1st Feb 2022 07:00
ICG Enterprise Trust Plc: Q3 Update for the three months ended 31 October 2021ICG Enterprise Trust plc
1 February 2022
Q3 Update for the three months ended 31 October 2021
NAV per Share Total Return of 33.2% in the last 12 months, strong momentum continuing
| Highlights NAV per Share of 1,628p (31 July 2021: 1,523p), NAV per Share Total Return of 7.3%1 during the quarter; 33.2% during the last twelve monthsPortfolio Return on a Local Currency Basis during the quarter of 8.3%1 (Sterling return: 8.5%); 44.7% during the last twelve months. Portfolio valued at £1,090m on 31 October 2021Realisation Proceeds of £90.0m during the quarter, including 27 Full Exits at a weighted-average of 40%1 Uplift to Carrying Value and 4.2x1 Multiple to Cost£75.2m of investments during the quarter, 40.1% into High Conviction Investments including £16.9m into two Direct InvestmentsThird quarter dividend of 6p per share, taking total for the nine months to 31 October 2021 to 18p. Intention reaffirmed to declare total dividends of at least 27p per share in respect of the financial year ending 31 January 2022, which would represent an increase of 12.5% per share compared to the previous financial yearActively managed Portfolio well positioned to navigate dynamic market conditions |
| Oliver GardeyHead of Private Equity Fund Investments, ICG |
| This has been another very strong quarter for ICG Enterprise Trust, delivering NAV per share Total Return of 33.2% over the last twelve months. All parts of the business have produced good results, building on the continued positive momentum we reported for the first half of our financial year.The Portfolio return was broad-based, with our High Conviction investments generating an enhanced return on top of our diversified Third Party fund investments. This composition of growth underlines the benefits our shareholders receive from our active portfolio construction. Our LP secondaries programme is progressing well. The investment we made during the first half of this financial year is performing above expectations and we signed a second transaction after the end of the quarter covered in this report.Realisation and investment levels remain high. As we continue to benefit from realisations within the Portfolio, we are finding attractive opportunities to deploy our shareholders’ capital, particularly into new High Conviction investments. Looking ahead, we have an attractive and actively managed portfolio focussed on defensive growth and invested in high quality companies. The portfolio is well positioned to navigate dynamic market conditions, with balanced exposures across different vintages, sectors and countries. Activity remains robust and we have a healthy pipeline of both investments and realisations as we look to the fourth quarter of our financial year and beyond. |
PERFORMANCE OVERVIEW
| Three months to: | Nine months to: | 12 months to: | |||||
| 31 Oct. 2021 | 31 Oct. 2020 | 31 Oct. 2021 | 31 Oct. 2020 | 31 Oct. 2021 | 31 Oct. 2020 | ||
| Portfolio Return on a Local Currency Basis | 8.3% | 12.1% | 23.8% | 7.9% | 44.7% | 11.9% | |
| NAV per Share Total Return | 7.3% | 10.7% | 19.1% | 9.6% | 33.2% | 11.1% | |
| Realisation Proceeds | £90m | £72m | £265m | £94m | £308m | £127m | |
| Total New Investment | £75m | £30m | £209m | £82m | £266m | £131m | |
| Annualised | ||||||
| 3 months | 9 months | 1 year | 3 years | 5 years | 10 years | |
| Performance to 31 October 2021 | ||||||
| NAV per Share Total Return | 7.3% | 19.1% | 33.2% | 18.1% | 17.1% | 13.2% |
| Share Price Total Return | 15.7% | 31.6% | 56.3% | 17.7% | 16.8% | 15.4% |
| FTSE All-Share Index Total Return | 3.5% | 16.6% | 35.4% | 5.6% | 5.6% | 7.5% |
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
Chris Hunt, Head of Shareholder 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: 10 February 2022
Record date: 11 February 2022
Payment of dividend: 4 March 2022
ABOUT ICG ENTERPRISE TRUST
ICG Enterprise Trust is a leading listed private equity investor focused on creating long-term growth by delivering consistently strong returns through selectively investing in profitable private companies, primarily in Europe and the US.
As a listed private equity investor, our purpose is to provide shareholders with access to the attractive long-term returns generated by investing in private companies, with the added benefit of daily liquidity.
We invest in companies directly via co-investments and through funds managed by ICG and other leading private equity managers who focus on creating long-term value and building sustainable growth through active management and strategic change.
We have a long track record of delivering strong returns through a flexible mandate and highly selective approach that strikes the right balance between concentration and diversification, risk and reward.
NOTES
Included in this document are Alternative Performance Measures (“APMs”). APMs have been used if considered by the Board and the Manager to be the most relevant basis for shareholders in assessing the overall performance of the Company, and for comparing the performance of the Company to its peers and its previously reported results. The Glossary in the Company’s H1 results includes further details of APMs and reconciliations to International Financial Reporting Standards (“IFRS”) measures, where appropriate.
In the Manager’s Review and Supplementary Information, all performance figures are stated on a Total Return basis (i.e. including the effect of re-invested dividends). ICG Alternative Investment Limited, a regulated subsidiary of Intermediate Capital Group plc, acts as the Manager of the Company.
DISCLAIMER
This report may contain forward looking statements. These statements have been made by the directors in good faith based on the information available to them up to the time of their approval of this report and should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information. These written materials are not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption therefrom. The issuer has not and does not intend to register any securities under the US Securities Act of 1933, as amended, and does not intend to offer any securities to the public in the United States. No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in these written materials, will not be accepted.
BUSINESS REVIEW
Portfolio performance
Portfolio valued at £1,090m on 31 October 2021Portfolio Return on a Local Currency Basis of 8.3% during the quarter and 23.8% during the nine months to 31 October 2021High Conviction Investments (48.9% of the Portfolio) generated local currency returns of 9.3% during the quarterThird Party Funds (51.1% of the Portfolio) generated local currency returns of 7.3% during the quarterGains were broad-based, including a number of successful Full Exits and Partial Realisations within the PortfolioOur portfolio of secondary investments performed particularly strongly during the quarter, and at 31 October 2021 secondary investments represented 17.0% of our Portfolio (31 July 2021: 12.0%)| Movement in the Portfolio to 31 October 2021 | Three months £m | Nine months£m |
| Opening Portfolio | 1,019.0 | 949.2 |
| Total New Investments | 75.2 | 208.5 |
| Total Proceeds | (90.0) | (274.7) |
| Net cash (inflow)/outflow | (14.8) | (66.2) |
| Valuation movement* | 84.2 | 225.8 |
| Currency movement | 1.9 | (18.5) |
| Closing Portfolio | 1,090.3 | 1,090.3 |
| % Portfolio growth (local currency) | 8.3% | 23.8% |
| % currency movement | 0.2% | (2.0)% |
| % Portfolio growth (Sterling) | 8.5% | 21.8% |
| Expenses and other | (1.2)% | (2.7)% |
| NAV per share Total Return | 7.3% | 19.1% |
| * 91% of the Portfolio is valued using 30 September 2021 (or later) valuations. | ||
New investment and commitment activity
£75.2m of Total New Investment in the quarter; 40.0% (£30.1m) invested into High Conviction Investments with the remaining 60.0% (£45.1m) being drawdowns on commitments to Third Party FundsThis brings the Total New Investment in the nine months to 31 October to £208.5m, of which 63.1% (£131.6m) was into High Conviction Investments and 36.9% (£76.9m) was in the form of drawdowns from commitments to Third Party FundsWithin the £30.1m of High Conviction Investments made during the quarter, we invested a total of £16.9m in two new Direct Investments:| Company | Manager | Company sector | Description | Investment |
| Davies Group | BC Partners | TMT | Provider of business outsourcing services to the insurance sector | £8.7m |
| Planet | Eurazeo / Advent | Financials | Provider of integrated payments services focused on hospitality and luxury retail | £8.2m |
Realisation activity
Realisation proceeds of £90.0m received during the quarter, of which £61.5m was generated from 27 Full Exits executed at an average of 40% Uplift to Carrying Value and 4.2x Multiple to Cost. This includes proceeds from the sale of U-POL that was announced in our H1 resultsFor the nine months to 31 October 2021, Full Exits have been executed at an average of 30% Uplift to Carrying Value and 3.1x Multiple to CostQuoted Companies
We do not invest directly in publicly quoted companies, but gain listed investment exposure when IPOs are used to exit an investmentAt 31 October 2021, we had 54 investments in quoted companies, representing 13.5% of the Portfolio (31 July 2021; 14.2%)There were five quoted investments that individually accounted for 0.5% or more of the Portfolio value:| Company | Ticker | % value of Portfolio | |
| 1 | Chewy (part of PetSmart holding)1 | CHWY-US | 6.2% |
| 2 | Olaplex | OLPX | 0.9% |
| 3 | Allegro | ALE-WA | 0.6% |
| 4 | Synlab | SYAB-F | 0.6% |
| 5 | Autostore | AUTO.OL | 0.5% |
| Other | 4.7% | ||
| Total | 13.5% | ||
| 1 % value of Portfolio includes entire holding of PetSmart and Chewy. Majority of value is within Chewy | |||
Balance sheet and financing
Total liquidity of £246.9m, comprising £76.2m cash and £170.7m undrawn bank facility| £m | |
| Cash at 31 July 2021 | 69.5 |
| Realisation Proceeds | 90.0 |
| Third Party Fund drawdowns | (45.1) |
| High Conviction Investments | (30.1) |
| Shareholder returns | (4.1) |
| FX and other | (4.0) |
| Cash at 31 October 2021 | 76.2 |
| Available undrawn debt facilities | 170.7 |
| Cash and undrawn debt facilities (total available liquidity) | 246.9 |
| £m | % of net assets | |
| Total Portfolio | 1,090.3 | 97.7% |
| Cash | 76.2 | 6.8% |
| Current liabilities | (50.7) | (4.5)% |
| Net assets | 1,115.8 | 100% |
DIVIDEND
Continued commitment to provide a progressive dividend in line with current policyThird quarter dividend of 6p per share, taking total for the nine months to 31 October 2021 to 18p. Intention reaffirmed to declare total dividends of at least 27p per share in respect of the financial year ending 31 January 2022, which would represent an increase of 12.5% per share compared to the previous financial yearACTIVITY SINCE THE QUARTER END (TO 31 DECEMBER 2021)
Total Proceeds of £61.7mNew Investments of £47.2m, 36.3% into High Conviction InvestmentsNew Fund Commitments ICG Ludgate Hill II: $20.0m (£15m) – secondary portfolioICG Private Equity Fund Investments Team1 February 2022SUPPLEMENTARY INFORMATION
Top 30 companiesThe table below presents the 30 companies in which ICG Enterprise Trust had the largest investments by value at 31 October 2021.
| 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 | 6.2% | |
| 2 | Minimax+ | ||||
| Supplier of fire protection systems and services | ICG | 2018 | Germany | 3.0% | |
| 3 | IRI+ | ||||
| Provider of mission-critical data and predictive analytics to consumer goods manufacturers | New Mountain | 2018 | United States | 2.9% | |
| 4 | Leaf Home Solutions | ||||
| Provider of home maintenance services | Gridiron | 2016 | United States | 2.0% | |
| 5 | Yudo+ | ||||
| Manufacturer of components for injection moulding | ICG | 2017 | Hong Kong | 1.9% | |
| 6 | DOC Generici+ | ||||
| Distributor of pharmaceutical products | ICG | 2019 | Italy | 1.8% | |
| 7 | Berlin Packaging+ | ||||
| Provider of global packaging services and supplies | Oak Hill | 2018 | United States | 1.8% | |
| 8 | Froneri+ | ||||
| Manufacturer and distributor of ice cream products | PAI | 2019 | United Kingdom | 1.7% | |
| 9 | Visma+ | ||||
| Provider of business management software and outsourcing services | ICG / HgCapital | 2017 / 2020 | Norway | 1.6% | |
| 10 | Endeavor Schools+ | ||||
| Operator of private-pay schools | Leeds Equity | 2018 | United States | 1.6% | |
| 11 | David Lloyd Leisure+ | ||||
| Operator of premium health clubs | TDR | 2013 / 2020 | United Kingdom | 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 | 2020 | United States | 1.3% | |
| 14 | Ivanti+ | ||||
| Provider of IT management software solutions | Charlesbank | 2021 | United States | 1.2% | |
| 15 | PSB Academy+ | ||||
| Provider of tertiary education | ICG | 2018 | Singapore | 1.0% |
| Company | Manager | Year of investment | Country | Value as a % of Portfolio | |
| 16 | Davies Group + | ||||
| Provider of business outsourcing services to the insurance sector | BC Partners | 2021 | United Kingdom | 0.9% | |
| 17 | Olaplex | ||||
| Provider of hair care products | Advent | 2020 | United Kingdom | 0.9% | |
| 18 | DigiCert+ | ||||
| Provider of enterprise security solutions | ICG | 2021 | United States | 0.8% | |
| 19 | Curium Pharma+ | ||||
| Supplier of nuclear medicine diagnostic pharmaceuticals | ICG | 2020 | United Kingdom | 0.8% | |
| 20 | Class Valuation+ | ||||
| Provider of residential mortgage appraisal management services | Gridiron | 2021 | United States | 0.8% | |
| 21 | RegEd+ | ||||
| Provider of Saas-based governance, risk and compliance enterprise software solutions | Gryphon Investors | 2018 | United States | 0.8% | |
| 22 | Planet+ | ||||
| Provider of integrated payments services focused on hospitality and luxury retail | Eurazeo / Advent | 2021 | Ireland | 0.8% | |
| 23 | Crucial Learning+ (fka VitalSmarts) | ||||
| Provider of corporate training courses focused on communication skills and leadership development | Leeds Equity | 2019 | United States | 0.7% | |
| 24 | AMEOS Group+ | ||||
| Provider of health care services | ICG | 2021 | Switzerland | 0.7% | |
| 25 | Allegro | ||||
| Operator of an online marketplace and price comparison website | Cinven / Permira | 2017 | Poland | 0.6% | |
| 26 | Synlab | ||||
| Operator of medical diagnostic laboratories | Cinven | 2015 | Germany | 0.6% | |
| 27 | HSE24 | ||||
| Home shopping network in Germany | ICG | 2020 | Germany | 0.6% | |
| 28 | AutoStore | ||||
| Designer and manufacturer of automated storage and retrieval systems | TH Lee | 2019 | Norway | 0.5% | |
| 29 | proALPHA | ||||
| Developer and vendor of resource planning software | ICG | 2017 | Germany | 0.5% | |
| 30 | IRIS | ||||
| Provider of business-critical software | ICG | 2018 | United Kingdom | 0.5% | |
| Total of the 30 largest underlying investments | 41.3% |
+ 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
30 largest fund investmentsThe table below presents the 30 largest funds by value at 31 October 2021. The valuations are net of underlying managers’ fees and Carried Interest.
| Fund | Year of commitment | Country/ region | Value £m | Outstanding commitment £m | ||
| 1 | ICG Ludgate Hill I | |||||
| Secondary portfolio | 2021 | Europe/North America | 44.2 | 10.2 | ||
| 2 | BC European Capital IX Mid-market and large buyouts | 2011 | Europe/North America | 38.0 | 1.7 | |
| 3 | ICG Europe VII | |||||
| Mezzanine and equity in mid-market buyouts | 2018 | Europe | 34.8 | 10.5 | ||
| 4 | ICG Strategic Equities Fund III | |||||
| Secondary fund restructurings | 2018 | Global | 33.2 | 10.1 | ||
| 5 | Gridiron Capital Fund III | |||||
| Mid-market buyouts | 2016 | North America | 26.9 | 4.0 | ||
| 6 | Sixth Cinven Fund | |||||
| Large buyouts | 2016 | Europe | 24.1 | 2.0 | ||
| 7 | Graphite Capital Partners VIII | |||||
| Mid-market buyouts | 2013 | UK | 23.7 | 3.1 | ||
| 8 | Thomas H Lee Equity Fund VIII | |||||
| Mid-market and large buyouts | 2017 | North America | 21.1 | 4.3 | ||
| 9 | CVC European Equity Partners VI | |||||
| Large buyouts | 2013 | Europe/North America | 20.0 | 2.6 | ||
| 10 | CVC European Equity Partners VII | |||||
| Large buyouts | 2017 | Europe/North America | 19.8 | 7.2 | ||
| 11 | Advent Global Private Equity IX | |||||
| Large buyouts | 2019 | Europe/North America | 19.0 | 5.5 | ||
| 12 | Advent Global Private Equity VIII | |||||
| Large buyouts | 2016 | Europe/North America | 18.0 | 0.6 | ||
| 13 | PAI Strategic Partnerships | |||||
| Mid-market and large buyouts | 2019 | Europe | 17.7 | 0.6 | ||
| 14 | PAI Europe VI | |||||
| Mid-market and large buyouts | 2013 | Europe | 17.3 | 1.4 | ||
| 15 | BC European Capital X | |||||
| Mid-market and large buyouts | 2016 | Europe | 17.3 | 0.6 | ||
| 16 | TDR Capital III | |||||
| Mid-market and large buyouts | 2013 | Europe | 15.8 | 1.6 | ||
| 17 | PAI Europe VII | |||||
| Mid-market and large buyouts | 2017 | Europe | 14.3 | 10.3 | ||
| 18 | Gryphon V | |||||
| Mid-market buyouts | 2019 | North America | 14.0 | 1.4 | ||
| Fund | Year of commitment | Country/ region | Value £m | Outstanding commitment £m | |
| 18 | Gryphon V | ||||
| Mid-market buyouts | 2019 | North America | 14.0 | 1.4 | |
| 19 | New Mountain Partners V | ||||
| Mid-market buyouts | 2017 | North America | 13.7 | 1.5 | |
| 20 | Permira V | ||||
| Large buyouts | 2013 | Europe/North America | 13.2 | 0.4 | |
| 21 | ICG Strategic Equity Fund IV | ||||
| Secondary fund restructurings | 2021 | Global | 12.9 | 19.4 | |
| 22 | Gridiron Capital Fund IV | ||||
| Mid-market buyouts | 2019 | North America | 12.9 | 4.2 | |
| 23 | Permira VI | ||||
| Large buyouts | 2016 | Europe | 12.8 | 1.9 | |
| 24 | Resolute IV | ||||
| Mid-market buyouts | 2018 | North America | 12.6 | 2.2 | |
| 25 | Charterhouse Capital Partners X | ||||
| Large buyouts | 2015 | Europe | 11.9 | 3.8 | |
| 26 | Leeds Equity Partners VI | ||||
| Mid-market buyouts | 2017 | North America | 10.8 | 0.8 | |
| 27 | Permira VII | ||||
| Large buyouts | 2019 | Global | 10.4 | 3.6 | |
| 28 | ICG Strategic Secondaries II | ||||
| Secondary fund restructurings | 2016 | Europe/North America | 9.9 | 15.2 | |
| 29 | One Equity Partners VIMid-market buyouts | 2016 | Europe/North America | 9.6 | 0.6 |
| 30 | Resolute II Continuation Mid-market buyouts | 2021 | North America | 9.5 | - |
| Total of the largest 30 fund investments | 573.4 | 132.7 | |||
| Percentage of total investment Portfolio | 52.6% | ||||
Portfolio at 31 October 2021All data is presented on a look-through basis to the investment portfolio held by the Company, consistent with the commentary in previous annual and interim reports
| Investment category | £m | % of Portfolio |
| ICG managed investments | 289.8 | 26.6% |
| Third party Direct Investments | 185.2 | 17.0% |
| Third party Secondary Investments | 58.1 | 5.3% |
| High Conviction Investments | 533.1 | 48.9% |
| Third Party Funds | 557.2 | 51.1% |
| Total | 1,090.3 | 100% |
| Portfolio by calendar year of investment | % of value of underlying investments | |
| 2021 | 19.4% | |
| 2020 | 12.1% | |
| 2019 | 18.9% | |
| 2018 | 19.1% | |
| 2017 | 10.2% | |
| 2016 | 6.9% | |
| 2015 | 8.2% | |
| 2014 and older | 5.2% | |
| Total | 100.0% | |
| Portfolio by sector | % of value of underlying investments |
| Consumer goods and services | 22.9% |
| TMT | 20.2% |
| Healthcare | 17.4% |
| Business services | 13.8% |
| Industrials | 8.9% |
| Education | 5.4% |
| Financials | 3.6% |
| Leisure | 3.4% |
| Other | 4.4% |
| Total | 100.0% |
| Portfolio by geographic distribution based on location of company headquarters | % of value of underlying investments |
| North America | 40.4% |
| Europe | 31.4% |
| UK | 19.4% |
| Rest of world | 8.8% |
| Total | 100.0% |
1 Alternative Performance Measure
Attachment
220201_ICGT 31 October 2021 Result_FINALRelated Shares:
ICG Enterprise Trust