ICG Enterprise Trust Annual Report 2019

FY2019 Annual Report · ICG Enterprise Trust

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ENTERPRISE TRUST

A leading listed private equity investor
Generating long term growth for shareholders

ICG ENTERPRISE TRUST PLC
Annual Report and Accounts 2019

ICG enterprise trust

Highlights of the year

We focus on delivering consistently strong
returns through investing in profitable
private 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.

A flexible mandate and highly selective
approach allow us to strike the right balance
between concentration and diversification,
risk and reward.

1,057P

NAV PER SHARE
(31 January 2018: 959p)

22P

Dividend
(31 January 2018: 21p)

+12.4%1

NAV PER SHARE
total return
(31 January 2018: 12.5%)

+3.0%1

Share price
total return
(31 January 2018: 20.1%)

+15.0%1

Portfolio return
on a local
currency basis
(31 January 2018: 16.4%)

+35.0%1

Realisation uplift
to previous
carrying value
(31 January 2018: 40%)

Strategic report

Governance

Supplementary Information

At a glance

Investing in private equity

2
4 Chairman’s statement
6
8 Our approach
10 How we create value
12 A strong track record
14 Key performance indicators
16 Manager’s review
24 Market review
26 30 largest underlying companies
30
ICG Enterprise Trust Team
32 Corporate social responsibility
34 Principal risks and uncertainties

40 Board of Directors
42 Corporate governance report
45 Report of the Directors
48
Investment policy
49 Directors’ Remuneration Report
52 Report of the Audit Committee
54 Additional disclosures required

by the Alternative Investment Fund
Managers Directive
55 Statement of Directors’

responsibilities

Financial statements

Independent auditors’ report to the
members of ICG Enterprise Trust plc
Income statement

63
64 Balance sheet
65 Cash flow statement
66 Statement of changes in equity
67 Notes to the financial statements

icg-enterprise.co.uk
To view and download our Annual Report online

86 The 30 largest fund investments
88 Private equity explained
90 Portfolio analysis
90 Realisation activity
90
Investment activity
91 Commitments analysis
92 Currency exposure
92 Dividend analysis
93 Glossary

Shareholder Information

97 The Annual General Meeting
98 Notice of meeting
99 Notice of meeting: explanatory notes
101 Useful information
102 How to invest in ICG Enterprise

Our continued strong performance
reflects the high quality of the Portfolio
and the benefits of our highly selective
investment approach and focus on
defensive growth companies.

Jeremy Tigue, Chairman

FOCUSED
FLEXIBLE
SELECTIVE

This is an Alternative Performance Measure (“APM”)
We assess our performance using a variety of measures that are not specifically defined under IFRS and are therefore termed APMs. These 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 effect of reinvested dividends).

AT A GLANCE

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

We combine our proven strategy and
balanced approach with the strength
of ICG’s global platform

The Company

Proven strategy

ICG Enterprise Trust listed on the London Stock
Exchange in 1981, raising £23m. It has since grown
its net assets to £731m, generating significant
value for shareholders through multiple cycles.

YEAR Track RECORD

£731m1

NET ASSETS

42x

return on original
capital raised

£239m

returned to
shareholders
since listing

the manager

a Global network

ICG has offices in:

• London
• New York
• Paris
• Madrid
• Amsterdam

• Stockholm
• Frankfurt
• Luxembourg
• Warsaw
• Tokyo

• Hong Kong
• San Francisco
• Singapore
• Sydney

YEAR Track RECORD

countries

€35bn

assets under
management

>300

employees

Data as at 31 January 2019

1 31 January 2018: £664m

Data as at 31 December 2018

Our unique approach

ICG Enterprise is unique in the listed private equity sector in
combining directly managed investments with those managed by
third parties, both directly and through funds.

Focused
on strong and
consistent returns
by investing in
profitable private
companies, primarily in
Europe and the US.

Flexible
investment mandate
enables us to both
enhance returns and
manage risk.

Selective
investment driving
consistently strong
returns, while limiting
downside risk.

Expertise
and long track
record of lending
to and investing
in private equity
backed businesses.

Access
to proprietary deal
flow from the wider
ICG network and
through relationships
across the private
equity asset class.

Insights
into private equity
managers and
companies through
local investment teams
across the globe.

ICG Enterprise benefits from access to the proprietary deal flow
of investments from ICG’s network and its expertise and insights
gained from 30 years of investing in private markets.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Global alternative asset manager in private debt, credit and equity.A leading global alternative asset manager with €35bn of assets under management across 18 strategies. ICG focuses on providing capital to help companies grow. It develops long term relationships with its business partners to deliver value for shareholders, clients and employees.ICG invests across the capital structure, with an objective of generating income and consistently high returns while protecting against investment downside. A leading listed private equity investor.Providing shareholders with access to a portfolio of investments in profitable private companies, primarily in Europe and the US.We invest directly and through funds with a flexible mandate that enables us to both enhance returns and manage risk, optimising the portfolio mix and capital deployment.Chairman’s statement

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Strong growth across the
portfolio delivers another
year of double digit growth

We have a high quality Portfolio
that is increasingly geographically
diverse and continues to produce
consistently strong returns

board of directors

corporate
Governance

Performance to 31 January 2019

FTSE All-Share Index
Share price
Net asset value per share

All figures are on a total return basis.

431%

148%

173%

(4)%

12%

63%

54%

29%

31%

67% 75%

1 year

3 years

5 years

10 years

Strong underlying earnings growth and
realisations at material uplifts to carrying
value have driven another year of double
digit growth and I am delighted to report
a strong set of results. NAV per share
increased from 959p to 1,057p, a 12.4%
total return, significantly outperforming
the loss from the FTSE All-Share of -3.8%.

Continued progress towards
strategic goals
We continue to make excellent progress
towards our strategic goals. In particular,
becoming more fully invested, increasing our
weighting towards high conviction
investments and becoming more
geographically diverse.

The Portfolio1 now represents 95% of net
assets versus 82% three years ago. By
increasing the capital invested in individual
co-investments, we have been able to
increase capital deployment without being
any less selective as the team recycles the
record levels of proceeds from the
Portfolio into compelling opportunities.

We have a target for high conviction
investments to represent 50% – 60% of the
Portfolio and this year they made up 50%
of capital deployed, up from 42% in the

previous year and 33% in 2016. A key driver
of this has been the increase in proprietary
deal-flow from ICG. Over the last five years,
high conviction investments have generated
a return of 19% p.a.2 in local currencies, and
we expect them to continue to produce
strong returns.

The Portfolio is more geographically
diverse. In particular, we have made a number
of new commitments and co-investments in
the US, which now represents 26% of the
Portfolio. The US is the largest private equity
market in the world, and over the medium
term, we expect US investments to represent
30% to 40% of the Portfolio.

Dividend
We know that a reliable source of income is
important for shareholders so last year we
committed to a progressive annual dividend
policy and quarterly payments. In line with
this, we are proposing a final dividend of 7p,
which, together with the three interim
dividends of 5p each, will take total
dividends for the year to 22p. This is a 4.8%
increase on the prior year dividend of 21p
and a 2.7% yield on the year-end share price.

HIGHLIGHTS

1,057p

NAV per share

+12.4%

NAV per share
total return

In the Chairman’s Statement, Manager’s Review and
Supplementary Information, reference is made to the
“Portfolio”. The Portfolio is defined as the aggregate
of the investment portfolios of the Company and of its
subsidiary limited partnerships. The rationale for this
APM is discussed in detail in the Glossary.

2 Net of management fees and carried interest.

Strengthening of the ICG
Enterprise team and succession
ICG continues to invest in the development
of the investment team, which has
benefitted significantly from the enhanced
support and oversight provided by ICG,
as a leading alternative asset manager.

The team has grown over the last three
years. We now have an investment team
with over 60 years’ combined experience
in private equity, which is supported by
oversight from ICG on the Investment
Committee, which includes ICG’s Chief
Investment Officer and Chief Executive,
Benoît Durteste, and Andrew Hawkins,
ICG’s Head of Private Equity Solutions. We
also have a strong dedicated team in legal,
finance and IR and access to a number of
specialist shared resources, including risk,
treasury, compliance and IT.

Emma Osborne, who has led the Company’s
investment team since 2004, will be moving
to a senior adviser role within ICG at the
end of 2019. Over the last 14 years,
Emma has built a strong multi-disciplined
investment team with significant private
equity expertise and a strong track record
of outperformance. As a senior adviser,
she will remain on the Investment
Committee to provide oversight of the
Portfolio. ICG is in the process of
identifying Emma’s successor, and with
her assistance, we expect that person
to transition into the leadership of the
investment team in the second half of
this year. Emma has provided excellent
leadership of the team and I am
delighted we will continue to benefit
from her involvement.

continued evolution
of the board
We have worked closely over the last few
years to ensure that changes to the Board
strike the right balance between continuity
and succession.

As part of this process, Alastair Bruce joined
the Board in May 2018 and became Chairman
of the Audit Committee in February of this
year. Andrew Pomfret will be retiring from
the Board at the forthcoming AGM, having
served for over eight years, and I would
like to thank Andrew for his wise counsel
and guidance.

Jane Tufnell will join the Board later this
month. She brings extensive financial services
and investment management experience to
the Board, and I welcome her. We expect to
appoint one further non-executive director
during the course of this year and I intend to
step down from the Board during 2020,
when I will have served on the Board for
12 years. We will continue to evolve the
Board and make further appointments,
as appropriate.

A cautious and selective
approach remains key in the
current environment
The macro-economic backdrop remains
uncertain, geopolitical risks are increasing
and volatility is rising. Against this backdrop,
the Manager remains patient and selective
in deploying capital, focusing on
opportunities that the team has a high
conviction will outperform and in sectors
with non-cyclical growth drivers. In the
case of our ICG investments, many of
these investments also have the benefit
of structural downside protection, which
we believe will serve us well should the
macro-economic environment deteriorate.

I am confident our differentiated portfolio,
highly selective approach and focus on
delivering consistently strong returns will
continue to generate significant growth
well in excess of public markets.

JEREMY TIGUE
Chairman
12 April 2019

Progress against
strategic goals

Investment portfolio
as % of net assets

95%

82%

2016

2019

By increasing the
capital invested in
individual
co-investments, the
team has been able to
increase capital
deployment without
the team being any less
selective.

Increase amount deployed into
high conviction investments
as % of capital invested

50%

33%

2016

2019

Our high conviction
investments
(co-investments,
secondary fund
investments and ICG
funds) represented
41% of the Portfolio
and 50% of capital
deployed in the year.
Over the medium term
we expect 50% to 60%
of the Portfolio to be
weighted towards
these investments.

Increase in exposure to US market (%)

26%

14%

2016

2019

Our exposure to the US
market has increased
from 14% three years
ago to 26% at the year
end. Over the medium
term we expect US
investments to
represent 30% to 40%
of the Portfolio.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

INVESTING IN PRIVATE EQUITY

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

An active ownership
model driving returns in
excess of public markets

within private equity, we have a
Highly focused approach, aiming
for strong and consistent returns
with relatively low downside risk

manager’s review

private equity
explained

Private equity backed companies touch
most of us in our everyday lives, whether it
be a restaurant chain, a manufacturer, a
healthcare provider, or a software company.
Most sectors in almost every country have
companies owned and funded through
private equity investment. With an
opportunity set far greater than that available
in the listed market, private equity has, over
multiple cycles, generated returns that have
significantly outperformed public markets.

It is an active ownership model. When you
invest in private equity you are investing in
the skills and expertise of a manager to
identify and work with companies whose
growth can be unlocked through a focused
and hands-on approach. It is not a simple
asset class to navigate, barriers to entry are
high and manager selection is key. However,
when executed well private equity’s active
ownership model and focus on creating value
through operational and strategic change has
driven strong returns for investors.

How private equity
creates value
Long term investment horizon
When compared to listed companies, there
is less short term performance pressure.
This long term view means that fundamental
value creation can be prioritised over short
term profit targets.

Strong alignment of interest and
focused stakeholder group
Remuneration structures prioritise equity
incentivisation, aligning company management
teams with private equity managers. In
addition, private equity backed companies
benefit from a focused group of stakeholders
that have the expertise and control to drive
strategic and operational change.

AN ACTIVE OWNERSHIP MODEL
How private equity creates value

Value
creation

Exit planning

Financial discipline

Operational improvements

Strategic change

Governance and responsible investing

Extensive due diligence

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e
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v
t
c
A

Strong alignment of interest and focused stakeholder group

Long term investment horizon

l
a
r
u
t
c
u
r
t
S

s
e
g
a
t
n
a
v
d
a

Extensive due diligence
Due to the illiquid nature of investment in
private companies, private equity managers
will only invest after a long period of deep
investigation, in most cases alongside
management.

Governance and responsible investing
Through investing responsibly and
considering Environmental, Social and
Governance (“ESG”) issues at all stages of
the investment cycle, private equity is able
to manage ESG risks to generate long term
sustainable returns.

Strategic change, operational
improvement and financial discipline
Private equity managers provide focused
strategic and operational guidance to
management teams. They bring significant
financial and capital markets expertise,
encouraging strong financial discipline.

Exit planning
Ultimately, all private equity backed
companies are for sale. Ensuring a business
is an attractive asset for a purchaser, by
creating value and generating a strong
return on capital invested, is fundamental
to the investment process.

all private equity

buyouts

developed
markets

mid-market and
larger deals

leading private
equity managers

Defensive
growth
companies

Buyouts offer more
consistent returns with lower
risk than other private equity
strategies e.g. venture capital
and distressed debt

Mid-market and larger
companies are more likely to
be more resilient to economic
cycles and typically attract
stronger management teams

Defensive growth – targeting
companies with strong market
positions and high barriers to
entry in industries with low
correlation to economic
cycles, strong cash flow
conversion, high recurring
revenues and high margins

OUR INVESTMENT philosophy
Targeting defensive growth

Developed markets have a
more established private
equity sector and more
experienced managers

Leading private equity
managers with track records
of investing and adding value
through cycles

Case study: CO-INVESTMENT
IN endeavor schools

• Leading US operator of schools for children

aged from four to 13

• Currently has 43 campuses, serving over

6,500 students across nine states in the US

• Continuing to grow, both by greenfield
expansion and by selectively acquiring
high performing schools

• Endeavor benefits from strong underlying

growth trends and stable cash flows

• Value of ICG Enterprise holding is £9m

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

READ MORE ON PAGE 18

£527

NAV TOTAL RETURN

£279

Jan 2019

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Key performance indicators

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

a focus on generating
long term growth for
shareholders
The Company regularly reviews its KPIs to ensure that they are the
most effective metrics for measuring the Company’s performance
and monitoring progress in delivering against its strategic objectives
of providing shareholders with long term capital growth through
investment in unquoted companies.

Key

New KPI

NAV per Share
Total Return

12.4%

15.4% p.a.

12.4%

11.8% p.a.

Rationale
Includes all of the components of the Company’s
performance. It reflects the attributable value of
a shareholder’s investment in ICG Enterprise.

NAV per share growth is shown net of all costs
associated with running the Company and includes
the impact of any movement in foreign exchange on
valuations.

Total shareholder
return

3.0%

Portfolio
Return on a local
Currency Basis

15.0%

Total Dividend
per Ordinary share
in Year

22p

1 Year

3 Years

5 Years

17.6% p.a.

10.8% p.a.

3.0%

1 Year

3 Years

5 Years

17.7% p.a.

15.0%

15.3% p.a.

1 Year

3 Years

5 Years

20p

21p

22p

2017

2018

2019

Rationale
Measures performance in the delivery of
shareholder value, after taking into account share
price movements (capital growth) and any
dividends paid in the period.

The share price total return will differ from NAV
per share total return depending on the movement
in the share price discount to NAV per share.

Rationale
A measure of the performance of the investment
team’s selective investment approach and
management of the portfolio.

Portfolio Return on a Local Currency Basis
measures the total movement in the underlying
investment portfolio valuation. It is net of underlying
managers’ fees and carried interest and before
taking into account the impact of foreign exchange
on valuations.

Rationale
Demonstrates the Company’s commitment
to a progressive annual dividend.

In the absence of unforeseen circumstances
the Board intends to grow the annual dividend
progressively.

Distributions by way of dividends may be paid from
the revenue reserve and/or the realised capital
reserve, as permitted by the Company’s articles.

Progress in the year
The Company has continued to build on its
strong performance, reporting NAV total
return of 12.4% in the 12 months to 31 January
2019 (31 January 2018: 12.5%).

This return compares favourably to the loss
from the FTSE All-Share (Total Return) of -3.8%
over the same period.

Progress in the year
Share price increased from 818p to 822p,
which together with dividends of 21p
generated a total shareholder return of 3.0%
in the 12 months to 31 January 2019
(31 January 2018: 20.1%).

This return compares favourably to the loss
from the FTSE All-Share (Total Return) of -3.8%
over the same period.

Progress in the year
The Portfolio generated a local currency return
of 15.0% in the 12 months to 31 January 2019,
net of management fees and carried interest
charged by the underlying managers.

Links to strategic objective
• Maximising long term capital

growth through a flexible mandate
and highly selective approach

Examples of related factors that we monitor
• Performance relative to the wider public market

and in particular the FTSE All-Share (TR)
• Performance relative to listed private equity

peer group

• Monitoring of the Portfolio performance
• Valuations provided by private equity managers
• Impact of foreign exchange on valuations
• Effect of financing (cash drag) on performance
• Accretive impact of any share buy backs
• Ongoing charges

Links to investment objective
• Maximising shareholder returns
through long term capital growth
• Progressive annual dividend policy

Examples of related factors that we monitor
• Performance relative to the wider public market

and in particular the FTSE All-Share (TR)
• Performance relative to listed private equity

peer group

• Level of discount in absolute terms and relative
to the wider listed private equity peer group

• Trading liquidity and demand for Company’s shares

in conjunction with marketing activity

Links to investment objective
• Maximising long term capital

growth through a flexible mandate
and highly selective approach

Examples of related factors that we monitor
• Monitoring of the Portfolio performance and watchlist
• Valuations provided by private equity managers
• Performance of the high conviction investments and

funds portfolio

• Detailed analysis of the Top 30 companies’

performance, EBITDA and revenue growth, leverage,
valuation multiples, performance against investment
thesis and exit prospects

• Monitoring of the overall EBITDA and revenue growth,

leverage and valuation multiples of the Portfolio

Progress in the year
The directors are proposing a final dividend of
7p, which, together with the interim dividends
of 15p, will take total dividends for the year to
22p. This is a 4.8% increase on the prior year
dividend of 21p and a 2.7% yield on the year-end
share price of 822p.

Links to investment objective
• The Board recognises that a
reliable source of growing
dividends is an important part of
shareholder total return over both
the short and the longer terms

Examples of related factors that we monitor
• Distributable reserves
• Cash balances
• Proceeds received during the year
• Investment pipeline and available financing

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Manager’s review

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

10th consecutive year of
double digit portfolio
growth

Top 30 companies dominated by high
conviction investments and generating
double digit earnings growth
Our largest 30 underlying companies
(“Top 30”) represent 46% of the Portfolio
by value (31 January 2018: 47%), and are
weighted towards our high conviction
investments, which make up 70% of the
Top 30 by value.

The Top 30 performed well in the year,
reporting average LTM earnings growth
of 16% and revenue growth of 13%. It is
particularly encouraging that a third of
these companies are generating LTM
earnings growth in excess of 20%, driven
by both organic growth and M&A activity.

Over the year, the valuation multiples of
the Top 30 increased marginally from
10.6x to 10.9x, a reflection of the change
of mix and weightings, rather than an
increase in aggregate multiples overall.
The net debt/EBITDA ratio remained flat
at 4.2x, although mix and weightings
also had an impact with the majority of
companies de-levering in the year on
a like-for-like basis.

Compared with the portfolio as a whole,
the Top 30 have a higher weighting to
larger deals and to the healthcare and
education sectors, reflecting our strong
focus on defensive growth in our
co-investments.

Performance overview
Profit growth and realisations drive
10th consecutive year of double digit
underlying growth
Continued strong operating performance
and realisations at significant uplifts to
carrying value generated a return of 15.0%
in local currencies, or 16.6% in sterling.
These results represent the 10th
consecutive year of double digit underlying
portfolio growth, over which time period
the Portfolio return has averaged 16.4%
p.a. in local currencies. Approximately 35%
of the valuation gain in the year came from
realisations and IPOs.

Portfolio overview
High conviction investments underpinned
by a portfolio of leading funds
Our Portfolio combines investments
managed by ICG and those managed by
third parties, in both cases through funds
and directly and at 31 January 2019 was
valued at £695m.

Third party funds were valued at £407m,
providing the Portfolio with a base of
strong diversified returns and also deal
flow for our high conviction portfolio. The
underlying funds have a bias to mid-market
and large-cap European and US private
equity managers and over the last five years
this portfolio has generated a return of
13.1% p.a. in local currencies.

High conviction investments, which
includes those managed directly by ICG as
well as our third party co-investments and
secondary funds, were valued at £288m.
These are underlying companies that we
have proactively increased exposure to,
where we have a high conviction they will
outperform and over the last five years
these investments have generated a local
currency return of 19.0% p.a. We have a
strategic goal of increasing the weighting
of these investments to 50% – 60% of the
Portfolio.

15%

LOCAL CURRENCY PORTFOLIO RETURN1

12 months to 31 January 2018: 16%

16%

TOP 30 COMPANIES EARNINGS GROWTH
(LAST 12 MONTHS)

31 January 2018: 12%

1 This is an APM as defined in the Glossary

we focus on the buyout
segment of the market,
in which target companies
are almost invariably
established, profitable
and cash generative, which
we believe will generate
STRONGER AND MORE
CONSISTENT RETURNS THAN
OTHER PRIVATE EQUITY
STRATEGIES

Third party
funds portfolio
• Underlying companies selected by
36 leading private equity managers

• Strong relationships in many

cases over multiple fund cycles

• A base of strong diversified returns

• Source of deal flow and insights
for the high conviction portfolio

• Five year constant currency returns

of 13.1% p.a.4

£695m1

total value of
investment portfolio

19.9%

ICG managed investments

High conviction
companies
• Underlying companies

selected by ICG

• Increases exposure to

attractive assets

• Enhances returns, increases

visibility and control

• Enables greater flexibility
in portfolio management

• Targeting 50% – 60% weighting

• Five year constant currency

returns of 19.0% p.a.4

59%

15.8%

Third party direct
co-investments

41%

£407m2,4

Third party funds PORTFOLIO

14.8% invested in funds managed
by the former manager, Graphite
Capital, a leading mid-market
buyout manager.

43.8% invested in other third
party funds. The funds portfolio
has a bias to mid-market and
large cap European and US
private equity managers.

5.7%

Third party secondary investments

Insights and
source of
deal flow for
third party
co-investments
and secondary
investments

58.6%

Third party
primary funds

£288m3,4

high conviction COMPANIES

Within the ICG weighting, we
are invested in four of ICG’s
strategies with a focus on funds
that have a bias to equity returns
targeting annualised gross
returns of 15% – 20%.

Of the 19.9% invested with ICG,
10.1% is via funds (both primary
and secondary investments) and
9.8% is via co-investments.

21.5% of the portfolio is
weighted towards third party
co-investments and secondary
investments.

1 31 January 2018: £601m

2 31 January 2018: £349m

3 31 January 2018: £252m

4 This is an APM as defined

in the Glossary

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Manager’s review continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

ATTRACTIVE DEAL
DYNAMICS AND
ACTIVE OPERATIONAL
MANAGEMENT

Cambium provides educational
software for primary schools in
the United States. ICG Enterprise
invested in the company in 2016
alongside the ICG Strategic
Equity team

4.8x

return on investment
for icg enterprise

Cambium was acquired in 2016 as part of a
restructuring transaction originated by the ICG
Strategic Equitys team. The team agreed to acquire
interests in US based mid-market manager, Veronis
Suhler Stevenson’s (“VSS”) 2005 vintage fund. VSS
believed that the remaining portfolio needed additional
time to optimise returns but much of the investor base
wanted to realise their interests in the fund, which was
in its 11th year.

The restructuring of the fund resulted in ICG Strategic
Equity providing additional capital to invest in the
underlying companies, extending the fund’s life and
providing existing investors with an option to exit. As a
result, the ICG Strategic Equity team acquired Cambium
at a highly attractive entry multiple. ICG Enterprise
participated in the transaction through its commitment
to ICG Strategic Secondaries II and directly.

The ICG Strategic Equity team played an active role in
the management of the Cambium, helping to drive
strategic change and to make key changes to
Cambium’s senior management team. The team also
helped to accelerate the digitisation of the business
and its conversion to a subscription based model as
well as working with VSS to formulate an exit strategy.
Between 2016 and 2018, EBITDA grew by 10% p.a.
and free cash flow was used to completely deleverage
the business.

In December 2018, Cambium was sold for $685m, a
113% uplift to the January 2018 valuation and a gross
IRR on the investment of 82%. The transaction
demonstrated the ability of the Strategic Equity team
to acquire companies at attractive valuations and the
value of its active operational involvement to generate
strong returns.

Realisations
Continued strong realisation activity
at significant uplifts to carrying value
and cost
The Portfolio continued to be highly cash
generative in the year as our underlying
managers took advantage of the sustained
favourable exit environment, generating
proceeds of £153m1. While this is lower than
the record £217m, generated in the year to
January 2018, at 26%1 of the opening
Portfolio, cash generation remained
relatively high.

The realisations of 60 companies
completed at an average uplift of 35%2
to the previous carrying value, which is
consistent with the long term trend of
significant uplifts being generated when
companies are sold. The average return
multiple of 2.4x cost was also strong,
reflecting a number of highly successful
investments realised in the year with over a
third, by number, being sold for more than
3.0x cost. Over the last five years exits have
averaged 33% uplift to carrying value and a
multiple of 2.3x cost.

The sale of Cambium by the ICG Strategic
Equity team was by far the most significant
realisation in terms of both total proceeds
(£18.6m) and the gain in the year (+113%).
Cambium, which provides educational
software for US schools, was acquired as
part of a fund restructuring transaction in
2016 and was sold in December 2018 for
4.8x the original cost, a gross IRR of 82%.

IPOs also contributed to performance,
with three companies listed during the year.
The most significant of these was Ceridian,
a global human capital management
software company, in which we co-invested
in 2007 alongside Thomas H Lee. The
company floated in April 2018 at $22 per
share and at the year end the share price
had risen to $41. Over the course of the
year the value of our holding in Ceridian
increased by 178% which moved it from the
27th largest underlying company at the
start of the year to the 8th at January 2019.

In addition to sales by our underlying
managers, we completed a secondary sale
of our interest in GCP Europe Fund II and
the co-investment in Frontier Medical
alongside it, which generated a further
£10m of proceeds. These investments have
performed well and we took the
opportunity to lock-in a strong return at a
time when we perceived the downside risks
to outweigh the further upside potential.
This transaction highlights our active
approach to managing the portfolio.

From our largest 30 underlying companies
at the start of the year, six were fully
realised: Cambium from the ICG portfolio;
The Laine Pub Company, Swiss Education
and Frontier Medical, from our third party
co-investment portfolio; and CeramTec and
TMF from the third party funds portfolio,
including a secondary investment in the
latter company.

New investments
Selective investment into high
conviction opportunities
We invested a total of £158m in the year,
up from £142m in the year to January 2018.
Half of new investment was into our high
conviction portfolio, up from 42% in the
year to January 2018. Investments
sourced through the ICG network
accounted for 27% of capital deployed,
including two co-investments and a
secondary investment, totalling £22m,
sourced from three of the in-house teams
we partner with. We also completed three
co-investments and a secondary investment
alongside our third party managers,
totalling £35m, all of which were US based.

Co-investments have always been a feature
of our strategy and have performed
strongly over multiple cycles. Over the
last three years we have increased capital
deployed in individual co-investments,
allowing us to increase deployment, while at
the same time not being any less selective.

35%

realisation uplift to previous
carrying value3

31 January 2018: 40%

2.4x

multiple of cost of realisations3

31 January 2018: 2.7x

Refers to proceeds generated from underlying
portfolio (excludes secondary sales)

Uplift figure excludes publically listed companies
that were exited via multiple share sales

3 This is an APM as defined in the Glossary

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

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INVESTING IN STRONG
AND CONSISTENT GROWTH
Using our relationships with leading managers
to source attractive co-investments for our
high conviction portfolio

iri is one of the world’s leading
data providers to the Consumer
Packaged Goods (“CPG”) industries.
ICG Enterprise co-invested $15
million in the company in December
2018, alongside New Mountain

IRI was established in 1979. The initial idea was to take
advantage of the development of the then nascent
technology of barcode scanners to try to measure
consumer behaviour by supplying a small number of local
supermarkets with scanners. 40 years later, the company
has grown into a global leader, providing data about
consumption patterns and behaviour to the world’s
leading consumer packaged goods manufacturers.

New Mountain originally acquired IRI from a specialist
technology investor in 2012. During its period of
ownership, the business has grown consistently. New
Mountain believes that there is considerable opportunity to
develop its existing service lines and we were invited to
provide new equity alongside a consortium of institutional
investors arranged by New Mountain.

Data provided by IRI is “mission critical” to CPG
manufacturers such as Pepsi, Nestlé and Unilever: it is
used to understand product demand patterns and to
guide critical business decisions around promotional
activities, production and performance. The business
model has many of the features we seek for our defensive
growth theme: It has considerable barriers to entry given
the significant upfront costs required to replicate its
intellectual property and databases. It has low customer
concentration and its core (syndicated data) business is
resilient and has demonstrated consistent revenue and
EBITDA growth through cycles. There is further potential
for growth through the development of new ancillary
tools such as predictive analytics.

£11m

Total ICG ENTERPRISE INVESTMENT

Our focus remains on defensive growth
businesses with high cash flow conversion
which have demonstrated resilience to
economic cycles. The investments with the
ICG Europe and Asia Pacific subordinated
debt and equity teams also feature a
combination of investments across the capital
structure which provides an element of
downside protection. While defensive growth
and structural downside protection are our
key areas of focus, we also remain alert to
opportunities where we can find relative
value in the current challenging market,
usually as a result of unusual transaction
dynamics. Relative value is a feature of
investments made by the ICG Strategic Equity
team which completed five transactions in the
year at an average entry multiple significantly
below the market average.

The three largest new investments made in
the year were:

• Minimax (a global provider of fire
protection systems and services)
alongside ICG Europe, in which we
invested £17m. ICG has a 12 year history
with this business and is the sole
institutional equity provider in the
most recent management buyout

• IRI (a market leading provider of

“must-have” data and predictive analytics
to consumer goods manufacturers)
co-investment alongside New Mountain
Capital, in which we invested £11m
• Endeavor Schools (a US schools

operator) co-investment alongside
education investment specialist Leeds
Equity Partners, in which we invested £8m

10 new fund commitments to both
existing and new manager relationships
We completed 10 new fund commitments
in the year totalling £162m. In addition, we
committed £20m to a new ICG Strategic
Equity transaction, and a number of other
commitments relating to co-investments
and secondaries, taking the total of new
commitments in the year to £185m.

Three of the new funds, totalling £73m, are
managed by ICG including the addition of a
fourth ICG strategy to our Portfolio with a
$10m commitment to ICG’s North American
Private Debt II. The fund invests in
subordinated debt and equity of US private
equity-backed mid-market companies,
targeting gross annualised returns of 13%
to 17% with low downside risk. We also
committed €40m to ICG Europe VII and
$40m to ICG Strategic Equity III, strategies
the Company has backed since 1989 and
2016 respectively.

Of the seven third party fund commitments,
three are to European managers we have
invested with for many years (Graphite Capital,
Bowmark Capital and Bain Capital). We also
added four new manager relationships of
which three are focused on the US mid-market
(The Jordan Company, Tailwind Capital and
Five Arrows Capital Partners) and one on the
European mid-market (Five Arrows Principal
Investments). The Portfolio is increasingly
geographically diverse; of our 28 core
manager relationships, nine are US managers
and over the medium term we expect our
weighting to the US market to increase to
30% – 40% of the Portfolio.

Four of the 10 new funds have already led to
co-investments or secondaries, highlighting
the effectiveness of our strategy of
leveraging manager relationships for high
conviction investments.

The £20m committed alongside ICG
Strategic Equity is part of a $1bn transaction
backing the spin-out of Standard
Chartered’s private equity team in Asia and
comprising a diversified portfolio of over 30
companies. This transaction is expected to
complete in the first half of 2019.

ICG investments summary

ICG Europe

ICG Strategic Equity

ICG Asia Pacific

Subordinated debt and equity
in European mid-market
companies targeting companies
with experienced management
teams who have a proven
strategy, typically in non-cyclical
industries. The team works with
businesses to develop flexible
capital solutions tailored to
achieve a company’s goals
and will usually be the sole
institutional investor. Targeting
gross returns of 15 – 20% p.a.
with low downside risk.

Acquisitions of significant
positions in funds and/or
portfolios of companies
through fund restructurings,
recapitalisations and whole-fund
liquidity solutions. The team
works with incumbent private
equity managers to provide
liquidity options for investors in
mature fund vehicles. Targeting
gross returns in excess of
20% p.a.

Subordinated debt and
equity in mid-market
companies in developed
Asia Pacific markets. The team
focuses on providing flexible
capital solutions to leveraged
buyouts, corporate
investments and restructuring
of capital structures (excluding
those of distressed
companies). Targeting gross
returns of 15 – 20% p.a. with
low downside risk.

ICG North American
Private Debt

Subordinated debt, second
lien debt, first lien debt and
equity co-investments in
mid-market companies – both
private equity sponsored and
sponsorless. Targeting gross
returns of 13% – 17% p.a. with
low downside risk, with the
majority of the return
generated from current
income.

Value
£91m

Undrawn
commitment
£46m

Value
£22m

Undrawn
commitment
£65m

Value
£25m

Undrawn
commitment
£5m

Value
£ -

Undrawn
commitment
£8m

total value
£138m
20% of
portfolio

Undrawn
commitment
£124m
30% of uncalled
commitments

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Portfolio analysis
Focus on mid-market companies
The Portfolio is biased towards mid-market
(47%) and large deals (45%), which we view
as more defensive than smaller deals,
benefiting from experienced management
teams and often market leading positions. Our
definition of large deals in a private equity
context is those with an entry transaction size
of over €500m , which would be small or mid
cap for a public company.

Portfolio becoming more
geographically diverse
The Portfolio is focused on developed
private equity markets: primarily continental
Europe (39%), the UK (31%) and the US
(26%). Investments in the Asia Pacific region
represent 4% of value, which is primarily in
developed Asian markets through ICG’s Asia
Pacific subordinated debt and equity team,
while there is minimal emerging markets
exposure. In line with one of our strategic
objectives, our weighting to the US has
increased from 14% at the time of the move to
ICG in 2016. Over the same period, the UK
bias has reduced from 45%. We expect both
of these trends to gain momentum as the
benefits of being part of ICG’s global
alternative asset manager platform are
further realised.

Portfolio by calendar year
of investment %

2.7

0.8

0.3

2.8

1.7 1.4

1.1

20.0

20.1

17.9

11.9

9.2

9.8

‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15

‘06
and
before

0.3

‘16 ‘17 ‘18 ‘19

Attractive and well-balanced
vintage year exposure
The Portfolio’s maturity profile balances near
term realisation prospects with a strong
pipeline of medium to longer term growth.
Investments completed in 2015 or earlier,
which are more likely to generate gains from
realisations in the shorter term, represent
42% of the Portfolio. Against this, 58% of
value is in investments made in 2016 or later,
providing the Portfolio with medium to longer
term growth potential as value created within
these businesses translates into gains.

Bias towards sectors with non-cyclical
growth drivers
The Portfolio is weighted towards sectors
that primarily have non-cyclical growth
drivers, such as demographics, increasing
regulation and the provision of “must-have”
data. 21% of the Portfolio is invested in
healthcare and education and 16% in business
services with the remainder of the portfolio
broadly spread across the industrial (21%),
consumer goods and services (14%), leisure
(9%) and technology (10%) sectors.

Balance sheet and financing
Strong balance sheet
At the year end the Portfolio represented
95% of net assets, an increase from 90% at
31 January 2018. Becoming more fully
invested, without compromising the quality of
the Portfolio, was one of our key strategic
objectives at the time of the move to ICG
when the investment level was 82%.

In managing the Company’s balance sheet
our objective is to be broadly fully invested
through the cycle while ensuring that we
have sufficient liquidity to be able to take
advantage of attractive investment
opportunities as they arise. We do not
intend to be geared other than, potentially,
for short term working capital purposes.

Portfolio by investment type %

Large buyouts
Mid-market buyouts
Small buyouts
Other

44.7%
47.2%
4.6%
3.5%

Portfolio by sector breakdown %

Healthcare and education
Industrials
Business services
Consumer goods and services
TMT
Leisure
Financials
Other

Portfolio by Geography %

Europe
UK
US
Rest of world

20.8%
20.6%
15.8%
13.6%
11.8%
8.7%
5.5%
3.2%

38.8%
30.9%
25.9%
4.4%

3 Refer to supplementary information for
comparative information.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

£m

Portfolio*

Cash

Net obligations

Net assets

Portfolio as % of net assets

31 Jan 2019

31 Jan 2018

695

(25)

731

95.0%

601

(15)

664

90.4%

* Refer to the Glossary for reconciliation to the Portfolio balance presented in the unaudited results and
definition of net obligations.

Undrawn commitments of £411m provide
the Company with a robust medium term
investment pipeline. If outstanding
commitments, which are typically drawn
down over a period of four to six years, follow
a linear investment pace to the end of their
respective remaining investment periods, we
estimate that approximately £90m would be
called over the next 12 months. Including
realisation proceeds likely to be generated in
the next 12 months, this leaves significant
available capital for high conviction
investments over and above the investments
that will be made by our underlying funds.

At 31 January 2019, commitments exceeded
available liquidity by £247m, or 34% of net
assets. Since the year end, we have further
strengthened the Company’s financial
position by agreeing a new bank facility of

€176m (£150m), which matures in two equal
tranches in April 2021 and April 2022. This
enlarged facility gives us greater flexibility to
take advantage of investment opportunities.
The negotiation of the new facility was led by
ICG’s dedicated treasury team and has been
agreed on more favourable terms than our
prior facility. Pro forma for this new facility,
overcommitment at the year end would have
been 27%.

Outlook
Further realisations and a strong pipeline
of new opportunities
Since the year end, the Portfolio has
continued to generate cash proceeds, with
£19m of distributions received in the two
months to 31 March 2019. Against this, we
have paid £12m in capital calls and have
recently committed to two new US

mid-market managers ( $15m to Gryphon
Investors and $20m to AEA Investors) and
one existing European relationship
(€20m to Cinven VII). We have a strong
pipeline of further opportunities with a
number of co-investments under review and
several new and existing private equity
manager relationships fundraising this year,
providing us with a wide choice of new
fund opportunities.

Portfolio well positioned to generate
significant shareholder value
The Portfolio is highly cash generative and,
against the current backdrop of high
valuations for new investments and
continuing geopolitical uncertainties, we
remain cautious in re-deploying capital. Our
flexible mandate allows us to adapt the mix of
new investment to evolving market conditions
and where we see the best relative value. The
proprietary opportunities sourced through
the ICG network, which have the additional
benefit of structural downside protection, are
proving to be particularly attractive and these
are becoming a more significant part of the
Portfolio.

We have a high quality Portfolio that is
increasingly geographically diverse and
believe it is well positioned to continue to
generate shareholder value.

ICG Private Equity Fund Investments Team
12 April 2019

Case study:
endeavor schools

Endeavor Schools is a leading US operator
of schools for children aged from four to 13.
It currently has 43 campuses, serving over
6,500 students across nine states, and is
continuing to grow, both by greenfield
expansion and by selectively acquiring high
performing schools.

The group is a supportive partner to its
schools, allowing them to maintain their
identities and individual learning cultures
whilst providing support in areas such as
curriculum development and management.

It has a particular focus on Montessori
education, which aims to create an ethos of
critical thought, respect and independent
learning and which is becoming increasingly
popular in the United States.

Leeds Equity acquired Endeavor in
February 2018. Endeavor has begun to
expand the number of sites and is
performing well. Leeds has extensive
knowledge of this sector having
successfully managed a schools group in
a prior fund. Leeds was selected by the
company’s management team as the optimal
partner to grow the business with the

resources and above all specialist
experience to guide the business to
its next phase of development.

Endeavor was recently named as one
of the top 1,000 growing private
companies in the United States and one
of the top 20 fastest growing companies
in the education sector. ICG Enterprise
co-invested directly as well as investing
through its commitment to Leeds
Equity VI.

£9M

TOTAL ICG ENTERPRISE HOLDING

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

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A PATIENT AND SELECTIVE APPROACH
TO CAPITAL DEPLOYMENT IN THE
CURRENT MARKET ENVIRONMENT

recent investments focus on
three key themes: Defensive
growth, structural downside
protection and relative value

MACRO Overview
Following strong performance through most
of 2018, market volatility rose in the latter part
of 2018, with sharp market declines in Q4
2018 followed by strong recoveries in the first
few months of 2019. The main cause of the
market swings has been shifting perceptions
of the sustainability of the global economic
expansion. Across most countries in recent
months growth data has generally come in
below market expectations, with Europe
experiencing the brunt of the disappointment.
The root causes of the slowdown are
tightening financial conditions combined
with a broad-based weakening of the global
industrial cycle driven by the lagged impact
of credit tightening in China and the US-China
trade war hitting global trade flows
and sentiment.

Despite the growth slowdown, we think
recession and systemic financial crisis risks
remain low. Bank balance sheets in the US,
Europe and the UK have been substantially
shored up since the global financial crisis.
Household balance sheets are generally
strong and employment conditions are
healthy. The earnings growth of listed
companies is slowing from high levels but
remains positive and recent policy changes
by the US Federal Reserve, ECB and China
should help stabilise growth later this year.
However, within the UK, the continued
political and economic uncertainty
surrounding Brexit is starting to have a real
impact on the UK economy, with business
investment slowing sharply and consumer
sentiment faltering.

In this slower but still positive growth
environment, well managed companies
should continue to perform well. We think,
however, in this stage of the cycle, investors
need to continue to focus on downside
protection. This includes an emphasis on
less cyclical companies and sectors and a
preference for exposures to companies with
defensive cash generative businesses. Slower
growth, continued geopolitical uncertainty
and reduced central bank liquidity will likely
keep market volatility high, but should also
create opportunities for patient investors
with medium to long term time horizons.

Europe and US buyout Markets

$403BN

value of New Investments

$237bn

total fundraising

European and US Buyout:
New Investments

European and US Buyout:
FUNDRAISING

$ billions

# of deals

450

400

350

300

250

200

150

100

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

‘08 ‘09 ‘10 ‘11

‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18

$ billions
300

# of funds
300

250

200

150

100

‘08 ‘09 ‘10 ‘11

‘12 ‘13

‘14 ‘15

‘16 ‘17

‘18

250

200

150

100

Europe

# of deals (RHS)

Europe

# of funds (RHS)

Source: Preqin

New Investments Trends
2018 saw an increase in activity in both the US and
Europe with the number of buyouts increasing by
9% and the average value of transactions increasing
significantly in the period

Competition for deals remains fierce, sustaining
high multiples paid. The average multiple paid for
new investments in the US remained flat at 10.6x
EBITDA while in Europe it increased to 11.0x
EBITDA from 10.3x1

FUNDRAISING Trends
2018 saw another strong year of fundraising,
marginally reduced from the 2017 peak

Majority of capital concentrated in the top 50
funds; the 10 largest funds accounting for
approximately a quarter of all capital raised2

Recognising the long term outperformance
of private equity, allocations to the asset class
are increasing

Market outlook for 2019 is mixed, with managers
wary of macro factors and geopolitical uncertainty,
but optimistic about a number of non-cyclical
growth drivers

response
We believe 2019 will be a strong year for
fundraising in both the US and Europe, giving
us a wide range of funds to choose from

We continue to select leading private equity
managers, who invest in high quality defensive
businesses

Strong relationships ensure allocations to top
performing oversubscribed funds

We are leveraging the strength of ICG’s platform
and relationships to access new top performing
managers, particularly in the US

2 Source: Preqin

response
Our mandate allows us to be nimble and
adjust the mix of investments dependent on
market conditions and where we see the best
relative value

We remain cautious and selective in deploying
capital, focusing on resilient businesses

Strong relationships with underlying managers
have resulted in a good flow of compelling
co-investment opportunities

We have access to proprietary ICG deal flow and
are selectively investing in situations featuring
structural downside protection and more
attractive pricing due to complex deal dynamics

1 Source: S&P

Where are we finding value?
In the current market environment, we
remain patient and selective in deploying
our capital.

We made 10 primary commitments in the
year, seven of which were to third party
managers. Within our third party funds
portfolio, we are invested with established
managers, with strong track records of
value creation through multiple cycles, and
we are confident in their ability to generate
attractive returns through the cycle.

Within our high conviction portfolio
we are focused on high quality defensive
businesses and in special situations where
we can achieve relative value. Our flexible
mandate allows us to deploy capital into high
conviction investments on a case by case
basis and we remain focused on:

Defensive growth
We have invested in companies with
relatively low correlation to the economic
cycle. These companies typically have high
barriers to entry, leading market positions
and strong recurring revenue streams. We
also look for businesses with high margins,
low customer concentration and often in
structural growth industries.

Structural downside protection
A number of our recent investments with
ICG have structural downside protection
as well as defensive growth qualities.

Some of the growth drivers
in the current market:
Demographics
• Healthcare and education

Pressure on public spending
• Healthcare, education and

technology

Increasing regulation
• Healthcare, industrial
and business services

“Must have” data
• Business services

Software as a Service
• Technology

EUROPE

Defensive growth

• Strong market positions in

growing markets

• Highly resilient businesses with
relatively low correlation to
economic cycles

• Strong recurring revenue

streams, high margins and highly
cash generative

Structural downside
protection

• Typically ICG managed assets

STRATEGIC SECONDARIES

• Investing across the
capital structure

RELATIVE VALUE

• Attractive pricing due to

deal dynamics

• Fund recapitalisations alongside
ICG; investing at 6-7x EBITDA

• Includes certain “late primary”

fund investments

Two of the new co-investments completed
in the 12 months include a mixture of
subordinated debt and equity investments.
By combining the downside protection of
the subordinated debt investment with the
upside potential of the equity investment,
these structured deals are targeting a
blended return which is similar to a typical
equity deal but with much lower downside
risk and we think this is a particularly
attractive dynamic.

Relative value
We have also invested in a number of
situations where the deal dynamic has
facilitated investment at very attractive
valuations. The best example of this is our
commitment to the ICG Strategic Equity

strategy, which focuses on leading
restructuring and recapitalisation
transactions for mature private equity
funds. The fund has completed
10 transactions, buying portfolios at
an average of 6-7x EBITDA. To date, 18 of
the 42 underlying companies have been
sold, including Cambium which generated
a return on investment of 4.8x.

Other examples of relative value include
“late primary” transactions. These are
when a fund is partially invested at the time
of our commitment and we are able to
diligence early investments and invest at
original cost, even if an underlying company
has been written up on performance
grounds. An example of a late primary
is Leeds Equity Partners.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

30 largest underlying companies

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report

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OUR 30 LARGEST UNDERLYING COMPANIES
MAKE UP 46% OF THE PORTFOLIO AND
ARE WEIGHTED TOWARDS OUR HIGH
CONVICTION INVESTMENTS

1. City & County
Healthcare Group
A leading provider of home care
services with over 100 branches
across the UK. The company
provides high quality care
where trained carers assist
with day-to-day tasks to enable
elderly and disabled people to
continue living independently
in their own homes.

3. Minimax 1
A leading global provider of
fire protection systems and
services. Minimax operates
an integrated business model
throughout the fire protection
value chain, including R&D,
sourcing and manufacturing,
product sales and distribution,
system integration and
associated services.

5. Visma 1
A leading provider of
business-critical accounting,
resource planning and payroll
software to small and mid-sized
businesses and the public sector
in the Nordic and Benelux
regions with a customer base of
more than 600,000 enterprises.

7. Yudo 1
The global leader in the
production of mission critical
components for plastic injection
moulding. Yudo’s technology is
used in the automotive parts,
electronics, consumer products,
household, medical, closures,
packaging and transportation
industries.

2. DomusVi 1
Third largest nursing home
operator in Europe, active
across all areas of elderly care,
including medical nursing
homes, non-medical nursing
homes, residential and
home-care services with market
leading positions in France
and Spain.

4. Froneri 1,2
Created through a joint venture
between R&R and Nestlé’s
ice cream and frozen food
activities, Froneri operates
in more than 20 countries
and is the second largest
manufacturer of ice cream
in Europe and the third
largest worldwide.

6. Roompot 1
A leading operator and
developer of holiday parks
with over 30 holiday parks in
the Netherlands and Germany.
Roompot has a leading position
in coastal locations and an
impressive track record in
developing new parks and
integrating acquired
holiday parks.

8. Ceridian 1
A provider of outsourced
business processing services,
with a broad range of HR
services including payroll,
workforce management, tax
filing, benefits administration,
recruitment, health and wellness,
and HR outsourcing. Ceridian
serves over 25 million users in
more than 50 countries.

Value as % of Portfolio
Manager
Invested
Country

3.2%
ICG
2017
France

Value as % of Portfolio
Manager
Invested
Country

2.5%
PAI Partners
2013
UK

Value as % of Portfolio
Manager
Invested
Country

2.2%
PAI Partners
2016
Netherlands

Value as % of Portfolio
2.0%
Manager Thomas H Lee Partners
Invested
2007
Country
USA

Value as % of Portfolio
Manager
Invested
Country

3.4%
Graphite Capital
2013
UK

Value as % of Portfolio
Manager
Invested
Country

2.6%
ICG
2018
Germany

Value as % of Portfolio
Manager
Invested
Country

2.4%
Cinven & ICG
2014 & 2017
Norway

Value as % of Portfolio
Manager
Invested
Country

2.2%
ICG
2018
South Korea

9. nGAGE
A diversified recruitment
company serving a range of
customers within the public
and private sectors in the UK.
nGAGE provides specialist staff
to clients within the health and
social care, social housing,
construction and infrastructure,
and engineering sectors.

11. ICR Group
A leading provider of specialist
repair and maintenance services
to the energy industry. ICR’s
offering includes repair and
inspection services, pipe
connections and other
engineering solutions used
to service and repair pipes
on offshore platforms and
in onshore plants.

13. Education
Personnel 1,2
A leading UK provider of supply
teaching staff. Through
a network of over 60 branches,
it supplies teachers, teaching
assistants and nursery staff
to c. 25,000 primary and
secondary schools in England
and Wales.

15. Gerflor 2
Gerflor creates, manufactures
and markets innovative,
decorative and environmentally
responsible solutions for
flooring and interior finishes. It is
the third largest manufacturer of
PVC flooring in the world with its
products used in professional as
well as residential applications.

Value as % of Portfolio
Manager
Invested
Country

2.0%
Graphite Capital
2014
UK

Value as % of Portfolio
Manager
Invested
Country

1.8%
Graphite Capital
2014
UK

Value as % of Portfolio
Manager
Invested
Country

1.7%
ICG
2014
UK

Value as % of Portfolio
Manager
Invested
Country

1.6%
ICG
2011
France

Value as % of Portfolio
Manager
Invested
Country

1.9%
Graphite Capital
2016
UK

Value as % of Portfolio
1.8%
Manager Thomas H Lee Partners
Invested
2016
Country
USA

Value as % of Portfolio
Manager
Invested
Country

1.7%
New Mountain
2018
USA

10. Beck & Pollitzer
A global engineering services
business, serving a range of
blue-chip multinational
manufacturing clients.
Headquartered in Dartford,
it operates from 26 offices in
14 countries, providing specialist
installation of new machinery,
relocation of existing machinery
and maintenance services.

12. System One 1
Provider of specialist staffing
services diversified across the
engineering, IT, scientific and
legal sectors. System One helps
some of the largest companies
in the US staff complex mission
critical functions on a recurring
basis and is one of the US’
largest staffing providers in
its niches, sectors.

14. IRI 1
One of the world’s leading
data providers to the consumer
packaged goods industry.
Data provided by IRI is used to
understand product demand
patterns and to guide critical
business decisions around
promotional activities,
production and performance.

All or part of this investment
is held directly as a co-investment
or other direct investment.

All or part of this investment
was acquired as part of a
secondary purchase.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

30 largest underlying companies continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

16. PetSmart 1
A leading retailer of pet
products and services in North
America. It operates through
over 1,300 stores offering a
wide variety of pet products,
in addition to in-store services
such as professional grooming
and training, boarding and
veterinary clinics.

18. Endeavor Schools 1
An owner and operator of 43
independent schools across the
US. Endeavor’s strategy is to
acquire private schools and to
maintain their existing identities/
local reputation. The company
ensures operational best
practices, regulatory compliance
and provides a number of group
services.

20. PSB Academy 1
A provider of private tertiary
education in Singapore, with a
presence across five regional
campuses in Vietnam, Myanmar
and Indonesia. It has c.10,000
students undertaking graduate
certificates, diplomas and
degrees offered in partnership
with eight globally recognised
universities.

22. Compass Community
An independent provider of
fostering services and child
residential care. The company
recruits and places foster carers
with local authority customers
and provides carers with
ongoing training and support.
Compass also operates
residential care homes
for children.

Value as % of Portfolio
Manager
Invested
Country

1.3%
Graphite Capital
2017
UK

Value as % of Portfolio
Manager
Invested
Country

0.9%
Graphite Capital
2010
UK

Value as % of Portfolio
Manager
Invested
Country

0.8%
Graphite Capital
2002 & 2014
UK

Value as % of Portfolio
Manager
Invested
Country

0.8%
Tailwind Capital
2018
USA

17. YSC
A provider of leadership
consulting and management
assessment services to
corporate and private equity
clients globally. Headquartered
in London, YSC has a further
15 offices in Europe, North
America and Asia Pacific.

19. U-POL 2
A manufacturer and global
distributor of automotive
refinishing products with
a leading position in the UK
and growing presence in the
US and key emerging markets.
The company sells a broad range
of high quality, branded
products worldwide.

21. Cognito 1,2
A provider of specialist
software and services to
optimise mobile communications
systems for companies with
large field workforces. Its digital
network is accessed using third
party devices and enables
customers to improve service
quality by providing rich,
real-time information.

23. Abode Healthcare 1
A provider of hospice treatment
and home health services in the
US. The hospice segment
provides palliative at-home care
for terminally ill patients. The
home health segment provides
care to help patients avoid
unnecessary hospitalisations
and speed up recovery time.

Value as % of Portfolio
Manager
Invested
Country

1.4%
BC Partners
2015
USA

Value as % of Portfolio
Manager
Invested
Country

1.3%
Leeds Equity Partners
2018
USA

Value as % of Portfolio
Manager
Invested
Country

0.9%
ICG
2018
Singapore

Value as % of Portfolio
Manager
Invested
Country

0.8%
Graphite Capital
2017
UK

24. Random42
A provider of medical animation
and digital media services to the
healthcare and pharmaceutical
industries. The company
generates scientific animations,
which demonstrate disease
mechanisms and how medical
and pharmaceutical products
interact with the human body.

26. David Lloyd Leisure 1
Europe’s largest operator of
premium racquets, health and
fitness clubs with 98 clubs in
the UK and 13 across mainland
Europe. The company provides
an enhanced experience for
its members with swimming,
racquet sports, food and
beverage facilities and
children’s areas.

28. LeafFilter
LeafFilter Gutter Protection
manufactures and installs
gutter cover solutions and is
considered one of the largest
home improvement companies
in the US, with multiple offices
across North America.

30. Atlas for Men
Atlas for Men designs and
manufactures men’s outdoor
clothing. The company was
founded in 1999 and is based
in Paris, France.

Value as % of Portfolio
Manager
Invested
Country

0.7%
Graphite Capital
2017
UK

Value as % of Portfolio
Manager
Invested
Country

0.7%
TDR Capital
2013
UK

Value as % of Portfolio
Manager
Invested
Country

0.7%
Gridiron
2016
USA

Value as % of Portfolio
Manager
Invested
Country

0.4%
Activa
2016
France

Value as % of Portfolio
Manager
Invested
Country

0.7%
Charterhouse
2014
USA

Value as % of Portfolio
Manager
Invested
Country

0.7%
Graphite Capital
2016
UK

Value as % of Portfolio
Manager
Invested
Country

0.6%
ICG
2018
USA

25. Skillsoft 1
A leading global provider
of high quality, innovative,
cloud-based learning and
performance support resources.
Skillsoft’s customers are mostly
global enterprises, but also
include government
departments and small and
medium sized businesses.

27. New World
Trading Company
Operates 22 pub restaurants
across the UK, featuring an
affordable, high quality all-day
dining offering. Trading under
six different brands including its
flagship Botanist concept, its
multi brand approach enables
the company to target a wide
range of customers.

29. Alerian 2
Alerian is an independent
provider of energy infrastructure
market intelligence. Its
benchmarks are widely used by
industry executives, investment
professionals, research analysts,
and national media to analyse
relative performance.

All or part of this investment is held
directly as a co-investment or other
direct investment.

All or part of this investment was
acquired as part of a secondary
purchase.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

ICG ENTERPRISE TRUST TEAM
ICG ENTERPRISE TRUST TEAM

A STRONG COMBINATION
OF DIRECT and fund
investment experience

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Member of the Investment Committee
Member of the Investment Team
ICG oversight and support

The portfolio is managed by
a dedicated investment team
within ICG

Benoit Durteste
Chief Investment Officer and
Chief Executive Officer

andrew hawkins
Head of Private
Equity Solutions

Emma Osborne
Head of Private Equity
Fund Investment

Colm Walsh
Managing Director

Private equity experience: 26 years

Private equity experience: 24 years

Private equity experience: 14 years

Background
Benoît is Chief Investment Officer and
Chief Executive Officer of ICG. He is
also a member of the Board of ICG Plc
and the Chairman of the BVCA
Alternative Lending Working Group.
Benoît joined ICG in 2002 from Swiss
Re where he was a Managing Director
in the Structured Finance division in
London. Prior to Swiss Re, Benoît
worked in the Leveraged Finance
division of BNP Paribas and in GE
Capital’s telecom and media private
equity team in London. Benoît is a
graduate of the Ecole Superieure
de Commerce de Paris.

Investment Committee role
Benoît has extensive direct investment
experience. As Chairman of other ICG
investment committees covering
private debt, mezzanine and strategic
equity in Europe, US and Asia, Benoît
brings a broad perspective on the
private equity landscape and on
relative value and risk. Through his
long tenure in the market he also has a
broad range of manager relationships.

Background
Andrew is Head of ICG’s US business
as well as Head of Private Equity
Solutions, the division of ICG which
includes both Strategic Equity and
ICG Enterprise Trust. Andrew is
based in New York and also sits on
the investment committee for ICG
Strategic Equity. He was formerly
Partner and Managing Partner
at Palamon Capital Partners and
Vision Capital Partners respectively.
Most recently Andrew was CEO
of NewGlobe Capital Partners, a
business he founded in 2012. He has
an LLB in law from Bristol University
and is a Chartered Accountant.

Investment Committee role
Andrew brings significant
direct investment experience to the
Investment Committee. This long
tenure in both the European and US
markets gives him strong insights
as well as a broad range of manager
relationships. As the head of Strategic
Equity, Andrew is currently active in
the private equity secondaries market
which brings a different perspective
on relative value.

Background
Emma has been the lead portfolio
manager for the Company for over
14 years, originally joining Graphite
Capital as head of fund investments
and latterly as a Senior Partner of the
firm. Prior to this, Emma held various
roles in private equity including Merrill
Lynch Investment Managers (private
equity funds and co-investments),
Morgan Grenfell Private Equity
(direct equity), Royal Bank of
Scotland (mezzanine) and Coopers &
Lybrand (private equity advisory).
Emma holds a first-class degree in
Economics and Politics from
Bristol University and qualified as a
Chartered Accountant.

Investment Committee role
Emma has overall responsibility
for the development and execution
of the Company’s investment strategy.
She has extensive experience across
the private equity market, both as
a direct investor across the capital
structure and as a fund investor.

Background
Colm joined the team in 2010. He
focuses on primary funds, co-
investments and secondary transactions
and over the last three years has taken
primary responsibility for building up
the US investment programme. He has
led a number of recent commitments to
and co-investments alongside US
managers. He previously worked at
Terra Firma Capital Partners in its
finance and structuring team. Prior to
this, he worked as a manager in the
financial services audit group at Deloitte
where his clients included a number of
private equity firms. Colm is a graduate
of Economics from the London School
of Economics. He is both a Chartered
Accountant and a CFA Charterholder.

Investment Committee role
Colm brings experience of both fund
and direct investments in Europe and
the US to the Investment Committee. He
has a broad range of relationships with
both managers and investors in private
equity which help provide insights on
new opportunities.

Fiona Bell
Principal

Liza Lee Marchal
Principal

Kelly Tyne
Vice President

Private equity experience: 12 years

Private equity experience: 13 years

Private equity experience: 5 years

Background
Fiona joined the team in 2009 and has
recently taken on responsibility for
European market coverage. She has
worked on a wide range of primary
funds, secondaries and co-investments.
Fiona started her career at KPMG in the
media and private equity groups before
joining JP Morgan Cazenove where she
worked as a corporate broker and
mergers and acquisitions advisor in the
industrials sector. Fiona qualified as a
Chartered Accountant and holds a
degree in Experimental Psychology
from Oxford University.

Background
Liza joined the team in 2019. She was
previously with GIC Private Equity for
11 years, first in the London office and
most recently in the Singapore office.
During her time at GIC, Liza worked in
both the Direct and Fund Investments
teams. Prior to this, she worked in the
private equity division of Henderson
Global Investors and started her career
in the corporate finance group at
PricewaterhouseCoopers. Liza holds a
degree in Biochemistry from Oxford
University and an MBA from INSEAD.

Background
Kelly joined the team in 2014 and has
worked on a wide range of primary
funds and co-investments in Europe
and the US. Prior to this, Kelly was
an equity and fixed income research
analyst at First NZ Capital (Credit
Suisse, New Zealand) and spent
three years in the consulting team
at PricewaterhouseCoopers.
Kelly is a graduate in Finance and
Accounting from Otago University.

Craig grant
Analyst

Private equity experience: 2 years

Background
Craig joined the team in 2017 since
which time he has primarily focused on
underlying investment performance
and portfolio analysis. He has also
worked on a range of fund investments.
Craig is graduate of Trinity College
Dublin with an MSc in Finance.

andy lewis
General Counsel and
Company Secretary

ian stanlake
Head of Finance and
Investor Relations

Background
Andy is responsible for ICG’s Legal
and Company Secretarial functions.
Prior to joining ICG in 2013, he
spent 11 years in legal practice with
Slaughter and May, and Ashurst LLP,
specialising in company law, mergers
and acquisitions and corporate
governance. He is qualified as a
Solicitor in England and Wales and
is a graduate of Oxford University.

Background
Ian joined ICG plc in 2012, as Head of
Finance and Investor Relations and is
the CFO of ICG Enterprise Trust plc.
Prior to joining ICG, Ian was Group
Financial Controller at private equity
backed foreign exchange retail and
business payments business, Travelex.
Ian has a breadth of finance skills
covering all aspects of reporting,
business process changes, corporate
transactions and investor relations,
in both the private equity and listed
plc environments.

A new Associate will be
joining the investment team
in June. The investment team
is further supported by
a dedicated team in finance
and IR and has access to a
number of specialist shared
resources, including risk,
regulation, IT and legal.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Corporate social responsibility

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Our commitment to
responsible investing

ICG INVESTMENTS REPRESENT 20% OF THE
company’s PORTFOLIO. eimear palmer,
ICG’s responsible investing officer,
discusses icg’s commitment to esg

The long term success of ICG
Enterprise requires the effective
management of both financial
and non-financial measures.

Both the Board and the Manager
believe that companies which
are successful in managing
Environmental, Social and
Governance (ESG) risks while
capturing ESG opportunities will
outperform over the longer term.

ICG is committed to its responsibility to its
people, community and the environment
and has a well-defined Responsible
Investment Policy and ESG framework
in place. Full details can be found on its
website www.icgam.com.

Responsible investment
Responsible investing is an approach to
investing that aims to incorporate ESG
factors into investment decision making,
to better manage ESG risks and generate
long term sustainable returns.

ICG has been a signatory to the
United Nations-supported Principles for
Responsible Investment (PRI) since 2013.
The PRI has become the standard for global
best practice in responsible investing. PRI
signatories are required to report on their
responsible investment activities annually,
which ensures accountability and
transparency and also promotes
continual improvement.

ICG aims to act responsibly and cautiously
as the guardian of its investors’ capital in
portfolio companies, and considers ESG at
all stages of the investment cycle. It has a
well-defined Responsible Investment Policy
in place and an ESG framework which
clearly outlines the key ESG considerations
and practices from screening and due
diligence through to exit.

The ICG Enterprise investment team
receive regular formal training on ESG
and are provided with the skills and tools
necessary to identify and investigate ESG
issues during the pre-investment stage of

an investment, including specifically an
ESG checklist and policies. All investment
recommendations include a dedicated
section on ESG, outlining the policies and
practices of the manager, which is taken
into consideration when making investment
decisions by the Investment Committee.

The vast majority of our underlying private
equity managers are members of the PRI or
have a Responsible Investment/ESG policy.
Where a private equity manager does not
have a formal policy, the team seeks
assurances from the manager regarding
their ESG practices.

We have a greater degree of control of
ESG considerations in our high conviction
portfolio. Within our third party funds
portfolio, regulations and commercial
realities limit the degree of influence which
the Company could have on those funds.
ICG engages with the underlying managers
to identify where ESG issues may have an
impact on the Company’s reputation and on
that of our shareholders. The investment
team aims to do this by:

• Before investment, evaluating how the

underlying managers assess ESG issues as
part of their due diligence on companies
and how they report such issues

• Developing strong and open working

relationships with underlying managers

• Undertaking early and constructive

engagement on ESG issues of legitimate
concern to the Company’s shareholders

• Ensuring the highest levels of integrity in

relationships with the underlying managers,
including appropriate transparency on fees
and governance matters

Diversity and inclusion
ICG’s vision is to provide an inclusive
and respectful environment in which
each individual is motivated to make
their fullest contribution; in which they
feel fairly recognised, rewarded and
included regardless of age, gender,
race, sexual orientation, disability,
religion or beliefs. ICG has a diversity
and inclusion strategy and recently
established a Diversity and Inclusion
Steering Committee, with the aim of
increasing diversity and creating an
inclusive workplace.

Supporting Women
in private equity
ICG is a sponsor of Level 20, a
not-for-profit organisation founded
by a group of 12 senior women active in
private equity, including Emma Osborne,
ICG’s Head of Private Equity Fund
Investments. Level 20 aims to inspire
women to join and succeed in the
European private equity industry
and has an objective of increasing the
proportion of women in senior roles.

In July 2018, ICG was proud to become
a signatory to the HM Treasury Women
in Finance Charter, joining 271 other
British companies that have pledged to
increase the number of women in senior
management roles.

ICG’s Women’s Network was launched
recently as part of ICG’s broader
commitment to increase the number
of women in senior management to
30% by 2023.

ENTERPRISE TRUST

2018 PRI Assessment Score
Strategy and Governance scored a ‘Grade A’
Direct Private Equity scored a ‘Grade A’

Q| What is your role at ICG?
I am ICG’s Responsible Investing Officer. My
role is to further integrate ESG factors across
all ICG’s fund strategies, including ICG
Enterprise Trust. I am responsible for
ensuring ICG’s policies and procedures
reflect best practice while engaging with
portfolio companies proactively on ESG
issues. I work closely with ICG’s business
and investment teams, including the ICG
Enterprise investment team, during
investment screening and due diligence,
to ensure ESG is considered throughout
the investment process. Within the ICG
strategies that ICG Enterprise invests in,
in many cases ICG is the lead investor.
Therefore, I engage directly with the
portfolio companies during the investment
period to identify the material ESG risks and
opportunities and set ESG KPIs which are
monitored annually at the portfolio company
board level.

Q| How does responsible investment
inform investment decisions at ICG?
ICG has a comprehensive ESG Screening
Checklist which helps to inform our
investment decisions. In processes where
ICG has significant influence, external ESG
due diligence is conducted as standard.
This provides us with a very good
understanding of the potential ESG risks
and opportunities during due diligence and
is considered by the investment committee
when making the investment decision. This
information is also an excellent starting
point for discussion and engagement with
management during the investment period.

Q| How do you engage with portfolio
companies on ESG issues?
We engage directly with portfolio companies,
where we have influence, to identify ESG
risks, share best practice and improve
ESG performance. We collaborate with
management to establish company-specific
ESG KPIs which we monitor at Board-level
throughout the investment period. All ESG
KPIs reflect ICG’s ESG Priorities and where
relevant they are aligned to the Sustainable
Development Goals (SDGs). The asset
management industry has a key role to play in

deploying capital towards achieving the
SDGs and encouraging our portfolio
companies to do the same.

ICG also circulates an annual dedicated ESG
monitoring questionnaire to management
teams, across a number of our strategies,
to identify gaps and monitor progress on
the implementation of ESG initiatives.

Q| What are the biggest challenges facing
the industry from an ESG perspective?
One of the biggest challenges we are facing
as a society is climate change and as an
industry we have a responsibility to our
investors to understand and manage the
climate-related risks and opportunities
across our portfolios as we start to shift
towards a low-carbon economy.

Over the past year we have surveyed many
of our portfolio companies to understand
whether or not they have assessed climate
change risks, set climate change related
objectives or assigned responsibility at
management level for handling climate
change issues.

We are actively engaging with portfolio
companies where we have influence to
set targets to reduce energy intensity
and associated emissions. We are actively
considering how we can align our investment
activities with the spirit and intentions of the
Task Force for Climate-related Financial
Disclosures (TCFD). In 2018, ICG
participated in CDP (formerly the Carbon
Disclosure Project) and we are pleased to
report that ICG received a B score.

Q| What are ICG’s aspirations in terms
of ESG?
We recognise that we have a duty and
an obligation to take account of ESG
issues in our investment processes and
decision-making, and to encourage high
standards of ESG performance in the
companies or other entities in which we
invest. We are committed to fostering a
culture where responsible investing is
fully embedded across ICG.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Principal Risks and uncertainties

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Risk Management
The Board is responsible for risk management and determining the Company’s overall risk appetite. The Audit Committee assesses
and monitors the risk management framework and specifically reviews the controls and assurance programmes in place.

Board of
Directors
Risk management
leadership.

Audit Committee
Reviews and monitors
the risk management
process.

Principal risks and uncertainties
The execution of the Company’s investment strategy is subject to
risk and uncertainty and the Board and Manager have identified
a number of principal risks to the Company’s business.

The Company considers its principal risks (as well as a number of
underlying risks comprising each principal risk) in four categories:

Investment Risks – the risk to performance resulting from
ineffective or inappropriate investment selection, execution
or monitoring.

External Risks – the risk of failing to deliver the Company’s
strategic objectives due to external factors beyond the
Company’s control.

Operational Risks – the risk of loss or missed opportunity
resulting from a regulatory failure or the failure of people,
processes or systems.

Financial Risks – the risks of adverse impact on the Company
due to having insufficient resources to meet its obligations or
counterparty failure and the impact any material movement in
foreign exchange rates may have on underlying valuations.

Other risks, including reputational risk, are seen as potential
outcomes of the core principal risks materialising. These risks are
managed as part of the overall risk management of the Company.

THE MANAGER’S
Risk function
Risk reporting and running
the controls assurance
programmes overseen
by the Manager’s Risk
Committee.

Investment
Manager
Risk management is
integral to the investment
process and financial
management.

A comprehensive risk assessment process is undertaken regularly
to re-evaluate the impact and probability of each risk materialising
and the ﬁnancial or strategic impact of the risk. Where the residual
risk is determined to be outside of appetite, appropriate action is
taken. Further information on risk factors is set out on pages 80
to 83 of the financial statements.
Risk appetite
The Board acknowledges and recognises that in the normal course
of business the Company is exposed to risk and that it is willing to
accept a certain level of risk in managing the business to achieve its
targeted returns.

As part of its risk management framework, the Board considers its
risk appetite in relation to each principal risk and monitors this on
an ongoing basis. Where a risk is approaching or is outside the
tolerance set, the Board will consider the appropriateness of
actions being taken to manage the risk.

In particular, the Board has a very low tolerance for financing risk
with the aim to ensure that, even under the most severe stress
scenario, the Company is likely to meet its funding requirements
and financial obligations. Similarly, the Board has a low-risk
tolerance concerning operational risks including legal, taxation,
regulatory and business process and continuity risk.

IMPACT

MITIGATION

Change in
the year

Poor origination, investment
selection and monitoring by the
Manager and/or third party
managers could significantly affect
the performance of the portfolio.

The Manager has a highly selective investment
approach and disciplined process, which is
overseen by ICG Enterprise’s Investment
Committee within the Manager, which
comprises a balance of skills and perspectives.
Further, the Company’s Portfolio is diversified
reducing the likelihood of a single investment
decision impacting portfolio performance.

(see pages 30 to 31).

RISK

Investment

Investment performance
The Manager selects the fund
investments and direct co-investments
for the Company’s Portfolio. The
underlying managers of those funds
in turn select individual investee
companies.

The origination, investment selection
and management capabilities of both
the Manager and the third party
managers are key to the performance
of the Company.

Increase

Decrease

Stable

RISK

IMPACT

MITIGATION

Change in
the year

Valuation
In valuing its investments in private
equity funds and unquoted companies
and publishing its NAV, the Company
relies to a significant extent on the
accuracy of financial and other
information provided by the underlying
managers to the Manager. There is the
potential for inconsistency in the
valuation methods adopted by the
managers of these funds and companies
and for valuations to be misstated.

Incorrect valuations being
provided would lead to an
incorrect overall NAV.

The Manager carries out a formal valuation
process involving a quarterly review of third
party valuations, verification of the latest audited
reports, as well as a review of any potential
adjustments that are required to ensure the
valuation of the underlying investments are in
accordance with the fair market value principles
required under International Financial Reporting
Standards (“IFRS”).

Foreign exchange
The Company has continued to expand
its geographic diversity by making
investments in a number of countries.
Accordingly, a number of investments
are denominated in US dollars, euros and
other currencies as well as sterling.

At present, the Company does
not hedge its foreign exchange
exposure. Therefore, movements
in exchange rates between these
currencies may have a material
effect on the underlying valuations
of the investments and performance
of the Company.

The Board regularly reviews the Company’s
exposure to currency risk and reconsiders
possible hedging strategies on an annual
basis. Furthermore, the Company’s
multicurrency bank facility permits the
borrowings to be drawn in euros and US
dollars, if required.

External

Political and macro-economic
uncertainty
Political and macro-economic
uncertainty, including impacts from
the EU referendum or similar scenarios,
could impact the environment in which
the Company and its investment
portfolio companies operate.

Private equity sector
The private equity sector could fall
out of favour with investors leading to a
reduction in demand for the Company’s
shares.

Changes in the macro-economic
or political environment could
significantly affect the performance
of existing investments (and
valuations) and prospects for
realisations. In addition, it could
impact the number of credible
investment opportunities the
Company can originate.

A change in sentiment to the sector
has the potential to damage the
Company’s reputation and impact
the performance of the Company’s
share price and widen the discount
the shares trade at relative to NAV
per share, causing shareholder
dissatisfaction.

The Manager actively monitors these
developments, with the support of a
dedicated in-house economist and
professional advisers where appropriate, to
ensure it is prepared for any potential impacts
(to the extent possible).

Private equity has outperformed public markets
over the long term and it has proved to be an
attractive asset class through various cycles.

The Manager is active in marketing the
Company’s shares to a wide variety of
investors to ensure the market is informed
about the Company’s performance and
investment proposition.

The Board monitors the discount to NAV and
considers appropriate solutions to address
any ongoing or substantial discount to NAV,
including share buybacks.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Principal Risks and uncertainties continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

IMPACT

MITIGATION

Change in
the year

RISK

IMPACT

MITIGATION

Change in
the year

RISK

Operational

Regulatory, legislative
and taxation compliance
Failure by the Manager to comply
with relevant regulation and legislation
could have an adverse impact on the
Company, or adherence to such could
become onerous. This includes the
Corporate Governance Code,
Corporation Tax Act 2010, the
Companies Act, the Alternative
Investment Fund Managers Directive,
accounting standards, investment
trust regulations and the Listing
Rules and Disclosure Guidance
and Transparency Rules.

People
Loss of key investment professionals
at the Manager could impair the
Company’s ability to deliver its
investment strategy if replacements
are not found in a timely manner.

If applicable laws and regulations
are not complied with, the Company
could face regulatory sanction and
penalties as well as significant
damage to its reputation.

If the Manager’s investment team
were not able to deliver, investment
opportunities could be missed
or misevaluated, while existing
investment performance may suffer.

The Board is responsible for ensuring the
Company’s compliance with all applicable
regulations. Monitoring of this compliance, and
regular reporting to the Board thereon, has
been delegated to the Manager. The
Manager’s in-house legal counsel, supported
by the Compliance and Risk functions, provides
regular updates to the Board covering relevant
changes to legislation and regulation. The
Manager and the Board ensure compliance
with applicable regulation and legislation
occurs in an effective manner.

The Manager regularly updates the Board on
team developments and succession planning.

The Manager places significant focus on
developing key individuals to ensure that
there is a pipeline of potential succession
candidates internally. External appointments
are also considered if that best satisfies the
business needs at the appropriate time.

The Company’s investment team within the
Manager has always taken a team-based
approach to decision-making which helps to
mitigate against key person risk. In addition, no
one investment professional has sole
responsibility for an investment or fund
manager relationship and, to ensure that
insights and knowledge are widely spread
across the investment team, the team meets
weekly to discuss all potential new investments
and the overall performance of the portfolio.

The Manager’s compensation policy is
designed to minimise turnover of key people.
In addition, the senior investment professionals
are required to co-invest alongside the
Company for which they are entitled to a share
of investment profits if performance hurdles
are met, which aids retention.

The Manager and other
third party advisers, including
business processes and continuity
The Company is dependent on third
parties for the provision of all systems
and services.

In particular, the Company is dependent
on the business processes of the
Manager, Administrator and Depositary
operating effectively. These systems
support key business functions.

Control failures and gaps in these
systems and services could result
in a loss or damage to the Company.

A significant failure of or disruption
to the Manager, Administrator or
Depositary’s processes could result
in, among other things, financial
losses, an inability to perform
business critical functions,
regulatory censure, legal liability
and reputational damage.

The Audit Committee formally assesses the
internal controls of the Manager, the
Administrator and Depositary on an annual
basis to ensure adequate controls are in place.

The assessment in respect of the current year
is discussed in the Report of the Audit
Committee on pages 52 to 53.

The Management Agreement and agreements
with other key service providers are subject to
notice periods that are designed to provide
the Board with adequate time to put in place
alternative arrangements.

Information security
The Company is dependent on effective
information technology systems at both
the Manager and Administrator. These
systems support key business functions
and are an important means of
safeguarding sensitive information.

A significant disruption to these IT
systems, including breaches of data
confidentiality or cybersecurity, could
result in, among other things, financial
losses, an inability to perform business
critical functions, regulatory censure,
legal liability and reputational damage.

Financial

Financing
The Company has outstanding
commitments that may be drawn down at
any time in excess of total liquidity to
private equity funds. The ability
to fund this difference is dependent
on receiving cash proceeds from
investments (the timing of which are
unpredictable) and the availability
of financing facilities.

If the Company encountered difficulties
in meeting its outstanding commitments,
there would be significant reputational
damage as well as risk of damages being
claimed from managers and other
counterparties.

It is also possible that the Company
might need to raise new equity to fund
its outstanding commitments.

Application of the Manager’s and
Administrator’s information security
policies is supported by a governance
structure and a risk framework that allows
for the identification, control and
mitigation of technology risks.

The adequacy of the systems and controls
the Manager and Administrator have in
place to mitigate the technology risks is
continuously monitored and subject to
regular testing. The effectiveness of the
framework is periodically assessed.

The Manager monitors the Company’s
liquidity and covenants on a frequent basis,
and undertakes cash flow monitoring,
and provides regular updates on these
activities to the Board.

Commitments are expected to be mostly
deployed over a five year period. If
necessary the Company can reduce
the level of co-investments and
secondary investments, which are
discretionary, to preserve liquidity for
funding its commitments. The Company
could also dispose of assets.

The Company signed a new €176m
(£150m) multi-currency bank facility on
2 April 2019. The new facility matures in
2021/2022.

The total available liquidity as at
31 January 2019 stood at £164.5m,
comprising £60.6m in cash balances and
£103.9m in undrawn bank facilities. As a
result, the available financing along with
the private equity portfolio exceeded the
outstanding commitments by a factor of
2.0 times.

Increase

Decrease

Stable

Changes in Risk

Foreign exchange

People

Financing

The risk relating to Foreign exchange
exposure has been rated as increased
due to the increased volatility of sterling
and the strategic choice to increase the
portion of the Portfolio which is invested
in the United States (and therefore
denominated in US dollars), as well as the
Company’s exposure to the euro through
its European investment programme.

As noted in the Chairman’s statement,
the head of the Company’s investment
team is transitioning to a senior adviser
role at the end of 2019 and her successor
is currently being sought. As a result of this
exercise, the Board believes that the risk in
respect of People is currently heightened.
The Board anticipates this risk to return to
stable once her successor is appointed.

There has been a reduction in the risk
relating to Financing as the Company’s
bank facility has been extended on
improved terms.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Governance

40 Board of Directors
42 Corporate governance report
45 Report of the Directors
48
Investment policy
49 Directors’ Remuneration report
52 Report of the Audit Committee
54 Additional disclosures required by the

Alternative Investment Fund Managers Directive

55 Statement of Directors’ responsibilities

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

board of directors

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

All members of the
Board are independent
non-executive directors

New board member
Appointed to the Board
on 18 April 2019

Jeremy Tigue

Alastair Bruce

Sandra Pajarola

ANDREW Pomfret

Lucinda Riches

JANE TUFNELL

Chairman

Chairman of Audit Committee

Member of Audit Committee

Senior Independent Director
and Member of Audit Committee

Non-executive director

Background
Jeremy Tigue was appointed to
the Board in 2008 and became
Chairman in 2017. He joined
F&C Management in 1981 and
was the fund manager of F&C
Investment Trust from 1997 to
2014. He is Chairman of Syncona
Limited and a non-executive
director of The Mercantile
Investment Trust plc, The
Monks Investment Trust PLC
and Aberdeen Standard Equity
Income Trust PLC.

Experience
Jeremy brings extensive
financial services experience,
having spent 33 years as a fund
manager, including 17 years as
the lead manager of the F&C
Investment Trust. He has broad
and deep knowledge of all
aspects of investment company
management, governance and
regulation and is a seasoned
public company board member
and chairman.

Background
Alastair Bruce was appointed
to the Board in 2018 and
became Chairman of the Audit
Committee in February 2019.
Alastair was Managing Partner
of Pantheon Ventures between
2006 and 2013, having joined
the firm in 1996. During his
tenure at Pantheon Ventures
Alastair was involved in all
aspects of the firm’s business,
particularly the management
of Pantheon International
Participations PLC (PIP),
the expansion of Pantheon
Ventures’ global platform
and the creation of a
co-investment business.

Experience
Alastair brings over 25 years
of private equity, investment
management and financial
experience to the Board.
Through his involvement with
the management of PIP, he has
extensive experience in
managing a listed private
equity vehicle.

Background
Sandra Pajarola was appointed
to the Board in March 2013.
Sandra has over 30 years of
experience in private equity
and financial services. She was
a Partner at Partners Group
having served on its global
investment committee for
12 years and was key in building
up and managing their primary
funds’ investment team and
portfolio. In her role, she also
held various board seats on
direct investments as well as
advisory board seats for funds.
In 2013, she changed her role to
Operating Partner for Partners
Group. In addition, Sandra is an
angel investor in private equity
across Europe.

Experience
Sandra brings extensive private
equity investing experience
having executed a broadly
similar strategy during her time
at Partners Group. As the head
of the team there Sandra built
relationships with many private
equity managers in Europe and
has a broad perspective on the
private equity industry.

Background
Andrew Pomfret was appointed
to the Board in March 2011
and was Chairman of the
Audit Committee from 2017
to January 2019. He joined
Rathbone Brothers Plc as
finance director in 1999, and
served as chief executive from
2004 until 2014. He is currently
a non-executive director of
Aberdeen New Thai Investment
Trust PLC, Sabre Insurance
Group plc, Sanne Group Plc and
Miton UK MicroCap Trust plc.
He is standing down from the
Board at the Company’s AGM
on 27 June 2019.

Experience
Andrew brings a broad range
of experience spanning
accountancy and finance, private
equity investing and public
company management, both in
executive and non-executive
roles. Andrew has extensive
experience as an audit
committee member of listed
investment companies.

Background
Lucinda Riches was appointed
to the Board in July 2011 and
became Senior Independent
Director in June 2018. She
worked at UBS and its
predecessor firms for 21 years
until 2007 where she was a
managing director, global head
of Equity Capital Markets and
a member of the board of
the investment bank. She is a
non-executive director of The
British Standards Institution,
Ashtead Group plc, CRH plc
and will join the board of
Greencoat UK Wind PLC, as
a non-executive director, on
1 May 2019. She was awarded
a CBE in 2017 for her services
to financial services, British
industry and to charity.

Experience
Lucinda brings significant capital
markets experience, having
advised public companies
on strategy, fundraising and
investor relations for many
years. She also brings extensive
experience as a public company
non-executive director across a
variety of businesses, including
two FTSE 100 companies.

Background
Jane Tufnell started her
career in 1986 joining
County NatWest, where
she jointly ran the NatWest
Pension Fund’s exposure
to UK smaller companies. In
1994 she co founded Ruffer
Investment Management Ltd
where she worked for over
20 years to build the
business to an AUM of £20
billion, before leaving in
2014. Jane is Chair of
Odyssean Investment Trust
and a non-executive director
of Diverse Income Trust,
JPM Claverhouse Trust and
Record plc, the currency
management specialist.

Experience
Jane brings extensive
financial services and fund
management experience to
the Board. She is a seasoned
public company board
member and chair and has
significant experience of
all aspects of investment
company management,
governance and regulation.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Corporate governance report

CORPORATE GOVERNANCE
The Company is committed to appropriate
standards of corporate governance.
The Board applied the principles set out in
the UK Corporate Governance Code issued
by the Financial Reporting Council in 2016
(the “Code”) during the year ended
31 January 2019. A copy of the Code can be
obtained from the website of the Financial
Reporting Council (www.frc.org.uk).

During the year, the Company complied
with the Code save that (as it has no
employees or executive directors) it does
not have a remuneration committee as
recommended by the Code, and does not
have an identified Chief Executive. The
Directors’ Remuneration Report, which
shareholders will be asked to approve at
the Annual General Meeting, can be found
on pages 49 to 51.

The Board is aware of the changes to the
Code which will apply for the financial year
commencing 1 February 2019, and intends
to conduct itself in line with the Code to the
extent reasonably practicable (although for
the reasons set out below it will not comply
with the provisions imposing a time limit on
the Chairman’s tenure as it does not feel
this to be in the best interests of
shareholders). Any non-compliance will be
explained to shareholders. The Board is
aware of the AIC’s version of the Code and
will consider it during the year.

The Company is also subject to the
Alternative Investment Fund Managers
Directive (“AIFMD”) and has a
management agreement with the Manager
to act as its Alternative Investment Fund
Manager (“AIFM”). Aztec Financial
Services (UK) Limited acts as its
depositary, in accordance with the
requirements of the AIFMD.

Role of the Board
It is the responsibility of the Board to
ensure that there is effective stewardship
of the Company’s affairs. Strategic issues
are determined by the Board and a formal
schedule of operational matters reserved
for the Board has been adopted. In

order to enable them to discharge their
responsibilities, directors have full and
timely access to relevant information.

The Board, which meets at least four times
each year, reviews the Company’s
investment portfolio and investment
performance and considers financial
reports. There is also contact with the
directors between meetings where this is
necessary for the Company’s business.

There is an agreed procedure under
which directors, wishing to do so in the
furtherance of their duties, may take
independent professional advice at the
Company’s expense.

The quorum for any Board meeting is two
directors but attendance by all directors
at each meeting is strongly encouraged.

Composition and independence
The Board is currently comprised of five
non-executive directors. Jane Tufnell will be
appointed on 18 April 2019 and will stand for
election at the forthcoming AGM. There is no
Chief Executive position within the Company
as day to day management of the Company’s
affairs has been delegated to the Manager.
The Board regularly reviews the
independence of its members and, having
due regard to the definitions and current
guidelines on independence under the
Governance Code, considers all directors to
be independent (despite the length of service
of some directors, in respect of whom it has
concluded that they still offer sufficient
independence and challenge). There are
no relationships or circumstances relating
to the Company that are likely to affect
their judgement.

Senior Independent Director
Lucinda Riches is the Senior
Independent Director.

Company secretary
The directors also have access to the
advice and services of the company
secretary, Andrew Lewis (on behalf of ICG
Nominees 2015 Limited).

Induction and training
Board training is provided regularly to
ensure that Board members are well placed
to conduct their role. In addition, directors
benefit from training received while sitting
as members of other Boards.

New Board members receive a formal
induction on all aspects of the
Company’s business.

Performance evaluation
The Board has a formal process for the annual
evaluation of its own performance and that of
the Chairman, which took place as usual
during the year. This process is based on an
open discussion and assessment of the Board
and its committees, with the Chairman making
recommendations to improve performance
where necessary. The most recent evaluation
concluded that the Board and its members
continue to operate effectively. In line with
the Code, an external evaluation will take
place during the current financial year.

Board diversity
There are currently two female and three male
directors on the Board. Jane Tufnell will be
appointed to the Board on 18 April 2019 and
will stand for election at the forthcoming AGM.
The Board considers all candidates for Board
appointments and does not discriminate
based on gender or any other factor, making
appointments based solely on the skills and
experience of the candidates. The ongoing
search for new directors is being conducted
on an open basis without any discrimination.

Tenure
As discussed on page 43, the Board’s tenure
and succession policy seeks to ensure that the
Board is well balanced by the appointment of
directors with a range of skills and experience.
The Company has no other employees.

Meetings

Jeremy Tigue

Alastair Bruce1

Sandra Pajarola

Andrew Pomfret

Lucinda Riches

1 Appointed mid year.

Board

Nominations

Audit

4/4

3/3

4/4

2/2

N/A

2/2

3/3

2/3

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

During the year under review, four regular
meetings were held and attended by
directors as set out in the opposite table.
A number of additional telephone meetings
regarding routine matters were also held.
In the cases where directors were unable
to attend Board and Committee meetings,
the relevant directors were contacted by
the Chairman before and/or after the
meeting to ensure that they were aware of
the issues being discussed and to obtain
their input. Peter Dicks, who retired from
the Board in June 2018, also attended one
Board meeting before his retirement.

Information flows
The Board receives written reports from
the Manager and its advisers on at least a
quarterly basis and as appropriate on
specific matters. The Chairman ensures
that directors are provided, on a regular
basis, with key information on the
Company’s policies, regulatory
requirements and the Company’s risk
management and control results.

Insurance and indemnities
During the year under review, the Board has
maintained appropriate insurance cover in
respect of legal action against the directors.
The policy does not cover dishonest or
fraudulent actions by the directors.

Stewardship
The Company seeks to make investments
in funds and companies which are well
managed with high standards of corporate
governance. The directors believe this
creates the proper conditions to enhance
long term shareholder value. The exercise
of voting rights attached to the Company’s
Portfolio has been delegated to the
Manager. However, the Board will be
informed of any sensitive voting issues
involving the Company’s investments.

Conflicts of interest
The Company has adopted a policy
requiring all directors to disclose other
positions and also any other matter which
may give rise to a conflict. Such conflicts
can then be considered by the other
directors and, if necessary, either approved
or not approved. Currently there are no
material conflicts in respect of any director.

Anti-bribery and Corruption Policy
The Manager has processes in place to
ensure that bribery and corruption do not
take place within the Manager or the
Company. These include formal policies
and regular training for all staff. The Board
has reviewed these processes and found
them adequate.

Internal control around financial reporting
The key features of the Company’s internal
control systems that ensure the accuracy
and reliability of financial reporting include
clearly defined lines of accountability and
delegation of authority, policies and
procedures that cover financial reporting,
preparation of quarterly management
accounts, project governance and a review
of the disclosures within the Annual Report
and Accounts from functional heads.
This combined ensures the disclosures
made appropriately reflect the
developments within the Company in
the year and meet the requirement of
being fair, balanced and understandable.

Environmental Policy
Due to the Company’s premium listing on
the London Stock Exchange, the Company
is required to disclose its Environmental
Policy. Further information on the social
and environmental policies of the Manager
can be found in the Corporate Social
Responsibility and ESG sections on
pages 32 and 33.

Committees
Nominations Committee
All of the directors serve on the Nominations
Committee which meets when necessary to
select and propose suitable candidates for
appointment or reappointment to the Board.
The Committee is chaired by Jeremy Tigue.
When making an appointment, the Board
considers the existing composition of the
Board to determine areas which require
strengthening. Independent external
consultants are used to help identify a
shortlist of candidates.

The Board’s tenure and succession policy
seeks to ensure that the Board is well
balanced by the appointment of directors
with a range of skills and experience.
Candidates for the Board are assessed
as to the appropriateness of their skills and
experience prior to their appointment.
The Board does not discriminate based
on gender or any other factor when
considering candidates.

There were two meetings of the Committee
during the year (2018: two). These related
to succession planning for the Chairman and
for the Board as a whole. As a further result
of these discussions, Andrew Pomfret will
retire from the Board from the end of this
year’s Annual General Meeting having
served eight years. Since the year end, the
appointment of Jane Tufnell has been
announced following a thorough search
process. The Committee has also adopted a
succession plan to ensure that succession
matters are appropriately considered in the
coming years.

The Nominations Committee has
considered the position of the Chairman,
particularly in the light of the new Code
provision that a limit of nine years should
apply to the Chairman’s length of service.
Jeremy Tigue was appointed Chairman in
2017, however he had served on the Board
for a number of years before becoming
Chairman, and has therefore exceeded
this period.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Corporate governance report continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

However, the Nominations Committee
believe that it would not be beneficial for
shareholders for Mr Tigue to step down
from the Board at this time; he remains an
effective and independent Chairman who is
overseeing a series of Board changes to
ensure that shareholders have a settled
Board. If he were to retire, his replacement
could not be one of the longer serving
directors as they are all either approaching
or already in excess of nine years of service,
and a new director would not yet be familiar
with the operations of the Company and its
business. It is therefore intended that Mr
Tigue should oversee the Board refresh and
complete a handover to a new Chair before
retiring from the Board as soon as
practicable. The Nominations Committee
currently anticipates that Mr Tigue will retire
during 2020.

Remuneration Committee
As the Board is comprised solely of
non-executive directors, the Company
does not have a Remuneration Committee.
The determination of the directors’ fees is
dealt with by the whole Board.

Please see pages 49 to 51 for the report on
Directors’ remuneration.

Audit Committee
Please see pages 52 to 53 for the report
of the Audit Committee.

Internal controls
The Board, at least annually, assesses the
internal controls of the Manager. There
have been no material adverse findings
from this review. Please see page 53 for
details of this in the report of the Audit
Committee. The Company does not have an
internal audit function, although the need
for such a function is considered annually.
All of the Company’s management functions
are delegated to the Manager, which has its
own internal audit function.

Investor relations
Both the Company’s Annual Report and
Accounts, containing a detailed review
of performance and of changes to the
investment portfolio, and Interim Review,
containing updated information in a more
abbreviated form, are made available to
investors either by post or through the
Company’s website. A copy of the latest
Company presentation is available on the
Company’s website. Quarterly releases in
respect of the Company’s performance are
announced to the market and available to
shareholders. At the AGM, a presentation
is made by the Manager and investors are
given an opportunity to question the
Chairman, the other directors and the
Manager. Shareholders are encouraged
to attend.

Communication with shareholders is given
a high priority by the Board. The Manager
and all directors, and in particular the
Senior Independent Director, are available
to enter into dialogue with shareholders.
The Manager holds regular discussions
with analysts and existing and potential
institutional shareholders and values
the feedback obtained in this manner.
A structured programme of shareholder
presentations by the Manager to
institutional shareholders takes place
following the publication of the Annual and
Interim results, including several group
lunches which were attended by several
directors. The Board receives regular
updates from the Company’s broker and is
kept informed of all material discussions
with investors and analysts which helps the
directors develop their understanding of
shareholders’ views and expectations.
A detailed list of the Company’s
shareholders is reviewed at each
Board meeting.

Directors can be contacted via the
registered office of the Company
(see Useful Information section).

going concern
Having reviewed the balance sheet and
current activities of the Company, the
directors believe that it is appropriate to
continue to adopt the going concern basis
of preparation of the Company’s financial
statements. The Company’s business
activities, together with factors likely to
affect its future development, performance,
position and cash flows, are set out in the
Chairman’s Statement, Strategic Report,
Portfolio Review and Market Review on
pages 4 to 25.

VIABILITY STATEMENT
In accordance with the UK Corporate
Governance Code, the Board has assessed
the financial position and prospects of the
Company over a longer period than the 12
months required by the “going concern”
basis of accounting.

The Board has assessed the viability of the
Company over a three year period from the
balance sheet date, as the Board expects
the majority of the Company’s current
commitments to funds to be drawn down
in cash over the next three years.

The Board has carried out a robust
assessment of the principal risks and their
mitigants noted on pages 34 to 37. In
particular, the Board has assessed the
Company’s ability to manage the
overcommitment risk through the review of
balance sheet and cash flow projections
provided by the Manager, which included
scenarios with differing levels of underlying
valuation growth, fund drawdowns and
realisations, and exchange rates.

Based on its review, the Board has a
reasonable expectation that the Company
will be able to continue in operation and
meet its liabilities as they fall due over a
three year period.

Jeremy Tigue
Chairman
12 April 2019

THE DIRECTORS PRESENT THEIR REPORT AND THE AUDITED
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2019

The Directors’ Report should be read in conjunction with the Strategic Report (pages 2 to 37)
and the Directors’ Remuneration Report (pages 49 to 51).

Status of the Company
ICG Enterprise Trust plc (“the Company”) is
an investment company as defined by section
833 of the Companies Act 2006 and is
registered and domiciled in England (number
1571089). During the year under review the
Company carried on the business of an
investment trust. The last accounting period
for which the Company has been approved
by HM Revenue & Customs in accordance
with the provisions of Section 1158 of the
Corporation Tax Act 2010 is the year ended
31 January 2019. The Company will retain its
investment trust status with effect from
1 February 2019 provided it continues to
satisfy the conditions of Section 1158 of the
Corporation Tax Act 2010. The Company has
subsequently directed its affairs with the
objective of retaining such approval.

The Company’s shares are eligible for
tax-efficient wrappers such as Individual
Savings Accounts (“ISAs”), Junior ISAs and
Self Invested Personal Pensions (“SIPPs”).

Reporting period
This Annual Report has been prepared for
the year to 31 January 2019.

Investment policy
The Company’s investment policy is set out
on page 48. There have been no material
changes to it since last year.

No material change will be made to
the investment policy without prior
shareholder approval.

Purchase of shares
The Company has the authority, subject to
various terms as set out in its Articles and in
accordance with the Companies Act 2006,
to acquire up to 14.99% of the shares in
issue. The Company intends to renew this
authority annually.

During the course of the year, the Company
purchased 85,000 shares (representing 0.1%
of the issued share capital of the Company on
25 April 2019, being the latest practical date

before publication of this document) at an
average price of 829p, for a total cost of
£0.7m at a weighted average discount of
19%. These shares are held in treasury.

of this review, the appointment of Jane
Tufnell has been proposed and Andrew
Pomfret will retire from the Board from the
end of this year’s Annual General Meeting.

Dividend
Interim dividends in respect of the year
ended 31 January 2019 were paid on
7 September 2018 (5.0p per share),
7 December 2018 (5.0p per share) and
1 March 2019 (5.0p per share) for a total of
15.0p per share. A final dividend of 7.0p per
share will, if approved, be paid on 26 July
2019 to holders of ordinary shares on the
register at the close of business on 5 July
2019. This would bring the total dividend
for the year to 22p per share.

Directors
All of the directors listed on pages 40 to 41
held office throughout the year and up to the
date of signing the financial statements,
except for Alastair Bruce who was appointed
as a director on 1 May 2018. Jane Tufnell will
be appointed to the Board with effect from
18 April 2019 and will stand for election at
the forthcoming Annual General Meeting.

Sandra Pajarola is resident in Switzerland.
All of the other directors of the Company
are resident in the UK. The directors’
biographical details demonstrate the wide
range of skills and experience that they
bring to the Board. In addition to the
requirement of the Articles of Association
that one third of the Board is subject to
retirement each year, all directors are
required to submit themselves for
re-election at least every three years.
However, in accordance with corporate
governance principles, the Board has
decided that all directors will submit
themselves for re-election every year.

A thorough review of the Board’s tenure and
succession planning was conducted by the
Nominations Committee during the year,
further details of which can be found in the
Nominations Committee section of the
Corporate Governance Report. As a result

A thorough review of all directors standing
for re-election has been conducted, which
has been particularly rigorous in the case of
Jeremy Tigue and Lucinda Riches given their
length of service. The review concluded
that all directors bring valuable skills and
experience to the Board and continue to
operate effectively, and accordingly all are
recommended for re-election.

Manager
ICG Alternative Investment Limited (“ICG”
or “the Manager”) is the manager of the
Company. ICG is authorised as an Alternative
Investment Fund Manager and is regulated
by the Financial Conduct Authority.

The Manager provides investment
management, company secretarial and
general administrative services to the
Company under a management agreement.
This agreement can be terminated by either
party giving not less than one year’s notice.

The investment management fee payable
under this agreement is calculated as
1.4% of the investment portfolio and 0.5%
of outstanding commitments to funds in
their investment periods, in both cases
excluding the funds managed directly by
ICG (see Figure 1 on page 46) and by
Graphite Capital (see Figure 2 on page 47).

For the ICG managed funds (as disclosed
in Figure 1 on page 46) the annual
management charge is between 1.3% and
1.5% of original commitments for funds in
their investment period, and between 0.8%
to 1.5% of unrealised cost for funds where
their investment period has ended.

For the Graphite managed funds (as
disclosed in Figure 2 on page 47) the
annual management charge is 2% of original
commitments for funds in their investment
period, and between 0.75% to 2% for funds
where their investment period has ended.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Report of the Directors continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

The charges and incentive arrangements
for both ICG and Graphite managed funds
are at the same level as those paid by third
party investors in the funds.

The Board reviews the activities and
performance of the Manager on an
ongoing basis, and reviews the
investment strategy annually.

The Board reviews the Company’s
investment record over short and long term
periods, taking into account factors
including the net asset value per share and
the share price as well as the general
competence of the Manager.

The Board also considers the performance
of the Manager in carrying out its company
secretarial and general administrative
functions.

In addition, the Audit Committee carries
out a formal assessment of the Manager’s
internal controls and risk management
systems every year.

The Board has contractually delegated
responsibility for management of the
investment portfolio and the provision of
accounting and company secretarial services
to the Manager. Custody of unquoted
securities has been contractually delegated
to an FCA regulated third party custodian,
Aztec Financial Services (UK) Limited

(“Aztec”). Aztec has also been appointed
the Company’s depositary, in accordance
with the Alternative Investment Fund
Managers Directive. Custody of quoted
securities has been contractually delegated
to an FCA regulated third party custodian,
Charles Stanley & Co Limited, although
Aztec retains liability for safeguarding in
respect of these assets. The performance of
these third parties is overseen by the Board
as part of its regular reviews of the Manager.

Based on the above, it is the Board’s opinion
that the continuing appointment of ICG as
manager of the Company on the agreed
terms is in the best interests of shareholders
as a whole.

Co-investment incentive scheme
ICG and certain of its executives and, in
respect of certain historic investments,
the executives and connected parties of
the Former Manager (together “the
Co-investors”), are required to co-invest
alongside the Company, for which they are
entitled to a share of investment profits if
certain performance hurdles are met,
as set out below.

The Co-investors are required to contribute
0.5% of the cost of every new fund
investment (excluding those by Graphite
Capital funds, and any ICG fund investments
made after 1 February 2016) and direct
investment made by the Company.

If such an investment has generated at
least an 8% per annum compound return
in cash to the Company (the “Threshold”),
the Co-investors are entitled to receive
10% of the Company’s total gains from
that investment, out of future cash receipts
from the investment or, very rarely, in
specie on the flotation of underlying
portfolio companies.

For investments made before 24 May 2007,
if the Threshold is not achieved the
Co-investors do not recover their
contribution. For investments made after
24 May 2007, the Co-investors recover their
contribution at the same rate as the Company
recovers the cost of its investment.

Further details of these arrangements can
be found in notes 1 and 9 to the financial
statements.

Capital
As at 31 January 2019, 72,913,000 ordinary
shares of 10.0p each were in issue and fully
paid, including 3,735,945 shares which had
been bought back into treasury. 3,760,945
Treasury Shares, representing 5% of the
Company’s share capital, were held as at
12 April 2019, being the latest practical date
before publication of this document.

INVESTMENTS IN ICG Funds
Figure 1

Fund

ICG Europe Fund VII 1
ICG Europe Fund VI 1
ICG Europe Fund V 1
ICG European Fund 2006B 1
ICG European Fund 2008B Recovery Fund 1
ICG North American Private Debt Fund II 2
ICG Strategic Equity Fund III 2
ICG Strategic Secondaries Fund II 2
ICG Augusta Co-Investor 2
ICG Cross Border Co-Investor 2
ICG Velocity Partners Co-Investor 2
ICG Asia Pacific III 2
Total

31 January 2019

Original
commitment
£’000

Remaining
commitment
£’000

34,925
21,828
13,426
9,188
10,478
7,629
30,516
26,701
19,072
3,814
11,443
11,443
200,463

31,527
3,448
890
2,177
7,285
7,629
29,944
14,946
18,338
1,041
363
4,676
122,264

Fair
value
£’000

3,332
22,727
4,744
6,822
2,855
–
572
13,467
734
3,238
3,516
8,003
70,010

Original
commitment
£’000

31 January 2018

Remaining
commitment
£’000

–
21,868
13,451
9,204
10,497
–
–
24,664
–
–
10,570
10,570
100,824

–
4,561
892
2,104
8,135
–
–
16,176
–
–
2,012
5,383
39,263

Fair
value
£’000

–
21,601
8,392
7,531
2,821
–
–
12,032
–
–
10,703
5,923
69,003

Independent auditors
As set out in the report of the Audit
Committee, the audit of the Company for
the year ending 31 January 2020 has been
tendered and Ernst & Young LLP are
recommended for appointment by the
Audit Committee. A resolution appointing
them and authorising the directors to
determine their remuneration will be
submitted at the AGM.

Annual General Meeting
The Annual General Meeting of the
Company will be held at The Exhibition Room,
Goldsmiths’ Hall, Foster Lane, London,
EC2V 6BN on 27 June 2019 at 3.00p.m.
The resolutions are set out in the Notice
of Meeting on page 98.

By order of the Board,

Andrew Lewis
For and on behalf of
ICG Nominees 2015 Limited
12 April 2019

Resolutions will be proposed at the
forthcoming AGM to:

• allot up to a maximum of 22,828,428

ordinary shares of 10p each, representing
33% of the Company’s issued share capital
(excluding shares held as Treasury
Shares) (resolution 11 on page 97) as at
12 April 2019; and

• disapply pre-emption rights on up to 10%
of the issued share capital (excluding
shares held as Treasury Shares) to enable
the Board to re-issue any ordinary shares
held in treasury without having first to
offer them to all existing shareholders
(resolution 12 on page 97); and to renew
the directors’ authority to buy back up to
10,369,641 ordinary shares (being
14.99% of the issued share capital
(excluding shares held as Treasury Shares
as at 12 April 2019)) subject to the
constraints set out in the resolution
(resolution 13 on page 97). The authority
will be used where the directors consider
it to be in the best interest of
shareholders. It is the current intention of
the Board that any shares thus purchased
would be held as Treasury Shares.

Substantial share interests
At 12 April 2019, the Company had received
no notifications of disclosable interests in
its issued share capital.

Greenhouse gas emissions
The Company has no greenhouse gas
emissions to report, nor does it have
responsibility for any other emissions
producing sources under the Companies
Act 2006 (Strategic Report and Directors’
Reports) Regulations 2013.

Transfer of shares
and voting rights
All ordinary shares have equal voting rights.
There are no restrictions concerning the
transfer of securities in the Company, no
special rights with regard to control attached
to securities, no agreements between
holders of securities regarding their transfer
known to the Company, and no agreement to
which the Company is party that affects its
control following a takeover bid.

Disclosure of information
to auditors
Each of the persons who are a director at the
date of approval of this report confirms that:

• so far as the director is aware, there is no
relevant audit information of which the
Company’s auditors are unaware; and
• each director has taken all the steps that

he or she ought to have taken as a director
in order to become aware of any relevant
audit information and to establish that the
Company’s auditors are aware of that
information. The confirmation is given and
should be interpreted in accordance with
the provisions of section 418 of the
Companies Act 2006.

INVESTMENTS IN Graphite Capital Funds
Figure 2

Fund

Graphite Capital Partners IX 1
Graphite Capital Partners VIII
Graphite Capital Partners VIII Top Up Fund
Graphite Capital Partners VII
Graphite Capital Partners VII Top Up Fund
Graphite Capital Partners VII Top Up Fund Plus
Graphite Capital Partners VI
Total

31 January 2019

Original
commitment
£’000

Remaining
commitment
£’000

30,000
80,000
20,000
36,489
8,480
4,458
71,331
250,758

30,000
10,260
6,613
3,474
671
600
–
51,618

Fair
value
£’000

(281)
77,626
11,335
9,539
1,556
1,383
4,263
105,421

Original
commitment
£’000

31 January 2018

Remaining
commitment
£’000

–
80,000
20,000
42,800
10,000
6,000
78,188
251,988

–
15,779
10,864
3,424
671
600
2,084
33,422

Fair
value
£’000

–
65,114
9,691
9,631
1,576
1,401
7,523
94,936

1 Euro denominated positions translated to sterling at spot rate on 31 January 2019 and 31 January 2018.

2 US dollar denominated positions translated to sterling at spot rate on 31 January 2019 and 31 January 2018.

1 Fair value is negative due to fund expenses incurred while no commitment has yet been drawn.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Investment Policy

Directors’ Remuneration Report

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Cash
The Company holds cash on deposit with
UK banks or invests it in debt instruments
or funds which themselves invest in such
instruments. These investments are
typically very liquid, with high credit quality,
low capital risk and low maturity. The
Company will invest cash only in low risk
assets and will limit exposure to any one
bank, fund or issuer to 15% of gross assets.

Benchmark
The Company’s benchmark is the FTSE
All-Share Index, which measures the share
price performance of quoted companies
of all sizes in the UK. The Board considers
that this provides the most appropriate
comparator for the Company’s
shareholders.

Currency risk
The Company holds investments in
currencies other than sterling and is
exposed to the risk of movements in the
exchange rate of these currencies. From
time to time the Company may put in place
hedging arrangements in order to manage
currency risk.

The objective of ICG Enterprise
is to provide shareholders with
long term capital growth through
investment in unquoted
companies, mainly through
specialist funds but also directly.

Risk diversification
ICG Enterprise’s policy is to maintain an
investment portfolio which provides
exposure to unquoted companies across
a broad range of sizes, with the greatest
emphasis on medium sized and large
companies.

Asset allocation
ICG Enterprise invests principally in
unquoted companies either indirectly
through a fund or directly in a company.
Where investments are made through a
fund, that fund may itself be either
unquoted or quoted. Unquoted companies
in which ICG Enterprise has an interest may
from time to time obtain a quotation and the
Company may continue to hold its interest
in quoted form. Investments in unquoted
companies and quoted companies held
post-flotation will typically comprise
between 50% and 100% of the Company’s
gross assets.

The Company makes a significant majority
of its investments through funds. It also
invests directly, mainly in the form of
co-investments alongside funds.

The Company expects the largest part
of its investment portfolio to be in well
established companies. The Company may
also invest in infrastructure projects, early
stage companies and other unquoted
investments.

Underlying investments will mostly be in
equity or equivalent risk instruments. A
minority of investments may also be in lower
risk instruments such as mezzanine debt.

The Company may from time to time make
investments which provide exposure to
other asset classes or which provide
exposure to unquoted companies in other
forms. These investments (including the
market exposure provided by them) may
comprise up to 40% of the Company’s
gross assets.

The aim is for the Portfolio to be diversified
by geography, industry sector and year
of investment.

The Company will ensure that its interest
in any one portfolio company, taking into
account direct and indirect holdings, will
not exceed 15% of the Company’s total
investments at the time of initial acquisition
or subsequent addition. It is the Company’s
policy to invest no more than 10% of its
gross assets in other listed investment
companies.

Borrowings
The companies in which ICG Enterprise
invests often use borrowings to enhance
the returns to equity investors. The funds
through which the Company invests may
also use borrowings.

The Company does not expect to take on
long term borrowings but may have long
term facilities. Short to medium term
borrowings may be required from time
to time.

Overcommitment
Overcommitment is the practice of making
commitments to funds which exceed the
cash available for immediate investment.
The Company may be overcommitted in
order to ensure that it is more fully invested
in the future. The level of overcommitment
is monitored regularly by the Board and the
Manager, taking into account uninvested
cash, the availability of bank facilities, the
projected timing of cash flows to and from
the Portfolio, and market conditions.

Remuneration Committee
As the Board is comprised solely of non-executive directors, the Company does not have a Remuneration Committee. The determination
of the directors’ fees is dealt with by the whole Board.

Statement by Chairman of the Board
In accordance with the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013,
the Company presents its Remuneration Policy and Remuneration Report separately.

The Remuneration Policy sets out how the Company proposes to pay the directors, including each element of remuneration that the
directors are entitled to, and how this supports the Company’s long term strategy and performance. All provisions of this policy are
expected to remain in effect until the Annual General Meeting in 2020 when the Company is next required to submit its policy on the
remuneration of its directors to the members.

The Remuneration Report sets out how the Remuneration Policy has been implemented in the year.

In accordance with the Remuneration Policy set out below, the Board performed an annual review of directors’ fees. The fees payable to
the directors were adjusted to reflect the growth of the Company and the remuneration levels of other comparable investment trusts.

Components of remuneration package

Basic directors’ fee

Additional fee for Chairman

Additional fee for Chairman of the Audit Committee

Additional fee for other members of the Audit Committee

Year ended
31 January 2019
£

Year ended
31 January 2018
£

36,400

21,300

5,800

3,800

35,300

20,700

5,700

3,700

Remuneration Policy
It is the Company’s policy to determine the level of directors’ fees having regard to the level of fees payable to non-executive directors in
the industry generally, the role that individual directors fulfil, the time committed to the Company’s affairs and the limits stated by the
Company’s Articles of Association. It is not the Company’s policy to include an element of performance related pay. The Remuneration
Policy is unchanged from the prior year.

The Company’s performance is measured against the FTSE All-Share Index as this is considered to be the most appropriate benchmark.

The level of fees for directors is reviewed annually, in arrears, by the Board and any adjustment back-dated to the start of the financial
year. For example, the level of fees for the year ending 31 January 2020 will be determined towards the end of that financial year.
Until the review is completed, the directors will be remunerated at levels for the year to 31 January 2019 set out above.

Share price performance1

550

500

450

400

350

300

250

200

150

100

x
e
d
n

Dec 08

Dec 09

Jan 10

Jan 11

Jan 12

Jan 13

Jan 14

Jan 15

Jan 16

Jan 17

Jan 18

Jan 19

ICG Enterprise share price

FTSE All-Share Index

1 On a total return basis (i.e. including the effect of re-invested dividends).

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Directors’ Remuneration Report continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

The Articles of Association and subsequent shareholder resolutions currently limit the aggregate fees payable to the directors to a total
of £350,000 per annum.

The Board considers the Remuneration Policy as described on the previous page, to be effective in supporting the short and long term
strategic objectives of the Company by ensuring that the Company continues to be able to recruit and retain non-executive directors who
are suitably qualified and experienced to supervise the Company’s affairs.

Service contracts
It is not the Company’s policy to enter into service contracts with its directors. No director has a service contract with the Company.
The directors each serve under a letter of appointment.

Notice period and loss of office payment policy
The directors are subject to a notice period of one month unless removed by a resolution at a General Meeting or pursuant to any
provision of the Articles of Association. It is not the Company’s policy to enter into arrangements that entitle any of the directors to
compensation for loss of office. No director is entitled to any such compensation.

Statement of consideration of conditions elsewhere in the Company
The Company has no employees. Therefore the Company cannot take into account the pay and employment conditions of its employees
when setting and implementing the Remuneration Policy.

Statement of consideration of shareholder views
The Company places great importance on communication with its shareholders. The Board confirms that no negative views were
expressed in relation to its Remuneration Policy during the year.

DIRECTORS’ REMUNERATION
The law requires the Company’s auditors to audit certain of the disclosures provided. Where disclosures have been audited, this is indicated below.

The directors were not entitled to any loss of office payments, pension benefits, share options or other incentives in the year ended
31 January 2019 (2018: £nil).

Relative importance of spend on pay
The following table compares the remuneration paid to the directors with aggregate distributions to shareholders in the year to 31 January 2019
and the prior year. This disclosure is a statutory requirement. However, the directors consider that this comparison is not meaningful as its objective
is to provide shareholders with long term capital growth and share buybacks and the dividend forms only a small part of shareholders’ returns.

Components of remuneration package

Directors’ remuneration

Shareholder distributions in the year (including share buybacks)

Remuneration in the year (audited)

Name

Jeremy Tigue

Sandra Pajarola1

Andrew Pomfret

Lucinda Riches

Alastair Bruce

Peter Dicks

Mark Fane

Total

Fees
£’000

–

225

Year ended
31 January 2019
£ ’000

Year ended
31 January 2018
£ ’000

229

15,247

236

21,706

31 January 2018

Total
£’000

Fees
£’000

Taxable benefits
£’000

Total
£’000

31 January 2019

Taxable
benefits
£’000

–

229

–

232

–

236

Sandra Pajarola is resident in Switzerland and the Company has agreed to pay for her costs of travel to London (including appropriate accommodation) to attend meetings of the Board.
These costs are presented gross of tax as taxable benefits. The fees were paid to Lake Valley Consulting AG for making her available to serve as director of the Company.

Directors’ shareholdings and share interests (audited)
The beneficial interests of the directors in the shares of the Company are shown below. There is no requirement for the directors to own
securities of the Company. Save as disclosed below, no director had any notifiable interest in the securities of the Company.

Name

Jeremy Tigue

Sandra Pajarola

Andrew Pomfret

Lucinda Riches

Alastair Bruce

Total

31 January 2019
Number of
shares

31 January 2018
Number of
shares

94,260

6,000

20,000

10,000

94,260

6,000

20,000

–

150,260

140,260

Note that Peter Dicks, who retired from the Board in June 2018, held 7,000 shares at the date of his retirement and as at 31 January 2018.
There has been no change in the number of shares held by the existing directors since the year end.

Statement of shareholder voting
The Remuneration Policy was last approved at the Annual General Meeting on 13 June 2017, with the following votes cast:

Votes

For

Against

Withheld

Number

18,119,310

337,763

163,061

98.2

1.8

At the Annual General Meeting held on 18 June 2018, a resolution to approve the Directors’ Remuneration Report for the year ended
31 January 2018 was passed on a poll. The final proxy figures are as follows:

Votes

For

Against

Withheld

Number

20,531,071

215,883

194,966

99.0

1.0

The Board does not consider the numbers of votes against these resolutions to be significant.

Resolution to approve Directors’ Remuneration Report
A resolution to approve the Remuneration Report for the year ended 31 January 2019 will be put to the members at the forthcoming
Annual General Meeting (see resolution 10 on page 97).

On behalf of the Board

Jeremy Tigue
Chairman
12 April 2019

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

report of the audit committee

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Andrew Pomfret

Alastair Bruce

Audit Committee members

Andrew Pomfret
(Chairman of the Committee until 31 January 2019)

Alastair Bruce
(Chairman of the Committee since 1 February 2019)

Sandra Pajarola

Lucinda Riches

key Responsibilities

Reviewing the interim and annual financial
statements, the effectiveness and scope of the
external audit, the risks to which the Company
is exposed and mitigating controls, and
compliance with regulatory and financial
reporting requirements.

Activities in the year included

Three meetings held in the financial year,
all were quorate.

Conducted an audit tender process with new
auditors to be appointed for the year ending
31 January 2020.

Comprehensive review of the risk
management framework and quarterly
risk assessment process.

AUDIT COMMITTEE
The Audit Committee is comprised of four
non-executive directors: Alastair Bruce,
Andrew Pomfret, Sandra Pajarola and
Lucinda Riches. Alastair Bruce succeeded
Andrew Pomfret as Chairman of the
Committee on 1 February 2019. As set out
on pages 40 to 41 the members of the
Committee have a range of recent and
relevant financial experience and also have
relevant experience in the sector in which
the Company operates.

The Committee operates within written
terms of reference, which are available
within the Corporate Governance section
of the Company’s website, clearly setting
out its authority and duties. The primary
role of the Committee is to review the
interim and annual financial statements, the
effectiveness and scope of the external
audit, the risks to which the Company is
exposed and mitigating controls, and
compliance with regulatory and financial
reporting requirements. The Committee
also provides advice to the Board on
whether the Annual Report and Accounts,
taken as a whole, is fair, balanced and
understandable.

The Committee meets at least three times
a year. A quorum is any two of the members
of the Committee but attendance at each
meeting is strongly encouraged.

Three meetings were held in the financial
year, and all were quorate. The Company’s
auditors, PricewaterhouseCoopers LLP,
attended all three meetings. The Committee
also has direct access to the auditors as
necessary at other times and the
opportunity to meet the auditors without
the Manager being present.

The main matters discussed at these
meetings were the tender of the Company’s
audit, the review of the Company’s internal
controls, the annual plan of the auditors, the
report of the auditors following their audit,
the effectiveness of the audit process and
the independence of the auditor, the annual
and interim financial statements and the
Company’s Risk Management Framework
and principal risks.

SIGNIFICANT ISSUES IN RELATION
TO THE FINANCIAL STATEMENTS
In its review of the financial statements, the
Committee considers in particular whether
the investment portfolio is fairly valued.
Before the year end, the Committee
discussed the valuation process in detail
with the Manager and reviewed the plan of
the external auditors to ensure that it was
appropriately designed to provide
assurance over the valuation of the
Portfolio. After the year end, the Manager
reported the results of the valuation
process, including the sources of valuation
information and the methodologies used.
The auditors separately reported the
results of their audit work to the Committee.
The Committee concluded that the
valuation process had been properly
carried out and that the investment
portfolio has been fairly valued.

Auditing standards require the auditors to
identify and consider the risks of material
misstatement, including fraud in revenue
recognition and of management override of
internal controls. The auditors also focus on
a number of key audit matters that, in the
auditors’ professional judgement, were of
most significance in the audit of the
financial statements of the current period.

Following a thorough review, and discussion
with the Manager and the auditors, the
Committee has advised the Board that the
Annual Report and Accounts for the year
ended 31 January 2019, taken as a whole,
is fair, balanced and understandable and
provides the information necessary for
shareholders to assess the Company’s
position and performance, business model
and strategy.

Internal controls and need
for an internal audit function
The Board has overall responsibility for
the Company’s systems of internal controls
and for reviewing their effectiveness. The
purpose of the controls is to ensure that the
assets of the Company are safeguarded,
proper accounting records are maintained
and the financial information used within
the business and for publication is reliable.

The Committee regularly reviews,
identifies and evaluates the risks taken
by the Company to allow them to be
appropriately managed.

All of the Company’s management functions
are delegated to the Manager which has its
own internal control and risk monitoring
arrangements. The Committee makes a
regular assessment of these arrangements,
with reference to the Company’s risk matrix.

The Committee also reviewed a Statement
of Internal Controls for the year to
31 January 2019 which sets out the key
internal controls over the administration
of the Company’s investments. As in
previous years the auditors were engaged
to carry out agreed upon procedures to
test these controls.

In accordance with the Alternative
Investment Fund Managers Directive
(“the Directive”), the Company has
appointed Aztec Financial Services (UK)
Limited (“the Depositary”) as depositary.
The Depositary’s responsibilities include
the monitoring of the cash flows of the
Company, the safekeeping of the
Company’s assets, and the general
oversight of the Company including its
compliance with its investment policy.
The Audit Committee has reviewed the
Depositary’s reports for the period from
1 February 2018 to 31 January 2019, that set
out the testing and procedures carried out
by the Depositary to satisfy itself that it is
fulfilling its obligations, and that the
Company was operating in accordance with
the Directive. The report did not identify
any issues. The Chairman of the Audit
Committee and his agreed successor also
met with Aztec during the year to discuss
their operational approach.

The Committee reviews the performance
of the auditors each year. The Committee
considers a range of factors including the
quality of service, their expertise and the level
of audit fee.

PricewaterhouseCoopers LLP (including its
predecessor firms) has acted as auditors to
the Company since 1981. For the year ended
31 January 2015, the Committee conducted
a formal tender process that led to the
reappointment of PricewaterhouseCoopers
LLP as auditors. The Company is aware that,
as a result of the EU Audit Directive and
Regulation, companies where the auditor was
appointed on or before 16 June 1994 cannot
renew or enter into an audit engagement with
the auditor that extends beyond 2020.

The Committee carried out a tender process
in respect of external audit services during
2018 to ensure compliance with legislation,
taking into consideration FRC guidance on
best practice, in particular ensuring
independence in respect of potential audit
firms. The existing external audit firm was not
invited to re-tender given the duration of its
tenure to date. Four firms were invited to
tender, and, after submission of materials, two
firms were selected for further consideration,
including meetings with Andrew Pomfret and
Alastair Bruce and a presentation to the full
Audit Committee. After deliberation, the
submission from Ernst & Young LLP was
agreed to be the best all round proposal, as
they had demonstrated impressive
credentials in this area and convinced the
Committee of their robust and thorough
approach.

The Committee considers, therefore, that
an internal audit function specific to the
Company is unnecessary.

The Committee accordingly recommends that
Ernst & Young LLP be appointed auditors for
the year ending 31 January 2020.

Audit independence
and effectiveness
The Audit Committee has reviewed the
provision of non-audit services and believes
them to be cost-effective and not an
impediment to the auditors’ objectivity
and independence. In the year ended
31 January 2019, £58,833 (2018: £58,540)
was payable by the Manager to the auditors
for agreed upon procedures testing over the
controls of the Manager to the Audit
Committee. It has been agreed that all
non-audit work to be carried out by the
external auditors must be approved in
advance by the Audit Committee.

Andrew Pomfret
Chairman of the Audit Committee for the
year to 31 January 2019

12 April 2019

Alastair bruce
Chairman of the Audit Committee since
1 February 2019

12 April 2019

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Additional disclosures required by the Alternative
Investment Fund Managers Directive (UNAUDITED)

The Company is an alternative investment fund (“AIF”) for the purposes of the
Alternative Investment Fund Managers Directive (Directive 2011/61/EU) (“AIFMD”)
and the Manager was appointed as its alternative investment fund manager (“AIFM”)
for the purposes of the AIFMD.

The Directive requires certain disclosures
to be made in the Annual Report of the
Company. Many of these disclosures are
included in other sections of the Annual
Report, principally the Strategic Report
(pages 2 to 37), Governance (pages 39 to
55) and Financial Information (pages 56 to
84). This section completes the disclosures
required by the Directive.

ASSETS SUBJECT TO SPECIAL
ARRANGEMENTS
The Company holds no assets subject to
special arrangements arising from their
illiquid nature, which are unusual within
the context of the fund.

LEVERAGE
The Company has no borrowings and
therefore is not currently levered. The
Company will not employ leverage in excess
of 30% of its gross asset value.

PROFESSIONAL LIABILITY
OF THE MANAGER
In accordance with the requirements of the
Directive, the Manager holds additional
capital to cover potential professional
liability risks. In addition, the Manager
holds professional indemnity insurance.

REDEMPTION RIGHTS
The shares of the Company are listed on
the London Stock Exchange.

Shareholders may buy and sell shares on
that market. As the Company is closed
ended, shareholders do not have the right
to redeem their investment.

FAIR TREATMENT OF SHAREHOLDERS
The Manager is governed by a board
consisting of both non-executive and
executive directors which oversees and
manages the ICG group of which the Manager
is part. ICG has a number of committees that
assist in this regard, together with a risk
function that through a risk framework assists
in the identification, control and mitigation
of the ICG group’s risks. This includes, but is
not limited to, the fair treatment of the ICG
group’s regulatory clients, fund investors and

corporate investors. Details of ICG’s
governance and risk framework can be found
in ICG’s annual report which is available on
request or at www.icgam.com

RISK PROFILE AND RISK MANAGEMENT
The risks and uncertainties facing the
Company are regularly reviewed by the
Board, the Audit Committee and the
Manager. The principal risks faced by the
Company and the approach to managing
those risks are set out in the Principal Risks
and Uncertainties (pages 34 to 37).

The sensitivity of the Company to market,
credit and investment, and capital risk is
discussed in note 17 of the financial
statements (page 80). The risk limits
currently in place in respect of the
diversification of the portfolio and credit
risk are set out in the investment policy
(page 48).

MATERIAL CHANGES
There have been no material changes in
relation to the matters described in Article
23 of the Directive.

REMUNERATION
Under the Alternative Investment Fund
Managers Directive (“AIFMD”), we are
required to make disclosures relating to
remuneration of certain staff working for
the Manager, which acted as manager of
the Company throughout the year ended
31 January 2019.

Amount of remuneration paid
The Manager paid the following
remuneration to staff in respect of the
financial year ending on 31 January 2019
in relation to work on the Company:

Fixed remuneration
Variable remuneration
Total remuneration
Number of beneficiaries

£’000

1,497
2,338
3,835
13

The above disclosures reflect those staff of
the Manager involved in the management of
the Company, and only to the extent that
their remuneration is attributable to the

activities of the Manager in respect of the
Company. It is not possible to attribute
remuneration paid to individual staff directly
to income received from any fund and hence
the above figures represent a notional
approximation only. Variable remuneration
includes carried interest received.

Given the change of manager from
1 February 2016, the amounts paid to senior
management of the Manager are spread
across a significantly wider set of
alternative investment funds (“AIFs”),
however the functions performed are not
significant and have therefore not been
disclosed.

Co-investment incentive scheme
The incentive paid by the Company during
the year ended 31 January 2019 is disclosed
in note 9 to the financial statements.

Remuneration and incentivisation
policies and practices
The overriding principle governing the
Manager’s remuneration decisions is that
awards, in particular of variable
remuneration, do not encourage risk taking
which is inconsistent with the investment
objectives (and therefore risk profiles)
of the funds managed by the Manager.

Remuneration consists of salary, bonus and
co-investment incentives.

The co-investment incentive arrangements
are intended to closely align the interests
of shareholders and the Manager – under
these arrangements, payments may only be
made when investment profits have been
realised in cash. The operation of these
arrangements is set out in the Report of the
Directors on page 46.

The Manager has a remuneration committee
which takes remuneration decisions. The
committee takes into account the short and
long term performance of the Manager,
of the funds managed by the Manager, and
of individuals.

Statement of Directors’ Responsibilities

The directors are responsible for preparing the Annual Report, the
Directors’ Remuneration Report and the financial statements in accordance
with applicable law and regulations.

The directors are responsible for
the maintenance and integrity of the
Company’s website.

Legislation in the United Kingdom
governing the preparation and
dissemination of financial statements may
differ from legislation in other jurisdictions.

Having taken advice from the Audit
Committee, the directors consider that the
Annual Report, taken as a whole, is fair,
balanced and understandable and provides
the information necessary for shareholders
to assess the Company’s position and
performance, business model and strategy.

Each of the directors, whose names and
functions are listed on pages 40 to 41,
confirm that, to the best of their knowledge:

• the financial statements, which have been
prepared in accordance with IFRS as
adopted by the European Union, give a
true and fair view of the assets, liabilities,
financial position and profit of the
Company; and

• the Strategic Report includes a fair
review of the development and
performance of the business and the
position of the Company, together with
a description of the principal risks and
uncertainties that it faces.

On behalf of the Board

Jeremy Tigue
Chairman
12 April 2019

Company law requires the directors to
prepare financial statements for each
financial year. Accordingly, the directors
have prepared the financial statements in
accordance with International Financial
Reporting Standards (IFRS) as adopted by
the European Union. Company law also
requires that the directors do not approve
the financial statements unless they are
satisfied that they give a true and fair view
of the state of affairs of the Company and
of the profit or loss of the Company for the
relevant period. In preparing these financial
statements, the directors are required to:

• select suitable accounting policies and

then apply them consistently;
• make judgements and accounting
estimates that are reasonable and
prudent;

• state whether applicable IFRS, as

adopted by the European Union, have
been followed, subject to any material
departures disclosed and explained
in the financial statements; and
• prepare the financial statements

on a going concern basis unless it
is inappropriate to presume that the
Company will continue in business.

The directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the
Company’s transactions and disclose
with reasonable accuracy at any time the
financial position of the Company and
enable them to ensure that the financial
statements and the Directors’
Remuneration Report comply with the
Companies Act 2006 and, as regards the
Company’s financial statements, Article 4
of the International Accounting Standards
Regulation (EC) No 1606/2002. They are
also responsible for safeguarding the
assets of the Company and for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Financial
statements

Independent auditors’ report to the
members of ICG Enterprise Trust plc
Income statement

63
64 Balance sheet
65 Cash flow statement
66 Statement of changes in equity
67 Notes to the financial statements

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Independent auditors’ report to the members of ICG Enterprise Trust plc

Report on the audit of
the financial statements

Opinion
In our opinion, ICG Enterprise Trust plc’s financial statements:

• give a true and fair view of the state of the company’s affairs as at 31 January 2019 and of its profit and cash flows for the year then ended;
• have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union;

and

• have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements, included within the Annual Report and Accounts 2019 (the “Annual Report”), which comprise:
the balance sheet as at 31 January 2019; the income statement, the cash flow statement, the statement of changes in equity for the year
then ended; and the notes to the financial statements, which include a description of the significant accounting policies.

Our opinion is consistent with our reporting to the Audit Committee.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of
our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence
We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided
to the company.

Other than those disclosed in note 4 to the financial statements, we have provided no non-audit services to the company in the period
from 1 February 2018 to 31 January 2019.

Our audit approach
Overview

• Overall materiality: £7.3 million (2018: £6.6 million), based on 1% of net assets.

Materiality

Audit scope

• The Company is an investment company which has three subsidiaries, also investment companies, managing
a widely diversified portfolio. The Company financial statements hold the subsidiaries as investments at fair
value in accordance with IFRS 10; each subsidiary is a Limited Partnership.

• We audited the complete financial information of the Company and the three subsidiaries which accounted

for all of the Company’s income, its profit before tax, and net assets.

• We tailored the scope of our audit taking into account the types of investments within the Company, the

accounting processes and controls, and the industry in which the Company operates.

Key audit
matters

• Valuation of unquoted investments.
• Recognition of investment income and gains/losses from investments.

The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In
particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that
involved making assumptions and considering future events that are inherently uncertain.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Independent auditors’ report to the members of ICG Enterprise Trust plc
continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Capability of the audit in detecting irregularities, including fraud
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations
related to failure by the Manager to comply with relevant regulation and legislation (see page 36 of the Annual Report and Accounts 2019,
and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those
laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of
controls), and determined that the principal risks were related to posting inappropriate journal entries to increase the valuation of unquoted
investments, and management bias in accounting estimates. Audit procedures performed by the engagement team included:

• Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
• Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
• Review of the financial statement disclosures to underlying supporting documentation; and
• Review of minutes of meetings of those charged with governance for the Company.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and
regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the
risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit.

Key audit matter

How our audit addressed the key audit matter

Valuation of unquoted investments
Refer to pages 52 to 53 (Report of the Audit Committee), pages
67 to 70 (Accounting Policies) and pages 71 to 84 (Notes to the
Financial Statements).

The investment portfolio at 31 January 2019 comprised direct
co-investments and fund investments.

We focused on the valuation of investments as investments
represented a material balance in the financial statements(£670m)
and the valuation assumptions used to derive fair value generally
do not have observable inputs that reflect quoted prices in active
markets and are, therefore, more subjective.

The valuation of investments is shown net of the incentive scheme
accrual which represents amounts accruing to executives of the
Manager and Former Manager at the year end. The calculation is
relatively complex and is dependent upon the valuations of the
unquoted investments.

The majority of investments which are in private equity direct
co-investments and private equity funds were valued by the
Manager based on third party manager reports. We tested the
process that the Manager used to value these investments. In
particular, for funds and co-investments, we:

• Checked a sample of the funds’ and co-investments’ most recent
audited financial statements or latest investor capital statements
to substantiate the valuations applied;

• Understood the accounting policies of the underlying fund
managers to assess whether they are in accordance with
International Financial Reporting Standards and the International
Private Equity and Venture Capital Valuation (‘IPEV’) guidelines;
• Assessed the validity of any adjustments made by the Manager to
reflect cash, foreign exchange or quoted stock movements (for
quoted investments in the underlying funds) between the
reporting dates of the fund managers and 31 January 2019;

• Checked the accuracy of a sample of prior year valuations based
on estimated and unaudited reports, to their respective audited
financial statements to assess the historical accuracy of the
underlying fund managers’ estimates;

• Independently confirmed a sample of the valuations and

percentage ownership with the underlying fund managers; and,

• Recalculated the amounts due to executives of the Former

Manager and Manager under the incentive scheme accrual based
on the methodology outlined in the subsidiary limited partnership
agreements. Where applicable, we verified inputs to the
calculation back to supporting documentation.

Based on the work performed we found that the valuations of
investments were supported by the evidence we obtained.

Key audit matter

How our audit addressed the key audit matter

Recognition of investment income and gains/losses
from investments
Refer to pages 52 to 53 (Report of the Audit Committee), pages
67 to 70 (Accounting Policies) and pages 71 to 84 (Notes to the
Financial Statements).

Investment income comprises mainly dividends and distributions
received from direct co-investments and fund investments.

The majority of gains and losses on investments represent fair
value changes in the value of investments over the financial year
and gains and losses made on the disposal of investments.

Unrealised fair value movements are based on the change in
investment valuations which in themselves are subjective as
noted above.

Investment income and gains and losses on investments are
measures used to calculate returns being achieved by the
Company and so there is a potential incentive for the Manager
to overstate this figure in order to enhance results.

This, combined with the size of the balance, made this a key
audit matter.

We tested investment income receipts to supporting
documentation by performing the following procedures:

• Agreed amounts to bank statements;
• Agreed amounts to distribution notices received from the
underlying fund manager of the fund investments and
co-investments;

• Assessed the appropriateness of the allocation of investment

income and net gains between income and capital based on the
requirements of the Association of Investment Companies
Statement of Recommended Practice;

• Recalculated unrealised gains and losses on investments based
on the valuation movement in investments over the year. The
calculation of these gains was supported by evidence obtained
from the work we performed over investment valuations; and
• Recalculated the realised gains and losses on investments based

on distribution notices and dividends received.

Based on the work performed we found that the recognition of
investment income and gains / losses from investments were
supported by the evidence we obtained.

How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a
whole, taking into account the structure of the company, the accounting processes and controls, and the industry in which it operates.

Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit
procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually
and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Overall materiality

£7.3 million (2018: £6.6 million).

How we determined it

1% of net assets.

Rationale for benchmark applied

We believe that net assets was the most appropriate benchmark because this is the key
metric against which the performance of the Company is measured. It is also a generally
accepted measure used for companies in this industry.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £365,400
(2018: £332,000) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Independent auditors’ report to the members of ICG Enterprise Trust plc
continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Going concern
In accordance with ISAs (UK) we report as follows:

Reporting obligation

Outcome

We are required to report if we have anything material to add or draw
attention to in respect of the directors’ statement in the financial
statements about whether the directors considered it appropriate to
adopt the going concern basis of accounting in preparing the
financial statements and the directors’ identification of any material
uncertainties to the company’s ability to continue as a going concern
over a period of at least twelve months from the date of approval of
the financial statements.

We have nothing material to add or to draw attention to.

However, because not all future events or conditions can be
predicted, this statement is not a guarantee as to the company’s
ability to continue as a going concern. For example, the terms
on which the United Kingdom may withdraw from the European
Union are not clear, and it is difficult to evaluate all of the
potential implications on the company’s trade, customers,
suppliers and the wider economy.

We are required to report if the directors’ statement relating to
Going Concern in accordance with Listing Rule 9.8.6R(3) is
materially inconsistent with our knowledge obtained in the audit.

We have nothing to report.

Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report
thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any
form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required
to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report based on these responsibilities.

With respect to the Strategic Report, Report of the Directors and Corporate Governance Statement, we also considered whether the
disclosures required by the UK Companies Act 2006 have been included.

Based on the responsibilities described above and our work undertaken in the course of the audit, the Companies Act 2006 (CA06),
ISAs (UK) and the Listing Rules of the Financial Conduct Authority (FCA) require us also to report certain opinions and matters as
described below (required by ISAs (UK) unless otherwise stated).

Strategic Report and Report of the Directors
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and Report of
the Directors for the year ended 31 January 2019 is consistent with the financial statements and has been prepared in accordance
with applicable legal requirements. (CA06)

In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not
identify any material misstatements in the Strategic Report and Report of the Directors. (CA06)

Corporate Governance Statement
In our opinion, based on the work undertaken in the course of the audit, the information given in the Corporate Governance
Statement (as set out on pages 42 to 44) about internal controls and risk management systems in relation to financial reporting
processes and about share capital structures in compliance with rules 7.2.5 and 7.2.6 of the Disclosure Guidance and Transparency
Rules sourcebook of the FCA (“DTR”) is consistent with the financial statements and has been prepared in accordance with
applicable legal requirements. (CA06)

In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not
identify any material misstatements in this information. (CA06)

In our opinion, based on the work undertaken in the course of the audit, the information given in the Corporate Governance Statement
(as set out on pages 42 to 44) with respect to the company’s corporate governance code and practices and about its administrative,
management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the DTR. (CA06)

We have nothing to report arising from our responsibility to report if a corporate governance statement has not been prepared by the
company. (CA06)

The directors’ assessment of the prospects of the company and of the principal risks that would threaten the solvency or
liquidity of the company
We have nothing material to add or draw attention to regarding:

• The directors’ confirmation on page 34 to 37 of the Annual Report that they have carried out a robust assessment of the principal risks

facing the company, including those that would threaten its business model, future performance, solvency or liquidity.
• The disclosures in the Annual Report that describe those risks and explain how they are being managed or mitigated.
• The directors’ explanation on page 44 of the Annual Report as to how they have assessed the prospects of the company, over what

period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a
reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over the period of
their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.

We have nothing to report having performed a review of the directors’ statement that they have carried out a robust assessment of
the principal risks facing the company and statement in relation to the longer-term viability of the company. Our review was
substantially less in scope than an audit and only consisted of making inquiries and considering the directors’ process supporting
their statements; checking that the statements are in alignment with the relevant provisions of the UK Corporate Governance Code
(the “Code”); and considering whether the statements are consistent with the knowledge and understanding of the company and its
environment obtained in the course of the audit. (Listing Rules)

Other Code Provisions
We have nothing to report in respect of our responsibility to report when:

• The statement given by the directors, on page 53, that they consider the Annual Report taken as a whole to be fair, balanced and

understandable, and provides the information necessary for the members to assess the company’s position and performance, business
model and strategy is materially inconsistent with our knowledge of the company obtained in the course of performing our audit.
• The section of the Annual Report on page 52 describing the work of the Audit Committee does not appropriately address matters

communicated by us to the Audit Committee.

• The directors’ statement relating to the company’s compliance with the Code does not properly disclose a departure from a relevant

provision of the Code specified, under the Listing Rules, for review by the auditors.

Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006. (CA06)

Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities set out on page 55, the directors are responsible for the
preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair
view. The directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern,
disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either
intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3
of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for
any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by
our prior consent in writing.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Independent auditors’ report to the members of ICG Enterprise Trust plc
continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Other required reporting

Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from

branches not visited by us; or

• certain disclosures of directors’ remuneration specified by law are not made; or
• the financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting

records and returns.

We have no exceptions to report arising from this responsibility.

Appointment
Following the recommendation of the audit committee, we were appointed by the directors in 1981 to audit the financial statements for
the year ended 31 December 1981 and subsequent financial periods. The period of total uninterrupted engagement is 38 years, covering
the years ended 31 December 1981 to 31 January 2019.

Alex Bertolotti
(Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London

12 April 2019

INCOME STATEMENT

Year to 31 January 2019

Year to 31 January 2018

Notes

Revenue
return
£’000

Capital
return
£’000

Total
£’000

Revenue
return
£’000

Capital
return
£’000

Total
£’000

Investment returns

Income, gains and losses on investments

2, 10

5,753

85,769

91,522

22,257

60,124

82,381

Deposit interest

Other income

Foreign exchange gains and losses

Expenses

Investment management charges

Other expenses

Profit before tax

Taxation

Profit for the year

Attributable to:

Equity shareholders

156

–

5,969

(1,996)

(1,851)

(3,847)

2,122

(260)

1,862

–

938

86,707

(5,988)

(1,052)

(7,040)

79,667

260

79,927

156

938

–

92,676

22,386

(7,984)

(2,903)

(10,887)

81,789

–

81,789

(1,791)

(1,659)

(3,450)

18,936

(2,435)

16,501

–

826

60,950

(5,374)

(1,075)

(6,449)

54,501

2,294

56,795

826

83,336

(7,165)

(2,734)

(9,899)

73,437

(141)

73,296

1,862

79,927

81,789

16,501

56,795

73,296

Basic and diluted earnings per share

118.12p

105.56p

The columns headed “Total” represent the income statement for the relevant financial years and the columns headed “Revenue return”
and “Capital return” are supplementary information, in line with the Statement of Recommended Practice for Financial Statements of
Investment Trust Companies and Venture Capital Trusts issued by the Association of Investment Companies. There is no Other
Comprehensive Income.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

BALANCE SHEET

Non-current assets

Investments held at fair value

Unquoted investments

Quoted investments

Subsidiary investments

Current assets

Cash and cash equivalents

Receivables

Current liabilities

Payables

Net current assets

Total assets less current liabilities

Capital and reserves

Share capital

Capital redemption reserve

Share premium

Capital reserve

Revenue reserve

Total equity

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

CASH FLOW STATEMENT

Operating activities

Sale of portfolio investments

Purchase of portfolio investments

Net cash flows to subsidiary investments

Interest income received from portfolio investments

Dividend income received from portfolio investments

Other income received

Investment management charges paid

Other expenses paid

Net cash (outflow)/inflow from operating activities

Financing activities

Bank facility fee

Purchase of shares into treasury

Equity dividends paid

Net cash outflow from financing activities

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Net (decrease)/increase in cash and cash equivalents

Effect of changes in foreign exchange rates

Cash and cash equivalents at end of year

The notes on pages 67 to 84 form an integral part of the financial statements.

Year to
31 January
2019
£’000

Year to
31 January
2018
£’000

Notes

135,461

(101,790)

(32,427)

3,994

1,883

216

(7,956)

(1,749)

(2,368)

(1,081)

(709)

(14,543)

(16,333)

(18,701)

78,389

(18,701)

938

60,626

160,712

(99,601)

(12,824)

15,967

6,230

129

(7,090)

(1,456)

62,067

(1,320)

(7,810)

(13,896)

(23,026)

39,041

38,522

39,041

826

78,389

Notes

10, 17

31 January
2019
£’000

31 January
2018
£’000

519,806

478,362

1,655

148,611

670,072

60,626

548

61,174

1,733

96,392

576,487

78,389

10,410

88,799

386

963

60,788

730,860

87,836

664,323

7,292

2,112

12,936

708,520

–

730,860

7,292

2,112

12,936

630,738

11,245

664,323

Net asset value per share (basic and diluted)

1,056.5p

959.1p

The financial statements on pages 63 to 84 were approved by the Board of directors on 12 April 2019 and signed on its behalf by:

Jeremy Tigue
Director
12 April 2019

Alastair Bruce
Director
12 April 2019

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Note that cash flows from investments in subsidiaries were included within sales of portfolio investments in the 2018 Annual Report. These cash flows are now shown separately within
net cash flows to subsidiary investments.

STATEMENT OF CHANGES IN EQUITY

NOTES TO THE FINANCIAL STATEMENTS

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Company

Year to 31 January 2019

Share capital
£’000

Capital
redemption
reserve
£’000

Share premium
£’000

Realised
capital
reserve
£’000

Unrealised
capital reserve
£’000

Revenue
reserve
£’000

Total
shareholders’
equity
£’000

Opening balance at 1 February 2018

7,292

2,112

12,936

313,550

317,188

11,245

664,323

Profit for the year and total
comprehensive income

Dividends paid or approved

Purchase of shares into treasury

–

37,227

(1,436)

(709)

Closing balance at 31 January 2019

7,292

2,112

12,936

348,632

359,888

42,700

1,862

81,789

(13,107)

(14,543)

–

(709)

730,860

Company

Year to 31 January 2018

Share capital
£’000

Capital
redemption
reserve
£’000

Share
premium
£’000

Realised
capital
reserve
£’000

Unrealised
capital
reserve
£’000

Revenue
reserve
£’000

Total
shareholders’
equity
£’000

Opening balance at 1 February 2017

7,292

2,112

12,936

355,946

225,807

8,640

612,733

Profit for the year and total
comprehensive income

Dividends paid or approved

Purchase of shares into treasury

–

Closing balance at 31 January 2018

7,292

2,112

12,936

The notes on pages 67 to 84 form an integral part of the financial statements.

(34,586)

91,381

–

(7,810)

313,550

16,501

(13,896)

–

73,296

(13,896)

(7,810)

317,188

11,245

664,323

–

1 ACCOUNTING POLICIES
General information
These financial statements relate to ICG Enterprise Trust plc (“the Company”). ICG Enterprise Trust plc is registered in England and Wales and
domiciled in England. The registered office is Juxon House, 100 St Paul’s Churchyard, London EC4M 8BU. The Company’s objective is to provide
shareholders with long term capital growth through investment in unquoted companies, mostly through private equity funds but also directly.

(a) Basis of preparation
The financial information for the year ended 31 January 2019 has been prepared in accordance with the Companies Act 2006 as applicable to
companies using International Financial Reporting Standards (“IFRS”) and the Statement of Recommended Practice (“SORP”) as amended
in November 2014 and updated in February 2018 with consequential amendments issued by the Association of Investment Companies.

IFRS comprises standards and interpretations approved by the International Accounting Standards Board (“IASB”) and the IFRS
Interpretations Committee as adopted in the European Union as at 31 January 2019.

These financial statements have been prepared on a going concern basis and on the historical cost basis of accounting, modified for the
revaluation of certain assets at fair value.

The principal accounting policies adopted are set out below. These policies have been applied consistently throughout the current and
prior year. In order to reflect the activities of an investment trust company, supplementary information which analyses the income
statement between items of revenue and capital nature has been presented alongside the income statement. In analysing total income
between capital and revenue returns, the directors have followed the guidance contained in the SORP as follows:

• Capital gains and losses on investments sold and on investments held arising on the revaluation or disposal of investments classified as

held at fair value through profit or loss should be shown in the capital column of the income statement.

• Returns on any share or debt security for a fixed amount (whether in respect of dividends, interest or otherwise) should be shown in the

revenue column of the income statement.

• The Board should determine whether the indirect costs of generating capital gains should also be shown in the capital column of the

income statement. If the Board decides that this should be so, the management fee should be allocated between revenue and capital in
accordance with the Board’s expected long term split of returns, and other expenses should be charged to capital only to the extent that
a clear connection with the maintenance or enhancement of the value of investments can be demonstrated.

The accounting policy regarding the allocation of expenses is set out in note 1(i).

In accordance with IFRS 10 (amended), the Company is deemed to be an investment entity on the basis that:

(a) it obtains funds from one or more investors for the purpose of providing investors with investment management services;

(b) it commits to its investors that its business purpose is to invest funds for both returns from capital appreciation and investment income; and

As a result, the Company’s subsidiaries are deemed to be investment entities and are included in subsidiary investments classified as held
at fair value through profit or loss.

Standards adopted in the year ended January 2019
The IASB and IFRS IC have issued new accounting standards, amendments to existing standards and interpretations. The financial year ended
31 January 2019 is the first year in which the following standards have been applied, and have had no material impact as explained below.

IFRS 9 – Financial Instruments
IFRS 9 addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of IFRS 9
was issued in July 2014. It replaces the guidance in IAS 39 that relates to the classification and measurement of financial instruments.
IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets:
amortised cost, fair value through other comprehensive income and fair value through profit or loss. The basis of classification depends
on the entity’s business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are
required to be measured at fair value through profit or loss.

The Company holds instruments such as investments at fair value designated at fair value through profit or loss which is permitted under the
new standard and remains unchanged. Receivables and payables principally comprise short term settlement accounts and accruals, neither of
which are held for trading or meet the definition of items that could be carried at fair value. Such instruments therefore remain at amortised cost.

In terms of expected credit losses, cash held with banks could be at risk should the financial institutions holding it fail. Receivables
comprise distribution receivable, prepayments and accrued income and payables comprise accruals. We have not experienced and do
not expect to experience credit losses to arise from these counterparties.

In addition, the Company does not apply hedge accounting; therefore, IFRS 9 hedge accounting related changes have no impact on the
financial statements.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

NOTES TO THE FINANCIAL STATEMENTS continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

1 ACCOUNTING POLICIES continued
IFRS 15 – Revenue from Contracts with Customers
IFRS 15 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers.
It has superseded the current revenue standard IAS 18 Revenue. This has had no material impact, as the Company’s revenue principally
arises from interest and dividend income and gains and losses on investments, which are outside the scope of IFRS 15.

Future changes to accounting policies
The following new standard has a mandatory effective date for annual periods beginning on or after 1 January 2019, with earlier
application permitted. It is not applicable to these financial statements, and we do not expect the new standard to have a significant
impact on the Company.

IFRS 16 – Leases
IFRS 16 will be applicable to the financial year ended 31 January 2020, addressing the distinction between operating leases and finance
leases, replacing the guidance in IAS 17. The complete version of IFRS 16 was issued by the IASB in January 2016. Under the new
guidance, lessees will be required to recognise assets and liabilities for all leases with a term of more than 12 months, unless the
underlying asset is of low value. The Company has no lease obligations, therefore the adoption of IFRS 16 is not anticipated to have
a material impact on the financial statements.

(b) Financial assets
The Company classifies its financial assets in the following categories: at fair value through profit or loss; and loans and receivables.
The classification depends on the purpose for which the financial assets were acquired. The classification of financial assets is
determined at initial recognition.

Financial assets at fair value through profit or loss
The Company classifies its quoted and unquoted investments as financial assets at fair value through profit or loss. These assets are
measured at subsequent reporting dates at fair value and further details of the accounting policy are disclosed in note 1(c).

Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
These are classified as current assets and measured at amortised cost using the effective interest method. The Company’s loans and
receivables comprise cash and cash equivalents and trade and other receivables in the balance sheet.

(c) Investments
All investments are designated upon initial recognition as held at fair value through profit or loss (described in these financial statements
as investments held at fair value) and are measured at subsequent reporting dates at fair value. Changes in the value of all investments
held at fair value, which include returns on those investments such as dividends and interest, are recognised in the income statement and
are allocated to the revenue column or the capital column in accordance with the SORP (see note 1(a)). More detail on certain categories
of investment is set out below. Given that the subsidiaries and associates are held at fair value and are exposed to materially similar risks
as the Company, we do not expect the risks to materially differ from those disclosed in note 17.

Unquoted investments
Fair value for unquoted investments is established by using various valuation techniques.

Funds and co-investments are valued at the underlying investment manager’s valuation where this is consistent with the requirement
to use fair value.

Where this is not the case, adjustments are made or alternative methods are used as appropriate. The most common reason for
adjustments is to take account of events occurring after the date of the manager’s valuation, such as realisations.

The fair value of direct unquoted investments is calculated in accordance with the 2018 International Private Equity and Venture Capital
Valuation Guidelines. The primary valuation methodology used is an earnings multiple methodology, with other methodologies used
where they are more appropriate.

Quoted investments
Quoted investments are held at the last traded bid price on the balance sheet date. When a purchase or sale is made under contract,
the terms of which require delivery within the timeframe of the relevant market, the contract is reflected on the trade date.

Subsidiary undertakings
The investments in the subsidiaries are recognised at fair value through profit and loss.

The valuation of the subsidiaries takes into account an accrual for the estimated value of interests in the co-investment incentive scheme.
Under these arrangements, ICG and certain of its executives and, in respect of certain historic investments, the executives and connected
parties of Graphite Capital Management LLP (the “Former Manager”) (together “the Co-investors”), are required to co-invest
alongside the Company, for which they are entitled to a share of investment profits if certain performance hurdles are met. These
arrangements are discussed further in the Report of the Directors on page 46. At 31 January 2019, the accrual was estimated as the
theoretical value of the interests if the portfolio had been sold at the carrying value at that date.

Associates
Investments which fall within the definition of an associate under IAS 28 (Investments in Associates) are accounted for as investments
held at fair value through profit or loss, as permitted by that standard.

The Company holds an interest (including indirectly through its subsidiaries) of more than 20% in a small number of investments that may
normally be classified as subsidiaries or associates. These investments are not considered subsidiaries or associates as the Company
does not exert control or significant influence over the activities of these companies/partnerships as they are managed by other third
parties.

(d) Receivables
Receivables include unamortised fees which were incurred directly in relation to the agreement of a financing facility. These fees will be
amortised over the life of the facility on a straight line basis.

(e) Payables
Other payables are non-interest bearing and are stated at their amortised cost, which is not materially different from fair value.

(f) Cash and cash equivalents
Cash and cash equivalents comprise cash and short term bank deposits with an original maturity of three months or less.

(g) Dividend distributions
Dividend distributions to shareholders are recognised in the period in which they are paid or approved.

(h) Income
When it is probable that economic benefits will flow to the Company and the amount can be measured reliably, interest is recognised
using the effective interest method.

Dividends receivable on quoted equity shares are brought into account on the ex-dividend date. Dividends receivable on equity shares
where no ex-dividend date is applicable are brought into account when the Company’s right to receive payment is established.

UK dividend income is recorded at the amount receivable. Overseas dividend income is shown net of withholding tax.

Income distributions from funds are recognised when the right to distributions is established.

(i) Expenses
All expenses are accounted for on an accruals basis. Expenses are allocated to the revenue column in the income statement, consistent
with the SORP, with the following exceptions:

• Expenses which are incidental to the acquisition or disposal of investments (transaction costs) are allocated to the capital column.

This includes expenses incurred where the transaction did not proceed.

• The Board expects the substantial majority of long term returns from the portfolio to be generated from capital gains. The investment
management and bank facility charges have been allocated 75% to the capital column and 25% to the revenue column in line with this
expectation.

• Other expenses are allocated to the capital column where a clear connection with the maintenance or enhancement of the value of

investments can be demonstrated.

All expenses allocated to the capital column are treated as realised capital losses (see note 1(l)).

(j) Taxation
Investment trusts which have approval as such under Section 1158 of the Corporation Tax Act 2010 are not liable for taxation on capital gains.

Tax recognised in the income statement represents the sum of current tax and deferred tax charged or credited in the year. The tax effect
of different items of expenditure is allocated between capital and revenue on the same basis as the particular item to which it relates.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

NOTES TO THE FINANCIAL STATEMENTS continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

1 ACCOUNTING POLICIES continued
Deferred tax is the tax expected to be payable or recoverable on the difference between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the
balance sheet liability method.

Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax assets are not
recognised in respect of tax losses carried forward to future periods.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the assets are realised.
Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in
which case the deferred tax is also dealt with in equity.

(k) Foreign currency translation
The functional currency of the Company is sterling since that is the currency of the primary economic environment in which the Company
operates. The presentation currency for the Company is also sterling.

Transactions in currencies other than sterling are recorded at the rates of exchange prevailing on the dates of the transactions. At each
balance sheet date, financial assets and liabilities denominated in foreign currencies are translated at the rates prevailing on the balance
sheet date.

Gains and losses arising on the translation of investments held at fair value are included within gains and losses on investments held at fair
value in the income statement. Gains and losses arising on the translation of other financial assets and liabilities are included within
foreign exchange gains and losses in the income statement.

(l) Revenue and capital reserves
The revenue return component of total income is taken to the revenue reserve within the statement of changes in equity. The capital
return component of total income is taken to the capital reserve within the statement of changes in equity.

Gains and losses on the realisation of investments including realised exchange gains and losses and expenses of a capital nature are taken
to the realised capital reserve (see note 1(i)). Changes in the valuations of investments which are held at the year end and unrealised
exchange differences are accounted for in the unrealised capital reserve.

The revenue reserve is distributable by way of dividends to shareholders. The realised capital reserve is distributable by way of
dividends and share buybacks.

(m) Treasury Shares
Shares that have been repurchased into treasury remain included in the share capital balance, unless they are cancelled.

(n) Critical estimates and assumptions
Estimates and judgements used in preparing the financial information are continually evaluated and are based on historic experience and
other factors, including expectations of future events that are believed to be reasonable. The resulting estimates will, by definition,
seldom equal the related actual results.

The only estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities relate to the valuation of unquoted investments. Note 1(c) sets out the accounting policy for unquoted investments.

Judgement is required in order to determine appropriate valuation methodologies and subsequently in determining the inputs into the
valuation models used.

Judgement is also required when determining whether the underlying investment managers’ valuations are consistent with the
requirements to use fair value.

(o) Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
The chief operating decision maker who is responsible for allocating resources and assessing performance of the segments has been
identified as the Board. It is considered that the Company’s operations comprise a single operating segment.

2 INVESTMENT RETURNS

Income from investments

UK investment income

Overseas interest and dividends

Deposit interest on cash

Other

Total income

Analysis of income from investments

Quoted in the United Kingdom

Quoted overseas

Unquoted

Year ended
31 January
2019
£’000

Year ended
31 January
2018
£’000

2,140

3,613

5,753

156

216

11,922

10,335

22,257

129

5,969

22,386

–

5,739

5,753

–

22,244

22,257

3 INVESTMENT MANAGEMENT CHARGES
Management fees paid to ICG for managing the Enterprise Trust amounted to 1.14% (2018: 1.12%) of the average net assets in the period.
The management fee charged for managing the Company is 1.4% (2018: 1.4%) of the fair value of invested assets and 0.5% (2018: 0.5%)
of outstanding commitments, in both cases excluding funds managed by Graphite Capital Management LLP and ICG. No fee is charged
on cash or liquid asset balances. The allocation of the total investment management charge was unchanged in 2019 with 75% of the total
allocated to capital and 25% allocated to revenue.

The amounts charged during the year are set out below.

Investment management charge

Year ended 31 January 2019

Year ended 31 January 2018

Revenue
£’000

1,996

Capital
£’000

5,988

Total
£’000

7,984

Revenue
£’000

1,791

Capital
£’000

5,374

Total
£’000

7,165

The Company also incurs management fees in respect of its investments in funds managed by members of ICG on an arms-length basis.

ICG Strategic Secondaries Fund II

ICG Europe Fund VI

ICG Europe Fund VII

ICG Asia Pacific III

ICG Strategic Equity Fund III

ICG Europe Fund V

ICG Recovery Fund 2008B

ICG Europe Fund 2006B

ICG North American Private Debt Fund II

Year ended
31 January
2019
£’000

Year ended
31 January
2018
£’000

288

235

229

105

–

469

234

–

272

–

100

–

1,141

1,188

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

NOTES TO THE FINANCIAL STATEMENTS continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

4 OTHER EXPENSES
The Company did not employ any staff in the year to 31 January 2019 (2018: none).

Directors’ fees (see note 5)

Fees payable to the Company’s auditor for the audit of the Company’s annual accounts

Fees payable to the Company’s auditor and its associates for other services:

Audit of the accounts of the subsidiaries

Audit-related assurance services

Total auditors’ remuneration

Administrative expenses

Bank facility costs allocated to revenue

Expenses allocated to revenue

Bank facility costs allocated to capital

Expenses allocated to capital

Total other expenses

£’000

Year ended
31 January
2019
£’000

229

146

1,126

1,501

350

1,851

1,052

2,903

£’000

Year ended
31 January
2018
£’000

236

150

915

1,301

358

1,659

1,075

2,734

Professional fees of £0.2m (2018: £0.2m) incidental to the acquisition or disposal of investments are included within gains/(losses)
on investments held at fair value.

5 DIRECTORS’ REMUNERATION AND INTERESTS
The fees paid by the Company to the directors are shown in the Directors’ Remuneration section on page 50. No income was received
or receivable by the directors from any other entity in the Company. The directors’ interests in the share capital of the Company are
shown in the Report of the Directors on page 51.

6 TAXATION
In both the current and prior years the tax charge was lower than the standard rate of corporation tax, principally due to the Company’s
status as an investment trust which means that capital gains are not subject to corporation tax. The standard rate of corporation tax in the
UK changed from 20% to 19% with effect from 1 April 2017. Accordingly the Company’s profits for the year ended 31 January 2019 are
taxed at an effective rate of 19%. The effect of this and other items affecting the tax charge is shown in note 6(b) below.

a) Analysis of charge in the year

Tax charge on items allocated to revenue

Tax charge on items relating to prior years

Total tax charge allocated to revenue

Tax credit on items allocated to capital

Corporation tax

b) Factors affecting tax charge for the year

Profit on ordinary activities before tax

Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19.00% (2018: 19.16%)

Effect of:

– net investment returns not subject to corporation tax

– dividends not subject to corporation tax

– current year management expenses not utilised/(utilised)

– other movements in respect of subsidiary investments

Total tax charge

Year ended
31 January
2019
£’000

Year ended
31 January
2018
£’000

260

–

260

(260)

–

2,435

–

2,435

(2,294)

141

81,789

15,540

73,437

14,072

(16,474)

(335)

1,071

198

–

(11,679)

(1,194)

(1,058)

–

141

The Company has £5.7m excess management expenses carried forward (2018: nil). There are no carried forward deferred tax assets or
liabilities (2018: nil). Due to the Company’s status as an investment trust, and the intention to continue meeting the conditions required
to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the
revaluation or disposal of investments. For all investments the tax base is equal to the carrying amount.

7 EARNINGS PER SHARE

Revenue return per ordinary share

Capital return per ordinary share

Earnings per ordinary share (basic and diluted)

Year ended
31 January
2019

Year ended
31 January
2018

2.69p

115.43p

118.12p

23.76p

81.80p

105.56p

Revenue return per ordinary share is calculated by dividing the revenue return attributable to equity shareholders of
£1.9m (2018: £16.5m) by the weighted average number of ordinary shares outstanding during the year.

Capital return per ordinary share is calculated by dividing the capital return attributable to equity shareholders of
£79.9m (2018: £56.8m) by the weighted average number of ordinary shares outstanding during the year.

Basic and diluted earnings per ordinary share are calculated by dividing the earnings attributable to equity shareholders of
£81.8m (2018: £73.3m) by the weighted average number of ordinary shares outstanding during the year.

The weighted average number of ordinary shares outstanding (excluding those held in treasury) during the year was
69,243,466 (2018: 69,435,737). There were no potentially dilutive shares, such as options or warrants, in either year.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

NOTES TO THE FINANCIAL STATEMENTS continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

8 DIVIDENDS

Second interim dividend in respect of year ended 31 January 2018 of 5.0p (Prior year: interim dividend 10.0p) per share

Final dividend in respect of year ended 31 January 2018 of 6.0p (Prior year: 10.0p) per share

First quarterly dividend in respect of year ended 31 January 2019 of 5.0p per share

Second quarterly dividend in respect of year ended 31 January 2019 of 5.0p per share

Total

Year ended
31 January
2019
£’000

Year ended
31 January
2018
£’000

3,463

4,156

3,463

3,461

6,936

6,960

–

14,543

13,896

10 INVESTMENTS
The tables below analyse the movement in the carrying value of the investment portfolio in the year. In accordance with accounting
standards, this note has been prepared on a fund-level basis rather than an underlying investment basis.

A fund is considered to generate realised gains if it is more than 85% drawn and has returned at least the amount invested by the
Company. All gains and losses arising from the underlying investments of such funds are presented as realised. All gains and losses
in respect of other funds are presented as unrealised.

Direct investments are considered realised when they are sold.

Investments are held by both the Company and through the underlying subsidiary Partnerships. An analysis of gains and losses
on an underlying investment basis is presented on page 46.

The Company paid a third quarterly dividend of 5.0p per share in March 2019. The Board has proposed a final dividend of 7.0p per share
(totalling £4,840,644) in respect of the year ended 31 January 2019 which, if approved by shareholders, will be paid on 26 July 2019,
to shareholders on the register of members at the close of business on 5 July 2019.

9 SUBSIDIARY UNDERTAKINGS AND UNCONSOLIDATED STRUCTURED ENTITIES
Subsidiary undertakings
ICG Enterprise Trust Limited Partnership (97.5% owned), ICG Enterprise Trust (2) Limited Partnership (97.5% owned) and ICG
Enterprise Trust Co-investment Limited Partnership (99.0% owned) (“the Partnerships”), which are registered in England, are
subsidiary undertakings at 31 January 2019.

In accordance with IFRS 10 (amended), the Partnerships are not consolidated and are instead included in unquoted investments
at fair value.

The value of the subsidiaries is shown net of an accrual for the interests of the Co-investors (ICG and certain of its executives, and,
in respect of certain historic investments, the executives and connected parties of Graphite Capital, the Former Manager) in the
co-investment incentive scheme. As at 31 January 2019, £24.8m (2018: £22.5m) was accrued in respect of these interests. During the
year the Co-investors invested £0.6m (2018: £0.6m). Payments received by Co-investors amounted to £6.1m or 3.6% of £170.7m cash
proceeds received in the year (2018: £6.5m or 2.9% of £220.6m proceeds received). More than 40% of payments related to investments
made in 2008 or before, reflecting the very long term nature of the incentive scheme. See page 46 for further details of the operation
of the scheme.

Unconsolidated structured entities
The Company’s principal activity is investing in private equity funds and directly into private companies. Such investments may be made
and held via a subsidiary. The majority of these investments are unconsolidated structured entities as defined in IFRS 12.

The Company holds interests in closed ended limited partnerships which invest in underlying companies for the purposes of capital
appreciation. The Company and the other limited partners make commitments to finance the investment programme of the relevant
manager, who will typically draw down the amount committed by the limited partners over a period of four to six years.

The table below classifies the Company’s interests in unconsolidated structured entities by type of investment. The table presents
for each category the related balances and the maximum exposure to loss.

Total investments

As at 31 January 2019

As at 31 January 2018

Unquoted
investments
£’000

686,701

593,383

Co-investment
incentive scheme
accrual
£’000

(24,117)

(21,987)

Maximum loss
exposure
£’000

662,584

571,396

The Company also holds investments of £7.1m (2018: £3.4m) that are not unconsolidated structured entities. In addition the Company
also holds quoted stock investments of £1.7m (2018: £1.7m). Further details of the Company’s investment portfolio are included in the
Supplementary Information section on pages 90 to 92.

Cost at 1 February 2018

Unrealised appreciation at 1 February 2018

Valuation at 1 February 2018

Movements in the year:

Purchases

Sales

– capital proceeds

– realised gains and losses based on carrying value at previous balance sheet date

Movement in unrealised (depreciation)/ appreciation

Valuation at 31 January 2019

Cost at 31 January 2019

Unrealised (depreciation)/ appreciation at 31 January 2019

Valuation at 31 January 2019

Cost at 1 February 2017

Unrealised appreciation at 1 February 2017

Valuation at 1 February 2017

Movements in the year:

Purchases

Transfer of instrument to level 1

Sales

– capital proceeds

– realised gains and losses based on carrying value at previous balance sheet date

Movement in unrealised appreciation

Valuation at 31 January 2018

Cost at 31 January 2018

Unrealised (depreciation)/ appreciation at 31 January 2018

Valuation at 31 January 2018

Quoted
£’000

1,552

181

1,733

–

(78)

1,655

1,552

103

1,655

Quoted
£’000

432

(68)

364

1,983

469

(932)

(69)

(82)

1,733

1,552

181

1,733

Unquoted
£’000

338,539

139,823

478,362

Subsidiary
undertakings
£’000

51,310

45,082

96,392

Total
£’000

391,401

185,086

576,487

101,434

35,750

137,184

(129,368)

9,329

60,049

519,806

371,946

147,860

519,806

Unquoted
£’000

333,579

157,520

491,099

97,976

(469)

(165,874)

(31,188)

86,818

478,362

338,539

139,823

478,362

–

16,469

148,611

87,060

61,551

148,611

Subsidiary
undertakings
£’000

40,281

40,437

80,718

(129,368)

9,329

76,440

670,072

460,558

209,514

670,072

Total
£’000

374,292

197,889

572,181

11,029

110,988

–

4,645

96,392

51,310

45,082

96,392

–

(166,806)

(31,257)

91,381

576,487

391,401

185,086

576,487

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

NOTES TO THE FINANCIAL STATEMENTS continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

10 INVESTMENTS continued

11 CASH AND CASH EQUIVALENTS

Realised gains based on cost

Amounts recognised as unrealised in previous years

Realised gains based on carrying values at previous balance sheet date

Increase in unrealised appreciation

Gains on investments

31 January
2019
£’000

31 January
2018
£’000

61,341

72,927

(52,012)

(104,184)

9,329

76,440

85,769

(31,257)

91,381

60,124

Related undertakings
At 31 January 2019, the Company held interests in three limited partnership subsidiaries, ICG Enterprise Trust Limited Partnership,
ICG Enterprise Trust (2) Limited Partnership, and ICG Enterprise Trust Co-investment Limited Partnership. The value of these interests
represented 92%, 71% and 81% (2018: 94%, 70% and 69%) respectively of the net assets of each partnership at the balance sheet date.
The registered address and principal place of business of the partnerships is Juxon House, 100 St Paul’s Churchyard, London EC4M 8BU.

In addition the Company held an interest (including indirectly through its subsidiaries) of more than 20% in the following entities:

Cash at bank and in hand

12 RECEIVABLES – CURRENT

Fund distribution receivable

Prepayments and accrued income

Subsidiary undertakings

31 January
2019
£’000

31 January
2018
£’000

60,626

78,389

31 January
2019
£’000

31 January
2018
£’000

–

548

–

548

6,095

992

3,323

10,410

As at 31 January 2019, prepayments and accrued income included £0.2m (2018: £0.5m) of unamortised costs in relation to the bank
facility. Of this amount £0.2m (2018: £0.3m) is expected to be amortised in less than one year.

Instrument

% interest1

13 PAYABLES – CURRENT

As at 31 January 2019

Investment

Cognito IQ Limited2

Graphite Capital Partners VI4

Graphite Capital Partners VII Top Up Plus4

Graphite Capital Partners VIII Top Up4

The Groucho Club Limited5

As at 31 January 2018

Investment

Cognito IQ Limited2

CSP Secondary Opportunities II Unit Trust3

Graphite Capital Partners VI4

Graphite Capital Partners VII Top Up Plus4

Graphite Capital Partners VIII Top Up4

The Groucho Club Limited5

The Laine Pub Company Limited6

Preference shares

Ordinary shares

Limited partnership interests

Ordinary shares

44.0%

35.5%

20.8%

20.0%

41.1%

21.6%

Instrument

% interest1

Preference shares

Ordinary shares

Limited partnership interests

Ordinary shares

Preference shares

Ordinary shares

44.0%

36.1%

59.7%

20.8%

20.0%

41.1%

21.6%

42.6%

32.4%

Accruals

Corporation tax payable

Fund capital call payables

14 SHARE CAPITAL

Equity share capital

31 January
2019
£’000

31 January
2018
£’000

385

–

386

Number

Authorised
Nominal
£’000

Number

464

141

358

963

Issued and
fully paid
Nominal
£’000

Balance at 31 January 2019 and 31 January 2018

120,000,000

12,000

72,913,000

7,292

All ordinary shares have a nominal value of 10.0p. At 31 January 2019, 72,913,000 shares had been allocated, called up and fully paid. Of
this total, the Company held 3,735,945 shares in treasury (2018: 3,650,945) leaving 69,177,055 (2018: 69,262,055) shares outstanding,
all of which have equal voting rights. The market value of the Company’s ordinary shares at 31 March 1982 was 16p.

15 NET ASSET VALUE PER SHARE
The net asset value per share is calculated on net assets attributable to shareholders of £730.9m (2018: £664.3m) and on 69,177,055
(2018: 69,262,055) ordinary shares in issue at the year end. There were no potentially dilutive ordinary shares, such as options or
warrants, at either year end. Calculated on both the basic and diluted basis the net asset value per share was 1,056.5p (2018: 959.1p).

The percentage shown for limited partnership interests represents the proportion of total commitments to the relevant fund. The percentage shown for shares represents the
proportion of total shares in issue.

2 Address of principal place of business is Rivergate House, Newbury Business Park, London Road, Newbury, United Kingdom, RG14 2PZ
3 Address of principal place of business is No 1 Seaton Place, St Helier, Jersey JE4 8YJ
4 Address of principal place of business is Berkeley Square House, Berkeley Square, London W1J 6BQ
5 Address of principal place of business is 45 Dean Street, London, England, W1D 4QB
6 Address of principal place of business is Park House Crawley Business Quarter, Manor Royal, Crawley, West Sussex, United Kingdom, RH10 9AD

These investments are not considered subsidiaries as the Company does not exert control over the activities of these companies/
partnerships.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

NOTES TO THE FINANCIAL STATEMENTS continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

16 CAPITAL COMMITMENTS AND CONTINGENCIES
The Company and its subsidiaries had uncalled commitments in relation to the following portfolio investments.

ICG Europe VII

ICG Strategic Equity Fund III

ICG Augusta Partners Co-Investor2

ICG Strategic Secondaries Fund II

ICG North American Private Debt Fund II

ICG Recovery Fund 2008 B2

ICG Asia Pacific Fund III

ICG Europe VI2

ICG European Fund 2006 B

ICG Cross Border2

ICG Europe V2

ICG Topvita Co-investmentI

ICG Progress Co-Investment

ICG Velocity Partners Co-Investor2

ICG MXV Co-InvestmentI

ICG Match Co-Investment

ICG Trio Co-Investment

Total ICG funds

Graphite Capital Partners IX

Graphite Capital Partners VIII1

Graphite Capital Partners VII1/2

Graphite Capital Partners VI1

Total Graphite funds

31 January
2019
£’000

31 January
2018
£’000

31,527

29,944

18,338

14,946

7,629

7,285

4,676

3,448

2,177

1,041

890

764

711

363

222

125

117

–

16,176

–

8,135

5,383

4,561

2,104

–

892

303

–

2,012

–

697

156

124,203

40,419

30,000

16,873

4,745

–

51,618

–

26,643

4,745

2,084

33,472

PAI Europe VII

CVC European Equity Partners VII

Thomas H Lee Equity Fund VIII

Bowmark Capital Partners VI

Resolute IV

Tailwind Capital Partners III

Sixth Cinven Fund

Five Arrows Principal Investments III

Charterhouse Capital Partners X

New Mountain Partners V

Bain Capital Europe V

BC European Capital X

Five Arrows Capital Partners

Hg Capital 8

Oak Hill Capital Partners IV

Silverfleet II

Leeds Equity Partners VI

Advent Global Private Equity VIII

Permira VI

Gridiron Capital Fund III

IK VIII

Thomas H Lee Equity Fund VII

Piper Private Equity Fund VI

Hollyport Secondary Opportunities VI

The Fourth Alcuin Fund

Deutsche Beteiligungs Fund V

Activa Capital Fund III

Resolute II2

Hollyport Secondary Opportunities V

TDR Capital III

Commitments of less than £2,000,000 at 31 January 2019

Total third party

Total commitments

1 Includes the associated Top Up Funds.
2 Includes interest acquired through a secondary fund purchase.

31 January
2019
£’000

21,828

17,625

14,860

12,500

10,354

10,247

9,490

31 January
2018
£’000

21,868

20,994

14,093

–

13,569

8,731

8,106

7,389

6,985

6,653

6,302

5,334

5,307

4,802

4,583

4,401

4,101

3,458

3,403

3,095

3,064

3,052

3,036

3,009

2,978

2,413

2,250

2,183

–

9,316

9,350

–

9,954

–

5,500

9,053

7,518

5,221

7,197

6,421

5,407

5,697

6,131

3,903

5,990

5,226

3,756

5,882

–

2,250

3,062

33,802

235,341

411,162

59,916

247,274

321,165

As at 31 January 2019, the Company (excluding its subsidiaries) had uncalled commitments in relation to the above portfolio of £309.2m
(2018: £225.5m). The Company did not have any contingent liabilities at 31 January 2019 (2018: None).

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

NOTES TO THE FINANCIAL STATEMENTS continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

17 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Company is an investment company as defined by section 833 of the Companies Act 2006 and conducts its affairs so as to qualify
as an investment trust under the provisions of section 1158 of the Corporation Tax Act 2010 (“Section 1158”). The Company’s objective
is to provide shareholders with long term capital growth through investment in unquoted companies, mostly through specialist funds
but also directly.

Investments in funds have anticipated lives of approximately ten years. Direct investments are made with an anticipated holding period
of between three and five years. Investment agreements will, however, usually provide that any loans advanced to investee companies are
for a longer period than this. The agreements will usually provide for repayments to be made by instalments with provision for full
repayment on sale or flotation.

Financial risk management
The Company’s activities expose it to a variety of financial risks: market risk (comprising currency risk, interest rate risk and price risk),
investment risk, credit risk and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the Company’s financial performance. The Manager has overall
responsibility for managing the risks and the framework for monitoring and coordinating these risks. This is monitored by the Board.
The Company’s financial risk management objectives and processes used to manage these risks have not changed from the previous
period and the policies are set out below:

Market risk
(i) Currency risk
The Company’s investments are principally in the UK, continental Europe and the US, and are primarily denominated in sterling, euros and
US dollars. There are also smaller amounts in other currencies. The Company is exposed to currency risk in that movements in the value of
sterling against these foreign currencies will affect the net asset value and the cash required to fund undrawn commitments. The Board
regularly reviews the level of foreign currency denominated assets and outstanding commitments in the context of current market
conditions and may decide to buy or sell currency or put in place currency hedging arrangements.

The composition of the net assets of the Company by currency at the year end is set out below:

31 January 2019

Investments

Cash and cash equivalents and other net current assets

31 January 2018

Investments

Cash and cash equivalents and other net current assets

Sterling
£’000

217,081

38,789

255,870

Sterling
£’000

266,602

40,090

306,692

Euro
£’000

190,837

5,625

196,462

Euro
£’000

219,281

44,526

263,807

USD
£’000

173,347

14,383

187,730

USD
£’000

83,700

2,168

85,868

Other
£’000

88,807

1,991

90,798

Other
£’000

6,904

1,052

7,956

Total
£’000

670,072

60,788

730,860

Total
£’000

576,487

87,836

664,323

These figures are based on the currency of the location of the underlying portfolio companies’ headquarters.

The effect of a 25% increase or decrease in the sterling value of the euro would be a fall and a rise of £45.4m and £45.3m in the value of
shareholders’ equity at 31 January 2019 respectively (2018: a fall and a rise of £51.0m and £51.3m based on 25% increase or decrease).
The effect of a 25% increase or decrease in the sterling value of the euro on profit after tax would be a fall and a rise of £45.4m and
£45.3m (2018: a fall and a rise of £32.6m and £77.6m based on 25% movement).

The effect of a 25% increase or decrease in the sterling value of the USD would be a fall and a rise of £44.3m and £43.3m in the value
of shareholders’ equity at 31 January 2019 respectively (2018: a fall and a rise of £27.8m and £29.3m based on 25% movement). The
effect of a 25% increase or decrease in the sterling value of the USD on profit after tax would be a fall and a rise of £44.3m and £43.3m
(2018: a fall and a rise of £7.9m and £53.0m based on 25% movement).

The percentages applied are based on market volatility in exchange rates over recent periods.

(ii) Interest rate risk
The fair value of the Company’s investments and cash balances are not directly affected by changes in interest rates.

(iii) Price risk
The risk that the value of a financial instrument will change as a result of changes to market prices is one that is fundamental to the
Company’s objective, which is to provide long term capital growth through investment in unquoted companies. The investment portfolio
is continually monitored to ensure an appropriate balance of risk and reward in order to achieve the Company’s objective. No hedging
of this risk is undertaken.

The Company is exposed to the risk of change in value of its private equity investments. For all investments the market variable is deemed
to be the price itself. The table below shows the impact of a 30% increase or decrease in the valuation of the investment portfolio.
The percentages applied are reasonable based on the managers’ expectation of potential changes in portfolio valuation in light of
volatility in the market.

30% movement in the price of investments

Impact on profit after tax

Impact as a percentage of profit after tax

Impact on shareholders’ equity

Impact as a percentage of shareholders’ equity

31 January 2019

31 January 2018

Increase
in variable
£’000

Decrease
in variable
£’000

Increase
in variable
£’000

Decrease
in variable
£’000

193,107

236.1%

193,107

26.4%

(197,276)

(241.2%)

(197,276)

(27.0%)

202,759

276.6%

167,507

25.2%

(157,662)

(215.1%)

(169,018)

(25.4%)

Investment and credit risk
(i) Investment risk
Investment risk is the risk that the financial performance of the companies in which ICG Enterprise invests either improves or deteriorates,
thereby affecting the value of that investment. Investments in unquoted companies whether indirectly or directly are by their nature
subject to potential investment losses. This risk is mitigated by having a highly diversified investment portfolio.

(ii) Credit risk
The Company’s exposure to credit risk arises principally from its investment in cash deposits. The Company aims to invest the majority
of its liquid portfolio in assets which have low credit risk. The Company’s policy is to limit exposure to any one investment to 15% of gross
assets. This is regularly monitored by the Manager as a part of its cash management process.

Cash is held on deposit with two UK banks and totalled £60.6m (2018: £78.4m). Of this amount £60.1m was deposited at Royal Bank of
Scotland (“RBS”), which has a credit rating of A- from S&P, and this represents the maximum exposure to credit risk at the balance sheet
date. No collateral is held by the Company in respect of these amounts. None of the Company’s cash deposits were past due or impaired
at 31 January 2019 (2018: nil).

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

NOTES TO THE FINANCIAL STATEMENTS continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

17 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT continued
Liquidity risk
The Company has significant investments in unquoted companies which are inherently illiquid. The Company also has substantial
undrawn commitments to funds, the great majority of which are likely to be called over the next five years. The Company aims to
manage its affairs to ensure sufficient cash, other liquid assets and undrawn borrowing facilities will be available to meet contractual
commitments when they are called and also seeks to have cash generally available to meet other short term financial needs. All cash and
cash equivalents are available on demand. The Company’s liquidity management policy involves projecting cash flows and considering
the level of liquidity necessary to meet these.

The Company signed a new €176m (£150m) committed bank facility on 2 April 2019, replacing the existing £104m facility that was due
to mature in 2019 and 2020. The new €176m (£150m) facility is a multi-currency RCF and is provided by Lloyds, ICBC and NatWest.
The facility is split into two equal tranches, maturing in April 2021 and April 2022. The key terms are:

• Upfront Cost: 80bps
• Non-utilisation fees: 85bps
• Tranche A Margin: 280bps
• Tranche B Margin: 300bps

As at 31 January 2019 the Company’s financial liabilities amounted to £0.4m of payables (2018: £1.0m) which were due in less than
one year.

Capital risk management
The Company’s capital is represented by its net assets, which are managed to achieve the Company’s investment objective.
The Company currently has no debt.

The Board can manage the capital structure directly since it has taken the powers, which it is seeking to renew, to issue and buy back
shares and it also determines dividend payments. The Company is subject to externally imposed capital requirements with respect to the
obligation and ability to pay dividends by section 1159 Corporation Tax Act 2010 and by the Companies Act 2006, respectively.

Total equity at 31 January 2019, the composition of which is shown on the balance sheet, was £730.9m (2018: £664.3m).

Fair values estimation
IFRS 7 requires disclosure of fair value measurements of financial instruments categorised according to the following fair value
measurement hierarchy:

• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices)

or indirectly (that is, derived from prices) (level 2).

• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The valuation techniques and inputs applied to level 1 and level 3 assets are described in note 1(c) in accordance with IFRS 13.

The sensitivity of the Company’s investments to a change in value is discussed on pages 80 and 81.

The following tables present the assets that are measured at fair value at 31 January 2019 and 31 January 2018. The Company had
no financial liabilities measured at fair value at those dates.

As at 31 January 2019

Investments held at fair value

Unquoted investments – indirect

Unquoted investments – direct

Quoted investments – direct

Subsidiary undertakings

Total investments held at fair value

Level 1
£’000

Level 2
£’000

Level 3
£’000

–

1,655

–

1,655

–

410,970

108,836

–

148,611

668,417

As at 31 January 2018

Investments held at fair value

Unquoted investments – indirect

Unquoted investments – direct

Quoted investments – direct

Subsidiary undertakings

Total investments held at fair value

Level 1
£’000

Level 2
£’000

Level 3
£’000

–

1,733

–

1,733

–

379,921

98,441

–

96,392

574,754

The following tables present the changes in level 3 instruments for the year to 31 January 2019 and 2018.

31 January 2019

Opening balances

Additions

Disposals

Gains and losses recognised in profit or loss

Closing balance

Total gains for the year included in income statement
for assets held at the end of the reporting period

31 January 2018

Opening balances

Additions

Disposals

Transfer of interest to level 1

Gains and losses recognised in profit or loss

Closing balance

Total (losses)/gains for the year included in income statement
for assets held at the end of the reporting period

Unquoted
investments
(indirect) at fair
value through
profit or loss
£’000

Unquoted
investments
(direct) at fair
value through
profit or loss
£’000

379,921

79,758

98,441

21,676

Subsidiary
undertakings
£’000

96,392

35,750

Total
£’000

574,754

137,184

(102,631)

(26,737)

–

(129,368)

53,922

410,970

15,456

108,836

16,469

148,611

85,847

668,417

52,157

7,892

16,469

76,518

Unquoted
investments
(indirect) at fair
value through
profit or loss
£’000

383,068

81,122

Unquoted
investments
(direct) at fair
value through
profit or loss
£’000

108,031

16,853

(128,941)

(36,933)

–

44,672

379,921

(469)

10,959

98,441

Subsidiary
undertakings
£’000

80,718

11,029

–

4,645

96,392

Total
£’000

571,817

109,004

(165,874)

(469)

60,276

574,754

(53,072)

(7,277)

4,645

(55,704)

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

NOTES TO THE FINANCIAL STATEMENTS continued

18 RELATED PARTY TRANSACTIONS
Significant transactions between the Company and its subsidiaries are shown below:

Subsidiary

ICG Enterprise Trust Limited Partnership

ICG Enterprise Trust (2) Limited Partnership

ICG Enterprise Trust Co – Investment LP

Nature of transaction

Increase in amounts owed to subsidiaries
Income allocated

Increase in amounts owed by subsidiaries

Income allocated

Year ended
31 January
2019
£’000

Year ended
31 January
2018
£’000

1,887
174

6,545
1,089

45,711

170

7,623
1,205

11,192
1,719

30,441

426

Amounts owed by subsidiaries represent funding provided by the Company to its subsidiaries to allow them to make investments.
The balances will be repaid out of proceeds from their portfolios.

Subsidiary

ICG Enterprise Trust Limited Partnership

ICG Enterprise Trust (2) Limited Partnership

ICG Enterprise Trust Co – Investment LP

A full list of related undertakings is presented in note 10.

Amounts owed by subsidiaries

Amounts owed to subsidiaries

31 January 2019
£’000

31 January 2018
£’000

31 January 2019
£’000

31 January 2018
£’000

–

39,736

91,143

–

36,939

45,432

38,219

23,478

–

36,332

14,136

–

Funds managed by the Company’s Manager, excluding direct co-investments of £1.9m (2018: £1.2m), are:

Year ended 31 January 2019

Year ended 31 January 2018

Supplementary
information
(UNAUDITED)

Fund

ICG Europe Fund VII1

ICG Europe Fund VI1

ICG Europe Fund V1

ICG Europe Fund 2006B1

ICG Recovery Fund 2008B1

ICG North American Private Debt Fund II2

ICG Strategic Equity Fund III2

ICG Strategic Secondaries Fund II2

ICG Augusta Co-Investor2

ICG Cross Border2

ICG Velocity Partners Co-Investor2

ICG Asia Pacific III2

Total

Original
commitment
£’000

Remaining
commitment
£’000

34,925

21,828

13,426

9,188

10,478

7,629

30,516

26,701

19,072

3,814

11,443

31,527

3,448

890

2,177

7,285

7,629

29,944

14,946

18,338

1,041

363

4,676

Fair
value
£’000

3,332

22,727

4,744

6,822

2,855

–

572

13,467

734

3,238

3,516

8,003

Original
commitment
£’000

Remaining
commitment
£’000

–

21,868

13,451

9,204

10,497

–

4,561

892

2,104

8,135

–

Fair
value
£’000

–

21,601

8,392

7,531

2,821

–

24,664

16,176

12,032

–

10,570

–

2,012

5,383

39,263

–

10,703

5,923

69,003

200,463

122,264

70,010

100,824

1 Euro denominated positions translated to sterling at spot rate on 31 January 2019 and 31 January 2018.

2 US dollar denominated positions translated to sterling at spot rate on 31 January 2019 and 31 January 2018.

At the balance sheet date the Company has fully funded its share of all commitments due to ICG managed funds in which it is invested.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

30 LARGEST FUND INVESTMENTS

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

WE HAVE INVESTMENTS with
37 LEADING PRIVATE EQUITY FIRMS,
of which 28 relationships are current

1. Graphite Capital Partners VIII 1
£450m fund focused on small to mid-sized UK
buyouts. Sectors include healthcare, business
services, industrials, leisure and consumer.

2. ICG Europe VI2
€3bn pan-European mezzanine and equity fund
investing in mid-to-large sized companies. The fund
invests across the capital structure aiming for private
equity returns with a subordinated debt risk profile.

3. BC European Capital IX 2
€6.7bn fund investing in large buyouts in Europe
and the US of market leading businesses with
defensive growth characteristics.

Value 1
Outstanding commitment
Committed
Country/region

£89m
£16.9m
2013
UK

Value 1
Outstanding commitment
Committed
Country/region

£22.7m
£3.4m
2015
Europe

Value 1
Outstanding commitment
Committed
Country/region

£18.6m
£0.5m
2011
Europe/USA

4. CVC European Equity Partners VI
€10.5bn large buyout fund investing in a wide range
of global industrial and service businesses
headquartered in Europe and North America.

5. Thomas H Lee Equity Fund VII
$2.6bn fund investing in US mid-market and large
buyouts with a focus on business and financial
services, consumer and healthcare, media and
information services sectors.

6. One Equity Partners VI
$1.7bn fund focused on buy and build transactions
in middle market companies in North America and
Western Europe.

Value
Outstanding commitment
Committed
Country/region

£17.7m
£0.4m
2013
Europe/USA

Value
Outstanding commitment
Committed
Country/region

£14.5m
£3.1m
2015
USA

Value
Outstanding commitment
Committed
Country/region

£13.7m
£0.6m
2016
USA/Europe

7. PAI Europe VI
€3.3bn fund focused on market leading companies
in five core sectors: business services, food and
consumer goods, general industrials, healthcare
and retail and distribution.

8. ICG Strategic Secondaries Fund II
$1.1bn fund focused on acquiring portfolios of
direct private equity investments primarily in the
US and Europe.

9. CVC European Equity Partners V 2
€10.7bn pan-European fund investing in a wide
range of deal sizes and industries targeting market
leading businesses operating in stable and
non-cyclical markets.

16. Advent Global Private Equity VIII
$13bn fund investing in European and US
mid-market and large buyouts across a variety
of sectors.

17. Fifth Cinven Fund
€5.2bn fund investing in large buyouts in
Western Europe with a focus on business
and financial services, healthcare, industrials
and consumer sectors.

Value
Outstanding commitment
Committed
Country/region

£9.6m
£4.4m
2016
Europe/USA

Value
Outstanding commitment
Committed
Country/region

£9.3m
£1.4m
2012
Europe

19. Sixth Cinven Fund
€7bn fund investing in large buyouts in
Western Europe with a focus on business
and financial services, healthcare, industrials
and consumer sectors.

20. Hollyport Secondary
Opportunities V
£188m fund focused on acquiring tail-end portfolios
of mature private equity fund interests
on a global basis.

Value
Outstanding commitment
Committed
Country/region

£8.2m
£9.5m
2016
Europe

Value
Outstanding commitment
Committed
Country/region

£8.0m
£2.3m
2015
Global

18. IK VII
€1.4bn Northern European fund investing in
mid-market companies with the potential to achieve
leading and defensible positions. Key sectors
include business services, care, consumer goods
and industrial goods.
Value
Outstanding commitment
Committed
Country/region

£8.6m
£0.4m
2013
Europe

21. ICG Asia Pacific Fund III
$691m mezzanine and equity fund investing
in developed markets in the Asia Pacific region.
The fund invests across the capital structure aiming
for private equity returns with a subordinated
debt risk profile.
Value
Outstanding commitment
Committed
Country/region

£8.0m
£4.7m
2016
Asia Pacific

22. Silverfleet II
€870m European mid-market fund with a particular
focus on buy and build transactions.

23. Bowmark Capital Partners IV
£265m fund focused on small UK buyouts. Sectors
include business services, healthcare services,
leisure, IT services and media.

24. Nordic Capital Partners VIII
€3.6bn mid and large buyout fund investing in
a range of industry sectors in the Nordic region
and Germany and in healthcare on a global basis.

Value
Outstanding commitment
Committed
Country/region

£13.6m
£0.9m
2013
Europe

Value
Outstanding commitment
Committed
Country/region

£13.5m
£14.9m
2016
USA/Europe

Value
Outstanding commitment
Committed
Country/region

£13.1m
£0.5m
2008
Europe/USA

Value
Outstanding commitment
Committed
Country/region

£7.4m
£4.8m
2014
Europe

Value
Outstanding commitment
Committed
Country/region

£7.4m
–
2007
UK

Value
Outstanding commitment
Committed
Country/region

£7.4m
£1.3m
2013
Europe

10. Activa Capital Fund III
€204m French mid-market fund focused on buyouts
in consumer goods, distribution, business services,
healthcare, media and IT sectors.

11. Graphite Capital Partners VII 1,2
£475m fund focused on small to mid-sized UK
buyouts with a focus on roll-outs and buy and
build transactions.

12. Gridiron Capital Fund III
$850m US mid-market buyout fund targeting
investments focused on three core sectors:
business services, niche industrial manufacturing
and specialty consumer services.

Value
Outstanding commitment
Committed
Country/region

£12.8m
£3.0m
2013
France

Value 1
Outstanding commitment
Committed
Country/region

£12.5m
£4.7m
2007
UK

Value
Outstanding commitment
Committed
Country/region

£11.1m
£3.5m
2016
USA

13. Resolute II 2
$3.6bn fund managed by The Jordon Company
focused on mid-market buyouts in the US. Sectors
include industrials, consumer and healthcare,
transportation and logistics, telecoms, technology
and utility, energy and financial services.
Value
Outstanding commitment
Committed
Country/region

£10.7m
£2.4m
2018
USA

14. Permira V
€5bn fund focused on mid and large buyouts
primarily in Europe, but also including the US and
Asia. Sectors include consumer, TMT, industrials,
financial services and healthcare.

15. TDR Capital III
€2.1bn fund investing in European mid-market
companies. TDR’s strategy is to invest in a small
number of companies allowing for a highly
operationally focused approach.

Value
Outstanding commitment
Committed
Country/region

£10.4m
£1.4m
2013
Europe/USA

Value
Outstanding commitment
Committed
Country/region

£10.1m
£2.2m
2013
Europe

Includes the associated Top Up Funds.

All or part of an interest acquired through a secondary fund purchase.

25. Hollyport Secondary
Opportunities VI
$500m fund focused on acquiring tail-end
portfolios of mature private equity fund interests on
a global basis.

26. ICG European Fund 2006 B 2
Secondary fund established to acquire and
recapitalise a portfolio of European mid-market
mezzanine and equity investments.

27. Bain Capital Europe IV
€3.5bn pan-European upper mid-market fund with
a strong focus on transformational change through
operational improvement.

Value
Outstanding commitment
Committed
Country/region

£7.3m
£3.1m
2017
Global

Value
Outstanding commitment
Committed
Country/region

£6.8m
£2.2m
2014
Europe

Value
Outstanding commitment
Committed
Country/region

£6.5m
£1.6m
2014
Europe

28. Thomas H Lee Parallel Fund VI
$8.1bn fund investing in US mid-market and large
buyouts with a focus on business and financial
services, consumer and healthcare, and media
and information services.

29. Deutsche Beteiligungs Fund VI
€700m German mid-market buyout fund focused
on five target sectors: mechanical engineering,
automotive supply, industrial services and logistics,
industrial automation and chemicals.

30. Bowmark Capital Partners V
£375m UK mid-market buyout fund focused on
investments in outsourced services, healthcare
leisure, media and IT services companies.

Value
Outstanding commitment
Committed
Country/region

£6.3m
£1.0m
2007
USA

Value
Outstanding commitment
Committed
Country/region

£6.2m
£0.9m
2012
Germany

Value
Outstanding commitment
Committed
Country/region

£6.2m
£1.8m
2013
UK

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

private equity EXPLAINED

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Private equity is a term used
to describe investment in
unquoted companies

What is Private Equity?
The term private equity covers a wide
spectrum of investments, from early-stage
investment in start-up companies capitalised
at less than £1m (venture capital) to
acquisitions of larger established companies
of all sizes (buyouts). ICG Enterprise focuses
on buyouts as we believe this part of the
market best enables us to meet our objective
of generating strong and consistent returns
for our shareholders, while limiting
downside risk.

A buyout typically involves the purchase
of a majority or a significant minority of the
equity of a well-established, profitable
company by one or more private equity
funds, which invest alongside the existing
management team (a Management Buyout
or MBO) or a new management team
(a Management Buyin or MBI). The sellers
may be the founders or other individuals,
or larger companies seeking to divest
subsidiaries or another private equity firm
selling an investment. Quoted companies
may also be acquired by private equity
investors in public to private transactions.

Active ownership model
generating outperformance
through cycles

Long term investment horizon
Private equity is a long term ownership
model. There is less short term
performance pressure on private equity
owned companies than in the public
markets. This long term view allows private
equity managers to set ambitious medium
to long term goals for management, making
it possible to prioritise fundamental value
creation over short term profit targets and
thereby build an attractive business for
future acquirers.

AN ACTIVE OWNERSHIP MODEL
How private equity creates value

Value
creation

Exit planning

Financial discipline

Operational improvements

Strategic change

p
h
s
r
e
n
w
o
e
v
t
c
A

Governance and responsible investing

Extensive due diligence

Strong alignment of interest and focused stakeholder group

Long term investment horizon

l
a
r
u
t
c
u
r
t
S

s
e
g
a
t
n
a
v
d
a

Strong alignment of interest and
focused stakeholder group
To ensure close alignment of interests
between investors and management teams,
remuneration structures prioritise equity
incentivisation, aligning the business teams
with the private equity managers and
ultimately those managers’ underlying
investors. The same is true between the
private equity managers and their respective
investors (such as ICG Enterprise Trust):
performance fees are only paid once the
respective fund has returned 100% of
capital, plus a hurdle (typically 8% p.a.).
After that, gains are typically split 80%
to the investor and 20% to the private equity
manager; this performance fee is called
carried interest or carry. In addition, private
equity backed businesses benefit from a
focused group of shareholders that have the
expertise and control to drive strategic and
operational change.

Extensive due diligence
The long term focus of private equity and
the illiquid nature of any investment in
private companies means that significant
due diligence is undertaken prior to any
investment. Private equity managers will
typically only invest after a long period of
deep investigation, often over several
months and sometimes even years, and in
most cases alongside management. Private
equity managers are typically sector
focused and will have detailed knowledge
of potential investee companies’
competitive landscape. This not only
plays an integral part in the due diligence
process but also informs the investment
thesis and strategy for the business, should
it be acquired.

Listed private equity companies are
“evergreen”, reinvesting proceeds from the
sale of investments, free of capital gains tax,
into new investments, compounding returns
and providing the shareholder with long term
capital appreciation. This, together with the
long term horizon of private equity, means
that listed private equity is best suited to long
term holding, rather than frequent trading.

There is a deep and mature listed private
equity sector available to investors in
Europe. The London Stock Exchange listed
private equity sector is broadly split
between highly diversified private equity
fund of funds and specialist direct
investors. In ICG Enterprise Trust’s case,
we combine features of both the specialist
direct investors and the diversified fund of
funds, which we believe strikes the right
balance between the two.

Finally, London listed investment trusts
are supervised by boards of directors,
who are typically all independent and who
oversee the manager’s accountability
to shareholders.

Private equity is an active ownership model, with a focus
on creating value through operational and strategic
change, which, if executed well, drives returns for
investors that have materially outperformed public
markets through multiple cycles.

Governance and responsible investing
Through investing responsibly and
considering Environmental, Social and
Governance (ESG) issues at all stages of
the investment cycle, private equity is able
manage ESG risks to generate long term
sustainable returns.

Strategic and operational change
Private equity is an active ownership model
with managers providing focused strategic
and operational guidance to the companies
in their portfolio. This can include expansion
into new markets or business lines or
growing companies through acquisition.
Operationally, private equity managers
work with management teams to maximise
efficiencies within the business, and
importantly the close lines of communication
mean that any under-performance can be
identified early, with the skills on hand to
address issues quickly.

Financial expertise and discipline
Private equity managers bring significant
financial and capital markets expertise to
the businesses they invest in, encouraging
financial discipline and ensuring that the
business has access to competitive
financing solutions. Most private equity
managers use leverage prudently, with a
clear focus on free cash flow generation
and interest cover, ensuring the business
has the right capital structure to withstand
any economic or end market uncertainty.

Sale
Ultimately, all private equity backed
businesses are for sale, and when
companies are ready for disposal, they
may be sold to trade buyers, or to financial
buyers (including other private equity
funds). Alternatively, they may float on
a stock market in an initial public offering
(IPO). Once an investment is sold the net
proceeds are returned to the private equity
manager’s investors. In the case of
ICG Enterprise Trust, these proceeds are
recycled into new investments or returned
to shareholders through dividends.

Investing in private equity
Traditional private equity funds are difficult
for most private investors to access.
Minimum commitment sizes are typically
at least £5m, and investors commit
to a long term obligation to fund a private
equity managers’ investment programme.
This commitment is typically through a ten
year limited partnership fund, with a five
year investment period, and requires
careful management of cash resources
to ensure that all commitments can be met.
It can also be difficult to sell fund interests,
as secondary market liquidity can
be limited.

Like all asset classes, manager selection
is key. However, unlike traditional asset
classes such as equities or bonds, the
dispersion of returns in private equity is
far more pronounced. Historically, top
performing private equity managers have
materially outperformed public markets;
the same cannot always be said for median
or poorer performing managers. To
safeguard against mediocre returns,
extensive due diligence on the private
equity manager, its track record, investment
strategy and competitive differentiators is
essential, as are strong relationships with
funds managed by top performing firms,
which are often oversubscribed and
hard to access.

Benefits of listed private equity
Investment in listed private equity addresses
many of these issues. Shareholders in listed
private equity benefit from daily liquidity
while participating in the potentially superior
returns of a private equity portfolio.

For the price of a share, shareholders gain
exposure to a diversified private equity
portfolio and can benefit from the expertise
of the listed private equity manager in
selecting investments. In addition,
shareholders are not bound by the long
term obligation to fund an underlying
managers’ investment programme,
benefitting from the scale and experience
the listed private equity manager has in
administration and management of cash
and undrawn commitments.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Portfolio analysis

commitments analysis

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Movement in the portfolio
£m

Opening Portfolio 1

Third party funds portfolio drawdowns

High conviction investments – ICG funds, secondary investments and co-investments

Total new investment

Realisation proceeds

Net cash (inflow)/outflow

Underlying valuation movement 2

% underlying Portfolio growth

Currency movement

% currency movement

Closing Portfolio 2

1 Refer to the Glossary for reconciliation to the portfolio balance presented in the unaudited results.
2

In this report 91% of the Portfolio is valued using 31 December 2018 (or later) valuations.

Realisation activity

Investment

Cambium

The Laine Pub Company

David Lloyd Leisure

TMF

Swiss Education

Corporate Risk Holdings

Minimax

CeramTec

Sky Betting and Gaming

Ufinet

Total of 10 largest underlying realisations

Total realisations

Investment Activity

Manager

ICG

Graphite Capital

TDR Capital

Doughty Hanson

Invision Capital

ICG

Cinven

CVC

Cinven

Year of investment

2016

2014

2013

2008

2015

2017

2014

2013

2015

2014

Realisation type

Financial buyer

Trade

Recapitalisation

Financial buyer

Trade

Financial buyer

Trade

Financial buyer

Year ended
31 January
2019

Year ended
31 January
2018

600.7

79.2

78.4

157.6

(163.0)

(5.4)

90.4

15.0%

9.1

1.6%

694.8

594.4

82.3

59.6

141.9

(226.6)

(84.7)

97.7

16.4%

(6.7)

(1.1%)

600.7

Proceeds
£m

18.6

10.7

10.4

8.3

6.5

4.0

3.8

3.7

3.2

73.0

163.0

Original
commitment
£’000

21,231

488,484

875,421

1,385,136

Investment period not commenced

Funds in investment period

Funds post investment period

Total

Movement in outstanding commitments in year ended 31 January 2019

As at 1 February 2018

New primary commitments

New commitments relating to co-investments and secondary purchases

Drawdowns

Secondary disposals

Currency and other movements

As at 31 January 2019

Outstanding
commitment
£’000

Average
drawdown
percentage

% of
commitments

21,231

319,482

70,449

411,162

0.0%

34.6%

92.0%

70.3%

New commitments during the year to 31 January 2019

Fund

Primary commitments

ICG Europe Fund VII

ICG Strategic Equity III

Graphite Capital Partners IX

Bowmark Capital Partners VI

Resolute IV

Tailwind Capital Partners III

Five Arrows Principal Investments III

Five Arrows Capital Partners

ICG North American Private Debt Fund II

Bain Capital Europe V

Total primary commitments

Commitments relating to co-investments and secondary investments

Total new commitments

Strategy

Geography

Mid-market buyouts

Secondary fund restructurings

Mid-market buyouts

Mid-market buy-outs

Europe

Global

USA

Europe

Lower middle-market buyouts

North America

Subordinated debt and mezzanine

North America

Mid-market buyouts

Europe

5.2%

77.7%

17.1%

100.0%

£m

321.2

162.1

23.3

(99.8)

(2.2)

6.6

411.2

£m

34.6

31.3

30.0

12.5

11.4

11.3

8.9

7.7

7.4

7.0

162.1

23.3

185.4

Investment

Minimax

IRI

Description

Supplier of fire protection systems and services

Provider of data and predictive analytics to consumer goods manufacturers

Endeavor Schools

Operator of schools

PSB Academy2

Provider of private tertiary education

Abode Healthcare

Provider of hospice care and healthcare services

Alerian

IRIS

Provider of data and investment products focused on natural resources

Provider of business critical software and services to the accountancy and payroll sectors

Manager

ICG

Country

Germany

New Mountain

USA

Leeds Equity Partners USA

ICG

Singapore

Tailwind Capital

ICG

Nurture Landscapes

Provider of grounds maintenance, landscape construction and gritting services

Graphite Capital

Etanco

GFL

Manufacturer of fixing/fastening systems for the construction market

Provider of diversified environmental solutions

ICG

BC Partners

Total of 10 largest underlying new investments

Total new investments

1 Represents ICG’s indirect exposure (share of fund cost) plus any amounts paid for co-investments in the period.
2 Represents a new co-investment during the period. PSB Academy was already in the portfolio as at 31 January 2018 via a primary holding in ICG Asia Pacific III.

USA

France

Canada

Cost 1
£m

17.4

11.5

8.1

6.9

5.1

3.5

3.2

2.3

2.0

1.6

61.6

157.6

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Currency exposure

GLossary

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Portfolio1

Sterling

Euro

US dollar

Other European

Other

Total

31 January
2019
£m

31 January
2019
%

31 January
2018
£m

31 January
2018
%

241.9

190.8

173.3

53.8

35.0

694.8

34.8%

27.5%

25.0%

7.7%

5.0%

235.8

174.3

119.6

49.8

21.2

100.0%

600.7

1 Currency exposure is calculated by reference to the location of the underlying Portfolio companies’ headquarters.

Outstanding commitments

– Sterling

– Euro

– US dollar

– Other European

Total

Dividend Analysis

Period ended

31 January 2019 1

31 January 2018

31 January 2017

31 January 2016

31 January 2015

31 January 2014

31 January 2013

31 January 2012

31 January 2011

31 December 2009

31 December 2008

31 December 2007

31 December 2006

31 January
2019
£m

83.3

172.2

153.9

1.8

411.2

31 January
2019
%

20.3%

41.9%

37.4%

0.4%

100.0%

Revenue
return
per share
p

Ordinary
dividend
per share
p

Special
dividend
per share
p

Total
dividend
per share
p

2.69

23.76

8.13

11.07

12.96

19.02

3.15

6.33

1.51

(0.11)

5.12

8.86

7.44

22.0

21.0

20.0

11.0

10.0

7.5

5.0

2.25

4.5

8.0

6.5

–

5.5

8.0

–

22.0

21.0

20.0

11.0

15.5

5.0

2.25

4.5

8.0

6.5

31 January
2018
£m

63.2

170.0

86.1

1.9

321.2

Net
asset value
per share
p

1,056.5

959.1

871.0

730.9

695.2

677.2

631.5

569.4

534.0

464.1

449.0

519.4

454.6

Includes the quarterly dividend of 5p paid on 1 March 2019 and the final dividend of 7p to be paid on 26 July 2019 subject to shareholder approval at the AGM.

39.3%

29.0%

19.9%

8.3%

3.5%

100.0

31 January
2018
%

19.7%

52.9%

26.8%

0.6%

100.0%

Closing
mid-market
share price
p

822.0

818.0

698.5

545.0

575.0

563.5

487.0

357.0

308.0

305.0

187.0

474.0

386.0

Alternative Performance Measures (“APMs”)
are a term defined by the European Securities and Markets
Authority as “financial measures of historical or future
performance, financial position, or cash flows, other than
a financial measure defined or specified in the applicable
financial reporting framework”.

APMs are used in this report 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, taking
into account industry practice. Definitions and reconciliations
to IFRS measures are provided in the main body of the report
or in this Glossary, where appropriate.

Buyout funds
are funds that acquire controlling interests in companies with a view
towards later selling those companies or taking them public.

Compound Annual Growth Rate (“CAGR”)
represents the annual growth rate of an investment over a
specified period of time longer than one year.

Carried interest
is equivalent to a performance fee. This represents a share of the
profits that will accrue to the underlying private equity managers,
after achievement of an agreed preferred return.

Co-investment
is a direct investment in a company alongside a private equity fund.

Co-investment incentive scheme accrual
represents the estimated value of interests in the co-investment
incentive scheme operated by the Company. At both 31 January
2019 and 31 January 2018, the accrual was estimated as the
theoretical value of the interests if the Portfolio had been sold
at its carrying value at those dates.

Commitment
represents the amount of capital that each limited partner agrees
to contribute to the fund which can be drawn at the discretion of
the general partner.

Discount
arises when the investment trust shares trade at a discount to NAV.
In this circumstance, the price that an investor pays or receives for
a share would be less than the value attributable to it by reference
to the underlying assets. The discount is the difference between
the share price and the NAV, expressed as a percentage of the
NAV. For example, if the NAV was 100p and the share price was
90p, the discount would be 10%.

Drawdowns
are amounts invested by the Company into funds when called
by underlying managers in respect of an existing commitment.

EBITDA
stands for earnings before interest, tax, depreciation and
amortisation, which is a widely used performance measure
in the private equity industry.

Enterprise value
is the aggregate value of a company’s entire issued share capital
and net debt.

FTSE All-Share Index Total return
is the change in the level of the FTSE All-Share Index, assuming
that dividends are re-invested on the day that they are paid.

Full realisations
are exit events (e.g. trade sale, sale by public offering, or sale
to a financial buyer) following which the residual exposure to
an underlying company is zero or immaterial.

Funds in investment period
are those funds which are able to make new platform investments
under the terms of their fund agreements, usually up to five years
after the initial commitment.

General Partner (“GP”)
is the entity managing a private equity fund that has been
established as a limited partnership. This is commonly referred
to as the Manager.

Hedging
is an investment technique designed to offset a potential loss on
one investment by purchasing a second investment that is expected
to perform in the opposite way.

High conviction portfolio
refers to co-investments, ICG managed funds and secondary
fund investments.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

GLossary continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Initial Public Offering (“IPO”)
is an offering by a company of its share capital to the public
with a view to seeking an admission of its shares to a recognised
stock exchange.

Internal Rate of Return (“IRR”)
is a measure of the rate of return received by an investor in a fund.
It is calculated from cash drawn from and returned to the investor
together with the residual value of the investment.

Last Twelve Months (“LTM”)
refers to the time frame of the immediately preceding 12 months
in reference to a financial metric used to evaluate the Company’s
performance.

Limited Partner (“LP”)
is an institution or individual who commits capital to a private
equity fund established as a limited partnership. These funds are
generally protected from legal actions and any losses beyond
the original investment.

Limited Partnership
includes one or more general partners, who have responsibility
for managing the business of the partnership and have unlimited
liability, and one or more limited partners, who do not participate
in the operation of the partnership and whose liability is ordinarily
capped at their capital and loan contribution to the partnership.
In typical fund structures, the general partner receives a priority
profit share ahead of distributions to limited partners.

Local currency return
is the change in the valuation of the Company’s investments,
before the effect of currency movements.

Management Buyin (“MBI”)
is a change of ownership, where an incoming management
team raises financial backing, normally a mix of equity and debt,
to acquire a business.

Management Buyout (“MBO”)
is a change of ownership, where the incumbent management
team raises financial backing, normally a mix of equity and debt,
to acquire a business it manages.

Net asset value per share (“NAV”)
is the value of the Company’s net assets attributable to one
ordinary share. It is calculated by dividing “shareholders’ funds”
by the total number of ordinary shares in issue. Shareholders’
funds are calculated by deducting current and long term liabilities,
and any provision for liabilities and charges, from the Company’s
total assets.

Net asset value per share Total Return
is the change in the Company’s net asset value per share, assuming
that dividends are re-invested at the end of the quarter in which the
dividend was paid.

Net debt
is calculated as the total short term and long term debt in a
business, less cash and cash equivalents.

Overcommitment
refers to where private equity fund investors make commitments
exceeding the amount of cash immediately available for investment.
When determining the appropriate level of overcommitment,
careful consideration needs to be given to the rate at which
commitments might be drawn down, and the rate at which
realisations will generate cash from the existing portfolio to fund
new investment.

Portfolio
represents the aggregate of the investment portfolios of the
Company and of its subsidiary limited partnerships. This is consistent
with the commentary in previous annual and interim reports. The
Board and the Manager consider that this is the most relevant basis
for shareholders to assess the overall performance of the Company
and comparison with its peers.

The closest equivalent amount reported on the balance sheet is
“investments at fair value”. A reconciliation of these two measures
is presented below.

Investments
at fair value as
per balance
sheet

Cash held by
subsidiary
limited part-
nerships

Balances receiv-
able from sub-
sidiary limited
partnerships

Co-investment
incentive
scheme accrual

Portfolio

670.1

576.5

–

1.7

24.7

694.8

22.5

600.7

£m

31
January
2019

31
January
2018

Post-crisis investments
are defined as those completed in 2009 or later.

Pre-crisis investments
are defined as those completed in 2008 or before, based on
the date the original deal was completed, which may differ from
when the Company invested if acquired through a secondary
investment.

Preferred return
is the preferential rate of return on an individual investment
or a portfolio of investments, which is typically 8% per annum.

Premium
occurs when the share price is higher than the NAV
and investors would therefore be paying more than the value
attributable to the shares by reference to the underlying assets.

Undrawn commitments
are commitments that have not yet been drawn down.

Unquoted company
is any company whose shares are not listed or traded on a
recognised stock exchange.

Valuation multiples
are earnings or revenue multiples applied in valuing a business
enterprise.

Venture capital
refers to investing in companies at a point in that company’s life
cycle that is either at the concept, start-up or early stage of
development.

Public to private (“P2P”)
is the purchase of all of a listed company’s shares using a
special-purpose vehicle funded with a mixture of debt and
unquoted equity.

Quoted company
is any company whose shares are listed or traded on a recognised
stock exchange.

Realisation proceeds
are amounts received by the Company in respect of the Portfolio,
which may be in the form of capital proceeds or income such as
interest or dividends.

Uplift on exit
represents the increase in gross value relative to the underlying
manager’s most recent valuation prior to the announcement of
the disposal. Excludes a small number of investments that were
public throughout the life of the investment. May differ from
valuation gains in the reporting period in certain instances
due to timing differences.

Secondary investments
occur when a Company purchases existing private equity fund
interests and commitments from an investor seeking liquidity.

Share price Total Return
is the change in the Company’s share price, assuming that
dividends are re-invested on the day that they are paid.

Total Return
is a performance measure that assumes the notional re-investment
of dividends. This is a measure commonly used by the listed private
equity sector and listed companies in general.

The table below sets out the share price and the net asset value
per share growth figures for periods of one, three, five and ten
years to the balance sheet date on a Total Return basis.

Total Return performance
in years to 31 January 2019

Net asset value per share

Share price

FTSE All-Share Index

1 year

12.4%

3.0%

-3.8%

3 years

53.7%

62.8%

28.5%

5 years

10 years1

74.7%

67.2%

31.2%

172.9%

431.1%

148.3%

As the Company changed its year end in 2010, the ten year figures are for the 121 month
period to 31 January 2019.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Shareholder
information
(UNAUDITED)

97 The Annual General Meeting
98 Notice of meeting
99 Notice of meeting: explanatory notes
101 Useful information
102 How to invest in ICG Enterprise

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

THE ANNUAL GENERAL MEETING

Resolution 10
Approves the remuneration report as set
out in the Directors’ Remuneration section
(pages 49 to 51) for the year ended
31 January 2019.

Resolution 13
Renews the authority of the Company to
make market purchases of up to 14.99%
of the issued ordinary share capital (the
“Buyback Authority”).

The price paid for a share under the
Buyback Authority will be at least 10p (the
nominal value of a share) and no more than
the highest of (a) 5% above the average
share price over the five business days
preceding the date of the market purchase,
(b) the price of the last independent trade
in the Company’s shares and (c) the highest
amount bid. These limits are in accordance
with company law and the Listing Rules.

The Buyback Authority will expire at the
conclusion of the Annual General Meeting
of the Company to be held in 2020, or,
if earlier, at the close of business on
31 July 2020.

Resolution 14
Allows the calling of a general meeting
(unless it is an Annual General Meeting)
on not less than 14 days’ notice.

Resolutions 11 and 12
Renews the authority of the Board to
increase the share capital of the Company
by issuing shares subject to certain
conditions (the “Share Issue Authorities”).

Resolution 11 gives the Board the ability to
issue shares equivalent to 33% of issued
ordinary share capital. In such
circumstances, the Companies Act requires
that existing shareholders are given the
opportunity to participate before new
shareholders (“pre-emption”). Resolution
12 gives the Board the ability to issue shares
equivalent to 10% of issued ordinary share
capital without pre-emption applying.

The Listing Rules do not permit the
Company to issue shares at a discount to
NAV per share unless they are offered to
existing shareholders first. This would be
unchanged by these resolutions.

The Share Issue Authorities will expire at
the conclusion of the Annual General
Meeting of the Company to be held in 2020,
or, if earlier, at the close of business on
31 July 2020.

The notice convening the Annual
General Meeting (page 98) sets
out in full the resolutions to be
voted on at the Meeting. The
effect of each proposed
resolution, if passed by the
shareholders, is summarised
below:

Resolution 1
Approves the audited financial statements
for the year ended 31 January 2019 (pages
63 to 84) together with the Independent
Auditors’ Report (pages 57 to 62) and the
Report of the Directors (pages 45 to 47).

Resolution 2
Approves the recommended final dividend
of 7.0p per ordinary share for the year
ended 31 January 2019.

Resolutions 3 TO 7
Approves the re-election of Jeremy Tigue,
Alastair Bruce, Sandra Pajarola and Lucinda
Riches. Save for those directors retiring at
the end of the Annual General Meeting, all
directors are offering themselves for
re-election annually in accordance with
corporate governance principles. Approves
the election of Jane Tufnell.

Resolutions 8 and 9
Approves the appointment of the auditors,
Ernst & Young LLP, and authorises the
directors to set their remuneration. This
is recommended by the Audit Committee
(see page 53).

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Notice of meeting

Notice is hereby given that the Annual
General Meeting of ICG Enterprise Trust
plc will be held at The Exhibition Room,
Goldsmiths’ Hall, Foster Lane, London,
EC2V 6BN on 27 June 2019 at 3.00p.m.
for the following purposes.

Resolutions 12 to 14 inclusive will be
proposed as special resolutions, requiring
75% of votes cast to be in favour in order to
be passed. All other resolutions will be
proposed as ordinary resolutions, requiring
more than 50% of votes cast to be in favour
in order to be passed.

Ordinary business
(1) To receive and adopt the reports

of the directors and auditors and the
Company’s financial statements for
the year ended 31 January 2019.

(2) To declare a final dividend of 7.0p on
the ordinary shares of the Company,
payable on 26 July 2019 to those
shareholders who were on the register
of the Company as at 5 July 2019.

(3) To re-elect J. Tigue as a director.

(4) To re-elect A. Bruce as a director.

(5) To re-elect S. Pajarola as a director.

(6) To re-elect L. Riches as a director.

(7) To elect J. Tufnell as a director.

(8) To appoint Ernst & Young LLP as

auditors to the Company to hold office
until the conclusion of the next general
meeting at which financial statements
are laid before the Company.

(9) To authorise the directors to fix
the remuneration of the auditors.

(10) To consider and, if thought fit, to

approve the remuneration report set
out in the Directors’ Remuneration
section of the Annual Report for the
year ended 31 January 2019.

Authority to allot shares
(11) THAT:

a. the directors be generally and
unconditionally authorised, in
accordance with section 551 of the
Companies Act 2006 (the “Act”), to
exercise all the powers of the Company
to allot shares in the Company or to
grant rights to subscribe for or to
convert any security into shares in the
Company up to an aggregate nominal
amount of £2,282,018 (representing
22,820,178 ordinary shares of 10p each

as at 12 April 2019, such amount being
equivalent to 33% of the issued ordinary
share capital excluding shares held as
Treasury Shares) during the period
commencing on the date of the passing
of this resolution and expiring at the
conclusion of the Annual General
Meeting of the Company in 2020,
or, if earlier, at the close of business
on 31 July 2020; and

b. all authorities and powers previously
conferred under section 551 of the
Act are hereby revoked, provided
that such revocation shall not have
retrospective effect.

Special business
Disapplication of pre-emption rights
(see note 1)
(12) THAT:

a. subject to the passing of resolution 11
above the directors be empowered to
allot equity securities as defined in
section 560(1) or section 560(3) of the
Act wholly for cash during the period
commencing on the date of the passing
of this resolution and expiring at the
conclusion of the Annual General
Meeting of the Company in 2020,
or, if earlier, at the close of business
on 31 July 2020. In connection with
an allotment of shares pursuant to the
authority referred to in resolution 11
above or the sale of Treasury Shares,
up to an aggregate nominal amount
of £691,521 (representing 6,915,206
ordinary shares of 10p each as at
12 April 2019, such amount being
equivalent to 10% of the issued ordinary
share capital (excluding shares held as
Treasury Shares)) as if section 561 of
the Act did not apply to any such
allotment or sale; and

b. by such power the directors may make
offers or agreements which would or
might require equity securities to be
allotted after the expiry of such period.

and in such manner as the directors
may determine, provided that:

a. the maximum number of shares

which may be purchased is 10,365,893
(being approximately 14.99% of the
issued ordinary share capital as at
12 April 2019 (excluding shares held as
Treasury Shares));

b. the minimum price which may be paid

for each ordinary share is 10p;

c. the maximum price which may be

paid for a share is an amount equal
to the highest of (a) 105% of the
average of the closing price of the
Company’s ordinary shares as derived
from the London Stock Exchange Daily
Official List for the five business days
immediately preceding the day on
which such share is contracted to
be purchased, and (b) the price of
the last independent trade or (c) the
highest current bid, as stipulated by
Commission-adopted Regulatory
Technical Standards pursuant to
article 5(6) of the Market Abuse
Regulation; and

d. this authority shall expire at the

conclusion of the Annual General
Meeting of the Company held in 2020,
or, if earlier, at the close of business
on 31 July 2020 (except in relation to
the purchase of shares the contract
for which was concluded before the
expiry of such authority and which
might be executed wholly or partly
after such expiry) unless such
authority is varied, revoked or
renewed prior to such time.

GENERAL MEETING ON A MINIMUM
14 DAYS’ NOTICE
(14) THAT:

a general meeting other than an Annual
General Meeting may be called on not
less than 14 days’ notice.

Authority to purchase shares
(13) THAT:

the Company be and is hereby
unconditionally and generally
authorised for the purpose of section
701 of the Act to make market purchases
(as defined in section 693 of that Act)
of ordinary shares of 10p each in the
capital of the Company on such terms

By order of the Board

Company Secretary
Andrew Lewis for and on behalf
of ICG Nominee 2015 Limited
12 April 2019

Registered office:
Juxon House,
100 St Paul’s Churchyard,
London, EC4M 8BU

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Notice of meeting: EXPLANATORY NOTES

Note 1: In accordance with Listing Rule
15.4.11, unless authorised by shareholders,
the Company may not issue shares at a
discount to net asset value unless they are
first offered to existing shareholders
pro-rata to their existing holdings.

Note 2: A member entitled to attend and
vote at this meeting may appoint one or
more persons as his/her proxy to attend,
speak and vote on his/her behalf at the
meeting. A proxy need not be a member
of the Company. If multiple proxies are
appointed they must not be appointed in
respect of the same shares. To be effective,
the enclosed form of proxy, together with
any power of attorney or other authority
under which it is signed or a certified copy
thereof, should be lodged at the office of
the Company’s Registrar, Computershare
Investor Services PLC, The Pavilions,
Bridgwater Road, Bristol BS99 6ZY not
later than 3.00pm on 25 June 2019. In view
of this requirement, investors holding
shares in the Company through the BMO
Private Investor, General Investment
Account or Pension Savings Plans, a BMO
Child Trust Fund, a BMO Junior ISA or in a
BMO Individual Savings Accounts should
ensure that forms of direction are returned
to Computershare Investor Services PLC
not later than 3.00p.m. on 21 June 2019.
The appointment of a proxy will not prevent
a member from attending the meeting and
voting in person if he/she so wishes. A
member present in person or by proxy shall
have one vote on a show of hands and on a
poll every member present in person or by
proxy shall have one vote for every ordinary
share of which he is the holder.

To appoint more than one proxy, members
will need to complete a separate proxy
specifying clearly on each proxy form
how many shares the proxy is appointed in
relation to. A failure to specify the number
of shares each proxy appointment relates
to or specifying an aggregate number of
shares in excess of those held by the
member will result in the proxy appointment
being invalid. Please indicate if the proxy
instruction is one of multiple instructions
being given. All proxy forms must be signed
and should be returned together in the
same envelope.

Note 3: A person to whom this notice is
sent who is a person nominated under
section 146 of the Companies Act 2006
to enjoy information rights (a “Nominated
Person”) may, under an agreement
between him/her and the shareholder by
whom he/she was nominated, have a right
to be appointed (or to have someone else
appointed) as a proxy for the Annual
General Meeting. If a Nominated Person
has no such proxy appointment right or
does not wish to exercise it, he/she may,
under any such agreement, have a right
to give instructions to the shareholder
as to the exercise of voting rights. The
statements of the rights of members in
relation to the appointment of proxies in
Notes 1 and 2 above do not apply to a
Nominated Person. The rights described
in those Notes can only be exercised by
registered members of the Company.

Note 4: As at 12 April 2019 (being
the latest practicable day prior to the
publication of this notice) the Company’s
issued share capital amounted to
69,152,055 ordinary shares carrying one
vote each and 3,760,945 non-voting
Treasury Shares which represents
approximately 5% of the total number of the
ordinary share capital of the Company.
Total issued share capital, including
Treasury Shares, was 72,913,000.

Note 5: Pursuant to Regulation 41 of the
Uncertificated Securities Regulations 2001,
the Company specifies that only those
shareholders registered on the Register
of Members of the Company as at 6.00p.m.
on the day which is two days before the day
of the meeting (or, in the event of any
adjournment, as at 6.00p.m. on the day
which is two days prior to the adjourned
meeting) shall be entitled to attend in
person or by proxy and vote at the Annual
General Meeting in respect of the number
of shares registered in their name at that
time. Changes to entries on the Register
of Members after that time shall be
disregarded in determining the rights of
any person to attend or vote at the meeting.

Note 6: CREST members who wish to
appoint a proxy or proxies through the
CREST electronic proxy appointment
service may do so for this meeting and
any adjournment(s) thereof by using the
procedures described in the CREST
Manual, which is available to download
from the Euroclear website (www.euroclear.
com/CREST). CREST Personal Members or
other CREST sponsored members, and
those CREST members who have appointed
a voting service provider(s), should refer to
their CREST sponsor or voting service
provider(s), who will be able to take the
appropriate action on their behalf.

In order for a proxy appointment or
instruction made using the CREST
service to be valid, the appropriate CREST
message (a “CREST Proxy Instruction”)
must be properly authenticated in
accordance with Euroclear’s specifications
and must contain the information required
for such instructions, as described in the
CREST Manual.

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

Notice of meeting: EXPLANATORY NOTES continued

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

Note 9: A copy of this Notice of Annual
General Meeting is incorporated in the
Annual Report for the year ended
31 January 2019 available on the Company’s
website: www.icg-enterprise.co.uk,
together with other information required
by Section 311A of the Companies Act 2006.

Note 10: The following documents will be
available for inspection at the registered
office of the Company during usual business
hours on any weekday (except Saturdays,
Sundays and public holidays) until the date
of the AGM and at the place of the AGM for
a period of 15 minutes prior to and during
the meeting: (a) the terms and conditions
of appointment of non-executive directors;
and (b) a copy of the current Articles of
Association. None of the directors has a
contract of service with the Company.

If you are in any doubt as to the content or
action you should take, you should consult
immediately your stockbroker, bank
manager, solicitor, accountant or other
independent financial adviser authorised
under the Financial Services and Markets
Act 2000.

If you have sold or otherwise transferred
all of your shares in the Company, please
send this document, together with the
accompanying Form of Proxy and
Attendance Card, to the purchaser or
transferee or to the stockbroker, bank
or other agent through whom the sale
or transfer was affected for transmission
to the purchaser or transferee.

The message, regardless of whether it
constitutes the appointment of a proxy or
an amendment to the instruction given to a
previously appointed proxy, must, in order
to be valid, be transmitted so as to be
received by the issuer’s agent (ID 3RA50)
by the latest time(s) for receipt of proxy
appointments specified in the notice of
meeting and determined by the timestamp
applied to the message by the CREST
Applications Host from which the issuer’s
agent is able to retrieve the message by
enquiry to CREST in the manner prescribed
by CREST. After this time any change of
instructions to proxies appointed through
CREST should be communicated to the
appointee through other means.

CREST members and, where applicable,
their CREST sponsors or voting service
providers should note that Euroclear does
not make available special procedures in
CREST for any particular messages. Normal
system timings and limitations will therefore
apply in relation to the input of CREST
Proxy Instructions. It is the responsibility
of the CREST member concerned to take
(or, if the CREST member is a CREST
personal member or sponsored member
or has appointed a voting service
provider(s), to procure that his/her CREST
sponsor or voting service provider(s)
take(s)) such action as shall be necessary
to ensure that a message is transmitted by
means of the CREST system by any
particular time. In this connection, CREST
members and, where applicable, their
CREST sponsors or voting service
providers are referred, in particular,
to those sections of the CREST Manual
concerning practical limitations of the
CREST system and timings.

The Company may treat as invalid a CREST
Proxy Instruction in the circumstances set
out in Regulation 35(5) (a) of the
Uncertificated Securities Regulations 2001

Note 7: In accordance with section 319A
of the Companies Act 2006, the Company
must cause any question relating to the
business being dealt with at the AGM put by
a shareholder attending the meeting to be
answered. No such answer need be given if:

to do so would:

ii.

interfere unduly with the
preparation for the AGM; or

involve the disclosure of
confidential information;

the answer has already been given on
a website in the form of an answer to
a question; or

it is undesirable in the interests of
the Company or the good order of the
meeting that the question be answered.

Note 8: Shareholders should note that it is
possible that, pursuant to requests made by
shareholders of the Company under section
527 of the Companies Act 2006, the
Company may be required to publish on a
website a statement setting out any matter
relating to:

the audit of the Company’s financial
statements (including the Auditors’
Report and the conduct of the audit)
that are to be laid before the AGM; or
(ii) any circumstance connected with an
auditor of the Company ceasing to hold
office since the previous meeting at
which annual financial statements and
reports were laid in accordance with
section 437 of the Companies Act
2006. The Company may not require
the shareholders requesting any such
website publication to pay its expenses
in complying with sections 527 or 528
of the Companies Act 2006. Where
the Company is required to place a
statement on a website under section
527 of the Companies Act 2006, it
must forward the statement to the
Company’s auditor not later than
the time when it makes the statement
available on the website. The business
which may be dealt with at the AGM
includes any statement that the
Company has been required under
section 527 of the Companies Act
2006 to publish on a website.

Useful information

Address
ICG Enterprise Trust plc
Juxon House
100 St Paul’s Churchyard
London EC4M 8BU
020 3201 7700

Registered number: 01571089
Place of registration: England

Website
www.icg-enterprise.co.uk

Registrar
Computershare Investor Services PLC

The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
www-uk.computershare.com/investor

Telephone: 0370 889 4091

BMO savings schemes
Investors through BMO savings schemes
can contact the Investor Services team on:

Telephone: 0345 600 3030
Email: investor.enquiries@bmogam.com

Financial calendar
The announcement and publication of
the Company’s results may normally be
expected in the months shown below:

April/May

Final results for year
announced, Annual Report and
financial statements published

June

Annual General Meeting and
First quarter’s results
announced

October

Interim figures announced and
half-yearly report published

January

Third quarter’s results
announced

All announcements can be viewed on
the Company’s website (see above).

Manager
ICG Alternative Investment Limited
Juxon House
100 St Paul’s Churchyard
London EC4M 8BU
020 3201 7700

Authorised and regulated by the Financial
Conduct Authority (FRN: 606186).

Broker
Numis Securities Limited
The London Stock Exchange Building
10 Paternoster Square
London EC4M 7LT

Dividend – 2018/2019
Quarterly dividends of 5.0p were paid on:

7 September 2018
7 December 2018
1 March 2019

A final dividend of 7.0p is proposed
in respect of the year ended
31 January 2019, payable as follows:

Ex-dividend date – 4 July 2019
(shares trade without rights to the dividend).

Record date – 5 July 2019 (last date for
registering transfers to receive the
dividend).

Dividend payment date – 26 July 2019

2019/20 dividend payment dates
Q1 2019 payment date – September 2019

Q2 2019 payment date – December 2019

Q3 2019 payment date – March 2020

Payment of dividends
Cash dividends will be sent by cheque
to the first-named shareholder at their
registered address, to arrive on the
payment date.

Alternatively, dividends may be paid direct
into a shareholder’s bank account via Bankers’
Automated Clearing Service (“BACS”).
This can be arranged by contacting the
Company’s registrar, Computershare Investor
Services PLC (see contact details on this
page).

Share price
The Company’s mid-market ordinary share
price is published daily in the Financial Times
and Daily Telegraph under the section
“Investment Companies”. In the Financial
Times the ordinary share price is listed in the
sub-section “Conventional-Private Equity”.

Registrar services
Communications with shareholders are
mailed to the address held in the share
register. Any notifications and enquiries
relating to the registered share holdings,
including a change of address or other

amendment, should be directed to
Computershare Investor Services PLC
(details on this page). For those
shareholders that hold their shares through
the BMO savings schemes, please contact
the Investor Services team (details on
this page).

E-communications for shareholders
ICG Enterprise Trust would like to
encourage shareholders to receive
shareholder documents electronically,
via our website or email notification instead
of hard copy format. This is a faster and
more environmentally friendly way of
receiving shareholder documents.

The online investor centre from our
registrar, Computershare, provides all of the
information required regarding your shares.

Its features include:

• The option to receive shareholder

communications electronically instead
of by post.

• Direct access to data held for you on

the share register including recent share
movements and dividend details.

• The ability to change your address or

dividend instructions online.

To receive shareholder communications
electronically in the future, including all
reports and notices of meetings, you just
need the Shareholder Reference Number
(SRN) printed on your proxy form or
dividend notices, and knowledge of your
registered address. Please register your
details free at www.investorcentre.co.uk

For those shareholders that hold their
shares through the BMO savings schemes,
please contact the BMO Investor Services
team (details on this page) to register your
detail for e-communications.

ISIN/SEDOL numbers
The ISIN/SEDOL numbers and code for the
Trust’s ordinary shares are:

ISIN
SEDOL
Reuters

GB0003292009
0329200
ICGT.L

AIC
The Company is a member of the
Association of Investment Companies.
www.theaic.co.uk.

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101

Strategic
report

Governance

Financial
statements

Supplementary
Information

Shareholder
Information

NOTES

How to invest in ICG Enterprise

ICG Enterprise is listed on the London
Stock Exchange and its shares can be
bought and sold just as those of any
other listed company. A straightforward
way for individuals to purchase and hold
shares in the Company is to contact a
stockbroker, savings plan provider or
online investment platform.

You may be able to find a stockbroker using
the website of the independent Wealth
Management Association (WMA)
at www.pimfa.co.uk.

You may also be able to purchase shares
via your bank account provider.

For a small fee, your chosen intermediary
can purchase shares in the Company on
your behalf.

BMO savings schemes
Investors through BMO savings schemes
can contact the Investor Services team on:

Telephone: 0345 600 3030
Email: investor.enquiries@bmogam.com

ISA status
The Company’s shares are eligible for
tax-efficient wrappers such as Individual
Savings Accounts (“ISAs”), Junior ISAs, and
Self Invested Personal Pensions (“SIPPs”).

Information about ISAs and SIPPs, as well
as general advice on saving and investing,
can be found on the government’s free
and independent service at
www.moneyadviceservice.org.uk.

As with any investment into a company
listed on the stock market, you should
remember that:

• the value of your investment and the

income you get from it can fall as well as
rise, so you may not get back the amount
you invested; and

• past performance is no guarantee of

future performance.

This is a medium to long term investment
so you should be prepared to invest your
money for at least five years.

If you are uncertain about any aspect of
your decision to invest, you should consider
seeking independent financial advice.

Details of the Company’s website and
contact information for potential and
existing shareholders can be found in
the Useful Information section on the
previous page.

102

ICG ENTERPRISE TRUST Annual Report and Accounts 2019

103

ENTERPRISE TRUST

ICG Enterprise Trust plc

Juxon House
100 St Paul’s Churchyard
London
EC4M 8BU