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ICGT’s results to April 2022 reported “NAV per Share of 1,761p (31 January 2022: 1,690p), NAV per Share Total Return of 4.5% during the quarter; 27.9% during the last twelve months. Portfolio Return on a Local Currency Basis during the quarter of 2.0% (Sterling return: 5.2%); 30.2% during the last twelve months. Portfolio valued at £1,244m on 30 April 2022. Disciplined transaction activity: new Investments of £59.1m and Realisation Proceeds of £48.8m during the quarter, including 17 Full Exits executed at an average of 23% Uplift to Carrying Value and 2.7x Multiple to Cost. First quarter dividend of 7p per share. Revolving Credit Facility increased to €240m in May, and maturity extended to February 2026”.

  • Outlook comment: “Looking ahead, we believe ICGT’s focus on investing in companies with defensive growth characteristics through our actively managed portfolio positions us well to generate long-term value. We are invested in high quality companies that we expect to show resilient operational and financial performance across economic cycles, and our Portfolio offers diversified exposure across vintages, sectors and countries”.
  • New direct investments: On 29 June, ICGT announced an additional $20m investment in Precisely (at 30 April, already 0.8% of portfolio), €15m in ECA Group and a direct co-investment of approximately $25m in Project Ludgate Hill III.
  • Valuation: NAV valuations are conservative (uplifts on realisations averaging 35% long term). The ratings are undemanding, and the carry value against cost modest. The 43% discount to NAV is anomalous, we believe, with defensive market-beating returns, and is greater than the pre-COVID-19 levels. The yield is 2.0%.
  • Risks: PE’s post-expense returns are consistently market-beating, but this is an above-average cost model. Even though actual experience has been of continued NAV outperformance in economic downturns, sentiment is likely to be adverse. We believe ICGT’s permanent capital structure is right for unquoted and illiquid assets.
  • Investment summary: ICGT consistently generates superior returns, by adding value in an attractive market. ICGT’s focus on identifying companies with defensive characteristics means it is well-positioned to deliver resilient growth. It leverages ICG family synergies. Valuations/governance appear conservative. Risks are primarily sentiment-driven on costs and cyclicality, as well as the underlying assets’ liquidity. It seems anomalous that a business with a consistent record of outperformance is trading at a 43% discount to (April 2022) NAV.
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