TIDMICGT
ICG Enterprise Trust plc
2 February 2023
Q3 Update for the three months ended 31 October 2022
NAV per Share Total Return +3.6% in the third quarter; +19.9%
LTM
Highlights
-- NAV per Share of 1,918p (31 July 2022: 1,852p); NAV
per Share Total Return of 3.6% for the quarter and
19.9% for the last twelve months ('LTM')
-- Portfolio Return on a Local Currency Basis of 0.2%
for the quarter and 13.8% on an LTM basis
-- New Investments of GBP59.9m, including 3 Direct
Investments
-- Realisation Proceeds of GBP62.6m during the quarter,
including 11 Full Exits executed at a 33.0% weighted
average Uplift to Carrying Value
-- Third quarter dividend of 7p per share, taking total
dividends for the period to 21p (Q3 FY22: 18p);
reiterated intention to declare total dividend for
FY23 of at least 30p per share
-- Long-term share buyback programme initiated in
October, with GBP0.3m being invested in share
buybacks during the quarter and total repurchases
under the program of GBP2.1m up to and including 31
January 2023
-- Revised management fee agreement and cost-sharing,
effective from 1 February 2023
Oliver Gardey
Head of Private Equity Fund Investments, ICG
ICG Enterprise Trust extended its track record of
delivering resilient growth during the period, generating
NAV per Share Total Return of 3.6% in the third quarter,
bringing our five-year annualised NAV per Share Total
Return to 17.6%.
Our Portfolio generated local currency returns of
0.2% in the third quarter, and 13.8% on an LTM basis.
Importantly, we continued to realise assets at a premium,
with 11 full exits completed during the third quarter
at an average Uplift to Carrying Value of 33%. We
believe these uplifts underline the quality and value
of our Portfolio. We are also encouraged to see this
momentum continuing post-period end.
ICG and our third-party managers have continued to
source attractive opportunities, whilst our strong
capitalisation is enabling us to invest for the future.
Our investment strategy, centred on 'defensive growth',
is underpinned by a disciplined approach to capital
allocation, seeking to enable ICG Enterprise Trust
shareholders to benefit from both income and capital
appreciation over the long term.
PERFORMANCE OVERVIEW
Annualised
------------ -------- -------- --------- ---------------------------------
Performance
to 31
October
2022 3 months 9 months 1 year 3 years 5 years 10 years
------------ -------- -------- --------- --------- --------- ---------
Portfolio
Return on a
Local
Currency
Basis 0.2% 7.9% 13.8% 22.2% 20.2% 14.4%
NAV per
Share Total
Return 3.6% 14.8% 19.9% 21.0% 17.6% 14.6%
Share Price
Total
Return (13.9)% (15.2)% (18.1)% 4.9% 6.3% 11.7%
FTSE
All-Share
Index Total
Return (4.6)% (4.7)% (2.8)% 2.3% 2.4% 6.2%
Three months to: Nine months to: 12 months to:
------------ ------------------ -------------------- ----------------------
Portfolio 31 Oct. 31 Oct. 31 Oct. 31 Oct. 31 Oct. 31 Oct.
activity 2022 2021 2022 2021 2022 2021
------------ -------- -------- --------- --------- --------- -----------
Realisation GBP62.6m GBP90.0m GBP169.4m GBP265.3m GBP237.7m GBP308.3m
Proceeds
Total New GBP59.9m GBP75.2m GBP203.6m GBP208.5m GBP298.8m GBP265.7m
Investments
ENQUIRIES
Investors and analysts:
Oliver Gardey, Head of Private Equity Fund Investments, ICG: +44
(0) 20 3545 2000
Colm Walsh, Managing Director, Private Equity Fund Investments,
ICG
Chris Hunt, Shareholder Relations, ICG
Livia Bridgman Baker, Shareholder Relations, ICG
Media:
Clare Glynn, Corporate Communications, ICG: +44 (0) 20 3545
1395
Website:
www.icg-enterprise.co.uk
EVENTS
A presentation for investors and analysts will be held at 10:30
GMT today. A link for the presentation can be found on the Results
& Reports page
https://www.globenewswire.com/Tracker?data=SrDC1aQFAwpRjopRmpj6LZ-GDy4HafQ9dv8k3ehY_N5zMmeGiUxCObTolOFerCck99PFdUPmOwEVC5REFxPvFNx0XgDojylNnc6HkRiTQ-KPjkw1UCbXVwrCkXAI1GRCjALLhzm8Xy4s3SL26-nZ6Ev3uZNgYIjb7dDfHIkjVy8=
of the Company website. A recording of the presentation will be
made available on the Company website after the event.
Company timetable
Ex-dividend date: 16 February 2023
Record date: 17 February 2023
Payment of dividend: 3 March 2023
ABOUT ICG ENTERPRISE TRUST
ICG Enterprise Trust is a leading listed private equity investor
focused on creating long-term growth by delivering consistently
strong returns through selectively investing in profitable,
cash-generative private companies, primarily in Europe and the US,
while offering the added benefit to shareholders of daily
liquidity.
We invest in companies directly as well as through funds managed
by 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 Business 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 composition
We take an active approach to portfolio construction, with a
flexible mandate that enables us to deploy capital into primary,
secondary and direct investment opportunities. Our portfolio
composition as at 31 October 2022 is shown below:
31 October 2022 31 October 2022
Investment category GBPm % of Portfolio
-------------------- --------------- ---------------
Primary 749.7 53.3%
-------------------- --------------- ---------------
Secondary 266.6 18.9%
-------------------- --------------- ---------------
Direct 391.6 27.8%
-------------------- --------------- ---------------
Total 1,407.9 100.0%
-------------------- --------------- ---------------
We invest in 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.
Investments managed by ICG account for 30.3% of the Portfolio as at
31 October 2022.
Our primary investments provide a diversified base to our
Portfolio, and through our direct and secondary investments we seek
to proactively increase our exposure to companies that particularly
align to our investment strategy.
31 October 2022 31 October 2022
Investment category GBPm % of Portfolio
------------------------------------------------------- --------------- ---------------
ICG managed investments(1) 426.5 30.3%
Third party Direct Investments 238.4 16.9%
Third party Secondary Investments 66.5 4.7%
------------------------------------------------------- --------------- ---------------
High Conviction Investments 731.4 51.9%
------------------------------------------------------- --------------- ---------------
Third Party Funds 676.5 48.1%
------------------------------------------------------- --------------- ---------------
Total 1,407.9 100.0%
------------------------------------------------------- --------------- ---------------
(1) ICG managed investments include Primary, Secondary
and Direct Investments
Geographically we focus on the developed markets of North
America and Europe, including the UK, which have deep and mature
private equity markets supported by a robust corporate governance
framework. The geographic profile of the Portfolio is shown
below:
31 October 2022 31 October 2022
Geography(1) GBPm % of Portfolio
----------------- ------------------ -----------------
North America 640.6 45.5%
----------------- ------------------ -----------------
Europe 430.8 30.6%
----------------- ------------------ -----------------
UK 242.2 17.2%
----------------- ------------------ -----------------
Other 94.3 6.7%
----------------- ------------------ -----------------
Total 1,407.9 100%
----------------- ------------------ -----------------
(1) Calculated by reference to the location of the
headquarters of the underlying Portfolio companies
on a value-weighted basis
Portfolio performance
-- Portfolio valued at GBP1,407.9m on 31 October 2022, with 87.2% of the
Portfolio having a Valuation Date of 30 September 2022 or later (October
2021: 88.9%)
-- The Portfolio Return on a Local Currency Basis of 0.2% during the quarter
represents modest declines within our Primary funds of (0.5)%; an
increase of 0.3% within Secondaries; and an increase of 1.7% within
Direct investments
-- Due to the geographic diversification of our Portfolio, the reported
value is impacted by changes in foreign exchange rates. During the third
quarter, the Portfolio increased by GBP53.6m (4.0%) due to FX movements,
driven primarily by US Dollar strengthening against Sterling. The
Portfolio return on a reported currency basis was therefore 4.2% during
the period
Movement in the Portfolio Three months to
GBPm 31 October 2022
--------------------------------------------------- ----------------
Opening Portfolio 1,353.7
----------------
Total New Investments 59.9
Total Proceeds (62.6)
----------------
Net (proceeds)/investments (2.7)
Valuation movement 3.3
Currency movement 53.6
--------------------------------------------------- ----------------
Closing Portfolio 1,407.9
--------------------------------------------------- ----------------
% Portfolio growth (local currency) 0.2%
% currency movement 4.0%
--------------------------------------------------- ----------------
% Portfolio growth (Sterling) 4.2%
Impact of (net cash)/net debt 0.3%
Expenses and other income (0.5)%
Co-investment Incentive Scheme Accrual (0.4)%
Impact of share buybacks and dividend reinvestment -
--------------------------------------------------- ----------------
NAV per Share Total Return 3.6%
--------------------------------------------------- ----------------
Realisation activity
-- Total Realisation proceeds of GBP62.6m during the third quarter
-- 11 Full Exits completed in the quarter, at a weighted average Uplift to
Carrying Value of 33.0% and 1.8x Multiple to Cost
Investment activity
-- Total New Investment of GBP59.9m in the third quarter. New investment by
category was as follows:
GBPm % of total
---------- ---- ----------
Primary 33.9 56.6%
---------- ---- ----------
Secondary - -
---------- ---- ----------
Direct 26.0 43.4%
---------- ---- ----------
Total 59.9 100.0%
---------- ---- ----------
-- Total New Investment in the third quarter included three new direct
investments for a combined total of GBP25.9m, as outlined below:
Company Manager Company sector Description Investment value
--------------- -------- ---------------- --------------- ----------------
ECA Group ICG Industrials Provider of GBP13.0m
autonomous
systems and
navigation
solutions
--------------- -------- ---------------- --------------- ----------------
KronosNet ICG Business Provider of GBP8.8m
Services business
process
outsourcing
services
--------------- -------- ---------------- --------------- ----------------
Vistage Gridiron Business Provider of GBP4.1m
Worldwide Services executive
advisory
services
--------------- -------- ---------------- --------------- ----------------
New Commitments
-- We made one new fund Commitment of GBP17.2m during the third quarter:
Fund Manager Focus Commitment
value
------------------- ------------- ------------- -----------------
Leonard Green IX(1) Leonard Green Large buyouts $20.0m (GBP17.2m)
------------------- ------------- ------------- -----------------
(1) Represents a new manager relationship during the
period
Quoted Companies
-- We do not actively invest in publicly quoted companies but gain listed
investment exposure when IPOs are used as a route to exit an investment.
In these cases, exit timing typically lies with the third party manager
alongside whom we are invested
-- At 31 October 2022, quoted companies representing 8.0% of the Portfolio
were valued by reference to the latest market price (31 July 2022; 8.8%)
-- Only one quoted investment individually accounted for 0.5% or more of the
Portfolio value:
Company Ticker % of Portfolio value
----- ----------------------------------- ------- --------------------
1 Chewy (part of PetSmart holding)(1) CHWY-US 3.5%
----- ----------------------------------- ------- --------------------
Other 4.5%
----- ----------------------------------- ------- --------------------
Total 8.0%
----- ----------------------------------- ------- --------------------
(1) % value of Portfolio includes entire holding of
PetSmart and Chewy. Majority of value is within Chewy
Balance sheet and financing
-- Total available liquidity of GBP174.2m, comprising GBP22.7m cash and
GBP151.5m undrawn bank facility
GBPm
-------------------------------------------------- ------
Cash at 31 July 2022 12.7
Realisation Proceeds 62.6
New investments (59.9)
Shareholder returns (0.3)
FX and other(1) 7.6
-------------------------------------------------- ------
Cash at 31 October 2022 22.7
-------------------------------------------------- ------
Available undrawn debt facilities 151.5
-------------------------------------------------- ------
Cash and undrawn debt facilities (total available
liquidity) 174.2
-------------------------------------------------- ------
(1) FX and other includes a GBP13.1m drawing from
existing debt facilities, partially offset by FX and
other expenses paid out
-- At 31 October 2022 the Portfolio represented 107.2% of net assets and the
Company had net debt of GBP32.7m
GBPm % of net assets
----------------------------------------- ------- ---------------
Total Portfolio 1,407.9 107.2%
Cash 22.7 1.7%
Drawn debt (55.4) (4.2)%
Co-investment Incentive Scheme Accrual (59.8) (4.6)%
Other net current liabilities (2.0) (0.1)%
----------------------------------------- ------- ---------------
Net assets 1,313.4 100.0%
----------------------------------------- ------- ---------------
-- Undrawn commitments of GBP528.5m, of which 18.8% (GBP99.1m) were to funds
outside of their investment period
Dividend and share buyback
-- Progressive dividend policy maintained: third quarter dividend of 7p per
share, bringing total dividends for the financial year-to-date to 21p
-- 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
-- Long-term share buyback program initiated in October 2022, with 30,000
shares repurchased during the third quarter for a total consideration of
GBP0.3m at an estimated weighted-average discount of 45.9% to last
reported NAV per Share
-- In aggregate, GBP2.1m invested in share buybacks since the program was
initiated, up to and including 31 January 2023, with a total of 191,480
shares having been repurchased at an estimated weighted-average discount
of 40.0% to the last reported NAV per Share
Changes to management fees and costs
-- The ICG Enterprise Trust Board and the Manager have agreed a revised
management fee rate, effective from 1 February 2023
-- While the management fee arrangement will remain unchanged, a tiered cap
as a proportion of NAV has been introduced at the following thresholds:
ICG Enterprise Trust NAV Management Fee Cap
------------------------- ------------------
< GBP1.5bn 1.25%
------------------------- ------------------
>= GBP1.5bn <= GBP2.0bn 1.10%
------------------------- ------------------
> GBP2.0bn 1.00%
------------------------- ------------------
-- The Board believes that this arrangement fairly compensates the Manager,
and ensures that ICG Enterprise Trust shareholders benefit from the
economies of scale generated from growth in the Company's NAV
-- The management fees for the twelve months to Q3 FY23 were 1.34% of NAV.
As an illustration, had the revised agreement been in place during this
period, management fees would have been capped at 1.25%. This would have
reduced the management fee by approximately 6% (approximately GBP1.1m)
-- The Manager has also agreed to absorb a number of ongoing costs
previously paid for by ICG Enterprise Trust, in particular a material
share of Sales and Marketing costs. The Board estimates that these are
equivalent to approximately 25-30% of the General Expenses (which exclude
management fees and finance costs) that would have been paid by ICG
Enterprise Trust prior to this agreement being reached
Notable activity since the period end(1)
-- One new Primary Commitment of GBP12.5m
-- New investments of GBP44.5m
-- Total Proceeds of GBP46.3m
ICG Private Equity Fund Investments Team
2 February 2023
SUPPLEMENTARY INFORMATION
Top 30 companies
The table below presents the 30 companies in which ICG
Enterprise Trust had the largest investments by value at 31 October
2022.
% of
Year of Portfolio
Company Manager investment Country value
----------------------------------------------------------- ------------ ----------- ------------ ---------
1 PetSmart
Retailer of pet products and services BC Partners 2015 United States 3.5%
2 Endeavor Schools
Provider of paid private schooling Leeds Equity 2018 United States 2.8%
3 Minimax
Supplier of fire protection systems and services ICG 2018 Germany 2.7%
4 Leaf Home Solutions
Provider of home maintenance services Gridiron 2016 United States 1.9%
5 Froneri
Manufacturer and distributor of ice cream products PAI 2013 / 2019 United Kingdom 1.8%
6 Yudo
Designer and manufacturer of hot runner systems ICG 2017 / 2018 South Korea 1.8%
7 DOC Generici
Manufacturer of generic pharmaceutical products ICG 2019 Italy 1.7%
8 Precisely
Provider of enterprise software Clearlake 2021 / 2022 United States 1.4%
9 AML RightSource
Provider of compliance and regulatory services and
solutions Gridiron 2020 United States 1.3%
10 Ambassador Theatre Group
ICG /
Operator of theatres and ticketing platforms Providence 2021 United Kingdom 1.3%
11 Curium Pharma
Supplier of nuclear medicine diagnostic pharmaceuticals ICG 2020 United Kingdom 1.2%
12 DigiCert
Provider of enterprise internet security solutions ICG 2021 United States 1.2%
13 IRI/NPD
Provider of mission-critical data and predictive analytics
to consumer goods manufacturers New Mountain 2022 United States 1.2%
14 DomusVi
Operator of retirement homes ICG 2017 / 2021 France 1.2%
15 David Lloyd Leisure
Operator of premium health clubs TDR 2013 / 2020 United Kingdom 1.2%
16 European Camping Group
Operator of premium campsites and holiday parks PAI 2021 France 1.1%
17 Newton
Provider of management consulting services ICG 2021 / 2022 United Kingdom 1.1%
18 Ivanti
Charlesbank
Provider of IT management solutions / ICG 2021 United States 1.1%
19 Visma
Provider of business management software and outsourcing Hg Capital /
services ICG 2017 / 2020 Norway 1.0%
20 PSB Academy
Provider of private tertiary education ICG 2018 Singapore 1.0%
21 Crucial Learning
Provider of corporate training courses focused on
communication skills and leadership development Leeds Equity 2019 United States 1.0%
22 Planet Payment
Provider of integrated payments services focused on Advent /
hospitality and luxury retail Eurazeo 2021 Ireland 0.9%
23 Brooks Automation
Thomas H.
Provider of semiconductor manufacturing solutions Lee 2021 / 2022 United States 0.9%
24 ECA Group
Provider of autonomous systems for the aerospace and
maritime sectors ICG 2022 France 0.9%
25 Class Valuation
Provider of residential mortgage appraisal management
services Gridiron 2021 United States 0.8%
26 Davies Group
Provider of specialty business process outsourcing
services BC Partners 2021 United Kingdom 0.8%
27 RegEd
Provider of SaaS-based governance, risk and compliance
enterprise software solutions Gryphon 2018 / 2019 United States 0.7%
28 MoMo Online Mobile Services
Operator of remittance and payment services via
mobile e-wallet ICG 2019 Vietnam 0.6%
29 AMEOS Group
Operator of private hospitals ICG 2021 Switzerland 0.6%
30 KronosNet
Provider of tech-enabled customer engagement and business
solutions ICG 2022 Spain 0.6%
Total of the 30 largest underlying investments 39.3%
---------------------------------------------------------------------------------------------------- ---------
Portfolio at 31 October 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 17.4%
2021 25.3%
2020 10.2%
2019 13.7%
2018 12.4%
2017 6.5%
2016 4.4%
2015 4.3%
2014 and older 5.8%
-------------------------------------- ------------------------------------
Total 100.0%
-------------------------------------- ------------------------------------
Portfolio by sector % of value of underlying investments
---------------------------- ------------------------------------
TMT 23.0%
Consumer goods and services 20.1%
Healthcare 14.5%
Business services 11.8%
Industrials 8.8%
Financials 7.3%
Education 6.9%
Leisure 3.8%
Other 3.8%
---------------------------- ------------------------------------
Total 100.0%
---------------------------- ------------------------------------
(1) Unless otherwise stated, values in this section refer to the
period up to 31 December 2022
(END) Dow Jones Newswires
February 02, 2023 02:00 ET (07:00 GMT)
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