×

In our note, Unique approach to capital allocation, we examined how shareholders benefit from ICGT’s unique approach to capital allocation. In previous notes, we have highlighted how ICGT’s defensive growth strategy, in practice, differentiates itself from peers (see Appendix 1 of the note) and the capital allocation policy is also a differentiator. ICGT’s approach rewards investors with immediate income through a progressive dividend, long-term compounding capital growth through new PE investments, ongoing NAV accretion through a long-term buyback programme and further NAV accretion with an opportunistic buyback programme when the discount is high.

  • ICG report showing strength of private companies: ICGT’s insights page hosts a review of private companies, noting EBITDA growth in Europe and the UK has bucked the trend of relatively weak economic growth in 2024. Sector mix and company selection have played a key role in the continued outperformance,
  • Seminar on ICG Strategic Equity A recording of the 5 March seminar is available by following the link here and slides here. The 20-minute session gave an overview of the secondary strategy, why ICG has confidence in its growth and why it is well positioned to capture this growth.
  • Valuation: ICGT’s NAV valuations are conservative (regular realisation uplifts). The ratings are undemanding, and the ongoing carry value against cost is modest. The 36% discount to NAV is anomalous, we believe, with defensive, market-beating returns, and is above the levels seen pre COVID-19. The 2025E yield is 2.8%.
  • 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 has consistently generated superior returns, by adding value in an attractive market, having a strategic focus on defensive growth and exploiting ICG synergies. Valuations appear conservative, and governance is strong. ICGT focuses on delivering resilient, risk-adjusted returns. The risks are primarily sentiment-driven on costs and cyclicality, and on the underlying assets’ liquidity. It seems anomalous, in our view, to have a consistent record of outperformance and to trade at a 36% discount to NAV.
Download the full report

Request a meeting

If you'd like to be introduced to the team at ICG Enterprise Trust, get in touch.

Request a meeting
Download the full report