ICG Enterprise Trust Plc: For the three months to 31

23 January 2020
ICG Enterprise Trust plc
Quarterly Update

For the three months to 31 October 2019

Highlights

NAV per share of 1,140.4p
- Total return of +9.7% over the nine months
- Total return of -2.5% over the quarter; performance impacted by foreign exchange movements
Continued positive underlying performance across the portfolio
Cash generative portfolio with healthy level of realisations at significant uplifts to carrying value and multiples of cost
Continued development of new high-quality manager relationships and highly selective co-investment programme
- Further increasing exposure to the North American market, which now represents 30% of the portfolio
Active management of the portfolio, post the reporting period, one secondary sale has been completed at a premium to fund valuation
NAV and share price continue to outperform the FTSE All-Share Index over one, three, five and 10 years

Business review

Continued strong performance across the portfolio

Investment portfolio valued at £782.6m¹
- +12.4% portfolio return for the first nine months of the financial year; +12.6% on a constant currency basis
- -2.1% portfolio return for the quarter; +2.1% on a constant currency basis
- Impact of FX movements negative during the quarter but broadly neutral over the nine months

Portfolio is cash generative

16 full realisations in the quarter; £40.5m of proceeds received
- Realisation of Abode Healthcare co-investment alongside Tailwind III at 2.0x cost, generating proceeds of £9.8m, an IRR of 81%
41 full realisations in the first nine months of the financial year; £108.1m of proceeds received
- Realisations at a 34% uplift to carrying value; 2.3x multiple of cost

Selective investment into a number of compelling high conviction investment opportunities

High conviction investments (ICG directly controlled investments, third-party co-investments and secondary investments) comprise 41% of investment portfolio
Two US co-investments completed during the quarter, each alongside leading US mid-market managers
- $10m (£8.1m) into VitalSmarts, a leading provider of corporate training courses, our second co-investment alongside Leeds Equity
- $10m (£7.8m) into Berlin Packaging, a provider of global packaging services and supplies, alongside Oak Hill Capital Partners
£45.7m of new investment in the quarter; £109.6m in the nine months
- High conviction investments 36% of capital deployed in quarter; 37% in nine months
- Focus remains on defensive growth, structural downside protection and relative value
- The portfolio is well balanced across a range of developed markets; US exposure now 30% of the portfolio having more than doubled as a proportion of the portfolio since 2016 when ICG became manager
£34.5m new primary commitments to three funds in the quarter including two new leading European managers (Carlyle and Investindustrial)
- €10m (£8.6m) commitment to Carlyle Europe V, focused on mid-market European buyouts
- €15m (£13.6m) commitment to Investindustrial VII, focused on Southern European mid-market buyouts, with a specific focus on Italy and Spain
- $15m (£12.4m) commitment to Gridiron IV, a US mid-market buyout fund
In total, £152.4m of new primary commitments have been made to eleven funds in the first nine months of the financial year

Continued cash generation and new investment opportunities since quarter end

Further £37.7m of proceeds received since the quarter end², including £8.2m from a secondary sale at a premium to the prior valuation
- The secondary market is a key tool for actively managing the portfolio both from a new investment and a realisation perspective
£34.1m of new investment, including £13.1m redeployed into a restructuring transaction alongside PAI Partners, whereby we chose to continue to hold the majority of our holding in Froneri, alongside PAI Partners. We first invested in Froneri, which is the third largest manufacturer and distributor of ice cream worldwide, in 2013, via our commitment to PAI V and directly via a co-investment alongside the fund. The original investment delivered a strong return having quadruped EBITDA in the last five years of PAI ownership.
Closing net asset value of £786.2m; investment portfolio represents 99.5% of net asset value
Cash balance of £33.1m; uncalled commitments of £493.7m
- £184.8m total liquidity (including £151.7m undrawn bank facility)

Strong balance sheet

Dividend

Third quarter dividend of 5p declared, taking dividends for the nine months to 15p
- Third quarter dividend will be paid on 6 March 2020
- The ex-dividend date will be 13 February 2020 and the record date 14 February 2020

Board
·Since the period end, non-executive director, Jane Tufnell, has been appointed Chair-designate and will succeed Jeremy Tigue when he steps down from the Board at the AGM in June 2020

Consistent strong performance
The performance of the Company remains strong over the short, medium and long term

Performance to 31 October 2019	3 months	9 months	1 year	3 years	5 years	*10 years**
Net asset value per share (TR)	-2.5%	+9.7%	+11.3%	+48.5%	+86.7%	+226.4%
Share price (TR)	+7.0%	+15.6%	+15.5%	+53.8%	+85.5%	+242.4%
FTSE All-Share Index (TR)	-2.1%	+8.3%	+6.8%	+19.3%	+37.9%	+117.9%
* As the Company changed its year end in 2010, the ten-year figures are for the 121 month period to 31 October 2019. Oliver Gardey, Head of Private Equity Fund Investments, ICG, commented: “The portfolio has continued to deliver strong underlying returns in the third quarter. We have continued to deploy capital into private companies with strong defensive characteristics in sectors with non-cyclical growth drivers. We are pleased with the progress made on increasing our portfolio weighting to international markets. The portfolio continues to report realisations at significant uplifts to carry value and cost, and we believe it is well positioned to continue to generate value for shareholders, as well as weather political and economic uncertainty. We have continued to build new high-quality manager relationships successfully which will offer us unique private market insights and investment opportunities in the future.” Enquiries Analyst / Investor enquiries: +44 (0) 20 3201 7700 Oliver Gardey, Head of Private Equity Fund Investments, ICG Colm Walsh, Managing Director, ICG Owen Jones, Investor Relations, ICG Media: Alicia Wyllie, Co-Head of Corporate Communications, ICG +44 (0) 20 3201 7994 Vikki Kosmalska, Associate Partner, Maitland +44 (0) 20 7379 5151 Disclaimer This report may contain forward looking statements. These statements have been made by the Directors in good faith based on the information available to them up to the time of their approval of this report and should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information. These written materials are not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption therefrom. The issuer has not and does not intend to register any securities under the US Securities Act of 1933, as amended, and does not intend to offer any securities to the public in the United States. No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in these written materials, will not be accepted.

Supplementary information

The 30 largest underlying investments

The table below presents the 30 companies in which ICG Enterprise had the largest investments by value at 31 October 2019. These investments may be held directly or through funds, or in some cases in both ways. The valuations are gross and are shown as a percentage of the total investment Portfolio.

	Company	Manager	Year of investment	Country	Value as a % of Portfolio
1	DomusVi +
	Operator of retirement homes	ICG	2017	France	3.7%
2	City & County Healthcare Group
	Provider of home care services	Graphite Capital	2013	UK	3.0%
3	Minimax +
	Supplier of fire protection systems and services	ICG	2018	Germany	2.7%
4	Froneri +^
	Manufacturer and distributor of ice cream products	PAI Partners	2013	UK	2.6%
5	PetSmart +
	Retailer of pet products and services	BC Partners	2015	USA	2.4%
6	Roompot +
	Operator and developer of holiday parks	PAI Partners	2016	Netherlands	2.3%
7	Yudo +
	Manufacturer of components for injection moulding	ICG	2018	South Korea	2.0%
8	Beck & Pollitzer
	Provider of industrial machinery installation and relocation	Graphite Capital	2016	UK	1.9%
9	LeafFilter
	Provider of gutter protection solutions	Gridiron	2016	USA	1.8%
10	Visma +
	Provider of accounting software and accounting outsourcing services	ICG	2017	Norway	1.8%
11	System One +
	Provider of specialty workforce solutions	Thomas H Lee Partners	2016	USA	1.8%
12	ICR Group
	Provider of repair and maintenance services to the energy industry	Graphite Capital	2014	UK	1.7%
13	Gerflor^
	Manufacturer of vinyl flooring	ICG	2011	France	1.7%
14	Supporting Education Group +^
	Provider of temporary staff for the education sector	ICG	2014	UK	1.6%
15	Doc Generici +
	Retailer of pharmaceutical products	ICG	2019	Italy	1.6%
16	IRI +
	Provider of data and predictive analytics to consumer goods manufacturers	New Mountain	2018	USA	1.5%
17	nGAGE
	Provider of recruitment services	Graphite Capital	2014	UK	1.4%
18	Endeavor Schools +
	Operator of schools	Leeds Equity Partners	2018	USA	1.4%
19	YSC
	Provider of leadership consulting and management assessment services	Graphite Capital	2017	UK	1.3%
20	Berlin Packaging +
	Provider of global packaging services and supplies	Oak Hill Capital Partners	2019	USA	1.2%
21	PSB Academy +
	Provider of private tertiary education	ICG	2018	Singapore	1.1%
22	VitalSmarts +
	Provider of corporate training courses focused on communication skills and leadership development	Leeds Equity Partners	2019	USA	1.0%
23	Compass Community
	Provider of fostering services and children residential care	Graphite Capital	2017	UK	1.0%
24	David Lloyd Leisure +
	Operator of premium health clubs	TDR Capital	2013	UK	0.9%
25	Ceridian +
	Provider of payroll and human capital software	Thomas H Lee Partners	2007	USA	0.8%
26	U-POL^
	Manufacturer and distributor of automotive refinishing products	Graphite Capital	2010	UK	0.8%
27	Cognito +^
	Supplier of communications equipment, software & services	Graphite Capital	2002 / 2014	UK	0.7%
28	EG Group
	Operator of petrol station forecourts	TDR Capital	2014	UK	0.6%
29	RegEd +
	Provider of regulatory compliance and management software products	Gryphon Investors	2019	USA	0.6%
30	Alerian^
	Provider of data and investment products focused on natural resources	ICG	2018	USA	0.5%
	Total of the 30 largest underlying investments				47.2%

	⁺ All or part of this investment is held directly as a co-investment or other direct investment.
	^ All or part of this investment was acquired as part of a secondary purchase.

The 30 largest fund investments

The 30 largest funds by value at 31 October 2019 are:

	Fund	Year of commitment		Country/ region		Value £m		Outstanding commitment £m
1	Graphite Capital Partners VIII *
	Mid-market buyouts	2013		UK		93.4		14.9
2	Gridiron Capital Fund III
	Mid-market buyouts	2016		North America		21.9		4.2
3	ICG Europe VI **
	Mezzanine and equity in mid-market buyouts	2015		Europe		19.6		3.3
4	CVC European Equity Partners VI
	Large buyouts	2013		Europe/USA		18.2		2.9
5	Thomas H Lee Equity Fund VII
	Mid-market and large buyouts	2015		USA		16.6		1.6
6	BC European Capital IX **
	Large buyouts	2011		Europe/USA		15.2		0.4
7	Advent Global Private Equity VIII
	Large buyouts	2016		Europe/USA		14.7		1.4
8	PAI Europe VI
	Mid-market and large buyouts	2013		Europe		13.9		1.7
9	ICG Strategic Secondaries Fund II
	Secondary fund restructurings	2016		Europe/USA		13.5		16.2
10	Sixth Cinven Fund
	Large buyouts	2016		Europe		13.2		5.4
11	Graphite Capital Partners VII * / **
	Mid-market buyouts	2007		UK		12.7		2.8
12	Permira V
	Large buyouts	2013		Europe/USA		12.6		0.9
13	One Equity Partners VI
	Mid-market buyouts	2016		Europe/USA		11.8		1.1
14	Silverfleet II
	Mid-market buyouts	2014		Europe		11.4		2.1
15	ICG Europe VII
	Mezzanine and equity in mid-market buyouts	2018		Europe		11.1		24.9
16	Resolute II **
	Mid-market buyouts	2018		USA		10.5		2.3
17	TDR Capital III
	Mid-market and large buyouts	2013		Europe		10.2		2.2
18	ICG Asia Pacific Fund III
	Mezzanine and equity in midmarket buyouts	2016		Asia Pacific		10.1		3.9
19	BC European Capital X
	Large buyouts	2016		Europe		9.3		4.7
20	IK VII
	Mid-market buyouts	2013		Europe		8.7		0.4

21	Hollyport Secondary Opportunities VI
	Tail-end secondary portfolios		2017		Global		8.6		2.3
22	Activa Capital Fund III
	Mid-market buyouts		2013		France		8.5		2.1
23	The Fourth Alcuin Fund
	Mid-market buyouts		2015		UK		8.2		1.7
24	Permira VI
	Large buyouts		2016		Europe		8.2		1.9
25	Nordic Capital Partners VIII
	Mid-market and large buyouts		2013		Europe		8.1		1.4
26	Oak Hill Capital Partners IV
	Mid-market buyouts		2017		USA		8.1		3.4
27	IK VIII
	Mid-market buyouts		2016		Europe		7.8		1.1
28	Charterhouse Capital Partners X
	Large buyouts		2015		Europe		7.7		5.9
29	Bain Capital Europe IV
	Mid-market buyouts		2014		Europe		7.5		1.1
30	Harwood Private Equity IV
	Mid-market buyouts		2015		UK		7.4		-
	Total of the largest 30 fund investments						428.7		118.2
	Percentage of total investment Portfolio						54.8%
	* Includes the associated Top Up funds.
	** All or part of an interest acquired through a secondary fund purchase.

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

Investment category	% of portfolio
High conviction portfolio ICG	21.1%
Third party co-investments	16.4%
Third party secondary investments	3.9%
Total High Conviction investments	41.4%
Third party funds portfolio Graphite Capital primary funds	13.4%
Third party primary funds Total diversified fund investments	45.2% 58.6%
Total	100.0%

Portfolio by investment type	% of value of underlying investments
Large buyouts	49.6%
Mid-market buyouts	41.5%
Small buyouts	5.6%
Other	3.3%
Total	100.0%
Portfolio by calendar year of investment		% of value of underlying investments
2019		11.5%
2018		20.6%
2017		19.4%
2016		16.8%
2015		8.0%
2014		8.8%
2013		8.2%
2012		1.7%
2011		0.9%
2010		1.3%
2009		1.0%
2008		0.2%
2007		1.3%
2006 and before		0.3%
Total		100.0%

Portfolio by sector		% of value of underlying investments
Healthcare and education		22.7%
Industrials		21.6%
Consumer goods and services		13.8%
TMT		13.5%
Business services		12.4%
Leisure		7.6%
Financials		5.4%
Other		3.0%
Total		100.0%

Portfolio by geographic distribution based on location of Company headquarters		% of value of underlying investments
UK		29.9%
North America		29.5%
Europe		36.4%
Rest of world		4.2%
Total		100.0%

Balance sheet information

The summary balance sheet at 31 October 2019 is set out below.

	31 October 2019	% of net assets	31 January 2019	% of net assets
	£m	% of net assets	£m	% of net assets
Total portfolio	782.6	99.5%	694.8	95.1%
Cash and liquid assets	33.1	4.2%	60.6	8.3%
Other net current liabilities	(29.5)	(3.7%)	(24.5)	(3.4)%
Net assets	786.2	100.0%	730.9	100.0%

	Movement in the portfolio		9 months
	£m		31 October 19
	Opening Portfolio*		694.8
	Third-party funds portfolio drawdowns		68.6
	High conviction investments – ICG funds, secondary investments and co-investments		41.0
	Total new investment		109.6
	Realisation Proceeds		(108.1)
	Net cash (inflow)/outflow		1.5
	Underlying Valuation Movement**		87.6
	Currency movement		(1.3)
	Closing Portfolio*		782.6
	% underlying Portfolio growth (local currency)		12.6%
	% currency movement		(0.2%)
	% underlying Portfolio growth (Sterling)		12.4%
	** 85% of the Portfolio is valued using 30 September 2019 (or later) valuations (31 Jan 19: 91%).
Movement in liquid assets
£m		9 months 31 October 19
Additions		(109.6)
Cash proceeds generated by the portfolio (including income)		108.1
Net cash generated by the investment portfolio		(1.5)
Non-investment cash flows		(11.8)
Effect of changes in foreign exchange rates		0.1
Cash inflow before shareholder distributions		(13.2)
Dividends paid to shareholders		(11.7)
Share buy backs		(2.6)
Net cash movement		(27.5)
Opening cash and liquid assets		60.6
Closing cash and liquid assets		33.1

Uncalled commitment coverage
	31 October 2019 £m	31 January 2019
		£m
Cash and liquid assets	33.1	60.6
Undrawn bank facility	151.7	103.9
Total liquidity	184.8	164.5

Outstanding commitments	493.7	411.2
Less: Total liquidity	(184.8)	(164.5)
Over-commitment	308.9	246.7
Over-commitment as % of net assets	39.3%	33.7%

¹ 85% of the Portfolio is valued using 30 September 2019 (or later) valuations.

² As at 31 December 2019

ICG Enterprise Trust Plc: For the three months to 31 October 2019