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Annual Report and
Accounts 2022
INVESTING
CREATING
G R O W I N G
Contents
Strategic report
2
4
8
12
17
19
23
23
28
32
42
44
45
57
65
ICG at a glance
Chairman’s statement
The ICG business model
Chief Executive Officer’s review
Market environment
Our strategy and KPIs
Stakeholder engagement
Section 172 statement
Sustainability and people
Task Force on Climate-related Financial Disclosures
Environment
Non-financial information statement
Financial review
Risk management
Viability statement
Governance report
67
68
70
73
75
77
85
90
93
98
110
111
118
125
Chairman’s introduction to governance
The Board’s year
Board of Directors
Corporate governance
Director induction and development
Audit Committee report
Risk Committee report
Nominations and Governance Committee report
Remuneration Committee report
Annual report on remuneration
Governance of remuneration
Directors’ remuneration policy
Directors’ report
Directors’ responsibilities
Financial statements
Auditor’s report
126
Financial statements
136
Notes to the financial statements
142
Additional information
196
201
204
Glossary
Other information
Shareholder and Company information
Visit icgam.com
Our Annual Report for 2022
This report combines all aspects of ICG’s performance and reflects
how we are addressing areas which we believe have the potential to
have a material impact on the delivery of our strategic objectives.
Unless otherwise stated, performance information is for the year
ended 31 March 2022.
Our approach to sustainability
ICG recognises that we have a responsibility to collaborate and work
closely with our peers and other stakeholder groups. We are
committed to working with others to promote collaboration within
our Responsible Investing activities as we believe that a collective
voice may provide greater leverage and influence. To achieve this ICG
is an active participant in several leading industry initiatives and
memberships including:
See our Sustainability & People Report for more information
Navigation
This report will indicate key information points, identified
through a series of icons to allow you to find further
information from other sources.
Read more
Go online
Principal risks
Key performance indicator
Sustainability & People Report
A GLOBAL
ALTERNATIVE ASSET
MANAGER
ICG is a global alternative asset manager providing
flexible and sustainable solutions across the capital
structure to help companies develop and grow.
We manage capital on behalf of our global client base
across four asset classes.
THIRD-PARTY ASSETS
UNDER MANAGEMENT
$BN
$68.5bn
PROFIT BEFORE
TAX
£M
£565.4m
ORDINARY
DIVIDEND
PER SHARE
76.0p
(2021: $56.2bn)
(2021: £509.5m)
(2021: 56.0p)
NUMBER OF
EMPLOYEES
525
UNPRI ASSESSMENT
RESULTS
A+ A+ A
NUMBER OF
CLIENTS
586
(2021: 470)
(2021: A+A+A)
(2021: 476)
ICG | Annual Report & Accounts 2022
1
ICG at a glance
INVESTING
CREATING
G R O W I N G
We are well placed to capitalise on future opportunities
and continue to generate long-term value for our
shareholders and clients through...
Our vision
Our asset classes
Sustainability
Global leadership in alternative asset
management focusing on an
outstanding product offering and
creating value for shareholders, clients
and employees
Our purpose
Creating value by providing capital
to help businesses develop and grow
Read more about how we are
delivering on our purpose on
page 19
Investing across the capital structure
to deliver our strategic objectives
Structured and private equity:
providing structured and
equity financing solutions to
private companies
Private debt: providing debt
financing to high-quality
corporate borrowers
Real assets: providing financing
solutions in the real estate and
infrastructure sectors
Credit: investing in primary and
secondary public credit markets
We invest responsibly across all our
asset classes and are committed to
being a Net Zero Asset Manager by
2040
Read more on page 28
People
We succeed because of our people and
culture, and a world-class team
demonstrating integrity, diversity and
collaboration
Read more on page 30
2
ICG | Annual Report & Accounts 2022
DELIVERING LONG-TERM GROWTH
Third-party Assets Under Management (AUM)
$68.5bn
Read more
about our
business model
on page 10
18.1
8.0
19.8
22.5
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
Structured and Private Equity
Private Debt
Real Assets
Credit
Fund Management Company (FMC) profit before tax
£286.2m
Read more
about the ICG
platform on
page 8
$bn
70
60
50
40
30
20
10
0
£m
300
270
240
210
180
150
120
90
60
30
0
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
ICG | Annual Report & Accounts 2022
3
Chairman’s statement
RISING TO MEET GLOBAL CHALLENGES
“ICG has repeatedly
demonstrated its resilience.
We have focused on executing
a clear strategy of expanding
our product offering, client
base, and AUM. We have
delivered this strategy
consistently and successfully,
and in doing so, we have grown
and diversified the sources of
our fee income.”
Andrew Sykes
Interim Chairman
4
ICG | Annual Report & Accounts 2022
To fellow shareholders,
It is a pleasure to write to you in my role as Interim
Chairman of ICG1. As you are aware, Lord Davies of
Abersoch, the Chairman since 2019, tendered his
resignation in March 2022 due to the significant
increase in time required by commitments to his other
responsibilities. The Board is hugely grateful for his
leadership through the challenges of the Covid-19
pandemic, and for the guidance and support he gave
our management through a period of continued
strong growth. We wish him all the very best for the
future. In accordance with our protocols for Board
succession, the Nominations and Governance
Committee is undertaking the process to find a
permanent successor for Lord Davies, and during this
period the Board has appointed me as Interim
Chairman. We will of course update shareholders in
due course, and further details of this process, along
with various changes to the Board’s committees as a
result of this change, can be found on page 92.
In his letter last year, Lord Davies spoke about the
importance of innovation and resilience as the world
looked to navigate a path out of the Covid-19
pandemic. Science has now enabled the daily lives of
many people to return to something more normal
following the pandemic, but as we shift from the acute
stage of the pandemic to a more endemic phase, new
and potentially enduring challenges are presenting
themselves. Government responses to the pandemic
in developed economies were extraordinary,
mobilising the productive and economic power of the
state to fund vaccine research, extend credit to
businesses, and support individuals. The
consequences socially and in the capital markets of
unwinding such a dramatic and wide-ranging state
intervention were always likely to be uncomfortable.
Combined with an uncertain economic outlook,
increased geopolitical instability, and pre-existing
tensions in the social fabric of many countries, the
coming years have the potential to be particularly
unpredictable.
The economic and geopolitical background has been
made even more uncertain and challenging with
Russia’s invasion of Ukraine. First and foremost, we
are mindful of the terrible human suffering of innocent
people that is occurring in Ukraine, and as a firm we
have made a meaningful donation to help those fleeing
the conflict. While we do not have a presence in
Ukraine, a number of colleagues (including those in
our Warsaw office) are personally and directly
affected. We will continue to do all we can to support
them and, more broadly, I am proud of the number of
colleagues who have sought ways to personally help
the relief effort.
1.
Intermediate Capital Group plc and its subsidiaries.
From a commercial perspective, ICG has no material
direct or indirect exposure to Russia or Ukraine.
However, the second- and third-order consequences
could have far-reaching effects on businesses,
economies and capital markets globally. The increases
in inflation and interest-rate expectations so far this
year, accompanied by some quite significant
movement in valuations of certain sectors, give an
indication of how volatile this period might be.
There have of course been a number of other shocks
and periods of economic uncertainty since the Global
Financial Crisis, including the Great Recession, the
Euro crisis, the ‘taper tantrum’, and Brexit. Throughout
these periods, ICG has repeatedly demonstrated its
resilience, as we did during the Covid-19 pandemic.
We have focused on executing a clear strategy of
expanding our product offering, client base, and AUM.
We have delivered this strategy consistently and
successfully, and in doing so, we have grown and
diversified the sources of our fee income.
Today ICG has a broad range of products, spanning
the entire capital structure from common equity to
senior debt. From the perspective of our portfolio
companies, we are a partner who can provide the most
appropriate form of capital to meet their needs. For
our clients, this diversification allows us to help them
achieve their investment objectives in their private
markets allocations – whether in structured and
private equity, private debt, real assets, or credit. For
shareholders, the diversity of our business is a
powerful driver of resilience and growth, providing
multiple streams of management fee income that are
locked in over the life of our funds.
OUR GROUP
We are global, but multi-local rather than
multinational, directly impacting local
communities
525 employees
15 countries
ICG | Annual Report & Accounts 2022
5
Chairman’s statement continued
In our conversations with shareholders over the last
twelve months we have been encouraged by the level
of engagement on these topics, as also evidenced by
the positive response we received to our shareholder
seminar on sustainability and people earlier this year. It
is clear to all of us that the public markets are taking an
increasingly sophisticated and nuanced approach to
the qualitative issues of an organisation’s culture, its
impact on wider society and the environment, and how
successes in these areas combine to help generate
future shareholder value.
Volatility and uncertainty are never comfortable
environments. As individuals, businesses and societies
look to adjust to changing circumstances, we will be
guided by a strong set of values, constantly seek to
innovate, and be agile in capturing opportunities
where they arise. Through multiple periods of
uncertainty, ICG has successfully grown and
developed. Our resilient business model, increasing
scale and the breadth of our platform mean we look to
the future with confidence that we will continue to
create long-term sustainable value for our
shareholders and clients.
Looking back over a year of notable growth and
investment success, I salute the hard work, creativity
and dynamism of the ICG team, and I would like to take
this opportunity to thank them all on behalf of the
Board.
Andrew Sykes
Interim Chairman
25 May 2022
We therefore take a long-term view when looking at
the performance of our business, in line with our
five- to ten-year investment cycle that generates value
for clients over time. By consistently executing well,
we are reinforcing strategic advantages that will
provide the potential to capitalise on the opportunities
ahead.
“Our resilient business model,
increasing scale and the breadth
of our platform mean we look to
the future with confidence that
we will continue to create long-
term sustainable value for our
shareholders and clients.”
On its own, however, our track record is not a
guarantee of future success. We also need to have the
right people and client offering to continue to develop
and grow our business. Here, we benefit enormously
from our long-term approach and robust capitalisation
that enable us to invest in our people and to
successfully innovate and scale new investment
strategies.
Our ability to attract, retain and develop the best
people underpins every part of our business: investing
our clients’ capital; managing our client relationships;
and keeping the infrastructure of the business
operating in an environment of very rapid growth. We
compete in a global marketplace for talent, and our
successes at recruiting and retaining people at all
levels are a testament to the dynamic, entrepreneurial
and stretching career opportunities we offer.
The successful first-time fund raises for Sale and
Leaseback and Infrastructure Equity during the year
underline many facets of how we grow and create
shareholder value, including how a thoughtful
approach to sustainability can generate strong client
demand, provide attractive economic returns and
make a positive impact. They are also evidence of the
emphasis ICG has placed on this critical aspect of our
business. We will continue to assess our product
offering in light of social and environmental concerns,
ensuring that we both mitigate risks and capture new
growth opportunities presented by these shifts.
6
ICG | Annual Report & Accounts 2022
INVESTING
“Our long-term success is
underpinned by our track record
of investing in attractive
opportunities, managing those
investments well, and being
disciplined in our approach to
realisations.”
ICG | Annual Report & Accounts 2022
7
The ICG business model
THE ICG PLATFORM
What we do
We help grow our clients’ capital and provide flexible, sustainable
financing solutions to companies
We manage capital, typically in long-term closed-end funds and
across market cycles, on behalf of a global and diverse client base
We receive fee income for managing our clients’ capital
We leverage our global footprint, local presence and long track
record to source and execute attractive investment opportunities
We are committed to being net zero across our operations and
relevant investments1 by 2040, an ambition supported by approved
and validated science-based targets
By investing successfully and growing our AUM, we create
sustainable value for our clients, shareholders and broader
stakeholders
Read more about our performance in the year on page 12
Read more about our key performance indicators on page 19
Read more about our principal risks on page 57
Read more about our exposure to climate risk on page 64
G r ow AUM
M
a
n
a
g
e
a
n
d
R
e
alise
Invest
How we do it
We have 525 employees across 15 offices globally. Our business is organised to reflect our emphasis on investment performance, client focus,
and operational excellence
Investment Teams
Marketing and Client Relations
Corporate and Business Services
Originate and manage investments on behalf
of our funds, deploying our clients’ capital in
line with the stated investment objectives
Originate and manage client relationships,
market new strategies and subsequent
vintages of existing strategies to our clients
Support the business in areas such as
finance and tax, operations and risk, legal,
compliance and human resources, ensuring
we have a scalable platform
271
46
208
Read more about our people on page 30
1. See Glossary on page 196 for definition of relevant investments
8
ICG | Annual Report & Accounts 2022
Our asset classes
We manage our AUM across four asset classes, providing capital to our portfolio
companies across the capital structure in the most appropriate form to meet their
needs, and to help clients meet their investment objectives.
Contribution to FMC
Third-party
AUM
Third-party fee
income
Structured and
Private Equity
Provides structured and
equity solutions to private
companies, including both
control transactions and
minority investments
6
strategies
33%
56%
Private Debt
Provides debt financing to
high-quality corporate
borrowers
3
strategies
29%
16%
Real Assets
Provides debt and equity
financing in the real estate
and infrastructure sectors
5
strategies
12%
14%
Credit
Investing in primary and
secondary credit markets
6
strategies
26%
14%
Read more about our funds on page 45
Our clients
We develop long-term relationships and serve a global client base, helping them meet their investment objectives. Our clients include pension
funds and insurance companies, and thereby indirectly we serve millions of individuals globally. Our strong client franchise enables us to grow
existing strategies and launch new strategies. At 31 March 2022 we had 586 clients.
Client split by geography1
Client split by type1
Client diversification1
29%
20%
26%
EMEA (excl. UK
and Ireland)
Asia Pacific
25%
Americas
UK and Ireland
15%
12%
13%
44%
63%
4%
12%
10%
11%
16%
Pension funds
Insurance companies
SWFs
Asset managers
Other
Largest client
Top 2-5 clients
Top 6-10 clients
Top 11-20 clients
Rest
1. Weighted by % of third-party AUM, excluding CLOs and listed vehicles
ICG | Annual Report & Accounts 2022
9
The ICG business model
GENERATING A POSITIVE IMPACT
ICG provides capital to help companies develop and grow. We develop long-term,
resilient relationships to deliver value for shareholders, clients and employees, and work
with our portfolio companies to foster positive impacts on society and the environment.
Our culture and values
Performance for
our clients
Entrepreneurialism
and innovation
Ambition
and focus
Taking responsibility
and managing risk
Working collaboratively
and acting with integrity
Read more about our people on page 30
Our competitive advantages
G r ow AUM
What we do
M
a
n
a
g
e
a
n
d
R
e
alise
Invest
Local presence,
global network
525 employees in 15
countries underpin
our ability to source,
execute and manage
investments
Ability to
invest across the
capital structure
We provide capital to
companies in a
form appropriate to
their needs
Focus on
clients’ needs
Global client team ensures
that we continue to
understand and meet the
requirements of our clients
Capital to
support growth
Our balance sheet is a
strategic advantage that
enables us to seed and
accelerate new strategies
and align our interests with
our clients
Read more about our Strategy and KPIs on page 19
10
ICG | Annual Report & Accounts 2022
Our resilient business model
delivers stakeholder value
How we generate shareholder value
Shareholders and lenders
Read more on page 24
Grow AUM
Raise and manage third-party assets, largely in closed-end funds
Earn management fees on committed or invested AUM, generating
long-term locked-in value
Invest
Identify and secure attractive investment opportunities
Earn performance fees if certain hurdle rates are met
Manage and Realise
Work with management teams in our investments to drive strategic change
Crystallise returns for clients and shareholders through successful
realisation of investments
Clients
Read more on page 24
Employees
Read more on page 25
Suppliers
Read more on page 25
Community
Read more on page 26
Environment
Read more on page 26
Regulators
Read more on page 27
Underpinned by our unified platform
Our risk management
on page 57
Our governance
framework on page 73
Our fund distribution
on page 8
ICG | Annual Report & Accounts 2022
11
Chief Executive Officer’s review
A DEFINING YEAR
“This has been a defining year for
ICG both in our market standing
and in our growth trajectory. Our
scale, diversification, brand and
investment performance have
combined to generate a record
year on many levels.”
Benoît Durteste
CEO and CIO
12
ICG | Annual Report & Accounts 2022
Our product breadth, global footprint, client relationships and brand
strength have enabled ICG to perform very strongly. We have made
clear progress across our three strategic objectives encompassing
fundraising, deployment and realisations:
– “Grow AUM”: record $22.5bn third-party AUM raised, bringing
total AUM to $72bn
– “Invest”: record $15.0bn third-party AUM deployed from our
direct investment funds
– “Manage and realise”: continued value creation within our
portfolio, realisations of $6.4bn of third-party fee-earning AUM
within our direct investment funds
We are delivering on our growth strategy. During the period we
pulled forward the launch of our flagship strategy Europe VIII to take
advantage of an attractive fundraising window; we closed two
first-time funds at over €1bn each; and we continued to make seed
investments on behalf of strategies that we expect to launch in future.
At 31 March 2022 we had a total of 586 clients (31 March 2021: 476),
and during the year attracted new clients both across our established
and first-time strategies.
This has been a defining year in demonstrating the scale and breadth
of our business. We have a number of large strategies across equity
and debt, making us even more relevant to our clients and potential
clients. With a growing presence in real assets, we are opening up
potentially very substantial markets and pools of capital to ICG that
we could not access a number of years ago. ICG is scaling
substantially, and the strategic and financial benefits of our business
model are becoming ever more visible in the growth of our client base
and in our operational and financial results.
As anticipated, FY22 was a record year for fundraising in this cycle,
raising $22.5bn from our clients. It exemplifies our strategy of
“growing up” and “growing out”, which generates an increasingly
diverse and compounding stream of visible management fees. These
fundraises lock-in streams of fee income for future years and
demonstrate the benefits of scale we are experiencing: the larger our
strategies grow, the more relevant we are becoming to our largest
clients.
In absolute terms, fundraising was driven by established strategies.
Notably, Europe VIII (which is still fundraising) raised €6.5bn of
capital from clients during the financial year and, at the end of April,
has already attracted 69% more third-party AUM than its
predecessor vintage. During the year we also signed our two
largest-ever mandates within Private Debt (Senior Debt Partners), at
over $1bn each.
How we grow to $100bn AUM and beyond
Our growth strategy is built on the breadth of our product offering, the
strength of our investment track record, and our ability to retain and grow
our client base
We grow by raising larger successor vintages of existing strategies
(growing up), and bringing new strategies to market (growing out), thereby
building an attractive and increasingly broad waterfront of strategies
Growing up is very asset-light with significant operational leverage
Growing out broadens our product offering and revenue streams,
increasing the size of the Group’s addressable market and diversifying its
future growth profile
By managing these two routes of growth effectively and efficiently, we
create significant long-term value
Grow existing
strategies
Develop new strategies
ICG balance sheet
ICG | Annual Report & Accounts 2022
13
Chief Executive Officer’s review continued
2022 performance summary
We have made strong progress during the year
against our strategic objectives:
→ Total AUM of £72bn with record
fundraising of $22.5bn
→ Third-party fee income: £449m
during the period, an increase of
34% compared to FY21
→ Fund Management Company: profit
before tax of £286m an increase of
41% compared to FY21
→ Total dividends for FY22 of 76p per
share, an increase of 36%
compared to FY21 and the twelfth
consecutive annual increase in
ordinary dividend per share
→ Accelerating fundraising guidance
by a year due to confidence in
outlook and execution
1 Grow AUM
$22.5bn
Record third-party AUM
raised, bringing total AUM to
$72bn
2 Invest
$15.0bn
Record third-party AUM
deployed from our direct
investment funds
3 Manage and realise
Continued value creation
within our portfolio,
realisations of $6.4bn of
third-party fee-earning AUM
within direct investment funds
Results presented on an APM
basis (see page 45)
Successfully raising first-time strategies is an
important milestone in underpinning future diversified
growth as we continue to broaden our waterfront of
strategies. FY22 was a very impressive year in this
regard, with Sale and Leaseback I closing at a total
fund size of €1.2bn and Infrastructure Equity I at
€1.5bn. Both funds have already made a number of
attractive investments, have large addressable
markets, and in the coming years have the potential to
generate meaningful incremental shareholder value as
we raise subsequent vintages.
Our long-term success is underpinned by our track
record of investing in attractive opportunities,
managing those investments well, and being
disciplined in our approach to realisations. Our local
footprint enables us to source and manage
proprietary opportunities, and our investment
strategies allow us to provide flexible financing
solutions across the capital structure. Within our direct
investment funds, these qualities have enabled us to
14
ICG | Annual Report & Accounts 2022
deploy $15.0bn of our clients’ capital and to realise
$6.4bn of third-party fee-earning AUM during the
period. Our funds in all asset classes continued to
perform strongly during the period. In particular, a
number of our equity strategies recorded significant
increases in value and are showing the potential to be
some of our best-ever vintages.
In the final quarter of our financial year there were a
number of economic and geopolitical events, including
rising inflation, rising interest rates and the invasion of
Ukraine by Russia. Within this context, our levels of
deployment and realisation activity remained robust;
indeed, in absolute terms Q4 FY22 was in-line with or
above what we saw in Q4 FY21. Furthermore, our
funds continued to deliver attractive performance.
And so while the markets are clearly more complex, we
have the breadth and expertise to successfully
navigate them.
Sustainability and people are integral to our success,
and I enjoyed discussing this topic in depth during our
shareholder seminar in January. More detail on our
progress in this area during the year can be found
later in this report, and I am particularly proud that
during the period we committed to achieve Net Zero
by 2040 across our operations and relevant
investments (see Glossary on page 196 for definition).
This is supported by ambitious emissions reduction
targets that have been approved and validated by the
Science Based Targets initiative. We are part of a small
group leading the way in our industry in this field, and
we believe there are powerful moral and commercial
reasons to ensure we execute successfully on this
ambition.
We are a long-term business, and take a long-term
view when building for future growth. During this year
we made a number of senior hires within investment
teams to drive future growth, particularly in Real
Estate, and we worked to further enhance how our
colleagues collaborate to leverage the knowledge and
capabilities across our organisation. Importantly, we
also continue to reinforce our operating platform with
a “fit for future” mindset.
These factors have culminated in strong financial
performance, with third-party fee income of £448.7m,
up 34% compared to FY21 and resulting in record
Fund Management Company profit before tax of
£286.2m, up 41% compared to FY21. We have declared
a final dividend of 57.3p per share, bringing total
dividends for the year to 76.0p per share, an increase
of 36% compared to FY21. Our balance sheet is
diversified and robust, with net gearing of 0.45x and
total available liquidity of £1.3bn.
Looking ahead, we are well positioned to navigate the elevated levels
of macro-economic and geopolitical uncertainty. We actively chose to
pull forward fundraising in FY22, in particular for Europe VIII, which
has resulted in us having significant levels of capital to deploy across
our strategies. Our ability to invest across the capital structure and to
execute on complex transactions puts us in advantageous position,
and means we are able to provide flexible solutions at all points in a
market cycle. While rising inflation and interest rates could have a
range of potential impacts on the global economy, our investment
approach and breadth of strategies – including those that directly
benefit clients in rising interest rate environments – are strategic
benefits supporting our long-term growth.
Sustainability and people
Our people are at the heart of our success, and during the year we
continued to focus on our employees. Our staff globally have largely
returned to the office, and we are engaging with our colleagues to
understand what we as an organisation can take from our experiences
over the last two years to improve efficiency, work-life balance and
employee wellbeing.
The record results we are reporting are testament to the hard work
of our people and their collaborative, entrepreneurial approach. We
would like to extend our thanks to each of our colleagues for their
continued dedication to the success of ICG.
In FY23 we expect to hold final closes for Europe VIII and Strategic
Equity IV, and will continue fundraising for Senior Debt Partners V
and the first vintage of our LP Secondaries strategy. Depending on
the pace of deployment of current vintages and the broader market
conditions, we will consider launching subsequent vintages towards
the end of the financial year for a number of existing strategies
(including Sale and Leaseback II, Europe Mid-Market II and North
America Private Debt III), as well as potentially launching some
first-time strategies.
Diversity of thought has been a crucial ingredient in this success. We
were pleased this year to achieve our UK Women in Finance Charter
ambition a year early, with women accounting for 41% of our senior
employees in the UK (35% globally). We continue to make progress
internally through recruitment and development, and externally
through partnering with other organisations to help make successful
and fulfilling careers in the investment industry accessible to a wide
range of people irrespective of their ethnicity, gender, sexual
orientation or socio-economic background.
The enduring structural tailwinds that support successful platforms
within our industry remain very much in place. We have exceptional
people, a powerful client franchise, a strong origination capability,
and a track record of creating sustainable value. With our focus and
approach, I am confident we will continue to drive scalable growth in
AUM and profitability.
As a result of our strong strategic and financial progress, we are
accelerating our fundraising guidance: we now expect to raise at least
$40bn in aggregate one year earlier than previously communicated. I
look forward to building on this defining year in the development of
ICG, and to continue delivering long-term success.
Benoît Durteste
CEO and CIO
Strategic hiring across the organisation continues in order to ensure
we have the breadth and depth of expertise to execute on the
long-term opportunities ahead. The investments we have made in our
people in recent years are meaningful, and our ability to successfully
attract new colleagues highlights the appeal of ICG as a place to work
as well as our growing reputation. The number of Group permanent
employees grew by 12% during the period to 525 (31 March 2021:
470). In FY23 we expect to continue to invest in our platform, in
particular in growing our Marketing and Client Relations team.
We are proud to be helping to lead the alternative asset management
sector in the area of sustainability. During the year we committed to
achieve Net Zero by 2040 across our operations and relevant
investments (see Glossary on page 196 for definition). This
commitment is supported by two ambitious emissions reduction
targets, which have been approved and validated by the Science
Based Targets initiative (SBTi):
– Ensure 100% of relevant investments will have SBTi-approved
targets by 2030, with an interim target of 50% by 2026; and
– Reduce ICG’s direct (Scope 1 and 2) emissions by 80% by 2030
from a 2020 base year.
The integration of sustainability into our existing and new strategies
is fundamental to our offering to clients. During the year Europe VIII
launched with an enhanced ESG engagement strategy, taking a
thematic approach with a particular emphasis on climate change,
human capital management and D&I. These topics will feed directly
into the governance of portfolio companies, as well as into the
tracking and reporting of their strategic, operational and financial
performance. The first-time funds we raised during the year (Sale and
Leaseback I and Infrastructure Equity I) are each aligned to specific
ICG | Annual Report & Accounts 2022
15
UN Sustainable Development Goals, underlining how
a thoughtful approach to sustainability can drive
innovation and create value for all our stakeholders. Of
the AUM raised during the year that is classified under
the Sustainable Finance Disclosure Regulation
(SFDR), 99% was categorised as Article 8.
We also continued to pursue a strategy of integrating
ESG KPIs into our financing, and at 31 March 2022 we
had $3.9bn of ESG-linked financing committed across
Group- and fund-level facilities. At the Group level, we
successfully executed an 8-year, €500m sustainability-
linked bond in January 2022. This builds on the £550m
ESG-linked RCF into which we entered during the last
financial year. We also agreed ESG-linked fund
facilities for Europe VIII and for Real Estate
Partnership Capital VI during the period.
Our third-party ESG ratings reflect our focus in these
areas. In 2021, ICG received a rating of AAA (on a
scale of AAA – CCC) in the MSCI ESG Ratings
assessment. In October 2021 ICG received an ESG
Risk Rating of 18.4 and was assessed by Sustainalytics
to be at low risk of experiencing material financial
impacts from ESG factors. ICG’s ESG Risk Rating
places it 12th percentile in the Diversified Financials
industry and 3rd percentile in the Asset Management
and Custody Services subindustry assessed by
Sustainalytics.
These areas will continue to be a focus in FY23, and we
look forward to achieving further progress on these
important matters.
Benoît Durteste and Antje Hensel-Roth
Chief Executive Officer’s review continued
Charitable
giving
The Group has increased its annual charitable donation budget beyond £2m
annually and has entered into a number of major charitable partnerships to
further our historic charitable philosophy of supporting educational and
social mobility. We have sought appropriate and impactful partners for each
stage of the journey to ensure that an impact is being made at every stage of
young people’s development, and will be partnering with The Access
Project, UpReach and Seizing Every Opportunity (SEO)
Commitments of £3.75m in total are being made to these three partners over
the next three years. This framework, together with our existing initiatives,
positions ICG as a committed supporter of education as a means of
improving social mobility outcomes, as well as confirming our contribution in
the D&I space. They also allow us to build a more impactful profile at a global
scale mirroring our business footprint, confirming us as both a global firm of
note and a FTSE100 constituent taking responsibility locally
The three new partnerships are in addition to a number of other initiatives
undertaken by the Group, working with local partners in London and New
York to increase social mobility, donations in support of those affected by
the conflict in Ukraine, our ongoing support for employee fundraising and
donations, through matching amounts raised or donated; and the provision
of two volunteering days for all employees worldwide in support of any
charity they wish
16
ICG | Annual Report & Accounts 2022
MARKET ENVIRONMENT
Market
Market activity
Description
Interest rates
Inflation
– The alternative asset management industry saw a strong
– Global interest rates fell to historically low
rebound in transaction volumes in 2021, with global buyout
activity in 2021 increasing by 94% compared to 2020, over
twice the five-year average
levels during the Covid-19 pandemic as major
central banks flooded markets with liquidity
and slashed interest rates
– For the majority of our financial year, global equity markets
continued to rally. Between 1 April 2021 and 31 December 2021
the FTSE 100 was up 10.0%, STOXX 600 up 13.5% and S&P
500 up 20.0%
– The final quarter of our financial year (1 January 2022 to
31 March 2022) saw public market volatility rise, driven by
concerns about rising inflation, interest rates and negative
economic and financial spillover impacts from Russia’s invasion
of Ukraine
– More recently, however, as economies have
re-opened, economic growth has recovered
and inflation has surged, central banks have
moved to start normalising monetary policy.
Markets have anticipated this with bond yields
in most major developed economies rising
quickly from their pandemic lows. However,
real returns remain negative across the globe,
underlining the challenge for investors seeking
to grow wealth
– In the US, the consumer price index rose 8.5%
in the 12 months to 31 March 2022, the largest
12-month increase since December 1981
– In the UK the Consumer Prices Index (CPI)
rose by 7.0% in the 12 months to March 2022,
up from 6.2% in February, its highest level
since March 1992
– Inflation in the EU, US and the UK is generally
expected to peak in 2022 and moderate
through 2023, although the outlook remains
uncertain, with diverse views in particular
around how long elevated levels of inflation
may last
What this means for ICG
– Our diverse range of strategies and ability to invest across
the capital structure mean that we are positioned to invest
throughout economic cycles
– We generate the majority of our fees from long-term closed-
end funds and make investments on behalf of our clients
for the long term. As such, short term market moves do not
materially impact the performance of most of the funds that
we manage
– Management fees on our closed-end funds are charged either
on committed capital or invested capital, so are not impacted
by movements in valuations
– Our Investment Company co-invests alongside our funds
and therefore its performance will be correlated to the
performance of the funds
– Lower mark-to-market volatility compared to public markets
is one of the attractions of private markets to our clients, a
benefit which is underlined in periods such as these
Read more
– The main driver of our profitability and growth
is third-party fee income, which is not impacted
by movements in interest rates
– We take a conservative approach to leverage in
– High inflation could make it harder for clients
to achieve a ‘real return’, potentially making
alternatives more attractive and supporting
incremental client demand
our portfolio companies
– Where our funds invest in a portfolio
company’s debt, these are typically ‘floating
rate’ instruments, providing those portfolios
with a natural hedge against higher interest
rates
– All of our term debt at the ICG plc level is fixed
rate
– Our diverse range of strategies and ability
to invest across the capital structure mean
that we are positioned to invest throughout
economic cycles
– Our investment management activities factor
inflation risk into investment decisions that
we make and how we engage with portfolio
companies during our period of ownership
– At the Group level our largest cost is staff
costs, and we continue to ensure we hire
selectively and remain competitive as an
employer
Our business model → page 10
Our debt facilities → page 55
The valuation of our balance sheet → page 52
1. Bain_report_global-private-equity-report-2022.pdf
2. Before seasonal adjustment. Source: Consumer Price Index-March 2022 (bls.gov)
3. Consumer price inflation, UK – Office for National Statistics
4. Alternatives in 2022 (preqin.com)
ICG | Annual Report & Accounts 2022
17
ICG is well positioned to benefit from
private market trends
Strong track record of investment performance
Read more on page 48
Structured and holistic approach to responsible
investing
Read more on page 28
Multiple strategies to suit clients’ investment
objectives
Read more on page 8
Proven ability to innovate and pioneer new
strategies in response to client demand and
market opportunity
Read more on page 12
Scalable and unified operating platform
Read more on page 10
Market environment continued
Industry
Demand for alternatives
Responsible investing
Description
– Demand for alternatives remains very
– The long-term trend towards focussing on
responsible investing continued in 2022, and
clients’ interest in strategies which incorporate
Environmental, Social and Governance factors
continued to increase
– Net zero carbon emissions achieved further
prominence in both public and private sectors,
given further prominence by COP 26 taking place
during the year
– The EU’s Sustainable Finance Disclosure Regulation
(SFDR) came into force just before the start of this
financial year
– Effective stewardship continued to gain momentum
strong, underpinned by investors’ search for
attractive risk-adjusted returns; the ability for
investors to allocate a portion of their capital
to longer-term investments that are less
volatile than public markets; and the historic
outperformance of private market investments
compared to public markets
– Globally, $1.2tn was raised in private capital
during 2021, a 14% increase on 2020 and the
highest level reached1
– Alternative assets under management have
grown at a 13.9% CAGR from the end of
2015 to 2021 and are forecast to grow at an
annualised rate of 14.8% between 2021 and
2026, taking alternatives AUM (excluding
hedge funds) to $17.8tn globally. Within that,
Private Equity is expected to grow at 15.9%
CAGR, Private Debt at 17.4% CAGR and
Infrastructure at 16.6% CAGR over the same
period
What this means for ICG
– The structural tailwinds supporting our AUM
– We aim to be an important voice in the alternative
growth are expected to remain in place, and we
have the platform and expertise to successfully
execute on the opportunity
– Our diversity of strategies allows us to help
clients meet their investment objectives across
a wide range of funds, and enables us to
provide capital to portfolio companies in the
form most appropriate to their needs
– Our global footprint with a local sourcing
network underpins our ability to successfully
invest and manage our clients’ capital
asset management space for ESG issues
– We have committed to the Net Zero Asset Manager
Initiative, targeting net zero across our operations
and relevant investments by 2040
– 99% of the new third-party AUM raised by the
Group during the year was classified under SFDR
as Article 8
– In March 2022 we were accepted by the FRC as a
signatory to the UK Stewardship Code
– We have further enhanced our ESG reporting to
shareholders, clients and other stakeholders
– We continue to develop new strategies that
are linked to sustainability themes, for example
Infrastructure and Sale and Leaseback, as well as
enhancing our approach in existing strategies (for
example Europe VIII)
Read more
Our clients → page 8
Sustainability → page 28
Our range of strategies → page 8
Task Force on Climate-related Disclosures
→ page 32
1. Bain_report_global-private-equity-report-2022.pdf
2. Before seasonal adjustment. Source: Consumer Price Index-March 2022 (bls.gov)
3. Consumer price inflation, UK – Office for National Statistics
4. Alternatives in 2022 (preqin.com)
18
ICG | Annual Report & Accounts 2022
Our strategy and KPIs
DELIVERING OUR PURPOSE
Our purpose
is to create value
by providing capital
to help businesses
develop and grow
1
We raise capital from
clients across a range of
investment strategies
G r o w AUM
Our strategic
objectives enable
us to fulfil our
purpose
M
a
n
a
g
e
a
n
d
R
e
alise
Invest
2
We use our
investment platform
and expertise to secure
attractive opportunities
on behalf of our
clients
3
We work with
management teams in our
investments to help develop
and grow those entities,
creating value for clients and
shareholders which is
crystallised when those
investments are
realised
Alternative performance measures
Our KPIs include alternative performance measures, providing
additional insight into the performance of our business
The IFRS financial information on page 136 includes the impact
of the consolidated funds which are determined by IFRS to be
controlled by the Group, although the Group’s loss exposure
to these funds is limited to the capital invested by the Group in
each fund
The glossary on page 196 includes the definitions of these
alternative performance measures and reconciliation to the
relevant IFRS measures
Our Key Performance Indicators
(KPIs) help us monitor our progress:
Key Performance Indicator
Total AUM
Weighted-average fee rate
Fund Management Company
operating margin
Deployment of direct
investment funds
Percentage of realised assets
exceeding performance hurdle
UK senior management diversity
Strategic objective
alignment
1
1
1 2
2
3
1 2 3
ICG | Annual Report & Accounts 2022
19
Our strategy and KPIs continued
MONITORING OUR PROGRESS
Total AUM ($bn)
Weighted-average fee
rate (%)1
FMC operating margin
(%)
Deployment of direct
investment funds (%)
$72.1bn
0.88%
55.8%
0
.
7
8
0
.
7
8
0
.
7
9
.
0
8
8
.
0
8
1
4
5
4
.
5
2
.
3
5
3
.
6
5
2
.
1
5
5
8
.
7
2
.
1
*
22.5
5
9
6
.
5
0
0
.
3
5
.
3
3
6
2
.
M
U
A
y
t
r
a
p
-
d
r
i
h
t
w
e
N
9.6
9.7
11.3
10.6
2018
*
2019 2020 2021 2022
2022 Total AUM includes Balance
Sheet Investments portfolio of $3.5bn.
Rationale
Raising third-party funds is
one of the leading indicators of
the Group’s profitability.
We expect to raise at least
$40.0bn in aggregate over
FY22 to FY24.
2018 2019 2020 2021 2022
1. During the year the Group refined its
calculation of weighted-average fee
rate. Prior years are presented on a
consistent basis.
Rationale
The weighted-average
management fee rate on
fee-earning AUM is a measure
of profitability.
Fee rates vary across our
strategies. The weighted-
average fee rate will depend on
the composition of fee-earning
AUM.
Outcome
As expected, FY22 was a very
strong year for fundraising
given the funds we had in the
market, which drove a 22%
increase in third-party AUM
(27% on a constant currency
basis) and a 21% increase in
total AUM (26% on a constant
currency basis).
Outcome
Our weighted-average fee rate
continued to grow during the
year. The increase was due to
the substantial fundraising
within Structured and Private
Equity in strategies with higher
fee rates charging fees on
committed capital.
2018 2019 2020 2021 2022
Rationale
The Fund Management
Company (FMC) operating
margin is a measure of the
efficiency of our fund
management activities.
The Group has invested
substantially in its growth and
the return on this investment is
measured through the
operating margin. The Group is
targeting a margin above 50%
for its fund management
business.
Outcome
The FMC operating margin
remains in line with our target of
being above 50%. The
operating margin for FY22 was
supported by the rapid
fundraising for Europe VIII as
well as the catch-up fees that
we earned during the year.
100
80
60
40
20
0
l
d
e
y
o
p
e
d
%
20
40
60
80
100
% investment period
Rationale
Direct investment funds have a
defined investment period. We
monitor progress against a
straight-line deployment basis
as an indicator of timing for any
subsequent fund raising.
Outcome
We saw strong levels of
deployment during the year
across many of our strategies.
For many strategies our
deployment pace is quicker
than a straight-line basis (based
on a fund’s contractual
maximum investment period)
would imply.
Rationale
Rationale
Rationale
Rationale
An indicator of our ability to
We believe a more diverse
Return on equity reflects the
The Group’s ability to pay
manage portfolios to maximise
and inclusive workforce will
combined performance of the
dividends and return value to
Fund Management Company
and the Investment Company.
value is the level of realised
assets for which the return is
above the fund performance
enhance the delivery of our
strategic objectives and
shareholder value. We have
hurdle rate. This is the minimum
pledged to increase the number
return level clients expect and
of women in senior
the point at which the Group
earns performance fees.
Details of the hurdle rate per
fund can be found on page 201.
management roles in an
industry in which senior
investment positions are
predominantly held by men.
shareholders is a measure of its
ability to generate returns from
managing third-party funds.
The Group’s dividend policy is
to recommend a dividend
pay-out of 80-100% of the Fund
Management Company profit
after tax on an APM basis and
this year’s dividend is 36%
higher than last year.
Outcome
Outcome
Outcome
Outcome
Our strategies continued to
We continued to see progress
Growth in Group profit after tax
Our progressive dividend
perform strongly, and we took
in improving our gender
advantage of market conditions
balance.
to anchor the performance of a
number of funds, realising
$6.4bn of third-party AUM
from direct investment funds.
The outcome for the year on
The impact of the change in
definition was to refine the
population of senior
management to Executive
this KPI is in line with our 5-year
Directors and a defined group
average.
of key leadership roles.
was partially offset by high
average shareholders’ funds
(due to increased retained
earnings and reduced net
policy has been maintained, and
the 36% increase compared to
FY21 is driven by the significant
growth in FMC profit after tax
debt), resulting a 30.8% return
during the year.
on equity during the year,
marginally down on FY21.
Strategic alignment
1
3
Grow AUM
2
Invest selectively
Manage portfolios to maximise value
North America
Private Debt Fund II
Infrastructure
Equity Fund I
Senior Debt
Partners IV
Real Estate
Partnership
Capital VI
Europe Mid-market
Fund
Sale & Leaseback
Fund I
Asia Pacific
Fund IV
Europe
Fund VIII
Strategic Equity Fund IV
20
ICG | Annual Report & Accounts 2022
Rationale
Rationale
Raising third-party funds is
The weighted-average
one of the leading indicators of
management fee rate on
Rationale
The Fund Management
Company (FMC) operating
the Group’s profitability.
fee-earning AUM is a measure
margin is a measure of the
We expect to raise at least
$40.0bn in aggregate over
FY22 to FY24.
of profitability.
Fee rates vary across our
strategies. The weighted-
average fee rate will depend on
the composition of fee-earning
AUM.
efficiency of our fund
management activities.
The Group has invested
substantially in its growth and
the return on this investment is
measured through the
operating margin. The Group is
targeting a margin above 50%
for its fund management
business.
Outcome
Rationale
Direct investment funds have a
defined investment period. We
monitor progress against a
straight-line deployment basis
as an indicator of timing for any
subsequent fund raising.
Outcome
Outcome
Outcome
As expected, FY22 was a very
Our weighted-average fee rate
The FMC operating margin
We saw strong levels of
continued to grow during the
year. The increase was due to
the substantial fundraising
remains in line with our target of
deployment during the year
being above 50%. The
across many of our strategies.
operating margin for FY22 was
For many strategies our
within Structured and Private
supported by the rapid
deployment pace is quicker
Equity in strategies with higher
fundraising for Europe VIII as
than a straight-line basis (based
fee rates charging fees on
well as the catch-up fees that
on a fund’s contractual
total AUM (26% on a constant
committed capital.
we earned during the year.
maximum investment period)
would imply.
strong year for fundraising
given the funds we had in the
market, which drove a 22%
increase in third-party AUM
(27% on a constant currency
basis) and a 21% increase in
currency basis).
Percentage of realised
assets exceeding
performance hurdle (%)
89.3%
9
5
.
5
9
1
.
7
9
2
0
.
8
8
2
.
8
9
.
3
56
UK senior management
gender diversity (%)1
Return on equity (%)
Ordinary dividend per
share (p)
41.2%
30.8%
76.0p
4
3
.
8
%
4
2
.
1
%
4
1
.
2
%
3
2
9
.
3
0
8
.
7
6
0
.
5
6
0
.
5
0
8
.
4
5
0
.
3
0
0
.
1
9
.
1
2
0
0
.
7
.
9
2018 2019 2020 2021 2022
2018 2019 2020 2021 2022
24
26
22
f
o
r
e
b
m
u
N
s
n
o
i
t
a
s
i
l
a
e
r
17
.
1
8
8
%
1
4
.
3
%
2018
2019 2020 2021 2022
Rationale
An indicator of our ability to
manage portfolios to maximise
value is the level of realised
assets for which the return is
above the fund performance
hurdle rate. This is the minimum
return level clients expect and
the point at which the Group
earns performance fees.
Details of the hurdle rate per
fund can be found on page 201.
2018 2019 2020 2021 2022
1.
During the year the Group updated
its definition of senior management.
Prior years are presented on a
consistent basis.
Rationale
We believe a more diverse
and inclusive workforce will
enhance the delivery of our
strategic objectives and
shareholder value. We have
pledged to increase the number
of women in senior
management roles in an
industry in which senior
investment positions are
predominantly held by men.
Rationale
Return on equity reflects the
combined performance of the
Fund Management Company
and the Investment Company.
Rationale
The Group’s ability to pay
dividends and return value to
shareholders is a measure of its
ability to generate returns from
managing third-party funds.
The Group’s dividend policy is
to recommend a dividend
pay-out of 80-100% of the Fund
Management Company profit
after tax on an APM basis and
this year’s dividend is 36%
higher than last year.
Outcome
Our progressive dividend
policy has been maintained, and
the 36% increase compared to
FY21 is driven by the significant
growth in FMC profit after tax
during the year.
ICG | Annual Report & Accounts 2022
21
Outcome
Our strategies continued to
perform strongly, and we took
advantage of market conditions
to anchor the performance of a
number of funds, realising
$6.4bn of third-party AUM
from direct investment funds.
The outcome for the year on
this KPI is in line with our 5-year
average.
Outcome
We continued to see progress
in improving our gender
balance.
The impact of the change in
definition was to refine the
population of senior
management to Executive
Directors and a defined group
of key leadership roles.
Outcome
Growth in Group profit after tax
was partially offset by high
average shareholders’ funds
(due to increased retained
earnings and reduced net
debt), resulting a 30.8% return
on equity during the year,
marginally down on FY21.
Details of our Executive Director KPIs are shown on page 98
CREATING
“We offer creative solutions,
developing strategies which are
increasingly shaped by our
responsible and sustainable
investment principles.”
22
ICG | Annual Report & Accounts 2022
Stakeholder engagement
ENGAGEMENT WITH OUR STAKEHOLDERS
Our key stakeholder groups
The Directors consider that the following groups
are the Group’s key stakeholders. The Board
seeks to understand the interests of each
stakeholder group so that these may be properly
factored into the Board’s decisions. We do this
through various methods including direct
engagement by Board members where relevant;
receiving reports and updates from management;
and receiving input and counsel from external
experts as appropriate.
s
r
t o
u l a
g
e
R
nt
e
m
n
o
r
i
v
n
E
C
o
m
m
u
n
it
y
Shareholders and le
n
d
e
r
s
C
l
i
e
n
t
s
E m ployees
Read about how the Board engages with
stakeholders on page 68
Suppliers
Section 172 statement
As required by the Companies Act 2006, the Directors have had
regard to wider stakeholders’ needs when performing their
duties under s.172. In particular, the Directors recognise the
importance of acting in a way that promotes the long-term
success of the Company to the benefit of its members as a
whole
We set out on the following pages how the Directors
considered the interests of stakeholders. The clearest example
of this is in capital allocation and the use of our balance sheet to
support the long-term growth of our Fund Management
Company
During the year, in determining the level of commitments our
balance sheet would make to new funds, management and the
Board balanced a number of considerations including:
– Alignment of the Group’s interests with its clients, co-
investing in our strategies alongside our clients, while
seeking to reduce the Group’s commitments over time where
appropriate
– Growing third-party fee income in the FMC, seeding
investments to launch new strategies that will be a source of
future incremental management fees
– Maintaining robust capitalisation, with strong liquidity and
appropriate gearing
ICG | Annual Report & Accounts 2022
23
Stakeholder engagement continued
Shareholders
& lenders
Clients
Why is it
important to
engage?
Effective access to capital is crucial for the success of the
Group, and fostering a supportive investor base that is
interested in the long-term prospects of the Group is of
strategic importance.
Clients entrust us with their capital to invest on their
behalf. The single largest driver of our long-term growth
is continuing to attract increasing levels of capital from
our clients.
We seek to foster a two-way dialogue with both current and
potential shareholders and lenders.
Ensuring that we understand our clients’ needs and serve
them appropriately is fundamental to the success of the
Group.
The success of the Group depends on collaboration and expertise across
We work to ensure that our key suppliers are engaged with
teams.
Effective two-way communication with our employees is essential to build and
maintain engagement.
Our employee engagement informs us where we are doing well and where
further actions should be considered and applied.
our business and that each party understands the approach
of the other.
This enables our suppliers to better meet our needs and us to
understand their perspective, as well as delivering
appropriate oversight of the supplier relationship.
We strive to communicate clearly to them our performance and
prospects.
We also seek to understand their views on our industry and
our business so that these perspectives can be factored into
management and Board decisions.
How have the
Board and
management
engaged?
The Group conducts an active Investor Relations programme,
engaging with shareholders, lenders and rating agencies
throughout the year using a variety of channels.
We are continually considering the position of our clients,
and how we can best engage with them. More
information on our clients can be found on page 8.
We have a number of formal and informal channels to achieve this, including a
We hold regular relationship meetings with our key
significant employee engagement survey held during the year, regular whole
suppliers to ensure that any issues in our interactions
company business briefings and regular team meetings.
with them are fully considered and addressed and to
review supplier performance.
The Board and management receive feedback on shareholder
and lender views directly from our shareholders, rating
agencies and balance sheet finance providers, the Group’s
Investor Relations function and from third parties such as our
corporate brokers.
The Chair undertook a series of meetings with our largest
shareholders without management present to receive
shareholder feedback on the Group, our growth plan and
management.
Our in-house distribution team engages regularly with all
clients and potential clients, providing detailed updates
on fund performance, new funds and other business
developments, including ESG matters.
We held regular client investor days and investor
conferences, ensuring our clients have access to our
in-house distribution team as well as senior management
and members of our investment teams.
What were the
key topics of
engagement?
– Ability to deliver continued strong growth for shareholders
– Investment performance
– Clear communication of strategy
– Understanding our shareholders’ and lenders’
– Designing funds to meet clients’ needs
– Reporting of portfolio performance
– Integrating ESG considerations into our client
reporting and our investment processes
ESG requirements
– Clarity around our balance sheet’s function in driving
new business
– Longer-term plans for the Group’s balance sheet gearing
Amy Schioldager is the NED responsible for employee engagement, and she
held a number of formal and informal sessions with employees during the year
in individual and group forums.
Details of our employee engagement can be found on page 30.
– Growth and development of our employees
– Wellbeing of employees
– Managing the complexities of hybrid working
– Succession planning
– Ensuring that the employee experience is not adversely impacted by our
growth trajectory
– Ability of key providers, including third-party
administrators, to continue to provide a high-quality
service
– Enhancement of ethical and responsible procurement
practices including conducting of Modern Slavery risk
assessment of suppliers
– Building broader relationships with key supplier teams
Outcomes as
a result of that
engagement
– Increased engagement with current and potential
shareholders both through regular reporting and
off-cycle
– Continued to broaden our expertise and offering of
– Enhanced formal engagement with senior management through ‘town
– Review of key relationships by specialist in oversight of
funds to meet client needs
halls’ and more regular videos and information sharing
suppliers
– Offered successor vintages of established funds to
– Series of discussions and workshops with employees at all levels to review
– Reviewed prompt payment practices and processes to
– Focused engagement with selected ESG ratings providers
to ensure shareholders viewing this information have
accurate and up-to-date insight into ICG
– Shareholder seminar hosted on Sustainability and People,
with clear statement that we will host seminars on a range
of topics more regularly in the future
– Issued €500m ESG-linked bond, to ensure long term
gearing aligned with expectations and requirements
meet client demand
– Enhanced our monitoring, target setting and
reporting for portfolio companies
– Continued to offer a number of funds with sustainable
elements
the results of the 2021 employee engagement survey and disseminate
ensure that suppliers are not left unpaid for inappropriate
response points
lengths of time
– Launch of new internal communications system to ensure employees are
– Enhanced invoice payment process
informed about business developments
– Significant review of framework for performance management and reviews
– Rollout of enhanced training and development programme for employees
– Further enhancements of Diversity and Inclusion initiative led by our
Diversity and Inclusion hub, including the launch of new networks
– Continued to hold significant global induction events for new joiners
24
ICG | Annual Report & Accounts 2022
We strive to communicate clearly to them our performance and
prospects.
We also seek to understand their views on our industry and
our business so that these perspectives can be factored into
management and Board decisions.
The Board and management receive feedback on shareholder
Our in-house distribution team engages regularly with all
and lender views directly from our shareholders, rating
clients and potential clients, providing detailed updates
agencies and balance sheet finance providers, the Group’s
on fund performance, new funds and other business
Investor Relations function and from third parties such as our
developments, including ESG matters.
corporate brokers.
management.
The Chair undertook a series of meetings with our largest
conferences, ensuring our clients have access to our
shareholders without management present to receive
in-house distribution team as well as senior management
shareholder feedback on the Group, our growth plan and
and members of our investment teams.
We held regular client investor days and investor
What were the
key topics of
engagement?
– Ability to deliver continued strong growth for shareholders
– Designing funds to meet clients’ needs
– Investment performance
– Clear communication of strategy
– Understanding our shareholders’ and lenders’
– Reporting of portfolio performance
– Integrating ESG considerations into our client
reporting and our investment processes
– Clarity around our balance sheet’s function in driving
ESG requirements
new business
– Longer-term plans for the Group’s balance sheet gearing
Outcomes as
a result of that
engagement
off-cycle
Why is it
important to
engage?
Effective access to capital is crucial for the success of the
Clients entrust us with their capital to invest on their
Group, and fostering a supportive investor base that is
behalf. The single largest driver of our long-term growth
interested in the long-term prospects of the Group is of
is continuing to attract increasing levels of capital from
strategic importance.
our clients.
We seek to foster a two-way dialogue with both current and
Ensuring that we understand our clients’ needs and serve
potential shareholders and lenders.
them appropriately is fundamental to the success of the
Group.
The success of the Group depends on collaboration and expertise across
teams.
Effective two-way communication with our employees is essential to build and
maintain engagement.
Our employee engagement informs us where we are doing well and where
further actions should be considered and applied.
We work to ensure that our key suppliers are engaged with
our business and that each party understands the approach
of the other.
This enables our suppliers to better meet our needs and us to
understand their perspective, as well as delivering
appropriate oversight of the supplier relationship.
Employees
Suppliers
How have the
Board and
management
engaged?
The Group conducts an active Investor Relations programme,
We are continually considering the position of our clients,
engaging with shareholders, lenders and rating agencies
and how we can best engage with them. More
throughout the year using a variety of channels.
information on our clients can be found on page 8.
We have a number of formal and informal channels to achieve this, including a
significant employee engagement survey held during the year, regular whole
company business briefings and regular team meetings.
We hold regular relationship meetings with our key
suppliers to ensure that any issues in our interactions
with them are fully considered and addressed and to
review supplier performance.
Amy Schioldager is the NED responsible for employee engagement, and she
held a number of formal and informal sessions with employees during the year
in individual and group forums.
Details of our employee engagement can be found on page 30.
– Growth and development of our employees
– Wellbeing of employees
– Managing the complexities of hybrid working
– Succession planning
– Ensuring that the employee experience is not adversely impacted by our
growth trajectory
– Ability of key providers, including third-party
administrators, to continue to provide a high-quality
service
– Enhancement of ethical and responsible procurement
practices including conducting of Modern Slavery risk
assessment of suppliers
– Building broader relationships with key supplier teams
– Increased engagement with current and potential
– Continued to broaden our expertise and offering of
– Enhanced formal engagement with senior management through ‘town
– Review of key relationships by specialist in oversight of
shareholders both through regular reporting and
funds to meet client needs
halls’ and more regular videos and information sharing
suppliers
– Focused engagement with selected ESG ratings providers
meet client demand
to ensure shareholders viewing this information have
accurate and up-to-date insight into ICG
– Shareholder seminar hosted on Sustainability and People,
with clear statement that we will host seminars on a range
of topics more regularly in the future
– Issued €500m ESG-linked bond, to ensure long term
gearing aligned with expectations and requirements
– Offered successor vintages of established funds to
– Enhanced our monitoring, target setting and
reporting for portfolio companies
– Continued to offer a number of funds with sustainable
elements
– Series of discussions and workshops with employees at all levels to review
the results of the 2021 employee engagement survey and disseminate
response points
– Reviewed prompt payment practices and processes to
ensure that suppliers are not left unpaid for inappropriate
lengths of time
– Launch of new internal communications system to ensure employees are
– Enhanced invoice payment process
informed about business developments
– Significant review of framework for performance management and reviews
– Rollout of enhanced training and development programme for employees
– Further enhancements of Diversity and Inclusion initiative led by our
Diversity and Inclusion hub, including the launch of new networks
– Continued to hold significant global induction events for new joiners
ICG | Annual Report & Accounts 2022
25
Stakeholder engagement continued
Community
Environment
Why is it
important to
engage?
We are a people business, with offices in 15 countries
and investing money on behalf of clients including
pension funds and insurance companies worldwide.
We are aware of the impact of our business operations
on the environment. We are seeking to reduce our
own negative impact, and those of our funds’
portfolio companies where relevant.
Our actions may have meaningful and direct impacts on
local communities. It is incumbent upon us to ensure that
we actively cultivate and maintain strong local relationships
and help our local communities share in our success.
How have the
Board and
management
engaged?
What were the
key topics of
engagement?
We carried out a review of our charitable giving and we
have decided to substantially increase our work in the area
of social inclusion through education.
Details of our focus on environmental matters and climate
risk can be found on pages 28 to 43.
– Identifying the most appropriate way for the Group
– How to integrate climate risks into our corporate and
to positively impact the wider community
– Continued commitment of employee time to
charitable initiatives
portfolio management decision making
– The most appropriate and credible way to align the
business and investments to commit to meeting Net Zero
trajectory
– Ensuring that investment decisions are made with
appropriate regard to environmental factors, including
our shareholders’, lenders’, client’s and regulator’s ESG
requirements
Outcomes as
a result of that
engagement
– Established more robust internal governance around
– Continue to reduce greenhouse gas emissions from our
charitable giving
operations
– Launched major new charitable partnerships in support
– Committed to support the goal of achieving Net
of social mobility across the educational spectrum
– Continued to support our £1.5m, three-year relationship
with the Education Endowment Foundation supporting
the Nuffield Early Learning Intervention and Tutor Trust
Zero emissions across our operations and relevant
investments by 2040. The commitment is supported by
targets approved by the Science Based Target Initiative
(SBTi) (see page 28)
Commitment to
Net Zero and SBTi
Following significant consideration, in November the Group committed
to a goal of net zero greenhouse gas emissions by 2040 and became a
signatory to the Net Zero Asset Managers initiative. The Group’s
commitment is supported by approved science-based targets (more
details of our commitment can be found on page 28). This followed a
detailed discussion at our Board offsite of the impact of climate change
on global society and the economy, including a roundtable session led
by Lord Turner of the Energy Transitions Commission. The Board is
mindful of our responsibilities in respect of climate change to a variety
of stakeholders, and seeks to use our influence to make a positive
impact towards the net zero economy.
Key considerations:
– Our responsibility to wider society
– Impact, including costs and reduction of potential investment
universe
– Operational readiness for making a commitment
Issuance of new sustainability-linked
bond to maintain balance sheet
diversification
The Board decided to issue a public bond to diversify its sources of debt
and to ensure availability of funding for future growth. A €500m Bond
was issued on 28 January 2022 with an eight-year maturity period and a
sustainability linked coupon with links to the achievement of the Group’s
approved science-based targets. This followed the Board requesting a
balance sheet review and consideration of a proposal from management.
It was concluded that the issuance would benefit shareholders by
providing long-term funding to the balance sheet on attractive terms.
Key considerations:
– Balance sheet position of the Group, with regard to overall gearing
and forthcoming maturity dates for existing debt
– The projected cash flow of the Group over a multi-year period
– The potential to continue to grow the business
– A desire to engage with a diverse range of sources to provide debt
– ESG metrics and their impact on the coupon
26
ICG | Annual Report & Accounts 2022
We are subject to regulation by a variety of financial regulators in
a number of jurisdictions worldwide.
Understanding and adhering to the standards set by
these bodies is of paramount importance to our standing
as an asset manager and to meeting the expectations of
our stakeholders.
We mandate our employees to comply with these standards,
which are built into our business practices and processes.
We engage with regulators in a constructive and transparent
manner, completing required filings and other submissions
and acting responsively and thoughtfully to any inbound queries.
We participate in industry bodies and consultations and provide
input to regulators through these and similar channels. Where
requested or appropriate, we engage directly with regulators on
specific topics.
– Amendment of certain line items in 2021 Annual Report
compared to the prior year following constructive dialogue
with the Financial Reporting Council.
– After participation in a number of industry round tables with
regulators, we reviewed all internal operations in respect of
the implementation of the Investment Firms Prudential Regime
– We have completed our project to ensure that our business
practices move away from LIBOR-related benchmarks
Why is it
important to
engage?
We are a people business, with offices in 15 countries
We are aware of the impact of our business operations
and investing money on behalf of clients including
on the environment. We are seeking to reduce our
pension funds and insurance companies worldwide.
own negative impact, and those of our funds’
portfolio companies where relevant.
Our actions may have meaningful and direct impacts on
local communities. It is incumbent upon us to ensure that
we actively cultivate and maintain strong local relationships
and help our local communities share in our success.
How have the
Board and
management
engaged?
What were the
key topics of
engagement?
We carried out a review of our charitable giving and we
Details of our focus on environmental matters and climate
have decided to substantially increase our work in the area
risk can be found on pages 28 to 43.
of social inclusion through education.
– Identifying the most appropriate way for the Group
– How to integrate climate risks into our corporate and
to positively impact the wider community
portfolio management decision making
– Continued commitment of employee time to
– The most appropriate and credible way to align the
charitable initiatives
business and investments to commit to meeting Net Zero
– Ensuring that investment decisions are made with
appropriate regard to environmental factors, including
our shareholders’, lenders’, client’s and regulator’s ESG
trajectory
requirements
operations
Outcomes as
a result of that
engagement
charitable giving
– Established more robust internal governance around
– Continue to reduce greenhouse gas emissions from our
– Launched major new charitable partnerships in support
– Committed to support the goal of achieving Net
of social mobility across the educational spectrum
Zero emissions across our operations and relevant
– Continued to support our £1.5m, three-year relationship
with the Education Endowment Foundation supporting
the Nuffield Early Learning Intervention and Tutor Trust
investments by 2040. The commitment is supported by
targets approved by the Science Based Target Initiative
(SBTi) (see page 28)
Regulators
We are subject to regulation by a variety of financial regulators in
a number of jurisdictions worldwide.
Understanding and adhering to the standards set by
these bodies is of paramount importance to our standing
as an asset manager and to meeting the expectations of
our stakeholders.
We mandate our employees to comply with these standards,
which are built into our business practices and processes.
We engage with regulators in a constructive and transparent
manner, completing required filings and other submissions
and acting responsively and thoughtfully to any inbound queries.
We participate in industry bodies and consultations and provide
input to regulators through these and similar channels. Where
requested or appropriate, we engage directly with regulators on
specific topics.
– Amendment of certain line items in 2021 Annual Report
compared to the prior year following constructive dialogue
with the Financial Reporting Council.
– After participation in a number of industry round tables with
regulators, we reviewed all internal operations in respect of
the implementation of the Investment Firms Prudential Regime
– We have completed our project to ensure that our business
practices move away from LIBOR-related benchmarks
Employee
engagement
The Board is always mindful that attracting and retaining talent in a highly
competitive sector is crucial to the success of the Group. As such, we are keen to
understand the employee voice on an ongoing basis. Our annual programme
includes a regular update from Amy Schioldager, the NED responsible for leading
employee engagement. Amy hosts regular formal and informal discussion groups
and roundtables to understand employee motivations and concerns, and this is
reported back to the Board on an aggregated basis for discussion. This forms an
important part of our consideration of the Group’s culture and operations. In
addition, during the year management reported on the in depth findings from a full
employee engagement survey, which provided further detailed insight. Management
has also determined that more regular ‘pulse’ engagement surveys will be carried
out to ensure the Board, Executive Committee and senior management are able to
effectively monitor employee engagement more actively.
Key considerations
– Obtaining the authentic employee voice to understand the business from the
people who know it best
– Talent retention
– Articulation of our culture
Capital Allocation to support
business growth
Dialogue with Financial
Reporting Council
The Board approves the strategy and business plan of the Group, which defines
the approach to capital allocation. Each new product is subject to approval by the
Executive Directors who may approve allocations of capital within the limits
specified within the Board terms of reference. In determining which strategies
capital is allocated to, consideration is given to the requirements of different
stakeholders. In allocating capital we consider how to best support the growth of
the business for shareholders; how the widening of our product range would
benefit clients by offering new opportunities and choice; and how different
investment strategies benefit our potential portfolio companies by giving them
access to capital to support their business and grow.
The Board receives regular updates on the current and proposed future
investment strategies of the Group and approves allocations of capital which
exceed limits defined in the Board terms of reference. The Board closely monitors
the performance of all investment strategies and considers the implications of that
performance for clients, portfolio companies and employees.
Key considerations
– Aligning the Group’s interest with its clients
– Growing third-party fee income in the FMC
– The overall gearing and balance sheet position of the Group
In February 2021, the Company received a letter from the Corporate Reporting
Review Team of the Financial Reporting Council (FRC) as part of its regular review
and assessment of the quality of corporate reporting in the UK, requesting further
information in relation to the Company’s 2020 Annual Report and Accounts. The
letter focused on (a) the significant judgement in respect of non-consolidation of
carried interest partnerships and (b) the cashflow statement. This led to an
exchange of correspondence with the FRC on these points, including a live meeting.
Discussions were led by management, with detailed oversight by the Audit
Committee. As disclosed in the annual report published in June 2021, certain line
items were restated in the Group Statement of Changes in Equity, the Parent
Company Cashflow Statement and the Parent Company Statement of Financial
Position. The Company also adopted a number of recommendations in preparing its
2021 Annual Report and Accounts (and retained them for this 2022 Annual Report
and Accounts). Discussions continued following June 2021, and in November 2021
the FRC concluded that its points of query had been answered and confirmed that
their review had been closed without the need for further changes.
Key considerations
– Transparent and open dialogue with a key regulator
– Ensuring clarity in our accounts for shareholders and other stakeholders
ICG | Annual Report & Accounts 2022
27
Sustainability and People
HOW WE OPERATE MATTERS AS MUCH AS
WHAT WE DO
SUSTAINABILITY
THE GROUP
We are a long-term business that manages capital on
behalf of our clients, looks to generate attractive returns
for our shareholders, and seeks to have a positive
impact on our broad range of stakeholders, including
our employees.
By encouraging responsible and sustainable business practices in our
investment strategies, in the companies in which our funds invest, and
in our own operations, we can both enhance our investment
performance and contribute to building a more sustainable global
economy and inclusive society.
Our focus on sustainability impacts all that we do. During the year
the Group:
– Issued a €500m sustainability-themed bond (read more on page
26)
– Committed to net zero by 2040 across our operations and
relevant investments – one of only a handful of alternative asset
managers worldwide to do so – and this commitment is supported
by approved and validated science-based targets covering 100%
of our relevant investments (read more on page 32)
– Raised AUM into SFDR-classified funds, 99% of which was into
Article 8 funds including into three sustainability-themed funds
Industry Initiatives
“Our focus on sustainability and people is
not an adjunct to our day-to-day work, it is
a key pillar of our successful execution of
that opportunity, and we treat it as such.”
Benoît Durteste
CEO
To watch our Sustainability & People Seminar
To read our Sustainability & People Report
28
ICG | Annual Report & Accounts 2022
SUSTAINABILITY
INVESTING SUSTAINABLY
Sustainability-linked issues are an important driver of investment value and a source of investment risk. Effectively
implementing our responsible business practices helps us to deliver long-term value to our stakeholders.
ICG has been a signatory to the UN-backed Principles for Responsible Investment (UNPRI) since 2013 and is an active
contributor to a range of industry collaborative initiatives.
Our responsible investing policy, which cover 100% of our AUM, is available at www.icgam.com
ICG’s approach to Responsible Investing
Our approach to Responsible Investing is focused around four key activities which represent our Responsible Investing Fundamentals:
ENGAGE
with portfolio companies to
drive sustainability
INNOVATE
to drive sustainability
outcomes
REPORT
on company-specific ESG
progress to enhance transparency
to our stakeholders
COLLABORATE
on initiatives to drive industry
best practice
KEY AREAS OF FOCUS FOR
RELEVANT INVESTMENTS
Environment:
– Climate change
Social:
– Diversity and inclusion
– Human capital management
Key highlights
From our focus on sustainable investing during the year:
– Committed to support the goal of net zero with approved science-
based targets (read more on page 26)
– Launched three sustainability-themed funds in the market which
align to specific Sustainable Development Goals (SDGs), which
are classified as SFDR Article 8 or 8+
– Raised $2.6bn of ESG-linked fund-level financing
During the year we enhanced our reporting
on these critical areas and published
a comprehensive Sustainability &
People Report
Read more about Task Force on Climate-related Financial Disclosures
(TCFD) on page 32
Read more about our new funds on page 12
ICG | Annual Report & Accounts 2022
29
OUR PEOPLE
Sustainability and People continued
“We have exceptional people who are
thriving at the firm, giving us an excellent
foundation to grow to $100bn AUM and
beyond. We will continue to maintain and
enhance our culture, as we have done
successfully throughout our significant
growth to date. Our hiring will remain
targeted, ambitious and strategic.”
Antje Hensel-Roth
CPEAO
30
ICG | Annual Report & Accounts 2022
Our people initiatives focus on four areas:
DIVERSITY AND
INCLUSION
EMPLOYEE
DEVELOPMENT
Cultivating a diversity
of perspectives, improving
our teams’ performance
Helping our people reach
their full potential
and building the next
generation of talent
WELLBEING AND
BENEFITS
ENGAGEMENT
AND VOICE
Supporting the physical and
mental wellbeing of our
employees, their families
and dependants
Effective communication to
build and maintain
engagement
Our values support all we do
– Performance for our clients
– Entrepreneurialism and innovation
– Ambition and focus
– Taking responsibility and managing risk
– Working collaboratively and acting with
integrity
OUR PEOPLE
Progress in the year:
Three new employee networks formed in FY22: NextGen
(early professionals), Together (LGBTQ+) and Unify (ethnic
minorities). These networks join alongside the groups for
Women, Family & Carers, Wellbeing and Sport &Wellness
Conducted the first Inclusion Survey, which had a 75%
response rate, and acted swiftly on a number of suggestions
for development
Continued our Graduate Programme with a focus on
diversity
Ran a series of campaigns focused on working practices and
maintaining a healthy work-life balance, and have also focused
on hard-hitting topics such suicide prevention
Conducted Group-wide employee engagement survey with
88% participation
Key employee metrics
Number of permanent employees (total)
Number of permanent employees (FTE)
Employee turnover (%)
Female representation at Board (%) (see
page 75)
Female representation in senior
leadership (%) (see page 44)
Female representation in all employees
(%)
2022
525
523
16%
45%
35%
35%
2021
470
456
8%
42%
44%
34%
Read more about Employee matters on page 44
Read more about Board diversity on page 75
Read more about Gender pay gap disclosures on page 107
Gender
All employees (525)
Female
Male
35%
65%
Ethnicity (UK only)
White
Black, Asian and
minority ethnic
Unspecified
61%
24%
15%
ICG | Annual Report & Accounts 2022
31
Task Force on Climate-related Financial Disclosures
OUR CLIMATE-RELATED FINANCIAL
DISCLOSURES
The Group first reported against the recommendations
of the Financial Stability Board’s Task Force on Climate-
related Financial Disclosures (TCFD) in 2020 and has
continued to do so in each financial year thereafter.
The report below sets out the 11 TCFD recommended
disclosures within each of the four pillars representing
how our organisation operates and summarises the
progress we have made over the past year. Please refer
to the Group’s 2022 Climate Change Policy for further
details.
In this report we look at climate-related disclosure through two
lenses: at the level of the Group’s operations, and at the level of our
third-party fund management activities. These funds are generally not
consolidated; however, we consider the climate-related issues
surrounding these funds and our fund management activities as an
integral part of our business. We clearly outline in our disclosures
whether we are discussing the Group’s operations or our fund
management activities.
Our Climate Change Policy is available at www.icgam.com
OUR COMMITMENT TO NET ZERO
In November 2021 the Group announced its commitment to
support the goal of net zero greenhouse gas emissions across
its operations and relevant investments by 2040
The Group’s net zero commitment is underpinned by two
ambitious emissions reduction targets by 2030, which have
been approved and validated by the Science Based Targets
initiative (SBTi)
The Group committed to systematically monitoring progress
against its targets and reporting on an annual basis. Over the
coming years, relevant investments in more recently launched
strategies will also be included in the targets
32
ICG | Annual Report & Accounts 2022
GOVERNANCE
(a) Describe the Board’s oversight of climate-related risks and
opportunities
Group operations
The diagram below gives a summary overview of our governance
structure for the oversight of climate-related risks and opportunities.
Organisational oversight of climate-related matters
Board of Directors
Executive
Directors
Risk
Committee
Management
Committee
Responsible
Investing
Committee
Investment
Committees1
Investment Teams
Oversight
Implementation
1Each third-party fund has its own Investment Committee (IC). The ICs are comprised of
senior investment professionals and include members of the Management Committee.
The CEO has lead responsibility for climate-related issues. The Board
sets the Group’s strategic direction and, when setting strategic
objectives, it considers all material influencing factors including those
relating to climate change. The Executive Directors implement the
strategy, including driving climate-related programmes across the
organisation.
The Board receives formal updates on ESG-related matters, including
climate-related issues, at least twice every financial year. For specific
climate-related targets (see Metrics in this TCFD disclosure), the
Board receives annual updates on progress. To facilitate the Board’s
engagement on these topics, the Board has nominated a non-
executive director to oversee management’s implementation of ESG
matters (see page 68). In addition, the Board also considers climate
risk, as relevant, when reviewing the annual strategy and business
plans over the short, medium, and long term, for example, in annual
budgets, performance objectives and determining the risk profile/
appetite of the Group.
Moreover, the Board Risk Committee oversees the Group’s risk
management framework and controls associated with it, including
ESG and climate-related risks, and formally discusses climate risk as it
relates to the Group at least annually (see page 85).
The CFOO, reporting to the CEO, is responsible for ensuring
climate-related risks which might impact the Group’s own operations
are understood and mitigated.
Once an investment is made, the investment teams and the RI team
monitor climate-related risks and (as appropriate) the
implementation of climate-related initiatives and performance relative
to established targets by the portfolio companies, as described in
Metrics within this TCFD disclosure. Where a Fund has significant
influence in the capital structure, progress of climate-related
initiatives are monitored by the relevant Fund’s IC on a quarterly basis
as part of the broader regular portfolio monitoring process.
Day-to-day implementation of the Climate Change Policy is the
responsibility of all investment professionals, guided by the Group’s
RI Committee. The RI Committee meets four times a year and is
comprised of the Head of Investment Office and the Head of
Responsible Investing, along with senior investment professionals
from across the investment strategies. Its role is to oversee the
promotion, support and integration of responsible investing
practices, including in respect of climate-related matters, across all
asset classes. The RI Committee provides regular updates to the
Executive Directors and escalates matters to the CEO, as necessary.
As part of the day-to-day activities of the RI team and investment
professionals, there is frequent dialogue on climate-related issues for
both potential investment opportunities and current investments.
STRATEGY
(a) Describe the climate-related risks and opportunities the
organization has identified over the short, medium, and long term
We look at three time horizons for climate-related risks and
opportunities: short term (0 to 5 years), medium term (5 to 10 years)
and long term (10 to 20 years). These are broadly related to the
length of an individual investment (short term), the length of a fund’s
life (medium term) and a reasonable period of visibility for the Group
as a whole (long term).
We consider climate change as a cross-cutting risk type that
manifests through the Group’s established principal risks (see page
64 of this Annual Report). The table below outlines the relevant
climate-related risks and opportunities within the Group’s operations
and our fund management activities. The Board Risk Committee
meets regularly to assess the Group’s risk profile and factors
climate-related risks and opportunities into its decision making when
assessing which risks could have a material impact on the
organisation.
Fund management activities
The CEO, who also serves as the Group’s Chief Investment Officer,
has ultimate accountability and oversight of investment processes
and is therefore responsible for climate-related issues across the
investment process and in our portfolios.
The overarching charters governing climate-related risks within our
fund management activities are the Responsible Investing Policy and
the Climate Change Policy, which cover 100% of our AUM. The
Climate Change Policy contains an exclusion list and, furthermore,
requires us to consider the implications of climate-related risk and
opportunities in our investment research, valuation, and decision-
making processes.
The Board has delegated responsibility for the implementation of the
Responsible Investing and Climate Change policies to the Executive
Directors. As part of the normal course of business, the Board
receives updates on how these policies are being implemented.
(b) Describe management’s role in assessing and managing
climate-related risks and opportunities
Group operations
The Group has a comprehensive risk governance framework and
compliance processes and procedures to ensure that all risks,
including ESG and climate-related risks, are identified, managed, and
monitored and that the Group is compliant with all applicable
legislation. Given the limited direct impact of climate-related issues at
a Group level, climate change is not deemed by the Board Risk
Committee to be a Principal Risk, albeit it is considered a cross-
cutting risk as described below (see page 64).
The Responsible Investing (RI) team and Legal and Compliance
teams are jointly responsible for monitoring current and potential
environmental legislative changes that could impact the Group and
provide formal updates to the Executive Directors on a quarterly
basis.
Fund management activities
The Management Committee supports the CEO in overseeing our
climate-related policies and procedures for our fund management
activities, addressing issues if there are any, and approving new
investment strategies, including those with specific climate-related
objectives and targets.
An assessment of climate-related risks and opportunities is included
in all investment proposals, presented to, and considered by, the
Investment Committees (IC) of all our investment strategies. Each IC
is responsible for ensuring that climate-related issues are
appropriately considered when taking an investment decision. This
includes ensuring that the RI team’s view is factored into the
investment decision, where climate-related issues are material.
ICG | Annual Report & Accounts 2022
33
Task Force on Climate-related Financial Disclosures continued
Strategy continued
Climate-related risks and opportunities
ICG
Risk/opportunity
Category
Description
Principal risks Time horizon
Potential impact
Group
operations
Risks
Acute
physical
– Increased severity and frequency
of extreme weather
Chronic
physical
Policy and
legal
– Changes in precipitation patterns
– Rising mean temperatures
– Rising sea levels
– Enhanced emissions reporting
and climate-related compliance
obligations
– Potential exposure to regulatory
censure, fines and penalties for
non-compliance
Opportunities Resource
efficiency
– Use of lower-emissions sources
of energy in offices
– Upgrade energy efficiency of, or
move to, more efficient offices
– Use of more efficient modes of
transport for business travel or
business conduct
– Use of alternatives to travel such
as online meetings
– Enhanced climate-related
disclosure obligations for funds
– Increasing regulatory pressure
(e.g. carbon price/tax) for
current and potential investments
Risks
Fund
management
activities
Policy and
legal
6
6
5
6
5
– Short
term
– Long
term
– Short
term
– Operational disruptions
– Increased capital expenditure
e.g., higher cost related to
workforce impacts; higher
insurance premiums factored into
office leases
– Increased cost of compliance
– Reputational damage
– Decreased profitability
– Short
term
– Short
term
– Medium
term
– Reduced operating cost and
exposure to energy price
volatility
– Increased capital expenditure
/ operating expenditure
associated with upgrade
requirements
– Increased profitability
– Short
term
– Increased cost of compliance
including the requirement to
ensure compliance during
holding period of investments
– Increased due diligence cost
– Reduced fund performance
– Loss of clients or reduced
demand for our funds
Technology
– Substitution of existing products
and services with lower
emissions options impacting
portfolio companies
Market
– Changing client behaviour
impacting demand for products
and/or services of current or
potential investments
– Increasing production costs
for portfolio companies due to
changing input prices and/or
output controls across current or
potential investments
2
3
– Medium
term
– Lower fund performance and
impact on track record
– Lower asset valuations impacting
the Group’s balance sheet and
fund investments
– Loss of clients or reduced
demand for our products
2
3
– Medium
term
– Lower fund performance and
impact on track record
– Lower asset valuations impacting
the Group’s balance sheet and
fund investments
– Loss of clients or reduced
demand for our funds
34
ICG | Annual Report & Accounts 2022
ICG
Risk/opportunity
Category
Description
Principal risks Time horizon
Potential impact
Fund
management
activities
Risks
Reputation
– Changing client behaviour
impacting demand for products
and/or services of current or
potential investments
– Stigmatisation of specific
industries, impacting existing
investment exposure
– Evolution of products that
incorporate climate change
mitigation and/or adaptation
– Expansion of investment
strategies that focus on climate
solutions
Opportunities Products
and services
2
3
– Short
term
– Lower fund performance and
impact on track record
– Lower asset valuations impacting
the Group’s balance sheet and
fund investments
– Loss of clients or reduced
demand for our products
– Negative stakeholder perception
– Increased revenues in line with
growing demand
– Growth in AUM
2
3
– Short
term
Technology
– Substitution of existing products
and services with lower
emissions options across current
and potential investments
Market
– Attracting new clients through
strategies aligned with the Paris
Agreement/Net Zero
– Climate-linked financing reducing
the cost of capital at portfolio
company, fund, and corporate
level
2
3
– Medium
term
– Higher fund performance and
enhanced track record
– Higher asset valuations impacting
the Group’s balance sheet and
fund investments
– Increasing client demand
2
3
– Short
term
– Growth in AUM
– Retention of current and
attraction of new clients
– Enhanced brand and competitive
reputation
Link to Principal Risks
Strategic & Business
Financial
Operational
1 External Environment Risk
3 Financial Risk
4 Key Personnel Risk
7 Third Party Provider Risk
2 Fund Performance Risk
5 Legal, Regulatory & Tax Risk
8 Key Business Process Risk
6 Operational Resilience Risk
ICG | Annual Report & Accounts 2022
35
Task Force on Climate-related Financial Disclosures continued
Strategy continued
(b) Describe the impact of climate-related risks and opportunities
on the organization’s businesses, strategy, and financial planning
Group operations
As a cross-cutting risk type, climate-related risk manifests through
many of the Group’s established principal risks. We consider that the
Group’s direct operations are not materially exposed to climate risk
from changing climatic conditions because, amongst other factors,
the Group does not have a complex supply chain, does not make
capital investments in research and development, and is able to
operate flexibly from a variety of locations.
From a real estate perspective, the Group operates from leased
offices and our employees have the ability to work remotely. The
Group has assessed the physical climate risk exposure of its office
locations using an established external physical climate risk
assessment tool. The results indicated that none of our key offices
(London, New York, Warsaw and Paris) are likely to be materially
exposed to physical climate-related risks.
The Group’s Net Zero commitment is supported by approved and
validated science-based targets covering 100% of our relevant
investments. Relevant investments as at 31 March 2022 comprise
25.7% of AUM and include all investment strategies within Structured
and Private Equity and Real Assets where a Fund has sufficient
influence (defined as at least 25% equity ownership and at least one
Board seat).
More detail on our science-based targets can be found here.
Retaining existing clients and attracting new clients through our
climate commitments and sustainability-themed funds is an important
part of our growth strategy and to date the Group has launched three
sustainability-themed funds which, at 31 March 2022, managed a total
of $3.2bn of client capital.
At a fund level, we seek to link our climate ambition to our third-party
financing, where possible. We have raised a total of $2.6bn ESG-linked
fund-level financing since 2021.
The RI, Legal and Compliance teams work closely to ensure the
Group’s compliance with climate-related regulation, including the UK
Streamlined Energy and Carbon Reporting (SECR).
(c) Describe the resilience of the organization’s strategy, taking
into consideration different climate-related scenarios, including a
2°C or lower scenario
Group operations
The Group has a highly resilient business model, which is driven by
management fee income. This fee income is paid by our clients for
managing our funds, and as such is long-term and visible in nature.
The fees are predominantly charged on the basis of invested or
committed capital, so an increase or decrease in the valuation of
funds (including as a result of climate-related issues) would not
immediately impact the Group’s financial position. At a Group level,
we do not believe we are directly impacted by climate-related risks.
Fund management activities
Climate risk assessment of existing portfolio
We conduct a formal assessment of exposure to climate-related risks
across the portfolio every two years with support from a third-party
climate consultancy. We assess the impact of climate-related drivers
associated with both changing climatic conditions (physical risks)
and the transition to a low carbon economy (transition risks) related
to policy, regulatory, market and technology changes. We then
conduct a scenario analysis exercise on selected investments which
we identified as having potentially higher exposure to climate-related
risks.
In 2022, our climate risk assessment assessed approximately
900 portfolio companies across our four asset classes covering
almost 90% of our AUM at 31 December 2021.
The Group is committed to supporting the goal of net zero GHG
emissions by 2040 or sooner, in line with global efforts to limit
warming to 1.5°C. As part of this commitment, the Group has
committed to reducing our direct (Scope 1 and Scope 2) emissions by
80% from a 2020 base year.
We seek to link our climate ambition to our third-party financing,
where possible. At the Group level we have raised a total of £1.0bn
ESG and sustainability-linked financing, including issuing a €500 million
sustainability-linked Bond with adjustments to the coupon rate linked
to progress against the Group’s portfolio-level science-based target.
Fund management activities
We recognise that the financial impact of climate-related risk and
opportunities is most likely to materialise through our investment
decisions. The impact of climate change on the operations of
portfolio companies or specific asset classes may impact the valuation
of those assets in the short term, and the performance of funds in the
medium term. Fund underperformance or a failure to develop funds
that address our clients’ requirements in respect of climate change is
a long-term risk to the Group.
We have developed policies and processes to support us in
understanding where climate-related risk may be realised, managing
these risks and actively engaging as appropriate with portfolio
companies on these matters. Ensuring our investment and RI teams
have the necessary skills and expertise to deliver on these ambitious
commitments and successfully launch new strategies has required
careful planning in terms of headcount and budget.
36
ICG | Annual Report & Accounts 2022
Scenario analysis of existing portfolio
In 2022 we conducted our second scenario analysis exercise. We
expanded the number of scenarios from two to three in line with
market practice and used the framework provided by the Network for
Greening the Financial System. We considered both transition and
physical risk against three scenarios:
– Hot House World: no new international or national policy action
takes place to reduce greenhouse gas emissions, leading to
warming of over 3°C and severe physical risks
– Orderly: immediate and global action to reduce emissions in
a measured way, at a rate that is fast enough to keep climate
warming within 2°C with 67% probability, leading to net zero
carbon emissions before 2070
– Disorderly: ambitious new climate policies are introduced, but
only in 2030. Emissions are sufficiently limited to keep global
warming below 2°C, but the transition is faster than in the Orderly
scenario as a result of delayed action, leading to larger transition
risks for households and businesses
Our transition risk scenario analysis uses scenario indicators drawn
from globally recognised datasets. Our physical risk assessment is
undertaken at the country level, utilising data trends of countries in
which our portfolio companies’ key operations are located.
The principal mechanism we employ for assessing climate risk is a
proprietary Climate Risk Assessment Tool (CAT), that we have
developed in-house with the support of a third-party adviser. The
initial step is to use CAT to identify all companies with a potentially
heightened exposure to climate risk. The findings from the process
helped us define the scope for conducting further climate risk
scenario analysis.
Within our Structured and Private Equity and Private Debt asset
classes, CAT identified 13 companies as having potentially
heightened exposure to climate risk and with unrealised value above
our materiality threshold1 . Further scenario analysis has been
conducted on these portfolio companies.
Within our Credit asset class, we conducted a sector-based scenario
analysis across 10 sectors. This covered all companies with a
potentially heightened exposure based on the results of our analysis
with CAT and where the unrealised value exceeded our materiality
threshold1.
Our scenario analysis enables us to improve our understanding of the
heightened exposure of these companies to transition and/or
physical risks. This analysis is shared with the portfolio company
management teams, where relevant, to support their strategic
decision making. As appropriate, we then work closely with the
management teams to help them address these issues and improve
their resilience to climate-related issues.
1. Materiality for this assessment was £25m
2. 99% of capital raised that is classified under SFDR, from 1 April 2021 to 31 March 2022
Developing new investment strategies
We future proof our organisation in part by continually evolving our
existing strategies and developing new strategies. This enables us to
better serve the changing needs of our clients and to capitalise on a
wider range of investment opportunities. An important component of
considering new potential strategies is incorporating climate-related
risk and opportunities into the decision-making process.
We have considered climate-related opportunities in the
development of new strategies, including when developing our new
sustainability-themed Sale and Leaseback, Infrastructure Equity, and
Real Estate Partnership Capital investment strategies. During the year
the Group raised a total of $1.7bn of capital for these sustainability-
themed funds.
More broadly, 99% of capital raised2 since 31 March 2021 has been in
funds classified as Article 8 under the EU’s Sustainable Finance
Disclosure Regulation, which are funds that promote environmental
or social characteristics. Please refer to our Sustainability and People
Report for further details.
To read our Sustainability and People Report.
RISK MANAGEMENT
(a) Describe the organization’s processes for identifying and
assessing climate-related risks
Group
We consider climate risk broadly and have incorporated it into our
Group-wide risk framework as a cross-cutting risk. We assess the
following principal risks as currently most likely to be impacted, to
varying degrees, as follows:
– Fund Performance Risk: Considering the varying climate-related
risks that have the potential to affect our investment decisions,
driven by changes in regulation and consumer preferences and
other physical and business risks and adapting our screening and
due diligence and monitoring processes, where appropriate
– Financial Risk: Recognising that climate risk will increasingly be
incorporated into risk assessments and asset valuations, which
could have a material impact on the attractiveness of existing and
potential transactions impacting the Group’s balance sheet and
fund investments
– Legal, Regulatory and Tax Risk: Assessing increasing legal and
regulatory requirements in relation to climate risk and ensuring
that (where relevant) such requirements are embedded in our
processes and disclosures
– Operational Resilience Risk: Recognising and understanding
the potential for business disruption caused by climate change,
including within the Group’s key third-party providers, to ensure
that the Group can adapt and increase our resilience where
appropriate
ICG | Annual Report & Accounts 2022
37
Task Force on Climate-related Financial Disclosures continued
Risk management continued
Reputational risk, whilst not a principal risk, is also an important
consideration and the Group recognises the increased scrutiny of its
actions following a change in stakeholder perceptions of climate-
related action or inaction.
Fund management activities
For relevant investments, setting climate-specific targets and KPIs is a
core component of our ESG engagement process, which we monitor
and track over the life of the investment.
Further details of the Group’s risk management framework, including
the processes used to determine which risks could have a material
financial impact on the Group, are set out on page 57.
Our approach to identifying and assessing climate risk is summarised
by key strategy below:
Pre-investment
– Bespoke Climate Risk Assessment Tool
– Enhanced internal climate due diligence (as needed)
– External climate due diligence (as needed)
Post-investment
– Ongoing portfolio monitoring process (incl. RepRisk,
a third-party ESG research tool)
– Annual ESG survey (including climate change)
– Investment-specific climate-related KPIs
– Investment-specific targeted SBT engagement
– Bi-annual climate risk assessment and scenario analysis
(see page 36)
Structured and Private Equity
Private Debt
Real Assets
European
and Asia
Pacific
Corporate
Strategic
Equity
Fund of funds/
Secondaries
Senior Debt
Partners
Real Estate
debt and equity
Infrastructure
Equity
Credit
Structured
Credit
CLOs
Multi-Asset
Credit
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y1
Y
Y
Y
Y
Y
Y2
Y
Y
Y
Y2
Y2
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
1. ESG due diligence supplied by the third-party equity investment partner
2. Real Estate strategy conducts environmental due diligence as standard and is in the process of standardising its Annual ESG Survey. ICG Real Estate Debt Fund VI has specific climate
targets.
(b) Describe the organization’s processes for managing climate-
related risks.
Further details of the Group’s risk management framework, including
the processes used to determine which risks could have a material
financial impact on the organisation, are set out on page 57.
Group
The Group’s exposure to climate risk arising from its co-investment
portfolio is managed in line with our standard fund management
activities, as outlined above.
All employees benefit from full remote working capability which
minimises business risk and reduces reliance on our office locations
for business continuity in the unlikely event of a physical climate risk
being realised. In addition, 100% of our IT infrastructure systems and
data resides in the cloud and the Group leverages cloud services
from multiple providers, further reducing concentration risk.
The Group’s consistent approach to the management of climate
change is further demonstrated by a Sustainable Fit Out policy which
sets out our expected minimum standards for the sustainable fit-out,
as necessary, of offices to ensure lower carbon development and
enable the reduction of carbon emissions during operation. This
policy is applied to all new material leases into which the Group
enters.
Fund management activities
The Group incorporates climate-risk assessment into the investment
process for all funds. Where the Group has the necessary level of and
influence over management, we undertake specific carbon footprint
analysis and agree with the portfolio companies’ management their
bespoke climate-related targets. For relevant investments, the
investment team and RI team engage directly with the board and
management teams to help them calculate their carbon emissions,
and then set emissions reduction targets aligned with the latest
climate science and develop strategies to help deliver these targets.
We support portfolio companies to get these targets approved and
validated by the SBTi.
38
ICG | Annual Report & Accounts 2022
Across our investment portfolio we have integrated the review,
assessment and monitoring of climate change considerations into our
investment processes. In line with our commitment to support a more
climate-resilient economy, in 2021 we introduced new prohibitions on
any direct investments in companies that generate the majority of
their revenue from:
– Coal exploration, extraction, production, transportation, power
generation, distribution and/or storage
– Oil (including oil from tar sands) exploration, extraction,
production, transportation, power generation, distribution and/ or
storage; and
– Gas exploration, extraction and/or production
Please refer to ICG’s 2022 Climate Policy and Responsible Investing
Policy for further details including our complete Exclusion List.
For each potential investment opportunity, we identify whether there
are any material climate change-related issues associated with the
investment. We use our CAT to guide this process. The tool assesses
potential climate risk associated with an investment by evaluating
industry sub-sector, low-carbon economy transition, and physical
climate risks. The tool draws upon various data sources (including
the TCFD, Sustainability Accounting Standards Board (SASB),
ThinkHazard, Climate Change Performance Index and the World Bank
Carbon Pricing Dashboard which are regularly reviewed and updated
as necessary. The CAT is a core component of our investment
process; it is embedded within our mandatory ESG Screening
Checklist, and the result of the assessment is recorded in each
investment proposal for consideration by the IC. This ensures that
exposure to climate-related risks and opportunities has been
explicitly assessed by the relevant IC and considered when making
the investment decision. Where investment opportunities are
identified as having a higher potential exposure to climate-related
risks, additional analysis is completed during the pre-acquisition due
diligence process.
In situations where we have significant influence over portfolio
companies, external ESG due diligence, including a specific analysis
of climate-related risks and opportunities, is conducted as standard
and the results incorporated in the IC review process. Following the
enhancement of our Responsible Investing Policy in February 2021,
we began to systematically track deals declined for climate-related
reasons. Between February 2021 and March 2022, we have declined
67 deals where climate-related risk was a contributing factor to the
decision. These include investments with significant exposure or
dependency on fossil fuel-related products or industries. Where
material climate-related issues are identified, the IC may decide not to
proceed; may request further action is taken to ensure these issues
are properly investigated; or may require further actions to be taken
following the closing of an investment.
Following investment, material climate change-related risks and
opportunities are monitored and reviewed as a standard part of the
portfolio monitoring process. Depending on the nature of the issue
and the level of influence, we may ask portfolio companies to disclose
to us how they manage these issues through our annual ESG survey.
Climate change is an integral part of this survey which monitors
portfolio companies’ governance and management of climate change,
as well as their performance and plans for improvement. We publish
summary results of our annual ESG survey in our Sustainability and
People Report.
To read our Sustainability and People Report.
(c) Describe how processes for identifying, assessing, and
managing climate-related risks are integrated into the
organization’s overall risk management.
Group
Climate-related risks are considered within the Group’s wider risk
management framework (see page 57) and section (b) above.
METRICS AND TARGETS
(a) Disclose the metrics used by the organization to assess
climate-related risks and opportunities in line with its strategy and
risk management process.
Fund management activities
We undertake a carbon footprint analysis of key funds in our
Structured and Private Equity and Real Assets asset classes, and the
results of this analysis have been incorporated into our ESG reporting
to clients.
During this financial year, we enhanced our monitoring and
transparency of climate-related matters across our Private Debt and
Credit asset classes with the development of a bespoke ESG and
Climate Factsheet for our clients. This includes a Fund Climate risk
assessment along with key climate metrics recommended by the
TCFD for Asset Managers, such as portfolio carbon footprint and
weighted average carbon intensity.
We are focused on decarbonising our relevant portfolio, integrating
climate risk assessments into our investment decisions, and
improving and monitoring energy efficiency and reducing emissions
at both portfolio company and fund level.
ICG | Annual Report & Accounts 2022
39
Task Force on Climate-related Financial Disclosures continued
Metrics and targets continued
1. Exposure by asset class to heightened climate-related risk
This metric supports the Group’s management of climate-related risk by
asset class
Fund Management activities
The table below discloses investments with heightened exposure to
climate risk by asset class, based on investments identified as very
high risk using the CAT. We take a conservative approach to climate
risk assessment and the score is a combination of transition (sector
and value chain) and physical risk, taking into account the
geographical location of company headquarters and key operational
assets. The CAT identifies the following sectors as having a
heightened exposure to climate risk: energy, transportation, materials
and building and agriculture, food and forestry sectors. The value of
investments with heightened exposure to climate-related risks within
our portfolios3 is:
% of portfolio by
unrealised value
% of portfolio companies
assessed as material
Structured and
Private Equity1
Private Debt
Real Assets2
Credit3
3%
0%
0%
6%
3%
0%
0%
2%
1.
Includes the top 30 largest investments of ICG Enterprise Trust Plc (as at 31 July
2021).
ICG Infrastructure Equity I only
2.
3. Excluding Structured credit strategies
(b) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse
gas (GHG) emissions and the related risks.
Group
We disclose the Group’s GHG emissions in alignment with SECR
requirements. We quantify and report our Scope 1 and Scope 2 GHG
emissions and voluntarily report our Scope 3 indirect GHG emissions
from business travel (see page 42).
(c) Describe the targets used by the organization to manage climate-
related risks and opportunities and performance against targets.
The following targets and underlying metrics are used by the Group to
assess climate-related risk and opportunities, support the Group’s Net
Zero commitment and are directly linked to the Group’s approved and
validated science-based targets:
1. Total Scope 1 and Scope 2 GHG emissions
– This metric supports our operational GHG emissions reduction
target, which has been approved by the SBTi, to reduce the Group’s
direct Scope 1 and Scope 2 GHG emissions by 80% by 2030 from a
2020 base year
– The chart below illustrates the Group’s emission reduction
versus our SBT trajectory and a 1.5 degree aligned trajectory
(see page 42 for our annual disclosure table)
2. Relevant investments with SBTi-approved science-based targets
(%)
– The Group’s target for 100% of relevant investments to have SBTi-
approved science-based targets by 2030, with an interim target of
50% by 2026, was approved by the SBTi in November 2021. This
supports our ambition to reduce portfolio emissions
– Relevant investments were 25.7% of AUM as at 31 March 2022
Group Scope 1 & 2 (market-based) greenhouse gas (GHG) emissions (tCO2e)
1000
800
600
400
200
0
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY25
FY26
FY27
FY28
FY29
FY30
Total Scope 1 and 2 (market-based) GHG emissions (tCO2e)
ICG SBT linear trajectory
1.5 degree aligned trajectory
3. As at 31 December 2021 or the latest available at the time of assessment
40
ICG | Annual Report & Accounts 2022
FUTURE PRIORITIES
We are pleased with our progress to date but recognise the way we
address certain TCFD recommendations could be further enhanced.
As the Group looks to increase its investment and focus on climate-
related risks and opportunities, our future priorities will include:
– Continuing to build on existing knowledge at the Board-level
to support its work on overseeing climate-related risks and
opportunities within the Group’s overall business strategy
– Continuing to monitor progress against the Group’s Net Zero
commitment and particularly the Group’s approved science-based
targets
– Further embed climate-related risk and opportunities in due
diligence, where information is available, to provide more detailed
understanding of the impacts of physical climate change and the
transition to a lower carbon economy. The Group recognises this
is a rapidly evolving area, and improved access to standardised
information will facilitate improved due diligence
– Enhancing reporting to clients in respect of climate-related
matters through the deployment of our standardised ESG
disclosure framework, including fund-level climate metrics,
particularly across investing funds
– Expanding product-specific climate-related disclosures to include
Scope 3 emissions reporting
– Continuing to assess how each investment strategy might be
affected by the transition to a lower carbon economy
– Continuing to closely monitor developments in TCFD disclosures
across our market to ensure we can provide information which
suitably meets stakeholder requirements and market practice
Metrics: working with peers to improve
industry-wide disclosure
One of the challenges facing private market investors is the lack
of consistent, comparable climate-related data. As a member of
private equity investor-led Initiative Climat International (iCI),
we actively participate in three working groups focusing on
Carbon Footprinting, Regulation and Net Zero
As part of the Net Zero working group, during 2021, we
engaged directly with the SBTi, and were a member of the
industry-wide Expert Advisory Group, to develop and road test
sector-specific science-based target guidance for the private
equity industry. In order to improve and standardise carbon
disclosures we have worked with our peers to develop
guidance for the private equity industry to measure and report
on Scope 1, Scope 2 and Scope 3 greenhouse gas emissions
We are also an active member of the CDP Private Markets
Technical Working Group. The aim is to improve the availability
and consistency of climate-related metrics and facilitate the
benchmarking of climate-related data across the private market
ICG | Annual Report & Accounts 2022
41
Environment
ANNUAL GHG EMISSIONS STATEMENT
This statement has been prepared in accordance with our regulatory obligation to report greenhouse gas (GHG) emissions pursuant to the
Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 which implement the
government’s policy on Streamlined Energy and Carbon Reporting.
Scope 1 & 2 emissions (tCO2e)
d
e
s
a
b
-
t
e
k
r
a
M
d
e
s
a
b
-
n
o
i
t
a
c
o
L
2022
0
81 81
2021
82
112 195
2020
2022
309
237 545
59
142
201
2021
92
130
222
2020
284
230
514
UK
RoW
GHG Emissions Performance
During the reporting period 1 April 2021 to 31 March 2022, our measured Scope 1 and Scope 2
(market-based) emissions totalled 81 tCO2e. This equated to 0.13 tCO2e/FTE or 0.08 tCO2e/ £m
revenue.
Office and business travel-related GHG emissions:
GHG emissions (tCO2e)
Direct emissions
(Scope 1)
Indirect emissions
(Scope 2)
Indirect emissions
(Scope 3)
2022
2021
2020
Combustion of fuel and operation of facilities
Purchased electricity/heat (location-based)1
Purchased electricity/heat (market-based)
Business travel (flights, rail, vehicles & taxis)
Water supply and waste generation (offices)
Total Scope 3
7
194
74
749
4
753
11
211
184
41
0.6
42
66
448
479
2,640
8
2,647
1. 2021 Scope 2 (location-based) emissions for the UK have been restated following an update of the electricity consumption
data. Therefore, the UK total found here will differ from previously reported.
Overall, our Scope 1 and 2 (market-based) emissions decreased by 58% this reporting period,
primarily due to a rise in the number of offices procuring 100% renewable electricity. This is despite
a growth in the number of employees in the Group and their return to more frequent work from the
office. As shown in the next section, our offices are consuming a comparable amount of electricity,
which explains why total Scope 2 (location-based) emissions have only decreased slightly as
national energy mixes continue to decarbonise.
With business travel rebounding, Scope 3 emissions have risen though still significantly below
pre-Covid-19 reporting periods. Air travel emissions make up 96% of the Scope 3 total. Water
consumption and waste generation in offices has also increased as people are not working from
home as often as before.
Our emissions were verified to a limited level of assurance by an independent third party according
to the ISO 14064-3 standard.
Metrics
Scope 1 & 2 (market-based) emissions per FTE2 (tCO2e)
Scope 1 & 2 (market-based) emissions per £M revenue (tCO2e)
Selected fund investments:
GHG emissions (tCO2e)
2022
0.13
0.08
2021
0.35
0.24
2022
2021
Measured emissions related to fund investments3
234,102
54,997
2020
1.07
1.32
2020
–
2. FTE figures include all staff: permanent employees and contractors.
3. These emissions represent the total absolute Scope 1 and 2 (market-based) emissions of the portfolio companies in ICG
Europe Fund VII and ICG Infrastructure Equity I. Figures reported for 2022 reflect a more comprehensive coverage of Scope
1 and 2 emissions related to the portfolio companies in each fund as well as an increase in the number of portfolio companies
in each fund compared to 2021.
42
ICG | Annual Report & Accounts 2022
Energy Consumption
During the year, our total fuel and electricity consumption in our operations totalled 677 MWh, of
which 41% was consumed in the UK. The split between fuel and electricity consumption is displayed
below; with 58% of our electricity from renewable sources (vs 23% in the previous year).
Energy Consumption (kWh)
Electricity
Of which, from renewable sources
Fuels1
1. Natural gas and transportation fuels (petrol and diesel).
2022
2021
2020
650,729
379,161
25,992
686,572 1,468,177
–
154,744
316,156
37,927
Methodology
We quantify and report our organisational GHG emissions in alignment with the World Resources
Institute’s Greenhouse Gas Protocol Corporate Accounting and Reporting Standard and in
alignment with the Scope 2 Guidance. We consolidate our organisational boundary according to the
operational control approach, which includes all our offices around the world. We have adopted a
materiality threshold of 5% for GHG reporting purposes. The GHG sources that constituted our
operational boundary for the year are:
– Scope 1: Natural gas combustion within boilers and refrigerants from air-conditioning
equipment
– Scope 2: Purchased electricity consumption for our own use
– Scope 3: Business travel (grey fleet, rail, taxis, and air), water supply, and waste generation
In some cases, where data is missing, values have been estimated using either extrapolation of
available data or data from the previous year as a proxy.
The Scope 2 Guidance requires that we quantify and report Scope 2 emissions according to two
different methodologies (“dual reporting”): (i) the location-based method, using average
emissions factors for the country in which the reported operations take place; and (ii) the market-
based method, which uses the actual emissions factors of the energy procured.
Consumption data has been converted into CO2 equivalent using:
– UK Government 2019, 2020 and 2021 Conversion Factors for Company Reporting
– International Energy Agency international electricity conversion factors (to calculate emissions
from corresponding activity data)
Energy Consumption (kWh)
y
t
i
c
i
r
y
t
t
c
i
e
c
i
l
r
E
t
c
e
E
l
2022
2022
279,585
371,144 650,729
279,585
2021
371,144 650,729
2021
383,087
303,486 686,572
303,486 686,572
383,087
2020
2020
910,966
910,966
2022
557,211
= 1,468,177
557,211
= 1,468,177
0
2022
25,992
= 25,992
0
25,992
= 25,992
2021
2021
22,727
= 37,927
22,727
= 37,927
s
l
e
u
F
s
l
e
u
F
15,200
2020
15,200
2020
284,378
284,378
UK
UK
31,778
= 316,156
31,778
RoW
= 316,156
RoW
ICG | Annual Report & Accounts 2022
43
Non-financial information statement
NON-FINANCIAL INFORMATION STATEMENT
The Group complies with the Non-Financial Reporting requirements contained in sections 414CA and 414CB of the
Companies Act 2006. This information is intended to help stakeholders better understand how we address key
non-financial matters. This aligns with the work we already do in support of the Taskforce on Climate-related Financial
Disclosures, UN Global Compact and UN Sustainable Development Goals (see pages 28 and 32). Further details of
the activities we undertake in supporting these frameworks are available on our website. Details of our principal risks
and how we manage those risks are included in the Strategic Risk section.
Employee matters
We aim for employees to have a sense of wellbeing and promote an
inclusive working culture where they can freely question practices
and suggest alternatives. We support agile working and offer access
to a range of flexible benefits. We ensure our levels of overall
remuneration are without gender bias and designed to attract,
develop and retain talented employees.
Employee diversity
As at 31 March 2022, the Group has a permanent employee
population of 525 of which 184 are women and 341 are men.
There are three Executive Directors including one woman and one
from an ethnic background. Of the 17 senior managers reporting to
the Executive Directors (including those based outside the UK), 35%
are women.
Board diversity
Biographical details of the Board are set out on page 70 with
information on diversity on page 75.
Measurement
The Board approved a target of increasing the number of women in
UK senior management to 30% by 2023 and a shareholder KPI has
been established to reinforce a culture of inclusivity which supports a
diverse and thriving workforce and lays the foundation for
sustainable success (see page 19).
We have published our gender pay gap data which is set out on
page 107.
Human rights and social matters
We do not tolerate discrimination of any nature and comply fully
with appropriate human rights legislation.
Policies and standards
We are committed to preventing any form of Modern Slavery and
human trafficking. We seek to ensure there are no such practices in
our business and supply chain. During the year, we have carried out
employee training and awareness raising and continued to include
anti-slavery considerations in supplier selection and due diligence.
We have also conducted a review of our own business, our portfolio
companies that are covered by our statement, and material suppliers.
No concerns were raised in any of our due diligence.
The Group’s full policy on Modern Slavery can be found at
www.icgam.com.
Anti-bribery and corruption
We are committed to ethical business across all our operations and
investments. Our policy is never to offer, request or receive bribes,
and to refuse any request to pay them. We actively seek to reduce
opportunities for corruption. We do not invest in companies or
projects that engage in corruption or appear to have a high risk of
such behaviour and we investigate and deal with all reported or
identified cases of corruption in line with our policy. The policy
applies to all entities within the Group wherever we do business.
Environmental matters
The Group’s disclosures in response to the recommendations of the
Task Force on Climate-related Financial Disclosures are set out on
page 32.
The Group’s disclosures in accordance with the Streamlined Energy
and Carbon Reporting (SECR) requirements are set out on page 42.
44
ICG | Annual Report & Accounts 2022
Financial review
A DISCIPLINED APPROACH TO INVESTING
FOR FUTURE GROWTH
Vijay Bharadia
Chief Financial and Operating Officer
The Board and management monitor the financial performance of the Group on the basis of Alternative
Performance Measures (APM), which are non-IFRS measures. The APM form the basis of the financial results
discussed in this review, which the Board believes assists shareholders in assessing their investment and the
delivery of the Group’s strategy through its financial performance.
The substantive difference between APM and IFRS is the consolidation of funds and related entities deemed to
be controlled by the Group, which are included in the IFRS consolidated financial statements but excluded from
the APM.
Under IFRS, the Group is deemed to control and therefore consolidate entities where it can make significant
decisions that can substantially affect the variable returns of investors. This has the impact of including the
assets and liabilities of these entities in the consolidated statement of financial position and recognising the
related income and expenses of these entities in the consolidated income statement. Details of the
reconciliation of APM to IFRS can be found in note 4 to the IFRS financial statements on page 146.
The Group’s profit after tax on an IFRS basis was above the prior year at £525.1m (FY21 £461.0m). On the APM basis it was also above the prior
year at £538.0m (FY21 £462.7m).
AUM and fund performance
Total AUM
Total AUM for the Group grew 21% during the year (26% on a constant currency basis) and at 31 March 2022 was $72.1bn (31 March 2021: $59.6bn).
The balance sheet investment portfolio (excluding warehoused assets) accounted for 5.0% of the Total AUM (31 March 2021: 5.8%).
Third-party AUM
Third-party AUM grew 22% (27% on a constant currency basis), or $12.3bn, during the period to $68.5bn (FY21: $56.2bn).
Third-party AUM ($m)
Structured and Private Equity
Private Debt
Real Assets
Credit
Total third-party AUM
At 1 April 2021
Additions
Realisations
FX and other
At 31 March 2022
Change $m
Change %
Change % (constant exchange rate)¹
1. Please see page 56 for an explanation of constant exchange rate calculation methodology.
14,548
11,064
(2,642)
(463)
22,507
7,959
55%
61%
17,289
4,239
(860)
(862)
19,806
2,517
15%
19%
6,317
3,017
(576)
(730)
8,028
1,711
27%
34%
17,998
5,064
(4,607)
(328)
18,127
129
1%
4%
56,152
23,384
(8,685)
(2,383)
68,468
12,316
22%
27%
ICG | Annual Report & Accounts 2022
45
Financial review continued
At 31 March 2022 we had $17.3bn of third-party AUM available to deploy in new investments, $10.1bn of which is not yet paying fees but will do
so when the capital is invested or enters its investment period.
Additions to third-party AUM include $0.9bn of capital that we have called during the period from vintages of funds that have previously had a
step-down and are therefore reflected in third-party AUM on a net invested cost basis. Of this, $0.7bn was in Structured and Private Equity and
$0.2bn in Private Debt. This is not included in the fundraising performance discussed below.
The movement in “FX and other” during the year of $(2.4)bn was largely due to the strengthening of the US dollar against the euro during the
year.
Fundraising
– We raised $22.5bn of third-party AUM during the period, a record amount for ICG. Fundraising was strong across existing and first-time
strategies
– Structured and Private Equity was the key driver of fundraising, contributing $10.4bn. Within this, Europe VIII raised $7.7bn from clients
and Strategic Equity IV raised $1.5bn during the year. At 31 March 2022, Strategic Equity IV’s total fund size was $3.0bn. Both funds are still
raising, and we expect to hold final closes for them during FY23
– Private Debt raised a total of $4.1bn, including $2.9bn across two mandates for our SDP strategy, our two largest-ever single-client mandates
within ICG
AUM drives visible and contractual management fee income
Management fees for closed-end funds are charged on one of two bases:
– Fees on committed capital; or
– Fees on original cost of invested capital
Management fees for closed-end funds are not subject to market movements
As subsequent vintages of funds are raised, we generate fees from multiple vintages concurrently, creating a compounding fee
stream profile.
A strategy charging fees on committed capital
A strategy charging fees on invested capital
Third-party AUM
Fee-earning AUM
Third-party AUM
Fee-earning AUM
Deployed
AUM
Dry powder
Deployed
AUM
Dry powder
1
2
3
AUM not-yet
paying fees
2
1
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
i
g
n
g
r
a
h
c
f
o
s
i
s
a
B
s
e
e
f
t
n
e
m
e
g
a
n
a
m
Fund
1
Fund
2
Fund
3
Committed Capital
Invested Capital
Committed Capital
Invested Capital
Invested Capital
Fund
1
Fund
2
Fund
3
Invested Capital
Committed Capital
Invested Capital
1
2
3
Fees are charged on total committed capital during a fund’s
investment period. All commitments to the fund are charged
fees from the date of the ‘first close’.
Successor funds are launched typically once a fund is
85 – 90% invested.
At this point, the previous vintage of the fund ‘steps down’
to charge fees on invested capital, potentially with a
reduction in fees of ~25bps. As the fund realises
investments, the invested capital base is reduced.
Fees are charged on the original cost of total invested capital
for the entirety of the fund’s life. The fee-earning AUM
therefore increases as capital is deployed, and reduces as the
fund realises investments.
No ‘step down’ in fees when a successor fund is launched.
1
2
In addition to management fees, the Group receives performance fees from certain funds if performance thresholds are met: see page 50
46
ICG | Annual Report & Accounts 2022
– Real Assets raised $3.0bn, with real estate debt raising a total of $1.6bn across a number of strategies. In addition Infrastructure Equity I
raised $1.0bn and Sale and Leaseback I raised $0.5bn during the year. Both funds had final closes during the period (with total fund sizes of
€1.5bn / $1.7bn and €1.2bn / $1.3bn at 31 March 2022 respectively), and both represent very strong first-time funds, embedding the future
growth potential of those strategies
– Credit raised $5.1bn, of which $0.9bn was in liquid funds and $4.2bn was in CLOs. During the year we raised three new CLOs, accounting
for $1.2bn of fundraising. We also took advantage of attractive market conditions by amending the terms of eight existing CLOs to extend the
duration of our management fees and lock-in enhanced future returns. This accounted for $3.0bn of fundraising, for which we recorded an
equivalent level of realisations
Realisations
– We continued to take advantage of attractive valuations and elevated levels of market activity to anchor fund performance by realising assets
as appropriate. We had $8.7bn of realisations within third-party AUM and $11.0bn of realisations of third-party fee-earning AUM (of which
$6.4bn was from direct investment funds)
– Structured and Private Equity accounted for $2.6bn of realisations within both third-party AUM and third-party fee-earning AUM, with
particularly notable activity in Europe VI and Europe VII (2015 and 2018 vintages respectively)
– Realisations of third-party AUM in Private Debt were $0.9bn, whilst realisations within third-party fee-earning AUM were $2.8bn. The
difference between the two is that the majority of realisations were from funds and mandates within Senior Debt Partners where we can
re-deploy the capital we realised. While we do not earn fees on uninvested capital on these funds and mandates, and so it is no longer within
third-party fee-earning AUM, it remains within our third-party AUM (and we will earn fees on the capital once it is re-deployed)
– Credit accounted for $4.6bn of realisations within both third-party AUM and third-party fee-earning AUM, of which $3.0bn were due to the
eight CLOs we amended during the year and for which we recorded an equivalent level of fundraising. The remainder primarily came from
liquid credit ($1.2bn)
Deployment
During the year we deployed a total of $15.0bn of AUM on behalf of our direct investment funds (FY21: $7.2bn), split between our asset classes
as follows:
$m
Structured and Private Equity
Private Debt
Real Assets
Group
FY22
8,027
4,843
2,280
14,950
– Within Structured and Private Equity we saw particularly strong activity in our European Corporate strategies ($5.2bn) and Strategic Equity
($2.5bn)
– Within Private Debt, deployment was driven by Senior Debt Partners ($4.3bn from combination of co-mingled funds and SMAs)
– Within Real Assets, real estate debt strategies deployed $1.2bn, Sale and Leaseback I deployed $0.5bn and Infrastructure Equity deployed
$0.2bn
Third-party fee-earning AUM
Third-party fee-earning AUM grew 25% (30% on a constant currency basis), or $11.6bn, during the period to $58.3bn (FY21: $46.7bn).
Third-party fee-earning AUM ($m)
At 1 April 2021
Funds raised: fees on committed capital
Deployment of funds: fees on invested capital
Total additions
Realisations
FX and other
At 31 March 2022
Change $m
Change %
Change % (constant exchange rate)¹
Structured and
Private Equity
Private Debt
Real Assets
Credit
Total third-party
fee-earning AUM
13,878
9,598
1,534
11,132
(2,642)
(268)
22,100
8,223
59%
66%
10,315
–
4,843
4,843
(2,756)
(449)
11,953
1,637
16%
20%
5,331
1,388
1,403
2,791
(1,005)
(244)
6,873
1,542
29%
35%
17,205
–
5,064
5,064
(4,607)
(253)
17,409
204
1%
5%
46,729
10,986
12,844
23,830
(11,010)
(1,214)
58,335
11,606
25%
30%
1. Please see page 56 for an explanation of constant exchange rate calculation methodology.
ICG | Annual Report & Accounts 2022
47
Financial review continued
Deployment levels of key funds
Deployment levels are lead indicators of our potential fundraising timetable. The deployment level for funds that charge fees on invested capital
also has an impact on our profitability. The table below details the deployment levels for funds whose fundraising cycle for the subsequent
vintage is dependent on the deployment level of the current vintage (excluding funds that were still fundraising at 31 March 2022):
Fees charged on committed capital
Structured and Private Equity
Europe Mid-Market I
Real Assets
Infrastructure Equity I¹
Sale and Leaseback I
Fees charged on invested capital
Private Debt
North American Private Debt II
Senior Debt Partners IV¹
Percentage
deployed at
31 March 2022
64%
32%
74%
74%
64%
1. Co-mingled fund, excluding mandates, and, for Senior Debt Partners IV, excludes mandates and undrawn commitments.
To ensure continuity between two fund vintages, ICG’s fundraisings usually follow a cycle whereby successor vintages start investing when the
predecessor fund is close to being fully invested. This means that the investment period of the predecessor fund typically ends when
approximately 90% of its total commitments are invested (with the remaining commitments being used primarily for add-on acquisitions and
other capital injections as well as for ongoing expenses).
Performance of key ICG funds
Our funds have continued to perform very strongly this year. We saw particularly significant value creation across all our strategies within
Structured and Private Equity. Equity strategies within Real Assets (Sale and Leaseback I and Infrastructure Equity I) are at relatively early stages
of their fund lives, and both are showing very promising signs at this point. Our debt strategies are performing well, and the floating-rate nature
of many of these strategies is attractive to clients in the current environment, who benefit from rising rates.
We take a disciplined approach to portfolio management. This is reflected in our core sectors such as software, healthcare services, education
and renewable energy, as well in how we structure our transactions (typically with lower leverage and a focus on downside protection). Across
all our strategies, we ensure that our portfolio companies are appropriately hedged to protect them against interest rate rises, and this is an area
we have been spending time on during the last twelve months.
Gross MOIC (Multiple of Invested Capital) is an indication of the returns our funds have made before fees, including both realised and unrealised
returns, and therefore of the value that we have created. The target MOIC will vary between strategies and within strategies, and newer vintages
with more recent investments will typically have a lower MOIC as the investments have not had time to grow in value. The Gross MOIC of key ICG
funds is set out below:
48
ICG | Annual Report & Accounts 2022
Structured and Private Equity
Europe V
Europe VI
Europe VII
Europe VIII
Europe Mid-Market I
Asia Pacific III
Asia Pacific IV
Strategic Secondaries II
Strategic Equity III
Strategic Equity IV
Private Debt
Senior Debt Partners II
Senior Debt Partners III
Senior Debt Partners IV
North America Private Debt I
North America Private Debt II
Real Assets
Real Estate Partnership Capital III
Real Estate Partnership Capital IV
Real Estate Partnership Capital V
Infrastructure Equity I
Sale & Leaseback I
Investment period started
31 March 2022
31 March 2021
September 2011
March 2015
April 2018
April 2021
May 2019
July 2014
February 2020
March 2016
November 2018
March 2021
March 2015
December 2017
January 2020
June 2014
January 2019
December 2012
February 2015
April 2018
March 2020
September 2019
1.8x
2.1x
1.7x
1.1x
1.2x
2.1x
1.4x
2.8x
2.2x
1.3x
1.3x
1.2x
1.1x
1.4x
1.2x
1.4x
1.3x
1.2x
1.2x
1.3x
1.8x
1.9x
1.5x
–
1.1x
1.7x
1.2x
1.8x
1.5x
–
1.2x
1.2x
1.1x
1.4x
1.2x
1.4x
1.3x
1.2x
1.1x
1.0x
Overview: Group financial performance
Third-party fee income grew 34% to £448.7m, driving a 32% increase in our Fund Management Company (FMC) revenue to £512.8m. FMC profit
before tax was £286.2m, an increase of 41% compared to FY21, resulting in an FMC operating margin of 55.8% (FY21: 52.1%).
Strong performance of our funds led to a significant net investment returns (NIR) for the co-investment by the Investment Company (IC) of
£485.7m, driven predominantly by Structured and Private Equity.
In aggregate the Group reported profit before tax of £568.8m (FY21: £507.7m).
Group earnings per share grew by 16% to 187.6p (FY21: 162.3p).
We remain committed to our progressive dividend policy, and the proposed final dividend of 57.3p per share brings the total dividend per share
to 76.0p for FY22, an increase of 36% compared to FY21.
Our balance sheet remains strong and well capitalised, with net gearing of 0.45x, total available liquidity of £1,311.5m and a net asset value per
share of 696p. We have a long-term objective to have zero net gearing.
ICG | Annual Report & Accounts 2022
49
Financial review continued
Recognition of performance fees
In addition to management fees (see page 46), the Group receives performance fees from certain funds if performance thresholds
are met (see page 201).
Performance fees are a relatively small but important part of the Group’s revenue.
The Group receives approximately 20 – 25% of performance fees from the funds that it manages, with the remainder going to the
investment teams.
Over the medium term we expect performance fees to be ~10 – 15% of our total third-party fee income.
Accrual of unrealised performance fees is a matter of judgement (see note 3 on page 144) and we take a conservative approach to
minimise the possibility of any significant reversals.
Illustrative recognition of performance fee accrual under IFRS for a fund that charges fees on committed
capital (see page 144)
When a successor fund is raised
and is earning management fees,
the prior vintage has a step down in
management fees (see page 46)
Performance fees are recognised only if it is highly probable
that there will not be a significant reversal in the future.
In practice recognition generally occurs after a number of
realisations have been made.
Timing of recognition depends on deployment, exits and fund
performance.
Where the hurdle date is expected to be reached within 24
months of the year end, a constraint will be applied to the
performance fee that is recognised but not yet paid. For FY22,
this constraint was 46% (see page 145).
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Management fees
Performance fees
Certain funds that charge fees on invested capital also charge performance fees, which the Group benefits from. The process for
recognising performance fees in these funds is the same as outlined above, and the illustrative profile in the graph would change to
reflect the management fee being charged on invested. For more detail on how we charge management fees (see page 46).
£m unless stated
31 March 2022
31 March 2021
Change %
Third-party management fees
Third-party performance fees
Third-party fee income
Other income
Fund Management Company revenue
Fund Management Company operating expenses
Fund Management Company profit before tax
Fund Management Company operating margin
Investment Company revenue
Investment Company operating expenses
Interest expense
Investment Company profit before tax
Group profit before tax
Tax
Group profit after tax
Earnings per share
Dividend per share
Net gearing
Net asset value per share
50
ICG | Annual Report & Accounts 2022
392.7
56.0
448.7
64.1
512.8
(226.6)
286.2
55.8
451.7
(118.6)
(50.5)
282.6
568.8
(30.8)
538.0
187.6p
76.0p
0.45x
696p
280.5
53.2
333.7
54.8
388.5
(186.2)
202.3
52.1%
419.0
(58.1)
(55.5)
305.4
507.7
(45.0)
462.7
162.3p
56.0p
0.63x
566p
40%
5%
34%
17%
32%
22%
41%
7%
8%
104%
(9%)
(7%)
12%
(32%)
16%
16%
36%
(0.18)x
23%
Fund Management Company
The Fund Management Company (FMC) is the Group’s principal driver of long-term profit growth. It manages our third-party AUM, which it
invests on behalf of the Group’s clients.
During the year the FMC generated profit before tax of £286.2m, a 41% increase compared to FY21 (FY21: £202.3m).
Third-party fee income
Third-party fee income grew 34% to £448.7m in FY22 (FY21: £333.7m).
£m
Year ended 31 March 2022
Year ended 31 March 2021
Change %
Structured and Private Equity – management fees
Structured and Private Equity – performance fees
Structured and Private Equity
Private Debt – management fees
Private Debt – performance fees
Private Debt
Real Assets – management fees
Real Assets – performance fees
Real Assets
Credit – management fees
Credit – performance fees
Credit
Third-party fee income
Of which management fees
Of which performance fees
206.2
47.3
253.5
66.5
6.1
72.6
61.4
0.1
61.5
58.6
2.5
61.1
448.7
392.7
56.0
131.4
42.0
173.4
52.9
2.9
55.8
36.5
–
36.5
59.7
8.3
68.0
333.7
280.5
53.2
57%
13%
46%
26%
110%
30%
68%
–
68%
(2%)
(70%)
(10%)
34%
40%
5%
Our third-party fee income is largely comprised of management fees, which have a high degree of visibility and are directly linked to our third-
party fee-earning AUM. The increase in management fees during FY22 was largely due to fundraising for Europe VIII and Strategic Equity IV,
both of which charge fees on committed capital. Real Assets also saw a notable year-on-year increase due to fundraising for Sale and Leaseback
I and Infrastructure Equity I.
Management fees during FY22 include a total of £14.3m catch-up fees, primarily due to Sale and Leaseback I and Infrastructure Equity I.
The effective management fee rate on our third-party fee-earning AUM at the period end was 0.88% (FY21: 0.81%). The increase was due to the
substantial fundraising within Structured and Private Equity in strategies with higher fee rates charging fees on committed capital. The fee rate is
split between asset classes as follows:
Structured and Private Equity
Private Debt
Real Assets
Credit
Group
31 March 2022
31 March 2021
1.24%
0.83%
0.87%
0.47%
0.88%
1.21%
0.82%
0.88%
0.45%
0.81%
Performance fees are a relatively small but integral part of our revenue, and during the five years to 31 March 2022 accounted for an average of
12.3% of our third-party fee income. In FY22 performance fees totalled £56.0m (FY21: £53.2m) and accounted for 12.5% (FY21: 16.0%) of our
third-party fee income.
Third-party fees are 88% denominated in euros or US dollars. The Group’s policy is to economically hedge non-sterling fee income to the
extent that it is not matched by costs and is predictable. Third-party fee income in FY22 included a negative impact of £(14.7)m due to FX
(FY21: £(1.6)m).
Other income
The FMC recorded dividend receipts of £38.0m (FY21: £33.4m) from investments in CLO equity and recognised £24.8m for managing the IC
balance sheet investment portfolio (FY21: £21.4m).
ICG | Annual Report & Accounts 2022
51
Financial review continued
Operating expenses and margin
Operating expenses of the FMC were £226.6m (FY21: £186.2m). The increase was driven by employee-related expenses due to the full year
impact of hires made in FY21 and new hires made in FY22, as well as an increase in incentive costs due to the strong performance of the Group
during the year.
During the year we have hired across the business, particularly into investment teams and corporate functions (CBS), ensuring that we have the
platform to continue to execute on our growth ambitions. We expect to continue to invest in our business during FY23, as well as to see the
full-year impact of the hires made in FY22.
£m
Salaries
Incentive scheme costs
Administrative costs
Depreciation and amortisation
FMC operating expenses
FMC operating margin
Year ended
31 March 2022
Year ended
31 March 2021
76.0
87.2
55.1
8.3
226.6
55.8%
63.3
73.1
43.2
6.6
186.2
52.1%
Change
%
20%
19%
28%
26%
22%
7%
The FMC therefore recorded a profit before tax of £286.2m (FY21: £202.3m) and an operating margin of 55.8% (FY21: 52.1%). The operating
margin for FY22 was supported by the rapid fundraising for Europe VIII as well as the catch-up fees that we earned during the year. For FY23 we
continue to expect an operating margin in excess of 50%, consistent with our medium-term guidance.
Investment Company
The Investment Company (IC) invests the Group’s proprietary capital to seed and accelerate emerging strategies, and invests alongside the
Group’s more established funds to align interests between our clients, employees and shareholders. It also supports a number of costs including
for certain central functions, a part of the Executive Directors’ compensation, and the portion of the investment teams’ compensation linked to
the returns of the balance sheet investment portfolio (Deal Vintage Bonus, or DVB).
Balance sheet investment portfolio
The balance sheet investment portfolio (excluding warehoused investments) was valued at £2,727.1m at 31 March 2022 (31 March 2021: £2,491.8m).
The growth was due to valuation gains of £473.1m, largely within Structured and Private Equity. On a cash basis, it experienced net realisations
during the year of £269.9m, being new investments of £748.3m and realisations of £1,018.2m.
In addition, the balance sheet had £94.6m (FY21: £64.6m) of warehoused investments at 31 March 2022 that are held in anticipation of being
transferred to a third-party fund once the relevant fund has had a first close. Within the warehoused assets, we made new investments of
£203.7m during the year including on behalf of LP Secondaries and Life Sciences, and transferred £187.1m to funds that were launched (primarily
Real Estate Partnership Capital VI and LP Secondaries I).
The total value of the balance sheet investment portfolio at 31 March 2022 was therefore £2,821.7m (31 March 2021: £2,556.4m).
£m
Structured and Private Equity
Private Debt
Real Assets
Credit1
Total balance sheet investment portfolio
(excluding warehoused investments)
Warehoused investments
Total balance sheet investment portfolio
(including warehoused investments)
As at
31 March 2021
1,564.6
158.8
303.8
464.8
2,491.8
64.6
New investments
Realisations
Gains / (losses)
in valuation
FX & Other
As at
31 March 2022
509.5
37.6
107.7
93.5
748.3
203.7
(706.8)
(75.8)
(117.7)
(117.9)
(1,018.2)
(187.1)
454.2
24.6
(5.2)
(0.5)
473.1
7.7
4.4
3.6
16.4
7.5
31.9
5.7
1,825.8
148.8
305.0
447.5
2,727.1
94.6
2,556.4
952.0
(1,205.3)
480.8
37.6
2,821.7
1. Within Credit, at 31 March 2022 £162.0m was invested in liquid strategies, with the remaining £285.5m invested in CLO debt (£105.6m) and equity (£179.9m)
The balance sheet investment portfolio is 45% euro denominated, 28% US dollar denominated and 19% sterling denominated. We hedge the
majority of the FX exposure on our balance sheet.
52
ICG | Annual Report & Accounts 2022
Net Investment Returns
Net Investment Returns (NIR) of £485.7m (FY21: £445.1m) were primarily driven by Structured and Private Equity, and was split by asset class on
an absolute basis as follows:
£m
Structured and Private Equity
Private Debt
Real Assets
Credit
Total net investment returns (excluding warehoused investments)
Warehoused investments
Total net investment returns (including warehoused investments)
As at
31 March 2022
As at
31 March 2021
457.7
24.9
(4.1)
(0.5)
478.0
7.7
485.7
342.1
19.2
20.9
57.9
440.1
5.0
445.1
Change
%
34%
29%
n/m
n/m
9%
54%
9%
This translated into the following NIR as a percentage of the average balance sheet investment portfolio:
£m
Structured and Private Equity
Private Debt
Real Assets
Credit
Total net investment returns (excluding warehoused investments)
Warehoused investments
Total net investment returns (including warehoused investments)
Balance sheet
investment portfolio
at 31 March 2022
FY22 average
balance sheet
investment portfolio
FY22 net
investment returns
%
1,825.8
148.8
305.0
447.5
2,727.1
94.6
2,821.7
1,695.2
153.8
304.4
456.0
2,609.4
79.6
2,689.0
27.0%
16.2%
(1.4%)
(0.1%)
18.3%
9.7%
18.1%
During the five years to 31 March 2022, NIR have averaged 12.8% and we continue to expect NIR of low double-digit percentage points over the
medium term.
Our NIR in FY22 were driven by a strong performance in Structured and Private Equity, which reported a 27.0% NIR in the year. The main
contributors to that performance were our European Corporate, Asia Pacific Corporate and Strategic Equity strategies. Real Assets was
impacted by a write-down on one legacy asset. Within Credit, FY21 was a particularly strong year given write-ups following FY20, and there was
also a modest (£2.6m) negative impact on our NIR in Q4 as a result of our liquid funds mark-to-market. Structured and Private Equity and Private
Debt both continued to see positive NIR in Q4 of FY22.
Over 50% of the NIR generated during the period were from assets that were sold or for which sale prices were agreed during the period.
In addition to the NIR, the IC recorded other operating income of £2.6m, paid a fee of £24.8m (FY21: £21.4m) to the FMC and recorded a fair
value loss of £11.8m (FY21: loss of £7.3m) in movements on derivatives (which are now reported through the revenue line). This resulted in the IC
recording revenues of £451.7m (FY21: £419.0m).
Investment Company expenses
Operating expenses in the IC of £118.6m increased from £58.1m in FY21. The increase is predominantly due to a £52.1m increase in incentive
scheme costs, which were higher following the strong performance of certain investments within the balance sheet investment portfolio that are
eligible for the deal vintage bonus (DVB) scheme. This relates to the performance of relevant balance sheet investments and is paid to
investment professionals. It is accounted for on an accrual basis but is distributed only when assets are realised. For more information on the
DVB scheme, see page 162.
Employee costs for teams who do not yet manage a third-party fund are allocated to the IC. Once those funds have a first close, the costs of
those teams are reported in the FMC from that date onwards. For FY22, the costs within the Investment Company attributable to teams that have
not had a first close of a third-party fund were £15.4m (FY21: £11.6m).
ICG | Annual Report & Accounts 2022
53
Financial review continued
£m
Salaries
Incentive scheme costs
Administrative costs
Depreciation and amortisation
IC operating expenses
Year ended
31 March 2022
Year ended
31 March 2021
16.7
82.5
16.0
3.4
118.6
12.4
30.4
13.0
2.3
58.1
Change
%
35%
171%
23%
48%
104%
Interest expense was £50.5m (FY21: £55.5m) and the IC therefore recorded a profit before tax of £282.6m (FY21: £305.4m).
Group
Tax
The Group recognised a tax charge of £30.8m (FY21: £45.0m), resulting in an effective tax rate for the period of 5.4% (FY21: 8.9%). The decline
in the Group’s effective tax rate was largely due to the mix of earnings, resulting in lower taxable income in FY22, as well as a number of reversals
of previous accruals.
As detailed in note 14, the Group has a structurally lower effective tax rate than the statutory UK rate. This is largely driven by the Investment
Company, where certain forms of income benefit from tax exemptions. The effective tax rate will vary depending on the income mix.
Dividend
We have a progressive dividend policy, distributing 80-100% of FMC profit after tax, to be paid twice-yearly (with the interim dividend being
one-third of the previous year’s total dividend).
For FY22, in addition to the 18.7p per share interim dividend, the Board is proposing a 57.3p per share final dividend. This would result in a total
dividend of 76.0p per share being paid for the year, and increase of 36% compared to FY21 (56.0p). We continue to make the dividend
reinvestment plan available.
Balance sheet
Balance sheet strategy
Delivering our strategy and maximising shareholder value require a clear approach to managing our balance sheet. We have a robust, diversified
balance sheet and strong liquidity position that allows us to weather crises whilst continuing to invest in the business and support our long-term
growth prospects.
Our approach to managing our balance sheet is structured around three priorities. These ensure we have the financial and operational flexibility
to successfully execute our strategic objectives:
– Align the Group’s interests with its clients
– co-invest in our strategies alongside our clients, whilst seeking to reduce the Group’s commitments over time where appropriate
– Grow third-party fee income in the FMC
– fund and warehouse seed investments to launch new strategies that will be a source of future incremental management fees in the FMC
– Maintain robust capitalisation
– retain strong liquidity
– long-term objective of zero net gearing
Net debt and liquidity
At 31 March 2022, the Group had net financial debt of £893.5m, total available liquidity of £1,311.5m, and net gearing of 0.45x. Over time we
expect our net gearing to continue to reduce.
In January 2022 the Group issued a sustainability-linked, €500m 8-year bond with a fixed coupon of 2.5%. This provides ample liquidity for
repaying outstanding instruments as they mature, at an attractive rate below our current blended cost of debt. The bond features a coupon
adjustment based on the progress ICG makes in achieving its science-based targets, underlining our commitment to achieving Net Zero by 2040
across all of our operations and relevant investments.
54
ICG | Annual Report & Accounts 2022
Net financial debt decreased during the year to £893.5m (31 March 2021: £1,027.2m), with cash increasing from £296.9m to £761.5m due to
positive operating cashflow along with the proceeds from the bond issuance:
£m
Cash at 1 April 2021
Net cash generated by operating activities
Debt issuance – term debt
Dividend paid
FX and other movements
Cash at 31 March 2022
Available undrawn ESG-linked RCF
Cash and undrawn debt facilities
(total available liquidity)
296.9
324.9
300.6
(165.7)
4.8
761.5
550.0
1,311.5
The Group has a credit rating of BBB (stable outlook) / BBB- (positive outlook) from Fitch and S&P respectively. The Group’s drawn debt is
provided through a range of facilities and in a range of currencies (the Group hedges certain material foreign currency exposures).
All facilities, except the ESG-linked RCF, are fixed-rate instruments. The weighted average cost of term debt at 31 March 2022 was 3.29% (31
March 2021: 3.59%), with the reduction driven by the attractive rate of the bond issuance we undertook during the year as well as a repayment of
a more expensive private placement that matured.
Committed debt facilities in place at 31 March 2022 were as follows:
ESG-linked RCF
Eurobond 2020
ESG Linked Bond
EMTN 2015
Total bonds
PP2013 – Class B
Private Placement 2013
PP 2015 – Class B
PP 2015 – Class C
PP 2015 – Class F
Private Placement 2015
PP 2016 Class B
PP 2016 Class C
PP 2016 Class F
PP 2016 Class E
Private Placement 2016
PP 2019 – Class A
PP 2019 – Class B
PP 2019 – Class C
PP 2019 – Class D
Private Placement 2019
Total Private Placements
Total
Currency
GBP
EUR
EUR
GBP
USD
USD
USD
EUR
USD
USD
EUR
EUR
USD
USD
USD
EUR
Drawn
£m
–
421.0
421.0
160.0
1,002.0
48.7
48.7
32.0
60.9
37.0
129.9
86.0
41.1
25.3
18.5
170.9
95.1
37.1
76.1
95.2
303.5
653.0
1,655.0
Undrawn
£m
550.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
550.0
Total
£m
550.0
421.0
421.0
160.0
1,002.0
48.7
48.7
32.0
60.9
37.0
129.9
86.0
41.1
25.3
18.5
170.9
95.1
37.1
76.1
95.2
303.5
653.0
2,205.0
Interest rate
Maturity
SONIA +1.41% Jan-25 +1 yr
Feb-27
Jan-30
Mar-23
1.63%
2.50%
5.00%
6.25%
May-23
4.95%
5.21%
3.38%
4.66%
4.96%
3.04%
2.74%
4.76%
4.99%
5.35%
2.02%
May-22
May-25
May-25
Sep-24
Sep-26
Jan-25
Jan-27
Apr-24
Mar-26
Mar-29
Apr-24
The weighted-average life of drawn debt at 31 March 2022 was 4.6 years (31 March 2021: 4.2 years). The maturity profile of our term debt is set
out below:
£m
Term debt maturing
FY23
192.0
FY24
48.7
FY25
301.6
FY26
135.0
FY27
480.6
FY28
—
FY29
76.1
FY30
421.0
ICG | Annual Report & Accounts 2022
55
Financial review continued
Net asset value
Shareholder equity increased to £1,995.0m (31 March 2021: £1,619.5m), equating to 696p per share (31 March 2021: 566p), due to the retained
profits generated during the year.
Net asset value
At 1 April 2021
Group profit after tax
Dividends paid
FX and other
At 31 March 2022
£m
Pence per share
1,619.5
538.0
(165.7)
3.2
1,995.0
566
188
(58)
–
696
Net gearing
The movements in the Group’s cash position, debt facilities and shareholder equity resulted in net gearing declining to 0.45x at 31 March 2022
(31 March 2021: 0.63x).
In line with our prudent approach to balance sheet management, we have a long-term objective to have zero net gearing. As we continue to
launch a number of new equity funds in the coming years, supported by our balance sheet, we view this as an appropriate trajectory.
£m
Cash
Gross drawn debt
Net financial debt (A)
Shareholder equity (B)
Net gearing (A/B)
As at
31 March 2022
As at
31 March 2021
761.4
1,655.0
893.5
1,995.0
0.45x
296.9
1,324.1
1,027.2
1,619.5
0.63x
Change
%
156%
25%
(13%)
23%
(29%)
Russia and Ukraine
ICG does not have any material financial or operational exposure at the Group level or within the funds we manage, directly or indirectly, to
Russia or the Ukraine, nor do we have any Russian or Ukrainian clients. From an investment perspective we do not have any investment strategies
whose investment focus is Central and Eastern Europe (including Russia). Operationally, with the exception of Warsaw, we do not have any
offices in Central and Eastern Europe (including Russia).
We extend our sympathies and thoughts to those impacted by the ongoing conflict as a result of Russia’s invasion of Ukraine. At a corporate level
we have made donations to support humanitarian relief efforts, and a number of our colleagues and portfolio companies have also taken direct
action to help those in need.
Medium-term guidance
We are accelerating our fundraising ambition given the strength and breadth of our platform, along with the strong continued operational
performance of the business we are seeing. We now expect to raise at least $40bn in aggregate between 1 April 2021 and 31 March 2024
(previously: $40bn between 1 April 2021 and 31 March 2025).
Guidance on performance fees, FMC operating margin and net investment returns remains unchanged.
Fundraising
Performance fees
FMC operating margin
Net investment returns
At least $40bn fundraising in aggregate
between 1 April 2021 and 31 March 2024
Performance fees to represent 10 – 15% of
third-party fee income over medium term
In excess of 50%
Low double-digit percentage
points over the medium term
Foreign exchange rates
The following foreign exchange rates have been used throughout this review.
GBP:EUR
GBP:USD
EUR:USD
Average rate
for FY22
Average rate
for FY21
31 March 2022
year end
31 March 2021
year end
1.1755
1.3626
1.1595
1.1254
1.3173
1.1705
1.1876
1.3138
1.1063
1.1750
1.3783
1.1730
At 31 March 2022 our third-party AUM was $68,469m. If GBP:USD had been by 5% higher 1.3795 our reported third-party AUM would have
been $473m higher. If EUR:USD had been 5% higher 1.1616 our reported third-party AUM would have been $1,979m higher.
Where noted, this review presents changes in AUM on a constant exchange rate basis. For the purposes of these calculations, FY21 AUM
numbers have been translated from their underlying fund currencies to USD at the respective FY22 period end exchange rates. This has then
been compared to the FY22 closing AUM to arrive at the change on a constant currency exchange rate basis.
56
ICG | Annual Report & Accounts 2022
Risk management
MANAGING RISK
Effective risk management is a core competence underpinned by a strong control culture.
Our approach
The Board is accountable for the overall stewardship of the Risk
Management Framework (RMF), for internal control assurance, and
for determining the nature and extent of the risks it is willing to take in
achieving the Group’s strategic objectives. In so doing, the Board
sets an appetite for risk within a strong control environment to
generate a return for clients and shareholders and protect their
interests.
The risk appetite is reviewed by the Risk Committee, on behalf of the
Board, and covers the principal risks that the Group seeks to take in
delivering the Group’s strategic objectives.
The Risk Committee is provided with regular management
information and monitors performance against set thresholds and
limits to support the achievement of the Group’s strategic objectives,
within the boundaries of the agreed risk appetite. The Board also
seeks to promote a strong risk management culture by encouraging
acceptable behaviours and attitudes towards taking and managing
risk throughout the Group.
Read more in the Risk Committee report
on page 85
Managing risk
Risk management is embedded across the Group through the RMF,
which ensures that current and emerging risks are identified,
assessed, monitored, mitigated, and appropriately governed based
on a common risk taxonomy and methodology. The RMF is designed
to protect the interests of all stakeholders and meet our
responsibilities as a UK listed company and parent of several
regulated entities. The Board reviews the RMF regularly, and it forms
the basis on which the Board reaches its conclusions on the
effectiveness of the Group’s system of internal controls.
Taking risk opens up opportunities to innovate and further enhance
our business, for example new investment strategies or new
approaches to managing our client relationships. Therefore, we
maintain a risk culture that allows for entrepreneurial leadership
within a framework of prudent and effective controls to enable
effective risk management.
Taking responsibility and managing risk is one of our key values that
drive our success. For more information about our culture and values,
see page 10.
Lines of defence
We operate a risk framework consistent with the principles of the
‘three lines of defence’ model. This ensures clarity over responsibility
for risk management and segregation of duties between those who
take on risk and manage risk, those who oversee risk and those who
provide assurance.
– The first line of defence is the business functions and their
respective line managers, who own and manage risk and controls
across the processes they operate
– The second line of defence is made up of the control and
oversight functions, including the Legal, Risk and Compliance
teams, who provide oversight and assurance that risk management
policies and procedures are operating effectively
– The third line of defence is Internal Audit who provide
independent assurance over the design and operation of controls
established by the first and second lines to manage risk
Assessing risk
The Group adopts both a top-down and a bottom-up approach to
risk assessment:
– The Risk Committee undertakes a top-down review of the external
environment and the strategic planning process to identify
the most consequential and significant risks to the Group’s
businesses. These are referred to as the principal risks
– The business undertakes a bottom-up review which involves a
comprehensive risk assessment process designed to facilitate the
identification and assessment of key risks and controls related
to each business function’s most important objectives and
processes. This is primarily achieved through the Risk and Control
Self-Assessment process (RCSA)
The risk assessment process is supported by the Group’s Risk
Taxonomy which is a top-down comprehensive set of risk categories
designed to encourage those involved in risk identification to consider
all types of risks that could affect the Group’s strategic objectives.
ICG | Annual Report & Accounts 2022
57
The Group has been able to demonstrate resilience in the face of the
Covid-19 pandemic, from a financial, investment and operational
perspective, and we remain confident in our ability to withstand
further challenges that may or may not emerge. We will remain alert to
the uncertainties that persist which may present new competitive
risks and opportunities for the Group.
Principal risks and uncertainties
The Group’s principal risks are individual risks, or a combination of
risks, that can seriously affect the performance, prospects, or
reputation of the Group. These include those risks that would
threaten the Group’s business model, future performance, solvency,
or liquidity. The Group considers its principal risks across three
categories:
1. Strategic and business risks
The risk of failing to respond to developments in our industry
sector, client demands or the competitive environment, impacting
the successful delivery of our strategic objectives
2. Financial risks
The risk of an adverse impact on the Group due to market
fluctuations, counterparty failure or having insufficient resources
to meet financial obligations
3. Operational risks
The risk of loss resulting from inadequate or failed internal
processes, people or systems and external events
Reputational risk is not in itself one of the principal risks. However, it
is an important consideration and is actively managed and mitigated
as part of the wider risk management framework.
We use a principal and emerging risks process to provide a forward-
looking view of the potential risks that may threaten the execution of
the Group’s strategy or operations over the medium to long term. We
proactively assess the internal and external risk environment, as well
as review the themes identified across our global businesses for any
risks that may require additional monitoring, updating our principal
and emerging risks as necessary.
The Group’s RMF identifies eight principal risks, within the three
categories mentioned above, which are accompanied by associated
responsibilities and expectations around risk management and
control. Each of the principal risks is overseen by an accountable
Executive Director, who is responsible for the related framework,
policies and standards.
Risk management continued
Key developments in FY22
During the year the risk management development plan which
commenced in 2019 has delivered its key objectives, including
implementing effective policies, procedures, and frameworks to help
direct the Group’s risk management strategy and enhance the
execution of an effective end-to-end risk management process across
all three lines of defence.
Other key initiatives included:
– Assessing the Group’s risk exposure to the potential impacts of
the Russia-Ukraine conflict and the sanctions imposed on Russia.
The Group does not have any material financial or operational
exposure at the Group level or within the funds we manage,
directly or indirectly, to Russia or Ukraine
– Refining the RCSA’s and updating the documentation and
assessment of key controls into this one process
– Project managing the business response to the Covid-19
pandemic, with employee well-being, business resilience and risk
management at the core of our approach
– Developing a combined assurance mapping process to provide
an integrated and coordinated approach to aligning the Group’s
assurance activities, focusing on key risk exposures across the
Group
– Assessing the Group’s response to the Investment Firm Prudential
Regime, including the Group’s preparedness for implementation
– Making appropriate preparations for potential changes arising
from the proposed audit reform developments made by the UK
government, including that the UK should adopt a strengthened
internal controls regime, to assess the implications for the Group
– Enhancing the annual fraud risk assessment, to better identify
and prioritise areas of fraud risk with a focus on increasing the
coverage of potential fraud schemes and the internal controls in
place to prevent or detect those schemes
Covid-19
The current outlook is more encouraging than at this point last year,
with vaccine programmes having a positive effect and restoring
confidence and stability. The Group continues to operate with limited
disruption and responding to the operational impacts of the
pandemic has become part of our day-to-day operations.
Our employees have continued to adjust to the changes necessitated
by the pandemic, and we have recognised the importance of these
changes as they evolved throughout the year. We have transitioned to
new ways of working that acknowledges both external change and
employee sentiment, whilst remaining mindful to the challenges of
collaboration and ensuring continued high standards of performance.
We also continue to work closely with the management of our funds’
portfolio companies, and any relevant impacts of Covid-19 are
subject to regular updates and assessments as part of enhanced
portfolio monitoring.
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ICG | Annual Report & Accounts 2022
The Directors confirm that they have undertaken a robust assessment
of the principal risks in line with the requirements of the UK Corporate
Governance Code and that no significant failings or weaknesses in
internal controls have been identified. In making their assessment the
Directors consider the likelihood of each risk materialising, in the
short and long term. This is supported by an annual material controls
assessment and fraud risk assessment, facilitated by the Group Risk
function, which provides the Directors with a detailed assessment of
related internal controls. Additionally, Internal Audit findings,
compliance monitoring findings, and risk events reported during the
period are reviewed to assess whether any deficiency has been
identified which is a significant failing or weakness.
The Group’s risk profile has not changed materially since 2021.
However, Key Personnel Risk has been a focus and consideration has
been given to the residual impacts of Covid-19 on the well-being of
our employees, and the ability of the Group to attract talent and retain
key people, in what is currently a candidate driven market. As a result
of this an increasing likelihood has been reported against Key
Personnel Risk. Other risks are stable or reducing after assessing the
performance of existing, additional, and ongoing enhancements to
processes and controls.
The diagram below shows the Group’s principal risks and risk trend
compared to the previous year. The horizontal axis shows the
estimated impact of a principal risk if it were to materialise, and the
vertical axis illustrates the estimated likelihood of this occurring. The
assessments are based on the residual risk exposure remaining after
mitigating controls.
Risk profile
Risk trend
1
86
3
7
4
5
2
1
2
3
4
5
6
7
8
ICG | Annual Report & Accounts 2022
59
Risk management continued
External Environment Risk
Strategic alignment
1
2
3
Risk appetite
Moderate
Executive Director Responsible
Benoît Durteste
Fund Performance Risk
Risk trend
Strategic alignment
Risk trend
1
2
3
Risk appetite
Moderate
Executive Director Responsible
Benoît Durteste
Risk Description
Geopolitical and macroeconomic concerns and other global events such as pandemics
and natural disasters that are outside the Group’s control could adversely affect the
environment in which we, and our fund portfolio companies, operate and we may not be
able to manage our exposure to these conditions and/or events. In particular, these
events have contributed and may continue to contribute to volatility in financial markets
which can adversely affect our business in many ways, including by reducing the value or
performance of the investments made by our funds, making it more difficult to find
opportunities for our funds to exit and realise value from existing investments and to find
suitable investments for our funds to effectively deploy capital. This could in turn affect
our ability to raise new funds and materially reduce our profitability.
Key Controls and Mitigation
– The Group’s business model is predominantly based on illiquid funds which are
closed-end and long-term in nature. Therefore, to a large extent the Group’s fee
streams are ‘locked in’. This provides some mitigation in relation to profitability and
cashflows against market downturn. Additionally, given the nature of closed-end
funds, they are not subject to redemptions
– A range of complementary approaches are used to inform strategic planning and risk
mitigation, including active management of the Group’s fund portfolios, profitability
and balance sheet scenario planning and stress testing to ensure resilience across a
range of outcomes
– The Board, the Risk Committee and the Group Risk function monitor emerging risks,
trends, and changes in the likelihood of impact. This assessment informs the universe
of principal risks faced by the Group
Trend and Outlook
The risks and uncertainties arising from the immediate consequences of the Covid-19
pandemic are receding. However, macroeconomic uncertainty and geopolitical risks are
increasing from other angles. Several macro challenges have developed, including
increased inflation and interest rate concerns. At a Group level we are somewhat
insulated from the direct impact of these risks, with our debt financing being fixed rate
and with limited supply chain risk. We continue to work closely with the management of
our funds’ portfolio companies to identify and mitigate these risks, where appropriate.
At the time of writing, the Russia-Ukraine conflict is bringing additional turbulence and
uncertainty to the markets. ICG does not have any material financial or operational
exposure at the Group level or within the funds we manage, directly or indirectly, to
Russia or Ukraine.
Despite the uncertainty, these challenges are not new to the Group, and we are well
positioned to navigate this investment environment in the long-term interests of our
clients. This is evident for the period, where we have experienced very strong
fundraising, raising significant third-party AUM, and deploying a substantial amount of
capital across all our strategic asset classes.
We remain alert to the current macroeconomic and geopolitical uncertainty and continue
to monitor the potential impact as regards our investment strategies, clients, and
portfolio companies, as well as the broader markets. While the uncertainty remains
elevated, we do not see an increased risk to our operations, strategy, or client demand as
a result.
Risk Description
Current and potential clients continually assess our investment fund performance. There
is a risk that our funds may not meet their investment objectives, that there is a failure to
deliver consistent performance, or that prolonged fund under-performance could erode
our track record. Consequently, investors in funds might decline to invest in future
investment funds we raise and might withdraw their investments in our open-ended
strategies. Poor fund performance may make it more challenging to raise new funds,
thereby impacting our ability to grow and compete effectively. This could in turn
materially affect our profitability and impact our plans for growth.
Key Controls and Mitigation
– A robust and disciplined investment process is in place where investments
are selected and regularly monitored by the Investment Committees for fund
performance, delivery of investment objectives, and asset performance
– All proposed investments are subject to a thorough due diligence and approval
process during which all key aspects of the transaction are discussed and assessed.
Regular monitoring of investment and divestment pipelines is undertaken on an
ongoing basis
– Monitoring of all portfolio investments is undertaken on a quarterly basis focusing on
the operating performance and liquidity of the portfolio
– Material ESG and climate-related risks are assessed for each potential investment
opportunity and presented to, and considered by, the Investment Committees of all
investment strategies. Further analysis is conducted for opportunities identified as
having a higher exposure to climate-related risks
Trend and Outlook
The strength of our resilient and growth-orientated business model has been evident in
our performance for the financial year. We have experienced positive momentum across
the whole of the ICG platform during the period and our portfolios have demonstrated
resilience and adaptability, in particular to the impacts of the Russia-Ukraine conflict
where our exposures are minimal.
Our funds have performed strongly across several dimensions: deployment, realisations
and returns. At 31 March 2022, realised portfolio returns (see page 98) reached 15.4%
with virtually all funds with hurdles performing above their hurdle rate. Our more
equity-focused strategies have seen significant increases in valuation, whilst our debt
strategies continue to observe very low impairment rates. The successful and
broad-based performance during the last two years against the background of the
Covid-19 pandemic provides a strong track-record that will be beneficial in marketing our
future funds to clients for many years to come.
Looking ahead, the outlook remains positive. We continue to hire selectively to help drive
future growth, most recently in Real Estate where we have hired a Global Head of Real
Estate. We have a powerful local sourcing network and a diversified product offering of
successful investment strategies that enable us to navigate dynamic market conditions,
which helps to mitigate this risk.
Read more detail about the performance of the Group’s funds on page
12
Strategic alignment
1
Grow AUM
2
Invest selectively
3
Manage portfolios to maximise value
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ICG | Annual Report & Accounts 2022
Financial Risk
Strategic alignment
1
2
3
Risk appetite
Low to moderate
Executive Director Responsible
Vijay Bharadia
Key Personnel Risk
Risk trend
Strategic alignment
Risk trend
1
2
3
Risk appetite
Low to moderate
Executive Director Responsible
Antje Hensel-Roth
Risk Description
The Group is exposed to liquidity and market risks. Liquidity risks refer to the risk that the
Group may not have sufficient financial resources to meet its financial obligations when
they fall due. Market risk refers to the possibility that the Group may suffer a loss resulting
from the fluctuations in the values of, or income from, assets and liabilities held on the
Group’s balance sheet. The Group does not deliberately seek exposure to market risks to
generate profit; however, on an ancillary basis we will invest alongside clients into our
funds, warehouse assets in preparation for new fund launches or hold investments in
Collateralised Loan Obligations (CLOs) in accordance with regulatory requirements.
Consequently, adverse market conditions could impact the carrying value of the Group’s
investments resulting in losses on the Group’s balance sheet. In addition, the Group is
exposed to having insufficient liquidity to meet its financial obligations, including its
commitments to its fund co-investments.
Key Controls and Mitigation
– Debt funding for the Group is obtained from diversified sources and the repayment
profile is managed to minimise material repayment events. The profile of the debt
facilities available to the Group is reviewed frequently by the Treasury Committee
– Hedging of non-sterling income and expenditure, and matching assets vs liabilities
and revenue vs cost is undertaken to minimise short-term volatility in the financial
results of the Group
– Market and liquidity exposures are reported monthly and reviewed by the Group’s
Treasury Committee
Risk Description
The Group depends upon the experience, skill and reputation held by our senior
executives and investment professionals. The continued service of these individuals, who
are not obligated to remain employed with us, is uniquely valuable and a significant factor
in our success. Additionally, a breach of the governing agreements of our funds in
relation to ‘Key Person’ provisions could result in the Group having to stop making
investments for the relevant fund or impair the ability of the Group to raise new funds if
not resolved in a timely manner. The loss of key personnel, or the inability to attract and
develop talent, could have a material adverse effect on our revenues, profitability and
cashflows and could harm our ability to maintain or grow assets under management in
existing funds or raise additional funds in the future.
Key Controls and Mitigation
– An active and broad-based approach to attracting, retaining, and developing talent,
supported by a range of complementary approaches including a well-defined
recruitment process, succession planning, a competitive and long-term approach
to compensation and incentives, and a focus on development through the appraisal
process and mentoring programmes which is supported by a dedicated Learning and
Development team
– Continued focus on the Group’s culture by developing and delivering initiatives that
reinforce appropriate behaviours to generate the best possible long-term outcomes
for our employees, clients, and shareholders
– Promotion of a diverse and inclusive workforce with active support across a wide
– Long-term forecasts and stress tests are prepared to assess the Group’s future
range of health and wellbeing activities
liquidity as well as compliance with the regulatory capital requirements
– Regular reviews of resourcing and key person exposures are undertaken as part of
– Investment Company (IC) commitments are reviewed and approved by the CEO and
the CFOO on a case-by-case basis assessing the risks and return on capital
Trend and Outlook
Global markets remain susceptible to volatility from several macroeconomic and
geopolitical factors. We have implemented measures to mitigate the impact of foreign
exchange and interest rate fluctuations in line with Group policy and we will continue to
monitor and respond to the prevailing market environment.
Our balance sheet makes commitments to our funds as well as seeding new strategies.
Accordingly, we take a conservative approach to managing our capital resources. We
manage our balance sheet prudently, with a strong focus on liquidity. The commitments
to funds are legally binding so the Group is required to ensure it has sufficient resources
to meet capital calls as they arise. During the year, the Group made several commitments
to funds, all of which were carefully reviewed by the CEO and CFOO to ensure that they
were in the long-term interest of the Group and that we have sufficient resources to meet
such commitments.
The Group remains well capitalised, with £ 1,311.5m available cash and unutilised bank
lines as of 31 March 2022. In addition, the Group has significant headroom to its debt
covenants. During the year we successfully priced an eight-year, €500m sustainability-
linked Eurobond, which will enhance our financial flexibility, lengthen the duration of the
Group’s liabilities, and provide further liquidity to fund upcoming maturities in the coming
years. All the Group’s debt is fixed rate, with the exception of the revolving credit facility,
which was undrawn as of 31 March 2022 and which is only intended to provide short-term
working capital for the Group if required.
Read more about the Group’s liquidity, gearing and headroom on page
54
business line reviews and the fund and portfolio company review processes
– The Remuneration Committee oversees the Directors’ Remuneration Policy and its
application to senior employees, and reviews and approves incentive arrangements
to ensure they are commensurate with market practice
Trend and Outlook
Despite the encouraging vaccination programmes, the pandemic still represents a risk to
our employees’ wellbeing and morale and navigating the pandemic and its aftermath
remains an ongoing challenge. The importance of employee wellbeing remains elevated,
with an increasing focus amongst existing and potential employees on work-life balance
and flexible working arrangements, which is being addressed through our enhanced
engagement and wellbeing initiatives.
Our people are critical to our success and attracting and retaining key people is a
significant operational risk. This is made more challenging in what is currently a
candidate-driven market. We have focused this year on ensuring that ICG is well
positioned to attract, retain, and develop the necessary calibre of employees, through
our enhanced learning and development programmes, targeted engagement on topics of
importance to our employees, and our efforts around diversity and inclusion. We have
also continued to hire across the business to support our growth ambitions, enhancing
our onboarding programme to welcome new colleagues, with a stronger emphasis on
collaboration to ensure that the culture and identity of the Group are maintained.
Looking ahead, we intend to utilise quarterly pulse surveys to remain even closer to our
employees and to enable us to focus more dynamically on specific areas for potential
development.
Read more about our people on page 30
ICG | Annual Report & Accounts 2022
61
Risk management continued
Legal, Regulatory and Tax Risk
Operational Resilience Risk
Strategic alignment
1
2
3
Risk appetite
Low
Executive Director Responsible
Vijay Bharadia
Risk trend
Strategic alignment
Risk trend
1
2
3
Risk appetite
Low to moderate
Executive Director Responsible
Vijay Bharadia
Risk Description
The Group is exposed to a wide range of threats which can impact our operational
resilience. Natural disasters, cyber threats, terrorism, environmental issues, and
pandemics have the potential to cause significant disruption to our operations and
change our working environment. Our disaster recovery and business continuity plans
may not be sufficient to mitigate the damage that may result from such a disaster or
disruption. Additionally, the failure of the Group to deliver an appropriate information
security platform could result in unauthorised access by malicious third parties, breaching
the confidentiality, integrity and availability of our data and systems. Regardless of the
source, any critical system failure or material loss of service availability could negatively
impact the Group’s reputation and our ability to maintain continuity of operations and
provide services to our clients.
Key Controls and Mitigation
– Operational resilience, in particular cyber security, is top of the Group’s Board and
senior management agenda, and the adequacy of the Group’s response is reviewed
on an ongoing basis
– Business Continuity and Disaster Recovery plans are reviewed and approved on at
least an annual basis by designated plan owners, and preparedness exercises are
complemented by an automated Business Continuity Planning tool
– Providing laptops for all employees globally removes the physical dependency on the
office and allows employees to work securely from home
– The Group’s technology environment is continually maintained and subject to regular
testing, such as penetration testing, vulnerability scans and patch management.
Technology processes and controls are also upgraded where appropriate to ensure
ongoing technology performance and resilience
– An externally managed security operations centre supplies the Group with skilled
security experts and technology to proactively detect and prevent potential threats
and to recover from security incidents, including cyber attacks
Trend and Outlook
The Covid-19 pandemic has been pervasive, simultaneously impacting the Group and our
employees, investors and suppliers for a duration previously not considered a possibility.
Despite the challenges, our response to the pandemic has demonstrated the resilience of
our employees and the strength of the infrastructure supporting our business processes.
There has been no significant impact on business operations, notwithstanding a
significant number of employees working remotely at various times over the period.
We continue to enhance the resilience of systems that underpin our critical business
processes and strengthen our response to disruption, particularly considering the
current heightened cyber threat landscape as a result of the Russia-Ukraine conflict.
Business continuity and contingency planning processes are regularly reviewed and
tested and have enabled us to minimise disruption for people working from home. We
also manage relationships with key strategic technology suppliers to avoid any disruption
to service provision which could adversely affect the Group’s businesses.
The Group continues to invest in technology and the maturity of our cyber mitigation
controls. Cyber threat is expected to persist in 2022 with increasing levels of
sophistication anticipated. The Group’s technology and resiliency requirements will
continue to be kept under review to ensure that the management of our cyber risk
remains appropriate to mitigate the continued and changing nature of the threat and to
support the growth of the business.
Risk Description
Regulation defines the overall framework for the investment management and distribution
of the Group’s funds and our supporting business operations. The failure of the Group to
comply with the rules of professional conduct and relevant laws and regulations could
expose the Group to regulatory censure, penalties or legal or enforcement action.
Additionally, the increase in demand for tax-related transparency means that tax rules are
continuing to be designed and implemented globally in a more comprehensive manner.
This raises a complex mix of tax implications for the Group, in particular for our transfer
pricing, permanent establishment and fund structuring processes. The tax authorities
could challenge our interpretation of these tax rules, resulting in additional tax liabilities.
Changes in the legal and regulatory and tax framework applicable to our business may
also disrupt the markets in which we operate and affect the way we conduct our business.
This could in turn increase our cost base, lessen competitive or market opportunities,
reduce our future revenues and profitability, or require us to hold more regulatory
capital.
Key Controls and Mitigation
– Compliance and Legal functions dedicated to understanding and fulfilling regulatory
and legal expectations on behalf of the Group, including interactions with our
regulators and relevant industry bodies. The functions provide guidance to, and
oversight of, the business in relation to regulatory and legal obligations
– Compliance undertakes routine monitoring and deep-dive activities to assess
compliance with regulations and legislation
– The Tax function oversees the Group’s business activities and fund structures, and
actively seeks to evaluate, monitor, and manage tax risks and ensure compliance with
all relevant tax requirements and principles
– Regulatory, legislative and tax developments are continually monitored to ensure we
engage early in any areas of potential change
Trend and Outlook
During the year, the Group has closely monitored several significant regulatory change
and oversight programmes to ensure successful execution, notably the Investment Firm
Prudential Regime (IFPR), which came into effect on 1 January 2022. IFPR introduces a
wide-ranging set of new requirements spanning capital, liquidity, reporting and
disclosure, and remuneration. The Group has completed the necessary preparations to
meet the requirements of the new regime. Enhancements have also been made to the
Group’s subsidiary governance framework to strengthen accountability and flows of
information, appropriate for the Group’s subsidiary activities and complexity.
Our plan to transition away from LIBOR-equivalents is complete for GBP-based products
and we are now focused on the USD transition.
We continue to monitor the UK Government’s audit reform proposals and to strengthen
internal controls.
In December 2021 the Organisation for Economic Co-operation and Development
published model legislation to give effect to the Pillar Two Model rules (also referred to
as the ‘Anti Global Base Erosion’ or ‘GloBE’ rules), which are designed to ensure that
large multinational corporations pay a minimum effective tax rate on income arising in
each jurisdiction in which they operate. The Group’s trading activities within the FMC are
subject to tax at the relevant statutory rates in the jurisdictions in which income is earned.
The Group is closely monitoring developments in respect of the implementation of the
Pillar Two rules and the potential impact of the rules on the Group’s tax position. The
Pillar One proposals provide for new profit allocation and nexus rules for multinational
corporations in scope. Pillar One is not expected to apply to the Group based on the
proposed minimum €20bn worldwide revenue threshold.
The Group remains responsive to a wide range of developing regulatory areas and the
increase in regulatory scrutiny around private markets more generally, and continues to
invest in our Legal, Compliance and Tax teams to meet these new challenges, recruiting
specialist roles to optimise our coverage and enhance our monitoring and oversight
capabilities.
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ICG | Annual Report & Accounts 2022
Third-Party Provider Risk
Strategic alignment
1
2
3
Risk appetite
Moderate
Executive Director Responsible
Vijay Bharadia
Business Process Risk
Risk trend
Strategic alignment
Risk trend
1
2
3
Risk appetite
Low to moderate
Executive Director Responsible
Vijay Bharadia
Risk Description
The Group outsources several critical functions to Third-Party Service Providers (TPP)
as part of our business model, as well as managing outsourcing arrangements on behalf
of our funds. The risk that the Group’s key TPPs fail to deliver services in accordance with
their contractual obligations could compromise our operations and impair our ability to
respond in a way which meets client and stakeholder expectations and requirements.
Over-reliance on one or only a very limited number of TPPs in a specific and critical
business area could also expose the Group to heightened levels of risk, particularly if the
service is not easily substitutable. Additionally, the failure of the Group to maintain
sufficient knowledge, understanding and oversight of the controls and processes in
place to proactively manage our TPPs could damage the quality and reliability of these
TPP relationships.
Risk Description
All key operational activities at the Group follow defined business processes that are
designed to maximise efficiency, deliver operational excellence, and grow profitability.
We face the risk of errors in existing processes, or from new processes because of
ongoing change activity which inherently increases the profile of operational risks across
our business. The Group operates within a system of internal controls that provides
oversight of business processes, which enables our business to be transacted and
strategies and decision making to be implemented effectively. The risk of failure of
significant business processes and controls could compromise our operations and
disadvantage our clients, or expose the Group to unanticipated financial loss, regulatory
censure, or damage to our reputation. This could in turn materially reduce our
profitability.
Key Controls and Mitigation
– The TPP oversight framework consists of policies, procedures, and tools to govern
the oversight of key suppliers, including our approach to selection, contracting and
on-boarding, management and monitoring, and termination and exit. In particular, we
undertake initial and ongoing due diligence of our TPPs to identify and effectively
manage the business risks related to the delegation or outsourcing of our key
functions
– Ongoing monitoring of the services delivered by our TPPs is delivered through
regular oversight interactions where service levels are measured against the
expected standards documented in service agreements and agreed-upon standards
– Regular TPP management includes validation and ongoing oversight of our TPP
business continuity practices, to ensure they align with ICG Group standards
Trend and Outlook
Strong governance processes and mechanisms are key to the successful implementation
and operation of the Group’s outsourced TPP arrangements. During the year, the Group
enhanced the TPP governance and oversight framework to optimise commercial
contracts, service levels and improve monitoring capabilities. An internal TPP oversight
team has been developed to formally lead the oversight framework and activities across
our key outsourcers. Additional measures, including clarity of oversight roles and
responsibilities and a new suite of key indicators, have been put in place to better
understand our TPP relationships by tracking key metrics related to third-party controls,
performance, and activities. Additionally, contracts have been re-evaluated and
re-negotiated, as needed, to ensure the provision and coverage of TPP services align
with the growth of the Group.
The Group will continue to develop the TPP governance and oversight framework to
increase the resilience of our outsourced arrangements against a backdrop of evolving
risks and to meet any changes to regulatory requirements.
Key Controls and Mitigation
– Key business processes are regularly reviewed, and the risks and controls are
assessed through the RCSA process
– A ‘three lines of defence’ model is in place, which ensures clarity over individual
and collective responsibility for process risk management and to ensure policies,
procedures and activities have been established and are operating as intended
– Ongoing monitoring of underlying causes of operational risk events, to identify
enhancements that require action
– A well-established incident management process for dealing with system outages
that impact important business processes
– An annual review of the Group’s material controls is undertaken by senior
management and Executive Directors
Trend and Outlook
The Group continues to make good progress on improving the scalability of our
operations platform by increasing fungibility of resources, mitigating individual-specific
knowledge, making better use of outsource providers, and optimising and adapting our
business processes to new organisational needs. Transformation and project activity,
including workflow automation, is yielding more efficient and automated processes and a
reduction in operational risk. It is recognised that systematisation of process is likely to
increase automation risk, and this is feeding into future IT plans for disaster recovery and
business continuity.
To compliment the delivery of key transformation activities, the Group has undertaken a
reorganisation of our operations teams, which is now embedded. Additionally, the Group
continues to invest in recruitment, bringing additional experience and coverage to key
operations areas.
Significant aspects of the Group’s target operating model assessment are moving to a
state of completeness; however, we recognise and continue to respond effectively to the
ongoing challenges to ensure the successful embedding of change, including ongoing
system and platform enhancements.
There were no significant changes to the Group’s RMF’s overall approach to risk
governance or its operation in the period, but we continued to refine our framework for
risk management where appropriate.
ICG | Annual Report & Accounts 2022
63
Risk management continued
Climate Risks
The Group’s risk management framework is how climate risk, and
broader ESG risks, are assessed for their proximity and significance
to the Group. Climate risk is considered as a cross-cutting risk type
that manifests through ICG’s established principal risks and is
integrated into the Group-wide operational risk management
framework through existing policies, processes, and controls. We
assess materiality from two angles; first at a Group level, and
secondly within our fund management activities.
Close monitoring of Climate risk and ESG risks continues through the
Group’s Responsible Investing Framework.
Emerging Risks
Emerging risks are thematic risks with potentially material unknown
components that may crystallise beyond a one-year time horizon. If an
emerging risk were to materialise, it could have a material effect on
the Group’s long-term strategy, profitability, and reputation. Existing
mitigation plans are likely to be minimal, reflecting the uncertain
nature of these risks at this stage.
Emerging risks are identified through conversations and workshops
with stakeholders throughout the business, reviewing academic
papers, attending industry events (webinars and in person), and
other horizon scanning by Group Risk and Compliance. The purpose
of monitoring and reporting emerging risks is to give assurance that
the Group is prioritising our response to emerging risks
appropriately in our strategy, which is the primary risk management
tool for longer-term strategic risks.
Examples of emerging risks which have been considered during the
year include; current and developing macro challenges, including the
Russia-Ukraine crisis; elevated levels of inflation and the potential for
interest rate rises that could impact the Group and our fund
investments; ongoing risks related to the transformation programmes
underway to deliver our strategy for growth; implications of the UK
Government’s audit reform proposals and strengthening internal
controls; cyber security; and the increased importance of diversity
and other social issues.
Risk appetite for the principal risks
Risk appetite is defined as the level of risk which the Group is
prepared to accept in the conduct of our activities. It sets the ‘tone
from the top’ and provides a basis for ongoing dialogue between
management, Executive Directors, and the Board with respect to the
Group’s current and evolving risk profile, allowing strategic and
financial decisions to be made on an informed basis.
Each risk appetite statement is supported by several metrics and
tolerances to enable us to provide an assessment of risk profile
against risk appetite, which is formally assessed on an annual basis
and challenged by the Risk Committee and Board. The current risk
profile is within our risk appetite and manageable exposure limits.
Risk Appetite Summary
Risk Appetite Level
Low
Moderate
High
1. External Environment Risk
2. Fund Performance Risk
3. Finance Risk
4. Key Personnel Risk
5. Legal, Regulatory & Task Risk
6. Operational Resilience Risk
7. Third Party Provider Risk
8. Key Business Process Risk
64
ICG | Annual Report & Accounts 2022
Viability statement
VIABILITY STATEMENT
In accordance with the UK Corporate Governance Code, the Directors have carried out a comprehensive and robust
assessment of the prospects and viability of the Group.
The Group’s long-term prospects are primarily assessed through the
strategic and financial planning process. The main output of this
process is the Group’s strategic plan. The strategic plan is approved
by the Board following a robust review and challenge process. This
assessment also reflects the Group’s strategic priorities (see page
19).
Having reviewed the results of the stress tests, the Directors have
concluded that the Group would have sufficient resources in the
stressed scenario and that the Group’s ongoing viability would be
sustained. The stress scenario assumptions include maintaining the
Group’s dividend policy but this and other assumptions would be
reassessed if necessary over the longer term.
The review of the strategic plan is underpinned by the regular
briefings received by the Board on macroeconomics, markets, new
products and strategies, people management and processes (see
page 68). New strategy reviews consider both the market
opportunity for the Group and the associated risks, principally the
ability to raise third-party funds, and deliver strong investment
performance.
In addition, the Group undertakes a reverse stress test to identify the
circumstances under which the business model becomes unviable.
The most likely scenario to cause the business model to be unviable is
investment write-downs causing a breach of debt covenants. The
reverse stress test determines the level of investment write-downs
required to breach debt covenants and trigger a business model
failure point, in the absence of any management actions.
Period for assessing viability
The period covered by the Group’s strategic plan, regulatory capital
reporting, shareholder fundraising guidance and the deployment
duration for some of the larger strategies is three years. This,
combined with an assessment of the period over which forecasting
assumptions are most reliable and taking into account the
recommendations of the Financial Reporting Council in their 2021
thematic review publication, has led the Directors to choose a period
of three years to March 2025 for their formal assessment of viability.
The Directors are satisfied that a forward-looking assessment of the
Group for this period is sufficient to enable a reasonable statement of
viability.
Assessment of viability
The assessment of the Group’s viability requires the Directors to
consider the principal risks that could affect the Group, which are
outlined on the previous pages. The Directors review the principal
risks regularly and consider the options available to the Group to
mitigate these risks so as to ensure the ongoing viability of the Group
is sustained.
Stress testing is performed on the Group’s strategic plan, which
considers the impact of one or more of the key risks crystallising over
the assessment period. The severe but plausible stress scenario
applied to the strategic plan is a significant reduction in AUM arising
as a result of one or more of the following principal risks crystallising:
– External environment risk
– Fund performance risk
Analysis of this scenario concluded that write-downs significantly in
excess of those experienced during the global financial crisis or the
Covid-19 related market downturn experienced in early 2020, without
any mitigating actions, would be required in order for the Group to
breach its banking covenants. The Directors however consider this
level of write down as extremely remote.
Viability statement
Based on the results of the analysis, and in accordance with the
provisions of the UK Corporate Governance Code, the Directors
confirm that they have a reasonable expectation that the Group will
continue to operate and meet its liabilities, as they fall due, for the
next three years. The Directors’ assessment has been made with
reference to the Group’s current position and prospects, the Group’s
strategy, the Board’s risk appetite, the Group’s principal risks and the
management of those risks, as detailed in the Strategic Report on
pages 2 to 65.
Given the above, the Directors also considered it appropriate to
prepare the financial statements on the going concern basis as set
out on pages 120 and 143.
ICG | Annual Report & Accounts 2022
65
GROWING
“We see huge potential for ICG’s future
growth. The combination of our unique and
wide-ranging platform, our flexible
investment solutions, and our global
breadth with local knowledge, are key
attributes which make up our investment
DNA.”
66
ICG | Annual Report & Accounts 2022
Chairman’s introduction to governance
Dear Shareholders
I am writing as Chairman for the first time, having assumed this role
following the resignation (due to suddenly increased time
commitments elsewhere) of Lord Davies of Abersoch on 4 March.
Lord Davies had been a knowledgeable and greatly valued leader of
our Board since his appointment in late 2019, and we thank him for his
contribution to the Company.
The work of the Board during the year is set out in detail overleaf. A
key part of the Board’s agenda during the year was a Strategy offsite,
during which we undertook a detailed review of the current strategy
and business plan in the context of current and projected
macroeconomic, geopolitical and environmental developments.
These discussions were an important backdrop for setting long term
and strategic challenges for management.
We have enjoyed discussing our strategy with a number of
shareholders this year; as part of a programme of engagement Lord
Davies participated in meetings with 11 of our largest shareholders
without management present. It was pleasing to receive a clear
message of support and confidence from those meetings, with
shareholders remarking on their support for management and our
growth agenda. I will continue to engage with a range of stakeholders
to ensure that their views are reflected in our board considerations.
Sustainability and people matters have become ever more prominent
at Board level, and a number of the sessions at our Strategy offsite
were focused on considering such issues. Your Board believes that
the Group should act as a responsible participant in society and that
our strategy should reflect this objective.
Sustainability considerations are an important part of the Board
agenda, and during the year we have received regular detailed
reports from the executive team on ESG matters such as our Net Zero
commitment and ESG Investment Criteria. We also invited external
governance and ESG specialist to present to the Board. Stephen
Welton continues to act as the NED responsible for ESG matters,
liaising with management on a regular basis.
Our Board has a diverse membership in terms of gender, ethnicity,
experience and background, and Board members’ diversity of
thought contributes both to broad and wide-ranging discussions and
to carefully considered outcomes. The Board’s effectiveness
depends on this breadth of debate, and I am delighted to note that
our two newest Board members, Rosemary Leith and Matthew
Lester, have made significant contributions to our proceedings
during the year. All of your Board members are very actively engaged
in our discussions.
A culture of open discussion and diverse perspectives is an important
component of ICG’s success to-date, and will be a significant
contributor to the future development of the company. Culture is
challenging to measure, but it is of course underpinned and
reinforced by effective corporate governance. In her capacity as the
NED responsible for employee engagement, Amy Schioldager has
continued to meet employees at various offices remotely and in
person throughout the year, and has reported back to the Board on a
regular basis. Along with our regular discussions with the Executive
Committee on people matters, this input helps the Board oversee the
practical functioning of ICG’s culture.
The Board also considers its own future with long-term succession
planning. During the year, the Board agreed that Rusty Nelligan
should (after nearly six years of service) step down as Chair of the
Audit Committee from 1 July 2022, to be succeeded by Matthew
Lester. An experienced NED, who has chaired other Boards and
Audit Committees, and with a professional background as a CFO,
Matthew will continue the thorough work of his predecessor. Rusty
will remain on the Board and the Audit Committee, continuing to
bring his experience and knowledge of ICG’s business, and
supporting continuity, which we believe will be of benefit to both
management and the Board.
Throughout the year, the Board and its Committees carefully
considered the requirements of the revised Corporate Governance
Code. We complied with those requirements for the year ending 31
March 2022. We also recognise the importance of our wider
stakeholders in delivering our strategy and business sustainability.
We are conscious of our responsibilities and duties to our
stakeholders as part of our duty under section 172 of the Companies
Act 2006. The impacts of our decisions on different stakeholder
groups are uppermost in our minds when discussing issues at Board
meetings. You can read more detail on how various stakeholders
were considered as part of the Board’s decision-making process on
page 23.
The Board remains grateful for the support we have had from our
stakeholders throughout the year, and we look forward to continuing
our constructive dialogue.
Andrew Sykes
Interim Chairman
25 May 2022
ICG | Annual Report & Accounts 2022
67
Chairman’s introduction to governance continued
THE BOARD’S YEAR
The work of the Board during the year was conducted
through seven formal meetings and regular informal
engagement with executive management. The activity
at formal meetings was reflective of a number of themes.
Strategic review and oversight
In September 2021, the Board held a two-day offsite,
designed to focus on strategic matters away from the
normal flow of Board activity. The first day featured a
number of challenging presentations from guests on
macro-economic, geopolitical and market topics, with time
for reflection from the Board on how changing global
dynamics may impact the future direction of the Group’s
business. All aspects of our Group were considered in this
light, including potential new funds and products,
geographic expansion and the impact of technology on
our operating platform. The centrepiece of our second
day of discussions was a presentation from the Executive
Directors of a five-year plan, including a detailed review of
each business unit’s potential for growth. We also received
input from external advisers on the views of our
shareholders, investors and other stakeholders.
Subsequent meetings included a number of follow-up
discussions and debates, such as a Board discussion with
the Head of Marketing and Client Relations to assess the
opportunities for new fundraising routes.
Financial performance, outlook and capital
Progress against the Group’s Board-approved budget
and the market-consensus view of our financials was a
topic on each Board agenda, and was discussed in detail
by the CFOO in his formal updates to each meeting. The
budget for the financial year ended 31 March 2023 was
also reviewed and challenged by the Board during the
year, and ultimately approved after discussion. The Board
was also responsible for reviewing the recommendations
of the Audit Committee as to reporting financial results at
full year and half year, and as to final and interim dividends,
and approving these after appropriate challenge. The
balance sheet capital position was also kept under review
during the year in a series of presentations by the CFOO
and the Group’s Treasurer, culminating in the issuance of a
€500m sustainability linked bond in January 2022.
68
ICG | Annual Report & Accounts 2022
Products, investments and markets
At each meeting, the Board received a detailed update
from executive management in respect of the overall
markets and the macroeconomic situation, progress in
respect of fundraising, business development, deployment
and realisations. The ongoing effect of the Covid-19
pandemic on the Group’s portfolio and investment
pipeline was a particular area of focus and was discussed
in detail at each meeting. The Board received detailed
presentations from portfolio managers during the year in
respect of the performance of and outlook for key
investment strategies; this was part of the ongoing
oversight programme of investment areas and was not
solely related to the pandemic. The presentations included
detailed reviews of established business areas such as
Real Estate and Private Equity Solutions, as well as new
areas such as Life Sciences and the opportunities within
the Global Wealth Management space.
Operations, risk management and systems
The Board continued to demonstrate a strong oversight of
the Group’s operating platform during the year, receiving
regular updates on how the corporate functions of the
Group are adapting to support the continued growth of
the business. The Board regularly discussed the
importance of scalability as the Group continues to grow
over the long term, and received detailed reports on the
investments made in the Group’s operational capacity,
technology and resources, and the enhancements effected
across a number of areas. The Board also reviewed and
approved key compliance policies, and continued to
provide oversight of management’s plan prepared to take
account of Covid-19 restrictions.
Change of Chairman
Lord Davies of Abersoch resigned as Chairman of the
Board at a meeting on 4 March 2022, in response to
significantly increased demands on his time from other
commitments. The Board acted quickly to consider its
leadership, convening a Nominations and Governance
Committee meeting immediately. Both that Committee and
the Board as a whole concluded that the most appropriate
Chair would be Andrew Sykes, the Senior Independent
Director. He was therefore invited to become Chair and to
consider the longer term picture. In subsequent
discussions led by Andrew Sykes, the Committee and the
Board concluded that it should search for a long term
Chair appointment, and given the current balance of skills
and expertise on the Board, there is not an immediate
imperative to make an appointment.
Management and leadership
The Board values a culture of transparency and challenge,
and as such placed considerable emphasis on considering
the findings of the internal board evaluation. The outcome
of that evaluation was discussed in full at the start of the
year with actions being set, with a follow-up discussion
being held six months later to discuss progress against
those actions and a further assessment being reported on
by the Chairman at the end of the financial year. The Board
also recognises the importance of long-term succession
planning, and conducted focused discussions in the year in
respect of such for NEDs as well as a number of members
of senior management.
Culture and values
The Board continued to provide important oversight and
leadership in respect of the Group’s culture and values.
Amy Schioldager, in her role as the designated NED for
employee engagement, also provided reports on her
engagement activities with employees and her reflections
on the culture of the Group, and management provided
details of the views outlined by employees in a formal
employee survey. The ongoing work of the Diversity and
Inclusiveness Champions group was reported on, and the
Board provided their insight from experience in other
sectors or companies. The Board was also regularly
updated on the Group’s philanthropy programme and the
deployment of the charitable budget, with Andrew Sykes
continuing his input as the NED who has led the Charity
Working Group since its establishment in 2019; these
discussions culminated in a decision to increase our
charitable giving to over £2 million for the year and focus
on the area of education and social mobility.
Recurring matters
The Board also reviewed and/or approved a number of
other standing matters, including reviewing the Terms of
Reference of the Board and its Committees, compliance
with Terms of Reference on an ongoing basis, the
recommendation for re-election of all Directors, the
renewal of the Group’s insurance policies, the Notice of
Annual General Meeting, outside interests of Directors,
reviewing fees of all NEDs (excluding the Chairman) and
checking the shareholdings of senior executive employees
are in line with the internal shareholding policy.
Stakeholders and shareholders
A continual theme in the Board’s discussions during the
year was the increasing importance of the Group
considering its obligations to stakeholders, the
environment and society as a whole. Two formal
presentations on ESG matters were received during the
year, discussing ICG’s Net Zero commitment and the
integration of ESG factors into investment processes;
outside of these presentations, Stephen Welton continued
his work as the NED with responsibility for ESG matters,
and he and the management team provided ongoing
updates to the Board.
The Board also sought external views during the year. The
Board was provided with a presentation by a corporate
finance and advisory business, concerning the Company’s
general performance, engagement with shareholders and
corporate messaging, and from the Company’s brokers
(Numis and Citi) on market perceptions of the Group. The
Board also received a formal presentation from our largest
shareholder, Wellington Asset Management, on areas of
shareholder focus. The Board regularly reviewed input
from shareholders, with the Head of Investor Relations
providing updates to each regular meeting and the
Company Secretary providing a summary of governance-
related input received from shareholders at the time of the
Group’s AGM.
Employee-related matters
Our ongoing desire to recruit, retain and develop the best
talent meant that employee matters continued to be a top
priority for the Board during the year. Each Board meeting
received a full update from the Chief People and External
Affairs Officer about all relevant matters in respect of our
workforce. While this included regular updates on matters
such as training and development, workforce diversity and
succession planning, a key area throughout the year
related to workforce wellbeing, with the Board being
continually updated on this area and offering insight on
how the Group could continue to best support its
employees.
ICG | Annual Report & Accounts 2022
69
Board of Directors
BROAD AND DIVERSE EXPERIENCE
ANDREW SYKES
Interim Chairman
Joined Board: 2018
(Interim Chairman
since March 2022)
I
N
R
RI
BENOÎT
DURTESTE
Chief Executive Officer
and Chief Investment
Officer
Joined Board: 2012
(Chief Executive
Officer since 2017)
Andrew Sykes has a wealth of
financial services and non
executive experience. He was
previously Chairman of Smith &
Williamson Holdings Ltd, and
Chairman of SVG Capital plc.
Andrew spent 26 years of his
executive career at Schroders
PLC. He is an experienced
director of UK listed companies
with a deep knowledge of the
financial services sector and of
corporate governance
requirements, which, together
with his background as a senior
executive in the asset
management sector, has proven
to be invaluable in helping
oversee the Group’s continued
growth.
Other Directorships
BBGI Global Infrastructure SA;
Governor of Winchester College
and member of Nuffield College
Investment Committee.
Benoît Durteste has been ICG’s
Chief Executive Officer and Chief
Investment Officer since 2017.
He is an experienced investor
with a strong understanding of
the markets in which the Group
operates. During his time on the
Board he has been a strong
contributor to the Group’s
strategic development, including
leading its European investment
business. He contributes a
thorough understanding of
financial markets and the
Group’s investment portfolio to
Board proceedings. Benoît
joined ICG in September 2002
with previous experience at
Swiss Re, GE Capital Private
Equity and BNPParibas Levfin.
Other Directorships
ICG entities and Chairman of the
BVCA Alternative Lending
Committee.
VIJAY
BHARADIA
Chief Finance and
Operating Officer
Joined Board: 2019
ANTJE
HENSEL-ROTH
Chief People and
External Affairs Officer
Joined Board: 2020
Vijay Bharadia has extensive
experience as a Chief Financial
Officer in the alternative asset
management sector. Prior to
joining ICG he spent 10 years as
International Chief Financial
Officer for Blackstone with
responsibility for financial, tax
and regulatory reporting across
Europe and Asia, as well as
holding a wider operational and
governance brief. Prior to that,
he worked at Bank of America
Merrill Lynch in a variety of roles,
latterly as Co-Chief Financial
Officer for EMEA Equities. Vijay
was appointed as ICG’s Chief
Finance and Operating Officer
and joined the Board in 2019.
Other Directorships
ICG entities and Barts Charity.
Antje Hensel-Roth has a wealth
of experience in human capital
management; prior to joining
ICG she was Global Co-Head of
the Investment Management
Practice at Russell Reynolds
Associates, during which time
she acted as an adviser to the
global alternative investment
community. Since joining ICG in
2018, she has been a strong
contributor to the strategic
direction of the Group and has
led a comprehensive drive for
excellence in leadership, talent
management and diversity &
inclusion.
Antje is responsible for leading
strategic human capital with a
particular focus on business
diversification strategies; she
also leads communications and
external affairs.
Other Directorships
None.
Board Committees
A
I
Audit
Independent
N Nominations and Governance
70
ICG | Annual Report & Accounts 2022
R
Ri
Remuneration
Risk
Committee Chair
ROSEMARY
LEITH
Non Executive
Director
Joined Board: 2021
I
R
RI
MATTHEW
LESTER
Non Executive
Director
Joined Board: 1 April
2021
A
I
N
RI
Rosemary Leith brings to the
Board her deep expertise from
25 years in finance, principal
investment, start-up creation and
growth in Europe and North
America. Rosemary is SID,
Remuneration Committee Chair
and a member of the Audit
Committee of YouGov Plc, and
was previously a Non-Executive
Director of HSBC (UK) with
responsibility for Digital. She is a
Trustee of the National Gallery
(London) and a Fellow at
Harvard University’s Berkman
Center for Internet & Society.
She has extensive experience in
the technology and digital fields,
including as a co-founding
Director of the World Wide Web
Foundation, and advises and
invests in several technology
businesses.
Other Directorships
YouGov plc and World Wide Web
Foundation.
Matthew Lester serves as
Chairman of Kier Group plc and
Chair of the Audit and Risk
Committee of Capita plc, as well
as a Senior Advisor to Federated
Hermes EOS. Matthew is a senior
finance leader with extensive
public company experience,
having previously served as
Group Chief Financial Officer of
both Royal Mail plc and ICAP plc.
He also previously served as a
Non-Executive Director of both
Man Group plc and Barclays
Bank plc. He will succeed Rusty
Nelligan as Chair of the Audit
Committee on 1 July 2022.
Other Directorships
Kier Group plc and Capita plc
KATHRYN
PURVES
Non Executive
Director
Joined Board: 2014
A
I
N
RI
MICHAEL
‘RUSTY’
NELLIGAN
Non Executive
Director
Joined Board: 2016
A
I
RI
Kathryn Purves was previously
the Chief Executive of IFG Group
plc, a wealth management and
financial advisory group, leaving
this role in 2020 following the
sale and de-listing of IFG. Prior
to this, her most recent executive
role was as the Chief Risk Officer
of Partnership Assurance Group
plc. Kathryn brings relevant
expertise to the Board from her
role as a non executive of a
number of financial services
companies, including as Chair of
Saunderson House and
Redington. Kathryn’s executive
experience, particularly in risk
management, has proved a
valuable resource to the Board
and she enhances oversight in a
key area for the Group. She also
brings valuable investment
experience to the Board. Before
joining Partnership in 2008, she
worked within the private equity
industry for 10 years, most
recently at Phoenix Equity
Partners.
Other Directorships
James Hay Partnership, Aztec
Group and Redington.
Rusty Nelligan was a partner with
PwC, retiring in 2016. As lead
client partner for global
companies in financial services
and pharmaceutical life sciences,
he was responsible for direction,
development and delivery of
services for independent audits,
assurance and advisory projects
relating to corporate
governance, internal controls,
risk management, regulatory
compliance, acquisitions and
financial reporting. Rusty was
employed by PwC in the US from
1974, in Europe from 1994, and
is a US Certified Public
Accountant. His extensive and
current experience of working
closely with major international
financial and corporate
institutions on matters of
corporate governance, financial
reporting and internal controls
has proven a valuable addition to
the Board and Company’s
development in a growth
environment. After serving as
Chair of the Audit Committee for
six years, he will step down from
this role on 1 July 2022 but
continue to serve on the Board
and the Committee.
Other Directorships
None.
ICG | Annual Report & Accounts 2022
71
Board of Directors continued
VIRGINIA
HOLMES
Non Executive
Director
Joined Board: 2017
I
N
R
RI
AMY
SCHIOLDAGER
Non Executive
Director
Joined Board: 2018
A
I
RI
Virginia Holmes brings to the
Board an extensive knowledge of
the financial services industry,
including both investment
management and banking. Her
executive experience includes
serving as Chief Executive of
AXA Investment Managers in the
UK and more than a decade with
the Barclays Bank Group. She is
an experienced director of a
number of UK PLCs (including
serving on remuneration
committees), who enhances the
corporate governance
understanding of the Board and
aids it in considering its
relationships with stakeholders.
Other Directorships
Syncona Ltd and European
Opportunities Trust PLC.
Amy Schioldager was a senior
executive at BlackRock where
she was a member of the global
executive committee and Head
of Beta Strategies. She brings
extensive knowledge of
international investment markets
and a track record of global
expansion. She is based in the
US, a region that is a key growth
area for the Group. She was the
Founder of BlackRock’s
Women’s Initiative and Vice Chair
of BlackRock’s Corporate
Governance Committee and
brings valuable expertise to the
Board in these areas. Amy acts as
the Non Executive Director
responsible for Employee
Engagement, bringing forth
employee views to the Board.
Other Directorships
Boardspan, Inc. and Corebridge
Financial, Inc.
STEPHEN
WELTON
Non Executive
Director
Joined Board: 2017
I
N
R
Stephen Welton has over 25
years’ experience in the
development capital and private
equity industry as well as angel
investing. He has been the
Founder and Chief Executive of
the Business Growth Fund
(BGF), the UK’s largest growth
capital investor, since its launch
in 2011 until July 2020, having
previously spent over 10 years at
CCMP Capital. He started his
career in banking and has also
worked as the Chairman and
Chief Executive Officer of
various growth companies. His
current Executive Chairman role
of BGF and deep investment
experience mean that he is well
placed to contribute to the
Board on matters relating to
strategy and business
development.
Other Directorships
Executive Chairman Business
Growth Fund plc (BGF) and
director of a number of
subsidiaries.
Board Committees
A
I
Audit
Independent
N Nominations and Governance
72
ICG | Annual Report & Accounts 2022
R
Ri
Remuneration
Risk
Committee Chair
Corporate governance
CORPORATE GOVERNANCE FRAMEWORK
Board of Directors
Executive Directors
– Comprises the Interim Chairman, Executive
and Non Executive Directors (NEDs)
– Has the authority to conduct the business
of the Company in accordance with the
Company’s constitutional documents
– Runs the Group for the long-term benefit of
shareholders and other stakeholders
– Day-to-day authority (delegated from the
Board) for the management of the Group and
its business
– General responsibility for:
– The Group’s resources
– Executing the approved strategy
– Financial and operational control
– Managing the business worldwide
Read more on pages 70 to 72
Read more on page 118
Audit Committee
– Composed of NEDs
– Oversees external
and internal audit
and the Group’s
financial reporting and
disclosure
Risk Committee
– Composed of NEDs
– Oversees the Group’s
risk management
framework and system
of internal controls
Remuneration Committee
– Composed of NEDs
– Determines the Group’s
Remuneration Policy
– Reviews the
remuneration of senior
management
Nominations and
Governance Committee
– Composed of NEDs
– Evaluates the
Board’s composition,
performance and
succession planning
– Oversees the Group’s
culture and diversity
and inclusion initiatives
– Considers candidates
for Board positions
Committee liaises with:
– CFOO
– Head of Finance
– Head of Investor
Relations
– Internal Audit
Committee liaises with:
– Head of Risk
– Global Head
of Compliance
– Global Head of Legal
and Company Secretary
– Head of Internal Audit
Committee liaises with:
– CPEAO
– Human Resources
– Global Head of Legal
Committee liaises with:
– CPEAO
– Human Resources
– Global Head of Legal
and Company Secretary
and Company Secretary
Read more in the report
of the Audit Committee
on page 77
Read more in the report
of the Risk Committee
on page 85
Read more in the report
of the Remuneration
Committee on page 93
Read more in the report
of the Nominations and
Governance Committee
on page 90
ICG | Annual Report & Accounts 2022
73
Corporate governance continued
Board roles
Chairman
– Andrew Sykes, who is responsible for:
– Organising the business of the Board
– Ensuring its effectiveness and setting its agenda
– Effective communication with the Group’s shareholders
and other stakeholders
Read more in the Chairman’s letter to shareholders on page 67
Non-Executive Directors
– Virginia Holmes, Rosemary Leith, Matthew Lester, Rusty Nelligan,
Kathryn Purves, Amy Schioldager and Stephen Welton act as NEDs
of the Company
– All NEDs are independent
– Responsible for providing independent oversight of, and
challenge to, the Executive Directors
Read more on the Directors’ profiles on pages 70 to 72
Chief Executive Officer (CEO)
– Benoît Durteste, who oversees the Group and is accountable
to the Board for the Group’s overall performance
Chief Finance and Operating Officer (CFOO)
– Vijay Bharadia, who leads and manages the Group’s financial
affairs and the operating platform of the Group
Chief People and External Affairs Officer (CPEAO)
– Antje Hensel-Roth, who has responsibility for strategic human
capital management, communications and external affairs
Senior Independent Director
– Kathryn Purves, who acts as a sounding board for the Chairman
and, where necessary, acts as an intermediary for shareholders
or other Directors if they feel issues raised have not been
appropriately dealt with by the Chairman
Key Board support roles
Company Secretary
– Responsible for advising on legal, governance and listing matters
at Board level and across the Group
– Provides advice and support to the Board and its Committees
– Manages the Group’s relationships with shareholder bodies
– Each Committee’s Secretary provides advice and support within
the specialist remit of that Committee; they are responsible
for ensuring that the Committee members receive relevant
information and that appropriate matters are discussed
Committee Secretaries
– Nominations and Governance Committee: Company Secretary
– Remuneration Committee: Company Secretary
– Audit Committee: Head of Finance
– Risk Committee: Head of Risk
Financial year ended 31 March 2022 Board and Committee meeting attendance
Director
Lord Davies of Abersoch1
Andrew Sykes
Benoît Durteste
Vijay Bharadia
Antje Hensel-Roth
Virginia Holmes
Rosemary Leith
Matthew Lester
Rusty Nelligan
Kathryn Purves
Amy Schioldager
Stephen Welton
Secretary
Board
Audit2
6/6
7/7
7/7
7/7
7/7
7/7
7/7
7/7
7/7
7/7
7/7
7/7
7/7
–
4/4
–
–
–
–
–
4/4
5/5
5/5
5/5
–
5/5
Risk2
–
3/3
–
–
–
3/3
3/3
2/2
3/3
3/3
3/3
–
3/3
Remuneration2
Nominations2
3/3
4/4
–
–
–
4/4
4/4
–
–
–
–
3/4
4/4
2/2
4/4
–
–
–
2/2
–
2/2
–
4/4
4/4
4/4
4/4
1. Lord Davies of Abersoch served on the Board throughout the year until his departure on 4 March 2022.
2. Some non-members attended part or all of some or all Committee meetings at the invitation of the Committee Chair.
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ICG | Annual Report & Accounts 2022
Director induction and development
BOARD DEVELOPMENT
Key meetings and knowledge-sharing
Matthew Lester was appointed to the Board on 1 April 2021 and received a
tailored induction programme. Also during the year we completed the
induction for Rosemary Leith, who joined the Board on 1 February 2021 and
had begun her induction in the prior financial year.
The NED induction was conducted both virtually and with in-person meetings
arranged as follow-ups, and included:
– A Group strategy briefing from the CEO
– An operational matters briefing from the CFOO
– A talent review with the CPEAO
– A Board-practices session with the Company Secretary
– Investment strategy briefings from business unit heads
– Detailed sessions with the heads of key corporate teams such as Finance,
Operations, Legal and Compliance, Risk and Investor Relations
“ My induction provided the
information I needed to become
effective immediately.”
Matthew Lester
Non Executive Director
Ongoing training and development
Business and market environment
During the year, the main focus of development for the Board has
been to continue improving their detailed knowledge of the Group’s
business and the market environment. Business unit heads present
developments in their areas, including risks and opportunities for
growth, to the Board on a regular basis. Business areas reviewed
during the year included Private Equity Solutions, the Real Estate
division, a new Life Sciences strategy, and other established
investment strategies. These sessions give the NEDs a deeper
understanding of the Group’s business, strategies and markets, and
an understanding of team structures to assist with succession
planning. They also provide greater opportunity for the NEDs to
challenge Executive Directors and senior management.
Knowledge-sharing
The heads of the Group’s control and oversight functions made
regular presentations. The Board and its Committees also received
technical updates from external advisers, including financial advisers
and brokers, on matters such as ESG considerations, external market
conditions and the stakeholder narrative in respect of the Company.
Training
A regular training programme has been established. Training ensures
the NEDs receive detailed and more operationally-focused
presentations about specialist topics relating to the Group’s business
(such as incoming regulation or technical market developments). In
addition, the Group monitors other external training undertaken by
the NEDs, often from leading global advisory companies. The
Executive Directors attend Board training and have also undertaken
courses on anti-money laundering, anti-bribery and corruption and
information security. Each also receives formal and ad hoc updates on
statutory and regulatory developments from internal and external
parties. The Executive Directors regularly lead business-focused
update sessions for all employees on the Group’s strategy and
markets.
Board gender diversity
2022
5
(45%)
6
(55%)
7
(58%)
2021
5
(42%)
Female
Male
ICG | Annual Report & Accounts 2022
75
BOARD EVALUATION
Process
The Board reviews its own performance annually. The assessment
covers the effectiveness and performance of the Board as a whole,
the Board Committees and an evaluation of each Director. It is
typically led by the Chairman, with support from the Company
Secretary, and includes an independent evaluation of the Chairman by
the SID.
Following the exercise conducted in 2020 by Consilium and the
internal evaluation conducted in 2021, in February 2022 the then
Chairman (Lord Davies of Abersoch) commenced a Board Evaluation
internally, with Q&A forms being sent to each Director and returned
to the Chairman for his review. The Board review exercise was
concluded by Andrew Sykes due to the unexpected resignation of
Lord Davies on 4 March 2022. The Board has considered the results
of the internal evaluation in the light of the departure of Lord Davies,
noting that while some points were particularly pertinent to the Board
dynamic under his Chairmanship, most remain relevant for the future.
2022 review
The exercise concluded that the Board and each Committee continue
to operate effectively. The assessment found that the culture of the
Board is transparent and cohesive, and that all board members
continue to operate effectively and contribute well to the debate at
the Board table. The review noted the Board’s commitment to
providing support, advice and challenge to Executive Directors; it
also concluded that the Board had continued to act effectively and
quickly despite the challenges presented by the Covid-19 pandemic,
including continued virtual meetings.
The review noted that the findings of reviews from prior years had
been wholly or partially addressed, including by a greater focus from
the Board on the Group’s strategic direction during the year (in
particular at the strategy day held during the year) and by the Board
receiving a greater insight into ESG matters and their effects on the
Group’s business.
It was concluded that the main findings of the initial exercise were still
pertinent and valuable to the Board’s assessment of itself, but that
the exercise to be conducted in the financial year to end on 31 March
2023 (which will be externally led) would be important in considering
the evolution of the Board under a new Chair. A key priority will be for
the Board to ensure that strong relationships are built with a new
Chair, including from the CEO.
Some other minor areas of refinement or enhancement were noted
following the survey. These will be areas of focus during the
forthcoming financial year, alongside any matters identified by a new
Chair. The Board will also need to follow through on the impetus
provided by the strategy day in September 2021. It was also
suggested that Committee attendance be reviewed to ensure
consistency.
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Audit Committee Report
AUDIT COMMITTEE REPORT
The purpose of the Audit Committee is to assist
the Board in fulfilling its oversight
responsibilities relative to the integrity of
financial reporting and effectiveness of internal
controls. We oversee the Group’s financial
reporting and related elements of its
accounting, disclosures, internal controls and
regulatory compliance, in addition to the
internal and external auditing processes.
AREAS OF FOCUS
Governance
– Committee governance
– Best practice developments
– People and business changes
Financial reporting
– Content and integrity of annual and other periodic
financial reporting
– Application of Alternative Performance Measures
and reconciliations to IFRS reported financials
– Annual Report presentation: fair, balanced
and understandable
– Accounting policies
– Key accounting judgements and estimates
– Going concern and viability
External audit
– Appointment and remuneration of external auditors
– Independence and objectivity
– Audit scope, quality and effectiveness
– Audit firm and leadership rotation and tender process
Internal controls and internal audit
– Financial operations: leadership, effectiveness
– Framework of internal controls over financial reporting
– Material controls underlying overall risk management,
in conjunction with the Risk Committee
– Scope, planning, activities and resources of Internal
Audit
Committee members
– Matthew Lester
– Kathryn Purves
– Rusty Nelligan (Chair)
– Amy Schioldager
Dear shareholder
I am pleased to present the Committee’s report for the year ended 31
March 2022. Separate sections on Committee governance, Review of
the year, External audit, Internal controls and Internal audit follow.
It has been another year of significant activity for both the Group and
the Committee. In addition to our recurring duties, we have focused
on the initiatives in Finance to support the growth of the Group as
well as continued enhancement to internal control systems over
financial reporting. A key priority for the Committee is that this Annual
Report and Accounts published by the Group is an accurate
representation of its position, performance and development, and
that it provides a reliable basis for decision making. In approving this
report the Committee has taken into account the increased
macroeconomic risk arising in part from the conflict in Ukraine as well
as the aftereffects of the Covid-19 pandemic.
During the year the Committee oversaw the Group’s response to the
consultation on the White Paper on “Restoring trust in audit and
corporate governance” issued by the Department for Business,
Energy, and Industrial Strategy (BEIS). The Committee has received
regular updates on the work undertaken by the Group to ensure it is
appropriately positioned for any new requirements. This has included
consideration of an Audit and Assurance Policy, a combined
assurance mapping process, and initial outline of activities to further
strengthen internal control evaluation.
The Group is required to report in accordance with the Task Force on
Climate-related Financial Disclosures (TCFD) in the current year and
has presented a TCFD report on a voluntary basis since the financial
year ended 31 March 2020. The Committee has carefully considered
the disclosure in this area, including the impact of climate change on
the financial statements, in particular given the commitment to net
zero supported by emissions reductions targets approved and
validated by the Science Based Targets initiative which were
announced during the year.
The Committee has critically evaluated the significant judgements
made by management in preparation of the Group’s financial
statements. This included a review of valuations and performance
fees, in particular to ensure reasonable consideration of developing
external factors such as uncertainty as a result of ongoing supply
chain constraints and labour shortages, energy supplies, inflation
trends, and central bank and related government responses.
ICG | Annual Report & Accounts 2022
77
Audit Committee Report continued
Key areas of focus and priorities for the next year
Focus
Current year
Internal control framework and
enhancement of assurance processes
Outcomes
– The Committee has received regular updates on the progress of initiatives in Finance to
enhance key components of financial reporting processes, including improvements to cash flow
reporting, control assessments of structured entities, including carried interest partnerships,
and the ongoing system and platform enhancements to facilitate improved control over the
preparation of financial reports.
Financial reporting developments
– Reviewed and implemented changes in response to publications by the FRC and monitored the
consultation in respect of the future of corporate reporting.
UK Audit Reform
– Responded to BEIS consultation and ongoing discussion with external auditors on the potential
impact on the Group’s governance and assurance activities.
Development of Audit and Assurance
Policy
– The Committee has overseen management’s development of an initial Audit and Assurance
Policy which will be considered in the context of the BEIS guidance.
Next year
Finalisation of Audit and Assurance Policy and ongoing monitoring of developments as a result of the BEIS consultation.
Continued enhancement of the internal control framework and assurance processes, including further system enhancements
We also challenged management to confirm appropriate
consideration of climate-change risk is incorporated in the portfolio
valuations. The Committee has continuously evaluated critical
activities, viability and going concern assessments, other financial
reporting considerations, internal controls effectiveness, and
assurance. Assumptions, judgements, estimates, risks, and
uncertainties taken into account in the reporting process were
subject to appropriate scrutiny and debate.
High quality assurance, including that provided by internal audit, is a
key objective of the Committee. During the year the Committee has
monitored ongoing development of the internal audit function under
new leadership and considered potential future requirements for
assurance in accordance with internal policy and expected changes
arising from the BEIS consultation.
In February 2021, the Company received a letter from the Corporate
Reporting Review Team of the Financial Reporting Council (FRC) as
part of its regular review and assessment of the quality of corporate
reporting in the UK, requesting further information in relation to the
Company’s 2020 Annual Report and Accounts. The letter focused on
the significant judgement in respect of non-consolidation of carried
interest partnerships and its Statements of Cash Flow.
The FRC have confirmed that their enquiries in respect of both
matters have closed1.
The Audit Committee has continued to coordinate with the Risk
Committee and the Remuneration Committee with the aim of
effectively covering pertinent topics in the most suitable forum.
Andrew Sykes resigned from the Committee on his appointment as
Interim Chairman. I would like to thank him for his contribution to our
work.
The Committee plays a vital role in assisting the Board in its oversight
responsibilities for the integrity of financial reporting, effectiveness
of internal controls, and assessment of quality of the assurance
functions. I would therefore be pleased to discuss the Committee’s
work with any shareholder.
Lastly I wish to thank my fellow members of the Audit Committee, as
well as the entire Board of Directors and management, for their
steadfast support during the past six years of my tenure as Chair of
the Audit Committee, and I look forward to supporting my successor,
Matthew Lester.
The Company responded to the enquiries and agreed to make certain
prospective enhancements to its disclosures and corrections in its
Statements of Cash Flow, none of which were considered material.
Rusty Nelligan
Chair of the Audit Committee
25 May 2022
1. When reviewing the Company’s 2020 Annual Report and Accounts, the FRC has asked us to make clear the limitations of its review are as follows: its review is based on the 2020
Annual Report and Accounts only and does not benefit from a detailed knowledge of the Group’s business or an understanding of the underlying transactions entered into;
communications from the FRC provide no assurance that the Company’s 2020 Annual Report and Accounts are correct in all material respects and are made on the basis that the FRC
(and its officers, employees and agents) accepts no liability for reliance on them by the Company or any third party, including but not limited to investors and shareholders; and the
FRC’s role is not to verify information provided but to consider compliance with reporting requirements.
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ICG | Annual Report & Accounts 2022
Committee has the relevant sector competence to enable it to fulfil its
terms of reference in a robust and independent manner. Rusty
Nelligan, a US Certified Public Accountant, was previously a partner
at PwC working for over 20 years as lead client partner for European-
headquartered global companies in financial services and
pharmaceutical life sciences. The Board considers that he has
competence in accounting and auditing as well as recent and relevant
financial experience.
The Executive Directors and Chairman of the Board are not members
of the Committee but regularly attend meetings at the invitation of the
Chair of the Committee, together with EY, the Group’s external
auditor, the Head of Internal Audit, the Head of Finance and the Head
of Risk.
The Committee meets separately with the external auditors and Head
of Internal Audit without management present at least twice a year to
ensure that they are receiving full cooperation from management,
obtaining all the information they require, and are able to raise
matters directly with the Audit Committee if they consider it is
desirable to do so.
In addition, the Chair of the Committee meets with the external
auditors, Head of Internal Audit, Executive Directors, and other
members of financial and operational management separately, and as
appropriate, throughout the year.
Terms of reference
The Committee’s terms of reference are approved and reviewed by
the Board on a regular basis, most recently in May 2022.
The terms of reference are available on the Group’s website
www.icgam.com, or by contacting the Company Secretary.
Effectiveness
The operations of the Committee were reviewed as part of the
internal Board evaluation led by the Chairman in early 2022; the
Committee was found to be operating effectively. For more details of
this exercise, please see page 76.
Summary of meetings in the year
The Committee held five meetings during the year. The Committee
members attending each of the meetings can be found on page 74.
In addition, there was an ad hoc committee meeting in April 2021 to
review key aspects of the 2021 Annual Report.
Committee governance
On behalf of the Board, the Committee encourages and seeks to
safeguard high standards of integrity and conduct in financial
reporting and internal control.
Our work focuses on the evaluation of significant estimates and
judgements underlying the financial statements and the overall
fairness and clarity of reported financial information.
Roles and responsibilities
The Committee meets regularly, at least four times a year. It is
responsible for:
– Reviewing the annual and interim accounts before they are
presented to the Board, in particular addressing any significant
issues arising from the audit; accounting policies and clarity of
disclosures; compliance with applicable accounting and legal
standards; and information used in making significant judgements,
including fair values, going concern and viability
– Monitoring the integrity of the financial statements of the Group,
including its annual and half-yearly reports, trading updates
and any other formal announcements relating to its financial
performance, and advising the Board whether it considers the
Annual Report to be fair, balanced and understandable
– Selecting and recommending the appointment and reappointment
of the external auditor, including tenders where necessary; and
negotiating and agreeing audit fees and scope of work
– Reviewing the performance of the external auditor in respect of
scope of work, reporting, and quality of audit and overall service
– Reviewing independence, including key-partner rotation, and
remuneration of the external auditor and the relationship between
audit and non-audit work
– Approving the appointment or termination of the Head of Internal
Audit; approving the internal audit charter; and monitoring the
effectiveness of the internal audit function in the context of the
Group’s overall risk management framework
– Reviewing and assessing the annual internal audit plan and
resources, receiving and evaluating internal audit reports, and
monitoring management’s responsiveness to internal audit
findings and recommendations
In carrying out its duties, the Committee is authorised by the Board to
obtain any information it needs from any Director or employee of the
Group.
Composition
The Committee consists of independent NEDs only. The current
members are Rusty Nelligan (Chair of the Committee), Matthew
Lester, Kathryn Purves and Amy Schioldager. Biographical details can
be found on pages 70 to 72.
The Committee members have a wide range of business and financial
experience, including accounting and auditing, risk management,
asset management and investment, regulation and compliance, M&A,
tax and international business practices. These skills ensure the
ICG | Annual Report & Accounts 2022
79
Audit Committee Report continued
Review of the year
The agenda of the Committee comprises recurring, seasonal and other business. Over the course of the year, the Committee considered and
discussed the following significant matters:
The matter and its significance Work undertaken
Comments and conclusion
Performance measures
Alternative performance
measures can add insight to the
IFRS reporting and help to give
shareholders a fuller
understanding of the
performance of the business
See KPIs on page 19 and the
Financial review on page 45
The Group uses a number of alternative performance
measures, including but not limited to:
– Cash and debt position
– Cash generated from operating activities
– Gearing
– Balance sheet investment portfolio
– Net investment return
– FMC operating margin
A full list can be found in the glossary on page 196.
Strategic KPIs that are alternative performance
measures are detailed on page 19.
We discussed the use of alternative performance
measures with the Executive Directors and the
external auditor and reviewed their continued
appropriateness and consistency with prior years.
Internal audit provided assurance that the alternative
performance measures had been prepared on a basis
consistent with prior years and were subject to
adequate review and validation controls.
We challenged the information analysed by
management to assess which third-party funds,
carried interest partnerships, and portfolio
companies are either controlled by the Group or over
which the Group exercises significant influence.
Consolidation of investments in
structured entities
The Group holds investments in
a number of structured entities
which it manages. Judgement is
required in assessing whether
these entities are controlled by
the Group and therefore need to
be consolidated into the
Group’s financial statements
See note 28 and the Auditor’s
Report on page 126
We were satisfied that alternative performance
measures, which are widely used in the asset
management industry, can provide insight into
performance from the perspective of our
shareholders and other stakeholders.
A review of the alternative performance measures
was undertaken and we were satisfied that they did
not detract from IFRS measures and were: sufficiently
defined; consistently applied; and, where relevant,
reconciled to IFRS measures.
We concluded that the Group controlled 19 funds
and two carried interest partnerships. The Group
exercised significant influence over four other
entities during the financial year. Accordingly, the
controlled entities have been consolidated into the
Group’s financial statements. This has had the impact
of grossing up the balance sheet for IFRS compared
to APM, with total assets and total liabilities both
increasing by £4.8bn (2021: £4.3bn).
The Committee concluded that the accounting
policies and disclosures were appropriate and had
been updated properly. Based on our inquiries of the
Executive Directors and external auditors, we
concluded policies are being properly applied in
areas such as assessing control and significant
influence.
We concluded that the areas of judgement (see page
143 ) are properly explained. We gained comfort from
the Executive Directors and the external auditors that
the Group complied with its reporting requirements.
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ICG | Annual Report & Accounts 2022
The matter and its significance Work undertaken
Comments and conclusion
Annual Report
Taken as a whole, the Annual
Report needs to be fair,
balanced and understandable so
that it is relevant to readers
See page 125
We held preparatory discussions with the Executive
Directors to determine the format of the Annual
Report and reviewed the assigned responsibilities
for its content and overall cohesion and clarity.
The Executive Directors compared our 2022 Annual
Report with that of other alternative asset managers
and best practice more widely. In light of that work
we commented on design and content, taking into
account the Financial Reporting Council’s (FRC)
publications and ensuring that feedback on the prior
year Annual Report had been addressed.
We reviewed all sections of the 2022 Annual Report
having particular regard to the Committee’s specific
responsibilities for the financial statements. We used
the Executive Directors’ and the Committee’s
collective knowledge to determine the overall
fairness, balance and understandability prior to final
approval by the Board. In this context, we especially
considered judgemental matters such as the key risks
(see page 57), estimates and the period covered by
the viability statement (see page 65).
The Committee received confirmation that individual
responsibilities had been fulfilled and confirmed that
the overall report was consistent with the Directors’
knowledge and understanding of the Group. This
supported the Committee’s, and the Board’s,
assessment that the Annual Report taken as a whole
is fair, balanced and understandable.
We were satisfied that the information presented in
the Strategic Report was consistent with the
performance of the business reported in the financial
statements. In particular, we were satisfied that the
estimates and quantified risk disclosures in the
financial statements are consistent with those
identified in the Strategic Report. The Committee
concluded that appropriate judgement had been
applied in determining the estimates and that
sufficient disclosure had been included to allow
readers to understand the uncertainties surrounding
outcomes.
We were satisfied that the viability statement should
consider a three-year time horizon given the period
covered by the Group’s strategic plan, regulatory
capital reporting, shareholder fundraising guidance,
deployment duration of larger strategies and the
cash resources available to the Group.
ICG | Annual Report & Accounts 2022
81
Audit Committee Report continued
The matter and its significance Work undertaken
Comments and conclusion
The Committee received reports summarising the
conclusions of the Group’s Valuation Committee
(GVC) and challenged the judgements made. The
Committee paid particular attention to the valuations
requiring considerable professional judgement, with
direct input from the Chief Investment Officer on
market conditions and relevant sector and company
insights.
Management determined that the most appropriate
valuation methodology was applied to ensure that
the investments were valued in accordance with the
Group’s accounting policies, which remain
unchanged, and International Private Equity and
Venture Capital Valuation or other relevant guidelines
where applicable.
The Committee inquired into the progress of
ongoing asset realisations after the year end as an
indicator of the reliability of the valuation process.
In addition to the Executive Directors’ procedures
and the work of the external auditors, internal audit
periodically reviews the valuation process and
provides the appropriate assurance to the
Committee of the Executive Directors’ compliance
with the Group’s valuation policies, process and
procedures.
We reviewed the revenue recognition of management
fees, performance fees and investment income to
confirm that the treatments were consistent with the
Group’s accounting policies.
Investment valuation
Investments in funds managed
by the Group, in warehoused
assets, in senior and
subordinated notes of CLO
vehicles and in disposal groups
held for sale represent 78.3% of
our total assets under IFRS. As
the assets are mainly unquoted
and illiquid, considerable
professional judgement is
required in determining their
valuation
See notes 5 and 10 to the financial
statements and the Auditor’s
Report on page 126
Revenue recognition
Revenue recognition involves
certain estimates and
judgements, particularly in
respect of the timing of
recognising performance fees,
which are subject to
performance conditions
See note 3 to the financial
statements and the Auditor’s
Report on page 126
The Committee reviewed the conclusions of the GVC,
carefully considering the impact of the current
economic environment on the judgement required.
We reviewed the methodologies used to value the
Group’s investments and concluded that the
valuations had been performed in line with the
accounting policies.
In our review of the financial statements we were
satisfied that sufficient disclosures had been
provided on the estimates and judgements made in
determining the value of the portfolio.
The Committee concluded that revenue has been
properly recognised in the financial statements.
In addition to the significant matters addressed above, the Committee maintained a rolling agenda of items for its review including auditor
independence and external audit effectiveness, internal audit, capital strategy, financial and management reporting (including any changes to the
Group’s accounting policies), risk and treasury management capabilities, relevant people changes, the going concern concept of accounting
(see pages 120 and 143), the viability statement (see page 65), the Auditor’s Report (see page 126), accounting developments and the Auditor’s
management letter. No issues of significance arose.
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ICG | Annual Report & Accounts 2022
External audit
The Group complies with the UK Corporate Governance Code, the
FRC Guidance on Audit Committees and the EU Regulation on Audit
Reform. In addition, we comply with all aspects of the Competition
and Markets Authority Statutory Audit Services Order.
Appointment and rotation
The Group’s policy is to submit the external audit to tender every ten
years, as a fair balance between the costs and disruption of a tender
and the benefits of a potential fresh pair of eyes and challenge, and
for the external audit firm to be rotated at least every 20 years. Under
transition arrangements of the relevant regulations, the Group was
required to rotate its external audit firm for the financial year ended 31
March 2022 at the latest. The Group elected to make this rotation
with effect from the financial year ended 31 March 2021 appointing EY
as external auditors. The next tender must be completed for the
financial year ended 31 March 2031.
Execution
The Committee discusses and agrees the scope of the audit prior to
its commencement. For the financial year ended 31 March 2022, the
full scope audit coverage amounted to 93% (2021: 96%) of the
Group’s profit before tax and 94% (202: 96%) of the Group’s net
assets.
The Committee reviews with EY the risks of material misstatement of
the financial statements and confirms a shared understanding of
these risks. While planning the audit, EY sets out the key tests that
they perform on the higher-risk areas, and the Committee provides
input on areas that it wants to receive particular attention.
The Committee Chair meets or calls the lead audit partner generally
monthly throughout the year and more frequently at the public
reporting periods, to review Group developments and audit
progress. The Committee also discusses with EY, prior to
recommendation of the financial statements to the Board, the audit
findings, including audit differences, and observations on internal
controls, operations and resources. This includes discussions in
private sessions without the Executive Directors present.
In accordance with relevant independence standards, the external
auditors do not place direct reliance on the work of internal audit.
The Committee are satisfied that the audit is probing, challenging and
effective and that the approach provides a reliable audit opinion with
a reasonable expectation of detecting material errors, irregularities
and fraud.
Materiality
The Committee reviews accuracy of financial reporting with EY
including both accounting errors of lesser significance that will be
brought to our attention and amounts that would need to be adjusted
so that the financial statements give a true and fair view. In principle,
errors can arise for many reasons ranging from deliberate fraud to
estimates made which did not consider all available information.
For the financial year ended 31 March 2022, overall audit materiality
was set at £28.3m (2021: £25.5m). This equates to 5% (2021: 5%) of
Group profit before tax. This is within the range that audit opinions
are conventionally thought to be reliable.
The auditors use overall materiality combined with their knowledge of
the Group, controls environment and assessment of significant risks, to
determine which Group entities require full-scope audits or specific
audit procedures in order to confirm that the financial statements are
free of material misstatement. Further details can be found in the
Auditor’s Report on page 126.
To manage the risk that aggregate uncorrected errors become
potentially material, the Committee agreed with EY to draw attention to
all identified uncorrected misstatements greater than £1.4m (2021:
£1.3m).
Quality and effectiveness
In assessing the quality and effectiveness of the external audit, the
Committee looks at the audit team’s demonstrated competence,
experience, diligence, objectivity, professional scepticism, current
knowledge and its relationship with the Executive Directors and senior
management. In particular, the Committee assesses the depth of review
and level of challenge provided by the external auditors over the
significant judgements and estimates made by management.
The Committee observed healthy debate initiated by EY, and received
high-quality reports with detailed information on the scope and results
of their work, including challenge to management judgements,
estimates and assumptions. The Committee gained valuable insight
from EY on the nature of operations underlying the Group’s production
of financial information, and received a current assessment of internal
controls over financial reporting, to the extent observed as a by-
product of their audit of the consolidated financial statements.
The overall assessment of audit quality includes an annual evaluation of
the independence and objectivity of the external auditor and the
effectiveness of the audit process, taking into consideration relevant
professional and regulatory requirements. This assessment is based in
part on results of observation, inquiry and challenge, throughout the
year, as well as periodic reflection and input collected separately from
Committee members, Executive Directors and other relevant senior
management. The annual evaluation of EY was undertaken by the
Committee in September 2021.
In addition to the annual evaluation and regular review of reports and
the working practices of the EY audit team, the Committee undertakes
an ongoing assessment of external audit quality and effectiveness
including, but not limited to, the following:
– The content of EY’s annual Transparency Report which sets out their
commitment to audit quality and governance
– Insights arising from the Audit Quality Review team (AQRt) of
the Financial Reporting Council’s annual audit of a sample of EY’s
audits. Following discussion with EY, insofar as any issues might
be applicable, the Committee determines that EY has proper and
adequate procedures in place for the audit
– The formal terms of engagement with the auditor, and the audit fee.
The Committee determined that the Group audit fee of £1.8m (2021:
£1.5m) appropriately reflected the scope and complexity of the work
undertaken by EY
– The audit status update received from EY at every Audit Committee
meeting, including findings, fees, and compliance with independence
requirements
ICG | Annual Report & Accounts 2022
83
Audit Committee Report continued
On the basis of this review and our ongoing interactions and
observations, the Committee remains confident in EY’s work.
Non-audit services
The Board has an established policy setting out what non-audit
services can be purchased from the firm appointed as external
auditors. The Committee monitors non-audit services provided to the
Group by EY to ensure there is no impairment to their independence or
objectivity.
The policy sets out the categories of non-audit services which the
external auditor is and is not allowed to provide to the Group. We
received confirmations from the Executive Directors and EY of
adherence to this policy and monitor non-audit services against a fee
cap.
A copy of the policy can be found on the Group’s website,
www.icgam.com.
During the year, the Group paid £0.2m (2021: £0.2m) to EY for the
provision of corporate non-audit services. Of the fees, £0.2m is in
respect of services in their capacity as auditor. The ratio of non-audit
services to 70% of audit fees on a three-year rolling basis was 0.13:1. A
detailed analysis of fees paid by the Group to EY is shown in note 12 on
page 161.
Internal controls
Risk management and internal control matters are the responsibility of
the Group’s Risk Committee. Its report is set out on page 85.
The Group has an established control framework, designed to manage
but not eliminate risks and provide reasonable but not absolute
assurance against material losses or misstatements.
Effectiveness
The Committee reviews the effectiveness of the financial control
environment, including controls over our financial reporting and the
preparation of financial information included in the Annual Report. That
assessment is taken into account by the Board when it undertakes its
review of the effectiveness of material controls (see page 87).
The Committee reviews the operation of the finance function to ensure
it is sufficiently resourced and has the appropriate processes and
controls over financial reporting to fulfil its duties.
Developments
During the year, the Group made significant progress in further
enhancing the operating model for finance and other operations, and
continued development of its process and control framework. These
changes were advocated by the Committee and are considered
necessary steps in view of continued regulatory development and
business growth.
Internal audit
The Group has an internal audit function led by an experienced Head of
Internal Audit, reporting to the Chair of the Audit Committee. The Head
of Internal Audit has access to external service providers with
specialised skills, to augment internal resources as needed.
Approach
In conformity with the Financial Services Code (Guidance on effective
internal audit in the financial services sector), a risk-based planning
process is performed annually. This includes consideration of business
objectives and a focus on those risks identified as being most likely to
impact delivery of the Group’s strategy.
The resulting plan is reviewed and approved by the Committee, with
regular updates provided. This is kept under constant review, with any
significant changes recommended to the Committee for approval.
The Group has a number of regulated entities that have specific
requirements for internal audit activities. These requirements are taken
into account in the planning process and, as appropriate, relevant
reports on audit scope and findings are shared with the Boards of the
regulated subsidiaries.
Execution
The Committee considered and approved the updated internal audit
strategy and plan for fiscal years 2021 and 2022. Updates on delivery of
this plan, together with related status of remedial actions, are reported
at each meeting of the Committee.
During the year, in accordance with the plan, 16 risk-based reviews
were completed, responded to by management and reviewed by the
Committee. We pay particular attention to identified themes across the
business, relative importance and relationship of findings,
recommended and agreed remedial actions, and compliance with
timescales for resolution and follow-up.
The Committee is satisfied that delivery of the approved internal audit
strategy and plan is providing timely and appropriate assurance on the
controls in place to feasibly manage the principal risks to the Group.
Effectiveness
The Committee monitors the effectiveness of Internal Audit within the
context of the function’s charter and stakeholder expectations. The
Committee will periodically request an External Quality Assessment of
Internal Audit to assess conformance with the IIA Standards and the
Financial Services Code.
In the current period, the Committee concluded that the Internal Audit
function is operating effectively, at the present level of operations. We
continue to monitor resourcing in view of regulatory development and
business growth.
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Risk Committee Report
RISK COMMITTEE REPORT
The role of the Committee is to support the
Board in identifying and managing risk,
complying with regulations, and promoting
good conduct.
AREAS OF FOCUS
Principal and emerging risks
– Identification and management of principal risks
– Risk appetite and tolerances
– Identification of emerging risks
Governance
– Committee governance
– Oversight of risk and compliance policies
– Best practice and governance code developments
Risk management framework
– Effectiveness of risk management systems
– Review of risk events and remedial actions
– Risk function resourcing
Regulatory risks
– Impact and implementation of regulatory change
– ICAAP / ICARA
– Compliance function resourcing
Committee members
– Kathryn Purves (Chair)
– Rusty Nelligan
– Virginia Holmes
– Amy Schioldager
– Matthew Lester
– Rosemary Leith
Dear shareholder
I am pleased to present the Risk Committee Report for the year
ended 31 March 2022.
The purpose of the Committee is to support the Board in providing
oversight and challenge of risk management processes and the
internal control framework to ensure that we meet the expectations
of our shareholders, regulators, and clients. The Committee monitors
the Group’s risks on an on-going basis and supports the Group’s
agreed risk appetite, covering the extent and categories of risk which
the Board considers acceptable for the Group. Using the information
and assessments obtained from regular top-down and bottom-up
reviews, alongside evaluation of the Group’s principal risk exposures,
the Committee creates an effective framework for overseeing risks
across the Group.
The committee is deeply concerned about the Russian invasion of
Ukraine. First and foremost, our thoughts are with the people in
Ukraine, and with our colleagues and clients impacted by the crisis.
ICG does not have any material financial or operational exposure at
the Group level or within the funds we manage, directly or indirectly,
to Russia or Ukraine. Since the crisis began, the Group has taken
several actions including promptly and fully implementing the
sanctions and other measures imposed and rigorously testing our
operational resilience to confirm that the day-to-day running of our
operations will not be affected. The Committee recognises the
potential for heightened geopolitical, macroeconomic uncertainty
and other risk contagion, should the crisis be prolonged and / or
escalate further and will continue to monitor the situation closely and
adapt our approach as appropriate.
Not surprisingly, throughout the financial year the Committee
continued to engage extensively with management over the course of
the Covid-19 pandemic and oversee the Group’s response, seeking
to ensure that the risks posed by the pandemic were mitigated.
Responding to the operational impacts of the pandemic has become
part of our day-to-day operations, which is overseen by the Executive
Directors. However, the Committee remains alert to the uncertainties
that persist which may present new risks and opportunities for the
Group.
ICG | Annual Report & Accounts 2022
85
Finally, the Committee welcomed the progress being made in
response to the challenges, risks and opportunities arising from
climate change and ESG, which are becoming critical components of
risk management. In particular, ESG considerations have been further
embedded within the investment process and engagement with
portfolio companies. The Committee acknowledges that further work
is required to better understand how ESG risks of material
significance to the Group are effectively incorporated into the
Group’s existing operational risk assessments and frameworks, to
assist in the ongoing maturity of the Group’s broader risk
management capabilities.
Looking ahead to the next financial year, it is anticipated that the
Committee will focus on:
– Monitoring the heightened geopolitical and macro-economic
uncertainty, in particular as a result of the Russia-Ukraine conflict
and adapting our approach as appropriate
– Further embedding of ESG into the Risk Management Framework
– Risks associated with the Group’s transformation agenda,
recognising the challenges faced in ensuring both successful
delivery and embedding of change
– Overseeing the Group’s ongoing response to the Investment
Firm Prudential Regime, and operationally the revised processes
required, including developing the ICARA
– Supporting the Audit Committee in its oversight of the Group’s
plans to implement the UK Government’s audit reform proposals
and strengthening internal controls
– Improving the use of more forward-looking risk information and
incorporating risk connectivity into the Group’s Risk Management
Framework to allow for more proactive management of risk
The Committee will continue to ensure that we are adopting a
proactive response to the challenges, risks, and opportunities to
which the Group is exposed.
I would be pleased to discuss the Committee’s work with any
shareholder.
Kathryn Purves
Chair of the Risk Committee
25 May 2022
Risk Committee Report continued
There has been heightened attention on the Key Personnel risk
profile of the Group in view of the longevity of the pandemic and the
impacts to our employees. Additionally, our employees are
experiencing elevated levels of activity and complexity because of the
growth of the Group and the transformation activity that is underway
to deliver our strategy for growth. Consideration has been given to
high performing individuals to support the Group’s key commitments
and the retention risk of certain groups of subject matter experts is
being closely monitored. We also continue to focus on our
employees’ physical and mental well-being. The Committee will
continue to provide the necessary risk oversight as the Group
manages the ongoing impact of the pandemic, monitors retention,
develops new ways of working and develops plans to build the right
skills and capabilities for the future.
The risk management development plan (RMDP) that commenced in
2019, has delivered its key objectives, including effective policies,
procedures, and frameworks to help direct the Group’s risk
management strategy and enhance the execution of an effective
end-to-end risk management process across all three lines of
defence. Focus has now shifted to refining these enhancements to
ensure that business actions and decisions are demonstrably
influenced by risk management considerations and information, and
to ensure the framework is integrated and aligned with day-to-day
management, operations, business processes, and the risk culture of
the Group. The aim is to attain a fully integrated and embedded Risk
Management Framework that will bring benefits to the Group in
financial and non-financial terms.
Alongside the Audit Committee, the Committee monitored the audit
reform developments made by the UK government, and the proposal
that the UK should adopt a strengthened internal controls regime.
Although the requirements and timeline for the regulation to come
into force are not established at this stage, the Committee believes it
is important for the Group to be aware of the potential practical
implications and consider what actions to take now. Following pilot
activity, a new approach to the RCSA process is being adopted
across the Group through a phased plan, the aim of which is to fully
integrate the Group’s material control assessments into one process.
The Committee supports the revised approach, and the required
cultural change to ensure successful adoption, as well as the Group’s
plans for implementation and embedding.
During the year there continued to be high profile cyber incidents for
corporates in the UK and elsewhere, and this threat is expected to
persist with increasing levels of sophistication anticipated. The cyber
security team increased its monitoring activity as a result of the
Russia-Ukraine conflict, and to date we have not seen an increase in
overall threats to the Group. The Committee remains alert to the
Group’s continuous monitoring of the external threat environment to
ensure that the management of cyber risk remains appropriate to
mitigate the continued and changing nature of the cyber threat.
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experience, including risk management, fund management and
investment, regulation and compliance, M&A, tax, and international
business practices. In particular, Kathryn Purves was the CRO of
Partnership Assurance Group plc. These skills enable the Committee
to fulfil its terms of reference in a robust and independent manner.
The Executive Directors of the Board are not members of the
Committee but attend meetings at the invitation of the Chair of the
Committee. The Head of Risk, Group Head of Compliance, Head of
Internal Audit, and the Company Secretary attend all the meetings.
Terms of reference
The Committee’s terms of reference are approved and reviewed by
the Board on a regular basis, most recently in May 2022.
The terms of reference are available on the Group’s website,
www.icgam.com, or by contacting the Company Secretary.
Effectiveness
The operations of the Committee were reviewed as part of the
internal Board evaluation led by the Chairman in early 2022; the
Committee was found to be operating effectively. For more details of
this exercise, please see page 76.
Monitoring the effectiveness of controls
The Risk Committee is provided with several risk reports, which it
uses to continually review the Group’s risk management framework
and works closely with the Audit Committee to review the system of
internal controls. The reports enable the Committees to develop a
cumulative assessment and understanding of the effectiveness with
which internal controls are being managed and risks are being
mitigated by management across the Group.
As part of their review the Committees consider whether the
processes in place are sufficient to identify all material controls,
defined as those critical to the management of the principal risks of
the business. Additional reporting on the effectiveness of material
controls is provided to the Audit Committee on an annual basis to
support the review of the effectiveness of controls in managing the
principal risks.
The Board, on recommendation from the Risk and Audit Committees,
and considering the work of Internal Audit overseen by the Audit
Committee, confirms that the Group’s risk management and internal
control systems are operating effectively, and material controls
operated effectively throughout the year.
Governance of risk
On behalf of the Board, the Committee encourages, and seeks to
safeguard, high standards of risk management and effective internal
controls.
Roles and responsibilities
The Committee meets regularly and is responsible for providing
oversight and challenge on:
– The Group’s risk appetite, material risk exposures and the impact
of these on the levels and allocation of capital
– Changes to the risk appetite framework and quantitative risk
limits, ensuring its ongoing integrity and suitability to support the
Board’s strategic objectives
– The design, structure and implementation of the Group’s risk
management framework and its suitability to identify and manage
current risks and react to forward-looking issues and the changing
nature of risks
– Risk reports on the effectiveness of the Group’s risk management
framework and system of internal controls, including notification
of material potential or actual breaches of risk limits and internal
control processes and the remedial action taken or proposed
– Risks in relation to major investments, major product
developments and other corporate transactions
– Regulatory compliance across the Group, which includes
reviewing and approving the Group’s compliance policies and
monitoring compliance with those policies
– The remit of the risk management and compliance functions,
ensuring they have adequate resources and appropriate access to
information to enable them to perform their functions effectively
The Committee also reviews and recommends:
– The Internal Capital Adequacy Assessment Process (ICAAP) at
least annually and more frequently as necessary, to the Board
– The extent of Directors’ and Officers’ insurance coverage, to the
Board
– The prosecution, defence or settlement of litigation or alternative
dispute resolution for material potential liabilities, to the Board
– The effectiveness of the Group’s risk management and internal
controls systems, to the Board
– Alignment of the remuneration policy with risk appetite, and
adjustments to any employee’s remuneration for events that have
been detrimental to the Group or events that have exceeded the
Board’s risk appetite, to the Remuneration Committee
– All material statements to be included in the Annual Report,
half year report, prospectuses and circulars concerning risk
management, to the Audit Committee
Composition
The current members are Kathryn Purves (Chair of the Committee),
Virginia Holmes, Matthew Lester, Rosemary Leith, Rusty Nelligan and
Amy Schioldager. Biographical details can be found on page 70. The
Committee members have a wide range of business and financial
ICG | Annual Report & Accounts 2022
87
Risk Committee Report continued
Summary of meetings in the year
The Committee held three meetings during the year. In the ordinary
course of business, the Committee receives reports from both the
Head of Risk (providing an assessment of each principal risk versus
appetite, key risk events, key emerging risks, actions taken or being
taken to manage the risks), and from the Group Head of Compliance
(providing an assessment of global compliance including the Group’s
monitoring programme and implementation of relevant regulatory
developments).
Over the course of the year the Committee considered and discussed
the following significant matters:
– The Committee continuously evaluated the Group’s principal risks,
considering recommendations for promoting additional risks and
changes in the scope of existing risks. In addition, the Committee
received regular reporting on principal risks, upcoming trends,
and emerging risks. Careful attention continues to be paid to the
ongoing potential impacts of Covid-19, and the Committee will
continue to monitor the potential exposures and overall risk profile
of the Group as matters evolve
– Delivery and embedding of the RMDP that commenced in 2019
has remained a key focus, with the Committee receiving regular
updates on the continued roll out of the RCSA process. As the
Group continues to refine the RCSA process, the Committee
will focus on continuing the strengthening of the Group’s risk
management activities and overseeing the shift and improvement
of risk management responsibilities to the Group’s first line teams
– The Committee carried out a detailed review of the Group’s 2021
ICAAP and was satisfied that the operational risk and financial
stress scenarios were appropriately calibrated and also stressed
the particular vulnerabilities of the Group. They were further
satisfied that the Group would meet internal and regulatory
requirements for capital and liquidity in such scenarios
– The Committee considered regular updates on emerging
regulatory and legal risks and continued to closely monitor
several significant regulatory change and oversight programmes
to ensure successful execution, notably the Investment Firm
Prudential Regime (IFPR), which came into effect on 1 January
2022. IFPR introduces a wide-ranging set of new requirements
spanning capital, liquidity, reporting and disclosure and
remuneration. Of particular note is the proposed replacement of
the current ICAAP with a new Internal Capital and Risk Assessment
(ICARA) process. The Committee was briefed on the Group’s
readiness to meet the requirements of the regime, which captured
all substantive matters and the steps that the Group needs to take
to ensure compliance when the ICARA is prepared in 2022
– The Group places significant focus on subsidiary governance
and recognises the role subsidiaries have in terms of corporate
governance, reporting and managing risk. The Committee
welcomed an update from the Group’s Global Head of Legal and
Compliance regarding the proposals to enhance the subsidiary
framework to strengthen accountability and flows of information,
appropriate for the Group’s subsidiary activities and complexity
– The Group’s cyber security lead presented the annual Information
Technology and Cyber update to the Committee, which covered
the progress made in the development of the Group-wide
governance model and strategy for cyber security management
and data privacy risks. The Committee looks forward to receiving
detailed reporting of key cyber metrics and corresponding risk
assessments on a more regular basis
– The Committee was briefed on the progress in terms of plans
and preparedness for the Libor transition in respect of the
Group and fund to the new risk-free rates and was pleased to
hear that key milestones set by the Risk Free Rate Working Group
have been met and are in line with FCA expectations, including
transitioning existing deals and borrowing facilities in GBP Libor
and concluding outstanding system upgrades. The transition of
USD Libor exposure will be a key focus in the financial year ending
31 March 2023. The impact on the Group is immaterial
– The Committee was updated on the progress being made to the
operational risk framework in response to the challenges, risks
and opportunities arising from climate change. The Committee
welcomed the progress being made to better understand how
climate risks of material significance can be digested into practical
risk assessments and incorporated into the Group’s existing
operational risk framework
– The Committee acknowledged the continued efforts to enhance
the Group’s supplier risk oversight framework and discussed with
the Head of Operations and Information Technology the positive
work undertaken to reduce operational risk exposure through
improved third-party provider service levels and risk reporting.
The Committee considers that these activities will ensure the
ongoing resilience of key services to the Group and its investors
– The Group’s assurance functions held a dedicated session
with the Chair of the Risk Committee and the Chair of the Audit
Committee to review and challenge the new Combined Assurance
proposal, which aims to provide an integrated and coordinated
approach to aligning the Group’s assurance activities, focusing
on key risk exposures across the Group. The Committee is
satisfied with the good progress being made to align the Group’s
assurance activities
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Other matters considered
In addition to the significant matters addressed above, the Committee
maintained a rolling agenda of items for its review, including the
adequacy of resourcing in the compliance and risk functions, updates
on key policies and a review of the annual Whistleblowing report and
the Money Laundering Officer’s report. The Committee meets
privately with both the Head of Risk and the Group Head of
Compliance on an annual basis.
Internal Audit, Risk and Compliance monitoring
Internal Audit, Risk and Compliance work closely together to ensure
appropriate coverage of the Group’s activities.
The Committee supported the Audit Committee in its oversight of the
internal audit programme (see page 84), which is risk-based. It is
designed to permit changes to the programme in the light of changed
circumstances. In conjunction with the Audit Committee, the
Committee reviews and approves the programme of compliance
monitoring to be undertaken during the following fiscal year and at
each of its subsequent meetings reviews the status and output of
compliance monitoring undertaken relative to the planned
programme.
Where there is a perceived overlap of responsibilities between the
Audit and Risk Committees, the respective committee chairs will have
the discretion to agree the most appropriate committee to fulfil any
obligation. During the year the Committee ensured that appropriate
monitoring was undertaken in accordance with the approved
programme for the year. No significant matters of concern were
identified.
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89
Nominations and Governance Committee report
NOMINATIONS AND GOVERNANCE
COMMITTEE REPORT
The role of the Committee is to oversee the
membership of the Board to ensure a balance
of skills, diversity and experience among the
Directors, and to oversee senior management
succession planning and the governance
practices and processes of the Group.
AREAS OF COMMITTEE FOCUS
Culture, diversity and inclusion
– Employee engagement
– Gender diversity considerations
Succession planning
– Non-Executive, Executive and senior management
succession planning
– Talent development
Director skills and experience
– Director induction
– Director training
Appointments
– Board composition
– Additional appointments
Committee members
– Lord Davies (until 4 March 2022)
– Virginia Holmes (from 4 March 2022)
– Matthew Lester (from 4 March 2022)
– Andrew Sykes (Chair)
– Kathryn Purves
– Stephen Welton
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ICG | Annual Report & Accounts 2022
Dear shareholder
I am pleased to present the Nominations and Governance Committee
report for the financial year ending 31 March 2022.
Good governance requires the appropriate balance of skills, diversity
of thought and experience, independence and knowledge, making
the work of the Nominations and Governance Committee a key part of
our oversight.
The Committee’s current main focus is on the search for candidates
for a long term appointment as Chair of the Board following the
departure of Lord Davies of Abersoch. This search is being
conducted with regard to a range of skillset, experience and diversity
criteria, and taking into account the profiles of the existing Board
members. The Committee is satisfied that the interim chair
arrangements are appropriate, and will conduct a thorough process
to find the best possible candidate. We will keep shareholders
updated through market announcements when the search process is
concluded.
During the year, the Committee closely monitored the composition of
the Board and concluded that the Board remains well balanced and of
an appropriate size and diverse skill set. We have, therefore, not
recommended any further changes to the Board during the year,
although we will continue to keep this under review as part of our
longer-term succession planning and this will be reconsidered once a
new Chair has been identified. The Committee noted the strong
contribution to the Board of all Directors, regardless of their tenure.
The Committee has also continued to monitor the feedback from
employees gained through focus group sessions led by Amy
Schioldager, as the NED responsible for liaising with employees.
Employee views are always important to us and we are pleased to
note the effectiveness of Amy’s work.
We also regularly hear from management on executive succession
planning for key individuals and ensuring development and training
for our key talent. In particular, NEDs have worked closely with the
Chief People and External Affairs Officer in this area and a strong
emphasis has been placed on enhancing bench strength across the
organisation, including at the level of emerging future leaders. ICG is
a people business and developing our talent is crucial in helping to
deliver the Group’s strategic objectives.
The output from both internal and external Board evaluations is
always front of mind for the Committee as we continue to evaluate the
skills, composition and cohesion of our Board. We are confident that
your Board is well placed to continue to oversee and provide
challenge to executive management.
I would be pleased to respond to any shareholders’ questions about
the Committee’s work either at the AGM or otherwise.
Andrew Sykes
Chair of the Nominations and Governance Committee
25 May 2022
Committee governance
Roles and responsibilities
The Committee is responsible for:
– Identifying, and nominating for the Board’s approval, candidates
to fill any Board vacancy
– Succession planning, including the progressive refreshing
of the Board, and developing executive talent below Executive
Director level
– Ensuring that all appointments to the Board are made on objective
criteria and that candidates have sufficient time to devote to their
prospective responsibilities
– Appointing a NED as the Whistleblowing Champion
– Appointing a NED as the Employee Engagement Champion
– Appointing a NED as the ESG Champion
– Considering the composition of the Board to ensure that the
balance of its membership between Executive Directors and NEDs
is appropriate
– Overseeing diversity and inclusiveness, culture, employee
engagement and other governance-related matters within the
Group
– Annually assessing the continued fitness and proprietary of the
Senior Management Function (SMF) holders, including the NEDs,
together with reviewing the Group’s responsibilities map which
describes the management and governance arrangements, as
required under SMCR
– Ensuring the Group is managed to high standards of corporate
governance
Composition
The Nominations and Governance Committee consists of NEDs:
Andrew Sykes (Chair of the Committee), Virginia Holmes, Matthew
Lester, Kathryn Purves and Stephen Welton. Biographical details can
be found on page 70.
The Company Secretary acts as Secretary to the Committee.
Appointments of Executive Directors and NEDs are made as
necessary as a result of discussions by the Committee and are subject
to full Board approval and election or re-election at a General
Meeting of the shareholders.
Terms of reference
The Committee’s terms of reference are approved and reviewed by
the Board on a regular basis, most recently in May 2022.
The terms of reference are available on the Group’s website, www.
icgam.com, or by contacting the Company Secretary.
Effectiveness
The operations of the Committee were reviewed as part of the
internal Board evaluation led by the Chairman in early 2022; the
Committee was found to be operating effectively. For more details of
this exercise, please see page 76.
ICG | Annual Report & Accounts 2022
91
Nominations and Governance Committee report continued
Summary of meetings in the year
The Committee held four meetings during the year as well as a joint
session with the Board on employee engagement. Over the course of
the year the Committee considered and discussed the following
significant matters:
Other matters considered
The Committee also conducted a review of the size and composition
of the Board and its Committees, the skill set of all Directors, their
ongoing training and development and the independence of NEDs.
No points of concern were raised.
Diversity is very important to our Board. The Board’s policy is for at
least 33% of members to be female in accordance with the
recommendation of the Davies Report. At the date of publication,
45% of the Board is female. The Board does not currently have a
policy on ethnic diversity but has determined always to select the
best candidate for a role, regardless of race, ethnicity or any other
demographic factors. The Board is aware of the recommendations of
the Parker Review that at least one member of the Board of a
FTSE100 company should be non-white; that recommendation has
been met.
The Committee monitors the diversity of the Group with a specific
focus on senior management roles and their direct reports
(see page 44).
– The resignation of Lord Davies of Abersoch from his role as Chair
of the Company and the appointment of the Senior Independent
Director, Andrew Sykes, as Chair and the appointment of Kathryn
Purves as Senior Independent Director
– The process to be followed to search for a longer term Chair
appointment. The Committee set parameters for a search (having
discussed desired skills and experience and the importance of
diversity to the Board), and agreed to appoint Russell Reynolds
Associates to conduct a search on behalf of the Company
– Whether it may be appropriate to appoint further NEDs to the
Board to supplement the existing skill set of the Board and assist
with long-term succession planning. It was concluded that in the
current year no further appointments were needed, but once
a new chair is in place the Committee should continue to seek
to enhance the Board to maintain the skill set of the Board and
account for long-term succession planning
– The employee engagement NED, Amy Schioldager, provided
insights on the culture of the Group and other feedback from the
ongoing informal engagement programme to a joint session of
the Committee and the Board. This was based on her engagement
during the year with several groups and included the views of a
wide range of employees drawn from a number of the different
geographies in which the Group is active. She had regularly met
employees virtually or in person in groups of 10-12 and sought
their views on a range of issues; more details are provided on
page 68
Non Executive Director area of expertise
Asset
Management
Investment
UK Corporate
Governance
International
Risk
Management
Financial
Name
Andrew Sykes (Chair)
Virginia Holmes
Rosemary Leith
Matthew Lester
Rusty Nelligan
Kathryn Purves (SID)
Amy Schioldager
Stephen Welton
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Remuneration Committee report
REMUNERATION COMMITTEE REPORT
AREAS OF FOCUS
Remuneration policy
– Continuous assessment of the effectiveness of the
Group’s remuneration policy
– Consideration of shareholder and representative
shareholder bodies’ feedback
Key performance indicators
– Setting of KPIs for the Executive Directors
– Monitoring performance against those KPIs
Governance, stakeholders and shareholders
– Consideration of feedback from shareholders
– Adherence to regulatory requirements
Executive remuneration
– Determination of Executive Directors’ awards
– Review of awards payable to all material risk takers
Oversight of awards
– Review of the calculation of Pre-Incentive Cash Profit
(PICP) to determine the Annual Award Pool (AAP)
– Review of market data on award levels
Committee members
– Virginia Holmes (Chair)
– Lord Davies of Abersoch (until 4 March 2022)
– Rosemary Leith
– Andrew Sykes
– Stephen Welton
Contents:
93
96
98
110
111
Letter from the Chairman
Remuneration at a glance
Annual report on remuneration
Governance of remuneration
Directors’ Remuneration Policy
Dear shareholder
I am pleased to present the Committee’s Report for the year ended 31
March 2022.
Directors’ Remuneration Policy
Our Directors’ Remuneration Policy was approved by shareholders in
2020, with 94.43% of votes in favour. Last year’s Directors’
Remuneration Report received overwhelming backing, with 98.34%
of votes cast in favour. We are pleased that these results indicate
strong and continued support from our shareholders for the Policy
and its implementation.
Prior to the 2020 AGM, we consulted extensively with major
shareholders on our Policy proposals and updated the Policy to take
account of the latest changes in the UK Corporate Governance Code
as well as guidelines from shareholders and voting agencies. During
FY22, we have continued to monitor developments in shareholder
guidelines and addressed any shareholder questions directly with
those who had raised them.
We are pleased to say that the Policy continues to be well-aligned
with our business strategy and shareholder guidelines, and no
changes are proposed for FY23.The Committee has also considered
the requirements of the new FCA Remuneration Code for investment
firms, which will first apply to ICG in FY23. We shall undertake a full
review of the Policy prior to the next Policy vote, due at the 2023
AGM. The review will consider business needs, developments in
market practice and shareholder guidance.
Corporate Governance Code remuneration
requirements
Our remuneration policies and practices comply with the
remuneration requirements of the Corporate Governance Code,
including in the following areas:
Strategic rationale and remuneration levels
Remuneration policy and practice within ICG is designed to support
the strategy of the business, with a clear emphasis on sustainable,
profitable growth. The variable pay structure for Executive Directors
is simple, with a single performance scorecard containing clear
financial and non-financial KPIs.
ICG | Annual Report & Accounts 2022
93
Remuneration Committee report continued
Statement of the Chair continued
This drives a single variable pay award of which at least 70% is
deferred into ICG shares, vesting over a 5-year period to promote
long-term shareholding. Executive directors also have in-service and
post-exit shareholding requirements. The policy aligns to our
company culture of recognising and rewarding performance and
delivering outstanding annual and long-term value for stakeholders.
Each Executive Director has a target and maximum variable pay level,
providing clear remuneration levels based on performance. The
quantum of total remuneration at ‘threshold’, ‘target’ and ‘stretch’
performance levels is set appropriately and proportionately to ensure
that the quantum of total remuneration at each level corresponds with
performance. Payment of variable pay is also subject to maintaining
robust risk and compliance controls, reinforced by malus and
clawback provisions, with key ‘triggers’ as set out in the Directors’
Remuneration Policy. The Committee also considers, prior to each
year’s award, whether discretion should be exercised to take account
of wider performance or other relevant factors. Base salary, pension
and benefits levels are restrained, with pension allowances for
executive directors set no higher than the majority of the UK
workforce.
Engagement with shareholders and the workforce
The Committee closely monitors shareholder guidance and feedback
on remuneration. Shareholder voting on AGM remuneration
resolutions is reviewed annually, and major shareholders are directly
consulted each year if they have indicated any disagreement with
ICG’s remuneration policy or practices. During annual engagement
meetings, major shareholders have the opportunity to provide
feedback to the Board and Remuneration Committee on ICG’s
remuneration approach.
There are a number of existing channels of communication with
employees regarding ICG’s remuneration policies, including
executive remuneration and its alignment with wider company pay
policy. Our company-wide employee engagement survey enables
colleagues, on a confidential basis, to provide feedback on a full
range of employment issues, including remuneration. The NED
responsible for employee engagement also holds a number of formal
and informal sessions with employees during the year in individual
and group forums. During these sessions employees are invited to
provide feedback and comments on any issues of importance to
them, including remuneration policies. The Committee also receives
regular feedback on how employees perceive the Group’s
remuneration policies and practices, and how these have influenced
recruitment, retention and motivation of colleagues. This information
is used by the Committee in its monitoring and development of
remuneration policies.
Variable pay approach
During FY22, we maintained our long-term orientated approach to
variable pay, which aligns our executives to the interests of our
shareholders. We make a single variable pay award each year to
Executive Directors, based on a balanced scorecard of key
performance indicators (KPIs) and funded from our capped Group
variable pay pool (the Annual Award Pool – ‘AAP’).
We completed an extensive review of the performance criteria for
variable pay prior to setting the objectives for FY22. The KPIs were
tested robustly and continue to be fully aligned with shareholders’
goals and our Group’s Strategic Objectives of growing AUM,
investing selectively, and managing portfolios to maximise value. In
anticipation of a strong FY22, the Committee increased the
thresholds for quantitative KPIs and refined the deliverables for
qualitative ones to ensure both are appropriately stretching. In
addition, we expanded our KPI relating to Culture and Diversity &
Inclusion, to include Sustainability. This reflects the Board’s strong
focus on the Sustainability metric overall and specifically our
commitment to reach net zero greenhouse gas emissions for 100% of
our relevant investments by 2040.
We have listened to shareholder feedback and have further
developed the reporting of our KPIs. This includes continuing to
report metrics, weightings and target levels as well as providing
additional detail of performance outcomes for each KPI.
The KPIs reflect the Group’s long-term strategic goals and near-term
operational priorities against the backdrop of the Group’s continued
evolution and the excellent progress in terms of scale and
diversification, as well as thought leadership on Diversity & Inclusion
and Sustainability. They also reflect our leading position in the
alternative investment industry and progress within the FTSE index.
Focus on sustained, long-term performance
Our remuneration approach encourages and reflects sustained,
long-term performance. The AAP is based on the cash profits which
the Group realises from its fund management business and its
investments. It is capped at 30% of realised profits, annualised over a
five-year period. Furthermore, for Executive Directors, at least 70% of
the variable pay award is deferred over five years into shares, with
vesting in three equal tranches after the third, fourth and fifth
anniversaries of award.
Each Executive Director has a target level and a maximum cap on their
total variable pay. These are expressed in monetary value rather than
as a multiple of base salary, in order to discourage upward pressure
on base salary. The maximum total variable pay awards are payable
for outstanding performance only. The Committee also liaises closely
with both the Audit and Risk Committees to ensure that risk and audit
matters are taken into account in determining the remuneration levels
for the Executive Directors.
Business performance and remuneration for FY22
Business performance in the year ended 31 March 2022 has been
outstanding. ICG raised a record $22.5bn in new funds, exceeding the
Group’s fundraising target by 181% and last year’s very strong
performance by 112%. The FMC (Fund Management Company)
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ICG | Annual Report & Accounts 2022
operating margin was 55.8% and the Group deployed a record
$15.0bn in new investments. Pre-Incentive Cash Profit (PICP) also
represented a record, at £566.1m.
increase) and the CPEAO’s salary has been increased to £442,000 (a
4% increase). This is lower than the average workforce salary
increase of 6.45% (effective for FY23).
We have a long-standing policy of awarding variable pay across the
workforce of not more than 30% of PICP, measured on a five-year
rolling basis. The Committee has determined that £115.9m should be
awarded to eligible employees under the AAP for the year ended 31
March 2022, compared with £87.2m in the prior year. This is the result
of excellent individual and corporate performance as well as an
increase in bonus-eligible staff of 11.7% year-on-year. The awards are
in the form of cash bonuses, deferred ICG share awards, and Deal
Vintage Bonus (DVB) awards. DVB awards are a long-term incentive
enabling certain investment teams, excluding Executive Directors, to
share in the future realised profits from the Group’s own balance
sheet investments.
In considering the variable awards to be made to the Executive
Directors, the Committee took into account their individual
contributions to the overall performance in relation to the quantitative
and qualitative objectives. The variable pay awards reflect the
outstanding performance across the Executive Director KPIs. The
Committee exercised its discretion to make slightly lower awards to
the CFOO and CPEAO than strictly formulaic KPI calculations would
indicate. This reflects the nature of these roles and their scope to
influence Group financial results and other KPIs relative to that of the
CEO. Consequently, the Committee made variable pay awards of
£5,880,000, £1,840,000 and £1,350,000 respectively to the CEO,
CFOO and CPEAO this year.
The Committee has allocated 24.4% of PICP on a five-year cumulative
rolling percentage basis, which is 5.6 percentage points below the
maximum 30% permitted under the Policy. This Policy provides a
focus on long-term performance and only takes account of cash
profits, thus aligning with shareholders’ interests fully. It also allows
us to smooth out some of the potential volatility in remuneration, and
this, as well as the use of our Business Growth Pool (BGP), provides
capacity to continue to develop the business through the cycles.
In addition to the AAP, the Committee allocated £6.7m to the BGP to
fund incentive awards during the year for teams developing new
investment strategies which have not yet completed a fundraise,
including our Life Sciences, Real Estate Equity and North American
Private Equity strategies. This pool excludes Executive Directors.
This year’s BGP award compares with £6.9m awarded in the prior
year.
As in FY21, we have continued to manage the business through the
Covid-19 pandemic by adapting our ways of working to protect the
health of our workforce. We are pleased that we have not needed to
furlough any of our employees, nor take any form of Covid support
from Government or make redundancies. Dividends have been
maintained throughout the period of the pandemic and indeed have
been increased to a total dividend of 76.0 pence per share for the
FY22 year.
Executive Director remuneration
The total remuneration for the year for each Executive Director is
shown in the table on page 102.
During the previous three years, the base salary for the CEO has not
been increased and has remained at £394,000, which is substantially
lower than the typical CEO salary level for a company of ICG’s size
and complexity as well as similar asset managers. The CFOO’s base
salary was set at £500,000 on joining in May 2019, and the CPEAO’s
base salary was set at £425,000 on her appointment to the Board in
April 2020. Neither was increased last year. This year and effective
for FY23, the CEO’s salary has been increased to £410,000 (a 4.06%
increase), the CFOO’s salary has been increased to £520,000 (a 4%
80% of the CEO’s variable pay award and 70% of the CFOO’s and
CPEAO’s variable pay awards were deferred into ICG PLC shares
vesting in equal tranches on the third, fourth and fifth anniversaries of
award.
Board Changes
As previously announced, Lord Davies stepped down as Board
Chairman effective 4 March 2022, and Andrew Sykes, previously the
Senior Independent Director (SID), has been appointed as Interim
Chairman. Lord Davies’ fee payments ceased with effect from the
date he stepped down from the Board. For the period during which
he is interim Board Chairman, Andrew Sykes will receive a fee at the
same rate as the outgoing Board Chairman, in lieu of the fees he
previously received as Non-Executive Director and SID. Kathryn
Purves has taken on the responsibilities of the SID as of 24 March
2022 whilst Andrew is interim Board Chairman, and will receive the
relevant fees for this additional responsibility. Full details of the
Board Chairman and Non-Executive Director fee rates are included in
the report.
Total Shareholder Return (TSR)
ICG has continued to deliver very strong TSR performance. For the
ten years to 31 March 2022, TSR was 825.5% versus 99.5% for the
FTSE All Share Index.
Conclusion
Our Policy provides a clear, simple and predictable remuneration
model, which helps drive the achievement of our corporate strategy
as well as a prudent approach to risk. On behalf of the Remuneration
Committee, I would like to thank all of our shareholders for their
continued support and welcome any feedback.
Virginia Holmes
Chair of the Remuneration Committee
25 May 2022
ICG | Annual Report & Accounts 2022
95
Remuneration Committee report continued
REMUNERATION AT A GLANCE
Executive Remuneration Framework and Policy Summary
Purpose and link to strategy
Operation
Maximum opportunity
Outcomes for FY22
Base Salary
Adequate to recruit and retain
Executive Directors to deliver the
strategic objectives of the Group
Benefits
Adequate to recruit and retain
Executive Directors to deliver the
strategic objectives of the Group
Normally reviewed annually with any
changes generally applying from the start
of the financial year
In considering increases, the Committee
assesses the range of salary increases
applying across the Group, and local
market levels
The CEO’s salary was increased by 4.06%
to £410,000, the CFOO’s salary was
increased by 4% to £520,000 and the
CPEAO’s salary was increased by 4% to
£442,000. All increases were lower than
the average workforce increase of 6.45%.
Benefits currently receivable by Executive
Directors include life assurance, private
medical insurance and income protection
Provision and level of benefits are
competitive and appropriate in the
context of the local market
There have been no changes to the
Executive Directors’ benefits provision
this year
Pension
Adequate to recruit and retain
Executive Directors to deliver the
strategic objectives of the Group
All Executive Directors are entitled to a
pension allowance payable each month at
the same time as their salary
A pension allowance of no more than the
level available to the majority of the
Group’s workforce in the relevant location
is provided
The Executive Directors’ pension
allowances are set no higher than the
majority of the Group’s workforce with the
CEO and CPEAO at 12.5% and CFOO at
10%; there have been no changes this year
Total variable pay award
Adequate to recruit and retain
Executive Directors to deliver the
strategic objectives of the Group
ICG PLC Equity Award
Rewards achievement of business
KPIs, cash profits and employing
sound risk and business
management and aligns the
interests of Executive Directors
with those of shareholders
The total variable pay award consists of
the Cash Bonus Award and ICG PLC
Equity Award (see below)
Max variable pay awards to Executive
Directors are £6m for the CEO/CIO, £2m
for the CFOO and £1.5m for the CPEAO
Variable pay awards for the CEO, CFOO
and CPEAO were £5.88m, £1.84m and
£1.35m respectively. 80% of the CEO’s
award and 70% of the awards for the other
Executive Directors were deferred into
shares, vesting over 5 years
At least 70% of an Executive Director’s
total variable pay award shall be delivered
in ICG PLC Equity
Shares normally vest by one third in each
of the third, fourth and fifth years
following the year of grant
See details above in relation to the overall
annual variable award
80% of the CEO’s variable pay award and
70% of the CFOO’s and CPEAO’s variable
pay awards were deferred into ICG
PLC shares
Business performance
PROFIT BEFORE
TAX
£565.4m
THIRD-PARTY ASSETS
UNDER MANAGEMENT
$68.5bn
ORDINARY DIVIDEND
PER SHARE
76.0p
UNPRI ASSESSMENT
RESULTS
A+A+A
(2021: $56.2bn)
(2021: £509.5m)
Five-year AAP overview
We have a long-standing policy of awarding variable pay across the workforce of not more than 30% of PICP measured on a five-year rolling
basis. The Committee has determined that £115.9m should be awarded to eligible employees under the AAP for the year ended 31 March 2022,
compared with £87.2m in the prior year.
(2021: A+A+A)
(2021: 56.0p)
Percentage of PICP over five years rolling
Spend on incentives (£m)
Number of employees
FY18
FY19
FY20
FY21
FY22
Cumulative
21.5%
77.7
294
23.6%
78.0
336
22.2%
70.8
408
23.6%
87.2
470
24.4%
115.9
525
24.4%
429.6
96
ICG | Annual Report & Accounts 2022
KPI performance outcomes
KPI
Quantitative KPIs
Fundraising
Realised Portfolio Returns
FMC Operating Margin
Net Gearing
Qualitative KPIs (% of max)
Strategic Development
Culture, D&I and Sustainability
Operating Platform & Risk Management
Overall leadership and personal effectiveness
Link to strategic
objectives
1
3
3
2
1 2
N/A
1 2
1 2
1 2
1 2
3
3
3
3
Threshold
Target
Stretch
FY22 Outcome
$6bn
4%
47%
$8bn
5.2%
49%
<0.75x
$11.5bn
$22.5bn
7%
51%
15.4%
55.8%
0.45x
95%
95%
87.5%
97.5%
Strategic alignment:
1
Grow AUM
2
Invest selectively
3
Manage portfolios to maximise value
Read more about performance on page 98
Total remuneration (actual vs target)
Benoît Durteste
Vijay Bharadia
Antje Hensel-Roth
6,500
5,850
5,200
4,550
3,900
3,250
2,600
1,950
1,300
650
0
6,462 6,342
0
0
2
4
,
4
0
7
,
4
4,062
0
2
5
2
,
0
0
8
,
1
6
7
1
,
1
0
8
0
,
1
462
462
462
t
e
g
r
a
T
m
u
m
i
x
a
M
d
r
a
w
A
462
462
l
y
n
o
y
a
p
d
e
x
i
F
Fixed pay
Cash Bonus Award
ICG PLC Equity
3,000
2,700
2,400
2,100
1,800
1,500
1,200
900
600
300
0
2,563
1.400
2,403
1.288
1,563
700
563
563
300
563
600
552
563
563
l
y
n
o
y
a
p
d
e
x
i
F
t
e
g
r
a
T
m
u
m
i
x
a
M
d
r
a
w
A
3,000
2,700
2,400
2,100
1,800
1,500
1,200
900
600
300
0
1,989
1,050
1,839
945
1,239
525
489
489
225
489
450
405
489
489
l
y
n
o
y
a
p
d
e
x
i
F
t
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g
r
a
T
m
u
m
i
x
a
M
d
r
a
w
A
ICG | Annual Report & Accounts 2022
97
Remuneration Committee report continued
Annual report on remuneration
EXECUTIVE DIRECTOR PERFORMANCE
Awards in respect of annual performance1
KPI
Quantitative KPIs
Link to
strategic
objectives
Threshold
Target
Stretch
FY22 Outcome
CEO
weighting
CFOO
weighting
CPEAO
weighting
Fundraising
1
$6bn
$8bn
$11.5bn
$22.5bn
27.5%
20.0%
25.0%
Realised portfolio
returns
FMC
operating margin
2
3
4%
5.2%
7%
15.4%
15.0%
10.0%
10.0%
1 2
3
47%
49%
51%
55.8%
20.0%
25.0%
22.5%
Net gearing2
N/A
<0.75x
0.45x
2.5%
5.0%
2.5%
Qualitative KPIs
Strategic
development
1 2
3
95.0%
10.0%
10.0%
10.0%
% of max
Culture, D&I and
Sustainability
1 2
3
Operating platform
and risk management
1 2
3
Overall leadership and
personal effectiveness
1 2
3
Strategic objectives
1
2
Grow AUM
Invest selectively
3 Manage portfolios to maximise value
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ICG | Annual Report & Accounts 2022
95.0%
15.0%
10.0%
15.0%
87.5%
5.0%
15.0%
10.0%
97.5%
5.0%
5.0%
5.0%
1. The on-target variable pay levels are 60% of maximum for the CEO and 50% of
maximum for the CFOO and CPEAO. 25% of maximum is payable for threshold
performance, and 100% of maximum for performance at stretch level or above.
2. The Board did not set threshold and stretch targets for net gearing but a target
of <0.75x, which was met.
Executive Director Performance continued
measure as a clear expression of performance relative to the targets
we agree with our clients for each investment strategy.
At the outset of FY22, the Committee set stretching targets across all
KPIs, commensurate with the continued growth and success of ICG.
In light of the ongoing development of ICG, the Committee also
reviewed the KPI weightings. Financial KPIs had a 65% weighting for
the CEO, and 60% for the CFOO and CPEAO. Non-financial KPIs
included a Culture, Diversity & Inclusion, and Sustainability category,
with a weighting of 15% for the CEO and CPEAO and 10% for the
CFOO.
In this exceptional year, we are delighted to say that all stretch targets
for the financial KPIs have been significantly exceeded.
Financial KPIs:
1. Fundraising
How performance is measured
Given the increased guidance to the market in June 2021 of US$40bn
over four years with a minimum of US$7bn in any given year, we
increased the targets for our fundraising KPI as follows:
– The threshold target was raised from $4.8bn to $6bn annualised
– The on-target was raised from $7.2bn to $8bn annualised
– The stretch target was raised by ~20% from $9.6bn to $11.5bn
annualised, which would represent the highest fund raise in the
history of the firm and one that is 15% above the linearly annualised
four-year target communicated to the market
Performance achieved this year
In this exceptionally strong fund raising year, ICG has exceeded its
annualised target of $8bn by 181% ($14.5bn), raising $22.5bn in new
funds. This represents an uplift of 112% ($11.9bn) compared to the
FY21 outcome of $10.6bn and exceeds the ED KPI stretch target by
96% ($11bn). Of particular note are the significant fundraises for the
flagship European Fund VIII ($7.7bn raised during the year) and
Strategic Equity IV ($1.5bn raised during the year) as well as the very
successful first-time fund sizes of $1.3bn for Sale and Leaseback I and
$1.7bn for Infrastructure Equity I. All four funds carry highly attractive
headline fee levels of between 125bps and 150bps, including a fee
structure based on committed capital. In light of the wider market
dynamics for fundraising as well as the exceptionally strong
deployment of their predecessor funds, ICG was able to bring
forward the fundraises for Europe VIII and Strategic Equity IV, which
gives us substantial dry powder across our strategies and benefited
revenue streams.
2. Realised Portfolio Returns
How performance is measured
Realised Portfolio Returns measure the realised weighted investment
returns in aggregate relative to the weighted average performance
hurdle, which differs depending on the underlying investment
strategy. As there is no recognised benchmark for the full suite of
ICG’s investment strategies, the Committee has opted for this
Here too, the Committee has increased KPI targets as follows
compared to FY21: threshold has increased from 3% to 4% and
on-target has increased from 5% to 5.2%. 5.2% is in line with our
weighted average investment performance hurdle in aggregate
across all funds. The stretch target is 7%.
Performance achieved this year
In order to achieve on-target KPI performance this year, virtually all
funds had to clear their performance hurdle on a weighted average
aggregated basis. In order to reach the stretch performance level, all
funds in weighted aggregate had to outperform the weighted
average performance fee hurdle by 33%.
Investment performance, which forms the basis of future fund raising,
growth of fee income and therefore FMC profitability, continues to
be exceptional, putting ICG in a strong position for continued
success. Realised Portfolio Returns reached 15.4%, reflecting both
excellent investment acumen and taking advantage of attractive
valuations to anchor fund performance.
3. Operating Margin
How performance is measured
The Committee increased FMC operating margin targets from FY21
to FY22 as follows:
– Threshold from 43% to 47%;
– On-target from 45% to 49%; and
– Stretch from 50% to 51%.
We consider these to be highly stretching, both relative to the wider
UK market and our global competitors with a similar asset base as
well as given the continued need to invest in what is a high-growth
business.
Performance achieved this year
Based on exceptional fundraising, significant revenue growth and a
disciplined approach to cost management, the outperformance
target was significantly exceeded with an FMC operating margin of
55.8%.
4. Net Gearing
How performance is measured and performance achieved this year
In light of shareholder guidance changing to a gearing target of <1x,
the Committee has amended this KPI from <1x to <0.75x. The net
gearing as at the end of FY22 is 0.45x, demonstrating prudent
balance sheet management.
ICG | Annual Report & Accounts 2022
99
Remuneration Committee report continued
Annual report on remuneration continued
Non-Financial KPIs:
5. Strategic Development
How performance is measured
Key elements of ICG’s strategic evolution as a market-leading
alternative investment firm include the refinement of our positioning
through selective diversification and growth; enhancing our presence
in key distribution channels; and furthering our bench strength in
terms of capabilities across all areas of the firm.
Performance achieved this year
This year has been exceptionally successful in both our ‘grow up’ and
‘grow out’ strategy for business building; ICG’s global standing in
our flagship European Corporate and Strategic Equity strategies has
been further cemented with record fundraises. There has also been
very successful progress on the strategically important build-out of
our real assets business, with Infrastructure Equity I and Sale and
Leaseback I closing at $1.7bn and $1.3bn respectively with fees on
committed capital, the recruitment of a Global Head of Real Estate
with a strong private equity background and the building of a
European Opportunistic Real Estate investment team.
In distribution, management have created dedicated fundraising
channels for Real Estate, recognising the significant opportunity in
this asset class as well as for Credit, given the specific requirements
of this client group. There has also been good progress in the Wealth
Management channel, with capital commitments into flagship
strategies.
Management have recruited and/or developed future succession
candidates for critical roles in all teams across all business units. In
addition to a number of high impact hires in investments, in
fundraising and in the corporate functions, bench strength is being
increased through development programmes aimed at enhancing the
leadership capabilities of the senior team, including those tailored to
the next generation of top managers.
6. Culture, D&I and Sustainability
How performance is measured
ICG’s culture, inclusive environment and commitment to sustainability
form the key building blocks of our success. We set stretching targets
to make significant progress towards ensuring at least 30% of senior
roles continue to be held by women by 2023; further enhancing an
environment in which Inclusion thrives through employee
engagement programmes; driving an impactful CSR agenda; and
further establishing ICG as a leader in sustainability within our
industry.
Performance achieved this year
Culture
This year, management continued a programme of enhancing
communication, relaunching an internal engagement platform, as well
as conducting comprehensive engagement surveys and roundtable
staff engagements to help inform executive decision-making.
As a result, ICG has launched a global platform for holistic leadership
and performance management internally, anchoring firmwide values
and enhancing cultural cohesion whilst driving strong performance.
Participation in fund success has been enhanced more equitably
across the firm by creating a firmwide co-investment programme
open to all colleagues across our funds.
D&I
ICG has exceeded the commitment made under the UK Women in
Finance Charter, doing so two years earlier than planned: 41% of our
senior UK-based roles are now held by women (well above the 30%
threshold for achieving our commitment). Globally that figure is 35%.
Management have focused in particular on creating more
opportunities for Inclusion, launching three new employee-led
networks as well as a market-leading, global Wellbeing offering
focusing on mental as much as physical health, as well as enhancing
support for key life events.
The leadership team have also worked extensively on ICG’s
responsibility to create a more equitable industry beyond just ICG.
This has included extensive support for industry-wide initiatives such
as 100 Women in Finance, Level 20, #10,000 Black Interns and the UK
Diversity Project, as well as internships and insight days for under-
represented groups in our industry.
As part of a broader commitment to create a more diverse and
inclusive industry, a corporate giving framework has been established
which reflects ICG’s Inclusion goals and advances social mobility in
our own and adjacent industries. Charitable giving has significantly
increased to over £2m across a dedicated framework of: broadening
access to top-level tertiary education for underprivileged teenagers;
supporting disadvantaged university students, typically from ethnic
minority and/or lower socio-economic backgrounds, to succeed at
top universities; levelling access for such students to the alternative
investment industry as well as the top level professions through
dedicated mentoring, internship and support programmes. This is
being undertaken in partnership with The Access Project, UpReach
and Seizing Every Opportunity (SEO) in our strategically important
markets of the UK, US, France and Germany.
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ICG | Annual Report & Accounts 2022
Sustainability
ICG has committed to be net zero by 2040 and was in the first group
of alternative asset managers globally to publish approved and
validated science-based targets (SBTs). This is supported by two
ambitious emissions reduction targets by 2030, which have been
approved and validated by the SBT initiative. ICG has committed to
ensuring that 100% of relevant investments have SBTs by 2030, with
an interim target of 50% by 2026.
ICG’s MSCI ESG Ratings were upgraded from BBB to AAA with a
perfect industry-adjusted score of 10/10. Our S&P CSA rating
improved from the 75th to the 91st percentile, and our Sustainalytics
rating from 25/360 to 11/441 in our global peer group.
99% of capital raised in FY22 has been in funds classified as Article 8.
As at 31 March 2022, ICG has $3.9bn of ESG-linked financing,
connecting the performance of the business and our funds with
ambitious efforts to improve sustainability and address the climate
challenge. ICG also successfully launched a €500m, eight-year
sustainability-linked Eurobond featuring a coupon adjustment based
on the Group’s Net Zero ambition.
Through ICG’s role with the initiative Climat International (iCI), we
contributed to developing carbon footprint guidance for private
market investors and their portfolios across the industry. For ICG’s
own investment strategies, reporting metrics have been further
enhanced, with full assessment frameworks embedded across all
asset classes, taking into account emerging disclosure regulations,
industry best practice and evolving client expectations, thereby
bringing additional rigour to investment decision-making. This
included developing a proprietary ESG rating for Credit and Private
Debt strategies.
ICG has enhanced improved transparency and communication on
ESG matters to shareholders, including best practice in ESG
disclosures, and published our inaugural Sustainability and People
Report.
7. Operating Platform & Risk Management
How performance is measured
One of the critical performance indicators for our successful growth
is continuously refining our operating platform as a driver for scale
and excellence whilst ensuring that we maintain very high standards
for our risk management and control environment.
Performance achieved this year
– Reorganised Operations function to functionalise responsibilities
across all asset classes and created an even more scalable
platform
– Created a centre of excellence for data, reporting and analytics
and enhanced governance and systems extensively to enable
ICG’s highly diversified platform
– Further strengthened our control functions with recruitment of
senior leaders in Group Internal Audit and US Compliance
– Made continuous progress on implementing our risk management
framework
– Implemented readiness planning for the implementation of IFPR
(the Investment Firms Prudential Regime) which has implications
for regulatory capital and remuneration
– Completed Libor transition activities for non-USD Libor
currencies in line with regulatory expectations
There were no material risks or operational events, consistent with a
track record of excellent risk management.
8. Overall Leadership & Personal Effectiveness
All three Executive Directors have demonstrated excellent overall
leadership. As demonstrated in the exceptional company
performance across all financial and non-financial KPIs, the Executive
Directors have become a well versed, complementary leadership
team with robust challenge as well as a strong team spirit. A drive for
excellence across all business areas, the continued implementation of
a high-performance culture and a holistic approach to leadership is
significantly contributing to the firm’s success.
Executive Director remuneration:
In considering the awards to be made to the Executive Directors, the
Committee took into account their individual contributions to the
overall performance in relation to the quantitative and qualitative
objectives.
Having considered his delivery across the range of KPIs, the
Committee made a total variable pay award to Benoît Durteste of
£5,880,000, comprising an annual Cash Bonus Award of £1,176,000
and a deferred PLC Equity Award of £4,704,000, reflecting his
performance in his dual role as CEO and CIO of the Group.
For Vijay Bharadia, the Committee made a total variable pay award of
£1,840,000. This comprises an annual Cash Bonus Award of
£552,000 and a deferred PLC Equity Award of £1,288,000. For Antje
Hensel-Roth, the Committee determined that an award of £1,350,000
was appropriate, comprising an annual Cash Bonus Award of
£405,000 and a deferred PLC Equity Award of £945,000.
ICG | Annual Report & Accounts 2022
101
Remuneration Committee report continued
Annual report on remuneration continued
Single total figure of remuneration table (audited)
The following table shows a single total figure of remuneration in respect of qualifying services for the financial year ended 31 March 2022 for
each Executive Director who served during the year, together with comparative figures for the previous financial year:
Salaries
£000
Benefits1
£000
Pension
allowance
£000
Fixed
remuneration
£000
Short-term
incentives,
available
as cash2
£000
Total
emoluments
£000
Short-term
incentives,
deferred3
£000
Total variable
remuneration
£000
Total
remuneration
£000
Long-term
Incentives4,5
vested from
prior years
(legacy awards)
£000
Single total
figure of
remuneration
£000
394.0
394.0
500.0
500.0
425.0
407.5
23.8
13.4
18.6
12.2
16.7
12.3
43.8
48.7
44.4
44.4
47.2
44.6
461.6 1,176.0
1,140.0
456.1
1,637.6 4,704.0
1,596.1 4,560.0
5,880.0
5,700.0
6,341.6
6,156.1
1,509.4
1,374.3
7,851.0
7,530.4
563.0
556.6
552.0
480.0
1,115.0
1,036.6
1,288.0
1,120.0
1,840.0
1,600.0
2,403.0
2,156.6
488.9
464.4
405.0
330.0
893.9
794.4
945.0
770.0
1,350.0
1,100.0
1,838.9
1,564.4
–
–
–
–
2,403.0
2,156.6
1,838.9
1,564.4
Executive Directors
Benoît Durteste
2022
2021
Vijay Bharadia
2022
2021
Antje Hensel-Roth
2022
2021
See page 108 for details of payments to NEDs
1. Each Executive Director’s benefits include medical insurance, life insurance and income protection for the year ended 31 March 2022.
2. This represents the Cash Bonus Award element of the variable remuneration.
3. This represents the ICG PLC Equity Awards made for the year ended 31 March 2022 and deferred over five years vesting in years three, four and five following award.
4. The long-term incentive amounts are legacy award payments received during the year in respect of Deal Vintage Bonus and shadow carry. These awards were made in prior years and
are no longer available to Executive Directors. FY14, FY15, FY16 and FY17 Deal Vintage Bonus awards were distributed in FY22.
5. Share price movements do not have any impact on the value of long-term incentives vesting during the current year (legacy awards).
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ICG | Annual Report & Accounts 2022
Performance graph of Total Shareholder Return (ten years)
The graph below shows a comparison between the Group’s total shareholder return performance and the total shareholder return for the FTSE
All Share index. The graph compares the value at 31 March 2012 of £100 invested in Intermediate Capital Group plc with the FTSE All Share Index
over the subsequent ten years. This index has been chosen to give a comparison with the average returns that shareholders could have received
by investing in a range of other companies.
The TSR for the Company during this period has been 825.5%, compared to 99.5% for the Index.
Total shareholder return
1400
1200
1000
800
600
400
200
0
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
Intermediate Capital Group
FTSE All Share
Total remuneration of the Chief Executive Officer
The table below details the total remuneration of the CEO for the past ten years. The amounts are presented on the basis of the Single Total Figure
of Remuneration Table (see page 102) and include some deferred compensation awarded in previous years but reported in the year received.
£000
Benoît Durteste
Christophe Evain
Financial year
Total remuneration
Percentage of maximum
opportunity of short-term
incentives awarded
Percentage of maximum
opportunity of long-term incentives
awarded
2022
2021
2020
2019
20181
20181
2017
2016
2015
2014
2013
7,851
7,530
5,886
9,526
3,412
183
6,888
4,295
5,103
4,797
1,492
98%
95%
84%
87%
77%
0%
102%
76%
80%
97%
24%
N/A
N/A
N/A
N/A
N/A
N/A
160%
98%
98%
20%
1%
1. The amounts above have been pro-rated to reflect the transition of the CEO role from Christophe Evain to Benoît Durteste on 25 July 2017.
A comparison of the change of pay of the CEO and the other Directors to that of all employees of the Group is shown on page 106.
ICG | Annual Report & Accounts 2022
103
Remuneration Committee report continued
Annual report on remuneration continued
Relative importance of spend on pay
The table below illustrates the relative importance of spend on pay compared with other disbursements from profit (namely distributions to
shareholders) for the financial year under review and the previous financial year. The increase in employee costs includes the impact of ongoing
investment in people and the annualisation effect of new joiners in FY21.
Ordinary dividend paid (£m)
Permanent headcount at year end
Employee costs (£m)
Year ended 31 March
2021
Year ended 31 March
2022
Percentage change
150.9
470
179.4
165.7
525
262.1
9.8%
11.7%
46.1%
Directors’ interests in shares (audited)
The Directors and their connected persons held the following interests in shares of the Company:
Directors
Benoît Durteste
Vijay Bharadia
Antje Hensel-Roth
Lord Davies of Abersoch
Virginia Holmes
Rosemary Leith
Matthew Lester
Rusty Nelligan
Kathryn Purves
Amy Schioldager
Andrew Sykes
Stephen Welton
Shares held outright
as at 31 March 2021
Shares held outright
as at 31 March 2022
Unvested ICG PLC
Equity Award/DSA
interests
Unvested SAYE
options
Shareholding requirement
met?
As at 31 March 2022
1,141,580
20,822
3,819
30,452
10,000
N/A
N/A
141,000
10,737
10,000
15,000
55,000
1,141,580
29,744
2,434
Nil
10,000
1,705
4,863
150,000
10,737
20,000
15,000
60,000
1,284,946
140,754
58,381
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1,468
1,468
1,468
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Yes
Build-up period
Build-up period
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Under the Directors’ Remuneration policy, the CEO is required to hold shares amounting to 300% of his annual salary and the other Executive
Directors are each required to hold shares amounting to 200% of their annual salary, at the share price prevailing on 31 March 2022 with a
build-up period for new Executive Directors. Both Vijay Bharadia and Antje Hensel-Roth are still within this build-up period. There are no set
shareholding requirements for NEDs, although all are encouraged to purchase a holding to align themselves with shareholders.
As at 25 May 2022, there were no changes in the Directors’ share interests from the figures set out in the tables above.
Total pension entitlements (audited)
No Executive Director had a prospective entitlement to a defined benefit pension by reason of qualifying services.
Executive Directors’ co-investment in third-party funds
Fund investors expect the CEO/CIO to co-invest in funds to demonstrate his alignment, and as such he has made significant personal commitments
from his own resources to the majority of the Group’s closed-end strategies. At times, other Executive Directors may also make co-investments
from their own resources to demonstrate alignment.
The CEO/CIO’s co-investments from his personal resources range from £112.5k to £5.3m across 19 funds.
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ICG | Annual Report & Accounts 2022
Carried interest on third-party funds
Certain professionals (including the Executive Directors) are expected to invest in carried interest arrangements under which a portion of the
carried interest (usually between 50% and 80%) in respect of certain managed funds is available for allocation to investment professionals. Those
investment professionals who participate in such arrangements pay full market value for the interests at the time of acquisition. Carried interest on
third-party funds is an investment required by third-party fund clients to drive alignment and is not remuneration for services provided to the Group.
The current standard framework with third-party fund investors, which reflects industry standards in the UK and globally, meant that Executive
Director carried interest commitments in the year ended 31 March 2022 have ranged between 10% and 15% per relevant fund. Further details of
the funds managed by the Group (including an indication of those funds which have carried interest arrangements required by fund investors)
can be found on page 201.
Scheme interests awarded during the financial year (audited)
The following table provides the details of scheme interests awarded to the Executive Directors during the year ended 31 March 2022:
Director
Benoît Durteste
Vijay Bharadia
Antje Hensel-Roth
Award
Award date
Face value at grant
(£000)
Number of shares
awarded
ICG PLC Equity Awards
ICG PLC Equity Awards
ICG PLC Equity Awards
8 June 2021
8 June 2021
8 June 2021
4,560.0
1,120.0
770.0
210,818
51,779
35,598
On 8 June 2021, ICG PLC Equity awards were granted to Executive Directors who had served in the year ended 31 March 2021 in relation to their
performance in that year. 80% of the variable pay awarded to Benoît Durteste and 70% of the variable pay awarded to Vijay Bharadia and Antje
Hensel-Roth in respect of that year was granted in the form of ICG PLC Equity. Awards vest in tranches of one third at the end of the third, fourth
and fifth years following the year of grant. As awards are made on the basis of PICP generated and performance achieved, there are no further
performance conditions. The share price on the date of award of ICG PLC Equity Awards was £21.63. This was the middle market quotation for
the five dealing days prior to 8 June 2021.
CEO pay ratio
The table below compares the CEO’s single total remuneration figure for FY22 to the remuneration of the Group’s UK workforce as at
31 March 2022.
2022
2021
2020
Method
25th percentile pay ratio
Median pay ratio
75th percentile pay ratio
Option A
Option A
Option A
66:1
74:1
58:1
42:1
46:1
37:1
21:1
24:1
18:1
Our ratio is lower than many FTSE companies due to a consistent remuneration approach. The median pay ratio has decreased from 46:1 to 42:1.
Consistent with our calculation methodology in prior years, employee pay is calculated on the basis of the CEO single figure, which is ‘Option A’
under the reporting requirements. Of the three possible methodologies which companies can adopt (Options A, B or C) we have chosen Option
A which we consider the most robust. Option A requires the Group to calculate the pay and benefits of all its UK employees for the relevant
financial year in order to identify the total remuneration at the 25th percentile, at the median and at the 75th percentile. Employee pay data are
based on full-time equivalent pay for UK employees as at 31 March 2022, in line with the CEO single figure methodology. In calculating these
ratios, we have annualised any part-time employees or new joiners to a full-time equivalent (where relevant).
Remuneration for quartile employees
Salary
Total pay and benefits
Employee at 25th percentile
Median Employee
Employee at 75th percentile
£70,000
£118,729
£100,000
£189,143
£150,000
£374,976
ICG | Annual Report & Accounts 2022
105
Remuneration Committee report continued
Annual report on remuneration continued
Percentage change in remuneration of Directors
The table below details how changes to the Directors’ pay compare with the change in the average pay across all employees of the Group. Each
figure is a percentage change of the values between the previous financial year and the financial year under review. The total permanent
workforce has been selected as the comparator for salaries and fees and short-term incentives. The comparison of the increase in taxable
benefits has been made for UK permanent employees only as their remuneration packages are most directly comparable to that of the Chief
Executive.
Percentage change
Salaries/fees
Taxable benefits
Short-term incentives
Salaries/fees
Taxable benefits1
Short-term incentives2
FY21
FY22
Benoît Durteste
Vijay Bharadia
Antje Hensel-Roth
Lord Davies of Abersoch
Virginia Holmes
Rosemary Leith
Matthew Lester
Rusty Nelligan
Kathryn Purves
Amy Schioldager
Andrew Sykes
Stephen Welton
All employees
0.0%
0.0%
N/A
0.0%
0.0%
N/A
N/A
0.0%
0.0%
0.0%
0.0%
0.0%
1.6%
1.7%
52.3%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
22.9%
23.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.0%
0.0%
0.0%
18.2%
4.1%
N/A
N/A
4.1%
4.1%
0.0%
0.0%
0.0%
-9.5%
26.7%
26.7%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
27.4%
4.1%
4.3%
5.6%
3.2%
15.0%
22.7%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
18.8%
1. Excludes taxable business expenses for the Directors and all employees. The significant increase in taxable benefits for Vijay Bharadia and Antje Hensel-Roth is due to an increase in
medical insurance premiums, whereas the premiums for Benoît Durteste’s medical insurance have fallen largely due to the improved GBP/EUR conversion.
2. The increases in short-term incentives for employees arise from demographic changes in the employee population including a number of senior hires over the last couple of years and
improved performance. This demographic change means that employees are more likely to receive more substantial short-term incentives compared to a more junior population.
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ICG | Annual Report & Accounts 2022
Gender pay
We are required by law to publish data on the following:
– Gender pay gap (mean and median)
– Gender bonus gap (mean and median)
– Proportion of men and women in each quartile of the Group’s pay structure
– Proportion of men and women receiving bonuses
The gender pay gap is a UK comparison across the pay of all men and all women regardless of their level or role. This is different from an equal
pay gap, an individual measure comparing the pay of a man and a woman in the same or a similar role. The Group has equal pay for equal work
regardless of gender.
Both the pay and bonus gaps have increased during the financial year. The mean pay gap is now 35.7% and the mean bonus gap is 77.2%.
Whilst there has been an increase in women in all parts of the Group, including at the most senior level, and promotions as a percentage of the
overall population have been equal between men and women, a small increase in the proportion of men occupying senior roles in the most
high-paying parts of the organisation has led to the overall increase in our gender pay gap. Given our relatively small headcount, those small
year-on-year changes in headcount at senior levels can have a significant impact. We also note that the vast majority of these high-paying awards
are highly deferred in the form of DSA, PLC Equity Awards and DVB.
The mean bonus gap has increased largely as a function of similar long-term incentives granted several years ago and being paid out now. At the
time of grant, the occupation of senior roles by women was much lower across the Group. Given the long-term nature of these incentive plans
and the methodology for gender bonus gap calculations, we expect to see this dynamic continue for some time.
Mean pay gap
Mean bonus gap
2018
33.6%
67.7%
2019
2020
2021
28.9%
78.3%
26.2%
66.6%
30.9%
68.8%
2022
35.7%
77.2%
The Group is nonetheless pleased with the overall progress which continues to be made and continues to be committed to addressing our
gender pay gap with a number of initiatives which are now well established. It continues to increase talent diversity and foster a culture of
inclusivity through:
– In 2018, the Group committed to the Women in Finance Charter with a goal of having 30% of senior roles in the UK filled by women. Through
our extensive work on diversity, we have reached and indeed exceeded this target already and are pleased to report that 41% of our UK senior
roles are filled by women
– Recruitment: improving hiring diversity through extending the reach of our search and selection activities; pressing for balanced candidate
short lists for all roles; maximising diversity on our interview panels to moderate bias; continuously developing the interviewing skills of our staff;
creating opportunities for returnships for women who had previously taken a break from the industry, especially in investment and client teams
– Development: supporting individuals in their career progression through extensive mentoring and training; as well as holding managers
accountable for the development and progression of their teams through dedicated KPIs
– Retention: creating a culture of inclusion driven from both the top down and the bottom up, through formal initiatives and informal networks;
continuously developing our offering in terms of parental benefits, mental and physical wellbeing, and career sustainability
ICG | Annual Report & Accounts 2022
107
Remuneration Committee report continued
Annual report on remuneration continued
Benchmarking
Remuneration awards are benchmarked against the following peers in the major jurisdictions where the Group operates:
– Listed and unlisted alternative asset managers
– Listed and unlisted asset managers
– Investment banks
– Listed financial service companies
– Other organisations as appropriate for the individual role
The Group carries out an extensive annual exercise to benchmark proposed salaries, bonuses and deferred awards for all employees globally.
Our Executive Directors are benchmarked against equivalent individuals at a range of relevant public and private companies globally. While it is
extremely challenging to obtain publicly available data on many private companies, we are able to gain insight into this area by commissioning
bespoke research by leading external compensation and recruitment consultants and other independent providers of compensation data.
Due to the unique nature of the Group’s business as a UK-listed alternative asset manager, which competes for talent against other alternative
asset managers which are not listed in the UK or indeed at all, it is imperative to obtain a wide range of benchmark data.
Hence, while we do consider other UK-listed financial services companies in our benchmarking, they can be a less relevant comparator.
Fees paid to NEDs (audited)
In the financial year under review, NEDs’ fees were as follows:
Non Executive Directors
Date appointed
Lord Davies of Abersoch1
Virginia Holmes
Rusty Nelligan
Rosemary Leith
Matthew Lester
Kathryn Purves4
Amy Schioldager2
Andrew Sykes3
Stephen Welton
November 2019
March 2017
September 2016
February 2021
April 2021
October 2014
January 2018
March 2018
September 2017
Board
membership
fees
£000
Board and
Committee
Chairman fees
£000
Senior
Independent
Director fee
£000
Audit
Committee
£000
Remuneration
Committee
£000
Risk
Committee
£000
Total for
year ended
2021
£000
Total for
year ended
2022
£000
302.9
25.0
25.0
25.0
20.5
23.8
76.5
76.5
76.5
76.5
76.5
76.5
71.3
76.5
12.3
12.3
12.3
11.4
14.4
12.3
12.3
12.3
12.3
12.3
275.0
109.3
109.3
17.0
N/A
109.3
121.6
116.6
88.8
302.9
113.8
113.8
101.1
101.1
113.8
121.6
132.3
88.8
12.3
11.4
12.3
1. The Chairman does not receive a fee in respect of his membership of the Remuneration Committee. Lord Davies stepped down as Board Chairman effective 4 March 2022 and fee
payments ceased effective from this date.
2. This fee relates to Amy Schioldager’s role as Board Director of Employee Engagement.
3. Andrew Sykes, previously the Senior Independent Director (SID), has been appointed as Interim Chairman effective from 5 March 2022. For the period during which he is interim
Board Chairman, Andrew Sykes will receive a fee at the same rate as the outgoing Chairman in lieu of the fees he previously received as a Non-Executive Director and SID.
4. Kathryn Purves has taken on the responsibilities of the SID for the period Andrew Sykes is interim Board Chairman, and will receive the relevant fees for this responsibility. This is
effective from 23 March 2022 and the increase in fees will be reflected in the April 2022 payroll and so has not been included above.
5. For the year ended 31 March 2022, there were £14.8k of taxable expenses paid to the NEDs.
NEDs do not have contracts of service and are not eligible to join the designated Group pension plan or receive payment for loss of office. All NEDs
have a three-month notice period, are re-elected annually and were last re-elected in July 2021.
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ICG | Annual Report & Accounts 2022
Payments made to past directors (audited)
The following payments (in excess of £500), in respect of DVB awards made whilst they were Executive Directors, were made in the financial
year ended 31 March 2022 to former directors. These are deferred awards for performance in previous years and were retained on leaving
service.
Employee
Philip Keller
Christophe Evain
£
743,278
783,516
Statement of implementation of Remuneration Policy in following financial year
The NEDs’ fees have been benchmarked against fees of NEDs in comparable companies of similar size and nature. The Chairman’s fee has not
been increased this year. The NEDs’ base fees have not been increased this year but the Committee Chair fees have been increased from
£25,000 to £30,000 and the Committee Membership fees have been increased from £12,250 to £14,000, to move more in line with market
norms.
The salaries for the Executive Directors and fees for the NEDs for the coming year are set out below.
Role
CEO
CFOO
CPEAO
Chairman
Non-Executive Director base fee (other than Chairman)
Senior Independent Director
Remuneration Committee Chair
Audit Committee Chair
Risk Committee Chair
Member of the Audit Committee, Risk Committee or Remuneration Committee
Board Director for Employee Engagement
Annual salaries and fees £000
Year ended
31 March 2022
Year ended
31 March 2023
394.0
500.0
425.0
325.0
76.5
15.5
25.0
25.0
25.0
12.3
20.5
410.0
520.0
442.0
325.0
76.5
15.5
30.0
30.0
30.0
14.0
20.5
Committee composition is set out on page 74 and in the relevant Committee reports on pages 77 to 117.
For the coming year, the AAP will be calculated as described in the Directors’ Remuneration Policy. All incentives for qualifying services payable
to Executive Directors and other employees of the Group will be funded out of the AAP. The Executive Directors’ annual bonus and other
incentives will be guided by their achievement of specific objectives.
The Executive Directors’ annual variable pay awards will be based on a scorecard of KPIs, with an expected weighting of at least 60% on financial
KPIs as for FY22. These KPIs take account of the key business priorities including, for example: fundraising, realised returns on investments and
profitability. Part of the variable pay award will be based on strategic and operational KPIs, such as Culture, Diversity and Inclusion and
Sustainability.
Statement of voting at Annual General Meeting
The table below sets out the votes cast on the Directors’ Remuneration Report at the 2021 Annual General Meeting of the Company and on the
Directors’ Remuneration Policy when last tabled at the 2020 Annual General Meeting of the Company.
Directors’ Remuneration Report
Remuneration Policy
Payments for loss of office (audited)
No payments were made for loss of office in the financial year under review.
Votes for
Votes against
Abstentions
98.34%
1.66%
15,377
94.43%
5.57%
242,894
ICG | Annual Report & Accounts 2022
109
Remuneration Committee report continued
GOVERNANCE OF REMUNERATION
Committee governance
The Committee is authorised by the Board to determine and agree
the remuneration of the Chairman of the Group, the Executive
Directors and such other members of the executive management
(including all material risk takers).
Roles and responsibilities
The Committee is responsible for:
– Recommending to the Board the Group Remuneration Policy and
share incentive schemes to be recommended to shareholders
ensuring compliance with applicable laws, regulations and the
Group’s risk appetite
– Recommending the remuneration terms for any person proposed
to join the Board as the Chairman or as an Executive Director and,
in consultation with the Chairman, determining the contractual
terms of employment of the Executive Directors
– Monitoring the level and structure of remuneration for Executive
Directors and certain senior employees taking account of all
relevant factors and having regard to views of shareholders and
other stakeholders
– Determining targets or key performance indicators (consistent
with the Group’s strategy, budget and individuals’ personal
objectives) for performance-related pay schemes applicable to
Executive Directors and determining the outcomes under such
schemes
– Determining the remuneration of the Chairman and, having taken
advice from the Chairman, the Executive Directors
– For all share incentive plans, determining when awards will be
made, the aggregate quantum of such awards, the individual
awards to certain senior employees and, having taken advice from
the Chairman, the individual awards to Executive Directors
– Making proportionate adjustments to any employee’s
remuneration for events that have been detrimental to the Group
– Overseeing any payments made on the termination of employment
of an Executive Director or certain senior employees
– Approving the aggregate variable pay pool and any Business
Growth Pool
Composition
The Committee consists entirely of NEDs. During the year, the
members of the Committee were Virginia Holmes (Chair of the
Committee), Lord Davies of Abersoch, Rosemary Leith, Andrew
Sykes and Stephen Welton.
Kathryn Purves and Rusty Nelligan have also attended meetings of
the Committee during the year at the invitation of the Committee
Chair, in their roles as Chairs of the Risk and Audit Committees, to
ensure that risk and audit matters are taken into account in
determining the remuneration of Directors.
Biographical details can be found on page 70
None of the Committee members has any personal financial interests
(other than as a shareholder in ICG) which would lead to a conflict of
interests or conflicts arising from cross directorships or day-to-day
involvement in running the business. The Company therefore
complies with the Corporate Governance Code recommendations
regarding the composition of the Committee.
The Committee meets at least three times a year and more frequently
if necessary. Executive Directors attend the meetings by invitation.
The Committee consults the Executive Directors regarding its
proposals and also has access to professional advice from outside
the Group. The Head of Reward also attends meetings, and the
Company Secretary attends as Secretary. No Director is involved in
any decisions as to their own remuneration.
A table showing the number of Committee meetings held during the
year and the attendance record of individual Directors can be found
in the Corporate Governance section (see page 74).
Terms of reference
The Committee’s terms of reference are approved and reviewed by
the Board on a regular basis, most recently in November 2021.
The terms of reference are available on the Group’s website www.
icgam.com, or by contacting the Company Secretary.
Effectiveness
The operations of the Committee were reviewed as part of the
internal Board evaluation led by the Chairman in early 2022; the
Committee was found to be operating effectively. For more details of
this exercise, please see page 76.
Advisers to the Committee
During the year, external advice to the Committee was provided by
Alvarez and Marsal. Legal advisers (including Allen & Overy and
Slaughter & May) have been available to the Committee during the
year to 31 March 2022, and PwC and Deloitte are available for advice
on certain taxation and other matters. Advisers are selected on the
basis of their expertise in the area and with a view to ensuring
independence from other advisers to the Group. Therefore, the
Committee is confident that independent and objective advice is
received from its advisers.
The fees charged for advice to the Committee were £99,272 payable
to Alvarez and Marsal. Fees are charged on the basis of time spent.
This Annual Report on Remuneration is approved by the Board and
signed on its behalf by
Virginia Holmes
Chair of the Remuneration Committee
25 May 2022
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ICG | Annual Report & Accounts 2022
DIRECTORS’ REMUNERATION POLICY
This section describes our remuneration policy, which was approved
by our shareholders at the 2020 AGM with a 94.43% vote in favour.
The ongoing appropriateness of the 30% limit for the existing
business is kept under review.
Annual Award Pool (AAP) and Business Growth Pool
(BGP)
A central feature of the Group’s Remuneration policy is the AAP. All
incentives awarded across the Group are governed by an overall limit
of 30% of Pre-Incentive Cash Profit (PICP) over a five-year period.
Awards to the Executive Directors are paid as a mix of cash and ICG
PLC shares. A significant proportion of the variable pay is made in the
form of deferred shares, with at least 70% of the total variable pay for
each Executive Director awarded in the form of ICG PLC shares
deferred over three, four and five years.
This percentage may be exceeded in any single year but must not be
exceeded on an average basis over five years. Managing the AAP by
reference to a five-year rolling average ensures that variable awards
to employees are made in a considered way with a long-term
perspective rather than as a reaction to a single year’s exceptional
performance.
The AAP is funded by PICP, so that:
– Interest income and capital gains are only recognised on a cash
basis
– Impairments on investment principal are included
– Fair value movement of derivatives is excluded
The holding period for investments is typically four to eight years and
a significant portion of the Group’s fund management fees arise from
committed closed-end funds and are payable over the life of the fund
which can be up to 12 years. This means that the AAP is long-term in
nature as it includes realisations from a number of investment
vintages. By generating the award pool in this way, we ensure that
employees are only rewarded once returns have crystallised.
Allocation of the award pool
The AAP is based on cash profits the Group has already realised from
its fund management business and its investments, and it is capped at
30% annualised over a five-year period. The Committee exercises
discretion over the actual amount to be awarded in variable
compensation each year, based on an assessment of market levels of
pay, Group KPIs, and individual performance (subject to the overall
cap on the AAP).
In a strong year that has generated high PICP, the Committee may
choose not to distribute the full AAP but can instead retain some of it
for potential use in future years. In years where PICP is low, the
Committee may distribute some of the retained AAP from previous
years, if appropriate. The Committee applies a prudent approach to
setting the actual size of variable pay pool, within the overall limits
described above.
Cash Bonus Awards for the Executive Directors are subject to
clawback which applies for two years post award. ICG PLC Equity
Awards are subject to both malus until vesting and clawback which
applies for two years post-vesting.
Business Growth Pool (BGP)
The BGP is capped at 3% of the five-year rolling average PICP and is
designed to support the establishment of new investment strategies,
commensurate with the overall business strategy. The BGP is used to
fund the incentives of relevant teams involved in developing such new
strategies, and is ring-fenced and limited in duration to the period
when the new investment strategy is being developed. Any awards
made from the BGP are overseen by the Committee, and Executive
Directors do not participate in any such awards.
Awards falling within the AAP
All cash and share awards are distributed from the AAP. Historically,
there have been two different award types to be made over ICG
shares: Deferred Share Awards and ICG PLC Equity Awards. We have
also introduced a new award type this year, “Growth Incentive
Awards”, delivered in the form of market value options to a small
group of certain eligible employees which are satisfied using shares
purchased in the market by our Employee Benefit Trust. Deferred
Share Awards and Growth Incentive Awards are not made to
Executive Directors.
Certain performance fees (funded by third-party investors) and
other fund performance incentives funded by ICG are also included in
the overall limits set for the AAP.
Carried interest on third-party funds and similar arrangements in
respect of ICG direct investment funds or business acquisitions that
do not give rise to a cost or liability to the Group are not
remuneration and are outside the AAP.
ICG | Annual Report & Accounts 2022
111
Remuneration Committee report continued
Directors’ Remuneration Policy continued
Remuneration policy table
The table below outlines each element of the remuneration policy for the Directors of the Company.
Purpose and link to strategy
Operation
Maximum opportunity
Performance conditions
– Paid monthly
– Normally reviewed annually
with any changes generally
applying from the start of
the financial year
1. Base salary
– Adequate to recruit and retain
Executive Directors to deliver
the strategic objectives of the
Group
– Designed to be sufficient
to ensure that Executive
Directors do not become
dependent on their variable
remuneration
– Reflects local competitive
market levels
– In considering increases, the
– None
Committee considers the range
of salary increases applying
across the Group, and local
market levels
– Any increase in salary for an
Executive Director will not
normally exceed the average
salary increase across the
Group unless there are
exceptional reasons such as,
but not limited to, a change in
the role or responsibilities of
the Executive Director
2. Benefits
– Benefits currently receivable
– Provision and level of benefits
– None
– Adequate to recruit and retain
Executive Directors to deliver
the strategic objectives of
the Group
– Reflects local competitive
market levels
by Executive Directors
include life assurance,
private medical insurance and
income protection
– Additional benefits (such
as relocation assistance)
may be offered in line with
market practice if considered
appropriate by the Committee
are competitive and appropriate
in the context of the local market
– The maximum opportunity will
depend on the type of benefit
and cost of its provision, which
will vary according to the market
and individual circumstances
3. Pension
– All Executive Directors are
– A pension allowance of no
– None
– Adequate to recruit and
retain Executive Directors to
deliver the strategic objectives
of the Group Purpose and link
to strategy
entitled to a pension allowance
payable each month at the
same time as their salary
more than the level available
to the majority of the Group’s
workforce in the relevant
location is provided. The
current level for the UK
workforce is up to 12.5% of
base salary
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ICG | Annual Report & Accounts 2022
Purpose and link to strategy
Operation
Maximum opportunity
Performance conditions
– An Executive Director’s annual
variable award is drawn from
the AAP which is determined as
described on page 111
– Total variable pay awards
to Executive Directors are
subject to a cap, payable for
outstanding performance only.
This is £6m for the CEO/ CIO,
£2m for the CFOO and £1.5m
for the CPEAO
– Target variable awards to
Executive Directors are £3.6m
for the CEO/CIO, £1m for the
CFOO and £750k for the CPEAO
– An Executive Director’s annual
variable award is drawn from
the AAP, and so is directly
determined by reference to
the Group’s cash profit for the
relevant financial year
– Executive Director’s annual
variable award entitlement is
also determined by reference
to performance against
personal and corporate
performance objectives, which
are derived from the Group’s
key performance indicators
– See details above in relation to
– See details above in relation
the overall annual variable award
to the overall annual
variable award
4. Total variable pay award
– The Total Variable Pay Award
is split between Cash Bonus
Award and ICG PLC Equity
Award (see below)
– The total variable pay
award consists of the
Cash Bonus Award and
ICG PLC Equity Award
4a. Cash Bonus Award
– Rewards achievement of
business KPIs, cash profits
and employing sound risk and
business management
– Awards are made after the
end of the financial year
– The maximum amount of an
Executive Director’s Total
Variable Pay Award that can
be paid as a Cash Bonus
Award is 30%
– Cash Bonus Awards are
subject to clawback which
applies for three years
post award. Forfeiture
of compensation may be
triggered by, amongst other
things, a misstatement of the
accounts, fraud, regulatory
breaches and serious
breaches of contract
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113
Remuneration Committee report continued
Directors’ Remuneration Policy continued
Purpose and link to strategy
Operation
Maximum opportunity
Performance conditions
– See details above in relation
– See details above in relation
to the overall annual
variable award
to the overall annual
variable award
4b. ICG PLC Equity Award
– Rewards achievement of
business KPIs, cash profits
and employing sound risk and
business management
– Aligns the interests of
Executive Directors with those
of shareholders
– Awards are made over shares
in the Company after the end
of the financial year
– At least 70% of an Executive
Director’s Total Variable Pay
Award shall be delivered in
ICG PLC Equity
– Shares normally vest by
one third in each of the third,
fourth and fifth years following
the year of grant unless the
Executive leaves for cause or
to join a competitor, in which
case the awards lapse. The
Committee has discretion
to vary the date of vesting if
necessary or desirable for
regulatory or legislative reasons
– In the event of a change in
control (other than an internal
reorganisation) shares vest
in full
– Dividend equivalents accrue to
participants during the vesting
period and are paid at the
vesting date
– PLC Equity Awards made are
subject to both malus, until
vesting, and clawback which
will apply for up to seven
years post grant. Forfeiture
of compensation may be
triggered by, amongst other
things, a misstatement of the
accounts, fraud, regulatory
breaches and serious
breaches of contract
5. Shareholding
requirement
– To align the interests of the
Group’s Executive Directors
with those of shareholders.
– To further enhance long-term
alignment with shareholders,
a post-cessation
shareholding requirement has
been introduced
– Executive Directors are
– N/A
– N/A
required to build ownership of a
number of ordinary shares in the
Group, normally over five years
from appointment, with a market
value equal to a multiple of the
Director’s annual base salary.
This multiple is three times for
the CEO and two times for the
other Executive Directors
– Executive Directors are
normally required to maintain
this level (or the level so far
accrued at cessation, if lower)
of holding for two years after
they cease to be employed
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ICG | Annual Report & Accounts 2022
Purpose and link to strategy
Operation
Maximum opportunity
Performance conditions
– Employees may save the
maximum permitted by
legislation each month
– The Plan is not subject to any
performance conditions, as
this is not permitted by the
relevant legislation
6. The Intermediate
Capital Group PLC
SAYE Plan 2014
– Provides an opportunity for all
employees to participate in the
success of the Group
– All UK employees are offered
the opportunity to save a
regular amount each month
over 36 months and may
receive an uplift at the end of
the saving contract (subject to
HMRC legislation)
– At maturity, employees can
exercise their option to acquire
and purchase shares in ICG
PLC at the discounted price set
at the award date or receive
the accumulated cash
– None of the Non Executive
Directors’ remuneration
is subject to performance
conditions
7. Fees paid to
Non Executive Directors
– To facilitate the recruitment of
Non Executive Directors who
will oversee the development
of strategy and monitor
the Executive Directors’
stewardship of the business
– Fees are payable to Non
– Non Executive Directors
cannot participate in any of
the Group’s variable pay plans
or share schemes and are not
eligible to join the designated
Group pension plan
– Fees are set and reviewed
in line with market rates.
Aggregate annual fees do not
exceed the limit set out in the
Articles of Association
– Any benefits receivable by Non
Executive Directors will be in
line with market practice
Executive Directors for their
services in positions upon the
Board and various Committees
– Fees for the Board Chairman
are determined and reviewed
annually by the Committee
and fees for Non Executive
Directors are determined by
the Board Chairman and the
Executive Directors
– The Committee refers to
objective research on up-
to-date, relevant benchmark
information for similar
companies
– Non Executive Directors are
reimbursed for expenses,
such as travel and subsistence
costs, incurred in connection
with their duties. Any tax costs
associated with these benefits
are paid by the Group
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Remuneration Committee report continued
Directors’ Remuneration Policy continued
Performance measures and targets
The AAP is determined based on the Group’s financial performance. The Group’s PICP provides a link between income generation for
shareholders and employee compensation (see page 111).
Once the AAP has been calculated, it is then allocated based on business performance and an individual’s performance as determined by the
annual appraisal process.
Executive Directors have performance objectives set and KPIs are set by the Committee. Details of these KPIs are set out on page 98. Further
management information is provided to the Committee on performance to ensure that financial results are put into the context of wider
performance factors, compliance and risk appetite.
Co-investment and carried interest in third-party funds
Executive Directors and investment professionals in the Group may be required to invest in third-party funds through co-investment and carried
interest. Where this applies, the relevant employee pays full market value for these interests at the time of acquisition, and takes the investment
risk. These are personal investments that are expected by third-party fund clients, to drive financial alignment with third-party fund performance,
rather than remuneration provided by ICG for services to the Group.
Committee discretion
The Committee, consistent with market practice, retains discretion over a number of areas relating to the operation of the Policy. These include,
but are not limited to, the following:
– the timing of awards or payments
– the size of awards (within the limits set out in the Policy table)
– the choice of weighting and assessment of performance metrics
– in exceptional circumstances, determining that a share-based award shall be settled (in full or in part) in cash
– the treatment of awards in the event of a change of control or restructuring
– determination of good leaver status, and treatment of awards for such leavers
– whether, and to what extent, malus and/or clawback should apply
– adjustments required in exceptional circumstances such as rights issues, corporate restructuring, or special dividends
– adjustments to performance criteria where there are exceptional events
Service contracts and policy on payments for loss of office
Executive Directors
The Group’s policy is for Executive Directors to have ongoing contracts which are deemed appropriate for the nature of the Group’s business.
Service contracts are held, and are available for inspection, at the Group’s registered office. The details of the service contracts for Executive
Directors serving during the year and the treatment of deferred share awards to Executive Directors are shown below.
Executive Director
Date of service contract Last re-elected
Re-election
frequency
Notice period
Non-compete
provisions
Compensation on termination by the Company without notice or cause
Benoît Durteste 21 May 2012
July 2021
Annual
12 months Restraint period
of 12 months
Vijay Bharadia
20 May 2019
July 2021
Annual
12 months Restraint period
of 9 months
Antje Hensel-
Roth
16 April 2020
July 2021
Annual
12 months Restraint period
of 9 months
The salary for any unexpired period of notice plus
the cost to the Group (excluding National Insurance
contributions) of providing insurance benefits for the
same period. The Group may also make payments,
where necessary, to mitigate any potential claims,
and to compensate for legal fees or outplacement
costs incurred
Deferred share award
PLC Equity Award
Status
Unvested
Deferred Share Award
Unvested
Death, disability,
long-term ill health
Retain with early
vesting
Retain with early
vesting
Redundancy
Cause or competing
Any other reason
Retain
Retain
Forfeit, subject to
discretion
Retain, subject to
discretion
Forfeit, subject to
discretion
Retain, subject to
discretion
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ICG | Annual Report & Accounts 2022
Exercise of discretion
The discretion available to the Committee under the variable pay
plans is intended to provide the Committee with flexibility to deal
fairly with every eventuality. In exercising its discretion, the
Committee will take into account the circumstances in which the
individual has left the Group, their performance and the impact that
this has had on the Group’s overall performance. The Committee
reserves discretion to make a variable pay award to an Executive
Director in respect of the final year of service, taking into account the
circumstances of the individual’s termination of office, the portion of
the year served, and performance for the financial year concerned.
Approach to recruitment remuneration
The Group operates in a highly specialised and competitive market,
and hence competition for talent is intense. The Committee’s
approach to recruitment remuneration is to pay what is appropriate
to attract candidates to a role.
New Executive Directors are offered a remuneration package similar
to that of existing employees in the same role. All Executive Directors
are offered an appropriate annual salary, benefits and pension
allowance and all participate in the Annual Award Pool and are
subject to an overall cap on variable reward.
However, it may be necessary to offer a new Executive Director a
remuneration package that differs from that currently provided to the
Executive Directors in order to attract the best recruit. This could
include a higher base salary and relocation and/or housing benefits
and higher total variable pay, but not more than the CEO/CIO level set
out in the policy table, unless there are exceptional circumstances.
Replacement of forfeited compensation such as deferred bonuses
and long-term incentives is permitted.
This is subject to, as far as possible, the timing, delivery mechanism
(i.e. shares or cash) and amounts paid out being set to reflect any
former arrangement.
As far as possible, the value of any replacement awards will reflect the
expected value of the forfeited awards.
In the event of an internal promotion to the Board, the Committee
reserves the right to allow any pre-existing awards or arrangements
to be retained until their normal maturity date, notwithstanding that
these may not be consistent with the approved policy.
Statement of consideration of shareholder views
The Committee is responsible for the overall remuneration policy for
all the Group’s employees and ensures that the remuneration
arrangements should take into account the long-term interests of
shareholders, clients and other stakeholders.
The Group recognises the importance of communication with its
shareholders, particularly through interim and annual reports and the
AGM.
The CEO, CFOO and the Chairmen of the Board and each of its
Committees will be available to answer shareholders’ questions at the
AGM. The CEO and the CFOO meet institutional shareholders on a
regular basis, and the Chairman periodically contacts the Group’s
major shareholders and offers to meet with them. The Board is kept
fully informed of the views and concerns of the major shareholders
and relevant NEDs attend meetings with major shareholders and
shareholder advisory groups when requested to do so.
Statement of consideration of employment conditions
elsewhere in the Group and employee views
The Committee considers the employment conditions and the
remuneration structures in place for all employees of the Group when
setting the Directors’ Remuneration Policy.
The Committee also reviews the remuneration arrangements of
senior investment and marketing employees and senior management
and control function employees and oversees the remuneration
structure and market positioning for other roles. The overall and
average salary increase across the Group is approved by the
Committee each year. The Board has established a process which is
being used to seek the opinions of employees when setting the
Directors’ Remuneration Policy by seeking feedback through a
designated NED.
In addition employees’ views are represented at Committee meetings
through the Chief People and External Affairs Officer, who is also an
Executive Director, and the Head of Reward.
ICG | Annual Report & Accounts 2022
117
Directors’ report
DIRECTORS’ REPORT
The Directors present their Annual Report and the audited financial statements for the financial year ended 31 March
2022. The risks to which the Group is subject, and the policies in respect of such risks, are set out on pages 57 to 64
and are incorporated into this report by reference. The Corporate Governance section set out on pages 67 to 117 is
incorporated into this report by reference. The Strategic Report section set out on pages 2 to 65 is also incorporated
by reference.
Throughout the financial year ended 31 March 2022 the Group was in compliance with the provisions of the 2018 UK
Corporate Governance Code issued by the Financial Reporting Council. A copy of the Code is available on the
Financial Reporting Council’s website: www.frc.org.uk. The Governance section of this report (page 67) sets out
how we have applied the Code’s principles and provisions throughout the year.
Significant shareholdings
As at 19 May 2022 the Company had been notified or otherwise
become aware of the following interests pursuant to the Disclosure
Rules and the Transparency Rules representing 3% or more of the
issued share capital of the Company.
Institution
BlackRock Inc
Aviva Investors
Wellington Management Company
Abrdn Plc
The Vanguard Group Inc
Ameriprise/Threadneedle
Franklin Resources Inc
Number of
shares
Percentage of
voting rights
25,233,473
21,271,787
20,149,717
16,462,513
11,824,223
10,579,684
9,718,723
8.68%
7.32%
6.93%
5.67%
4.07%
3.65%
3.35%
Directors
The profiles of the Directors currently serving are shown on page 70;
those details are incorporated into this report by reference. All of the
Directors served throughout the year.
The composition of each of the Committees of the Board and the
Chair of each Committee are detailed in the report of each
Committee, found on pages 77 to 117.
Directors’ interests
The interests of Directors who held office at 31 March 2022 and their
connected persons, as defined by the Companies Act 2006, are
disclosed in the report of the Remuneration Committee on page 104.
During the financial year ended 31 March 2022, the Directors had no
options over or other interests in the shares of any subsidiary
company.
The roles of the Chairman and Chief Executive
In accordance with the Code, the Board has adopted a formal division
of responsibilities between the Chairman and the CEO, so as to
establish a clear division of responsibilities between the running of
the Board and the executive responsibility for the running of the
Company’s business.
The Interim Chairman, Andrew Sykes, was considered independent at
the date of his appointment as Chairman.
The Board has delegated the following responsibilities to the
Executive Directors:
– The development and recommendation of strategic plans for
consideration by the Board
– Delivery of objectives and priorities determined by the Board
– Implementation of the strategies and policies of the Group as
determined by the Board
– Monitoring of operating and financial results against plans and
budgets
– Monitoring the quality of the investment process
– Developing and maintaining risk management systems
Disclosure documents
The terms of reference of each of the Board Committees, together
with the Directors’ service agreements, the terms and conditions of
appointment of NEDs and Directors’ deeds of indemnity, are
available for inspection at the Company’s registered office during
normal business hours.
Committee proceedings
Each Committee has access to such external advice as it may consider
appropriate. The terms of reference of each Committee are
considered regularly by the respective Committee and referred to the
Board for approval.
Delegation to Executive Directors
The Company has three Executive Directors, each of whom has a
specific area of responsibility.
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ICG | Annual Report & Accounts 2022
Benoît Durteste is Chief Executive Officer and, in addition to his
strategic and operational remit, oversees the Group’s Investment
Committees in his role as the Chief Investment Officer.
Vijay Bharadia is Chief Financial and Operating Officer and is
responsible for compliance, finance, treasury, tax, investor relations,
legal, operations and IT, and risk.
Antje Hensel-Roth is Chief People and External Affairs Officer and is
responsible for human resources, communications and external
affairs.
A Management Committee is in place to support, assist and challenge
the Executive Directors in the exercise of their authority. This
Committee is made up of other individuals from the senior
management team of the Group and focuses on ongoing business
operations and business development opportunities.
Board process
Each Board member receives a comprehensive Board pack at least
five days prior to each meeting which incorporates a formal agenda
together with supporting papers for items to be discussed at the
meeting. Further information is obtained by the Board from the
Executive Directors and other relevant members of senior
management, as the Board, particularly its NEDs, consider
appropriate.
A similar process is followed for each Committee.
Advice for Directors
All Directors have access to the advice and services of the Company
Secretary and the Secretaries to each of the Committees on which
they serve and may take independent professional advice at the
Group’s expense in the furtherance of their duties. The appointment
or removal of the Company Secretary would be a matter for the
Board.
Meetings with the Chairman
Time is allocated at the end of each Board meeting for the NEDs to
hold meetings in the absence of Executive Directors. As appropriate
(and at least once per year), the NEDs will also hold sessions in the
absence of the Chairman.
In accordance with the Code, any shareholder concerns not resolved
through the usual mechanisms for investor communication can be
conveyed to the Senior Independent Director (SID). The SID acts as a
sounding board for the Chairman and also leads the annual appraisal
of the Chairman.
Directors’ indemnity
The Group has entered into standard contractual indemnities with
each of the Directors. The Group also provides Directors’ and
Officers’ insurance for the Directors.
Conflicts of interest
Directors have a statutory duty to avoid conflicts of interest with the
Group. The Company’s Articles of Association allow the Directors to
authorise conflicts of interest and the Board has adopted a policy and
effective procedures for managing and, where appropriate,
approving potential conflicts of interest. No material conflicts of
interest exist.
Internal control
The Board has overall responsibility for the Group’s internal control
system and monitoring of risk management, the effectiveness of
which is reviewed at least annually. Internal controls include giving
reasonable, but not absolute, assurance that assets are safeguarded,
transactions are authorised and recorded properly, and that material
errors and irregularities are prevented or detected within a timely
period.
Through the regular meetings of the Board and the schedule of
matters reserved to the Board or its duly authorised Committees,
the Board aims to maintain full and effective control over appropriate
strategic, financial, operational and compliance issues. For further
details of the Group’s Committees, please see pages 77 to 117 and for
further details of the Board, page 67.
The Board has put in place an organisational structure with clearly
defined lines of responsibility and delegation of authority.
The Board annually considers and approves a strategic plan and
budget. In addition, there are established procedures and processes
in place for the making and monitoring of investments and the
planning and controlling of expenditure.
The Board also receives regular reports from Executive Directors and
other members of senior management on the Group’s operational
and financial performance, measured against the annual budget, as
well as regulatory and compliance matters. For further details of the
Group’s Executive Directors, please see page 118.
The Group has in place arrangements whereby individuals may raise
matters of concern in confidence about possible improprieties in
matters of financial reporting or other matters.
The rationale for the system of internal control is to maximise
effectiveness for the commercial management of the business and to
provide the Board with regular and effective reporting on the
identified significant risk factors. The Board is responsible for
determining strategies and policies for risk control, and management
is responsible for implementing such strategies and policies.
The Board confirms that an ongoing process for identifying,
evaluating and managing the Group’s significant risks has operated
throughout the year and up to the date of the approval of the
Directors’ report and financial statements. For further details of the
risks relating to the Group, please see page 57 and the report of the
Risk Committee on page 85.
ICG | Annual Report & Accounts 2022
119
Directors’ report continued
Going concern statement
The Group’s business activities, together with the factors likely to
affect its future development, performance and position, are set out
in the Strategic Report on pages 2 to 65. The financial position of the
Group, its cashflows, liquidity position, and borrowing facilities are
described in the Finance and Operating Review on page 54. In
addition, the Directors have taken account of the Group’s risk
management process described on page 57. The Directors have
made an assessment of going concern, taking into account both the
Group’s current performance and the Group’s outlook, using the
information available up to the date of issue of these financial
statements.
The Group has good visibility on future management fees due to the
long-term nature of our funds, underpinned by a strong and well
capitalised balance sheet. At 31 March 2022, liquidity, which consists
of unencumbered cash and undrawn debt facilities, was £1,311.5m (31
March 2021: £846.9m). This financial position and liquidity profile
provide confidence that the Group has sufficient financial resources
for the foreseeable future. As a consequence, the Directors believe
that the Company and the Group are well positioned to manage its
and their businesses and liabilities as they fall due.
The Directors have acknowledged their responsibilities in relation to
the financial statements for the year to 31 March 2022. After making
the assessment of going concern, the Directors have concluded that
the preparation of the financial statements on a going concern basis
to 30 June 2023, a period of more than 12 months from the signing of
the financial statements, continues to be appropriate.
Forward-looking statements
This Annual Report includes statements that are, or may be deemed
to be, ‘forward-looking statements’. These forward-looking
statements can be identified by the use of forward-looking
expressions, including the terms ‘believes’, ‘estimates’, ‘anticipates’,
‘expects’, ‘intends’, ‘may’, ‘will’ or ‘should’ or, in each case, their
negative or other variations or similar expressions, or by discussions
of strategy, plans, objectives, goals, future events or intentions.
These forward-looking statements include all matters that are not
historical facts. They appear in a number of places throughout this
Annual Report and include, but are not limited to, the following:
statements regarding the intentions, beliefs or current expectations
of the Directors, the Company and the Group concerning, amongst
other things, the Group’s results of operations, financial condition,
liquidity, prospects, growth, strategies and the industries in which
the Group operates.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances.
Forward-looking statements are not guarantees of future
performance and the actual results of the Group’s operations,
financial condition and liquidity, and the development of the countries
and the industries in which the Group operates may differ materially
from those described in, or suggested by, the forward-looking
statements contained in this Annual Report. In addition, even if the
120
ICG | Annual Report & Accounts 2022
results of operations, financial condition and liquidity, and the
development of the countries and the industries in which the Group
operates, are consistent with the forward-looking statements
contained in this Annual Report, those results or developments may
not be indicative of results or developments in subsequent periods.
Many of these factors are beyond the control of the Directors, the
Company and the Group. Should one or more of these risks or
uncertainties materialise, or should underlying assumptions on which
the forward-looking statements are based prove incorrect, actual
results may vary materially from those described in this Annual
Report. Except to the extent required by laws and regulations, the
Directors, the Company and the Group do not intend, and do not
assume any obligation, to update any forward-looking statements set
out in this Annual Report.
Change of control agreements
There are no significant agreements to which the Group is a party
that take effect, alter or terminate upon a change of control of the
Group, other than:
1. The Private Placement arrangements of $64m dated 8 May 2013,
$122m and €44m dated 11 May 2015, $167m and €52m dated 29
September 2016, and $350m and €44m dated 26 March and 24
April 2019, where a change of control of the Company gives rise
to a prepayment offer, whereby the Company must make an offer
to all holders of the Private Placement notes to prepay the entire
unpaid principal amount of the Private Placement notes, together
with accrued interest thereon.
2. The £550m committed syndicated Revolving Credit Facility
agreement entered into on 22 January 2021 contains a change
of control provision which provides, upon the occurrence of
a change of control of the Company, for a 30-day negotiation
period with the syndicate lenders to agree terms and conditions
which are acceptable to syndicate lenders and the Company for
continuing the facilities. If, at the end of the negotiation period,
no such agreement is reached, the facilities agreement gives each
lender the right, but not the obligation, upon applicable notice,
to cancel their commitments under the facilities agreement and
declare their participation in the loans then outstanding repayable
immediately, together with accrued interest and all other amounts
payable thereon.
3. The terms and conditions of the £160m bond issue which took
place in March 2015, the €500m institutional bond issue which
took place in February 2020 and the €500m institutional bond
issue which took place in January 2022 each of which set out that,
following a change of control event, investors have the right but
not the obligation to sell their notes to the Company if the change
of control results in either a credit ratings downgrade from
investment grade to sub-investment grade or withdrawal, or a
downgrade of one or more notches (or withdrawal of the rating) if
already sub-investment grade.
4. The employee share schemes, details of which can be found in the
report of the Remuneration Committee on 93, awards and options
under the 2001 Approved and Unapproved Executive Share
Option Schemes and SAYE Plan 2004 become exercisable for a
limited period following a change of control. Awards and options
under the Omnibus Plan and the BSC Plan vest immediately on a
change of control.
5. Carried interest arrangements in respect of a number of funds
vest fully in favour of the Company and certain of the Group’s
employees following a change of control event.
There are no agreements between the Group and its Directors or
employees providing for compensation for loss of office or
employment that occurs because of a takeover bid apart from those
described above and the usual payment in lieu of notice.
Information included in the Strategic report
In accordance with section 414 C (11) of the Companies Act 2006,
the following information otherwise required to be set out in the
Directors’ report has been included in the Strategic report: risk
management objectives and policies (pages 57 to 64); engagement
with employees (page 30) and engagement with suppliers and other
stakeholders (pages 23).
Dividend
The Directors recommend a final net ordinary dividend payment in
respect of the ordinary shares of the Company at a rate of 57.3 pence
per share (2021: 39.0 pence per share), which when added to the
interim net dividend of 18.7 pence per share (2021: 17.0 pence per
share) gives a total net dividend for the year of 76.0 pence per share
(2020: 56.0 pence per share). The recommendation is subject to the
approval of shareholders at the Company’s AGM in July 2022.
The amount of ordinary dividend paid in the year was £165.7m
(2021: £150.9m).
Distributable reserves
The distributable reserves of the Parent Company at 31 March 2022
were £564.6m (£674.7m at 31 March 2021).
Disclosures required under Listing Rule 9.8.4
Dividend waivers have been issued in respect of shares which are
held by the Group’s Employee Benefit Trust (EBT), or held as
treasury shares; other than this, there are no disclosures required to
be made under UK Listing Rule 9.8.4.
Compliance with Listing Rule 9.8.6R
The Group has complied with the requirements of LR 9.8.6R by
including climate-related financial disclosures consistent with the
TCFD recommendations and recommended disclosures.
Disclosures can be found on the following pages:
Pillar
Disclosure
Strategy
Governance a. Describe the Board’s oversight of climate-
related risks and opportunities
b. Describe management’s role in assessing and
managing climate-related risks and
opportunities
a. Describe the climate-related risks and
opportunities the organization has identified
over the short, medium, and long term
b. Describe the impact of climate-related risks
and opportunities on the organization’s
businesses, strategy, and financial planning
climate-related risks
c. Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario
a. Describe the organisation’s processes for
identifying and assessing climate-related risks
b. Describe the organisation’s processes for
managing climate-related risks
c. Describe how processes for identifying,
assessing, and managing climate-related risks
are integrated into the organisation’s overall risk
management
a. Disclose the metrics used by the organisation
to assess climate-related risks and opportunities
in line with its strategy and risk management
process
b. Disclose Scope 1, Scope 2 and, if appropriate,
Scope 3 greenhouse gas (GHG) emissions and
the related risks
c. Describe the targets used by the organization
to manage climate-related risks and
opportunities and performance against targets
Risk
management
Metrics and
targets
Page
32
33
37
39
Read more on our TCFD disclosures on pages 32 to 41
Non-UK branches
A subsidiary of the Company, Intermediate Capital Managers Limited,
operates a branch in France.
Auditor
EY were the auditor for the financial year ended 31 March 2022. A
resolution for the appointment of EY as the auditor was passed at the
AGM held on 29 July 2021. Details of auditor’s remuneration for audit
and non-audit work are disclosed in note 12 to the accounts.
Further details are set out in the Audit Committee report on page 77
Complex supplier arrangements
The Group does not use supplier financing arrangements.
ICG | Annual Report & Accounts 2022
121
Directors’ report continued
Research and development activities
Details of the research and development activities undertaken are set
out in note 17.
Disclosure of information to the auditor
Each of the persons who is 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 auditor is unaware
– The Director has taken all reasonable steps that they ought to
have taken as a Director in order to make themselves aware of
any relevant audit information and to ensure that the Company’s
auditor is aware of that information
This confirmation is given and should be interpreted in accordance
with the provisions of section 418 of the Companies Act 2006.
Post balance sheet events
Material events since the balance sheet date are described in note 33
and form part of the Directors’ report disclosures.
Political contributions
No contributions were made during the current and prior year for
political purposes.
Greenhouse gas emissions
All disclosures required by the Streamlined Energy and Carbon
Reporting (SECR) requirements set out in the Companies Act 2006
(Strategic Report and Directors’ Report) Regulations 2013 and the
Companies (Directors’ Report) and Limited Liability Partnerships
(Energy and Carbon Report) Regulations 2018 have been complied
with and are detailed on page 42 which forms part of the Directors’
report disclosures.
Approach to discrimination and consideration
of disabled employees
The Group is committed to creating an environment where all its
employees are treated with dignity and respect at work and which is
free from discrimination, victimisation, harassment and bullying. Such
conduct is harmful to our employees and our business and we seek to
address any form of discrimination, victimisation, harassment or
bullying where it occurs in the workplace. All our employees and
other third parties working for or with us, without exception, have a
duty to comply with our policies to ensure that their colleagues are
treated with dignity and respect and wherever possible to prevent
discrimination, victimisation, harassment or bullying.
We aim to:
– ensure that all job applicants are treated fairly and judged on
criteria relevant to a vacant position
– ensure that all employees are treated in a fair and equitable
manner which allows each individual to reach their full potential
– ensure that decisions on recruitment, selection, training,
promotion, career management, transfer, terms and conditions
of employment and every other aspect of employment are based
solely on objective and job-related criteria
– provide the Group with a workforce of the highest ability which
reflects the population as a whole
– avoid any type of unlawful discrimination
– ensure all managers actively promote equal opportunities within
the Group
We strongly disapprove of and will not tolerate unlawful
discrimination, victimisation, harassment, bullying or any other
inappropriate behaviour towards our employees by managers, other
employees or any third party such as clients, suppliers, visitors,
consultants or contractors. All our employees and third parties
working for or with the Group are required to make sure they treat
everyone fairly and without bias.
The Group treats applicants and employees with disabilities fairly and
provides facilities, equipment and training to assist disabled
employees to do their jobs. Arrangements are made as necessary to
ensure support to job applicants who happen to be disabled and who
respond to requests to inform the Group of any requirements. Should
an employee become disabled during their employment, efforts
would be made to retain them in their current employment or to
explore the opportunities for their retraining or redeployment within
the Group.
Financial support is also provided by the Group to support disabled
employees who are unable to work, as appropriate to local market
conditions.
Acquisition of shares by EBT
Acquisitions of shares by the ICG Employee Benefit Trust 2015
purchased during the year are as described in note 24 to the financial
statements.
Share capital and rights attaching to the Company’s
shares
As at 31 March 2022 the issued share capital of the Company was
294,285,804 ordinary shares of 26¼p each (including 3,733,333
shares held by the Company as treasury shares).
Certain key matters regarding the Company’s share capital are noted
below:
– Under the Company’s Articles of Association, any share in
the Company may be issued with such rights or restrictions,
whether in regard to dividend, voting, transfer, return of capital
or otherwise as the Company may from time to time by ordinary
resolution determine or, in the absence of any such determination,
as the Board may determine. All shares currently in issue are
ordinary shares of 26¼p each carrying equal rights. The Articles
of Association of the Company cannot be amended without
shareholder approval
122
ICG | Annual Report & Accounts 2022
– At a General Meeting of the Company every member present in
person or by a duly appointed proxy has one vote on a show of
hands and on a poll one vote for each share held
– The ICG Employee Benefit Trust 2015 holds shares which may be
used to satisfy options and awards granted under the Company’s
employee share schemes including its long-term incentive plans.
The voting rights of these shares are exercisable by the trustees in
accordance with their fiduciary duties
– The notice of any general meeting specifies deadlines for
exercising voting rights either by proxy or present in person in
relation to resolutions to be passed at a general meeting
– No shareholder is, unless the Board decides otherwise, entitled to
attend or vote either personally or by proxy at a general meeting
or to exercise any other right conferred by being a shareholder if:
– They or any person with an interest in shares has been sent a
notice under section 793 of the Companies Act 2006 (section
793 notice) (which confers upon public companies the power
to require information with respect to interests in their voting
shares)
– They or any interested person have failed to supply the
Company with the information requested within 14 days where
the shares subject to the notice (the ‘default shares’) represent
at least 0.25% of their class or in any other case 28 days after
delivery of the notice. Where the default shares represent
0.25% of their class, unless the Board decides otherwise, no
dividend is payable in respect of those default shares and
no transfer of any default shares shall be registered. These
restrictions end seven days after receipt by the Company
of a notice of an approved transfer of the shares or all the
information required by the relevant section 793 notice,
whichever is the earlier
– The Directors may refuse to register any transfer of any share
which is not a fully paid share, although such discretion may not be
exercised in a way which the Financial Conduct Authority regards
as preventing dealings in the shares of the relevant class or classes
from taking place on an open and proper basis. The Directors may
likewise refuse to register any transfer of a share in favour of more
than four persons jointly
– The Company is not aware of any other restrictions on the transfer
of ordinary shares in the Company other than:
– Certain restrictions that may from time to time be imposed by
laws and regulations (for example, insider trading laws or the
UK Takeover Code)
– Pursuant to the Listing Rules of the Financial Conduct Authority
whereby certain employees of the Company require approval
of the Company to deal in the Company’s shares
The Company is not aware of any agreements between shareholders
that may result in restrictions on the transfer of securities or voting
rights.
At the 2021 AGM the Directors were given the power to allot shares
and grant rights to subscribe for, or convert any security into, shares:
up to an aggregate nominal amount of £25,422,529.91 and, in the
case of a fully pre-emptive rights issue only, up to a total amount of
£50,845059.82.
A resolution will be proposed to renew the Company’s authority to
allot further new shares at the forthcoming AGM. In accordance with
applicable institutional guidelines, the proposed new authority will
allow the Directors to allot ordinary shares equal to an amount of up
to one third of the Company’s issued ordinary share capital as at 19
May 2022 plus, in the case of a fully pre-emptive rights issue only, a
further amount of up to an additional one third of the Company’s
issued share capital as at 19 May 2022. The authority for Directors to
allot the Company’s shares is renewed annually and approval will be
sought at the forthcoming AGM for its renewal.
The Directors’ authority to effect purchases of the Company’s shares
on the Company’s behalf is conferred by resolution of shareholders.
At the 2021 AGM the Company was granted authority to purchase its
own shares up to an aggregate value of approximately 10% of the
issued ordinary share capital of the Company as at 8 June 2021.
During the year no shares were bought back. The authority to effect
purchases of the Company’s shares is renewed annually and approval
will be sought at the forthcoming AGM for its renewal.
Powers of Directors
Subject to its Articles of Association and relevant statutory law and to
such direction as may be given by the Company by special resolution,
the business of the Company is managed by the Board, who may
exercise all powers of the Company whether relating to the
management of the business or not.
The Company’s Articles of Association give power to the Board to
appoint Directors. The Articles also require any Directors appointed
by the Board to submit themselves for election at the first AGM
following their appointment and for one third of the Company’s
Directors to retire by rotation at each AGM. Directors may resign or
be removed by an ordinary resolution of shareholders.
Notwithstanding the above, the Company has elected, in accordance
with the UK Corporate Governance Code, to have all Directors
reappointed on an annual basis (other than any who have decided to
retire at the relevant AGM).
In relation to the Directors who are standing for election or re-
election, the Chairman is satisfied that, following the conclusion of
the formal performance evaluation described on page 76, each of the
other Directors continues to be effective and demonstrates
commitment to their role. In the case of the Chairman, the NEDs are
satisfied that he continues to be effective and demonstrates
commitment to his role.
ICG | Annual Report & Accounts 2022
123
Directors’ report continued
Results of resolutions proposed at 2021 Annual General Meeting
Resolution
Votes for
Votes against
Votes withheld
1. To receive the Company’s financial statements and reports of the directors of the Company (the “Directors”)
and of the auditor for the financial year ended 31 March 2021.
2. To approve the Directors’ Remuneration Report (excluding the Directors’ Remuneration Policy) as set out in
the Annual Report and Accounts for the financial year ended 31 March 2021.
3. To re-appoint Ernst & Young LLP as auditors of the Company to hold office as the Company’s auditors until the
conclusion of the Company’s Annual General Meeting in 2022.
4. To authorise the Audit Committee, for and on behalf of the Board, to determine the remuneration of the
auditors.
5. To declare a final dividend of 39.0 pence per ordinary share for the financial year ended 31 March 2021.
6. To reappoint Vijay Bharadia as a Director.
7. To reappoint Benoît Durteste as a Director.
8. To reappoint Virginia Holmes as a Director.
9. To reappoint Michael Nelligan as a Director.
10. To reappoint Kathryn Purves as a Director.
11. To reappoint Amy Schioldager as a Director.
12. To reappoint Andrew Sykes as a Director.
13. To reappoint Stephen Welton as a Director.
14. To reappoint Lord Davies of Abersoch as a Director.
15. To reappoint Antje Hensel-Roth as a Director.
16. To appoint Rosemary Leith as a Director.
17. To appoint Matthew Lester as a Director.
18. To grant the Directors authority to allot shares pursuant to section 551 of the Companies Act 2006.
19. Subject to the passing of resolution 18, to authorise the Directors to allot equity securities and to sell ordinary
shares pursuant to sections 570 (1) and 573 of the Companies Act 2006.
20. In addition to the authority granted under resolution 19 and subject to the passing of resolutions 18 and 19, to
authorise the Directors to allot equity securities.
21. To authorise the Company to make market purchases of its ordinary shares.
22. To approve that a general meeting of the Company (other than the annual general meeting) may be called on
less than 14 clear days’ notice.
231,717,986
8,880
1,896,212
229,723,362
3,884,339
15,377
231,268,709
2,347,898
6,471
233,551,245
233,448,747
233,213,437
233,619,510
231,359,919
233,620,410
233,277,535
233,610,522
233,114,619
231,638,184
230,335,084
233,618,368
233,619,981
233,533106
227,299,752
69,719
173,343
407,987
1,914
2,260,725
1,014
343,109
10,902
506,025
514,671
3,286,340
3,056
663
88,318
6,322,338
2,114
988
1,654
1,654
2,434
1,654
2,434
1,654
2,434
1,470,223
1,654
1,654
2,434
1,654
988
232,558,288
1,063690
1,100
224,115,645
231,072,790
9,506,333
2,300,963
1,100
249,325
205,188,179
28,433,911
988
The issued share capital of the Company at the date of the Annual General Meeting was 294,283,301 ordinary shares of 26¼p each (excluding
3,733,333 treasury shares held by the Company).
2022 Annual General Meeting
The AGM of the Company is scheduled to take place at the Head Office of the Company on 21 July 2022 at 9:00 am; the exact arrangements for
the meeting will be subject to any restrictions on gatherings which may be in force. Details will be contained in the Notice of Meeting, and
shareholders will be updated if arrangements change. Any shareholder who wishes to vote by proxy or raise a question to be answered in writing
should refer to the Notice of Meeting for instructions on how to do so. Details of the resolutions to be proposed at the AGM along with
explanatory notes are set out in the circular to be posted to shareholders in June 2022 convening the meeting. In line with market practice, if
votes of more than 20% of those voting are cast against a resolution, the Company will make a statement when announcing the results of the vote
to explain any actions it intends to take to understand the reasons behind the vote result.
This Directors’ Report is approved by the Board and signed on its behalf by:
Andrew Lewis
Company Secretary
25 May 2022
124
ICG | Annual Report & Accounts 2022
Directors’ responsibilities
DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and
Accounts in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law the Directors are required to
prepare the Group and Parent Company financial statements in
accordance with UK-adopted international accounting standards
(UK-adopted IAS) and, as regards the Parent Company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006. Under company law the Directors must not
approve the accounts 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 that period.
In preparing these financial statements, the Directors are required to:
– Select suitable accounting policies in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors
and then apply them consistently
– Make judgements and accounting estimates that are reasonable
and prudent
– Present information, including accounting policies, in a manner
that provides relevant, reliable, comparable and understandable
information
– Provide additional disclosures when compliance with the specific
requirements of UK-adopted IAS are insufficient to enable users
to understand the impact of particular transactions, other events
and conditions on the Group and Company financial position and
financial performance
– In respect of the Group and Parent financial statements, state
whether UK-adopted IAS have been followed and, as regards the
Parent Company financial statements, applied in accordance with
the provisions of the Companies Act 2006, subject to any material
departures disclosed and explained in the financial statements
– Prepare the financial statements on a going concern basis unless it
is appropriate to presume that the company and/or the group will
not 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 comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Policy and Corporate Governance
statement that comply with that law and those regulations. The
Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the company’s
website.
The Directors confirm, to the best of their knowledge:
– That the consolidated financial statements, prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and UK-
adopted IAS, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole
– That the Annual Report and Accounts, including the Strategic
Report, includes a fair review of the development and
performance of the business and the position of the Company and
the undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and uncertainties
that they face
– That they consider that this Annual Report and Accounts, taken
as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Company’s
and the Group’s performance, business model and strategy.
Benoît Durteste
Chief Executive Officer
Vijay Bharadia
Chief Financial and Operating Officer
25 May 2022
ICG | Annual Report & Accounts 2022
125
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF INTERMEDIATE
CAPITAL GROUP PLC
Opinion
In our opinion:
– Intermediate Capital Group plc’s financial statements and Parent Company financial statements (the ‘ financial statements’) give a true and fair
view of the state of the Group’s and of the Parent Company’s affairs as at 31 March 2022 and of the Group’s profit for the year then ended;
– the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
– the Parent Company financial statements have been properly prepared in accordance with UK-adopted international accounting standards as
applied in accordance with section 408 of the Companies Act 2006; and
– the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Intermediate Capital Group plc (the ‘Parent Company’) and its subsidiaries (together the ‘Group’)
for the year ended 31 March 2022 which comprise:
Group
Parent Company
Consolidated income statement for the year ended 31 March 2022
Consolidated and Parent Company statements of comprehensive
income for the year ended 31 March 2022
Consolidated and Parent Company statements of comprehensive
income for the year ended 31 March 2022
Consolidated and Parent Company statements of financial position as
at 31 March 2022
Consolidated and Parent Company statements of financial position as
at 31 March 2022
Consolidated and Parent Company statements of cash flow for the
year ended 31 March 2022
Consolidated and Parent Company statements of cash flow for the
year ended 31 March 2022
Consolidated and Parent Company statement of changes in equity for
the year ended 31 March 2022
Consolidated and Parent Company statements of changes in equity
for the year ended 31 March 2022
Related notes 1 to 33 to the financial statements, including a summary
of significant accounting policies
The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting
standards and, as regards the Parent Company financial statements, as applied in accordance with section 408 of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s 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 are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent Company and we remain
independent of the Group and the Parent Company in conducting the audit.
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Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and Parent Company’s ability to continue to adopt
the going concern basis of accounting included:
– obtaining an understanding of the Directors’ process for determining the appropriateness of the use of the going concern basis, including
the approval by the Audit Committee;
– evaluating the regulatory capital and liquidity position of the Group, including reviewing the Internal Capital Adequacy Assessment Process;
– reviewing the assumptions used in the Directors’ cash flow forecast for the period to 30 June 2023 and determined that the models are
appropriate to enable the Directors to make an assessment in respect of going concern, including availability of existing and forecast cash
resources and undrawn facilities;
– assessing the appropriateness of the stress and reverse stress test scenarios that consider the key risks to going concern identified by
management. We have also evaluated the analysis by testing the clerical accuracy and assessing the conclusions reached in the stress and
reverse stress test scenarios;
– assessing the plausibility of available options to mitigate the impact of the key risks by comparing them to our understanding of the Group;
– performing enquires of management and those charged with governance to identify risks or events that may impact the Group’s ability to
continue as a going concern. We also reviewed the management paper approved by the Board, minutes of meetings of the Board and its
committees, and made enquires of management and the Board; and
– assessing the appropriateness of the going concern disclosures by comparing them to the Directors’ assessment for consistency and for
compliance with the relevant reporting requirements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group and Parent Company’s ability to continue as a going concern for the period assessed by the
Directors, being the period to 30 June 2023, which is at least twelve months from when the financial statements were authorised for issue.
In relation to the Group and Parent Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s ability to continue as a
going concern.
Overview of our audit approach
Audit scope
– The Group is managed principally from one location, with core business functions, including finance
and operations, located in London. All key accounting records are maintained in the UK. The Group
operates international offices in Europe, Asia and North America, which are primarily responsible for
deal origination, marketing and investment portfolio monitoring.
– The Group comprises 202 consolidated subsidiaries, including 21 consolidated structured entities.
– The Group audit team, based in London, performed direct audit procedures on all items material to the
Group financial statements. The legal entities where the Group audit team performed full or specific
audit procedures accounted for 93% of profit before tax and 93% of net assets.
Key audit matters
– Valuation of investments in portfolio companies and real estate assets (including those held via fund
structures and assets held for sale)
– Valuation of investments in Collateralised Loan Obligations (‘CLOs’), including debt (senior) and
equity (subordinated debt) tranches and the assets and liabilities held by consolidated CLOs
– Calculation and recognition of management fees and performance fees
Materiality
– Overall group materiality of £28.3m which represents 5% of group profit before tax
This approach is consistent with the 2021 audit.
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An overview of the scope of the Parent Company and Group audits
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for each entity
within the Group. Taken together, this enables us to form an opinion on the consolidated financial statements. We take into account size, risk
profile, the organisation of the Group and effectiveness of group-wide controls, changes in the business environment and other factors such as
recent internal audit results, when assessing the level of work to be performed at each entity.
In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate quantitative coverage of
significant accounts in the financial statements, we selected 26 legal entities within the following countries: United Kingdom, Luxembourg,
United States of America and Jersey, which represent the principal business units within the Group.
Of the 26 legal entities selected, we performed an audit of the complete financial information of 21 legal entities (‘full scope components’) which
were selected based on their size or risk characteristics. For the remaining five legal entities (‘specific scope components’), we performed audit
procedures on specific accounts within that legal entity that we considered had the potential for the greatest impact on the significant accounts
in the financial statements either because of the size of these accounts or their risk profile.
For the remaining entities that together represent 7% of the Group’s profit before tax and 7% of the Group’s net assets, we performed other
procedures, including analytical review procedures, testing of consolidation journals and intercompany eliminations, and foreign currency
translation recalculations to respond to any potential risks of material misstatement to the Group financial statements.
The charts below illustrate the coverage obtained from the work performed by our audit teams.
Profit before tax
7%
14%
Total net assets
7%
1%
Full scope components
Specific scope components
Other procedures
Full scope components
Specific scope components
Other procedures
79%
92%
Involvement with overseas teams
All audit work performed for the purposes of the Group audit was undertaken by the Group audit team.
Climate change
There has been increasing interest from stakeholders as to how climate change will impact companies. The Group has determined that climate
risk manifests through its established principal risks and the most significant future impacts may be through adverse effects on the underlying
portfolio investments. This is primarily explained on pages 32-41 in the Task Force on Climate-related Financial Disclosures and on page 64 in the
Managing Risk section, which form part of the ‘Other information’, and do not form part of the audited financial statements. Our procedures on
these disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements, or our
knowledge obtained in the course of the audit, or otherwise appear to be materially misstated.
As explained in the Basis of preparation section of the General information and basis of preparation, on pages 142-143, climate risks have been
considered in the preparation of the consolidated financial statements where management consider it appropriate. The principal areas of
consideration by management are the valuation of financial assets and the application of the Group’s revenue policy, primarily the impact on the
net asset value of the funds on which performance-related fees are generated. Management concluded that these considerations did not have a
material impact on the financial reporting judgments and estimates.
Our audit effort in considering climate change was focused on assessing whether the effects of potential climate risks have been appropriately
reflected by management in reaching their judgments in relation to the assessment of fair value of investments and the impact on performance
fees. We also challenged the Directors’ considerations of climate change in their assessment of viability and associated disclosure.
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Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our 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) that we identified. These
matters included 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 were addressed in the context of our audit of the financial statements as a whole, and in our
opinion thereon, and we do not provide a separate opinion on these matters.
Risk
Our response to the risk
Valuation of investments in portfolio companies and real estate
assets (including those held via fund structures and assets held for
sale)
In the Consolidated and Parent Company statements of financial
position, the Group’s investments in portfolio companies (co-
investments or alongside funds managed by ICG) (2022: £1,642.5m,
2021: £1,525m) and real estate assets (2022: £239.7m, 2021: £273m)
are included in Financial assets at fair value and Investment property.
Assets held for sale (2022: £159.5m, 2021: £56.7m) are included in
Disposal groups held for sale.
Refer to the Audit Committee Report (page 77 to 84); Accounting
policies (page 151); and Note 5 of the Financial Statements (page 151
to 157)
The Group’s investment portfolio contains unquoted debt and equity
securities, and real estate assets, that are held either directly,
including through joint ventures, or through funds managed by the
Group. These investments are held at fair value through profit and
loss or investments held for sale in accordance with IFRS 5 – Non-
current Assets Held for Sale and Discontinued Operations (‘IFRS 5’).
The Group adopts a valuation policy based on the International
Private Equity and Venture Capital Valuation Guidelines 2018 (‘IPEV
guidelines’) and Royal Institution of Chartered Surveyors (‘RICS’) in
conformity with IFRS 13 – Fair Value Measurements (‘IFRS 13’) and
IAS 40 – Investment Property (‘IAS 40’). The Group predominantly
applies either an earnings based valuation technique or discounted
cash flow model (‘DCF’) to value non-real estate investments. For
certain real estate strategies, the Group engages external valuers to
perform valuations.
Owing to the unquoted and illiquid nature of these investments, the
assessment of fair valuation is subjective and requires several
significant and complex judgments to be made by management. The
exit value will be determined by the market at the time of realisation
and therefore despite the valuation policy adopted and judgments
made by management, the final sales value may differ materially from
the valuation at the year-end.
There is the risk that inaccurate judgments made in the assessment of
fair value could lead to the incorrect valuation of investments in
portfolio companies and real estate assets. In turn, this could
materially misstate the Financial assets at fair value in the
Consolidated and Parent Company statements of financial position,
and the Net gains on investments in the Consolidated income
statement.
There is also a risk that management may influence the judgments and
estimations in respect of the portfolio companies and real estate
asset valuations in order to meet market expectations of the Group.
We obtained an understanding of management’s processes and
controls for the valuation of investments (co-investments or
alongside funds managed by ICG) and real estate assets by
performing walkthrough procedures, in which we evaluated the
design effectiveness of controls. This included discussing with
management the valuation governance structure and protocols
around their oversight of the valuation process, including the Group
Valuation Committee.
We compared management’s valuation methodologies to IFRS and
the relevant IPEV and RICS guidelines. We sought explanations from
management where there were judgments applied in their application
of the guidelines and assessed their appropriateness.
With the assistance of our valuation specialists, we formed an
independent range for the key assumptions used in the valuation of a
sample of portfolio company and real estate investments, with
reference to relevant industry and market valuation considerations
and data points. We derived a range of acceptable fair values through
our analysis including taking into account other qualitative risk
factors, such as company specific risk factors. We compared these
ranges to management’s fair values and discussed our results with
both management and the Audit Committee
For the sample selected we agreed key inputs in the valuation models
to source data, including portfolio company financial information. We
also performed procedures on key judgments made by management
in the calculation of fair value:
– performed calculations to assess the appropriateness of discount
rates used in DCF valuations, with reference to relevant industry
and market data;
– assessed the suitability of the comparable companies used in the
calculation of the earnings multiples;
– challenged management on the applicability and completeness of
adjustments made to earnings multiples by obtaining rationale and
supporting evidence for adjustments made;
– assessed the appropriateness of the portfolio company financial
information, including business plans, used in the valuation and any
relevant adjustments made by obtaining rationale and supporting
evidence; and
– obtained the external valuation reports, where an external valuer
has been engaged, and assessed their competence and objectivity
We checked the mathematical accuracy of the valuation models on a
sample basis. We recalculated the unrealised gains/losses on
revaluation of investments impacting the Net gains on investments in
the Consolidated income statement.
We have considered the impact of climate change throughout the
procedures performed on the valuation of portfolio companies and
real estate assets, by challenging whether the valuation inputs and
assumptions used are appropriate.
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Risk
Our response to the risk
We challenged management to understand the rationale for any
material differences between the exit prices of investments realised
during the year and the prior year fair value, to further verify the
reasonableness of the current year valuation models and
methodology adopted by management.
We performed full and specific scope audit procedures over this risk
area, which covered 93% of these investments.
Key observations communicated to the Audit Committee
The valuation of the Group’s portfolio company and real estate investments is determined to be within a reasonable range of fair values and in
accordance with UK-adopted international accounting standards and the IPEV or RICS guidelines respectively.
Based on our procedures performed, we had no material matters to report the Audit Committee.
Risk
Our response to the risk
Valuation of investments in Collateralised Loan Obligations (‘CLOs’),
including debt (senior) and equity (subordinated debt) tranches and
the assets and liabilities held by consolidated CLOs
In the Consolidated and Parent Company statements of financial
position, the Group’s investments in CLO debt (senior) (2022:
£105.6, 2021: £107m) and equity (subordinated debt) tranches
(2022: £12.2m, 2021: £27m), and investments held by consolidated
CLOs (2022: £4,362m, 2021: £3,965m) are included in Financial
assets at fair value. The liabilities held by consolidated CLOs (2022:
£4,411m, 2021: £4,024m) are included in Financial liabilities at fair
value.
Refer to the Audit Committee Report (page 77 to 84); Accounting
policies (page 151); and Note 5 of the Financial Statements (page 151
to 157)
We obtained an understanding of management’s processes and
controls for the valuation of CLOs by performing walkthrough
procedures, in which we evaluated the design effectiveness of
controls.
We agreed each tranche size of all consolidated and non-
consolidated CLOs to observable market data (i.e. Fitch Ratings).
For the positions where observable inputs were available, we
obtained this market data and compared to management’s fair
valuations.
For the positions where observable market data was not available, we
formed an independent range of fair values for the debt and equity
tranches with the assistance of our valuation specialists. This covered
65% of all CLO Debt and Equity positions held. This included:
The Group holds investments in CLOs in both the debt and equity
tranches. These investments are accounted for at fair value through
profit or loss. The Group consolidates the CLOs where it is deemed
to have control in accordance with IFRS 10 – Consolidated Financial
Statements (‘IFRS 10’).
– projecting cash flows using a cash flow model and market-based
assumptions such as default rates;
– estimating a range of yields based on either recent trade data or
comparable CLO securities; and
– performing comparative calculations using the cash flows and
In particular, significant judgments are required where there is limited
market activity to provide reliable observable inputs.
There is the risk that inaccurate judgments made in the assessment of
fair value could lead to the incorrect valuation of investments in CLOs
which could materially misstate the Financial assets and Financial
liabilities at fair value in the Consolidated and Parent
Company statements of financial position. In turn, this could materially
misstate the Net gains on investments account in the Consolidated
income statement.
There is also a risk that management may influence the judgments and
estimations of the investments in CLO debt and equity tranches in
order to meet market expectations of the Group.
yields; and
– recalculating the unrealised gain/loss on revaluation of investments
impacting the Net gains on investments in the Consolidated income
statement
In addition, we checked the mathematical accuracy of the equity
models.
We reviewed the material assets and liabilities associated with each of
the consolidated CLOs and tested the underlying balances.
We have considered the impact of climate change throughout the
procedures performed on the valuation of the consolidated and
unconsolidated CLO investments, by challenging whether the
valuation inputs and assumptions used are appropriate.
Key observations communicated to the Audit Committee
The valuation of the CLO debt and equity tranches was found to be within a reasonable range of fair values and materially in accordance with
UK-adopted international accounting standards. Reasonable inputs to the valuations were used.
Based on our procedures performed we had no material matters to report to the Audit Committee.
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Risk
Our response to the risk
Calculation and recognition of management fees
and performance fees
In the Consolidated income statement, management fees
(2022: £429.4m, 2021: £325.0m), including performance fees
(2022: £57.5m, 2021: £65.3m), are included in Fee and other
operating income.
Refer to the Audit Committee Report (page 77 to 84);
Accounting policies (page 144); and Note 3 of the Financial
Statements (page 144)
The Group manages funds across numerous domiciles and
investment strategies. The Group receives management fees
and performance fees from its performance of investment
management services for third-party money it manages.
Management fees are calculated based on an agreed
percentage of either committed capital, invested capital or net
asset value (‘NAV’), depending on the contractual agreement
of the underlying fund. The calculations are prepared by ICG or
third-party administrators. Due to the manual nature of the
process, there is a risk that management fees are incorrectly
calculated.
Performance fees are calculated as a contractual percentage of
a fund’s return, once a specified hurdle rate is expected to be
met. These amounts are specified in the underlying contract
between the fund and the Group in its capacity as investment
manager. Performance fees are only received when a triggering
event, such as a realisation or refinancing a fund’s investment,
occurs.
In respect of performance fees, management must apply
judgment in accordance with IFRS 15 – Revenue from contracts
with customers (‘IFRS 15’) to determine whether it is highly
probable that a significant reversal will not occur in the future.
The following are identified as the key risks or judgments in
respect to the recognition of performance fees:
– inappropriate judgments are made by management in the
calculations, including whether a constraint is applied and the
forecast exit dates of the underlying investments;
– errors made in complex manual calculation models; and
– inappropriate inputs used by management in the calculations.
The accuracy and recognition of revenue is important to the
Group’s financial statements. Stakeholder expectations may
place pressure on management to influence the recognition of
revenue. This may result in overstatement or deferral of
revenue to assist in meeting current or future revenue targets
or expectations.
We obtained an understanding of management’s processes and controls
for the calculation and recognition of management fees and performance
fees by performing walkthrough procedures, in which we evaluated the
design effectiveness of controls.
In respect of management fees, for a sample of funds, we:
– agreed the fee terms used in the calculation, to the terms as specified in
the relevant legal agreements, for example the Investment Management
Agreement or Limited Partnership Agreement;
– validated key inputs, such as committed capital, invested capital or NAV,
to supporting evidence;
– tested the arithmetical accuracy of the calculations prepared by ICG or
the third-party administrators by performing independent recalculations;
– traced management fees received during the year to bank statements;
and
– traced the year end debtor balance to post year end bank statements to
assess recoverability.
In respect of performance fees, for a sample of funds, we:
– agreed contractual terms such as hurdle rates and percentage receivable
to underlying legal agreements;
– recalculated the waterfall to test management’s judgment that the
relevant hurdles are expected to be met where performance fees are
being accrued;
– determined the reasonableness of forecast exit dates with reference to
our work performed over valuations of the investment portfolio and our
understanding of the investment life cycle;
– tested the arithmetical accuracy of the calculations by performing
independent recalculations; and
– assessed whether each payment of performance fees was a result of a
triggering event, such as a realisation or refinancing and verified cash
flows to bank statements.
We compared the performance of the underlying funds used in the
performance fee calculations to our understanding of the performance of
the relevant funds’ underlying investments gained through our valuation
work.
We challenged management to understand the rationale for any differences
between the performance fee payments received during the year and the
prior year estimates, to further assess the reasonableness of the current
year performance fee models and methodology adopted by management.
In order to address the residual risk of management override we have
performed journal entry testing and have made enquiries of management.
We have considered the impact of climate change on performance fees by
challenging the impact on the valuations as outlined in the key audit matters
above.
We performed full and specific scope audit procedures over this risk area,
which covered 78.8% of management fees, including performance fees.
Key observations communicated to the Audit Committee
All transactions tested have been recognised in accordance with the underlying agreements or other supporting documentation. Management
fees and performance fees have been recorded materially in accordance with UK-adopted international accounting standards.
Based on our procedures performed we had no material matters to report to the Audit Committee.
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Changes from the prior year
We no longer consider ‘First year audit transition’ to be a key audit matter as this Ernst & Young LLP’s second year as auditors.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in
forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic
decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures.
We determined materiality for the Group to be £28.3m (2021: £25.5m), which is 5% (2021: 5%) of profit before tax. We believe that profit before
tax is the most relevant measure to the stakeholders of the entity and is demonstrated by the focus in the market on the Group’s fund
management activities.
We determined materiality for the Parent Company to be £9.4m (2021: £10.7m), which is 1% (2021: 1%) of net assets. The Parent Company is an
investment company and, therefore, net assets is considered to be the key focus for users of the financial statements.
During the course of our audit, we reassessed initial materiality based on 31 March 2022 profit before tax, and net asset value in relation to the
Parent Company, and adjusted our audit procedures accordingly.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgement was that
performance materiality was 50% (2021: 50%) of our planning materiality, namely £14.1m (2021: £12.7m). We have set performance materiality at
this percentage due to our observations of the control environment and the misstatements identified in the prior year. In determining
performance materiality, we considered our risk assessments, together with our assessment of the Group’s overall control environment.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £1.4m (2021: £1.3m), which is
set at 5% (2021: 5%) of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative
grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other relevant
qualitative considerations in forming our opinion.
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Other information
The other information comprises the information included in the Annual Report other than the financial statements and our auditor’s report
thereon. The Directors are responsible for the other information contained within the Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report,
we do not express any form of assurance conclusion thereon.
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 course of the audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in
the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act
2006.
In our opinion, based on the work undertaken in the course of the audit:
– the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is
consistent with the financial statements; and
– the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit,
we have not identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our
opinion:
– adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from
branches not visited by us; or
– the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
– certain disclosures of Directors’ remuneration specified by law are not made; or
– we have not received all the information and explanations we require for our audit.
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Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance
Statement relating to the Group and Parent Company’s compliance with the provisions of the UK Corporate Governance Code specified for our
review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements or our knowledge obtained during the audit:
– Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties
identified set out on page 120;
– Directors’ explanation as to its assessment of the Parent Company’s prospects, the period this assessment covers and why the period is
appropriate set out on page 65;
– Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in operation and meets its liabilities
set out on page 120;
– Directors’ statement on fair, balanced and understandable, as set out on page 125;
– Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks, as set out on page 59;
– The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems as set out on
page 84; and
– The section describing the work of the Audit Committee, as set out on page 77 to 84.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement set out on page 125, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors 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 Group and Parent 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 Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s 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 auditor’s 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.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,
outlined above, to detect irregularities, including fraud. 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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
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However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the company
and management.
– We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the most
significant are those that relate to the reporting framework (UK-adopted international accounting standards, the Companies Act 2006 and
UK Corporate Governance Code) and relevant tax compliance regulations. In addition, we concluded that there are certain significant laws
and regulations which may have an effect on the determination of the amounts and disclosures in the financial statements, being the Listing
Rules of the UK Listing Authority and relevant Financial Conduct Authority (‘FCA’) rules and regulations.
– We understood how the Group is complying with those frameworks by making enquiries of senior management, including the Chief Financial
and Operating Officer, Group Head of Legal and Company Secretary, Global Head of Compliance, Head of Risk, Head of Internal Audit and
the Chairman of the Audit Committee. We corroborated our understanding through our review of board and committee meeting minutes,
papers provided to the Audit Committee, and correspondence received from regulatory bodies.
– We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur by discussing
with the Audit Committee and management to understand where they considered there was susceptibility to fraud. We considered
performance targets and their potential influence on efforts made by management to manage or influence the perceptions of analysts.
We considered the controls that the Group has established to address risks identified, or that otherwise prevent, deter and detect fraud,
including in a remote-working environment; and how senior management and those charged with governance monitor these controls. Where
the risk was considered to be higher, we performed audit procedures to address each identified fraud risk.
– Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures
involved: journal entry testing, with a focus on manual journals and journals indicating large or unusual transactions based on our
understanding of the business; enquiries of senior management, and focused testing, as referred to in the key audit matters section above.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at
https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters we are required to address
– Following the recommendation from the Audit Committee, we were appointed by the Parent Company on 21 July 2020 to audit the financial
statements for the year ending 31 March 2021 and subsequent financial periods. Our appointment as auditor was approved by shareholders
at the Annual General Meeting on 21 July 2020.
– The period of total uninterrupted engagement including previous renewals and reappointments is two years, covering the years ended 2021
and 2022.
– The audit opinion is consistent with the additional report to the Audit Committee.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Parent Company’s members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Ashley Coups
(Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
25 May 2022
1. The maintenance and integrity of the Intermediate Capital Group plc website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration
of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the
website.
2. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
ICG | Annual Report & Accounts 2022
135
Financial statements
CONSOLIDATED INCOME STATEMENT
For the year ended 31 March 2022
Fee and other operating income
Finance loss
Net gains on investments
Total Revenue
Finance costs
Administrative expenses
Share of results of joint ventures accounted for using the equity method
Profit before tax
Tax charge
Profit after tax from continuing operations
Loss after tax from disposal groups held for sale
Profit for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Earnings per share (pence)
Diluted earnings per share (pence)
Year ended
31 March 2022
Year ended
31 March 2021
Notes
3
9
10
11
12
30
14
29
£m
434.0
(7.4)
555.5
982.1
(53.1)
(363.1)
(0.5)
565.4
(31.1)
534.3
(9.2)
525.1
526.8
(1.7)
525.1
16
16
183.7p
181.1p
£m
331.2
(9.4)
507.4
829.2
(56.8)
(263.1)
0.2
509.5
(48.5)
461.0
—
461.0
457.1
3.9
461.0
160.3p
157.5p
Other than for amounts reported as disposal groups held for sale, all activities represent continuing operations.
The accompanying notes 1 to 33 are an integral part of these financial statements.
136
ICG | Annual Report & Accounts 2022
CONSOLIDATED AND PARENT COMPANY STATEMENTS OF COMPREHENSIVE
INCOME
for the year ended 31 March 2022
Group
Profit after tax
Items that may be subsequently reclassified to profit of loss if specific conditions are met
Notes
Exchange differences on translation of foreign operations
Total comprehensive income for the year
Attributable to:
Equity holders of the parent
Non controlling interests
Year ended
31 March 2022
Year ended
31 March 2021
£m
525.1
6.9
532.0
533.7
(1.7)
532.0
£m
461.0
(8.9)
452.1
448.2
3.9
452.1
Company
Profit after tax
Total comprehensive income for the year
The accompanying notes 1 to 33 are an integral part of these financial statements.
Notes
8
Year ended
31 March 2022
Year ended
31 March 2021
£m
46.7
46.7
£m
203.0
203.0
ICG | Annual Report & Accounts 2022
137
Financial statements continued
CONSOLIDATED AND PARENT COMPANY STATEMENTS
OF FINANCIAL POSITION
as at 31 March 2022
Non-current assets
Intangible assets
Property, plant and equipment
Investment property
Investment in subsidiaries
Investment in Joint Venture accounted for under the equity method
Trade and other receivables
Financial assets at fair value
Derivative financial assets
Deferred tax asset
Current assets
Trade and other receivables
Current tax debtor
Financial assets at fair value
Derivative financial assets
Cash and cash equivalents
Assets of disposal groups held for sale
Total assets
Non-current liabilities
Trade and other payables
Financial liabilities at fair value
Financial liabilities at amortised cost
Other financial liabilities
Derivative financial liabilities
Deferred tax liabilities
Current liabilities
Provisions
Trade and other payables
Current tax creditor
Financial liabilities at amortised cost
Other financial liabilities
Derivative financial liabilities
Liabilities of disposal groups held for sale
Total liabilities
Equity and reserves
Called up share capital
Share premium account
Other reserves
Retained earnings
Equity attributable to owners of the Company
Non-controlling interest
Total equity
Total equity and liabilities
31 March 2022
Group
31 March 2021
Group
31 March 2022
Company
31 March 2021
Company
Notes
£m
£m
£m
£m
17
18
19
28
30
20
5
5
14
20
5
5
6
29
21
7
7
7
5
14
21
7
7
5
23
23
17.1
60.4
1.5
—
2.2
91.1
6,973.1
1.3
25.0
7,171.7
283.1
31.9
—
137.3
991.8
1,444.1
256.7
8,872.5
76.4
4,364.7
1,452.3
52.2
2.9
15.1
5,963.6
—
434.4
14.5
201.1
6.5
153.4
809.9
97.2
6,870.7
21.5
67.0
1.8
—
2.8
62.8
6,264.5
2.4
8.8
6,431.6
215.2
4.4
64.6
109.5
581.2
974.9
57.4
7,463.9
41.9
3,882.9
1,208.9
55.0
31.7
0.8
5,221.2
0.5
427.3
3.5
112.5
3.7
68.2
615.7
4.8
5,841.7
77.3
180.3
0.2
1,688.9
1,946.7
55.1
2,001.8
8,872.5
77.2
180.2
(2.9)
1,362.7
1,617.2
5.0
1,622.2
7,463.9
12.1
49.9
—
1,871.4
—
574.1
362.8
2.1
0.9
2,873.3
211.2
23.7
80.6
37.9
707.1
1,060.5
—
3,933.8
76.4
—
1,452.3
44.8
3.1
—
1,576.6
—
1,155.5
—
201.1
3.1
53.6
1,413.3
—
2,989.9
77.3
180.3
36.3
650.0
943.9
—
943.9
3,933.8
17.1
56.3
—
1,648.1
—
506.6
451.6
2.4
2.9
2,685.0
716.6
19.3
62.9
44.3
264.3
1,107.4
—
3,792.4
41.9
—
1,208.9
47.4
31.6
0.5
1,330.3
0.6
1,282.0
—
112.5
1.0
5.1
1,401.2
—
2,731.5
77.2
180.2
34.5
769.0
1,060.9
—
1,060.9
3,792.4
The Parent Company’s total profit for the year was £46.7m (2021: Profit £203.0m) Company Registration Number: 02234775. The
accompanying notes 1 to 33 are an integral part of these financial statements.
These financial statements were approved and authorised for issue by the Board of Directors on 25 May 2022 and were signed on its behalf
by:
Andrew Sykes
Interim Chairman
Vijay Bharadia
Chief Financial and Operating Officer
138
ICG | Annual Report & Accounts 2022
CONSOLIDATED AND PARENT COMPANY STATEMENTS OF CASH FLOWS
For the year ended 31 March 2022
Profit before tax from continuing operations
Adjustments for:
Fee and other operating income
Dividend income
Interest Income
Net investment returns
Net fair value gains on derivatives
Impact of movement in foreign exchange rates
Interest expense
Depreciation, amortisation and impairment of property, equipment and intangible
assets
Share based payment expense
Intragroup reallocation of incurred costs
Working capital changes:
Increase in trade and other receivables
Increase/(Decrease) in trade and other payables
Proceeds from sale of current financial assets and disposal groups held for sale
Purchase of current financial assets and disposal groups held for sale
Purchase of investments
Proceeds from sales and maturities of investments
Interest and dividend income received2
Fee and other operating income received
Interest paid
Cash generated from/used in operations
Taxes paid
Net cash flows from/used in operating activities
Investing activities
Purchase of intangible assets
Purchase of property, plant and equipment
Net cashflow from derivative financial instruments
Cashflow as a result of change in control of subsidiary
Cash paid in respect of group investing activities (acquisition of long-term assets)
Cash received in respect of group investing activities (proceeds from long-term assets)
Increase in amounts owed by subsidiaries
Investment in subsidiaries
Net cash flows from/used in investing activities
Financing activities
Purchase of Own shares
Payment of principal portion of lease liabilities
Proceeds from borrowings
Repayment of long-term borrowings
Dividends paid to equity holders of the parent
Increase in amounts owed to subsidiaries
Repayment of amounts owed to subsidiaries
Increase in amounts owed to subsidiaries (receipts of proceeds from long-term assets)
Net cash flows from/used in financing activities
Net increase/(decrease) in cash and cash equivalents
Effects of exchange rate differences on cash and cash equivalents
Cash and cash equivalents at 1 April
Cash and cash equivalents at 31 March
Year ended
31 March 2022
Group
Year ended
31 March 2021
Group
Year ended
31 March 2022
Company
Notes
£m
565.4
£m
509.5
£m
23.8
Year ended 31
March 2021
Company
(restated)1
£m
224.4
3
(434.0)
—
—
(555.5)
7.3
0.1
53.1
19.5
29.6
—
(32.5)
(27.4)
(374.4)
185.2
(204.0)
(3,532.8)
3,743.8
259.8
393.0
(183.3)
287.3
(43.9)
243.4
(4.3)
(3.5)
22.4
30.9
—
—
—
—
45.5
(20.9)
(4.1)
413.5
(111.5)
(165.7)
—
—
—
111.3
400.2
10.4
581.2
991.8
17 & 18
25
20
21
17
18
20 & 21
20 & 21
20 & 21
15
20 & 21
20 & 21
20 & 21
6
6
(331.2)
—
—
(507.4)
9.4
—
56.8
19.2
26.9
—
(35.4)
87.2
(165.0)
27.1
(79.6)
(2,836.1)
2,838.5
257.1
285.1
(189.8)
137.3
(26.3)
111.0
(3.9)
(6.9)
40.6
34.9
—
—
—
—
64.7
—
(6.8)
—
(495.6)
(150.9)
—
—
—
(653.3)
(477.6)
(28.1)
1,086.9
581.2
(10.5)
(163.0)
(50.5)
(30.0)
13.5
1.1
102.0
24.9
29.6
(113.2)
(6.0)
23.5
(154.8)
158.4
(165.1)
(29.9)
143.4
9.8
26.7
(49.2)
(60.7)
(41.3)
(102.0)
(3.4)
(2.6)
13.8
—
(561.9)
145.9
(68.1)
(231.7)
(708.0)
—
(3.6)
413.5
(111.5)
(165.7)
333.4
(65.4)
848.4
1,249.1
439.1
3.7
264.3
707.1
(35.4)
(156.2)
(3.0)
(53.0)
(32.7)
(93.7)
55.6
10.7
26.9
(82.9)
(19.7)
(5.6)
(164.6)
69.9
(66.2)
(20.9)
137.6
30.8
27.9
(55.1)
(40.6)
(15.9)
(56.5)
(4.0)
(6.7)
41.1
—
(200.6)
123.8
(4.2)
(251.4)
(302.0)
—
(2.3)
—
(495.4)
(150.9)
272.2
(31.2)
149.0
(258.6)
(617.1)
(12.6)
894.0
264.3
1 The Parent Company’s (‘Company’) Dividend income, Interest income and Net investment returns have been restated (see note 2)
2 Comprises Interest income received of £221.8m (Group) (2021: £223.7m) and £9.8m (Company) (2021: £30.8m) and Dividend income received of £38.0m (Group) (2021:
£33.4m) and £nil (Company) (2021: £nil).
The accompanying notes 1 to 33 are an integral part of these financial statements. The Group’s cash and cash equivalents include £230.3m
(2021: £284.3m) of restricted cash held principally by structured entities controlled by the Group (see note 6).
ICG | Annual Report & Accounts 2022
139
Financial statements continued
CONSOLIDATED AND PARENT COMPANY STATEMENTS
OF CHANGES IN EQUITY
For the year ended 31 March 2022
Capital
redemption
reserve1
Share based
payments
reserve
(note 25)
Own
shares3
(note 24)
Foreign
currency
translation
reserve2
Retained
earnings
£m
£m
£m
£m
60.5
(82.2)
13.8
1,362.7
1,617.2
Total
£m
Non-
controlling
interest
£m
5.0
Total
equity
£m
1,622.2
£m
5.0
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(27.8)
(20.9)
10.1
—
—
—
5.0
5.2
29.6
—
—
—
67.5
—
(93.0)
Share
capital
(note 23)
£m
77.2
—
—
0.1
—
—
—
77.3
Share
premium
(note 23)
£m
180.2
—
—
—
0.1
—
—
180.3
—
6.9
6.9
—
—
—
—
—
—
—
20.7
526.8
526.8
(1.7)
525.1
—
6.9
—
6.9
526.8
533.7
(1.7)
532.0
—
(25.1)
(9.8)
0.1
(25.1)
(20.9)
(27.4)
5.2
29.6
(165.7)
1,688.9
(165.7)
1,946.7
—
51.8
—
—
—
—
—
55.1
0.1
26.7
(20.9)
(27.4)
5.2
29.6
(165.7)
2,001.8
Capital
redemption
reserve1
Share based
payments
reserve
(note 25)
Own
shares3
(note 24)
Retained
earnings
£m
£m
£m
50.8
(21.3)
769.0
1,060.9
Total
equity
£m
£m
5.0
—
—
—
—
—
—
—
(27.8)
—
—
5.0
29.6
—
52.6
—
—
—
—
—
46.7
46.7
—
46.7
46.7
0.1
—
(27.7)
—
29.6
—
(21.3)
(165.7)
650.0
(165.7)
943.9
Group
Balance at 1 April 2021
Profit after tax
Exchange differences on translation
of foreign operations
Total comprehensive income/
(expense) for the year
Issue of share capital
Movement in control of subsidiary
Own shares acquired in the year
Options/awards exercised4
Tax on options/awards exercised
Credit for equity settled share
schemes
Dividends paid
Balance at 31 March 2022
Share
capital
(note 23)
£m
77.2
Share
premium
(note 23)
£m
180.2
—
—
—
0.1
—
—
—
—
—
—
—
—
—
—
—
0.1
—
—
—
77.3
—
180.3
Company
Balance at 1 April 2021
Profit after tax
Total comprehensive income for the year
Issue of share capital
Options/awards exercised
Credit for equity settled share schemes
Dividends paid
Balance at 31 March 2022
140
ICG | Annual Report & Accounts 2022
Financial statements continued
Group
Balance at 1 April 2020
Profit after tax
Exchange differences on translation
of foreign operations
Total comprehensive income/
(expense) for the year
Movement in control of subsidiary
Options/awards exercised4
Tax on options/awards exercised
Credit for equity settled share
schemes
Dividends paid
Balance at 31 March 2021
Share
capital
(note 23)
£m
77.2
Share
premium
(note 23)
£m
179.9
—
—
—
—
—
—
—
—
—
—
—
0.3
—
—
—
77.2
—
180.2
Company
Balance at 1 April 2020
Profit after tax
Total comprehensive income for the year
Options/awards exercised
Tax on options/awards exercised
Credit for equity settled share schemes
Dividends paid
Balance at 31 March 2021
Capital
redemption
reserve1
Share based
payments
reserve
(note 25)
Own
shares3
(note 24)
Foreign
currency
translation
reserve2
Retained
earnings
£m
£m
£m
£m
58.4
(114.4)
22.7
1,080.4
1,309.2
—
—
457.1
457.1
Total
£m
Non-
controlling
interest
£m
1.5
3.9
Total
equity
£m
1,310.7
461.0
—
—
—
—
6.8
26.9
—
(31.6)
£m
5.0
—
—
—
—
—
—
—
5.0
—
(8.9)
—
(8.9)
—
(8.9)
—
(8.9)
457.1
448.2
3.9
452.1
—
32.2
—
—
—
—
—
—
—
13.8
(0.1)
(0.1)
(0.4)
(0.5)
(23.8)
(22.9)
—
(22.9)
—
—
6.8
26.9
—
—
6.8
26.9
(150.9)
1,362.7
(150.9)
1,617.2
—
5.0
(150.9)
1,622.2
Capital
redemption
reserve1
Share based
payments
reserve
(note 25)
Own
shares3
(note 24)
£m
58.4
£m
(21.3)
—
—
(31.6)
(2.9)
26.9
—
—
—
—
—
Retained
earnings
£m
716.9
203.0
203.0
—
—
—
Total
equity
£m
1,016.1
203.0
203.0
(31.3)
(2.9)
26.9
—
50.8
—
(21.3)
(150.9)
769.0
(150.9)
1,060.9
£m
5.0
—
—
—
—
—
—
5.0
—
60.5
—
(82.2)
Share
capital
(note 23)
£m
77.2
Share
premium
(note 23)
£m
179.9
—
—
—
—
—
—
—
0.3
—
—
—
77.2
—
180.2
1. The capital redemption reserve is a reserve created when a company buys its own shares which reduces its share capital. This reserve is not distributable to shareholders. £1.4m
of the balance relates to the conversion of ordinary shares and convertible shares into ordinary shares in 1994. The remaining £3.6m relates to the cancellation of treasury
shares in 2015.
2. Other comprehensive income/(expense) reported in the foreign currency translation reserve represents foreign exchange gains and losses on the translation of subsidiaries
reporting in currencies other than sterling.
3. The movement in the Group Own shares reserve in respect of Options/awards exercised, represents the employee shares vesting net of personal taxes and social security.
4. The associated personal taxes and social security liabilities are settled by the Group with the equivalent value of shares retained in the Own shares reserve.
The accompanying notes 1 to 33 are an integral part of these financial statements.
ICG | Annual Report & Accounts 2022
141
NOTES TO THE FINANCIAL STATEMENTS
1. General information and basis of preparation
General information
Intermediate Capital Group plc (the ‘Parent Company’, ‘Company’ or
‘ICG plc’) is a public company limited by shares, incorporated,
domiciled and registered in England and Wales under the Companies
Act, with the company registration number 02234775. The
registered office is Procession House, 55 Ludgate Hill, New Bridge
Street, London EC4M 7JW.
The consolidated financial statements for the year to 31 March 2022
comprise the financial statements of the Parent Company and its
consolidated subsidiaries (collectively, the ‘Group’). The nature of
the Group’s operations and its principal activities are detailed in the
Strategic Report.
Basis of preparation
The consolidated financial statements of the Group and Company
are prepared in accordance with UK-adopted international
accounting standards (IAS) and, as regards the Parent Company
financial statements, as applied in accordance with the provisions of
the Companies Act 2006. The Company has taken advantage of
section 408 of the Companies Act 2006 not to present the Parent
Company profit and loss account.
The financial statements have been prepared on a going concern
basis and under the historical cost convention, except for financial
instruments that are measured at fair value through profit and loss
at the end of the reporting period, as detailed in note 5, and certain
investments in associates and joint ventures held for venture capital
purposes, as detailed in note 30.
In the application of the Group’s accounting policies, the Directors
are required to make judgements, estimates and assumptions about
the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors
that are considered to be relevant. Actual results may differ from
these estimates.
The judgements, estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision and
future periods if the revision affects both current and future periods.
Details of the critical judgements made, and key sources of
estimation uncertainty, are included in note 1 and in the note to
which the critical judgement or source of estimation uncertainty
relates.
In preparing the financial statements, the Directors have considered
the impact of climate change, particularly in the context of the
climate change risks identified in the TCFD Report. The Directors’
considerations included the medium and longer-term cash flow
impacts of climate change on a number of key estimates within the
financial statements, including:
– the valuation of financial assets; and
– the application of the Group’s revenue recognition policy,
primarily the impact on the net asset value (NAV) of funds on
which performance-related fees are generated.
These considerations did not have a material impact on the financial
reporting judgements and estimates in the current year. This reflects
the conclusion that climate change is not expected to have a
significant impact on the Group’s short-term cash flows including
those considered in the going concern and viability assessments.
The accounting policies as set out in the notes to the accounts have
been applied consistently to all periods presented in these
consolidated financial statements.
Basis of consolidation
The Group’s financial statements consolidate the results of
Intermediate Capital Group plc and entities controlled by the
Company for the period to 31 March each year. Control is achieved
when the Company has power over the relevant activities, exposure
to variable returns from the investee, and the ability to affect those
returns through its power over the investee.
The assessment of control is based on all relevant facts and
circumstances and the Group reassesses its conclusion if there is an
indication that there are changes in facts and circumstances.
Subsidiaries are included in the consolidated financial statements
from the date that control commences, until the date that control
ceases. See note 28 which lists the Group’s subsidiaries and
controlled structured entities.
Each component of other comprehensive income and profit or loss is
attributed to the owners of the Company and to the non-controlling
interests.
Adjustments are made where required to the financial statements of
subsidiaries for consistency with the accounting policies of the
Group. All intra-group transactions, balances, unrealised income and
expenses are eliminated on consolidation.
142
ICG | Annual Report & Accounts 2022
Critical judgements in the application of accounting policies and
key sources of estimation uncertainty
Critical judgement
In preparing the financial statements, apart from those involving
estimations, two critical judgements have been made by the
Directors in the application of the Group’s accounting policies:
i. The Group’s assessment as to whether it controls certain
investee entities, including third-party funds and carried interest
partnerships, and is therefore required to consolidate the
investee, as detailed above. The Group’s assessment of this
critical judgement is discussed further in note 28.
Going concern
The Directors have, at the time of approving the financial
statements, a reasonable expectation that the Company and the
Group have adequate resources to continue in operational existence
for the foreseeable future. Therefore, they continue to adopt the
going concern basis of preparing the financial statements, as detailed
in the Directors’ report (page 120) and viability statement (page 65).
In assessing the Group’s ability to continue in its capacity as a going
concern, the Board and the Executive Directors of the Group
considered:
– The ongoing impacts of the Covid-19 pandemic, including market
ii. The application of the Group’s revenue recognition policy in
volatility and new ways of working
respect of the performance fee component of management fees.
Judgement is primarily applied in considering the timings of
when expected performance conditions will be met and the
appropriate constraint to be applied. The Group’s assessment of
this critical judgement is discussed further in note 3.
Key sources of estimation uncertainty
The key sources of estimation uncertainty at the reporting date, that
may have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial
year, results from the Group’s assessment of fair value of its financial
assets and liabilities (discussed further in note 5 and note 7) and the
impact of this assessment on trade and other payables related to the
Deal Vintage Bonus - see notes 13 and 21.
Critical judgements and key sources of estimation uncertainty are
reviewed by the Audit Committee during the year and its
involvement in the process is included in its report on page 77.
Foreign currencies
The functional currency of the Company is sterling as the Company’s
shares are denominated in sterling and the Company’s costs are
primarily incurred in sterling. The Group has determined the
presentational currency of the Group is the functional currency of
the Company. Information is presented to the nearest million (£m).
Transactions denominated in foreign currencies are translated using
the exchange rates prevailing at the date of the transactions. At each
reporting date, monetary assets and liabilities denominated in a
foreign currency are retranslated at the rates prevailing at the
reporting date. Non-monetary assets and liabilities denominated in
foreign currencies that are measured at fair value are translated at
the rate prevailing at the date the fair value was determined. Non-
monetary items that are measured at historical cost are translated
using rates prevailing at the date of the transaction.
The assets and liabilities of the Group’s foreign operations are
translated using the exchange rates prevailing at the reporting date.
Income and expense items are translated using the average
exchange rates during the year. Exchange differences arising from
the translation of foreign operations are taken directly to the foreign
currency translation reserve. On disposal of a foreign operation,
exchange differences previously recognised in other comprehensive
income are reclassified to the income statement.
– The impact of conflict in Ukraine and the macro-inflationary
backdrop on investment performance
– The impact on the Group’s fee income. Specifically, performance-
related revenue, as part of this assessment the Group performed
additional sensitivity analysis around performance fees and the
impact this would have on overall fee income. This is discussed in
note 3
– The adequacy of the Group’s capital and liquidity throughout the
pandemic and potential shortfalls in access to capital. As at 31
March 2022 the Group has available liquidity of £1.3bn, including
£550m of undrawn debt facilities. The macro-economic scenarios
were in line with those used in the ICAAP stress test and are
discussed in the viability statement on page 65
– The operational resilience of the Group’s critical functions to
maintain risk management and compliance. Including IT, Finance,
Treasury and Operations
– The regulatory and legal environment and any potential conduct
risks which could arise
– The appropriateness of valuation techniques applied to
determine the fair value of investments that are not quoted in an
active market. This is discussed further in note 5
– Those entities which are not controlled by the Group but where
the Group has a joint venture relationship or has significant
influence over an associate and whether they have the ability to
continue as a going concern. These risks have been captured in
the Group’s overall fair value assessments of the underlying
assets described in note 5
The Directors have concluded based on the above assessment that
the preparation of the financial statements on a going concern basis,
to 30 June 2023, a period of more than 12 months from the date of
signing of the financial statements, continues to be appropriate.
ICG | Annual Report & Accounts 2022
143
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
2. Changes in accounting policies and disclosures
New and amended standards and interpretations
The new and amended standards and interpretations that are issued,
but not yet effective, up to the date of issuance of the Group’s
financial statements are disclosed below. The Group intends to
adopt these standards, if applicable, when they become effective.
These new standards are not expected to have a material impact on
the Group.
3. Revenue
Revenue and its related cash flows, within the scope of IFRS 15
‘Revenue from Contracts with Customers’, are derived from the
Group’s fund management company activities and are presented net
of any consideration payable to a customer in the form of rebates.
The significant components of the Group’s fund management
revenues are as follows:
Accounting periods
commencing on or after
1 January 2022
Type of contract/service
Management fees1
Other income
Fee and other operating income
Year ended
31 March 2022
Year ended
31 March 2021
£m
429.4
4.6
434.0
£m
325.0
6.2
331.2
1 January 2023
1.
Included within management fees is £57.5m (2021: £65.3m) of performance related
fees.
1 January 2023
Management fees
The Group earns management fees from its investment management
services. Management fees are charged on third-party capital
managed by the Group and are based on an agreed percentage of
either committed capital, invested capital or NAV, dependent on the
fund. Management fees comprise both non-performance and
performance-related fee elements related to one contract
obligation .
Non-performance-related management fees for the year of £371.9m
(2021: £259.7m) are charged in arrears and are recognised in the
period services are performed.
Performance-related management fees (performance fees) are
recognised only to the extent it is highly probable that there will not
be a significant reversal of the revenue recognised in the future. This
is generally towards the end of the contract period or upon early
liquidation of a fund. The estimate of performance fees is made with
reference to the liquidation profile of the fund, which factors in
portfolio exits and timeframes. For certain funds the estimate of
performance fees is made with reference to specific requirements. A
constraint is applied to the estimate to reflect uncertainty of future
fund performance. Performance fees of £57.5m (2021: £65.3m)
have been recognised in the year. Performance fees will only be
crystallised and received in cash when the relevant fund
performance hurdle is met.
There are no other individually significant components of revenue
from contracts with customers.
IFRS/IAS
IFRS 9
IAS 8
IAS 1 and IFRS
Practice
Statement 2
IAS 1
Financial Instruments - Fees
in the ‘10 per cent’ test for
derecognition of financial
liabilities
Definition of Accounting
Estimates
Disclosure of Accounting
Policies
Classification of Liabilities as
Current or Non-current
1 January 2023
Changes in significant accounting policies
No changes to significant accounting policies were implemented.
Parent Company restatements
As a result of reclassification, the Parent Company statement of cash
flow includes the following presentational changes:
– The adjusting item in respect of ‘Interest expense’ has been
increased £3m to £55.6m to reflect the disaggregation of
‘Interest income’
– The adjusting item in respect of ‘Interest income’ has been stated
at £3m
– The adjusting item in respect of ‘Net investment returns’ has been
restated to £53.0m, a reduction of £156.1m to reflect the
disaggregation of ‘Dividend income’ which is now presented
separately
– The adjusting item in respect of ‘Net fair value gains on
derivatives’ has been restated to £32.7m, a reduction of £93.7m
to reflect the disaggregation of ‘Impact of movement in foreign
exchange rates’ which is now presented separately
144
ICG | Annual Report & Accounts 2022
The weighted-average constraint at the reporting date is 46%. If the
average constraint were to increase by 10 basis points to 56% this
would result in a reduction in revenue of £0.62m. Conversely, a 10%
decrease in constraint would result in an increase in revenue of
£0.55m being recognised in the income statement. In certain limited
circumstances performance fees received may be subject to
clawback provisions if the performance of the fund deteriorates
materially following the receipt of performance fees.
Critical judgement
A critical judgement for the Group is whether performance fees will
meet their expected performance conditions within the expected
timeframes. The Group bases its assessment on the best available
information pertaining to the funds and the activity of the underlying
assets within that fund. The valuation of the underlying assets within
a fund will be subject to fluctuations in the future, including the
impact of macroeconomic factors outside the Group’s control. The
information on which this judgement is based is the liquidation NAV
of the relevant funds (which are subject to annual audit).
The Directors base their projected views on a 24-month look-
forward basis, the ‘forecast period’, from the year end. The Directors
believe they have a reasonable basis on which to judge expected
exits and value within a two-year horizon, but not beyond that.
Within this forecast period, the Directors will consider funds that
have either reached their hurdle rate or are expected to reach the
hurdle rate in the forecast period. In determining whether a fund is
expected to reach the hurdle rate, the key inputs are the latest
expected repayment dates of the underlying assets and expected
proceeds on realisation, as approved by the Fund Investment
Committees.
Where the hurdle date is expected to be reached within 24 months
of the year end but performance fees are not yet paid, a constraint
will be applied within the determination of the performance fee
receivable. Application of the constraint limits the revenue
recognised. This is assessed by on a case-by-case basis.
ICG | Annual Report & Accounts 2022
145
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
4. Segmental reporting
For management purposes, the Group is organised into two operating segments, the Fund Management Company (‘FMC’) and the Investment
Company (‘IC’) which are also reportable segments. In identifying the Group’s reportable segments, management considered the basis of
organisation of the Group’s activities, the economic characteristics of the operating segments, and the type of products and services from
which each reportable segment derives its revenues.
The Executive Directors monitor the operating results of the FMC and the IC for the purpose of making decisions about resource allocation
and performance assessment. The Group does not aggregate the FMC and IC as those segments do not have similar economic characteristics.
Information about these segments is presented below.
The FMC earns fee income for the provision of investment management services and incurs the majority of the Group’s costs in delivering
these services, including the cost of the investment teams and the cost of support functions, primarily marketing, operations, information
technology and human resources.
The IC is charged a management fee of 1% of the carrying value of the average balance sheet investment portfolio by the FMC and this is
shown below as the Inter-segmental fee. The costs of finance, treasury and legal teams, and other Group costs primarily related to being a
listed entity, are allocated to the IC. The remuneration of the Executive Directors is allocated equally to the FMC and the IC.
The amounts reported for management purposes in the tables below are reconciled to the IFRS reported amounts on the following pages.
External fee income
Inter-segmental fee
Other operating income
Fund management fee income
Net investment returns
Dividend income
Net fair value loss on derivatives
Total revenue
Interest expense
Staff costs
Incentive scheme costs
Other administrative expenses
Profit before tax
Year ended 31 March 2022
Year ended 31 March 2021
FMC
£m
448.7
24.8
1.7
475.2
—
38.0
(0.4)
512.8
(1.7)
(76.0)
(87.2)
(61.7)
286.2
IC
£m
0.5
(24.8)
2.1
(22.2)
485.7
—
(11.8)
451.7
(50.5)
(16.7)
(82.5)
(19.4)
282.6
Reportable
segments Total
£m
449.2
—
3.8
453.0
485.7
38.0
(12.2)
964.5
(52.2)
(92.7)
(169.7)
(81.1)
568.8
FMC
£m
333.7
21.4
—
355.1
—
33.4
—
IC
£m
—
(21.4)
2.6
(18.8)
445.1
—
(7.3)
388.5
419.0
—
(63.3)
(73.1)
(49.8)
(55.5)
(12.4)
(30.4)
(15.3)
202.3
305.4
Reportable
segments Total
£m
333.7
—
2.6
336.3
445.1
33.4
(7.3)
807.5
(55.5)
(75.7)
(103.5)
(65.1)
507.7
Reconciliation of amounts reported to the Executive Directors to the financial statements reported under IFRS
Included in the following tables are statutory adjustments made to the following:
– All income generated from the balance sheet investment portfolio is presented as net investment returns for reportable segments
purposes, whereas under IFRS it is presented within gains on investments and other operating income. Total reportable segment figures
are alternative performance measures (‘APM’)
– The structured entities controlled by the Group are presented as fair value investments for reportable segments (APM), whereas the
statutory financial statements present these entities on a consolidated basis under IFRS
146
ICG | Annual Report & Accounts 2022
Consolidated income statement
Year ended 31 March 2022
Fund management fee income
Other operating income
Fee and other income
Dividend income
Net fair value gain/(loss) on derivatives
Finance and Dividend income/(loss)
Net investment returns/gains on investments
Total revenue
Finance costs
Staff costs
Incentive scheme costs
Other administrative expenses
Administrative expenses
Share of results of joint ventures accounted for using equity method
Profit before tax
Tax charge
Profit/(loss) after tax from disposal groups held for sale
Profit after tax
Year ended 31 March 2021
Fund management fee income
Other operating income
Fee and other income
Dividend income
Net fair value loss on derivatives
Finance and Dividend income/(loss)
Net investment returns/gains on investments
Total revenue
Finance costs
Staff costs
Incentive scheme costs
Other administrative expenses
Administrative expenses
Share of results of joint ventures accounted for using equity method
Profit before tax
Tax charge
Profit after tax
Reportable
segments
£m
449.2
3.8
453.0
38.0
(12.2)
25.8
485.7
964.5
(52.2)
(92.7)
(169.7)
(81.1)
(343.5)
—
568.8
(30.8)
—
538.0
Reportable
segments
£m
333.7
2.6
336.3
33.4
—
33.4
445.1
814.8
(62.8)
(75.7)
(103.5)
(65.1)
(244.3)
—
507.7
(45.0)
462.7
Consolidated
entities
Financial
statements
£m
(19.8)
0.8
(19.0)
(38.0)
4.8
(33.2)
69.8
17.6
(0.9)
0.3
—
(19.9)
(19.6)
(0.5)
(3.4)
(0.3)
(9.2)
(12.9)
£m
429.4
4.6
434.0
—
(7.4)
(7.4)
555.5
982.1
(53.1)
(92.4)
(169.7)
(101.0)
(363.1)
(0.5)
565.4
(31.1)
(9.2)
525.1
Consolidated
entities
Financial statements
£m
(8.7)
3.6
(5.1)
(33.4)
(9.4)
(42.8)
62.3
14.4
6.0
(0.1)
—
(18.7)
(18.8)
0.2
1.8
(3.5)
(1.7)
£m
325.0
6.2
331.2
—
(9.4)
(9.4)
507.4
829.2
(56.8)
(75.8)
(103.5)
(83.8)
(263.1)
0.2
509.5
(48.5)
461.0
ICG | Annual Report & Accounts 2022
147
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
4. Segmental reporting continued
Consolidated statement of financial position
Non-current financial assets
Other non-current assets
Cash
Current financial assets
Other current assets
Total assets
Non-current financial liabilities
Other non-current liabilities
Current financial liabilities
Other current liabilities
Total liabilities
Equity
Total equity and liabilities
Non-current financial assets
Other non-current assets
Cash
Current financial assets
Other current assets
Total assets
Non-current financial liabilities
Other non-current liabilities
Current financial liabilities
Other current liabilities
Total liabilities
Equity
Total equity and liabilities
148
ICG | Annual Report & Accounts 2022
Reportable
segments
£m
2,728.4
193.3
761.5
126.4
193.2
4,002.8
1,507.4
91.2
256.4
152.8
2,007.8
1,995.0
4,002.8
Reportable
segments
£m
2,492.8
156.3
296.9
108.9
139.3
3,194.2
1,407.7
50.8
8.8
107.4
1,574.7
1,619.5
3,194.2
2022
Consolidated
entities
£m
4,246.0
4.0
230.3
10.9
378.5
4,869.7
4,364.7
0.3
104.6
393.3
4,862.9
6.8
4,869.7
2021
Consolidated
entities
£m
3,774.1
2.5
284.3
65.2
143.6
4,269.7
3,770.9
(8.2)
175.6
328.7
4,267.0
2.7
4,269.7
Financial
statements
£m
6,974.4
197.3
991.8
137.3
571.7
8,872.5
5,872.1
91.5
361.0
546.1
6,870.7
2,001.8
8,872.5
Financial statements
£m
6,266.9
158.8
581.2
174.1
282.9
7,463.9
5,178.6
42.6
184.4
436.1
5,841.7
1,622.2
7,463.9
Consolidated statement of cash flows
Profit before tax from continuing operations
Adjustments for:
Fee and other operating Income
Net investment returns
Net fair value loss on derivatives
Impact of movement in foreign exchange rates
Interest expense
Depreciation, amortisation and impairment of property, equipment and intangible assets
Share based payment expense
Working capital changes:
Increase in trade and other receivables
Increase/(Decrease) in trade and other payables
Proceeds from sale of current financial assets and disposal groups held for sale
Purchase of current financial assets and disposal groups held for sale
Purchase of investments
Proceeds from sales and maturities of investments
Interest and dividend income received
Fee and other operating income received
Interest paid
Cash generated from/used in operations
Taxes paid
Net cash flows from/used in operating activities
Investing activities
Purchase of intangible assets
Purchase of property, plant and equipment
Net cashflow from derivative financial instruments
Cashflow as a result of acquisition of subsidiaries
Net cash flows from investing activities
Financing activities
Purchase of Own Shares
Payment of principal portion of lease liabilities
Proceeds from borrowings
Repayment of long-term borrowings
Dividends paid to equity holders of the parent
Net cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Effects of exchange rate differences on cash and cash equivalents
Cash and cash equivalents at 1 April
Cash and cash equivalents at 31 March
Reportable
segments
£m
568.8
(453.0)
(485.7)
12.1
0.1
52.2
19.5
29.6
(21.5)
35.5
(242.4)
185.2
(204.0)
(748.3)
958.8
100.3
387.8
(55.7)
381.8
(43.9)
337.9
(4.3)
(3.5)
17.3
1.6
11.1
(20.9)
(4.1)
413.5
(111.5)
(165.7)
111.3
460.2
4.4
296.9
761.5
2022
Consolidated
structured entities Financial Statements
£m
(3.4)
£m
565.4
19.0
(69.8)
(4.8)
—
0.9
—
—
(11.0)
(62.9)
(132.0)
—
—
(434.0)
(555.5)
7.3
0.1
53.1
19.5
29.6
(32.5)
(27.4)
(374.4)
185.2
(204.0)
(2,784.5)
(3,532.8)
2,785.0
3,743.8
159.5
5.2
(127.6)
(94.5)
—
(94.5)
—
—
5.1
29.3
34.4
—
—
—
—
—
—
(60.0)
6.0
284.3
230.3
259.8
393.0
(183.3)
287.3
(43.9)
243.4
(4.3)
(3.5)
22.4
30.9
45.5
(20.9)
(4.1)
413.5
(111.5)
(165.7)
111.3
400.2
10.4
581.2
991.8
ICG | Annual Report & Accounts 2022
149
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
4. Segmental reporting continued
Profit before tax from continuing operations
Adjustments for:
Fee and other operating Income
Net investment returns
Net fair value gains on derivatives
Interest expense
Depreciation, amortisation and impairment of property, equipment and intangible assets
Share based payment expense
Working capital changes:
Increase in trade and other receivables
Increase/(Decrease) in trade and other payables
Proceeds from sale of current financial assets and disposal groups held for sale
Purchase of current financial assets and disposal groups held for sale
Purchase of investments
Proceeds from sales and maturities of investments
Interest and dividend income received
Fee and other operating income received
Interest paid
Cash generated from operations
Taxes paid
Net cash flows from/used in operating activities
Investing activities
Purchase of intangible assets
Purchase of property, plant and equipment
Net cashflow from derivative financial instruments
Cashflow as a result of acquisition of subsidiaries
Net cash flows from investing activities
Financing activities
Purchase of Own Shares
Payment of principal portion of lease liabilities
Proceeds from borrowings
Repayment of long-term borrowings
Dividends paid to equity holders of the parent
Net cash flows used in financing activities
Net increase/(decrease) in cash and cash equivalents
Effects of exchange rate differences on cash and cash equivalents
Cash and cash equivalents at 1 April
Cash and cash equivalents at 31 March
Reportable segments
structured entities Financial Statements
2021
Consolidated
£m
507.7
(336.3)
(445.1)
7.3
55.5
19.2
26.9
(6.6)
(32.4)
(203.8)
27.1
(79.6)
(454.6)
402.8
86.6
305.2
(58.6)
25.1
(26.3)
(1.2)
(3.9)
(6.9)
41.1
—
30.3
—
(6.8)
—
(495.6)
(150.9)
(653.3)
(624.2)
(26.8)
947.9
296.9
£m
1.8
5.1
(62.3)
2.1
1.3
—
—
(28.8)
119.6
38.8
—
—
(2,381.5)
2,435.7
170.5
(20.1)
(131.2)
112.2
—
112.2
—
—
(0.5)
34.9
34.4
—
—
—
—
—
—
146.6
(1.3)
139.0
284.3
£m
509.5
(331.2)
(507.4)
9.4
56.8
19.2
26.9
(35.4)
87.2
(165.0)
27.1
(79.6)
(2,836.1)
2,838.5
257.1
285.1
(189.8)
137.3
(26.3)
111.0
(3.9)
(6.9)
40.6
34.9
64.7
—
(6.8)
—
(495.6)
(150.9)
(653.3)
(477.6)
(28.1)
1,086.9
581.2
150
ICG | Annual Report & Accounts 2022
Geographical analysis of non-current financial assets
Asset Analysis by Geography
Europe
Asia Pacific
North America
Total
Geographical analysis of Group revenue
Income Analysis by Geography
Europe
Asia Pacific
North America
Total
5. Financial assets
Accounting policy
Year ended
31 March 2022
Year ended
31 March 2021
£m
3,613.8
244.0
3,115.3
6,973.1
£m
3,220.9
247.0
2,796.6
6,264.5
Year ended
31 March 2022
Year ended
31 March 2021
£m
693.3
84.0
204.8
982.1
£m
576.0
67.5
185.7
829.2
Financial assets
Financial assets can be classified into the following categories: Amortised Cost, Fair Value Through Profit and Loss (‘FVTPL’) and Fair
Value Through Other Comprehensive Income (‘FVOCI’). The Group has classified all invested financial assets as FVTPL.
Financial assets at FVTPL are initially recognised and subsequently measured at fair value. A valuation assessment is performed on a
recurring basis with gains or losses arising from changes in fair value recognised through net gains on investments in the consolidated
income statement. Dividends or interest earned on the financial assets are also included in the net gains on investments.
Where the Group holds investments in a number of financial instruments such as debt and equity in a portfolio company, the Group
views their entire investment as a unit of account for valuation purposes. Industry standard valuation guidelines such as the
International Private Equity and Venture Capital (’IPEV’) Valuation Guidelines - December 2018, allow for a level of aggregation where
there are a number of financial instruments held within a portfolio company.
Recognition of financial assets
When the Group invests in the capital structure of a portfolio company, these assets are initially recognised and subsequently measured
at fair value, and transaction costs are recognised in the consolidated income statement immediately.
Derecognition of financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when substantially all
the risks and rewards of ownership of the asset are transferred to another party. On derecognition of a financial asset in its entirety, the
difference between the asset’s carrying value amount and the sum of the consideration received and receivable, is recognised in profit or
loss.
Offsetting of financial assets
Financial assets and liabilities are only offset, and the net amount presented in the statement of financial position when the Group has a
legal right to offset the amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
The Group does not currently offset any financial assets and liabilities.
Key sources of estimation uncertainty on financial assets
Fair value is the amount for which an asset could be exchanged, or liability settled, between knowledgeable, willing parties in an arm’s
length transaction at the reporting date. The fair value of investments is based on quoted prices, where available. Where quoted prices
are not available, the fair value is estimated in line with IFRS and industry standard valuation guidelines such as IPEV for direct
investments in portfolio companies, and the Royal Institute of Chartered Surveyors Valuation – Global Standards 2020 for investment
property. These valuation techniques can be subjective and include assumptions which are not supportable by observable data. Details
of the valuation techniques and the associated sensitivities are further disclosed in this note on page 156.
Given the subjectivity of investments in private companies, senior and subordinated notes of CLO vehicles and investments in
investment property, these are key sources of estimation uncertainty, and as such the valuations are approved by the relevant Fund
Investment Committees and Group Valuation Committee. The unobservable inputs relative to these investments are further detailed
below.
ICG | Annual Report & Accounts 2022
151
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
5. Financial assets continued
Fair value measurements recognised in the statement of financial position
The information set out below provides information about how the Group and Company determines fair values of various financial assets and
financial liabilities, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
– Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities
– Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for
the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
– Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not
based on observable market data (i.e. unobservable inputs)
The following table summarises the valuation of the Group’s financial assets and liabilities by fair value hierarchy:
Group
Financial Assets
Investment in or alongside managed funds1
Investment in loans held in consolidated
Derivative assets
Investment in private companies2
Senior and subordinated notes of CLO
Disposal groups held for sale
Total assets
Financial Liabilities
As at 31 March 2022
As at 31 March 2021
Level 1
Level 2
Level 3
£m
£m
£m
Total
£m
Level 1
Level 2
Level 3
£m
£m
£m
Total
£m
9.8
—
—
0.4
—
12.7
—
2,112.9
4,467.4
138.6
—
105.6
—
145.2
—
122.7
9.1
89.2
2,122.7
4,612.6
138.6
123.1
114.7
101.9
11.7
—
1,802.1
—
—
—
—
—
3,978.3
111.9
—
106.6
—
168.6
—
234.6
27.2
57.4
1,813.8
4,146.9
111.9
234.6
133.8
57.4
22.9
4,711.6
2,479.1
7,213.6
11.7
4,196.8
2,289.9
6,498.4
Borrowings and loans held in consolidated
—
(4,130.1)
(234.6)
(4,364.7)
—
(3,619.5)
(263.4)
(3,882.9)
Derivative liabilities
Disposal groups held for sale
Total liabilities
—
(156.3)
—
(156.3)
—
(99.9)
—
—
—
(5.0)
(5.0)
(4,286.4)
(239.6)
(4,526.0)
—
—
—
(4.8)
(99.9)
(4.8)
—
(3,719.4)
(268.2)
(3,987.6)
1.
2.
Level 3 Investments in or alongside managed funds includes £41.1m senior debt (2021: £36.0m), £1,487.7m subordinated debt and equity (2021: £1,355.5m), £215.1m of real
estate assets (2021: £195.1m), and £369.0m private equity secondaries (2021: £215.5m).
Level 3 Investment in private companies includes £96.2m subordinated debt and equity (2021: £129.5m) and £26.5m of real estate assets (2021: £105.1m).
152
ICG | Annual Report & Accounts 2022
Fair value hierarchy
The following table summarises the valuation of the Company’s financial assets and liabilities by fair value hierarchy.
Company
Financial Assets
As at 31 March 2022
As at 31 March 2021
Level 1
Level 2
Level 3
£m
£m
£m
Total
£m
Level 1
Level 2
Level 3
£m
£m
£m
Total
£m
Investment in or alongside managed funds1
Derivative assets
Investment in private companies
Senior and subordinated notes of CLO
vehicles
Total assets
110.7
—
160.7
271.4
136.2
—
179.8
316.0
—
12.7
—
40.0
—
—
—
158.9
0.2
40.0
171.6
0.2
—
—
—
46.7
—
—
—
189.3
9.2
46.7
189.3
9.2
123.4
40.0
319.8
483.2
136.2
46.7
378.3
561.2
Financial Liabilities
Derivative liabilities
Total liabilities
Valuations
—
—
56.7
56.7
—
—
56.7
56.7
—
—
(36.7)
(36.7)
—
—
(36.7)
(36.7)
Investment in or alongside managed funds
When fair values of publicly traded closed-ended funds and open-ended funds are based on quoted market prices in an active market for
identical assets without any adjustments, the instruments are included within Level 1 of the hierarchy. The Group values these investments at
bid price for long positions and ask price for short positions.
The Group also co-invests with funds, including credit and private equity secondary funds, which are not quoted in an active market. The
Group considers the valuation techniques and inputs used by these funds to ensure they are reasonable, appropriate and consistent with the
principles of fair value. The latest available NAV of these funds are generally used as an input into measuring their fair value. The NAV of the
funds are adjusted, as necessary, to reflect restrictions on redemptions, and other specific factors relevant to the funds. In measuring fair
value, consideration is also given to any transactions in the interests of the funds. The Group classifies these funds as Level 3.
Investment in private companies
The Group takes debt and equity stakes in private companies that are, other than on very rare occasions, not quoted in an active market and
uses either a market-based valuation technique or a discounted cash flow technique to value these positions.
The Group’s investments in private companies are held at fair value using the most appropriate valuation technique based on the nature,
facts and circumstances of the private company. The first of two principal valuation techniques is a market comparable companies technique.
The enterprise value (‘EV’) of the portfolio company is determined by applying an earnings multiple, taken from comparable companies, to the
profits of the portfolio company. The Group determines comparable private and public companies, based on industry, size, location, leverage
and strategy, and calculates an appropriate multiple for each comparable company identified. The second principal valuation technique is a
discounted cashflow (‘DCF’) approach. Fair value is determined by discounting the expected future cashflows of the portfolio company to the
present value. Various assumptions are utilised as inputs, such as terminal value and the appropriate discount rate to apply. Typically, the
DCF is then calibrated alongside a market comparable companies approach. Alternate valuation techniques may be used where there is a
recent offer or a recent comparable market transaction, which may provide an observable market price and an approximation to fair value of
the private company. The Group classified these assets as Level 3.
Investment in loans held in consolidated structured entities
In the absence of quoted prices in an active market, the loan asset portfolios of the consolidated structured entities are valued using
observable inputs such as recently executed transaction prices in securities of the issuer or comparable issuers and from independent loan
pricing sources. To the extent that the significant inputs are observable the Group classifies these assets as Level 2 and other assets are
classified as Level 3. Level 3 assets are valued using a discounted cashflow technique.
Derivative assets and liabilities
The Group uses market-standard valuation models for determining fair values of over-the-counter interest rate swaps, currency swaps and
forward foreign exchange contracts. The most frequently applied valuation techniques include forward pricing and swap models, using
present value calculations. The models incorporate various inputs including both credit and debit valuation adjustments for counterparty and
own credit risk, foreign exchange spot and forward rates and interest rate curves. For these financial instruments, significant inputs into
models are market observable and are included within Level 2.
ICG | Annual Report & Accounts 2022
153
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
5. Financial assets continued
Senior and subordinated notes of CLO vehicles
The Group holds investments in the senior and subordinated notes of the CLOs it manages, predominately driven by European Union risk-
retention requirements. The Group employs DCF analysis to fair value these investments, using several inputs including constant annual
default rates, prepayments rates, reinvestment rates, recovery rates and discount rates.
The DCF analysis at the reporting date shows that the senior notes are typically expected to recover all contractual cashflows, including
under stressed scenarios, over the life of the CLOs. Unobservable inputs are used in determining the fair value of subordinated notes, which
are therefore classified as Level 3 instruments. Observable inputs are used in determining the fair value of senior notes and these
instruments are therefore classified as Level 2.
Borrowings and loans held in consolidated credit funds
Rated debt liabilities of consolidated CLOs are generally valued at par plus accrued interest, which we assess as fair value, as evidenced by
the general availability of market prices and discounting spreads for rated debt liabilities of CLOs. This is consistent with the valuation
approach of the rated debt assets held in the unconsolidated CLOs. As a result we deem these liabilities as Level 2.
Unrated/subordinated debt liabilities of consolidated CLOs are valued directly in line with the fair value of the CLOs’ underlying loan asset
portfolios. These underlying assets comprise observable loan securities traded in active markets. The underlying assets are reported in both
Level 2 and Level 3. As a result of this methodology deriving the valuation of unrated/subordinated debt liabilities from a combination of
Level 2 and Level 3 asset values, we deem these liabilities to be Level 3.
Real estate assets
To the extent that the Group invests in real estate assets, whether through an investment in a managed fund or an investment in a private
company, the underlying assets may be a debt instrument or property classified as investment property in accordance with IAS 40
‘Investment Property’. The fair values of the directly held investment properties have been recorded based on independent valuations
prepared by third-party real estate valuation specialists in line with the Royal Institution of Chartered Surveyors Valuation – Global
Standards 2020. At the end of each reporting period, the Group reviews its assessment of the fair value of each property, taking into account
the most recent independent valuations. The Directors determine a property value within a range of reasonable fair value estimates, based
on information provided.
All resulting fair value estimates for properties are included in Level 3.
Reconciliation of Level 3 fair value measurements of financial assets
The following tables set out the movements in recurring financial assets valued using the Level 3 basis of measurement in aggregate. Within
the income statement, realised gains and fair value movements are included within gains on investments, and foreign exchange gains/(losses)
are included within finance costs.
2022
2021
Financial assets
designated as FVTPL
Financial assets
designated as FVTPL
£m
2,289.9
463.9
8.4
855.7
(1,105.0)
(33.8)
2,479.1
£m
1,820.9
390.8
(96.2)
490.4
(461.1)
145.1
2,289.9
Group
At 1 April
Total gains or losses in the income statement
– Net investment return
– Foreign exchange
Purchases
Exit proceeds
Transfer between levels
At 31 March
154
ICG | Annual Report & Accounts 2022
Company
At 1 April
Total gains or losses in the income statement
– Net investment return
– Foreign exchange
Purchases
Exit proceeds
Transfer between levels
At 31 March
2022
2021
Financial assets
designated as FVTPL
Financial assets
designated as FVTPL
£m
378.3
30.4
(10.2)
83.1
(158.2)
(3.6)
319.8
£m
475.0
56.1
(14.6)
87.2
(225.4)
—
378.3
Transfers in and out of Level 3 financial assets were due to changes to the observability of inputs used in the valuation of these assets
Reconciliation of Level 3 fair value measurements of financial liabilities
The following tables sets out the movements in reoccurring financial liabilities valued using the Level 3 basis of measurement in aggregate.
Within the income statement, realised gains and fair value movements are included within gains on investments, and foreign exchange gains/
(losses) are included within finance costs.
Group
At 1 April
Total gains or losses in the income statement
– Fair value (losses)/gains
– Foreign exchange gains
Purchases
Disposal groups held for sale
Transfer between levels
At 31 March
2022
2021
Financial liabilities
designated as FVTPL
Financial liabilities
designated as FVTPL
£m
268.2
(31.8)
—
25.9
5.0
(27.7)
239.6
£m
—
29.9
21.0
29.8
4.8
182.7
268.2
Transfers in and out of Level 3 financial liabilities were due to changes to the observability of inputs used in the valuation of these liabilities
Valuation inputs and sensitivity analysis
The following table summarises the inputs and estimates used for items categorised in Level 3 of the fair value hierarchy together with a
quantitative sensitivity analysis:
ICG | Annual Report & Accounts 2022
155
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
5. Financial assets continued
Fair Value
Fair Value
As at
31 March 2022
£m
1,598.4
Group Assets
Corporate -
subordinated debt
and equity2
As at
31 March 2021
Primary Valuation
Technique1
1,485.0 Market
£m
Comparable
Companies
Discounted Cash
Flow
Real Estate
316.3
357.6 Third-party
Strategic Equity
369.0
215.5
Valuation
LTV based
impairment
model
Third-party
Valuation
Corporate -
Senior debt
41.1
36.0 Discounted cash
flow
Subordinated
notes of CLO
vehicles3
9.1
27.2 Scenario
Analysis
Discounted Cash
Flow
Key Unobservable
Inputs
Earnings Multiple
Range
1.9x - 31.2x
Weighted
Average/ Fair
Value Inputs
15.2x
Discount rate
7.2% - 25.9% 9.9%
Earnings Multiple
N/A
6.5x - 20.0x
N/A
13.8x
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Sensitivity/
Scenarios
'+10%
Earnings
Multiple2
'-10% Earnings
Multiple2
+10% Third-
party
-10% Third-
party
+10% Third-
party
-10% Third-
party
Probability of
default
Loss given default
Maturity of loan
Effective interest
rate
Discount rate
Next 12 months
Annual Default
Rate
Subsequent
months Default
Rate %
1.8% - 4.6%
1.9%
Upside Case
Downside
19.4%
3 years
8.7% - 9.0%
11.5% -
13.25%
3%
19.4%
3 years
8.7%
12.4%
3%
3.0%
3.0%
Upside Case3
Prepayment rate % 20.0%
75.0%
Recovery rate %
99.5%
Reinvestment
price
N/A
N/A
20.0%
75.0%
99.5%
N/A
N/A
N/A
N/A
Investments in
loans held in
structured entities
Total assets
Borrowings and
loans held in
structured entities
145.2
168.6 Third-party
Valuation
2,479.1
(234.6)
2,289.9
(263.4) Third-party
Valuation
Disposal group
held for sale
Total liabilities
(5.0)
(4.8)
(239.6)
(268.2)
Downside
Case3
+10% Third-
party
-10% Third-
party
+10% Third-
party
-10% Third-
party
Valuation
Effect on Fair
Value4
31 March 2022
£m
154.1
(154.3)
31.6
(31.6)
36.9
(36.9)
—
(0.7)
18.7
(19.5)
14.5
(14.5)
(23.5)
23.5
1. Where the Group has co-invested with its managed funds, it is the type of the underlying investment, and the valuation techniques used for these underlying investments, that is
set out here.
2. For investments valued using a DCF methodology (including Infrastructure investments) the imputed earnings multiple is used for this sensitivity analysis.
3. The sensitivity analysis is performed on the entire portfolio of subordinated notes of CLO vehicles that the Group has invested in with total value of £174.2m (2021: £163.4m).
This value includes investments in CLOs that are not consolidated (2022: £9.1m (2021: £27.2m)) and investments in CLOs which are consolidated (2022: £165.3m (2021:
£136.1m)). The upside case is based on the default rate being lowered to 1% p.a. for the next 24 months, keeping all other parameters consistent. The downside case is based on
the probability of default being increased over the next twenty four months to 5% p.a., keeping all other parameters consistent.
4. The effect of fair value across the entire investment portfolio ranges from -£281.0m (downside case) to +£279.3m (upside case).
156
ICG | Annual Report & Accounts 2022
Derivative financial instruments
Accounting policy
Derivative financial instruments for economic hedging
The Group holds derivative financial instruments to hedge foreign currency and interest rate exposures. Derivatives are recognised at
fair value determined using independent third-party valuations or quoted market prices. Changes in fair values of derivatives are
recognised immediately in the consolidated income statement.
A derivative with a positive fair value is recognised as a financial asset while a derivative with a negative fair value is recognised as a
financial liability. A derivative is presented as a non-current asset or non-current liability if the remaining maturity of the instrument is
more than 12 months from the reporting date, otherwise a derivative will be presented as a current asset or current liability.
Group
Cross currency swaps
Forward foreign exchange contracts (excl
those held in consolidated credit funds)
Forward foreign exchange contracts held in
consolidated credit funds
Total
Company
Cross currency swaps
Forward foreign exchange contracts
Total
2022
2021
Contract or
underlying principal
amount
£m
306.1
Fair values
Asset
£m
28.4
Contract or
underlying principal
amount
£m
299.3
Liability
£m
(30.1)
Fair values
Asset
£m
31.9
Liability
£m
(35.0)
1,113.6
4.7
(22.5)
857.9
14.8
(1.7)
102.6
1,522.3
105.5
138.6
(103.7)
(156.3)
76.1
1,233.3
65.2
111.9
(63.2)
(99.9)
2022
2021
Contract or
underlying principal
amount
£m
306.1
1,580.3
1,886.4
Fair values
Asset
£m
28.4
11.7
40.1
Contract or
underlying principal
amount
£m
299.3
857.9
1,157.2
Liability
£m
(30.1)
(26.6)
(56.7)
Fair values
Asset
£m
31.9
14.8
46.7
Liability
£m
(35.0)
(1.7)
(36.7)
The value of cash held in margin accounts and therefore pledged as collateral as at 31 March 2022 was £27.0m (31 March 2021: £26.8m).
The counterparties were: Citigroup Global Markets Limited, Citibank NA, HSBC Bank London, Commonwealth Bank of Australia, Lloyds
Bank Corporate Markets Plc, Royal Bank of Scotland Plc, Credit Agricole, and Société Générale Paris. All the Credit Support Annexes that
have been agreed with our counterparties are fully compliant with European Market Infrastructure Regulation (EMIR).
There was no change in fair value related to credit risk, in relation to derivatives as at 31 March 2022 (31 March 2021: £nil).
Under the relevant International Swaps and Derivatives Association (‘ISDA’) Master Agreements in place with our counterparties, the close-
out netting provision would result in all obligations under a contract with a defaulting party being terminated and there would be a
subsequent combining of positive and negative replacement values into a single net payable or receivable. This reduces the credit exposure
from gross to net.
ICG | Annual Report & Accounts 2022
157
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
6. Cash and cash equivalents
Cash and cash equivalents
Cash at bank and in hand
Group
2022
£m
2021
£m
Company
2022
£m
2021
£m
991.8
581.2
707.1
264.3
Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less. The carrying
amount of these assets approximates to their fair value. Cash and cash equivalents at the end of the reporting period as shown in the
consolidated statement of cash flows can be reconciled to the related items in the consolidated statement of financial position as shown
above.
The Group’s cash and cash equivalents include £230.3m (2021: £284.3m) of restricted cash, held principally by structured entities controlled
by the Group. The Group does not have legal recourse to these balances as their sole purpose is to service the interests of the investors in
these structured entities.
In the current year £11.1m cash and cash equivalents were included in disposal groups held for sale (2021: £0.4m) (note 29).
158
ICG | Annual Report & Accounts 2022
7. Financial liabilities
Accounting policy
Financial liabilities, which include borrowings and listed notes and bonds (with the exception of financial liabilities designated as FVTPL),
are initially recognised at fair value net of transaction costs and subsequently measured at amortised cost using the effective interest
rate method.
Included within financial liabilities held at amortised cost is the Group’s present value of its future lease payments. Lease liabilities are
initially measured at the present value of all the future lease payments. The present value at the inception of the lease is determined by
discounting all future lease payments at the Group’s centrally determined incremental borrowing rate at the date of inception of the
lease. In calculating the present value of lease payments, the Group uses its incremental borrowing rate because the interest rate
implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there
is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the
underlying asset.
Financial liabilities at FVTPL are initially recognised and subsequently measured at fair value on a recurring basis with gains or losses
arising from changes in fair value and interest paid on the financial instruments recognised through gains on investments in the income
statement. Interest paid on the financial instruments is included within net gains on investments. A financial instrument is designated as
FVTPL if it is a derivative that is not designated and effective as a hedging instrument, or the designation eliminates or significantly
reduces a measurement or recognition inconsistency that would otherwise arise.
Included within financial liabilities at FVTPL are derivative liabilities and other financial liabilities designated as FVTPL within structured
entities controlled by the Group.
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or expire.
Group
Liabilities held at amortised cost
- Private placement
- Listed notes and bonds
- Unsecured bank debt¹
Total Liabilities held at amortised cost
Other financial liabilities
Liabilities held at FVTPL:
- Derivative financial liabilities
Interest rate
%
Maturity
Current
Non-current
Current
Non-current
£m
£m
£m
£m
2022
2021
2.02% - 6.25% 2022 - 2029
1.63% - 5.00%
2023 - 2030
39.2
162.9
617.2
836.8
113.6
—
SONIA +1.41%
2025
(1.0)
(1.7)
(1.1)
2.85% - 7.09%
2022 - 2031
1,452.3
52.2
2.9
4,364.7
5,872.1
201.1
6.5
153.4
—
361.0
2022
112.5
3.7
68.2
—
184.4
2021
628.5
582.7
(2.3)
1,208.9
55.0
31.7
3,882.9
5,178.5
- Structured entities controlled by the Group
0.8%-8.9%
2028-2035
Company
Liabilities held at amortised cost
- Private placement
- Listed notes and bonds
- Unsecured bank debt¹
Total Liabilities held at amortised cost
Other financial liabilities
Liabilities held at FVTPL
- Derivative financial liabilities
Current
Non-current
Current
Non-current
£m
£m
£m
£m
39.2
162.9
(1.0)
201.1
3.1
617.2
836.8
(1.7)
1,452.3
44.8
113.6
—
(1.1)
112.5
1.0
628.5
582.7
(2.3)
1,208.9
47.4
53.6
257.8
3.1
1,500.2
5.1
118.6
31.6
1,287.9
1. Unsecured bank debt includes associated fees amortised over the life of the facility.
The fair value of the Listed notes and bonds, being the market price of the outstanding bonds, is £956.4m (2021: £599.8m) . Private
placements and unsecured bank debt is held at amortised cost which the Group has determined to be the fair value of these liabilities.
ICG | Annual Report & Accounts 2022
159
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
7. Financial liabilities continued
Movement in financial liabilities arising from financing activities
The following tables sets out the movements in financial liabilities (other than lease liabilities and derivatives) arising from financing activities
undertaken during the year.
At 1 April
Proceeds from borrowings
Repayment of long term borrowings
Net interest movement
Foreign exchange movement
At 31 March
Group
2022
£m
2021
£m
Company
2022
£m
2021
£m
1,321.4
1,916.9
1,321.4
1,916.9
413.5
(111.5)
4.2
25.8
1,653.4
—
(495.6)
(3.1)
(96.8)
1,321.4
413.5
(111.5)
4.2
25.8
1,653.4
—
(495.6)
(3.1)
(96.8)
1,321.4
During the year, the Group issued a €500m sustainability-linked bond maturing in January 2030. The bond has an eight year term and an
annual coupon of 2.5%. The proceeds will be used for general corporate purposes, including to repay certain existing debt facilities as they
mature. The bond features a coupon adjustment based on the progress the Group makes in achieving its approved science-based targets (see
page 40).
8. Profit of Parent Company
As permitted by section 408 of the Companies Act 2006, the income statement of the Parent Company is not presented as part of these
financial statements. The Parent Company’s profit for the year amounted to £46.7m (2021 : £203.0m).
9. Finance (loss)/income
Accounting policy
The Group earns interest on its bank deposits. Changes in the fair value of derivatives are recognised in the income statement as
incurred.
Fair value movements on derivatives
2022
£m
(7.4)
(7.4)
2021
£m
(9.4)
(9.4)
10. Net gains on investments
Accounting policy
The Group recognises net gains and losses on investments comprising realised and unrealised gains and losses from disposals and
revaluations of financial assets and financial liabilities measured at fair value.
Financial Assets
Change in fair value of financial instruments designated at FVTPL
Financial Liabilities
Change in fair value of financial instruments designated at FVTPL
Net gains arising on investments
160
ICG | Annual Report & Accounts 2022
2022
£m
2021
£m
643.1
1,207.0
(87.6)
(699.6)
555.5
507.4
11. Finance costs
Accounting policy
Interest expense on the Group’s debt, excluding financial liabilities within structured entities controlled by the Group, is recognised
using the effective interest rate method based on the expected future cash flows of the liabilities over their expected life. Financial
liabilities within structured entities controlled by the Group is accounted for within Net gains and losses arising on investment (see note
10).
Interest expense associated with lease obligations represents the unwinding of the lease liability discount, accounted for in accordance
with IFRS 16 (see note 18).
Finance costs
Interest expense recognised on financial liabilities held at amortised cost
Arrangement and commitment fees
Interest expense associated with lease obligations
12. Profit for the year
Profit for the year has been arrived at after charging:
Staff costs
Amortisation and depreciation
Operating lease expenses
Auditor's remuneration
2022
£m
45.4
5.7
2.0
53.1
2022
£m
262.1
18.1
3.8
2.1
2021
£m
52.2
3.3
1.3
56.8
2021
£m
179.3
15.5
2.3
1.7
Auditor’s remuneration includes fees for audit and non-audit services payable to the Group’s auditor, Ernst and Young LLP, and are analysed
as below.
ICG Group
Audit fees
Group audit of the annual accounts
The audit of subsidiaries' annual accounts
Total audit fees
Non audit fees
Non audit fees in capacity as auditor
Other non audit fees
Total non audit fees
Total auditor's remuneration incurred by the Group
2022
£m
1.3
0.5
1.8
0.2
—
0.2
2.0
2021
£m
1.1
0.4
1.5
0.1
0.1
0.2
1.7
ICG | Annual Report & Accounts 2022
161
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
13. Employees and Directors
Accounting policy
The Deal Vintage Bonus (‘DVB’) scheme forms part of the Group’s Remuneration Policy for investment executives. DVB is reported
within Wages and salaries.
Payments of DVB are made in respect of plan years, which are aligned to the Group’s financial year. Payments of DVB are made only
when the performance threshold for the plan year has been achieved on a cash basis and proceeds are received by the Group. An
estimate of the DVB liability for a plan year is developed based on the following inputs: expected realisation proceeds; expected timing
of realisations; and allocations of DVB to qualifying investment professionals. The Group accrues the estimated DVB cost associated
with that plan year evenly over five years, reflecting the average holding period for the underlying investments. Payments of DVB are
not subject to clawback.
Directors’ emoluments
Employee costs during the year including Directors:
Wages and salaries
Social security costs
Pension costs
The monthly average number of employees (including Executive Directors) was:
Investment Executives
Marketing and support functions
Executive Directors
2022
£m
4.8
229.9
26.2
6.0
244
260
3
507
2021
£m
4.4
151.6
22.4
5.4
207
232
3
442
ICG plc, the Company, does not have any employees but relies on the expertise and knowledge of employees of ICG FMC Limited,
Intermediate Capital Group Inc., Intermediate Capital Group SAS, Intermediate Capital Asia Pacific Limited and Intermediate Capital Group
Polska Sp. z.o.o, subsidiaries of ICG plc.
Contributions to the Group’s defined contribution pension schemes are charged to the consolidated income statement as incurred.
The performance related element included in employee costs is £169.7m (2021: £103.5m) which represents the annual bonus scheme,
Omnibus Scheme and the DVB Scheme. Please refer to the report of the Remuneration Committee on page 93.
In addition, during the year, third-party funds have paid £62.0m (2021: £4.2m) to former employees and £123.2m (2021: £7.2m) to current
employees, including Executive Directors, relating to distributions from investments in carried interest partnerships made by these
employees in prior periods. Such amounts become due over time if, and when, specified performance targets are ultimately realised in cash by
the funds and paid by the carried interest partnerships (CIPs) of the funds (see note 28). As these funds and CIPs are not consolidated, these
amounts are not included in the Group’s consolidated income statement.
162
ICG | Annual Report & Accounts 2022
14. Tax expense
Accounting policy
The tax expense comprises current and deferred tax.
Current tax assets and liabilities comprise those obligations to, or claims from, tax authorities relating to the current or prior reporting
periods, that are unpaid at the reporting date.
Deferred tax is provided in respect of temporary differences between the carrying amounts of assets and liabilities and their tax bases.
Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available against which the deferred tax assets can be utilised.
Deferred tax is not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition of
other assets and liabilities in a transaction, other than a business combination, that affects neither the tax nor the accounting profit.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to be applied to their respective period of realisation,
provided they are enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset when there is a legally enforceable right of set off, when they relate to income taxes levied
by the same tax authority and the Group intends to settle on a net basis.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where they
relate to items that are charged or credited directly to equity, in which case the related deferred tax is also charged or credited directly
to equity.
Current tax:
Current year
Prior year adjustment
Deferred tax:
Current year
Prior year adjustments
Tax on profit on ordinary activities
2022
£m
37.5
(3.5)
34.0
1.9
(4.8)
(2.9)
31.1
2021
£m
44.0
(1.5)
42.5
10.1
(4.1)
6.0
48.5
The Group is an international business and operates across many different tax jurisdictions. Income and expenses are allocated to these
jurisdictions based on transfer pricing methodologies set out both (i) in the laws of the jurisdictions in which the Group operates, and (ii)
under guidelines set out by the Organisation for Economic Co-operation and Development (OECD).
The effective tax rate reported by the Group for the period ended 31 March 2022 of 5.5% (2021: 9.5%) is lower than the statutory UK
corporation tax rate of 19%.
The FMC activities are subject to tax at the relevant statutory rates ruling in the jurisdictions in which the income is earned. The lower
effective tax rate compared to the statutory UK rate is largely driven by the IC activities. The IC benefits from statutory UK tax exemptions
on certain forms of income arising from both foreign dividend receipts and gains from assets qualifying for the substantial shareholdings
exemption. The effect of these exemptions means that the effective tax rate of the Group is highly sensitive to the relative mix of IC income,
and composition of such income, in any one period.
The Group’s tax charge for the period ended 31 March 2022 includes certain items which relate to discussions with tax authorities ongoing
during the year. Firstly, the UK companies in the Group concluded on a collaborative review with advisers and Her Majesty’s Revenue &
Customs (HMRC) relating to historic transfer pricing arrangements of the Group. The best estimate of the net settlement arising as a result of
this review is included in the tax charge for the year. Secondly, a Luxembourg subsidiary of the Group was successful in the Luxembourg
Court of Appeal in respect of a historic dispute over corporate income taxes due in previous years. The Group had previously provided for
this corporate income tax which, following the Court’s decision, has been released on the expectation that amounts previously paid on
account of this liability will be refunded to the Group.
ICG | Annual Report & Accounts 2022
163
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
14. Tax expense continued
A reconciliation between the statutory UK corporation tax rate applied to the Group’s profit before tax and the reported effective tax rate is
provided below.
Profit on ordinary activities before tax
Tax at 19% thereon
Effects of
Prior year adjustment to current tax
Prior year adjustment to deferred tax
Non-taxable and non-deductible items
Overseas tax suffered
Non-taxable Investment Company income
Trading income generated by overseas subsidiaries subject to different tax rates
Effect of changes in statutory rate changes
Release of Luxembourg tax provision
Tax charge for the period
2022
£m
565.4
107.4
(3.5)
(4.8)
99.1
(2.5)
—
(69.6)
1.0
6.4
(3.3)
31.1
Deferred tax
Deferred tax (asset)/liability
Group
As at 31 March 2020
Prior year adjustment
Reclassification to Current Tax
Charge / (Credit) to equity
Charge / (Credit) to income
As at 31 March 2021
Prior year adjustment
Impact of changes to statutory tax rates
Charge / (Credit) to equity
Charge / (Credit) to income
Movement in Foreign Exchange on retranslation
As at 31 March 2022
Deferred tax (asset)/liability
Company
As at 31 March 2020
Prior year adjustment
Reclassification to Current Tax
Charge / (Credit) to equity
Charge / (Credit) to income
As at 31 March 2021
Prior year adjustment
Impact of changes to statutory tax rates
Charge / (Credit) to income
As at 31 March 2022
164
ICG | Annual Report & Accounts 2022
Share based
payments and
compensation
deductible as paid
Investments
Derivatives
Other temporary
differences
£m
2.1
2.9
(1.2)
—
8.1
11.9
5.1
8.7
—
10.4
—
36.1
£m
(23.8)
(0.1)
—
(2.2)
1.3
(24.8)
(0.5)
(3.7)
1.4
(10.5)
—
(38.1)
£m
9.4
(6.2)
(1.4)
—
(0.6)
1.2
—
(0.2)
—
(1.8)
—
(0.8)
£m
3.1
(0.7)
—
—
1.3
3.7
(9.4)
1.6
—
(2.6)
(0.4)
(7.1)
Share based
payments and
compensation
deductible as paid
Investments
Derivatives
Other temporary
differences
£m
5.1
2.4
—
—
(0.4)
7.1
(0.1)
2.1
(0.5)
8.6
£m
(22.3)
7.7
—
2.9
1.0
(10.7)
—
(2.0)
4.5
(8.2)
£m
9.4
(6.2)
(1.4)
—
(0.6)
1.2
—
(0.2)
(1.8)
(0.8)
£m
(0.3)
(2.5)
—
—
2.8
—
(1.6)
(0.1)
1.2
(0.5)
2021
£m
509.5
96.8
(1.5)
(4.1)
91.2
(1.0)
0.2
(44.2)
2.3
—
—
48.5
Total
£m
(9.2)
(4.1)
(2.6)
(2.2)
10.1
(8.0)
(4.8)
6.4
1.4
(4.5)
(0.4)
(9.9)
Total
£m
(8.1)
1.4
(1.4)
2.9
2.8
(2.4)
(1.7)
(0.2)
3.4
(0.9)
Deferred tax (assets)/liabilities have been accounted for at the applicable tax rates enacted or substantively enacted, in each case in the
relevant jurisdiction of the tax arising, at the reporting date. As at 31 March 2022 the value of losses unrecognised for deferred tax is £nil
(2021: £0.2m value of losses unrecognized for deferred tax).
In its Budget held in March 2021, the UK Government announced that the UK rate of corporation tax will increase from 19% to 25% from 1
April 2023. In addition, as announced in the French Finance Bill 2021, the rate of corporation tax in France will decrease from 26.5% (27.5%
where profits exceed €500,000) to 25% from 1 April 2022. These legislative changes have been substantively enacted, and these rates have
been considered when calculating the closing deferred tax balances at the reporting date.
15. Dividends
Accounting policy
Dividends are distributions of profit to holders of Intermediate Capital Group plc’s share capital and as a result are recognised as a
deduction in equity. Final dividends are announced with the Annual Report and Accounts and are recognised when they have been
approved by shareholders. Interim dividends are announced with the Half Year Results and are recognised when they are paid.
Ordinary dividends paid
Final
Interim
Proposed final dividend
2022
2021
Per share pence
£m
Per share pence
£m
39.0
18.7
57.7
57.3
112.1
53.6
165.7
162.0
35.8
17.0
52.8
39.0
102.3
48.6
150.9
111.5
Of the £165.7m (2021: £150.9m) of ordinary dividends paid during the year, £6.0m (2021: £2.9m) were reinvested under the dividend
reinvestment plan offered to shareholders.
16. Earnings per share
Earnings
Earnings for the purposes of basic and diluted earnings per share being net profit attributable to equity holders
of the Parent
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share
Effect of dilutive potential ordinary share options
Weighted average number of ordinary shares for the purposes of diluted earnings per share
Earnings per share (pence)
Diluted earnings per share (pence)
Year ended
31 March 2022
Year ended
31 March 2021
£m
£m
526.8
457.1
286,759,806
285,154,566
4,194,481
290,954,286
5,043,079
290,197,645
183.7p
181.1p
160.3p
157.5p
ICG | Annual Report & Accounts 2022
165
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
17. Intangible assets
Accounting policy
Business combinations
Business combinations are accounted for using the acquisition method. The acquisition method involves the recognition of all assets,
liabilities and contingent liabilities of the acquired business at their fair value at the acquisition date.
The excess of the fair value at the date of acquisition of the cost of investments in subsidiaries over the fair value of the net assets
acquired which is not allocated to individual assets and liabilities is determined to be goodwill. Goodwill is reviewed at least annually for
impairment.
Investment management contracts
Intangible assets with finite useful lives that are acquired separately, including investment management contracts, are carried at cost
less accumulated depreciation and impairment losses. These are measured at cost and are amortised on a straight line basis over the
expected life of the contract.
Computer software
Research costs associated with computer software are expensed as they are incurred.
Other expenditure incurred in developing computer software is capitalised only if all of the following criteria are demonstrated:
– An asset is created that can be separately identified;
– It is probable that the asset created will generate future economic benefits; and
– The development cost of the asset can be measured reliably.
Following the initial recognition of development expenditure, the cost is amortised over the estimated useful life of the asset created,
which is determined as three years. Amortisation commences on the date that the asset is brought into use. Work-in-progress assets are
not amortised until they are brought into use and transferred to the appropriate category of intangible assets. Amortisation of
intangible assets is included in administrative expenses in the income statement and detailed in note 12.
Impairment of non-financial assets and goodwill
The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when
annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the
higher of an asset’s fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying
amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
166
ICG | Annual Report & Accounts 2022
Group
Cost
At 1 April
Reclassified2
Additions
Derecognised
Exchange differences
At 31 March
Depreciation
At 1 April
Charge for the year
Derecognised
At 31 March
Net book value
Computer software
Goodwill1
Investment management contract
Total
2022
£m
20.8
—
3.4
(3.8)
0.1
20.5
10.1
6.1
(3.8)
12.4
8.1
2021
£m
37.1
—
4.0
(20.3)
—
20.8
23.5
5.5
(18.9)
10.1
10.7
2022
£m
4.3
—
2.5
(2.4)
(0.1)
4.3
—
—
—
—
4.3
2021
£m
4.3
—
—
—
—
4.3
—
—
—
—
4.3
2022
£m
25.5
(0.3)
1.1
—
—
26.3
19.0
2.6
—
21.6
4.7
2021
£m
25.5
—
—
—
—
25.5
16.7
2.3
—
19.0
6.5
2022
£m
50.6
(0.3)
7.0
(6.2)
—
51.1
29.1
8.7
(3.8)
34.0
17.1
2021
£m
66.9
—
4.0
(20.3)
—
50.6
40.2
7.8
(18.9)
29.1
21.5
1. Goodwill was acquired in the ICG-Longbow Real Estate Capital LLP business combination and represents a single cash generating unit. The recoverable amount of the real estate
cash generating unit is based on fair value less costs to sell where the fair value equates to a multiple of adjusted net income, in line with the original consideration methodology.
The significant headroom on the recoverable amount is not sensitive to any individual assumption.
2. During the current year the Group carried out a review of its intangible assets relating to investment management contracts. £0.3m was reclassified from intangible assets to
financial assets.
Company
Cost
At 1 April
Additions
Derecognised
At 31 March
Depreciation
At 1 April
Charge for the year
Derecognised
At 31 March
Net book value
Computer software
Investment management contract
Total
2022
£m
20.8
3.4
(3.8)
20.4
10.2
6.1
(3.8)
12.5
7.9
2021
£m
37.1
—
4.0
20.8
23.5
5.5
(18.8)
10.2
10.6
2022
£m
19.9
—
—
19.9
13.4
2.3
—
15.7
4.2
2021
£m
19.9
—
—
19.9
11.1
2.3
—
13.4
6.5
2022
£m
40.7
3.4
(3.8)
40.3
23.6
8.4
(3.8)
28.2
12.1
2021
£m
57.0
—
4.0
40.7
34.6
7.8
(18.8)
23.6
17.1
During the financial year ended 31 March 2022 the Group recognised an expense of £0.6 m (2021: £0.1m) in respect of research and
development expenditure.
ICG | Annual Report & Accounts 2022
167
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
18. Property, plant and equipment
Accounting policy
The Group’s property, plant and equipment provide the infrastructure to enable the Group to operate. Assets are initially stated at cost,
which includes expenditure associated with acquisition. The cost of the asset is recognised in the income statement as an amortisation
charge on a straight line basis over the estimated useful life, determined as three years for furniture and equipment and five years for
short leasehold premises. Right of Use (‘ROU’) assets are amortised over the full contractual lease term.
Group as a lessee
Included within the Group’s property, plant and equipment are its ROU assets. ROU assets are the present value of the Group’s global
leases and comprise all future lease payments, and all expenditure associated with acquiring the lease. The Group’s leases are primarily
made up of its global offices. The Group has elected to capitalise initial costs associated with acquiring a lease before commencement as
a ROU asset. The cost of the ROU asset is recognised in the income statement as an amortisation charge on a straight line basis over the
life of the lease term.
Short-term leases and leases of low value assets
The Group applies the short-term lease recognition exemption to its leasehold improvements and short-term leases (those that have a
lease term of 12 months or less from the commencement date which do not contain a purchase option). The Group also applies the
recognition exemption to leases that are considered to be low value. Leasehold improvements are amortised on a straight line basis over
the lease term. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight line basis
over the lease term.
Group
Cost
At 1 April
Reclassified1
Additions
Disposals
Exchange differences
At 31 March
Depreciation
At 1 April
Reclassified1
Charge for the year
Disposals
At 31 March
Net book value
Furniture and equipment
ROU asset
Leasehold improvements
2022
£m
3.8
—
0.6
2021
£m
5.5
—
2.3
—
(4.1)
0.1
4.5
1.6
—
1.2
0.1
2.9
1.6
0.1
3.8
4.6
—
0.5
(3.5)
1.6
2.2
2022
£m
73.0
—
2.4
(7.7)
—
67.7
17.7
—
7.3
(6.8)
18.2
49.5
2021
£m
42.3
(10.9)
56.0
(14.4)
—
73.0
29.8
(5.8)
6.8
(13.1)
17.7
55.3
2022
£m
10.6
—
0.7
—
—
11.3
1.1
—
0.9
—
2.0
9.3
2021
£m
—
10.9
4.9
(5.2)
—
10.6
—
5.8
0.5
(5.2)
1.1
9.5
Total
2022
£m
87.4
—
3.7
(7.7)
0.1
83.5
20.4
—
9.4
(6.7)
23.1
60.4
2021
£m
47.8
—
63.2
(23.7)
0.1
87.4
34.4
—
7.8
(21.8)
20.4
67.0
1. During the prior year, the Group carried out an assessment of its assets categorised as furniture and equipment and determined that those assets relating to computer software
were more appropriately classified as intangible assets. These assets were transferred at book value and there was no profit or loss arising on transfer.
168
ICG | Annual Report & Accounts 2022
Company
Cost
At 1 April
Reclassified1
Additions
Disposals
At 31 March
Depreciation
At 1 April
Reclassified1
Charge for the year
Disposals
At 31 March
Net book value
Furniture and equipment
ROU asset
Leasehold improvements
2022
£m
2.6
—
0.2
—
2.8
0.6
—
1.0
—
1.6
1.2
2021
£m
1.8
—
2.2
(1.4)
2.6
1.5
—
0.5
(1.4)
0.6
2.0
2022
£m
50.9
—
1.3
(2.1)
50.1
5.2
—
6.5
(1.9)
9.8
40.3
2021
£m
26.9
(9.5)
47.9
(14.4)
50.9
19.7
(4.2)
2.8
(13.1)
5.2
45.7
2022
£m
8.9
—
0.6
—
9.5
0.3
—
0.8
—
1.1
8.4
2021
£m
—
9.5
4.6
(5.2)
8.9
—
4.2
0.3
(4.2)
0.3
8.6
Total
2022
£m
62.4
—
2.1
(2.1)
62.4
6.1
—
8.3
(1.9)
12.5
49.9
2021
£m
28.7
—
54.7
(21.0)
62.4
21.2
—
3.6
(18.7)
6.1
56.3
1. During the prior year, the Company carried out an assessment of its assets categorised as furniture and equipment and determined that those assets relating to computer
software were more appropriately classified as intangible assets. These assets were transferred at book value.
Group as Lessor
Accounting policy
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as
operating leases. Rental income arising is accounted for on a straight-line basis over the lease term and is included in other income in the
consolidated income statement due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease
are added to the carrying amount of the leased asset and amortised over the lease term on the same basis as rental income. Contingent
rents are recognised as revenue in the period in which they are earned.
The Group has entered into sub-lease agreements of certain office buildings (see Note 18 above). These leases have terms of between
two and five years. Rental income recognised by the Group during the year was £0.3 m (2021: £0.8m). Future minimum rentals
receivable under non-cancellable operating leases as at 31 March are as follows:
Group
Within one year
After one year but not more than five years
At 31 March
2022
£m
5.7
29.6
35.3
2021
£m
0.3
2.3
2.6
ICG | Annual Report & Accounts 2022
169
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
19. Investment property
Accounting policy
The Group holds investment property for the development of the Group’s long-term real assets strategy. Properties are being held with
a purpose to earn rental income and/or for capital appreciation and are not occupied by the Group. IAS 40 Investment Property requires
that the property be measured initially at cost, including transaction costs, and subsequently measured at fair value. The fair value of the
investment properties has been recorded based on independent valuations prepared by third-party real estate valuation specialists in
line with the Royal Institution of Chartered Surveyors Valuation – Global Standards 2020. A market and income approach was
performed to estimate the fair value of the Group’s investments. These valuation techniques can be subjective and include assumptions
which are not supportable by observable data. Details of the valuation techniques and the associated sensitivities are further disclosed
in note 5.
Group
Investment property at fair value
At 1 April
Disposals
Fair value loss
Movement in control of subsidiary
Classified as held for sale or disposals
At 31 March
2022
£m
1.8
—
(0.3)
—
—
1.5
2021
£m
8.1
(6.3)
—
56.7
(56.7)
1.8
During the year, the Group held £59.3m (2021: £56.7m) investment property within disposal groups held for sale (see note 29).
170
ICG | Annual Report & Accounts 2022
20. Trade and other receivables
Accounting policy
Trade and other receivables represent amounts the Group is due to receive in the normal course of business and are held at amortised
cost. Trade and other receivables excluding structured entities controlled by the Group include performance fees, which are considered
contract assets under IFRS 15 and will only be received after realisation of the underlying assets, see note 3. Trade and other receivables
within structured entities controlled by the Group relate principally to unsettled trades on the sale of financial assets.
Amounts owed by Group companies are non-interest bearing and repayable on demand. Trade and other receivables from Group
entities are considered related party transactions as stated in note 27.
The carrying value of trade and other receivables reported within current assets approximates fair value as these are short-term and do
not contain any significant financing components. The carrying value of trade and other receivables reported within non-current assets
approximates fair value as these do not contain any significant financing components.
The Company has adopted the simplified approach to measuring the loss allowance as lifetime Expected Credit Loss (ECL), as permitted
under IFRS 9. The ECL of trade and other receivables arising from transactions with Group entities or its affiliates are expected to be nil
or close to nil. The assets do not contain any significant financing components, therefore the simplified approach is deemed most
appropriate.
Trade and other receivables within structured entities controlled by the Group
Trade and other receivables excluding structured entities controlled by the
Group
Amount owed by Group companies
Prepayments
Total current assets
Non-current assets
Trade and other receivables excluding structured entities controlled by the
Group
Amounts owed by Group companies
Total non-current assets
Group
Company
2022
£m
125.3
155.0
—
2.8
283.1
91.1
—
91.1
2021
£m
99.5
107.1
—
8.6
215.2
62.8
—
62.8
2022
£m
—
6.9
199.4
4.9
211.2
7.4
566.7
574.1
2021
£m
—
8.2
704.2
4.2
716.6
33.8
472.8
506.6
Non-current Trade and other receivables excluding structured entities controlled by the Group comprises performance-related fees (see
note 2).
ICG | Annual Report & Accounts 2022
171
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
21. Trade and other payables
Accounting policy
Trade and other payables are held at amortised cost and represent amounts the Group is due to pay in the normal course of business.
Other payables in the table below relate principally to unsettled trades on the purchase of financial assets within structured entities
controlled by the Group. Accruals represent costs, including remuneration, that are not yet billed or due for payment, but for which the
goods or services have been received. Amounts owed to Group companies are non-interest bearing and repayable on demand. The
carrying value of trade and other payables approximates fair value as these are short-term and do not contain any significant financing
components.
Trade and other payables from Group entities are considered related party transactions as stated in note 27.
Trade and other payables within structured entities controlled by the Group
Trade and other payables excluding structured entities controlled by the
Group
Amounts owed to Group companies
Social security tax
Total current liabilities
Non-current liabilities
Trade and other payables excluding structured entities controlled by the
Group
Total non-current liabilities
Group
Company
2022
£m
293.4
138.7
—
2.3
434.4
76.4
76.4
2021
£m
315.9
110.1
—
1.3
427.3
41.9
41.9
2022
£m
—
114.2
1,038.6
2.7
1,155.5
2021
£m
—
114.8
1,165.7
1.5
1,282.0
76.4
76.4
41.9
41.9
Current Trade and other payables excluding structured entities controlled by the Group includes £69.4m (2021: £14.9m) in respect of Deal
Vintage Bonus (DVB, see note 13) and non-current Trade and other payables excluding structured entities controlled by the Group is entirely
comprised of amounts payable in respect of DVB.
22. Financial risk management
The Group has identified financial risk, comprising market and liquidity risk, as a principal risk. Further details are set out on page 57. The
Group has exposure to market risk (including exposure to interest rates and foreign currency), liquidity risk and credit risk arising from
financial instruments.
Interest rate risk
The Group’s assets include both fixed and floating rate loans and non-interest-bearing equity investments.
The Group’s operations are financed with a combination of its shareholders’ funds, bank borrowings, private placement notes, public bonds,
and fixed and floating rate notes. The Group manages its exposure to market interest rate movements by matching, to the extent possible, the
interest rate profiles of assets and liabilities and by using derivative financial instruments.
The sensitivity of floating rate financial assets to a 100 basis points interest rate increase is £55.5m (2021: £43.8m) and the sensitivity of
financial liabilities to a 100 basis point interest rate increase is £46.0m (2021: £37.6m). The Group’s sensitivity to movements is calculated by
applying 100 basis points sensitivity to interest rates to the Group’s forecast model. There is an indirect exposure to interest rate risk through
the impact on the performance of the portfolio companies of the funds that the Group has invested in, and therefore the fair valuations. There
is no interest rate risk exposure on fixed rate financial assets or liabilities.
172
ICG | Annual Report & Accounts 2022
Exposure to interest rate risk
Group
Financial assets (excl investments in loans held in
consolidated entities)
Investments in loans held in consolidated entities
Financial liabilities (excl borrowings and loans held
in consolidated entities)
Floating
£m
889.6
4,599.7
2022
Fixed
£m
Total
£m
2,824.7
479.5
3,714.3
5,079.2
Floating
£m
460.5
3,916.0
2021
Fixed
£m
Total
£m
2,680.2
338.0
3,140.7
4,254.0
Borrowings and loans held in consolidated entities
(4,604.1)
(374.5)
885.2
1,037.6
—
(1,892.1)
(1,892.1)
(4,978.6)
1,922.8
3.6
(1,576.9)
(3,763.7)
616.4
(547.5)
893.8
(1,573.3)
(4,311.2)
1,510.2
Foreign exchange risk
The Group is exposed to currency risk in relation to non-sterling currency transactions and the translation of non-sterling net assets. The
Group’s most significant exposures are to the euro and the US dollar. Exposure to market currency risk is managed by matching assets with
liabilities to the extent possible and through the use of derivative instruments.
The Group regards its interest in overseas subsidiaries as long-term investments. Consequently, it does not normally hedge the translation
effect of exchange rate movements on the financial statements of these businesses.
The Group is also exposed to currency risk arising on the translation of fund management fee income receipts, which are primarily
denominated in euro and US dollar. Fund management fee income is hedged to provide more certainty over the value of future cash inflows.
The sensitivity to movements in exchange rates is assumed by applying a percentage measure, based on the volatility of the applicable
currency, as defined in the Group’s treasury policy, to the net currency asset or liability at the balance sheet date.
The effect of fluctuations in other currencies is considered by the Directors to be insignificant in the current and prior year. The net assets/
(liabilities) by currency and the sensitivity of the balances to foreign exchange rates are shown below:
Market risk - Foreign exchange risk
Sterling
Euro
US dollar
Other currencies
Sterling
Euro
US dollar
Other currencies
Net statement of
financial Position
exposure
Forward exchange
contracts
£m
688.1
718.1
326.9
207.4
1,940.5
£m
1,057.9
(624.3)
(251.0)
(200.3)
(17.7)
2022
Net exposure
£m
1,746.0
93.8
75.9
7.1
1,922.8
2021
Sensitivity to
strengthening
Increase in net
assets
%
—
15 %
20 %
10-25%
—
£m
—
14.1
15.2
—
29.3
Net statement of
financial Position
exposure
£m
353.5
791.8
54.1
298.8
1,498.2
Forward exchange
contracts
Net exposure
Sensitivity to
strengthening
Increase in net
assets
£m
960.8
(747.8)
75.3
(276.3)
12.0
£m
1,314.3
44.0
129.4
22.5
1,510.2
%
—
15 %
20 %
10-25%
£m
—
6.6
25.9
—
32.5
The weakening of the above currencies would have resulted in an equal but opposite impact, being a decrease in net assets.
ICG | Annual Report & Accounts 2022
173
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
22. Financial risk management continued
Liquidity risk
The Group manages its liquidity risk by maintaining headroom on its financing facilities, particularly its bank facilities.
The table below shows the liquidity profile of the Group’s financial liabilities, based on contractual repayment dates of principal and interest
payments. Future interest and principal cash flows have been calculated based on exchange rates and floating rate interest rates as at 31
March 2022. It is assumed that Group borrowings under its senior debt facilities remain at the same level as at 31 March 2022 until
contractual maturity. Included in financial liabilities are contractual interest payments. All financial liabilities, excluding structured entities
controlled by the Group, are held by the Company.
Liquidity profile
As at 31 March 2022
Financial liabilities
Private placements
Listed notes and bonds
Debt issued by controlled structured entities
Derivative financial instruments
Contractual maturity analysis
Less than one year
One to two two
years
Two to five years
More than five
years
£m
£m
£m
£m
59.1
185.4
499.9
22.1
766.5
76.1
17.4
79.7
(2.5)
170.7
519.2
473.1
239.2
(4.7)
1,226.8
105.3
452.6
4,656.5
0.0
5,214.4
Total
£m
759.8
1,128.4
5,475.4
14.9
7,378.5
As at 31 March 2022 the Group has liquidity of £1,311.5m (2021: £846.9m) which consists of undrawn debt facility of £550m (2021: £550m)
and £761.5m (2021: £296.9m) of unencumbered cash. Unencumbered cash excludes £230.3m (2021: £284.3m) of restricted cash held
principally by structured entities controlled by the Group.
As at 31 March 2021
Financial liabilities
Private placements
Listed notes and bonds
Debt issued by controlled structured entities
Derivative financial instruments
Contractual maturity analysis
Less than one year
One to two two
years
Two to five years More than five years
£m
£m
£m
£m
138.5
14.9
69.4
(3.6)
219.2
59.0
174.9
69.4
26.3
329.6
503.4
20.7
208.2
0.0
732.3
171.7
432.4
4,329.3
0.0
4,933.4
Total
£m
872.6
642.9
4,676.3
22.7
6,214.5
The Group’s policy is to maintain continuity of funding. Due to the long-term nature of the Group’s assets, the Group seeks to ensure that the
maturity of its debt instruments is matched to the expected maturity of its assets.
Credit risk
Credit risk is the risk of financial loss to the Group as a result of a counterparty failing to meet its contractual obligations. This risk is
principally in connection with the Group’s investments.
This risk is mitigated by the disciplined credit procedures that the relevant Fund Investment Committees have in place prior to making an
investment and the ongoing monitoring of investments throughout the ownership period. In addition, the risk of significant credit loss is
further mitigated by the Group’s policy to diversify its investment portfolio in terms of geography and industry sector and to limit the amount
invested in any single company.
The Group is exposed to credit risk through its financial assets (see note 5) and investment in joint ventures.
174
ICG | Annual Report & Accounts 2022
Exposure to credit risk
Investment in private companies
Investment in managed funds
Senior and subordinated notes of CLO vehicles
Investments in loans held within consolidated entities
Derivatives assets
Investment in joint venture
Group
2022
£m
225.0
2,122.7
114.7
4,612.6
138.6
2.2
7,215.8
20211
£m
292.0
1,813.8
133.8
4,146.9
111.9
2.8
6,501.2
Company
2022
£m
171.6
271.4
0.2
—
40.0
—
483.2
20211
£m
189.3
316.0
9.2
—
46.7
—
561.2
1 The 2021 comparable numbers included in this table have been updated to include all financial assets (see note 5). The impact of this change is to increase comparable balances
as follows: Investment in private companies - £120.2m (Group) and £62.9m (Company); Investment in managed funds - £1.0m (Group); Senior and subordinated notes of CLO
vehicles - £1.7m (Group); Derivatives assets - £111.9m (Group) and £46.7m (Company); and to reduce Investments in loans held within consolidated entities by £0.9m (Group).
The Group manages its operational cash balance by the regular forecasting of cashflow requirements, debt management and cash pooling
arrangements. Credit risk exposure on cash and derivative instruments is managed in accordance with the Group’s treasury policy which
provides limits on exposures with any single financial institution. The Group’s surplus cash is held in financial institutions rated AAA or above.
Other credit exposures arise from outstanding derivatives with financial institutions rated from BBB to AAA, with 93% at institutions rated
A- or above.
The Group is exposed to credit risk as a result of financing guarantees provided. The maximum exposure to guarantees is £7.4m (2021:
£8.2m). No liability has been recognised in respect of these guarantees.
The Directors consider the Group’s credit exposure to trade and other receivables and current assets held for sale to be low and as such no
further analysis has been presented. The Directors consider the credit risk of the investments within the structured entities controlled by the
Group to be low.
The Group’s investments in CLOs and loans held within structured entities controlled by the Group principally comprise senior loans. The
Group’s exposure to the credit risk of this collateral, in these consolidated entities, is limited to its investment into these entities, which at 31
March 2022 was £426.0m (2021: £506.0m).
The carrying amount of financial assets represents the Directors’ assessment of the maximum credit risk exposure of the Group and
Company at the balance sheet date. Decreases in fair value during the year reflect the decline in prices on individual assets, as a result either
of company specific or of general macroeconomic conditions.
The Directors believe that credit risk as a result of the concentration of significant counterparties is low as there is no individual counterparty
comprising more than 10% of the Group’s total exposure.
Other than the Group investments in CLOs and loans held within structured entities controlled by the Group, the Group has no direct
exposure to defaulted and past due financial assets.
Capital management
Managing capital is the ongoing process of determining and maintaining the quantity and quality of capital appropriate for the Group and
ensuring capital is deployed in a manner consistent with the expectations of our stakeholders. The primary objectives of the Group’s capital
management are (i) align the Group’s interests with its clients, (ii) grow third-party fee income in the FMC and (iii) maintain robust
capitalisation, including ensuring that the Group complies with externally imposed capital requirements by the Financial Conduct Authority
(the FCA). The Group’s strategy has remained unchanged from the year ended 31 March 2021.
(i) Regulatory capital requirements
The Group is required to hold capital resources to cover its regulatory capital requirements. The Group’s capital for regulatory purposes
comprises the capital and reserves of the Company, comprising called up share capital, reserves and retained earnings as disclosed in the
Statement of Changes in Equity (see page 140). The full Pillar 3 disclosures are available on the Group’s website: www.icgam.com.
ICG | Annual Report & Accounts 2022
175
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
22. Financial risk management continued
(ii) Capital and risk management policies
The formal procedures for identifying and assessing risks that could affect the capital position of the Group are described in the Strategic
Report on page 57. The capital structure of the Group consists of cash and cash equivalents, £991.8m (2021: £581.2m) (see note 6); debt,
which includes borrowings, £1,653.4m, (2021: £1,321.4m) (see note 7) and capital and reserves of the Company, comprising called up share
capital, reserves and retained earnings as disclosed in the Statement of Changes in Equity, £943.9m (2021 : £1,060.9m) (see page 140).
23. Called up share capital and share premium
Share capital represents the number of issued ordinary shares in Intermediate Capital Group plc multiplied by their nominal value of 26¼p
each.
The Company has the authority limited by shareholder resolution to issue, buy back, or cancel ordinary shares in issue (including those held in
trust, described below). New shares are issued when share options are exercised by employees. The Company has 294,285,804 authorised
shares (2021: 294,276,532)
Group and Company
1 April 2021
Shares Issued
31 March 2022
Group and Company
1 April 2020
Shares issued
31 March 2021
Number of ordinary
shares of 26¼p allotted,
called up and fully paid
294,276,532
9,272.0
294,285,804
Number of ordinary
shares of 26¼p allotted,
called up and fully paid
294,179,174
97,358
294,276,532
Share Capital
£m
77.2
0.1
77.3
Share Capital
£m
77.2
—
77.2
Share Premium
£m
180.2
0.1
180.3
Share Premium
£m
179.9
0.3
180.2
24. Own shares reserve
Accounting policy
Own shares are recorded by the Group when ordinary shares are purchased in the market by ICG plc or through the ICG Employee
Benefit Trust 2015 (‘EBT’).
The EBT is a special purpose vehicle, with the purpose of purchasing and holding shares of the Company for the hedging of future
liabilities arising as a result of the employee share-based compensation schemes, (see note 25) in a way that does not dilute the
percentage holdings of existing shareholders.
Own shares are held at cost and their purchase reduces the Group’s net assets by the amount spent. When shares vest or are cancelled,
they are transferred from own shares to the retained earnings reserve at their weighted average cost. No gain or loss is recognised on
the purchase, sale, issue or cancellation of the Company’s own shares.
The movement in the year is as follows:
At 1 April
Purchased (ordinary shares of 26¼p)
Options/awards exercised
As at 31 March
2022
£m
82.2
20.9
(10.1)
93.0
2021
£m
2022
Number
2021
Number
114.4
8,389,246
10,899,484
—
(32.2)
1,000,000
(1,654,397)
—
(2,510,238)
82.2
7,734,849
8,389,246
The Company held 3,733,333 shares in the Own Share Reserve at 31 March 2022 and 31 March 2021 at a cost of £21.3m. These shares were
purchased through a share buy back programme in prior years.
The number of shares held by the Group at the balance sheet date represented 2.6% (2021: 2.9%) of the Parent Company’s allotted, called up
and fully paid share capital.
176
ICG | Annual Report & Accounts 2022
25. Share based payments
Accounting policy
The Group issues compensation to its employees under equity settled share based payment plans.
Equity settled share based payments are measured at the fair value of the awards at grant date. The fair value includes the effect of non-
market based vesting conditions. The fair value determined at the date of grant is expensed on a straight line basis over the vesting
period.
At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest as a result of non-market
based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in the income statement with a
corresponding adjustment to equity.
The total charge to the income statement for the year was £29.6m (2021: £26.9m) and this was credited to the share based payments
reserve. Details of the different types of awards are as follows:
Intermediate Capital Group plc Omnibus Plan
The Omnibus Plan provides for two different award types to be made over ICG plc shares: Deferred Share Awards and PLC Equity Awards.
Deferred Share Awards
Awards are made after the end of the financial year (and in a small number of cases during the year) to reward employees for delivering cash
profits, managing the cost base, and employing sound risk and business management. These share awards normally vest one-third at the end
of the first, second and third years following the year of grant, unless the individual leaves for cause or to join a competitor. Dividend
equivalents accrue to participants during the vesting period and are paid at the vesting date. Awards are based on performance against the
individual’s objectives. There are no further performance conditions.
PLC Equity Awards
Awards are made after the end of the financial year to reward employees, including Executive Directors, for increasing long-term shareholder
value. These share awards normally vest one-third at the end of the third, fourth and fifth years following the year of grant, unless the
individual leaves for cause or to join a competitor. Dividend equivalents accrue to participants during the vesting period and are paid at the
vesting date. Awards are based on performance against the individual’s objectives. There are no further performance conditions.
Share awards outstanding under the Omnibus Plan were as follows:
Deferred share awards
Outstanding at 1 April
Granted
Vested
Outstanding as at 31 March
PLC Equity awards
Outstanding at 1 April
Granted
Vested
Outstanding as at 31 March
Number
Weighted average fair value
2022
2,958,483
1,048,813
(1,537,016)
2,470,280
2021
2,829,014
1,512,583
(1,383,114)
2,958,483
2022
12.47
21.63
12.21
16.52
2021
11.33
13.07
10.80
12.47
Number
2022
2021
2,680,734
3,333,119
374,477
(916,001)
2,139,210
429,746
(1,082,131)
2,680,734
Weighted average fair value
2022
10.22
21.63
8.12
10.33
2021
8.74
13.08
6.78
10.22
The fair values of awards granted under the ICG plc Omnibus Plan are determined by the average share price for the five business days prior
to grant.
ICG | Annual Report & Accounts 2022
177
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
25. Share based payments continued
FMC Equity Awards
FMC Equity Awards were awarded up until May 2017. Awards were made after the end of the financial year to incentivise those employees
charged with accelerating the expansion of the Company’s fund management business. The awards were over shares in the FMC and shares
vested one-third in each of the first, second and third years following the year of grant subject to continuing service. A holding period applies
until the third year following the year of grant, at which time all vested FMC shares are automatically ‘exchanged’ for Company shares of an
equivalent value. The value of a share was determined by an independent valuation every year. Awards were based on performance against
the individual’s objectives. There are no further performance conditions.
There are no outstanding awards at 31 March 2021 and 31 March 2022.
FMC Equity awards
Outstanding at 1 April
Granted
Vesting
Outstanding as at 31 March
Number
2022
—
—
—
—
2021
11,104
—
(11,104)
—
Weighted average fair value
2022
—
—
—
—
2021
700.0
—
700.0
—
Intermediate Capital Group plc Buy Out Awards
Buy Out Awards are shares awarded to new employees in lieu of awards forfeited from their previous employment. These share awards shall
vest or be forfeited according to the schedule and terms of the forfeited awards, and any performance conditions detailed in the individual’s
employment contract. Buy Out Awards may be cash settled.
Buy Out Awards outstanding were as follows:
Buy Out Awards
Outstanding as at 1 April
Granted
Vesting
Outstanding as at 31 March
Number
Weighted average fair value
2022
245,423
33,965
(123,448)
155,940
2021
175,512
215,817
(145,906)
245,423
2022
12.06
13.85
10.67
12.85
2021
7.87
13.42
9.10
12.06
The fair values of the Buy Out Awards granted are determined by the average share price for the five business days prior to grant.
Save As You Earn
The Group offers a Sharesave Scheme (‘SAYE’) to its UK employees. Options are granted at a 20% discount to the prevailing market price at
the date of issue. Options to this equity-settled scheme are exercisable at the end of a three year savings contract. Participants are not
entitled to dividends prior to the exercise of the options. The maximum amount that can be saved by a participant in this way is £6,000 in any
tax year.
Fair value is measured using the Black–Scholes valuation model, which considers the current share price of the Group, the risk-free interest
rate and the expected volatility of the share price over the life of the award. The expected volatility was calculated by analysing three years of
historic share price data of the Group.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the share awards and options at grant
date, which is remeasured at each reporting date. The total amount to be expensed during the year is £187,660 (2021: £227,264).
Save As You Earn
Outstanding as at 1 April
Granted
Vesting
Forfeited
Outstanding as at 31 March
178
ICG | Annual Report & Accounts 2022
Number
Weighted average fair value
2022
137,395
96,136
(9,272)
(24,522)
199,737
2021
244,446
—
(92,240)
(14,811)
137,395
2022
3.19
5.95
2.27
3.35
4.54
2021
2.79
3.26
2.15
3.14
3.19
26. Financial commitments
As described in the Strategic Report, the Group invests balance sheet capital alongside the funds it manages to grow the business and create
long-term shareholder value. Commitments are made at the time of a fund’s launch and are drawn down with the fund as it invests.
Commitments may increase where distributions made are recallable. At the balance sheet date the Group had undrawn commitments, which
can be called on over the commitment period, as follows:
ICG Europe Fund V
ICG Europe Fund VI
ICG Europe Fund VII
ICG Europe Fund VIII
ICG Mid-Market Fund
Intermediate Capital Asia Pacific Fund III
ICG Asia Pacific Fund IV
Nomura ICG Investment Business Limited Partnership A
ICG Strategic Secondaries Fund II
ICG Strategic Equity Fund III
ICG Strategic Equity Fund IV
ICG Recovery Fund II
ICG Senior Debt Partners
ICG Senior Debt Partners II
ICG Senior Debt Partners III
ICG Senior Debt Partners IV
ICG Senior Debt Partners IV - CIC
ICG North American Private Debt Fund
ICG North American Private Debt Fund II
ICG Centre Street Partnership
ICG-Longbow UK Real Estate Debt Investments V
ICG-Longbow UK Real Estate Debt Investments VI
ICG-Longbow Development Fund
ICG Infrastructure Equity Fund I
ICG Private Markets Pooling - Sale and Leaseback
2022
£m
27.8
95.5
44.8
191.6
34.6
42.6
31.2
18.8
12.9
28.2
91.3
58.4
—
5.4
5.5
14.0
1.3
30.4
46.3
—
6.0
6.0
4.6
128.8
22.7
948.7
2021
£m
32.5
86.5
121.2
—
60.7
45.2
46.9
19.8
30.7
44.4
145.1
76.2
8.9
4.4
6.2
17.5
—
30.0
56.8
4.6
13.1
25.0
4.0
92.3
44.2
1,016.2
ICG | Annual Report & Accounts 2022
179
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
27. Related party transactions
Subsidiaries
The Group is not deemed to be controlled or jointly controlled by a party directly or through intermediaries. The Group consists of the Parent
Company, Intermediate Capital Group plc, incorporated in the UK, and its subsidiaries listed in note 28. All entities meeting the definition of a
controlled entity as set out in IFRS 10 are consolidated within the results of the Group. All transactions between the Parent Company and its
subsidiary undertakings are classified as related party transactions for the Parent Company accounts and are eliminated on consolidation.
Significant transactions with subsidiary undertakings relate to dividends received, the aggregate amount received during the year is £163.0m
(2021: £121.2m) and recharge of costs to a subsidiary, £166.7m (2021: £127.9m)
Associates and joint ventures
An associate is an entity over which the Group has significant influence, but not control, over the financial and operating policy decisions of
the entity. As the investments in associates are held for venture capital purposes they are designated at fair value through profit or loss. A
joint venture is an arrangement whereby the parties have joint control over the arrangements, see note 30. Where the investment is held for
venture capital purposes they are designated as fair value through profit. These entities are related parties and the significant transactions
with associates and joint ventures are as follows:
Income statement
Net gains on investments
Statement of financial position
Trade and other receivables
Trade and other payables
2022
£m
(15.8)
(15.8)
2022
£m
119.5
(60.4)
59.1
2021
£m
(2.8)
(2.8)
2021
£m
84.3
(42.3)
42.0
Unconsolidated structured entities
The Group has determined that, where the Group holds an investment, loan, fee receivable, guarantee or commitment with an investment
fund, carried interest partnership or CLO, this represents an interest in a structured entity in accordance with IFRS 12 Disclosure of Interest
in Other Entities (see note 31). The Group provides investment management services and receives management fees (including performance-
related fees) and dividend income from these structured entities, which are related parties. Amounts receivable and payable from these
structured entities arising in the normal course of business remain outstanding. At 31 March 2022, the Group’s interest in and exposure to
unconsolidated structured entities are as follows:
Income statement
Management Fees
Dividend Income
Statement of financial position
Performance Fees Receivable
Trade and other receivables
Trade and other payables
2022
£m
382.2
3.4
385.6
2022
£m
91.0
680.6
(621.1)
150.5
2021
£m
268.9
4.6
273.5
2021
£m
81.6
381.9
(351.7)
111.8
During the year the Group reduced its investment in a structured entity, ICG Alternative Credit (Jersey) CIP LP. The Group reassessed this
entity for control under the rules of IFRS 10 and concluded that the Group no longer controlled the entity (see note 28).
180
ICG | Annual Report & Accounts 2022
Key management personnel
Key management personnel are defined as the Executive Directors. The Executive Directors of the Group are Vijay Bharadia, Benoît
Durteste and Antje Hensel-Roth.
The compensation of key management personnel during the year was as follows:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payment benefits
Fees paid to Non-Executive Directors were as follows:
Andrew Sykes
Amy Schioldager
Kathryn Purves
Lord Davies of Abersoch
Matthew Lester
Rosemary Leith
Rusty Nelligan
Stephen Welton
Virginia Holmes
2022
£m
3.5
0.1
1.5
6.9
12.0
2022
£000
132.3
121.6
113.8
302.9
101.1
101.1
113.8
88.8
113.8
2021
£m
3.3
0.1
1.4
6.5
11.3
2021
£000
116.6
121.6
109.3
275.0
—
17.0
109.3
88.8
109.3
The remuneration of Directors and key executives and Non-Executive Directors is determined by the Remuneration Committee having
regard to the performance of individuals and market rates. The Remuneration Policy is described in more detail in the Remuneration
Committee Report on page 93.
ICG | Annual Report & Accounts 2022
181
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
28. Subsidiaries
Accounting policy
Investment in subsidiaries
The Group consists of the Parent Company, Intermediate Capital Group plc, and its subsidiaries, described collectively herein as ‘ICG’ or
the ‘Group’. Investments in subsidiaries in the Parent Company statement of financial position are recorded at cost less provision for
impairments or at fair value through profit or loss.
Critical judgement
A critical judgement for the Group is whether the Group controls an investee or fund and is required to consolidate the investee or fund
into the results of the Group. Control is determined by the Directors’ assessment of decision making authority, rights held by other
parties, remuneration and exposure to returns.
When assessing whether the Group controls any fund it manages (or any entity associated with a fund) it is necessary to determine
whether the Group acts in the capacity of principal or agent for the third-party investor. An agent is a party primarily engaged to act on
behalf and for the benefit of another party or parties, whereas a principal is primarily engaged to act for its own benefit.
A critical judgement when determining that the Group acts in the capacity of principal or agent is the kick-out rights of the third-party
fund investors. We have reviewed these kick-out rights, across each of the entities where the Group has an interest. Where fund
investors have substantive rights to remove the Group as the investment manager it has been concluded that the Group is an agent to
the fund and thus the fund does not require consolidation into the Group. We consider if the Group has significant influence over these
entities and, where we conclude it does, we recognise them as associates. Where the conclusion is that the Group acts in the capacity of
principal the fund has been consolidated into the Group’s results.
Where the Group has Trust entities in investment deals or fund structures, a key judgement is whether the Trust is acting on behalf of
the Group or another third party. Where the Trust is considered to act as an agent of the Group, the Trust and its related subsidiaries
have been consolidated into the Group.
As a fund manager ICG participates in carried interest partnerships (CIPs), the participants of which are the Group, certain of the
Group’s employees and others connected to the underlying fund. These vehicles have two purposes: 1) to facilitate payments of carried
interest from the fund to carried interest participants, and 2) to facilitate individual co-investment into the funds. The Directors have
undertaken a control assessment of each CIP in accordance with IFRS10 and have considered whether the CIP participants were
providing a service for the benefit of the Group. In undertaking this assessment the Directors took account of the following key
considerations:
– the Group’s exposure to the variable returns of the CIP is limited to the amounts allocated to the Group (see page 201). Such
allocations are typically 20% or less of total returns realised by the CIP with the balance attributable to other participants
– CIPs are used to facilitate substantial co-investment by individuals in the underlying funds. These individuals are exposed to the risk
of personal financial loss
– fund investors can, in certain conditions, veto changes in the key persons managing the fund
The Directors have assessed that certain CIPs are controlled, and they are included within the list of controlled structured entities
below. The Directors conclude that other CIPs are not controlled by the Group.
The Group consists of a Parent Company, Intermediate Capital Group plc, incorporated in the UK, and a number of subsidiaries held directly
or indirectly by ICG plc, which operate and are incorporated around the world. The subsidiary undertakings of the Group are shown below.
All are wholly owned, and the Group’s holding is in the ordinary share class, except where stated. The Companies Act 2006 requires
disclosure of certain information about the Group’s related undertakings. Related undertakings are subsidiaries, joint ventures and
associates.
The registered office of all related undertakings at 31 March 2022 was Procession House, 55 Ludgate Hill, New Bridge Street, London EC4M
7JW, unless otherwise stated.
The financial year end of all related undertakings is 31 March, unless otherwise stated.
All entities are consolidated as at 31 March.
182
ICG | Annual Report & Accounts 2022
Directly held subsidiaries
Name
ICG Carbon Funding Limited
ICG Debt Advisors (Cayman) Ltd
ICG Financing (Ireland) Limited
ICG FMC Limited
ICG Global Investment UK Limited
ICG Japan (Funding 2) Limited
Ref
18
17
Country of incorporation
England & Wales
Principal activity
Investment company
Cayman Islands
Advisory company
Share class
Ordinary shares
Ordinary shares
Ireland
Special purpose vehicle Ordinary shares
England & Wales
Holding company
England & Wales
Holding company
England & Wales
Holding company
ICG Longbow Development (Brighton) Limited
England & Wales
Holding company
ICG Longbow Richmond Limited
ICG Longbow Senior Debt I GP Limited
ICG Re Holding (Germany) GmbH
ICG Watch Jersey GP Limited
ICG-Longbow BTR Limited
England & Wales
Holding company
England & Wales
General partner
4
9
Germany
Jersey
England & Wales
Holding company
General partner
Special purpose vehicle Ordinary shares
Intermediate Capital Group Espana SL
34
Spain
Advisory company
Intermediate Capital Investments Limited
England & Wales
Investment company
Ordinary shares
Intermediate Capital Nominees Limited
England & Wales
Nominee company
Ordinary shares
Intermediate Investments Jersey Limited
9
Jersey
Investment company
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
% Voting rights
held
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
LREC Partners Investments No. 2 Limited
England & Wales
Investment company
Ordinary shares
54.8%
ICG | Annual Report & Accounts 2022
183
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
28. Subsidiaries continued
Indirectly held subsidiaries
Name
ICG Alternative Credit (Cayman) GP Limited
ICG Alternative Credit (Jersey) GP Limited
ICG Alternative Credit (Luxembourg) GP S.A.
ICG Alternative Credit LLC
ICG Alternative Credit Warehouse Fund I GP, LLC
ICG Alternative Investment (Netherlands) B.V.
ICG Alternative Investment Limited
ICG Asia Pacific Fund III GP Limited
ICG Asia Pacific Fund III GP LP
ICG Asia Pacific Fund IV GP LP SCSp
ICG Asia Pacific Fund IV GP S.à r.l.
ICG Augusta Associates LLC
ICG Augusta GP LP
ICG Australia Senior Debt GP Limited
ICG Centre Street Partnership GP Limited
ICG Debt Administration LLC
ICG Debt Advisors LLC – Holdings Series
ICG Debt Advisors LLC - Manager Series
ICG (DIFC) Limited
ICG EFV MLP GP Limited
ICG EFV MLP Limited
ICG Employee Benefit Trust 2015
ICG Enterprise Carry GP Limited
ICG Enterprise Co-Investment GP Limited
ICG Europe Fund V GP Limited
ICG Europe Fund V GP LP
ICG Europe Fund VI GP Limited
ICG Europe Fund VI GP Limited Partnership
ICG Europe Fund VI Lux GP S.à r.l.
ICG Europe Fund VII GP LP SCSp
ICG Europe Fund VII GP S.à r.l.
ICG Europe Fund VIII GP LP SCSp
ICG Europe Fund VIII GP S.à r.l.
ICG Europe Mid-Market Fund GP LP SCSp
ICG Europe Mid-Market Fund GP S.à r.l.
ICG Europe S.à r.l.
ICG European Credit Mandate GP LP SCSp
ICG European Credit Mandate GP S.à r.l.
ICG European Fund 2006 B GP Limited
ICG EXCELSIOR GP LP SCSp
ICG Excelsior GP S.à r.l.
ICG Executive Financing Limited
ICG Fund Advisors LLC
ICG Global Investment Jersey Limited
ICG Global Nominee Jersey Limited
184
ICG | Annual Report & Accounts 2022
Ref
19
9
11
6
21
32
9
9
13
13
20
33
33
26
21
21
21
27
26
22
9
26
26
26
26
15
14
14
16
16
14
14
8
14
14
9
16
16
9
21
26
26
Country of
incorporation
Principal activity
Share class
% Voting
rights held
Cayman Islands
General partner
Jersey
Luxembourg
Delaware
Delaware
General partner
General partner
Advisory company
General partner
Netherlands
Advisory company
England & Wales
Advisory company
Jersey
Jersey
Luxembourg
Luxembourg
Delaware
General partner
Limited partner
Limited partner
General partner
General partner
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
N/A
N/A
Ordinary shares
Ordinary shares
Cayman Islands
Limited partner
N/A
Cayman Islands
General partner
General partner
Service company
Ordinary shares
Ordinary shares
Ordinary shares
Investment company
Ordinary shares
Advisory company
Ordinary shares
Jersey
Delaware
Delaware
Delaware
United Arab
Emirates
Service company
England & Wales
General partner
Jersey
Guernsey
Jersey
General partner
N/A
General partner
England & Wales
General partner
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
N/A
Ordinary shares
N/A
Ordinary shares
N/A
Ordinary shares
N/A
Ordinary shares
N/A
Ordinary shares
Ordinary shares
N/A
Ordinary shares
Ordinary shares
N/A
Ordinary shares
Ordinary shares
Ordinary shares
Jersey
Jersey
Jersey
Jersey
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Jersey
Luxembourg
Luxembourg
Jersey
Delaware
Jersey
Jersey
General partner
Limited partner
General partner
Limited partner
General partner
Limited partner
General partner
Limited partner
General partner
Limited partner
General partner
Advisory company
Limited partner
General partner
General partner
Limited partner
General partner
Service company
Advisory company
Investment company
Ordinary shares
Special purpose vehicle Ordinary shares
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
— %
— %
100 %
100 %
— %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
—
100 %
—
100 %
—
100 %
—
100 %
—
100 %
100 %
—
100 %
100 %
—
100 %
100 %
100 %
100 %
100 %
Name
ICG Global Nominee Jersey 2 Limited
ICG Infrastructure Equity Fund I GP LP SCSp
ICG Infrastructure Equity Fund I GP S.a.r.l
ICG Japan KK
ICG Life Sciences GP LP SCSp
ICG Life Sciences GP S.à r.l.
ICG Life Sciences SCSp
ICG Longbow Development Debt Limited
ICG - Longbow Fund V GP S.à r.l.
ICG LP Secondaries Associates I LLC
ICG LP Secondaries Fund Associates I S.a. r.l.
ICG LP Secondaries I GP LP
ICG LP Secondaries I GP LP SCSp
ICG MF 2003 No. 3 EGP 1 Limited
ICG MF 2003 No.1 EGP 1 Limited
ICG MF 2003 No.1 EGP 2 Limited
ICG MF 2003 No.3 EGP 2 Limited
ICG NA Debt Co-Invest Limited
ICG Nordic AB
ICG North America Associates II LLC
ICG North America Associates LLC
ICG North America Holdings Limited
ICG North American Private Debt (Offshore) GP Limited
Partnership
ICG North American Private Debt Fund GP LP
ICG North American Private Debt II (Offshore) GP LP
ICG North American Private Debt II GP LP
ICG North American Private Equity Associates I LLC
ICG North American Private Equity Debt Limited
ICG North American Private Equity Fund I LP
ICG North American Private Equity I GP LP
ICG Private Credit GP S.à r.l.
ICG Private Markets General Partner SCSp
ICG Private Markets GP S.à r.l.
ICG RE Australia Group PTY Limited
ICG RE Capital Partners Australia PTY Limited
ICG RE Corporate Australia PTY Limited
ICG RE Funds Management Australia PTY Limited
ICG Real Estate Debt VI GP LP SCSp
ICG Real Estate Debt VI GP S.à r.l.
ICG Real Estate E Debt Limited
ICG Real Estate Fund I GP S.à r.l.
ICG Real Estate Fund I Investment S.à.r.l.
ICG Real Estate Fund I SCSp
ICG Real Estate Senior Debt V GP S.à r.l.
ICG Recovery Fund 2008 B GP Limited
ICG Recovery Fund II GP LP SCSp
ICG Recovery Fund II GP S.à r.l.
ICG Senior Debt Partners
26
16
16
30
13
13
13
12
20
16
20
16
24
21
21
33
33
39
33
39
36
9
36
36
14
13
13
28
28
28
28
13
13
9
13
13
13
13
9
16
16
14
Country of
incorporation
Ref
Jersey
Luxembourg
Luxembourg
Japan
Luxembourg
Luxembourg
Luxembourg
Principal activity
Share class
Special purpose vehicle Ordinary shares
Limited partner
General partner
Advisory company
Limited partner
General partner
N/A
Ordinary shares
Ordinary shares
N/A
Ordinary shares
Special purpose vehicle Ordinary shares
England & Wales
Investment company
Ordinary shares
Luxembourg
Delaware
Luxembourg
Delaware
Luxembourg
General partner
General partner
General partner
Limited partner
Limited partner
England & Wales
General partner
England & Wales
General partner
England & Wales
General partner
England & Wales
General partner
Ordinary shares
Ordinary shares
Ordinary shares
N/A
N/A
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
England & Wales
Investment company
Ordinary shares
Sweden
Delaware
Delaware
Advisory company
General partner
General partner
Ordinary shares
Ordinary shares
Ordinary shares
Cayman Islands
Investment company
Ordinary shares
Cayman Islands
Limited partner
Delaware
Limited partner
Cayman Islands
Limited partner
Limited partner
General partner
N/A
N/A
N/A
N/A
Ordinary shares
Delaware
Delaware
Jersey
Delaware
Delaware
Luxembourg
Luxembourg
Luxembourg
Australia
Australia
Australia
Australia
Luxembourg
Luxembourg
Jersey
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Jersey
Luxembourg
Luxembourg
Luxembourg
Special purpose vehicle Ordinary shares
Special purpose vehicle Ordinary shares
Limited partner
General partner
General partner
General partner
Service company
Advisory company
Service company
Service company
Limited partner
General partner
N/A
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
N/A
Ordinary shares
Special purpose vehicle Ordinary shares
General partner
Ordinary shares
Special purpose vehicle Ordinary shares
Special purpose vehicle Ordinary shares
General partner
General partner
Limited partner
General partner
General partner
Ordinary shares
Ordinary shares
N/A
Ordinary shares
Ordinary shares
% Voting
rights held
100 %
—
100 %
100 %
—
100 %
100 %
100 %
100 %
100 %
100 %
—
—
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
— %
— %
— %
— %
100 %
100 %
100 %
— %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
— %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
—
100 %
100 %
ICG | Annual Report & Accounts 2022
185
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
Name
ICG Senior Debt Partners GP S.à r.l.
ICG Senior Debt Partners Performance GP Limited
Country of
incorporation
Luxembourg
Jersey
Ref
6
9
General partner
General partner
ICG Senior Debt Partners UK GP Limited
England & Wales
General partner
Principal activity
Share class
% Voting
rights held
ICG Strategic Equity Advisors LLC
ICG Strategic Equity Associates II LLC
ICG Strategic Equity Associates III LLC
ICG Strategic Equity Associates IV LLC
ICG Strategic Equity Associates IV S.à r.l
ICG Strategic Equity III (Offshore) GP LP
ICG Strategic Equity III GP LP
ICG Strategic Equity IV GP LP
ICG Strategic Equity IV GP LP SCSp
ICG Strategic Equity Side Car (Onshore) GP LP
ICG Strategic Equity Side Car GP LP
ICG Strategic Equity Side Car II (Onshore) GP LP
ICG Strategic Equity Side Car II GP LP
ICG Strategic Secondaries Carbon Associates LLC
ICG Strategic Secondaries Carbon Fund (Offshore) GP
LP
ICG Strategic Secondaries II (Offshore) GP LP
ICG Strategic Secondaries II GP LP
ICG Structured Special Opportunities GP Limited
ICG Total Credit (Global) GP, S.à r.l.
ICG US Senior Loan Fund GP Ltd
ICG Velocity Co-Investor (Offshore) GP LP
ICG Velocity Co-Investor Associates LLC
ICG Velocity Co-Investor GP LP
ICG Velocity GP LP
ICG Velocity Partners Co-Investor Associates LLC
ICG Watch Limited Partnership
ICG-Longbow B Investments L.P.
ICG-Longbow Development GP LLP
ICG-Longbow Investment 3 LLP
ICG-Longbow IV GP S.à r.l.
ICG-Longbow Senior GP LLP
Intermediate Capital Asia Pacific 2008 GP Limited
Intermediate Capital Asia Pacific Limited
Intermediate Capital Asia Pacific Mezzanine 2005 GP
Limited
Intermediate Capital Asia Pacific Mezzanine
Opportunities 2005 GP Limited
Intermediate Capital Australia PTY Limited
Intermediate Capital GP 2003 Limited
Intermediate Capital GP 2003 No.1 Limited
Intermediate Capital Group (Italy) S.r.l
Intermediate Capital Group (Singapore) Pte. Limited
Intermediate Capital Group Benelux B.V.
Intermediate Capital Group Beratungsgesellschaft
GmbH
21
37
20
37
16
33
37
37
16
37
33
37
33
39
19
33
37
33
10
33
33
20
37
37
37
15
9
38
9
9
29
9
9
23
1
32
3
186
ICG | Annual Report & Accounts 2022
Delaware
Delaware
Delaware
Delaware
Luxembourg
Advisory company
General partner
General partner
General partner
General partner
Cayman Islands
Limited partner
Delaware
Delaware
Luxembourg
Delaware
Limited partner
Limited partner
Limited partner
Limited partner
Cayman Islands
Limited partner
Delaware
Limited partner
Cayman Islands
Limited partner
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
—
—
—
—
—
—
—
—
Delaware
General partner
Ordinary shares
100 %
Cayman Islands
General partner
Cayman Islands
Limited partner
Delaware
Limited partner
Cayman Islands
General partner
Luxembourg
General partner
Cayman Islands
General partner
N/A
N/A
N/A
Ordinary shares
Ordinary shares
Ordinary shares
Cayman Islands
Limited partner
N/A
Delaware
Delaware
Delaware
Delaware
General partner
Limited partner
Limited partner
General partner
Ordinary shares
N/A
N/A
Ordinary shares
England & Wales
Limited partner
N/A
England & Wales
Investment company
Ordinary shares
England & Wales
General partner
N/A
England & Wales
Luxembourg
Special purpose vehicle
General partner
N/A
Ordinary shares
England & Wales
General partner
N/A
Jersey
Hong Kong
General partner
Advisory company
Ordinary shares
Ordinary shares
— %
— %
— %
100 %
100 %
100 %
— %
100 %
— %
— %
100 %
— %
50 %
— %
— %
100 %
— %
100 %
100 %
Jersey
General partner
Ordinary shares
100 %
Jersey
Australia
Jersey
Jersey
Italy
Singapore
Netherlands
General partner
Advisory company
General partner
General partner
Advisory company
Advisory company
Advisory company
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
100 %
100 %
100 %
100 %
100 %
100 %
100 %
Germany
Advisory company
Ordinary shares
100 %
Name
Intermediate Capital Group Dienstleistungsgesellschaft
mbH
Intermediate Capital Group Inc.
Intermediate Capital Group Polska Sp. z.o.o
Intermediate Capital Group SAS
Intermediate Capital Inc
Intermediate Capital Managers (Australia) PTY Limited
Country of
incorporation
Germany
Delaware
Poland
France
Delaware
Australia
Ref
3
21
35
2
21
31
Intermediate Capital Managers Limited
England & Wales
Advisory company
Principal activity
Share class
% Voting
rights held
Service company
Advisory company
Service company
Advisory company
Dormant
Advisory company
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
21
Delaware
General partner
England & Wales
Advisory company
N/A
Luxembourg
Luxembourg
Special purpose vehicle Ordinary shares
Special purpose vehicle Ordinary shares
England & Wales
Special purpose vehicle Ordinary shares
England & Wales
Special purpose vehicle Ordinary shares
Luxembourg
Special purpose vehicle Ordinary shares
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
New York
New York
New York
Special purpose vehicle
Special purpose vehicle
Special purpose vehicle
Special purpose vehicle
Special purpose vehicle
Special purpose vehicle
Portfolio company
Portfolio company
Portfolio company
Massachusetts
Portfolio company
New Jersey
New Jersey
Portfolio company
Portfolio company
N/A
N/A
N/A
N/A
N/A
N/A
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
13
13
5
25
39
39
39
39
39
39
40
41
41
42
43
43
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
— %
100 %
100 %
83 %
70 %
100 %
— %
— %
— %
— %
— %
— %
100 %
100 %
100 %
100 %
100 %
100 %
KIK Equity Co-Invest LLC
Longbow Real Estate Capital LLP
Sertic Deal Co S.à.r.l.
Sertic Mezz Co S.à.r.l.
Wise Living Homes Limited
Avanton Richmond Developments Limited
European Credit 2019 S.à r.l.
Gil-bar Aggregator LP
Gil-bar Parent LLC
Gil-bar Optionco LLC
Gil-bar Holdco LLC
Gil-bar Industries LLC
Gil-bar Solutions LLC
GBHLS LLC
Metro Air Products, LLC
MIH Systems Group, LLC
APA LLC
Mechanical Technologies LLC
Dynamic Equipment LLC
ICG | Annual Report & Accounts 2022
187
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
28. Subsidiaries continued
Registered offices
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
#21-01, 20 Collyer Quay, 049319, Singapore
1 rue de la Paix, Paris, 75002, France
12th Floor, An der Welle 5, Frankfurt, 60322, Germany
12th Floor, Stockwerk, An der Welle 5, Frankfurt, 60322, Germany
17 Regan Way, Chetwynd Business Park, Chilwell, Nottingham, NG9 6RZ, England & Wales
2-4 Rue Eugène Ruppert, Grand Duchy of Luxembourg, L-2453, Luxembourg
2711 Centerville Road, Suite 400, Wilmington, New Castle County, DE, 19808, United States
32-36, boulevard d'Avranches L - 1160 Luxembourg, 1160, Luxembourg
44 Esplanade, St. Helier, JE4 9WG, Jersey
49 Avenue John F. Kennedy, Luxembourg, L-1855, Luxembourg
5 Allée Scheffer, Luxembourg, L-2520, Luxembourg
51, Avenue J.F. Kennedy, Luxembourg, L-1855, Luxembourg
6, rue Eugene Ruppert, Luxembourg, L-2453, Luxembourg
60, Avenue J.F. Kennedy, Luxembourg, L-1855, Luxembourg
6D Route de Trèves, Senningerberg, L-2633, Luxembourg
6H Route de Trèves, Senningerberg, L-2633, Luxembourg
6th Floor South Bank House, Barrow Street, Dublin 4, Ireland
75 Fort Street, Clifton House, c/o Estera Trust (Cayman) Limited, PO Box 1350, Grand Cayman, KY1-1108, Cayman Islands
c/o Maples Corporate Services Limited, PO Box 309,Ugland House, Grand Cayman, KY1-1104, Cayman Islands
c/o Maples Fiduciary Services (Delaware) Inc., Suite 302, 4001 Kennett Pike, Wilmington, DE, 19807, United States
c/o The Corporation Trust Company, 1209 Orange Street, Wilmington, DE, 19801, United States
c/o Zedra Trust Company (Guernsey) Limited, 3rd Floor, Cambridge House, Le Truchot, St Peter Port, GY1 1WD, Guernsey
Corso Giacomo Matteotti 3, Milan, 20121, Italy
David Bagares Gata 3, Stockholm, 111 38, Sweden
Ground Floor Office South, 51 Welbeck St, London, W1G 9HL, England, United Kingdom
IFC 1, The Esplanade, St. Helier, JE1 4BP, Jersey
Index Tower, Floor 4, Unit 404, Dubai International Financial Centre, Dubai, United Arab Emirates
Level 12, 167 Eagle St., Brisbane, QLD 4000, Australia
Level 18, 88 Phillip Street, Sydney, NSW 2000, Australia
Level 23, Otemachi Nomura Building, 2-1-1 Otemachi, Chiyoda-ku, Tokyo, 100-0004, Japan
Level 31, 88 Phillip Street, Sydney, NSW 2000, Australia
Paulus Potterstraat 20, 2hg., Amsterdam, 1071 DA, Netherlands
PO Box 309, Ugland House, C/o Maples Corporate Services Limited, Grand Cayman, KY1-1104, Cayman Islands
Serrano 30-3º, 28001 Madrid, Spain
Spark B, Aleja Solidarności 171, Warsaw, 00-877, Poland
Suite 210, 200 Bellevue Parkway, Wilmington, DE, 19809, United States
Suite 302, Maples Fiduciary Services (Delware) Inc., 4001 Kennett Pike, Wilmington, DE, 19807, United States
Suites 1301-02, 13/F, AIA Central, 1 Connaught Road Central, Hong Kong
The Corporation Trust Company, 1209 Orange Street, Wilmington, DE, 19801, United States
5 West 19th Street, 7th Floor, New York, NY, United States, 10011
20 West 36th Street, Suite 700, New York, NY, United States, 10018
4 Campanelli Circle, Canton, MA 02021
10 Bloomfield Avenue, Pine Brook, NJ 07058
188
ICG | Annual Report & Accounts 2022
The table below shows details of structured entities that the Group is deemed to control:
Name of subsidiary
ICG Newground RE Finance Trust1
ICG US CLO 2014-1, Ltd.
ICG US CLO 2014-2, Ltd.
ICG US CLO 2014-3, Ltd.
ICG US CLO 2015-1, Ltd.
ICG US CLO 2015-2R, Ltd.
ICG US CLO 2016-1, Ltd.
ICG US CLO 2017-1, Ltd.
ICG US CLO 2020-1, Ltd.
ICG US Senior Loan Fund
ICG Euro CLO 2021-1 DAC
ICG Global Total Credit Fund 1 DAC
ICG High Yield Bond Fund
St. Paul's CLO II DAC
St. Paul's CLO III-R DAC
St. Paul's CLO VI DAC
St. Paul's CLO VIII DAC
St. Paul's CLO XI DAC
ICG Enterprise Carry (1) LP
ICG Enterprise Carry (2) LP
ICG Total Credit (Global) SCA
Country of incorporation
Australia
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Jersey
Jersey
Luxembourg
% of ownership interests and voting rights 2022
100 %
50 %
72 %
51 %
50 %
83 %
63 %
60 %
52 %
100 %
67 %
37 %
100 %
85 %
62 %
53 %
53 %
57 %
100 %
50 %
100 %
1. The Group’s interest in ICG Global Total Credit Fund is held through ICG Total Credit (Global) S.C.A.
The structured entities controlled by the Group include £5,057.2m (2021: £4,513.6m) of assets and £4,992.8m (2021: £4,458.8m) of
liabilities within 21 credit funds listed above. These assets are restricted in their use to being the sole means by which the related fund
liabilities can be settled. All other assets can be accessed or used to settle the other liabilities of the Group without significant restrictions.
The Group has not provided contractual or non-contractual financial or other support to a consolidated structured entity during the period. It
is not the current intention to provide such support, including the intention to assist the structured entity in obtaining financial support.
ICG | Annual Report & Accounts 2022
189
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
29. Disposal groups held for sale
Non-current and current financial assets held for sale and disposal groups
Accounting policy
Non-current and current financial assets held for sale and disposal groups
The Group may make an investment and hold the asset on its balance sheet prior to it being transferred into a fund, or sold to third-party
investors. The assets are expected to be held for a period up to a year, during which the asset will be classified as held for sale. Where the
investment is held through a controlled investee the investee entity is classified as a disposal group held for sale.
The conditions for disposal groups held for sale are regarded as met only when the asset is available for immediate sale, the Directors
are committed to the sale, and the sale is expected to be completed within one year from the date of classification.
Disposal groups held for sale are recognised at the lower of fair value less cost to sell and their carrying amount as required by IFRS 5
Non-Current Assets Held for Sale and Discontinued Operations, except where the asset is a financial instrument or investment
property. The measurement of these assets is determined by IFRS 9 Financial Instruments and IAS 40 Investment Property respectively.
The Group’s measurement of these assets is detailed in note 5.
Financial year ended 31 March 2022
During the year the Group acquired a controlling interest in four warehouse funds. The assets of three of these warehouse funds
consisted of financial assets at fair value and cash, totalling £42.5m. The North America Private Equity Fund warehouse acquired a
controlling interest in Gil-Bar Industries Incorporated. The underlying assets of Gil-Bar Industries Incorporated consisted of intangible
assets, trade debtors and other balances associated with its business of providing heating and ventilation solutions. During the year the
Group recognised £9.2m of losses relating to the operation of this entity.
The non-current assets and liabilities of the disposal groups held for sale are as follows:
190
ICG | Annual Report & Accounts 2022
Group
Non-current assets
Intangible assets
Property, plant and equipment
Investment property
Financial assets at fair value
Current assets
Inventory
Cash
Trade and other receivables
Other debtors
Non-current liabilities
Financial liabilities at amotised cost
Other financial liabilities
Current liabilities
Trade and other payables
Other financial liabilities
Statement of comprehensive income
Sales
Cost of sales
Operating expenses
Depreciation and amortisation
Other expenses
Transaction costs
Loss after tax from disposal groups held for sale
2022
£m
101.0
0.3
59.3
36.9
197.5
0.8
11.1
47.1
0.2
59.2
70.8
(9.7)
61.1
36.0
0.1
36.1
122.8
(88.2)
(22.9)
(6.6)
(10.5)
(3.8)
(9.2)
2021
£m
—
—
56.7
—
56.7
—
0.4
—
0.3
0.7
4.8
—
4.8
—
—
—
—
—
—
—
—
—
—
ICG | Annual Report & Accounts 2022
191
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
30. Associates and joint ventures
Accounting policy
Investment in associates
An associate is an entity over which the Group has significant influence, but no control, over the financial and operating policy decisions of the
entity. As the investments in associates are held for venture capital purposes they are designated at fair value through profit or loss.
Investment in joint ventures
A joint venture is a joint arrangement whereby the parties that have joint control over the arrangement have rights to the net assets of the
arrangements. The results and assets and liabilities of joint ventures are incorporated in these financial statements using the equity method
of accounting from the date on which the investee becomes a joint venture, except when the investment is held for venture capital purposes
in which case they are designated as fair value through profit and loss. Under the equity method, an investment in a joint venture is initially
recognised in the consolidated statement of financial position at cost, and adjusted thereafter to recognise the Group’s share of the joint
venture’s profit or loss.
The nature of some of the activities of the Group associates and joint ventures are investment related which are seen as complementing the
Group’s operations and contributing to achieving the Group’s overall strategy. The remaining associates and joint ventures are portfolio
companies not involved in investment activities.
Details of associates and joint ventures
Details of each of the Group’s associates at the end of the reporting period are as follows:
Name of associate
ICG Europe Fund V Jersey Limited1
ICG Europe Fund VI Jersey Limited1
ICG North American Private Debt Fund2
ICG Asia Pacific Fund III Singapore Pte.
Limited3
Principal activity
Investment company
Country of incorporation
Jersey
Investment company
Jersey
Investment company United States of America
Investment company
Singapore
2022
20%
17%
20%
20%
2022
58.6
114.2
5.4
32.1
2021
0.6
25.9
6.0
2.1
Proportion of
ownership interest/
voting rights held by
the Group
Income
distributions
received from
associate
Income
distributions
received from
associate
All associates are accounted for at fair value.
1.
2.
3.
The registered address for this entity is IFC 1 – The Esplanade, St Helier, Jersey JE1 4BP.
The registered address for this entity is 600, Lexington Avenue, 24th Floor, New York, NY 10022, United States of America.
The registered address for this entity is #13-01 One Raffles Place, Singapore, 048616.
The Group has a shareholding in each of these fund entities arising from its co-investment with the fund. The Group appoints the General
Partner (GP) to each fund. The investors have substantive rights to remove the GP without cause. The Funds also each have an Advisory
Council, nominated by the investors, whose function is to ensure that the GP is acting in the interest of investors. As the Group has a 17%–
20% holding, and therefore significant influence in each entity, they have been considered as associates
Details of each of the Group’s joint ventures at the end of the reporting period are as follows:
Name of associate
Nomura ICG KK
Principal activity
Advisory company Japan
Country of incorporation
Proportion of ownership
interest/voting rights
held by the Group
2022
50 %
Proportion of voting
rights held by the Group
2022
50 %
Brighton Marina Group Limited
Investment
United Kingdom
70 %
50 %
Nomura ICG KK is equity accounted as a joint venture in accordance with IFRS 11. Nomura ICG KK is not a portfolio company and was
established to operate the Group’s core business of fund management activities in Japan. Management therefore considers it more
appropriate to equity account for this entity in the financial statements.
Brighton Marina Group Limited is accounted for at fair value in accordance with IAS28 and the Group’s accounting policy in note 5 to the
financial statements.
192
ICG | Annual Report & Accounts 2022
The Group holds 70% of the ordinary shares of Brighton Marina Group Limited and the management of this entity is jointly controlled with a
third party who the Group does not control and therefore the Group is unable to execute decisions without the consent of the third party.
Significant restriction
There are no significant restrictions on the ability of associates and joint ventures to transfer funds to the Group other than having sufficient
distributable reserves.
Summarised financial information for associates material to the reporting entity
The Group’s only material associates are ICG Europe Fund V Jersey Limited and ICG Europe Fund VI Jersey Limited which are associates
measured at fair value through profit and loss. The information below is derived from the IFRS financial statements of the entities. Materiality
has been determined by the carrying value of the associate as a percentage of total Group assets.
The entities allow the Group to co-invest with ICG Europe Fund V, ICG Europe Fund VI and ICG Infrastructure Equity Fund I respectively,
aligning interests with other investors. In addition to the returns on its co-investment the Group receives performance-related fee income
from the funds (see note 3). This is industry standard and is in line with other funds in the industry.
Current assets
Non-current assets
Current liabilities
Revenue
Profit from continuing operations
Total comprehensive income
ICG Fund VI Jersey Limited
ICG Fund V Jersey Limited
2022
£m
24.9
2021
£m
11.8
1,910.0
2,935.4
(49.7)
(38.8)
1,885.2
2,908.4
685.8
667.0
667.0
876.8
862.8
862.8
2022
£m
6.1
122.5
(1.6)
127.0
27.3
26.4
26.4
2021
£m
8.6
586.8
(0.7)
594.7
25.2
23.6
23.6
Summarised financial information for equity accounted joint ventures
Nomura ICG KK made a profit from continuing operations and total comprehensive income of £1.0m for the year ended 31 March 2022
(2021: £0.3m), of which the Group’s share of results accounted for using the equity method is £0.5m for the year ended 31 March 2022
(2021: £0.2m).
ICG | Annual Report & Accounts 2022
193
Financial statements continued
NOTES TO THE FINANCIAL STATEMENTS continued
31. Unconsolidated structured entities
A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the
entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual
arrangements. The Group has determined that it has an interest in a structured entity where the Group holds an investment, loan, fee
receivable or commitment with an investment fund or CLO. Where the Group does not hold an investment in the structured entity,
management has determined that the characteristics of control, in accordance with IFRS 10, are not met.
The Group, as fund manager, acts in accordance with the pre-defined parameters set out in various agreements. The decision-making
authority of the Group and the rights of third parties are documented. These agreements include management fees that are commensurate
with the services provided and performance fee arrangements that are industry standard. As such, the Group is acting as agent on behalf of
these investors and therefore these entities are not consolidated into the Group’s results. Consolidated structured entities are detailed in
note 28.
At 31 March 2022, the Group’s interest in and exposure to unconsolidated structured entities including outstanding management and
performance fees are detailed in the table below, and recognised within financial assets at FVTPL and trade and other receivables in the
statement of financial position:
2022
Maximum exposure
to loss
£m
289.1
171.7
1,646.3
217.5
372.6
2,697.2
2021
Maximum exposure
to loss
£m
135.9
27.1
1,472.3
Funds
CLOs
Credit Funds
Investment in
Fund
Management
fees receivable
£m
285.5
162.0
£m
3.6
9.7
Management fee rates
%
0.35% to 0.65%
0.40% to 1.50%
Performance fees
receivable
£m
—
Performance fee rates
%
0.05% to 0.20%
— 20% of returns in excess of 0% for
Alternative Credit Fund only
Corporate Investment Funds
1,505.5
54.7
0.60% to 2.0%
86.1
Real Asset Funds
203.1
14.3
0.38% to 1.50%
Secondaries Funds
341.7
26.0
1.25% to 1.50%
Total
2,497.8
108.3
0.1
4.9
91.0
20%–25% of total performance
fee of 20% of profit over the
threshold
20% of returns in excess of 9%
IRR
10%–20% of total performance
fee of 8%–20% of profit over the
threshold
Investment in
Fund
Management
fees receivable
Management fee rates
Performance fees
receivable
£m
132.1
£m
3.8
%
0.35% to 0.65%
16.0
11.1
0.40% to 1.50%
£m
—
0.1
Performance fee rates
0.05% to 0.20%
20% of returns in excess of 0% for
Alternative Credit Fund only
1,373.2
40.4
0.60% to 2.0%
58.6
20%–25% of total performance fee
of 20% of profit over the threshold
Funds
CLOs
Credit Funds
Corporate Investment Funds
Real Asset Funds
Secondaries Funds
204.1
20.7
0.38% to 1.50%
— 20% of returns in excess of 9% IRR
224.8
Total
1,941.0
84.8
215.6
8.8
1.25% to 1.50%
10%–20% of total performance fee
of 8%–20% of profit over the
threshold
4.1
62.8
228.5
2,088.6
The Group’s maximum exposure to loss is equal to the value of any investments held and unpaid management fees and performance fees.
The Group has not provided non-contractual financial or other support to the unconsolidated structured entities during the year. It is not the
current intention to provide such support, including the intention to assist the structured entity in obtaining financial support.
194
ICG | Annual Report & Accounts 2022
32. Contingent liabilities
The Parent Company and its subsidiaries may be party to legal claims arising in the course of business. The Directors do not anticipate that
the outcome of any such potential proceedings and claims will have a material adverse effect on the Group’s financial position and at present
there are no such claims where their financial impact can be reasonably estimated. The Parent Company and its subsidiaries may be able to
recover any monies paid out in settlement of claims from third parties.
There are no other material contingent liabilities.
33. Post balance sheet events
There have been no material events since the balance sheet date.
ICG | Annual Report & Accounts 2022
195
Other Information
GLOSSARY
Non-IFRS alternative performance measures (APM) are defined below:
Term
Short Form
Definition
EPS
– APM earnings
per share
– APM Group
profit before tax
APM profit after tax (annualised when reporting a six-month period’s results) divided by the weighted
average number of ordinary shares as detailed in note 16.
Group profit before tax adjusted for the impact of the consolidated structured entities. As at 31 March,
this is calculated as follows:
2022
2021
– APM Investment
Company profit
before tax
– APM return on
ROE
equity
– Assets under
management
AUM
– Balance sheet
investment
portfolio
– Cash profit
PICP
– Dividend
income
– Earnings per
EPS
share
– EBITDA
– Equalisation
Profit before tax
Plus/(less) consolidated structured entities
APM Group profit/(loss) before tax
Investment Company profit adjusted for the impact of the consolidated structured entities. As at 31
March, this is calculated as follows:
£565.4m
£3.4m
£568.8m
£509.5m
(£1.8m)
£507.7m
2022
2021
Investment Company profit before tax
Plus/(less) consolidated structured entities
APM Investment Company profit/(loss) before tax
APM profit after tax (annualised when reporting a six month period’s results) divided by average
shareholders’ funds for the period. As at 31 March, this is calculated as follows:
£279.2m
£3.4m
£282.6m
£307.2m
(£1.8m)
£305.4m
2022
2021
£538.0m
£462.7m
£1,745.9m £1,406.5m
32.9%
APM profit after tax
Average shareholders’ funds
APM return on equity
Value of all funds and assets managed by the FMC. During the investment period third-party AUM is
measured on the basis of committed capital. Once outside the investment period third-party AUM is
measured on the basis of invested cost. AUM is presented in US dollars, with non-US dollar
denominated at the period end closing rate.
The balance sheet investment portfolio represents financial assets from the statement of financial
position, adjusted for the impact of the consolidated structured entities and excluding derivatives and
other financial assets. See note 4 for a full reconciliation.
Cash profit is defined as internally reported profit before tax and incentive schemes, adjusted for
non-cash items
30.8%
2022
2021
£568.8m
£169.7m
(£172.4m)
£566.1m
£507.7m
APM profit before tax
£103.5m
Add back incentive schemes
(£366.4m)
Other adjustments
£244.8m
Cash profit
Dividend income represents distributions received from equity investments. Dividend income reported
on an internal basis excludes the impact of the consolidated structured entities.
See note 4 for a full reconciliation.
Profit after tax (annualised when reporting a six-month period’s results) divided by the weighted
average number of ordinary shares as detailed in note 16.
Earnings before interest, tax, depreciation and amortisation.
When new third-party clients subscribe to a closed-end fund after the first close, they pay a pre-agreed
return to clients who subscribed to the fund at an earlier close. This compensates those clients for their
capital being tied up for longer. This is referred to as ‘equalisation’ and can result in gain or loss for
earlier investors compared to the latest fund valuation.
196
ICG | Annual Report & Accounts 2022
Term
Short Form
Definition
– Interest
expense
– APM net asset
value per share
– Net current
assets
Interest expense excludes the cost of financing associated with the consolidated structured entities.
See note 11 for a full reconciliation.
Total equity from the statement of financial position adjusted for the impact of the consolidated
structured entities divided by the closing number of ordinary shares. As at 31 March, this is calculated
as follows:
2022
2021
Total equity
Closing number of ordinary shares
Net asset value per share
The total of cash, plus current financial assets, plus other current assets, less current liabilities as
internally reported. This excludes the consolidated structured entities. As at 31 March, this is calculated
as follows:
£1,619.5m
286,550,955 285,887,286
566p
£1,995.0m
696p
Cash
Current financial assets
Other current assets
Current financial liabilities
Other current liabilities
Net current assets
On an IFRS basis net current assets are as follows:
Cash
Current financial assets
Other current assets
Disposal groups held for sale
Current financial liabilities
Other current liabilities
Liabilities directly associated with disposal groups held for sale
Net current assets
2022
2021
£761.5m
£126.4m
£193.2m
(£256.4m)
(£152.8m)
£671.6m
£296.9m
£108.9m
£139.3m
(£8.8m)
(£107.4m)
£428.9m
2022
2021
£991.8m
–
£452.3m
£256.7m
(£207.6m)
(£602.3m)
(£97.2m)
£793.7m
£581.2m
£64.6m
£335.0m
£57.4m
(£116.2m)
(£499.6m)
(£4.8m)
£417.6m
ICG | Annual Report & Accounts 2022
197
Other Information continued
Term
Short Form
Definition
– Net debt
– Net gearing
– Net Investment
Returns
– Operating
cashflow
– Operating
expenses of the
Investment
Company
– Operating
profit margin
– Third Party Fee
Earning AUM
– Third Party
Fee Income
– Total AUM
– Total available
liquidity
– Total fund size
– Weighted-
average fee rate
Net debt, along with gearing, is used by management as a measure of balance sheet efficiency.
Net debt includes unencumbered cash whereas gearing uses gross borrowings and is therefore not
impacted by movements in cash balances.
Total drawn debt less unencumbered cash of the Group, excluding the consolidated structured
entities. As at 31 March, this is calculated as follows:
2022
2021
Total liabilities held at unamortised cost
Impact of upfront fees/unamortised discount
APM gross drawn debt
Less unencumbered cash
Net debt
Net gearing is used by management as a measure of balance sheet efficiency. Net debt, excluding the
consolidated structured entities, divided by total equity from the statement of financial position adjusted
for the impact of the consolidated structured entities. As at 31 March, this is calculated as follows:
£1,321.4m
£1,653.4m
£2.7m
£1.6m
£1,324.1m
£1,655.0m
(£296.9m)
(£761.5m)
£893.5m £1,027.2m
2022
2021
Net debt
Shareholders’ equity
Net gearing
Net Investment Returns is the total of interest income, capital gains, dividend and other income less
asset impairments.
Operating cashflow represents the cash generated from operating activities from the statement of
cashflows, adjusted for the impact of the consolidated structured entities. See note 4 for a full
reconciliation.
Investment Company operating expenses are adjusted for the impact of the consolidated structured
entities. See note 4 for a full reconciliation.
£893.5m £1,027.2m
£1,995.0m £,1,619.5m
0.63x
0.45x
Fund Management Company profit before tax divided by Fund Management Company total revenue.
As at 31 March this is calculated as follows:
2022
2021
Fund Management Company profit before tax
Fund Management Company total revenue
Operating profit margin
AUM for which the Group is paid a management fee or performance fee. Fee-earning AUM is
determined by the fee basis on which the fund earns fees, either commitments or investments.
Fees generated on fund management activities as reported in the Fund Management Company
including fees generated by consolidated structured entities which are excluded from the IFRS
consolidation position. See note 4 for a full reconciliation.
Total AUM is calculated by adding Third Party AUM and the value of the Balance Sheet Investment
Portfolio, excluding warehoused investments:
£286.2m
£512.8m
55.8%
£202.3m
£388.5m
52.1%
Third Party AUM
Balance Sheet Investment Portfolio (excluding warehoused investments)
Total AUM
Total available liquidity comprises cash and available undrawn debt facilities.
2022
2021
$68.5bn
$3.6bn
$72.1bn
$56.2bn
$3.4bn
$59.6bn
Total fund size is the sum of third-party AUM and ICG plc’s commitment to that fund. The aggregate of
all total fund sizes is equal to Total AUM.
An average fee rate across all strategies, based on the fee rates applicable at FY22 reporting date,
weighted by their associated fee earning AUM.
198
ICG | Annual Report & Accounts 2022
Other definitions which have not been identified as non-IFRS GAAP alternative performance measures are as follows:
Term
Short Form
Definition
APM
The EU Alternative Investment Fund Managers Directive.
These are non-IFRS financial measures.
– AIFMD
– Alternative
performance
measure
– Catch-up fees
– Closed-end
fund
– Co-investment
– Collateralised
Co-invest
CLO
Loan Obligation
– Close
– Default
– Direct
investment
funds
– Employee
Benefit Trust
– Environmental,
Social and
Governance
criteria
– Financial
Conduct
Authority
– Financial
Reporting
Council
EBT
ESG
FCA
FRC
– Fund
FMC
Management
Company
– HMRC
– IAS
– IFRS
– Illiquid assets
– Internal Capital
Adequacy
Assessment
Process
– Investment
Company
ICAAP
IC
– Internal Rate of
IRR
Return
Fees charged to investors who commit to a fund after its first close. This has the impact of backdating
their commitment thereby aligning all investors in the fund.
A fund where investor’s commitments are fixed for the duration of the fund and the fund has a defined
investment period.
A direct investment made alongside or in a fund taking a pro-rata share of all instruments.
CLO is a type of investment grade security backed by a pool of loans.
A stage in fundraising whereby a fund is able to release or draw down the capital contractually
committed at that date.
An ‘event of default’ is defined as:
– A company fails to make timely payment of principal and/or interest under the contractual terms of
any financial obligation by the required payment date
– A restructuring of the company’s obligations as a result of distressed circumstances
– A company enters into bankruptcy or receivership
Funds which invest in self-originated transactions for which there is a low-volume, illiquid secondary
market. Direct investment funds exclude Credit funds.
Special purpose vehicle used to purchase ICG plc shares which are used to satisfy share options and
awards granted under the Group’s employee share schemes.
Environmental, social and governance (ESG) criteria are a set of standards for a company’s operations
that socially conscious investors use to screen potential investments.
Regulates conduct by both retail and wholesale financial service companies in provision of services
to consumers.
The UK’s independent regulator responsible for promoting high quality corporate governance and
reporting.
The Group’s fund management business, which sources and manages investments on behalf of the IC
and third-party funds.
HM Revenue & Customs, the UK tax authority.
International Accounting Standards.
International Financial Reporting Standards as adopted by the European Union.
Asset classes which are not actively traded.
The ICAAP allows companies to assess the level of capital that adequately supports all relevant current
and future risks in their business.
The Investment Company invests the Group’s capital in support of third-party fundraising and funds
the development of new strategies.
The annualised 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 asset.
ICG | Annual Report & Accounts 2022
199
Other Information continued
Term
Short Form
Definition
– Key Person
– Key
KPI
Certain funds have a designated Key Person. The departure of a Key Person without adequate
replacement triggers a contractual right for investors to cancel their commitments or kick-out the
Group as fund manager.
A business metric used to evaluate factors that are crucial to the success of an organisation.
performance
indicator
– Key risk
indicator
– Liquid assets
– Money multiple MOIC or MM Cumulative returns divided by original capital invested.
– Open-ended
KRI
A measure used to indicate how risky an activity is. It is an indicator of the possibility of future adverse
impact.
Asset classes with an active, established market in which assets may be readily bought and sold.
A fund which remains open to new commitments and where an investor’s commitment may be
redeemed with appropriate notice.
Also known as rolled-up interest. PIK is the interest accruing on a loan until maturity or refinancing,
without any cashflows until that time.
Share of profits that the fund manager is due once it has returned the cost of investment and agreed
preferred return to investors.
fund
– Payment in kind
PIK
Carried
interest or
Carry
SASB
The Code
– Performance
fees
– Realisation
– Relevant
Investments
– Sustainable
Accounting
Standards
Board
– Securitisation
– SFDR
– Structured
entities
– TCFD
– Total AUM
– UK Corporate
Governance
Code
– UNPRI
– Weighted
average
The return of invested capital in the form of principal, rolled-up interest and/or capital gain.
All investments within Structured and Private Equity and Real Assets where a Fund has sufficient
influence (defined as at least 25% equity ownership and at least one Board seat).
The Sustainability Accounting Standards Board is an independent non-profit organisation that sets
standards to guide the disclosure of financially material sustainability information by companies to their
investors.
A form of financial structuring whereby a pool of assets is used as security (collateral) for the issue of
new financial instruments.
Sustainable Finance Disclosure Regulation
Entities which are classified as investment funds, credit funds or CLOs and are deemed to be
controlled by the Group, through its interests in either an investment, loan, fee receivable, guarantee or
commitment. These entities can also be interchangeably referred to as credit funds.
Task Force on Climate-related Financial Disclosures
The aggregate of the Third Party AUM and the Balance Sheet investment portfolio.
Sets out standards of good practice in relation to board leadership and effectiveness, remuneration,
accountability and relations with shareholders.
UN Principles for Responsible Investing.
An average in which each quantity to be averaged is assigned a weight. These weightings determine
the relative importance of each quantity on the average.
200
ICG | Annual Report & Accounts 2022
CARRIED INTEREST EARNING FUNDS
(UNAUDITED)
Fund
Intermediate Capital Asia Pacific 2008
Intermediate Capital Asia Pacific Fund III
Intermediate Capital Asia Pacific Fund IV
Nomura ICG Fund A
ICG Europe Fund IV 2006B
ICG Europe Fund V
ICG Europe Fund VI
ICG Europe Fund VII
ICG Europe Fund VIII
ICG Europe co-investment funds
ICG Recovery Fund 2008B
ICG Europe Mid-Market Fund I
ICG Real Estate Partnership Capital V
ICG Real Estate Partnership Capital VI
ICG-Longbow Development funds
ICG Sale and Leaseback Fund I
ICG Infrastructure Equity Fund I
North American Private Debt Fund
North American Private Debt Fund II
ICG Senior Debt Partners Fund II
Senior Debt Partners co-investment funds
Senior Debt Partners III
ICG Senior Debt Partners IV
ICG Strategic Secondaries Fund II
ICG Strategic Equity Fund III
ICG Strategic Equity Fund IV
ICG Strategic Equity co-investment funds
ICG Recovery Fund II
ICG Enterprise Trust
ICG Alternative Credit Fund
Third-party
capital
Target money
multiple
% Carried interest1
$600m
$491m
$455m
¥26,501m
€940m
€2,000m
€2,500m
€4,000m
€6,521m
€934m
€308m
€898m
£927m
£440m
£321m
€1,100m
€1,269m
$558m
$1,200m
€1,492m
$9,285m
€2,480m
€4,964m
$866m
$1,650m
$2,784m
$1,336m
€440m
£867m
$735m
1.35x
1.8x
N/A
1.3x
1.8x
1.6x
1.6x
1.8x
1.8x
1.8x
2.0x
1.8x
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1.2x
1.2x
1.2x
1.2x
1.75x
N/A
N/A
N/A
N/A
N/A
N/A
20% of 20 over 8
20% of 20 over 7
20% of 20 over 7
10% of 20 over 4
20% of 5 over 8
20% of 20 over 8
20% of 20 over 8
20% of 20 over 8
20% of 20 over 8
20% of 20 over 8
20% of 12.5 over 8 up to 20% of 15 over 20
20% of 20 over 8
20% of 20 over 6
20% of 20 over 6
20% of 20 over 9
20% of 20 over 8
20% of 15 over 7
20% of 20 over 8
20% of 20 over 8
20% of 15 over 4 up to 20% of 20 over 7
20% of 15 over various
20% of 15 over 4 up to 20% of 20 over 7
20% of 15 over 4 up to 20% of 20 over 7
20% of 12.5 over 8
20% of 15 over 8 up to 20% of 20 over 20 and 1.5x money multiple
20% of 15 over 8 up to 20% of 20 over 20
20% of various
20% of 20 over 8
50% or 100% of 10% subject to an 8% compound return on an
investment by investment basis
50% of performance fee
1. Total carried interest is a fixed percentage of the fund gains. For example, in Intermediate Capital Asia Pacific 2008 the carry is 20% of gains and the Group is entitled to 20% of this.
Carried interest is triggered when fund returns exceed a hurdle; for Intermediate Capital Asia Pacific 2008 this is 8%.
ICG | Annual Report & Accounts 2022
201
Other information continued
THIRD-PARTY AUM (UNAUDITED)
Third Party AUM by fund
Status
FY22 AUM ($m)
FY21 AUM ($m)
219.5
290.5
4.4
541.6
307.9
8.5
877.9
1,739.6
3,862.4
4,692.4
986.8
1,046.1
7,216.4
833.6
-
60.1
250.8
454.8
14.0
211.7
1,155.7
2,755.0
1,336.4
60.0
1,328.0
589.4
22,507.1
-
222.4
7.9
72.2
295.8
425.0
41.7
298.5
1,112.4
1,258.6
822.5
-
1,138.5
516.0
14,547.6
101.2
277.1
1,200.0
1,200.1
75.0
777.5
1,961.6
5,381.5
9,287.3
1,022.0
75.0
920.5
2,356.9
5,166.6
6,241.3
1,052.1
19,806.1
17,289.6
Structured and Private Equity funds
ICG Europe Fund V
ICG Recovery Fund 2008B
ICG EF 2006B
ICG Europe Fund VI
ICG Europe Fund VII
ICG Europe Mid-Market
ICG Europe Fund VIII
Europe Co-investment
Fully invested
Fully invested
Fully invested
Fully invested
Fully invested
Investing
Investing
-
Intermediate Capital Asia Pacific Mezzanine Fund I 2005
Fully invested
Intermediate Capital Asia Pacific Fund 2008
Intermediate Capital Asia Pacific Fund III
Intermediate Capital Asia Pacific Fund IV
Nomura ICG Fund
ICG Strategic Secondaries Fund II
ICG Strategic Equity Fund III
ICG Strategic Equity Fund IV
Strategic Equity Co-investment
ICG LP Secondaries Fund I
ICG Enterprise Trust – listed fund
ICG Recovery Fund II
Structured and Private Equity total
Private Debt funds
North American Private Debt Fund
North American Private Debt Fund II
Fully invested
Fully invested
Investing
Fully invested
Fully invested
Fully invested
Investing
-
Investing
Investing
Fundraising
Fully invested
Investing
North American Private Debt co-invest
-
ICG Senior Debt Partners II
ICG Senior Debt Partners III
ICG Senior Debt Partners IV
Senior Debt Partners Co-investment
ICG Australia Senior Loan Fund
Private Debt total
Fully invested
Fully invested
Investing
-
Open-ended
202
ICG | Annual Report & Accounts 2022
Third Party AUM by fund
Real Asset funds
ICG-Longbow UK Real Estate Debt Investments III
ICG-Longbow UK Real Estate Debt Investments IV
ICG-Longbow UK Real Estate Debt Investments V
ICG Real Estate Debt Investments VI
ICG-Longbow Senior Debt – listed fund
ICG-Longbow Senior Debt programme
ICG-Longbow Development Fund
ICG Sale & Leaseback Fund I
Infrastructure Equity Fund I
Real Assets funds total
Credit funds
Structured credit strategies
European credit strategies
Global credit strategies
Eurocredit CLOs
European CLOs
US CLOs
Credit funds total
Total third-party AUM
Status
FY22 AUM ($m)
FY21 AUM ($m)
Fully invested
Fully invested
Fully invested
Investing
Fully invested
Investing
Investing
Investing
Investing
Open-ended
Open-ended
Open-ended
Fully invested
Investing
Investing
68.1
408.2
1,185.1
524.1
115.3
2,236.1
834.0
1,220.4
1,436.8
8,028.1
1,472.1
4,649.6
993.2
-
5,191.2
5,821.0
193.4
577.2
1,244.4
286.7
152.8
1,677.4
849.2
787.3
548.2
6,316.6
1,373.2
5,236.7
928.4
17.4
5,050.8
5,391.6
18,127.1
17,998.1
68,468.4
56,152.0
ICG | Annual Report & Accounts 2022
203
SHAREHOLDER AND COMPANY
INFORMATION
Timetable
Event
– Ex-dividend date
– Record date
– Last date for dividend reinvestment election
– Last date and time for submitting Forms of Proxy
– AGM and Trading statement
– Payment of ordinary dividend
– Half year results announcement
Date
– 16 June 2022
– 17 June 2022
– 15 July 2022
– 9.00am, 19 July 2022
– 21 July 2022
– 5 August 2022
– 17 November 2022
Company Information
Stockbrokers
Citi Global Markets Limited
Citigroup Centre
33 Canada Square
London
E14 5LB
Numis Securities Limited
45 Gresham St
London
EC2V 7BF
Auditor
Ernst & Young LLP
25 Churchill Place
Canary Wharf
London
E14 5EY
Registrars
Computershare Investor Services PLC
PO Box 92
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
Registered office
Procession House
55 Ludgate Hill
London
EC4M 7JW
Company registration number
02234775
204
ICG | Annual Report & Accounts 2022
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