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ICG Enterprise Trust Plc: Q1 Update for the three months ended 30 April 2022

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ICG Enterprise Trust plc
Q1 Update for the three months ended 30 April 2022
28 June 2022

NAV per Share Total Return of 4.5% in the first quarter;
27.9% in the last twelve months

Highlights

  • NAV per Share of 1,761p (31 January 2022: 1,690p), NAV per Share Total Return of 4.5% during the quarter; 27.9% during the last twelve months

  • Portfolio Return on a Local Currency Basis during the quarter of 2.0% (Sterling return: 5.2%); 30.2% during the last twelve months. Portfolio valued at £1,244m on 30 April 2022

  • Disciplined transaction activity: new Investments of £59.1m and Realisation Proceeds of £48.8m during the quarter, including 17 Full Exits executed at an average of 23% Uplift to Carrying Value and 2.7x Multiple to Cost

  • First quarter dividend of 7p per share; progressive dividend policy maintained

  • Revolving Credit Facility increased to €240m in May, and maturity extended to February 2026

  • Board strengthened further by the appointment of two additional Non-Executive Directors


Oliver Gardey
Head of Private Equity Fund Investments, ICG

The 4.5% growth in ICGT’s NAV per Share Total Return in the first quarter reflects the resilience of our Portfolio, which grew 2.0% during the quarter on a local currency basis. Our Portfolio of private companies continues to generate attractive shareholder returns and, while realisation proceeds are lower than during Q1 FY22, the 17 Full Exits from our Portfolio were executed at attractive uplifts to carrying values.

We are currently in an unusual environment, which is presenting attractive primary and secondary opportunities. Furthermore, our Manager’s expertise in structured transactions with downside protection is generating differentiated investment opportunities for ICG Enterprise Trust. We were able to capitalise on these factors during the quarter, making a number of primary commitments to high-performing managers and sourcing attractive secondary and direct investment opportunities. Discipline is crucial, and we remain highly selective in our investment process.

Looking ahead, we believe ICGT’s focus on investing in companies with defensive growth characteristics through our actively managed portfolio positions us well to generate long-term value. We are invested in high quality companies that we expect to show resilient operational and financial performance across economic cycles, and our Portfolio offers diversified exposure across vintages, sectors and countries.

PERFORMANCE OVERVIEW

 

 

 

Annualised

 

3 months

1 year

3 years

5 years

10 years

Performance to 30 April 2022

 

 

 

 

 

NAV per Share Total Return

4.5%

27.9%

20.3%

17.4%

13.8%

Share Price Total Return

(6.7%)

5.2%

10.9%

11.5%

13.3%

FTSE All-Share Index Total Return

1.1%

8.7%

4.5%

4.8%

7.2%


 

 

Three months to:

12 months to:

 

 

30 Apr. 2022

30 Apr. 2021

30 Apr. 2022

30 Apr. 2021

Portfolio Return on a Local Currency Basis

 

2.0%

3.4%

30.2%

37.0%

NAV per Share Total Return

 

4.5%

1.6%

27.9%

29.8%

Realisation Proceeds

 

£49m

£100m

£282m

£208m

Total New Investment

 

£59m

£32m

£331m

£139m

ENQUIRIES

Investor / Analyst enquiries:

Oliver Gardey, Head of Private Equity Fund Investment, ICG: +44 (0) 20 3545 2000

Colm Walsh, Managing Director of Private Equity Fund Investments, ICG

Chris Hunt, Head of Shareholder Relations, ICG

Livia Bridgman Baker, Shareholder Relations, ICG

Media enquiries:

Clare Glynn, Corporate Communications, ICG: +44 (0) 20 3545 1395

Website:

www.icg-enterprise.co.uk

Company timetable

Ex-dividend date: 7 July 2022

Record date: 8 July 2022

Payment of dividend: 22 July 2022

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 private companies, primarily in Europe and the US.

As a listed private equity investor, our purpose is to provide shareholders with access to the attractive long-term returns generated by investing in private companies, with the added benefit of daily liquidity.

We invest in companies directly via co-investments and through funds managed by ICG and other leading private equity managers who focus on creating long-term value and building sustainable growth through active management and strategic change.

We have a long track record of delivering strong returns through a flexible mandate and highly selective approach that strikes the right balance between concentration and diversification, risk and reward.

NOTES

Included in this document are Alternative Performance Measures (“APMs”). APMs have been used if considered by the Board and the Manager to be the most relevant basis for shareholders in assessing the overall performance of the Company, and for comparing the performance of the Company to its peers and its previously reported results. The Glossary in the Company’s H1 results 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

This report may contain forward looking statements. These statements have been made by the directors in good faith based on the information available to them up to the time of their approval of this report and should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information. These written materials are not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption therefrom. The issuer has not and does not intend to register any securities under the US Securities Act of 1933, as amended, and does not intend to offer any securities to the public in the United States. No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in these written materials, will not be accepted.

BUSINESS REVIEW

Portfolio Structure
We invest in businesses directly, through ICG managed funds, and through third-party private equity managers. We believe that this combination of investments results in a differentiated and balanced portfolio construction, striking the right balance between concentration and diversification, risk and reward.

ICGT’s Portfolio composition as at 30 April 2022 is shown below:

Investment category


£m


% of Portfolio

ICG managed investments

358.7

28.8%

Third party Direct Investments

201.5

16.2%

Third party Secondary Investments

60.0

4.8%

High Conviction Investments

620.2

49.9%

Third Party Funds

623.5

50.1%

Total

1,243.7

100.0%

Portfolio performance

  • Portfolio valued at £1,244m on 30 April 2022

  • Portfolio Return on a Local Currency Basis of 2.0% during the quarter

  • High Conviction Investments (49.9% of the Portfolio) generated local currency returns of 2.1% during the quarter and Third Party Funds (50.1% of the Portfolio) generated local currency returns of 1.9%

Movement in the Portfolio to 30 April 2022

Three months
£m

Opening Portfolio

1,172.2

Total New Investments

59.1

Total Proceeds

(48.8)

Net (proceeds)/investments

10.3

Valuation movement*

23.1

Currency movement

38.1

Closing Portfolio

1,243.7

% Portfolio growth (local currency)

2.0%

% currency movement

3.1%

% Portfolio growth (Sterling)

5.2%

Effect of cash drag

0.1%

Expenses and other income

(0.5)%

Co-investment Incentive Scheme Accrual

(0.3)%

Impact of share buybacks and dividend reinvestment

0.0%

NAV per share Total Return

4.5%

* 83% of the Portfolio is valued using 30 March 2022 (or later) valuations (Q1 22: 82%)

New investment

  • £59.1m of Total New Investment in the quarter; 52.8% (£31.2m) invested into High Conviction Investments with the remaining 47.2% (£27.9m) being drawdowns on a range of Commitments to Third Party Funds

  • Within our High Conviction Investments, we made a new co-investment of £12.8m alongside our Manager and deployed £16.7m in drawdowns to ICG-managed funds (principally LP Secondaries I and ICG Europe Fund VIII). The detail of the co-investment made during the period is set out below:

Company

Manager

Company sector

Description

Investment

Newton

ICG

Business Services

Provider of management consulting services

£12.8m

  • The balance of £1.7m of High Conviction Investments made during the quarter comprises co-investments alongside third-party managers and drawdowns on commitments acquired through secondary transactions

New commitments

  • During the period we made a total of £119.0m of new fund Commitments, of which £45.5m was to the ICG-managed LP Secondaries Fund I, supporting our strategic target to increase our exposure to the secondary market

  • The breakdown of new Commitments was as follows:

Fund

Manager

Focus

ICG Enterprise Trust Commitment during the period

ICG LP Secondaries Fund I

ICG

Secondary portfolio of mid-market and large buyouts

$60.0m (£45.5m)

PAI Europe VIII

PAI

Mid-market and large buyouts

€25.0m (£20.9m)

Advent X

Advent

Large buyouts

€20.0m (£16.8m)

Gridiron V

Gridiron

Mid-market buyouts

$20.0m (£15.0m)

Permira VIII

Permira

Large buyouts

€15.0m (£12.6m)

Hg Genesis X

Hg Capital

Mid-market buyouts

€5.0m (£4.2m)

Hg Saturn III

Hg Capital

Mid-market and large buyouts

$5.0m (£4.0m)

Realisation activity

  • Realisation proceeds of £48.8m received during the quarter, of which £37.9m was generated from 17 Full Exits executed at an average of 23% Uplift to Carrying Value and 2.7x Multiple to Cost

Quoted Companies

  • We do not invest directly in publicly quoted companies, but gain listed investment exposure when IPOs are used to exit an investment. Public market valuations are typically more volatile than those observed in private markets

  • At 30 April 2022, quoted companies representing 9.2% of the Portfolio were valued by reference to the latest market price (31 January 2022; 10.3%)

  • Only one quoted investment individually accounted for 0.5% or more of the Portfolio value:

 

Company

Ticker

% value of Portfolio

1

Chewy (part of PetSmart holding)1

CHWY-US

3.5%

Other

 

 

5.7%

Total

 

 

9.2%

1 % value of Portfolio includes entire holding of PetSmart and Chewy. Majority of value is within Chewy

Balance sheet and financing

  • Total liquidity of £166.4m, comprising £15.4m cash and £151.0m undrawn bank facility

 

£m

Cash at 31 January 2022

41.3

Realisation Proceeds

48.8

Third Party Fund drawdowns

(27.9)

High Conviction Investments

(31.2)

Shareholder returns

(4.1)

FX and other

(11.3)

Cash at 30 April 2022

15.4

Available undrawn debt facilities

151.0

Cash and undrawn debt facilities (total available liquidity)

166.4

  • Portfolio represented 103.1% of net assets

 

£m

% of net assets

Total Portfolio

1,243.7

103.1%

Cash

15.4

1.3.%

Net current liabilities

(52.6)

(4.4%)

Net assets

1,206.5

100%

  • Undrawn commitments of £491.9m, of which 19.1% (£93.9m) were to funds outside of their investment period

DIVIDEND

  • Maintaining a progressive dividend policy

  • First quarter dividend of 7p per share

  • In the absence of any unforeseen circumstances, it is the Board’s current intention to declare total dividends of at least 30p per share for the financial year ended 31 January 2023. This would represent an increase of 3p (11.1%) per share compared to the financial year ended 31 January 2022

ACTIVITY SINCE THE QUARTER END (TO 31 MAY 2022)

  • Total Proceeds of £45.0m

  • New investments of £4.8m, 14.6% into High Conviction Investments

  • Post period-end, we increased the size of our Revolving Credit Facility ("RCF") to €240m (from €200m previously), in keeping with the Company’s higher net asset value. In addition, the maturity of the RCF was also extended by one year to February 2026. The other key terms remain unchanged. The RCF is available for general corporate purposes, including short-term financing of investments such as the Drawdown on Commitments to funds

BOARD CHANGES

  • Adiba Ighodaro and Janine Nicholls have been appointed as Non-Executive Directors of the Company, and will join the Board on 1 July 2022

  • Sandra Pajarola has retired from the Board, effective 28 June 2022, having served as a Non-Executive Director of the Company for nine years

ICG Private Equity Fund Investments Team
28 June 2022

SUPPLEMENTARY INFORMATION

Top 30 companies
The table below presents the 30 companies in which ICG Enterprise Trust had the largest investments by value at 30 April 2022.

 

Company

Manager

Year of investment

Country

Value as a %
of Portfolio

1

PetSmart+

 

 

 

 

 

Retailer of pet products and services

BC Partners

2015

United States

3.5%

2

Minimax+

 

 

 

 

 

Supplier of fire protection systems and services

ICG

2018

Germany

2.7%

3

IRI+

 

 

 

 

 

Provider of mission-critical data and predictive analytics to consumer goods manufacturers

New Mountain

2018

United States

2.6%

4

Yudo+

 

 

 

 

 

Designer and manufacturer of hot runner systems

ICG

2017 / 2018

South Korea

2.1%

5

Leaf Home Solutions

 

 

 

 

 

Provider of home maintenance services

Gridiron

2016

United States

1.9%

6

DOC Generici+

 

 

 

 

 

Manufacturer of generic pharmaceutical products

ICG

2019

Italy

1.6%

7

Endeavor Schools+

 

 

 

 

 

Provider of private schooling

Leeds Equity

2018

United States

1.6%

8

Froneri+

 

 

 

 

 

Manufacturer and distributor of ice cream products

PAI

2013 / 2019

United Kingdom

1.5%

9

Visma+

 

 

 

 

 

Provider of business management software and outsourcing services

Hg Capital / ICG

2017 / 2020

Norway

1.3%

10

AML RightSource+

 

 

 

 

 

Provider of compliance and regulatory services and solutions

Gridiron

2020

United States

1.2%

11

DomusVI+

 

 

 

 

 

Operator of retirement homes

ICG

2017 / 2021

France

1.2%

12

David Lloyd Leisure+

 

 

 

 

 

Operator of premium health clubs

TDR

2013 / 2020

United Kingdom

1.2%

13

DigiCert+

 

 

 

 

 

Provider of enterprise internet security solutions

ICG

2021

United States

1.2%

14

Newton+

 

 

 

 

 

Provider of management consulting services

ICG

2021 / 2022

United Kingdom

1.2%

15

Ambassador Theatre Group+

 

 

 

 

 

Operator of theatres and ticketing platforms

ICG / Providence

2021

United Kingdom

1.1%


 

Company

Manager

Year of investment

Country

Value as a %
of Portfolio

16

Curium Pharma+

 

 

 

 

 

Supplier of nuclear medicine diagnostic pharmaceuticals

ICG

2020

United Kingdom

1.1%

17

Ivanti

 

 

 

 

 

Provider of IT management solutions

Charlesbank / ICG

2021

United States

1.1%

18

PSB Academy+

 

 

 

 

 

Provider of private tertiary education

ICG

2018

Singapore

1.0%

19

Planet Payment+

 

 

 

 

 

Provider of integrated payments services focused on hospitality and luxury retail

Advent / Eurazeo

2021

Ireland

1.0%

20

Class Valuation+

 

 

 

 

 

Provider of residential mortgage appraisal management services

Gridiron

2021

United States

0.8%

21

European Camping Group+

 

 

 

 

 

Operator of premium campsites and holiday parks

PAI

2021

France

0.8%

22

Precisely

 

 

 

 

 

Provider of enterprise software

ICG

2021

United States

0.8%

23

MoMo Online Mobile Services

 

 

 

 

 

Operator of remittance and payment services via mobile e-wallet

ICG

2019

Vietnam

0.7%

24

Brooks Automation+

 

 

 

 

 

Provider of semiconductor manufacturing solutions

Thomas H. Lee

2021 / 2022

United States

0.7%

25

Davies Group+

 

 

 

 

 

Specialty business process outsourcing service provider

BC Partners

2021

United Kingdom

0.7%

26

RegEd+

 

 

 

 

 

Provider of SaaS-based governance, risk and compliance enterprise software solutions

Gryphon

2018 / 2019

United States

0.7%

27

Crucial Learning+

 

 

 

 

 

Provider of corporate training courses focused on communication skills and leadership development

Leeds Equity

2019

United States

0.6%

28

Travel Nurse Across America

 

 

 

 

 

Provider of travel nurse staffing services

Gridiron

2016

United States

0.6%

29

AMEOS Group+

 

 

 

 

 

Operator of private hospitals

ICG

2021

Switzerland

0.6%

30

nGAGE

 

 

 

 

 

Provider of recruitment services

Graphite

2014

United Kingdom

0.5%

 

Total of the 30 largest underlying investments

 

 

 

38.0%

+ All or part of this investment is held directly as a Co-investment or other Direct Investment

30 largest fund investments
The table below presents the 30 largest funds by value at 30 April 2022. The valuations are net of underlying managers’ fees and Carried Interest.

 

Fund

Year of commitment

Country/ region

Value £m

Outstanding commitment £m

1

ICG Ludgate Hill I

 

 

 

 

 

Secondary portfolio

2021

Europe/North America

43.1

13.8

2

ICG Strategic Equity Fund III

 

 

 

 

 

Secondary fund restructurings

2018

Global

37.5

11.0

3

Graphite Capital Partners VIII

 

 

 

 

 

Mid-market buyouts

2013

UK

36.6

4.4

4

ICG Europe VII

 

 

 

 

 

Mezzanine and equity in mid-market buyouts

2018

Europe

34.8

10.1

5

Gridiron Capital Fund III

 

 

 

 

 

Mid-market buyouts

2016

North America

31.4

4.3

6

CVC European Equity Partners VII

 

 

 

 

 

Large buyouts

2017

Europe/North America

27.3

2.1

7

CVC European Equity Partners VI

 

 

 

 

 

Large buyouts

2013

Europe/North America

25.2

2.1

8

Thomas H Lee Equity Fund VIII

 

 

 

 

 

Mid-market and large buyouts

2017

North America

21.3

3.6

9

Sixth Cinven Fund

 

 

 

 

 

Large buyouts

2016

Europe

20.5

1.3

10

ICG LP Secondaries Fund I

 

 

 

 

 

Secondary portfolio

2023

Europe/North America

19.3

13.2

11

BC European Capital IX

 

 

 

 

 

Mid-market and large buyouts

2011

Europe/North America

19.1

0.7

12

PAI Strategic Partnerships

 

 

 

 

 

Mid-market and large buyouts

2019

Europe

18.8

0.6

13

New Mountain Partners V

 

 

 

 

 

Mid-market buyouts

2017

North America

18.1

1.0

14

Advent IX

 

 

 

 

 

Large buyouts

2019

Europe/North America

17.2

3.8

15

Permira V

 

 

 

 

 

Large buyouts

2013

Europe/North America

17.0

0.4

16

Oak Hill V

 

 

 

 

 

Mid-market buyouts

2019

North America

17.0

1.8

17

Gridiron Capital Fund IV

 

 

 

 

 

Mid-market buyouts

2019

North America

17.0

2.8

18

BC European Capital X

 

 

 

 

 

Large buyouts

2016

Europe

16.9

2.5


 

Fund

Year of commitment

Country/ region

Value £m

Outstanding commitment £m

19

Resolute IV

 

 

 

 

 

Mid-market buyouts

2018

North America

16.4

1.7

20

Advent Global Private Equity VIII

 

 

 

 

 

Large buyouts

2016

Europe/North America

16.4

0.0

21

ICG Strategic Equity Fund IV

 

 

 

 

 

Secondary fund restructurings

2021

Global

16.2

18.6

22

TDR Capital III

 

 

 

 

 

Mid-market and large buyouts

2013

Europe

15.3

1.6

23

PAI Europe VI

 

 

 

 

 

Mid-market and large buyouts

2013

Europe

15.2

1.3

24

Gryphon V

 

 

 

 

 

Mid-market buyouts

2019

North America

14.0

1.9

25

ICG Augusta Partners Co-Investor

 

 

 

 

 

Secondary fund restructurings

2018

Global

13.8

18.9

26

ICG Ludgate Hill II

 

 

 

 

 

Secondary portfolio

2022

North America

13.3

5.7

27

PAI Europe VII

 

 

 

 

 

Mid-market and large buyouts

2017

Europe

13.3

10.3

28

Resolute II Continuation Fund

 

 

 

 

 

Secondary fund restructurings

2018

North America

12.8

2.2

29

AEA VII

 

 

 

 

 

Mid-market buyouts

2019

North America

12.2

4.1

30

Leeds Equity Partners VI

 

 

 

 

 

Mid-market buyouts

2017

North America

11.8

1.0

 

Total of the largest 30 fund investments

 

 

608.8

146.6

 

Percentage of total investment Portfolio

 

 

49.0%

 

 

 

 

 

 

 

 

 

 

 

Portfolio at 30 April 2022
All data is presented on a look-through basis to the investment portfolio held by the Company, consistent with the commentary in previous annual and interim reports

Portfolio by calendar year of investment

% of value of underlying investments

2022

 

3.7%

2021

 

25.5%

2020

 

11.8%

2019

 

15.5%

2018

 

17.2%

2017

 

9.1%

2016

 

5.4%

2015

 

5.0%

2014 and older

 

6.8%

Total

 

100.0%


Portfolio by sector

% of value of underlying investments

TMT

24.1%

Consumer goods and services

19.5%

Healthcare

15.9%

Business services

12.3%

Industrials

8.4%

Financials

5.5%

Education

5.4%

Leisure

4.2%

Other

4.7%

Total

100.0%


Portfolio by geographic distribution based on location of company headquarters

% of value of underlying investments

North America

42.3%

 

Europe

30.6%

 

Other

27.1%

 

Total

100.0%

 


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