). At 31 January 2023, the Company held 4,577,425 shares in
treasury (2022: 4,395,945) and had 68,335,575 (2022: 68,517,055)
shares outstanding, all of which have equal voting rights.
15 NET ASSET VALUE PER SHARE
The net asset value per share is calculated on equity
attributable to equity holders of GBP1,300.6m (2022: GBP1,158.0m)
and on 68,335,575 (2022: 68,517,055) ordinary shares in issue at
the year end. There were no potentially dilutive shares, such as
options or warrants, at either year end. Calculated on both the
basic and diluted basis the net asset value per share was 1,903.3p
(2022: 1,690.1p).
16 CAPITAL COMMITMENTS AND CONTINGENCIES
The Company and its subsidiaries had uncalled commitments in
relation to the following Portfolio investments:
31 January 31 January
2023 2022
GBP'000 GBP'000
---------------------------------------------------- ---------- ----------
ICG Asia Pacific Fund III(2) 3,159 2,895
ICG Europe VI(1) 4,459 4,214
ICG Europe VII(1) 6,765 10,348
ICG Europe VIII(1) 28,551 30,590
ICG Europe Mid-Market Fund(1) 8,536 9,909
ICG North American Private Debt Fund II(2) 3,232 4,234
ICG Strategic Secondaries Fund II(2) 17,041 15,613
ICG Strategic Equity Fund III(2) 11,269 10,325
ICG Strategic Equity IV(2) 15,943 17,369
ICG LP Secondaries Fund I LP 27,443 --
ICG Ludgate Hill (Feeder B) SCSp(1) 14,393 13,724
ICG Ludgate Hill (Feeder) II Boston SCSp(2) 8,077 5,161
ICG Ludgate Hill (Feeder) IIIA Porsche SCSp(2) 1,467 --
ICG Augusta Partners Co-Investor(2) 18,895 17,636
ICG Dallas Co-Investment(2) 1,400 1,282
ICG Colombe Co-investment(1) 1,750 2,355
Commitments of less than GBP1,000,000 at 31 January
2023 7,178 4,809
---------------------------------------------------- ---------- ----------
Total ICG funds 179,558 150,464
Graphite Capital Partners IX 5,805 8,882
Graphite Capital Partners VIII(2) 2,194 4,408
Graphite Capital Partners VII(1,2) 907 1,554
---------------------------------------------------- ---------- ----------
Total Graphite funds 8,906 14,844
---------------------------------------------------- ---------- ----------
1. Includes interest acquired through a secondary fund purchase.
2. Includes the associated Top Up funds.
31 January 31 January
2023 2022
GBP'000 GBP'000
---------------------------------------------------- ---------- ----------
PAI Europe VIII 22,045 --
Advent International X 16,313 --
Green Equity Investors Side IX 16,234 --
Gridiron V 13,881 --
Bain VI 13,227 --
Permira VIII 13,227 --
CDR XII 12,175 --
Thomas H Lee Equity Fund IX 11,266 14,318
Integrum I 8,117 --
BC XI 8,050 8,626
Seventh Cinven Fund 6,421 7,566
PAI Mid-Market Fund 5,811 6,788
Bain XIII 5,743 --
CVC European Equity Partners VIII 5,589 10,078
Investindustrial VII 5,021 8,283
Leeds VII 4,770 7,033
Charlesbank X 4,711 5,733
New Mountain VI 4,517 7,272
PAI VII 4,501 10,182
European Camping Group II 4,409 --
Gridiron Capital Fund III 4,401 4,066
Hg Genesis X 4,371 --
Carlyle Europe Partners V 4,351 4,394
Bowmark Capital Partners VI 4,279 7,230
FSN VI 4,236 6,126
GI Partners VI 4,119 5,246
Thoma Bravo XV 4,109 --
Hg Saturn III 4,028 --
GHO Capital III 3,722 6,672
Bain Tech Opportunities II 3,409 --
Bregal Unternehmerkapital III 3,360 7,200
CDR XI 3,151 --
AEA VII 3,010 5,867
Ivanti 2,997 2,746
Gryphon V 2,564 --
Tailwind III 2,471 --
Thomas H Lee Equity Fund VIII 2,398 3,719
Apax X 2,351 4,390
Resolute V 2,307 7,787
Hellman Friedman X 2,275 3,382
Ambassador Theatre Group 2,196 2,087
Commitments of less than GBP2,000,000 at 31 January
2023 52,130 43,026
---------------------------------------------------- ---------- ----------
Total third party 308,262 253,303
---------------------------------------------------- ---------- ----------
Total commitments 496,726 418,611
---------------------------------------------------- ---------- ----------
The Company and its subsidiaries had no other unfunded
commitments to investment funds. Commitments made by the Company
and its subsidiaries are irrevocable.
As at 31 January 2023, the Company (excluding its subsidiaries)
had uncalled commitments in relation to the above Portfolio of
GBP55.0m (2022: GBP76.0m). The Company did not have any contingent
liabilities at 31 January 2023 (2022: None).
The Company's subsidiaries, which are not consolidated, had the
balance of uncalled commitments in relation to the above Portfolio
of GBP441.7m (2022: GBP342.6m). The Company is responsible for
financing its pro-rata share of those uncalled commitments (see
note 9).
17 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Company is an investment company as defined by Section 833
of the Companies Act 2006 and conducts its affairs so as to qualify
as an investment trust under the provisions of Section 1158 of the
Corporation Tax Act 2010 ('Section 1158'). The Company's objective
is to provide long-term growth by investing in private companies
managed by leading private equity managers.
Investments in funds have anticipated lives of approximately 10
years. Direct Investments are made with an anticipated holding
period of between three and five years.
Financial risk management
The Company's activities expose it to a variety of financial
risks: market risk (comprising currency risk, interest rate risk
and price risk), investment risk, credit risk and liquidity risk.
The Company's overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise
potential adverse effects on the Company's financial performance.
The Board has overall responsibility for managing the risks and the
framework for monitoring and coordinating these risks. The Audit
Committee regularly reviews, identifies and evaluates the risks
taken by the Company to allow them to be appropriately managed. All
of the Company's management functions are delegated to the Manager
which has its own internal control and risk monitoring
arrangements. The Committee makes a regular assessment of these
arrangements, with reference to the Company's risk matrix. The
Company's financial risk management objectives and processes used
to manage these risks have not changed from the previous period and
the policies are set out below:
Market risk
(i) Currency risk
The Company's investments are principally in continental Europe,
the US and the UK, and are primarily denominated in euro, US
dollars and sterling. There are also smaller amounts in other
European currencies. The Company's investments in controlled
structured entities are reported in Sterling. The Company is
exposed to currency risk in that movements in the value of sterling
against these foreign currencies will affect the net asset value
and the cash required to fund undrawn commitments. The Board
regularly reviews the level of foreign currency denominated assets
and outstanding commitments in the context of current market
conditions and may decide to buy or sell currency or put in place
currency hedging arrangements. No hedging arrangements were in
place during the financial year.
The composition of the net assets of the Company by reporting
currency at the year end is set out below:
Sterling Euro US dollar Other Total
31 January 2023 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- -------- --------- -------- ---------
Investments 1,112,572 89,120 147,165 218 1,349,075
Cash and cash equivalents
and other net current
assets (65,250) 14,817 1,721 255 (48,457)
------------------------- --------- -------- --------- -------- ---------
1,047,323 103,937 148,886 473 1,300,618
------------------------- --------- -------- --------- -------- ---------
Sterling Euro US dollar Other Total
31 January 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- -------- --------- -------- ---------
Investments 950,837 62,743 109,985 182 1,123,747
Cash and cash equivalents
and other net current
assets 14,413 12,648 6,906 263 34,230
------------------------- --------- -------- --------- -------- ---------
965,250 75,391 116,891 445 1,157,977
------------------------- --------- -------- --------- -------- ---------
The effect of a 25% increase or decrease in the sterling value
of the euro would be a fall of GBP28.6m and a rise of GBP106.0m in
the value of shareholders' equity and on profit after tax at 31
January 2023 respectively (2022: a fall of GBP66.1m and a rise of
GBP46.7m based on 25% increase or decrease).
The effect of a 25% increase or decrease in the sterling value
of the US dollar would be a fall of GBP113.7m and a rise of
GBP191.0m in the value of shareholders' equity and on profit after
tax at 31 January 2023 respectively (2022: a fall of GBP112.8m and
a rise of GBP92.6m based on 25% movement).
These sensitivity figures are based on the currency of the
location of the underlying portfolio companies' headquarters. The
percentages applied are based on market volatility in exchange
rates observed in prior periods.
(ii) Interest rate risk
The Company's assets primarily comprise non-interest bearing
investments in funds and non-interest bearing investments in
portfolio companies. The fair values of these investments are not
significantly directly affected by changes in interest rates. The
Company's net debt balance is exposed to interest rate risk; the
financial impact of this risk is currently immaterial.
The Company is indirectly exposed to interest rate risk through
the impact of interest rates on the performance of investments in
funds and portfolio companies as a result of interest rate changes
impacting the underlying manager valuation. This performance impact
as a result of interest rate risk is recognised through the
valuation of those investments, which will be affected by the
impact of any change in interest rates on the financial performance
of the underlying portfolio companies and also on any valuation of
those investments for sale. The Company is not able to quantify how
a change in interest rates would impact valuations.
(iii) Price risk
The risk that the value of a financial instrument will change as
a result of changes to market prices is one that is fundamental to
the Company's objective, which is to provide long-term capital
growth through investment in unquoted companies. The investment
Portfolio is continually monitored to ensure an appropriate balance
of risk and reward in order to achieve the Company's objective.
The Company is exposed to the risk of change in value of its
private equity investments. For all investments the market variable
is deemed to be the price itself. The table below shows the impact
of a 30% increase or decrease in the valuation of the investment
Portfolio. The percentages applied are reasonable based on the
Manager's view of the potential for volatility in the Portfolio
valuations under stressed conditions.
31 January 2023 31 January 2022
Increase Decrease Increase Decrease
30% movement in the in variable in variable in variable in variable
price of investments GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ------------ ------------ ------------ ------------
Impact on profit after
tax 388,422 (349,350) 319,449 (330,909)
Impact as a percentage
of profit after tax 236.1% (239.7)% 141.0% (146.1)%
Impact as a percentage
of shareholders'
equity 29.9% (30.3)% 27.6% (28.6)%
---------------------- ------------ ------------ ------------ ------------
A reasonably possible percentage change in relation to the
earnings estimates or Enterprise Value/EBITDA multiples used by the
underlying managers to value the private equity fund investments
and co-investments may result in a significant change in fair value
of unquoted investments.
Investment and credit risk
(i) Investment risk
Investment risk is the risk that the financial performance of
the companies in which the Company invests either improves or
deteriorates, thereby affecting the value of that investment.
Investments in unquoted companies whether indirectly or directly
are, by their nature, subject to potential investment losses. The
investment Portfolio is highly diversified in order to mitigate
this risk.
(ii) Credit risk
The Company's exposure to credit risk arises principally from
its investment in cash deposits. The Company aims to invest the
majority of its liquid portfolio in assets which have low credit
risk. The Company's policy is to limit exposure to any one
investment to 15% of gross assets. This is regularly monitored by
the Manager as a part of its cash management process.
Cash is held on deposit with Royal Bank of Scotland ('RBS') and
totalled GBP20.7m (2022: GBP41.3m).RBS currently has a credit
rating of A1 from Moody's. This represented the maximum exposure to
credit risk at the balance sheet date. No collateral is held by the
Company in respect of these amounts. None of the Company's cash
deposits or money market fund balances were past due or impaired at
31 January 2023 (2022: nil) and as a result of this, no ECL
provision has been recorded.
Liquidity risk
The Company makes commitments to private equity funds in advance
of that capital being invested, typically in illiquid, unquoted
companies. These commitments are in excess of the Company's total
liquidity, therefore resulting in an overcommitment. When
determining the appropriate level of overcommitment, the Board
considers the rate at which commitments might be drawn down,
typically over four to six years, versus the rate at which existing
investments are sold and cash realised. The Company has an
established liquidity management policy, which involves active
monitoring and assessment of the Company's liquidity position and
its overcommitment risk. This is regularly reviewed by the Board
and incorporated into the Board's assessment of the viability of
the Company. This process incorporates balance sheet and cash flow
projections, including scenarios with varying levels of Portfolio
gains and losses, fund drawdowns and realisations, availability of
the credit facility, exchange rates, and possible remedial action
that the Company could
undertake if required in the event of significant Portfolio
declines.
At the year end, the Company had cash and cash equivalents
totalling GBP20.7m and had access to committed bank facilities of
GBP167.0m maturing in February 2026, which is a multi-currency
revolving credit facility provided by Credit Suisse. The key terms
of the facility are:
-- Upfront cost: 100bps.
-- Non-utilisation fees: 114bps per annum.
-- Margin on drawn amounts: 300bps per annum.
As at 31 January 2023 the Company's total financial liabilities
amounted to GBP71.6m (2022: GBP9.3m) of payables which were due in
less than one year, which includes accrued balances payable in
respect of the credit facility above.
Capital risk management
The Company's capital is represented by its net assets, which
are managed to achieve the Company's investment objective. As at
the year end, the Company had net debt of GBP44.6m (2022:
GBPnil).
The Board can manage the capital structure directly since it has
taken the powers, which it is seeking to renew, to issue and buy
back shares and it also determines dividend payments. The Company
is subject to externally imposed capital requirements with respect
to the obligation and ability to pay dividends by Section 1159 of
the Corporation Tax Act 2010 and by the Companies Act 2006,
respectively. Total equity at 31 January 2023, the composition of
which is shown on the balance sheet, was GBP1,300.6m (2022:
GBP1,158.0m).
Fair values estimation
IFRS 13 requires disclosure of fair value measurements of
financial instruments categorised according to the following fair
value measurement hierarchy:
-- Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1).
-- Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (level 2).
-- Inputs for the asset or liability that are not based on observable market
data (that is, unobservable inputs) (level 3).
The valuation techniques applied to level 3 assets are described
in note 1(c) of the financial statements. No investments were
categorised as level 2.
The Company's policy is to recognise transfers into and
transfers out of fair value hierarchy levels at the end of the
reporting year when they are deemed to occur.
The sensitivity of the Company's investments to a change in
value is discussed on pages 46.
The following table presents the assets that are measured at
fair value at 31 January 2023 and 31 January 2022:
Level 1 Level 2 Level 3 Total
As at 31 January 2023 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- --------- --------- --------- ---------
Investments held at fair value
Unquoted investments -- indirect -- -- 158,896 158,896
Unquoted investments -- direct -- -- 110,282 110,282
Quoted investments -- direct -- -- -- --
Subsidiary undertakings -- -- 1,079,897 1,079,897
---------------------------------- --------- --------- --------- ---------
Total investments held at fair
value -- -- 1,349,075 1,349,075
---------------------------------- --------- --------- --------- ---------
Level 1 Level 2 Level 3 Total
As at 31 January 2022 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- --------- --------- --------- ---------
Investments held at fair value
Unquoted investments -- indirect -- -- 140,060 140,060
Unquoted investments -- direct -- -- 61,949 61,949
Quoted investments -- direct -- -- -- --
Subsidiary undertakings -- -- 921,738 921,738
---------------------------------- --------- --------- --------- ---------
Total investments held at fair
value -- -- 1,123,747 1,123,747
---------------------------------- --------- --------- --------- ---------
All unquoted and quoted investments are valued at fair value in
accordance with IFRS 13. The Company has no quoted investments as
at 31 January 2023; quoted investments held by subsidiary
undertakings are reported within Level 3.
Investments in level 3 securities are in respect of private
equity fund investments and co-investments. These are held at fair
value and are calculated using valuations provided by the
underlying manager of the investment, with adjustments made to the
statements to take account of cash flow events occurring after the
date of the manager's valuation, such as realisations or liquidity
adjustments.
The following tables present the changes in level 3 instruments
for the year to 31 January 2023 and 31 January 2022.
Unquoted investments (indirect) at fair value through Unquoted investments (direct) at fair value through
profit or loss profit or loss Subsidiary undertakings Total
31 January 2023 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------------------ ----------------------------------------------------- --------------------------------------------------- ----------------------- ---------
Opening balances 123,319 78,689 921,738 1,123,747
Additions 20,894 34,151 10,162 72,407
Disposals (27,475) (4,661) -- (32,136)
Gains and losses recognised in profit or loss 34,958 2,103 147,997 185,057
------------------------------------------------------ ----------------------------------------------------- --------------------------------------------------- ----------------------- ---------
Closing balance 158,896 110,282 1,079,897 1,349,075
------------------------------------------------------ ----------------------------------------------------- --------------------------------------------------- ----------------------- ---------
Total gains for the year included in income statement
for assets held at the end of the reporting period 9,816 17,934 147,997 175,747
------------------------------------------------------ ----------------------------------------------------- --------------------------------------------------- ----------------------- ---------
Unquoted investments (indirect) at fair value through Unquoted investments (direct) at fair value through
profit or loss profit or loss Subsidiary undertakings Total
31 January 2022 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------------------ ----------------------------------------------------- --------------------------------------------------- ----------------------- ---------
Opening balances 442,696 151,813 277,351 871,860
Additions 33,479 41,647 2,524 77,649
Transfer to Subsidiary undertakings (349,295) (93,706) 443,001 --
Disposals (34,115) (31,165) -- (65,280)
Gains and losses recognised in profit or loss 30,555 10,100 198,862 239,517
------------------------------------------------------ ----------------------------------------------------- --------------------------------------------------- ----------------------- ---------
Closing balance 123,319 78,689 921,738 1,123,747
------------------------------------------------------ ----------------------------------------------------- --------------------------------------------------- ----------------------- ---------
Total gains for the year included in income statement
for assets held at the end of the reporting period 28,587 10,100 198,862 237,549
------------------------------------------------------ ----------------------------------------------------- --------------------------------------------------- ----------------------- ---------
18 RELATED PARTY TRANSACTIONS
Significant transactions between the Company and its
subsidiaries are shown below:
Year ended Year ended
31 January 31 January
2023 2022
Subsidiary Nature of transaction GBP'000 GBP'000
------------------------- ------------------------- ----------- -----------
ICG Enterprise Trust Increase in amounts owed
Limited Partnership to subsidiaries -- 5,884
(Decrease) in amounts
owed by subsidiaries (17,470) --
Income allocated 10 --
------------------------- ------------------------- ----------- -----------
ICG Enterprise Trust (2) Increase in amounts owed
Limited Partnership to subsidiaries 5,776 11,318
(Decrease) in amounts
owed by subsidiaries -- --
Income allocated 403 740
--------------------------------------------------- ----------- -----------
ICG Enterprise Trust Increase in amounts owed
Co-investment LP by subsidiaries 43,949 52,773
Income allocated 2,605 6,687
--------------------------------------------------- ----------- -----------
ICG Enterprise Holdings Increase in amounts owed
LP to subsidiaries 22,904 22,820
Decrease in amounts owed
by subsidiaries -- --
Income allocated 6,603 9,824
--------------------------------------------------- ----------- -----------
Increase in amounts owed
ICG Morse Partnership LP by subsidiaries 5,107 3,282
Decrease in amounts owed
to subsidiaries --
Income allocated -- --
------------------------- ------------------------- ----------- -----------
Increase in amounts owed
ICG Lewis Partnership LP by subsidiaries 2,344 71
Decrease in amounts owed by subsidiaries -- --
Income allocated -- --
--------------------------------------------------- ----------- -----------
For the purpose of IAS 24 Related Party Disclosures, key
management personnel comprised the Board of Directors. Details of
remuneration are disclosed below and in further detail in the
Directors' Remuneration Report.
Remuneration in
the year
(audited) Fees Expenses Total
2023 2022 2023 2022 2023 2022
Name GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ -------- -------- -------- -------- -------- --------
Jane Tufnell 67 65 -- -- 67 65
Alastair Bruce 54 52 -- -- 54 52
Gerhard Fusenig 44 42 4 2 48 44
Adiba Ighodaro 26 -- -- -- 26 --
Janine Nicholls 26 -- -- -- 26 --
Sandra Pajarola 19 42 2 2 23 44
Lucinda Riches -- 17 -- -- -- 17
David Warnock 44 42 -- -- 44 42
------------------ -------- -------- -------- -------- -------- --------
Total 280 260 6 4 288 264
------------------ -------- -------- -------- -------- -------- --------
Amounts owed by/to subsidiaries represent the Company's loan
account balances with those entities, to which the Company's share
of drawdowns and distributions in respect of those entities are
credited and debited respectively.
Amounts owed by subsidiaries Amounts owed to subsidiaries
31 January 31 January 31 January 31 January
Subsidiary 2023 GBP'000 2022 GBP'000 2023 GBP'000 2022 GBP'000
-------------- -------------- -------------- -------------- --------------
ICG Enterprise
Trust Limited
Partnership -- -- 8,299 25,769
ICG Enterprise
Trust (2)
Limited
Partnership -- -- 22,908 17,132
ICG Enterprise
Trust
Co-investment
LP 250,742 206,792 -- --
ICG Enterprise
Holdings LP -- -- 45,725 22,820
ICG Morse
Partnership
LP 14,513 9,405 -- --
ICG Lewis
Partnership
LP 6,062 3,718 -- --
-------------- -------------- -------------- -------------- --------------
The Company and its subsidiaries' total shares in funds and
co-investments managed by the Company's Manager are:
Year ended 31 January 2023 Year ended 31 January 2022
Remaining Remaining
Original commitment Fair value investment Original commitment Fair value investment
Fund/Co-investment commitment GBP'000 GBP'000 GBP'000 commitment GBP'000 GBP'000 GBP'000
------------------- ------------------- ----------- --------------------- ------------------- ----------- ---------------------
ICG Asia Pacific
Fund III(2) 12,175 3,159 8,454 11,155 2,895 8,814
ICG Europe V(1) 13,359 730 603 12,845 767 1,569
ICG Europe VI(1) 22,044 4,459 6,030 20,884 4,214 14,262
ICG Europe VII(1) 35,270 6,765 33,425 33,414 10,348 36,073
ICG Europe VIII(1) 35,270 28,551 7,227 66,828 30,590 2,712
ICG Europe
Mid-Market
Fund(1) 17,635 8,536 11,888 16,707 9,909 7,899
ICG North American
Private Debt Fund
II(2) 8,117 3,232 5,053 7,437 4,234 3,389
ICG Strategic
Secondaries Fund
II(2) 28,409 17,041 10,913 26,028 15,613 8,829
ICG Strategic
Equity Fund
III(2) 32,468 11,269 35,610 29,746 10,325 35,022
ICG Strategic
Equity IV(2) 32,468 15,943 22,133 59,493 17,369 15,177
ICG European Fund
2006 B(1) 7,515 506 49 7,119 479 57
ICG Recovery Fund
2008 B(1) 5,108 892 4,500 10,024 845 4,752
ICG LP Secondaries
Fund I LP 48,701 27,443 30,817 -- -- --
ICG Ludgate Hill
(Feeder B)
SCSp(1) 39,679 14,393 34,428 37,591 13,724 --
ICG Ludgate Hill
(Feeder) II Boston
SCSp(2) 16,234 8,077 11,227 7,437 5,161 12,003
ICG Ludgate Hill
(Feeder) IIIA
Porsche SCSp(2) 20,292 1,467 23,376 -- -- --
ICG Augusta
Partners
Co-Investor(2) 20,292 18,895 15,419 18,592 17,636 12,886
ICG Cross Border(2) 4,058 223 3,941 3,718 290 3,477
ICG Velocity
Partners
Co-Investor(2) 12,175 654 99 11,155 599 159
ICG Sunrise
Co-Investment(1) 4,409 90 5,425 2,088 91 4,209
ICG Cheetah
Co-Investment(1) 6,172 714 9,990 5,847 680 8,086
ICG Dallas
Co-Investment(2) 8,929 1400 8583 4,090 1,282 7,102
ICG Diocle
Co-Investment(1) 9,623 153 109 9,117 145 14,798
ICG Colombe
Co-investment(1) 13,226 1750 12,922 20,756 2,355 12,051
ICG MXV
Co-Investment(1) 12,345 225 27,547 11,695 213 22,086
ICG Progress
Co-Investment(2) 8,123 594 11,721 7,437 544 9,916
ICG Trio
Co-Investment(1) 16,980 38 7,016 7,521 36 6,873
ICG Match
Co-Investment(2) 10,557 132 18,608 7,437 121 20,137
ICG Vanadium
Co-Investment 13,226 259 12,968 -- -- --
ICG Crown
Co-Investment 4,058 176 3,882 -- -- --
CX VIII
Co-Investment 8,818 176 8,642 -- -- --
ICG Newton
Co-Investment 12,812 393 14,175 -- -- --
ICG EOS Loan Fund I
Ltd 1,771 -- 6 -- -- --
ICG Topvita
Co-Investment 16,165 724 3 -- -- --
ICG Holiday
Co-Investor I 2,336 296 2,040 -- -- --
ICG Holiday
Co-Investor II 1,723 205 1,517 -- -- --
Total 562,542 179,560 410,346 456,161 150,465 272,338
------------------- ------------------- ----------- --------------------- ------------------- ----------- ---------------------
1. Euro denominated positions translated to sterling at spot rate on 31
January 2023 and 31 January 2022.
2. US dollar denominated positions translated to sterling at spot rate on 31
January 2023 and 31 January 2022.
At the balance sheet date the Company has fully funded its share
of capital calls due to ICG-managed funds in which it is
invested.
19 POST BALANCE SHEET EVENTS
There have been no material events since the balance sheet
date.
GLOSSARY
Term Short form Definition
--------------------------------- --------------
Alternative Performance Measures are a term defined
by the European Securities and Markets Authority as
"financial measures of historical or future performance,
financial position, or cash flows, other than a financial
measure defined or specified in the applicable financial
reporting framework".
APMs are used in this report if considered by the
Board and the Manager to be the most relevant basis
for shareholders in assessing the overall performance
of the Company and for comparing the performance of
the Company to its peers, taking into account industry
practice.
Definitions and reconciliations to IFRS measures are
provided in the main body of the report or in this
Alternative Performance Measures APMs Glossary, where appropriate.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Carried interest is equivalent to a performance fee.
This represents a share of the profits that will accrue
to the underlying private equity managers, after achievement
Carried interest of an agreed Preferred Return.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Cash drag is the negative impact on performance arising
as a result of the allocation of a portion of the
Cash drag entity's assets to cash.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Co-investment is a Direct Investments in a company
Co-investment alongside a private equity fund.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Co-investment Incentive Scheme Accrual represents
the estimated value of interests in the Co-investment
Co-investment Incentive Scheme Incentive Scheme operated by the subsidiary partnerships
Accrual of the Company.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Commitment represents the amount of capital that each
investor agrees to contribute to a fund or a specific
Commitment investment.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Deployment Please see 'Total new investment'.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
An investment in a portfolio company held directly,
not through a private equity fund. Direct Investments
are typically co-investments with a private equity
Direct Investments fund.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Discount arises when the Company's shares trade at
a price below the Company's NAV per Share. In this
circumstance, the price that an investor pays or receives
for a share would be less than the value attributable
to it by reference to the underlying assets. The Discount
is the difference between the share price and the
NAV, expressed as a percentage of the NAV. For example,
if the NAV was 100p and the share price was 90p, the
Discount Discount would be 10%.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Drawdowns are amounts invested by the Company when
called by underlying managers in respect of an existing
Drawdowns Commitment.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Stands for earnings before interest, tax, depreciation
and amortisation, which is a widely used performance
EBITDA measure in the private equity industry.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Enterprise Value is the aggregate value of a company's
Enterprise Value EV entire issued share capital and Net Debt.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
The Exclusion List defines the business activities
Exclusion List which are excluded from investment.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
The change in the level of the FTSE All-Share Index,
assuming that dividends are re- invested on the day
FTSE All-Share Index Total Return that they are paid.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Full Exits are exit events (e.g., trade sale, sale
by public offering, or sale to a financial buyer)
following which the residual exposure to an underlying
company is zero or immaterial; this does not include
Full Exits Fund Disposals. See 'Fund Disposals'.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Fund Disposals are where the Company receives sales
proceeds from the full or partial sale of a fund position
Fund Disposals within the secondary market.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
The General Partner is the entity managing a private
General Partner GP equity fund. This is commonly referred to as the manager.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Hedging is an investment technique designed to offset
a potential loss on one investment by purchasing a
second investment that is expected to perform in the
Hedging opposite way.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
An Initial Public Offering is an offering by a company
of its share capital to the public with a view to
seeking an admission of its shares to a recognised
Initial Public Offering IPO stock exchange.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Internal Rate of Return is a measure of the rate of
return received by an investor in a fund. It is calculated
from cash drawn from and returned to the investor,
Internal Rate of Return IRR together with the residual value of the investment.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Investment Period is the period in which funds are
able to make new investments under the terms of their
fund agreements, typically up to five years after
Investment Period the initial Commitment.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Last Twelve Months refers to the timeframe of the
immediately preceding 12 months in reference to financial
Last Twelve Months LTM metrics used to evaluate the Company's performance.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
The Limited Partner is an institution or individual
who commits capital to a private equity fund established
as a Limited Partnership. These funds are generally
protected from legal actions and any losses beyond
Limited Partner LP the original investment.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
A Limited Partnership includes one or more General
Partners, who have responsibility for managing the
business of the partnership and have unlimited liability,
and one or more Limited Partners, who do not participate
in the operation of the partnership and whose liability
is ordinarily capped at their capital and loan contribution
to the partnership. In typical fund structures, the
General Partner receives a priority share ahead of
Limited Partnership distributions to Limited Partners.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Net Asset Value per Share is the value of the Company's
net assets attributable to one Ordinary share. It
is calculated by dividing 'shareholders' funds' by
the total number of ordinary shares in issue. Shareholders'
funds are calculated by deducting current and long-term
liabilities, and any provision for liabilities and
Net Asset Value per Share NAV per Share charges, from the Company's total assets.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Net Asset Value per Share Total Return is the change
in the Company's Net Asset Value per Share, assuming
Net Asset Value per Share Total that dividends are re- invested at the end of the
Return quarter in which the dividend was paid.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Net cash/debt is calculated as net debt / (cash) divided
by the NAV. It is a measure of financial leverage.
A negative percentage indicates the Company has a
Net cash/debt net cash position.
-----------------------------------------------------------------------------------------------------------
Net Debt is calculated as the total short-term and
Net Debt long-term debt in a business, less cash and cash equivalents.
--------------------------------- -------------- -----------------------------------------------------------------------------------------------------------
Ongoing Charges are calculated in line with guidance
issued by the Association of Investment Companies
('AIC') and capture management fees and expenses,
excluding finance costs, incurred at the Company level
only. The calculation does not include the expenses
Ongoing charges and management fees incurred by any underlying funds.
31 January Total per income statement Amount excluded from AIC Ongoing Charges Included Ongoing Charges
2023 GBP'000 GBP'000 GBP000
Management fees 17,030 -- 17,030
General expenses 1,955 98 1,857
Finance costs 4,316 4,316 --
Total 23,300 4,414 18,887
------------------------------------------------------------ -------------------------- ---------------------------------------- ------------------------
Total Ongoing Charges 18,887
---------------------------------------------------------------------------------------------------------------------------------- ------------------------
Average NAV 1,272,342
---------------------------------------------------------------------------------------------------------------------------------- ------------------------
Ongoing Charges as % of NAV 1.48 %
---------------------------------------------------------------------------------------------------------------------------------- ------------------------
31 January Total per income statement Amount excluded from AIC Ongoing Charges Included Ongoing Charges
2022 GBP'000 GBP'000 GBP000
Management fees 13,417 -- 13,417
General expenses 2,082 491 1,591
Finance costs 2,565 2,565 --
------------------------------------------------------------ -------------------------- ---------------------------------------- ------------------------
Total 18,064 3,056 15,008
------------------------------------------------------------ -------------------------- ---------------------------------------- ------------------------
Total Ongoing Charges 15,008
---------------------------------------------------------------------------------------------------------------------------------- ------------------------
Average NAV 1,070,494
---------------------------------------------------------------------------------------------------------------------------------- ------------------------
Ongoing Charges as % of NAV 1.40 %
---------------------------------------------------------------------------------------------------------------------------------- ------------------------
Other Net Liabilities Other Net Liabilities at the aggregated Company level
represent net other liabilities per the Company's
balance sheet. Net other liabilities per the balance
sheet of the subsidiaries include amounts payable
under the Co-investment Incentive Scheme Accrual.
------------------------------------------------- ----------------------------------------------------------------------------------------------------------
Overcommitment Overcommitment refers to where private equity fund
investors make Commitments exceeding the amount of
cash immediately available for investment. When determining
the appropriate level of Overcommitment, careful consideration
needs to be given to the rate at which Commitments
might be drawn down, and the rate at which realisations
will generate cash from the existing Portfolio to
fund new investment.
------------------------------------------------- ----------------------------------------------------------------------------------------------------------
Portfolio represents the aggregate of the investment
Portfolios of the Company and of its subsidiary Limited
Partnerships. This APM is consistent with the commentary
in previous annual and interim reports. The Board
and the Manager consider that disclosing our Portfolio
assists shareholders in understanding the value and
performance of the underlying investments selected
by the Manager. It is shown before the Co-investment
Incentive Scheme Accrual to avoid being distorted
by certain funds and Investments on which ICG Enterprise
Trust Plc does not incur these costs (for example,
on funds managed by ICG plc). Portfolio is related
to the NAV, which is the value attributed to our shareholders,
and which also incorporates the Co-investment Incentive
Scheme Accrual as well as the value of cash and debt
retained on our balance sheet.
The value of the Portfolio at 31 January 2023 is GBP1,406.4m
Portfolio (31 January 2022: GBP1,172.2m).
Co-investment
IFRS Balance sheet fair Incentive
31 January 2023 GBPm value Net assets of subsidiary limited partnerships Scheme Accrual Total Company and subsidiary Limited Partnership
-------------------------- ---------------------------- -------------------------------------------------------- --------------- ------------------------------------------------
Investments(1) 1,349.1 (0.8) 58.1 1,406.4
Cash 20.7 20.7
Other Net Liabilities (69.2) 0.8 (58.1) (126.5)
------------------------------------- ---------------------------- -------------------------------------------------------- --------------- ------------------------------------------------
Net assets 1,300.6 1,300.6
------------------------------------- ---------------------------- -------------------------------------------------------- --------------- ------------------------------------------------
Co-investment
IFRS Balance sheet fair Incentive
31 January 2022 GBPm value Balances receivable from subsidiary Limited Partnerships Scheme Accrual Total Company and subsidiary Limited Partnership
-------------------------- ---------------------------- -------------------------------------------------------- --------------- ------------------------------------------------
Investments(1) 1,123.7 (0.6) 49.1 1,172.2
Cash 41.3 41.3
Other Net Liabilities (7.1) 0.6 (49.1) (55.6)
------------------------------------- ---------------------------- -------------------------------------------------------- --------------- ------------------------------------------------
Net assets 1,157.9 1,157.9
------------------------------------- ---------------------------- -------------------------------------------------------- --------------- ------------------------------------------------
(1) Investments as reported on the IFRS balance sheet
at fair value comprise the total of assets held by
the Company and the net asset value of the Company's
investments in the subsidiary Limited Partnerships.
---------- -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Portfolio Portfolio Return on a Local Currency Basis represents
Return on the change in the valuation of the Company's Portfolio
a Local before the impact of currency movements and Co-investment
Currency Incentive Scheme Accrual. The Portfolio return of
Basis 10.5% is calculated as follows:
January 31,
GBPm 2023 January 31, 2022
-------------------------------------------------------- -------------------------------------------------------- --------------- ------------------------------------------------
Income, gains and losses on Investments 190.0 245.5
Foreign exchange gains and losses included in gains
and losses on investments (76.4) 17.2
Incentive accrual valuation movement 9.0 16.7
------------------------------------------------------------------- -------------------------------------------------------- --------------- ------------------------------------------------
Total gains on Portfolio investments excluding impact
of foreign exchange 122.6 279.4
------------------------------------------------------------------- -------------------------------------------------------- --------------- ------------------------------------------------
Opening Portfolio valuation 1,172.2 949.2
------------------------------------------------------------------- -------------------------------------------------------- --------------- ------------------------------------------------
Portfolio Return on a Local Currency Basis 10.5 % 29.4 %
------------------------------------------------------------------- -------------------------------------------------------- --------------- ------------------------------------------------
Short
Term form Definition
------------------------------------------- ------
A reconciliation between the Portfolio Return on Local
Portfolio Return on a Local Currency Basis Currency Basis and NAV per Share Total Return is disclosed
(continued) under 'Total Return'.
------------------------------------------- ------ ----------------------------------------------------------------------------------
Portfolio Company refers to an individual company
Portfolio Company in an investment portfolio.
------------------------------------------- ------ ----------------------------------------------------------------------------------
Preferred Return is the preferential rate of return
on an individual investment or a portfolio of investments,
Preferred Return which is typically 8% per annum.
------------------------------------------- ------ ----------------------------------------------------------------------------------
Premium occurs when the share price is higher than
the NAV and investors would therefore be paying more
than the value attributable to the shares by reference
Premium to the underlying assets.
------------------------------------------- ------ ----------------------------------------------------------------------------------
A Quoted Company is any company whose shares are listed
Quoted Company or traded on a recognised stock exchange.
------------------------------------------- ------ ----------------------------------------------------------------------------------
Realisation Proceeds are amounts received in respect
of underlying realisation activity from the Portfolio
and exclude any inflows from the sale of fund positions
Realisation Proceeds via the secondary market.
------------------------------------------- ------ ----------------------------------------------------------------------------------
Realisations - Multiple to Cost is the average return
from Full Exits from the Portfolio in the period on
Realisations - Multiple to Cost a primary investment basis, weighted by cost.
31
January 31 January
GBPm 2023 2022
------------------------------------------------------ ----- ------- ----------
Realisation Proceeds from Full Exits in the year-to-date 133.2 211.5
Cost 50.1 108.1
------------------------------------------------------------- ------------------------------------------------- ------- ----------
Average return Multiple to Cost 2.7x 2.6x
------------------------------------------- ------ ====================================================== ===== ======= ==========
Realisations -- Uplift To Carrying Value is the aggregate
uplift on Full exits from the Portfolio in the period
excluding publicly listed companies that were exited
Realisations -- Uplift To Carrying Value via sell downs of their shares.
31
January 31 January
GBPm 2023 2022
------------------------------------------------------ ----- ------- ----------
Realisation Proceeds from Full Exits in the year-to-date 133.2 210.5
Prior Carrying Value (at previous quarterly valuation
prior to exit) 107.5 154.4
------------------------------------------------------------- ------------------------------------------------- ------- ----------
Realisations -- Uplift To Carrying Value 23.9% 36.3%
------------------------------------------------------------- ------------------------------------------------- ------- ----------
Secondary Investments occur when existing private
equity fund interests and Commitments are purchased
Secondary Investments from an investor seeking liquidity.
------------------------------------------- ------ ----------------------------------------------------------------------------------
Share Price Total Return is the change in the Company's
share price, assuming that dividends are re-invested
Share Price Total Return on the day that they are paid.
------------------------------------------- ------ ----------------------------------------------------------------------------------
Total New Investment is the total of direct Co-investment
and fund investment Drawdowns in respect of the Portfolio.
In accordance with IFRS 10, the Company's subsidiaries
are deemed to be investment entities and are included
in subsidiary investments within the financial statements.
Movements in the cash flow statement within the financial
statements reconcile to the movement in the Portfolio
Total New Investment as follows:
31
January 31 January
GBPm 2023 2022
------------------------------------------------------ ----- ------- ----------
Purchase of Portfolio investments per cash flow statement 62.2 75.1
Purchase of Portfolio investments within subsidiary
investments 225.0 228.8
------------------------------------------------------------- ------------------------------------------------- ------- ----------
Total New Investment 287.2 303.7
------------------------------------------------------------- ------------------------------------------------- ------- ----------
Short
Term form Definition
------------ ------
Total Proceeds are amounts received by the Company
in respect of the Portfolio, which may be in the form
of capital proceeds or income such as interest or
dividends. In accordance with IFRS 10, the Company's
subsidiaries are deemed to be investment entities
Total and are included in subsidiary investments within
Proceeds the financial statements.
GBPm 31 January 2023 31 January 2022
------------------------------------------------------ --------------- -------------- --------------- ---------------
Sale of Portfolio investments per cash flow statement 32.1 101.0
Sale of Portfolio investments, interest received,
and dividends received within subsidiary investments 217.7 236.4
Interest income per cash flow statement 1.8 2.0
Dividend income per cash flow statement 0.4 1.6
-------------------------------------------------------------------------- --------------- -------------- --------------- ---------------
Total Proceeds 252.0 342.9
-------------------------------------------------------------------------- --------------- -------------- --------------- ---------------
Fund Disposals -- 9.4
-------------------------------------------------------------------------- --------------- -------------- --------------- ---------------
Realisation Proceeds 252.0 333.5
-------------------------------------------------------------------------- --------------- -------------- --------------- ---------------
Total Return is a performance measure that assumes
the notional re-investment of dividends. This is a
measure commonly used by the listed private equity
Total Return sector and listed companies in general.
The table below sets out the share price and the Net
Asset Value per Share growth figures for periods of
one, three, five and ten years to the balance sheet
date on an annualised Total Return basis:
Total Return performance in years to 31 July 2022
(annualised) 1 year 3 years 5 years 10 years
------------------------------------------------------ --------------- -------------- --------------- ---------------
Net Asset Value per Share 14.4 % 20.3 % 16.8 % 13.8 %
-------------------------------------------------------------------------- --------------- -------------- --------------- ---------------
Share price (2.3) % 8.5 % 9.7 % 11.6 %
FTSE All-Share Index 5.2 % 5.0 % 4.2 % 6.3 %
-------------------------------------------------------------------------- --------------- -------------- --------------- ---------------
The table below shows the breakdown of the one-year
Net Asset Value per Share Total Return for the period:
Change in NAV (% of opening NAV) 31 January 2023 31 January 2022
------------------------------------------------------ --------------- -------------- --------------- ---------------
Portfolio Return on a Local Currency Basis 10.5 % 29.4 %
Currency movements on the Portfolio 6.5 % (1.8) %
-------------------------------------------------------------------------- --------------- -------------- --------------- ---------------
Portfolio return in sterling 17.0 % 27.6 %
Impact of (net cash)/net debt 0.2 % (0.1) %
-------------------------------------------------------------------------- --------------- -------------- --------------- ---------------
Impact of net portfolio movement on net asset value 17.2 % 27.5 %
Expenses and other income (1.8) % (1.5) %
Incentive accrual valuation movement (1.2) % (1.8) %
-------------------------------------------------------------------------- --------------- -------------- --------------- ---------------
Increase in Net Asset Value per Share before buy backs 14.2 % 24.2 %
Impact of share buy backs & dividend reinvestment 0.3 % 0.2 %
-------------------------------------------------------------------------- --------------- -------------- --------------- ---------------
Net Asset Value per Share Total Return 14.5 % 24.4 %
-------------------------------------------------------------------------- --------------- -------------- --------------- ---------------
Undrawn Commitments Undrawn Commitments are Commitments that have not
yet been drawn down (please see 'Drawdowns').
-------------------- ------------------------------------------------------------------------------------------------------------------------
Unquoted Company An Unquoted Company is any company whose shares are
not listed or traded on a recognised stock exchange.
-------------------- ------------------------------------------------------------------------------------------------------------------------
Valuation Date The date of the valuation report issued by the underlying
manager.
-------------------- ------------------------------------------------------------------------------------------------------------------------
Valuation Multiples Valuation Multiples are earnings (EBITDA), or revenue
multiples applied in determining the value of a business
enterprise.
-------------------- ------------------------------------------------------------------------------------------------------------------------
(1) From 1 February 2023 up to and including 2 May 2023
(END) Dow Jones Newswires
May 11, 2023 02:00 ET (06:00 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
Icg Enterprise (LSE:ICGT)
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