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We reviewed ICGT’s 1HFY’26 results to July in our note, Mid-teens EBITDA growth and long-term returns. The key takeaway was the continued strength of the operating companies (on average, 15% LTM EBITDA growth). Margins have widened by ca.5%, which should help allay some concerns over the impact of the challenging environment. New investment is forecast to accelerate, and realisation proceeds already exceed FY’25, with an average 14% uplift to carrying values on exit. Some short-term volatility is to be expected, and 1HFY’26 returns were below long-run averages, but the exit and investment outlooks are encouraging. 2Q was well ahead of 1Q. ICGT’s capital return policy is balanced.

  • 1HFY’26 numbers: ICGT’s constant-currency portfolio return was 2.1%, and the NAV p/sh. total return -0.7%. A narrowing discount saw a share price return of 12.6%. Investee company LTM EBITDA growth was 15.2%. New investments totalled £113m and realisation proceeds were £222m, already above FY’25.
  • Long term: Over five years, ICGT’s constant-currency CAGR portfolio return was 17.4%, and the NAV p/sh. total return 14.5%. The return consistency generates compounding benefits. Shareholder return was 16.5% (narrower discount) and ICGT is one of ca.10% of 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 22% discount to NAV is anomalous, we believe, with defensive, market-beating returns, and is above the levels seen pre COVID-19. The 2026E yield is 2.4%.
  • 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 22% discount to NAV.
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