ENTERPRISE TRUST ICG ENTERPRISE TRUST PLC TRUST ENTERPRISE ICG Annual Report and Accounts 2018 and Accounts Annual Report ICG ENTERPRISE TRUST PLC Annual Report and Accounts 2018 ICG enterprise trust We invest in profitable cash generative unquoted companies primarily in Europe and the US. We do this by investing in companies managed by ICG and other leading private equity managers, directly and through funds. 01 02 04 Strategic report Governance Supplementary Information 2 At a glance 34 Board of Directors 78 Commitments analysis 4 Chairman’s statement 36 Corporate governance report 79 Currency exposure 6 A strong track record 39 Report of the Directors 79 Dividend analysis 8 Our approach 42 Investment policy 80 Portfolio analysis 10 How we create value 43 Directors’ Remuneration Report 80 Realisation activity 12 Manager’s review 46 Report of the Audit Committee 80 Investment activity 20 Market review 48 Additional disclosures required by 81 Glossary 22 The 30 largest underlying companies the Alternative Investment Fund 23 The 30 largest fund investments Managers Directive 24 ICG Enterprise Trust team 49 Statement of Directors’ 27 Corporate social responsibility Responsibilities 05 28 How private equity creates value Shareholder Information 30 Principal risks and uncertainties 85 The Annual General Meeting 03 86 Notice of meeting 87 Notice of meeting: explanatory notes Financial statements 89 Useful information 51 Independent auditors’ report to the 90 How to invest in ICG Enterprise members of ICG Enterprise Trust plc 57 Income statement 58 Balance sheet 59 Cash flow statement 60 Statement of changes in equity 61 Notes to the financial statements icg-enterprise.co.uk To view and download our Annual Report online Delivering consistently strong returns through a flexible mandate and highly selective approach that strikes the right Balance between concentration and diversification, risk and reward Highlights of the year 959P +12.5%1 +20.1%1 NAV PER SHARE NAV PER SHARE Share price total return total return (31 January 2017: 871p) (31 January 2017: 23.4%) (31 January 2017: 31.6%) 21P +16.4%1 +40%1 Dividend Portfolio return Realisation uplift on a constant to previous currency basis carrying value (31 January 2017: 20p) (31 January 2017: 21.8%) (31 January 2017: 24%) Chairman’s Manager’s statement review page 4 page 12 1 This is an Alternative Performance Measure (“APM”). APMs have been used 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 and its previously reported results. The Glossary includes further details of APMs and reconciliations to IFRS measures, where appropriate. Throughout this report, all share price and NAV per share performance figures are stated on a total return basis (i.e. including the impact of reinvested dividends). 1 ICG ENTERPRISE TRUST Annual Report and Accounts 2018 At a glance We combine our proven strategy and balanced approach with the strength of ICG’s global platform The Company Our unique approach A leading listed private equity investor. ICG Enterprise is unique in the Providing shareholders with access to a portfolio of listed private equity sector in combining investments in profitable cash generative unquoted in-house directly managed investments companies, primarily in Europe and the US. with those managed by third parties, We invest directly and through funds with a flexible mandate both directly and through funds. that enables us to both enhance returns and manage risk, optimising the portfolio mix and capital deployment. Proven strategy Focused on strong and consistent returns ICG Enterprise Trust listed on the London Stock Exchange by investing in profitable cash in 1981, raising £23m. It has since grown its net assets generative companies, primarily to £664m, generating significant value for shareholders in Europe and the US. through multiple cycles. Flexible 1 investment mandate enables us to both 37 £664m enhance returns and manage risk. YEAR Track RECORD NET ASSETS 38x £217m return on original returned to shareholders capital raised since listing Selective investment driving consistently strong returns, while limiting downside risk. Data as at 31 January 2018. 1 31 January 2017: £613m. 2 ICG ENTERPRISE TRUST Annual Report and Accounts 2018 Strategic report Governance Financial statements Supplementary Information Shareholder Information Read more: Private equity funds’ team 24 Our approach 8 The Manager ICG Enterprise benefits from Specialist asset manager in private debt, access to the proprietary deal credit and equity. flow of investments from ICG’s A leading specialist manager with €27bn of assets network and its expertise and under management across 16 strategies. insights gained from 29 years ICG invests across the capital structure, with an objective of investing in private markets. of generating income and consistently high returns while protecting against investment downside. It combines flexible capital solutions, local access and insights and an entrepreneurial approach to give it a competitive edge in its markets. Expertise a Global network and long track record of lending to and investing in private equity ICG has offices in: backed businesses. • London • Stockholm • Hong Kong • New York • Frankfurt • San Francisco • Paris • Luxembourg • Singapore • Madrid • Warsaw • Sydney • Amsterdam • Tokyo Access to proprietary deal flow from the wider ICG network and through 29 €27bn relationships across the private Year track record Assets under management equity asset class. 13 >290 Countries Employees Insights into private equity managers and companies through local Data as at 31 December 2017. investment teams across the globe. 3 ICG ENTERPRISE TRUST Annual Report and Accounts 2018 Chairman’s statement ANOTHER YEAR OF EXCELLENT PROGRESS AND strong RETURNS Highly selective and balanced approach continuing to drive significant shareholder value A record period of realisations at significant uplifts to carrying value and continued strong portfolio company operating performance have again driven returns that have outperformed the wider market, with NAV per share increasing from 871p to 959p, a 12.5% total return1 in the year. These results and the underlying progress of our Portfolio 2 are driven by the highly selective and balanced approach taken by our investment team. With a focus on consistent and strong returns, the team has, over many years, delivered significant growth, while limiting downside risk. In an environment where volatility is rising and pricing for new investments is high, our flexible mandate allows us to strike the right I am very pleased to report another balance between risk and reward; adjusting year of excellent progress and the mix of investments to where the team sees the best relative value and increasing strong returns, further extending exposure to companies that the team the Company’s track record of believes will outperform, through the cycle. consistently strong growth over This approach and our flexible mandate multiple cycles. is unique among listed private equity funds and we believe will continue to drive better returns than public markets. Leveraging the strengths of ICG’s global platform ICG is a leading alternative asset manager, a specialist investor in private credit, debt and equity with €27bn of assets under management and a strong track record spanning 29 years. Performance to 31 January 2018† 1 year 3 years 5 years 10 years† The strategic benefits of our move to ICG two years ago are gaining momentum. Net asset value per share 12.5% 48.0% 67.8% 113.0% Not only do insights on the marketplace Share price 20.1% 55.1% 89.7% 107.3% and private equity managers help inform FTSE All-Share Index 11.3% 27.4% 50.3% 80.9% investment decisions, but we are also seeing significant tangible benefits of All figures are on a total return basis the move, in particular, an increase in † As the Company changed its year end in 2010, the ten year figures are for the 121 month period proprietary deal flow of highly attractive to 31 January 2018. investments. We have become more diversified geographically, with the US 4 ICG ENTERPRISE TRUST Annual Report and Accounts 2018 Strategic report Governance Financial statements Supplementary Information Shareholder Information Read more: Board of Directors 34 I AM CONFIDENT THAT the Company Corporate governance report 36 WILL CONTINUE TO DELIVER LONG TERM GROWTH AHEAD OF PUBLIC Markets now representing 22% of the Portfolio. At has been deployed (31 January 2017: Annual General Meeting the same time there has been more capital £128m), and we ended the year with cash The Annual General Meeting will be held deployed into the high conviction portfolio balances of £78m (31 January 2017: £39m), at The Wren Suite, The Crypt, St Paul’s (co-investments, ICG managed funds and or 12% of net assets. Cathedral, St Paul’s Churchyard, London, secondary fund investments), which we EC4M 8AD on 18 June 2018 at 3.00pm. Nine primary commitments were made expect to produce the best returns. We There will be a presentation by the during the 12 months and uncalled have set more precise targets for how and Company’s investment team and an commitments stood at £321m at the year where the Portfolio is invested and over opportunity for shareholders to meet the end (31 January 2017: £300m). While the the next five years expect exposure to the investment team and the Board. I encourage Company has an undrawn £104m working US to represent 30% – 40% of the Portfolio you to attend. capital borrowing line in place (31 January and the weighting to high conviction 2017: £103m), we anticipate that these investments to increase to 50% – 60%. Current market environment uncalled commitments will be met from plays to the strengths of I am delighted with the significant progress cash resources and proceeds from future our balanced approach and we have made in a short period of time and realisations.