ICG Enterprise Trust Plc: Unaudited Interim Results for the six months ended 31 July 2021
*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*
· NAV per Share of 1,523p, NAV per Share Total Return of 11.1%^1 during the period; 37.5% over the last twelve months
· Portfolio Return on a Local Currency Basis during the period of 14.9%^1 (Sterling return: 12.8%); 48.5% over the last twelve months. Portfolio valued at £1,019m on 31 July 2021
· Realisation Proceeds of £175m in the period, higher than the average annual Realisation Proceeds for the last five years
· 34 Full Exits generated 26%^1 Uplift to Carrying Value and 2.8x^1 Multiple to Cost
· £133m of investments in the period, 76% into High Conviction Investments including five Direct Investments
· Second quarter dividend of 6p per share, taking total for the period to 12p. Intention reaffirmed to declare total dividends of at least 27p per share during the financial year ending 31 January 2022, an increase of 12.5% per share compared to the previous financial year
*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 Portfolio^2 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** *1,01**9.0* *765.0*
*% Portfolio growth (local currency)* *14.**9**%* (3.6)%
% currency movement (2.1)% 3.7%
*% Portfolio growth (Sterling)* *1**2.8**%* 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* *4**92* *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 27^3, 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 2^nd 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 10^th 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 relationshipsWe 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 CompaniesWe 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 £70m^4 (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
*1*** *Advent Global Private Equity VIII* Large buyouts 2016 Europe/North America 20.3 0.6
*1**1* *CVC European Equity Partners VII* Large buyouts 2017 Europe/North America 19.9 7.3
*1**2* *PAI Strategic Partnerships *** Mid-market and large buyouts 2019 Europe 18.3 0.6
*1**3* *ICG Europe VI *** Mezzanine and equity in mid-market buyouts 2015 Europe 17.6 4.3
*1**4* *PAI Europe VI* Mid-market and large buyouts 2013 Europe 16.9 1.4
*1**5* *BC European Capital X* Large buyouts 2016 Europe/North America 16.5 1.8
*1**6* *New Mountain Partners V* Mid-market buyouts 2017 North America 15.2 1.0
*1**7* *Thomas H Lee Equity Fund VIII* Mid-market and large buyouts 2017 North America 15.1 6.8
*1**8* *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
*2*** *Permira** VI* Large buyouts 2016 Europe 12.9 1.9
*2**1* *Gryphon V* Mid-market buyouts 2019 North America 12.8 1.4
*2**2* *ICG Asia Pacific Fund III* Mezzanine and equity in midmarket buyouts 2016 Asia Pacific 12.3 2.8
*2**3* *PAI Europe VII* Mid-market and large buyouts 2017 Europe 12.2 11.7
*2**4* *Resolute IV* Mid-market buyouts 2018 North America 11.8 2.1
*2**5* *Charterhouse Capital Partners X* Large buyouts 2015 Europe 11.6 3.8
*2**6* *TDR Capital III* Mid-market and large buyouts 2013 Europe 10.7 1.6
*2**7* *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* *5**62**.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*
*Portfolio*^*1* *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* *1,01**9.0* *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* *Cost*^*1*
*£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* *1**12**,**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,**88**6**)* *(6,**6**80**)* *(8,566)* *(2,639)* *(4,389)* *(7,028)*
*Profit/(loss)* *before* *tax* *5,73**4* *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*
*1**50**.**96**p*
*(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 *1,0**17**,**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* *1,0**43**,**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* *1,0**43**,**514* *952,016* *Net* *asset* *value* *per* *share* *(basic* *and* *diluted)*
*6*
*1,5**23**.****p*
*1,**384.4**p*
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 202**** (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 estimationIFRS 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 undertakings^1 – – 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’.
*Discount*^*1*
Arises when the Company’s shares trade at a discount to NAV. In this circumstance, the price that a