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In our note, Investing in resilience, delivering growth (21 May 2025), we examined ICGT’s FY’25 results (to January), noting the operating companies’ continued strength (average 15% LTM EBITDA growth and margins widened by ca.4%). This should help allay any concerns over the challenging environment. New investment is rising YoY, and realisation activity continued with an average 19% uplift to carrying values on exit. A degree of short-term volatility is to be expected, and the five- and 10-year total annualised NAV p/sh. return (both ca.14%) are a good reflection of what investors are getting from ICGT’s defensive growth strategy. ICGT has a balanced capital return policy.

  • FY’25 numbers: ICGT’s constant-currency portfolio return was 10.2%, and the NAV per share total return 10.5%. A narrowing discount saw a share price return of 12.5%. Investee companies saw EBITDA growth of 15.3% and their leverage fell. New investments totalled £181m and realisation proceeds were £151m.
  • Long-term: On a five-year view, ICGT’s constant-currency CAGR portfolio return was 15.8%, and the NAV p/sh. total return 14.5%. The return consistency generates compounding benefits. The shareholder return is 9.6% (wider discount) and ICGT is one of ca.10% ITs that are “ISA-millionaire” investments.
  • Valuation: ICGT’s NAV valuations are conservative (regular realisation uplifts). The ratings are undemanding, and the ongoing carry value against cost is modest. The 40% 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 3.1%.
  • 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 liquidity of the underlying assets. It seems anomalous, in our view, to have a consistent record of outperformance and to trade at a 40% discount to NAV.
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