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ICG Enterprise Trust Plc: Unaudited Interim Results for the six months ended 31 July 2021

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ICG Enterprise Trust plc
5 October 2021
Unaudited Interim Results for the six months ended 31 July 2021

Portfolio grows to milestone valuation of £1bn,
NAV per Share of 1,523p

Highlights


Oliver Gardey
Head of Private Equity Fund Investments, ICG

We are delighted to report another strong period for ICG Enterprise Trust. NAV per Share stood at 1,523p at the period end, delivering NAV per Share Total Return of 11.1% in the first half of the year.

Our Portfolio has performed well, generating a 14.9% Return on a Local Currency Basis within the period and 48.5% over the last twelve months. We are proud that the Portfolio has grown to the £1bn milestone. Growth was broad-based, underpinned by strong performance of our investments across the Portfolio as well as by realisation activity. Realisations continue to be at a significant Uplift to Carrying Value. This is a testament to our focused investment strategy and the quality of the Portfolio we have actively constructed.

Investment activity during the second quarter was particularly elevated, in particular in High Conviction Investments. As well as five new direct investments, we co-invested alongside ICG in a substantial LP secondary investment into an attractive portfolio of mature funds. This transaction further demonstrates the benefits we enjoy by being part of the broader ICG platform.

Looking ahead, we continue to see a strong pipeline of exciting opportunities to generate attractive risk-adjusted returns. I am therefore confident we remain well placed to deliver further long-term shareholder value.

PERFORMANCE OVERVIEW

3 months

6 months

1 year

3 years

5 years

10 years

Performance to 31 July 2021

NAV per Share Total Return

9.3%

11.1%

37.5%

57.2%

111.3%

213.3%

Share Price Total Return

0.9%

13.7%

40.7%

37.6%

109.0%

246.7%

FTSE All-Share Index Total Return

1.8%

12.6%

26.6%

5.5%

32.3%

90.7%

Six months to
31 July 2021

Six months to
31 July 2020

12 months to
31 July 2021

12 months to
31 July 2020

Portfolio Return on a Local Currency Basis

14.9%

(3.6)%

48.5%

1.5%

NAV per Share Total Return

11.1%

(1.0)%

37.5%

(2.2)%

Realisation Proceeds

£175m

£39m

£273m

£112m

Total New Investment

£133m

£52m

£220m

£147m

ENQUIRIES

Investor / Analyst enquiries:

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

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

James Caddy, Investor Relations, ICG

Media enquiries:

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

Ed Gascoigne Pees, Georgina Whittle, Camarco: +44 (0) 20 3757 4987

Website:

www.icg-enterprise.co.uk

Company timetable

Ex-dividend date: 12 November 2021

Record date: 12 November 2021

Payment of dividend: 3 December 2021

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 includes further details of APMs and reconciliations to International Financial Reporting Standards (“IFRS”) measures, where appropriate.

In the Chair’s Foreword, Manager’s Review and Supplementary Information, all performance figures are stated on a Total Return basis (i.e. including the effect of re-invested dividends). ICG Alternative Investment Limited, a regulated subsidiary of Intermediate Capital Group plc, acts as the Manager of the Company.

DISCLAIMER

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.

CHAIR’S FOREWORD

The backdrop for private equity investments has been strong during the first half of the year despite continued fall-out from the COVID-19 pandemic and other macro uncertainties. We experienced a record period of deal activity globally, both in terms of deal value and volume. Performance dispersion between sectors continued, with the leisure and travel sectors still heavily impacted by government restrictions. Technology, healthcare, and other more defensive sectors on the whole continued to perform well.

In this context, I am pleased to report that your Company’s NAV per Share Total Return during the period was 11.1% and at 31 July 2021 NAV stood at 1,523p per share. The Portfolio2 has performed strongly, recording a Portfolio Return on a Local Currency Basis of 14.9% for the six months to 31 July 2021. It continues to be well constructed and in line with our strategic objectives, with High Conviction Investments representing 48% of the Portfolio and 41% of the Portfolio being invested in the US.

An ICG Enterprise Trust share generated a total return of 13.7% during the period and the Board has declared a dividend of 6p per share in respect of the second quarter. In July the Board approved a buyback of 250,000 of the Company’s shares. This decision demonstrates the Board’s focus on shareholder returns and on capital allocation to optimise long-term growth in NAV per share.

As we look to the second half of the financial year and beyond, significant macro uncertainties persist and, in some cases, are increasing. However, our investment strategy is clear, our track record continues to grow and our Portfolio is robust.

Your Board remains confident that ICG Enterprise Trust is well positioned to provide shareholders with access to the attractive long-term returns generated by investing in private companies, with the added benefit of daily liquidity.

Jane Tufnell
4 October 2021

MANAGER’S REVIEW

Performance overview

Consistently strong Portfolio performance

Despite continued volatility as a result of the COVID-19 pandemic within the period, the strength of our business model and highly focused investment strategy remains. Over the six month period to 31 July 2021 the Portfolio generated a 14.9% Portfolio Return on a Local Currency Basis and 48.5% over the last twelve months. Over the last five years, the Portfolio has generated Portfolio Return on a Local Currency Basis of 21% p.a.

We aim to deliver attractive risk-adjusted returns by executing our focused and differentiated investment strategy. We focus on buyouts in developed markets, targeting mid-market and larger deals. We look for businesses that are profitable, cash generative and with strong defensive growth characteristics. We find these characteristics in a range of sectors and invest in these businesses directly, through ICG managed funds and through third party private equity managers. When combined, we believe this results in a uniquely balanced portfolio with attractive growth characteristics.

The strength of performance during the period was broad-based, with only one single portfolio company contributing over 5% of gains. Realisation activity has also continued to support Portfolio performance during the period, with an average Uplift to Carrying Value on realisation of 26%.

Movement in the Portfolio
£m

Six months to 31 July 2021
£m

Six months to 31 July 2020
£m

Opening Portfolio*

949.2

806.4

Total New Investments

133.3

52.4

Total Proceeds

(184.7)

(94.4)

Net cash (inflow)/outflow

(51.4)

(42.0)

Valuation Movement**

141.6

(28.7)

Currency movement

(20.4)

29.3

Closing Portfolio*

1,019.0

765.0

% Portfolio growth (local currency)

14.9%

(3.6)%

% currency movement

(2.1)%

3.7%

% Portfolio growth (Sterling)

12.8%

0.1%

Expenses and other

(1.7)%

(1.1)%

NAV per share Total Return

11.1%

(1.0)%

* Refer to the Glossary for reconciliation to the Portfolio balance presented in the unaudited results.

** 99% of the Portfolio is valued using 30 June 2021 (or later) valuations (31 January 21: 95%).

High Conviction Investments underpinned by investments in leading Third Party Funds

High Conviction Investments are those where ICG has actively selected the underlying companies. We seek to enhance returns and increase visibility on underlying performance drivers. Over the last five years, this part of the Portfolio has generated a Portfolio Return on a Local Currency Basis of 25% p.a.

High Conviction Investments represented 48% of the Portfolio value at 31 July 2021 (31 January 2021: 51%), and we anticipate these investments will represent 50% - 60% of the Portfolio in the medium term. High Conviction Investments generated 10% Portfolio Return on a Local Currency Basis for the period. Key contributors to the strength of performance were from businesses in the technology sector, in particular IRI and Visma. IRI, a provider of mission-critical data and predictive analytics to consumer goods manufacturers, performed extremely well during the period and its valuation was marked up following a partial realisation. Visma, a provider of business management software and outsourcing services, also displayed strong operational performance in the period. Our direct investment in Visma is held alongside Hg Capital and ICG. A number of ICG funds also generated broad-based valuation increases.

Third Party Funds provide a base of strong diversified returns. They also play an important strategic role by providing direct and secondary investment opportunities. Over the last five years, this element of the Portfolio has generated a Portfolio Return on a Local Currency Basis of 18% p.a.

Third Party Funds represented 52% of total Portfolio value at 31 July 2021 (31 January 2021: 49%). Our Third Party Funds generated 20% Portfolio Return on a Local Currency Basis for the period. The most significant contributor to these returns was U-POL Ltd (“U-POL”). U-POL’s valuation was increased by 132% compared to its carrying value at 30 April 2021, reflecting an agreed sale price.

Investment category

31 July 2021
£m

31 July 2021
% of Portfolio

31 July 2020
% of Portfolio

ICG managed investments

274

27%

23%

Third party Direct Investments

155

15%

16%

Third party Secondary Investments

63

6%

5%

High Conviction Investments

492

48%

44%

Third Party Funds

527

52%

56%

Total

1,019

100%

100%

Top 30 companies report another period of double-digit revenue and earnings growth
Our largest 30 underlying companies (“Top 30 companies”) represented 43% of the Portfolio by value at 31 July 2021 (31 January 2021: 52%). They performed well in the period, underpinned by strong operational performance, and reported LTM revenue growth of 23%.

Of the Top 30 companies, EBITDA is a relevant metric for 273, which in aggregate represent 34% of the Portfolio by value. These companies reported LTM revenue and EBITDA growth of 18% and 26% respectively. Their Enterprise Value / EBITDA multiples were 14.4x (31 January 2021: 14.0x) and the Net Debt/EBITDA ratio was 3.9x (31 January 2021: 4.3x). Our Top 30 companies are heavily weighted towards developed private equity markets. 47% of the Top 30 by Portfolio value is invested in the US, 28% in Europe and 18% in the UK.

There were seven new entrants to our Top 30 companies within the period, of which five were High Conviction Investments. Two, DigiCert and ProAlpha, are ICG managed investments whilst Ivanti and Class Valuation are third party Direct Investments. The fifth, Pharmathen, is a third party Secondary Investment. The two new entrants from Third Party Funds were Rough Country and Synlab.

Realisation activity

Realisations at significant Uplifts to Carrying Value and cost

Realisation momentum experienced in the first quarter continued apace into the second quarter, with Realisation Proceeds for the six month period higher than the average annual Realisation Proceeds for the last five years.

Total Proceeds for the period amounted to £184m. This was comprised of £175m generated from the realisation of individual companies (either held directly or through funds) and £9m of proceeds from Fund Disposals.

There were 34 Full Exits completed in the period which realised £143m of proceeds. These realisations were completed at an average of 26% Uplift to Carrying Value and an average Multiple to Cost of 2.8x. A further £32m of proceeds were received from partial exits.

Five of our Top 30 companies at the beginning of the financial year were fully realised during the period. The largest exit was Telos, the 2nd largest investment at the start of the financial year, which we fully realised early in the period at a slight uplift to the 31 January 2021 carrying value. Our investment in DomusVi (the third largest underlying company at the start of the year) alongside ICG Europe Fund VI was fully realised in the period. Given the strength of the business and continued opportunity for growth, we subsequently decided to make a partial reinvestment in DomusVi alongside ICG Europe Fund VII. Other notable realisations included the exit of another ICG investment, Supporting Education Group (which was the 10th largest underlying portfolio company at the start of the year), System One and Cognito. Also in the period, third party manager Graphite Capital entered into an agreement to sell U-POL to US-listed Axalta Coating Systems. We anticipate the transaction will close in the second half of the year, generating cash proceeds of c.£24m.

A small number of Fund Disposals were also completed during the period, generating £9m of proceeds and releasing £10m of Undrawn Commitments.

New investment activity

Executing against a substantial investment pipeline

We deployed substantial capital in the period, particularly into High Conviction Investments. In total we invested £133m, of which £101m (76%) was in High Conviction Investments and £32m was in the form of drawdowns from Third Party Funds.

Over 25 potential direct investment opportunities were generated in the period from our Third Party Funds and the ICG platform. Of these, we selectively completed five new Direct Investments for a total of £37m. These new investments were made in:

Company

Manager

Company sector / description

ICG Enterprise Trust investment during the period

AMEOS Group

ICG

Private hospital operator in the DACH region

£4m

Class Valuation

Gridiron Capital

Provider of residential mortgage appraisal management services

£7m

DigiCert

ICG

Internet security software platform and leading provider of secure sockets layer (“SSL”) certificates

£7m

DomusVi

ICG

Operator of retirement homes

£10m

Ivanti

Charlesbank

Provider of enterprise IT software

£9m

In addition, the investment team utilised their secondary investment network and unique access to the ICG platform to execute a £32m secondary investment alongside our Manager into an LP secondary portfolio of mature private equity funds. Secondary investments form an important part of our investment strategy and over the long term we expect these investments to represent 10-20% of the Portfolio value (31 July 2021: 12%).

The remaining £32m of High Conviction Investments made in the period were through ICG funds (£30m) and add-on investments for existing Direct Investments (£2m).

Nine new fund Commitments to both existing and new manager relationships

We continued to benefit from the broader ICG platform, committing £64m to two ICG funds in the period. These were in attractive strategies we have invested in previously. We also selectively committed to a number of leading third party private equity managers who complement our long-term strategic objectives, share values which are aligned to our ESG framework and have an investment approach that suits our defensive growth focus. We completed seven new Third Party Fund Commitments in the period totalling £69m. Four of these Commitments were to managers with whom we have not invested before, demonstrating our ability to source and execute new opportunities to work with leading managers.

In total we made £133m of Commitments as follows:

Fund

Focus

ICG Enterprise Trust Commitment during the period

BC Partners XI

European and North American mid-market buyouts

€15m (£13m)

Bregal Unternehmerkapital III*

European mid-market buyouts

€10m (£9m)

GHO Capital III*

European and North American mid-market buyouts

€10m (£9m)

GI Partners VI-A*

North American mid-market buyouts

$10m (£7m)

Hellman and Friedman X*

North American mid-market and large buyouts

$10m (£7m)

ICG Europe Fund VIII

European structured and equity financing in mid-market buy-outs

€40m (£35m)

ICG Strategic Equity IV

Secondary fund restructurings

$40m (£29m)

Resolute V

North American mid-market buyouts

$15m (£11m)

TH Lee IX

North American mid-market and large buyouts

$20m (£14m)

* New manager relationship during the period

Portfolio analysis at 31 July 2021

The Top 30 contribute 43% of the Portfolio value. The Portfolio is appropriately diversified by sector and geography. This strikes a good balance between concentration, so that Direct Investments can meaningfully impact performance, and diversification, so that we are not overly exposed to the risks of individual portfolio companies or sectors.

Focus on developed markets

The Portfolio is focused on developed private equity markets, invested across the US (41%), continental Europe (33%) and the UK (18%).

Focus on sectors with defensive growth characteristics
The Portfolio is well diversified and weighted towards sectors with defensive growth characteristics. Technology (18%), Healthcare (16%), Business Services (13%) and Education (5%) make up 52% of the Portfolio. We feel these are particularly attractive sectors, benefitting from structural growth trends. Within our exposure to the Consumer and Industrial sectors (26% and 8% respectively), we have a bias to companies with more defensive business models, non-cyclical growth drivers and high recurring revenue streams. We have relatively low exposure to the Financials (6%) and Leisure (3%) sectors.

Quoted Companies

We do not invest in publicly quoted companies but gain listed investment exposure when IPOs are used as a route to exit an investment. We therefore have exposure to listed businesses within our Portfolio. In these cases, exit timing typically lies with the third party manager we have invested alongside.

Our managers took advantage of the currently attractive market conditions for initial public offerings during the period. A total of seven underlying portfolio companies were listed, generating a combined gross valuation uplift of £8m compared to their valuation at 31 January 2021.

At 31 July 2021, we had 40 underlying investments in quoted companies, representing 14.2% of the Portfolio value compared to 20.4% at 31 January 2021. The reduction was largely driven by the realisation of our entire stake in Telos during February as well as by the fall in Chewy’s share price, partially offset by new IPOs.

At 31 July 2021 there were three investments that each accounted for 0.5% or more of the Portfolio value:

Company

Ticker

% value of Portfolio

1

Chewy (part of PetSmart)1

CHWY-US

7.5%

2

Allegro

ALE-WA

1.0%

3

Synlab*

SYAB-F

0.6%

Other

5.1%

Total

14.2%

1 % value of Portfolio includes entire holding of PetSmart and Chewy. Majority of value is within Chewy
* Company listed during the period

Balance sheet and financing
Our liquidity position is robust, with a period-end cash balance of £70m4 (31 January 2021: £45m). At 31 July 2021 we had total available liquidity of £241m, comprising £70m cash and £171m undrawn revolving credit facility.

£m

Cash at 31 January 2021

45

Realisation Proceeds

175

Fund Disposals

9

Third Party Fund drawdowns

(32)

High Conviction Investments

(101)

Shareholder returns

(12)

FX and other

(15)

Cash at 31 July 2021

70

Available undrawn debt facilities

171

Cash and undrawn debt facilities (total available liquidity)

241

At 31 July 2021 the Portfolio represented 98% of net assets (31 January 2021: 100%).


31 July 2021
£m

31 January 2021
£m

Portfolio*

1,019

949

Cash

70

45

Other net liabilities*

(45)

(42)

Net assets

1,044

952

*Refer to the Glossary for reconciliation from the Investments at fair value presented on the balance sheet to the Portfolio balance and calculation of other net liabilities

At 31 July 2021, we had Undrawn Commitments of £485m (31 January 2021: £418m) of which 17% (£81m) were to funds outside of their Investment Period.

31 July 2021
£m

31 January 2021
£m

Undrawn Commitments – funds in Investment Period

404

341

Undrawn Commitments – funds outside Investment Period

81

77

Total Undrawn Commitments

485

418

Total available liquidity (including facility)

(241)

(201)

Overcommitment (including facility)

244

217

Overcommitment % of net asset value

24%

23%

Our objective is to be fully invested through the cycle, while ensuring that we have sufficient liquidity to be able to take advantage of attractive investment opportunities as they arise. We do not intend to be geared other than for short-term working capital purposes.

Activity since the period end (for the one month to 31 August 2021)

The momentum experienced across the business in the first half of the year has continued with the following activity taking place:

  • Realisation Proceeds of £22m

    • Including proceeds from the sale by Gridiron Capital of Rough Country to TSG Consumer Partners

  • Deployment

    • Invested £13m (£10m Drawdowns of existing third party fund Commitments, £3m High Conviction Investments)

ICG Private Equity Fund Investments Team
4 October 2021

SUPPLEMENTARY INFORMATION (UNAUDITED)

This section presents supplementary information regarding the Portfolio (see Manager’s Review and the Glossary for further details and definitions).

Top 30 companies
The table below presents the 30 companies in which ICG Enterprise had the largest investments by value at 31 July 2021. These investments may be held directly or through funds, or in some cases through both routes. The valuations are gross of underlying managers fees and Carried Interest and are shown as a percentage of the total investment Portfolio.

Company

Manager

Year of investment

Country

Value as a % of Portfolio

1

PetSmart/Chewy+^

Retailer of pet products and services

BC Partners

2015

United States

7.5%

2

Minimax+

Supplier of fire protection systems and services

ICG

2018

Germany

3.1%

3

U-POL^

Manufacturer and distributor of automotive refinishing products

Graphite Capital

2010

United Kingdom

2.7%

4

Visma+

Provider of business management software and outsourcing services

ICG / HgCapital

2017 / 2020

Norway

2.6%

5

IRI+

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

New Mountain Capital

2018

United States

2.4%

6

Leaf Home Solutions

Provider of gutter protection solutions

Gridiron Capital

2016

United States

2.0%

7

DOC Generici+

Retailer of pharmaceutical products

ICG

2019

Italy

1.9%

8

Froneri+

Manufacturer and distributor of ice cream products

PAI Partners

2019

United Kingdom

1.9%

9

Yudo+

Manufacturer of components for injection moulding

ICG

2017

Hong Kong

1.8%

10

Berlin Packaging+

Provider of global packaging services and supplies

Oak Hill Capital

2018

United States

1.7%

11

Endeavor Schools+

Provider of paid private schooling

Leeds Equity Partners

2018

United States

1.4%

12

DomusVi+

Operator of retirement homes

ICG

2021

France

1.4%

13

AML RightSource+

Provider of compliance and regulatory services and solutions

Gridiron Capital

2020

United States

1.1%

14

PSB Academy+

Provider of private tertiary education

ICG

2018

Singapore

1.1%

Company

Manager

Year of investment

Country

Value as a % of Portfolio

15

Allegro

Operator of an online marketplace and price comparison website

Cinven / Permira Advisers

2017

Poland

1.0%

16

Ivanti+

Provider of IT management software solutions

Charlesbank Capital Partners

2021

United States

1.0%

17

Curium Pharma+

Supplier of nuclear medicine diagnostic pharmaceuticals

ICG

2020

United Kingdom

0.8%

18

Class Valuation+

Provider of residential mortgage appraisal management services

Gridiron Capital

2021

United States

0.8%

19

David Lloyd Leisure+

Operator of premium health clubs

TDR Capital

2013 / 2020

United Kingdom

0.8%

20

VitalSmarts+

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

Leeds Equity Partners

2019

United States

0.8%

21

DigiCert+

Provider of enterprise security solutions

ICG

2021

United States

0.7%

22

Springer^

Publisher of professional and academic media

BC Partners

2013 / 2021

Germany

0.6%

23

RegEd+

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

Gryphon Investors

2018

United States

0.6%

24

Synlab

Operator of medical diagnostic laboratories

Cinven

2015

Germany

0.6%

25

proALPHA

Developer and vendor of resource planning software

ICG

2017

Germany

0.5%

26

IRIS Accountancy Solutions

Provider of business critical software and services for the accountancy and payroll sectors

ICG

2018

United Kingdom

0.5%

27

Rough Country

Provider of branded off-road suspension products and accessories

Gridiron Capital

2017

United States

0.5%

28

EG Group

Operator of petrol station forecourts

TDR Capital

2014

United Kingdom

0.5%

29

Compass Community

Provider of fostering services and children residential care

Graphite Capital

2017

United Kingdom

0.5%

30

Pharmathen^

Manufacturer of pharmaceutical products

BC Partners

2015

Greece

0.5%

Total of the 30 largest underlying investments

43.3%

* 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 table below presents the 30 largest funds by value at 31 July 2021. The valuations are net of underlying managers fees and Carried Interest.

Fund

Year of commitment

Country/ region

Value £m

Outstanding commitment £m

1

BC European Capital IX **

Large buyouts

2011

Europe/North America

41.8

2.0

2

ICG Europe VII

Mezzanine and equity in mid-market buyouts

2018

Europe

33.5

10.3

3

ICG Waterfall **

LP secondary portfolio

2021

Europe/North America

31.8

6.6

4

ICG Strategic Equities Fund III

Secondary fund restructurings

2018

Global

30.7

9.6

5

Graphite Capital Partners VII * / **

Mid-market buyouts

2007

UK

28.8

2.8

6

Gridiron Capital Fund III

Mid-market buyouts

2016

North America

28.7

3.9

7

Graphite Capital Partners VIII *

Mid-market buyouts

2013

UK

27.9

4.4

8

Sixth Cinven Fund

Large buyouts

2016

Europe

25.3

2.0

9

CVC European Equity Partners VI

Large buyouts

2013

Europe/North America

21.3

2.6

10

Advent Global Private Equity VIII

Large buyouts

2016

Europe/North America

20.3

0.6

11

CVC European Equity Partners VII

Large buyouts

2017

Europe/North America

19.9

7.3

12

PAI Strategic Partnerships **

Mid-market and large buyouts

2019

Europe

18.3

0.6

13

ICG Europe VI **

Mezzanine and equity in mid-market buyouts

2015

Europe

17.6

4.3

14

PAI Europe VI

Mid-market and large buyouts

2013

Europe

16.9

1.4

15

BC European Capital X

Large buyouts

2016

Europe/North America

16.5

1.8

16

New Mountain Partners V

Mid-market buyouts

2017

North America

15.2

1.0

17

Thomas H Lee Equity Fund VIII

Mid-market and large buyouts

2017

North America

15.1

6.8

18

One Equity Partners VI

Mid-market buyouts

2016

Europe/North America

14.2

0.6

19

Permira V

Large buyouts

2013

Europe/North America

13.4

0.4

20

Permira VI

Large buyouts

2016

Europe

12.9

1.9

21

Gryphon V

Mid-market buyouts

2019

North America

12.8

1.4

22

ICG Asia Pacific Fund III

Mezzanine and equity in midmarket buyouts

2016

Asia Pacific

12.3

2.8

23

PAI Europe VII

Mid-market and large buyouts

2017

Europe

12.2

11.7

24

Resolute IV

Mid-market buyouts

2018

North America

11.8

2.1

25

Charterhouse Capital Partners X

Large buyouts

2015

Europe

11.6

3.8

26

TDR Capital III

Mid-market and large buyouts

2013

Europe

10.7

1.6

27

Leeds Equity Partners VI

Mid-market buyouts

2017

North America

10.6

0.7

28

Gridiron Capital Fund IV

Mid-market buyouts

2019

North America

10.5

4.1

29

Egeria Private Equity Fund IV

Mid-market buyouts

2012

Netherlands

10.1

1.0

30

ICG Strategic Equities Fund IV

Secondary fund restructurings

2021

Global

9.6

19.1

Total of the largest 30 fund investments

562.4

119.4

Percentage of total investment Portfolio

55.2%

* Includes the associated Top Up funds.

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

Portfolio analysis

Closing Portfolio by value

Portfolio by investment type

% of value of
underlying
investments
31 July 2021

% of value of
underlying
investments
31 January 2021

Large buyouts

56.5%

56.3%

Mid-market buyouts

34.9%

33.5%

Small buyouts

8.6%

10.2%

Total

100.0%

100.0%


Portfolio by calendar year of investment

% of value of underlying investments
31 July 2021

% of value of underlying investments
31 January 2021

2021

11.1%

0.4%

2020

11.0%

10.1%

2019

19.0%

18.3%

2018

19.7%

18.4%

2017

13.0%

17.1%

2016

7.7%

9.6%

2015

9.8%

11.2%

2014

3.2%

6.0%

2013

1.5%

1.6%

2012

0.9%

0.9%

2011

0.0%

0.0%

2010

2.6%

1.4%

2009

0.1%

0.2%

2008

0.0%

0.0%

2007

0.4%

0.5%

2006 and before

0.0%

4.3%

Total

100.0%

100.0%


Portfolio by sector

% of value of underlying investments
31 July 2021

% of value of underlying investments
31 January 2021

Consumer goods and services

26.2%

25.4%

TMT

18.4%

19.2%

Healthcare

16.2%

17.8%

Business services

12.6%

12.5%

Industrials

8.3%

6.9%

Education

5.0%

6.4%

Financials

6.0%

4.7%

Leisure

2.8%

4.5%

Other

4.5%

2.6%

Total

100.0%

100.0%


Portfolio by geographic distribution based on location of company headquarters

% of value of
underlying
investments
31 July 2021

% of value of
underlying
investments
31 January 2021

Europe

33.0%

31.8%

UK

18.0%

18.9%

North America

40.9%

42.0%

Rest of world

8.1%

7.3%

Total

100.0%

100.0%

Commitments analysis
The following tables analyses Commitments at 31 July 2021. Original Commitments are translated at 31 July 2021 exchange rates.

Total Undrawn Commitments

Original
Commitment
£’000

Outstanding
Commitment
£’000

Average
drawdown
percentage

% of
Commitments

Investment period not commenced

12,806

12,806

0.0%

2.6%

Funds in investment period

536,076

342,599

36.1%

70.6%

Funds post investment period

697,948

130,181

81.3%

26.8%

Total

1,246,830

485,586

61.1%

100.0%


Movement in outstanding Commitments in period ended 31 July 2021

£m

As at 1 February 2021

418.5

New primary Commitments

132.9

New Commitments relating to Co-investments and secondary purchases

26.2

Drawdowns

(77.4)

Commitments released from Fund Disposals

(9.8)

Currency and other movements

(4.8)

As at 31 July 2021

485.6

New Commitments during the 6 months ended 31 July 2021

Fund

Strategy

Geography

£m

Primary Commitments

ICG Europe VIII

Mezzanine and equity in mid-market buy-outs

Europe

34.8

ICG Strategic Equity Fund IV

Secondary fund restructurings

Global

28.8

TH Lee IX

Mid-market and large buyouts

North America

14.1

BC Partners XI

Large Buyouts

Europe/North America

12.8

Resolute V

Mid-market buy-outs

North America

10.9

GHO Capital III

Mid-market buyouts

Europe/North America

8.6

Bregal Unternehmerkapital III

Mid-market buyouts

Europe

8.6

GI Partners VI

Mid-market buyouts

North America

7.2

Hellman Friedman X

Mid-market and large buyouts

North America

7.1

Total primary Commitments

132.9

Commitments relating to Co-investments and Secondary Investments

26.2

Total new Commitments

159.1

Currency exposure

Portfolio1

31 July
2021
£m

31 July
2021
%

31 January
2021
£m

31 January
2021
%

Sterling

195.7

19.2%

197.4

20.8%

Euro

225.8

22.2%

208.3

21.9%

US Dollar

408.4

40.1%

380.5

40.1%

Other European

89.0

8.7%

73.9

7.8%

Other

100.1

9.8%

89.1

9.4%

Total

1,019.0

100.0%

949.2

100.0%

1 Currency exposure is calculated by reference to the location of the underlying Portfolio companies’ headquarters.


Outstanding Commitments

31 July
2021
£m

31 July
2021
%

31 January
2021
£m

31 January
2021
%

– Sterling

32.9

6.8

43.7

10.4

– Euro

241.7

49.8

195.9

46.8

– US Dollar

211.0

43.4

178.2

42.6

– Other European

0.0

0.0

0.7

0.2

Total

485.6

100.0

418.5

100.0

Realisation activity

Investment

Manager

Year of investment

Realisation type

Exit

Proceeds £m

Telos

Directly held investment

1998

Public sell down post IPO

Full

44.5

Domus

ICG

2017

Financial buyer

Full

36.3

Education Personnel

ICG

2014

Trade

Full

14.7

System One

Thomas H. Lee Partners

2016

Financial buyer

Full

11.8

Cognito

Graphite Capital

2002

Trade

Full

10.9

Leaf Home Solutions

Gridiron Capital

2016

Recapitalisation

Partial

4.4

Sabre Industries

The Jordan Company

2019

Financial buyer

Full

2.6

Node4

Bowmark

2016

Financial buyer

Full

2.5

Oxford International

Bowmark

2014

Trade

Full

2.1

AutoStore

Thomas H. Lee Partners

2019

Financial buyer

Partial

1.9

Total of 10 largest underlying realisations

131.6

Realisation Proceeds

175.3

Fund Disposals

9.4

Total Proceeds

184.7

Investment activity

Investment

Description

Manager

Country

Cost1
£m

Domus

Operator of retirement homes

ICG

France

13.8

Ivanti

Provider of IT management software solutions

Charlesbank Capital Partners

USA

9.6

Class Valuation

Provider of residential mortgage appraisal management services

Gridiron Capital

USA

8.1

DigiCert

Provider of enterprise security solutions

ICG

USA

6.7

AMEOS Group

Provider of health care services

ICG

Switzerland

4.2

Kee Safety

Provider of fall protection solutions

ICG

USA

3.1

Datamars

Provider of data solutions for farming and textiles

ICG

Switzerland

2.5

Trinity Consultants Holdings

Provider of air quality consulting and compliance services

Oak Hill Capital

USA

1.7

Broadstone

Provider of pensions and employee benefits

ICG

UK

1.4

AIT Worldwide Logistics

Provider of end-to-end supply chain services

The Jordan Company

USA

1.2

Total of 10 largest underlying new investments

52.2

Total New Investment

133.3

1 Represents ICG Enterprise Trust's indirect exposure (share of fund cost) plus any amounts paid for Co-investments in the period.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties facing the Company are substantially the same as those disclosed in the Strategic Report and in the notes to the Financial Statements in the Company’s latest Annual Report for the year ended 31 January 2021 which was approved by the Board on 27 April 2021.

The principal risks and uncertainties can be divided into the following areas:

  • Investment performance;

  • Valuation;

  • Political and macroeconomic uncertainty;

  • Private equity sector;

  • Regulatory, legislative and taxation compliance;

  • People;

  • The Manager and other third party advisers;

  • Information security;

  • The manager and other third party advisers;

  • Foreign exchange; and

  • Financing.


In addition to these, emerging risks are regularly considered to assess any potential impact on the Company and to
determine whether any actions are required. The Board also regularly considers the evolution of requirements and standards relating to ESG and responsible investing.

The Board’s ongoing view of the impact of the COVID-19 outbreak is that although significant and may prove to have long-term effects on the markets in which the Company operates, it does not change the long term view of the Company’s principal risks.

INTERIM FINANCIAL STATEMENTS

Income statement



Half year to 31 July 2021
(unaudited)



Half year to 31 July 2020
(unaudited)

Notes

Revenue
return
£’000

Capital return
£’000

Revenue
return
£’000

Capital return
£’000

Total
£’000

Total
£’000

Investment returns

Income, gains and losses on investments

7,619

105,351

112,970

2,127

(3,964)

(1,837)

Deposit interest

1

1

24

24

Other income

46

46

Foreign exchange gains and losses

(601)

(601)

(89)

(89)

7,620

104,750

112,370

2,197

(4,053)

(1,856)



Expenses

Investment management charges

(620)

(5,586)

(6,206)

(1,247)

(3,741)

(4,988)

Other expenses

(1,266)

(1,094)

(2,360)

(1,392)

(648)

(2,040)

(1,886)

(6,680)

(8,566)

(2,639)

(4,389)

(7,028)

Profit/(loss) before tax

5,734

98,070

103,804

(442)

(8,442)

(8,884)

Taxation

(45)

45

Profit/(loss) for the period

5,689

98,115

103,804

(442)

(8,442)

(8,884)



Attributable to:

Equity shareholders

5,689

98,115

103,804

(442)

(8,442)

(8,884)



Basic and diluted earnings per share



150.96p



(12.91p)

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 the Statement of Recommended Practice for Financial Statements of Investment Trust Companies and Venture Capital Trusts issued by the Association of Investment Companies. There is no Other Comprehensive Income.

The notes on pages 25 to 28 are an integral part of the condensed interim financial statements.

Balance sheet



Notes



31 July
2021
(unaudited)
£’000



31 January
2021
(audited)
£’000

Non-current assets

Investments held at fair value

7

1,017,427

907,562



Current assets

Cash and cash equivalents

29,349

45,143

Receivables

1,945

163

31,294

45,305



Current liabilities

Payables

5,207

851



Net current assets



26,087



44,454

Total assets less current liabilities

1,043,514

952,016



Capital and reserves

Share capital

7,291

7,291

Capital redemption reserve

2,113

2,113

Share premium

12,936

12,936

Capital reserve

1,021,174

929,676

Revenue reserve

-

Total equity

1,043,514

952,016



Net asset value per share (basic and diluted)



6



1,523.0p



1,384.4p

The notes on pages 25 to 28 are an integral part of the condensed interim financial statements.

Cash flow statement



Half year to
31 July 2021 (unaudited)
£’000



Half year to
31 July 2020 (unaudited)

£’000

Operating activities

Sale of portfolio investments

121,998

74,934

Purchase of portfolio investments

(82,203)

(31,590)

Net cash flows to subsidiary investments

(43,512)

(4,383)

Interest income received from portfolio investments

3,260

867

Dividend income received from portfolio investments

4,359

1,281

Other income received

1

39

Investment management charges paid

(2,915)

(5,082)

Other expenses paid

(2,990)

(861)

Net cash inflow/(outflow) from operating activities

(2,002)

35,205



Financing activities

Bank facility fee

(871)

(613)

Interest paid

(11)

(421)

Purchase of own shares into treasury

(2,679)

(775)

Credit Facility utilised

-

40,000

Credit Facility repaid

-

(40,000)

Equity dividends paid to shareholders

(9,628)

(8,945)

Net cash outflow from financing activities

(13,189)

(10,754)

Net increase/(decrease) in cash and cash equivalents

(15,191)

24,451



Cash and cash equivalents at beginning of period



45,143



14,469

Net increase/(decrease) in cash and cash equivalents

(15,191)

24,451

Effect of changes in foreign exchange rates

(603)

(89)

Cash and cash equivalents at end of period

29,349

38,831

The notes on pages 25 to 28 are an integral part of the condensed interim financial statements.

Statement of changes in equity



Share capital
£000

Capital redemption
reserve
£000



Share premium
£000



Capital reserve
£000



Revenue reserve
£000

Total shareholders’
equity
£000

Half year to 31 July 2021 (unaudited)

Opening balance at 1 February
2021

7,291

2,113

12,936

929,676

952,016

Profit for the period and total
comprehensive income









98,115



5,689



103,804

Dividends paid

(3,938)

(5,689)

(9,627)

Purchase of own shares into
treasury







(2,679)



(2,679)

Closing balance
at 31 July 2021

7,291

2,113

12,936

1,021,174


1,043,514




Share capital
£000

Capital redemption
reserve
£000



Share premium
£000



Capital reserve
£000



Revenue reserve
£000

Total shareholders’
equity
£000

Half year to 31 July 2020 (unaudited)

Opening balance at 1 February
2020

7,291

2,113

12,936

771,205

793,545

Profit for the period and total
comprehensive income









(8,442)



(442)



(8,884)

Dividends paid

(8,945)

_

(8,945)

Purchase of own shares into
treasury







(775)



(775)

Closing balance
at 31 July 2020

7,291

2,113

12,936

753,043

(442)

774,941

The notes on pages 25 to 28 are an integral part of the condensed interim financial statements.

NOTES TO THE FINANCIAL STATEMENTS(UNAUDITED)

For the period ended 31 July 2021

1. General information

ICG Enterprise Trust plc (“the Company”) is registered in England and Wales and domiciled in England. The registered office is Procession House, 55 Ludgate Hill, London, EC4M 7JW. The Company’s objective is to provide shareholders with long term capital growth through investment in unquoted companies, mostly through private equity funds but also directly.

2. Unaudited Interim report

This interim financial report does not comprise statutory accounts within the definition of section 434 of the Companies Act 2006. The financial information for the period ended 31 January 2021 has been extracted from the statutory accounts for that year which were approved by the Board of Directors on 27 April 2021 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statements under section 498(2) or (3) of the Companies Act 2006.

3. Basis of preparation

The annual financial statements of the Company will be prepared in accordance with United Kingdom adopted International Accounting Standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with United Kingdom adopted International Accounting Standard 34, “Interim Financial Reporting”.

This interim financial report does not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the annual financial statements for the year ended 31 January 2021, which have been prepared in accordance with United Kingdom adopted international accounting Standards.

The accounting policies applied are consistent with those of the annual financial statements for the year to 31 January 2021, as described in those annual financial statements. In order to reflect the activities of an investment trust company, supplementary information which analyses the income statement between items of a revenue and capital nature has been presented alongside the income statement. In analysing total income between capital and revenue returns, the Directors of the Company have followed the guidance contained in the Statement of Recommended Practice ('SORP') for investment trusts issued by the Association of Investment Companies in April 2021.

Change in allocation of expenses between revenue and capital

Effective 1 February 2021 the Company made changes to its expenses accounting estimate. In prior periods investment management and bank facility charges were being allocated 75% to the capital column of the income statement and 25% to the revenue column. On reassessment of the Company’s long-term total returns the Board agreed that an allocation of 90% to the capital column and 10% to the revenue column would better reflect the Company’s current and future return profile.

4. Dividends

Half year to
31 July
2021
£’000

Half year to
31 July
2020
£’000

Third quarterly dividend in respect of year ended 31 January 2021 of 5.0p per share (2020: 5.0p)



3,438



3,444

Final dividend in respect of year ended 31 January 2021 of 9.0p per share (2020: 8.0p)

6,189

5,501

Total

9,627

8,945

The Board has approved an interim dividend for the quarter to 30 April 2021 of 6.0p per share (totalling £4.1m) which has been paid on 3 September 2021 to shareholders on the register on 13 August 2021. The Board has proposed a second interim dividend of 6.0p per share in respect of the year ending 31 January 2022 which, if approved by shareholders, will be paid on 3 December 2021 to shareholders on the register of members at the close of business on 12 November 2021.

5. Earnings per share

Earnings per share

Half year to 31 July 2021

Half year to 31 July 2020

Revenue return per ordinary share

8.27p

(0.64p)

Capital return per ordinary share

142.69p

(12.27p)

Earnings per ordinary share (basic and diluted)

150.96p

(12.91p)

Weighted average number of shares

68,761,530

68,796,506

The earnings per share figures are based on the weighted average numbers of shares set out above.

During the half year, 250,000 shares were bought back in the market and held in treasury (31 January 2021: 110,000 shares). At 31 July 2021, the Company held 4,395,945 shares in treasury (31 January 2021: 4,145,945) leaving 68,517,055 (31 January 2021: 68,767,055) shares outstanding, all of which have equal voting rights.

6. Net asset value per share

The net asset value per share is calculated as the net assets attributable to shareholders of £1,043.5m (31 January 2021: £952.0m) and 68,517,055 (31 January 2021: 68,767,055) ordinary shares in issue at the period end. There were no potentially dilutive ordinary shares, such as options or warrants, at either period end. Calculated on both the basic and diluted basis the net asset value per share was 1,523.0p (31 January 2021: 1,384.4p).

7. Fair Value estimation

IFRS 13 requires disclosure of fair value measurements of financial instruments categorised according to the following fair value measurement hierarchy:

  • Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

  • Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).

  • Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The valuation techniques applied to level 1 and level 3 assets are described in note 1 of the annual financial statements. No investments were categorised as level 2.

The following tables present the assets that are measured at fair value at 31 July 2021 and 31 January 2021. The Company had no financial liabilities measured at fair value at those dates.

Level 1

Level 2

Level 3

Total

31 July 2021

£’000

£’000

£’000

£’000

Investments held at fair value

Unquoted investments

202,235

202,325

Quoted investments

1,190

1,190

Subsidiary undertakings1

813,912

813,912

Total investments held at fair value

1,190

1,016,237

1,017,427


Level 1

Level 2

Level 3

Total

31 January 2021

£’000

£’000

£’000

£’000

Investments held at fair value

Unquoted investments

604,306

604,306

Quoted investments

35,702

35,702

Subsidiary undertakings

267,554

267,554

Total investments held at fair value

35,702

871,860

907,562

All quoted and unquoted investments are measured in accordance with IFRS 9.

  1. During the six months to 31 July 2021, approximately £469m of assets were transferred at fair value to the Company’s wholly owned subsidiary ET Holdings LP. ET Holdings LP was incorporated on 15 December 2020 in order to hold investments in a single entity to provide security for the Company’s credit facility with Credit Suisse. All investments continue to be held at fair value. The fair value of investments held in ET Holdings LP as at 31 July 2021 is £514m.

Investments in level 3 securities are in respect of Third Party Funds and Direct investments. These are held at fair value, and are calculated using valuations provided by the underlying manager of the investment and reviewed by ICG, with adjustments made to the statements to take account of cashflow events occurring after the date of the manager’s valuation, such as realisations or liquidity adjustments. The valuations of unquoted investments provided by underlying managers are calculated in accordance with the 2018 IPEV Guidelines, which primarily use earnings multiple methodology. A 30% increase/(decrease) in the value of these assets (including those assets held within subsidiary undertakings) would result in a rise and fall in NAV of £304.8m or 29.2% respectively (31 January 2021: rise and fall in NAV of £252.0m and £254.8m respectively or 26.5% and 26.8%).

The following tables present the changes in level 3 instruments for the periods to 31 July 2021 and 31 July 2020.

Half year to
31 July
2021
£’000

Half year to
31 July
2020
£’000

Opening Balance 1 February

871,860

777,185

Additions

82,203

37,949

Disposals

(85,911)

(74,934)

Gains and losses recognised in profit or loss

148,085

(4,339)



Closing balance



1,016,237



735,861

STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors confirm that the interim financial statements have been prepared in accordance with United Kingdom adopted International Accounting Standard IAS 34 ‘Interim Financial Reporting’ and that the business review includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

• an indication of important events that have occurred during the first six months of the financial year and their impact on the interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

• that there were no changes in the transactions or arrangements with related parties as described in the last annual report that would have a material impact on the interim financial statements

The Directors of ICG Enterprise Trust plc are listed in the ICG Enterprise Trust plc Annual Report & Accounts for the year ended 31 January 2021, with the exception of Lucinda Riches who stepped down from the Board at the AGM on 21 June 2021.

A list of current directors is maintained on the ICG Enterprise Trust plc website:
http://www.icg-enterprise.co.uk/about-us/the-board.

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 over the next 12 months. As part of this review, the Board assessed the ongoing and potential impact of principal risks and the COVID-19 pandemic on the Company’s business activities.

As part of the Board’s assessment of going concern a range of stressed scenarios and sensitivity analyses were examined to identify conditions that might result in the facility’s covenants being breached. This included the consideration of possible remedial action that the Company could undertake to avoid such breaches. The diversification and defensive characteristics of the Portfolio were also considered. The output from the scenario analysis is sensitive to the reduction in Portfolio value which is dependent on external factors. The Company continues not to be in breach of any of its facility covenants, has sufficient headroom and is well placed to manage the Portfolio cash flows and its level of undrawn commitments, even in an extreme downside scenario. 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 for a period of at least 12 months. Therefore, it is appropriate to continue to adopt the going concern basis of preparation of the Company’s interim financial statements

INDEPENDENT REVIEW REPORT TO ICG ENTERPRISE TRUST PLC
Conclusion

We have been engaged by ICG Enterprise Trust plc (the ‘Company’) to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 July 2021 which comprises the Balance Sheet, Income Statement, Cash Flow Statement, Statement of Changes in Equity and the related Notes 1 to 7. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 July 2021 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom’s Financial Conduct Authority.

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 3, the annual financial statements of the Company will be prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, “Interim Financial Reporting”.

Responsibilities of the directors

The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority

Auditor’s responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion is based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Ernst & Young LLP

London

4 October 2021

GLOSSARY (UNAUDITED)

Term

Short form

Definition

Alternative Performance Measures

APMs

APMs 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 denoted 1 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.

Co-investment

Co-investment is a direct investment in a company alongside a private equity fund.

Co-investment Incentive Scheme Accrual

Represents the estimated value of interests in the co-investment incentive scheme operated by the Company.

Commitment

Represents the amount of capital that each limited partner agrees to contribute to the fund which can be drawn at the discretion of the general partner

Deployment

Please see ‘Total new investment’

Direct Investments

Please see ‘Co-investment’.

Discount1

Arises when the Company’s shares trade at a discount to NAV. 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

The amounts invested by the Company into funds 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 performance measure in the private equity industry.

Enterprise Value

EV

The aggregate value of a company’s entire issued share capital and net debt.

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

The 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

Where the Company receives sales proceeds from the full or partial sale of a fund position within the secondary market.

General Partner

GP

The entity managing a private equity fund that has been established as a limited partnership. This is commonly referred to as the Manager.

Hedging

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.

High conviction Investments1

Comprises Direct investments, ICG managed funds and Secondary investments.

Initial Public Offering

IPO

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

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

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

The time frame of the immediately preceding 12 months in reference to a financial metric used to evaluate the company’s performance.

Limited Partner

LP

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

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 profit share ahead of distributions to limited partners.

Net asset value

per share1

NAV per share

The value of the Company’s 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 asset value

per share Total

Return1

The change in the Company’s net asset value per share, assuming that dividends are re- invested at the end of the quarter in which the dividend was paid.

Net debt

Calculated as the total short-term and long-term debt in a business, less cash and cash equivalents.

Ongoing Charges

Are calculated in line with guidance issued by the Association of Investment Companies (‘AIC’) and capture management fees and expenses, excluding finance costs, incurred at the Company level only. The calculation does not include the expenses and management fees incurred by any underlying funds.

Other Net Liabilities1

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 are amounts payable under the co-incentive scheme accrual.

Overcommitment1

Where private equity fund investors make commitments exceeding the amount of cash immediately available for investment. When determining the appropriate level of overcommitment, careful consideration needs to be given to the rate at which commitments might be drawn down, and the rate at which realisations will generate cash
from the existing portfolio to fund new investment.

Portfolio1

The aggregate of the investment Portfolios of the Company and of its subsidiary limited partnerships. This is consistent with the commentary in previous annual and interim reports. The Board and the Manager consider that this is the most relevant basis for shareholders to assess the overall performance of the Company and comparison with its peers.

The closest equivalent amount reported on the balance sheet is ‘investments at fair value’. A reconciliation of these two measures along with other figures aggregated for the Company and its subsidiary limited partnerships is presented below:

31 July 2021 £m

Fair Value per balance sheet

Cash held by subsidiary limited partnerships

Balances receivable from subsidiary limited partnerships

Co-investment Incentive scheme accrual

Aggregated Company and subsidiary limited partnerships

Investments

1,017.4

(40.2)

(0.9)

42.7

1,019.0

Cash

29.3

40.2

-

-

69.5

Other net liabilities

(3.2)

-

0.9

(42.7)

(45.0)

Net assets

1,043.5

-

-

-

1,043.5


31 January 2021 £m

Fair Value per balance sheet

Cash held by subsidiary limited partnerships

Balances receivable from subsidiary limited partnerships

Co-investment Incentive scheme accrual

Aggregated Company and subsidiary limited partnerships

Investments

907.6

-

(0.2)

41.8

949.2

Cash

45.2

-

-

-

45.2

Other net liabilities

(0.7)

-

0.2

(41.8)

(42.3)

Net assets

952.1

-

-

-

952.1

Portfolio Return on a Local Currency Basis1

Represents the change in the valuation of the Company’s Portfolio, before the impact of currency movements and co-investment scheme accrual. The Portfolio return of 14% is calculated as follows:

£m

31 Jul 2021

FY 2021

Income, gains and losses on Investments

113.0

190.6

Foreign exchange gains and losses included in gains and losses on investments

20.4

(12.2)

Incentive accrual valuation movement

8.2

22.2

Total gains on Portfolio investments excluding impact of foreign exchange

141.6

200.6

Opening Portfolio valuation

949.2

806.4

Portfolio return on a Local Currency Basis

14.9%

24.9%

A reconciliation between the Portfolio return on local currency basis and NAV per share Total Return is disclosed overleaf, see ‘Total Return’.

Portfolio Company

An individual company in an investment portfolio.

Preferred Return

Is the preferential rate of return on an individual investment or a portfolio of investments, which is typically 8% per annum

Premium

Occurs when the share price is higher than the NAV and investors would therefore be paying more than the value attributable to the share by reference to the underlying assets.

Quoted company

Any company whose shares are listed or traded on a recognised stock exchange.

Realisation proceeds1

Amounts received in respect of underlying realisation activity from the Portfolio and excludes any inflows from the sale of fund positions via the secondary market.

Realisations – Multiple to Cost1

The average return from full exits from the Portfolio in the period on a primary investment basis, weighted by cost.

£m

31 Jul 2021

FY 2021

Cumulative realisation proceeds from full exits in the year

143.6

85.7

Cost

52.0

35.6

Average return Multiple to Cost

2.8x

2.4x

Realisations – uplift to carrying

value1

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 Jul 2021

FY 2021

Realisation proceeds from full exits in the year

97.2

78.0

Prior carrying value

77.2

59.7

Average return Multiple to Cost

26%

31%

Secondary investments

These occur when existing private equity fund interests and commitments are purchased from an investor seeking liquidity.

Share Price Total Return1

The change in the Company’s share price, assuming that dividends are re-invested on

the day that they are paid.

Total new investment1

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 condensed interim financial statements.

£m

31 Jul 2021

31 Jan 2021

Purchase of portfolio investments (per cashflow

statement)

82.2

86.1

Purchase of portfolio investments within subsidiary investments

51.1

53.1

Total New Investment

133.3

139.2

Total Proceeds1

The 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 Jul 2021

31 Jan 2021

Sale of Portfolio investments (per cashflow statement)

122.0

147.5

Sale of Portfolio investments, interest received and dividends received within subsidiary investments

55.0

55.1

Interest income

3.3

1.2

Dividend income

4.4

5.4

Total Proceeds

184.7

209.2

Fund Disposals

9.4

71.9

Realisation Proceeds

175.3

137.3

Total Return1

Performance measure that assumes the notional re-investment of dividends. This is a measure commonly used by the listed private equity sector and listed companies in general.

The table below sets out the share price and the net asset value per share growth figures for periods of one, three, five and ten years to the balance sheet date on a Total Return basis:

Total Return performance in years to 31 July 2021

1 year

3 years

5 years

10 years

Net asset value per share

37.5%

57.2%

111.3%

213.3%

Share price

40.7%

37.6%

109.0%

246.7%

FTSE All-Share Index

26.6%

5.5%

32.3%

90.7%

The table below shows the breakdown of the Net Asset Value per Share Total Return for the period:

Change in NAV (% of opening NAV)

31 Jul 2021

Portfolio Return on a Local Currency Basis

14.9%

Currency movements on the Portfolio

(2.1%)

Portfolio return in sterling

12.8%

Effect of cash drag

(0.1%)

Impact of net portfolio movement on net asset value

12.7%

Expenses and other income

(1.0%)

Incentive accrual valuation movement

(0.8%)

Increase in net asset value per share before buy backs

10.9%

Impact of share buy backs & dividend reinvestment

0.2%

Net Asset Value per Share Total Return

11.1%

Undrawn commitments

Commitments that have not yet been drawn down (see definition of drawdowns).

Unquoted company

Any company whose shares are not listed or traded on a recognised stock exchange.

Valuation Multiples

Are earnings (EBITDA) or revenue multiples applied in valuing a business enterprise.

Venture Capital

Refers to investing in companies at a point in that company’s life cycle that is either at the concept, start-up or early stage of development.

1 Alternative Performance Measure
2 In the Chair’s Foreword, Manager’s Review and Supplementary Information, reference is made to the “Portfolio”. This is an APM.
3 PetSmart/Chewy, Allegro and Ivanti were excluded from this analysis as EBITDA growth is not a relevant metric for these companies in the period

4 Cash for liquidity purposes includes £40.2m held within the Company’s wholly owned subsidiaries. Subsidiaries are held at fair value under IFRS 10 Consolidated Financial Statements.

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