ICG ENTERPRISE TRUST PLC
Annual Report and Accounts 2023
Focused
on defensive
growth
ICG ENTERPRISE TRUST PLC Annual Report and Accounts 2023
STRATEGIC REPORT
1 Introduction
2 At a glance
4 Our differentiated approach
6 Chair’s statement
8 How we access the market
10 Market overview
12 How we work with our Manager
14 Manager’s review
24 30 largest underlying companies
28 People and culture
32 Investing responsibly
34 Key performance indicators
36 Stakeholder engagement
40 How we manage risk
43 Principal risks and uncertainties
47 Viability and going concern statements
GOVERNANCE
48 Governance overview
50 Board of Directors
52 Corporate governance report
56 Report of the Directors
60 Directors’ remuneration report
64 Report of the Audit Committee
66 Statement of Directors’ responsibilities
FINANCIAL STATEMENTS
67 Independent auditor’s report to the
members of ICG Enterprise Trust Plc
74 Income statement
75 Balance sheet
76 Cash flow statement
77 Statement of changes in equity
78 Notes to the financial statements
OTHER INFORMATION
95 30 largest fund investments
97 Portfolio analysis
100 Glossary
103 Shareholder information
104 Investment policy
105 Additional disclosures required by
the Alternative Investment Fund
Managers Directive
106 How to invest in ICG Enterprise Trust Plc
icg-enterprise.co.uk
ICG Enterprise Trust Plc
Please note
In the Chair’s statement, Manager’s review and Other information sections, reference is made to the
‘Portfolio’ (2023: £1,406.4m; 2022: £1,172.2m). The Portfolio is an Alternative Performance Measure (‘APM’),
defined as the aggregate of the investment portfolios of the Company and of its subsidiary limited partnerships.
The Board and Manager consider that disclosing our Portfolio assists shareholders in understanding the
value and performance of the portfolio companies which comprise the assets of the ICG Enterprise Trust,
held through underlying fund investments and direct investments selected by the Manager. The Portfolio
does not include the Co-investment Incentive Scheme Accrual (2023: £58.1m; 2022: £49.1m;). This ensures
Portfolio returns are not distorted by certain funds and direct investments on which ICG Enterprise Trust Plc
does not incur Co-investment Incentive Scheme costs (for example, on funds managed by Intermediate
Capital Group plc (‘ICG’)). Portfolio is related to the Net Asset Value, which is the value attributed to our
shareholders, and which also incorporates the Co-investment Incentive Scheme Accrual as well as the
value of cash on our balance sheet. Further details are set out in the Glossary on pages 100 to 102.
1 This is an APM. Further details are set out in the Glossary on page 100.
2 Throughout this report, all share price and NAV per Share performance figures
are stated on a Total Return basis (i.e. including the effect of reinvested dividends).
1,903p
NAV per Share
(31 January 2022: 1,690p)
16.9%
Five-year annualised NAV per Share
Total Return
1,2
(31 January 2022: 16.4%)
14.5%
NAV per Share Total Return
1,2
(31 January 2022: 24.4%)
30p
Total dividend
(31 January 2022: 27p)
Highlights
We seek to deliver consistently
strong returns by investing
in profitable private companies,
primarily in North America
and Europe.
During a year of economic uncertainty,
I have been encouraged to see ICG
Enterprise Trust generating consistent
returns, demonstrating the inherent
resilience of our ‘defensive growth’
strategy. The Company delivered a
NAV per Share Total Return of 14.5%,
bringing the five-year annualised NAV per
Share Total Return to 16.9% per annum.
This year, your Board has implemented additional
measures to optimise shareholder returns. These include
a long-term buyback programme, running alongside our
existing progressive dividend policy, and an improved
management fee agreement, incorporating a cap on the
fee rate payable to our Manager.
I believe ICG Enterprise Trust is an attractive vehicle for
investors to gain exposure to privately-owned companies in
Europe and North America. It is managed by an experienced
and well-networked investment team, and our NAV per Share
Total Return has been greater than the FTSE All-Share Total
Return for every year for the last decade.
I thank you all for your continued support and invite you
to read more about our performance and activities during
the 12 months to 31 January 2023 in this Annual Report.
Jane Tufnell
Chair
Our focus on
defensive growth
continues to
set us apart
Our differentiated approach 4
Manager’s review 14
INTRODUCTION
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 1
50%
25%
25%
59%
14%
27%
50%50%
37%
63%
AT A GLANCE
Geographic split
See page 6
(Net cash)/debt
Chair’s statement 6
Investment type
See page 8
What we invest in
Cash-generative companies in Europe, North America and the UK
Our purpose
To provide shareholders with access to the attractive
long-term returns generated by investing in private companies,
with the added benefit of daily liquidity
How we manage our assets
Our points of difference
Our differentiated approach 4 How we work with our Manager 12 People and culture 28
+19%
Portfolio five-year annualised returns
DEFENSIVE GROWTH
A focus on investing in defensive
growth companies
PORTFOLIO
COMPOSITION
BALANCE
SHEET
$75bn
Assets under management
-10% +10%
0%
ICG PLATFORM
The strength of a leading global
alternative asset manager
80+
Years of combined industry experience
DEDICATED TEAM
A dedicated and highly experienced
investment team
Generating long-term shareholder value
117.8%
Five-year cumulative NAV per Share Total Return
TARGET FIVE-YEAR AVERAGE
Governance overview 48
Primary Funds
Secondary Investments
Direct Investments
Five-year average
Europe
North America
ICG Enterprise Trust Plc Annual Report and Accounts 20232
SOURCE
OPPORTUNITIES
ANALYSE
& INVEST
MONITOR &
ACTIVELY MANAGE
PORTFOLIO
REINVEST OR
RETURN
Investment Committee oversight.
MONITOR & ACTIVELY
MANAGE PORTFOLIO
Underlying performance
is closely monitored and
the Portfolio’s exposures
are actively managed
to ensure consistent
strong performance.
REINVEST OR RETURN
Proceeds from the sales
of portfolio companies are
reinvested in new investment
opportunities, or returned
to shareholders through
dividends or share buybacks.
Find out more about our approach
to capital allocation on page 36.
SOURCE OPPORTUNITIES
The team actively sources new
opportunities, maintaining close
relationships with private equity
managers. As part of ICG, the
team also benefits from insights
and proprietary deal flow from
the wider ICG network.
ANALYSE & INVEST
Ahead of any investment, deep
and granular due diligence
is undertaken. A detailed
investment recommendation is
then discussed by the Investment
Committee and, if approved,
moves to legal review.
How we manage our portfolio
Our business model enables us to realise long-term
value by combining our proven strategy alongside
our Manager’s global platform
A diligent investment process
Including ESG considerations and disciplined capital allocation
Finance & risk Sales & marketing
Underpinned by our approach to responsible investing
Investing responsibly 32
Operations
Manager’s review 14
STRATEGIC REPORT
ICG Enterprise Trust Plc Annual Report and Accounts 2023 3
GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
OUR DIFFERENTIATED APPROACH
A spotlight on defensive growth
What key characteristics do we look for?
A strong
market position
A provider of
mission-critical
services
Strong
pricing power
A high margin
business model
14
Consecutive years of double
digit Portfolio growth
Defensive growth companies are able to grow
even during difficult operating environments.
We target these companies so that our Portfolio
is less sensitive to economic cycles.
ICG Enterprise Trust Plc Annual Report and Accounts 20234
A SELECTIVE AND CLEAR INVESTMENT
STRATEGY BUILT ON DEFENSIVE GROWTH
We seek to invest in companies that are established,
profitable and cash generative. We make these
investments directly and through funds managed by
ICG and third-party managers, taking account of ESG
considerations throughout our investment process.
How we access the market
p8
A HIGHLY EXPERIENCED TEAM
OF SECTOR SPECIALISTS
Our Portfolio is managed by
a dedicated investment team
within ICG, who have a strong
combination of direct and
fund investment experience.
People and culture
p28
INSIGHT TO LOCAL PERSPECTIVES
ON AN INTERNATIONAL STAGE
Our Manager’s network provides us with
substantial benefits, and our unique access
to ICG-managed funds and associated
co-investment opportunities has generated
substantial value for our shareholders.
How we work with our Manager
p12
A balanced, actively
constructed portfolio
A diverse and dedicated
investment team of experts
Our differentiated approach focused on defensive growth sets us
apart. It shapes how we construct our Portfolio, how we evaluate
potential investments and how we allocate capital between them.
It is underpinned by our Manager’s leading global network and
the talent of our diverse and dedicated investment team.
A global network of access
provided by our Manager
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 5
CHAIR’S STATEMENT
I am pleased to report that your Company
has continued to grow and invest for the
future during the last financial year.
In a period characterised by geopolitical and macro-economic
uncertainty, ICG Enterprise Trust’s performance reinforces the
Board’s confidence in the resilience of the Portfolio and the benefits
through economic cycles of our strategic focus on ‘defensive growth’.
ICG Enterprise Trust’s NAV at 31 January 2023 was £1.3bn, equating to
1,903p NAV per Share. The Company has delivered 14.5% NAV per Share
Total Return for the financial year, and 16.9% on a five-year annualised
basis, net of all fees. Further details on the composition and performance
of the Portfolio and NAV can be found in the Manager’s review.
In public markets the macroeconomic uncertainty in 2022 was reflected
in amplified volatility, downward pressure on earnings estimates and
lower valuations placed on earnings. Understandably there have been
questions about the seemingly less volatile nature of private valuations
compared to public valuations. The Portfolio of ICG Enterprise Trust
is notably different from that of frequently-cited public indices and is
not weighted towards consumer, financials and energy companies
(in the case of the FTSE 100) or towards a narrow group of technology
companies (in the case of the S&P500). In addition, private market
valuations have not typically seen the same levels of exuberance as public
markets during periods when valuations have expanded dramatically.
When reviewing the valuation of the Portfolio, there are a number of
factors to consider; but the ultimate validation is how an investment
is realised, and whether at exit a buyer is willing to pay the value that
we had it marked at. During FY23 the Portfolio experienced 54 Full
Exits, generating £133.2m of cash proceeds (representing 11.4% of
the opening Portfolio value for the year). These were executed at a
weighted average Uplift to Carrying Value of 23.9% – slightly lower
than recent years, but still a significant uplift. I believe our track record
of Full Exits being at an Uplift to Carrying Value should give shareholders
comfort that the valuations in our Portfolio are generally robust, and
this is an area the Board continues to discuss in detail with the Manager.
Despite this consistent and strong track record, our share price has
been impacted by widening discounts across the listed private equity
investment trust sector. During this financial year our shareholders
endured a negative Share Price Total Return of (2.3)% and on
31 January 2023 our shares traded at a 40.1% discount to the last
published NAV of 1,918p (as at 31 October 2022).
The Board considers that the Company’s performance and the value
of its Portfolio and strategy are not appropriately recognised in its
share price, and implemented several additional measures this year
to optimise shareholder returns. These include a long-term buyback
program, running alongside our existing progressive dividend
policy, and an improved management fee agreement, that introduces
a cap on the fee rate payable to our Manager and the Manager
assuming a greater proportion of the Company’s ongoing costs.
PROVIDING PUBLIC ACCESS TO PRIVATE EQUITY
Private equity can play a valuable role in generating differentiated
returns for investors with a long-term perspective. It is, however,
a fundamentally illiquid asset class. The closed-end nature of
investment trusts solves the potential liquidity mismatch for investors
by creating traded shares that can be bought and sold on a stock
exchange. As a result, the portfolio can be managed for long-term
value creation without the risk of having to sell assets to fund
redemptions. By investing in vehicles such as ICG Enterprise Trust,
shareholders gain access to a mature and actively managed portfolio
of private equity investments, with the added benefit of daily liquidity.
A consequence of the investment trust structure, however, is that
shares can trade at discounts to the published NAVs, and currently
the sector as a whole – including ICG Enterprise Trust – is trading at
quite notable discounts. As discussed elsewhere, your Board continues
to work with the Manager to make shares in ICG Enterprise Trust more
attractive to a wider range of investors.
I continue to believe that investment trusts such as ICG Enterprise
Trust serve a useful purpose in helping provide access to private
equity to a more diverse range of investors who are seeking to
commit capital to this asset class.
HOW ICG ENTERPRISE TRUST IS MANAGED
Six years ago, ICG Enterprise Trust outlined three objectives.
We are pleased to have delivered against each of these since they
were introduced:
Former objectives
Medium-term
target FY16 FY23
Portfolio as percentage
of net assets 100% 82.1% 108.1%
North America as percentage
of Portfolio 40–50% 14.1% 46.6%
High Conviction Investments
as percentage of deployment 50% 33.0% 57.6%
The Company has evolved since these objectives were introduced,
and to reflect this the Board has revised these objectives to the following,
which focus on 1. Target Portfolio composition and 2. Balance sheet:
New objectives
Medium-term
target
Five-year
average FY23
1. Target Portfolio composition
1
Investment category
Primary ~50% 59.2% 54.1%
Direct ~25% 27. 3% 27. 3%
Secondary ~25% 13.5% 18.6%
Geography
2
North America ~50% 3 7.2% 46.6%
Europe (inc. UK) ~50% 62.8% 53.4%
2. Balance sheet
(Net cash)/debt
3
~0% (3.0)% 3.4%
1 As percentage of Portfolio value.
2 FY23 excludes 6.3% Other geographical exposure.
3 (Net cash)/debt as a percentage of NAV.
ICG Enterprise Trust Plc Annual Report and Accounts 20236
Importantly this does not indicate a change in the composition of
the Portfolio, it merely more accurately reflects how the Portfolio
and our balance sheet are being managed, and how they are expected
to be constructed over the medium term. I believe that today we have
a very high quality investment team through our Manager, and that
these objectives will enable us to maximise the value they generate
for our shareholders.
DIVIDEND AND SHARE BUYBACK
During the financial year the Board gave careful consideration to the level,
form and mechanism of shareholder returns. The nature of private equity
investments means that compounding capital appreciation is likely to be
the largest single component of shareholder returns over the long term.
The progressive dividend is an important component of shareholder
returns, and the Board remains committed to this policy. In line
with this, the Board is proposing a final dividend of 9p per share.
Together with the three interim dividends of 7p per share each,
this will result in total dividends for the year of 30p per share,
representing an 11.1% increase on the prior year dividend and
the seventh consecutive year of dividend increases.
In October 2022 the Board introduced a long-term share buyback
programme. The Board believes this programme demonstrates
the Manager’s discipline around capital allocation; underlines the
Board’s confidence in the long-term prospects of the Company,
its cash flows and NAV; will enhance the NAV per Share; and over
time may reduce the volatility of the Company’s discount and increase
its trading liquidity. At 2 May 2023 the Company has repurchased
472,178 shares since this programme was initiated, at an estimated
weighted average discount to the last reported NAV of 41.2%.
In aggregate these buybacks represent a capital return of £5.2m.
IMPROVED MANAGEMENT FEE AND COST SHARING WITH THE MANAGER
During the year we negotiated a revised fee agreement with the
Manager, effective from 1 February 2023. This agreement caps the
maximum fee rate payable to the Manager, and allows our shareholders
to benefit from economies of scale as our NAV grows. Had the revised
agreement been in place during FY23, the management fee paid would
have been reduced by approximately 6.5% (£1.1m).
It was also agreed that the Manager will absorb a number of ongoing
costs previously paid for by ICG Enterprise Trust. The Board estimates
that these are equivalent to approximately 25–30% of the general
expenses (which exclude management fees and finance costs)
that would have been paid by ICG Enterprise Trust prior to this
agreement being reached.
I am grateful to ICG for their co-operation during these negotiations
and am pleased with the outcome we have agreed.
We remain well positioned to provide
shareholders with access to attractive
long-term returns. Our investment strategy
is clear, our financial position is robust, and the
underlying companies in which our Portfolio
is invested are well-equipped to withstand
the economic uncertainties we currently face.
JANE TUFNELL
Chair
BOARD EVOLUTION
Following the retirement of Sandra Parajola in June 2022, we were
delighted to strengthen our Board with the appointment of two
new non-executive directors, Adiba Ighodaro and Janine Nicholls.
Adiba and Janine each bring a depth and breadth of knowledge
which is complementary to the Board’s existing skillset. Further details
on their backgrounds and experience can be found on page 50.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held on 27 June 2023. The Board
will be formally communicating with shareholders outlining the format
of the meeting separately in the Notice of Meeting. This will include
details of how shareholders may register their interest in attending the
Annual General Meeting, either in person or via video conference.
LOOKING AHEAD
I am confident that our Company is well-positioned to successfully
execute on its strategy. We have historically generated significant
value over the long term, and I believe we will continue to do so.
Our ability to continue to commit, deploy and realise capital through
uncertain economic times means that our Portfolio is not exposed
to particular vintage risk. We have a distinctive strategy, a Portfolio
managed by an experienced and well-networked team, and our Board
has demonstrated its disciplined approach to capital allocation.
Taken as a whole I believe this results in a differentiated and attractive
offering to shareholders.
Finally, I want to thank you for the continued trust and support you
give to ICG Enterprise Trust.
Jane Tufnell
Chair
10 May 2023
Changes to management fees and costs
The ICG Enterprise Trust Board and the Manager have agreed
a revised management fee rate, effective from 1 February 2023.
While the management fee arrangement will remain unchanged,
a tiered cap as a proportion of NAV has been introduced at the
following thresholds:
ICG Enterprise Trust NAV Management fee cap
< £1.5bn 1.25%
£1.5bn ≤ £2.0bn 1.10%
> £2.0bn 1.00%
The Board believes that this arrangement fairly compensates
the Manager, and ensures that ICG Enterprise Trust shareholders
benefit from the economies of scale generated from growth in
the Company’s NAV.
The management fees for the financial year covered in this report
were 1.34% of NAV. As an illustration, had the revised agreement
been in place during this period, the management fee rate would
have been capped at 1.25% which would have reduced the
management fee by approximately 6.5% (approximately £1.1m).
The Manager has also agreed to absorb a number of ongoing
costs previously paid for by ICG Enterprise Trust, in particular
a material share of Sales and Marketing costs. The Board
estimates that these are equivalent to approximately 25–30%
of the General Expenses (which exclude management fees and
finance costs) that would have been paid by ICG Enterprise
Trust prior to this agreement being reached.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 7
Year 0
Year 1
0
Fund life
OUT
IN
ICG Other
HOW WE ACCESS THE MARKET
A balanced, actively
constructed portfolio
We seek to invest in companies that are
established, profitable and cash generative.
We make these investments directly and
through funds managed by ICG and third-party
managers, taking account of ESG considerations
throughout our investment process.
We aim to build a portfolio of companies with
defensive growth characteristics to deliver
consistently strong returns over the long term.
Manager’s review 14
Primary Funds
INDICATIVE CASH PROFILE
Primary Fund commitments are typically drawn down over
three to five years and are repaid as the underlying fund
realises its investments.
29%
Of the Portfolio is invested into
ICG-managed Funds and Direct Investments
54%
Portfolio
Investments
Commitments to new private
equity funds.
ICG Enterprise Trust Plc Annual Report and Accounts 20238
Year 0 Year 7
Investment period
OUT
IN
F
und
Year 0
Year 5
OUT
IN
F
und
Investment period
Secondary Investments
Direct Investments
INDICATIVE CASH PROFILE
Direct Investments are realised when the underlying
portfolio company is sold by its underlying manager.
INDICATIVE CASH PROFILE
Investments in mature private equity funds which have an
established portfolio typically return capital earlier than
a Primary Fund investment.
29%
Of the Portfolio is invested into
ICG-managed Funds and Direct Investments
Portfolio
Investments
19%
Portfolio
Investments
27%
Investing directly in companies alongside
funds managed by ICG and third-party
fund managers.
Acquiring fund interests and
commitments from other investors.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 9
Congested fundraising
environment
ICG Enterprise Trust’s flexible investment mandate enabled
us to take advantage of the favourable supply/demand dynamics
in primaries and secondaries.
While remaining disciplined in our manager screening and investment
analysis, during FY23 we made primary commitments to 11 leading
managers, with an average Primary Fund commitment size of £11.5m.
In addition, we made new commitments to two funds focused on
Secondary Investments (both managed by ICG), for a combined
total of £65.9m.
1 PEI PE fundraising 2022.
2 Pitchbook data (US market) quoted in Cherry Bekaert PE 2022 Report.
3 Secondaries investor 2022 report.
MARKET OVERVIEW
Successfully navigating challenging markets
The trends we are seeing
We are particularly focused on
assessing risks around GDP-linked
revenue, discretionary spending and
inflation, and identifying differentiated
investments that can reduce the risk
of unknown variables.
The ways we are responding
There are great opportunities to be
captured by successfully navigating
challenging markets. In a time of
heightened macroeconomic uncertainty,
we target investments with fewer
unknown variables; identifying a number
of opportunities that can provide this.
2022 saw significant fundraising activity within private equity,
with a large number of managers seeking significant capital.
For investors looking to commit capital, this was a ‘buyers’
market’, allowing LPs to gain access to a wider range of funds,
and choose selectively between them.
According to market data from PEI
1
, total fundraising for 2022
($727bn) represented the third largest year on record. However,
the increase in average fundraising duration provides a clearer
indicator of the competitive dynamics: in 2022, the average time
taken to close a buyout fund was 15.4 months, a 12% increase
versus 2021 (13.4 months)
2
.
This level of fundraising, combined with lower realisation activity,
also created opportunities in the secondary market. For investors
with limited capacity to make new commitments, one solution
is to dispose of older investments in the secondary market.
2022 LP secondary transaction volumes were the second highest
on record, representing more than half of secondary activity
3
.
$727bn
Total PE fundraising in 2022
£11.5m
Average primary commitment size
ICG Enterprise Trust Plc Annual Report and Accounts 202310
Bifurcation in
transaction activity
Our investment strategy is focused on mid-market private equity,
where volumes and values have remained relatively resilient.
During the year we continued to see realisation levels broadly
in line with our five-year average. Realisation Proceeds in FY23
were £252.0m, representing 21.5% of our opening Portfolio value
(five-year average: 23.9%).
IPOs are not a typical route to exit for ICG Enterprise Trust or its
third-party managers.
-33%
Year-on-year change in large-cap PE deal volume
21.5%
Realisation Proceeds/opening Portfolio value
4.7x
Average Net Debt/EBITDA of Top 30 companies
7.3%
2022 annual inflation in advanced economies
FY23 was a year of two halves for private market deal activity. During
the first half of 2022, global transaction activity remained robust,
with European PE activity outpacing 2021 levels both on a volume
and value basis, with similar trends seen in US buyout activity
4,5
.
However, deal activity slowed meaningfully in the second half of
the year. According to data from McKinsey & Co, global buyout
transaction volumes decreased by 25% year-on-year between
July and December 2022. Notably, the slowdown in transaction
activity was skewed towards the large-cap private equity market,
which relies more heavily on capital market financing. In 2022, the
number of buyout and growth deals greater than $500m decreased
by 33% year-on-year.
6
The effective closure of the capital markets can also be seen in reduced
IPO activity. In 2022, IPO activity in the Americas sank to a 20-year low
by value; in Europe, IPO proceeds were down 78% year-on-year
6
.
ICG Enterprise Trust invests in profitable, cash generative
businesses at an attractive stage in their growth cycle. We seek
to identify businesses with defensive growth characteristics,
such as structurally high margins, price inelasticity, strong market
positions, or those that provide mission critical services. We do
not seek to invest in unprofitable technology companies or make
Venture Capital/Growth Equity investments.
At 31 March 2023, weighted average Net Debt/EBITDA for 27
of our Top 30 (representing 33% of Portfolio value) was 4.7x
8
.
We and our managers are focused on maintaining prudent amounts
of leverage in our investment companies and we monitor closely the
leverage and operational performance of our Portfolio.
The inflationary pressures we noted in our FY22 Annual Report
increased further during FY23. Increasing input costs impacted
consumers and companies globally, driven by supply chain
constraints, energy insecurity and labour market pressures.
During 2022, central banks implemented more aggressive
fiscal policy to target a reduction in inflation. In 2022, US, UK
and European central banks increased interest rates by 4.3%,
3.3% and 2.5% respectively
7
.
Though developed market economies generally avoided a
recession in 2022, this outcome was uncertain for much of the
year, fuelling a more risk-averse investor sentiment that contributed
to increased public market volatility. These concerns have also
impacted public market valuations, especially for those companies
whose value today is heavily dependent on substantial earnings
being generated quite some time in the future.
Rising interest
rates and inflation
4 RW Baird: European PE H1 report.
5 McKinsey & Company Global Private Markets Review 2023.
6 EY Global IPO Trends 2022 report.
7 Central bank websites (US Federal Reserve; Bank of England; European Central Bank).
8 Calculation basis and relevant exclusions are disclosed on page 16.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 11
HOW WE WORK WITH OUR MANAGER
A global network of access
provided by our Manager
Combining our proven strategy and
balanced approach with the strength
of ICG’s global platform
Our Manager’s expertise and access provide us
with substantial benefits, and our unique access to
ICG-managed funds and associated Direct Investment
opportunities has generated substantial value for
our shareholders since our relationship began.
Go online to find out more
information about our Manager
Our seven-year relationship
with our Manager is generating
shareholder value
icgam.com
ICG Enterprise Trust Plc Annual Report and Accounts 202312
A global platform
The ICG Group provides flexible capital
solutions to help companies develop and
grow. It is a leading global alternative
asset manager with over 30 years’ history,
managing $74.5bn of assets and investing
across the capital structure. The firm operates
across four asset classes: Structured and
Private Equity, Private Debt, Real Assets,
and Credit.
Developing long-term relationships
ICG develops long-term relationships
with its business partners to deliver value
for shareholders, clients and employees,
and uses its position of influence to benefit
the environment and society. The firm is
committed to being a net zero asset manager
across its operations and relevant investments
by 2040.
Access
We invest in ICG-managed funds and
are offered significant Direct Investment
opportunities through these commitments
and our close relationship with the Manager.
Insights
With 575 employees in 16 offices globally
and managing $74.5bn of assets across
approximately 20 investment strategies,
our Manager provides significant insights
into private market trends, sector themes
and company performance.
Expertise
Our operational platform and
broader approach benefit from
our Manager’s expertise.
16
Offices globally
575
Employees globally
29.2 %
Of portfolio in ICG-managed assets
90%
Of ICG AUM covered by
Comprehensive Climate Risk Assessment
$75bn
Assets under management
30+
Year track record
How we benefit
A leading global alternative asset manager
Proprietary deal flow
The Company benefits from access to
the proprietary deal flow of investments
from ICG’s network and its expertise
and insights gained from over 30 years
of investing in private markets.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 13
MANAGER’S REVIEW
The defensive growth characteristics
of our actively managed Portfolio are
increasingly apparent in our financial
results. As a result of our focused
investment strategy and balanced
portfolio composition we are
delivering long-term growth.
OLIVER GARDEY
Head of Private Equity Fund Investments
Alternative Performance Measures
The Board and the Manager monitor the financial performance
of the Company on the basis of Alternative Performance Measures
(APM), which are non-IFRS measures. The APM predominantly
form the basis of the financial measures discussed in this review,
which the Board believes assists shareholders in assessing their
investment and the delivery of the investment strategy.
The Company holds certain investments in subsidiary entities.
The substantive difference between APM and IFRS is the
treatment of the assets and liabilities of these subsidiaries.
The APM basis ‘looks through’ these subsidiaries to the
underlying assets and liabilities they hold, and it reports the
investments as the Portfolio APM. Under IFRS, the Company
and its subsidiaries are reported separately. The assets and
liabilities of the subsidiaries are presented on the face of the
IFRS balance sheet as a single carrying value. The same is true
for the IFRS and APM basis of the Cash flow statement.
The following table sets out IFRS metrics and the APM equivalents:
IFRS
31 January 2023
£m
31 January 2022
£m APM
31 January 2023
£m
31 January 2022
£m
Investments 1,349.1 1,123.7 Portfolio 1,406.4 1172.2
NAV 1,300.6 1,158.0
Cash flows from the sale of
portfolio investments
32.1 101.0 Total Proceeds 252.0 333.5
Cash flows related to the
purchase of Portfolio investments
62.2 75.1 Total New Investment 287.2 303.7
The Glossary on page 100 includes definitions for all APM and, where appropriate, a reconciliation between APM and IFRS.
10.5%
Portfolio Return on a
Local Currency Basis
1
(31 January 2022: 29.4%)
14.5%
NAV per Share Total Return
(31 January 2022: 24.4%)
1 This is an APM as defined in the Glossary on page 100.
ICG Enterprise Trust Plc Annual Report and Accounts 202314
Our investment strategy
We focus on investing in buyouts of profitable, cash-generative
businesses in developed markets that exhibit defensive growth
characteristics which might support strong and resilient returns
across economic cycles. There are a number of themes that
contribute to a business having, in our view, such characteristics.
These include (among others) attractive market positioning,
providing mission-critical services to their clients and customers,
ability to pass on price increases, and structurally high margins.
We take an active approach to portfolio construction, with a
flexible mandate that enables us to deploy capital in Primary,
Secondary and Direct investments. We believe our investment
strategy results in a differentiated portfolio with attractive growth
characteristics. Our Portfolio composition is shown opposite.
Investments managed by ICG accounted for 29.2% of the Portfolio.
Geographically we focus on the developed markets of North America
and Europe, including the UK, which have deep and mature private
equity markets supported by a robust corporate governance
framework. The geographic profile of the Portfolio is shown opposite.
Investment category
31 January 2023
£m
31 January 2023
% of Portfolio
Primary 761.7 54.1%
Direct 383.8 27.3%
Secondary 260.9 18.6%
Total 1,406.4 100.0%
Geography
1
31 January 2023
% of Portfolio
North America 46.6%
Europe (inc. UK) 47.1%
Other 6.3%
Total 100.0%
1 Calculated by reference to the location of the headquarters of the underlying
Portfolio companies on a value-weighted basis.
Performance overview
At 31 January 2023, our Portfolio was valued at £1,406.4m, and the
Portfolio Return on a Local Currency Basis for the financial year was
10.5% (FY22: 29.4%). This performance extends our track record of
generating double-digit Portfolio returns on a Local Currency Basis
to 14 consecutive years.
The Portfolio returns during FY23 were seen across Primary, Direct
and Secondary investments:
• Primary investments generated a local currency return of
8.0%. Valuation increases are primarily driven by operational
performance. There was notably strong performance from a
number of funds including those managed by PAI, Graphite,
and Gridiron
• Direct Investments generated a return of 15.5%, reflecting
resilient operational performance, as well as a number of
meaningful realisations agreed during the year, including
Endeavor Schools (exit agreed during FY23 and completed
post period end), and IRI (which completed its merger with
NPD on 1 August 2022)
• Secondary investments generated a return of 11.5%, driven by
strong performance from underlying investments within ICG LP
Secondaries and ICG Strategic Equity
Over the last five years, our Portfolio has generated an annualised
Portfolio Return on a Local Currency Basis of 19.1%.
Due to the geographic diversification of our Portfolio, the reported
value is impacted by changes in foreign exchange rates. During
the period, the Portfolio increased by £76.4m (+6.5%) due to
FX movements, driven primarily by US Dollar strengthening
against Sterling. Portfolio growth during the period was 17.0%
in Sterling terms.
The net result for shareholders was that ICG Enterprise Trust
generated a NAV per Share Total Return of 14.5% during FY23,
ending the period with a NAV per Share of 1,903p. The NAV per
Share Total Return during Q4 was (0.3%), driven predominantly
by negative FX movements more than offsetting a positive
underlying return at the Portfolio level.
Over the last five years, ICG Enterprise Trust has generated
an annualised NAV per Share Total Return of 16.9%.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 15
MANAGER’S REVIEW CONTINUED
Performance of Portfolio companies
Our largest 30 underlying companies (‘Top 30 companies’)
represented 38.3% of the Portfolio by value at 31 January 2023
(31 January 2022: 39.0%). There were four new entrants to our
Top 30 companies within the period: Newton (#15); ECA Group
(#23), KronosNet (#24) and Vistage (#30).
The Top 30 companies delivered impressive operational
performance during the year, generating LTM revenue growth of
21.9%. The weighted-average valuation of the Top 30 companies,
as measured by EV/EBITDA multiple, reduced from 14.6x to 14.3x.
Over the same period, Net Debt/EBITDA increased from 4.3x
to 4.8x, which is largely due to differences in the composition of
the Top 30 companies between the two dates and re-financings
undertaken during the period.
Top 30 companies
performance overview 31 January 2023 31 January 2022
LTM revenue growth
1
21.9% 27.1%
LTM EBITDA growth
1
21.5% 29.6%
LTM EBITDA margin
2
25.8% 26.6%
Net Debt/EBITDA
3
4.7x 4.3x
Enterprise Value/EBITDA
3
14.3x 14.6x
Total % of Portfolio 38.3% 39.0%
1 Growth rates exclude PetSmart; Ambassador Theatre Group; MoMo Online Mobile Services
(#1; #14; #28/30 respectively), for which prior year comparators are not meaningful.
2 Excludes MoMo Online Mobile Services (#28/30), for which EBITDA is not a relevant metric.
3 Excludes PetSmart and MoMo Online Mobile Services (#1 and #28/30 respectively) for
which EBITDA multiple is not an appropriate valuation metric.
Movement in the Portfolio
£m
12 months to
31 January 2023
12 months to
31 January 2022
Opening Portfolio
1
1,172.2 949.2
Total new investments 287.2 303.7
Total Proceeds (252.0) (342.9)
Net (proceeds)/investments 35.2 (39.2)
Valuation movement
2
122.6 279.4
Currency movement 76.4 (17. 2)
Closing Portfolio 1,406.4 1,172.2
% Portfolio growth (local currency) 10.5% 29.4%
% Currency movement 6.5% (1.8)%
% Portfolio growth (Sterling) 17.0% 27.6%
Impact of (net cash)/net debt 0.2% (0.1)%
Expenses and other income (1.8)% (1.5)%
Co-investment Incentive Scheme Accrual (1.2)% (1.8)%
Impact of share buybacks and dividend reinvestment 0.3% 0.2%
NAV per Share Total Return 14.5% 24.4%
1 Refer to the Glossary on page 100 for reconciliation to the Portfolio balance.
2 93% of the Portfolio is valued using 31 December 2022 (or later) valuations (2022: 98%).
ICG Enterprise Trust Plc Annual Report and Accounts 202316
Quoted company exposure
We do not actively invest in publicly quoted companies but gain
listed investment exposure when IPOs are used as a route to exit an
investment. In these cases, exit timing typically lies with the manager
with whom we have invested.
At 31 January 2023, ICG Enterprise Trust’s exposure to quoted
companies was valued at £109.4m, equivalent to 7.8% of the
Portfolio value (FY22: 10.3%). The share price of our largest listed
exposure, Chewy, increased 4.5% in local currency (USD) during
the year. ICG Enterprise Trust’s investment in PetSmart (which
includes Chewy) has delivered a strong return on investment for our
shareholders and remains our largest underlying exposure. Across
the Portfolio, local currency losses from declines in public market
valuations were largely offset in Sterling terms by positive FX gains.
Investment Description Manager Country
Proceeds
£m
DOC Generici Manufacturer of generic pharmaceutical products ICG Italy 24.3
IRI Provider of mission-critical data and predictive
analytics to consumer goods manufacturers
New Mountain
Capital
United States 22.8
Random42 Provider of medical animation and digital media services Graphite Capital United Kingdom 5.6
proALPHA Provider of application software services ICG Germany 5.1
YSC Consulting Providers of leadership consulting and
assessment
Graphite Capital United Kingdom 4.9
Park Holidays UK Operator of UK campsites and holiday parks ICG United Kingdom 4.9
Konecta Provider of business process outsourcing ICG Spain 4.8
The Groucho Club Operator of members’ club Graphite Capital United Kingdom 4.4
Romans Provider of residential sales & letting services Bowmark United Kingdom 4.3
Pirum Systems Provider of financial services technology Bowmark United Kingdom 4.2
Total of 10 largest underlying realisations 85.4
Realisation activity
Realisation Proceeds during the year amounted to £252.0m,
equivalent to 21.5% of our opening Portfolio value (five year
average: 23.9%).
There were 54 Full Exits of Portfolio holdings during the period,
generating proceeds of £133.2m. These were completed at a
weighted average Uplift to Carrying Value of 23.9% and weighted
At 31 January 2023 there was one quoted investment that
individually accounted for 0.5% or more of the Portfolio value:
Company Ticker
31 January 2023
% of Portfolio value
Chewy (part of PetSmart)
1
CHWY-US 3.6%
Other 4.2%
Total 7.8%
1 Includes entire holding of PetSmart and Chewy. Majority of value is within Chewy.
average Multiple to Cost of 2.7x. We believe that the ability to
continue to sell assets at an uplift to NAV reflects the sustained
demand for high-quality assets and underpins our confidence
in the valuation of our Portfolio.
The 10 largest underlying realisations in the period, which represent
33.9% of Total Realisation Proceeds, are set out in the table below:
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 17
ALL PRIVATE EQUITY
DEVELOPED MARKETS
Primarily in North America and Europe, including the UK, which have deep and mature
private equity markets with robust corporate governance frameworks.
LEADING PRIVATE EQUITY MANAGERS
With track records of investing and
adding value through cycles.
MID-MARKET AND LARGER DEALS
More likely to be resilient to economic cycles and typically
attract stronger management teams than smaller companies.
BUYOUTS
DEFENSIVE GROWTH
COMPANIES
MANAGER’S REVIEW CONTINUED
In a year of elevated macroeconomic
and geopolitical volatility, we remained
consistent in our investment approach,
seeking to identify attractive investments
that align to our focus on defensive
growth. Our flexible investment mandate
enabled us to react efficiently to changing
market dynamics in order to capitalise on
opportunities across Primary, Secondary
and Direct investments.
Implementing our investment strategy during the year
OUR INVESTMENT STRATEGY
A highly focused approach seeking to generate long-term capital growth.
Through this approach, we aim to
maintain a portfolio of companies with
defensive growth characteristics, as we
believe these companies will generate
the most resilient and consistently
strong returns over the long term.
We focus on the buyout segment of the
private equity market, in which target
companies are typically profitable, cash
generative and more mature. Within buyouts,
our focus is on mid-market and larger
transactions, partnering with leading private
equity managers in developed markets.
A STRONG
MARKET POSITION
A PROVIDER
OF MISSION-CRITICAL
SERVICES
STRONG
PRICING
POWER
A HIGH MARGIN
BUSINESS MODEL
INVESTED IN COMPANIES WITH DEFENSIVE GROWTH CHARACTERISTICS
Examples of defensive growth characteristics
During the year we were able to take
advantage of favourable market conditions
to make 14 new fund commitments to a range
of leading managers. These commitments,
which we expect to be invested over the next
three to four years, ensure that we will remain
appropriately invested through the cycle.
Our dedicated investment team has
concentrated on identifying investment
opportunities where they believe they have
good visibility on the likely performance of
the underlying assets and on transactions
with potentially lower volatility of returns
than the broader market. Reflecting this,
Direct Investment activity during the
period included three Direct Investments
alongside our Manager, benefiting from
their expertise in structured transactions.
We also made a number of follow-on
investments into existing portfolio holdings
in which we have greater visibility of,
and confidence in, the performance
of the underlying company.
ICG Enterprise Trust Plc Annual Report and Accounts 202318
New investment activity
Total new investment of £287.2m for the financial year, with new investment by category detailed in the table below. Within our
Primary investments during the period, £131.5m was to Third Party managers and the remainder (£7.1m) was to ICG-managed funds.
Investment category
31 January 2023
Cost £m
31 January 2023
% of new investments
Primary 138.6 48.3%
Direct 70.1 24.4%
Secondary 78.5 27. 3%
Total 287.2 100.0%
During the year we made nine new Direct Investments for a combined value of £68.3m. The balance of Direct Investments is comprised
of £1.8m of incremental drawdowns across existing Direct Investments.
The 10 largest underlying new investments in the period were as follows:
Investment
1
Description Manager Country Cost £m
Precisely Provider of enterprise software Clearlake Capital United States 15.5
ECA Group Provider of autonomous systems for the aerospace
and maritime sectors
ICG France 13.0
KronosNet Provider of tech-enabled customer engagement
and business solutions
ICG Spain 12.5
Newton Provider of management consulting services ICG United Kingdom 12.4
Vistage Provider of CEO leadership and coaching for
small and midsize businesses in the US
ICG United States 8.6
Access Provider of business management software to
mid-market companies
HgCapital United Kingdom 6.4
Zips Car Wash Provider of car washing services ICG United States 4.2
Gateway Services Provider of pet aftercare and cremation services ICG Canada 3.9
Partou Operator of kindergartens in the Netherlands ICG Netherlands 3.2
Pro Alpha II Provider of application software services ICG Germany 2.9
Total of 10 largest underlying new investments 82.4
1 Represents ICG Enterprise Trust’s indirect investment (share of fund cost) plus any direct investments in the period.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 19
MANAGER’S REVIEW CONTINUED
Fund Manager Focus Commitment during the period
Local currency £m
ICG LP Secondaries Fund I ICG LP-led secondary transactions $60.0m £45.5m
ICG Ludgate Hill III ICG Secondary portfolio $25.0m £20.4m
PAI Europe VIII PAI Mid-market and large buyouts €25.0m £20.9m
Green Equity Investors Side IX Leonard Green & Partners Large buyouts $20.0m £17. 2m
Advent X Advent Large buyouts €20.0m £16.8m
Gridiron V Gridiron Mid-market buyouts $20.0m £15.0m
CDR XII Clayton, Dubilier & Rice Mid-market and large buyouts $15.0m £13.4m
Permira VIII Permira Large buyouts €15.0m £12.6m
Bain Capital Europe VI Bain Capital Mid-market and large buyouts €15.0m £12.6m
Integrum I Integrum Mid-market and large buyouts $10.0m £8.5m
Thoma Bravo XV Thoma Bravo Mid-market and large buyouts $10.0m £8.0m
Hg Genesis X Hg Capital Mid-market buyouts €5.0m £4.2m
Bain Tech Opportunities II Bain Capital Mid-market buyouts $5.0m £4.1m
Hg Saturn III Hg Capital Mid-market and large buyouts $5.0m £4.0m
Commitments
During the year, we made Total New Commitments of £273.7m, this
represents new fund Commitments of £203.2m, including £65.9m
to funds managed by ICG, and £70.4m of Commitments related
to Direct investments.
We maintained our diligence in identifying leading managers who
complement our long-term strategic objectives, are committed
to values aligned to our Responsible Investing framework,
and have an investment approach that suits our defensive growth
focus. A number of commitments were made to managers with whom
we have longstanding relationships and who have a strong track record
of offering us attractive co-investment opportunities, such as PAI and
Gridiron. At the same time, we continued to originate new manager
relationships, making commitments to three new managers during the
financial year, Leonard Green & Partners, Thoma Bravo and Integrum.
The breakdown of new Commitments to funds was as follows:
ICG Enterprise Trust Plc Annual Report and Accounts 202320
At 31 January 2023 we had Total Undrawn Commitments of £496.7m, of which £367.0m were to funds within their investment period:
£m
31 January 2023
£m
31 January 2022
£m
Undrawn Commitments – funds in Investment Period 367.0 323.0
Undrawn Commitments – funds outside Investment Period 129.7 96.0
Total Undrawn Commitments 496.7 419.0
Total available liquidity (including facility) (167.0) (208.0)
Overcommitment net of total available liquidity 329.7 211.0
Overcommitment % of net asset value 25.3% 18.0%
The increase in Total Undrawn Commitments during the year was due to the large number of funds seeking investors during the year, which
ICG Enterprise Trust had anticipated and which allowed us to make a number of attractive Primary commitments. These commitments help
lay the foundations of our investment program for the coming years.
Our commitments are made in the funds’ underlying currencies, and the currency split of the outstanding commitments at 31 January 2023
was as follows:
Commitments currency exposure
Outstanding Commitments
31 January 2023
£m
31 January 2023
%
31 January 2022
£m
31 January 2022
%
Sterling 16.9 3.4% 28.7 6.8%
Euro 226.1 45.5% 200.4 47.9%
US Dollar 253.7 51.1% 189.5 45.3%
Total 496.7 100% 418.6 100%
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 21
MANAGER’S REVIEW CONTINUED
Foreign exchange rates
The details of relevant FX rates applied in this report are provided in the table below:
Investment category
Average rate
for FY23
Average rate
for FY22
31 January 2023
year end
31 January 2022
year end
GBP:EUR 1.1680 1.1696 1.1341 1.1971
GBP:USD 1.2257 1.3749 1.2320 1.3447
EUR:USD 1.0491 1.1758 1.0863 1.1229
At 31 January 2023 the Portfolio represented 108.1% of net assets
(31 January 2022: 101.2%).
£m % of net assets
Portfolio 1,406.4 108.1%
Cash 20.7 1.6%
Drawn debt (65.4) (5.0)%
Co-investment Incentive
Scheme Accrual
(58.1) (4. 5 )%
Other net current liabilities (3.0) (0.2)%
Net assets 1,300.6 100%
Our objective is to be fully invested through the cycle, while ensuring that
we have sufficient financial resources to be able to take advantage
of attractive investment opportunities as they arise. Drawdowns of
commitments are funded from Total Proceeds and, where appropriate,
the debt facility.
Balance sheet and liquidity
At 31 January 2023 we had a cash balance of £20.7m (31 January
2022: £41.3m) and total available liquidity of £167.0m. At 31 January
2023, the drawn debt was £65.4m (31 January 2022: nil). As a result
we had a net debt position of £44.7m.
£m
Cash at 31 January 2022 41.3
Realisation Proceeds 252.0
New investments (287.2)
Debt drawn down 65.4
Shareholder returns (21.9)
Management fees (21.2)
FX and other expenses ( 7.7 )
Cash at 31 January 2023 20.7
Available undrawn debt facilities 146.3
Cash and undrawn debt facilities
(total available liquidity) 167.0
ICG Enterprise Trust Plc Annual Report and Accounts 202322
Dividend and share buyback
In line with ICG Enterprise Trust’s progressive dividend policy,
the Board has declared a final dividend of 9p per share, taking total
dividends for the period to 30p (FY22: 27p), which represents an
increase of 11.1% on the previous financial year.
As part of its ongoing focus on optimising the return that the
Company delivers for its shareholders, in October the Board
announced the introduction of a long-term programme of share
buybacks, which may be executed at any discount to NAV.
Details of share repurchases settled under this programme
up to 31 January 2023 are provided below:
FY23
Number of shares purchased 191,480
Aggregate returns to shareholders £2.1m
Weighted average discount to last reported NAV 40%
The Board believes the buyback programme demonstrates the
Manager’s discipline around capital allocation; underlines the
Board’s confidence in the long-term prospects of the Company,
its cashflows and NAV; will enhance the NAV per share; and,
over time, may positively influence the volatility of the Company’s
discount and its trading liquidity.
The Board reviews the size, mandate and efficacy of the buyback
programme on a quarterly basis, to ensure it is working in the
long-term interests of shareholders and in line with the objectives
outlined above.
The Board retains absolute discretion as to the execution, pricing
and timing of any share buybacks, subject to the conditions set
out in the authority to execute share buybacks approved at the
Company’s 2022 Annual General Meeting. Any shares repurchased
by the Company will be held in treasury.
Both the progressive dividend policy and the buyback programme
are being maintained.
Changes to management fees and costs
As announced at our Q3 FY23 trading update, the ICG Enterprise
Trust Board and the Manager have agreed a revised management
fee rate, effective from 1 February 2023. While the management fee
arrangement will remain unchanged, a tiered cap as a proportion
of NAV has been introduced at the following thresholds:
ICG Enterprise Trust NAV Management fee cap
< £1.5bn 1.25%
≥ £1.5bn ≤ £2.0bn 1.10%
> £2.0bn 1.00%
The Board believes that this arrangement fairly compensates the
Manager, while ensuring that ICG Enterprise Trust shareholders
benefit from the economies of scale generated from growth in the
Company’s NAV.
In FY23, management fees were equivalent to 1.34% of NAV.
As an illustration, had the revised agreement been in place during
this period, management fees would have been capped at 1.25%.
This would have reduced the management fee by approximately
6.5% (approximately £1.1m).
The Manager has also agreed to absorb a number of ongoing costs
previously paid for by ICG Enterprise Trust, in particular a material
share of Sales and Marketing costs. The Board estimates that these
are equivalent to approximately 25–30% of the General Expenses
(which exclude management fees and finance costs) that would have
been paid by ICG Enterprise Trust prior to this agreement being reached.
Activity since the period end
Notable activity between 1 February 2023 and 31 March 2023
has included:
• Realisation Proceeds of £49.4m, including initial proceeds from
the sale of Endeavor Schools, announced on 2 February 2023
• New investments of £19.8m, which included one follow-on Direct
Investment of £0.5m
• Three new Fund Commitments for a combined value of £55.6m
• £3.1m shares bought back at a weighted average discount to NAV
of 42.0%
1
Outlook
We remain alert to continued macroeconomic headwinds such as
increased input costs, rising rates, and capital constraints in the wider
financial markets. These factors continue to have the potential to
impact the performance of our Portfolio companies, the valuation
of our Portfolio and the rate of deployments and realisations our
Portfolio experiences. We are continuing to monitor the environment
closely and are in regular dialogue with our Managers.
As outlined in our updated objectives, we are targeting a long-term
Portfolio composition of approximately 50% Primary, 25% Direct and
25% Secondary investments, and evenly split between North America
and Europe.
We are encouraged by the continued momentum of transaction
activity within our portfolio throughout FY23. Our financial and
operational ability to capitalise on very attractive market for primary
commitments has sown seeds for our future primary and direct
investment programme in the coming years, in what could be an
attractive vintage for private equity investments.
As we reflect on a year characterised by uncertainty, we remain
confident in our defensive growth strategy and are encouraged
by the robust operating performance of our Portfolio.
ICG Private Equity Fund Investments Team
10 May 2023
1 From 1 February 2023 up to and including 2 May 2023.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 23
19%
15%
8%
6%
11%
EDUCATION
14%
INDUSTRIALS
LEISURE
HEALTHCARE
27%
TECHNOLOGY, MEDIA
& TELECOMS
BUSINESS SERVICES
CONSUMER GOODS
& SERVICES
30 LARGEST UNDERLYING COMPANIES
Our Top 30 companies by value make up 38.3% of our Portfolio
DEFENSIVE GROWTH BY SECTOR
These four sectors are perfect examples
of those that fit our defensive growth focus,
with a proven track record of withstanding
economic downturns.
69%
Of our Top 30 is made up of
investments in these four sectors
STRONG
MARKET POSITION
MISSION-CRITICAL
SERVICES
ABILITY TO PASS
ON PRICE INCREASES
HIGH MARGINS
New entrant to the Top 30 during the year
HOW OUR TOP 30 COMPANIES ALIGN WITH OUR DEFENSIVE GROWTH FOCUS
ICG Enterprise Trust Plc Annual Report and Accounts 202324
Investing in companies
with strong defensive
growth characteristics
We believe our Portfolio strikes the right
balance between concentration in our Direct
Investments and diversification in our Primary
Funds and Secondary Investments portfolio.
We focus on investing in buyouts of businesses
that are profitable, cash generative and have
defensive growth characteristics that we believe
will deliver strong and resilient returns across
economic cycles.
A WORD FROM COLM WALSH
Managing Director
Our Portfolio
1
combines investments managed
by ICG and those managed by third parties,
in both cases directly and through funds.
Our Direct Investments, which include
27 of our Top 30 companies, allow us to
proactively increase exposure to companies
that benefit from long-term structural trends
and therefore have the ability to grow even
in less benign economic environments.
We are able to enhance returns and increase
visibility on underlying performance drivers,
and we mitigate the more concentrated risk
through a highly selective approach and a
focus on defensive growth companies.
1 This is an APM as defined in the Glossary on page 100.
Delivering defensive growth
through economic cycles
defines our approach.
£273.6m
Total New Commitments
1
£252.0m
Total Proceeds
1
An active and flexible approach
to Portfolio construction
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 25
30 LARGEST UNDERLYING COMPANIES CONTINUED
11. DomusVi
Operator of retirement homes.
Value as % of Portfolio 1.2%
Manager ICG
Invested 2017/2021
Country France
Sector Healthcare
27. AMEOS Group
Operator of private hospitals.
Value as % of Portfolio 0.7%
Manager ICG
Invested 2021
Country Switzerland
Sector Healthcare
3. Endeavor Schools
Provider of paid private schooling.
Value as % of Portfolio 2.2%
Manager Leeds Equity Partners
Invested 2018
Country USA
Sector Education
19. Ivanti
Provider of IT management solutions.
Value as % of Portfolio 1.1%
Manager
Charlesbank Capital
Partners/ICG
Invested 2021
Country USA
Sector Information technology
2. Minimax
Supplier of fire protection systems
and services.
Value as % of Portfolio 2.8%
Manager ICG
Invested 2018
Country Germany
Sector Technology, media & telecom
18. Planet Payment
Provider of integrated payments
services focused on hospitality
and luxury retail.
Value as % of Portfolio 1.1%
Manager
Advent International/
Eurazeo Funds Management
Luxembourg/ICG
Invested 2021
Country Ireland
Sector Technology, media & telecom
10. Curium Pharma
Supplier of nuclear medicine
diagnostic pharmaceuticals.
Value as % of Portfolio 1.2%
Manager ICG
Invested 2020
Country UK
Sector Healthcare
26. Class Valuation
Provider of residential mortgage
appraisal management services.
Value as % of Portfolio 0.8%
Manager Gridiron Capital
Invested 2021
Country USA
Sector Financials
1. PetSmart
Retailer of pet products and services.
Value as % of Portfolio 3.6%
Manager BC Partners
Invested 2015
Country USA
Sector Consumer goods & services
17. Visma
Provider of business management
software and outsourcing services.
Value as % of Portfolio 1.1%
Manager Hg Capital/ICG
Invested 2017/2020
Country Norway
Sector Technology, media & telecom
9. European Camping Group
Operator of premium campsites
and holiday parks.
Value as % of Portfolio 1.3%
Manager PAI Partners
Invested 2021
Country France
Sector Consumer goods & services
25. Davies Group
Provider of specialty business process
outsourcing services.
Value as % of Portfolio 0.9%
Manager BC Partners
Invested 2021
Country UK
Sector Business services
12. DigiCert
Provider of enterprise
security solutions.
Value as % of Portfolio 1.2%
Manager ICG
Invested 2021
Country USA
Sector Information technology
4. Froneri
Manufacturer and distributor
of ice cream products.
Value as % of Portfolio 2.0%
Manager PAI Partners
Invested 2013/2019
Country UK
Sector Consumer goods & services
20. PSB Academy
Provider of private tertiary education.
Value as % of Portfolio 1.0%
Manager ICG
Invested 2018
Country Singapore
Sector Education
28. MoMo Online Mobile Services
Operator of remittance and payment
services via mobile e-wallet.
Value as % of Portfolio 0.6%
Manager ICG
Invested 2019
Country Vietnam
Sector Information technology
Increasing our defensive growth focus
ICG Enterprise Trust Plc Annual Report and Accounts 202326
16. IRI/NPD
Provider of mission-critical
data and predictive analytics to
consumer goods manufacturers.
Value as % of Portfolio 1.1%
Manager New Mountain Capital
Invested 2022
Country USA
Sector Technology, media & telecom
8. AML RightSource
Provider of compliance and
regulatory services and solutions.
Value as % of Portfolio 1.3%
Manager Gridiron Capital
Invested 2020
Country USA
Sector Business services
14. Ambassador Theatre Group
Operator of theatres and
ticketing platforms.
Value as % of Portfolio 1.2%
Manager
ICG/Providence Equity
Partners VII
Invested 2021
Country UK
Sector Consumer goods & services
6. Yudo
Designer and manufacturer
of hot runner systems.
Value as % of Portfolio 1.6%
Manager ICG
Invested 2017/2018
Country South Korea
Sector Industrials
22. Brooks Automation
Provider of semiconductor
manufacturing solutions.
Value as % of Portfolio 0.9%
Manager Thomas H. Lee Partners
Invested 2021/2022
Country USA
Sector Information technology
30. Vistage
Provider of CEO leadership
and coaching for small and midsize
businesses in the United States.
Value as % of Portfolio 0.6%
Manager Gridiron Capital/ICG
Invested 2022
Country USA
Sector Business services
7. Precisely
Provider of enterprise software.
Value as % of Portfolio 1.4%
Manager Clearlake Capital/ICG
Invested 2021/2022
Country USA
Sector Information technology
15. Newton
Provider of management
consulting services.
Value as % of Portfolio 1.1%
Manager ICG
Invested 2021/2022
Country UK
Sector Healthcare
23. ECA Group
Provider of autonomous systems for
the aerospace and maritime sectors.
Value as % of Portfolio 0.9%
Manager ICG
Invested 2022
Country France
Sector Technology, media & telecom
24. KronosNet
Provider of tech-enabled customer
engagement and business solutions.
Value as % of Portfolio 0.9%
Manager ICG
Invested 2022
Country Spain
Sector Technology, media & telecom
5. Leaf Home Solutions
Provider of home
maintenance services.
Value as % of Portfolio 1.8%
Manager Gridiron Capital
Invested 2016
Country USA
Sector Consumer goods & services
13. David Lloyd Leisure
Operator of premium health clubs.
Value as % of Portfolio 1.2%
Manager TDR Capital
Invested 2013/2020
Country UK
Sector Leisure
29. RegEd
Provider of SaaS-based
governance, risk and compliance
enterprise solutions.
Value as % of Portfolio 0.6%
Manager Gryphon Investors
Invested 2018/2019
Country USA
Sector Healthcare
21. Crucial Learning
Provider of corporate training
courses focused on communication
skills and leadership development.
Value as % of Portfolio 0.9%
Manager Leeds Equity Partners
Invested 2019
Country USA
Sector Education
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 27
PEOPLE AND CULTURE
A diverse and dedicated
investment team of experts
Our core investment team is wholly focused
on ICG Enterprise Trust, dedicated to making
investments on behalf of our shareholders.
Diversity and inclusion
CREATING THE RIGHT ENVIRONMENT
The Manager’s vision is to provide an
inclusive and respectful environment in
which each individual is motivated to make
their fullest contribution; in which they feel
fairly recognised, rewarded and included
regardless of age, gender, race, sexual
orientation, disability, religion or beliefs.
DIVERSITY AND INCLUSION STRATEGY
The Manager has developed a diversity
and inclusion strategy with the aim
of increasing diversity and creating
an inclusive workplace.
Developing future leaders
TRAINING AND SUPPORT
The Manager considers that training
and development are essential to attract
and retain people of the highest calibre
and invests significantly in this area.
EFFECTIVE CAREER COACHING
Through its performance management system
and by actively encouraging managers to
deliver effective career coaching and provide
tailored training opportunities, the Manager
is able to develop and enhance core skills,
increase technical competency, and develop
and nurture talent.
Our culture centres around
long-term relationships
with a wide range of
stakeholders; sustainable
investment excellence;
and a world-class team
demonstrating integrity,
diversity and collaboration.
ICG Enterprise Trust Plc Annual Report and Accounts 202328
Performance
for our clients
Entrepreneurialism
and innovation
Ambition
and focus
Working
collaboratively and
acting with integrity
Taking responsibility
and managing risk
Our Manager’s
culture and
values
Board oversight
The Board of ICG Enterprise
Trust ensures that it reviews
the Manager’s culture as
expressed on these pages.
This is monitored through
our regular interaction
and discussions with the
Manager and the Management
Engagement Committee also
undertakes a formal review.
Culture and values
Our Manager’s culture
centres around long-term
relationships with a wide
range of stakeholders;
sustainable investment
excellence; and a world-class
team demonstrating integrity,
diversity and collaboration.
We don’t just invest in businesses;
we invest in relationships with our
portfolio companies, and in their
long-term success. The calibre
of the investment team is key
to our ongoing success.
ANTJE HENSEL-ROTH
Chief People and External Affairs Officer, ICG
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 29
The Portfolio is managed
by a dedicated investment
team within ICG, who have
a strong combination
of direct and fund
investment experience.
Member of the
Investment Committee
The Investment Committee is
responsible for the approval of all
new investments and the overall
management of the Portfolio,
including any secondary sales.
The Committee includes senior
members of the investment team
ensuring a broad perspective on
the private equity landscape and
relative value and risk.
OLIVER GARDEY
Head of Private Equity Fund Investments
25+
Years’ private equity experience
GERMAN
BACKGROUND
Oliver joined the team in 2019. He has over 25
years’ experience in the private equity industry.
For the previous decade he was a partner at
Pomona Capital where he was a member of the
global investment committee. Prior to this, he was
partner and an investment committee member
at Adams Street, Rothschild/Five Arrows Capital
and J.H. Whitney & Co. respectively. Oliver was
previously CEO of Inflight Service Corp., a global
leading aircraft galley equipment manufacturer,
and instrumental in the buyout, the operational
turnaround and the successful exit of the business.
Oliver graduated magna cum laude from Brown
University and received his MBA from Harvard
Business School.
INVESTMENT COMMITTEE ROLE
Oliver has overall responsibility for the execution
of the Company’s investment strategy. He has
extensive experience across the private equity
market, as a direct, secondary and fund investor.
COLM WALSH
Managing Director
18
Years’ private equity experience
IRISH
BACKGROUND
Colm joined the team in 2010. He works across
all investment types and over the last five years
has been responsible for building up the US
investment programme. He previously worked
at Terra Firma in its finance and structuring team
and at Deloitte where his clients included a
number of private equity firms. Colm is a
graduate of Economics from the London School
of Economics. He is both a Chartered Accountant
and a CFA Charterholder. Colm volunteers for
Level20, mentoring a group of five UK-based
female professionals starting their careers in
private equity.
INVESTMENT COMMITTEE ROLE
Colm brings experience of both fund and direct
investments in Europe and the US to the Investment
Committee. He has a broad range of relationships
with both managers and investors in private equity
which help provide insights on new opportunities.
PEOPLE AND CULTURE CONTINUED
The investment team
66%
Of the investment
team are female
6
Individuals make up
the investment team
ICG Enterprise Trust Plc Annual Report and Accounts 202330
How we manage risk 40
Board of Directors 50
LIZA LEE MARCHAL
Managing Director
17
Years’ private equity experience
BRITISH
BACKGROUND
Liza joined the team in 2019. She was previously with
GIC Private Equity for 11 years, first in the London
office and later in the Singapore office. During her
time at GIC, Liza worked in both the Direct and
Fund Investments teams. Prior to this, she worked
in the private equity division of Henderson Global
Investors and started her career in the corporate
finance group at PricewaterhouseCoopers.
Liza holds a degree in Biochemistry from Oxford
University and an MBA from INSEAD.
KELLY TYNE
Vice President
9
Years’ private equity experience
NEW ZEALANDER
BACKGROUND
Kelly joined the team in 2014 and has worked
on a wide range of primary funds, secondaries
and direct investments in Europe and the US.
Prior to this, Kelly was an equity and fixed income
research analyst at First NZ Capital (Credit Suisse,
New Zealand) and spent three years in the consulting
team at PricewaterhouseCoopers. Kelly is a graduate
in Finance and Accounting from Otago University.
6
Years’ private equity experience
AMERICAN
BACKGROUND
Josie joined the team in 2022 and focuses
on North American buyout investments,
including the evaluation, due diligence and
monitoring of partnerships and direct investments.
Prior to this, Josie spent five years at J.P. Morgan
in New York, where she was responsible for
sourcing, conducting due diligence and executing
private equity, private credit and real estate fund
opportunities. Josie received a BA in Economics
and a Minor in Mathematics from Boston College.
JOSIE FAIR
Vice President
8
Years’ private equity experience
BRITISH
BACKGROUND
Lili joined the team in 2019 from Ares
Management where she worked in the Direct
Lending Investment team on a range of private
equity-backed transactions. Prior to this,
she spent five years in the Corporate Finance
Debt Advisory and Restructuring businesses
at Deloitte. Lili is a Chartered Accountant
and a graduate from Warwick University with a
degree in MORSE (Maths, Operational Research,
Statistics and Economics).
LILI JONES
Vice President
ICG plc oversight
and support
Functional specialists
providing oversight
and support
The Company benefits from the
breadth of skills and experience
of the Manager in supporting
its activities and overseeing
its third-party providers.
The Manager’s global
investment teams, including
its Chief Investment Officer,
provide insight into
investment opportunities.
Specific technical expertise,
including Finance, Operations,
Legal and Company Secretarial,
support the Company’s
day-to-day activities.
Associate pool
The investment team has
access to a team of four
associates who support
investment activity for
the Company and other
Secondaries investments
managed by ICG.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 31
Partner with managers
who share a similar
approach to responsible
investing
Better identify
ESG risks
Incorporate ESG
factors into investment
decision making
Our approach to ESG integration
The long-term success of ICG Enterprise
Trust requires effective management of
both financial and non-financial measures.
Environmental, social and governance (‘ESG’) issues
can be an important driver of investment value,
as well as a source of risk.
ICG has had a longstanding commitment to responsible
investing, and operates a well-defined, firm-wide
Responsible Investing Policy and ESG framework.
Within ICG Enterprise Trust, we take a tailored
ESG approach across all stages of our investment
process. Our focus is on partnering with managers
who share a similar approach to responsible investing.
DEAL SCREENING
We have a well-established ESG
screening and diligence process
for all new fund investments and
direct investments. During the
past year, we have increased our
focus on climate-related risks
and opportunities in line with
our climate commitments and
risk assessment processes.
We have a greater ability to assess
ESG considerations in our High
Conviction Investments given
we have clearer visibility of the
underlying companies when making
an investment decision. We operate
an Exclusion List to ensure we do
not make direct investments in
companies considered incompatible
with our corporate values.
We think the best opportunity
to understand an investment’s
ESG risks and opportunities
is during the pre-investment
phase. Here are two recent
examples of how ESG
considerations have been
integrated into our diligence
process, and the ultimate impact
on our investment decision.
Opportunity to make a primary
commitment to a US-based private
equity manager.
INVESTMENT THESIS
A strong investment track record,
a differentiated strategy and deep
sector expertise.
KEY ESG CONSIDERATIONS
Previous investments in portfolio companies
accused of facilitating human rights violations
and having contracts with governments with
human rights abuse concerns.
INVESTING RESPONSIBLY
THE 3 KEY PRIORITIES OF OUR RESPONSIBLE INVESTING STRATEGY
Go online to read more about
ICG’s Responsible Investing Policy
ACROSS ALL MANAGERS WE MADE
COMMITMENTS TO IN FY23
100%
Operate an ESG Policy
100%
Have an ESG monitoring
process in place
77%
Are signatories of
the UN’s Principles for
Responsible Investment
23%
Have a net zero commitment
OPPORTUNITY DECLINED
ESG due diligence: investment process
• Exclusion List
• ESG Screening Checklist
(including climate risk assessment)
• RepRisk screening
icgam.com
Integrating
responsible investing
into our strategy
ICG Enterprise Trust Plc Annual Report and Accounts 202332
INVESTMENT THESIS
Leading position in a market with strong
growth prospects, an attractive financial
profile and strong in-house R&D capabilities.
KEY ESG CONSIDERATIONS
The company operates in the defence sector.
Third-party ESG diligence found that the
company has no exposure to activities on the
Exclusion List. It was assessed to have a solid
governance structure, well-integrated ESG
strategies and robust measures to comply with
strict regulatory obligations.
Opportunity to co-invest
in ECA Group
The company is a leading player
in maritime autonomous systems
and navigation solutions.
£13.0m
Overall investment
PRE-INVESTMENT
Our ESG diligence is tailored
based on the nature of the
company. We consider risks
associated with its sector
and geography, along with
environmental (including climate
change), social, corporate
governance and ethical concerns.
For Third Party Funds, given
we do not directly influence
a manager’s portfolio
construction, we seek to partner
with managers who share a
similar approach to responsible
investing. We use our focused
ESG Questionnaire to help us
to assess the manager’s ESG
approach and capabilities.
PORTFOLIO MONITORING
ESG performance is embedded
in our monitoring process for both
funds and Direct Investments.
We monitor ESG-related
metrics across the Portfolio,
for example managers’
commitments to international
standards and monitoring
of climate-related risks.
We have strong relationships
with managers across our
Portfolio and maintain active
engagement to identify and
mitigate any potential ESG
risks. We also use tools such
as RepRisk to monitor ESG
incidents across underlying
portfolio companies.
The ICG Enterprise Trust
investment team receives
formal training on ESG
and is provided with the
skills and tools necessary
to identify and investigate
ESG issues throughout the
investment process.
Looking forward, we
think ESG will remain at
the forefront of investors’
priorities. ICG Enterprise
Trust will continue to focus
on investing in line with
our corporate values
and partnering with
managers who share a
similar approach to ESG.
INVESTMENT APPROVED
ESG due diligence: investment process
• Third Party Funds ESG Questionnaire
• Discussions with manager
• Diligence findings included
in all investment proposals
• ESG performance embedded
in monitoring process
• Regular dialogue with managers
• Manager’s ESG reporting
• Training for investment team
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 33
1 YEAR 14.5%
20.4% P.A.
16.9% P.A.
3 YEARS
5 YEARS
5.2%
5.0%
4.2%
FTSE All-Share
Index Total
Return
1 YEAR 10.5%
21.3% P.A.
19.1% P.A.
3 YEARS
5 YEARS
KEY PERFORMANCE INDICATORS
Assessing our performance
NAV PER SHARE TOTAL RETURNPORTFOLIO RETURN ON A LOCAL CURRENCY BASIS
14.5%10.5%
PROGRESS IN THE YEAR
The Company has continued to build on its strong performance,
reporting NAV per Share Total Return of 14. 5% in the 12 months to
31 January 2023 (31 January 2022: 24.4%). The FTSE All-Share Total
Return was 5.2% over the same period (31 January 2022: 18.9%).
PROGRESS IN THE YEAR
The Portfolio generated a local currency return of 10.5% in the 12 months
to 31 January 2023 (31 January 2022: 29.4%). A reconciliation of the
performance can be found in the Glossary on page 100.
RATIONALE
NAV per Share Total Return is shown net of all costs associated with
running the Company and includes the impact of any movement in
foreign exchange on valuations. As it includes all of the components
of the Company’s performance it reflects the attributable value
of a shareholder’s investment in ICG Enterprise Trust Plc.
RATIONALE
Portfolio Return on a Local Currency Basis measures the total movement
in the underlying investment Portfolio valuation, without the influence
of foreign exchange movements or the Co-investment Incentive Scheme
Accrual. It is a measure of the performance of the underlying managers
and the investment team’s selective investment approach and
management of the Portfolio.
EXAMPLES OF RELATED FACTORS THAT WE MONITOR
• Performance relative to the wider public markets and in particular
the FTSE All-Share Total Return
• Performance relative to listed private equity peer group
• Portfolio performance
• Valuations provided by underlying managers
• Impact of foreign exchange on valuations
• Effect of financing (cash drag) on performance
• Accretive impact of any share buybacks
• Ongoing charges incurred, including management fees and expenses
EXAMPLES OF RELATED FACTORS THAT WE MONITOR
• Monitoring of the Portfolio performance and watchlist
• Valuations provided by underlying managers
• Performance of Primary Fund, Secondary Fund and Direct Investments
• Detailed analysis of the Top 30 companies’ performance, EBITDA
and revenue growth, leverage, valuation multiples, performance
against investment thesis and exit prospects
• Overall EBITDA and revenue growth, leverage and valuation
multiples of the Portfolio as reported by the underlying managers
LINK TO STRATEGIC OBJECTIVE
• Portfolio composition
• Net gearing
LINK TO STRATEGIC OBJECTIVE
• Portfolio composition
Rationale
RISK MANAGEMENT
The execution of the Company’s investment strategy is subject to risk
and uncertainty. The Board and Manager have a comprehensive risk
assessment process, regularly re-evaluating the impact and probability
of each risk materialising and the financial or strategic impact of the risk.
RISK APPETITE
The Board acknowledges and recognises that in the normal course of
business the Company is exposed to risk and that it is willing to accept a
certain level of risk in managing the business to achieve its targeted returns.
ICG Enterprise Trust Plc Annual Report and Accounts 202334
1 YEAR -2.3%
8.5% P.A.
9.7% P.A.
3 YEARS
5 YEARS
5.2%
5.0%
4.2%
FTSE All-Share
Index Total
Return
2023 30p
27p
24p
2022
2021
TOTAL SHAREHOLDER RETURN TOTAL DIVIDEND PER ORDINARY SHARE
-2.3% 30p
PROGRESS IN THE YEAR
The Company’s share price reduced to 1,150p. Together with dividends
of 30.0p paid in the year and share buybacks of £2.2m, we generated
a total shareholder return of -2.3% in the 12 months to 31 January 2023
(31 January 2022: 27.1%). The FTSE All-Share Total Return was 5.2% over
the same period (31 January 2022: 18.9%). See page 6 for more details.
PROGRESS IN THE YEAR
The directors are proposing a final dividend of 9p, which, together
with the interim dividends of 21p, will take total dividends for the year
to 30p. This is a 11.1% increase on the prior year dividend of 27p and
a 2.6% yield on the year-end share price of 1,150p.
RATIONALE
Measures performance in the delivery of shareholder value, after taking
into account share price movements (capital growth) and any dividends
paid in the period. The Share Price Total Return will differ from NAV
per Share Total Return depending on the movement in the share price
discount to NAV per Share.
RATIONALE
The Board recognises a reliable source of income is important for
certain shareholders, and in the absence of unforeseen circumstances
the Board intends to grow the annual dividend progressively.
EXAMPLES OF RELATED FACTORS THAT WE MONITOR
• Performance relative to the wider public markets and in particular
the FTSE All-Share Total Return
• Performance relative to listed private equity peer group
• Level of discount in absolute terms and relative to the wider listed
private equity peer group
• Trading liquidity and demand for Company’s shares in conjunction
with marketing activity
EXAMPLES OF RELATED FACTORS THAT WE MONITOR
• Distributable reserves
• Cash balances
• Proceeds received during the year
• Investment pipeline and available financing
• Forecast dividend cover
• Share buy-back programme
LINK TO STRATEGIC OBJECTIVE
• Portfolio composition
• Net gearing
• Progressive dividend policy and share buy-back programme
LINK TO STRATEGIC OBJECTIVE
• Progressive dividend policy and share buy-back programme
How we manage risk 40
Principal risks and uncertainties 43
As part of its risk management framework, the Board considers its risk
appetite in relation to each of the identified principal risks and monitors
this on an ongoing basis. Where a risk is approaching or is outside the
tolerance set, the Board will consider the appropriateness of actions being
taken to manage the risk.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 35
STAKEHOLDER ENGAGEMENT
OUR KEY STAKEHOLDER GROUPS
OUR INVESTEE
ENTITIES
OUR
MANAGER
OUR
SHAREHOLDERS
OTHER SERVICE
PROVIDERS
OUR
LENDERS
OUR COMMUNITY
AND ENVIRONMENT
Our shareholders
WHY THEY ARE A STAKEHOLDER
Shareholders’ interests are enshrined in
our purpose – that shareholders benefit
from the economic returns of the Company
– as key stakeholders, and serving the best
interests of the shareholders is a priority for
the Board. The Board is mindful of having
a range of shareholders, and considers any
decisions it makes in the interests of
shareholders as a whole.
LOOKING AHEAD
The Board believes that the focus on clarity
and quality of shareholder communication
has been beneficial to the Company’s position
in the market and the Board will continue
to build on this over the coming year.
HOW WE ENGAGE
The Board is committed to giving investors
the opportunity to build a clear understanding
of our investment strategy and developments,
and strives to make our vision and our
results accessible.
We engage with our shareholders across a
broad range of channels including our website,
our disclosures to the market, our publication
of results factsheets and a full Annual Report.
We also conduct General Meetings,
roadshows and update meetings with key
shareholders and potential shareholders.
Other means of effective engagement during
the year include our structured programme
of presentations to existing and potential
shareholders of the annual, interim and
quarterly results, as well as our regular
dialogue with sell-side analysts.
Engaging with our
stakeholders to ensure we
make the right decisions
Section 172 of the Companies Act 2006 requires
directors to act in a way that they consider, in good
faith, to promote the success of the Company for the
benefit of its members.
The Board directors have, in their discussions
and deliberations, had regard to the long-term
consequences of their decisions, the interests
of the Company’s various stakeholders, the impact
of the Company’s operations on the community
and the environment, maintaining a reputation
for a high standard of business conduct and fair
treatment between the Company’s members.
How we engage
ICG Enterprise Trust Plc Annual Report and Accounts 202336
Our investee entities
WHY THEY ARE A STAKEHOLDER
Our capital helps our portfolio companies
to grow. The Board carefully reviews
the Company’s investment strategy
and provides the Manager with its views
on the direction of future investment
opportunities that will benefit the investee
entities, as well as generating returns for
the Company’s shareholders.
The Manager engages with the General
Partners of our investee funds and Direct
Investments. The Board is also mindful
of the impact of the investee entity’s
operations on the environment and
community and requires the Manager
to report on key metrics in this regard.
LOOKING AHEAD
We maintain our focus on the Manager’s
active General Partners selection process
to ensure the Company invests shareholders’
capital in the right opportunities.
The Manager will continue to engage with
the General Partners, working closely and
collaborating with their investee entities to
set appropriate targets and to ensure
transparent and effective reporting.
Our Manager
WHY THEY ARE A STAKEHOLDER
The Manager looks after the shareholders’
capital, as well as supporting the Company
by providing a range of services. Our
Manager works with us to enable the
Company to benefit from the ICG Group’s
investment products, broad network and
specialist expertise. The Manager is a key
stakeholder, critical to the success of the
Company’s operations.
LOOKING AHEAD
Our investment manager is regularly launching
new investment strategies and in the coming
years the Board will carefully assess which
of these opportunities may be appropriate
for ICG Enterprise Trust to invest in.
HOW WE ENGAGE
The Board’s oversight of the Manager is
exercised through a series of formal and
informal meetings during the year. The Board
engages with the Manager at a range of
levels. Key relationships have been developed
with the investment team, as well as with the
strategic business functions such as Finance,
Legal and Treasury. The Board’s regular
engagement and open dialogue across these
relationships has proven to be effective
and beneficial.
The Board welcomes employees of the
Manager to attend and report to the
Board and Audit Committee meetings.
These structured and formal engagements
are supplemented by regular calls, planning
meetings and ad hoc involvement and advice
on ongoing matters.
The strong relationship between the Board
and the Manager, and the effective engagement
between them, has facilitated the constructive
negotiation of the revised investment
management contract referred to on page 7.
HOW WE ENGAGE
The Board provides oversight and strategic
direction for the Manager’s engagement with
the General Partners of our investee entities.
The Board is committed to working with
General Partners who are closely engaged
with the investee companies, with an active
management style, including the promotion
of direct board representation of the General
Partners on the investee entity boards.
The Manager regularly reports to the Board
on portfolio matters, including an overview
of financial performance (across tracked KPIs,
prescribed valuation metrics and EBITDA
growth) and operating performance for the
largest 30 investments, as well as deal-by-deal
investment breakdowns and material ESG and
key reputational matters. The Manager also
has an annual strategy review session with
the Board to consider performance and
adherence to the investment strategy.
The Manager and the Board work closely
together and the Board has the ability to
challenge the Manager as part of the dialogue.
The Board is kept updated on the
Manager’s ongoing dialogue across
the existing and potential investee base –
the Manager understands the importance
of maintaining relationships and building
new investment relationships.
The Board views the strength of the
Manager’s relationships as fundamental
to the success of our current investments,
as well as to generating new investment
opportunities.
The Manager has various levels of
relationships with the General Partners
of the investment funds and interactions
are continual – engagement takes place
in formal sessions (e.g. dedicated investor
days) as well as through regular informal
discussions. The Manager’s discussions
with General Partners focus on investment
performance, the pipeline of new opportunities
and ESG factors and, where the relationship
is closer (e.g. a long-term investment history
and/or a Direct Investment alongside a
General Partner), discussions are more
frequent and detailed. The Manager
also ensures that robust governance and
reporting frameworks are in place with
the underlying investee entities.
The Manager works with the General Partners
to drive and promote improved standards
at the investee entity level. The Manager
understands that it is important to the Board
that we, as a Company, maintain a reputation
for a high standard of business conduct and
that this ethos flows through into our
investment portfolio.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 37
Our community
and environment
Our lenders
Other service
providers
WHY THEY ARE A STAKEHOLDER
The Board recognises its wider
responsibilities to the community and
the environment and understands the
important role that the Company plays
as it invests its capital across the market.
WHY THEY ARE A STAKEHOLDER
The Company’s liquidity facilities
are important to the Company’s
operations and its long-term prospects.
Maintaining excellent lender engagement
and relationships with our lenders helps
the Board to secure optimum facility terms.
WHY THEY ARE A STAKEHOLDER
Our service providers support the
Company to ensure that its operations
run smoothly and to ensure compliance
with legal, regulatory and ethical
obligations. Our service providers
help the Company to maintain our high
business conduct standards.
LOOKING AHEAD
We are prepared for the increasing ESG
reporting requirements. The Board will
continue to monitor ESG factors and
performance across the portfolio.
LOOKING AHEAD
The Company’s revolving credit facility
comes up for renewal in February 2026
and the Board and the Manager keep
under constant review the renewal and
extension options.
LOOKING AHEAD
As the Company continues on its growth
journey and the regulatory landscape
evolves, the Board remains mindful of
the Company’s changing needs and the
Company’s wider responsibilities to the
community and environment as it takes
decisions in relation to service provider
relationships. The Board will continue to
assess the commercial arrangements with the
service providers to ensure the provision of
high quality services for an appropriate price.
HOW WE ENGAGE
The Board acknowledges that responsible
investing is subject to increasing focus
from its shareholders, as well as greater
regulatory emphasis. The Board is
therefore focused on partnering with
General Partners who share the Company’s
approach to responsible investing.
The Board recognises that the long-term
consequences of its decision making and
the operations of the Company have a
genuine influence on the community and
environment in which the Company operates.
The Company has a well-established
ESG screening and diligence process
that applies to all new investments, with
key metrics being monitored throughout
the lifetime of the investment. ESG
performance and reporting are reviewed
periodically – there is an ongoing
dialogue between the Company and
the Company’s stakeholders in this area.
Beyond investment scrutiny, the Board
is seeking out opportunities to engage
with its community and environment
stakeholders in a range of ways, including
the Board apprenticeship (see page 39)
and the Manager’s corporate-level
carbon reduction targets.
HOW WE ENGAGE
The Manager acts as the main point of
contact with our lenders. The Manager,
with direction from the Board, focuses on
ensuring a consistent and open dialogue
with our core relationship banks, keeping
the banks appraised of the Company’s
performance and banking needs.
The Board is alive to the importance of
liquidity facilities to the Company’s operations
and its long-term prospects and in the Board
directors’ discussions with the Manager
they have emphasised the value in maintaining
strong relationships with our lenders.
HOW WE ENGAGE
The ICG Group manages service providers
on behalf of the Company and the Board
oversees this management. The Manager
escalates key matters to the Board and the
Chairs of the Board Committees, and the
Audit Committee members also attend key
relationship meetings with our service
providers from time to time.
Key providers for the Company include
the Company’s auditors, brokers, fund
administration providers, the Depositary
and the Registrar. The Manager holds
regular engagement meetings with each
of these providers and the Board has
regular involvement in these relationships
as well. In particular, the Board exercises
oversight by way of the dedicated
Management Engagement Committee
which is responsible for the formal annual
relationship review process.
STAKEHOLDER ENGAGEMENT CONTINUED
How we engage continued
ICG Enterprise Trust Plc Annual Report and Accounts 202338
Shareholder returns
Long-term share buyback programme
The buyback programme was approved
and became effective from 11 October 2022.
As at 2 May 2023 the Company has repurchased
472,178 shares at a weighted-average discount
to last-reported NAV of 41.2%, these buybacks
represent a capital return of £5.2m.
Creating value
Revised management contract
STAKEHOLDER INTERESTS AND ENGAGEMENT
Focus on the maintenance of high standards of business
conduct, long-term prospects of the Company and the
fair treatment of the Company’s members.
STAKEHOLDER INTERESTS AND ENGAGEMENT
Focus on the Company’s responsibilities to the community,
enriching its business relationships, acting in the interests of its
employees and maintenance of high standards of business conduct.
In the Board’s view, the current and future scale
of the Company, and the wider market landscape,
warranted a review of the contractual agreement
with the Manager, including the management fee
arrangements. As part of a wider exercise to
review the investment management agreement
under which the Manager is appointed, the Board
asked the Manager to review the management fee
structure and the allocation of costs as between
the Company and the Manager, so as to secure a
future-proof and long-term arrangement focused
on generating value for the Company’s shareholders.
In reaching the decision to agree the revised
headline fee rate with the Manager, the Board
considered the market dynamics (including
the positioning of the Company’s peers in the
market) and the need for cost certainty. The
discussions focused on designing a structure
that better reflects the Company’s historic and
predicted growth trajectory.
The Board noted that, had the agreement been in
place during FY23, the management fee paid would
have been reduced by approximately 6.5% (£1.1m).
Updated contractual terms with the Manager
on a range of matters.
Effective from 1 February 2023, the management
fee will be capped at a maximum of 1.25% of
NAV up to £1.5bn, 1.10% on NAV from £1.5bn
to £2.0bn and 1.0% on NAV over £2bn. The
Manager has also agreed to absorb a number
of ongoing costs previously paid for by ICG
Enterprise Trust, in particular a material share
of Sales and Marketing costs.
The Board welcomed Galina, commencing
her apprenticeship in June 2022 for a period
of 12 months.
Promoting diversity
Board apprenticeship
The Board sees the promotion of diversity as
a fundamental part of its responsibilities to the
Company as well as to the wider community
and marketplace.
The Board considered that it would be beneficial
to a wide range of the Company’s stakeholders to
arrange the placement of Galina Nicholson as an
observer and apprentice to the Board. The Board
was keen to provide Galina with the opportunity
to build board-level experience over the course
of the year, as the Board is committed to
supporting and advocating for the genuine merit
and value associated with achieving increased
diversity of representation on boards.
The Board recognises the underrepresentation
of certain demographics on boards and
welcomed the opportunity to assist Galina with
her personal development as a board member
candidate and therefore to also play a role
in broadening the diversity of the pool of
experienced potential NEDs in the wider market.
The Board continues to support the wider
aims of the Board apprenticeship programme
to encourage diversity in boardrooms.
STAKEHOLDER INTERESTS AND ENGAGEMENT
Focus on the long-term prospects of the Company
and fair treatment of the Company’s members.
THE BOARD’S STAKEHOLDER CONSIDERATIONS
THE BOARD’S STAKEHOLDER CONSIDERATIONS
THE BOARD’S STAKEHOLDER CONSIDERATIONS
OUTCOME
OUTCOME
OUTCOME
The Board is aware that listed private equity
investment trusts typically trade at discounts
to NAV and that the volatility of this discount creates
uncertainty for the Company’s shareholders. While
the Board believes there are a number of reasons
for this, the Board is mindful of the form of return
received by shareholders as well as the performance
of the Portfolio. To this end, the Board conducted a
thorough review of the Company’s capital allocation
policy and as a result implemented a long-term
programme of share buybacks to run alongside
the Company’s progressive dividend policy.
The Board believes that the buyback programme
demonstrates a disciplined approach to capital
allocation, underlines the Board’s confidence
in the long-term prospects of the Company,
its cash flows and NAV, will enhance the NAV
per Company share and, over time, may also
positively influence the volatility of the
Company’s discount and its trading liquidity.
The Board will review quarterly the size, impact and
mandate of the buyback programme in conjunction
with its advisers to help ensure that it is working in
the long-term interests of all shareholders.
For more information on shareholder returns
of an ICG Enterprise Trust share:
Key performance indicators 34
For more information on Ongoing Charges:
Glossary 100
For more information on governance:
Corporate governance report 52
Key decisions taken during the year
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 39
BOARD OF DIRECTORS
Responsible for risk management leadership
Guides and provides counsel
Provides regular reporting
AUDIT COMMITTEE
Reviews and monitors the risk management process
THE MANAGER
Responsible for risk reporting and running the controls assurance
programmes overseen by the Manager’s Risk Committee
HOW WE MANAGE RISK
Identifying and evaluating the strategic,
financial and operational impact of our key risks
The execution of the Company’s investment strategy is subject to a variety of risks and uncertainties,
and the Board and Manager have identified several principal risks to the Company’s business.
As part of this process, the Board has put in place an ongoing process to identify, assess and
monitor the principal and emerging risks facing the Company, including those that would threaten
its business model, future performance, solvency or liquidity.
Risk management framework
The Board is responsible for risk management and determining the Company’s overall risk appetite. The Audit Committee assesses
and monitors the risk management framework and specifically reviews the controls and assurance programmes in place.
Corporate governance report 52
ICG Enterprise Trust Plc Annual Report and Accounts 202340
A comprehensive risk assessment process is undertaken regularly to
re-evaluate the impact and probability of each risk materialising and the
strategic, financial and operational impact of the risk. Where the residual
risk is determined to be outside of appetite, appropriate action is taken.
Further information on risk factors is set out within the financial statements.
1
Investment risks: the risk to performance resulting
from ineffective or inappropriate investment selection,
execution or monitoring.
2
External risks: the risk of failing to deliver the
Company’s investment objective and strategic goals
due to external factors beyond the Company’s control.
3
Operational risks: the risk of loss resulting from
inadequate or failed internal processes, people or
systems and external event, including regulatory risk.
4
Financial risks: the risks of adverse impact on the
Company due to having insufficient resources to meet
its obligations or counterparty failure and the impact
any material movement in foreign exchange rates may
have on underlying valuations.
PRINCIPAL RISKS
The Company’s principal risks are individual
risks, or a combination of risks, that could
threaten the Company’s business model,
future performance, solvency or liquidity.
Details of the Company’s principal risks,
potential impact, controls and mitigating
factors are set out on pages 40 to 46.
OTHER RISKS
Other risks, including reputational risk,
are potential outcomes of the principal
risks materialising. These risks are actively
managed and mitigated as part of the
wider risk management framework
of the Company and the Manager.
EMERGING RISKS
Emerging risks are considered by the Board
as they come into view and are regularly
assessed to identify any potential impact
on the Company and to determine whether
any actions are required. Emerging risks
often include those related to regulatory/
legislative change and macro-economic
and political change.
The Company depends upon the experience,
skill and reputation of the employees of
the Manager. The Manager’s ability to
retain the service of these individuals,
who are not obligated to remain employed
by the Manager, and recruit successfully,
is a significant factor in the success
of the Company.
Principal risks and uncertainties
The Company considers its principal risks (as well as several underlying
risks comprising each principal risk) in four categories:
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 41
Risk appetite and tolerance
The Board acknowledges and recognises
that in the normal course of business,
the Company is exposed to risk and that
it is willing to accept a certain level of risk
in managing the business to achieve its
targeted returns. The Board’s risk appetite
framework provides a basis for the
ongoing monitoring of risks and enables
dialogue with respect to the Company’s
current and evolving risk profile, allowing
strategic and financial decisions to be
made on an informed basis.
The Board considers several factors
to determine its acceptance for each
principal risk and categorises acceptance
for each risk as low, moderate and high.
Where a risk is approaching or is outside
the tolerance set, the Board will consider
the appropriateness of actions being
taken to manage the risk. In particular,
the Board has a lower tolerance for
financing risk with the aim to ensure
that even under a stress scenario, the
Company is likely to meet its funding
requirements and financial obligations.
Similarly, the Board has a low risk
tolerance concerning operational risks
including legal, tax and regulatory
compliance and business process and
continuity risk.
Low Risk tolerance High
INVESTMENT RISKS
Investment performance
Valuation
EXTERNAL RISKS
Political and macro-economic uncertainty
Climate change
Private equity sector
Foreign exchange
OPERATIONAL RISKS
Regulatory, legal and tax compliance
Key professionals
Information security
The Manager and third-party providers
FINANCIAL RISKS
Financing
HOW WE MANAGE RISK CONTINUED
Risk management is a core
competence, embedded in
our processes and controls.
OLIVER GARDEY
Head of Private Equity Fund Investments
Principal risks and uncertainties 43
ICG Enterprise Trust Plc Annual Report and Accounts 202342
PRINCIPAL RISKS AND UNCERTAINTIES
RISK IMPACT MITIGATION CHANGE IN THE YEAR
INVESTMENT RISKS
INVESTMENT PERFORMANCE
The Manager selects the fund
investments and direct investments
for the Company’s Portfolio.
The underlying managers of
those funds in turn select
individual investee companies.
The origination, investment
selection and management
capabilities of both the Manager
and the third-party managers
are key to the performance
of the Company.
Poor origination, investment
selection and monitoring by
the Manager and/or third-party
managers which may have a
negative impact on Portfolio
performance.
The Manager has a strong track record
of investing in private equity through
multiple economic cycles. The Manager
has a highly selective investment
approach and disciplined process,
which is overseen by ICG Enterprise
Trust’s Investment Committee within
the Manager, which comprises a balance
of skills and perspectives.
Further, the Company’s Portfolio is
diversified, reducing the likelihood
of a single investment decision impacting
Portfolio performance.
Stable
The Board is responsible for ensuring
that the investment policy is met.
The day-to-day management of the
Company’s assets is delegated to the
Manager under investment guidelines
determined by the Board. The Board
regularly reviews these guidelines
to ensure they remain appropriate
and monitors compliance with the
guidelines through regular reports
from the Manager, including
performance reporting. The Board
also reviews the investment strategy
at least annually.
Following this assessment and other
considerations, the Board concluded
that performance risk has remained
stable during the year.
VALUATION
In valuing its investments in private
equity funds and unquoted
companies and publishing its NAV,
the Company relies to a significant
extent on the accuracy of financial
and other information provided
by the underlying managers to
the Manager. There is the potential
for inconsistency in the valuation
methods adopted by the managers
of these funds and companies and
for valuations to be misstated.
Incorrect valuations being
provided would lead to
an incorrect overall NAV.
The Manager carries out a formal
valuation process involving a quarterly
review of third-party valuations.
This includes a comparison of unaudited
valuations to latest audited reports, as well
as a review of any potential adjustments
that are required to ensure the valuation
of the underlying investments are in
accordance with the fair market value
principles required under International
Financial Reporting Standards (‘IFRS’).
Stable
The Board regularly reviews and
discusses the valuation process in
detail with the Manager, including the
sources of valuation information and
methodologies used.
Following this assessment and other
considerations, the Board concluded
that there was no material change in
valuation risk during the year.
How we manage and mitigate our key risks
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 43
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
RISK IMPACT MITIGATION CHANGE IN THE YEAR
EXTERNAL RISKS
POLITICAL AND MACRO-
ECONOMIC UNCERTAINTY
Political and macro-economic
uncertainty and other global
events, such as pandemics,
that are outside of the Company’s
control could adversely impact
the environment in which the
Company and its investment
portfolio companies operate.
Changes in the political or
macro-economic environment
could significantly affect
the performance of existing
investments (and valuations)
and prospects for realisations.
In addition, they could impact
the number of credible
investment opportunities the
Company can originate.
The Manager uses a range of
complementary approaches to
inform strategic planning and risk
mitigation, including active investment
management, profitability and balance
sheet scenario planning and stress
testing to ensure resilience across
a range of outcomes.
The process is supported by a dedicated
in-house economist and professional
advisers where appropriate.
Increasing
The Board monitors and reviews
the potential impact on the
Company from political and
economic developments on an
ongoing basis, including input and
discussions with the Manager.
Incorporating these views and
other considerations, the Board
concluded that there was an increase
in political and macro-economic
uncertainty risk as a result of the
economic uncertainty.
CLIMATE CHANGE
The underlying managers
of the fund investments and
direct investments in the
Company’s Portfolio fail
to ensure that their portfolio
companies respond to the
emerging threats from
climate change.
Climate-related transition
risks, driven in particular by
abrupt shifts in the political
and technological landscape,
impact the value of the
Company’s Portfolio.
The Manager has a well-defined,
firm-wide Responsible Investing
Policy and ESG framework in place.
A tailored ESG framework applies
across all stages of the Company’s
investment process. This includes
ongoing monitoring of the underlying
manager’s ESG reporting.
Stable
The Board monitors and reviews the
potential impact to the Company from
failures by underlying managers to
mitigate the impact of climate change
on portfolio company valuation.
During the year the Board received
reports on the implementation
of the Manager’s Responsible
Investing Policy.
LISTED PRIVATE EQUITY
SECTOR
The listed private equity sector
could fall out of favour with investors
leading to a reduction in demand
for the Company’s shares.
A change in sentiment to
the sector has the potential
to damage the Company’s
reputation and impact the
performance of the Company’s
share price and widen the
discount the shares trade
at relative to NAV per Share,
causing shareholder
dissatisfaction.
Private equity continues to outperform
public markets over the long term and has
proved to be an attractive asset class
through various cycles. The Manager is
active in marketing the Company’s shares
to a wide variety of investors to ensure the
market is informed about the Company’s
performance and investment proposition.
The Board monitors the discount
to NAV and considers appropriate
solutions to address any ongoing
or substantial discount to NAV,
including share buybacks.
Stable
The Board receives regular
updates from the Company’s
broker and is kept informed
of all material discussions with
investors and analysts.
FOREIGN EXCHANGE
The Company has continued to
expand its geographic diversity
by making investments in different
countries. Accordingly, several
investments are denominated in US
dollars, euros and currencies other
than sterling.
At present, the Company does
not hedge its foreign exchange
exposure. Therefore, movements
in exchange rates between these
currencies may have a material
effect on the underlying
valuations of the investments and
performance of the Company.
The Board regularly reviews the
Company’s exposure to currency
risk and reconsiders possible hedging
strategies on at least an annual basis.
Furthermore, the Company’s
multicurrency bank facility permits
the borrowings to be drawn in euros
and US dollars, if required.
Stable
The Board reviewed the Company’s
exposure to currency risk and
possible hedging strategies and
concluded that there was no material
change in foreign exchange risk
during the year and that it remains
appropriate for the Company not to
hedge its foreign exchange exposure.
ICG Enterprise Trust Plc Annual Report and Accounts 202344
RISK IMPACT MITIGATION CHANGE IN THE YEAR
OPERATIONAL RISKS
REGULATORY, LEGAL AND
TAX COMPLIANCE
Failure by the Manager to comply
with relevant regulation and
legislation could have an adverse
impact on the Company.
Additionally, adherence to
changes in the legal, regulatory
and tax framework applicable
to the Manager could become
onerous, lessening competitive
or market opportunities.
The failure of the Manager and
the Company to comply with the
rules of professional conduct
and relevant laws and regulations
could expose the Company to
regulatory sanction and penalties
as well as significant damage
to its reputation.
The Board is responsible for ensuring the
Company’s compliance with all applicable
regulatory, legal and tax requirements.
Monitoring of this compliance has been
delegated to the Manager, of which the
in-house Legal, Compliance and Risk
functions provide regular updates to
the Board covering relevant changes
to regulation and legislation.
The Board and the Manager continually
monitor regulatory, legislative and tax
developments to ensure early engagement
in any areas of potential change.
Stable
The Company remains responsive
to a wide range of developing
regulatory areas; and will continue
to enhance its processes and controls
in order to remain compliant with
current and expected legislation.
KEY PROFESSIONALS
Loss of key professionals at
the Manager could impair the
Company’s ability to deliver its
investment strategy and meet its
external obligations if replacements
are not found in a timely manner.
If the Manager’s team is not
able to deliver its objectives,
investment opportunities could
be missed or misevaluated,
while existing investment
performance may suffer.
The Manager regularly updates the
Board on team developments and
succession planning. The Manager
places significant focus on:
• Developing key individuals to ensure
that there is a pipeline of potential
succession candidates internally.
External appointments are considered
if that best satisfies the business needs.
• A team-based approach to investment
decision making i.e. no one investment
professional has sole responsibility
for an investment or fund manager
relationship.
• Sharing insights and knowledge
widely across the investment team,
including discussing all potential
new investments and the overall
performance of the Portfolio.
• Designing and implementing a
compensation policy that helps to
minimise turnover of key people.
Stable
The Board reviewed the Company’s
exposure to people risk and
concluded that the Manager
continues to operate sustainable
succession, competitive
remuneration and retention plans.
The Board believes that the risk in
respect of people remains stable.
INFORMATION SECURITY
The Company is dependent on
effective information technology
systems at both the Manager and
Administrator. These systems
support key business functions and
are an important means of securing
data and sensitive information.
The failure of the Manager
and Administrator to deliver
an appropriate information
security platform for critical
technology systems could result
in unauthorised access by
malicious third parties, breaching
the confidentiality, integrity and
availability of Company data,
negatively impacting the
Company’s reputation.
Application of the Manager’s and
Administrator’s information security
policies is supported by a governance
structure and a risk framework that
allow for the identification, control
and mitigation of technology risks.
The effectiveness of the framework
is periodically assessed.
Additionally, the Manager’s and
Administrator’s technology environments
are continually maintained and subject
to regular testing, such as penetration
testing, vulnerability scans and patch
management.
Increasing
In order to gain a more comprehensive
understanding of the Manager’s
internal controls and risk management
systems the Board carries out a formal
annual assessment (supported by
the Manager’s internal audit
function).
Following this review and other
considerations, the Board concluded
that there was an increase in
information security risk during
the year.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 45
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
RISK IMPACT MITIGATION CHANGE IN THE YEAR
OPERATIONAL RISKS CONTINUED
THE MANAGER AND
THIRD-PARTY PROVIDERS
(INCLUDING BUSINESS
PROCESSES AND CONTINUITY)
The Company is dependent on
third parties for the provision of
services and systems, especially
those of the Manager, the
Administrator and the Depositary.
Failure by a third-party provider
to deliver services in accordance
with its contractual obligations
could disrupt or compromise
the functioning of the Company.
A material loss of service could
result in, among other things,
an inability to perform business
critical functions, financial loss,
legal liability, regulatory censure
and reputational damage.
The performance of the Manager, the
Administrator, the Depositary and other
third-party providers is subject to regular
review and reported to the Board.
The Manager, the Administrator and
the Depositary produce internal control
reports to provide assurance regarding
the effective operation of internal
controls. These reports are provided
to the Audit Committee for review.
The Committee would seek further
representations from service providers
if not satisfied with the effectiveness
of their control environment.
The Audit Committee formally assesses
the internal controls of the Manager,
the Administrator and Depositary
on an annual basis to ensure adequate
controls are in place.
The assessment in respect of the
current year is discussed in the
Report of the Audit Committee
within the Annual Report.
The Management Agreement and
agreements with other third-party
service providers are subject to notice
periods that are designed to provide the
Board with adequate time to put in place
alternative arrangements.
Stable
In order to gain a more
comprehensive understanding
of the Manager’s internal controls
and risk management systems the
Board carries out a formal annual
assessment (supported by the
Manager’s internal audit function).
The Board also received regular
reporting from the Manager and
other third parties.
Following this review and other
considerations, the Board concluded
that there was no material change in
the Manager and other third-party
advisers’ risk during the year.
FINANCIAL RISKS
FINANCING
The Company has outstanding
commitments that may be
drawn down at any time in excess
of total liquidity to private equity
funds. The ability to fund this
difference is dependent on
receiving cash proceeds from
investments (the timing of which
are unpredictable) and the
availability of financing facilities.
If the Company encountered
difficulties in meeting its
outstanding commitments, there
would be significant reputational
damage as well as risk of damages
being claimed from managers and
other counterparties.
The Manager monitors the Company’s
liquidity, overcommitment ratio and
covenants on a frequent basis, and
undertakes cash flow monitoring,
and provides regular updates on
these activities to the Board.
Increasing
A reduction in the number of
potential lenders to the Company has
increased the risk that the existing
financing facility cannot be extended
or replaced at its maturity date of
February 2026 on the same terms.
ICG Enterprise Trust Plc Annual Report and Accounts 202346
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.
The Company’s business activities,
together with factors likely to affect
its future development, performance,
position and cash flows, are set out
in the Chair’s statement on page 6,
and the Manager’s review on page 14.
As part of this review, the Board assessed
the potential impact of principal risks and
the prevailing macro-economic conditions
on the Company’s business activities, the
Company’s cash position, the availability of
the Company’s credit facility and compliance
with its covenants, and the Company’s cash
flow projections. Further details of this
assessment, including stress testing and
sensitivity analysis performed, are disclosed
within the Viability Statement.
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 until, at least, 31 May 2024, a period
of more than 12 months from the signing
of the financial statements. Therefore,
it is appropriate to continue to adopt the
going concern basis of preparation of
the Company’s financial statements.
VIABILITY STATEMENT
In accordance with the UK Corporate
Governance Code, the Board has assessed
the financial position and prospects of the
Company over a longer period than the
12 months required by the ‘going concern’
basis of accounting. The Board has assessed
the viability of the Company over a five-year
period from the balance sheet date, being
a period of time over which the Board can
reasonably assess the Company’s prospects
and over which the majority of the Company’s
commitments will be drawn down.
The Board has carried out a robust
assessment of the principal risks and their
mitigants as noted on page 43. Those
considered most significant to the viability
of the Company included those relating
to investment performance, political and
macro-economic uncertainty, and the ability
of the Company to manage its financing
and overcommitment risk.
As noted within the Manager’s review on
page 14, the Company’s financial position
is strengthened by its access to its bank
facility of €240m (£211m), which matures
in February 2026 and is subject to a number
of covenants. The Company’s net debt
was £44.7m as at 31 January 2023 which
is expected to be repaid with cash flows
from the Company’s investments.
The Board has assessed the Company’s
ability to remain viable and meet its liabilities
as they fall due through the review of balance
sheet and cash flow projections provided
by the Manager. As part of this, a range of
stressed scenarios and sensitivity analyses
was examined to identify conditions that
might result in the facility’s covenants being
breached, and included the consideration of
possible remedial action that the Company
could undertake to avoid such breaches.
Key variables considered included Portfolio
gains and losses, fund drawdowns and
realisations, availability of the credit
facility, and exchange rates. Based on this
assessment, the Board has a reasonable
expectation that the Company will remain
viable over a five-year period from the
balance sheet date.
The Company’s Strategic Report is set
out on pages 1 to 47 and was approved
by the Board on 10 May 2023.
Jane Tufnell
Chair
10 May 2023
VIABILITY AND GOING CONCERN STATEMENTS
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 47
Aligning our culture
with our purpose
GOVERNANCE OVERVIEW
Dear shareholders,
Effective corporate governance is fundamental
to the way the Company conducts its business.
By encouraging entrepreneurial and responsible
management, it supports the creation of long-term,
sustainable value for shareholders and for wider society.
Effective oversight of strategy and risk is particularly
important to promote the long-term success of the
Company. In performing this role, the Board seeks
to be responsive to both the evolving regulatory
environment and changing expectations about the
role of business in society.
In particular, the Board seeks to ensure that both
its own culture and that of the Manager are aligned
with the Company’s purpose and values, and that
the Company has the necessary financial and human
resources to deliver its strategy.
Role of the Board
STRATEGIC OVERSIGHT
It is the responsibility of the Board to ensure that
there is effective stewardship of the Company’s affairs.
Strategic issues are determined by the Board and a formal
schedule of matters reserved for the Board has been adopted.
In order to enable them to discharge their responsibilities,
directors have full and timely access to relevant information.
COMPLIANCE WITH THE CODE
The Board applies the principles of the AIC Code of
Corporate Governance (‘AIC Code’) which adapts the
Principles and Provisions set out in the UK Corporate
Governance Code (‘the Code’) to make them more
relevant for investment companies.
BOARD PERFORMANCE EVALUATION
The Board has a formal process for the annual evaluation
of its performance and that of the Chair. The most recent
evaluation concluded in January 2023 that the Board and
its members continue to operate effectively. An external
review will be undertaken in the year ended 31 January 2024.
CULTURE AND VALUES
The Board expects all directors to act with integrity and
to apply their skill, care, due diligence and professional
experience in deliberations regarding the Company’s
business. The Board applies various practices and behaviours
to ensure that its culture aligns with the Company’s purpose,
values and strategy, including a robust annual review and
regular consideration of our direction at Board meetings.
SUCCESSION PLANNING
The Board’s tenure and succession policy seeks to
ensure that the Board remains well-balanced through
the appointment of directors with a range of skills
and experience. This is managed through the phased
appointments of new directors.
REGULAR MEETINGS
The Board, which meets at least four times each year,
reviews the Company’s investment Portfolio and
investment performance and considers financial reports.
There is also contact with the directors between meetings
where this is necessary for the Company’s business.
Board developments
NEW DIRECTORS
Adiba Ighodaro and Janine Nicholls joined the Board as
non-executive directors of the Company on 1 July 2022
and have received a comprehensive induction programme.
We look forward to continuing to work with them on the
Board and respective Committees. These changes allow
the Board to maintain a diverse membership in terms of
gender, ethnicity, experience and background.
Effective oversight of strategy
and risk is particularly important
to promote the long-term
success of the Company.
JANE TUFNELL
Chair
ICG Enterprise Trust Plc Annual Report and Accounts 202348
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Our purpose
Impacting all aspects
of our business
By encouraging
entrepreneurial and
responsible management,
supported by a robust
governance framework,
we support the
creation of long-term,
sustainable value.
By understanding
our stakeholders,
we take a holistic view
of the potential impact
of our decisions.
We aim to build a portfolio of
companies with defensive growth
characteristics that will generate
consistently strong returns for
shareholders, over the long term.
The people who execute
on our strategy underpin
our success.
A targeted approach
to responsible investing
embedded within our
investment approach.
Fulfilling our purpose
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.
At ICG Enterprise Trust, our purpose is clear
and our track record of fulfilling it is strong.
It defines the way we manage our Portfolio and
our approach to selecting new investments.
By fulfilling our purpose, we generate value
for our stakeholders.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 49
BOARD OF DIRECTORS
BACKGROUND
Gerhard Fusenig was appointed
to the Board in 2019. Over the last
25 years, Gerhard has held a
number of senior management roles
including the position of co-COO
of Asset Management and CEO of
Core Investments at Credit Suisse,
as well as Global Head of Fund
Services at UBS. Gerhard is
a non-executive director of
SolvencyAnalytics AG. Former
directorships include Standard Life
Aberdeen PLC, Aberdeen Asset
Management PLC and Credit Suisse
Insurance Linked Strategies Ltd.
EXPERIENCE
Gerhard is highly experienced
as an executive in the investment
management sector and is also very
familiar with board practices and
corporate governance requirements
due to his range of board positions,
including major listed companies.
BACKGROUND
Jane Tufnell was appointed to the
Board in 2019 and became Chair
in 2020. She started her career
in 1986, joining County NatWest,
where she jointly ran the NatWest
Pension Fund’s exposure to UK
smaller companies. In 1994 she
co-founded Ruffer Investment
Management Ltd where she
worked for over 20 years to build
the business to an AUM of £20bn,
before leaving in 2015. Jane is Chair
of Odyssean Investment Trust and
Senior Independent Director of
Schroder Capital Global Innovation
Trust plc. She has served as a
non-executive director of a number
of other entities.
EXPERIENCE
Jane brings extensive financial
services and fund management
experience to the Board. She is a
seasoned public company board
member and chair, and has significant
experience of all aspects of investment
company management, governance
and regulation.
JANE TUFNELL
Chair and Chair of the Nominations Committee
BACKGROUND
David Warnock was appointed
to the Board in 2020, and became
Senior Independent Director in 2021.
David co-founded the investment
firm Aberforth Partners and was
a partner for 19 years until his
retirement from that firm in 2008.
He has held non-executive
directorships of several public
and private companies and before
Aberforth was with Ivory & Sime plc
and 3i Group plc. David is currently
Chair of CT Global Managed Portfolio
Trust plc and an active investor in a
number of private companies.
EXPERIENCE
David brings extensive private
equity, investment trust and
listed company experience to the
Board. He worked for many years
in private equity and served as a
non-executive director of abrdn
Private Equity Opportunities Trust
plc. He has been involved in all
aspects of investment trusts, either
as a manager or as a non-executive
director, for over 30 years.
DAVID WARNOCK
Senior Independent Non-Executive Director and
Chair of the Management Engagement Committee
BACKGROUND
Alastair Bruce was appointed to
the Board in 2018 and became Chair
of the Audit Committee in 2019.
Alastair was Managing Partner of
Pantheon Ventures between 2006
and 2013, having joined the firm in
1996. During his tenure at Pantheon
Ventures, Alastair was involved in
all aspects of the firm’s business,
particularly the management of
Pantheon International PLC (‘PIP’),
the expansion of Pantheon Ventures’
global platform and the creation
of a co-investment business.
EXPERIENCE
Alastair brings over 25 years
of private equity, investment
management and financial
experience to the Board.
Through his involvement with
the management of PIP, he has
extensive experience of managing
a listed private equity vehicle.
ALASTAIR BRUCE
Independent Non-Executive Director and Chair of the Audit Committee
GERHARD FUSENIG
Independent Non-Executive Director
ICG Enterprise Trust Plc Annual Report and Accounts 202350
Number of
Board members
Percentage
of the Board
Number of senior
positions on
the Board
1
Men 3 50% 1
Women 3 50% 1
Number of
Board members
Percentage
of the Board
Number of senior
positions on
the Board
1
White British
or other White
(including
minority white
groups)
5 83.3% 2
Black/African/
Caribbean/
Black British
1 16.7% 0
1 Defined as Chair, Chief Executive Officer (‘CEO’), Chief Financial Officer (‘CFO’)
or Senior Independent Director. The Company does not have a CEO or a CFO.
BACKGROUND
Janine Nicholls was appointed to
the Board in 2022. She has more
than 30 years’ experience in private
equity and financial services and is
currently COO of Snowball, a multi-
asset impact investor. She previously
held the same role at private equity
firms GHO Capital and Hermes GPE.
Prior to this, Janine held a number
of direct, co-investment and primary
funds’ investment roles and also held
a number of related advisory board
seats. She began her career by
qualifying as a chartered accountant
with Price Waterhouse.
EXPERIENCE
Janine brings to the Board diverse
financial, investment and operational
experience. In addition to her private
equity investment experience,
she has experience overseeing
functions including Regulatory
Compliance, Risk Management,
Accounting, Human Resources
and Investor Relations and has a
broad perspective on the private
equity industry. Janine is also a
Non-Executive Director on the
board of Calculus Venture Capital
Trust, where she is Chair of the
Audit Committee. Janine is a
qualified chartered accountant.
ETHNICITY REPRESENTATION
GENDER REPRESENTATION
MATRIX OF SKILLS AND EXPERIENCE
JANINE NICHOLLS
Independent Non-Executive Director
BACKGROUND
Adiba Ighodaro was appointed to
the Board in 2022. Adiba is a former
Partner and founding member
of the international private equity
firm Actis, where she held both
investor and fundraising leadership
roles in the UK, Nigeria and the US.
Prior to this she worked with CDC
Group plc (now British International
Investment) from which, combined
with Actis, she has close to 30 years
of investing across private equity,
energy infrastructure and real estate.
Adiba began her career practising
corporate and commercial law.
EXPERIENCE
Adiba brings extensive expertise
in global private markets from over
30 years of experience, including
legal structuring, development
finance, private equity origination
and investment. Adiba is currently
an Independent Non-Executive
Director on the board of Standard
Chartered Bank Nigeria Ltd, where
she is Chair of the Appointments
and Remuneration Committee and
a member of the Risk and Credit
Committees. Adiba is also a Trustee
on the board of the English
National Opera.
ADIBA IGHODARO
Independent Non-Executive Director
Management Engagement
Audit
COMMITTEE MEMBERSHIP
Nominations
Jane
Tufnell
David
Warnock
Alastair
Bruce
Gerhard
Fusenig
Adiba
Ighodaro
Janine
Nicholls
Investment Trusts
Private Equity
Asset Management
UK Corporate
Governance
International
Finance/Audit
At a glance
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 51
The Company is committed to
appropriate standards of corporate
governance and the Board has
applied the principles of the AIC
Code of Corporate Governance
(‘AIC Code’). The AIC Code adapts
the Principles and Provisions set out
in the UK Corporate Governance Code
(‘the Code’) issued by the Financial
Reporting Council to make them more
relevant for investment companies.
CORPORATE GOVERNANCE
The Board considers that reporting against
the Principles and Provisions of the AIC
Code, which has been endorsed by the
Financial Reporting Council, provides
more relevant information to shareholders.
The Board remains cognisant of the
provisions of the Code. A copy of the
AIC Code and the Code can be obtained
from the websites of the Association of
Investment Companies (www.theaic.co.uk)
and of the Financial Reporting Council
(www.frc.org.uk) respectively.
Throughout the year, the Company
complied with the provisions of the AIC
Code. The Board subscribes to the view
that long-serving directors should not
be prevented from forming part of an
independent majority. It does not consider
that a director’s tenure necessarily reduces
his or her ability to act independently and,
following formal performance evaluations,
believes that each of the directors is
independent in character and judgement
and that there are no relationships or
circumstances which are likely to affect
their judgement.
The Board considers that the tenure
profile of the Board, represented by the
length of service of each of its directors,
is appropriately balanced such that Board
succession and renewal planning is
managed over the medium to longer term.
The composition of the Board continues to
include directors who bring an appropriate
mix of skills, experience, expertise and
diversity (including gender diversity)
to Board decision making.
All of the Company’s directors will seek
re-election at each Annual General Meeting.
The terms and conditions of appointment of
the non-executive directors will be available
for inspection at the Annual General Meeting.
Each non-executive director is appointed
by a letter of appointment on an ongoing
basis and shareholders vote on whether to
elect/re-elect him or her at every Annual
General Meeting. A non-executive director
will only be proposed for re-election at
an Annual General Meeting if the Board is
satisfied with the non-executive director’s
performance, independence and ongoing
time commitment. There is no absolute limit
to the period that a non-executive director
can serve for; however the Board recognises
wider views regarding length of service
and factors these in when considering
whether or not directors’ appointments
should be continued.
The Directors’ Remuneration Report,
including the Directors’ Remuneration Policy
which shareholders will be asked to approve
at the Annual General Meeting, can be found
on page 60.
The Company is also subject to the
Alternative Investment Fund Managers
Directive (‘AIFMD’) and has a management
agreement with the Manager to act as
its Alternative Investment Fund Manager
(‘AIFM’). Aztec Financial Services (UK)
Limited acts as its Depositary, in accordance
with the requirements of the AIFMD.
Composition and independence
The Board is currently comprised of six
non-executive directors. There is no
Chief Executive Officer position within the
Company as day-to-day management of the
Company’s affairs has been delegated to
the Manager. The Board regularly reviews
the independence of its members and,
having due regard to the definitions and
current guidelines on independence under
the Code, considers all directors to be
independent. There are no relationships
or circumstances relating to the Company
that are likely to affect their judgement.
The Board agreed that during 2022 it would
act as a host Board for an apprentice under
the Board Apprentice Scheme, which is
designed to increase access to board-level
positions for those who have not previously
had this experience. The Board apprentice is
not a member of the Board but attends, and
contributes, to all meetings. Please see page
39 for more details of this scheme.
Senior Independent Director
David Warnock is the Senior Independent
Director. He provides support to the
Chair in her role leading the Board while
also providing his challenge and acting as
a conduit for any points to be raised in
respect of the Chair. Following the recent
Board evaluation, the Board considers him
to be operating effectively in this role.
Induction and training
Board training is provided regularly to
ensure that Board members are well placed
to conduct their role.
New Board members receive a formal induction
on all aspects of the Company’s business.
Performance evaluation
The Board reviews its performance annually
with an external assessment undertaken
every three years. The assessment covers
the effectiveness and performance of the
Board as a whole, the committees of the
Board and an evaluation of each director.
This process helps ensure that the Board’s
operations remain aligned with the culture,
purpose and values of the Company.
The last external assessment was undertaken
in the year ended 31 January 2021. The next
external assessment will take place in the
year ended 31 January 2024.
The Board conducted an internal self-
evaluation led by the Chair. This involved
the submission of written questionnaires
and then a full discussion of the output.
The review concluded that the Board
continues to operate effectively and
coherently, with a collaborative approach
taken. As a result of the review, the Board
has made some refinements to its annual
programme, including enhancing the annual
strategy session to allow detailed focus
on strategic matters. Each individual
director was also assessed as part of the
evaluation and it was concluded that each
director continues to make a valuable
contribution to the Board.
CORPORATE GOVERNANCE REPORT
ICG Enterprise Trust Plc Annual Report and Accounts 202352
Board of Directors
The Board is responsible for the effective stewardship of the Company’s affairs
JANE TUFNELL
Chair of the Board
DAVID WARNOCK
Senior Independent Director
ALASTAIR BRUCE
Non-Executive Director
AUDIT COMMITTEE
Alastair Bruce (Chair)
Gerhard Fusenig
Adiba Ighodaro
Janine Nicholls
Jane Tufnell
David Warnock
KEY RESPONSIBILITIES
Reviewing the interim and annual
financial statements
Reviewing the effectiveness and scope
of the external audit
Reviewing the risks to which the Company
is exposed and mitigating controls
Overseeing compliance with regulatory
and financial reporting requirements
NOMINATIONS COMMITTEE
Jane Tufnell (Chair)
Alastair Bruce
Gerhard Fusenig
Adiba Ighodaro
Janine Nicholls
David Warnock
KEY RESPONSIBILITIES
Selecting and proposing suitable candidates
for appointment or reappointment to the Board
MANAGEMENT ENGAGEMENT COMMITTEE
David Warnock (Chair)
Alastair Bruce
Gerhard Fusenig
Adiba Ighodaro
Janine Nicholls
Jane Tufnell
KEY RESPONSIBILITIES
Monitoring and evaluating the performance
and remuneration of the Manager
Monitoring and evaluating the performance
and remuneration of other key service providers
GERHARD FUSENIG
Non-Executive Director
ADIBA IGHODARO
Non-Executive Director
JANINE NICHOLLS
Non-Executive Director
MEETINGS
Board member Board Audit MEC Nominations
Jane Tufnell 6/6 3/3 1/1 1/1
David Warnock 6/6 3/3 1/1 1/1
Alastair Bruce 6/6 3/3 1/1 1/1
Gerhard Fusenig 6/6 3/3 1/1 1/1
Sandra Pajarola
1
2/2 1/1 N/A 1/1
Adiba Ighodaro 4/4 2/2 1/1 N/A
Janine Nicholls 4/4 2/2 1/1 N/A
1 Retired from the Board on 28 June 2022.
The quorum for any Board meeting is two directors but attendance
by all directors at each meeting is strongly encouraged.
BOARD OVERVIEW
Composition and independence
The Board is currently comprised of six independent non-executive directors.
There is no Chief Executive Officer position within the Company as day-to-day
management of the Company’s affairs has been delegated to the Manager.
Board diversity
There are currently three female and three male directors on the Board.
The Board considers all candidates for Board appointments and does not
discriminate based on gender or any other factor, making appointments
based solely on the skills and experience of the candidates.
Tenure
The Company has no employees and given the nature of its business
as an investment company, the Board believes that it is important for
it to be refreshed with new members periodically.
Report of the Audit Committee 64 Corporate governance report 52 Corporate governance report 52
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 53
CORPORATE GOVERNANCE REPORT CONTINUED
Directors’ time commitments
The Company has a policy of ensuring
that all non-executive directors of the
Company have sufficient time to commit to
the respective duties and responsibilities
applicable to their particular Board roles.
When making new appointments, the
Board takes into account other demands
on potential candidates’ time and prior to
appointment any significant commitments
are disclosed with an indication of the time
involved. In the year under review the Board
assessed the time commitment of each
individual director on external appointments.
Each director’s aggregate time commitment
is discussed with him or her as part of the
annual appraisal process. In the year under
review, all directors were considered to have
sufficient time to commit to their respective
roles on the Board, taking account of their
external appointments.
Board diversity
There are currently three female and
three male directors on the Board.
The Board considers all candidates
for Board appointments and does not
discriminate based on gender or any
other factor, making appointments based
on skills and experience of the candidates.
The Board is aware of the requirements
of the Listing Rules in respect of ethnic
diversity and acknowledges the importance
of all forms of diversity. Diversity is one
of the key considerations when directors
are appointed to the Board, and is factored
in to all searches for new directors.
Tenure
The Board’s tenure and succession policy
seeks to ensure that the Board remains
well-balanced through the appointment
of directors with a range of skills and
experience. Candidates for the Board
are assessed as to the appropriateness
of their skills and experience prior to
their appointment. The Company has
no employees and given the nature of its
business as an investment company, the
Board believes that while it is important
for it to be refreshed with new members
(as has been actively done in the last few
years), it is not of concern that at times
a director with longer than nine years’
experience may be on the Board.
Role of the Board
It is the responsibility of the Board to ensure
that there is effective stewardship of the
Company’s affairs. Strategic issues are
determined by the Board, a formal schedule of
operational matters reserved for the Board has
been adopted in order to enable it to discharge
its responsibilities, and directors have full and
timely access to relevant information.
The Board, which meets at least four times
each year, reviews the Company’s investment
Portfolio and investment performance and
considers financial reports. There is also contact
with the directors between meetings where
this is necessary for the Company’s business.
There is an agreed procedure under which
directors, wishing to do so in the furtherance
of their duties, may take independent
professional advice at the Company’s expense.
In the event that any directors are unable
to attend Board and Committee meetings,
the relevant directors will be contacted by
the Chair before and/or after the meeting
to ensure they were aware of the issues
being discussed and to obtain their input.
The Board meetings follow a formal
agenda, which is approved by the Chair
and circulated by the Company Secretary
in advance of the meeting to all the directors
and other attendees. At each Board meeting
every agenda item is considered against
the Company’s strategy, its investment
objectives and its investment policy.
A typical agenda includes:
• a review of investment performance;
• a review of investments and divestments
and asset management initiatives
in progress;
• an update on investment opportunities
available in the market and how they
fit within the Company’s strategy;
• consideration of any investment
opportunities above a specified size;
• a review of the Company’s financial
performance;
• a review of the Company’s financial
forecasts, cash flow and ability to meet
targets, including stressed scenarios
and sensitivity analyses;
• a review of the Company’s financial
and regulatory compliance;
• a review of any conflicts of interest,
including the consideration of investments
which may amount to a conflict of interest;
• updates on shareholder and
stakeholder relations;
• updates on the Company’s capital
market activity; and
• specific regulatory, compliance or
corporate governance updates.
Board meetings also include a number
of presentations from the Manager.
Board papers are disseminated to the
directors via a secure online platform for
reasons of efficiency and cyber security.
The online platform is also used to store
relevant Company documentation, as it
provides the directors with quick and
secure access.
Company Secretary
The directors also have access to the advice
and services of the Company Secretary,
Andrew Lewis (on behalf of ICG FMC
Limited), as well as a wider team and
Juniper, an independent investment
company specialist.
Insurance and indemnities
During the year under review, the Board has
maintained appropriate insurance cover in
respect of legal action against the directors.
The policy does not cover dishonest
or fraudulent actions by the directors.
Stewardship
The Company seeks to make investments
in funds and companies which are
well-managed with high standards of
corporate governance. The directors
believe this creates the proper conditions
to enhance long-term shareholder value.
The exercise of voting rights attached to the
Company’s Portfolio has been delegated
to the Manager. However, the Board will
be informed of any sensitive voting issues
involving the Company’s investments.
Conflicts of interest
The Company has adopted a policy requiring
all directors to disclose other positions
and also any other matter which may give
rise to a conflict. Such conflicts can then
be considered by the other directors
and, if necessary, either approved or not
approved. Currently there are no material
conflicts in respect of any director.
ICG Enterprise Trust Plc Annual Report and Accounts 202354
Manager policies
The Manager has policies and processes
in place, including those over the following
areas. Regular training is provided for all
employees. The Board has reviewed these
processes and found them adequate.
• Anti-bribery and corruption policy
• Whistleblowing policy
• Environmental policy
COMMITTEES
Nominations Committee
All of the directors serve on the Nominations
Committee which meets when necessary
to select and propose suitable candidates
for appointment or reappointment to the
Board. The Committee is chaired by Jane
Tufnell (save in respect of matters relating
to the Chair of the Board, when it is chaired
by the Senior Independent Director).
When making an appointment, the Board
considers the existing composition of the
Board to determine areas which require
strengthening. Independent external
consultants are used to help identify
a shortlist of candidates.
The Committee is mindful of all forms of
diversity in its processes, and does not
discriminate based on gender or any other
factor when considering candidates.
The Board is aware of the requirements
of the Parker Review in respect of ethnic
diversity and acknowledges the importance
of all forms of diversity. Diversity is one of
the key considerations when directors are
appointed to the Board, and is factored
into all searches for new directors.
The Committee has adopted a succession
plan to ensure that succession matters
continue to be appropriately considered
over the coming years. The long-term
plan takes account of the potential future
retirements of directors who reach nine
years of service and the skills that they bring
which will need replacement, and envisages
that successors will be sought ahead of
such retirements to allow for an appropriate
handover period with minimal disruption.
During the financial year the Nominations
Committee reviewed the composition of the
Board and identified the capabilities needed
for Board roles and succession timeframes;
with this in mind, the Committee conducted
a thorough search with regard to the
necessary skillset, experience and diversity
required and was successful in identifying
Adiba Ighodaro and Janine Nicholls as
non-executive directors of the Company.
Remuneration Committee
As the Board is comprised solely of
non-executive directors, the Company
does not have a Remuneration Committee.
The determination of the directors’ fees
is dealt with by the whole Board.
Please see page 60 for the Directors’
Remuneration Report.
Audit Committee
Please see page 64 for the Report of the
Audit Committee.
Management Engagement Committee
In accordance with industry good practice,
in February 2021 the Company formed
a Management Engagement Committee
(‘MEC’) to review the activities of the
Manager and other key service providers.
The MEC meets at least annually, is chaired
by the Senior Independent Director and
is comprised of all of the directors. The
Committee held its annual review of all
key service providers in November 2022.
It conducted a detailed review of the
performance of all key service providers,
including the Manager, and reviewed and
agreed a new proposed fee arrangement
with the Manager. A number of follow-up
actions were agreed, however, the Committee
concluded that in all material respects all
service providers were performing to the
required standards.
Engagement with service providers
The Board operates in an open and
co-operative manner with the Company’s
stakeholders, particularly in light of the
long-term nature of the Company’s
investment proposition. The Board
expects the Company’s third-party service
providers, particularly the Manager who
is responsible for the management of the
Company’s Portfolio, to uphold the same
values as the Board. To this end, the Board
(via the MEC) considers the Manager’s
corporate culture as part of the overall
assessment of the service provided to it.
Stakeholder engagement
Please see page 36 for further details.
INTERNAL CONTROLS
The Board, at least annually, assesses the
internal controls of the Manager. There have
been no material adverse findings from this
review. Please see page 64 for details of this
in the Report of the Audit Committee.
SHAREHOLDER RELATIONS
The Company’s Annual Report and
Accounts, containing a detailed review
of performance and of changes to the
investment Portfolio, our regular factsheets,
containing updated information in a more
abbreviated form, and the latest Company
presentations are made available to
shareholders through the Company’s
website (www.icg-enterprise.co.uk).
Quarterly releases in respect of the
Company’s performance are announced
to the market and available to shareholders.
At the Annual General Meeting, in ordinary
circumstances a presentation is made by
the Manager and investors are given an
opportunity to question the Chair, the other
directors and the Manager.
Communication with shareholders is given
a high priority by the Board. The Manager
and all directors, and in particular the
Chair and Senior Independent Director,
are available to enter into dialogue with
shareholders. The Manager holds regular
discussions with analysts and existing and
potential institutional shareholders and
values the feedback obtained in this manner.
A structured programme of shareholder
presentations by the Manager to institutional
shareholders takes place following the
publication of the Annual Report and quarterly
results. In addition, Board members are
available to meet institutional shareholders.
The Board receives regular updates from
the Company’s broker and is kept informed
of all material discussions with investors and
analysts which helps the directors develop
their understanding of shareholders’ views
and expectations.
A detailed list of the Company’s shareholders
is reviewed at each Board meeting.
Directors can be contacted via the registered
office of the Company (see the Shareholder
information section on page 103).
Jane Tufnell
Chair
10 May 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 55
The directors present their report and the audited
financial statements for the year ended 31 January 2023.
INVESTMENT POLICY
The Company’s investment policy is
set out on page 104. The policy has not
changed since last year.
No material change will be made to
the investment policy without prior
shareholder approval.
PURCHASE OF SHARES
The Company has the authority, subject to
various terms as set out in its Articles and in
accordance with the Companies Act 2006,
to acquire up to 14.99% of the shares in
issue. The Company intends to renew this
authority annually.
During the course of the year, the Company
purchased 191,480 shares (representing 0.3%
of the issued share capital of the Company
on 2 May 2023, being the latest practical date
before publication of this document) at an
average price of 1,111p, for a total cost of £2.1m
at a weighted average discount of 40.0 %.
These shares are held in treasury.
DIVIDEND
Quarterly dividends in respect of the year
ended 31 January 2023 were paid on
22 July 2022 (7.0p per share), 2 December 2022
(7.0p per share) and 3 March 2023 (7.0p per
share) for a total of 21.0p per share. A final
dividend of 9p per share will, if approved,
be paid on 21 July 2023 to holders of ordinary
shares on the register at the close of business
on 6 July 2023. This would bring the total
dividend for the year to 30p per share.
DIRECTORS
All of the directors listed on page 50
(excluding Adiba Ighodaro and Janine
Nicholls who joined the Board as non-
executive directors of the Company on
1 July 2022) held office throughout the year
and up to the date of signing the financial
statements, and all directors will stand
for re-election at the forthcoming Annual
General Meeting.
Gerhard Fusenig is resident in Switzerland.
All of the other directors of the Company
are resident in the UK. The directors’
biographical details demonstrate the wide
range of skills and experience that they bring
to the Board. The Board has decided that
all directors will submit themselves for re-
election every year.
A thorough review of all directors standing
for re-election has been conducted. The
review concluded that all directors bring
valuable skills and experience to the Board
and continue to operate effectively, and
accordingly are recommended for re-election.
REPORT OF THE DIRECTORS
The Report of the Directors
should be read in conjunction
with the Strategic Report
(pages 1 to 47) and the
Directors’ Remuneration
Report (pages 60 to 63).
STATUS OF THE COMPANY
ICG Enterprise Trust Plc (the ‘Company’)
is an investment company as defined by
Section 833 of the Companies Act 2006
and is registered and domiciled in England
(number 1571089). During the year under
review the Company carried on the business
of an investment trust. The Company will
continue to be an investment trust provided it
continues to satisfy the conditions of Section
1158 of the Corporation Tax Act 2010. The
Company has continued to direct its affairs
with the objective of retaining such approval.
The Company’s shares are eligible for
tax-efficient wrappers such as Individual
Savings Accounts (‘ISAs’), Junior ISAs and
Self Invested Personal Pensions (‘SIPPs’).
REPORTING PERIOD
This Annual Report has been prepared for
the year to 31 January 2023.
SIGNIFICANT SHAREHOLDINGS
At 2 May 2023, the Company had received
no notifications of disclosable interests in
its issued share capital.
ICG Enterprise Trust Plc Annual Report and Accounts 202356
Had the revised management fee rate been in
place for the year ended 31 January 2023 the
management fee would have been capped at
1.25% and the Company’s Ongoing Charges
ratio would have reduced to 1.39%.
For the ICG-managed funds (as disclosed
in note 18 to the financial statements on
page 93) the annual management charge
is between 1.3% and 1.5% of original
commitments for funds in their investment
period, and between 0.8% to 1.5% of
unrealised cost for funds where their
investment period has ended.
For the Graphite-managed funds (as
disclosed below) the annual management
charge is 2% of original commitments
for funds in their investment period, and
between 1% to 2% for funds where their
investment period has ended.
The charges and incentive arrangements for
both ICG and Graphite managed funds are
at the same level as those paid by third-party
investors in the funds.
The Board reviews the activities and
performance of the Manager on an
ongoing basis and reviews the investment
strategy annually.
The Board reviews the Company’s
investment record over short and long-
term periods, taking into account factors
including the Net Asset Value per Share
and the share price as well as the general
competence of the Manager.
The Board also considers the performance
of the Manager in carrying out its company
secretarial and general administrative functions.
In addition, the Audit Committee carries
out a formal assessment of the Manager’s
internal controls and risk management
systems every year.
The Board has contractually delegated
responsibility for management of the
investment Portfolio and the provision of
accounting and company secretarial services
to the Manager. Custody of unquoted
securities has been contractually delegated to
an FCA regulated third-party custodian, Aztec
Financial Services (UK) Limited (‘Aztec’).
Aztec has also been appointed the
Company’s Depositary, in accordance with
the Alternative Investment Fund Managers
Directive. Custody of quoted securities has
been contractually delegated to an FCA
regulated third-party custodian, Charles
Stanley & Co Limited, although Aztec retains
liability for safeguarding in respect of these
assets. The performance of these third
parties is overseen by the Board as part of
its regular reviews of the Manager.
Based on the above, it is the Board’s opinion
that the continuing appointment of ICG as
Manager of the Company on the agreed
terms is in the best interests of shareholders
as a whole.
MANAGER
ICG Alternative Investment Limited (‘ICG’
or the ‘Manager’) is the manager of the
Company. ICG is authorised as an Alternative
Investment Fund Manager and is regulated
by the Financial Conduct Authority.
The Manager provides investment
management, company secretarial and
general administrative services to the
Company under a management agreement.
This agreement can be terminated by either
party giving not less than one year’s notice.
The investment management fee payable
under this agreement is calculated as 1.4%
of the investment portfolio and 0.5% of
outstanding commitments to funds in their
investment periods, in both cases excluding
the funds managed directly by ICG (see
note 18 on page 93) and by the former
manager of the Company, Graphite Capital
(see below). From 1 February 2023 this fee
is subject to cap at 1.25% of Net Asset Value
(‘NAV’) up to £1.5bn of NAV, 1.10% on
NAV in excess of £1.5bn and below £2.0bn,
and 1.0% of NAV in excess of £2.0bn.
The effective management fee charged by
the Manager in the year was 1.34% of the
Company’s net assets and the Company’s
Ongoing Charges ratio was 1.48% as
calculated in accordance with AIC guidance
and as shown in the Glossary. Further
information around cost disclosures can
be found in the Company’s Key Information
Document on the Shareholder resources
section of the Company’s website.
INVESTMENTS IN GRAPHITE CAPITAL FUNDS (FORMER MANAGER)
31 January 2023 31 January 2022
Fund
Original
commitment
£’000
Remaining
commitment
£’000
Fair
value
£’000
Original
commitment
£’000
Remaining
commitment
£’000
Fair
value
£’000
Graphite Capital Partners IX 30,000 5,805 13,894 30,000 20,296 8,084
Graphite Capital Partners VIII 40,000 899 21,959 40,000 4,151 28,695
Graphite Capital Partners VIII Top Up Fund 20,000 1,295 4,068 20,000 1,295 2,181
Graphite Capital Partners VII 35,138 907 5,948 35,138 1,984 9,397
Graphite Capital Partners VII Top Up Fund 8,157 – – 8,157 348 2,677
Graphite Capital Partners VII Top Up Fund Plus 4,158 – – 4,158 300 2,388
Total 13 7,453 8,906 45,869 13 7,45 3 28,374 53,422
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 57
REPORT OF THE DIRECTORS CONTINUED
CO-INVESTMENT INCENTIVE SCHEME
ICG and certain of its executives and, in respect
of certain historic investments, the executives
and connected parties of the Former Manager
(together the ‘Co-investors’), are required to
co-invest alongside the Company, for which
they are entitled to a share of investment
profits if certain performance hurdles are
met, as set out below:
The Co-investors are required to contribute
0.5% of the cost of every new fund investment
(excluding those investments made by
Graphite Capital funds, and any ICG fund
investments made after 1 February 2016) and
Direct Investment made by the Company.
If such an investment has generated at least
an 8% per annum compound return in cash
to the Company (the ‘Threshold’), the
Co-investors are entitled to receive 10%
of the Company’s total gains from that
investment inclusive of return of cost, out
of future cash receipts from the investment
or, very rarely, in specie on the flotation of
underlying portfolio companies.
For investments made before 24 May
2007, if the Threshold is not achieved
the Co-investors do not recover their
contribution. For investments made after
24 May 2007, the Co-investors recover
their contribution at the same rate as the
Company recovers the cost of its investment.
Further details of these arrangements
can be found in note 9 to the
financial statements.
CAPITAL
As at 31 January 2023, 72,913,000 ordinary
shares of 10.0p each were in issue and
fully paid, including shares which had
been bought back into treasury. 4,868,123
treasury shares, representing 6.7% of the
Company’s share capital, were held as at
2 May 2023, being the latest practical date
before publication of this document.
Resolutions will be proposed at the
forthcoming Annual General Meeting to:
• allot up to a maximum of 22,681,620
ordinary shares of 10p each, representing
33% of the Company’s issued share capital
(excluding shares held as treasury shares)
as at 2 May 2023; and
• disapply pre-emption rights on up to 10%
of the issued share capital (excluding
shares held as treasury shares) to enable
the Board to re-issue any ordinary shares
held in treasury without having first to
offer them to all existing shareholders;
and to renew the directors’ authority
to buy back up to 10,199,927 ordinary
shares (being 14.99% of the issued share
capital (excluding shares held as treasury
shares as at 2 May 2023)) subject to the
constraints to be set out in the proposed
resolution. The authority will be used
where the directors consider it to be in
the best interest of shareholders. It is the
current intention of the Board that any
shares thus purchased would be held as
treasury shares.
GREENHOUSE GAS EMISSIONS
The Company has no employees and no
premises, and therefore has no greenhouse
gas emissions to report, nor does it have
responsibility for any other emissions-
producing sources under the Companies
Act 2006 (Strategic Report and Directors’
Reports) Regulations 2013 and the
Streamlined Energy and Carbon Reporting
(‘SECR’) requirements.
ICG Enterprise Trust Plc Annual Report and Accounts 202358
TRANSFER OF SHARES AND VOTING RIGHTS
All ordinary shares have equal voting rights.
There are no restrictions concerning the
transfer of securities in the Company,
no special rights with regard to control
attached to securities, no agreements
between holders of securities regarding
their transfer known to the Company, and no
agreement to which the Company is party that
affects its control following a takeover bid.
The Company’s Articles of Association
may be amended by special resolution
of the shareholders in a General Meeting.
Holders of ordinary shares enjoy the rights
set out in the Articles of Association of the
Company and under the laws of England
and Wales. Any share may be issued with
or have attached to it such rights and
restrictions as the Company by ordinary
resolution or, failing such resolution, the
Board may decide.
DISCLOSURE OF INFORMATION TO AUDITORS
Each of the persons who are a director at the
date of approval of this report confirms that:
• so far as the director is aware, there is no
relevant audit information of which the
Company’s auditors are unaware; and
• each director has taken all the steps that
he or she ought to have taken as a director
in order to become aware of any relevant
audit information and to establish that
the Company’s auditors are aware of that
information. The confirmation is given
and should be interpreted in accordance
with the provisions of Section 418 of the
Companies Act 2006.
INDEPENDENT AUDITORS
As set out in the Report of the Audit
Committee, Ernst & Young LLP were
appointed as auditors for the year ended
31 January 2023 at the Annual General
Meeting in 2022 and are recommended
for reappointment by the Audit Committee.
A resolution reappointing them and
authorising the directors to determine their
remuneration will be submitted at the Annual
General Meeting.
INCORPORATION BY CROSS REFERENCE
Certain information required to be disclosed
in the Report of the Directors is shown
within other sections of the Annual Report
and Accounts. Please refer to the Report
of the Directors on page 56.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held
on 27 June 2023. Further details will be
provided in the notice of general meeting
to be circulated to shareholders.
By order of the Board:
Andrew Lewis
On behalf of ICG FMC Limited
10 May 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 59
DIRECTORS’ REMUNERATION REPORT
REMUNERATION COMMITTEE
As the Board is comprised solely of non-executive directors, the Company does not have a Remuneration Committee. The determination
of the directors’ fees is dealt with by the whole Board.
STATEMENT BY THE CHAIR
In accordance with the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013,
the Company presents its Remuneration Policy and Remuneration Report separately.
The Remuneration Policy sets out how the Company proposes to pay the directors, including each element of remuneration that the
directors are entitled to, and how this supports the Company’s long-term strategy and performance.
All provisions of this policy are expected to remain in effect until the Annual General Meeting in 2023 when the Company is next required
to submit its policy on the remuneration of its directors to the members. At the 2023 Annual General Meeting, the Remuneration Policy
as set out below will be resubmitted to a vote of shareholders. No changes are proposed to the Remuneration Policy.
The Remuneration Report sets out how the Remuneration Policy has been implemented in the year.
In accordance with the Remuneration Policy set out below, the Board performs an annual review of directors’ fees. The fees payable to the
directors for the year ended 31 January 2024 were considered in January 2023. An increase in fees of 6% was applied, reflecting inflation
and market comparables.
TABLE OF REMUNERATION BY ROLE
Fund
Year ended
31 January 2024
£
Year ended
31 January 2023
£
Year ended
31 January 2022
£
Directors’ fee
1
46,407 43,780 42,300
Chair of the Audit Committee 57, 3 78 54,130 52,300
Chair of the Board 71,020 67,000 64,600
1 The fee includes all fees payable for service as a director and a member of the Audit Committee and the Management Engagement Committee.
PROPOSED REMUNERATION POLICY
It is the Company’s policy to determine the level of directors’ fees having regard to the level of fees payable to non-executive directors in
the wider industry, the role that individual directors fulfil, the time committed to the Company’s affairs and the limits stated by the Company’s
Articles of Association. It is not the Company’s policy to include an element of performance related pay; all fees are paid in cash rather than
any other instrument. This Remuneration Policy has been unchanged for a number of years and is unchanged since the last shareholder
approval at the 2020 Annual General Meeting.
The Articles of Association and subsequent shareholder resolutions currently limit the aggregate fees payable to the directors to a total
of £378,700 per annum. The limit in the articles increases annually in line with inflation and would also increase pro-rata in the event of an
additional appointment increasing the number of Board members.
The Company’s performance is compared to the FTSE All-Share Index Total Return as this is considered to be the most appropriate
comparator index. The level of fees for directors is reviewed annually by the Board.
ICG Enterprise Trust Plc Annual Report and Accounts 202360
The Board considers the Remuneration Policy to be effective in supporting the short and long-term strategic objectives of the Company
by ensuring that the Company continues to be able to recruit and retain non-executive directors who are suitably qualified and experienced
to supervise the Company’s affairs.
Share price performance
1
£0
£100
£200
£300
£400
ICG Enterprise Trust share price FTSE All-Share Index
Jan 2015Jan 2014Jan 2013 Jan 2016 Jan 2017 Jan 2018 Jan 2019 Jan 2022 Jan 2023Jan 2021Jan 2020
£303
£185
1 On a total return basis (i.e. including the effect of re-invested dividends). Indexed to a starting point of £100.
Service contracts
It is not the Company’s policy to enter into service contracts with its directors. No director has a service contract with the Company.
The directors each serve under a letter of appointment.
Notice period and loss of office payment policy
The directors are subject to a notice period of one month unless removed by a resolution at a General Meeting or pursuant to any provision
of the Articles of Association. It is not the Company’s policy to enter into arrangements that entitle any of the directors to compensation for
loss of office. No director is entitled to any such compensation.
Statement of consideration of conditions elsewhere in the Company
The Company has no employees. Therefore the Company cannot take into account the pay and employment conditions of its employees
when setting and implementing the Remuneration Policy.
Statement of consideration of shareholder views
The Company places great importance on communication with its shareholders. The Board confirms that no negative views were expressed
in relation to its Remuneration Policy during the year.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 61
DIRECTORS’ REMUNERATION REPORT CONTINUED
DIRECTORS’ REMUNERATION
The law requires the Company’s auditors to audit certain of the disclosures provided. Where disclosures have been audited, this is indicated below.
The directors were not entitled to any loss of office payments, pension benefits, share options or other incentives in the year ended
31 January 2023 (2022: £nil).
Relative importance of spend on pay
The following table compares the remuneration paid to the directors with aggregate distributions to shareholders in the year to 31 January 2023
and the prior year. This disclosure is a statutory requirement. However, the directors consider that this comparison is not meaningful as (a)
the Company has no employees, and (b) its objective is to provide shareholders with long-term capital growth, and share buybacks and the
dividend form only a small part of total shareholders’ returns.
Components of remuneration package
Year ended
31 January 2023
£’000
Year ended
31 January 2022
£’000
Directors’ remuneration 280 262
Shareholder distributions
Year ended
31 January 2023
£’000
Year ended
31 January 2022
£’000
Dividends paid 19,866 18,500
Share buybacks 2,016 2,968
Total distributions to shareholders 21,882 21,197
Remuneration in the year (audited)
Fees Expenses Total
Change in annual fee over years ended
31 January
Name
2023
£’000
2022
£’000
2023
£’000
2022
£’000
2023
£’000
2022
£’000
2023 2022 2021
Jane Tufnell
1
67 65 – – 67 65 3% 22% 61%
Lucinda Riches
2
– 17 – – – 17 N/A (60)% 0%
Alastair Bruce 54 52 – – 54 52 4% 19% 0%
Gerhard Fusenig
3,4
44 42 4 2 48 44 9% 7% 116%
Adiba Ighodaro
5
26 – – – 26 – N/A N/A N/A
Janine Nicholls
5
26 – – – 26 – N/A N/A N/A
Sandra Pajarola
4,6
19 42 4 2 23 44 (48)% 7% (7)%
David Warnock
7
44 42 – – 44 42 5% 504% N/A
Total 280 260 8 4 288 264
1 Joined the Board in June 2019 and served for part of the year ended 31 January 2020.
2 Retired from the Board in June 2021 and served for part of the year ended 31 January 2022.
3 Joined the Board in September 2019 and served for part of the year ended 31 January 2020.
4 Gerhard Fusenig and Sandra Pajarola are resident in Switzerland and the Company has agreed to pay for their costs of travel to London (including appropriate accommodation)
to attend meetings of the Board.
5 Joined the Board in July 2022 and served for part of the year ended 31 January 2023.
6 Retired from the Board in June 2022 and served for part of the year ended 31 January 2023.
7 Joined the Board in December 2020 and served for part of the year ended 31 January 2021.
ICG Enterprise Trust Plc Annual Report and Accounts 202362
Directors’ shareholdings and share interests (audited)
The beneficial interests of the directors in the shares of the Company are shown below. There is no requirement for the directors to own
securities of the Company. Save as disclosed below, no director had any notifiable interest in the securities of the Company.
Name
Year ended
31 January 2023
Number of shares
Year ended
31 January 2022
Number of shares
Jane Tufnell 30,025 28,025
Alastair Bruce 25,000 25,000
Gerhard Fusenig 22,803 15,000
Adiba Ighodaro – N/A
Janine Nicholls 2,219 N/A
David Warnock 20,000 20,000
Total 100,047 88,025
Note that Sandra Pajarola, who retired from the Board in June 2022, held 35,000 shares at the date of her retirement. There has been no
change in the number of shares held by the existing directors since the year end.
As at 2 May 2023, the Portfolio Manager, Oliver Gardey, holds 59,282 shares in the Company, which have been acquired in the open market
at market rates. In aggregate, and including the Portfolio Manager, employees of ICG hold a total of 135,086 shares in the Company, which
were also acquired in the open market at market rates. The Company does not compensate any employees of ICG through the issuance of
shares, nor does it offer employees of ICG the opportunity to acquire shares in the Company at preferential prices.
In addition, as at 31 January 2023, current employees of ICG have in aggregate made personal co-investments totalling a cash cost of £2.0m
as part of the Co-Investment Incentive Scheme.
Statement of shareholder voting
The Remuneration Policy was last approved at the Annual General Meeting on 17 June 2020, with the following proxy votes cast:
Votes Number %
For 19,855,520 98.56
Against 290,607 1.44
Withheld 229,378 –
At the Annual General Meeting held on 28 June 2022, a resolution to approve the Directors’ Remuneration Report for the year ended
31 January 2022 was passed with the following proxy votes cast:
Votes Number %
For 22,129,474 98.90
Against 246,504 1.10
Withheld 254,246 –
The Board does not consider the numbers of votes against these resolutions to be significant.
Resolution to approve Directors’ Remuneration Report
A resolution to approve the Remuneration Report for the year ended 31 January 2023 will be put to the members at the forthcoming Annual
General Meeting.
On behalf of the Board:
Jane Tufnell
Chair
10 May 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 63
Introduction
All Board members currently serve on the
Audit Committee. Sandra Pajarola served
on the Committee until her retirement in
June. As set out on page 50, the members
of the Committee have a range of recent and
relevant financial experience. They also have
relevant experience in the sector in which the
Company operates.
The Committee operates within written
terms of reference, which are available within
the Corporate governance section of the
Company’s website, clearly setting out its
authority and duties. The primary role of
the Committee is to review the interim and
annual financial statements, the effectiveness
and scope of the external audit, the risks
to which the Company is exposed and
mitigating controls, and compliance
with regulatory and financial reporting
requirements. The Committee also provides
advice to the Board on whether the Annual
Report and Accounts, taken as a whole,
is fair, balanced and understandable.
The Committee meets at least three times
a year. A quorum is any two of the members
of the Committee but full attendance at each
meeting is strongly encouraged.
Four meetings were held in the financial
year, and all were quorate. The Company’s
auditors, Ernst & Young LLP (‘EY’),
attended all meetings. The Committee
also has direct access to the auditors as
necessary at other times and the opportunity
to meet the auditors without the Manager
being present.
The main matters discussed at these
meetings were the annual plan of the
auditors, the report of the auditors following
their audit, the effectiveness of the audit
process and the independence of the
auditors, the review of the Company’s
internal controls, the annual and interim
financial statements and the Company’s risk
management framework and principal risks.
SIGNIFICANT JUDGEMENTS IN RELATION TO THE
FINANCIAL STATEMENTS
Valuation of the investment Portfolio
In its review of the financial statements,
the Committee considers whether the
investment Portfolio is fairly valued. The
valuation of the Portfolio is predominantly
based on third-party managers’ valuations.
Before the year end, the Committee
discussed the valuation process in detail
with the Manager and reviewed the plan
of the external auditors to ensure that it
was appropriately designed to provide
assurance over the valuation of the Portfolio.
Key responsibilities
Reviewing the interim and annual financial statements, the
effectiveness and scope of the external audit, the risks to which
the Company is exposed and mitigating controls, and compliance
with regulatory and financial reporting requirements.
Committee members
Alastair Bruce (Chair of the Committee)
Gerhard Fusenig
Adiba Ighodaro
Janine Nicholls
Jane Tufnell
David Warnock
Committee activities
Four meetings held in the financial year; all were quorate
Oversight of audit conducted by the Company’s auditors
Continued review and scrutiny of valuations
The primary role of the Committee
is to review the financial statements,
the effectiveness and scope of the
external audit, and the risks to which
the Company is exposed and the
controls that mitigate those risks.
ALASTAIR BRUCE
Chair of the Committee
REPORT OF THE AUDIT COMMITTEE
ICG Enterprise Trust Plc Annual Report and Accounts 202364
The Committee has been satisfied with
the process established by the Manager.
After the year end, the Manager reported
the results of the valuation process,
including the sources of valuation
information and the methodologies used.
The auditors separately reported the results
of their audit work to the Committee.
The Committee concluded that the valuation
process had been properly carried out
and that the investment Portfolio had been
fairly valued in accordance with IFRS, in line
with International Private Equity and Venture
Capital Valuation Guidelines.
Going concern and viability
In order to support the Board in determining
that it is appropriate to continue to adopt
the going concern basis of preparation of
the Company’s financial statements, the
Committee has challenged and assessed the
key assumptions underpinning that decision.
This included:
• an assessment of the Company’s business
activities, as set out in the Chair’s
statement on page 6 and the Manager’s
review on page 14;
• the Company’s principal risks and their
mitigants, as noted on page 43; and
• the Company’s ability to manage its
liquidity and overcommitment levels over
the period of 12 months and longer from
the date of this report, incorporating the
Company’s balance sheet and cash flow
projections provided by the Manager.
These projections included scenarios
with varying levels of Portfolio gains and
losses, fund drawdowns and realisations,
availability of the credit facility, exchange
rates, and possible remedial action that the
Company could undertake if required in the
event of significant Portfolio declines and/
or reductions in liquidity. Further details
around liquidity risk and overcommitment
risk are detailed on page 91 within the notes
to the financial statements. Accordingly,
the Committee was satisfied that the ‘going
concern’ basis of accounting remained
appropriate for the Company.
OTHER MATTERS
Auditing standards require the auditors to
identify and consider the risks of material
misstatement, including that due to fraud and
failure of internal controls. In the current year
the auditors focused on a number of key audit
matters that, in the auditors’ professional
judgement, were of most significance in the
audit of the financial statements.
Following a thorough review, and discussion
with the Manager and the auditors, the
Committee has advised the Board that the
Annual Report and Accounts for the year
ended 31 January 2023, taken as a whole, is fair,
balanced and understandable and provides
the information necessary for shareholders
to assess the Company’s position and
performance, business model and strategy.
INTERNAL CONTROLS AND NEED FOR AN
INTERNAL AUDIT FUNCTION
The Board has overall responsibility for
the Company’s systems of internal controls
and for reviewing their effectiveness.
The purpose of the controls is to ensure that
the assets of the Company are safeguarded,
proper accounting records are maintained
and the financial information used within the
business and for publication is reliable.
The Committee regularly reviews, identifies
and evaluates the risks taken by the Company
to allow them to be appropriately managed.
All of the Company’s day-to-day
management functions are delegated to
the Manager, which has its own internal
control and risk monitoring arrangements.
The Committee makes a regular assessment
of these arrangements with reference to the
Company’s risk matrix.
The Committee also received a report,
based on agreed-upon procedures,
from the Manager’s internal audit function.
In accordance with the Alternative
Investment Fund Managers Directive
(‘the Directive’), the Company has
appointed Aztec Financial Services (UK)
Limited (‘the Depositary’) as depositary.
The Depositary’s responsibilities include
the monitoring of the cash flows of the
Company, the safekeeping of the Company’s
assets, and the general oversight of the
Company including its compliance with its
investment policy. The Audit Committee
has reviewed the Depositary’s reports
for the period from 1 February 2022 to
31 January 2023, that set out the testing and
procedures carried out by the Depositary to
satisfy itself that it is fulfilling its obligations,
and that the Company was operating in
accordance with the Directive. The reports
did not identify any issues.
The Committee considers, therefore, that
an internal audit function specific to the
Company is unnecessary.
AUDIT INDEPENDENCE AND EFFECTIVENESS
EY were appointed as auditors for the
year ended 31 January 2023 at the Annual
General Meeting in June 2022. The
Company has complied with the terms
of the September 2014 Competition and
Markets Authority Order, including in
respect of audit tendering.
The Audit Committee has reviewed
the provision of non-audit services and
believes them to be cost-effective and not
an impediment to the auditors’ objectivity
and independence. Details of the total fees
paid to EY by the Company are set out in
note 4 to the financial statements. In the year
ended 31 January 2023, £39k (2021: £34k)
was payable to the auditors in respect of
non-audit services. It has been agreed that
all non-audit work to be carried out by the
external auditors must be approved in
advance by the Audit Committee, and in
line with the latest guidelines for the
provision of non-audit services by the
Company’s auditors.
The Committee reviews the performance
of the auditors each year. The Committee
considers a range of factors including the
quality of service, their expertise and the
level of audit fee.
The 2023 year-end audit was EY’s fourth
as auditors and oversight of their work
has been a key focus of the Committee
during the year. The Committee has been
pleased with the work undertaken by both
the Manager and EY. We look forward to
continuing to build on the relationship with
EY and the fresh insights that they will bring
to the Committee.
The Committee accordingly recommends that
Ernst & Young LLP be appointed auditors for
the year ending 31 January 2024.
I would be pleased to discuss the work of the
Committee with any shareholder.
Alastair Bruce
Chair of the Audit Committee
10 May 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 65
The directors are responsible for
preparing the Annual Report, the
Directors’ Remuneration Report
and the financial statements in
accordance with applicable law
and regulations.
Company law requires the directors to
prepare financial statements for each
financial year. Accordingly, the directors
have prepared the financial statements in
accordance with UK-adopted International
Accounting Standards (‘UK-IAS’) and
the Statement of Recommended Practice
(‘SORP’) for investment trusts issued by
the Association of Investment Companies
in July 2022. Company law also requires that
the directors do not approve the financial
statements unless they are satisfied that
they give a true and fair view of the state of
affairs of the Company and of the profit or
loss of the Company for the relevant period.
In preparing these financial statements, the
directors are required to:
• select suitable accounting policies
and then apply them consistently;
• make judgements and accounting
estimates that are reasonable
and prudent;
• provide additional disclosures when
compliance with the specific requirements
in IFRSs is insufficient to enable users
to understand the impact of particular
transactions, other events and conditions
on the Company financial position and
financial performance;
• state whether IFRSs have been followed,
subject to any material departures
disclosed and explained in the financial
statements; and
• prepare the financial statements on
a going concern basis unless it is
inappropriate to presume that the
Company will continue in business.
The directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Company’s
transactions and disclose with reasonable
accuracy at any time the financial position of
the Company and enable them to ensure that
the financial statements and the Directors’
Remuneration Report comply with the
Companies Act 2006 and, as regards the
Company’s financial statements, IFRSs and
the Statement of Recommended Practice
(‘SORP’) for investment trusts issued by
the Association of Investment Companies
in April 2021.
The directors are also responsible for
safeguarding the assets of the Company and
for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The directors are responsible for the
maintenance and integrity of the
Company’s website.
Legislation in the United Kingdom governing
the preparation and dissemination of
financial statements may differ from
legislation in other jurisdictions.
Having taken advice from the Audit
Committee, the directors consider that
the Annual Report, taken as a whole, is fair,
balanced and understandable and provides
the information necessary for shareholders
to assess the Company’s position and
performance, business model and strategy.
Each of the directors, whose names and
functions are listed on page 50, confirm that,
to the best of their knowledge:
• the financial statements, which have been
prepared in accordance with International
Accounting Standards in conformity with
the requirements of the Companies Act
2006, give a true and fair view of the
assets, liabilities, financial position and
profit of the Company; and
• the Strategic Report includes a fair review
of the development and performance of the
business and the position of the Company,
together with a description of the principal
risks and uncertainties that it faces.
On behalf of the Board:
Jane Tufnell
Chair
10 May 2023
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
ICG Enterprise Trust Plc Annual Report and Accounts 202366
OPINION
We have audited the financial statements of ICG Enterprise Trust plc (‘the Company’) for the year ended 31 January 2023 which comprise
the Income Statement, Balance Sheet, Cash Flow Statement, Statement of Changes in Equity, and the related notes 1 to 19, including a
summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable
law and UK-adopted international accounting standards.
In our opinion, the financial statements:
• give a true and fair view of the Company’s affairs as at 31 January 2023 and of its profit for the year then ended;
• have been properly prepared in accordance with UK-adopted international accounting standards; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
INDEPENDENCE
We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in
the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company and we remain independent of the
Company in conducting the audit.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Company’s ability to continue to adopt the going
concern basis of accounting included the following procedures:
• We made enquiries of the Audit Committee and ICG Alternative Investment Limited (‘the Manager’) to determine whether, in their opinion,
they had any knowledge of events or conditions beyond the period of the directors’ assessment that may cast significant doubt on the
Company’s ability to continue as a going concern.
• We obtained the directors’ going concern assessment, including the impact of the COVID-19 pandemic, and validated that the assessment
covers a period to 31 May 2024, which is at least 12 months from when the financial statements are authorised for issue.
• We obtained the forecasts and cash flows prepared by the Manager, underpinning the directors’ assessment of going concern.
We challenged the sensitivities and assumptions used in the forecasts, including comparing assumptions of future cash flows and
portfolio valuation movements to historical data.
• We obtained the stress testing and reverse stress testing performed by the Manager and challenged the appropriateness and severity of stresses
applied, through comparison to market and historical data. We validated the standing data used by agreeing this to supporting documentation.
• We made enquiries of the Audit Committee and the Manager to determine whether, in their opinion, there is any material uncertainty
regarding the Company’s ability to pay liabilities and commitments as they fall due over the period of twelve months from the date of
approval of the financial statements, and challenged this assessment.
• We obtained the legal agreements to validate the existence of the multi-currency revolving credit facility entered into by the Company
during the year and agreed the covenants included in the going concern assessment and supporting stress testing. We recalculated the
relevant covenants for each quarter-end in the going concern assessment period based on these key terms.
• We validated that the disclosures made in the Annual Report and Accounts regarding the Company’s ability to continue as a going
concern are consistent with our understanding of the business and with the assumptions and calculations which underpin the directors’
assessment of going concern.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ICG ENTERPRISE TRUST PLC
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 67
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period to 31 May 2024, which is at least
12 months from when the financial statements are authorised for issue.
In relation to the Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate
to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this
report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company’s ability
to continue as a going concern.
OVERVIEW OF OUR AUDIT APPROACH
Key audit matters • Risk of incorrect valuation of unquoted investments.
• Risk of inaccurate recognition of realised and unrealised gains/(losses) on unquoted investments.
Materiality • Overall materiality of £13.01m which represents 1% of net assets.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for the Company.
This enables us to form an opinion on the financial statements. We take into account size, risk profile, the organisation of the Company and
effectiveness of controls, the potential impact of climate change and changes in the business environment when assessing the level of work
to be performed. All audit work was performed directly by the audit engagement team.
Climate change
There has been increasing interest from stakeholders as to how climate change will impact companies. The Company has determined that
the impact of climate-related transition risks, driven in particular by abrupt shifts in the political and technological landscape, may impact
the value of the Company’s Portfolio, which is the aggregate of the investment portfolios of the Company and of its subsidiary limited
partnerships. This is explained on page 44 in the Principal Risks and Uncertainties section of the Strategic Report, which forms part of
the ‘Other information’, rather than the audited financial statements. Our procedures on these disclosures therefore consisted solely of
considering whether they are materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit
or otherwise appear to be materially misstated.
Our audit effort in considering climate change was focused on the adequacy of the Company’s disclosures in the financial statements as set
out in Note 1(a) and the conclusion that there is no further impact of climate change to be taken into account as the investments are valued
based on market pricing as at the year-end as required by IFRS. All investments therefore reflect the market participants view of climate
change risk on the investments held by the Company. We also challenged the directors’ considerations of climate change in their assessment
of going concern and viability and associated disclosures.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements
as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ICG ENTERPRISE TRUST PLC CONTINUED
ICG Enterprise Trust Plc Annual Report and Accounts 202368
Risk Our response to the risk
Key observations communicated
to the Audit Committee
Risk of incorrect valuation of
unquoted investments (2023:
£1,349.1m, 2022: £1,123.7m)
Refer to the Audit Committee Report
(pages 64 to 65); Accounting
policies (pages 78 to 81); and Note
10 and 17 of the Financial Statements
(page 85 to 86 and 90 to 92).
The unquoted investment portfolio
is material to the financial statements
and consists of illiquid private equity
fund investments of £158.9m (2022:
£140.1m) and direct co-investments
into private companies of £110.3m
(2022: £61.9m). The Company
also has six (2022: six) subsidiary
undertakings of £1,079.9m (2022:
£921.7m), held at fair value under
IFRS 10, which invest into the same
unquoted investments.
The valuations of unquoted
investments do not have observable
inputs that reflect quoted prices
in active markets and are therefore
subjective, increasing the likelihood
of error. The net assets of each
investment are provided to the
Company by the fund managers or
sponsors of the investee companies
and any necessary adjustments
are made by the Administrator,
for example cash flow adjustments
for drawdowns and distributions
between the date of the valuation
provided and the year-end date
of the Company. The year end
valuations are then reviewed by
the Manager and the directors.
We performed the following procedures:
We obtained an understanding of and evaluated the design
and implementation of processes and controls around the
unquoted investment valuations by performing a walkthrough.
We obtained the valuation policy applied by the Company
and validated compliance with the International Private Equity
and Venture Capital Guidelines December 2022.
For a sample of unquoted investments held by the Company,
we performed the following procedures to gain assurance
over the valuation:
• we independently obtained the most recently available
third-party valuations and agreed the valuations to the value
per the accounting records;
• where the most recently available third-party valuation was
not at the reporting date, we obtained management’s fair
value assessment at year end by reviewing the cash flow
adjustments, distributions and drawdowns, adjustments
on indirect investments by reviewing underlying quoted
adjustments using independent pricing sources on a
look through basis, and agreed these to supporting
documentation and bank statements; and
• we verified the reasonableness of all foreign exchange rates
used by comparison to an independent source.
Subsequent to the finalisation of the investment valuations,
we obtained updated capital account statements and other
financial information such as cashflow notices relevant to
the valuation of the unquoted investments received by the
Manager, to consider and ensure that no material valuation
differences arose.
We challenged the Manager’s procedures to determine whether
events and circumstances that occurred between the date of the
third-party valuations and the reporting date of the Company
had an impact on the valuation of the investment portfolio.
We reviewed the minutes of the Valuation Committee meetings
and held discussions with key personnel at the Manager to
discuss the performance of the portfolio for the year.
We performed the following procedures to gain assurance
over the reliability of the unaudited capital account statements:
• for a sample of investments where the valuation was based
on unaudited capital account statements, we assessed their
reliability by comparing the Net Asset Value (‘NAV’) per
the latest audited financial statements to the NAV per the
unaudited capital account statement as at the same date; and
• we obtained a sample of relevant underlying audited
financial statements, inspecting the GAAP applied and
accounting policies on key areas impacting the NAV and
comparing these to IFRS. We ensured that the auditor was
registered with the appropriate local accounting body and
issued an unmodified audit opinion.
The results of our
procedures are:
We identified no material
misstatements in relation to
the risk of incorrect valuation
of unquoted investments.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 69
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ICG ENTERPRISE TRUST PLC CONTINUED
Risk Our response to the risk
Key observations communicated
to the Audit Committee
Risk of inaccurate recognition of
realised (2023: £9.3m, 2022: £2.0m)
and change in unrealised (2023:
£175.7m, 2022: £237.6m) gains/
(losses) on unquoted investments
Refer to the Accounting policies
(pages 78 to 81); and Note 10 of the
Financial Statements (pages 85 to 86).
Gains or losses on investments
originate from the capital distributions
and capital gains investments during
the year. Total gains are calculated
as the difference between the
movement in cost against carrying
value during the year and the net
proceeds, after deducting cost
adjustments incidental to the sales.
There is a manual calculation
performed by the Manager for
recognising gains and losses as
realised or change in unrealised,
based on the Company’s revenue
recognition accounting policy.
There is a risk that the manual
calculations of realised and
change in unrealised gains and
losses on unquoted investments
are incorrectly calculated by the
Manager, which could lead to the
disclosures regarding the capital
element of the Income Statement
and the Statement of Changes in
Equity being materially misstated.
In addition, an incorrect recording
of realised gains and losses by the
Company could directly affect the
amount available to be paid as a
dividend to shareholders. This could
have an impact on the perceived
performance and share price of the
Company and therefore could be an
incentive to misstate the realised gains.
We performed the following procedures:
We obtained an understanding of and evaluated the design
and implementation of the processes and controls around the
recognition of realised and change in unrealised gains/(losses)
by performing a walkthrough.
To validate the inputs into the manual calculation:
• we recalculated the change in unrealised gain/(loss)
for a sample of investments based on the fair value of the
investments audited as part of our investments testing;
• we agreed a sample of purchases and sales of investments
during the year to call and distribution notices, or to
secondary sales documentation, and bank statements; and
• we agreed the carrying values used in the realised gains/
(losses) calculation for a sample of investments to
independently obtained capital account statements.
We performed a review and recalculation to confirm that the
Company’s accounting policy in relation to realised and change
in unrealised gains/(losses) on unquoted investments was
correctly applied with the Annual Report and Accounts and
we validated that the policy is in compliance with IFRS 9.
To address the risk of management override, we tested the
appropriateness of journal entries and other adjustments made
in the recording of gains/(losses) on fair value of investments.
The results of our
procedures are:
We identified no material
misstatements in relation to the risk
of inaccurate recognition of realised
and change in unrealised gains/
(losses) on unquoted investments.
ICG Enterprise Trust Plc Annual Report and Accounts 202370
OUR APPLICATION OF MATERIALITY
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit
and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the
economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our
audit procedures.
We determined materiality for the Company to be £13.01 million (2022: £11.58 million), which is 1% (2022: 1%) of net assets. We believe that
net assets provide us with materiality aligned to the key measurement of the Company’s performance.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Company’s overall control environment, our judgement was
that performance materiality was 50% (2022: 50%) of our planning materiality, namely £6.50m (2022: £5.78m). We have set performance
materiality at this percentage due to the corrected and uncorrected misstatements identified in the prior year audit, some of which were
above our Materiality. We considered that the misstatements identified imply that there is a higher likelihood of misstatement in the current
year audit, and we therefore maintained our performance materiality percentage at 50%.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £0.7m (2022: £0.6m),
which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other
relevant qualitative considerations in forming our opinion.
OTHER INFORMATION
The other information comprises the information included in the Annual Report other than the financial statements and our auditor’s report
thereon. The directors are responsible for the other information contained within the Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement
in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the
other information, we are required to report that fact.
We have nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the Directors’ report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
• the strategic report and Directors’ report have been prepared in accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if,
in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
• the financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records
and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 71
CORPORATE GOVERNANCE STATEMENT
We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance
Statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code specified for our review by the
Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements or our knowledge obtained during the audit:
• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on page 47;
• Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and why the period
is appropriate set out on page 47 ;
• Directors’ statement on whether it has a reasonable expectation that the group will be able to continue in operation and meets its liabilities
set out on page 47;
• Directors’ statement on fair, balanced and understandable set out on page 66;
• the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 40;
• the section of the Annual Report that describes the review of effectiveness of risk management and internal control systems set out on
page 52; and
• the section describing the work of the Audit Committee set out on page 64.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors’ responsibilities statement set out on page 66, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either
intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud
is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including
fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the
Company and management.
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most
significant are those that relate to the reporting framework (UK adopted international accounting standards, the Companies Act 2006,
the Listing Rules, the UK Corporate Governance Code, Section 1158 of the Corporation Tax Act 2010, The Companies (Miscellaneous
Reporting) Regulations 2018, and The Statement of Recommended Practice for the Financial Statements of Investment Trust Companies
as issues by the Association of Investment Companies).
• We understood how the Company is complying with those frameworks through discussions with members of the Manager and the
Non-Executive Directors including the Chairman of the Audit Committee, in addition to our review of board minutes, committee minutes,
and papers provided to the Audit Committee.
• We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur
by considering the key risks impacting the financial statements. We identified fraud and management override risks in relation to the
incorrect valuation of unquoted investments and inaccurate recognition of realised and change in unrealised gains/(losses) on unquoted
investments. Our audit procedures stated above in the ‘Key audit matters section’ of this auditor’s report were performed to address this
identified fraud risk.
• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures
involved review of the reporting to the directors with respect to the application of the documented policies and procedures and review of
the financial statements to ensure compliance with the reporting requirements of the Company.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at
https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ICG ENTERPRISE TRUST PLC CONTINUED
ICG Enterprise Trust Plc Annual Report and Accounts 202372
OTHER MATTERS WE ARE REQUIRED TO ADDRESS
• Following the recommendation from the Audit Committee, we were appointed by the Company on 27 June 2019 to audit the financial
statements for the year ending 31 January 2020 and subsequent financial periods. The period of total uninterrupted engagement
including previous renewals and reappointments is four years, covering the years ending 31 January 2020 to 31 January 2023.
• The audit opinion is consistent with the additional report to the Audit Committee.
USE OF OUR REPORT
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Denise Davidson
(Senior statutory auditor)
for and on behalf of Ernst & Young LLP
Statutory Auditor
London
10 May 2023
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 73
INCOME STATEMENT
Year to 31 January 2023 Year to 31 January 2022
Notes
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Investment returns
Income, gains and losses on investments 2, 10 2,224 185,201 187,425 5,501 240,030 245,531
Deposit interest 2 1 – 1 2 – 2
Other income 2 46 – 46 – – –
Foreign exchange gains and losses – 337 337 – (980) (980)
2,271 185,538 187,809 5,503 239,050 244,553
Expenses
Investment management charges 3 (1,701) (15,312) (17,013) (1,342) (12,075) (13,417)
Other expenses including finance costs 4 (2,387) (3,884) (6,271) (2,383) (2,263) (4,646)
(4,088) (19,196) (23,284) (3,725) (14,338) (18,063)
Profit/(loss) before tax (1,817) 166,342 164,525 1,778 224,712 226,490
Taxation 6 345 (345) – – – –
Profit/(loss) for the period (1,472) 165,997 164,525 1,778 224,712 226,490
Attributable to:
Equity shareholders (1,472) 165,997 164,525 1,778 224,712 226,490
Basic and diluted earnings per share 7 240.19p 329.97p
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 guidance published by the AIC. There is no Other Comprehensive Income.
All profits are from continuing operations.
The notes on pages 78 to 94 form an integral part of the financial statements.
ICG Enterprise Trust Plc Annual Report and Accounts 202374
BALANCE SHEET
Notes
31 January
2023
£’000
31 January
2022
£’000
Non-current assets
Investments held at fair value 9, 10, 17 1,349,075 1,123,747
Current assets
Cash and cash equivalents 11 20,694 41,328
Receivables 12 2,416 2,205
23,110 43,533
Current liabilities
Borrowings (65,293) –
Payables 13 (6,274) (9,303)
Net current assets/(liabilities) (48,457) 34,230
Total assets less current liabilities 1,300,619 1,157,977
Capital and reserves
Share capital 14 7,292 7,292
Capital redemption reserve 2,112 2,112
Share premium 12,936 12,936
Capital reserve 1,279,751 1,135,637
Revenue reserve (1,472) –
Total equity 1,300,619 1,157,977
Net Asset Value per Share (basic and diluted) 15 1,903.3p 1,690.1p
The notes on pages 78 to 94 form an integral part of the financial statements.
The financial statements on pages 74 to 94 were approved by the Board of Directors on 10 May 2023 and signed on its behalf by:
Jane Tufnell Alastair Bruce
Director Director
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 75
Notes
Year to
31 January
2023
£’000
Year to
31 January
2022
(restated)
£’000
Operating activities
Sale of portfolio investments 32,143 100,982
Purchase of portfolio investments (62,245) (75,125)
Cash flow to subsidiaries’ investments
1
(238,692) (247,035)
Cash flow from subsidiaries’ investments
1
228,530 244,511
Interest income received from portfolio investments 1,829 3,647
Dividend income received from portfolio investments 394 1,854
Other income received 46 2
Investment management charges paid
2
(21,218) (6,207)
Other expenses paid (1,567) (1,570)
Net cash (outflow)/inflow from operating activities (60,780) 21,059
Financing activities
Bank facility fee (1,728) (3,318)
Interest paid (1,963) (50)
Credit facility utilised 86,659 –
Credit facility repaid (21,367) –
Purchase of shares into treasury (2,016) (2,679)
Equity dividends paid 8 (19,866) (17,849)
Net cash inflow/(outflow) from financing activities 39,719 (23,896)
Net (decrease) in cash and cash equivalents (21,061) (2,837)
Cash and cash equivalents at beginning of year 11 41,328 45,143
Net (decrease) in cash and cash equivalents (21,058) (2,837)
Effect of changes in foreign exchange rates 424 (978)
Cash and cash equivalents at end of year 11 20,694 41,328
1 In the prior year financial statements, ‘Cash outflows to subsidiaries’ and ‘Cash inflows from subsidiaries’ were netted within ‘Net cash flows to subsidiary investments’ of £2,524k.
The netted items have been presented gross to display the individual inflows and outflows to provide better clarity for readers of the financial statements in line with IAS 7 with a nil
impact on the overall Cash Flow Statement.
2 Includes settlement of unbilled management fees relating to the prior year (see note 13).
The notes on pages 78 to 94 form an integral part of the financial statements.
CASH FLOW STATEMENT
ICG Enterprise Trust Plc Annual Report and Accounts 202376
Share capital
£’000
Capital
redemption
reserve
£’000
Share premium
£’000
Realised
capital
reserve
1
£’000
Unrealised
capital reserve
£’000
Revenue
reserve
£’000
Total
shareholders’
equity
£’000
Year to 31 January 2023
Opening balance at 1 February 2022 7,292 2,112 12,936 482,867 652,770 – 1,157,977
Profit for the year and total
comprehensive income – – – (10,431) 176,428 (1,473) 164,524
Capital distribution by subsidiary
2
– – – 17,500 (17,500) – –
Dividends paid or approved – – – (19,866) – – (19,866)
Purchase of shares into treasury – – – (2,016) – – (2,016)
Closing balance at 31 January 2023 7,292 2,112 12,936 468,053 811,698 (1,473) 1,300,619
Share capital
£’000
Capital
redemption
reserve
£’000
Share premium
£’000
Realised
capital
reserve
1
£’000
Unrealised
capital reserve
£’000
Revenue
reserve
£’000
Total
shareholders’
equity
£’000
Year to 31 January 2022
Opening balance at 1 February 2021 7,292 2,112 12,936 442,063 487,613 – 952,016
Profit for the year and total
comprehensive income – – – 59,554 165,158 1,778 226,490
Dividends paid or approved – – – (16,071) – (1,778) (17,849)
Purchase of shares into treasury – – – (2,679) – – (2,679)
Closing balance at 31 January 2022 7,292 2,112 12,936 482,867 652,770 – 1,157,977
1 Distributable reserves.
2 During the reporting period ICG Enterprise Trust Limited Partnership made a distribution of realised profits totalling £17.5m to the Company.
The notes on pages 78 to 94 form an integral part of the financial statements.
STATEMENT OF CHANGES IN EQUITY
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 77
NOTES TO THE FINANCIAL STATEMENTS
1 ACCOUNTING POLICIES
General information
These financial statements relate to ICG Enterprise Trust Plc (‘the Company’). ICG Enterprise Trust Plc is registered in England and Wales
and is incorporated in the United Kingdom. The Company is domiciled in the United Kingdom and its registered office is Procession House,
55 Ludgate Hill, London EC4M 7JW. The Company’s objective is to provide long-term growth by investing in private companies managed
by leading private equity managers.
(a) Basis of preparation
The financial information for the year ended 31 January 2023 has been prepared in accordance with UK-adopted International Accounting
Standards (‘UK-IAS’) and the Statement of Recommended Practice (‘SORP’) for investment trusts issued by the Association of Investment
Companies in July 2022.
UK-IAS comprises standards and interpretations approved by the International Accounting Standards Board (‘IASB’) and the IFRS
Interpretations Committee.
These financial statements have been prepared on a going concern basis and on the historical cost basis of accounting, modified for the
revaluation of certain assets at fair value. The directors have concluded that the preparation of the financial statements on a going concern
basis continues to be appropriate; the directors’ assessment is further detailed in the Report of the Directors on page 56.
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. The Company’s business activities, together with factors likely to affect its future development, performance,
position and cash flows, are set out in the Chair’s statement on page 6, and the Manager’s review on page 14.
As part of this review, the Board assessed the potential impact of principal risks and the COVID-19 pandemic on the Company’s business
activities, the Company’s cash position, the availability of the Company’s credit facility and compliance with its covenants, and the Company’s
cash flow projections.
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 until, at least, 31 May 2024, a period of more than 12 months from the signing of the financial statements. Therefore it is appropriate
to continue to adopt the going concern basis of preparation of the Company’s financial statements.
Climate change
In preparing the financial statements, the directors have considered the impact of climate change, particularly in the context of the climate
change risks identified in the Principal risks and uncertainties section of the Strategic Report, and the impact of climate change risk on the
valuation of investments.
These considerations did not have a material impact on the financial reporting judgements and estimates in the current year, nor were they
expected to have a significant impact on the Group’s going concern or viability.
Accounting policies
The principal accounting policies adopted are set out below. These policies have been applied consistently throughout the current and
prior year. In order to reflect the activities of an investment trust company, supplementary information which analyses the income statement
between items of revenue and capital nature has been presented alongside the income statement. In analysing total income between capital
and revenue returns, the directors have followed the guidance contained in the SORP as follows:
Capital gains and losses on investments sold and on investments held arising on the revaluation or disposal of investments classified as held
at fair value through profit or loss should be shown in the capital column of the income statement.
Returns on any share or debt security for a fixed amount (whether in respect of dividends, interest or otherwise) should be shown in the
revenue column of the income statement.
The Board should determine whether the indirect costs of generating capital gains should also be shown in the capital column of the income
statement. If the Board decides that this should be so, the management fee should be allocated between revenue and capital in accordance
with the Board’s expected long-term split of returns, and other expenses should be charged to capital only to the extent that a clear connection
with the maintenance or enhancement of the value of investments can be demonstrated.
The accounting policy regarding the allocation of expenses is set out in note 1(i).
In accordance with IFRS 10 (amended), the Company is deemed to be an investment entity on the basis that:
(a) it obtains funds from one or more investors for the purpose of providing investors with investment management services;
(b) it commits to its investors that its business purpose is to invest funds for both returns from capital appreciation and investment income; and
(c) it measures and evaluates the performance of substantially all of its investments on a fair value basis.
As a result, the Company’s controlled structured entities (‘subsidiaries’) are deemed to be investment entities and are included in subsidiary
investments classified as held at fair value through profit and loss.
ICG Enterprise Trust Plc Annual Report and Accounts 202378
(b) Financial assets
The Company classifies its financial assets in the following categories: at fair value through profit or loss; and at amortised cost.
The classification depends on the purpose for which the financial assets were acquired. The classification of financial assets is
determined at initial recognition.
Financial assets at fair value through profit or loss
The Company classifies its quoted and unquoted investments as financial assets at fair value through profit or loss. These assets
are measured at subsequent reporting dates at fair value and further details of the accounting policy are disclosed in note 1(c).
Financial assets at amortised cost
Financial assets at amortised cost are non-derivative financial assets which pass the contractual cash flow test and are held to receive contractual
cash flows. These are classified as current assets and measured at amortised cost using the effective interest rate method. The Company’s
financial assets at amortised cost comprise cash and cash equivalents and trade and other receivables in the balance sheet.
(c) Investments
Investments comprise fund investments and portfolio company investments held by the Company directly, together with the fair value
of the Company’s interest in controlled structured entities (see note 9) which themselves invest in fund investments and portfolio
company investments.
All investments are classified upon initial recognition as held at fair value through profit or loss (described in these financial statements as
investments held at fair value) and are measured at subsequent reporting dates at fair value. All investments are fair valued in line with IFRS 13
‘Fair Value Measurement’, using industry standard valuation guidelines such as the International Private Equity and Venture Capital (‘IPEV’)
valuation guidelines. Changes in the value of all investments held at fair value, which include returns on those investments such as dividends
and interest, are recognised in the income statement and are allocated to the revenue column or the capital column in accordance with the
SORP (see note 1(a)). More detail on certain categories of investment is set out below. Given that the subsidiaries and associates are held
at fair value and are exposed to materially similar risks as the Company, we do not expect the risks to materially differ from those disclosed
in note 17.
Unquoted investments
Fund investments and Co-investments (collectively ‘unquoted investments’) are fair valued using the net asset value of those unquoted
investments as determined by the third-party investment manager of those funds. The third-party investment manager performs periodic
valuations of the underlying investments in their funds, typically using earnings multiple or discounted cash flow methodologies to
determine enterprise value in line with IPEV Guidelines. In the absence of contrary information, these net asset valuations received from
the third-party investment managers are deemed to be appropriate by the Manager, for the purposes of the Manager’s determination of
the fair values of the unquoted investments. A robust assessment is performed by the Manager’s experienced Investment Committee to
determine the capability and track record of the investment manager. All investment managers are scrutinised by the Investment Committee
and an approval process is recorded before any new investment manager is approved and an investment made. This level of scrutiny
provides reasonable comfort that the investment manager’s valuation will be consistent with the requirement to use fair value.
Adjustments may be made to the net asset values provided or an alternative valuation method may be adopted if deemed to be more
appropriate. The most common reason for adjustments to the value provided by an underlying manager is to take account of events
occurring between the date of the manager’s valuation and the reporting date, for example, subsequent cash flows or notification
of an agreed sale.
Quoted investments
Quoted investments are held at the last traded bid price on the balance sheet date. When a purchase or sale is made under contract,
the terms of which require delivery within the timeframe of the relevant market, the contract is reflected on the trade date.
Subsidiary undertakings
The investments in the controlled structured entities (‘subsidiaries’) are recognised at fair value through profit and loss.
The valuation of the subsidiaries takes into account an accrual for the estimated value of interests in the Co-investment Incentive Scheme.
Under these arrangements, ICG (the ‘Manager’) and certain of its executives and, in respect of certain historic investments, the executives
and connected parties of Graphite Capital Management LLP (the ‘Former Manager’) (together ‘the Co-investors’), are required
to co-invest alongside the Company, for which they are entitled to a share of investment profits if certain performance hurdles are met.
These arrangements are discussed further in the Report of the Directors on page 56. At 31 January 2023, the accrual was estimated as
the theoretical value of the interests if the Portfolio had been sold at the carrying value at that date.
Associates
The Company holds an interest (including indirectly through its subsidiaries) of more than 20% in a small number of investments that may
normally be classified as subsidiaries or associates. These investments are not considered subsidiaries or associates as the Company does
not exert control or significant influence over the activities of these companies/structured entities as they are managed by other third parties.
(d) Receivables
Receivables include unamortised fees which were incurred directly in relation to the agreement of a financing facility. These fees will be
amortised over the life of the facility on a straight-line basis.
(e) Payables
Other payables are non-interest bearing and are stated at their amortised cost, which is not materially different from fair value.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 79
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
1 ACCOUNTING POLICIES CONTINUED
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less.
(g) Dividend distributions
Dividend distributions to shareholders are recognised in the period in which they are paid.
(h) Income
When it is probable that economic benefits will flow to the Company and the amount can be measured reliably, interest is recognised
on a time apportionment basis.
Dividends receivable on quoted equity shares are brought into account on the ex-dividend date. Dividends receivable on equity shares
where no ex-dividend date is applicable are brought into account when the Company’s right to receive payment is established.
UK dividend income is recorded at the amount receivable. Overseas dividend income is shown net of withholding tax. Income distributions
from funds are recognised when the right to distributions is established.
(i) Expenses
All expenses are accounted for on an accruals basis. Expenses are allocated to the revenue column in the income statement, consistent with
the SORP, with the following exceptions:
• Expenses which are incidental to the acquisition or disposal of investments (transaction costs) are allocated to the capital column.
• The Board expects the majority of long-term returns from the Portfolio to be generated from capital gains. Expenses are allocated 90% to
the capital column and 10% to the revenue column, reflecting the Company’s current and future return profile. Other expenses are allocated
to the capital column where a clear connection with the maintenance or enhancement of the value of investments can be demonstrated.
• All expenses allocated to the capital column are treated as realised capital losses (see note 1(l)).
(j) Taxation
Investment trusts which have approval as such under Section 1158 of the Corporation Tax Act 2010 are not liable for taxation on capital gains.
Tax recognised in the income statement represents the sum of current tax and deferred tax charged or credited in the year. The tax effect
of different items of expenditure is allocated between capital and revenue on the same basis as the particular item to which it relates.
Deferred tax is the tax expected to be payable or recoverable on the difference between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet
liability method.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax assets are not
recognised in respect of tax losses carried forward to future periods.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the assets are realised.
Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which
case the deferred tax is also dealt with in equity.
(k) Foreign currency translation
The functional and presentation currency of the Company is sterling, reflecting the primary economic environment in which the Company operates.
Transactions in currencies other than sterling are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance
sheet date, financial assets and liabilities denominated in foreign currencies are translated at the rates prevailing on the balance sheet date.
Gains and losses arising on the translation of investments held at fair value are included within gains and losses on investments held at fair value in
the income statement. Gains and losses arising on the translation of other financial assets and liabilities are included within foreign exchange gains
and losses in the income statement.
(l) Revenue and capital reserves
The revenue return component of total income is taken to the revenue reserve within the statement of changes in equity. The capital return
component of total income is taken to the capital reserve within the statement of changes in equity.
Gains and losses on the realisation of investments including realised exchange gains and losses and expenses of a capital nature are taken to
the realised capital reserve (see note 1(i)). Changes in the valuations of investments which are held at the year end and unrealised exchange
differences are accounted for in the unrealised capital reserve.
Net gains on the realisation of investments in the controlled structured entities (see note 9) are transferred to the Company by way of profit
distributions.
The revenue reserve is distributable by way of dividends to shareholders. The realised capital reserve is distributable by way of dividends and
share buybacks. The capital redemption reserve is not distributable and represents the nominal value of shares bought back for cancellation.
ICG Enterprise Trust Plc Annual Report and Accounts 202380
(m) Treasury shares
Shares that have been repurchased into treasury remain included in the share capital balance, unless they are cancelled.
(n) Critical estimates and assumptions
Estimates and judgements used in preparing the financial information are continually evaluated and are based on historic experience
and other factors, including expectations of future events that are believed to be reasonable. The resulting estimates will, by definition,
seldom equal the related actual results.
In preparing the financial statements, the directors have considered the impact of climate change on the key estimates within the
financial statements.
The only estimates and assumptions that have a significant risk of causing a material adjustment to the carrying values of assets and liabilities
in the next financial year relate to the valuation of unquoted investments. Unquoted investments are primarily the Company’s investments
in unlisted funds, managed by third-party investment fund managers and ICG. As such there is significant estimation in the valuation of
the unlisted fund at a point in time. Note 1(c) sets out the accounting policy for unquoted investments. The carrying amount of unquoted
investments at the year end is disclosed within note 10.
(o) Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
The chief operating decision maker who is responsible for allocating resources and assessing performance of the segments has been
identified as the Board. It is considered that the Company’s operations comprise a single operating segment.
(p) Company Restatement
The Company has restated its cash flow statement in the prior year to include the following presentational changes:
• The adjusting item in respect of ‘Net cashflows to subsidiary investments’ has been replaced with two separate line items representing
gross cashflows to and from subsidiaries.
• In order to maintain consistency, the Company has also amended the description used in Note 10 to describe investment transactions with
subsidiary undertakings.
2 INVESTMENT RETURNS
Year ended
31 January
2023
£’000
Year ended
31 January
2022
£’000
Income from investments
UK investment income – –
Overseas interest and dividends 2,224 5,501
2,224 5,501
Deposit interest on cash 1 2
Other 46 –
47 2
Total income 2,271 5,503
Analysis of income from investments
Quoted overseas – –
Unquoted 2,224 5,501
2,224 5,501
3 INVESTMENT MANAGEMENT CHARGES
Management fees paid to ICG for managing the Enterprise Trust amounted to 1.34% (2022: 1.25%) of the average net assets in the year.
This movement is due to an increase in the relative value of fee-bearing assets and commitments compared to non-fee bearing assets and
commitments together with the impact of the outstanding borrowings, increasing the value of the investments relative to net asset value.
The management fee charged for managing the Company remains at 1.4% (2022: 1.4%) of the fair value of invested assets and 0.5%
(2022: 0.5%) of outstanding commitments, in both cases excluding funds managed by Graphite Capital (the Former Manager) and ICG.
From 1 February 2023 the management fee is subject to a cap of 1.25% of net asset value. No fee is charged on cash or liquid asset balances.
The amounts charged during the year are set out below:
Year ended 31 January 2023 Year ended 31 January 2022
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Investment management charge 1,701 15,312 17,013 1,342 12,075 13,417
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 81
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
3 INVESTMENT MANAGEMENT CHARGES CONTINUED
The Company and its subsidiaries also incur management fees in respect of its investment in funds managed by members of ICG on an
arms-length basis.
Year ended
31 January
2023
£’000
Year ended
31 January
2022
£’000
ICG Strategic Equity IV 999 389
ICG Strategic Secondaries II 80 –
ICG Strategic Equity III 284 320
ICG Europe VII 126 318
ICG Europe Mid-Market 111 84
ICG Europe VIII 568 266
ICG Europe VI 43 71
ICG Recover Fund 2008B 32 31
ICG North American Private Debt II 26 –
ICG Asia Pacific III 25 38
ICG Europe V 8 20
ICG Recovery Fund 2006B – –
2,302 1,537
4 OTHER EXPENSES
The Company did not employ any staff in the year to 31 January 2023 (2022: none).
Year ended 31 January 2023 Year ended 31 January 2022
£’000 £’000 £’000 £’000
Directors’ fees (see note 5) 288 262
Fees payable to the Company’s auditors for the audit of the Company’s annual accounts 156 156
Fees payable to the Company’s auditors and its associates for other services:
– Audit of the accounts of the subsidiaries 135 122
– Audit-related assurance services 55 39
Total auditors’ remuneration
1
346 317
Administrative expenses 1,322 1,503
1,956 2,082
Bank facility costs allocated to revenue 235 252
Interest expense allocated to revenue 196 50
Expenses allocated to revenue 2,387 2,383
Bank facility costs allocated to capital 3,884 2,263
Total other expenses 6,271 4,646
1 The auditors of the Company have additionally provided £14k (2022: £13k) of non-audit related services permitted under the Financial Reporting Council’s (‘FRC’) Revised Ethical
Standards. The service related to agreed upon procedures over the Company’s carried interest scheme. These expenses have been charged to the Manager of the Company.
Included within Total other expenses above are £4.3m (2022: £2.6m) of costs related to financing and £0.1m (2022: £0.3m) of other
expenses which are non-recurring and are excluded from the Ongoing Charges as detailed in the Glossary on page 100.
Professional fees of £0.2m (2022: £0.1m) incidental to the acquisition or disposal of investments are included within gains/(losses) on
investments held at fair value.
5 DIRECTORS’ REMUNERATION AND INTERESTS
The fees paid by the Company to the directors and the directors’ interests in the share capital of the Company are shown in the Directors’
Remuneration Report on page 60. No income was received or receivable by the directors from any other subsidiary of the Company.
ICG Enterprise Trust Plc Annual Report and Accounts 202382
6 TAXATION
In both the current and prior years the tax charge was lower than the standard rate of corporation tax of 19%, principally due to the
Company’s status as an investment trust, which means that capital gains are not subject to corporation tax. The effect of this and other
items affecting the tax charge are shown in note 6(b) below.
The UK Government has announced an increase to the standard rate of corporation tax from 19% to 25% with effect from 1 April 2023.
This is not expected to have a material impact on the Company.
Year ended
31 January
2023
£’000
Year ended
31 January
2022
£’000
a) Analysis of charge in the year
Tax credit on items allocated to revenue (345) –
Tax charges on items allocated to capital 345 –
Corporation tax – –
b) Factors affecting tax charge for the year
Profit on ordinary activities before tax 164,525 226,490
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022: 19%) 31,260 43,033
Effect of:
– Net investment returns not subject to corporation tax (35,252) (45,419)
– Dividends not subject to corporation tax (75) (295)
– Current year management expenses not utilised/(utilised) 4,067 655
– Other movements in respect of subsidiary investments – 2,026
Total tax charge – –
The Company has £29.5m excess management expenses carried forward (2022: £28.7m). No deferred tax assets or liabilities (2022: nil)
have been recognised in respect of the carried forward management expenses due to the uncertainty that future taxable profit will be
generated that these losses can be offset against. For all investments the tax base is equal to the carrying amount. There was no deferred tax
expense relating to the origination and reversal of timing differences in the year (2022: nil).
7 EARNINGS PER SHARE
Year ended
31 January
2023
Year ended
31 January
2022
Revenue return per ordinary share (2.15)p 2.59p
Capital return per ordinary share 242.34p 327.38p
Earnings per ordinary share (basic and diluted) 240.19p 329.97p
Revenue return per ordinary share is calculated by dividing the revenue return attributable to equity shareholders of £(1.5)m (2022: £1.8m)
by the weighted average number of ordinary shares outstanding during the year.
Capital return per ordinary share is calculated by dividing the capital return attributable to equity shareholders of £166.0m (2022: £224.7m)
by the weighted average number of ordinary shares outstanding during the year.
Basic and diluted earnings per ordinary share are calculated by dividing the earnings attributable to equity shareholders of £164.5m (2022: £226.5m)
by the weighted average number of ordinary shares outstanding during the year.
The weighted average number of ordinary shares outstanding (excluding those held in treasury) during the year was 68,496,802
(2022: 66,638,288). There were no potentially dilutive shares, such as options or warrants, in either year.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 83
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
8 DIVIDENDS
Year ended
31 January
2023
£’000
Year ended
31 January
2022
£’000
Third quarterly dividend in respect of year ended 31 January 2022: 6p per share (2021: 5.0p) 4,111 3,438
Final dividend in respect of year ended 31 January 2022: 9p per share (2021: 9.0p) 6,167 6,189
First quarterly dividend in respect of year ended 31 January 2023: 7p per share (2022: 6.0p) 4,796 4,111
Second quarterly dividend in respect of year ended 31 January 2023: 7p per share (2022: 6.0p) 4,792 4,111
Total 19,866 17,849
The Company paid a third quarterly dividend of 7.0p per share in March 2022. The Board has proposed a final dividend of 9p per share in
respect of the year ended 31 January 2023 which, if approved by shareholders, will be paid on 21 July 2023 to shareholders on the Register
of Members at the close of business on 6 July 2023.
9 SUBSIDIARY UNDERTAKINGS AND UNCONSOLIDATED STRUCTURED ENTITIES
Subsidiary undertakings (controlled structured entities)
Subsidiaries of the Company as at 31 January 2023 comprise the following controlled structured entities, which are registered in England
and Wales. Subsidiaries of the Company’s direct subsidiaries are reported as indirect subsidiaries.
Direct subsidiaries
Ownership
interest 2023
Ownership
interest 2022
ICG Enterprise Trust Limited Partnership 97.5% 97.5%
ICG Enterprise Trust (2) Limited Partnership 97.5% 97.5%
ICG Enterprise Trust Co-investment Limited Partnership 99.0% 99.0%
Indirect subsidiaries
Ownership
interest 2023
Ownership
interest 2022
ET Holdings LP 99.5% 99.5%
ICG Morse Partnership LP 99.5% 99.5%
ICG Lewis Partnership LP 99.5% 99.5%
In accordance with IFRS 10 (amended), the subsidiaries are not consolidated and are instead included in unquoted investments at fair value.
The value of the subsidiaries is shown net of an accrual for the interests of the Co-investors (ICG and certain of its executives, and, in respect
of certain historical investments, the executives and connected parties of Graphite Capital, the Former Manager) in the Co-investment
Incentive Scheme. As at 31 January 2023, a total of £58.1m (2022: £49.2m) was accrued in respect of these interests. During the year
the Co-investors invested £1.8m (2022: £0.2m) into ICG Enterprise Trust Co-investment Limited Partnership. Payments received by the
Co-investors amounted to £8.2m or 3.3% of £252.0m Total Proceeds received in the year (2022: £9.2m or 0.3% of £342.9m proceeds
received). See the Report of the Directors on page 56 for further details of the operation of the scheme.
Unconsolidated structured entities
The Company’s principal activity is investing in private equity funds and directly into private companies. Such investments may be made and
held via a subsidiary. The majority of these investments are unconsolidated structured entities as defined in IFRS 12.
The Company holds interests in closed-ended limited partnerships which invest in underlying companies for the purposes of capital
appreciation. The Company and the other limited partners make commitments to finance the investment programme of the relevant manager,
who will typically draw down the amount committed by the limited partners over a period of four to six years (see note 16).
The table below disaggregates the Company’s interests in unconsolidated structured entities. The table presents for each category the
related balances and the maximum exposure to loss.
Total investments
Unquoted
investments
£’000
Co-investment
Incentive Scheme
Accrual
£’000
Maximum loss
exposure
£’000
As at 31 January 2023 1,404,293 (58,098) 1,346,195
As at 31 January 2022 1,171,302 (49,157) 1,122,145
The Company also holds investments of £2.9m (2022: £1.6m) that are not unconsolidated structured entities. Further details of the
Company’s investment Portfolio are included in the Other information section on page 97.
ICG Enterprise Trust Plc Annual Report and Accounts 202384
10 INVESTMENTS
The tables below analyse the movement in the carrying value of the Company’s investment assets in the year. In accordance with accounting
standards, subsidiary undertakings of the Company are reported at fair value rather than on a ‘look-through’ basis.
An investee fund is considered to generate realised gains or losses if it is more than 85% drawn and has returned at least the amount invested
by the Company. All gains and losses arising from the underlying investments of such funds are presented as realised. All gains and losses in
respect of fund investments that have not satisfied the above criteria are presented as unrealised.
Direct Investments are considered to generate realised gains or losses when they are sold.
Investments are held by both the Company and through its subsidiaries. An analysis of gains and losses on an underlying investment look-
through basis is presented on page 97 within the Other information section.
Quoted
£’000
Unquoted
£’000
Subsidiary
undertakings
£’000
Total
£’000
Cost at 1 February 2022 – 164,996 368,264 533,260
Net unrealised appreciation at 1 February 2022 – 37,013 553,474 590,487
Valuation at 1 February 2022 – 202,009 921,738 1,123,747
Movements in the year:
– Purchases – 62,245 – 62,245
– Net movement of investments with subsidiary undertakings – – 10,162 10,162
– Sales
– Capital proceeds – (32,137) – (32,137)
– Realised gains/(losses) based on carrying value at previous balance sheet date – 9,311 – 9,311
– Movement in unrealised appreciation 27,750 147,997 175,747
Valuation at 31 January 2023 – 269,178 1,079,897 1,349,075
Cost at 31 January 2023 – 195,104 378,426 573,531
Net unrealised appreciation for the year to 31 January 2023 – 74,074 701,471 775,544
Valuation at 31 January 2023 – 269,178 1,079,897 1,349,075
Quoted
£’000
Unquoted
£’000
Subsidiary
undertakings
(restated)
£’000
Total
£’000
Cost at 1 February 2021 1,410 394,393 136,393 532,196
Net unrealised appreciation at 1 February 2021 34,292 200,116 140,958 375,366
Valuation at 1 February 2021 35,702 594,509 277,351 907,562
Movements in the year:
– Transfer to subsidiary undertakings – Cost
1
– (232,126) 232,126 –
– Transfer to subsidiary undertakings – Unrealised appreciation
1
– (210,875) 210,875 –
– Purchases – 75,125 – 75,125
– Net movement of investments with subsidiary undertakings
2
– – 2,524 2,524
– Sales
– Capital proceeds (35,702) (65,280) – (100,982)
– Realised gains/(losses) based on carrying value at previous balance sheet date – 1,968 – 1,968
– Movement in unrealised appreciation – 38,687 198,862 237,550
Valuation at 31 January 2022 – 202,009 921,738 1,123,747
Cost at 31 January 2022 – 164,996 368,264 533,260
Net unrealised appreciation for the year to 31 January 2022 – 37,013 553,474 590,487
Valuation at 31 January 2022 – 202,009 921,738 1,123,747
1 On 26 February 2021, the Company finalised a new bank facility of €200m (£177m, translated at the rate prevailing on the day the facility became available for use) with Credit Suisse.
The facility was agreed to strengthen the Company’s financial position and replace the previous facility that was in place at the year end. The new facility requires at least £500m
of investments be held in a single entity in order to provide security for the facility. To meet this criteria, a new subsidiary of the Company, ET Holdings LP, was incorporated on
15 December 2020. During February and March 2021 the Company completed a number of transfers of its investments, as well as transfers of investments from the Company’s
subsidiary ICG Enterprise Trust Co-investment LP, to ET Holdings LP. In addition, during the year to 31 January 2023, ET Holdings LP entered into a number of new investments
in its own right. The fair value of investments held in ET Holdings LP as at 31 January 2023 is £837.8m.
2 In the prior year financial statements, net investment movements with subsidiary undertakings were presented as ‘Purchases’. The presentation has been updated in the prior year
to ‘Net movement of investments with subsidiary undertakings’.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 85
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
10 INVESTMENTS CONTINUED
31 January
2023
£’000
31 January
2022
£’000
Realised gains based on cost 9,311 79,908
Amounts recognised as unrealised in previous years – (77,940)
Realised gains based on carrying values at previous balance sheet date 9,311 1,968
Increase in unrealised appreciation 175,747 237,550
Gains on investments 185,058 239,518
‘Realised gains based on cost’ represents the total increase in value, compared to cost, of those funds which meet the criteria set out in page
85. These gains are adjusted for amounts previously reported as unrealised (and included within the fair value at the previous balance sheet
date) to determine the ‘Realised gains based on carrying values at previous balance sheet date’.
Gains on investments includes the ‘Realised gains based on carrying values at previous balance sheet date’ together with the net fair value
movement on the balance of the investee funds.
Related undertakings
At 31 January 2023, the Company held direct and indirect interests in six limited partnership subsidiaries. These interests, net of the
incentive accrual as described in note 9, were:
Investment
31 January
2023
%
31 January
2022
%
ICG Enterprise Trust Limited Partnership 99.9% 99.9%
ICG Enterprise Trust (2) Limited Partnership 66.5% 66.5%
ICG Enterprise Trust Co-investment Limited Partnership 66.0% 66.0%
ICG Enterprise Holdings LP 99.5% 99.5%
ICG Morse Partnership LP 99.5% 99.5%
ICG Lewis Partnership LP 99.5% 99.5%
The registered address and principal place of business of the subsidiary partnerships is Procession House, 55 Ludgate Hill, London EC4M 7JW.
In addition the Company held an interest (including indirectly through its subsidiaries) of more than 20% in the following entities.
These investments are not considered subsidiaries or associates as the Company does not exert control or have significant influence
over the activities of these companies/partnerships.
As at 31 January 2023
Investment Instrument % interest
1
Graphite Capital Partners VII Top Up Plus
3
Limited partnership interests 20.0%
Graphite Capital Partners VIII Top Up
3
Limited partnership interests 41.1%
ICG LP Secondaries Fund
4
Limited partnership interests 33.0%
As at 31 January 2022
Investment Instrument % interest
1
Cognito IQ Limited
2
Preference shares 44.0%
Cognito IQ Limited
2
Ordinary shares 34.5%
Graphite Capital Partners VII Top Up Plus
3
Limited partnership interests 20.0%
Graphite Capital Partners VIII Top Up
3
Limited partnership interests 41.1%
1 The percentage shown for limited partnership interests represents the proportion of total commitments to the relevant fund. The percentage shown for shares represents the
proportion of total shares in issue.
2 Address of principal place of business is Rivergate House, Newbury Business Park, London Road, Newbury RG14 2PZ.
3 Address of principal place of business is 7 Air Street, Soho, London W1B 5AD.
4 Address of principal place of business is Procession House, 55 Ludgate Hill, London, EC4M 7JW.
ICG Enterprise Trust Plc Annual Report and Accounts 202386
11 CASH AND CASH EQUIVALENTS
31 January
2023
£’000
31 January
2022
£’000
Cash at bank and in hand 20,694 41,328
12 RECEIVABLES
31 January
2023
£’000
31 January
2022
£’000
Prepayments and accrued income 2,416 2,205
As at 31 January 2023, prepayments and accrued income included £2.3m (2022: £2.2m) of unamortised costs in relation to the bank facility.
Of this amount £0.5m (2022: £0.7m) is expected to be amortised in less than one year.
13 PAYABLES – CURRENT
31 January
2023
£’000
31 January
2022
£’000
Accruals 6,274 9,303
Bank facility drawn 65,293 –
Payables – current 71,567 9,303
Accruals in the prior year included unbilled management fees in respect of that year which were settled in the current year.
14 SHARE CAPITAL
Equity share capital
Authorised Issued and fully paid
Number
Nominal
£’000 Number
Nominal
£’000
Balance at 31 January 2023 and 31 January 2022 120,000,000 12,000 72,913,000 7,292
All ordinary shares have a nominal value of 10.0p. At 31 January 2023 and 31 January 2022, 72,913,000 shares had been allocated, called up
and fully paid. During the year 191,480 shares were bought back in the market and held in treasury (2022: 250,000 shares). At 31 January
2023, the Company held 4,577,425 shares in treasury (2022: 4,395,945) and had 68,335,575 (2022: 68,517,055) shares outstanding,
all of which have equal voting rights.
15 NET ASSET VALUE PER SHARE
The net asset value per share is calculated on equity attributable to equity holders of £1,300.6m (2022: £1,158.0m) and on 68,335,575
(2022: 68,517,055) ordinary shares in issue at the year end. There were no potentially dilutive shares, such as options or warrants, at either
year end. Calculated on both the basic and diluted basis the net asset value per share was 1,903.3p (2022: 1,690.1p).
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 87
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
16 CAPITAL COMMITMENTS AND CONTINGENCIES
The Company and its subsidiaries had uncalled commitments in relation to the following Portfolio investments:
31 January
2023
£’000
31 January
2022
£’000
ICG Asia Pacific Fund III
2
3,159 2,895
ICG Europe VI
1
4,459 4,214
ICG Europe VII
1
6,765 10,348
ICG Europe VIII
1
28,551 30,590
ICG Europe Mid-Market Fund
1
8,536 9,909
ICG North American Private Debt Fund II
2
3,232 4,234
ICG Strategic Secondaries Fund II
2
17,041 15,613
ICG Strategic Equity Fund III
2
11,269 10,325
ICG Strategic Equity IV
2
15,943 17,369
ICG
LP
Secondaries Fund I LP 27,443 –
ICG Ludgate Hill (Feeder B) SCSp
1
14,393 13,724
ICG Ludgate Hill (Feeder) II Boston SCSp
2
8,077 5,161
ICG Ludgate Hill (Feeder) IIIA Porsche SCSp
2
1,467 –
ICG Augusta Partners Co-Investor
2
18,895 17,636
ICG Dallas Co-Investment
2
1400 1,282
ICG Colombe Co-investment
1
1,750 2,355
Commitments of less than £1,000,000 at 31 January 2023 7,178 4,809
Total ICG funds 179,558 150,464
Graphite Capital Partners IX 5,805 8,882
Graphite Capital Partners VIII
2
2,194 4,408
Graphite Capital Partners VII
1,2
907 1,554
Total Graphite funds 8,906 14,844
1 Includes interest acquired through a secondary fund purchase.
2 Includes the associated Top Up funds.
ICG Enterprise Trust Plc Annual Report and Accounts 202388
31 January
2023
£’000
31 January
2022
£’000
PAI Europe VIII 22,045 –
Advent International X 16,313 –
Green Equity Investors Side IX 16,234 –
Gridiron V 13,881 –
Bain VI 13,227 –
Permira VIII 13,227 –
CDR XII 12,175 –
Thomas H Lee Equity Fund IX 11,266 14,318
Integrum I 8,117 –
BC XI 8,050 8,626
Seventh Cinven Fund 6,421 7,566
PAI Mid-Market Fund 5,811 6,788
Bain XIII 5,743 –
CVC European Equity Partners VIII 5,589 10,078
Investindustrial VII 5,021 8,283
Leeds VII 4,770 7,033
Charlesbank X 4,711 5,733
New Mountain VI 4,517 7,272
PAI VII 4,501 10,182
European Camping Group II 4,409 –
Gridiron Capital Fund III 4,401 4,066
Hg Genesis X 4,371 –
Carlyle Europe Partners V 4,351 4,394
Bowmark Capital Partners VI 4,279 7,230
FSN VI 4,236 6,126
GI Partners VI 4,119 5,246
Thoma Bravo XV 4,109 –
Hg Saturn III 4,028 –
GHO Capital III 3,722 6,672
Bain Tech Opportunities II 3,409 –
Bregal Unternehmerkapital III 3,360 7,200
CDR XI 3,151 –
AEA VII 3,010 5,867
Ivanti 2,997 2,746
Gryphon V 2,564 –
Tailwind III 2,471 –
Thomas H Lee Equity Fund VIII 2,398 3,719
Apax X 2,351 4,390
Resolute V 2,307 7,787
Hellman Friedman X 2,275 3,382
Ambassador Theatre Group 2,196 2,087
Commitments of less than £2,000,000 at 31 January 2023 52,130 43,026
Total third party 308,262 253,303
Total commitments 496,726 418,611
The Company and its subsidiaries had no other unfunded commitments to investment funds. Commitments made by the Company and
its subsidiaries are irrevocable.
As at 31 January 2023, the Company (excluding its subsidiaries) had uncalled commitments in relation to the above Portfolio of £55.0m
(2022: £76.0m). The Company did not have any contingent liabilities at 31 January 2023 (2022: None).
The Company’s subsidiaries, which are not consolidated, had the balance of uncalled commitments in relation to the above Portfolio
of £441.7m (2022: £342.6m). The Company is responsible for financing its pro-rata share of those uncalled commitments (see note 9).
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 89
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
17 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Company is an investment company as defined by Section 833 of the Companies Act 2006 and conducts its affairs so as to qualify
as an investment trust under the provisions of Section 1158 of the Corporation Tax Act 2010 (‘Section 1158’). The Company’s objective
is to provide long-term growth by investing in private companies managed by leading private equity managers.
Investments in funds have anticipated lives of approximately 10 years. Direct Investments are made with an anticipated holding period
of between three and five years.
Financial risk management
The Company’s activities expose it to a variety of financial risks: market risk (comprising currency risk, interest rate risk and price risk),
investment risk, credit risk and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the Company’s financial performance. The Board has overall responsibility
for managing the risks and the framework for monitoring and coordinating these risks. The Audit Committee regularly reviews, identifies
and evaluates the risks taken by the Company to allow them to be appropriately managed. All of the Company’s management functions are
delegated to the Manager which has its own internal control and risk monitoring arrangements. The Committee makes a regular assessment
of these arrangements, with reference to the Company’s risk matrix. The Company’s financial risk management objectives and processes
used to manage these risks have not changed from the previous period and the policies are set out below:
Market risk
(i) Currency risk
The Company’s investments are principally in continental Europe, the US and the UK, and are primarily denominated in euro, US dollars
and sterling. There are also smaller amounts in other European currencies. The Company’s investments in controlled structured entities
are reported in Sterling. The Company is exposed to currency risk in that movements in the value of sterling against these foreign currencies
will affect the net asset value and the cash required to fund undrawn commitments. The Board regularly reviews the level of foreign currency
denominated assets and outstanding commitments in the context of current market conditions and may decide to buy or sell currency or
put in place currency hedging arrangements. No hedging arrangements were in place during the financial year.
The composition of the net assets of the Company by reporting currency at the year end is set out below:
31 January 2023
Sterling
£’000
Euro
£’000
US dollar
£’000
Other
£’000
Total
£’000
Investments 1,112,572 89,120 147,165 218 1,349,075
Cash and cash equivalents and other net current assets (65,250) 14,817 1,721 255 (48,456)
1,047,323 103,937 148,886 473 1,300,619
31 January 2022
Sterling
£’000
Euro
£’000
US dollar
£’000
Other
£’000
Total
£’000
Investments 950,837 62,743 109,985 182 1,123,747
Cash and cash equivalents and other net current assets 14,413 12,648 6,906 263 34,230
965,250 75,391 116,891 445 1,157,977
The effect of a 25% increase or decrease in the sterling value of the euro would be a fall of £28.6m and a rise of £106.0m in the value of shareholders’
equity and on profit after tax at 31 January 2023 respectively (2022: a fall of £66.1m and a rise of £46.7m based on 25% increase or decrease).
The effect of a 25% increase or decrease in the sterling value of the US dollar would be a fall of £113.7m and a rise of £191.0m in the value of
shareholders’ equity and on profit after tax at 31 January 2023 respectively (2022: a fall of £112.8m and a rise of £92.6m based on 25% movement).
These sensitivity figures are based on the currency of the location of the underlying portfolio companies’ headquarters. The percentages applied
are based on market volatility in exchange rates observed in prior periods.
(ii) Interest rate risk
The Company’s assets primarily comprise non-interest bearing investments in funds and non-interest bearing investments in portfolio
companies. The fair values of these investments are not significantly directly affected by changes in interest rates. The Company’s net debt
balance is exposed to interest rate risk; the financial impact of this risk is currently immaterial.
The Company is indirectly exposed to interest rate risk through the impact of interest rates on the performance of investments in funds and
portfolio companies as a result of interest rate changes impacting the underlying manager valuation. This performance impact as a result of
interest rate risk is recognised through the valuation of those investments, which will be affected by the impact of any change in interest rates
on the financial performance of the underlying portfolio companies and also on any valuation of those investments for sale. The Company
is not able to quantify how a change in interest rates would impact valuations.
(iii) Price risk
The risk that the value of a financial instrument will change as a result of changes to market prices is one that is fundamental to the Company’s
objective, which is to provide long-term capital growth through investment in unquoted companies. The investment Portfolio is continually
monitored to ensure an appropriate balance of risk and reward in order to achieve the Company’s objective.
ICG Enterprise Trust Plc Annual Report and Accounts 202390
The Company is exposed to the risk of change in value of its private equity investments. For all investments the market variable is deemed to be
the price itself. The table below shows the impact of a 30% increase or decrease in the valuation of the investment Portfolio. The percentages
applied are reasonable based on the Manager’s view of the potential for volatility in the Portfolio valuations under stressed conditions.
31 January 2023 31 January 2022
30% movement in the price of investments
Increase
in variable
£’000
Decrease
in variable
£’000
Increase
in variable
£’000
Decrease
in variable
£’000
Impact on profit after tax 388,422 (394,350) 319,449 (330,909)
Impact as a percentage of profit after tax 236.1% (239.7)% 141.0% (146.1)%
Impact as a percentage of shareholders’ equity 29.9% (30.3)% 27.6% (28.6)%
A reasonably possible percentage change in relation to the earnings estimates or Enterprise Value/EBITDA multiples used by the underlying
managers to value the private equity fund investments and co-investments may result in a significant change in fair value of unquoted investments.
Investment and credit risk
(i) Investment risk
Investment risk is the risk that the financial performance of the companies in which the Company invests either improves or deteriorates,
thereby affecting the value of that investment. Investments in unquoted companies whether indirectly or directly are, by their nature,
subject to potential investment losses. The investment Portfolio is highly diversified in order to mitigate this risk.
(ii) Credit risk
The Company’s exposure to credit risk arises principally from its investment in cash deposits. The Company aims to invest the majority of its
liquid portfolio in assets which have low credit risk. The Company’s policy is to limit exposure to any one investment to 15% of gross assets.
This is regularly monitored by the Manager as a part of its cash management process.
Cash is held on deposit with Royal Bank of Scotland (‘RBS’) and totalled £20.7m (2022: £41.3m).RBS currently has a credit rating of A1 from
Moody’s. This represented the maximum exposure to credit risk at the balance sheet date. No collateral is held by the Company in respect
of these amounts. None of the Company’s cash deposits or money market fund balances were past due or impaired at 31 January 2023
(2022: nil) and as a result of this, no ECL provision has been recorded.
Liquidity risk
The Company makes commitments to private equity funds in advance of that capital being invested, typically in illiquid, unquoted companies.
These commitments are in excess of the Company’s total liquidity, therefore resulting in an overcommitment. When determining the
appropriate level of overcommitment, the Board considers the rate at which commitments might be drawn down, typically over four to six
years, versus the rate at which existing investments are sold and cash realised. The Company has an established liquidity management policy,
which involves active monitoring and assessment of the Company’s liquidity position and its overcommitment risk. This is regularly reviewed
by the Board and incorporated into the Board’s assessment of the viability of the Company, as detailed on page 47 of the Strategic Report.
This process incorporates balance sheet and cash flow projections, including scenarios with varying levels of Portfolio gains and losses,
fund drawdowns and realisations, availability of the credit facility, exchange rates, and possible remedial action that the Company could
undertake if required in the event of significant Portfolio declines.
At the year end, the Company had cash and cash equivalents totalling £20.7m and had access to committed bank facilities of £167.0m
maturing in February 2026, which is a multi-currency revolving credit facility provided by Credit Suisse. The key terms of the facility are:
• Upfront cost: 100bps.
• Non-utilisation fees: 114bps per annum.
• Margin on drawn amounts: 300bps per annum.
As at 31 January 2023 the Company’s total financial liabilities amounted to £71.6m (2022: £9.3m) of payables which were due in less than
one year, which includes accrued balances payable in respect of the credit facility above.
Capital risk management
The Company’s capital is represented by its net assets, which are managed to achieve the Company’s investment objective. As at the year
end, the Company had net debt of £44.6m (2022: £nil).
The Board can manage the capital structure directly since it has taken the powers, which it is seeking to renew, to issue and buy back shares
and it also determines dividend payments. The Company is subject to externally imposed capital requirements with respect to the obligation
and ability to pay dividends by Section 1159 of the Corporation Tax Act 2010 and by the Companies Act 2006, respectively. Total equity
at 31 January 2023, the composition of which is shown on the balance sheet, was £1,300.6m (2022: £1,158.0m).
Fair values estimation
IFRS 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).
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 91
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
17 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT CONTINUED
The valuation techniques applied to level 3 assets are described in note 1(c) of the financial statements. No investments were categorised as level 2.
The Company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels at the end of the reporting year when they
are deemed to occur.
The sensitivity of the Company’s investments to a change in value is discussed on page 90.
The following table presents the assets that are measured at fair value at 31 January 2023 and 31 January 2022:
As at 31 January 2023
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Investments held at fair value
Unquoted investments – indirect – – 158,896 158,896
Unquoted investments – direct – – 110,282 110,282
Quoted investments – direct – – – –
Subsidiary undertakings – – 1,079,897 1,079,897
Total investments held at fair value – – 1,349,075 1,349,075
As at 31 January 2022
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Investments held at fair value
Unquoted investments – indirect – – 140,060 140,060
Unquoted investments – direct – – 61,949 61,949
Quoted investments – direct – – – –
Subsidiary undertakings – – 921,738 921,738
Total investments held at fair value – – 1,123,747 1,123,747
All unquoted and quoted investments are valued at fair value in accordance with IFRS 13. The Company has no quoted investments as at
31 January 2023; quoted investments held by subsidiary undertakings are reported within Level 3.
Investments in level 3 securities are in respect of private equity fund investments and co-investments. These are held at fair value and are
calculated using valuations provided by the underlying manager of the investment, with adjustments made to the statements to take account
of cash flow events occurring after the date of the manager’s valuation, such as realisations or liquidity adjustments.
The following tables present the changes in level 3 instruments for the year to 31 January 2023 and 31 January 2022.
31 January 2023
Unquoted
investments
(indirect) at fair
value through
profit or loss
£’000
Unquoted
investments
(direct) at fair
value through
profit or loss
£’000
Subsidiary
undertakings
£’000
Total
£’000
Opening balances 123,319 78,689 921,738 1,123,747
Additions 28,094 34,151 – 62,245
Disposals (27,475) (4,661) – (32,137)
Gains and losses recognised in profit or loss 34,958 2,103 158,159 195,220
Closing balance 158,896 110,282 1,079,897 1,349,075
Total gains for the year included in income statement
for assets held at the end of the reporting period 9,816 17,934 147,997 175,747
31 January 2022
Unquoted
investments
(indirect) at fair
value through
profit or loss
£’000
Unquoted
investments
(direct) at fair
value through
profit or loss
£’000
Subsidiary
undertakings
£’000
Total
£’000
Opening balances 442,696 151,813 277,351 871,860
Additions 33,479 41,647 2,524 77,649
Transfer to Subsidiary undertakings (349,295) (93,706) 443,001 –
Disposals (34,115) (31,165) – (65,280)
Gains and losses recognised in profit or loss 30,555 10,100 198,862 239,517
Closing balance 123,319 78,689 921,738 1,123,747
Total gains for the year included in income statement
for assets held at the end of the reporting period 28,587 10,100 198,862 237,549
ICG Enterprise Trust Plc Annual Report and Accounts 202392
18 RELATED PARTY TRANSACTIONS
Significant transactions between the Company and its subsidiaries are shown below:
Subsidiary Nature of transaction
Year ended
31 January
2023
£’000
Year ended
31 January
2022
£’000
ICG Enterprise Trust Limited Partnership Increase in amounts owed to subsidiaries – 5,884
(Decrease) in amounts owed by subsidiaries (17,470) –
Income allocated 10 –
ICG Enterprise Trust (2) Limited Partnership Increase in amounts owed to subsidiaries 5,776 11,318
(Decrease) in amounts owed by subsidiaries – –
Income allocated 403 740
ICG Enterprise Trust Co-investment LP Increase in amounts owed by subsidiaries 43,949 52,773
Income allocated 2,605 6,687
ICG Enterprise Holdings LP Increase in amounts owed to subsidiaries 22,904 22,820
Decrease in amounts owed by subsidiaries – –
Income allocated 6,603 9,824
ICG Morse Partnership LP Increase in amounts owed by subsidiaries 5,107 3,282
Decrease in amounts owed to subsidiaries – –
Income allocated – –
ICG Lewis Partnership LP Increase in amounts owed by subsidiaries 2,344 71
Decrease in amounts owed by subsidiaries – –
Income allocated – –
For the purpose of IAS 24 Related Party Disclosures, key management personnel comprised the Board of Directors as disclosed on page 50.
Details of remuneration are disclosed below and in further detail in the Directors’ Remuneration Report on page 60.
Remuneration in the year (audited)
Fees Expenses Total
Name
2023
£’000
2022
£’000
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Jane Tufnell 67 65 – – 67 65
Alastair Bruce 54 52 – – 54 52
Gerhard Fusenig 44 42 4 2 48 44
Adiba Ighodaro 26 – – – 26 –
Janine Nicholls 26 – – – 26 –
Sandra Pajarola 19 42 4 2 23 44
Lucinda Riches – 17 – – – 17
David Warnock 44 42 – – 44 42
Total 280 260 8 4 288 264
Amounts owed by/to subsidiaries represent the Company’s loan account balances with those entities, to which the Company’s share
of drawdowns and distributions in respect of those entities are credited and debited respectively.
Amounts owed by subsidiaries Amounts owed to subsidiaries
Subsidiary
31 January 2023
£’000
31 January 2022
£’000
31 January 2023
£’000
31 January 2022
£’000
ICG Enterprise Trust Limited Partnership – – 8,299 25,769
ICG Enterprise Trust (2) Limited Partnership – – 22,908 17,132
ICG Enterprise Trust Co-investment LP 250,742 206,792 – –
ICG Enterprise Holdings LP – – 45,725 22,820
ICG Morse Partnership LP 14,513 9,405 – –
ICG Lewis Partnership LP 6,062 3,718 – –
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 93
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
18 RELATED PARTY TRANSACTIONS CONTINUED
The Company and its subsidiaries’ total shares in funds and co-investments managed by the Company’s Manager are:
Year ended 31 January 2023 Year ended 31 January 2022
Fund/Co-investment
Original
commitment
£’000
Remaining
commitment
£’000
Fair value
investment
£’000
Original
commitment
£’000
Remaining
commitment
£’000
Fair value
investment
£’000
ICG Asia Pacific Fund III
2
12,175 3,159 8,454 11,155 2,895 8,814
ICG Europe V
1
13,359 730 603 12,845 767 1,569
ICG Europe VI
1
22,044 4,459 6,030 20,884 4,214 14,262
ICG Europe VII
1
35,270 6,765 33,425 33,414 10,348 36,073
ICG Europe VIII
1
35,270 28,551 7,227 66,828 30,590 2,712
ICG Europe Mid-Market Fund
1
17,635 8,536 11,888 16,707 9,909 7,899
ICG North American Private Debt Fund II
2
8,117 3,232 5,053 7,437 4,234 3,389
ICG Strategic Secondaries Fund II
2
28,409 17,041 10,913 26,028 15,613 8,829
ICG Strategic Equity Fund III
2
32,468 11,269 35,610 29,746 10,325 35,022
ICG Strategic Equity IV
2
32,468 15,943 22,133 59,493 17,369 15,177
ICG European Fund 2006 B
1
7,515 506 49 7,119 479 57
ICG Recovery Fund 2008 B
1
5,108 892 4,500 10,024 845 4,752
ICG
LP
Secondaries Fund I LP 48,701 27,443 30,817 – – –
ICG Ludgate Hill (Feeder B) SCSp
1
39,679 14,393 34,428 37,591 13,724 –
ICG Ludgate Hill (Feeder) II Boston SCSp
2
16,234 8,077 11,227 7,437 5,161 12,003
ICG Ludgate Hill (Feeder) III A Porsche SCSp
2
20,292 1,467 23,376 – – –
ICG Augusta Partners Co-Investor
2
20,292 18,895 15,419 18,592 17,636 12,886
ICG Cross Border
2
4,058 223 3,941 3,718 290 3,477
ICG Velocity Partners Co-Investor
2
12,175 654 99 11,155 599 159
ICG Sunrise Co-Investment
1
4,409 90 5,425 2,088 91 4,209
ICG Cheetah Co-Investment
1
6,172 714 9,990 5,847 680 8,086
ICG Dallas Co-Investment
2
8,929 1400 8583 4,090 1,282 7,102
ICG Diocle Co-Investment
1
9,623 153 109 9,117 145 14,798
ICG Colombe Co-investment
1
13,226 1750 12,922 20,756 2,355 12,051
ICG MXV Co-Investment
1
12,345 225 27,547 11,695 213 22,086
ICG Progress Co-Investment
2
8,123 594 11,721 7,437 544 9,916
ICG Trio Co-Investment
1
16,980 38 7,016 7,521 36 6,873
ICG Match Co-Investment
2
10,557 132 18,608 7,437 121 20,137
ICG Vanadium Co-Investment 13,226 259 12,968 – – –
ICG Crown Co-Investment 4,058 176 3,882 – – –
CX VIII Co-Investment 8,818 176 8,642 – – –
ICG Newton Co-Investment 12,812 393 14,175 – – –
ICG EOS Loan Fund I Ltd 1,771 – 6 – – –
ICG Topvita Co-Investment 16,165 724 3 – – –
ICG Holiday Co-Investor I 2,336 296 2,040 – – –
ICG Holiday Co-Investor II 1,723 205 1,517 – – –
Total 562,542 179,560 410,346 456,161 150,465 272,338
1 Euro denominated positions translated to sterling at spot rate on 31 January 2023 and 31 January 2022.
2 US dollar denominated positions translated to sterling at spot rate on 31 January 2023 and 31 January 2022.
At the balance sheet date the Company has fully funded its share of capital calls due to ICG-managed funds in which it is invested.
19 POST BALANCE SHEET EVENTS
There have been no material events since the balance sheet date.
ICG Enterprise Trust Plc Annual Report and Accounts 202394
1. ICG STRATEGIC EQUITIES FUND III
GP-led secondary transactions.
4. CVC EUROPEAN EQUITY PARTNERS VII
Large buyouts.
7. PAI STRATEGIC PARTNERSHIPS
2
Mid-market and large buyouts.
10. CVC EUROPEAN EQUITY PARTNERS VI
2
Large buyouts.
13. ICG STRATEGIC EQUITIES FUND IV
GP-led secondary transactions.
2. ICG LUDGATE HILL (FEEDER B) SCSP
Secondary portfolio.
5. GRIDIRON CAPITAL FUND III
Mid-market buyouts.
8. GRAPHITE CAPITAL PARTNERS VIII
1
Mid-market buyouts.
11. ICG LUDGATE HILL III
Secondary portfolio.
14. SIXTH CINVEN FUND
Large buyouts.
3. ICG EUROPE VII
Mezzanine and equity in mid-market buyouts.
6. ICG LP SECONDARIES FUND I LP
LP-led secondary transactions.
9. GRIDIRON CAPITAL FUND IV
Mid-market buyouts.
12. PAI EUROPE VII
Mid-market and large buyouts.
15. NEW MOUNTAIN PARTNERS V
Mid-market buyouts.
30 LARGEST FUND INVESTMENTS (UNAUDITED)
We have investments with 49 leading private equity managers
1 Includes the associated Top Up funds.
2 All or part of interest acquired through a secondary purchase.
Value £35.6m
Outstanding commitment £11.3m
Committed 2018
Country/region Global
Value £34.4m
Outstanding commitment £14.4m
Committed 2021
Country/region Europe/North America
Value £33.4m
Outstanding commitment £6.8m
Committed 2018
Country/region Europe
Value £32.2m
Outstanding commitment £1.8m
Committed 2017
Country/region Europe/North America
Value £31.2m
Outstanding commitment £4.4m
Committed 2016
Country/region North America
Value £30.8m
Outstanding commitment £27.4m
Committed 2022
Country/region Europe/North America
Value £27.0m
Outstanding commitment £0.5m
Committed 2019
Country/region Europe/North America
Value £26.0m
Outstanding commitment £2.2m
Committed 2013
Country/region UK
Value £24.3m
Outstanding commitment £1.4m
Committed 2019
Country/region North America
Value £23.8m
Outstanding commitment £1.9m
Committed 2013
Country/region Europe/North America
Value £23.4m
Outstanding commitment £1.8m
Committed 2022
Country/region Europe/North America
Value £23.0m
Outstanding commitment £4.5m
Committed 2017
Country/region Europe
Value £22.1m
Outstanding commitment £15.9m
Committed 2021
Country/region Global
Value £21.4m
Outstanding commitment £1.4m
Committed 2016
Country/region Europe
Value £20.6m
Outstanding commitment £1.1m
Committed 2017
Country/region North America
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 95
16. BC EUROPEAN CAPITAL IX
2
Large buyouts.
19. ADVENT GLOBAL PRIVATE EQUITY VIII
Large buyouts.
22. THOMAS H LEE EQUITY FUND VIII
Mid-market and large buyouts.
25. GRYPHON V
Mid-market buyouts.
28. TDR CAPITAL III
Mid-market and large buyouts.
1 Includes the associated Top Up funds.
2 All or part of interest acquired through a secondary purchase.
17. OAK HILL V
Mid-market buyouts.
20. ADVENT GLOBAL PRIVATE EQUITY IX
Large buyouts.
23. ICG AUGUSTA PARTNERS CO-INVESTOR
2
Secondary fund restructurings.
26. AEA VII
Mid-market buyouts.
29. SEVENTH CINVEN
Large buyouts.
18. RESOLUTE IV
Mid-market buyouts.
21. BC EUROPEAN CAPITAL X
Large buyouts.
24. RESOLUTE V
Mid-market buyouts.
27. GRAPHITE CAPITAL PARTNERS IX
Mid-market buyouts.
30. PAI EUROPE VI
Mid-market and large buyouts.
30 LARGEST FUND INVESTMENTS (UNAUDITED) CONTINUED
Value £19.3m
Outstanding commitment £0.7m
Committed 2011
Country/region Europe/North America
Value £18.7m
Outstanding commitment £1.0m
Committed 2019
Country/region North America
Value £18.3m
Outstanding commitment £1.5m
Committed 2018
Country/region North America
Value £17.3m
Outstanding commitment £0.0m
Committed 2016
Country/region Europe/North America
Value £17.2m
Outstanding commitment £1.7m
Committed 2019
Country/region Europe/North America
Value £16.6m
Outstanding commitment £1.4m
Committed 2016
Country/region Europe
Value £15.6m
Outstanding commitment £2.4m
Committed 2017
Country/region North America
Value £15.4m
Outstanding commitment £18.9m
Committed 2018
Country/region North America/Europe
Value £15.0m
Outstanding commitment £2.3m
Committed 2021
Country/region North America
Value £14.2m
Outstanding commitment £2.6m
Committed 2019
Country/region North America
Value £13.9m
Outstanding commitment £3.0m
Committed 2019
Country/region North America
Value £13.9m
Outstanding commitment £5.8m
Committed 2018
Country/region UK
Value £13.8m
Outstanding commitment £1.5m
Committed 2013
Country/region Europe
Value £13.8m
Outstanding commitment £6.4m
Committed 2019
Country/region Europe
Value £12.9m
Outstanding commitment £1.1m
Committed 2013
Country/region Europe
ICG Enterprise Trust Plc Annual Report and Accounts 202396
MOVEMENT IN THE PORTFOLIO
£m
Year ended
31 January
2023
Year ended
31 January
2022
Opening Portfolio
1
1,172.2 949.2
Total New Investment 287.2 303.7
Total Proceeds (252.0) (342.9)
Net cash outflow/(inflow) 35.2 (39.2)
Underlying valuation movement
2
122.6 279.4
Currency movement 76.4 (17.2)
Closing Portfolio
1
1,406.4 1,172.2
% underlying Portfolio growth (local currency) 10.5% 29.4%
% currency movement 6.5% (1.8)%
% underlying Portfolio growth (sterling) 17.0% 27.6%
1 Refer to the Glossary for reconciliation to the Portfolio balance presented in the unaudited results.
2 93% of the Portfolio is valued using 31 December 2022 (or later) valuations (31 January 2022: 98%).
REALISATION ACTIVITY
Investment Description Manager Country
Proceeds
£m
DOC Generici Manufacturer of generic pharmaceutical products ICG Italy 24.3
IRI
Provider of mission-critical data and predictive analytics to consumer
goods manufacturers New Mountain Capital United States 22.8
Random42 Provider of medical animation and digital media services Graphite Capital United Kingdom 5.6
proALPHA Provider of application software services ICG Germany 5.1
YSC Consulting Leadership consulting and management assessment business Graphite Capital United Kingdom 4.9
Park Holidays UK Operator of UK campsites and holiday parks ICG United Kingdom 4.9
Konecta Provider of business process outsourcing ICG Spain 4.8
The Groucho Club Operator of members’ club Graphite Capital United Kingdom 4.4
Romans Provider of residential sales & letting services Bowmark United Kingdom 4.3
Pirum Systems Provider of financial services technology Bowmark United Kingdom 4.2
Total of 10 largest underlying realisations 85.4
Other Realisation Proceeds 166.6
Fund Disposals –
Total Proceeds 252.0
INVESTMENT ACTIVITY
Investment Description Manager Country
Cost
1
£m
Precisely Provider of enterprise software Clearlake Capital United States 15.5
ECA Group Leading player in maritime autonomous systems and navigation solutions ICG France 13.0
KronosNet Provider of tech-enabled customer engagement and business solutions ICG Spain 12.5
Newton Provider of management consulting services ICG United Kingdom 12.4
Vistage CEO leadership and coaching organisation for small and midsize businesses
in the United States
ICG United States 8.6
Access Provider of business management software to mid-market companies HgCapital United Kingdom 6.4
Zips Car Wash Provider of car washing services ICG United States 4.2
Gateway Services Provider of pet aftercare and cremation services ICG Canada 3.9
Partou Operator of kindergartens in the Netherlands ICG Netherlands 3.2
Pro Alpha II Provider of application software services ICG Germany 2.9
Total of 10 largest underlying new investments 82.4
Total New Investments 287.2
1 Represents ICG Enterprise Trust’s indirect exposure (share of fund cost) plus any amounts paid for co-investments in the period.
PORTFOLIO ANALYSIS (UNAUDITED)
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 97
COMMITMENTS ANALYSIS
Outstanding commitments by fund investment period
Original
commitment
£m
Outstanding
commitment
£m
Average
drawdown
percentage
% of
commitments
Funds in investment period
771.8 367.0 52.4% 73.9%
Funds post investment period
935.0 129.7 86.1% 26.1%
Total
1,706.8 496.7 70.9% 100.0%
Movement in outstanding commitments
£m
31 January
2023
31 January
2022
Outstanding commitments at beginning of year
418.6 418.5
New Fund commitments
203.2 189.9
New commitments relating to co-investments
70.4 78.3
Drawdowns
(286.9) (303.6)
Commitments released from Fund Disposals
0.0 (9.8)
Currency and other movements
91.4 45.3
Outstanding commitments at end of year
496.7 418.6
£m
31 January
2023
31 January
2022
Outstanding commitments
497 418
Total available liquidity (including facility)
(167) (208)
Overcommitment (including facility) 330 210
Overcommitment % of Net Asset Value
25% 18%
NEW COMMITMENTS DURING THE YEAR TO 31 JANUARY 2023
Fund Manager Strategy Geography Local currency £m
ICG LP Secondaries Fund I
ICG LP-led secondary transactions Europe/North America $60.0m 45.5
ICG Ludgate Hill III
ICG Secondary portfolio Europe/North America $25.0m 20.4
PAI Europe VIII
PAI Mid-market and large buyouts Europe €25.0m 20.9
Green Equity Investors Side IX
Leonard Green & Partners Large buyouts Global $20.0m 17.2
Advent X
Advent Large buyouts Global €20.0m 16.8
Gridiron V
Gridiron Mid-market buyouts North America $20.0m 15.0
CDR XII
Clayton, Dubilier & Rice Mid-market and large buyouts North America $15.0m 13.4
Permira VIII
Permira Large buyouts Global €15.0m 12.6
Bain Capital Europe VI
Bain Capital Mid-market and large buyouts Europe €15.0m 12.6
Thoma Bravo XV
Thoma Bravo1 Mid-market and large buyouts Global $10.0m 8.0
Bain Tech Opportunities II
Bain Capital Mid-market buyouts North America $5.0m 4.1
Hg Genesis X
Hg Capital Mid-market buyouts Europe €5.0m 4.2
Hg Saturn III
Hg Capital Mid-market and large buyouts Europe $5.0m 4.0
Integrum I
Integrum Mid-market and large buyouts North America $10.0m 8.5
Total Fund commitments 203.2
Commitments relating to co-investments 70.4
Total new Commitments
273.6
PORTFOLIO ANALYSIS (UNAUDITED) CONTINUED
ICG Enterprise Trust Plc Annual Report and Accounts 202398
CURRENCY EXPOSURE
Portfolio
1
31 January
2023
%
31 January
2022
%
Sterling
46.6% 24.8%
Euro
29.3% 18.8%
US dollar
17.8% 38.4%
Other European
6.3% 18.0%
Total
100.0% 100.0%
1 Currency exposure is calculated by reference to the location of the underlying portfolio companies’ headquarters.
Outstanding commitments
31 January
2023
£m
31 January
2023
%
31 January
2022
£m
31 January
2022
%
Sterling
16.9 3.4% 28.7 6.8%
Euro
226.1 45.5% 200.4 47.9%
US dollar
253.7 51.1% 189.5 45.3%
Total
496.7 100.0% 418.6 100.0%
DIVIDEND ANALYSIS
Period ended
Revenue
return
per share
p
Ordinary
dividend
per share
p
Special
dividend
per share
p
Total
dividend
per share
p
Net
Asset Value
per Share
p
Closing
mid-market
share price
p
31 January 2023
1
(2.15) 30 – 30 1,903.3 1,150.0
31 January 2022
2.59 27.0 – 27.0 1,690.1 1,200.0
31 January 2021
2.59 24.0 – 24.0 1,384.4 966.0
31 January 2020
4.02 23.0 – 23.0 1,152.1 966.0
31 January 2019
2.69 22.0 – 22.0 1,056.5 822.0
31 January 2018
23.76 21.0 – 21.0 959.1 818.0
31 January 2017
8.13 20.0 – 20.0 871.0 698.5
31 January 2016
11.07 11.0 – 11.0 730.9 545.0
31 January 2015
12.96 10.0 5.5 15.5 695.2 575.0
31 January 2014
19.02 7. 5 8.0 15.5 677.2 563.5
31 January 2013
3.15 5.0 – 5.0 631.5 487.0
31 January 2012
6.33 5.0 – 5.0 569.4 357.0
31 January 2011
1.51 2.25 – 2.25 534.0 308.0
31 December 2009
(0.11) 2.25 – 2.25 464.1 305.0
31 December 2008
5.12 4.5 – 4.5 449.0 187.0
31 December 2007
8.86 8.0 – 8.0 519.4 474.0
31 December 2006
7.44 6.5 – 6.5 454.6 386.0
1 Includes the quarterly dividend of 7.0p paid on 4 March 2022 and the final dividend of 9p to be paid on 21 July 2023 subject to shareholder approval at the AGM.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 99
Alternative Performance Measures (‘APM’) 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 in this Glossary, where appropriate.
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 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 subsidiary partnerships of 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 arises when the Company’s shares trade at a price below
the Company’s NAV per Share. In this circumstance, the price that
an investor pays or receives for a share would be less than the value
attributable to it by reference to the underlying assets. The discount
is the difference between the share price and the NAV, expressed as
a percentage of the NAV. For example, if the NAV was 100p and the
share price was 90p, the discount would be 10%.
Drawdowns are amounts invested by the Company into funds when
called by underlying managers in respect of an existing Commitment.
EBITDA stands for earnings before interest, tax, depreciation and
amortisation, which is a widely used performance measure in the
private equity industry.
Enterprise Value (‘EV’) is the aggregate value of a company’s entire
issued share capital and Net Debt.
Exclusion List defines the business activities which are excluded
from investment.
FTSE All-Share Index Total Return is the change in the level of the
FTSE All-Share Index, assuming that dividends are re-invested on
the day that they are paid.
Full Exits are exit events (e.g. trade sale, sale by public offering or
sale to a financial buyer) following which the residual exposure to
an underlying company is zero or immaterial; this does not include
Fund Disposals. See ‘Fund Disposals’.
Fund Disposals are where the Company receives sales proceeds from
the full or partial sale of a fund position within the secondary market.
GLOSSARY (UNAUDITED)
General Partner (‘GP’) is the entity managing a private equity fund.
This is commonly referred to as the manager.
Hedging is an investment technique designed to offset a potential
loss on one investment by purchasing a second investment that is
expected to perform in the opposite way.
High Conviction Investments comprise Direct Investments, as well
as investments in ICG-managed funds and Secondary Investments.
Initial Public Offering (‘IPO’) is an offering by a company of its share
capital to the public with a view to seeking an admission of its shares
to a recognised stock exchange.
Internal Rate of Return (‘IRR’) is a measure of the rate of return
received by an investor in a fund. It is calculated from cash drawn
from and returned to the investor, together with the residual value
of the investment.
Investment Period is the period in which funds are able to make new
investments under the terms of their fund agreements, typically up
to five years after the initial Commitment.
Last Twelve Months (‘LTM’) refers to the time frame of the
immediately preceding 12 months in reference to financial metrics
used to evaluate the Company’s performance.
Limited Partner (‘LP’) is an institution or individual who commits
capital to a private equity fund established as a Limited Partnership.
These funds are generally protected from legal actions and any
losses beyond the original investment.
Limited Partnership includes one or more General Partners, who
have responsibility for managing the business of the partnership and
have unlimited liability, and one or more Limited Partners, who do
not participate in the operation of the partnership and whose liability
is ordinarily capped at their capital and loan contribution to the
partnership. In typical fund structures, the General Partner receives
a priority share ahead of distributions to Limited Partners.
Net Asset Value (‘NAV’) per Share is the value of the Company’s
net assets attributable to one ordinary share. It is calculated by
dividing shareholders’ funds by the total number of ordinary shares
in issue. Shareholders’ funds are calculated by deducting current
and long-term liabilities, and any provision for liabilities and charges,
from the Company’s total assets.
Net Asset Value (‘NAV’) per Share Total Return is the change in the
Company’s Net Asset Value per Share, assuming that dividends are
re-invested at the end of the quarter in which the dividend was paid.
Net cash/debt is calculated as net debt/(cash) divided by the NAV.
It is a measure of financial leverage. A negative percentage indicates
the Company has a net cash position.
Net Debt is calculated as the total short-term and long-term debt
in a business, less cash and cash equivalents.
Ongoing Charges are calculated in line with guidance issued by
the Association of Investment Companies (‘AIC’) and capture
management fees and expenses, excluding finance costs, incurred
at the Company level only. The calculation does not include the
expenses and management fees incurred by any underlying funds.
ICG Enterprise Trust Plc Annual Report and Accounts 2023100
31 January 2023
Total per
income
statement
£’000
Amount
excluded from
AIC Ongoing
Charges
£’000
Included
Ongoing
Charges
£’000
Management fees
17,030 – 17,030
General expenses
1,955 98 1,857
Finance costs 4,316 4,316 –
Total 23,300 4,414 18,887
Total Ongoing Charges
18,887
Average NAV
1,272,342
Ongoing Charges as % of NAV
1.48%
31 January 2022
Total per
income
statement
£’000
Amount
excluded from
AIC Ongoing
Charges
£’000
Included
Ongoing
Charges
£’000
Management fees
13,417 – 13,417
General expenses
2,082 491 1,591
Finance costs 2,565 2,565 –
Total 18,064 3,056 15,008
Total Ongoing Charges
15,008
Average NAV
1,070,494
Ongoing Charges as % of NAV
1.40%
Other Net Liabilities at the aggregated Company level represent net
other liabilities per the Company’s balance sheet. Net other liabilities
per the balance sheet of the subsidiaries are amounts payable under
the Co-investment Incentive Scheme Accrual.
Overcommitment refers to where private equity fund investors
make Commitments exceeding the amount of cash immediately
available for investment. When determining the appropriate level
of Overcommitment, careful consideration needs to be given to the
rate at which Commitments might be drawn down, and the rate at
which realisations will generate cash from the existing Portfolio to
fund new investment.
Portfolio represents the aggregate of the investment Portfolios of
the Company and of its subsidiary Limited Partnerships. This APM
is consistent with the commentary in previous annual and interim
reports. The Board and the Manager consider that disclosing
our Portfolio assists shareholders in understanding the value
and performance of the underlying investments selected by the
Manager. It is shown before the Co-investment Incentive Scheme
Accrual to avoid being distorted by certain funds and Direct
Investments on which ICG Enterprise Trust Plc does not incur these
costs (for example, on funds managed by ICG plc). Portfolio is
related to the NAV, which is the value attributed to our shareholders,
and which also incorporates the Co-investment Incentive Scheme
Accrual as well as the value of cash retained on our balance sheet.
The value of the Portfolio at 31 January 2023 is £1,406.4m
(2022: £1,172.2m).
The closest equivalent amount reported on the balance sheet
is ‘investments at fair value’. A reconciliation of these two measures
along with other figures aggregated for the Company and its
subsidiary Limited Partnerships is presented below:
31 January 2023
£m
IFRS balance
sheet fair
value
Net assets
of subsidiary
limited
partnerships
Co-investment
Incentive Scheme
Accrual
Total Company and
subsidiary Limited
Partnerships
Investments
1
1,349.1 (0.8) 58.1 1,406.4
Cash
20.7 – – 20.7
Other Net
Liabilities
(69.2) 0.8 (58.1) (126.5)
Net assets 1,300.6 – – 1,300.6
31 January 2022
£m
IFRS balance
sheet fair
value
Net assets
of subsidiary
limited
partnerships
Co-investment
Incentive Scheme
Accrual
Total Company and
subsidiary Limited
Partnerships
Investments
1
1,123.7 (0.6) 49.1 1,172.2
Cash
41.3 – – 41.3
Other Net
Liabilities
(7.1) 0.6 (49.1) (55.6)
Net assets 1,157.9 – – 1,157.9
1 Investments as reported on the IFRS balance sheet at fair value comprise the total
of assets held by the Company and the net asset value of the Company’s investments
in the subsidiary Limited Partnerships.
Portfolio Return on a Local Currency Basis represents the change
in the valuation of the Company’s Portfolio before the impact of
currency movements and Co-investment Incentive Scheme Accrual.
The Portfolio return of 10.5% is calculated as follows:
£m FY23 FY22
Income, gains and losses on investments
190.0 245.5
Foreign exchange gains and losses included
in gains and losses on investments
(76.4) 17.2
Incentive accrual valuation movement
9.0 16.7
Total gains on Portfolio investments
excluding impact of foreign exchange
122.6 279.4
Opening Portfolio valuation
1,172.2 949.2
Portfolio Return on a Local Currency Basis
10.5% 29.4%
A reconciliation between the Portfolio Return on a Local Currency Basis
and NAV per Share Total Return is disclosed under ‘Total Return’.
Portfolio Company refers to an individual company in an
investment portfolio.
Preferred Return is the preferential rate of return on an individual
investment or a portfolio of investments, which is typically 8% per annum.
Premium occurs when the share price is higher than the NAV and
investors would therefore be paying more than the value attributable
to the shares by reference to the underlying assets.
Quoted Company is any company whose shares are listed or traded
on a recognised stock exchange.
Realisation Proceeds are amounts received in respect of underlying
realisation activity from the Portfolio and exclude any inflows from the
sale of fund positions via the secondary market.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 101
Realisations – Multiple to Cost is the average return from Full
Exits from the Portfolio in the period on a primary investment basis,
weighted by cost.
£m FY23 FY22
Cumulative realisation proceeds from full exits
in the year
133.2 211.5
Cost
50.1 108.1
Average return multiple to cost
2.7x 2.6x
Realisations – Uplift to Carrying Value is the aggregate uplift
on Full Exits from the Portfolio in the period excluding publicly
listed companies that were exited via sell downs of their shares.
£m FY23 FY22
Realisation Proceeds from Full Exits in the year
133.2 210.5
Prior Carrying Value (at previous quarterly
valuation prior to exit)
107.5 154.4
Realisation – Uplift to Carrying Value
23.9% 36.3%
Secondary Investments occur when existing private equity fund
interests and Commitments are purchased from an investor
seeking liquidity.
Share Price Total Return is the change in the Company’s share
price, assuming that dividends are re-invested on the day that
they are paid.
Total New Investment is the total of direct Co-investment and fund
investment Drawdowns in respect of the Portfolio. In accordance
with IFRS 10, the Company’s subsidiaries are deemed to be
investment entities and are included in subsidiary investments
within the financial statements.
Movements in the cash flow statement within the financial statements
reconcile to the movement in the Portfolio as follows:
£m FY23 FY22
Purchase of Portfolio investments
per cash flow statement
62.2 75.1
Purchase of Portfolio investments
within subsidiary investments
225.0 228.8
Total New Investment
287.2 303.7
Total Proceeds are amounts received by the Company in respect
of the Portfolio, which may be in the form of capital proceeds or
income such as interest or dividends. In accordance with IFRS 10,
the Company’s subsidiaries are deemed to be investment entities and
are included in subsidiary investments within the financial statements.
Movements in the cash flow statement within the financial statements
reconcile to the movement in the Portfolio as follows:
£m FY23 FY22
Sale of Portfolio investments per cash flow statement
32.1 101.0
Sale of Portfolio investments, interest received and
dividends received within subsidiary investments
217.7 236.4
Interest income per cash flow statement
1.8 2.0
Dividend income per cash flow statement
0.4 1.6
Total Proceeds
252.0 342.9
Fund Disposals
– 9.4
Realisation Proceeds
252.0 333.5
GLOSSARY (UNAUDITED) CONTINUED
Total Return is a performance measure that assumes the notional
re-investment of dividends. This is a measure commonly used by
the listed private equity sector and listed companies in general.
The table below sets out the share price and the Net Asset Value
per Share growth figures for periods of one, three, five and 10 years
to the balance sheet date on a Total Return basis:
Total Return
performance
in years to
31 January 2023 1 year 3 years 5 years 10 years
Net Asset Value per Share
+14.5% +20.4% +16.9% +13.8%
Share price
-2.3% +8.5% +9.7% +11.6%
FTSE All-Share Index
+5.2% +5.0% +4.2% +6.3%
The table below shows the breakdown of the one-year Net Asset
Value per Share Total Return for the period:
Change in NAV
(% of opening NAV) FY23 FY22
Portfolio Return on a Local Currency Basis
10.5% 29.4%
Currency movements in the Portfolio
6.5% (1.8%)
Portfolio return in sterling
17.0% 27.6%
Effect of (net cash)/net debt
0.2% (0.1%)
Impact of net Portfolio movement
on Net Asset Value
17.2% 27.5%
Expenses and other income
(1.8%) (1.5%)
Co-investment Incentive Scheme Accrual
(1.2%) (1.8%)
Increase in Net Asset Value
per Share before buybacks
14.2% 24.2%
Impact of share buybacks & dividend reinvestment
0.3% 0.2%
Net Asset Value per Share Total Return
14.5% 24.4%
Undrawn Commitments are Commitments that have not yet been
drawn down (please see ‘Drawdowns’).
Unquoted Company is any company whose shares are not listed
or traded on a recognised stock exchange.
Valuation Multiples are earnings (EBITDA) or revenue multiples
applied in determining the value of a business enterprise.
Venture Capital refers to financing provided to a company in
the earlier stages of its lifecycle, either at the concept, start-up
or early stage of that company’s development.
ICG Enterprise Trust Plc Annual Report and Accounts 2023102
Address
ICG Enterprise Trust Plc
Procession House
55 Ludgate Hill
London EC4M 7JW
020 3545 2000
Registered number: 01571089
Place of registration: England
Website
www.icg-enterprise.co.uk
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
• www-uk.computershare.com/investor
• Telephone: 0370 889 4091
Columbia Threadneedle savings schemes
Investors through Columbia Threadneedle
savings schemes can contact the Investor
Services team on:
• Telephone: 0345 600 3030
• Email: investor.enquiries@
columbiathreadneedle.com
Financial calendar
The announcement and publication of
the Company’s results may normally be
expected in the months shown below:
April/May: Final results for year announced,
Annual Report and Accounts
published
June: Annual General Meeting and
first quarter’s results announced
October: Interim figures announced and
half-yearly report published
January: Third quarter’s results
announced
All announcements can be viewed on
the Company’s website (see above).
Manager
ICG Alternative Investment Limited
Procession House
55 Ludgate Hill
London EC4M 7JW
020 3545 2000
Authorised and regulated by the Financial
Conduct Authority (FRN: 606186).
Broker
Numis Securities Limited
45 Gresham Street
London EC2V 7BF
SHAREHOLDER INFORMATION
Dividend: 2022/2023
Quarterly dividends of 7.0p were paid on:
• 22 July 2022 (FY22 Final and FY23 Q1)
• 2 December 2022
• 3 March 2023
A final dividend of 9p is proposed in respect
of the year ended 31 January 2023, payable
as follows:
Ex-dividend date: 6 July 2023 (shares trade
without rights to the dividend).
Record date: 7 July 2023 (last date for
registering transfers to receive the dividend).
Dividend payment date: 21 July 2023.
2023/24 dividend payment dates
Quarterly dividends will be paid in the
following months:
• September 2023
• December 2023
• March 2024
• July 2024
Payment of dividends
Cash dividends will be sent by cheque to the
first-named shareholder at their registered
address, to arrive on the payment date.
Alternatively, dividends may be paid direct
into a shareholder’s bank account via
Bankers’ Automated Clearing Service
(‘BACS’). This can be arranged by
contacting the Company’s registrar,
Computershare Investor Services PLC
(see contact details on this page).
Share price
The Company’s mid-market ordinary share
price is published daily in the Financial Times
and Daily Telegraph under the section
‘Investment Companies’. In the Financial
Times the ordinary share price is listed in the
sub-section ‘Conventional-Private Equity’.
Registrar services
Communications with shareholders are
mailed to the address held in the share
register. Any notifications and enquiries
relating to the registered share holdings,
including a change of address or other
amendment, should be directed to
Computershare Investor Services PLC
(details on this page). For those shareholders
that hold their shares through the BMO
savings schemes, please contact the Investor
Services team (details on this page).
E-communications for shareholders
ICG Enterprise Trust Plc would like
to encourage shareholders to receive
shareholder documents electronically,
via our website or email notification instead
of hard copy format. This is a faster and
more environmentally friendly way of
receiving shareholder documents.
The online investor centre from our registrar,
Computershare, provides all of the
information required regarding your shares.
Its features include:
• The option to receive shareholder
communications electronically instead
of by post.
• Direct access to data held for you on
the share register including recent share
movements and dividend details.
• The ability to change your address or
dividend instructions online.
To receive shareholder communications
electronically in the future, including all
reports and notices of meetings, you just
need the Shareholder Reference Number
(‘SRN’) printed on your proxy form or
dividend notices, and knowledge of your
registered address. Please register your
details free at www.investorcentre.co.uk.
For those shareholders that hold their
shares through the Columbia Threadneedle
savings schemes, please contact the
Columbia Threadneedle Investor Services
team (details on this page) to register your
detail for e-communications.
ISIN/SEDOL numbers
The ISIN/SEDOL numbers and ticker for the
Company’s ordinary shares are:
ISIN: GB0003292009
SEDOL: 0329200
Reuters: ICGT.L
AIC
The Company is a member of the Association
of Investment Companies (www.theaic.co.uk).
Legal notice
‘FTSE’ is a trade mark of certain LSE Group
companies. All rights in any FTSE index or
data referred to herein vest in the relevant
LSE Group company which owns the index or
the data. Neither LSE Group nor its licensors
accept any liability for any errors or omissions
in the indexes or data and no party may rely
on any indexes or data contained in this
communication. The LSE Group does not
promote, sponsor or endorse the content
of this communication.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 103
INVESTMENT POLICY
The objective of the Company
is to provide long-term growth
by investing in private companies
managed by leading private
equity managers.
INVESTMENT TYPE
The Company will typically invest through:
• Primary Funds: commitments to private
equity funds during their initial fund raise.
• Secondary Funds: acquiring interests
in funds or investments after the fund’s
initial fund raise accessed either directly
or through a fund structure.
• Direct Investments: investing alongside
leading private equity managers, or
directly, in specific private companies.
INVESTMENT STAGE
The Company will predominantly gain
exposure to private companies which
are mature, cash generative, profitable
businesses and where the underlying private
equity manager exercises majority control.
The Company may invest in other private
markets strategies if it feels that these
opportunities would offer shareholders
similar risk-adjusted returns to its core
investment strategy. It does not expect
such investments to constitute a substantial
part of its investment programme.
PORTFOLIO CONSTRUCTION
The Company does not have any fixed
allocations to specific sectors or regions,
but aims to be broadly diversified by
geography, industry sector and year
of investment.
The Company may invest in either equity
or debt instruments but expects that
underlying investments will mostly be
in equity instruments. It expects that
the majority of its returns will be derived
from capital appreciation.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
(‘ESG’) MATTERS
The Company is committed to its responsibility
to its community and environment and
ESG matters are considered as part of the
investment process. The Company aims
to act responsibly and cautiously as the
guardian of its investors’ capital and ensures
that ESG matters are considered at all stages
of the investment cycle.
QUOTED SECURITIES
The Company may from time to time have
underlying interests in quoted companies.
This is typically due to companies which
were originally acquired as private companies
being listed on public markets as part of
an exit strategy. It may hold these interests
through a fund (where the underlying
manager is responsible for exiting the
investment) or directly.
The Company does not anticipate acquiring
new listed investments unless directly
related to the execution of its private
company investment strategy.
RISK DIVERSIFICATION
The Company will ensure that its interest
in any one portfolio company, taking into
account direct and indirect holdings, will
not exceed 15% of the Company’s total
investments at the time of initial acquisition
or subsequent addition. It is the Company’s
policy to invest no more than 10% of its gross
assets in other listed investment companies.
OVERCOMMITMENT AND USE
OF CREDIT FACILITIES
The Company intends to be overcommitted
in order to ensure a high level of investment.
The Company may from time to time draw
on its pre-agreed borrowing facilities to
fund investment drawdowns and ongoing
expenses of the Company. This allows the
Company to operate a more efficient balance
sheet by reducing the need to retain large
cash balances. The Company’s objective is
to be broadly fully invested, while ensuring
that there is 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. The level
of overcommitment is monitored regularly
by the Board and the Manager, taking into
account uninvested cash, the availability
of bank facilities, the projected timing
of cash flows to and from the Portfolio,
and market conditions.
CASH
The Company holds cash on deposit with
UK regulated banks or invests it in debt
instruments or money market funds which
themselves invest in such instruments.
These investments are typically very liquid,
with high credit quality and low capital risk.
The Company will limit exposure to any one
bank, issuer or fund to 15% of gross assets.
COMPARATOR INDEX
The Company’s comparator index is
the FTSE All-Share Index Total Return.
The Board considers that this provides
the most appropriate reference point
for the Company’s shareholders.
HEDGING
The Company holds investments and
makes fund commitments in currencies
other than sterling and is exposed to the
risk of movements in the exchange rate
of these currencies. From time to time
the Company may put in place hedging
arrangements in order to manage currency
risk. The Company may also from time to time
consider hedging certain other risks of the
Company such as equity market exposure
or interest rate risk.
ICG Enterprise Trust Plc Annual Report and Accounts 2023104
The Company is an Alternative
Investment Fund (‘AIF’) for
the purposes of the Alternative
Investment Fund Managers
Directive (Directive 2011/61/EU)
(‘AIFMD’) and the Manager
was appointed as its Alternative
Investment Fund Manager (‘AIFM’)
for the purposes of the AIFMD.
The Directive requires certain disclosures
to be made in the Annual Report of the
Company. Many of these disclosures
are included in other sections of the
Annual Report and Accounts, principally
the Strategic Report (pages 1 to 47),
Governance (pages 48 to 66) and Financial
Statements (pages 74 to 94). This section
completes the disclosures required by
the Directive.
ASSETS SUBJECT TO SPECIAL ARRANGEMENTS
The Company holds no assets subject to
special arrangements arising from their
illiquid nature which are unusual within
the context of the fund.
LEVERAGE
The Company will not employ leverage
in excess of 30% of its gross asset value.
PROFESSIONAL LIABILITY OF THE MANAGER
In accordance with the requirements of
the Directive, the Manager holds additional
capital to cover potential professional liability
risks. In addition, the Manager holds
professional indemnity insurance.
REDEMPTION RIGHTS
The shares of the Company are listed on the
London Stock Exchange.
Shareholders may buy and sell shares
on that market. As the Company is closed
ended, shareholders do not have the right
to redeem their investment.
FAIR TREATMENT OF SHAREHOLDERS
The Manager is governed by a board
consisting of both non-executive and
executive directors which oversees and
manages the ICG Group of which the
Manager is part. ICG has a number of
committees that assist in this regard,
together with a risk function that through
a risk framework assists in the identification,
control and mitigation of the ICG Group’s
risks. This includes, but is not limited to, the
fair treatment of the ICG Group’s regulatory
clients, fund investors and corporate
investors. Details of ICG’s governance and
risk framework can be found in ICG’s annual
report which is available at www.icgam.com.
RISK PROFILE AND RISK MANAGEMENT
The risks and uncertainties facing the
Company are regularly reviewed by the
Board, the Audit Committee and the
Manager. The principal risks faced by the
Company and the approach to managing
those risks are set out in Principal risks
and uncertainties (page 43).
The sensitivity of the Company to market,
credit and investment, and capital risk
is discussed in note 17 of the financial
statements. The risk limits currently in
place in respect of the diversification
of the Portfolio and credit risk are set
out in the Investment policy (page 104).
MATERIAL CHANGES
There have been no material changes in
relation to the matters described in Article
23 of the Directive.
REMUNERATION
Under the AIFMD, we are required to make
disclosures relating to remuneration of
certain employees working for the Manager,
which acted as manager of the Company
throughout the year ended 31 January 2023.
Amount of remuneration paid
The relevant disclosures are available on the
Company’s website.
Co-investment Incentive Scheme
The incentive paid by the Company during
the year ended 31 January 2023 is disclosed
in note 9 to the financial statements.
Remuneration and incentivisation policies
and practices
The overriding principle governing the
Manager’s remuneration decisions is
that awards, in particular of variable
remuneration, do not encourage risk taking
which is inconsistent with the investment
objectives (and therefore risk profiles)
of the funds managed by the Manager.
Remuneration consists of salary, bonus and
co-investment incentives.
The co-investment incentive arrangements
are intended to closely align the interests
of shareholders and the Manager – under
these arrangements, payments may only
be made when investment profits have
been realised in cash. The operation of
these arrangements is set out in the Report
of the Directors on page 56.
The Manager has a remuneration committee
which takes remuneration decisions.
The committee takes into account the
short and long-term performance of the
Manager, of the funds managed by the
Manager, and of individuals.
ADDITIONAL DISCLOSURES REQUIRED BY THE ALTERNATIVE
INVESTMENT FUND MANAGERS DIRECTIVE (UNAUDITED)
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION
ICG Enterprise Trust Plc Annual Report and Accounts 2023 105
ICG Enterprise Trust Plc is listed on the
London Stock Exchange. A straightforward
way for individuals to purchase and hold
shares in the Company is to contact a
stockbroker, savings plan provider or online
investment platform.
You may be able to find a stockbroker
using the website of the independent
Wealth Management Association (‘WMA’)
at www.pimfa.co.uk.
You may also be able to purchase shares
via your bank account provider.
For a fee, your chosen intermediary
can purchase shares in the Company
on your behalf.
Columbia Threadneedle savings schemes
Investors through Columbia Threadneedle
savings schemes can contact the Investor
Services team on:
• Telephone: 0345 600 3030
• Email: investor.enquiries@
columbiathreadneedle.com
HOW TO INVEST IN ICG ENTERPRISE TRUST PLC
ISA status
The Company’s shares are eligible for
tax-efficient wrappers such as Individual
Savings Accounts (‘ISAs’), Junior ISAs and
Self Invested Personal Pensions (‘SIPPs’).
Information about ISAs and SIPPs, as well
as general advice on saving and investing,
can be found on the government’s free
and independent service at
www.moneyhelper.org.uk.
As with any investment into a company
listed on the stock market, you should
remember that:
• the value of your investment and the
income you get from it can fall as well as
rise, so you may not get back the amount
you invested; and
• past performance is no guarantee of future
performance.
This is a medium to long-term investment so
you should be prepared to invest your money
for at least five years.
If you are uncertain about any aspect of
your decision to invest, you should consider
seeking independent financial advice.
Details of the Company’s website and
contact information for potential and
existing shareholders can be found
in the Shareholder information section
on page 103.
ICG Enterprise Trust Plc Annual Report and Accounts 2023106
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ICG ENTERPRISE TRUST PLC
Procession House
55 Ludgate Hill
London
EC4M 7JW
icg-enterprise.co.uk
ICG ENTERPRISE TRUST PLC Annual Report and Accounts 2023