ICG Enterprise Trust Icg Enterprise Trust Plc: Quarterly Update For The 3 Months To 30 April 2020
17 Junio 2020 - 08:00AM
UK Regulatory
TIDMICGT
17 June 2020
ICG Enterprise Trust Plc
Quarterly Update
For the 3 months to 30 April 2020
FOCUS ON DEFENSIVE GROWTH DRIVES RESILIENT PERFORMANCE IN THE QUARTER
Highlights
-- NAV per share of 1,100p; a total return of -4.1%
-- Investment portfolio return of -3.8%
-- Resilient performance reflects our focus on defensive growth
-- Q1 dividend declared of 5.0p
Business review
Resilient performance with single digit decline in Portfolio valuation
-- Investment Portfolio valued at GBP774m1
-- Return of -3.8% on the Investment Portfolio; -7.0% in local
currency
-- High conviction investments (42% of Portfolio).
-- Underlying fall in local currency valuations of less than
3%
-- Significant bias to defensive sectors or investments that
benefit from structural downside protection
-- Top 30 companies (46% of Portfolio) weighted towards high
conviction investments
-- A number of the Top 30 investments are continuing to trade
well
-- Third party funds portfolio (58% of Portfolio)
-- Underlying fall in local currency valuation of 10%
-- Portfolio is focused on top tier managers in the mid-market
and large segment of the market.
-- Portfolio performance during the first quarter of the year is
encouraging given the sharp decline seen in public markets
-- We anticipate the impact from COVID-19 on global economic
activity and on company valuations will continue to weigh
on valuations in the coming months
Portfolio is well positioned in current environment
-- The majority of Portfolio falls into a low to moderate range when
assessing the impact of COVID-19
-- Detailed assessment covered 84% of the Portfolio and is based on
discussions we with the underlying managers and a review of recent
financial performance and liquidity of the underlying companies
-- Portfolio is well balanced across a range of developed markets and
has large exposures to more resilient sectors such as healthcare
and education (24%), business services (14%) and technology (15%).
-- Exposure to Industrials (15%) and Consumer (16%) sectors with
higher potential impact of COVID-19, is concentrated in 'High
Conviction' investments with defensive characteristics and in a
number of cases, structural downside protection.
-- Limited exposure to energy and financials
-- We continue to closely monitor the impact of global macroeconomic
events on our Portfolio and are in regular contact with our third
party managers and colleagues at ICG
-- 10 full realisations in the quarter with GBP34m of proceeds received (4%
of opening portfolio value).
-- Majority of the proceeds derived from transactions agreed before
the impact of the COVID-19 pandemic had become apparent
-- Full realisations were at a 7% uplift to carrying value and at an
average of a 2.1x multiple of cost
-- Largest realisation was French vinyl floor manufacturer,
Gerflor, from ICG funds, generating total proceeds in the
period of GBP6m
-- GBP5m received from the completion of a secondary sale at a
premium to the underlying manager's valuation
-- We continue to actively manage the Portfolio, drawing on the
team's significant expertise in the secondary market
Continued cash generation and uplifts
Selective new commitments
-- GBP32m of new investments in the quarter
-- All new investment cashflows related to drawdowns on existing
commitments with no new co-investment or secondary activity
-- GBP13m new primary commitments to two funds in the quarter
-- EUR10m (GBP9m) commitment to Apax X, a global buyout fund, focused
on the Technology & Telecoms, Services, Healthcare, and Consumer
sectors
-- $5m (GBP4m) commitment to Hg Saturn 2, a fund managed by Hg
Capital.
Signs of slowdown in activity since quarter end(2)
-- Further GBP5m of proceeds received since the quarter end and GBP1m of new
investment, both significantly below the trend observed in recent years.
-- We believe that the level of drawdowns and new realisations are
likely to remain low over the next 3-6 months before returning to
a normal pace as economic activity begins to recover
The balance sheet remains robust
-- Closing net asset value of GBP757m; investment Portfolio represents 102%
of net asset value
-- During the quarter GBP40m was drawn down from the bank facility as a
precautionary short term liquidity measure
-- Gross cash balance of GBP49m (GBP9m cash, GBP40m drawn from facility);
uncalled commitments of GBP451m
-- GBP164m total liquidity (including GBP40m drawn and GBP115m
undrawn bank facility)
-- GBP91m of commitments outside their investment periods.
Q1 dividend of 5.0p
-- Q1 interim quarterly dividend of 5.0p declared
-- Maintained at Q1 2019 level
-- Will be paid 4 September 2020
-- The ex-dividend date will be 13 August 2020 and the record date 14
August 2020
Significant outperformance of public markets over the medium and long
term
-- The Company continues out-performed the FTSE All Share Index over 1,3, 5
and 10 years in terms of both its NAV growth and share price growth.
Performance to 30 April 3 months 1 year 3 years 5 years 10* years
-------------------------- -------- ------ ------- ------- ---------
Net asset value per share
(TR) -4.1% +5.0% +34.1% +76.7% +177.9%
Share price (TR) -23.4% -14.3% +8.1% +46.7% +181.8%
FTSE All-Share Index (TR) -18.8% -16.7% -7.5% +4.8% +61.1%
--------------------------- -------- ------ ------- ------- ---------
* As the Company changed its year end in 2010, the 10-year figures are
for the 121 month period to 30 April 2020.
Oliver Gardey, Head of Private Equity Fund Investments, ICG, commented:
"We are encouraged by the resilience shown by the Portfolio in the first
quarter of the year, with the majority of our portfolio companies
expected to experience only short term headwinds or to be minimally
impacted by the COVID-19 pandemic and its economic fallout. We note a
number of our portfolio companies are performing well as their business
models have adapted to current market conditions. We are also seeing the
benefits of the private equity model in more challenged investments,
where the ability to react quickly and decisively to the changing
economic environment is now more vital than ever.
Our investment approach means that we have built a Portfolio that is
focused almost exclusively on buy-outs in developed markets and has
minimal exposure to early stage investments or sectors such as
financials and energy. Our focus on top tier managers with experience of
managing through cycles gives the portfolio access to strong in-house
operating capabilities and dedicated support in areas such as managing
liquidity and financing, which we believe means they are well placed to
manage through current market volatility.
We are pleased with the seamless transition of our team's remote working
capabilities which has allowed our business operations to continue
uninterrupted during these challenging times; our staff are the most
important part of the business and we are still taking the necessary
actions to protect them. Having navigated the initial stages of the
crisis, our focus is on actively managing the Portfolio and remaining
nimble. While in the short term, we do not expect to see significant new
investment activity, when markets stabilise we are well placed to
benefit from more favourable entry valuations and take advantage of the
opportunities as they arise"
Enquiries Analyst / Investor enquiries: +44 (0) 20 3201 7700
Oliver Gardey, Head of Private Equity Fund Investments, ICG
Colm Walsh, Managing Director, ICG
Ian Stanlake, Investor Relations, ICG
Media:
Alicia Wyllie, Co-Head of Corporate Communications, ICG +44 (0) 20
3201 7994
Ed Gascoigne Pees, Eddie Livingstone-Learmonth, Camarco +44 (0) 20 3757
4993
Disclaimer
This report may contain forward looking statements. These statements
have been made by the Directors in good faith based on the information
available to them up to the time of their approval of this report and
should be treated with caution due to the inherent uncertainties,
including both economic and business risk factors, underlying such
forward-looking information. These written materials are not an offer of
securities for sale in the United States. Securities may not be offered
or sold in the United States absent registration under the US Securities
Act of 1933, as amended, or an exemption therefrom. The issuer has not
and does not intend to register any securities under the US Securities
Act of 1933, as amended, and does not intend to offer any securities to
the public in the United States. No money, securities or other
consideration from any person inside the United States is being
solicited and, if sent in response to the information contained in these
written materials, will not be accepted.
Supplementary information
The 30 largest underlying investments
The table below presents the 30 companies in which ICG Enterprise had
the largest investments by value at 30 April 2020. These investments may
be held directly or through funds, or in some cases in both ways. The
valuations are gross and are shown as a percentage of the total
investment Portfolio.
Value as
Year of a % of
Company Manager investment Country Portfolio
------------------------------------------------------------ ---------- ------------ ------------ ---------
1 DomusVi +
Operator of retirement homes ICG 2017 France 3.9%
2 PetSmart +
BC
Retailer of pet products and services Partners 2015 USA 3.4%
3 Minimax +
Supplier of fire protection systems and services ICG 2018 Germany 3.0%
4 City & County Healthcare Group
Graphite
Provider of home care services Capital 2013 UK 2.6%
5 Leaf Home Solutions
Provider of gutter protection solutions Gridiron 2016 USA 2.5%
6 Roompot +
PAI
Operator and developer of holiday parks Partners 2016 Netherlands 2.1%
7 Yudo +
Manufacturer of components for injection moulding ICG 2018 Hong Kong 1.9%
8 Visma +
Provider of accounting software and accounting outsourcing
services ICG 2017 Norway 1.9%
9 Doc Generici +
Retailer of pharmaceutical products ICG 2019 Italy 1.8%
10 Supporting Education Group +^
Provider of temporary staff for the education sector ICG 2014 UK 1.8%
11 Froneri^
PAI
Manufacturer and distributor of ice cream products Partners 2019 UK 1.8%
12 IRI +
Provider of data and predictive analytics to consumer New
goods manufacturers Mountain 2018 USA 1.5%
13 System One +
Thomas H
Lee
Provider of specialty workforce solutions Partners 2016 USA 1.5%
14 Endeavor Schools +
Leeds
Equity
Operator of schools Partners 2018 USA 1.4%
15 nGAGE
Graphite
Provider of recruitment services Capital 2014 UK 1.3%
16 Beck & Pollitzer
Provider of industrial machinery installation and Graphite
relocation Capital 2016 UK 1.2%
17 Berlin Packaging +
Oak Hill
Capital
Provider of global packaging services and supplies Partners 2019 USA 1.2%
18 YSC
Provider of leadership consulting and management assessment Graphite
services Capital 2017 UK 1.2%
19 ICR Group
Provider of repair and maintenance services to the Graphite
energy industry Capital 2014 UK 1.2%
20 VitalSmarts +
Leeds
Provider of corporate training courses focused on Equity
communication skills and leadership development Partners 2019 USA 1.1%
21 U-POL^
Manufacturer and distributor of automotive refinishing Graphite
products Capital 2010 UK 1.0%
22 PSB Academy +
Provider of private tertiary education ICG 2018 Singapore 1.0%
23 Compass Community
Provider of fostering services and children residential Graphite
care Capital 2017 UK 0.9%
24 David Lloyd Leisure +
TDR
Operator of premium health clubs Capital 2013 UK 0.8%
25 Cognito +^
Graphite
Supplier of communications equipment, software & services Capital 2002 & 2014 UK 0.7%
26 EG Group
TDR
Operator of petrol station forecourts Capital 2014 UK 0.7%
27 Alerian^
Provider of data and investment products focused on
natural resources ICG 2018 USA 0.7%
28 TeamViewer
Provider of secure remote support and online meeting
software Permira 2014 Germany 0.6%
29 RegEd +
Provider of regulatory compliance and management software Gryphon
products Investors 2019 USA 0.6%
30 Ceridian +
Thomas H
Lee
Provider of payroll and human capital software Partners 2007 USA 0.6%
------------------------------------------------------------ ---------- ---------------- ---------
Total of the 30 largest underlying investments 45.9%
---------------------------------------------------------------------------------------------------- ---------
All or part of this investment is held directly as
a co-investment or other direct investment.
^ All or part of this investment was acquired as part
of a secondary purchase.
The 30 largest fund investments
The 30 largest funds by value at 30 April 2020 are:
Outstanding
Year of Value commitment
Fund commitment Country/ region GBPm GBPm
------------------------- ----------------- ------------------- ----- -----------
Graphite Capital Partners
1 VIII *
Mid-market buyouts 2013 UK 69.3 14.7
2 Gridiron Capital Fund III
Mid-market buyouts 2016 North America 24.6 4.5
CVC European Equity
3 Partners VI
Large buyouts 2013 Europe/USA 18.5 3.0
4 ICG Europe VI **
Mezzanine and equity in
mid-market buyouts 2015 Europe 18.2 3.4
5 ICG Europe VII
Mezzanine and equity in
mid-market buyouts 2018 Europe 15.9 21.3
Thomas H Lee Equity Fund
6 VII
Mid-market and large
buyouts 2015 USA 15.9 1.6
ICG Strategic Secondaries
7 Fund II
Secondary fund
restructurings 2016 Europe/USA 15.7 14.6
8 BC European Capital IX **
Large buyouts 2011 Europe/USA 15.6 1.5
9 PAI Europe VI
Mid-market and large
buyouts 2013 Europe 15.3 1.6
PAI Strategic
10 Partnerships **
Mid-market and large
buyouts 2019 Europe 14.9 1.6
11 Sixth Cinven Fund
Large buyouts 2016 Europe 13.9 4.3
Graphite Capital Partners
12 VII * / **
Mid-market buyouts 2007 UK 13.7 2.8
Advent Global Private
13 Equity VIII
Large buyouts 2016 Europe/USA 13.1 0.9
14 Silverfleet II
Mid-market buyouts 2014 Europe 13.1 1.0
15 One Equity Partners VI
Mid-market buyouts 2016 Europe/USA 11.7 0.9
16 BC European Capital X
Large buyouts 2016 Europe 11.5 2.1
17 Permira V
Large buyouts 2013 Europe/USA 11.3 0.9
18 TDR Capital III
Mid-market and large
buyouts 2013 Europe 10.5 1.6
CVC European Equity
19 Partners VII
Large buyouts 2017 Europe/North America 10.4 10.4
20 Gryphon V
Mid-market buyouts 2019 North America 10.4 2.1
21 ICG Asia Pacific Fund III
Mezzanine and equity in
midmarket buyouts 2016 Asia Pacific 10.1 2.8
22 Resolute II **
Mid-market buyouts 2018 USA 9.5 1.9
23 Activa Capital Fund III
Mid-market buyouts 2013 France 9.2 0.9
Oak Hill Capital Partners
24 IV
Mid-market buyouts 2017 USA 8.7 2.8
25 New Mountain Partners V
Mid-market buyouts 2017 North America 8.7 3.8
26 IK VIII
Mid-market buyouts 2016 Europe 8.4 0.8
27 Permira VI
Large buyouts 2016 Europe 8.1 0.9
28 Resolute IV
Mid-market buyouts 2018 USA 7.8 5.6
29 Bain Capital Europe IV
Mid-market buyouts 2014 Europe 7.5 0.6
Charterhouse Capital
30 Partners X
Large buyouts 2015 Europe 7.5 5.9
Total of the largest 30 fund investments 429.0 120.8
Percentage of total investment Portfolio 55.4%
----------------------------------------------------------------- ----- -----------
* Includes the associated Top Up funds.
** All or part of an interest acquired through a secondary
fund purchase.
Portfolio analysis
All balance sheet data is presented on a look-through basis to the
investment portfolio held by the Company, which is consistent with the
commentary in previous annual and interim reports
Investment category % of portfolio
---------------------------------- --------------
High conviction portfolio
ICG 22.9%
Third party co-investments 14.1%
Third party secondary investments 5.2%
Total High Conviction investments 42.2%
Third party primary funds 57.8%
---------------------------------- --------------
Total 100.0%
---------------------------------- --------------
Portfolio by investment type % of value of underlying investments
-------------------------------------------- --------------------------------------
Large buyouts 47.0%
Mid-market buyouts 40.0%
Small buyouts 10.3%
Other 2.7%
-------------------------------------------- --------------------------------------
Total 100.0%
-------------------------------------------- --------------------------------------
Portfolio by calendar year of investment % of value of underlying investments
-------------------------------------------- ----------------------------------------
2020 1.8%
2019 19.5%
2018 20.3%
2017 18.6%
2016 14.7%
2015 7.4%
2014 8.2%
2013 5.0%
2012 1.3%
2011 0.1%
2010 1.4%
2009 0.6%
2008 0.0%
2007 0.8%
2006 and before 0.3%
-------------------------------------------- ----------------------------------------
Total 100.0%
-------------------------------------------- ----------------------------------------
Portfolio by sector % of value of underlying investments
---------------------------- ------------------------------------
Healthcare and education 23.9%
Consumer goods and services 15.8%
TMT 14.7%
Industrials 14.5%
Business Services 14.3%
Leisure 6.6%
Financials 6.0%
Other 4.2%
Total 100.0%
----------------------------- ------------------------------------
Portfolio by geographic distribution based on location
of Company headquarters % of value of underlying investments
Europe 36.0%
North America 32.3%
UK 24.8%
Rest of world 6.9%
-------------------------------------------------------- --------------------------------------
Total 100.0%
-------------------------------------------------------- --------------------------------------
Balance sheet information
The summary balance sheet at 30 April 2020 is set out below.
31 January
30 April 2020 2020
-------------- --------------
% of net % of net
GBPm assets GBPm assets
--------------- ------------- -------------- -------------- --------------
Total portfolio 773.9 102.3% 806.4 101.6%
Cash and liquid
assets 48.9 6.5% 14.5 1.8%
Bank facility
repayable (40.0) (5.3)% 0.0 0.0%
Other net
current
liabilities (26.2) (3.5%) (27.4) (3.4)%
------------- -------------- -------------- --------------
Net assets 756.6 100.0% 793.5 100.0%
Movement in the portfolio 30 April
GBPm 20
--------------------------------------------------------- --------------
Opening Portfolio* 806.4
Third-party funds portfolio drawdowns 25.9
High conviction investments -- ICG funds, secondary
investments and co-investments 6.2
--------------
Total new investment 32.1
Realisation Proceeds (33.8)
--------------
Net cash (inflow)/outflow (1.7)
Underlying Valuation Movement** (56.2)
Currency movement 25.4
Closing Portfolio* 773.9
--------------
% underlying Portfolio growth (local currency) (7.0)%
% currency movement 3.2%
--------------
% underlying Portfolio growth (Sterling) (3.8%)
--------------
** 84% of the Portfolio is valued using 31 March 2020
(or later) valuations (31 Jan 20: 95%).
Movement in liquid assets
3 months 30
GBPm April 20
---------------------------------------------------------- ------------
Additions (32.1)
Cash proceeds generated by the portfolio (including
income) 33.8
------------
Net cash generated by the investment portfolio 1.7
Drawn from credit facility 40.0
Non-investment cash flows 33.3)
Effect of changes in foreign exchange rates 0.2
------------
Cash inflow before shareholder distributions 38.6
Dividends paid to shareholders (3.4)
Share buy backs (0.8)
------------
Net cash movement 34.4
Opening cash and liquid assets 14.5
------------
Closing cash and liquid assets 48.9
Bank facility repayable (40.0)
------------
Closing net cash position 8.9
------------
Uncalled commitment coverage
30 April
2020 31 January
GBPm 2020
-----------
GBPm
----------------------------------------- ----------- --------------
Cash and liquid assets 48.9 14.5
Undrawn bank facility 114.9 147.8
----------------------------------------- ----------- --------------
Total liquidity 163.8 162.3
Outstanding commitments 451.0 458.6
Less: Total liquidity (163.8) (162.3)
----------------------------------------- ----------- --------------
Over-commitment 287.2 296.3
Over-commitment as % of net assets 38.0% 37.3%
Original Outstanding Average
Total undrawn commitment commitment drawdown % of
commitments GBP'000 GBP'000 percentage commitments
-------------- ----------- ----------- ----------- ----------------
Investment
period not
commenced - - 0.0% 0.0%
Funds in
investment
period 544,331 360,448 33.8% 79.9%
Funds post
investment
period 862,149 90,541 89.5% 20.1%
-------------- ----------- ----------- ----------- ----------------
Total 1,406,480 450,989 67.9% 100.0%
-------------- ----------- ----------- ----------- ----------------
(1) 84% of the Portfolio is valued using 31 March 2020 (or later)
valuations from underlying managers.
(2) As at 31 May 2020
(END) Dow Jones Newswires
June 17, 2020 09:00 ET (13:00 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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