UK markets closed
  • FTSE 100

    6,630.52
    -20.36 (-0.31%)
     
  • FTSE 250

    20,961.31
    -334.92 (-1.57%)
     
  • AIM

    1,163.26
    -10.13 (-0.86%)
     
  • GBP/EUR

    1.1617
    +0.0020 (+0.17%)
     
  • GBP/USD

    1.3848
    -0.0045 (-0.33%)
     
  • BTC-GBP

    35,554.17
    +712.36 (+2.04%)
     
  • CMC Crypto 200

    982.82
    +39.65 (+4.20%)
     
  • S&P 500

    3,847.20
    +78.73 (+2.09%)
     
  • DOW

    31,528.44
    +604.30 (+1.95%)
     
  • CRUDE OIL

    66.14
    +2.31 (+3.62%)
     
  • GOLD FUTURES

    1,696.80
    -3.90 (-0.23%)
     
  • NIKKEI 225

    28,864.32
    -65.78 (-0.23%)
     
  • HANG SENG

    29,098.29
    -138.50 (-0.47%)
     
  • DAX

    13,920.69
    -135.65 (-0.97%)
     
  • CAC 40

    5,782.65
    -48.00 (-0.82%)
     

ICG Enterprise Trust Plc: Q3 Update for the period to 31 October 2020

ICG Enterprise Trust Plc
·15-min read

4 February 2021
ICG Enterprise Trust Plc
Q3 Update for the period to 31 October 2020

Strong performance delivered by actively constructed portfolio

Highlights

  • Portfolio performance driving NAV growth

    • Strong underlying investment gains resulted in +12.1% local currency portfolio return in the quarter; +12.5% sterling return

    • High Conviction Investments experienced strong local currency returns of +17.6% during the quarter, Third Party Funds generated +7.6% local currency returns

    • NAV per share of 1,243.0p; +10.7% total return over the quarter, +9.6% total return over the last nine months

  • Realisations at significant uplifts to carrying value

    • Substantial proceeds from realisations and secondary sales of £72m in the quarter, including the realisation of the Roompot co-investment alongside PAI VI

    • Total proceeds over the last nine months of £166m and a further £42m of undrawn commitments released

      • Realisations generated proceeds of £94m from 22 full exits; 40% uplift to carrying value; 2.4x multiple to cost, in line with recent historical trend

      • Secondary sales generated proceeds of £72m proceeds over nine months and released £42m of undrawn commitments

  • Continued investment activity across High Conviction Investments and Third Party Funds

    • Robust deployment in the quarter of £30m; 42% invested into High Conviction Investments

    • High Conviction Investments increased over the last nine months from 41% to 46% of portfolio

    • Three Third Party Funds commitments made in the quarter to top-tier managers

    • Momentum has continued since period end, with a healthy pipeline of High Conviction Investments and Third Party Funds

  • Quarterly dividend of 5p per share

    • Dividends for the nine months total 15p per share


Performance to 31 October 2020

3 months

9 months

1 year

3 years

5 years

10 years

NAV per share (total return)

+10.7%

+9.6%

+11.1%

+41.2%

+97.0%

+202.5%

Share price (total return)

+4.2%

-13.4%

-9.8%

+6.2%

+50.9%

+237.4%

FTSE All-Share Index (total return)

-3.2%

-20.4%

-18.6%

-14.4%

+8.9%

+53.7%

Oliver Gardey, Head of Private Equity Fund Investments, ICG, commented:

“We were extremely pleased with the performance we delivered in this strong third quarter. The significant returns delivered across the portfolio demonstrate the benefits of our differentiated strategy of actively constructing a portfolio of investments with defensive growth characteristics. The strength of this portfolio construction is underlined by the strong performance of our High Conviction Investments and Third Party Funds.

“We continued to source attractive investment opportunities across our High Conviction Investments and Third Party Funds. Our portfolio is well diversified by sector and geography, well positioned in this time of uncertainty, and we continued to enjoy good momentum across the business after the end of this reporting period. I am confident that we are extremely well placed to take advantage of a growing investment pipeline and will continue to deliver significant shareholder value over the long term.”

Business review


Strong performance across the portfolio

  • Investment portfolio valued at £818m1

    • +12.1% local currency portfolio return for the quarter; +12.5% sterling return

    • +7.9% local currency portfolio return for the first nine months; +11.9% sterling return

  • High Conviction Investments delivered local currency returns of +17.6% in the quarter, are now contributing £378m to reported NAV, and represents 46% of the total portfolio value (31 July 2020: 44%)

  • Third Party Funds delivered local currency returns of +7.6% the quarter and is now contributing £440m to reported NAV

  • In line with our strategic objectives, we increased the weighting towards the US in our portfolio during the quarter, from 35% to 39%. This was partially driven by the strength of the performance of a number of our Top 30 investments (in particular Telos, Leaf Home Solutions and PetSmart) and partially by investments made in US companies

Strong realisations at significant uplift to portfolio value

  • 8 full realisations in the quarter; £55m of proceeds received

    • Cash proceeds for the quarter include the realisation of the Roompot co-investment alongside PAI VI

  • 22 full realisations in the first nine months of the financial year; £94m of proceeds received

    • Realisations at a 40% uplift to carrying value; 2.4x multiple of cost

  • Secondary sales in the first nine months generated £72m of proceeds and released £42m of undrawn commitments

Continued momentum in investment activity

  • £30m of new investment in the quarter, taking total to £82m for the nine months

    • High Conviction Investments represented 42% of capital deployed in the quarter

  • Two co-investments made during the quarter

    • $5m (£4m) completed in Visma alongside Hg in the world’s largest ever software buyout

    • €7m (£6m) committed to Curium Pharma, a leading provider of radiopharmaceuticals, alongside ICG Strategic Equity and CapVest

  • Third Party Funds remain critical to our strategy of having an appropriately balanced portfolio and to sourcing High Conviction Investments. During the quarter we committed £17m to three top-tier managers, all of which are focussed on expanding our presence in North America

    • Bain XIII, focused on large buyouts in North America: $10m (£8m)

    • Clayton, Dubilier & Rice XI, focused on mid-market and large buyouts in North America: $10m (£7m)

    • Gridiron IV, a US mid-market buyout fund: $3m (£2m) top-up commitment, bringing our total commitment to $18m and reflecting the strength of fund performance

Strong balance sheet

  • Closing NAV of £855m; investment portfolio represents 96% of NAV

  • Strong liquidity position of £231m, comprising £73m cash and £158m undrawn bank facility

  • Uncalled commitments of £431m (£74m of which are to funds outside of their investment period)

Dividend

  • Third quarter dividend of 5p declared, taking dividends for the nine months to 15p


Board

  • David Warnock appointed as a non-executive director with effect from 1 December 2020, joining the Audit and Nominations Committees

  • David brings extensive private equity, investment trust and listed company experience


Activity since the period end (to 31 December 2020)

  • Realisations

    • Proceeds of £38m received, including from the realisation of City & County Healthcare Group

    • Thomas H. Lee Partners reached an agreement to sell System One to Oaktree Capital Management

  • Deployment

    • Invested £48m, 56% into High Conviction Investments

  • Third Party Funds commitments

    • New Mountain Partners VI, focused on mid-market buyouts in the US: $14m (£10m)

    • Leeds Equity Partners VII, focused on mid-market buyouts in North America: $10m (£7m)

    • PAI Mid-Market Fund, focused on mid-market buyouts in Europe: €10m (£9m)

    • FSN Capital VI, focused on mid-market buyouts in Northern Europe: €10m (£9m)

  • Bank facility

    • Terms agreed on a new €200m (£180m) 4-year RCF to replace our existing €176m (£158m) facility

Company timetable


Ex-dividend date 11 February 2021
Record date 12 February 2021
Payment of dividend 5 March 2021

Enquiries

Analyst / Investor enquiries: +44 (0) 20 3545 2000

Oliver Gardey, Head of Private Equity Fund Investments, ICG
Colm Walsh, Managing Director, ICG
James Caddy, Investor Relations, ICG

Media:
Fiona Laffan, Global Head of Corporate Affairs, ICG: +44 (0) 20 3545 1510
Ed Gascoigne Pees, Eddie Livingstone-Learmonth, Camarco: +44 (0) 20 3757 4993

Disclaimer

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

Supplementary information

The 30 largest underlying investments

The table below presents the 30 companies in which ICG Enterprise had the largest investments by value at 31 October 2020. These investments may be held directly or through funds, or in some cases in both ways. The valuations are gross and are shown as a percentage of the total Portfolio.

Company

Manager

Year of investment

Country

Value as a % of Portfolio

1

PetSmart+

Retailer of pet products and services

BC Partners

2015

United States

5.8%

2

DomusVi+

Operator of retirement homes

ICG

2017

France

4.6%

3

Minimax+

Supplier of fire protection systems and services

ICG

2018

Germany

3.2%

4

Telos+2

Provider of information technology and cybersecurity

Direct shareholding

1998

United States

2.9%

5

Leaf Home Solutions

Provider of gutter protection solutions

Gridiron Capital

2016

United States

2.5%

6

DOC Generici+

Retailer of pharmaceutical products

ICG

2019

Italy

2.3%

7

Yudo+

Manufacturer of components for injection moulding

ICG

2017

Hong Kong

2.3%

8

Visma+

Provider of accounting software and
accounting outsourcing services

ICG / HgCapital

2017 / 2020

Norway

2.0%

9

Froneri^

Manufacturer and distributor of ice cream products

PAI Partners

2019

United Kingdom

2.0%

10

City & County Healthcare

Provider of home care services in the UK

Graphite Capital

2013

United Kingdom

1.9%

11

Supporting Education Group+^

Provider of supply teachers and support staff

ICG

2014

United Kingdom

1.8%

12

Berlin Packaging+

Provider of global packaging services and supplies

Oak Hill Capital

2018

United States

1.6%

13

IRI+

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

New Mountain Capital

2018

United States

1.6%

14

Endeavor Schools+

Provider of paid private schooling

Leeds Equity
Partners

2018

United States

1.4%

15

System One+

Provider of specialty workforce solutions

Thomas H. Lee Partners

2016

United States

1.4%

16

PSB Academy+

Provider of private tertiary education

ICG

2018

Singapore

1.2%

17

VitalSmarts+

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

Leeds Equity Partners

2019

United States

1.0%

18

Allegro

Operator of an online marketplace and price comparison website

Cinven / Permira

2017

Poland

1.0%

19

U-POL^

Manufacturer of automotive aftermarket products

Graphite Capital

2010

United Kingdom

0.9%

20

Cognito+^

Supplier of communications equipment, software & services

Graphite Capital

2002 / 2014

United Kingdom

0.7%

21

Compass Community

Provider of fostering services and children's residential care

Graphite Capital

2017

United Kingdom

0.7%

22

EG Group

Operator of petrol station forecourts

TDR Capital

2014

United Kingdom

0.7%

23

nGAGE

Provider of recruitment services

Graphite Capital

2014

United Kingdom

0.7%

24

RegEd+

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

Gryphon Investors

2018

United States

0.6%

25

David Lloyd Leisure+

Operator of premium health clubs

TDR Capital

2013

United Kingdom

0.6%

26

IRIS Accountancy Solutions

Provider of business-critical software and services to the accountancy and payroll sectors

ICG

2018

United Kingdom

0.6%

27

Beck & Pollitzer

Provider of industrial machinery installation and relocation

Graphite Capital

2016

United Kingdom

0.6%

28

YSC Consulting

Leadership consulting and management assessment business

Graphite Capital

2017

United Kingdom

0.6%

29

ICR Group

Provider of repair and maintenance services to the energy industry

Graphite Capital

2014

United Kingdom

0.6%

30

ELITech

Manufacturers of in-vitro diagnostic instruments and reagents

PAI Partners

2017

Italy

0.5%

Total of the 30 largest underlying investments

48.1%

⁺ All or part of this investment is held directly as a co-investment or other direct investment.

^ All or part of this investment was acquired as part of a secondary purchase.

The 30 largest fund investments

The 30 largest funds by value at 31 October 2020 are:

Fund

Year of commitment

Country/ region

Value £m

Outstanding commitment £m

1

Graphite Capital Partners VIII *

Mid-market buyouts

2013

UK

46.7

10.6

2

Gridiron Capital Fund III

Mid-market buyouts

2016

North America

29.9

4.3

3

ICG Europe VII

Mezzanine and equity in mid-market buyouts

2018

Europe

22.2

17.7

4

BC European Capital IX **

Large buyouts

2011

Europe/USA

22.2

1.5

5

ICG Europe VI **

Mezzanine and equity in mid-market buyouts

2015

Europe

20.1

4.6

6

Sixth Cinven Fund

Large buyouts

2016

Europe

20.0

2.9

7

Advent Global Private Equity VIII

Large buyouts

2016

Europe/USA

19.1

0.6

8

Thomas H Lee Equity Fund VII

Mid-market and large buyouts

2015

USA

18.7

1.5

9

CVC European Equity Partners VI

Large buyouts

2013

Europe/USA

18.2

2.7

10

PAI Europe VI

Mid-market and large buyouts

2013

Europe

15.5

1.4

11

PAI Strategic Partnerships **

Mid-market and large buyouts

2019

Europe

15.0

1.6

12

BC European Capital X

Large buyouts

2016

Europe

14.0

1.7

13

One Equity Partners VI

Mid-market buyouts

2016

Europe/USA

13.4

0.6

14

Graphite Capital Partners VII * / **

Mid-market buyouts

2007

UK

12.2

2.8

15

ICG Strategic Secondaries Fund II

Secondary fund restructurings

2016

Europe/USA

11.8

16.2

16

ICG Asia Pacific Fund III

Mezzanine and equity in midmarket buyouts

2016

Asia Pacific

11.4

3.0

17

CVC European Equity Partners VII

Large buyouts

2017

Europe/ North America

11.4

10.8

18

Resolute IV

Mid-market buyouts

2018

USA

11.4

5.5

19

Gryphon V

Mid-market buyouts

2019

North America

11.3

1.5

20

Permira V

Large buyouts

2013

Europe/USA

11.2

0.5

21

New Mountain Partners V

Mid-market buyouts

2017

North America

11.2

2.3

22

Oak Hill Capital Partners IV

Mid-market buyouts

2017

USA

10.5

0.7

23

TDR Capital III

Mid-market and large buyouts

2013

Europe

10.4

1.7

24

Permira VI

Large buyouts

2016

Europe

10.3

2.0

25

Charterhouse Capital Partners X

Large buyouts

2015

Europe

9.6

4.5

26

Thomas H Lee Equity Fund VIII

Mid-market and large buyouts

2017

USA

9.6

8.8

27

Resolute II **

Mid-market buyouts

2018

USA

9.5

1.7

28

Leeds Equity Partners VI

Mid-market buyouts

2017

North America

8.4

0.7

29

Graphite Capital Partners IX

Mid-market buyouts

2018

UK

7.8

20.6

30

Bain Capital Europe IV

Mid-market buyouts

2014

Europe

7.2

1.3

Total of the largest 30 fund investments

450.6

136.3

Percentage of total investment Portfolio

55.1%

* Includes the associated Top Up funds.

** All or part of an interest acquired through a secondary fund purchase.


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

Investment category

% of portfolio

High Conviction Investments
ICG funds and co-investments



24.7%

Third party co-investments

16.4%

Third party secondary investments

5.1%

Total High Conviction Investments

46.2%

Third Party Funds

53.8%

Total

100.0%


Portfolio by investment type

% of value of underlying investments

Large buyouts

54.1%

Mid-market buyouts

35.8%

Small buyouts

10.1%

Total

100.0%




Portfolio by calendar year of investment



% of value of underlying investments

2020

5.4%

2019

20.0%

2018

20.7%

2017

18.7%

2016

10.7%

2015

8.6%

2014

6.3%

2013

3.6%

2012

1.0%

2011

0.0%

2010

1.2%

2009

0.4%

2008

0.1%

2007

0.5%

2006 and before

2.8%

Total

100.0%


Portfolio by sector

% of value of underlying investments

Consumer goods and services

20.0%

Healthcare

19.4%

TMT

17.0%

Business services

13.0%

Industrials

10.5%

Education

6.9%

Financials

5.8%

Leisure

2.8%

Other

4.6%

Total

100.0%




Portfolio by geographic distribution based on location of Company headquarters



% of value of underlying investments

North America

39.2%

Europe

32.5%

UK

20.1%

Rest of world

8.2%

Total

100.0%


Balance sheet information

The summary balance sheet at 31 October 2020 is set out below.

31 October 2020

% of net assets

31 January 2020

% of net assets

£m

£m

Total portfolio

818.1

95.7%

806.4

101.6%

Cash and liquid assets

72.7

8.5%

14.5

1.8%

Other net current liabilities

(36.0)

(4.2%)

(27.4)

(3.4)%

Net assets

854.8

100.0%

793.5

100.0%


Movement in the portfolio

9 months

£m

31 October 20

Opening Portfolio*

806.4

Third Party Funds drawdowns

64.2

High Conviction Investments – ICG funds, secondary
investments and co-investments

17.8

Total new investment

82.0

Realisation Proceeds

(166.2)

Net cash outflow

(84.2)

Underlying Valuation Movement**

63.6

Currency movement

32.3

Closing Portfolio*

818.1

% underlying Portfolio growth (local currency)

7.9%

% currency movement

4.0%

% underlying Portfolio growth (Sterling)

11.9%



** 90% of the Portfolio is valued using 30 September 2020 (or later) valuations (31 Jan 20: 95%).

Movement in liquid assets
£m

9 months
31 October 20

Additions

(82.0)

Cash proceeds generated by the portfolio (including income)

166.2

Net cash generated by the investment portfolio

84.2

Non-investment cash flows

(12.6)

Effect of changes in foreign exchange rates

(0.2)

Cash inflow before shareholder distributions

71.4

Dividends paid to shareholders

(12.4)

Share buy backs

(0.8)

Net cash movement

58.2

Opening cash and liquid assets

14.5

Closing cash and liquid assets

72.7


Uncalled commitment coverage

31 October
2020
£m

31 January 2020

£m

Cash and liquid assets

72.7

14.5

Undrawn bank facility

158.3

147.8

Total liquidity

231.0

162.3

Outstanding commitments

431.4

458.6

Less: Total liquidity

(231.0)

(162.3)

Over-commitment

200.4

296.3

Over-commitment as % of net assets

23.4%

37.3%






1 90% of the Portfolio is valued using 30 September 2020 (or later) valuations.

2 Valuation based on the terms of the initial public offering which priced at $17 per share on 19 November 2020