We write to you with 2025 now well underway. There is no shortage of discussion points: in the US, what will the new administration bring? In the UK, the gilt markets have calmed down but for how long?
We have a long experience of managing through uncertainty and focus on what we can control: optimising investment performance; actively constructing the portfolio and seeking to improve shareholder returns.
There were a number of highlights from our Q3 results, released two weeks ago:
- Investment performance: NAV per Share Total Return of 3.0% in the quarter; long-term compounding returns of 13.8% annualised over the last 5 years1
- Active portfolio construction: Evolving our medium-term target portfolio composition towards more secondary and direct investments
- Shareholder returns: Continuing our shareholder-focused approach to capital allocation
Recent investment performance has an upward trajectory and we retain our positive outlook for 2025. Most major public market indices are up year-to-date, which will support private market valuations. There is increased confidence in both North America and Europe in continuing growth and a return of M&A activity.
We announced an evolution of our portfolio construction. We continue to trend towards a 50-50 split across North America and Europe, and announced a medium-term evolution towards more secondary and direct investments, and fewer primaries. This is designed to advance our aim of generating strong risk-adjusted returns. Secondaries has been a particularly fast-growing asset class in recent years – it has the potential to provide further portfolio and vintage diversification, visibility on the underlying portfolio companies and an attractive risk-return profile.
We typically gain exposure to secondaries through our manager, ICG, which has dedicated LP-led and GP-led secondaries strategies. ICG plc is hosting a webinar on the GP-led secondaries asset class on 5th March 2025 – this is available to sign up to here.
As for shareholder returns, our focus has not changed: seeking to generate long-term compounding growth for our shareholders through our investment programme and through our capital allocation policy. Dividends have grown at an annualised rate of 9% over the last 5 years2 and our buybacks since October 2022 have resulted in the purchase of a market-leading 6%3 of ordinary shares.
Our roots trace back to 1981 and we are the UK’s oldest continually listed private equity investment trust. Whilst there has been a lot of discussion about the investment trust structure over recent months, to our minds the discussions have highlighted even more the benefits of our structure for accessing an illiquid asset class such as private equity.
Over the weekend, we celebrated the ninth anniversary of joining ICG which we believe was a pivotal moment in our history. We believe the ICG platform provides a source of strong competitive advantage, with access to dealflow, significant global presence and a differentiated institutional network and knowledge base. ICG has grown in both breadth and scale in that period, which has further enhanced these benefits.
With best wishes,
Oliver and Colm
Past performance is not a reliable indicator of future performance.
1 ICG Enterprise Trust Q3 trading update, to 31 October 2024
2 FY20 to FY25, including intended total dividends for year ended FY25 of at least 35p
3 Source: Deutsche Numis research, ‘Opportunities abound in listed PE’, data from Dec 2022 to Dec 2024 (excludes tender offers)
Unsure of some of these terms? See our Glossary.
Subscribe to our newsletters
Sign up for Regulatory News updates: click here
Authors
Back