Preliminary Results for the twelve months ended 31 January 2024
08/05/2024 07:00
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ICG Enterprise Trust plc
Preliminary Results for the twelve months ended 31 January 2024
8 May 2024
Portfolio companies performing strongly
Highlights * NAV per Share of 1,909p, LTM NAV per Share Total Return* of 2.1% and 5-year annualised return of 14.6%
* Portfolio companies reporting strong operational performance (1): 14.2% LTM EBITDA growth and prudent leverage of 4.6x
* FY24 Portfolio Return* on a Local Currency Basis of 5.9%; FX movements resulted in a Portfolio Return on a Sterling Basis of 3.2%
* Executed 38 Full Exits at weighted-average Uplift to Carrying Value of 29.5%
* Sustainable growth in shareholder distributions: total of £35m returned to shareholders in FY24 (2)(FY23: £22m), comprising 33p total dividends per share (+10% compared to FY23) and £13m through share buybacks. Both the progressive dividend policy and long-term share buyback programme will be maintained for the foreseeable future
* In addition the Board is implementing an opportunistic buyback programme for FY25 to take advantage of current trading levels (see page 13 for further details)
* Our investment strategy, strong relationships and well-capitalised balance sheet allow us to maintain our investment programme through cycles
1 Based on Enlarged Perimeter covering 67.5% of the Portfolio. See page 11. Earnings growth and debt multiple based on weighted-average 2 Based on dividends declared or proposed for Q1 FY24 – Q4 FY24 inclusive, and buybacks up to and including 31 January 2024 *This is an Alternative Performance Measure. Please refer to the Glossary for the definition.
Jane Tufnell Oliver Gardey
Chair of ICG Enterprise Trust Portfolio Manager for ICG Enterprise Trust
As a Board we are focused on maximising shareholder value. The ICG Enterprise Trust's investment strategy of focusing on businesses with defensive growth characteristics has resulted in our portfolio companies reporting another period of strong operating performance. This, alongside a long-term trend of executing Full Exits at an Uplift to Carrying Value, gives us continued confidence in our approach, valuations and future prospects. Against a background of slower market-wide activity, our evergreen capital structure, well-capitalised balance sheet and strong relationships are enabling us to continue to invest for future growth.
investment strategy is continuing to deliver growth, and we are
seeing tangible benefits of the revised management fee and cost
arrangements that were effective for FY24. Today we are also
announcing a new, third component to our shareholder
distributions for FY25 – an opportunistic share buyback
programme. This runs alongside our progressive dividend policy
and long-term share buyback programme, and will enable us to
take advantage of current trading levels where the opportunity
to purchase shares in meaningful size and at a significant
discount presents itself. I believe we offer shareholders an
attractive route to invest in private companies owned by some of
the world's leading managers, which should continue to generate
attractive long-term returns.
PERFORMANCE OVERVIEW
Annualised
Performance to 31 January 2024 3 months 6 months 1 year 3 years 5 years 10 years
Portfolio Return on a Local Currency Basis 1.2% 1.3% 5.9% 14.8% 17.1% 16.2%
NAV per Share Total Return (2.1)% 1.1% 2.1% 13.3% 14.6% 13.2%
Share Price Total Return 13.2% 5.8% 9.6% 11.1% 11.2% 11.0%
FTSE All-Share Index Total Return 6.2% 1.1% 1.9% 8.4% 5.5% 5.5%
Financial year ended: Jan 2020 Jan 2021 Jan 2022 Jan 2023 Jan 2024 5 year track record
Fund performance Portfolio return (local currency) 16.6% 24.9% 29.4% 10.5% 5.9% Annualised: 17.1%
Portfolio return (sterling) 14.6% 26.4% 27.6% 17.0% 3.2% Annualised: 17.4%
NAV £794m £952m £1,158m £1,301m £1,283m +£489m
NAV per Share Total Return (%) 11.2% 22.5% 24.4% 14.5% 2.1% Annualised: 14.6%
Investment activity New Investments £159m £139m £304m £287m £137m
As % opening Portfolio 23% 17% 32% 24% 10% Average: 21%
Realisation Proceeds £141m £137m £334m £252m £171m
As % opening Portfolio 20% 17% 35% 21% 12% Average: 21%
Shareholder experience Closing share price 966p 966p 1,200p 1,150p 1,226p
Total dividends per share 23p 24p 27p 30p 33p CAGR: 9.4%
Share Price Total Return 20.5% 2.8% 27.1% (2.3)% 9.6% Annualised: 11.2%
Total shareholder distributions £18m £17m £21m £22m £35m CAGR: 18.1%
As % Realisation Proceeds 12% 12% 6% 9% 20%
- o/w distributions dividends (%) 83% 94% 86% 91% 63%
- o/w distributions buybacks (%) 17% 6% 14% 9% 37%
Portfolio activity overview for FY24 Primary Direct Secondary Total ICG-managed
Local Currency return 5.3% 6.2% 7.5% 5.9% 10.9%
Sterling return 2.5% 4.1% 4.4% 3.2% 7.9%
New Investments £92m £33m £12m £137m £20m
Total Proceeds £156m £37m £45m £239m £35m
New Fund Commitments £133m — £20m £153m £42m
Closing Portfolio value £715m £394m £240m £1,349m £438m
% Total Portfolio 53% 29% 18% 100% 32%
OUTLOOK
Our base case is that we will see a measured increase in transaction activity in the coming quarters if the current economic expectations remain broadly stable. The debt financing markets, which are important drivers of private equity activity, are showing some signs of increased activity, in particular in North America. From an operational perspective, many of the companies on which we have visibility (including in the public markets) appear to be showing resilience and to be reporting continued growth.
These factors give us confidence in the outlook for our Portfolio and investment strategy.
COMPANY TIMETABLE
A presentation for investors and analysts will be held at 10:00 BST today. A
link for the presentation can be found on the Results & Reports page
(https://www.globenewswire.com/Tracker?data=iArDMAdNOJDfL56nGFlqnNNCIm1bJyEpJsFNKlRy2BtZuZ6O0ovCwkeEnLreyy2IkEcViBn9elHJxq4xEUQBmaQW3L73rRiIBRZjaX6jCoUkVKhPQ190p3cG3YDvF-ZHn2Dn2XSUYWx3bq2PvNZrcA==)
of the Company website. A recording of the presentation will be made available
on the Company website after the event.
FY24 Final Dividend
Ex-dividend date 4 July 2024
Record date 5 July 2024
Dividend payment date 19 July 2024
Annual General Meeting The Annual General Meeting will be held on 25 June 2024. 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 Shareholder Seminar We will be holding a Shareholder Seminar for institutional shareholders and research analysts on 18 June 2024, with registration and breakfast starting at 8:45AM BST. Topics include: * Navigating the private equity landscape today
shareholders may register their interest in attending the Annual General Meeting. * The environment for financing buyouts
* Secondaries and their role in a portfolio
* ICG Enterprise Trust's positioning and opportunity set
Shareholders should contact icg-enterprise@icgam.com should they wish to attend. Please note that for regulatory reasons this event is only open to institutional investors and research analysts
ENQUIRIES
Institutional investors and analysts:
Chris Hunt, Head of Shareholder Relations +44 (0) 20 3545 2000
Nathan Brown, Deutsche
Numis +44 (0) 20 7260 1426
David Harris, Cadarn Capital +44
(0) 20 7019 9042
Media:
Cat Armstrong, Corporate Communications, ICG +44 (0) 20 3545
1850
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.
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 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
Dear fellow shareholders,
ICG Enterprise Trust ended the financial year with a NAV per Share of 1,909p,
representing a NAV per Share Total Return of 2.1%. Over the last five years we
have generated an annualised NAV per Share Total Return of 14.6% and an
annualised Share Price Total Return of 11.2%. To put that in absolute terms,
if you had invested in £1,000 in ICG Enterprise Trust’s shares on 31
January 2019 and had reinvested all dividends received, your shares at 31
January 2024 would be worth approximately £1,698. Those figures are net of
all fees and expenses(1).
Our investment strategy is delivering
In the 12 months under review, your Company’s Portfolio grew in local
currency terms by 5.9%. This performance is spread across all three of our
routes to market: Primary, Direct and Secondary investments, with Direct and
Secondary investments demonstrating slight outperformance compared to Primary
investments, showing the benefit of active fund management by the dedicated
ICG Enterprise Trust investment team.
This year we had 38 Full Exits of investments, which were executed at a
weighted average Uplift to Carrying Value of 29.5%. This uplift, coupled with
the strong financial performance of the underlying companies, gives me
confidence in the carrying valuation of our Portfolio.
In a financial year which started with a regional banking crisis in the US,
persistent inflation and high interest rates, optimism returned towards the
latter stages of the period that the worst may be over. The question on many
investors’ minds now is central banks' behaviour with regard to the
direction and pace of future interest rate movements. To the extent that the
coming quarters see increased levels of transaction volumes, I believe this is
likely to provide further proof points that our valuations are supportable and
that our NAV can be relied upon by shareholders as an indicator of the value
of their investment.
Focus on shareholder value
Your Board's approach to maximising shareholder value is anchored around four
pillars, which can be grouped into two categories: i) Optimising the NAV
return; and ii) Aligning as closely as possible the shareholder experience
with the NAV return:
Optimising NAV return 1. Investment strategy : Since ICG became our Manager in 2016, we have become fully invested and have increased allocations to North America and to Secondary investments. These shifts have positively impacted the Portfolio returns, and our focus on buyouts
of companies with defensive growth characteristics – with no exposure to venture capital or growth equity – has proven its worth and role in shareholders' portfolios. Our Portfolio is generating compounding growth. We have a dedicated investment team to
execute our strategy, which we believe will continue to perform in the years ahead.
2. Cost base : We work with our Manager and other providers to ensure that costs are appropriate, and to maximise the net return of our investment strategy. Effective February 2023, we announced a cap on our management fee rate and a change to the cost
sharing arrangement with the Manager, which combined have saved shareholders approximately £1.9 million in FY24.
Aligning shareholder experience to NAV return 3. Capital allocation : We focus on the allocation of capital between new investments and distributions to shareholders. To-date we have had two mechanisms of distributing capital: a progressive dividend policy (since 2017); and, since October 2022, a long
-term share buyback programme. Since its launch and up to and including 1 May 2024, we have been in the market on more than 115 separate occasions and have returned £22 million to shareholders through buybacks. I am proud that we were early movers in
taking a deliberate, long-term approach to buybacks and am pleased with the execution so far. Today we are also announcing a new, third component to our shareholder distributions for FY25 – an opportunistic share buyback programme. See page 13 for further
details.
4. Effective messaging and shareholder engagement : In recent quarters we have significantly advanced ICG Enterprise Trust's communications through clarified messages, a new website, and enhanced disclosure on the performance of the Portfolio companies.
Today, supported by our recently-announced partnership with Cadarn Capital, we are meeting with many more current and potential shareholders. This effort is continuing, and we believe it will help generate incremental demand for our shares.
Executed effectively, these four pillars should ensure that we have an
attractive investment Portfolio; a clear NAV development; an appropriate form
of shareholder returns between capital appreciation, dividend and buybacks;
and an increasingly deep pool of investor interest.
Both the Board and employees of the Manager have significant interest in this
approach succeeding, in aggregate owning over 250,000 shares in ICG Enterprise
Trust.
Dividend FY24
The Board is proposing a final dividend of 9p per share. Together with the
three interim dividends of 8p per share, this will result in total dividends
for the year of 33p per share, representing a 10% increase on the prior year
dividends and the eleventh consecutive year of ordinary dividend per share
increases.
Looking ahead – an investment that deserves wider recognition
I thank all shareholders for your support over the past year. I have spoken to
many of you during the last few months and I am confident that our long-term
investment strategy focused on generating defensive growth has a meaningful
role to play in many investors’ portfolios.
We support the Bill to amend the regulatory requirement for cost disclosure as
led by Baroness Altmann in the House of Lords in March this year. These
legislative changes would create greater understanding of the sector and are
much needed.
As private ownership of companies continues to grow in the coming years, ICG
Enterprise Trust’s purpose – to make the private available to the public
– will be evermore valid. We enable you to invest in parts of the economy
that you cannot directly access through public markets. I believe our
investment approach will continue to generate attractive risk-adjusted returns
in the future, and our evergreen capital base combined with our dedicated
investment team and broader support of the ICG network means we have the
financial and human resources needed to execute successfully.
I look forward to working hard with my Board colleagues, the Manager and the
wider investment community to further the interests of ICG Enterprise Trust in
the coming year and beyond.
Jane Tufnell
Chair
7 May 2024
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:
IFRS (£m) 31 January 2024 31 January 2023 APM (£m) 31 January 2024 31 January 2023
Investments 1,296 1,349 Portfolio 1,349 1,406
NAV 1,283 1,301 Realisation Proceeds 171 252
Cash flows from the sale of portfolio investments 41 32 Total Proceeds 239 252
Cash flows related to the purchase of portfolio investments 25 62 Total New Investment 137 287
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
that exhibit defensive growth characteristics which we believe support strong
and resilient returns across economic cycles.
We take an active approach to portfolio construction, with a flexible mandate
that enables us to deploy capital in Primary, Secondary and Direct
investments. Geographically, we focus on the developed markets of North
America and Europe which have deep and mature private equity markets,
supported by a robust corporate governance ecosystem.
Medium-term target Five-year average 31 January 2024
1. Target Portfolio composition (1)
Investment category
Primary ~50% 57% 53%
Direct ~25% 28% 29%
Secondary ~25% 15% 18%
Geography (2)
North America ~50% 40% 42%
Europe (inc. UK) ~50% 52% 51%
Other — 8% 7%
2. Balance sheet
Net cash/(Net Debt) (3) ~0% (1)% (1)%
1 As a percentage of Portfolio; 2 As a percentage of Portfolio; 3 Net cash/(Net debt) as a percentage of NAV Note: five year average is the linear average of FY exposures for FY20 - FY24
ICG Enterprise Trust benefits from access to ICG-managed funds and ICG-managed
direct co-investments, which represented 32% of the Portfolio value at the
period end and generated a 10.9% return on a local currency basis.
The market during FY24 and its impact on ICG Enterprise Trust(2)
The private equity buyout market globally saw a year-on-year decline in the
value of investments and realisations in 2023, down 37% and 44% respectively
compared to 2022. This marks the second consecutive year of reductions, and is
the steepest decline in activity since the Global Financial Crisis. While ICG
Enterprise Trust's business activity did reduce, we continued to be cashflow
positive at the Portfolio level.
Whilst private markets fundraising overall was down in 2023, global
fundraising for buyouts (by value) was up by 18% compared to 2022. However,
there was a significant shift towards larger funds, and as a result the
average fund size increased while the number of funds raised reduced. This
meant that despite a seemingly buoyant market, it remained a difficult
fundraising environment for the vast majority of managers. This benefits LPs
such as ICG Enterprise Trust, with evergreen capital structures and
well-capitalised balance sheets, as we were able to access the highest quality
and most sought-after managers, while achieving more favourable legal terms.
Looking ahead, this will also improve our opportunity set for both direct and
secondary investments.
From a Portfolio perspective, private market valuations have continued to show
more stability than public markets, and the market-wide trend of generally
realising investments at uplifts to NAV has continued – a trend that ICG
Enterprise Trust has also observed. This is supported by the strong
operational performance our portfolio companies have reported during the year.
The combination of lower transaction activity and higher debt financing costs
has meant that we executed on our investment strategy with elevated levels of
caution during FY24. We had a particular focus on managing our balance sheet
conservatively, and reduced the number of direct investments we made,
preferring to get wider exposure to the market through primary transactions.
In environments such as these, our focus on investing in companies with
defensive growth characteristics demonstrates its value for shareholders who
are looking for long-term compounding growth.
Performance overview
At 31 January 2024, our Portfolio was valued at £1,349m, and the Portfolio
Return on a Local Currency Basis for the financial year was 5.9% (FY23:
10.5%), driven by broad-based growth across Primary, Secondary and Direct
Co-investment. The performance was impacted by a decline in the share price of
Chewy (which now represents 1.4% of our Portfolio), and the impact of the
secondary sale we undertook. Excluding these factors, we estimate the
Portfolio Return on a Local Currency Basis would have been ~8.7%.
During the period, the Portfolio value on a sterling basis decreased due to FX
movements by £39m (-2.7%), and the Portfolio Return on a Sterling Basis was
therefore 3.2%.
As part of our active approach to managing our Portfolio, we executed a
Secondary sale of certain investments that we expect to generate lower returns
in the future than the rest of the Portfolio and than we expect to achieve
from new investments. The sale generated an attractive net return of 1.8x
invested cost, and gross cash proceeds of £68m that were received in December
2023. It also reduced our undrawn commitments by £9m. The sale was executed
at a discount of 15.9%, which we estimate led to a reduction in our NAV per
Share of approximately 1%.
The net result for shareholders was that ICG Enterprise Trust generated a NAV
per Share Total Return of 2.1% during FY24, and ended the period with a NAV
per Share of 1,909p.
For Q4 the Portfolio Return on a Local Currency Basis was 1.2% and the NAV per
Share Total Return was (2.1)%, with the latter being negatively impacted by
movements in FX as well as the secondary sale executed during December 2023.
Movement in the Portfolio £m Twelve months to 31 January 2024 Twelve months to 31 January 2023
Opening Portfolio (1) 1,406 1,172
Total New Investments 137 287
Total Proceeds (239) (252)
Portfolio net cashflow (102) 35
Valuation movement (2) 83 123
Currency movement (39) 76
Closing Portfolio 1,349 1,406
% Portfolio growth (local currency) 5.9% 10.5%
% currency movement (2.7)% 6.5%
% Portfolio growth (Sterling) 3.2% 17.0%
Impact of net cash/(net debt) (0.3)% (0.2)%
Management fee and other expenses (1.4)% (1.5)%
Co-investment Incentive Scheme Accrual (0.1)% (1.2)%
Impact of share buybacks and dividend reinvestment 0.7% 0.3%
NAV per Share Total Return 2.1% 14.5%
1 Refer to the Glossary
2 94% of the Portfolio is valued using 31 December 2023 (or later) valuations
(FY23: 93%)
Executing our investment strategy
Commitments in the financial year Total New Investments in the financial year Growth in the financial year Total Proceeds in the financial year
Making commitments to funds, which expect to be drawn over 3 to 5 years Cash deployments into portfolio companies, either through funds or directly Driving growth and value creation of our portfolio companies Cash realisations of investments in Portfolio companies, plus Fund Disposals
£153m (FY23: £203m) £137m (FY23: £287m) £83m (FY23: £123m) £239m (FY23: £252m)
Commitments
In an environment where many investors are restricted in their ability to
commit new capital, our evergreen capital structure and flexible investment
mandate enables us to commit through the cycle, maintaining vintage
diversification for our Portfolio and sowing the seeds for future growth.
During the period we made 12 new fund Commitments totalling £153m, including
£42m to funds managed by ICG, as detailed below:
Fund Manager Commitment during the period
Local currency £m
ICG Mid-Market II ICG €25.0m £22.0m
ICG Strategic Equity V ICG $25.0m £20.3m
New Mountain VII New Mountain $20.0m £16.4m
Bowmark VII Bowmark £15.0m £15.0m
Cinven VIII Cinven €15.0m £13.2m
CVC IX CVC €15.0m £13.0m
Resolute VI TJC $15.0m £12.0m
Apax XI Apax €10.0m £8.8m
Bregal Unter IV Bregal €10.0m £8.7m
Audax VII Audax $10.0m £8.0m
Genstar XI Genstar $10.0m £8.0m
Hellman & Friedman XI Hellman & Friedman $10.0m £8.0m
At 31 January 2024, ICG Enterprise Trust had outstanding Undrawn Commitments
of £552m.
Movement in outstanding Commitments Year to 31 January 2024 £m
Undrawn Commitments as at 1 February 2023 496.7
New Fund Commitments 153.3
New Commitments relating to Co-investments 24.7
Drawdowns (136.7)
Currency and other movements, including repayment of commitments which can be reinvested 14.0
Undrawn commitments as at 31 January 2024 552.0
Total Undrawn Commitments at 31 January 2024 were comprised of £434m of
Undrawn Commitments to funds within their Investment Period, and a further
£118m was to funds outside their Investment Period.
31 January 2024 £m 31 January 2023 £m
Undrawn Commitments – funds in Investment Period 434 367
Undrawn Commitments – funds outside Investment Period 118 130
Total Undrawn Commitments 552 497
Total available liquidity (including debt facility) (196) (167)
Overcommitment net of total available liquidity 356 330
Overcommitment % of net asset value 27.7% 25.3%
Commitments are made in the funds' underlying currencies. The currency split
of the undrawn commitments at 31 January 2024 was as follows:
31 January 2024 31 January 2023
Undrawn Commitments £m % £m %
US Dollar 290 52.5% 254 51.1%
Euro 236 42.7% 226 45.5%
Sterling 26 4.8% 17 3.4%
Total 552 100.0% 497 100.0%
Investment
Total new investments of £137m during the period, of which 15% (£20.5m) were
alongside ICG. New investment by category detailed in the table below:
Investment Category Cost (£m) % of New Investments
Primary 92 67.1%
Direct 33 23.9%
Secondary 12 9.0%
Total 137 100.0%
During the financial year we made four new Direct Co-investments for a
combined value of £24m. The balance of Direct Co-investments is comprised of
£9m of incremental drawdowns across existing Direct Co-investments.
The 10 largest new investments in the period were as follows:
Investment Description Manager Country Cost £m (1)
Archer Technologies Developer of governance, risk and compliance software Cinven United States 11.1
Ping Identity Provider of intelligent access management solutions Thoma Bravo United States 10.7
Atlas Technical Consultants Provider of professional testing, inspection, engineering, environmental and consulting services GI Partners United States 6.5
Big Blue Marble Academy Operator of schools Leeds Equity United States 3.6
PerkinElmer Provider of analytical testing New Mountain United States 2.7
Independence Products Provider of prescribed infection prevention products Graphite United Kingdom 1.5
group.ONE Provider of web hosting and domain services Cinven Sweden 1.5
NovaTaste Supplier of ingredients for the food industry PAI Austria 1.5
Maxar Provider of geospatial intelligence and satellite manufacturing services Advent United States 1.4
Envalior Provider of engineering materials solutions Advent Germany 1.3
Top 10 largest underlying new investments 41.7
1 Represents ICG Enterprise Trust's indirect investment (share of fund cost)
plus any direct investments in the period.
Growth
The portfolio grew by £83 million (+5.9%) on a Local Currency Basis in the 12
months to 31 January 2024.
Growth was reasonably balanced across the Portfolio:
* By investment type, growth was spread across Primary (+5.3%), Direct (+6.2%)
and Secondary (+7.5%)
* By geography, North America and Europe experienced similar growth
The growth in the Portfolio is underpinned by the performance of our Portfolio
companies, which delivered robust financial performance during the period,
generating double-digit revenue and EBITDA growth over the last 12 months and
with prudent leverage.
Top 30 Enlarged Perimeter
Portfolio coverage 38.6% 67.5%
Last Twelve Months ('LTM') revenue growth 10.1% 11.6%
LTM EBITDA growth 12.8% 14.2%
Net Debt / EBITDA (1) 4.4x 4.6x
Enterprise Value / EBITDA (1) 14.6x 14.6x
Note: values are weighted averages for the respective portfolio segment; see Glossary for definition and calculation methodology 1 Weighted average metrics exclude Chewy, for which EBITDA multiple is not an appropriate valuation metric
Portfolio growth was impacted by a decline in the share price of Chewy and the
impact of the secondary sale we undertook. Excluding these factors, we
estimate the Portfolio Return on a Local Currency Basis would have been ~8.7%.
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 2024, ICG Enterprise Trust’s exposure to quoted companies was
valued at £64m, equivalent to 4.8% of the Portfolio value (FY23: 7.8%). The
share price of our largest listed exposure, Chewy, decreased by 62% in local
currency (USD) during the period. This negatively impacted the Portfolio
Return on a Local Currency Basis by approximately 1.8%.
At 31 January 2024 there was one quoted investment that individually accounted
for 0.5% or more of the Portfolio value:
Company Ticker 31 January 2024 % of Portfolio value
Chewy CHWY-US 1.4%
Other companies 3.4%
Total 4.8%
Realisations
During FY24, the ICG Enterprise Trust Portfolio generated Realisation Proceeds
of £171m and Total Proceeds of £239m, with the latter including £68m gross
cash proceeds received in December 2023 from the secondary sale of certain
investments. The sale was executed at a discount of 15.9% (impacting NAV per
Share by approximately (1)%), and generated an attractive net return of 1.8x
invested cost.
Realisation activity during the period included 38 Full Exits that generated
Realisation Proceeds of £101m. These were completed at a weighted average
Uplift to Carrying Value of 29.5% and weighted average Multiple to Cost of
3.5x.
The 10 largest realisations in the period, which represent 45% of Realisation
Proceeds, are set out in the table below:
Investment Manager Description Country Proceeds £m
Endeavor Schools Leeds Equity Provider of paid private schooling United States 32.8
WCT T JC Provider of clinical research services United States 12.5
Signify Health New Mountain Provider of technology enabled healthcare payor services United States 8.3
Breitling CVC Manufacturer of luxury watches Switzerland 3.6
Mercer Advisors Oak Hill Provider of wealth management services United States 3.5
GoodLife Foods Egeria Producer of frozen snacks Netherlands 3.2
Creative Artists Agency ICG Provider of talent management services United States 3.1
Ask4 Bowmark Provider of internet service specialising in student accommodation United Kingdom 3.1
Messer Industries CVC Supplier and Manufacturer of industrial gases Germany 3.0
SERB Charterhouse Manufacturer of specialty pharmaceuticals Belgium 2.9
Total of 10 largest underlying realisations 76.1
Balance sheet and liquidity
Net assets at 31 January 2024 were £1,283m, equal to 1,909p per share.
At 31 January 2024, the drawn debt was £20.0m (31 January 2023: £65.4m),
resulting in a net debt position of £8.8m. At 31 January 2024, the Portfolio
represented 105.1% of net assets (31 January 2023: 108.1%).
£m % of net assets
Portfolio 1,349 105.1%
Cash 11 0.9%
Drawn debt (20) (1.6%)
Co-investment Incentive Scheme Accrual (54) (4.2%)
Other net current liabilities (3) (0.3%)
Net assets 1,283 100.0%
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.
At 31 January 2024 ICG Enterprise Trust had a cash balance of £11.2m (31
January 2023: £20.7m) and total available liquidity of £195.9m (31 January
2023: £167.0m).
£m
Cash at 31 January 2023 21
Total Proceeds 239
New investments (137)
Debt drawn down (45)
Shareholder returns (35)
Management fees (16)
FX and other expenses (16)
Cash at 31 January 2024 11
Available undrawn debt facilities 185
Total available liquidity 196
Dividend and share buyback
ICG Enterprise Trust has a progressive dividend policy alongside a long-term
share buyback programme to return capital to shareholders.
The Board has declared a dividend of 9p per share in respect of the fourth
quarter, taking total dividends for the period to 33p (FY23: 30p), which
represents an increase of 10% on the previous financial year.
In October 2022 the Board announced the introduction of a long-term share
buyback programme, which may be executed at any discount to NAV. Details of
share repurchases made under this programme are provided below:
Buyback activity summary FY24 (1) Since 19 October 2022 (2)
Number of shares purchased 1,140,708 1,922,188
Aggregate consideration (3) £13.1m £22.2m
Weighted average discount to last reported NAV 39.5% 39.6%
(1)Based on company-issued announcements / date of purchase, rather than date of settlement (2)Being the date the long-term share buyback programme was announced, up to and including 1 May 2024 3 Aggregate consideration excludes commission, PTM and SDRT
The Board believes the long-term share 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.
Both the progressive dividend policy and the long-term share buyback programme
are being maintained.
In addition, today the Board is announcing an opportunistic share buyback
programme for FY25 of up to £25m. This will enable us to take advantage of
current trading levels, when the ability to purchase shares in meaningful size
at a significant discount presents itself. In announcing this programme the
Board is seeking to balance the potential for immediate and visible NAV per
Share accretion, with the longer-term potentially higher returns of new
investments. The size of the opportunistic share buyback programme will be
subject to a number of considerations, including the availability of shares
and our cashflow experience and expectations.
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 2023 Annual General Meeting.
Any shares repurchased by the Company will be held in treasury.
Foreign exchange rates
The details of relevant foreign exchange rates applied in this report are
provided in the table below:
Average rate in the twelve months to
Average rate for FY24 Average rate for FY23 31 January 2024 year end 31 January 2023 year end
GBP:EUR 1.1526 1.1341 1.1729 1.1375
GBP:USD 1.2479 1.2320 1.2688 1.2337
EUR:USD 1.0827 1.0863 1.0818 1.0840
Activity since the period end
Notable activity between 1 February 2024 and 31 March 2024 has included:
* Two new fund commitments for a combined value of £31.7m
* New investments of £11.9m
* Realisation Proceeds of £21.9m
From 1 February 2024 up to and including 1 May 2024, £7.0m shares were bought
back at a weighted average discount to NAV of 39.7%.
ICG Private Equity Fund Investments Team
7 May 2024
SUPPLEMENTARY INFORMATION
This section presents supplementary information regarding the Portfolio (see
Manager’s Review and the Glossary for further details and definitions).
Portfolio composition
Portfolio by calendar year of investment % of value of underlying investments 31 January 2024 % of value of underlying investments 31 January 2023
2023 6.9% —%
2022 18.7% 19.6%
2021 27.9% 25.1%
2020 11.4% 10.3%
2019 12.4% 12.0%
2018 10.5% 12.0%
2017 4.2% 6.7%
2016 and older 8.0% 14.3%
Total 100.0% 100.0%
Portfolio by sector % of value of underlying investments 31 January 2024 % of value of underlying investments 31 January 2023
TMT 25.3% 22.5%
Consumer goods and services 17.5% 20.9%
Healthcare 11.3% 13.3%
Business services 13.1% 12.6%
Industrials 7.9% 8.4%
Education 5.7% 7.0%
Financials 7.4% 5.0%
Leisure 7.3% 3.9%
Other 4.5% 6.4%
Total 100.0% 100.0%
Portfolio by fund currency (1) 31 January 2024 £m 31 January 2024 % 31 January 2023 £m 31 January 2023 %
US Dollar 674 49.9% 690 43.4%
Euro 555 41.2% 603 47.6%
Sterling 120 8.9% 113 9.0%
Total 1,349 100.0% 1,406 100.0%
(1)Currency exposure by reference to the reporting currency of each fund .
Portfolio Dashboard
The tables below provide disclosure on the composition and dispersion of
financial and operational performance for the Top 30 and the Enlarged
Perimeter. At 31 January 2024, the Top 30 Companies represented 38.6% of the
Portfolio by value and the Enlarged Perimeter represented 67.5% of total
Portfolio value. This information is prepared on a value-weighted basis, based
on contribution to Portfolio value at 31 January 2024. Datasets for Top 30
companies and ‘Enlarged perimeter’ are not distinct and will have some
overlap.
% of value at 31 January 2024
Sector exposure Top 30 Enlarged Perimeter
TMT 27.4% 22.9%
Business services 17.2% 15.1%
Consumer goods and services 15.8% 16.4%
Industrials 15.2% 10.5%
Healthcare 8.1% 11.2%
Education 6.9% 6.7%
Leisure 6.8% 7.9%
Financials 2.5% 4.8%
Other —% 4.4%
Total 100.0% 100.0%
% of value at 31 January 2024
Geographic exposure (1) Top 30 Enlarged Perimeter
North America 41.5% 43.7%
Europe 51.1% 51.5%
Other 7.4% 4.8%
Total 100.0% 100.0%
1 Geographic exposure is calculated by reference to the location of the headquarters of the underlying Portfolio companies
% of value at 31 January 2024
LTM revenue growth Top 30 Enlarged Perimeter
<0% 11.3% 15.1%
0-10% 48.0% 39.1%
10-20% 23.3% 24.5%
20-30% 8.6% 9.9%
>30% 3.9% 7.7%
n.a. (1) 5.1% 3.7%
Weighted average 10.1% 11.6%
Note: for consistency, any excluded investments are excluded for all dispersion analysis. 1 n.a. within Top 30 represents PetSmart, for which EBITDA multiple is not an appropriate valuation metric.
% of value at 31 January 2024
LTM EBITDA growth Top 30 Enlarged Perimeter
<0% 18.2% 22.5%
0-10% 23.4% 21.7%
10-20% 35.4% 25.5%
20-30% 12.3% 12.7%
>30% 5.7% 13.0%
n.a (1) 5.1% 4.6%
Weighted average 12.8% 14.2%
Note: for consistency, any excluded investments are excluded for all dispersion analysis. 1 n.a. within Top 30 represents PetSmart, for which EBITDA multiple is not an appropriate valuation metric.
% of value at 31 January 2024
EV/EBITDA multiple Top 30 Enlarged Perimeter
0-10x 9.8% 12.1%
10-12x 29.6% 22.7%
12-13x 2.8% 5.9%
13-15x 14.0% 16.7%
15-17x 20.8% 17.0%
17-20x 12.2% 11.1%
>20x 5.8% 8.8%
n.a. (1) 5.1% 5.7%
Weighted average 14.6x 14.6x
Note: for consistency, any excluded investments are excluded for all dispersion analysis. 1 n.a. within Top 30 represents PetSmart, for which EBITDA multiple is not an appropriate valuation metric.
% of value at 31 January 2024
Net Debt / EBITDA Top 30 Enlarged Perimeter
<2x 22.5% 15.4%
2-4x 9.3% 18.3%
4-5x 15.9% 16.4%
5-6x 24.7% 20.5%
6-7x 2.9% 6.4%
>7x 19.7% 16.5%
n.a. (1) 5.1% 6.4%
Weighted average 4.4x 4.6x
Note: for consistency, any excluded investments are excluded for all dispersion analysis. 1 n.a. within Top 30 represents PetSmart, for which EBITDA multiple is not an appropriate valuation metric.
Top 30 companies
The table below presents the 30 companies in which ICG Enterprise Trust had
the largest investments by value at 31 January 2024. The valuations are gross
of underlying managers fees and carried interest.
Company Manager Year of investment Country Value as a % of Portfolio
1 Minimax
Supplier of fire protection systems and services ICG 2018 Germany 3.4%
2 Froneri
Manufacturer and distributor of ice cream products PAI 2013 / 2019 United Kingdom 2.4%
3 Leaf Home Solutions
Provider of home maintenance services Gridiron 2016 United States 1.8%
4 European Camping Group
Operator of premium campsites and holiday parks PAI 2021 / 2023 France 1.6%
5 Newton
Provider of management consulting services ICG 2021 / 2022 United Kingdom 1.5%
6 Yudo
Designer and manufacturer of hot runner systems ICG 2017 / 2018 South Korea 1.5%
7 PSB Academy
Provider of private tertiary education ICG 2018 Singapore 1.4%
8 Chewy
Retailer of pet products and services BC Partners 2014 / 2015 United States 1.4%
9 Circana
Provider of mission-critical data and predictive analytics to consumer goods manufacturers New Mountain 2022 United States 1.4%
10 Curium Pharma
Supplier of nuclear medicine diagnostic pharmaceuticals ICG 2020 United Kingdom 1.3%
11 Precisely
Provider of enterprise software Clearlake ICG 2021 / 2022 United States 1.3%
12 Visma
Provider of business management software and outsourcing services HgCapital ICG 2017 / 2020 Norway 1.3%
13 Ambassador Theatre Group
Operator of theatres and ticketing platforms ICG 2021 United Kingdom 1.3%
14 Crucial Learning
Provider of corporate training courses focused on communication skills and leadership development Leeds Equity 2019 United States 1.3%
15 Domus
Operator of retirement homes ICG 2017 / 2021 France 1.2%
16 Davies Group
Provider of specialty business process outsourcing services BC Partners 2021 United Kingdom 1.1%
17 Ivanti
Provider of IT management solutions Charlesbank ICG 2021 United States 1.1%
18 David Lloyd Leisure
Operator of premium health clubs TDR 2013 / 2020 United Kingdom 1.1%
19 AML RightSource
Provider of compliance and regulatory services and solutions Gridiron 2020 United States 1.1%
20 Class Valuation
Provider of residential mortgage appraisal management services Gridiron 2021 United States 1.1%
21 Planet Payment
Provider of integrated payments services focused on hospitality and luxury retail Advent Eurazeo ICG 2021 Ireland 1.1%
22 ECA Group
Provider of autonomous systems for the aerospace and maritime sectors ICG 2022 France 1.1%
23 Vistage
Provider of CEO leadership and coaching for small and mid-size businesses in the US Gridiron ICG 2022 United States 1.0%
24 VettaFi
Provider of master limited partnerships ("MLP") indices ICG 2018 United States 1.0%
25 DigiCert
Provider of enterprise security solutions ICG 2021 United States 1.0%
26 KronosNet
Provider of tech-enabled customer engagement and business solutions ICG 2022 Spain 0.9%
27 Brooks Automation
Provider of semiconductor manufacturing solutions THL 2021 / 2022 United States 0.9%
28 Ping Identity
Provider of intelligent access management solutions Thoma Bravo 2022 / 2023 United States 0.7%
29 AMEOS Group
Operator of private hospitals ICG 2021 Switzerland 0.7%
30 Archer Technologies
Developer of governance, risk and compliance software intended for risk management Cinven 2023 United States 0.7%
Total of the 30 largest underlying investments 38.6%
The 30 largest fund investments
The table below presents the 30 largest fund investments by value at 31
January 2024. The valuations are net of underlying managers’ fees and
carried interest.
Fund Year of commitment Value £m Outstanding commitment £m
1 ICG Strategic Equities Fund III
GP-led secondary transactions 2018 39.4 10.9
2 ICG Europe VII
Mezzanine and equity in mid-market buyouts 2018 35.0 6.5
3 PAI Strategic Partnerships **
Mid-market and large buyouts 2019 30.6 0.3
4 Gridiron Capital Fund III
Mid-market buyouts 2016 28.9 4.1
5 CVC European Equity Partners VII
Large buyouts 2017 28.4 1.1
6 ICG Strategic Equities Fund IV
GP-led secondary transactions 2021 28.0 10.4
7 Graphite Capital Partners VIII *
Mid-market buyouts 2013 27.4 2.2
8 Gridiron Capital Fund IV
Mid-market buyouts 2019 25.2 0.7
9 PAI Europe VII
Mid-market and large buyouts 2017 24.6 2.9
10 ICG Ludgate Hill (Feeder B) SCSp
Secondary portfolio 2021 24.4 13.9
11 ICG LP Secondaries Fund I LP
LP-led secondary transactions 2022 22.0 34.8
12 Resolute IV
Mid-market buyouts 2018 21.6 1.0
13 ICG Ludgate Hill III
Secondary portfolio 2022 21.1 4.7
14 Oak Hill V
Mid-market buyouts 2019 17.7 0.9
15 Sixth Cinven Fund
Large buyouts 2016 17.2 1.6
16 Seventh Cinven
Large buyouts 2019 17.2 2.9
17 Advent Global Private Equity IX
Large buyouts 2019 16.9 0.8
18 AEA VII
Mid-market buyouts 2019 16.5 0.5
19 Graphite Capital Partners IX
Mid-market buyouts 2018 15.9 4.5
20 New Mountain Partners V
Mid-market buyouts 2017 15.9 1.2
21 Resolute V
Mid-market buy-outs 2021 15.8 0.9
22 ICG Augusta Partners Co-Investor **
Secondary fund restructurings 2018 15.5 17.4
23 BC European Capital X
Large buyouts 2016 14.9 1.4
24 ICG Ludgate Hill (Feeder) II Boston SCSp
Secondary portfolio 2022 14.7 5.3
25 ICG Europe Mid-Market Fund
Mezzanine and equity in mid-market buyouts 2019 13.8 5.5
26 Permira VII
Large buyouts 2019 13.7 1.5
27 Investindustrial VII
Mid-market buyouts 2019 13.2 4.2
28 Permira V **
Large buyouts 2013 12.8 0.4
29 Tailwind Capital Partners III
Mid-market buyouts 2018 11.9 1.5
30 Bowmark Capital Partners VI
Mid-market buyouts 2018 11.6 1.4
Total of the largest 30 fund investments 611.8 145.2
Percentage of total investment Portfolio 45.3%
*All or part of interest acquired through a secondary sale.
**Includes the associated Top Up funds.
HOW WE MANAGE RISK
Identifying and evaluating the strategic, financial and operational impact of
our key risks
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 23 to 27.
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 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:
1. Investment risks: the risk to performance resulting from ineffective or
inappropriate investment selection, execution or monitoring.
2. 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.
3. Operational risks: the risk of loss resulting from inadequate or failed
internal processes, people or systems and external event, including regulatory
risk.
4. Financial risks: the risk 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.
RISK ASSESSMENT PROCESS
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 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 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 The Manager selects the fund investments and direct investments for the Company’s Portfolio, executing the investment strategy approved by the Board. The underlying managers of those funds in turn select individual investee companies. The origination, investment selection and management capabilities of both the Manager and the third-party managers are key to the performance of the Company. Poor origination, investment selection and monitoring by the Manager and/or third-party managers which may have a negative impact on Portfolio performance. The Manager has a strong track record of investing in private equity through multiple economic cycles. The Manager has a highly Stable The Board is responsible for ensuring that the investment policy is met. The day-to-day management of the Company’s assets is delegated to the Manager under investment guidelines determined by the Board. The Board regularly reviews these guidelines to ensure they remain appropriate and monitors compliance with the guidelines through 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.
selective investment approach and disciplined process, which is overseen by ICG Enterprise Trust’s Investment Committee within
the Manager, which comprises a balance of skills and perspectives. Further, the Company’s Portfolio is diversified, reducing
the likelihood of a single investment decision impacting Portfolio performance.
VALUATION In valuing its investments in private equity funds and unquoted companies and publishing its NAV, the Company relies to a significant extent on the accuracy of financial and other information provided by the underlying managers to the Manager. There is the potential for inconsistency in the valuation methods adopted by the managers of these funds and companies and for valuations to be misstated. Incorrect valuations being provided would lead to an incorrect overall NAV. The Manager carries out a formal valuation process involving a quarterly review of third-party valuations. This includes a Stable The Board regularly reviews and discusses the valuation process in detail with the Manager, including the sources of valuation information and methodologies used. Following this assessment and other considerations, the Board concluded that there was no material change in valuation risk during the year.
comparison of unaudited valuations to latest audited reports, as well as a review of any potential adjustments that are required
to ensure the valuation of the underlying investments are in accordance with the fair market value principles required under
International Financial Reporting Standards (‘IFRS’).
EXTERNAL RISKS
POLITICAL AND MACRO-ECONOMIC UNCERTAINTY Political and macro-economic uncertainty and other global events, such as pandemics, that are outside the Company’s control could adversely impact the environment in which the Company and its investment portfolio companies operate. Changes in the political or macro-economic environment could significantly affect the performance of existing investments (and valuations) and prospects for realisations. In addition, they could impact the number of credible investment opportunities the Company can originate. The Manager uses a range of complementary approaches to inform strategic planning and risk mitigation, including active Increasing The Board monitors and reviews the potential impact on the Company from political and economic developments on an ongoing basis, including input and discussions with the Manager. Incorporating these views and other considerations, the Board concluded that there was an increase in political and macro-economic uncertainty risk as a result of the political uncertainty.
investment management, profitability and balance sheet scenario planning and stress testing to ensure resilience across a range
of outcomes. The process is supported by a dedicated in-house economist and professional advisers where appropriate.
CLIMATE CHANGE The underlying managers of the fund investments and direct investments in the Company’s Portfolio fail to ensure that their portfolio companies respond to the emerging threats from climate change. Climate-related transition risks, driven in particular by abrupt shifts in the political and technological landscape, impact the value of the Company’s Portfolio. The Manager has a well-defined, firm-wide Responsible Investing Policy and ESG framework in place. A tailored ESG framework Stable The Board monitors and reviews the potential impact to the Company from failures by underlying managers to mitigate the impact of climate change on portfolio company valuation. During the year the Board received reports on the implementation of the Manager’s Responsible Investing Policy.
applies across all stages of the Company’s investment process. This includes ongoing monitoring of the underlying manager’s ESG
reporting.
THE LISTED PRIVATE EQUITY SECTOR The listed private equity sector could fall out of favour with investors leading to a reduction in demand for the Company’s shares. A change in sentiment to the sector has the potential to damage the Company’s reputation and impact the performance of the Company’s share price and widen the discount the shares trade at relative to NAV per Share, causing shareholder dissatisfaction. Private equity continues to outperform public markets over the long term and has proved to be an attractive asset class through Stable The risk is elevated due to the wide discount to NAV, but has remained stable through the reporting period. The Board receives regular updates from the Company’s broker and is kept informed of all material discussions with investors and analysts.
various cycles. The Manager is active in marketing the Company’s shares to a wide variety of investors to ensure the market is
informed about the Company’s performance and investment proposition. In setting the capital allocation policy, including the
allocations to dividends and share buy backs, the Board monitors the discount to NAV and considers appropriate solutions to
address any ongoing or substantial discount to NAV.
FOREIGN EXCHANGE The Company has continued to expand its geographic diversity by making investments in different countries. Accordingly, most investments are denominated in US dollars, euros and currencies other than sterling. At present, the Company does not hedge its foreign exchange exposure. Therefore, movements in exchange rates between these currencies may have a material effect on the underlying valuations of the investments and performance of the Company. The Board regularly reviews the Company’s exposure to currency risk and reconsiders possible hedging strategies on at least an Stable The Board reviewed the Company’s exposure to currency risk and possible hedging strategies and concluded that there was no material change in foreign exchange risk during the year and that it remains appropriate for the Company not to hedge its foreign exchange exposure.
annual basis. Furthermore, the Company’s multicurrency bank facility permits the borrowings to be drawn in euros and US
dollars, if required.
OPERATIONAL RISKS
REGULATORY, LEGAL AND TAX COMPLIANCE Failure by the Manager to comply with relevant regulation and legislation could have an adverse impact on the Company. Additionally, adherence to changes in the legal, regulatory and tax framework applicable to the Manager could become onerous, lessening competitive or market opportunities. The failure of the Manager and the Company to comply with the rules of professional conduct and relevant laws and regulations could expose the Company to regulatory sanction and penalties as well as significant damage to its reputation. The Board is responsible for ensuring the Company’s compliance with all applicable regulatory, legal and tax requirements. Stable The Company remains responsive to a wide range of developing regulatory areas; and will continue to enhance its processes and controls in order to remain compliant with current and expected legislation.
Monitoring of this compliance has been delegated to the Manager, of which the in-house Legal, Compliance and Risk functions
provide regular updates to the Board covering relevant changes to 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 Loss of key professionals at the Manager could impair the Company’s ability to deliver its investment strategy and meet its external obligations if replacements are not found in a timely manner. If the Manager’s team is not able to deliver its objectives, investment opportunities could be missed or misevaluated, while existing investment performance may suffer. The Manager regularly updates the Board on team developments and succession planning. The Manager places significant focus on: * Stable The Board reviewed the Company’s exposure to people risk and concluded that the Manager continues to operate sustainable succession, competitive remuneration and retention plans. The Board believes that the risk in respect of people remains stable.
Developing key individuals to ensure that there is a pipeline of potential succession candidates internally. External
appointments are considered if that best satisfies the business needs.
* 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.
CYBER SECURITY The Company is dependent on effective information technology systems at both the Manager and Administrator. These systems support key business functions and are an important means of securing data and sensitive information. The failure of the Manager and Administrator to deliver an appropriate cyber security platform for critical technology systems could result in unauthorised access by malicious third parties, breaching the confidentiality, integrity and availability of Company data, negatively impacting the Company’s reputation. Application of the Manager’s and Administrator’s cyber security policies is supported by a governance structure and a risk Stable The Board carries out a formal annual assessment (supported by the Manager’s internal audit function) of the Manager’s internal controls and risk management systems. Following this review and other considerations, the Board concluded that cyber security risk remained stable during the year.
framework that allow for the identification, control and mitigation of technology risks. The effectiveness of the framework is
periodically assessed. Additionally, the Manager’s and Administrator’s technology environments are continually maintained and
subject to regular testing, such as penetration testing, vulnerability scans and patch management.
THE MANAGER AND THIRD-PARTY PROVIDERS (INCLUDING BUSINESS PROCESSES AND CONTINUITY) The Company is dependent on third parties for the provision of services and systems, especially those of the Manager, the Administrator and the Depositary. Failure by a third-party provider to deliver services in accordance with its contractual obligations could disrupt or compromise the functioning of the Company. A material loss of service could result in, among other things, an inability to perform business critical functions, financial loss, legal liability, regulatory censure and reputational damage. The performance of the Manager, the Administrator, the Depositary and other third-party providers is subject to regular review Stable The Board carries out a formal annual assessment (supported by the Manager’s internal audit function) of the Manager’s internal controls and risk management systems. The Board also received regular reporting from the Manager and other third parties. Following this review and other considerations, the Board concluded that there was no material change in the Manager and other third-party advisers’ risk during the year.
and reported to the Board. The Manager, the Administrator and the Depositary produce internal control reports to provide
assurance regarding the effective operation of internal controls. These reports are provided to the Audit Committee for review.
The Committee would seek further representations from service providers if not satisfied with the effectiveness of their control
environment. The Audit Committee formally assesses the internal controls of the Manager, the Administrator and Depositary on an
annual basis to 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 The Company has outstanding commitments to private equity funds in excess of total liquidity that may be drawn down at any time. The ability to fund this difference is dependent on receiving cash proceeds from investments (the timing of which are unpredictable) and the availability of financing facilities. If the Company encountered difficulties in meeting its outstanding commitments, there would be significant reputational damage as well as risk of damages being claimed from managers and other counterparties. The Manager monitors the Company’s liquidity, overcommitment ratio and covenants on a frequent basis, and undertakes cash flow Stable The Board reviewed the Company’s exposure to financing risk, noting the term of the new financing facility, and concluded that this risk had stabilised.
monitoring, and provides regular updates on these activities to the Board.
Audited Financial Statements for the year ended 31 January 2024
INCOME STATEMENT
Year to 31 January 2024 Year to 31 January 2023
Notes Revenue return £’000 Capital return £’000 Total £’000 Revenue return £’000 Capital return £’000 Total £’000
Investment returns
Income, gains and losses on investments 2,10 2,365 39,369 41,734 2,224 185,201 187,425
Deposit interest 2 405 — 405 1 — 1
Other income 2 104 — 104 46 — 46
Foreign exchange gains and losses — 1,193 1,193 — 337 337
2,874 40,562 43,436 2,271 185,538 187,809
Expenses
Investment management charges 3 (1,615) (14,533) (16,148) (1,701) (15,312) (17,013)
Other expenses including finance costs 4 (2,520) (7,402) (9,922) (2,387) (3,884) (6,271)
(4,135) (21,935) (26,070) (4,088) (19,196) (23,284)
Profit/(loss) before tax (1,261) 18,627 17,366 (1,817) 166,342 164,525
Taxation 6 — 345 (345) —
Profit/(loss) for the period (1,261) 18,627 17,366 (1,472) 165,997 164,525
Attributable to:
Equity shareholders (1,261) 18,627 17,366 (1,472) 165,997 164,525
Basic and diluted earnings per share 7 25.63p 240.19p
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 33 to 57 form an integral part of the financial statements.
BALANCE SHEET
Notes 31 January 2024 £’000 31 January 2023 £’000
Non-current assets
Investments held at fair value 9,10,17 1,296,382 1,349,075
Current assets
Cash and cash equivalents 11 9,722 20,694
Prepayments and receivables 12 2,258 2,416
11,980 23,110
Current liabilities
Borrowings (20,000) (65,293)
Payables 13 (5,139) (6,274)
Net current assets / (liabilities) (13,159) (48,457)
Total assets less current liabilities 1,283,223 1,300,619
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 1,263,616 1,279,751
Revenue Loss (2,733) (1,472)
Total equity 1,283,223 1,300,619
Net Asset Value per Share (basic and diluted) 15 1909.4p 1903.3p
The notes on pages 33 to 57 form an integral part of the financial statements.
The financial statements on pages 29 to 57 were approved by the Board of
Directors on 7 May 2024 and signed on its behalf by:
Jane Tufnell Alastair Bruce
Director Director
CASH FLOW STATEMENT
Notes Year to 31 January 2024 £’000 Year to 31st January 2023 £’000
Operating activities
Sale of portfolio investments 40,611 32,143
Purchase of portfolio investments (25,162) (62,245)
Cash flow to subsidiaries' investments (116,084) (238,692)
Cash flow from subsidiaries' investments 195,300 228,530
Interest income received from portfolio investments 1,695 1,829
Dividend income received from portfolio investments 779 394
Other income received 509 46
Investment management charges paid (15,647) (21,218)
Other expenses paid (2,596) (1,567)
Net cash inflow/(outflow) from operating activities 79,405 (60,780)
Financing activities
Bank facility fee paid (3,970) (1,728)
Interest paid (5,571) (1,963)
Credit Facility utilised 128,109 86,659
Credit Facility repaid (174,954) (21,367)
Purchase of shares into treasury (13,068) (2,016)
Equity dividends paid 8 (21,694) (19,866)
Net cash (outflow)/inflow from financing activities (91,148) 39,719
Net (decrease) in cash and cash equivalents (11,743) (21,061)
Cash and cash equivalents at beginning of year 11 20,694 41,328
Net (decrease) in cash and cash equivalents (11,743) (21,058)
Effect of changes in foreign exchange rates 771 424
Cash and cash equivalents at end of period 11 9,722 20,694
1. Includes settlement of unbilled management fees relating to the prior year
(see note 13).
The notes on pages 33 to 57 form an integral part of the financial statements.
STATEMENT OF CHANGES IN EQUITY
Share capital £’000 Capital redemption reserve £’000 Share premium £’000 Realised capital reserve (1) £’000 Unrealised capital reserve £’000 Revenue reserve £’000 Total shareholders’ equity £’000
Period to 31 January 2024
Opening balance at 1 February 2023 7,292 2,112 12,936 468,054 811,698 (1,473) 1,300,619
Profit for the period and total comprehensive income — — — 31,032 (12,406) (1,260) 17,366
Capital distribution by subsidiary (2) 8,691 (8,691) —
Dividends paid or approved — — — (21,694) — — (21,694)
Purchase of shares into treasury (13,068) — (13,068)
Closing balance at 31 January 2024 7,292 2,112 12,936 473,015 790,601 (2,733) 1,283,223
Share capital £’000 Capital redemption reserve £’000 Share premium £’000 Realised capital reserve (1) £’000 Unrealised capital reserve £’000 Revenue reserve £’000 Total shareholders’ equity £’000
Period 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 period and total comprehensive income — — — (10,431) 176,428 (1,473) 164,524
Capital distribution by subsidiary (2) — — — 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 23 7,292 2,112 12,936 468,054 811,698 (1,473) 1,300,619
1. Distributable reserves.
2. During the reporting period ICG Enterprise Trust Limited Partnership made a
distribution of realised profits totalling £8.6m (2023: £17.5) to the
Company.
The notes on pages 33 to 57 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 2024 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 page 5, and the
Manager’s review on page 7.
As part of this review, the Board assessed the potential impact of principal
risks 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 2025, 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 this
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.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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 investments and are 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
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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.
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 2024, 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) Prepayments and 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.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
(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.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
(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.
2 INVESTMENT RETURNS
Year ended Year ended
31 January 2024 31 January 2023
£’000 £’000
Income from investments
UK investment interest — —
Overseas interest and dividends 2,365 2,224
2,365 2,224
Deposit interest on cash 405 1
Other 104 46
509 47
Total income 2,874 2,271
Analysis of income from investments
Unquoted 2,365 2,224
2,365 2,224
3 INVESTMENT MANAGEMENT CHARGES
Management fees paid to ICG for managing the Enterprise Trust amounted to
1.25% (2023: 1.34%) of the average net assets in the year. The reduction in
the fee is due to the application of the cap (see page 46).
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.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
The amounts charged during the year are set out below:
Year ended 31 January 2024 Year ended 31 January 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investment management charge 1,615 14,533 16,148 1,701 15,312 17,013
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 2024 31 January 2023
£’000 £’000
ICG Strategic Equity IV 593 999
ICG Europe VIII 467 568
ICG Europe VII 257 126
ICG Strategic Equity III 183 284
ICG Strategic Equity V 131 —
ICG Europe Mid-Market 120 111
ICG Augusta Partners Co-Investor II 91 108
ICG Europe Mid-Market II 87 121
ICG Strategic Secondaries II 74 80
ICG North American Private Debt II 74 26
ICG LP Secondaries Fund I LP 55 65
ICG Recover Fund 2006B 41 43
ICG Recovery Fund 2008B 31 32
ICG Asia Pacific III 30 25
ICG Europe V 1 8
2,235 2,596
4 OTHER EXPENSES
The Company did not employ any staff in the year to 31 January 2024 (2023:
none).
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Year ended Year ended
31 January 2024 31 January 2023
£’000 £’000 £’000 £’000
Directors’ fees (see note 5) 316 288
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts 239 156
Fees payable to the Company’s auditor and its associates for other services:
- Audit of the accounts of the subsidiaries 139 135
- Audit-related assurance services 53 55
Total auditors’ remuneration 431 346
Administrative expenses 1,021 1,322
1,768 1,956
Bank facility costs allocated to revenue 258 235
Interest costs allocated to revenue 493 196
Expenses allocated to revenue 2,519 2,387
Bank facility costs allocated to capital 7,403 3,884
Total other expenses 9,922 6,271
1. The auditors of the Company have additionally provided £15k (2023: £14k)
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 £8.2m (2023: £4.3m) of costs
related to financing and £0.1m (2023: £0.1m) of other expenses which are
non-recurring and are excluded from the Ongoing Charges as detailed in the
glossary on page 58.
Professional fees of £0.2m (2023: £0.2m) incidental to the acquisition or
disposal of investments are included within gains/(losses) on investments held
at fair value.
5 DIRECTORS’ REMUNERATION AND INTERESTS
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's main rate of corporation tax increased from 19% to 25% with effect
from 1 April 2023. A blended rate of 24% is applied for the period, calculated
by the number of days within the accounting period spanning the rate change
(2023:19%).
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Year ended Year ended
31 January 2024 31 January 2023
£’000 £’000
a) Analysis of charge in the year
Tax credit on items allocated to revenue — (345)
Tax charge on items relating to prior years — 345
Corporation tax — —
b) Factors affecting tax charge for the year
Profit on ordinary activities before tax 17,367 164,525
Profit before tax multiplied by rate of corporation tax in the UK of 24% (2023: 19%) 4,168 31,260
Effect of:
– net investment returns not subject to corporation tax (9,735) (35,252)
– dividends not subject to corporation tax (187) (75)
– current year management expenses not utilised/(utilised) 5,754 4,067
Total tax charge — —
The Company has £53.5m excess management expenses carried forward (2023:
£29.5m). No deferred tax assets or liabilities (2023: 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 (2023: nil).
7 EARNINGS PER SHARE
Year ended Year ended
31 January 2024 31 January 2023
Revenue return per ordinary share (1.86p) (2.15p)
Capital return per ordinary share 27.49p 242.34p
Earnings per ordinary share (basic and diluted) 25.63p 240.19p
Revenue return per ordinary share is calculated by dividing the revenue return
attributable to equity shareholders of £(1.3)m (2023: £(1.5)m) 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 £18.6m (2023: £166.0m) 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 £17.4m (2023: £164.5m) 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 67,761,359 (2023:68,496,802). There were
no potentially dilutive shares, such as options or warrants, in either year.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
8 DIVIDENDS
Year ended Year ended
January 31, 2024 January 31, 2023
£’000 £’000
Third quarterly dividend in respect of year ended 31 January 2023: 6p per share (2022: 6.0p) 4,781 4,111
Final dividend in respect of year ended 31 January 2023: 9p per share (2022: 9.0p) 6,105 6,167
First quarterly dividend in respect of year ended 31 January 2024: 8p per share (2023: 7.0p) 5,415 4,796
Second quarterly dividend in respect of year ended 31 January 2024: 8p per share (2023: 7.0p) 5,393 4,792
Total 21,694 19,866
The Company paid a third quarterly dividend of 8p per share in February 2024.
The Board has proposed a final dividend of 9p per share (estimated cost
£6.0m) in respect of the year ended 31 January 2024 which, if approved by
shareholders, will be paid on 19 July 2024 to shareholders on the Register of
Members at the close of business on 5 July 2024.
9 SUBSIDIARY UNDERTAKINGS AND UNCONSOLIDATED STRUCTURED ENTITIES
Subsidiary undertakings (controlled structured entities)
Subsidiaries of the Company as at 31 January 2024 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 2024 Ownership interest 2023
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 2024 Ownership interest 2023
ICG Enterprise 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 2024 a total of £54.4m (2023: £58.1m) was accrued in respect of
these interests. During the year the Co-investors invested £0.7m (2023:
£1.8m) into ICG Enterprise Trust Co-investment Limited Partnership. Payments
received by the Co-investors amounted to £5.4m or 2.3% of £238.6m. Total
Proceeds received in the year (2023: £8.2m or 3.3% of £252.0m proceeds
received).
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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 Investments Co-investment incentive scheme accrual Maximum loss exposure
As at 31 January 2024 1,350,821 (54,439) 1,296,382
As at 31 January 2023 1,404,293 (58,098) 1,346,195
The Company also holds investments of Nil (2023: £2.9m) that are not
unconsolidated structured entities.
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.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Quoted Unquoted Subsidiary Undertakings Total
£’000 £’000 £’000 £’000
Cost at 1 February 2023 — 195,104 378,426 573,530
Unrealised appreciation at 1 February 2023 — 74,074 701,471 775,545
Valuation at 1 February 2023 — 269,178 1,079,897 1,349,075
Movements in the year:
Purchases — 25,181 116,988 142,169
Sales
– capital proceeds (40,757) (195,300) (236,057)
– realised gains/(losses) based on carrying value at previous balance sheet date (1,044) (1,044)
Movement in unrealised appreciation 7,738 34,501 42,239
Valuation at 31 January 2024 — 260,296 1,036,086 1,296,382
Cost at 31 January 2024 — 179,528 300,114 479,642
Unrealised appreciation/ (depreciation) at 31 January 2024 — 80,768 735,972 816,740
Valuation at 31 January 2024 — 260,296 1,036,086 1,296,382
Net investment movements with subsidiary undertakings were presented as 'Purchases' in prior year. The presentation has been updated with disaggregation sales and purchases of subsidiaries.
Quoted Unquoted Subsidiary Undertakings Total
£’000 £’000 £’000 £’000
Cost at 1 February 2022 — 164,996 368,264 533,260
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 — 62,245 238,692 300,937
Sales
– capital proceeds (32,137) (228,530) (260,667)
– 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 2022 — 269,178 1,079,897 1,349,075
Cost at 31 January 2023 — 195,104 378,426 573,531
Unrealised appreciation/ (depreciation) at 31 January 2023 — 74,074 701,471 775,544
Valuation at 31 January 2023 — 269,178 1,079,897 1,349,075
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
31 January 2024 31 January 2023
£’000 £’000
Realised gains/loss based on cost (1,044) 9,311
Amounts recognised as unrealised in previous years — —
Realised gains based on carrying values at previous balance sheet date (1,044) 9,311
Increase in unrealised appreciation 42,239 175,747
Gains on investments 41,195 185,058
‘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 42.
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 2024, 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 2024 % 31 January 2023 %
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.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
As at 31 January 2024
Investment Instrument % interest (1)
Graphite Capital Partners VII Top Up Plus Limited partnership interests 20.0%
Graphite Capital Partners VIII Top Up Limited partnership interests 41.1%
ICG Velocity Limited partnership interests 32.5%
As at 31 January 2023
Investment Instrument % interest (1)
Graphite Capital Partners VII Top Up Plus (2) Limited partnership interests 20.0%
Graphite Capital Partners VIII Top Up (2) Limited partnership interests 41.1%
ICG LP Secondaries Fund (3) Limited partnership interests 33.0%
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 7 Air Street, Soho, London W1B
5AD.
3. Address of principal place of business is Procession House, 55 Ludgate
Hill, London, EC4M 7JW.
11 CASH AND CASH EQUIVALENTS
31 January 2024 31 January 2023
£’000 £’000
Cash at bank and in hand 9,722 20,694
12 PREPAYMENTS AND RECEIVABLES
31 January 2024 31 January 2023
£’000 £’000
Prepayments and accrued income 2,258 2,416
As at 31 January 2024, prepayments and accrued income included £2.1m (2023:
£2.3m) of unamortised costs in relation to the bank facility. Of this amount
£0.8m (2023: £0.5m) is expected to be amortised in less than one year.
13 PAYABLES – CURRENT
31 January 2024 31 January 2023
£’000 £’000
Accruals 5,139 6,274
Bank facility drawn 20,000 65,293
Payables - current 25,139 71,567
Bank facility details are shown in the liquidity section of note 17 on page
52.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
14 SHARE CAPITAL
Authorised Issued and fully paid
Nominal Nominal
Equity share capital Number £’000 Number £’000
Balance at 31 January 2024 120,000,000 12,000 72,913,000 7,292
Balance at 31 January 2023 120,000,000 12,000 72,913,000 7,292
All ordinary shares have a nominal value of 10.0p. At 31 January 2024 and 31
January 2023, 72,913,000 shares had been allocated, called up and fully paid.
During the year 1,130,708 shares were bought back in the market and held in
treasury (2023: 181,480 shares). At 31 January 2024, the Company held
5,708,133 shares in treasury (2023: 4,577,425) and had 67,204,867 (2023:
68,335,575) shares outstanding, all of which have equal voting rights.
31 January 2024 31 January 2023
Shares held in treasury 5,708,133 4,577,425
Shares not held in treasury 67,204,867 68,335,575
Total 72,913,000 72,913,000
15 NET ASSET VALUE PER SHARE
The net asset value per share is calculated on equity attributable to equity
holders of £1,283.2m (2023: £1,300.6m) and on 67,204,867 (2023: 68,335,575)
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 1,904.5p
(2023:1,903.3p).
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
16 CAPITAL COMMITMENTS AND CONTINGENCIES
The Company and its subsidiaries had uncalled commitments in relation to the
following Portfolio investments:
31 January 2024 £’000 31 January 2023 £’000
ICG LP Secondaries Fund I LP 34,811 27,443
ICG Europe VIII 25,901 28,551
ICG Europe Mid-Market Fund II 21,316 —
ICG Strategic Equity V 19,704 —
ICG Augusta Partners Co-Investor (2) 17,365 18,895
ICG Strategic Secondaries Fund II (2) 16,547 17,041
ICG Ludgate Hill (Feeder B) SCSp 13,860 14,393
ICG Strategic Equity Fund III (2) 10,942 11,269
ICG Strategic Equity IV (2) 10,385 15,943
ICG Europe VII (1) 6,541 6,765
ICG Europe Mid-Market Fund (1) 5,476 8,536
ICG Ludgate Hill (Feeder) II Boston SCSp 5,267 8,077
ICG Ludgate Hill (Feeder) IIIA Porsche SCSp 4,652 1,467
ICG Europe VI (1) 4,311 4,459
ICG Asia Pacific Fund III (2) 2,634 3,159
ICG Colombe Co-investment (1) 2,378 1,750
ICG North American Private Debt Fund II (2) 1,682 3,232
ICG Dallas Co-Investment (2) 1,280 1,400
Commitments of less than £1,000,000 at 31 January 2024 5,991 7,178
Total ICG 211,043 179,558
Graphite Capital Partners IX 4,525 5,805
Graphite Capital Partners VIII (2) 2,194 2,194
Graphite Capital Partners VII (1,2) 456 907
Total Graphite funds 7,175 8,906
1.Includes interest acquired through a secondary fund purchase.
2.Includes the associated Top Up funds.
31 January 2024 £’000 31 January 2023 £’000
PAI Europe VIII 20,900 22,045
New Mountain VII 15,763 —
Green Equity Investors Side IX 15,611 16,234
Bowmark VII 15,000 —
Cinven VII 12,789 —
CVC IX A 12,789 —
CDR XII 11,822 12,175
The Resolute Fund VI 11,822 —
Bain VI 11,319 13,227
Advent International X 10,849 16,313
Resolute II Continuation 9,893 —
Permira VIII 9,356 13,227
Gridiron V 9,008 13,881
Bregal Unternehmerkapital IV-A 8,526 —
Apax XI EUR 8,383 —
Hellman Friedman XI (Parallel) 7,881 —
Genstar Capital Partners XI (EU) 7,850 —
Thomas H Lee Equity Fund IX 6,762 11,266
Audax Private Equity VII-B 5,830 —
Integrum I 5,715 8,117
PAI Mid-Market Fund 4,963 5,811
BC XI 4,900 8,050
Investindustrial VII 4,219 5,021
Gridiron Capital Fund III 4,080 4,401
Leeds VII 3,581 4,770
Charlesbank X 3,543 4,711
Hg Genesis X 3,469 4,371
CVC European Equity Partners VIII 3,402 5,589
FSN VI 2,946 4,236
Seventh Cinven Fund 2,929 6,421
Ivanti 2,910 2,997
PAI VII 2,872 4,501
Bain XIII 2,739 5,743
Hg Saturn III 2,714 4,028
Thoma Bravo XV 2,648 4,109
GHO Capital III 2,617 3,722
New Mountain VI 2,276 4,517
Bain Tech Opportunities II 2,276 3,409
Carlyle Europe Partners V 2,243 4,351
Hellman Friedman X 2,194 2,275
GI Partners VI 2,168 4,119
Bregal Unternehmerkapital III 2,113 3,360
Ambassador Theatre Group 2,049 2,196
Thomas H Lee Equity Fund VIII 2,011 2,398
Tailwind III 1,517 2,471
European Camping Group II 1,474 4,409
Apax X 1,442 2,351
Bowmark Capital Partners VI 1,357 4,279
Resolute V 855 2,307
AEA VII 464 3,010
CDR XI — 3,151
Gryphon V — 2,564
Commitments of less than £2,000,000 at 31 January 2024 36,908 52,130
Total third party 333,747 308,262
Total commitments 551,965 496,726
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 2024, the Company (excluding its subsidiaries) had uncalled
commitments in relation to the above Portfolio of £98.1m (2023: £55.0m). The
Company did not have any contingent liabilities at 31 January 2024 (2023:
None).
The Company’s subsidiaries, which are not consolidated, had the balance of
uncalled commitments in relation to the above Portfolio of £453.9m (2023:
£441.7m). 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.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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 USD Other Total
31 January 2024 £’000 £’000 £’000 £’000 £’000
Investments 1,068,115 81,164 146,881 222 1,296,382
Cash and cash equivalents and other net current assets (21,552) 4,504 3,878 11 (13,159)
1,046,563 85,668 150,759 233 1,283,223
Sterling Euro USD Other Total
31 January 2023 £’000 £’000 £’000 £’000 £’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 1,300,619
The effect of a 25% increase or decrease in the sterling value of the euro
would be a fall of £74m and a rise of £56.1m in the value of
shareholders’equity and on profit after tax at 31 January 2024 respectively
(2023: a fall of £28.6m and a rise of £106.0m 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 £141.9m and a rise of £124.4m in the value
of shareholders’ equity and on profit after tax at 31 January 2024
respectively (2023: a fall of £113.7m and a rise of £191.0m 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.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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 2024 31 January 2023
Increase in variable Decrease in variable Increase in variable Decrease in variable
£’000 £’000 £’000 £’000
30% (2023: 30%) movement in the price of investments
Impact on profit after tax 374,044 (320,217) 388,422 (394,350)
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
£9.7m (2023: £20.7m). 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 2024 (2023: nil) and as a result of this, no ECL
provision has been recorded.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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 £9.7m
and had access to committed bank facilities of €240m maturing in May 2027,
which is a multi-currency revolving credit facility provided by SMBC and
Lloyds. The key terms of the facility are:
* Upfront cost: 120bps.
* Non-utilisation fees: 115bps per annum.
* Margin on drawn amounts: 300bps per annum.
As at 31 January 2024 the Company’s total financial liabilities amounted to
£25.1m (2023: £71.6m) of payables which were due in less than one year,
which includes accrued balances payable in respect of the credit facility
above.
Movement in financial liabilities arising from financing activities
The following tables sets out the movements in total liabilities held at
amortised cost arising from financing activities undertaken during the year.
1905 2023
£’000 £’000
At 1 February 67,700 —
Proceeds from borrowings 128,109 86,659
Repayment of long term borrowings (174,954) (21,367)
Bank facility fee movement 1,206 2,408
At 31 January 22,061 67,700
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 £10.3m (2023: £44.6m).
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 2024, the composition of
which is shown on the balance sheet, was £1,283.2m (2023: £1,300.6m).
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).
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
The valuation techniques applied to level 3 assets are described in note 1(c)
of the financial statements. No investments were categorised as level 1 or
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 page 51.
The following table presents the assets that are measured at fair value at 31
January 2024 and 31 January 2023:
31 January 2024
Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Investments held at fair value
Unquoted investments – indirect — — 136,473 136,473
Unquoted investments – direct — — 123,823 123,823
Quoted investments – direct — — — —
Subsidiary undertakings — — 1,036,086 1,036,086
Total investments held at fair value — — 1,296,382 1,296,382
31 January 2023
Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’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
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 2024;
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 2024 and 31 January 2023.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
31 January 2024 Unquoted investments (indirect) at fair value through profit or loss £’000 Unquoted investments (direct) at fair value through profit or loss £’000 Subsidiary undertakings £’000 Total £’000
Opening balances 158,896 110,282 1,079,897 1,349,075
Additions 14,933 10,248 116,988 142,169
Disposals (37,167) (3,590) (195,300) (236,057)
Gains and losses recognised in profit or loss (189) 6,883 34,501 41,195
Closing balance 136,473 123,823 1,036,086 1,296,382
31 January 2023 Unquoted investments (indirect) at fair value through profit or loss £’000 Unquoted investments (direct) at fair value through profit or loss £’000 Subsidiary undertakings £’000 Total £’000
Opening balances 123,319 78,689 921,738 1,123,747
Additions 28,094 34,151 238,692 300,937
Disposals (27,475) (4,661) (228,530) (260,667)
Gains and losses recognised in profit or loss 34,958 2,103 147,997 185,058
Closing balance 158,896 110,282 1,079,897 1,349,075
18 RELATED PARTY TRANSACTIONS
Significant transactions between the Company and its subsidiaries are shown
below:
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Subsidiary Nature of transaction Year ended 31 January 2024 £’000 Year ended 31 January 2023 £’000
ICG Enterprise Trust Limited Partnership Increase in amounts owed to subsidiaries — —
(Decrease) in amounts owed by subsidiaries (102) (17,470)
Income allocated — 10
ICG Enterprise Trust (2) Limited Partnership Increase in amounts owed to subsidiaries 11,420 5,776
(Decrease) in amounts owed by subsidiaries — —
Income allocated 151 403
ICG Enterprise Trust Co-investment LP Increase in amounts owed by subsidiaries (10,416) 43,949
Income allocated 6,681 2,605
ICG Enterprise Holdings LP Increase in amounts owed to subsidiaries (45,725) 22,904
Income allocated 6,819 6,603
ICG Morse Partnership LP Increase in amounts owed by subsidiaries (14,513) 5,107
Decrease in amounts owed to subsidiaries — —
Income allocated — —
ICG Lewis Partnership LP (Decrease) in amounts owed by subsidiaries 1,820 —
Increase in amounts owed by subsidiaries — 2,344
Income allocated — —
For the purpose of IAS 24 Related Party Disclosures, key management personnel
comprised the Board of Directors.
Remuneration in the year (audited) Fees Expenses Total
Name 2024 £’000 2023 £’000 2024 £’000 2023 £’000 2024 £’000 2023 £’000
Jane Tufnell 71 67 — 71 67
Alastair Bruce 58 54 — — 58 54
Gerhard Fusenig 46 44 3 4 49 48
Adiba Ighodaro 46 26 — — 46 26
Janine Nicholls 46 26 — — 46 26
Sandra Pajarola — 19 4 — 23
David Warnock 46 44 — — 46 44
Total 313 280 3 8 316 288
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.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Amounts owed by subsidiaries Amounts owed to subsidiaries
Subsidiary 31 January 2024 £’000 31 January 2023 £’000 31 January 2024 £’000 31 January 2023 £’000
ICG Enterprise Trust Limited Partnership — — 8,197 8,299
ICG Enterprise Trust (2) Limited Partnership — 34,328 22,908
ICG Enterprise Trust Co-Investment LP 240,326 250,742 — —
ICG Enterprise Holdings LP — — — 45,725
ICG Morse Partnership LP — 14,513 — —
ICG Lewis Partnership LP 7,881 6,062 — —
The Company and its subsidiaries’ total shares in funds and co-investments
managed by the Company’s Manager are:
Year ended 31 January 2024 Year ended 31 January 2023
Fund/Co-investment Remaining commitment £’000 Fair value investment £’000 Remaining commitment £’000 Fair value investment £’000
ICG Strategic Equity Fund III 10,942 39,374 11,269 35,610
ICG Europe VII 6,541 35,021 6,765 33,425
ICG MXV Co-Investment 217 31,658 225 27,547
ICG Strategic Equity IV 10,385 28,029 15,943 22,133
ICG Ludgate Hill (Feeder B) SCSp 13,860 24,366 14,393 34,428
ICG LP Secondaries Fund I LP 34,811 21,980 27,443 30,817
ICG Ludgate Hill (Feeder) III A Porsche SCSp 4,652 21,104 1,467 23,376
ICG Newton Co-Investment 393 17,909 393 14,175
ICG Augusta Partners Co-Investor 17,365 15,533 18,895 15,419
ICG Match Co-Investment 129 15,403 132 18,608
ICG Progress Co-Investment 577 15,156 594 11,721
ICG Ludgate Hill (Feeder) II Boston SCSp 5,267 14,721 8,077 11,227
ICG Vanadium Co-Investment 251 14,209 259 12,968
Ambassador Theatre Group — 14,177 — —
ICG Europe Mid-Market Fund 5,476 13,819 8,536 11,888
ICG Colombe Co-investment 1,678 12,221 1,750 12,922
ICG Cheetah Co-Investment 669 11,570 714 9,990
ICG Europe VIII 25,901 10,746 28,551 7,227
ICG Strategic Secondaries Fund II 16,547 10,052 17,041 10,913
CX VIII Co-Investment 171 8,996 176 8,642
ICG Asia Pacific Fund III 2,634 8,436 3,159 8,454
ICG Dallas Co-Investment 1,280 8,245 1,400 8,583
ICG Trio Co-Investment 37 7,988 38 7,016
ICG Europe VI 4,311 5,719 4,459 6,030
ICG Cross Border 178 5,555 223 3,941
ICG North American Private Debt Fund II 1,682 5,467 3,232 5,053
ICG Sunrise Co-Investment 76 5,402 90 5,425
ICG Crown Co-Investment 122 4,817 176 3,882
ICG Recovery Fund 2008 B1 862 4,545 892 4,500
ICG Holiday Co-Investor I 285 2,655 296 2,040
ICG Holiday Co-Investor II 197 1,966 205 1,517
ICG Strategic Equity IV 19,704 895 — —
ICG Europe V 555 808 730 603
ICG Diocle Co-Investment 148 98 153 109
ICG European Fund 2006 B1 489 28 506 49
ICG Velocity Partners Co-Investor 635 — 654 99
ICG EOS Loan Fund I Ltd — — — 6
ICG Topvita Co-Investment 700 — 724 3
ICG Europe Mid-Market II 21,316 (263) — —
Total 211,043 438,410 179,560 410,346
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 APMs 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 Glossary, where appropriate.
Carried Interest 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 of an agreed Preferred Return.
Cash drag Cash drag is the negative impact on performance arising as a result of the allocation of a portion of the entity’s assets to cash.
Co-investment Co-investment is a Direct Investment in a company alongside a private equity fund.
Co-investment Incentive Scheme Accrual Co-investment Incentive Scheme Accrual represents the estimated value of interests in the Co-investment Incentive Scheme operated by the subsidiary partnerships of the Company.
Commitment Commitment represents the amount of capital that each investor agrees to contribute to a fund or a specific investment.
Compound Annual Growth Rate CAGR The rate of return that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each period of the investment's life span.
Deployment Please see ‘Total new investment’.
Direct Investments An investment in a portfolio company held directly, not through a private equity fund. Direct Investments are typically co-investments with a private equity fund.
Discount 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 would be 10%.
Drawdowns Drawdowns are amounts invested by the Company when called by underlying managers in respect of an existing Commitment.
EBITDA Stands for earnings before interest, tax, depreciation and amortisation, which is a widely used profitability measure in the private equity industry.
Enlarged Perimeter The aggregate Portfolio value of the Top 30 Companies and as many of the managers from within the Top 30 funds as practicable.
Enterprise Value EV Enterprise Value is the aggregate value of a company’s entire issued share capital and Net Debt.
Exclusion List The Exclusion List defines the business activities which are excluded from investment.
FTSE All-Share Index Total Return The change in the level of the FTSE All-Share Index, assuming that dividends are re-invested on the day that they are paid.
Full Exits 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 Fund Disposals. See ‘Fund Disposals’.
Fund Disposals Fund Disposals are where the Company receives sales proceeds from the full or partial sale of a fund position within the secondary market.
General Partner GP The General Partner is the entity managing a private equity fund. This is commonly referred to as the manager.
Hedging 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 opposite way.
Initial Public Offering IPO 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 stock exchange.
Internal Rate of Return IRR 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, together with the residual value of the investment.
Investment Period 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 the initial Commitment.
Last Twelve Months LTM Last Twelve Months refers to the timeframe of the immediately preceding 12 months in reference to financial metrics used to evaluate the Company’s performance.
Limited Partner LP 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 the original investment.
Limited Partnership 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 distributions to Limited Partners.
Net Asset Value per Share NAV per Share 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 charges, from the Company’s total assets.
Net Debt Net Debt is calculated as the total short-term and long-term debt in a business, less cash and cash equivalents.
Ongoing charges 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 and management fees incurred by any underlying funds.
31 January 2024 Total per income statement £'000 Amount excluded from AIC Ongoing Charges £'000 Included Ongoing Charges £000
Management fees 16,148 — 16,148
General expenses 1,773 209 1,564
Finance costs 8,152 8,152 —
Total 26,073 8,362 17,712
Total Ongoing Charges 17,712
Average NAV 1,291,759
Ongoing Charges as % of NAV 1.37%
31 January 2023 Total per income statement £'000 Amount excluded from AIC Ongoing Charges £'000 Included Ongoing Charges £000
Management fees 17,030 — 17,030
General expenses 1,955 98 1,857
Finance costs 4,316 4,316 —
Total 23,301 4,414 18,887
Total Ongoing Charges 18,887
Average NAV 1,272,342
Ongoing Charges as % of NAV 1.48%
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 liquidity 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 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 Direct 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 2024 is £1,349.0m (31 January 2023: £1,406.4m).
31 July 2023 £m IFRS Balance sheet fair value Net assets of subsidiary limited partnerships Co-investment Incentive Scheme Accrual Total Company and subsidiary Limited Partnership
Investments (1) 1,296.4 (1.9) 54.4 1,349.0
Cash 9.7 9.7
Other Net Liabilities (22.9) 1.9 (54.4) (75.5)
Net assets 1,283.2 — — 1,283.2
31 January 2023 £m IFRS Balance sheet fair value Balances receivable from subsidiary Limited Partnerships Co-investment Incentive 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
(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 Return on a Local Currency Basis Portfolio Return on a Local Currency Basis represents the change in the valuation of the Company’s Portfolio before the impact of currency movements and Co-investment Incentive Scheme Accrual. The Portfolio return of 5.9% is calculated as follows:
£m 31 January 2024 31 January 2023
Income, gains and losses on Investments 125.3 190.0
Foreign exchange gains and losses included in gains and losses on investments (38.6) (76.4)
Incentive accrual valuation movement (3.7) 9.0
Total gains on Portfolio investments excluding impact of foreign exchange 83.1 122.6
Opening Portfolio valuation 1,406.4 1,172.2
Portfolio Return on a Local Currency Basis 5.9% 10.5%
Term Short form Definition
Portfolio Return on a Local Currency Basis (continued) A reconciliation between the Portfolio Return on Local Currency Basis and NAV per Share Total Return is disclosed under ‘Total Return’.
Portfolio Company Portfolio Company refers to an individual company in an investment portfolio.
Primary A Primary Investment is a Commitment to a private equity fund.
Quoted Company A Quoted Company is any company whose shares are listed or traded on a recognised stock exchange.
Realisation Proceeds Realisation Proceeds are amounts received in respect of underlying realisation activity from the Portfolio and exclude any inflows from the sale of fund positions via the secondary market.
Realisations - Multiple to Cost Realisations - Multiple to Cost is the average return from Full Exits from the Portfolio in the period on a primary investment basis, weighted by cost.
£m 31 January 2024 31 January 2023
Realisation Proceeds from Full Exits in the year-to-date 100.8 133.2
Cost 28.8 50.1
Average return Multiple to Cost 3.5x 2.7X
Realisations – Uplift To Carrying Value 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 via sell downs of their shares.
£m 31 January 2024 31 January 2023
Realisation Proceeds from Full Exits in the year-to-date 100.8 133.2
Prior Carrying Value (at previous quarterly valuation prior to exit) 89.2 107.5
Realisations – Uplift To Carrying Value 29.5% 23.9%
Secondary Investments Secondary Investments occur when existing private equity fund interests and Commitments are purchased from an investor seeking liquidity.
Share Price Total Return Share Price Total Return is the change in the Company’s share price, assuming that dividends are re-invested on the day that they are paid.
Total New Investment 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 as follows:
£m 31 January 2024 31 January 2023
Purchase of Portfolio investments per cash flow statement 25.2 62.2
Purchase of Portfolio investments within subsidiary investments 111.6 225.0
Total New Investment 136.7 287.2
Term Short form Definition
Total Proceeds 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 and are included in subsidiary investments within the financial statements.
£m 31 January 2024 31 January 2023
Sale of Portfolio investments per cash flow statement 40.6 32.1
Sale of Portfolio investments, interest received, and dividends received within subsidiary investments 195.3 217.7
Interest income per cash flow statement 1.7 1.8
Dividend income per cash flow statement 0.8 0.4
Other income per cash flow statement 0.0 —
Total Proceeds 238.6 252.0
Fund Disposals (67.6) 0.0
Realisation Proceeds 171.0 252.0
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.
(1) Note performance data excludes taxes that the end investor may incur and
dealing costs such as platform fees
(2) Market data, where quoted, from Bain & Company 'Global Private Equity
Report 2024', March 2024:
https://www.bain.com/insights/topics/global-private-equity-report/