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Annual Report
and Accounts 2023
Intermediate Capital Group PLC
Highlights
Third-party assets under management1 ($bn)
$77.0bn
(2022: $68.5bn)
Profit before tax (£m)
£251.0m
(2022: £565.4m)
Ordinary dividend per share (p)
77.5p
(2022: 76.0p)
Number of employees
582
(2022: 525)
Number of clients
647
(2022: 586)
1. During the year the Group updated its AUM measurement policy, see page 54.
Contents
Strategic report
2
4
10
12
15
18
20
20
26
30
53
54
66
73
ICG at a glance
Our business model
Chair’s statement
Chief Executive Officer’s review
Market environment
Key performance indicators
Section 172 statement
Stakeholder engagement
Sustainability and people
Task Force on Climate-related Financial Disclosures
Non-financial information statement
Finance review
Group risks
Viability statement
Governance report
75
76
78
81
83
84
90
94
97
103
115
116
125
132
Chair’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
Auditor’s report and financial statements
133
142
150
Auditor’s report
Financial statements
Notes to the financial statements
Other information
207
213
215
216
217
218
Glossary
Basis of preparation for GHG emissions statement
Carried interest earning funds (unaudited)
Third-party AUM (unaudited)
Outstanding debt facilities
Shareholder and Company information
Our Annual Report for 2023
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 2023.
Visit icgam.com
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.
ICG | ANNUAL REPORT & ACCOUNTS 2023
1
ICG AT A GLANCE
Our business
As a global alternative asset manager we help grow our clients’ capital and
provide flexible, sustainable financing solutions to companies. 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 purpose
Global leadership in alternative asset
management focusing on a diversified product
offering and creating value for shareholders,
clients and employees
Creating value by providing capital
to help businesses develop and grow
Read more on page 4 →
Our values
Our asset classes
Performance for our clients
Entrepreneurialism and innovation
Ambition and focus
Taking responsibility and managing risk
Working collaboratively and acting with integrity
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 debt and equity financing solutions in the real estate
and infrastructure sectors
Credit
Investing in primary and secondary credit markets
Read more on page 5 →
Our people
Sustainability
We succeed because of our people and
culture, with a world-class team demonstrating
integrity, diversity and collaboration
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 →
Read more on page 26 →
2
ICG | ANNUAL REPORT & ACCOUNTS 2023
Delivering long-term growth
ICG generates long-term value through growing assets under management,
generating management fees and increasing fund management company
profits.
Third-party assets
under management1
$77.0bn
Credit
Real Assets
Private Debt
Structured and Private Equity
Fund management
company profit before
tax
£310.7m
200
$bn
90
80
70
60
50
40
30
20
10
0
£m
400
350
300
250
200
150
100
50
0
$77.0bn
17.8
7.9
23.6
27.7
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
£310.7m
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
1. During the year the Group updated its AUM measurement policy, see page 54.
ICG | ANNUAL REPORT & ACCOUNTS 2023
3
OUR BUSINESS MODEL
What we do
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
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
2
We use our investment
platform and expertise to
secure attractive opportunities
on behalf of our clients
Invest
How we create value
Our Key Performance Indicators (KPIs) help us monitor
our progress:
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.
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.
Read more on page 8 →
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 gender diversity
Return on equity
Ordinary dividend per share
Read more on page 18 →
Strategic objective
4
ICG | ANNUAL REPORT & ACCOUNTS 2023
Our clients
We develop long-term relationships and serve a global client base, helping them meet their investment objectives.
Client split by geography
Client split by type
Client diversification1
EMEA (excl. UK
and Ireland): 37%
UK and Ireland: 15%
Asia Pacific: 22%
Americas: 26%
Sovereign Wealth Fund: 3%
Fund of Funds: 4%
Endowment/Foundation: 8%
Bank: 7%
Other: 5%
Family Office: 11%
Pension: 33%
Insurance Company: 15%
Asset Manager: 14%
Largest client: 5%
Top 2 – 5 clients: 9%
Top 6 – 10 clients: 8%
Top 11 – 20 clients: 13%
All other clients: 65%
1. Weighted by % of third-party AUM, excluding CLOs and listed vehicles.
Our strategies
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.
Contribution to FMC
Third-party AUM
Third-party fee income
Our asset classes
Structured and
Private Equity
Provides structured and equity
solutions to private companies,
including both control transactions
and minority investments
Private Debt
Provides debt financing to
high-quality corporate borrowers
Real Assets
Provides debt and equity
financing in the real estate and
infrastructure sectors
Credit
Investing in primary and
secondary credit markets
Read more on page 54 →
6
strategies
3
strategies
5
strategies
6
strategies
36%
59%
31%
18%
10%
10%
23%
13%
Our people
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
298
Read more on page 26 →
61
223
ICG | ANNUAL REPORT & ACCOUNTS 2023
5
OUR BUSINESS MODEL CONTINUED
Our competitive advantages
ICG’s entrepreneurial culture, breadth of investment strategies and our
well-capitalised platform enables us to sustain business activity throughout
economic cycles.
s o n c l ients’ needs
u
c
o
F
1
Ability to invest acro
s
s t
h
e c
a
p
i
t
a
l
s
t
r
u
c
t
u
r
e
2
People,
platform, global
presence and
performance
Structured and Private
Equity
AUM $27.7 bn
Private Debt
AUM $23.6 bn
Real Assets
AUM $7.9 bn
Credit
AUM $17.8 bn
4
B
a
l
a
n
c
e
s
h
e
£2.0bn
e
t c
a
pital to support gr o w t h
North America
Asia Pacific
Europe
Middle
East
e, glo bal network
3
c
n
e
s
e
Loc a l
p r
6
ICG | ANNUAL REPORT & ACCOUNTS 2023
1
2
3
4
Balance sheet capital to
support growth
Our balance sheet is a strategic
advantage that enables us to
seed and accelerate new
strategies and align our
interest with our clients.
Read more on page 54 →
A focus on clients’
needs
Ability to invest across
the capital structure
Local presence,
global network
Our global marketing and client
relations team ensures that we
continue to understand and
meet the requirements of our
clients.
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.
Read more on page 5 →
We are a world-class firm of
outstanding professionals, and
we form a purposeful
community together with our
colleagues, the businesses with
which we work and our
investors.
With offices in 16 cities
worldwide, our teams form part
of the local business landscape,
and create value through
unique market access based on
meaningful insights and
long-standing relationships.
Find more information online at
icgam.com →
We manage AUM across four
asset classes, providing capital
to our portfolio companies
across the capital structure in
the most appropriate form to
meet their needs.
Structured and Private Equity
funds provide capital to private
companies, including both
control transactions and
minority investments.
Private Debt funds provide
debt financing to high-quality
corporate borrowers.
Real Assets funds provide
debt and equity financing in the
real estate and infrastructure
sectors.
Credit funds invest in primary
and secondary credit markets.
Read more on page 54 →
ICG | ANNUAL REPORT & ACCOUNTS 2023
7
OUR BUSINESS MODEL CONTINUED
Our track record of growth
ICG was founded in 1989 on the principles of flexible capital solutions, specialist
experience and local knowledge. The values we established back then still hold true today.
We are as proud of our long-term relationships with our clients and portfolio companies,
and the diversity of our thinking, as we are of our returns.
Over time, we have broadened our specialist strategies and our global reach.
2012
Refocus of corporate strategy
In 2010 ICG refocuses its corporate
strategy, developing a third-party
investment business and building a
dedicated client function.
In 2012 we launch our inaugural
direct lending strategy, creating a
European market leader in response
to the lack of capital provision by
traditional lenders.
2014
Expansion continues
The founding members of our
Strategic Equity team join ICG,
launching a future flagship strategy.
Development of our Real Assets
business continues with the
completion of the acquisition of
Longbow, a UK real estate financing
business.
2015 - 2017
A new fundraising record and changes
in leadership
Europe Fund VI sets a new ICG record
closing at €3bn in 2015 and two years
later, our second direct lending vintage,
Senior Debt Partners III, raises €5.2bn.
Graphite Enterprise Trust, a private equity
investment trust and one of ICG’s
founding shareholders 26 years earlier, is
acquired in 2015, becoming the ICG
Enterprise Trust – a FTSE250 company in
its own right.
As Christophe Evain retires in 2017,
Benoît Durteste becomes Chief Executive
Officer and Chief Investment Officer.
2016
AUM
$23.04bn
2015
AUM
$19.2bn
2012
AUM
$12.2bn
2013
AUM
$13.7bn
2014
AUM
$13.8bn
Track record of growth in assets under management
8
ICG | ANNUAL REPORT & ACCOUNTS 2023
2023
AUM
$80.2bn1
2022
AUM
$72.1bn
We are focused on investing
responsibly, operating with purpose,
and leading change in our industry.
2021
AUM
$59.6bn
2020
AUM
$50.0bn
2019
AUM
$36.2bn
2021 - 2022
Leading on climate
We adopt a commitment to reach
Net Zero in operations by 2040,
using our position of influence to
lead change in our industry.
Our commitment to the Women in
Finance Charter, made in 2018, is
reached two years ahead of the
2023 target, with a 41%
representation of women in UK
senior management roles and 35%
globally.
2018
AUM
$35.3bn
2017
AUM
$25.5bn
2018 - 2019
Enhancing diversity and inclusion
We set clear priorities around inclusion —
firm goals to foster a workplace in which
each individual is supported to succeed
and be themselves. ICG signs the Women
in Finance Charter, which includes a
commitment to having 30% of
management roles filled by women by
2023. We enter into a partnership with teh
British Universities and Colleges Sport
(BUCS) to support the next generation of
female leaders across the UK and
establish a ‘returnship’ programme for
women who re-enter the financial services
industry after extended career breaks.
We continue to drive impressive success
as Europe VII closes at €4.5bn and
fundraising across all strategies totals
€10.1bn for the fiscal year.
In 2019, Vijay Bharadia is appointed Chief
Finance and Operating Officer and
Executive Director.
2020
Fast growth and a focus on
Environmental, social, and
governance (ESG)
In 2020 we launch an inaugural €500m
Eurobond and Antje Hensel-Roth joins the
Board as Chief People and External Affairs
Officer.
As the Covid-19 pandemic comes to a
head, we work hard to continue to deliver
outstanding performance. Our focus on
managing our business based on inclusion
and responsibility becomes ever more
important amid enormous challenges on
the physical and mental wellbeing of our
teams, our stakeholders and partners.
At the end of 2020, we win the Financial
News Alternatives Provider of the Year
award, and ICG achieves its highest-ever
score in the annual UN backed Principles
for Responsible Investment (UN PRI)
responsible investing assessment.
2023
Delivering growth through
cycles
Our fund management
company delivers year-on-year
growth in fee-earning AUM, fee
income and profits, and the
balance sheet performs in line
with our expectations during a
period of volatile market
conditions.
We take a long-term view on
investing for future growth,
hiring selectively across the
firm and investing balance
sheet capital in seed assets for
a number of strategies during
the year.
1. During the year the Group updated
its AUM measurement policy,
see page 54.
ICG | ANNUAL REPORT & ACCOUNTS 2023
9
CHAIR’S STATEMENT
Building and scaling a platform
I believe the
investments we
have made give us
substantial runway
to continue to grow
in the coming years,
and that in many
respects ICG is still
at the beginning of
its journey.
William Rucker
Chair
Elevated levels of uncertainty present difficulties for Boards. Many
businesses, ICG included, can react tactically in the short term as
opportunities present themselves. However, to create long-term
value, they are required to make strategic decisions around
allocating economic and intellectual capital, and then to pursue these
vigorously and consistently over a number of years. An unclear
outlook and an increasing cost of capital make these decisions more
challenging, and we have seen some of the implications of this
during the last twelve months in elevated volatility within public
markets, a transfer of value from equity to debt, reduced valuations
in many sectors, and a slowdown in M&A activity globally.
Against this background, I am comforted that private markets have
shown a remarkable ability to adapt and innovate across economic
cycles. Indeed, ICG’s business model today is the result of a
strategic decision taken over a decade ago to pivot to being a
third-party asset manager – a transition that was pursued with
determination and to great effect. There have been a number of
periods of economic uncertainty during that time since the Global
Financial Crisis, including the Euro crisis, Brexit, and of course
Covid-19 pandemic. Throughout all of these we have focused on
executing a clear strategy of expanding our product offering, client
base, and AUM. This has been delivered consistently and
successfully, and in doing so we have grown and diversified the
sources and robustness of our fee income.
To my fellow shareholders,
It is a pleasure to write to you as Chairman of ICG, a role I am
honoured to have taken on in January 2023. I would like to start by
expressing my gratitude on behalf of the Board to Andrew Sykes,
who fulfilled the duties of Interim Chairman while the search for a
permanent Chairman was undertaken. I look forward to his continued
insight and guidance around the Board table in his role as Senior
Independent Director.
Since Andrew’s letter last year, geopolitical and economic
uncertainty has continued to rise. The economic landscape has
become increasingly complex, with inflation reaching multi-year
highs in a number of countries, which has in turn forced central
banks to raise interest rates at a time when many economies are
slowing down. Today, the outlook remains nuanced. Certain
countries and sectors are more vulnerable, while others are
demonstrating significant resilience.
10
ICG | ANNUAL REPORT & ACCOUNTS 2023
There is always the risk that long-term ambitions get forgotten
during periods of short-term challenge. Concerted efforts to reduce
our environmental impact and to enhance diversity, equity and
inclusion in the workplace must not be seen as optional and “only for
the good times”. I am proud to Chair in ICG an organisation that is
action-orientated in these areas, being amongst the first group of
alternative asset managers to commit to net zero (by 2040) and
exceeding its commitment made under the UK Women in Finance
Charter two years earlier than planned. Of course, many other
initiatives in these areas continue and I am pleased with the progress
we have made over the last 12 months.
As a direct result of these decisions and actions, ICG today is better
positioned – strategically, financially, operationally and culturally –
than at any time in our history. We manage our clients’ assets across
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 alternative asset 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 avenues to increase our
AUM and thereby develop further long-term streams of management
fee income.
A consequence of our business and financial model is that we are
able to sustain business activity across economic cycles, and this is
visible in the results we report for FY23. We continued to deploy and
realise our clients’ capital, and recorded year-on-year growth across
AUM, fee income, FMC PBT and the distributions made to our
shareholders1.
Our confidence in the long-term and through-cycle prospects of ICG
is underlined by our simplification of the dividend policy to being
progressive. We are also stating the we intend over the long-term to
increase the dividend per share by at least mid-single digit
percentage points on an annualised basis. The breadth and scale of
ICG today allows us to have this dividend policy as an integral part of
our approach to capital allocation, running alongside commitments
to our funds and using our balance sheet to seed new strategies.
None of this is instant. Building and scaling a platform that generates
compounding growth over the long-term takes time, and that is
precisely what we are doing at ICG. In recent months, Andrew Sykes
and I have had a number of discussions with shareholders in a variety
of forums. We have both been encouraged by the level of
engagement around ICG; the clear understanding our shareholders
have of the business; and the thoughtful, long-term view with which
they approach ICG’s strategy and our potential to generate
long-term equity value. I look forward to more discussions with
shareholders and our broader stakeholders in the coming months.
OUR GROUP
We are global, but multi-local rather than
multinational
582 employees
16 countries
Post year-end there were two changes to the Board. Kathryn Purves
stepped down after nine years as a Non-Executive Director, during
which time she made a wide-ranging contribution including chairing
the Risk Committee and more recently serving as Senior Independent
Director. We also announced the appointment of David Bicarregui,
who joined ICG in April and who will take up the role of CFO in July,
replacing Vijay Bharadia. I would like to pass on my and the Board's
thanks to Kathryn and to Vijay for their significant contributions to
ICG.
The last twelve months have demonstrated the strategic and
financial benefits of our scale and diversification. Notwithstanding
our strong historical growth, I believe the investments we have made
give us substantial runway to continue to grow in the coming years,
and that in many respects ICG is still at the beginning of its journey.
Mindful of the uncertainty and volatility we may face in the future, we
are well positioned to navigate complex markets for the benefit of
our clients, portfolio companies and shareholders.
Over a number of decades I have watched and admired ICG’s
growth and development from afar. I am excited at the prospect of
being actively involved in its future, and look forward to working with
the ICG team, our shareholders and other stakeholders in the years
to come.
William Rucker
Chair
1. Including the proposed final dividend of 52.2p for the year ending 31 March 2023
ICG | ANNUAL REPORT & ACCOUNTS 2023
11
CHIEF EXECUTIVE OFFICER’S REVIEW
Predictability in unpredictable markets
ICG has performed
strongly over the last
twelve months on both
a strategic and financial
level.
Benoît Durteste
CEO and CIO
The last twelve months have been a busy and successful period for
ICG. Our scale and breadth have enabled us to capture
opportunities in a dynamic market environment. The investment
landscape and client appetite have shifted towards our areas of
particular expertise such as structured transactions, private debt
and infrastructure. We have continued to execute successfully on our
strategy of growing up and growing out, and have invested
selectively across the organisation to augment our investment teams,
marketing and client relations offering, and to enhance our operating
platform. By investing today, we are positioning ourselves to benefit
from what could be a rapid and significant rebound in private
markets activity when conditions become less volatile, and when the
market could continue to further concentrate around scaled, broad
managers.
Over the last year we have developed opportunities that embed
further long-term growth potential. The single largest contributor to
fundraising this year was our direct lending strategy, Senior Debt
Partners, which raised $3.3bn during the financial year ended
31 March 2023 (FY23) and which is continuing to fundraise – an
already-successful strategy that became incrementally attractive
both to clients and portfolio companies given its exposure to
floating rate debt and its ability to provide debt financing when many
other sources were not available. The year saw the final closes of
three funds (all at or above their original hard-caps) which in
aggregate account for $13.2bn of third-party AUM1 at 31 March
2023, including Europe VIII closing with almost twice as much capital
committed from clients as the previous vintage. We launched second
vintages of Infrastructure, Europe Mid-Market and Sale and
Leaseback; marketed a number of first-time funds; hired new teams
for future strategies, including Infrastructure Asia and Real Estate
Asia; and invested £214m of our balance sheet capital to seed a
number of future strategies.
The financial results we are reporting today reflect this strong
strategic performance. Third-party fee income for the year was
£501.0m, up 12% compared to FY22 (with management fees up 23%),
and record Fund Management Company (FMC) profit before tax
was £310.7m, up 9% compared to FY22. Our diversified and robust
balance sheet is performing in line with our expectations, generating
NIR of 4% over the twelve months. At 31 March 2023 the balance
sheet had net gearing of 0.50x and total available liquidity of £1.1bn.
The Board has declared a final dividend of 52.2p per share, bringing
total dividends for the year to 77.5p per share, an increase of 2%
compared to FY22. Over the last five years, ordinary dividends per
share have grown at an annualised rate of 21%, and the Board is
reaffirming its commitment to a progressive dividend policy.
1. Europe VIII ($8.3bn), Asia Pacific IV ($0.9bn), Strategic Equity IV ($4.0bn)
2. Includes the impact of a policy change in FY23 which increased third-party AUM by $3.1bn and fee-earning AUM by $0.5bn
12
ICG | ANNUAL REPORT & ACCOUNTS 2023
The nature of our business is that
we generate growth and value over
the long-term, and in recent years
we have successfully scaled and
broadened our product offering
and client franchise. We have raised
a total of $33bn so far in this
fundraising cycle since the
beginning of FY22, and are on track
to meet our accelerated fundraising
guidance of at least $40bn
cumulatively from FY22 to FY24. We
now manage $77bn of client capital,
up 15%2 in the year and 19%2 on an
annualised basis over the last five
years. Over the same period our
third-party fee income has grown at
an annualised rate of 25% and our
FMC profit before tax at 27%. Our
balance sheet has delivered
long-term value for our
shareholders, generating a
five-year average net investment
return of 11.2% and a NAV per share
annualised growth rate of 9.7%
over the same period.
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's business model today therefore provides a high degree of
stability and visibility, which is particularly powerful during periods
of volatility such as we have experienced over the last twelve months.
At 31 March 2023 we had $62.8bn of fee-earning AUM, with an
indicative annualised management fee generation potential of
~£459m, and a further $14.7bn of AUM that is not yet fee-earning
which, when deployed, has the indicative potential to generate
~£116m of annualised management fees.
Our ability to deliver attractive returns for our clients underpins our
future success. Our portfolio companies are generally continuing to
show strong operational performance, with those in our European
Corporate strategy for example showing LTM EBITDA growth of
13% and those in direct lending (SDP) showing LTM EBITDA growth
of 20%. We are reporting increases in fund valuations across many of
our strategies for the period; very low loss ratios with historically
high returns in debt strategies; and attractive life-to-date IRRs,
MOICs and DPIs in strategies with equity exposure. During the year
we realised $6.9bn of third-party fee-earning AUM at a realised
annualised return of 18.7%3, further anchoring the performance of
our funds. The track records we are developing today are important
components of marketing future vintages, and we continue to pay
very close attention to portfolio management to reinforce our track
record.
Successful execution of our strategies around Sustainability and
Diversity, Equity and Inclusion (DEI) are important components of
our ability to generate value for our clients and portfolio companies.
In January we published our latest Sustainability and People Report,
detailing our achievements over the last twelve months and our areas
of future focus. I was delighted to welcome a new Global Head of
Sustainability and ESG in an enhanced role during FY23, and we are
rapidly building on an already-strong position. At the first
anniversary of ICG’s commitment to be net zero by 2040, nine
portfolio companies have set science-based greenhouse gas (GHG)
emissions reduction targets: 15% of relevant investments in our first
year alone. Furthermore, many other portfolio companies have
advanced their target-setting plans, placing us on track to achieve
our interim target of 50% of relevant investments having such targets
by 2026. Our achievements in the areas of Sustainability and ESG are
recognised in our public ESG ratings, and for the first time ICG
became a member of Dow Jones Sustainability Indices (DJSI)
Europe as a result of our assessment by Standard and Poor's (S&P)
Global CSA. In the related area of DE&I, we were delighted to be
top-ranked for Private Equity globally in the Honordex, measuring
DE&I efforts and outcomes. This sits alongside extensive work
around enhancing DE&I not just for ICG but across our industry,
including through a comprehensive charity framework designed to
increase career access to our industry for underprivileged groups.
3. Return achieved on full realisations, weighted on original invested cost
ICG | ANNUAL REPORT & ACCOUNTS 2023
13
CHIEF EXECUTIVE OFFICER’S REVIEW CONTINUED
2023 performance summary
We have made strong progress during the year against our strategic objectives
Grow AUM
$10.2bn
Invest
$10.5bn
Record third-party AUM raised,
bringing total AUM to $80.2bn
Record third-party AUM deployed
from our direct investment funds
Manage and realise
$5.3bn
Continued value creation within our
portfolio, realisations of $5.3bn of
third-party fee-earning AUM within
direct investment funds
• Total AUM of £80.2bn with record fundraising of $10.2bn
• Sustained investment activity across our business
• Third-party fee income: £501m during the period, an increase
of 12% compared to FY22
• Fund Management Company profit before tax of £310.7m an
increase of 9% compared to FY22
• Total dividends for FY23 of 77.5p per share, an increase of
2% compared to FY22 and the thirteenth consecutive annual
increase in ordinary dividend per share
Looking to FY24 and beyond, I remain excited by our prospects. We
reiterate our fundraising target of at least $40bn cumulatively from
FY22 to FY24, and we will be marketing a number of first-time and
follow-on vintages in the coming year. We will invest for the future,
across our product offering, client franchise and operating platform.
We are well placed to deploy capital in dynamic market conditions,
with $20.9bn of dry powder at 31 March 2023 and local origination
teams with exceptional market access, supported by a disciplined
investment process. We have hundreds of companies across our
portfolio, giving us access to a large number of datapoints on the
performance of businesses across geographies and sectors,
enabling us to spot trends early and understand more holistically
how investment opportunities might perform. In the near-term,
transaction volumes might remain slower in the broader market. ICG
is well positioned to execute on opportunities that are particularly
attractive today, including in structured transactions, private debt
and real assets.
Longer-term, I expect the structural demand for private markets to
remain intact, and it was good to welcome many of you to our
shareholder seminar in January on fundraising and client strategy.
For portfolio companies, the attractions of private capital are largely
unimpacted by the broader macroeconomic context: bilateral
bespoke agreements; being capitalised by investors with substantial
dry powder to support future growth; and an ability to focus on
longer-term value creation. For clients, lower volatility, higher
returns, longer duration, and investments in parts of the economy
that cannot be accessed through public markets continue to make
allocations to private markets an important component of a long-
term asset allocation strategy. Our strategy of "growing up" and
"growing out" has enabled us to capture a growing breadth of the
market and has generated significant value for shareholders,
accelerated by our strong balance sheet. I see ample runway for
many years of profitable growth by continuing to execute
successfully on our strategy.
I believe there will be substantial rewards for the winners emerging
from this era of higher interest rates, inflation and macro uncertainty.
To be amongst that group, private markets managers will need
sufficient scale to be relevant, a broad product offering, a
differentiated origination capability, a track record of managing
portfolios to generate value through cycles, and a sophisticated
client strategy and operating platform.
ICG possesses all of those qualities. Today we are larger, broader,
more financially resilient, and the FMC more profitable than at any
point in our history, and I believe we are well positioned to navigate
the future for the benefit of our clients, portfolio companies and
shareholders.
Benoît Durteste
CEO and CIO
14
ICG | ANNUAL REPORT & ACCOUNTS 2023
Market environment
Market
Economic growth
Description
• Broadly, the economic outlook became more challenging
during the majority of 2022 due to a number of factors
including inflation, interest rates, geopolitical tension and
public market volatility. According the International Monetary
Fund’s (IMF) July 2022 report, “a tentative recovery in 2021
was followed by increasingly gloomy developments in 2022
as risks began to materialize. Global output contracted in the
second quarter of 2022, owing to downturns in China and
Russia, while US consumer spending undershot
expectations.” In April 2023, they reported that “On the
surface, the global economy appears poised for a gradual
recovery…. Below the surface, however, turbulence is
building and the situation is quite fragile.”
• On a global level the IMF expects growth to be 2.8% in 2023
and then rise modestly to 3.0% in 2024, although with
considerable variation between geographies.
What this means for ICG
• Our range of investment strategies and ability to invest
across the capital structure mean that we are well-positioned
to invest throughout economic cycles.
• As part of our due diligence when making investments, our
investment professionals model how potential portfolios are
likely perform during a range of scenarios including a
downturn. As such, as a reduction in global growth is always
factored into our investment case.
• From a shareholder perspective, management fees on our
closed-end funds are almost always charged either on
committed capital or invested capital, so are not impacted by
movements in fund valuations. Our balance sheet invests
alongside our funds and therefore its performance will be
correlated to the performance of the funds.
Read more
Our business model page 4 →
Our management fees page 58 →
The valuation of our balance sheet page 60 →
Inflation
Interest rates
• The spectre of inflation continued during
2022, with US Consumer Price Index growth
reaching its highest levels in 40 years. In the
US, the consumer price index rose 5.0% in the
12 months to 31 March 2023 (12 months to
31 March 2022: 8.5%); and Euro Area CPI was
6.9% (12 months to 31 March 2022: 7.4%).
• The notable shift in inflation narrative during
the year was in the debate around how
entrenched higher inflation is likely to be. At
the start of 2022, expectations were more
anchored in a transitory period of higher
inflation. That shifted rapidly towards a
concern that higher inflation could last for
longer. With many central banks targeting
nominal inflation, such concerns led to a rapid
shift in interest rate policy.
• The period of near-zero interest rate policy
for over a decade post the Global Financial
Crisis came to dramatic end – at least for now
– during 2022. In response to increasing
concerns about inflation, central banks
globally moved swiftly during the second half
of 2022 to increase rates, with a rapid series
of 75bps rises in the US and other marked
increases from central banks globally.
• Raising interest rates against a broader
background of a slowing global economy is
likely to be a challenging balance act for
central banks, with three possible outcomes:
a so-called “hard landing”, where higher rates
trigger a recession; a “soft landing”, where
central banks hold rates high enough to
contain inflation but low enough to keep
economic growth positive; and “stagflation”,
where rates are low enough to prevent a
recession but too low to contain inflation–
risking a period of low growth, moderate-to-
high inflation and interest rates, and a
stagnant economy.
• High inflation could make it harder for clients
to achieve a ‘real return’, potentially making
alternatives more attractive and supporting
incremental client demand.
• Certain of our investment strategies – such as
Infrastructure – are also potentially more
attractive in an inflationary environment. 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 costs are
employee costs, and we continue to ensure
we hire selectively and remain competitive as
an employer.
• The main driver of our profitability and
growth is third-party fee income, which is not
directly impacted by movements in interest
rates.
• Our direct lending strategy, Senior Debt
Partners, provides ‘floating rate’ debt to
portfolio companies; in periods of higher
interest rates, this strategy is generating
higher returns for our clients. From a portfolio
company perspective, we take a conservative
approach to leverage when investing in equity
or debt and we will typically require our
portfolio companies to hedge a portion of
their interest rate exposure.
• All of the term debt at the ICG plc level is fixed
rate.
Read more
Our debt facilities page 217 →
Sources: Bain – 2023 Global Private Equity Report; Preqin – Future of Alternatives 2025
ICG | ANNUAL REPORT & ACCOUNTS 2023
15
ICG is well positioned to benefit from
private market trends
Strong track record of investment
performance
Read more on page 54 →
Structured and holistic approach to
responsible investing
Read more on page 26 →
Multiple strategies to suit clients’ investment
objectives
Read more on page 5 →
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 4 →
MARKET ENVIRONMENT CONTINUED
Industry
Market activity
Description
• 2022 was very much a “year of two
halves” in private market activity. The first
six months continued at broadly the same
pace as the record-breaking 2021,
despite increasingly persistent inflation,
the invasion of Ukraine and rising
broader geopolitical tensions. In June
– when the Federal Reserve issued the
first in a series of 75bps increases in
interest rates – credit became scarcer
and more expensive, public market
valuations came down materially in
several sectors, and transaction velocity
in private markets slowed substantially.
• Globally the net result was still the
second largest year in terms of buyout
values historically, but a reduction of 35%
compared to 2021 and very much
weighted to the first half of the year.
• Aggregate transaction value in North
America and Europe were each down by
~30% year-on-year, with APAC down
59% due in part to Covid-related
restrictions. Buyout transaction count
reduced by a more modest 10%
compared to FY22 – the mid-market
space proving more resilient than the
‘mega buyouts’ – average deal value
globally reduced by 23% from $1,245m to
$964m.
What this means for ICG
• Lower transaction activity across the
market impacted the pace of deployment
and realisations in many of our funds
during FY23 – although deployment
within our direct lending strategy (Senior
Debt Partners) benefited due to the
scarcity of other forms of debt finance.
• While slower deployment over the
medium term extends fundraising cycles,
lower realisations mean that we earn
management fees for longer.
Fund raising
• “The long-term outlook for fund-raising
remains exceedingly bullish” state Bain &
Company in their Global Private equity report.
Indeed, 2022 saw $1.3tn raised globally – the
second-highest total ever. It was 10% down
compared to 2021, but 6% higher than the 2017
-2021 average.
• Increased macroeconomic uncertainty, lower
public valuations, a slowdown in realisations,
and the substantial levels of capital committed
to private markets in recent years led to more
caution from Limited Partners during the year.
The picture however was nuanced, with
buyouts raising 5% less than their 2017 – 2021
average while infrastructure raised 46% more
and direct lending 37% more.
• The longer-term drivers for private markets as
a whole remain intact. Again according to Bain
& Company’s 2022 report, “Private market
returns… are outpacing public returns over
every time horizon, while alternative funds
provide access to the broad global economy
and the fullest range of asset classes. These
advantages explain why private markets
continue to grow relative to the public
markets.”
• Our diversity of strategies is a strategic
advantage from a fundraising perspective as it
allows us to help clients meet their investment
objectives across a wide range of funds and
across economic cycles.
• Our balance sheet also provides support to
fundraising, demonstrating clear alignment
with clients and enabling us to provide seed
capital to new strategies.
• In the shorter term, a more challenging
fundraising market is likely to benefit
incumbent managers with strong brands and
track records – a trend from which we expect
ICG to benefit.
• The longer-term structural tailwinds
supporting our AUM growth are expected to
remain in place, and we have the platform and
expertise to successfully execute on the
opportunity.
Read more
Investment activity in FY23 page 56 →
Our management fees page 58 →
Read more
Our range of strategies page 5 →
Fundraising in FY23 page 55 →
Sources: Bain – 2023 Global Private Equity Report; Preqin – Future of Alternatives
2025
16
ICG | ANNUAL REPORT & ACCOUNTS 2023
How we are positioned
An exciting future
Broad product offering
Track record of
generating value
through cycles
Differentiated
origination capability
Successfully fundraising,
growing AUM, and increasing
profits from our fund
management activities underline
the powerful economic
characteristics that underpin
ICG’s resilient business model
today.
We are well positioned to
navigate an exciting future with
many opportunities likely to
arise as the economic landscape
continues to evolve.
ICG | ANNUAL REPORT & ACCOUNTS 2023
17
KEY PERFORMANCE INDICATORS
Measuring progress
Total AUM1 ($bn)
Weighted-average fee
rate (%)
FMC operating margin
(%)
Deployment of direct
investment funds (%)
$80.2bn
0.90%
57.5%
8
0
2
.
7
2
.
1
.
0
8
8
.
0
9
0
0
.
7
8
0
.
7
9
.
0
8
1
5
2
.
3
5
3
.
6
5
2
.
1
5
7
.
5
5
5
8
.
5
9
6
.
5
0
0
.
3
6
2
.
M
U
A
y
t
r
a
p
-
d
r
i
h
t
w
e
N
2
2
5
.
9
.
7
1
1
.
3
1
0
6
.
1
0
2
.
2019
2020 2021
2022
2023
2019 2020 2021
2022
2023
2019 2020 2021
2022
2023
l
d
e
y
o
p
e
d
%
100
80
60
40
20
20
40
80
% investment period
60
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.
The 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.
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.
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.
Outcome
Total AUM of $80.2bn up
14% compared to FY22 on a
constant currency basis.
Third-party fundraising in
line with guidance at
$10.2bn; on track to meet
accelerated fundraising
target of $40bn.
Key to funds
North America
Private Debt Fund II
Real Estate Partnership
Sale & Leaseback Fund I
Asia Pacific Fund IV
Capital VI
Strategic alignment
A Alternative performance
measures - see page 54
Infrastructure Equity Fund I
Europe Mid-Market Fund
Strategic Equity Fund IV
1. During the year the Group updated its AUM measurement policy, see page 54.
18
ICG | ANNUAL REPORT & ACCOUNTS 2023
100
performance hurdle rate. This
pledged to increase the
sheet equity.
Return on equity reflects the
post-tax performance of the
Fund Management Company
and the Investment Company
as well as the level of balance
We believe a more diverse
and inclusive workforce will
enhance the delivery of our
strategic objectives and
shareholder value. We have
number of women in senior
management roles in an
industry in which senior
investment positions are
predominantly held by men.
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
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 215.
Outcome
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
progressive. Over the long-
term, the Board intends to
increase the dividend per share
by at least mid-single digit
percentage points annually.
Our progressive dividend
policy has been maintained,
with a 2% increase in dividend
per share compared to FY22.
Over the last five years our
ordinary dividend per share
has increased at an annualised
rate of 21%.
The effective management fee
rate on our fee-earning AUM
at the period end was 0.90%
(FY22: 0.88%). The increase
was due to the fundraising
within Structured and Private
Equity in strategies with
higher fee rates charging fees
on committed capital as well
as a positive mix effect in
other asset classes.
The FMC operating margin of
57.5% (FY22: 55.8%) was
materially above our medium-
term guidance of above 50%,
driven in part by catch-up
fees and a strong focus on
cost control.
During the period we
deployed a total of $10.5bn of
AUM on behalf of our direct
investment funds
(FY22:$15.0bn).
Our strategies continued to
Following a change in
perform strongly. The
management organisation
outcome for the year on this
during the year the Group has
KPI is in line with our long-
maintained its gender
Group profit after tax of
£229.3m (FY22: £538.0m)
driven by an increased FMC
profit before tax of £310.7m
term average.
diversity above the Women in
(FY22: £286.2m) offset by an
Finance target.
IC loss of £52.6m (FY22:
Profit £282.6m), and a higher
group effective tax rate of
11.2% (FY22:5.4%).
Group net asset value was
largely unchanged at £1,977m
(FY22: £1,995m).
Rationale
We expect to raise at least
$40.0bn in aggregate over
FY22 to FY24.
Outcome
Total AUM of $80.2bn up
14% compared to FY22 on a
constant currency basis.
Third-party fundraising in
line with guidance at
$10.2bn; on track to meet
accelerated fundraising
target of $40bn.
Raising third-party funds is
one of the leading indicators
of the Group’s profitability.
The weighted-average
management fee rate on
The FMC operating margin is a
Direct investment funds have
measure of the efficiency of our
a defined investment period.
fee-earning AUM is a measure
fund management activities.
We monitor progress against
of profitability.
Fee rates vary across our
strategies. The weighted-
average fee rate will depend
on the composition of
fee-earning AUM.
The Group has invested
a straight-line deployment
substantially in its growth and
basis as an indicator of timing
the return on this investment is
for any subsequent fund
measured through the operating
raising.
margin. The Group is targeting
a margin above 50% for its fund
management business.
The effective management fee
The FMC operating margin of
During the period we
57.5% (FY22: 55.8%) was
materially above our medium-
term guidance of above 50%,
driven in part by catch-up
fees and a strong focus on
cost control.
deployed a total of $10.5bn of
AUM on behalf of our direct
investment funds
(FY22:$15.0bn).
rate on our fee-earning AUM
at the period end was 0.90%
(FY22: 0.88%). The increase
was due to the fundraising
within Structured and Private
Equity in strategies with
higher fee rates charging fees
on committed capital as well
as a positive mix effect in
other asset classes.
Percentage of realised
assets exceeding
performance hurdle (%)
UK senior management
gender diversity (%)
Return on equity (%)
Ordinary dividend per
share (p)
89.5%
35.3%
12.0%
77.5p
9
1
.
7
9
2
0
.
8
8
2
.
8
9
.
3
8
9
5
.
4
3
.
8
%
4
2
.
1
%
4
1
.
2
%
3
5
.
3
%
5
6
3
8
.
1
8
8
%
2
4
2
6
1
7
s
n
o
i
t
a
s
i
l
a
e
r
f
o
r
e
b
m
u
N
3
2
9
.
3
0
8
.
7
6
0
.
7
7
.
5
5
6
0
.
5
0
8
.
4
5
0
.
2
0
0
.
7
.
9
1
2
0
.
2019
2020 2021
2022
2023
2019 2020 2021
2022
2023
2019 2020 2021
2022
2023
2019 2020 2021
2022
2023
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 215.
Outcome
Our strategies continued to
perform strongly. The
outcome for the year on this
KPI is in line with our long-
term average.
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.
Following a change in
management organisation
during the year the Group has
maintained its gender
diversity above the Women in
Finance target.
Return on equity reflects the
post-tax performance of the
Fund Management Company
and the Investment Company
as well as the level of balance
sheet equity.
Group profit after tax of
£229.3m (FY22: £538.0m)
driven by an increased FMC
profit before tax of £310.7m
(FY22: £286.2m) offset by an
IC loss of £52.6m (FY22:
Profit £282.6m), and a higher
group effective tax rate of
11.2% (FY22:5.4%).
Group net asset value was
largely unchanged at £1,977m
(FY22: £1,995m).
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
progressive. Over the long-
term, the Board intends to
increase the dividend per share
by at least mid-single digit
percentage points annually.
Our progressive dividend
policy has been maintained,
with a 2% increase in dividend
per share compared to FY22.
Over the last five years our
ordinary dividend per share
has increased at an annualised
rate of 21%.
Details of our Executive Director KPIs are shown on page 103 →
ICG | ANNUAL REPORT & ACCOUNTS 2023
19
STAKEHOLDER ENGAGEMENT
Engagement with our stakeholders
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 their decision making, 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 in the longer
term where appropriate
• The longer-term prospects of new funds, what quantity
of third-party AUM such funds and future vintages are
likely to attract, and the management fee generation of such
new funds
• Maintaining robust capitalisation, with strong liquidity,
mindful of our long-term ambition to have zero net gearing
• The prevailing market conditions and macroeconomic
forecasts
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.
t o r s
u l a
g
e
R
nt
e
m
n
o
r
i
v
n
E
C
o
m
m
u
n
it
y
Read about how the Board engages with stakeholders on page 21
20
ICG | ANNUAL REPORT & ACCOUNTS 2023
Shareholders an
d le
n
d
e
r
s
C
l
i
e
n
t
s
E m ployees
Supplier s
Shareholders and 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.
We seek to foster a two-way dialogue with both current and
potential shareholders and lenders.
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. During FY23 these
included one-on-one and group meetings, shareholder
roadshows following results and on an ad hoc basis (in a number
of geographies), and shareholder dinners (including with
Non-Executive Directors and members of the management team).
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 Shareholder Relations
function and from third parties such as our corporate brokers.
The Interim 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.
What were the key topics of engagement?
• Long-term demand for alternative assets, and the potential
impact of high interest rates and inflation on such demand
• Ability to deliver continued strong growth for shareholders
• Investment performance
• Clear communication of strategies
• Director Remuneration Policy
• Clarity around our balance sheet’s function in driving new business
• Longer-term plans for the Group’s balance sheet gearing
Outcomes as a result of that engagement
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 and growing our
client base.
Ensuring that we understand our clients’ needs and serve them
appropriately is fundamental to the success of the Group.
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 5.
Our in-house marketing 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.
• Designing funds to meet clients’ needs
• Strategy to grow our client base and increase “share of wallet”
of existing clients
• Reporting of portfolio performance
• Integrating ESG considerations into our client reporting and our
investment processes
• Increased engagement with current and potential shareholders
• Continued to broaden our expertise and offering of funds to
both through regular reporting and off-cycle interactions
meet client needs
• Refined our disclosure on the performance of our funds
• Hosted a shareholder seminar on Client and Fundraising
strategy as part of our annual programme of shareholder
seminars
• Offered successor vintages of established funds to meet client
demand
• Enhanced our monitoring, target setting and reporting for
portfolio companies
• S&P Ratings upgraded our credit rating in July 2022
• Continued to offer a number of funds with sustainable elements,
including our new Article 9 Life Sciences Fund
ICG | ANNUAL REPORT & ACCOUNTS 2023
21
STAKEHOLDER ENGAGEMENT CONTINUED
Employees
Suppliers
Why is it important to engage?
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.
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.
• Ability of key providers, including third-party administrators, to
continue to provide a high-quality and fairly priced service
• Enhancement of ethical and responsible procurement practices
including conducting of Modern Slavery risk assessment of
suppliers
• Building broader relationships with key supplier team
• Reviewed key supplier contracts
• Reviewed processes with suppliers (both onboarding and the
go-forward relationship) and developed a new and enhanced
ESG assessment process which all new and existing material
suppliers will be required to complete
• Rolled out our Supplier Code of Conduct
• Review of invoice payment process to ensure prompt payment of
suppliers
How have the Board and management engaged?
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.
Amy Schioldager is the NED responsible for employee
engagement, and she held a number of sessions with employees
during the year in individual and group forums.
Details of our employee engagement can be found on page 28.
What were the key topics of engagement?
• Growth and development of our employees
• Wellbeing of employees
• Enhancing our agile working arrangements
• Succession planning
• Ensuring that the employee experience is not adversely
impacted by our growth trajectory
• Support for those affected by the cost-of-living crisis
Outcomes as a result of that engagement
• Continued formal engagement with senior management through
“town halls” and more regular videos and information sharing
• Awarded an additional “cost of living” bonus to employees in
lower salary bands, to help support our more vulnerable
employees through the cost-of-living crisis
• Further advanced our employee-led networks during the year,
including ensuring that employees across all our offices globally
are able to actively participate
• Reviewed our policies, including around family building and care
leave, to ensure that employees are able to balance their work
and family lives
• Continued to hold significant global induction events for new
joiners
22
ICG | ANNUAL REPORT & ACCOUNTS 2023
Community
Environment
Why is it important to engage?
We are a people business, with offices in 16 countries, 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?
We carried out a review of our charitable giving and we have
decided to substantially increase our charitable capital allocation.
Details of our focus on environmental matters and climate risk can
be found on pages 30 to 52.
What were the key topics of engagement?
• Identifying the most appropriate way for the Group to positively
• How to integrate climate risks into our corporate and portfolio
impact the wider community
management decision making
• Continued commitment of employee time to charitable initiatives
• 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’, clients’ and regulators’ ESG requirement
Outcomes as a result of that engagement
• Launched new charitable partnership in support of charities
• Continued to reduce GHG emissions from our operations. Scope
tackling the cost-of-living crisis via the “Million Meals Initiative”
and we also doubled any charitable donations by ICG
employees to these partner charities during the campaign
• Committed £2.5m this financial year to support a variety of
charitable causes
• Continued enhancement of our charitable efforts, with
a targeted approach to support social mobility and early
career development
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, following the global pandemic
• Committed to support the goal of achieving net 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 30)
ICG | ANNUAL REPORT & ACCOUNTS 2023
23
STAKEHOLDER ENGAGEMENT CONTINUED
Regulators
Why is it important to engage?
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.
How have the Board and management engaged?
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.
What were the key topics of engagement?
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.
Outcomes as a result of that engagement
• The EU Sustainable Finance Disclosure Regulation (SFDR) has
been one of the most substantive disclosure regimes that
covers our investment activities. For each fund in scope
of the SFDR, we have prepared and made available to investors
precontractual and periodic disclosures, identifying and
communicating the extent of attainment of the promoted
environmental and/or social characteristics or pursued
sustainable objectives by each fund, as relevant and applicable
• Obtained clearer understanding of regulatory requirements in
respect of a number of new requirements
24
ICG | ANNUAL REPORT & ACCOUNTS 2023
Commitment to Community
Continuing to assess the efficiency
of our balance sheet
Key stakeholders
Key stakeholders
We remain committed to serving and supporting our
wider community.
Board
Board
The Board made the decision to significantly increase
our charitable contributions. The Board launched a new
“Million Meals Initiative” to support charities
addressing the cost-of-living crisis by allocating
£500,000 of new funding across six leading charities.
The Board has also committed £4m from FY23 to FY25
to support three key partner charities, in addition to
other charitable commitments and increasing the level
of ‘matched giving’ the Company offers its employees.
ICG’s charitable contributions totalled over £2.5m for
the year ending 31 March 2023.
The Board approves the strategy and business plan of
the Group, which defines the approach to capital
allocation.
The Board reviewed our balance sheet capital allocation
policy with respect to the level of balance sheet
commitment needed to establish a track record to
enable the Group to raise third-party AUM and to
demonstrate alignment of interests between the Group
and its clients by way of co-investment. The Board
decided to reduce the capital intensity of our business
over the longer-term by reducing, where possible, the
Group’s commitments to its funds, while maintaining a
focus on growing third-party AUM.
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 how different investment strategies benefit our
potential portfolio companies by giving them access to
capital to support their business and grow.
Group
Group
The Group has launched three new partnerships this
year with the charities The Access Project, UpReach
and Seizing Every Opportunity (SEO), with a targeted
approach to support social mobility and early career
development, in line with ICG’s broader values. Further
details can be found in the Remuneration Committee
Report on page 106.
Key considerations:
• Our responsibility to wider society
• Impact of the cost-of-living crisis
• DE&I in the wider community
During the year the Group launched eight funds, with
aggregate balance sheet commitments of circa £800m.
Our balance sheet commitments for Infrastructure Fund
II and Strategic Equity V are smaller than the previous
vintages. In addition, the Group invested £214m in seed
assets for strategies including Life Sciences, LP
Secondaries, US Mid-Market and Real Estate
Opportunistic Equity Europe, with the expectation that
these assets will be transferred to the funds once they
have had a first close. The Group has also sought to
reduce the balance sheet exposure to certain of its
liquid credit strategies during the year, realising £101m
of cash for redeployment to other strategies more in
line with long-term growth drivers of the company.
Key considerations:
• Liquidity and gearing position of the Group
• Market opportunities and conditions
• Long-term AUM and fee potential of strategies
• Aligning the Group’s interests with its shareholders
and clients
ICG | ANNUAL REPORT & ACCOUNTS 2023
25
Over the last year,
against an increasingly
challenging macro
environment, ICG
continued to grow – in
AUM, in client base, in
profitability, and in
number of employees.
We have maintained a
strong focus on
sustainability and
people, as both are
integral to our
continued success.
Benoît Durteste
CEO and CIO
SUSTAINABILITY AND PEOPLE
Generating sustainable value
Industry initiatives
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. We identify the ESG topics most relevant to our
stakeholders, as well as those that align to our company values
and investment ethos, and seek to include them in our investment
strategies, in the companies in which our funds invest, and in
our own operations.
Our focus on sustainability impacts all that we do. During the
year the Group made progress on:
• sustainable investing (read more on page 30)
• our people initiatives (read more on page 28)
• our Scope 1 and 2 absolute emissions reduction target (read more
on page 50)
In addition, we introduced mandatory ESG training for all employees.
Read our Sustainability and People Report →
Our Stewardship Code Statement →
26
ICG | ANNUAL REPORT & ACCOUNTS 2023
Investing sustainably
Our approach to responsible investing
Sustainability 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. By supporting responsible and sustainable practices in
our investments we can deliver both long-term value and attractive
returns to our clients.
ICG has been a signatory to the UN PRI since 2013 and is an active
contributor to a range of industry collaboration initiatives.
For each investment strategy, we consider ESG issues at every stage
of the investment process – from exclusion, screening and due
diligence to closing, monitoring and eventual exit. The level of our
ability to effect change and influence the portfolio company varies
by asset class, strategy and between investments. However, we
strive to adopt best practice in our approach across all asset classes.
Our Responsible Investing Policy, which covers 100% of our AUM,
is available at www.icgam.com.
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Key highlights from our focus on sustainable investing during the year
• Issued first progress update on our approved and validated science-based portfolio coverage target, covering 100% of our
relevant investments (read more on page 48)
• ICG’s proprietary climate risk assessment applied to investment strategies representing 98% of total AUM at the end of FY23
(page 46)
• 96% of capital raised in scope of SFDR, was into Article 8 funds
• Total ESG-linked fund-level financing has risen to $2.8bn, compared to $2.6bn at the end of FY22
• ESG-linked compensation for all ICG portfolio managers
Read our Task Force on Climate-related Financial Disclosures (TCFD) report on page 30 →
Read more about our overall approach to Sustainability in our 2022 Sustainability & People Report at www.icgam.com →
ICG | ANNUAL REPORT & ACCOUNTS 2023
27
SUSTAINABILITY AND PEOPLE CONTINUED
Our people
We are proud of the
excellence, commitment
and diverse
perspectives of our
people. Our culture of
balancing ambition,
performance and
inclusion remains a
cornerstone of our
strategy and a key
driver of our success.
Antje Hensel-Roth
CPEAO
Our people initiatives focus on four areas
Diversity, Equity and
Inclusion (DE&I)
Cultivating a diversity
of perspectives,
improving our teams’
performance
Employee
development
Helping our people reach
their full potential and
building the next
generation of talent
Wellbeing
and benefits
Supporting the physical
and mental wellbeing of
our employees, their families
and dependents
Engagement
and voice
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
28
ICG | ANNUAL REPORT & ACCOUNTS 2023
Progress in the year
DE&I anchored further – all
leadership development now
incorporates a focus on DE&I and
enhanced training has been
implemented
DE&I Champions Group is bringing
all our employee networks together,
including representatives from all
regions to ensure global connectivity
Extensive efforts to improve access
to our industry for under-
represented groups through a
combination of external bodies and a
clear focus on access and education
in our charitable giving
Ranked #1 globally by Honordex for
DE&I initiatives within the private
equity industry
Comprehensive mentoring and development
programmes for employees throughout all
stages of their careers through our global
development platform, individual programmes,
mentoring, coaching and networks
Introduced a number of new policies to help
colleagues balance work and family lives: Global
Conception and Family Building; Pregnancy
Loss; Primary and Secondary Care Giver Leave;
Carers Leave; and Female Health.
Extensive engagement through bi-annual pulse
surveys, regular focus groups with the
Employee Engagement NED, and roundtables
focused on specific groups and topics
Key employee
metrics
Number of permanent
employees (total)
Number of permanent
employees (FTE)
Employee turnover (%)
582
(2022: 525)
579
(2022: 523)
16.8%
(2022: 16.0%)
Female representation
at Board (%)1
Female representation
in senior leadership (%)
Female representation
in all employees (%)
36%
(2022: 42%)
(see page 96 →)
32%
(2022: 35%)
(see page 53 →)
36%
(2022: 35%)
1. This reduction in female representation from 42% in FY22 is a result of Kathryn Purves stepping down as a NED in March 2023 after over eight years of service.
Gender
Ethnicity (UK only)
Female: 36%
Male: 64%
White: 65%
Asian: 15%
Black: 2%
Others: 6%
Prefer not to say: 12%
ICG | ANNUAL REPORT & ACCOUNTS 2023
29
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
Climate-related financial disclosures
Taking a robust and
proactive approach to
managing our exposure
to climate-related risks,
and seizing the
opportunities presented
by the low-carbon
transition, are integral
to reaching net zero
GHG emissions across
our operations and
relevant investments1
by 2040.
Benoît Durteste
CEO and CIO
Our commitment to net zero
In November 2021, ICG announced its commitment to reach net zero
GHG emissions across its operations and relevant investments by
2040. Our net zero commitment is supported by two ambitious
emissions reduction targets by 2030, which have been approved
and validated by the SBTi:
1. Ensure 100% of relevant investments1 have SBTi-approved
science-based targets by 2030, with an interim target of 50% by
2026.
2. Reduce the Group’s direct (Scope 1 and 2) emissions by 80% by
2030 from a 2020 base year.
Our approach towards net zero is summarised in the Strategy
section and key identified metrics are outlined in the Metrics and
targets section.
This report provides the Group’s
climate-related financial disclosures consistent
with the 11 recommendations of the Task Force
on Climate-related Financial Disclosures (TCFD)
and the Financial Conduct Authority (FCA)
climate-related disclosure requirements for
premium listed companies. This report presents
our approach to incorporating climate-related
risks and opportunities into our governance,
strategy, risk management, and metrics and
targets (as per the TCFD-recommended
disclosures), the progress we have made over the
past financial year and key steps we plan to take
next.
ICG began adopting the TCFD recommendations in 2019, and made
its first disclosure in 2020. Since then, we have continued to evolve
our approach, recognising the interconnectivity between our growth
strategy; the evolving expectations of our shareholders, clients,
regulators, and other stakeholders; and the emergence of best
practice in our industry.
Over the past financial year, we have:
• further reinforced alignment and accountability for climate-related
risks and opportunities across the organisation as part of a wider
effort to embed climate and other ESG considerations into our
investment culture (see page 37);
• enhanced the frameworks, tools and metrics we use to support
our understanding of climate-related risks and opportunities and
their possible (positive or negative) financial impact on our
business and the funds we manage (see page 35);
• made progress against ICG’s science-based targets (see page
49);
• begun incorporating, as standard, TCFD-recommended portfolio
climate metrics into certain fund-level reporting to clients (see
page 49); and
• continued to incorporate climate-related issues into the Group’s
Risk Management Framework (RMF) and policy framework (see
page 39).
The third-party funds we manage are generally not consolidated into
the Group from a financial perspective. However, we consider the
climate-related risks and opportunities surrounding these funds and
our fund management activities as a key part of our business. Where
material we also look at the level of our Group operations – but we
recognise that our operations have very limited climate-related risks
exposure.
Please also refer to ICG’s Climate Change Policy and previous TCFD reports
on our website →
1. Relevant investments include all investments within Structured and Private Equity and Real Assets where ICG has sufficient influence (defined as at least 25% equity ownership and at
least one Board seat). Investment strategies in scope of ICG’s potfolio coverage SBT represent 22% of AUM as at 31 March 2023.
30
ICG | ANNUAL REPORT & ACCOUNTS 2023
Governance
ICG’s governance of climate-related risks and opportunities
TCFD recommended disclosure
(a)
(b)
Description of ICG Board’s oversight of climate-related risks and opportunities
Description of ICG Management’s role in assessing and managing climate-related risks and opportunities
Oversight and management of climate-related risks and
opportunities are incorporated into the Group’s governance
structure and risk management framework. The Board receives
regular updates on climate-related matters, and has delegated
oversight of such matters, including progress towards ICG’s net
zero commitment, and the implementation of ICG’s Climate Change
Policy, to the Executive Directors.
Organisational oversight of climate-related matters
The diagram below provides an overview of the Group’s governance
structure for the oversight, assessment and management of
climate-related risks and opportunities.
ICG plc Board of Directors
Executive Directors
Remuneration
Committee
Risk
Committee
Audit
Committee
Climate assessment and stewardship of investments
Sustainability
& ESG team
Risk Oversight and
Control functions2
Investment
Committees1
Responsible
Investing
Committee
Investment
teams
Investee
companies
and/or assets
Oversight
Assessment and management
1. Each fund has its own Investment Committee (IC). The ICs are comprised of senior investment professionals, including the respective fund Portfolio Manager(s).
2. Legal, Compliance, Risk, and Internal Audit functions.
ICG | ANNUAL REPORT & ACCOUNTS 2023
31
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES CONTINUED
Board oversight
ICG plc Board of Directors (the Board)
The Board comprises three Executive Directors, a Non-Executive
Chair, and seven other Non-Executive Directors who have a broad
and diverse set of relevant skills and experience.
The Board sets the Group’s strategic direction and, when setting
strategic objectives, it considers all material factors including those
relating to climate change.
The Board is engaged in our focus on stewardship and ESG, and
regularly receives reports on client considerations, client
experience, investment performance and ESG matters. As part of
this, the Board receives formal updates on ESG-related matters,
including climate-related matters, at least twice every financial year.
For specific climate-related targets (see Metrics and Targets
section), 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 75). In addition, the Board
also considers climate-related risks, 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 appetite of the Group.
As part of the normal course of business, the Board receives
updates on how these policies are being implemented.
Executive Directors
The Executive Directors implement the Group’s approved strategy,
including driving our net zero commitment and various climate-
related programmes across the organisation. The CEO has lead
responsibility for climate-related matters. As part of the Board, the
CEO reviews and guides any decisions made regarding investment
strategies, including the update and implementation of the Group’s
Responsible Investing Policy and the Climate Change Policy, as well
as any arising or potential climate-related matters within the Group’s
fund management activities and operations.
Board Risk Committee
The Board Risk Committee oversees the Group’s RMF, compliance
processes and procedures, and controls assurance 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. ICG’s eight established principal risks
incorporate or consider a variety of factors, including ESG and
climate-related matters. Further information on our approach to
managing risk can be found on page 66.
Board Audit Committee
The Board Audit Committee oversees the Group’s financial
reporting and related elements of its internal controls and regulatory
compliance, including TCFD disclosure obligations of the Group and
other climate-related disclosure requirements, such as the UK
Streamlined Energy and Carbon Reporting (SECR) requirements.
Board Remuneration Committee
The Board 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. Since FY22, the remuneration of
the Executive Directors has been directly linked to several
sustainability targets, including progress towards ICG’s net zero
commitment. See Remuneration Committee Report for further detail
(page 103).
Role of Management
Climate-related risks are considered as a cross-cutting risk type that
manifests through the Group’s established principal risks and are
integrated into the Group-wide risk management framework through
existing policies, processes, and controls. We assess materiality
primarily at a Group level, as well as specifically within our fund
management activities. The Group risk management framework is
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; and
this approach is applied to climate-related risks and opportunities.
• The first line of defence with regards to climate-related risks
comprises ICs and investment teams, who own and manage risk
and controls across our fund management activities, and are
guided and supported by the Sustainability & ESG team and the
Responsible Investing Committee.
• 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 climate-related
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 climate-
related risk.
Fund management activities
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 consideration of the implications of climate-related risks
and opportunities in our investment due diligence, portfolio
management, valuation, and decision-making processes.
The Board has delegated responsibility for the implementation of
the Responsible Investing Policy and Climate Change Policy to the
CEO. The CEO, who also serves as Chief Investment Officer, has
ultimate accountability and oversight of investment processes of
ICG’s funds and is therefore responsible for climate-related issues
across the investment process and in our portfolios.
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ICG | ANNUAL REPORT & ACCOUNTS 2023
Investment Committees
Investment teams
An assessment of climate-related risks and opportunities is included
in all investment proposals, presented to, and considered by, the ICs
of the vast majority of our investment strategies. Each IC is
responsible for ensuring that climate-related issues are
appropriately considered when taking an investment decision. This
also includes ensuring that the Sustainability & ESG team’s view is
factored into the investment decision, where climate-related issues
are material or unclear.
In FY23, supported by the Executive Directors, ICG incorporated
ESG assessment into the annual performance appraisals of portfolio
managers across the firm. The aim of this practice is to reinforce
alignment and accountability at the right levels for achieving ESG
excellence, while ensuring we comply with a continued increase in
relevant regulatory requirements. It will also position portfolio
managers to lead by example, ensuring ESG, including climate-
related issues, are being appropriately and consistently considered
in their teams’ approaches to investment decision-making and
portfolio management.
Responsible Investing Committee
The Group has had a Responsible Investing (RI) Committee since
2014, made up of our Head of Investment Office, Global Head of
Sustainability & ESG, and senior investment professionals from
ICG’s investment strategies. The RI Committee promotes, supports,
and helps to integrate responsible and sustainable business
practices across ICG’s investment strategies and the businesses in
which we invest, in line with our Responsible Investing Policy and
Climate Change Policy. The RI Committee is also responsible for
ensuring that ICG’s investment teams have the required skills and
understanding to effectively identify ESG risks and opportunities
and engage with relevant company management in our portfolio
companies on ESG matters. The RI committee may escalate matters
to the Executive Directors, as necessary.
Sustainability & ESG team
The Global Head of Sustainability & ESG reports to the Head of the
Investment Office to ensure an embedded approach to ESG across
the firm. The Sustainability & ESG team provides subject-matter
expertise to the Group to support the assessment and management
of climate-related risks and opportunities across our fund
management activities, including assessment and engagement of
investee companies; setting strategic objectives and targets;
building capacity across the organisation; and fostering
collaboration within the industry. The team works closely with Risk
Oversight and Control functions within the Group, to ensure
adequate governance frameworks and controls are in place to
assess and manage climate-related risks. The Global Head of
Sustainability & ESG provides updates to the Board twice a financial
year and quarterly to the Executive Directors.
Day-to-day implementation of the Responsible Investing Policy and
Climate Change Policy, and the integration of climate-related
consideration in investment processes, are the responsibility of all
portfolio managers and investment professionals, guided by the RI
Committee and the Sustainability & ESG team.
Ensuring that our investment teams have sufficient knowledge to
implement the Responsible Investing Policy and Climate Change
Policy is essential. ICG is committed to providing investment teams
with regular bespoke training, comprehensive guidance and access
to online ESG tools to ensure they can identify and address ESG,
including climate-related, risks and opportunities in their investment
activities. The Sustainability & ESG team also provides regular
briefings on emerging ESG topics, regulatory developments and
industry best practice.
In FY23, ICG formally incorporated ESG assessment into the annual
performance appraisals of portfolio managers across the firm to
reinforce alignment and accountability at the right levels for
achieving ESG excellence, while ensuring we comply with a
continued increase in relevant regulatory requirements (as outlined
earlier in this report).
Group operations
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.
The Operations and IT teams, with support from the Sustainability &
ESG team, are responsible for assessing and managing climate-
related risks associated with Group offices, IT infrastructure or
third-party providers. Updates on climate-related issues are
provided to the CFOO, as and when they manifest.
Training and capacity building
Comprehensive online ESG training has been delivered to all IC
members and investment teams, and the Marketing and Client
Relations team every two years over the last decade. During FY23,
ICG has been developing its training programme so it can be
delivered to the wider business. Mandatory training for all
employees will incorporate core understanding of ESG at ICG, and
will focus on specific themes, such as climate-related risks and
opportunities. This will be supplemented by more advanced specific
knowledge-building for relevant professionals such as investment
teams in key topics that relate to their role. Learning pathways can
be built upon as users expand their learning in priority topics such as
climate change, diversity and inclusion, and governance. The new
approach was rolled out at the end of FY23 and will evolve further
over the coming years.
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Strategy
The actual and potential impacts of climate-related risks and opportunities on ICG’s businesses,
strategy and financial planning
TCFD recommended disclosure
(a)
(b)
(c)
Description of the climate-related risks and opportunities ICG has identified over the short, medium, and long term.
Description of the impact of climate-related risks and opportunities on ICG’s businesses, strategy, and financial planning.
Description of the resilience of ICG’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.
Climate change remains one of the most existential challenges of our
time – a threat to human lives, the natural world, individual
livelihoods, and economies at large. Addressing this challenge is an
urgent yet complex task that requires a fundamental transformation
of the global economy, so that no more GHG emissions are added to
the atmosphere.
ICG’s approach towards net zero
In November 2021, ICG announced its commitment to reaching net
zero GHG emissions across its operations and relevant investments1
by 2040. ICG’s net zero commitment is supported by two ambitious
emissions reduction targets by 2030, which have been approved
and validated by the SBTi:
As a global alternative asset manager, we recognise that climate-
related risks and opportunities are most likely to materialise through
our fund management activities and may have a material impact on
investment performance and returns over the short, medium and
long term. Therefore, it is important that we continue to act as good
stewards of our clients’ capital by properly accounting for climate-
related risks and opportunities in the design of new products, our
investment decisions and portfolio management activities, and the
focused engagement with our investment counter-parties portfolio
companies, and industry peers. As an investor and provider of
capital, ICG has an opportunity and a responsibility to support the
transition to a more sustainable and equitable economy, and play its
role in limiting the most adverse impacts of climate change.
1. Ensure 100% of relevant investments1 have SBTi-approved
science-based targets by 2030, with an interim target of 50% by
2026; and
2. Reduce ICG’s Scope 1 and 2 GHG emissions by 80% by 2030 from
a 2020 base year.
While ICG’s own operational emissions have negligible impact and
exposure to climate-related risks compared to those of our
investments, we recognise our responsibility to ensure our own
business operations are fully accounted for. The Group will continue
to deploy energy efficiency initiatives and source renewable energy,
and will offset any residual emissions using credible removal
solutions, as well as monitor the potential physical risks that may
affect its operations.
1. Relevant investments include all investments within Structured and Private Equity and Real Assets where ICG has sufficient influence (defined as at least 25% equity ownership and at
least one Board seat).Investment strategies in scope of ICG’s SBT represent 22% of total AUM as at 31 March 2023.
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ICG | ANNUAL REPORT & ACCOUNTS 2023
In order to chart a path to net zero, ICG’s top priority is the
decarbonisation of our investment portfolios wherever possible,
through our investment decision-making and engagement. Over
time, the tools to assess financed emissions and measure net zero
will evolve in the private markets. In addition to the setting of SBTs
for relevant investments, ICG is developing a plan to systematically
assess potential net zero solutions for the strategies not covered by
our SBTs.
We will continue to engage with industry groups and thought
leaders to explore decarbonisation tools and net zero measurement
frameworks for asset classes which do not currently have them, and
ICG will consider whether these new solutions might be applicable
to our portfolios.
Another powerful tool for responding to climate change is ICG’s
capacity for investing in climate solutions needed for the real
economy to reach net zero GHG emissions, such as the
infrastructure required for the growth of renewable energy.
Lastly, a successful global approach to net zero will require the
financial industry to account for nature’s fundamental contributions
to combating climate change, as well as a ‘Just Transition1’ to
respond to the impacts that a changing climate has on human
communities and livelihoods. ICG will reflect these considerations
into our ESG assessment and action over time – taking a holistic
approach.
ICG’s net zero strategy will continue to evolve as we work towards
building a more comprehensive approach across the firm, to support
the global goals of decarbonising the real economy, and towards
building a more sustainable financial system.
Climate-related risks and opportunities and their
potential impact
The time horizons and materiality of the impact of climate-related
risks and opportunities on our business may differ depending on a
range of factors, including the nature and type of investments,
geographical focus, and the external market environment.
Generally, we look at three time horizons for the potential impacts of
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-related risks as a cross-cutting risk type that
manifests through the Group’s established principal risks (see page
66), and therefore may affect the Group’s strategic objectives (see
page 4). 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 our business, strategy and financial
planning, in line with the Group’s RMF and approved risk appetites.
We have developed policies and processes to support us in
understanding where climate-related risks may be realised,
prioritising and managing these risks and actively engaging as
appropriate with portfolio companies or deal counterparties on
these matters. Ensuring our portfolio managers, investment teams
and the Sustainability & ESG team have the necessary skills and
expertise to deliver on our ambitious climate commitments and
successfully launch new strategies has required careful planning in
terms of headcount and resource planning.
The table on page 36 outlines the relevant climate-related risks and
opportunities we have identified within the Group’s fund
management activities and their potential impact on our business,
strategic objectives and financial planning, as well as their link to the
Group’s principal risks. Each of these climate-related risks and
opportunities may materially contribute, to varying degrees, to the
manifestation of the principal risks it relates to. The Group has
implemented a range of mitigating controls for each of these
principal risks (see page 66). Further detail on how climate-related
risks are identified and managed within our fund management
activities is provided in the Risk Management section (see page 39).
1. The Paris Agreement preamble reflects the close links between climate action, sustainable development, and a just transition, with Parties to the Agreement “taking into account the
imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities”, commonly referred
to as a ‘Just Transition’. Source: United Nations.
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Type
Description
Principal risks
Time horizon
Potential impact
• Legal,
Short term
• Increased cost of
Climate-
related risks
Policy,
regulatory
and legal
(Transition)
Market,
technology
and
reputation
(Transition)
Acute and
chronic
physical risks
(Physical)
Climate-
related
opportunities
Products
and services
(Transition)
• Enhanced climate-related disclosure
obligations for funds and investments
• Increasing regulatory pressure (e.g. carbon
price/tax and energy efficiency standards)
and litigation risk for current and potential
investments in carbon-intensive companies
or real assets not adequately prepared for a
transition to a low-carbon economy
• Changing preferences on climate change
affecting demand for products and/or
services of the Group as well as of current
or potential investments
• Increasing production costs affecting
current and potential investments in certain
sectors due to changing input prices and/
or output controls
• Substitution of existing products and
services with lower emissions options
impacting the competitiveness of current
and potential investments in certain sectors
• Stigmatisation of specific industries,
impacting existing investment exposure
• Increased severity and frequency of
extreme weather events that may cause
damage to physical assets or disrupt critical
operations in certain industries and/or
locations
• Shifts in climate patterns, such as rising
temperatures or sea levels that could affect
entire sectors and geographic regions that
haven’t built resilience or adapted to such
risks (typically in the longer term)
• Evolution of existing investment strategies
to further incorporate climate change
mitigation and/or adaptation
• Attracting new clients through strategies
supporting the transition to low-carbon
economy and investing in climate solutions
Regulatory
and Tax risk
Short to long
term
• Fund
Performance
risk
• Financial risk
• External
Environment
Risk
• Fund
Performance
risk
• Financial risk
Short to long
term
• Fund
Performance
risk
• Financial risk
Short to
medium term
Market and
reputation
(Transition)
• Stronger performance of company and real
• Financial risk
asset investments aligned with the
transition to a low-carbon economy; and
with developed resilience to physical
climate risks
• Climate-linked financing reducing the cost
of capital at deal and fund level
Short to
medium term
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ICG | ANNUAL REPORT & ACCOUNTS 2023
compliance for funds and
investments
• Increased due diligence
cost
• Reduced fund
performance and impact
on ICG’s track record
• Loss of clients or
reduced demand for our
funds
• Lower fund performance
and impact on track
record
• Lower asset valuations
impacting the Group’s
balance sheet and fund
investments
• Negative stakeholder
perception and impact on
ICG’s brand and
positioning
• Loss of clients or
reduced demand for our
funds
• Lower fund performance
and impact on track
record
• Lower asset valuations
impacting the Group’s
balance sheet and fund
investments
• Increased Group
revenues in line with
growing demand
• Growth in AUM through
retention of current and
attraction of new clients
• Growth in AUM through
retention of current and
attraction of new clients
• Enhanced brand and
competitive reputation of
Group and investments
• Higher fund performance
and enhanced track
record
• Higher asset valuations
impacting the Group’s
balance sheet and fund
investments
Embedding climate considerations into investment decisions
and portfolio management
We take a selective and thoughtful approach to making investments,
with due consideration of climate-related risks and opportunities.
ICG’s Exclusion List (see page 41) prohibits direct investments in
certain coal, oil and gas activities which limits the exposure of our
portfolios to investments with higher probability of becoming
stranded assets in the medium to long term.
In addition, climate risk assessment is a mandatory step in the
evaluation of new investment opportunities across the vast majority
of ICG’s investment strategies, with findings presented to ICs for
consideration in investment decision making. Investment
opportunities with potentially heightened climate risk exposure are
discussed with the ICG Sustainability & ESG team and expert
advisers, where appropriate. Between February 2021 and March
2023, we have declined 99 investment opportunities where climate-
related risk was a contributing factor to the investment decision.
We also seek to invest in climate-related opportunities, primarily
through our Real Assets investment strategies.
Following investment, material climate-related risks and
opportunities are tracked and reviewed as a standard part of the
portfolio monitoring process. Depending on the nature of the issues
and the level of influence, we may ask portfolio companies or
transaction counterparties to disclose to us how they manage these
issues. Where we have sufficient influence, we support portfolio
companies to address climate-related risks and capitalise on
climate-related opportunities in a number of ways, including by:
• Assigning responsibility for climate-related matters;
• Sharing the results of our company-specific climate risk
assessment, including scenario analysis, as relevant;
• Supporting a carbon footprint assessment of the business in line
with the GHG Protocol and the development of a Board-level
approved climate action and decarbonisation plan;
• Establishing company-specific climate change and energy-
focused KPIs and targets; and
• Seeking validation by the SBTi.
At a fund level, we also seek to link our climate ambition to our
third-party financing, where possible. Since 2021, we have raised a
total of $2.8bn ESG-linked fund-level financing, including climate-
related KPIs.
Resilience of our strategy to climate-related risks and
opportunities
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 that is contractually locked in for a long term and
largely not based on fund valuation.
As such any short-term increase or decrease in the valuation of
individual investments or funds (including as a result of climate-
related issues) would not immediately impact the Group’s financial
position. However, the impact of climate change on portfolio
companies or assets may impact the valuation of our investments 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 medium to
long-term risk to the Group.
ICG’s net zero commitment has an important role in building the
long-term resilience of our business strategy and funds to climate-
related risks and opportunities. This is exhibited in the launch of new
products and the investment decisions and management of
portfolios to crystallise returns for our clients.
Developing our 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 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 approval process.
We seek unique opportunities, including those presented by the
transition to a low-carbon economy, befitting ICG’s investment
approach and ability to invest across the capital structure to create
sustainable value. For example, investments in real assets, such as
commercial real estate, housing developments, renewable energy
and other infrastructure delivering core services, can play an
important role in supporting global economic growth, enhancing
social cohesion and delivering the transition to a low-carbon
economy. To capitalise on this growing investment opportunity, ICG
has launched a number of strategies investing in infrastructure and
real estate that underpin or have strong potential to align with the
transition to a low-carbon economy and the goals of the Paris
Agreement. As at 31 March 2023, these strategies constituted 48%
of total AUM in Real Assets, compared to 40% a year earlier.
We have also considered climate change in the launch of the latest
vintages of European Corporate and Mid-Market, Sale and
Leaseback, Strategic Equity, and Infrastructure Equity investment
strategies, which have explicit focus on engagement with portfolio
companies on decarbonisation. Since 1 April 2021, ICG has raised a
total of $11.6bn of capital in investment strategies with explicit focus
on engagement on climate change and/or in scope of ICG’s portfolio
coverage science-based target. Such strategies represent 28% of
total AUM, as at 31 March 2023.
ICG | ANNUAL REPORT & ACCOUNTS 2023
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Exposure of portfolios to climate-related risks
Overall, our portfolios1 as at 31 December 2022 have limited
exposure to heightened climate-related risks, with only 3% of
invested capital1 assessed as having potentially heightened climate
risk.
The principal mechanism for this assessment is ICG’s proprietary
climate risk assessment methodology, which was introduced in 2021
and which we further enhanced at the start of 2023 (see page 46).
This climate risk assessment is incorporated into the due dilligence
of new investment opportunities and results in a climate risk rating
for any such investment opportunity.
While the assessment has some inherent limitations, the exposure
metrics provide, in our view, a useful indication of the resilience of
our funds’ portfolios to climate-related risks. Please refer to the
Metrics and Targets section for further detail of the assessment and
breakdown of exposure by asset class.
Approach to scenario analysis
Starting in 2020, we have been conducting a formal assessment of
the exposure to climate-related risks across our portfolios every two
years. This assessment is considering the impact of climate-related
drivers associated with both changing climatic conditions (physical
risks) and the transition to a low-carbon economy (transition risks),
such as policy, regulatory, market and technology changes on
individual investments across key portfolios.
The latest such assessment, undertaken in 2022, included
approximately 900 portfolio companies across our four asset
classes covering almost 90% of our AUM as at 31 December 2021.
The principal mechanism we employed for assessing climate risk
across our portfolios was through proprietary climate risk
assessment methodology and tools (see page 46).
We then conducted a scenario analysis on certain investments which
we identified as having potentially heightened exposure to climate-
related risks. This comprised 13 companies within our Structured
and Private Equity and Private Debt asset classes.
We also conducted a sector-based transition-risk scenario analysis
across 10 sectors that are more likely to have higher exposure to
climate-related risks.
While the analysis confirmed that we have limited exposure to
potentially heightened climate-related risks across our portfolios,
this bottom-up approach enabled us to improve our understanding
of the exposure of specific investments to transition and/or physical
risks in the medium to long term. The findings of the analysis were
shared with the portfolio company management teams, where
relevant, to support their strategic decision making.
To conduct the transition risk scenario analysis, in line with market
practice, we adopted three of the transition scenarios provided by
the Network for Greening the Financial System (NGFS):
• Current Policies (base case) – this scenario assumes that only
currently implemented policies are preserved, resulting in
emissions growth until 2080, which leads to about 3°C of warming
and severe physical risks.
• Below 2°C – this scenario gradually increases the stringency of
climate policies, giving a 67% chance of limiting global warming to
below 2°C by the end of the century. Under this scenario net zero
emissions are achieved after 2070. Physical and transition risks are
both relatively low.
• Delayed Transition – this scenario assumes new climate policies
are not introduced until 2030 and the level of action differs across
countries and regions based on currently implemented policies.
As a result, emissions exceed the carbon budget temporarily and
decline more rapidly after 2030 to ensure a 67% chance of limiting
global warming to below 2°C by the end of the century. This leads
to both higher transition and physical risks than the the Below 2°C
scenario.
Read the full description of the scenarios on the NGFS website: https://www.
ngfs.net/ngfs-scenarios-portal/explore →
The physical risk scenario analysis was performed at a country-level
looking at key operating geographies using two Representative
Concentration Pathways (RCPs) adopted by the Intergovernmental
Panel on Climate Change (IPCC):
• RCP4.5, described by the IPCC as a moderate scenario in which
emissions peak around 2040 and then decline. This scenario
assumes future implementation of emissions management and
mitigation policies; and
• RCP8.5, is the highest baseline emissions scenario, in which
emissions continue to rise throughout the twenty-first century,
such that the most adverse effects of physical climate change
manifest.
Building on this approach, with expert support from external
advisers, we enhanced our proprietary climate risk assessment
methodology to incorporate sector-based transition risk scenario
analysis using the above scenarios. Implemented at the end of FY23,
this enhancement will provide investment teams with more nuanced
insight on climate-related risk as part of the ESG evaluation process
for new deals, and enable us to consider the potential impact on
portfolios under different transition scenarios.
Our approach to scenario analysis will evolve over time to further
incorporate expectations of clients, regulators and best practice in
the industry, with the aim to provide decision-useful and actionable
insight for building resilience to climate-related risks of our
portfolios.
1. The assessment was conducted for portfolios as at 31 December 2022, for which
ICG’s proprietary climate risk assessment methodology applies, and as such excluded
ICG Enterprise Trust, LP Secondaries, Alternative Credit, Secured Credit, and Real
Estate portfolios.
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ICG | ANNUAL REPORT & ACCOUNTS 2023
To support ICG’s net zero commitment, we have set science-based
target to reduce our direct (Scope 1 and Scope 2) emissions by 80%
by 2030 from a 2020 base year, and are on track to deliver (see page
49).
We also seek to link our climate ambition to our Group-level third-
party financing, where possible. We have raised a total of £1.2bn ESG
and sustainability-linked financing, including issuing a €500 million
sustainability-linked Bond with adjustments to the coupon rate linked
to progress against ICG’s approved and validated science-based
targets.
Group operations
We consider that the Group’s direct operations are not materially
exposed to physical climate-related risks because, amongst other
factors, the Group procures mainly professional and business
services and 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 in the short and medium
term.
The Sustainability & ESG, Legal, Risk and Compliance, and
Operations teams work closely to ensure the Group’s compliance
with current and emerging climate-related regulations of relevance
to its operations, including the UK SECR.
Risk management
The processes used by ICG to identify, assess and manage climate-related risks
TCFD recommended disclosure
(a)
(b)
(c)
Description of ICG’s processes for identifying and assessing climate-related risks.
Description of ICG’s processes for managing climate-related risks.
Describe how processes for identifying, assessing, and managing climate-related risks are integrated into ICG’s overall
risk management.
Group Risk Management Framework
Risk management is embedded across the Group through a dedicated RMF, which ensures that current and emerging risks are identified,
assessed, monitored, mitigated, and appropriately governed based on a common risk taxonomy and methodology. This is done within the risk
appetite set by the Board, i.e. the nature and extent of the risks it is willing to take in achieving the Group’s strategic objectives. The Group
adopts both a top-down and a bottom-up approach to risk assessment.
At a Group level, climate-related risk is considered broadly and has been incorporated into our Group-wide RMF as a cross-cutting risk. This
means that we recognise the potential impact climate-related issues may have on other material risks within our RMF, namely the Group
principal risks1 (see page 66). In line with the recommendations of TCFD and regulatory guidance, the Group considers the financial and
non-financial risks arising from physical climate risk (risks related to the physical impacts of climate change) and transition climate risk (risks
related to the transition to a low-carbon economy).
1. The Group defines principal risks as those that would threaten the Group’s business model, future performance, solvency, or liquidity.
ICG | ANNUAL REPORT & ACCOUNTS 2023
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Of the Group’s eight principal risks, we have assessed the following as currently most likely to be impacted by climate-related matters, to
varying degrees, as follows:
Principal risk
Potential impact
External
Environment Risk
Fund Performance
Risk
Financial Risk
Legal, Regulatory
and Tax Risk
Climate-related conditions and/or events outside the Group’s
control, such as rapid shifts in climate policy and/or clients’ climate
requirements, volatility in energy markets, and/or increased
frequency and severity of extreme weather events; may adversely
affect our business, 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.
Climate-related issues (as described above) may affect the
performance of our funds, and therefore make it more challenging to
raise capital or new funds and affect our reputation, thereby
impacting the Group’s ability to grow and compete effectively.
Climate-related risks will increasingly be incorporated into risk
assessments and asset valuations, which could have a material
impact on the attractiveness of existing and potential investments
impacting the Group’s balance sheet and fund investments.
Increasing legal and regulatory requirements in relation to
climate-related issues may result in increasing regulatory
enforcement or litigation risk for the Group and its fund
management entities and potential reputational damage due to
instances of non-compliance with current or emerging climate-
related regulations or market/client expectations, and ensuring that
(where relevant) such requirements are embedded in our
processes, procedures, controls and disclosures.
Operational
Resilience Risk
Potential operational disruption caused by climate-related issues.
primarily physical risk, including within the Group’s key third-party
providers.
Process for risk identification and
management
• Implementation of Climate Change Policy
• Screening and due diligence processes for new
investment opportunities
• Portfolio monitoring and stewardship (see table on
page 41)
• The Group’s New Product Approval process requires
ESG considerations, including climate-related risks
and opportunities, to be integrated into the design of
new strategies or funds where their nature allows us
to drive better ESG outcomes
• Global regulatory horizon scanning, including current
and emerging ESG and climate-related regulations
• Participation in industry working groups focused on
effective implementation of ESG-related regulations
• ESG regulatory task-force within the Group
comprising Legal, Sustainability & ESG, Risk and
Compliance functions; monitoring the implementation
of new regulatory requirements across the Group
• Implementation of Climate Change Policy
• Implementation of the Group’s Sustainable fit-out
guide to our offices
• Implementation of the Supplier Code of Conduct
• Third-party provider ESG assessment questionnaire
rolled out in FY23 to better assess ESG-related risks,
including arising from or related to climate change
Reputational risk, whilst not a principal risk, is also an important
consideration for the Board and the Executive Directors, in setting
and implementing the Group’s strategic objectives. Therefore we
recognise the potential impact to the Group if it is not seen by
stakeholders to be adequately supporting the transition to a
low-carbon economy, addressing clients’ requirements on climate
change, and demonstrating progress towards its commitment to
reach net zero across its operations and relevant investments by
2040.
Further details of the Group’s RMF, including the processes used to
determine which risks could have a material financial impact on the Group,
are set out on page 66 →
Incorporating climate considerations into fund
management
We recognise that climate change may have a material impact on
investment performance and returns over the short, medium and
long term. As described above, we therefore have processes and
procedures in place to account for climate-related risks and
opportunities in the design of new products, the execution of our
investment practices and processes and the focused engagement
with and stewardship over investments.
The Group Climate Change Policy — covering 100% of ICG’s AUM
— requires us to consider the implications of climate-related risks
and opportunities in our investment research, valuation, and
decision-making processes.
Please refer to ICG’s Climate Change Policy for further details including our
complete Exclusion List →
40 ICG | ANNUAL REPORT & ACCOUNTS 2023
Identifying, assessing and managing climate-related risks
Our approach to identifying, assessing, prioritising, and managing climate-related risks for active funds is summarised by key strategy in the
table below:
Asset class
Key strategy
Pre investment
Exclusion List
screening
Bespoke climate risk
assessment
Additional due
diligence for higher
climate risk exposures
Climate risk
assessment findings
included in IC memos
Post investment
Ongoing portfolio
monitoring process
(including through
annual surveys, where
relevant)
Climate stewardship
and engagement
Investment-specific
climate-related targets
and KPIs5
Structured and Private Equity
Private Debt
Real Assets
Credit
European
and Asia
Pacific
Corporate
Strategic
Equity
ICG
Enterprise
Trust / LP
Secondaries
Senior Debt
Partners
North
America
Capital
Partners
Real Estate
Debt
Real Estate
Equity
Infrastructure
Equity
Liquid Credit
CLOs
1
2
2
3
3
4
1. Applicable to direct investments by ICG Enterprise Trust.
2. Harmonised and formalised across all real estate investments from January 2023.
3. For certain investments in the European Real Estate Debt strategy as part of the strategy’s Green Loan Framework.
4. Typically focused on improved disclosures on climate risk and GHG emissions by investee companies.
5. For investments where we have sufficient influence.
Exclusion List screening
For any direct investment, investment teams screen against ICG’s
Exclusion List which, among other activities, prohibits us from
knowingly making direct investments in certain coal, oil and gas
activities, to avoid exposure of our funds to investments that are
inherently prone to having the most significant adverse
environmental and/or social impacts which could impact their
performance in the short, medium and/or long term.
For indirect investments, where feasible, ICG seeks to ensure that
the Exclusion List is implemented subject to a materiality threshold.
Between February 2021 and March 2023, we have declined 99
investment opportunities where climate-related risk was a
contributing factor to the investment decision.
Climate risk assessment
For each potential investment opportunity, we use a climate risk
assessment tool and methodology bespoke to the nature of the
investment (in a company or real asset) to help us identify and
assess whether there are any material climate-related risks
associated with an investment. As standard, these tools utilise
established external and ICG proprietary sources of data to support
the assessment of both physical climate risks and transitional climate
risks. A climate risk scorecard is produced and additional analysis
must be completed for investment opportunities identified as having
a higher exposure to climate-related risks. In situations where we
have sufficient influence, external ESG due diligence, including a
specific analysis of climate-related risks and opportunities, is
conducted as standard. The findings of the climate risk assessment
are consolidated and included as standard in the investment
proposal to the respective IC for most strategies. 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.
In the year to 31 March 2023, we introduced a dedicated climate risk
assessment for our Real Estate and LP secondaries strategies, with
98% of total AUM in funds in their investing period being covered by
an assessment of climate-related risks.
ICG | ANNUAL REPORT & ACCOUNTS 2023
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Engagement and monitoring
Following an investment, material climate-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, ICG may seek to better understand how
these issues are managed either through ongoing dialogue or
through our annual ESG surveys. Climate change is an integral part
of our annual ESG surveys which monitor governance and
management of climate change, as well as performance and
decarbonisation plans. We publish summary results of our ESG
surveys in our annual Sustainability and People report.
Read our Sustainability and People Report →
Where ICG has sufficient influence, we undertake specific carbon
footprint analysis of investments and set bespoke climate-related
targets. For relevant investments, the investment team and
Sustainability & ESG team engage directly with the board and
management teams of the relevant portfolio companies to help them
establish a baseline carbon footprint assessment, and then set
emissions reduction targets aligned with the latest climate science
and develop strategies to help deliver these targets. We also
support portfolio companies to get these targets approved and
validated by the SBTi.
The Group’s exposure to climate risk arising from its balance sheet
investment portfolio (seed assets) is managed in line with our
standard fund management activities, as outlined on page 41.
Further embedding sustainability risks
In FY23, a cross-functional working group with representatives of
Sustainability & ESG, Legal, Risk and Compliance teams was formed
to review the Group’s governance of sustainability risks (including
climate-related risks) and their integration as part of the Group’s
processes, procedures, and RMF. This also included an update of
ICG’s Sustainability Considerations Policy, which summarises our
approach to integrating sustainability risks and other sustainability-
related considerations, as part of its internal porocesses and
procedures.
Following the review, in FY24 we intend to implement any identified
enhancements and further formalise our approach.
Group operations – identifying and managing climate-
related risks
Physical climate risks
Following our established RMF and associated procedures, we
consider that the Group’s direct operations are not materially
exposed to physical climate risks 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) is likely to be materially exposed to physical
climate risks.
The Group’s consistent approach to the management of climate
change is further demonstrated by a Sustainable Fit-Out guide which
sets out our expected minimum standards for the sustainable fit-out,
as necessary, of our 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.
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.
We will continue to monitor changes in the exposure to physical
climate risks of our direct operations and address any identified
risks, as needed.
Transition climate risks
Enhanced GHG emissions reporting and climate-related compliance
requirements have been identified as a potential climate-related risk
to the Group operations. The Sustainability & ESG, Legal, Risk and
Compliance and Operations and IT teams work closely to ensure the
identification of relevant emerging regulatory requirements and the
Group’s compliance with climate-related regulation of relevance to
its operations, including the UK SECR and the UK Energy Savings
Opportunity Scheme (ESOS).
At the end of FY23, our assessment of key suppliers was enhanced to
include a wider range of ESG considerations, including exposure to
and capabilities to manage climate-related risks and opportunities,
where relevant.This will be rolled out in FY24.
42
ICG | ANNUAL REPORT & ACCOUNTS 2023
Metrics and targets
The metrics and targets used to assess and manage relevant climate-related
risks and opportunities
TCFD recommended disclosure
(a) Metrics used by ICG to assess climate-related risks and opportunities in line with its strategy and risk management process.
(b)
(c)
Scope 1, Scope 2, and, if appropriate, Scope 3 GHG emissions, and the related risks.
Description of the targets used by ICG to manage climate-related risks and opportunities and performance against targets.
The Group uses a variety of metrics and tools to assess climate-related risks and opportunities in line with its business strategy, net zero
approach and risk management processes.
While a source of important insight into the Group’s climate-risk exposure and a measure of progress towards our net zero commitment, some
of these metrics and tools have inherent limitations (e.g. scope of coverage, availability of data as well as the uncertainty associated with some
of the underlying assumptions). We utilise internal data and proprietary tools and methodologies, as well as external data sources and
providers, to produce these climate metrics.
ICG | ANNUAL REPORT & ACCOUNTS 2023
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Category
Climate metrics
Group target and/or current activity
Scope
Climate risk
Use and measurement
Climate-related risks exposure
Climate risks
Proprietary climate risk rating
Climate-related risks (both physical and transition) are assessed as standard for all direct
investment opportunities utilising our proprietary, asset-specific methodologies.
Individual direct investments
Transition & Physical
Assesses the potential physical and transition climate-related risks for individual
investment opportunities using the Group’s proprietary climate risks assessment
methodology. Climate risk rating is incorporated into all investment proposals for
consideration by ICs.
Potentially heightened climate
risk exposure
Conduct a Group-wide top-down portfolio assessment with a view to inform ICG’s ESG and
climate-specific objectives and priorities.
Investments across our Structured and
Transition & Physical
Measures the exposure of portfolios to potentially heightened climate risk based on the
Group’s proprietary climate risks assessment methodology, expressed as % of portfolio
by cost/value of investments, and % of investments with material exposure.
Heightened climate risk sector
exposure
Conduct a Group-wide top-down portfolio assessment with a view to inform ICG’s ESG and
climate-specific objectives and priorities.
Investments across our Structured and
Transition
Assess the exposure of certain portfolios to heightened climate risk sectors 1, expressed
as % of portfolio by invested capital.
Private Equity, Private Debt and Credit
asset classes, and Infrastructure
Equity strategy.
Private Equity, Private Debt, Real
Assets and Credit asset classes.
Embedding climate considerations into our culture
Remuneration
Proportion of Executive
Directors remuneration linked
to sustainability and climate
considerations*
Investment lifecycle
ESG and climate
considerations incorporated
into the investment lifecycle
Sustainability-linked
financing
Amount of ESG or
Sustainability financing, with
climate-related metrics
Transition to low-carbon economy
The Group and its Board has long-term approach to variable pay, which aligns our Executive
Directors to the interests of our shareholders. As per the Directors’ Remuneration Policy, the
Group makes a single variable pay award each year to Executive Directors, based on a
balanced scorecard of KPIs. Since FY22, the remuneration of the Executive Directors has been
directly linked to several sustainability targets. See Remuneration Committee Report for
further detail (page 103).
For each investment strategy, investment teams analyse ESG matters, including climate
change, to the extent feasible, at each stage of the investment process, from screening,
through due diligence, closing, monitoring and eventual exit. See page 41 as well as ICG
Responsible Investing and Climate Change policies for further details.
Executive Directors’ annual variable
Transition & Physical
Assesses the link of executive remuneration with sustainability considerations, including
pay
the Group’s net zero commitment (see page 103).
All investment strategies
Transition & Physical
Assesses the extent to which ESG and climate change considerations are embedded
within the investment decision making and portfolio monitoring processes adopted by
ICG.
The Group seeks to link its climate ambition to third-party financing, where possible.
Group and Fund related third-party
Transition & Physical
Measures the amount of third-party financing with built in climate-metrics that may adjust
financing
the margin or coupon of the facility. Expressed as an aggregate absolute amounts in GBP
for the Group and USD for fund related third-party financing.
Decarbonising our
investment
portfolios
Financed emissions
Long-term goal: reach net zero GHG emissions across relevant investments by 2040.
Interim target (approved and validated by the SBTi): 100% of relevant investments to have
SBTi-approved science-based targets by 2030, with an interim target of 50% by 2026.
Over time, the tools to assess financed emissions and measure net zero will evolve in the
private markets. In addition to the setting of SBTs for relevant investments, ICG is developing
a plan to systematically assess potential net zero solutions for the strategies not covered by
our SBTs.
Weighted average carbon
intensity
The Group is establishing a baseline for this metric across its portfolios.
Active funds making direct
Transition
Capacity for
investing in climate
solutions
Investments in low-carbon and
energy transition
infrastructure and real estate*
Installed renewable energy
generating capacity
ICG has three strategies that focus on investments in real assets that are already low-carbon in
nature or support directly the energy transition.
Infrastructure Equity, European Real
Transition
Measures the proportion of Group’s investments into low-carbon and energy transition
Estate Debt, and Sale and Leaseback
related infrastructure and real estate, expressed as % of total AUM. Monitored internally
Our operations
Scope 1 and 2 absolute GHG
emissions (market and location
based)*
Long-term goal: net zero GHG emissions across operations by 2040.
Interim target (approved and validated 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 (market based).
Scope 1 and 2 GHG emissions
intensity (market based)*
ICG seeks to improve the GHG intensity of our operations, year on year.
Group operations: combustion of fuel,
Transition
Measures efficiency of the direct operational carbon footprint of the Group relative to its
Purchased energy from
renewable sources (%)
Scope 3 absolute GHG
emissions*
ICG seeks to maximise the proportion of electricity consumption from renewables sources,
and encourage landlords to provide low-carbon heating solutions, wherever feasible.
The Group is establishing a complete baseline and assessing the tools and levers necessary to
reduce its scope 3 emissions.
* Indicates a cross-industry climate-related metric as per the TCFD Guidance on Metrics, Targets, and Transition Plans, 2021
1. Source ICG, the Heightened climate risk sectors categorisation is based on the latest TCFD Implementation Guidance (October 2021) which identifies the following sectors with the
highest likelihood of climate-related financial impacts: Energy, Transport, Materials & Buildings, and Agriculture, Food & Forestry Products. ICG has adapted these to incorporate
the framework provided by the Guidance on Use of Sectoral Pathways for Financial Institutions, produced by the Glasgow Financial Alliance for Net Zero in June 2022.
44 ICG | ANNUAL REPORT & ACCOUNTS 2023
Relevant investments2
Transition
Measures the proportion of relevant investments covered by science based targets.
Other Active funds3 making direct
Transition
Assesses the absolute GHG emissions associated with and attributable to a portfolio of
Measured as % of invested capital. Monitored internally and reported publicly on an
annual basis.
investments, expressed in tCO2e. Monitored internally and reported to investors in
certain active funds at least annually.
Measures a portfolio’s exposure to carbon-intensive investments, expressed in tCO2e/
million revenue in fund currency for corporate investments; or in tCO2e/m2 for real estate
investments. Monitored internally and reported to investors in certain active funds at
least annually.
investments across our Structured and
Private Equity, Private Debt, Real
Assets, and Credit asset classes.
investments across our Structured and
Private Equity, Private Debt, Real
Assets, and Credit asset classes.
and publicly reported annually.
Infrastructure Equity strategy
Transition
Measures the aggregate and annual change in installed renewable energy generating
capacity, expressed in GW. Monitored internally and publicly reported annually.
Group operations: combustion of fuel,
Transition
Measures the direct operational carbon footprint of the Group in line with the GHG
fugitive emissions, and purchased
electricity and heat
fugitive emissions, and purchased
electricity and heat
Protocol, expressed in tCO2e. Assessed annually and reported publicly, subject to
independent limited assurance.
revenue, expressed in tCO2e per £M revenue. Assessed annually and reported publicly,
subject to independent limited assurance.
Group operations: purchased
Transition
Measures the proportion of purchased electricity and heat from renewable sources.
electricity and heat
Assessed annually and reported publicly, subject to independent limited assurance.
Group operations: business travel,
Transition
Measures the indirect operational carbon footprint of the Group in line with the GHG
purchased goods and services, water
supply and waste generation
Protocol, expressed in tCO2e. Assessed annually and reported publicly, subject to
independent limited assurance.
Category
Climate metrics
Group target and/or current activity
Scope
Climate risk
Use and measurement
Climate-related risks exposure
Climate risks
Proprietary climate risk rating
Climate-related risks (both physical and transition) are assessed as standard for all direct
Individual direct investments
Transition & Physical
investment opportunities utilising our proprietary, asset-specific methodologies.
Assesses the potential physical and transition climate-related risks for individual
investment opportunities using the Group’s proprietary climate risks assessment
methodology. Climate risk rating is incorporated into all investment proposals for
consideration by ICs.
Investments across our Structured and
Private Equity, Private Debt and Credit
asset classes, and Infrastructure
Equity strategy.
Investments across our Structured and
Private Equity, Private Debt, Real
Assets and Credit asset classes.
Transition & Physical
Measures the exposure of portfolios to potentially heightened climate risk based on the
Group’s proprietary climate risks assessment methodology, expressed as % of portfolio
by cost/value of investments, and % of investments with material exposure.
Transition
Assess the exposure of certain portfolios to heightened climate risk sectors 1, expressed
as % of portfolio by invested capital.
Executive Directors’ annual variable
pay
Transition & Physical
Assesses the link of executive remuneration with sustainability considerations, including
the Group’s net zero commitment (see page 103).
Investment lifecycle
ESG and climate
For each investment strategy, investment teams analyse ESG matters, including climate
All investment strategies
Transition & Physical
Assesses the extent to which ESG and climate change considerations are embedded
within the investment decision making and portfolio monitoring processes adopted by
ICG.
Group and Fund related third-party
financing
Transition & Physical
Measures the amount of third-party financing with built in climate-metrics that may adjust
the margin or coupon of the facility. Expressed as an aggregate absolute amounts in GBP
for the Group and USD for fund related third-party financing.
Decarbonising our
Financed emissions
Long-term goal: reach net zero GHG emissions across relevant investments by 2040.
Relevant investments2
Transition
Other Active funds3 making direct
investments across our Structured and
Private Equity, Private Debt, Real
Assets, and Credit asset classes.
Active funds making direct
investments across our Structured and
Private Equity, Private Debt, Real
Assets, and Credit asset classes.
Transition
Transition
Infrastructure Equity, European Real
Estate Debt, and Sale and Leaseback
Transition
Infrastructure Equity strategy
Transition
Group operations: combustion of fuel,
fugitive emissions, and purchased
electricity and heat
Group operations: combustion of fuel,
fugitive emissions, and purchased
electricity and heat
Group operations: purchased
electricity and heat
Group operations: business travel,
purchased goods and services, water
supply and waste generation
Transition
Transition
Transition
Transition
Measures the proportion of relevant investments covered by science based targets.
Measured as % of invested capital. Monitored internally and reported publicly on an
annual basis.
Assesses the absolute GHG emissions associated with and attributable to a portfolio of
investments, expressed in tCO2e. Monitored internally and reported to investors in
certain active funds at least annually.
Measures a portfolio’s exposure to carbon-intensive investments, expressed in tCO2e/
million revenue in fund currency for corporate investments; or in tCO2e/m2 for real estate
investments. Monitored internally and reported to investors in certain active funds at
least annually.
Measures the proportion of Group’s investments into low-carbon and energy transition
related infrastructure and real estate, expressed as % of total AUM. Monitored internally
and publicly reported annually.
Measures the aggregate and annual change in installed renewable energy generating
capacity, expressed in GW. Monitored internally and publicly reported annually.
Measures the direct operational carbon footprint of the Group in line with the GHG
Protocol, expressed in tCO2e. Assessed annually and reported publicly, subject to
independent limited assurance.
Measures efficiency of the direct operational carbon footprint of the Group relative to its
revenue, expressed in tCO2e per £M revenue. Assessed annually and reported publicly,
subject to independent limited assurance.
Measures the proportion of purchased electricity and heat from renewable sources.
Assessed annually and reported publicly, subject to independent limited assurance.
Measures the indirect operational carbon footprint of the Group in line with the GHG
Protocol, expressed in tCO2e. Assessed annually and reported publicly, subject to
independent limited assurance.
Potentially heightened climate
Conduct a Group-wide top-down portfolio assessment with a view to inform ICG’s ESG and
risk exposure
climate-specific objectives and priorities.
Heightened climate risk sector
Conduct a Group-wide top-down portfolio assessment with a view to inform ICG’s ESG and
exposure
climate-specific objectives and priorities.
Embedding climate considerations into our culture
Remuneration
Proportion of Executive
The Group and its Board has long-term approach to variable pay, which aligns our Executive
Directors remuneration linked
Directors to the interests of our shareholders. As per the Directors’ Remuneration Policy, the
to sustainability and climate
Group makes a single variable pay award each year to Executive Directors, based on a
considerations*
balanced scorecard of KPIs. Since FY22, the remuneration of the Executive Directors has been
directly linked to several sustainability targets. See Remuneration Committee Report for
further detail (page 103).
considerations incorporated
change, to the extent feasible, at each stage of the investment process, from screening,
into the investment lifecycle
through due diligence, closing, monitoring and eventual exit. See page 41 as well as ICG
Responsible Investing and Climate Change policies for further details.
Sustainability-linked
Amount of ESG or
The Group seeks to link its climate ambition to third-party financing, where possible.
financing
Sustainability financing, with
climate-related metrics
Transition to low-carbon economy
investment
portfolios
Interim target (approved and validated by the SBTi): 100% of relevant investments to have
SBTi-approved science-based targets by 2030, with an interim target of 50% by 2026.
Over time, the tools to assess financed emissions and measure net zero will evolve in the
private markets. In addition to the setting of SBTs for relevant investments, ICG is developing
a plan to systematically assess potential net zero solutions for the strategies not covered by
our SBTs.
Weighted average carbon
The Group is establishing a baseline for this metric across its portfolios.
intensity
Capacity for
Investments in low-carbon and
ICG has three strategies that focus on investments in real assets that are already low-carbon in
investing in climate
energy transition
nature or support directly the energy transition.
solutions
infrastructure and real estate*
Installed renewable energy
generating capacity
Our operations
Scope 1 and 2 absolute GHG
Long-term goal: net zero GHG emissions across operations by 2040.
emissions (market and location
Interim target (approved and validated by the SBTi): to reduce the Group’s direct Scope 1 and
based)*
Scope 2 GHG emissions by 80% by 2030 from a 2020 base year (market based).
Scope 1 and 2 GHG emissions
ICG seeks to improve the GHG intensity of our operations, year on year.
intensity (market based)*
Purchased energy from
renewable sources (%)
ICG seeks to maximise the proportion of electricity consumption from renewables sources,
and encourage landlords to provide low-carbon heating solutions, wherever feasible.
Scope 3 absolute GHG
The Group is establishing a complete baseline and assessing the tools and levers necessary to
emissions*
reduce its scope 3 emissions.
2. Relevant investments includes all investments within Structured and Private Equity and Real Assets where ICG has sufficient influence - defined as at least 25% of fully diluted shares
and a board seat.
3. Active funds for this metric are those third-party funds managed by ICG that principally focus on direct investments and that were either in fundraising or investing period or
open-ended in nature, or were already measuring this metric at the start of FY22.
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Assessing the exposure of portfolios to
climate-related risks
Exposure to heightened climate-related risks by asset class
The principal mechanism ICG employs for assessing climate-related
risks before making a direct investment in a company is a proprietary
climate risk assessment methodology and tool that we developed
in-house with the support of a third-party adviser. The assessment
methodology utilises various external data sources, including TCFD
guidelines, the SASB Climate Risk Technical Bulletin, ThinkHazard,
the World Bank’s Climate Change Performance Index and Carbon
Pricing Dashboard, among others. Each investment opportunity
receives an overall climate risk rating on a 4-grade scale from Low to
Very High. The rating combines exposure to transition risk (sector
and value chain) and physical risk, taking into account the countries
of company headquarters and key operational assets.
While this assessment approach was designed primarily to support
investment decision making and engagement, we also use the climate
risk ratings to assess the exposure of relevant portfolios to
potentially heightened climate-related risks. As at 31 December
2022, 85.0% of assessed portfolios received a climate risk rating of
Low or Medium and only 3.3% with Very High risk rating, which we
consider as potentially heightened climate-related risk.
Distribution of climate risk ratings for total assessed ICG
portfolios (31 December 2022)
Low
Medium
High
Very High
53.9%
31.2%
11.6%
3.3%
The proportion of investments with potentially heightened exposure to climate-related risks by asset class is presented in the table below.
Overall, we saw low exposure of our portfolios as at 31 December 2022 across all assessed ICG asset classes, which is also in line with low
exposure as at 31 December 2021.
Exposure of assessed portfolios1 to potentially heightened climate-related risks by asset class
Year
% of portfolio by
investment cost5
Structured and
Private Equity2
Private Debt
Infrastructure Equity
(Real Assets)3
Credit4
Total assessed
ICG portfolios
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2.1%
3.4%
0.3%
0.0%
0.0%
0.0%
7.8%
6.4%
3.3%
3.8%
1. Portfolio composition as at 31 December in each respective year.
2. Excludes ICG Enterprise Trust and LP Secondaries - assessed portfolio in 2022 represents 93% of third-party AUM in this asset class as at 31 December 2022 (2021: 93%).
3. Relates to Infrastructure Equity, which represents 16% of third party AUM in this asset class as at 31 December 2022 (2021: 16%)
4. Excludes Alternative Credit and Secured Credit portfolios. Assessed portfolio in 2022 represents 87% of third-party AUM in this asset class as at 31 December 2022 (2021: 91%)
5. Except for Liquid Credit figures which are based on Market Value of investments. 2022 figures as at 31 December 2022, 2021 figures based on latest available at the time of
conducting the assessment.
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ICG | ANNUAL REPORT & ACCOUNTS 2023
Embedding climate considerations into our culture
Remuneration
The Group and its Board have a long-term orientated approach to
variable pay, which aligns our Executive Directors to the interests of
our shareholders. As per the Directors’ Remuneration Policy, the
Group makes a single variable pay award each year to Executive
Directors, based on a balanced scorecard of KPIs, one of which is
Culture, D&I and Sustainability. The details of the FY23 outcome and
weighting for each Executive Director can be found on page 103.
During FY23, the Group took efforts to further embed assessment
and management of climate-related risks and opportunities in our
investment culture. The Group incorporated ESG assessment into
the annual performance appraisals of portfolio managers across the
firm. The aim of this practice is to reinforce alignment and
accountability at the right levels for achieving ESG excellence, while
ensuring we comply with a continued increase in relevant regulatory
requirements. It will also position portfolio managers to lead by
example, ensuring ESG and climate-related issues are being
appropriately and consistently considered in their teams’
approaches to investment.
Investment lifecycle
For each investment strategy, investment teams analyse ESG matters,
including climate change, to the extent feasible, at each stage of the
investment process, from screening, through due diligence, closing,
monitoring and eventual exit.
See ICG Responsible Investing and Climate Change policies for
further details about our approach. ICG Sustainability and People
Report 2022 provides further insight into key process enhancements
and highlights per asset class during 2022.
Sustainability-linked financing
At the Group level we have raised a total of $1.2bn 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.
Across the funds managed by the Group, we have raised a total of
$2.8bn ESG-linked fund-level financing since 2021, with climate-
related metrics.
Transition to low-carbon economy
Our net zero strategy will continue to evolve as we work towards
building a more comprehensive approach across the Group. Over
time, as we incorporate measurement frameworks for our various
investment portfolios and build our capabilities and access to
relevant, quality data, we will expand our reporting on metrics, taking
into consideration the upcoming, applicable TCFD-related
regulatory requirements, the recommendations and guidance of the
TCFD, industry best practice and stakeholder expectations. Below
we outline the key metrics and targets we currently assess and
monitor, where available.
Decarbonising our investment portfolios
Financed emissions
In November 2021, ICG committed to reach net zero GHG emissions
across its operations and relevant investments. In order to meet this
ambition we need to reduce emissions associated with our
investment activities. To support our commitment we set a portfolio
coverage science based target approved and validated by the SBTi:
• ICG’s target for 100% of relevant investments to have SBTi-
approved science-based targets by 2030, with an interim target of
50% by 2026.
As at 31 December 2022, the Group has engaged with all 326
portfolio companies across five investment strategies7 qualifying as
relevant investments, representing nearly $8bn of invested capital.
Over time, the tools to assess financed emissions and measure net
zero will evolve in the private markets. In addition to the setting of
SBTs for relevant investments, ICG is developing a plan to
systematically assess potential net zero solutions for the strategies
not covered by our SBTs.
In FY23 we continued to expand the measurement of financed
emissions in line with the Partnership for Carbon Accounting
Financials Standard, and inclusion of such data as standard in ESG
reporting to clients or active funds. Disclosure of GHG data by
private companies and for real estate property is still nascent, so for
any gaps in actual data we utilise proxy data modelled by a reputable
external data provider. At the end of FY23, financed emissions,
alongside other portfolio metrics recommended by the TCFD, such
as weighted average carbon intensity and portfolio carbon footprint,
were assessed and reported for funds representing 36% of total
AUM and we will continue to explore ways to increase this coverage.
6. Relevant investments that were in our portfolios at the time of setting our portfolio coverage target that are still in the portfolio as at 31 December 2022. Note that the SBTi currently
does not validate and approve SBTs for educational institutions, so three portfolio companies in this sector have been excluded from our update.
7. These are Europe Corporate, Asia Pacific Corporate, Europe Mid-Market, and Infrastructure Equity.
ICG | ANNUAL REPORT & ACCOUNTS 2023
47
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES CONTINUED
companies located in Asia Pacific, Europe, and North America qualify as relevant investments for ICG’s portfolio coverage target.
ICG has engaged all such relevant investments on setting SBTi-approved GHG emissions reduction targets.
32
Completed
In progress
In early stages
Each of these companies is at a different stage of the SBT setting process, with progress shown below across three key milestones:
1 Establishing the required baseline carbon
footprint by the SBTi3
2 Developing SBTs and decarbonisation plans to deliver
on them in the short to mid term
are in early stages
13%
16%
are working on their baseline
28%
have completed Scope 1 and 2 emissions, and are in the
process of completing Scope 3 emissions calculations
44%
have completed a full baseline
25%
are in early stages
47%
are in the process of developing their
targets and plans
28%
have a fully developed target and plan
Have set SBTs and submitted
them to SBTi
Of which,
have approved targets by SBTi
Number of
relevant
investments
9
6
3 Have set SBTs
% of relevant investments
by invested
capital
by number of
companies
15% 28%
7%
19%
Commitments for over
69
thousand tonnes CO2e of
baseline emissions to be
reduced in line with the latest
climate science4
does not validate and approve SBT’s for educational institutions, so three portfolio companies in this sector have been excluded from our update.
1. Relevant investments that were in our portfolios at the time of setting our portfolio coverage target that are still in the portfolio as at
31 December 2022. Note that the SBTi currently does not validate and approve SBTs for educational institutions, so three portfolio
1. Relevant investments that were in our portfolios at the time of setting our portfolio coverage target that are still in this portfolio as at 31 December 2022. Note that the STBi currently
companies in this sector have been excluded from our update.
2. These are Europe Corporate, Asia Pacific Corporate, Europe Mid-Market, North America Private Equity, and Infrastructure Equity.
2. These are Europe Corporate, Asia Pacific Corporate, Europe Mid-Market, and Infrastructure Equity.
3. Percentages are calculated based on number of companies in the respective stages, and may not add to 100% due to rounding.
3. Percentages are calculated based on number of companies in the respective stages, and may not add to 100% due to rounding.
4. As per the applicable SBTi requirements for target setting and validation, as of 31 December 2022.
4. As per the applicable SBTi requirements for target setting and validation, as of 31 December 2022.
48
ICG | ANNUAL REPORT & ACCOUNTS 2023
Spotlight:
Towards harmonised GHG accounting and reporting
in private equity – an iCI sector guidance
Private market investors are increasingly being called upon to
set ambitious climate commitments. Regulators, investors,
lenders, and other stakeholders alike, are demanding GHG
reporting against consistent and comparable climate metrics.
Against this backdrop of rising transparency requests, the iCI
members saw an opportunity to develop a specific guidance to
private equity investors. As co-chair of the working group
tasked with developing this guidance, ICG was proud to
spearhead this effort, and bring our experience to bear in
providing investors and their portfolio companies consistent
guidance on:
1. Carbon footprinting - Calculating Scope 1, Scope 2 and
Scope 3 emissions.
2. Financed emissions - Attributing GHG emissions from
portfolios to GPs and Limited Partners.
3. Fund reporting - Aggregating emissions at the fund level and
reporting to stakeholders.
4. Target setting - Conducting portfolio analysis with a view to
set targets that support the transition to a net zero economy.
Capacity for investing in climate solutions
Investments in real assets, such as commercial real estate, housing
developments, renewable energy and other infrastructure delivering
core services, can play an important role in supporting global
economic growth and enhancing social cohesion. The Organisation
for Economic Co-operation and Development estimates5 that $6.9
trillion per year is needed up to 2050 for investment in sustainable
and resilient infrastructure to achieve the UN Sustainable
Development Goals by 2030 and net zero emissions by 2050.
To capitalise on this growing investment opportunity, ICG has
launched a number of strategies investing in infrastructure and real
estate that underpin or have strong potential to align with the
Group Scope 1 and 2 (market-based) GHG emissions (tCO2e)
transition to a low carbon economy. These strategies have
sustainability frameworks designed to align with specific UN
Sustainable Development Goals (SDGs), and all incorporate
climate-focused SDGs including SDG 7 (Clean Energy) and 13
(Climate Action); and deliver tangible, targeted improvements in the
sustainability performance of assets as part of the asset management
plans. As at 31 March 2023, these strategies constitute 48% of total
Group AUM in Real Assets, compared to 40% a year earlier; and
represent a growth opportunity for ICG.
In addition, as at 31 March 2023, 1.9GW of renewable energy
capacity was deployed across the Infrastructure Equity portfolios,
compared to 221 MW, as at 31 December 2020.
Our operations
The following targets and underlying metrics are used by the Group
to assess climate-related risk and opportunities for its operations in
line with its strategy and risk management process.
Long-term goal: net zero operations by 2040
Interim target (approved and validated 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 Group measures and discloses its operational GHG emissions in
compliance with the SECR requirements (see page 50). This
includes Scope 1 and Scope 2 GHG emissions and related energy use
broken down by region and source. In addition, we disclose scope 1
and 2 emissions intensity (tCO2e/£M revenue), and Scope 3 GHG
emissions related to business travel, purchased goods and services,
water use, and generated waste.
The chart below illustrates ICG’s emissions reduction versus its
scope 1 and 2 SBT trajectory and a 1.5 degree aligned trajectory.
1000
800
600
400
200
0
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Total Scope 1 and 2 GHG emissions (tCO2e)
ICG SBT linear trajectory
1.5 degree aligned trajectory
5. Source: UNEP, accessed on 29 November 2022, https://www.unep.org/explore-topics/green-economy/what-we-do/sustainable-infrastructure-investment
ICG | ANNUAL REPORT & ACCOUNTS 2023
49
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES CONTINUED
Annual Group GHG emissions statement
This statement has been prepared in accordance with our regulatory
obligation to report GHG emissions pursuant to the Companies
(Directors’ Report) and Limited Liability Partnerships (Energy and
Carbon Report) Regulations 2018 which implement the UK
government’s policy on SECR.
Operational GHG Emissions Performance
During the reporting period 1 April 2022 to 31 March 2023, our
measured Scope 1 and Scope 2 (market-based) emissions totalled
121 metric tCO2e compared to 81 metric tCO2e in FY22. The scope 1
and 2 intensity equated to 0.20* metric tCO2e/FTE and 0.19* metric
tCO2e/£mn revenue, compared to 0.13 metric tCO2e/FTE and
0.08 metric tCO2e/£mn revenue in FY22.
Scope 1 and 2 emissions (mtCO2e)1
2023: 121
121
2022: 81
81
2021: 195
d
e
s
a
b
-
t
e
k
r
a
M
FY23
FY22
FY21
FY20
82
112
GHG Emissions1
Direct
emissions
(scope 1)
Indirect
emissions
(scope 2)
Indirect
emissions
(scope 3)
Combustion of fuel
and operation of
facilities
Purchased electricity/
heat (location-based)
Purchased electricity/
heat (market-based)
Total scope 1 and 22
Business travel
(flights, rail, vehicles,
taxis, hotels)
Waste generated in
operation (incl. water)
New scope 3
categories to FY23
Purchased Goods and
Services3,4
Fuel and energy
related activities3
Total Scope 3
46*
7
11
66
250*
194
211
448
75*
121
74
81
184
195
479
545
2,724*
749
41
2,640
3*
4
0.6
13,286*
–
76*
16,089
–
753
–
–
42
8
–
–
2,648
* ICG plc engaged Ernst & Young LLP (EY) to provide limited assurance over GHG
emission metrics as indicated by * in the FY23 annual GHG Emission Statement. The
assurance engagement was planned and performed in accordance with International
Standard on Assurance Engagements (UK) 3000 (July 2020), as promulgated by the
Financial Reporting Council (FRC). The assurance report is publicly available at
https://www.icgam.com/sustainability-esg/. It includes details on the scope,
respective responsibilities, approach, restrictions, limitations and conclusions.
Previous years data were verified to ISO14064 by alternative providers.
2020: 545
2023: 297
309
237
53
244
2022: 201
59
142
2021: 222
d
e
s
a
b
-
n
o
i
t
a
c
o
L
92
130
2020: 514
UK
RoW
284
230
FY23 Scope 1 and 2 (market-based) emissions have decreased by
78% from ICG’s FY20 baseline, driven by an increase in the number
of offices procuring 100% renewable electricity.
The year-on-year increase in scope 1 and 2 (market-based)
emissions from FY22 to FY23 is primarily due to the expansion of ICG
operations in North America (New York), and an improvement in the
accessibility of heating (scope 1) data from landlords in leased
facilities in other global operations. During FY23, ICG North America
1. Numbers in the table have been rounded up or down to the nearest metric tonne (mt) of CO2e.
2. The sum of scope 1 and 2 emissions is based on the scope 2 market based data.
3. 2023 was the first year that Purchased Goods and services (PG&S) and fuel and energy related activities were calculated for ICG. PG&S calculation method used was a spend-based
approach.
4. PG&S spend does not include third party administrators of funds managed by ICG.
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ICG | ANNUAL REPORT & ACCOUNTS 2023
Energy Consumption (kWh)
2023: 835,901
275,084
560,817
2022: 650,729
y
t
i
c
i
r
t
c
e
E
l
279,585
371,144
2021: 686,572
383,087
303,486
2020: 1,468,177
910,966
557,211
254,307
284,378 31,778
2023: 254,307
0
2022: 25,992
s
l
e
u
F
25,992
0
2021: 37,927
22,727
15,200
2020: 316,156
UK
RoW
moved to a larger office location, resulting in an overlap of two
separate premises under ICG control for a period of 6 months from
31 August to 31 January 2023, while experiencing an increase in
electricity demand (and therefore scope 2 location-based
emissions) from its expanded workforce.
In FY23, ICG expanded its inventory profile to include its purchased
goods and services (PG&S), which now constitute the majority of
scope 3 emissions (82%). As this is the first year of estimating PG&S
emissions, ICG has utilised a spend-based estimation method for this
initial GHG profile of the supply chain. Waste and water related
emissions have reduced year on year due to waste reduction
measures implemented in our London office, whilst business travel
has rebounded to pre-pandemic levels, driven by an increase in FTE
and the removal of global restrictions to international travel.
Metrics
Scope 1 and 2 (market-based
emissions) per FTE (mtC02e)1
Scope 1 and 2 (market-based
emissions) per £Mn revenue
(mtCO2e)
FY23
FY22
FY21
FY20
0.20
0.13
0.35
1.07
0.19
0.08
0.24
1.32
Energy Consumption and Efficiency
During the year, our total fuel and electricity consumption in our
operations totalled 1,090 MWh. 25% of energy was electricity
consumed in the UK, 33% was electricity consumed in the US, while
the remaining 11 global sites consumed 18%. The remainder was
through heating fuel in 4 sites globally. The split between fuel and
electricity consumption is displayed in the table below. 76% of
electricity purchased is from renewable sources either through
green tariffs or backed by renewable energy certification, compared
with 58% in the previous year. ICG continues to expand the purchase
of renewable electricity while we explore energy efficiency solutions
such as the installation of LED lighting in suitable global offices. Fuel
consumption has increased from 2022 due to the new US office
utilising natural gas as compared to the electric based heating
system from the previous premises.
Electricity 3
Of which, from renewable
sources 3
Fuels2, 3
Total Electricity and Fuels3
FY23
FY22
FY21
FY20
835,901
650,729
686,572 1,468,177
638,697
254,307
1,090,207
379,161
25,992
676,721
154,744
37,927
–
316,156
724,499 1,784,333
1. FTE figures include all staff: permanent employees and contractors
2. Natural gas and transportation fuels (petrol and diesel)
3. Units provided in kWh
ICG | ANNUAL REPORT & ACCOUNTS 2023
51
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES CONTINUED
GHG statement methodology
Reporting period - 1 April 2022 - 31 March 2023
Boundary - Operational control. Facilities that are operated by ICG
where we have more than five members of staff in the building on a
permanent basis.
ICG quantifies and reports our organisational GHG emissions in
alignment with the World Resources Institute’s Greenhouse Gas
Protocol Corporate Accounting and Reporting Standard, alignment
with the Scope 2 Guidance, and Corporate Value Chain (Scope 3)
Standard. We consolidate our organisational boundary according to
the operational control approach, which includes all our offices
around the world with five or more employees.
The GHG sources that constituted our operational boundary for the
2023 reporting period are:
• Scope 1: Natural gas combustion within boilers and refrigerants
from air-conditioning equipment
• Scope 2: Purchased electricity consumption for our own use
(location based and market based)
• Scope 3: Business travel (rail, taxis, hotels (new to FY23) and air
travel), water supply and waste generation, transmission and
distribution of electricity (new to FY23 inventory), purchased
goods and services (new to FY23).
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. Further detailed explanation of the calculation
approach is provided in page 213.
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 when certified green electricity has
been procured.
Consumption data has been converted into CO2 equivalent using:
• UK Government 2020, 2021 and 2022 Conversion Factors for
Company Reporting across all emissions sources unless those
below were used.
• International Energy Agency international electricity conversion
factors (to calculate emissions from corresponding activity data)
• United States Environmental Protection Agency data for train
travel in the US, and Network for Transport Measures (NTM) data
for train travel in the EU.
• For business travel based on expenses, Quantis spend based
emissions factors are used.
• Spend based emissions factors from the Department for Business,
Energy and Industrial Strategy (BEIS) and sourced from the GHG
Protocol scope 3 guidance.
52
ICG | ANNUAL REPORT & ACCOUNTS 2023
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 30 to 52).
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 set out on page 66.
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 2023, the Group has a permanent employee
population of 582 of which 212 are women and 370 are men.
There are three Executive Directors including one woman and one
director from an ethnically diverse background. Of the 31 senior
managers reporting to the Executive Directors (including those
based outside the UK), 23% are women.
Board diversity
Biographical details of the Board are set out on page 78 with
information on diversity on page 96.
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 18).
We have published our gender pay gap data which is set out on
page 112.
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
TCFD are set out on page 30.
The Group’s disclosures in accordance with the SECR requirements
are set out on page 50.
ICG | ANNUAL REPORT & ACCOUNTS 2023
53
FINANCE REVIEW
A disciplined approach to investing
for future growth
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.
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-UK-adopted IAS measures. The APM form the basis of the financial results discussed in this review, which the Board believes
assist shareholders in assessing their investment and the delivery of the Group’s strategy through its financial performance.
The substantive difference between APM and UK-adopted IAS is the consolidation of funds and related entities deemed to be controlled by
the Group, which are included in the UK-adopted IAS consolidated financial statements but excluded for the APM.
Under IFRS 10, 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.
The Group’s profit before tax on an UK-adopted IAS basis was below the prior period at £251.0m (FY22: £565.4m). On the APM basis it was
below the prior period at £258.1m (FY22: £568.8m).
Detail of these adjustments can be found in note 4 to the UK-adopted IAS consolidated financial statements on pages 142 to 206.
AUM
Total AUM
During the period, total AUM grew 14% on a constant currency basis (up 11% on a reported basis) and at 31 March 2023 was $80.2bn (31
March 2022: $72.1bn). The balance sheet investment portfolio accounted for 4.1% of the Total AUM (31 March 2022: 5.0%).
Third-party AUM and fee-earning AUM
Third-party AUM grew 15% on a constant currency basis during the period, and stood at $77.0bn at 31 March 2023 (31 March 2022:
$68.5bn).
Fee-earning AUM grew 10% on a constant currency basis during the period, and stood at $62.8bn at 31 March 2023 (31 March 2022:
$58.3bn).
At 31 March 2023 we had $20.9bn of third-party AUM available to deploy in new investments (dry powder), $14.7bn of which is not-yet-fee-
earning, but will be when the capital is invested or enters its investment period.
With effect from 31 March 2023, the methodology for calculating third-party AUM was updated in line with industry practice to include i) all
uncalled capital commitments until they are legally expired (previously, uncalled capital commitments were removed from third-party AUM
as a ‘step-down’ despite the fund being legally able to call such capital); and ii) permanent fund-level leverage where such leverage has been
signed with the leverage provider and where we charge fees on the leverage. The aggregate impact of these changes is to increase third-
party AUM by $3.1bn and fee-earning AUM by $0.5bn.
54
ICG | ANNUAL REPORT & ACCOUNTS 2023
At 31 March 2023 56% of our fee-earning AUM was in euros; 31% in dollars; 12% in sterling; and 1% in other currencies. Our funds pay fees
in their fund currency. Third-party AUM reduced by $1.6bn during the period due to FX movements, partially offset by positive market
moves of $0.7bn impacting funds that charge fees on NAV. For more details on the impact of FX rates on our reported financials, see page 65.
Third-party AUM ($m)
At 1 April 2022
Additions1
Realisations
Policy change
FX and other
At 31 March 2023
Change $m
Change %
Change % (constant exchange rate)2
1. Includes $0.3bn of steps-up;
2. See page 65 for an explanation of constant exchange rate calculation
Fee-earning AUM ($m)
At 1 April 2022
Funds raised: fees on committed capital
Deployment of funds: fees on invested capital
Total additions
Policy change
Realisations
FX and other
At 31 March 2023
Change $m
Change %
Change % (constant exchange rate)1
1. See page 65 for an explanation of constant exchange rate calculation
Business activity
$bn
Structured and Private Equity
Private Debt
Real Assets
Credit
Total
1. Direct investment funds;
2. Realisations of third-party fee-earning AUM
Structured and
Private Equity
Private Debt
Real Assets
22,507
3,747
(1,513)
2,381
606
27,728
5,221
23 %
26 %
19,806
3,864
(391)
712
(350)
23,641
3,835
19 %
20 %
8,028
1,064
(439)
(7)
(783)
7,863
(165)
(2) %
3 %
Structured and
Private Equity
Private Debt
Real Assets
22,100
3,367
436
3,803
(38)
(2,327)
302
23,840
1,740
8 %
10 %
11,953
—
4,451
4,451
(10)
(1,937)
(208)
14,249
2,296
19 %
22 %
6,873
414
928
1,342
(11)
(1,005)
(337)
6,862
(11)
— %
5 %
Credit
18,127
1,895
(1,928)
42
(381)
17,755
(372)
(2) %
(1) %
Credit
17,409
422
1,411
1,833
534
(1,654)
(224)
17,898
489
3 %
4 %
Fundraising
Deployment1
Realisations1,2
FY23
3.5
3.8
1.0
1.9
10.2
FY22
10.4
4.1
3.0
5.0
22.5
FY23
4.3
4.5
1.7
n/a
10.5
FY22
8.0
4.9
2.1
n/a
15.0
FY23
2.3
2.0
1.0
n/a
5.3
Total
68,468
10,570
(4,271)
3,128
(908)
76,987
8,519
12 %
15 %
Total
58,335
4,203
7,226
11,429
475
(6,923)
(467)
62,849
4,514
8 %
10 %
FY22
2.6
2.8
1.0
n/a
6.4
ICG | ANNUAL REPORT & ACCOUNTS 2023
55
FINANCE REVIEW CONTINUED
Fundraising
• We attracted $10.2bn of new money during the period, in line with our guidance and bringing the total raised since 31 March 2021 to
$32.8bn, on track to meet accelerated fundraising target of at least $40bn cumulatively between FY22 - FY24
• Structured and Private Equity attracted $3.5bn of capital. Within this, Strategic Equity IV raised $1.3bn, Europe VIII raised $1.2bn and
Asia Pacific IV raised $450m. All three of these funds had final closes during the period at or above their original hard caps. During the
year, we also raised for Strategic Equity V, LP Secondaries I and Europe Mid-Market II
• Private Debt was the largest contributor to fundraising during the period amongst our asset classes, attracting a total of $3.8bn, $3.3bn of
which was in SDP V and SDP SMAs. During the period we launched North America Credit Partners III and had closed $427m of third-party
commitments at 31 March 2023
• Real Assets raised $1.1bn, with the majority ($591m) coming from Real Estate Debt strategies. In addition we raised $414m for Sale and
Leaseback II
• Credit raised $1.9bn, of which $1.2bn was from new CLOs (two in Europe and one in the US) and the remainder was within our liquid
credit funds
• At 31 March 2023 funds that were actively fundraising included: SDP V and SDP SMAs; Strategic Equity V; North America Credit Partners
III; Europe Mid-Market II; Infrastructure II; Sale and Leaseback II; LP Secondaries I; Life Sciences I; and various credit strategies. The
timings of closes for those funds depends on a number of factors, including the prevailing market conditions
Deployment
• During the period we deployed a total of $10.5bn of AUM on behalf of our direct investment funds
• Within Structured and Private Equity, Strategic Equity saw strong activity, deploying $2.6bn (FY22: $2.5bn), with the remainder across
European Corporate including Europe Mid-Market I and various other strategies
• Within Private Debt, deployment was driven by our direct lending strategy, Senior Debt Partners, which deployed $3.9bn. The Australia
Senior Loan fund deployed $0.3bn and North American Private Debt $0.2bn
• Within Real Assets, real estate debt strategies deployed $0.9bn, Infrastructure Equity I deployed $0.5bn and Sale and Leaseback deployed
$0.3bn
Realisations
• Despite the slowdown in transaction activity across the market, we continued to realise investments, with $5.3bn fee-earning AUM
realised from our direct investment funds (FY22: $6.4bn)
• Structured and Private Equity accounted for $2.3bn of realisations within fee-earning AUM, with the majority of activity coming from
Europe VI and Europe VII (2015 and 2018 vintages' respectively)
• Realisations of fee-earning AUM in Private Debt were $2.0bn, with the vast majority ($1.7bn) being within direct lending (Senior Debt
Partners)
• Real assets accounted for $1.0bn of realisations within fee-earning AUM, almost all of which was across a range of real estate debt
strategies
56
ICG | ANNUAL REPORT & ACCOUNTS 2023
Performance of key funds
A summary of selected ICG drawdown funds that have had a final close at 31 March 2023 is set out below:
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 American Private Debt I
North American Private Debt II
Real Assets
Real Estate Partnership Capital IV1
Real Estate Partnership Capital V1
Infrastructure Equity I
Sale & Leaseback I
Vintage
Total fund size 3
% deployed2
Gross MOIC
31 March 2023
Gross MOIC
31 March 2022
DPI
31 March 2023
2011
2015
2018
2021
2019
2014
2020
2016
2018
2021
2015
2017
2020
2014
2019
2015
2018
2020
2019
€2.5bn
€3.0bn
€4.5bn
€8.1bn
€1.0bn
$0.7bn
$1.0bn
$1.1bn
$1.9bn
$4.2bn
€1.5bn
€2.6bn
€5.0bn
$0.8bn
$1.4bn
£1.0bn
£1.0bn
€1.5bn
€1.2bn
43 %
78 %
43 %
95 %
100 %
92 %
90 %
99 %
1.8x
2.2x
1.8x
1.1x
1.4x
2.1x
1.4x
2.9x
2.3x
1.6x
1.3x
1.2x
1.1x
1.5x
1.3x
1.3x
1.2x
1.3x
1.3x
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
1.3x
1.2x
1.2x
1.3x
151%
171%
42%
—%
—%
103%
—%
136%
28%
5%
75%
43%
9%
128%
19%
82%
16%
1%
7%
Note co-mingled funds only. Where there are funds with multiple currencies, FX rates at 31 March 2023 used to convert
1. Gross MOIC as at 31 March 2023
2. For current vintages only
3. Third-party AUM plus ICG plc commitment at point of final close. MOICs and DPI for SDP III and SDP IV shown for EUR sleeves
Overview: Group financial performance
Fund Management Company (FMC) revenue was £539.9m (FY22: £512.8m) and FMC profit before tax was £310.7m (FY22: £286.2m),
an increase of 9% compared to FY22, resulting in an FMC operating margin of 57.5% (FY22: 55.8%).
Net investment returns (NIR) for the Investment Company (IC) of 4%, or £102.3m, and over the last five years have averaged 11%. The IC as
a whole recorded a (loss) of £(52.6)m (FY22: profit of £282.6m).
The Group generated a Group profit before tax of £258.1m (FY22: £568.8m) and Group earnings per share were 80.3p (FY22: 187.6p).
ICG has a progressive dividend policy, and the proposed final dividend of 52.2p per share brings the total dividend per share to 77.5p for
FY23, an increase of 2% compared to FY22. Over the last five years the dividend per share has grown at an annualised rate of 21%.
Our balance sheet remains strong and well capitalised, with net gearing of 0.50x, total available liquidity of £1.1bn and a net asset value per
share of 694p.
Our medium-term financial guidance remains unchanged from 31 March 2022.
ICG | ANNUAL REPORT & ACCOUNTS 2023
57
FINANCE REVIEW CONTINUED
£m unless stated
Third-party management fees
Third-party performance fees
Third-party fee income
Movement in FV of derivative
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 income
Interest expense
Investment Company (loss) / profit before tax
Group profit before tax
Tax
Group profit after tax
Earnings per share
Dividend per share
Liquidity
Net gearing
Net asset value per share
31 March 2023
481.4
19.6
501.0
(26.8)
65.7
539.9
(229.2)
310.7
57.5 %
98.4
(103.1)
13.9
(61.8)
(52.6)
258.1
(28.8)
229.3
80.3 p
77.5p
31 March 2023
£1.1bn
0.50x
694p
31 March 2022
392.7
56.0
448.7
(0.4)
64.5
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
31 March 2022
£1.3bn
0.45x
696p
Change %
23%
(65%)
12%
n/m
2%
5 %
1%
9 %
3%
(78%)
(13%)
>100%
22%
(119) %
(55) %
(6%)
(57) %
(57%)
2 %
Change %
(16%)
0.05x
—%
Fund Management Company
The 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.
Third-party fee income
Third-party fee income grew to £501.0m in FY23 (FY22: £448.7m), a year-on-year increase of 12% (an increase of 7% on a constant
currency basis).
£m
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
Year ended
31 March 2023
283.1
13.4
296.5
83.7
6.3
90.0
48.9
(0.1)
48.8
65.7
—
65.7
501.0
481.4
19.6
Year ended
31 March 2022
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
Change
%
37%
(72)%
17%
26%
3%
24%
(20)%
n/m
(21)%
12%
n/m
8%
12 %
23%
(65)%
Our third-party fee income is largely comprised of management fees, which have a high degree of visibility and are directly linked to our fee-
earning AUM.
58
ICG | ANNUAL REPORT & ACCOUNTS 2023
The increase in management fees during FY23 was due to a number of factors including fundraising for Europe VIII and Strategic Equity IV
(both of which charge fees on committed capital); net deployment within Private Debt (which charges fees on invested capital); and changes
in foreign exchange rates. The £12.7m reduction in fee income for Real Assets was due to the prior period including £14.3m of catch-up fees
(largely for Infrastructure Equity I and Sale and Leaseback I), which are non-recurring. Excluding those catch-up fees, third-party fee income
for Real Assets is up approximately 3.4%.
Management fees during FY23 include a total of £30.6m catch-up fees (FY22: £14.3m). We do not expect significant catch-up fees for FY24
given the funds we have in market and the potential timing of first closes.
The effective management fee rate on our fee-earning AUM at the period end was 0.90% (FY22: 0.88%). The increase was due to the
fundraising within Structured and Private Equity in strategies with higher fee rates charging fees on committed capital as well as a positive
mix effect in other asset classes. The fee rate is split between asset classes as follows:
Structured and Private Equity
Private Debt
Real Assets
Credit
Group
31 March 2023
31 March 2022
1.26 %
0.82 %
0.91 %
0.49 %
0.90 %
1.24 %
0.83 %
0.87 %
0.47 %
0.88 %
Performance fees are a relatively small part of our revenue, and during the five years to 31 March 2023 have accounted for an average of
10.2% of our third-party fee income. With lower transaction activity in the broader market, timing expectations for various exits within our
funds have been extended. This has resulted in a lower level of performance fees being recognised in this period, although does not impact
the absolute level of performance fees we expect to receive if our funds perform in line with expectations. At 31 March 2023 the Group had
an asset of £37.5m of accrued performance fees on its balance sheet (FY22: £91.0m):
£m
Accrued performance fees at 1 April 2022
Accruals during period
(Received) during period
FX and other movements
Accrued performance fees at 31 March 2023
91.0
19.4
(74.9)
2.0
37.5
Our funds charge fees in the fund currency, and third-party fee income for the period was 56% in euros, 32% in US dollars, 11% in sterling
and 1% in other currencies. On a constant currency basis our third-party fee income grew by 7% compared to FY22.
Movements in Fair value of derivatives and other income
During the year the Group changed its policy regarding hedging of non-sterling fee income. Previously the Group’s policy was to hedge non-
sterling fee income to the extent that it was not matched by costs and was predictable (transaction hedges). For FY23 FMC revenue included
a negative impact of £(26.8)m due to changes in the fair value of these transaction hedges (FY22: £(0.4)m). During the financial year the
Group decided to no longer enter into transaction hedges as a matter of course (although it may still do so on an ad hoc basis), and
economically closed out all outstanding transaction hedges. Further detail on our hedging policy and sensitivities can be found on page 65.
Other income includes recorded dividend receipts of £40.2m (FY22: £38.0m) from investments in CLO equity, which are continuing to be
received in line with historical experiences. The FMC also recognised £25.0m of revenue for managing the IC balance sheet investment
portfolio (FY22: £24.8m), as well as other income of £0.5m (FY22: £1.7m).
ICG | ANNUAL REPORT & ACCOUNTS 2023
59
FINANCE REVIEW CONTINUED
Operating expenses and margin
During the year we remained focussed on managing costs, resulting in operating expenses increasing by only 1% compared to FY22 and
totalling £229.2m (FY22: £226.6m). Salaries increased broadly in line with headcount (which grew 11%), while incentive scheme costs grew
by only 6%. Both administrative costs and depreciation and amortisation recorded absolute reductions compared to FY22. Administrative
costs reduced due to lower professional and consulting costs, lower placement agent fees and lower recruitment costs given the lower hiring
in FY23 compared to FY22.
Operating expenses for the period were 70% in sterling, 9% in euros, 14% in US dollars and 7% in other currencies.
£m
Salaries
Incentive scheme costs
Administrative costs
Depreciation and amortisation
FMC operating expenses
FMC operating margin
Year ended
31 March 2023
Year ended
31 March 2022
85.0
92.2
45.7
6.3
229.2
57.5 %
76.0
87.2
55.1
8.3
226.6
55.8 %
Change
%
12 %
6 %
(17 %)
(24 %)
1 %
2 %
The FMC recorded a profit before tax of £310.7m (FY22: £286.2m), a year-on-year increase of 9% and an increase of 14% on a constant
currency basis (excluding the change in fair value of derivatives).
The FMC operating margin of 57.5% (FY22: 55.8%) was above our medium-term guidance of above 50%, driven in part by a combination of
catch-up fees and a strong focus on cost control.
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 strategies to align interests between our shareholders, clients and employees. 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 grew 3% in absolute terms during the year and was valued at £2.9bn at 31 March 2023 (31 March
2022: £2.8bn). It experienced net realisations during the period of £128m (FY22: £253m), being new investments of £666m (FY22: £952m)
and realisations of £794m (FY22: £1,205m). Realisations in FY23 include £101m of proceeds received when we sold down a portion of the
balance sheet's exposure to ICG's liquid credit funds.
We made a number of new seed investments totalling £214m, including on behalf of Life Sciences, LP Secondaries, US Mid-Market and Real
Estate Opportunistic Equity Europe. These investments are held in anticipation of being transferred to a third-party fund. At 31 March 2023
the balance sheet held £330m of seed investments (31 March 2022: £178m).
At 31 March 2023 the balance sheet investment portfolio was 45% euro denominated, 27% US dollar denominated, 21% sterling
denominated and 7% in other currencies.
£m
Structured and Private Equity
Private Debt
Real Assets
Credit1
Seed Investments2
Total Balance Sheet Investment Portfolio
As at 31
March 2022
1,826
149
222
447
178
2,822
New
investments
260
31
130
31
214
666
Realisations
(513)
(33)
(88)
(109)
(51)
(794)
Gains/ (losses)
in valuation
112
14
20
(30)
(16)
100
FX & other
66
8
5
24
5
108
As at 31
March 2023
1,751
169
289
363
330
2,902
1. Within Credit, at 31 March 2023 £65m was invested in liquid strategies, with the remaining £298m invested in CLO debt (£106m) and equity (£192m)
2. Formerly referred to as Warehouse investments. Adjusted to include three assets previously reported with Real Assets, with a combined value of £83m at 31 March 2022
60
ICG | ANNUAL REPORT & ACCOUNTS 2023
Net Investment Returns
For the five years to 31 March 2023, Net Investment Returns (NIR) have been in line with our medium-term guidance, averaging 11.2%. For
the twelve months to 31 March 2023, NIR were £102.3m (FY22: £485.7m), or 4% (FY22: 18%).
NIR was comprised of interest of £113.2m from interest-bearing investments (FY22: £76.8m), unrealised losses of £(13.2)m (FY22: gain of
£404.0m) and other income of £2.3m. NIR were split between asset classes as follows:
£m
Structured and Private Equity
Private Debt
Real Assets
Credit
Seed Investments1
Total net investment returns
Twelve months to 31 March 2023
Twelve months to 31 March 2022
NIR (£m)
112.9
14.4
20.7
(30.1)
(15.6)
102.3
NIR (%)
6%
9%
8%
(7%)
(6%)
4 %
NIR (£m)
457.7
24.9
9.7
(0.5)
(6.1)
485.7
NIR (%)
27 %
16 %
5 %
— %
(4) %
18 %
1. FY22 NIR adjusted to reflect three assets with Seed Investments that were previously included within Real Assets
•
•
•
•
Structured and Private Equity, which accounted for 60% of the total balance sheet investment portfolio at 31 March 2023, saw a positive
NIR driven by European Corporate and Strategic Equity
Within Private Debt, SDP is performing resiliently and a strong performance during year within North America Credit Partners2 driving
the majority of the positive NIR
Real Assets - which as noted above now excludes three investments that have been moved to Seed investments - saw a strong return
within Infrastructure, offsetting valuation reductions within Sale and Leaseback. The Real Estate debt strategies have continued to
perform well, recording positive NIR during the year
Credit NIR of £(30.1)m includes a reduction of £(40.2)m in the value of the balance sheet's holdings of CLO equity to reflect CLO dividend
receipts recorded in the FMC and a reduction of £(6.3)m in respect of changes in the value of CLO debt and co-investments in our liquid
credit funds. This is partially offset by a £16.4m valuation gain on CLO equity, driven by gains arising from actual defaults being lower than
projections as well as by the passage of time increasing the current value of discounted future cashflows
2. Formerly North America Private Debt
In addition to the NIR, the IC recorded other revenue as follows:
£m
Changes in fair value of derivatives
Fee paid to FMC
Other
Other IC revenue
As a result, the IC recorded total revenues of £98.4m (FY22 revenue: £451.7m).
Year ended
31 March 2023
Year ended
31 March 2022
16.8
(25.0)
4.3
(3.9)
(11.8)
(24.8)
2.6
(34.0)
Change
%
n/m
1 %
65 %
n/m
ICG | ANNUAL REPORT & ACCOUNTS 2023
61
FINANCE REVIEW CONTINUED
Investment Company expenses
Operating expenses in the IC of £103.1m decreased by 13% compared to FY22 (£118.6m), which was largely due to a £22.9m reduction in
incentive scheme costs:
£m
Salaries
Incentive scheme costs
Administrative costs
Depreciation and amortisation
IC operating expenses
Year ended
31 March 2023
20.0
59.6
20.7
2.8
103.1
Year ended
31 March 2022
16.7
82.5
16.0
3.4
118.6
Change
%
20 %
(28 %)
29 %
(18 %)
(13 %)
Lower incentive scheme costs were predominantly the result of lower accrual of DVB during the period: £36.6m compared to £66.5m in
FY22. DVB, which is linked to the performance of certain investments within the balance sheet investment portfolio, only pays out upon cash
realisations.
Employee costs for teams who do not yet have a third-party fund are allocated to the IC. For FY23, the directly-attributable costs within the
Investment Company for teams that have not had a first close of a third-party fund was £24.4m (FY22: £15.4m). When those funds have a
first close, the costs of those teams are transferred to the Fund Management Company.
Interest expense was £61.8m (FY22: £50.5m) and interest earned on cash balances was £13.9m (FY22: nil).
The IC therefore recorded a (loss) before tax of £(52.6)m (FY22: profit before tax £282.6m).
Group
Tax
The Group recognised a tax charge of £(28.8)m (FY22: tax charge of £(30.8)m), resulting in an effective tax rate for the period of 11.2%
(FY22: 5.4%). The increase compared to the prior year is due to the change in composition of our earnings and the lower NIR in FY23
compared to FY22.
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
The Board of ICG is simplifying our dividend policy and reaffirming it as a progressive dividend policy, demonstrating our confidence in the
long-term growth prospects of the business. Over the long-term, the Board intends to increase the dividend per share by at least mid-single
digit percentage points on an annualised basis. The dividend will continue to be paid in two instalments, with the interim dividend being one
third of the prior year’s total dividend.
For FY23, in addition to the 25.3p per share interim dividend, the Board is proposing a 52.2p per share final dividend. This would result in a
total dividend of 77.5p per share being paid for the year, an increase of 2.0% compared to FY22 (76.0p). Over the last five years, ordinary
dividends per share have increased at an annualised rate of 21%. We continue to make the dividend reinvestment plan available.
Balance sheet
Balance sheet strategy
Delivering our strategy and maximising shareholder value requires a clear approach to managing our balance sheet. We have a robust,
diversified balance sheet and a strong liquidity position that allows us to invest in the business through economic cycles. This provides us with
significant strategic and financial flexibility, enabling us to take advantage of opportunities to generate future incremental fee income.
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
62
ICG | ANNUAL REPORT & ACCOUNTS 2023
Liquidity and net debt
At 31 March 2023 the Group had total available liquidity of £1,100m (FY22: £1,312m), net financial debt of £988m (FY22: £893m) and net
gearing of 0.50x (FY22: 0.45x).
During the period cash reduced by £212m from £762m to £550m, including the repayment of £195m of borrowings that matured.
The table below sets out movements in cash, including certain APM metrics, which management believes will help shareholders understand
where cash is being generated and used within the Company. The Glossary sets out the reconciliations from the APM cash measures in the
table below to the UK-adopted IAS measures of Net cash flows from/(used in) operations; Net cash flows from/(used in) investing activities;
and Net cash flows from/(used in) financing activities.
£m
Opening cash
Operating activities
Fee and other operating income
Net cashflows from investment activities and investment income1
Expenses and working capital
Tax paid
Group cashflows from operating activities - APM2
Financing activities
Interest paid
Purchase of own shares
Dividends paid
Net (repayment of) / proceeds from borrowings
Group cashflows from financing activities - APM2
Other cashflow3
FX and other movement
Closing cash
Available undrawn ESG-linked RCF
Cash and undrawn debt facilities (total available liquidity)
FY23
762
573
176
(322)
(32)
395
(64)
(39)
(236)
(195)
534
(77)
4
550
550
1,100
FY22
297
388
292
(242)
(44)
394
(56)
(21)
(166)
302
59
7
5
762
550
1,312
1. The aggregate cash (used)/received from balance sheet investment portfolio (additions), realisations, and cash proceeds received from assets within the balance sheet investment
portfolio
2. Interest paid, which is classified as an Operating cash flow under UK-adopted IAS, is reported within Group cashflows from financing activities - APM
3. Investing cashflows (UK-adopted IAS) in respect of purchase of intangible assets, purchase of property, plant and equipment and net cashflow from derivative financial
instruments ("Net cash flows used in financing activities" per Note 4) and "Payment of principal portion of lease liabilities" (see Note 4)
ICG | ANNUAL REPORT & ACCOUNTS 2023
63
FINANCE REVIEW CONTINUED
At 31 March 2023, the Group had drawn debt of £1,538m (31 March 2022: £1,655m). The change is due to the repayment of certain
facilities as they matured, along with changes in FX rates impacting the translation value:
Drawn debt at 31 March 2022
Debt (repayment) / issuance
Impact of foreign exchange rates
Drawn debt at 31 March 2023
Net financial debt therefore increased to £988m (31 March 2022: £893m):
£m
Drawn debt
Cash
Net financial debt
£m
1,655
(195)
78
1,538
31 March 2023
31 March 2022
1,538
550
988
1,655
762
893
During the period the Group's credit rating provided by S&P was upgraded to BBB, and at 31 March 2023 the Group had credit ratings of
BBB (stable outlook) / BBB (stable outlook) from Fitch and S&P, respectively.
The Group’s drawn debt is provided through a range of facilities. All facilities except the ESG-linked RCF are fixed-rate instruments. The
weighted average cost of drawn debt at 31 March 2023 was 3.17% (31 March 2022: 3.29%). The weighted-average life of drawn debt at 31
March 2023 was 4.1 years (31 March 2022 4.6 years). The maturity profile of our term debt is set out below:
£m
Term debt maturing
FY24
51
FY25
258
FY26
185
FY27
503
FY28
—
FY29
101
FY30
440
For further details of our debt facilities see Other Information (page 217).
Net asset value
Shareholder equity increased to £1,977m at 31 March 2023 (31 March 2022: £1,995m), equating to 694p per share (31 March 2022:
696p):
£m
Balance sheet investment portfolio
Cash and cash equivalents
Other assets
Total assets
Financial debt
Other liabilities
Total liabilities
Net asset value
Net asset value per share
31 March 2023
31 March 2022
2,902
550
424
3,876
(1,538)
(361)
(1,899)
1,977
694p
2,822
762
419
4,003
(1,655)
(353)
(2,008)
1,995
696p
Net gearing
The movements in the Group’s cash position, debt facilities and shareholder equity resulted in net gearing increasing to 0.50x at 31 March
2023 (31 March 2022: 0.45x). We maintain our long-term objective of having zero net gearing.
£m
Net financial debt (A)
Shareholder equity (B)
Net gearing (A/B)
31 March 2023
31 March 2022
Change %
988
1,977
0.50 x
893
1,995
0.45 x
11%
(1)%
0.05x
64
ICG | ANNUAL REPORT & ACCOUNTS 2023
Foreign exchange rates
The following foreign exchange rates have been used throughout this review:
GBP:EUR
GBP:USD
EUR:USD
Average rate
for FY23
Average rate
for FY22
31 March 2023
year end
31 March 2022
year end
1.1560
1.2051
1.0426
1.1755
1.3626
1.1595
1.1375
1.2337
1.0846
1.1876
1.3138
1.1063
We report our AUM in dollars: 56.1% of our fee-earning AUM at 31 March 2023 was in euros; 30.6% in dollars; 11.5% in sterling; and 1.8%
in other currencies.
At 31 March 2023 our third-party AUM was $77.0bn, based on FX rates at 31 March 2023. If GBP:USD had been 5% higher (1.2954) our
reported third-party AUM would have been $0.5bn higher. If EUR:USD had been 5% higher (1.1388) our reported third-party AUM would
have been $2.2bn higher.
Where noted, this review presents changes in AUM, third-party fee income and FMC PBT on a constant exchange rate basis. For the
purposes of these calculations, prior period numbers have been translated from their underlying fund currencies to the reporting currencies
at the respective FY23 period end exchange rates. This has then been compared to the FY23 numbers to arrive at the change on a constant
currency exchange rate basis.
During the year the Group changed its policy regarding hedging of non-sterling net fee income. Previously the Group’s policy was to hedge
non-sterling fee income to the extent that it was not matched by costs and was predictable (transaction hedges). For FY23 FMC revenue
included a negative impact of £(26.8)m due to changes in the fair value of these transaction hedges (FY22: £(0.4)m). During the financial year
the Group decided to no longer enter into transaction hedges as a matter of course (although it may still do so on an ad hoc basis), and
economically closed out all outstanding transaction hedges.
The table below sets out the indicative impact on our reported management fees, FMC PBT and NAV per share had sterling been 5% weaker
or stronger against the euro and the dollar in the period (excluding the impact of any legacy hedges):
Sterling 5% weaker against euro and dollar
Sterling 5% stronger against euro and dollar
1. Impact assessed by sensitising the average FY23 FX rates. Excluding impact of legacy hedges
2. NAV / NAV per share reflects the total indicative impact as a result of a change in FMC PBT and net currency assets
Impact on FY23
management fees1
Impact on FY23
FMC PBT1
NAV per share at 31
March 20232
+22.5m
-(20.3)m
+£22.7m
-£(20.5)m
+15p
-(14)p
ICG | ANNUAL REPORT & ACCOUNTS 2023
65
GROUP RISKS
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 ICG’s Risk
Management Framework (RMF), 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 a preference for risk within a strong control environment to
generate a return for investors and shareholders and protect their
interests.
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 who provide 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.
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.
Assessing risk
The Group adopts both a top-down and a bottom-up approach to
risk assessment:
The Risk Committee is provided with management information
regularly 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, decisions, and attitudes toward taking and
managing risk throughout the Group.
Managing risk
Risk management is embedded across the Group through ICG’s
RMF, which ensures that current and emerging risks are identified,
assessed, monitored, controlled, and appropriately governed based
on a common risk taxonomy and methodology. The RMF is designed
to protect the interests of stakeholders and meet our responsibilities
as a UK listed company and the parent company of a number of
regulated entities.
The Board’s oversight of risk management is proactive, ongoing and
integrated into the Group’s governance processes. The Board
receive regular reports on the Group’s risk management and internal
control systems. These reports set out any significant risks facing
the Group, and changes made to the systems. Evaluating risk events
and corrective actions supports the Board’s assessment of the
Group’s effectiveness at mitigating event impacts. The Board also
meet regularly with the internal and external auditors to discuss their
findings and recommendations, which helps it gain insight into areas
that require improvement. 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 provides 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 on our culture and values,
see page 2.
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
66
ICG | ANNUAL REPORT & ACCOUNTS 2023
• 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.
Key developments in FY23
During the year the Group undertook its first Internal Capital
Adequacy and Risk Assessment (ICARA) under the requirements of
the UK Investment Firm’s Prudential Regulation (IFPR). The new
regime sets new capital and liquidity requirements, revised
remuneration and governance standards and requires ICG to
complete an ICARA for our relevant UK entities. The Group is now
identifying, assessing, and managing risk of harm to clients, markets,
and the Group itself.
Other key initiatives included:
• Monitoring the Russia-Ukraine crisis for potential risks to people,
assets, operations, and supply chains in the region and globally.
• Monitoring the macro-economic environment – the inflationary
pressure, rising interest rates, and ongoing disruption to
international supply chains – and adapting our approach as
appropriate.
• 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.
• Monitoring risks associated with the Group’s transformation
agenda, recognising the challenges of implementation and
successful delivery.
• Enhancing the combined assurance process to provide an
integrated and coordinated approach to align the Group’s
assurance activities across the Group.
• Monitoring the Group’s technology and resiliency requirements to
ensure that the management of cyber risk remains appropriate to
mitigate the continued and changing nature of the threat and to
support the growth of the business.
• Further embedding ESG into the RMF.
• Improving the use of risk information and incorporating risk
connectivity into the Group’s RMF to allow for more proactive
management of risk.
Principal risks and uncertainties
The Group’s principal risks are individual risks, or a combination of
risks, that can seriously affect the performance, future 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 demand 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 can 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 escalation, updating our principal and
emerging risks as necessary. The Board, Risk Committee and
Executive Directors continue to monitor relevant impacts on the
business which are considered further below.
Within the three categories noted above, the Group’s RMF identifies
eight principal risks which are accompanied by the 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 framework, policies
and standards that detail the related requirements.
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 has been identified. In making this
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 diagram below shows the Group’s principal risks. The horizontal
axis shows the impact of a principal risk if it were to materialise, and
the vertical axis illustrates the likelihood of this occurring. The scales
are based on the residual risk exposure remaining after mitigating
controls.
Risk profile
n
i
a
t
r
e
c
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s
o
m
A
l
d
o
o
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i
l
e
k
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i
l
y
e
k
L
i
l
e
b
i
s
s
o
P
e
t
o
m
e
R
1
2
4
6
7
8
3
5
Low
Medium
High
Critical
Impact
Strategic and Business
Risk trend
1
2
External Environment Risk
Fund Performance Risk
Financial
3
Financial Risk
Operational
4
5
6
7
8
Key Personnel Risk
Legal, Regulatory and Tax Risk
Operational Resilience Risk
Third Party Provider Risk
Key Business Process Risk
ICG | ANNUAL REPORT & ACCOUNTS 2023
67
GROUP RISKS CONTINUED
External Environment Risk
Strategic alignment
1
2
3
Fund Performance Risk
Risk trend
Strategic alignment
Risk trend
1
2
3
Risk appetite: Very High
Executive Director Responsible: Benoît Durteste
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-ended 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 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
Inflationary pressure, rising interest rates, and ongoing disruption to international
supply chains means the macro-economic environment remains dynamic and the
outlook unclear. The Group has proven expertise in navigating complex and
uncertain market conditions, with our business model providing a high degree of
stability. We have substantial dry powder across a range of strategies following
our strong fundraising in the last 24 months. We have stable and visible
management fee income, are not under pressure to deploy or realise, and can
capitalise on opportunities that emerge across our asset classes.
We are actively supporting our portfolio companies as they seek to take advantage
of the current market dislocation by growing organically and inorganically, as well
as ensuring that they have the people, systems, and capital structures in place to
navigate a period of potentially protracted uncertainty, including to ensure they
are appropriately hedged against interest rate risks. Our portfolios remain
fundamentally well positioned, with robust operational performance and
reasonable leverage.
We remain alert to the current macroeconomic and geopolitical uncertainty and
continue to monitor the potential impact on 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,
performance, 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
underperformance could erode our track record. Consequently, existing investors
in our funds might decline to invest in funds we raise in future and might withdraw
their investments in our open-ended strategies. Poor fund performance may also
impact our ability to raise subsequent vintages or new strategies impacting our
ability to 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
Against a fast-moving global economic backdrop, we have continued to
successfully manage our clients’ assets. As expected, given our focus on downside
protection, our funds are showing attractive performance through a period of
volatility. In particular, our debt strategies are generating historically high returns
for clients.
Fund valuations have remained stable during the period, with strong underlying
performance of our portfolio companies and income from our interest-bearing
investments largely offsetting reductions in valuation multiples or increasing costs
of capital. Despite the slowdown in transaction activity across the market, we have
continued to anchor the performance of key vintages through a disciplined
approach to realisations.
The Group saw continued and significant client demand for our established and
new strategies. We have held final closes for Europe VIII, Strategic Equity IV, and
Asia Pacific IV, all above target size; launched the fifth vintage of our flagship
direct lending strategy (SDP) and the second vintage of Sale and Leaseback
launched the marketing of Europe Mid-Market II, Infrastructure II and Life Sciences
I - a new strategy. We have seeded investments for - amongst others – Real Estate
Opportunistic Equity Europe and Life Sciences. Our closed-end-funds model also
provides visibility of future long term fee income and therefore Fund Management
Company profits.
Looking ahead the outlook remains very positive. We continue to hire selectively to
help drive future growth within our investment teams, and within Marketing and
Client Relations, focussed on product and end-client expertise. 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.
More detail on the performance of the Group’s funds can be found on page
54.
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ICG | ANNUAL REPORT & ACCOUNTS 2023
Strategic alignment
1
Grow AUM
2
Invest selectively
3
Manage portfolios to maximise value
Financial Risk
Strategic alignment
1
2
3
Key Personnel Risk
Risk trend
Strategic alignment
Risk trend
1
2
3
Risk appetite: High
Executive Director Responsible: Vijay Bharadia
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,
proprietary assets and liabilities. The Group does not deliberately seek exposure
to market risks to generate profit; however, on an ancillary basis we will co-invest
alongside clients into our funds, seed assets in preparation for new fund launches
or hold investments in Collateralised Loan Obligations (CLOs) in accordance with
regulatory requirements. Consequently, the Group is exposed to having
insufficient liquidity to meet its financial obligations, including its commitments to
its fund co-investments. In addition, adverse market conditions could impact the
carrying value of the Group’s investments resulting in losses on the Group’s
balance sheet.
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 net exposure of income and expenditure, and net
assets 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.
• Long-term forecasts and stress tests are prepared to assess the Group’s future
liquidity as well as compliance with the regulatory capital requirements.
• 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.
• Valuation of the balance sheet investment portfolio is monitored quarterly by
the Group Valuation Committee, which includes assessing the assumptions
used in valuations of underlying investments.
Trend and Outlook
Global markets remain susceptible to volatility from a number of macro-economic
and geopolitical factors. We continue to implement measures to mitigate the
impact of market volatility and interest rate fluctuations in line with Group policy,
and we will respond to the prevailing market environment where appropriate.
Our balance sheet remains strong and well capitalised, with net gearing of 0.50x,
and with £1.1bn of available cash and unutilised bank lines as of 31 March 2023. In
addition, the Group has significant headroom to its debt covenants. All of the
Group’s debt is fixed rate, with the exception of the RCF, which was undrawn as of
31 March 2023 and which is only intended to provide short-term working capital
for the Group if required. Additionally, Standard & Poor carried out their year-end
assessment of the Group’s financial status and upgraded ICG to BBB (Stable),
aligning them to Fitch at the BBB Stable level.
The Groups liquidity, gearing and headroom are in the finance review on page 54.
Risk Description
The Group depends upon the experience, skill and reputation of 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.
As such, the loss of key personnel could have a material adverse effect on our
long-term prospects, revenues, profitability and cashflows and could impair 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 range of health and wellbeing activities.
• Regular reviews of resourcing and key person exposures are undertaken as part
of 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 appropriate and in line with market practice.
Trend and Outlook
Attracting and retaining key people remains a significant operational priority.
Strategic hiring across the organisation has continued during the period to ensure
we have the breadth and depth of expertise to execute on the long-term
opportunities ahead. Building on the investments we made in FY22, we have
continued to welcome a number of senior hires within the organisation across our
investment and ESG and Sustainability teams, helping to future-proof ICG as we
continue to market and invest in a larger range of products.
Within our marketing and client relations teams a number of key positions have
recently been filled, including a new Head of Client Relations and marketing
specialists for insurance clients and real estate. These are notable hires as we
continue to evolve our fundraising team, moving beyond our historical geographic
organisation towards a more nuanced structure incorporating product specialisms
where appropriate.
Staff turnover continues to be somewhat elevated in certain areas of finance and
operations, where the hiring market remains particularly candidate driven. Against
this backdrop we are still able to hire at the levels of experience and calibre
required for ICG, and are meeting our recruitment objectives. We expect the
candidate-driven dynamic to shift in the coming months as the financial industry
adapts to a more challenging period.
Read more about our people on page 28.
ICG | ANNUAL REPORT & ACCOUNTS 2023
69
GROUP RISKS CONTINUED
Legal, Regulatory and Tax Risk
Operational Resilience Risk
Risk trend
Strategic alignment
Risk trend
1
2
3
Risk appetite: 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 Leadership 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 Group continually seeks to increase operational resilience through adaptation,
planning, preparation and Testing of contingency plans, and our ability to respond
effectively to disruptive incidents and significant global events like the Covid-19
pandemic and Russia’s invasion of Ukraine. We actively manage relationships with
key strategic technology suppliers to avoid any disruption to service provision that
could adversely affect the Group’s businesses. Business continuity and
contingency planning processes are regularly reviewed and tested.
The Group continues to strengthen its robust information security management
framework and progress our programme to enhance and maintain levels of cyber
hygiene. We implement ongoing training, phishing campaigns and disaster
recovery exercises, aligned with threat intelligence, to support data privacy and
operational resilience.
We maintain heightened vigilance for cyber intrusion. The Group’s technology and
resiliency requirements will continue to be kept under review to ensure that the
management of our cyber risk provides appropriate mitigation and supports the
growth of the business.
Strategic alignment
1
2
3
Risk appetite: Low
Executive Director Responsible: Vijay Bharadia
Risk Description
Regulation defines the overall framework for the marketing and investment
management and distribution of the Group’s strategies and supporting our
business operations. The failure of the Group to comply with the relevant rules of
professional conduct and 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 our
competitiveness, reduce our future revenues and profitability, or require us to
hold more regulatory capital.
Key Controls and Mitigation
• Compliance and Legal functions are 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 relevant regulations and legislation
• The Tax function has close involvement with significant Group transactions,
fund structuring and business activities, both to proactively plan the most tax
efficient strategy and to manage the impact of business transactions on
previously taken tax positions.
• Regulatory, legislative and tax developments are continually monitored to
ensure we engage early in any areas of potential change
Trend and Outlook
ICG operates in highly regulated markets, and as the nature and focus of
regulation and laws evolve, the complexity of regulatory compliance continues to
increase and represents a challenge for our global business. Regulatory
engagement through 2022 has focused on the Group’s implementation of the
IFPR, strategic transformation and regulatory initiatives. Proactive engagement on
emerging focus areas has helped the regulatory risk profile remain broadly stable.
Legal risk continues to be impacted by the evolving UK legal and regulatory
landscape due to the UK’s exit from the EU and other changing regulatory
standards as well as uncertainty arising from the current and future litigation
landscape.
In December 2022 the Organisation for Economic Co-operation and Development
published an implementation package in respect of the Pillar Two Model rules
(also referred to as the ‘Anti Global Base Erosion’ or ‘GloBE’ rules), which are
expected to come into force for the financial year commencing 1 April 2024. 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. Pillar One is not
expected to apply for the Group based the worldwide revenue threshold. The
Group has performed an impact analysis on the Pillar Two proposals for a global
minimum tax rate of 15% and does not expect the implementation to be significant.
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 recruit specialist
roles that optimise our coverage and enhance our monitoring and oversight
capabilities.
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ICG | ANNUAL REPORT & ACCOUNTS 2023
Strategic alignment
1
Grow AUM
2
Invest selectively
3
Manage portfolios to maximise value
Third-Party Provider Risk
Strategic alignment
1
2
3
Risk appetite: Moderate
Executive Director Responsible: Vijay Bharadia
Risk Description
The Group outsources a number of 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. Any future over reliance on
one or a very limited number of TPPs in a specific and important 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.
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 compared to the
expected standards documented in service agreements and agreed-upon
standards.
Trend and Outlook
The Group has continued to embed the TPP Governance and Oversight
Framework during the course of the year, which has increased the resilience of our
outsourced arrangements. The regular monitoring coordinated by the TPP
Oversight Team has provided tangible measurement of performance to ICG’s
operational management and has allowed the correct focus to be applied to
improve the day to day activities provided by our TPPs. The KPI reporting has
provided an improved understanding of the performance themes across our TPPs
and allowed us to benchmark the quality of services from across the supplier base.
The Group will continue to embed the framework and gather further performance
reporting ahead of potential rationalisation of the portfolio to those TPPs
providing the most consistent services to the Group.
Key Business Process Risk
Risk trend
Strategic alignment
Risk trend
1
2
3
Risk appetite: Moderate
Executive Director Responsible: Vijay Bharadia
Risk Description
All operational activities at the Group follow defined business processes. We face
the risk of errors in existing processes, or from new processes as a result of the
growth of the business and 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
• 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.
• Regular reporting and ongoing monitoring of underlying causes of operational
risk events, to identify enhancements that require action.
• A well-established incident management processes 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
Our Operational Risk Framework defines our approach to the identification,
assessment, management and reporting of operational risks and associated
controls across the business. There were no significant changes to the Group’s
RMF’s overall approach to risk governance or its operation in the period.
We monitor underlying causes of errors to identify areas for action, promoting a
culture of accountability and continuously improving how we address issues. We
also continue to enhance the RMF. Against the backdrop of macroeconomic
uncertainty, and growth of the business, the operational risk profile has remained
broadly stable with operational losses in line with previous years. Investment
Operations, Fund Accounting and Finance continue to be the most material
operational risk areas.
The Group continues to make progress on improving the scalability of our
operations platform by implementing systems and enhancing infrastructure to
manage our growth plans more effectively. Transformation and project activity,
including workflow automation, is yielding more efficient and automated
processes and a reduction in operational risk.
ICG | ANNUAL REPORT & ACCOUNTS 2023
71
GROUP RISKS CONTINUED
Climate Risk
The Group’s risk management framework defines how climate risk,
and broader ESG risks, are assessed for their proximity and
significance to the Group. Climate risk is considered a cross-cutting
risk type that manifests through all of ICG’s established principal
risks. While our direct operations have very limited exposure to
climate-related risk, it is integrated into the Group-wide operational
risk management framework through existing policies, processes,
and controls. We consider the climate-related risks and
opportunities surrounding our third-party funds and our fund
management activities as a key part of our business. Climate-related
risk for both our own operations and our fund management activity
are addressed in greater detail in ICG’s TCFD disclosures (see page
30).
Please refer to note 1 of the financial statements on page 150 which
sets out how this risk has been considered in the basis of
preparation.
Emerging Risks
Emerging risks are thematic risks with potentially material unknown
components that may form and 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, attending industry
events, 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
elevated levels of inflation and 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 IFPR; 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. The risk
appetite framework is implemented through the Group’s operational
policies and procedures and internal controls and supported by
limits to control exposures and activities that have material risk
implications.
Risk Appetite Summary
The current risk profile is within our risk appetite and tolerance
range.
Low Moderate
High
Very high
Risk Appetite
Level
External
Environment Risk
Fund
Performance Risk
Financial Risk
Key Personnel
Risk
Legal, Regulatory
and Tax Risk
Operational
Resilience Risk
Third Party
Provider Risk
Key Business
Process Risk
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ICG | ANNUAL REPORT & ACCOUNTS 2023
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
4).
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 76). 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.
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 74.
Given the above, the Directors also considered it appropriate to
prepare the financial statements on the going concern basis as set
out on pages 127 and 151.
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 2026 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
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73
Corporate
governance
74
ICG | ANNUAL REPORT & ACCOUNTS 2023
CHAIR’S INTRODUCTION TO GOVERNANCE
From the Chair
Dear shareholders
I am writing as Chair of the Board for the first time, having assumed
this role on 31 January 2023. Having served on a number of other
listed boards, as well as having spent my career within a highly
regulated industry, I am well aware of the importance of governance,
transparency and communication with our shareholders; I will ensure
that your Board upholds these standards throughout my tenure as
Chair. I have enjoyed initial meetings with a number of long term
shareholders, and it has been enlightening to receive the insight of
their views. I look forward to more such meetings in the future.
Your Board is also very aware of its responsibilities to all of our
stakeholders; we believe that the Group should act as a responsible
participant in society and that our strategy should reflect this
objective. 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 20. During the year, we have continued to invest in our
employees and the community around us; we have considerably
enhanced our charitable giving, participated in a number of diversity
and inclusiveness initiatives and continued to prioritise our
responsible investment programme. Consideration of our wider
profile and societal impact has been ever more prominent on the
Board’s agenda, and will continue to be a key area of focus in the
coming year.
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 in
the first few meetings I have attended all Directors have made
significant contributions to our proceedings. 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.
Although the Board is performing well, we are all aware that
standards are ever evolving and boards must rise to meet new
challenges. We will conduct an externally led Board evaluation during
the year to ensure that we remain focused on the challenges of the
future; we will also consider long-term succession in the coming
months particularly in light of recent changes.
As previously announced, Vijay Bharadia is stepping down as Chief
Finance and Operating Officer in July 2023. Vijay has served ICG
since May 2019 and contributed significantly to enhancing the
financial and operational foundations of our business during a
critically important phase of our growth, as well as being
instrumental in navigating us through the Covid-19 pandemic. The
Board is hugely grateful for Vijay’s leadership and we wish him the
very best for the future. Our search for a replacement focused on
ensuring the appropriate skillset and experience, which resulted in
us welcoming David Bicarregui on 2 April 2023. Vijay and David have
been working closely together to facilitate the upcoming handover.
This year we also saw the retirement of Kathryn Purves. Kathryn had
served on the Board since 2014, including as Chair of the Risk
Committee and recently acting as Senior Independent Director. The
Board is very grateful to her for her service. The Board and
Nominations Committee are considering the composition of the
Board and its search for a replacement for Kathryn, with the intention
of welcoming a new Board member during the course of FY24. We
are also grateful to Andrew Sykes for his leadership during his
tenure as acting Chair during 2022.
Throughout the year, the Board and its Committees carefully
considered the requirements of the revised Corporate Governance
Code. We continued to comply with those requirements for the year
ending 31 March 2023. We are also conscious of our responsibilities
and duties to our stakeholders as part of our duty under section 172
of the Companies Act 2006. Your Board will continue ensure that
ICG’s business is run to high standards of governance.
The Board remains grateful for the support we have had from you all
throughout the year, and we look forward to continuing our
constructive dialogue.
William Rucker
Chair
24 May 2023
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75
CHAIR’S INTRODUCTION TO GOVERNANCE CONTINUED
The Board’s year
The work of the Board during the year was conducted through six formal
meetings and regular informal engagement with executive management.
The activity at formal meetings was reflective of a number of themes.
Management, leadership and
employee-related matters
The Board continued to highlight as a priority area the ongoing
desire to attract, retain and develop talent within the Group.
The Board received regular updates focusing in particular on
employee wellbeing and engagement, as well as growth and
development across all layers of the workforce. Additional
focus was dedicated to the Group’s ambitions in relation to
diversity and inclusion and the Board was updated that the
Group had exceeded its targets under the Women in Finance
Charter 18 months ahead of the target date. Discussion also
included the various strategic new hires within the Group’s
leadership and the importance of succession planning. During
the course of the year, the Board regularly reviewed the most
appropriate ways to retain and develop employees, as well as
introducing a flexible and agile working policy in direct
response to employee feedback. The Board also received
updates on the new office openings in our New York and
Singapore locations. The Board continues to offer insight as to
how the Group can continue to support its employees,
encourage the development of senior leaders and attract new
and diverse talent into the workforce, working closely with the
Chief People and External Affairs Officer to deliver key aims. In
addition to this, the Board considered management level
matters and in doing so approved the Remuneration
Committee’s proposals for the Group’s new Remuneration
Policy and the recommendation of all current Board directors
for re-election to be proposed to the shareholders at the
upcoming AGM.
Change of Chairman
During the year, our search for a long-term Chair appointment
focused on ensuring a strong balance of skills, diversity and
expertise on the Board and after an extensive search process,
and interviewing a number of candidates, the Board
unanimously decided to appoint William Rucker as the new
Chairman. This appointment took effect on 31 January 2023.
The Board is looking forward to working closely with William to
continue the Group’s growth journey.
Financial performance
and market outlook
The Board continually tracked progress against the Group’s
Board-approved budget and our financials were discussed in
detail by the CFOO in his formal updates to each meeting.
The executive management and the Board discussed the overall
markets and the macroeconomic situation, as well as our
performance in relation to fundraising, business development,
deployment and realisation at each Board meeting during the
year. A particular area of focus was the challenging external
market environment and a general shift in the market with some
investors beginning to restrict their commitment levels. In July,
the Board held an all-day strategy session to review the
business plan of the Group and opportunities for the future.
With the Board’s oversight and guidance, the Group is
proceeding with caution, but with confidence that there are no
material concerns with respect to the existing portfolio or
long-term performance. The Executive Directors provided the
Board with detailed reviews of potential growth opportunities
in key investment strategies and regions. The Board also
continued to demonstrate a strong oversight of the use of the
Group’s balance sheet to support certain funds, receiving
regular updates and presentations from the CFOO, with a clear
direction of reducing the capital intensity of the Group’s
business over the longer term reducing, where possible, the
deployment of balance sheet capital. The budget for the
forthcoming financial year 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.
Retirement of CFOO
As previously announced, Vijay Bharadia is stepping down as
Group CFOO in July 2023. The Board conducted a search for a
replacement and welcomed David Bicarregui to the Group as
Vijay’s successor on 2 April 2023. Vijay and David have been
working closely together to facilitate the upcoming handover.
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ICG | ANNUAL REPORT & ACCOUNTS 2023
Operations, systems and risk
The Board continued to demonstrate 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 was updated on key developments, including the
significant evolution of the Group’s operational platform in
both scale and complexity, to assist and facilitate the Group’s
growth, and the launch of a new streamlined onboarding
function for investor know your customer processes. The
Board also received briefings on upcoming system upgrades in
the Finance and Compliance functions, including technology
improvements to ensure effective oversight of third party
suppliers, as well as the launch of a new centre of excellence in
India to assist various Corporate Business Services functions.
The Board continued to receive regular reviews of
management’s plans in relation to process improvements and
technology solutions. The Board also focused on the role of
governance in the Group’s operations, systems and risk
frameworks; in doing so the Board approved a new subsidiary
governance framework.
Culture and values
The Board continued to provide important oversight and
leadership in respect of the Group’s culture and values. A
particular focus for this year, sitting alongside the investment in
employee-related matters covered earlier in this report, was
the Group’s focus on ESG. The Board received multiple
updates with respect to embedding ESG values into the
Group’s business and products (including the further
integration of ESG criteria in the Group’s Investment
Committee process) and into our culture, in particular through
the Group’s philanthropy programme. Andrew Sykes continued
his input as the NED who oversees the Charity Working Group
since its establishment in 2019 and Stephen Welton continued
his work as the NED with responsibility for ESG matters. This
year’s Board discussions have resulted in the Board’s approval
of a significant increase in the Group’s charitable giving budget
to £2.5m for FY23.
Stakeholders and shareholders
The Board maintains its focus and oversight on the importance
of the interests of stakeholders and shareholders, with
particular emphasis on engagement (including the launch of
the Group’s new website) and delivery of results (including the
strong performance of the issued corporate bond and the
Group’s recent upgraded credit rating by Standard & Poors).
With this in mind, the Board continues to monitor prevailing
market conditions and market opportunities and keeps the
Group’s strategic options under constant review. The Board
also reviewed in detail the shareholder feedback from
conferences and shareholder roadshows during the year and
were pleased that existing holders remain supportive of the
Group and its direction. Please refer to the Section 172
Statement on page 20 for further details of the Board’s
stakeholder engagement activities during the year.
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 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.
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 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.
ICG | ANNUAL REPORT & ACCOUNTS 2023
77
BOARD OF DIRECTORS
Broad and diverse experience
I
N
Re
William Rucker
Chairman
Joined Board: 2023
William joined the Board on
31 January 2023.
William is Chair of Lazard in the
UK, an investment bank
focused on asset management
and financial advisory
businesses. He joined Lazard in
1987 from Arthur Andersen
where he qualified as a
Chartered Accountant.
William has extensive
experience in the financial
services sector as well as
wide-ranging governance
experience having served on,
and been Chair of, the boards
of a number of significant listed
companies, charities and other
bodies.
Other directorships
Marston’s plc (Chair)
Lazard UK (Chair)
Benoît Durteste
Chief Executive Officer and
Chief Investment Officer
Joined Board: 2012 (Chief
Executive Officer since 2017)
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 BNP Paribas Levfin.
Other directorships
ICG entities and Chairman of
the BVCA Alternative Lending
Committee.
Vijay Bharadia
Chief Finance and
Operating Officer
Joined Board: 2019
Vijay Bharadia is stepping
down from the Board in July
2023. Vijay 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.
Vijay will be succeeded by
David Bicarregui who joined
the Group on 2 April 2023.
Other directorships
ICG entities and Crown Estate
Commissioner.
Antje Hensel-Roth
Chief People and External
Affairs Officer
Joined Board: 2020
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 and
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
National Opera Studio.
Board Committees
A Audit Committee
N Nominations and Governance Committee
Re Remuneration Committee
Ri Risk Committee
Committee Chair
I
Independent
78
ICG | ANNUAL REPORT & ACCOUNTS 2023
I
N
Re
Ri
I
A
Re
Ri
I
A
N
Ri
I
A
Ri
Virginia Holmes
Non Executive Director
Joined Board: 2017
Rosemary Leith
Non Executive Director
Joined Board: 2021
Matthew Lester
Non Executive Director
Joined Board: 2021
Michael ‘Rusty’ Nelligan
Non Executive Director
Joined Board: 2016
Matthew Lester 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. Matthew serves as
Chairman of Kier Group plc. He
also previously served as a
Non-Executive Director of both
Man Group plc and Barclays
Bank plc. He contributes a keen
knowledge of finance matters
to the Board. He succeeded
Rusty Nelligan as Chair of the
Audit Committee on 1 July
2022.
Other directorships
Kier Group plc.
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, as well as
bringing an extensive
knowledge of the pensions
sector.
Other directorships
Syncona Ltd , European
Opportunities Trust PLC and
Murray International Trust PLC.
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, World Wide Web
Foundation, National Gallery
and Bolon Management
Limited.
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 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. He stood down
as Chair of the Audit
Committee on 1 July 2022 but
continues to serve on the
Board and the Committee.
Other directorships
None.
ICG | ANNUAL REPORT & ACCOUNTS 2023
79
BOARD OF DIRECTORS CONTINUED
I
A
Ri
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A
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Amy Schioldager
Non Executive Director
Joined Board: 2018
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.
Andrew Sykes
Non Executive Director
Joined Board: 2018 (Interim
Chairman from March 2022
to January 2023)
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.
Board Committees
A Audit Committee
N Nominations and Governance Committee
Re Remuneration Committee
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ICG | ANNUAL REPORT & ACCOUNTS 2023
David Bicarregui
CFO Designate
Expected to join the Board:
July 2023
David Bicarregui joined
the Group with effect from
2 April 2023 and will stand for
shareholder election to the
Board in July 2023. David
Bicarregui brings to the
Board significant experience
in finance and operational
leadership, transformation
and business growth. Prior to
joining ICG, David spent 25
years with Goldman Sachs
where he held various senior
roles. Until 2022, he was Chief
Financial Officer of Goldman
Sachs International Bank and
prior to that, Global-ex North
America Treasurer. During his
tenure, David led the growth of
Goldman Sachs International
Bank to become the largest of
the firm’s banks outside of
North America.
Other directorships
Vice Chair, Board of
Governors, St George’s
Weybridge.
Stephen Welton
Non Executive Director
Joined Board: 2017
Stephen Welton has over 25
years’ experience in the
development capital and
private equity industry as well
as angel investing. He was the
Founder of the Business
Growth Fund (BGF), the UK’s
largest growth capital investor,
and Chief Executive from its
launch in 2011 until July 2020.
He 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 recent
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
Non- Executive Chairman
Business Growth Fund plc
(BGF) - stepping down in June
2023.
Ri Risk Committee
Committee Chair
I
Independent
CORPORATE GOVERNANCE
Corporate governance framework
Board of Directors
Comprises the 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
Read more on page 78 →
Executive Directors
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 page 125 →
Audit
Committee
Read more on page 84 →
Composed of NEDs
Oversees external and internal audit
and the Group’s financial reporting
and disclosure
Committee liaises with:
CFOO
Head of Finance
Head of Investor Relations
Head of Internal Audit
Nominations and
Governance Committee
Read more on page 94 →
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:
CPEAO
Human Resources
General Counsel and Company
Secretary
Risk
Committee
Read more on page 90 →
Remuneration
Committee
Read more on page 97 →
Composed of NEDs
Oversees the Group’s risk
management framework and system
of internal controls
Committee liaises with:
Head of Risk
Global Head of Compliance
General Counsel and Company
Secretary
Head of Internal Audit
Composed of NEDs
Determines the Group’s
Remuneration Policy
Reviews the remuneration of senior
management
Committee liaises with:
CPEAO
Human Resources
General Counsel and Company
Secretary
ICG | ANNUAL REPORT & ACCOUNTS 2023
81
CORPORATE GOVERNANCE CONTINUED
Board roles
Chairman
• William Rucker, 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 75
Non Executive Directors
• Virginia Holmes, Rosemary Leith, Matthew Lester, Rusty Nelligan,
Amy Schioldager, Andrew Sykes 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 78 to 80
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. Vijay will be
stepping down in July 2023 and will be succeeded by David
Bicarregui
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
• Andrew Sykes, 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 2023 Board and Committee meeting attendance
Director
William Rucker1
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
Risk2
Remuneration2
Nominations2
1/1
6/6
6/6
6/6
6/6
6/6
6/6
6/6
6/6
6/6
6/6
6/6
6/6
–
1/14
–
–
–
–
–
4/4
4/4
4/4
4/4
–
4/4
–
3/3
–
–
–
3/3
3/3
2/33
3/3
3/3
3/3
–
3/3
1/1
5/5
–
–
–
5/5
5/5
–
–
–
–
5/5
5/5
1/1
5/5
–
–
–
5/5
–
5/5
–
5/5
5/5
5/5
5/5
1. William Rucker joined the Board on 31 January 2023.
2. Some non-members attended part or all of some or all Committee meetings at the invitation of the Committee Chair.
3. Owing to prior commitments, Matthew Lester was unable to attend one Risk Committee meeting. This meeting had been scheduled prior to his appointment to the Committee.
4. Andrew Sykes rejoined the Audit Committee on 31 January 2023 following his tenure as Interim Chair. There was one Audit Committee meeting between 31 January 2023 and
31 March 2023.
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ICG | ANNUAL REPORT & ACCOUNTS 2023
DIRECTOR INDUCTION AND DEVELOPMENT
Board Development and Evaluation
A series of detailed induction meetings in the
period before my first Board meeting allowed
me to fully contribute to Board proceedings
from the start of my tenure.
William Rucker
Induction programme
A detailed and bespoke induction is conducted for every new Board
member in order to give them a well-rounded view of the business
and the markets they operate in. This takes place via a series of
structured meetings over a two- to three-month period when the
relevant Director is new to the Board.
Ongoing training and development
A regular programme has been established to ensure that all Board
members remain up to date on both business specific and general
industry matters. This is primarily done through the delivery of
formal Board presentations from business unit heads – there is a
detailed dive into one investment team’s area at each Board meeting,
while either the Board or its Committees receive detailed and
operationally focused reviews from other areas. The Group’s control
functions also provide training on legislative and regulatory
developments, and the training programme is supplemented by
presentations from external advisers on matters such as takeover
defence, ESG considerations and external market perceptions of the
company. 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 Compliance and operational matters such as
anti-money laundering, anti-bribery and corruption and information
security. Each also receives formal and ad hoc updates on statutory
and regulatory developments, and leads presentations and other
training sessions for other employees.
Board evaluation
The Board reviews its own performance annually, making an
assessment of the effectiveness and performance of the Board as a
whole, its Committees and each Director. Once every three years,
this exercise is conducted as a formal external review led by
independent experts.
The results of the most recent internal review were disclosed in full
in the Annual Report for the year ending 31 March 2022, and during
the year the Board has continued to progress the areas of
refinement identified. The last external review was conducted in the
spring of 2020, and as such a new external review was due this
spring. However, in the light of the appointment of William Rucker as
Chair only becoming effective on 31 January, and the retirements of
Kathryn Purves and Vijay Bharadia from the Board being announced,
it was concluded that it would be more beneficial for the Board to
undertake this review later in the financial year once the new Chair is
better embedded.
ICG | ANNUAL REPORT & ACCOUNTS 2023
83
AUDIT COMMITTEE REPORT
Audit Committee Report
Matthew Lester
Chair of the Audit Committee
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
• Rosemary Leith
• Matthew Lester (Chair)
• Rusty Nelligan
• Kathryn Purves (until 1 April 2023)
• Amy Schioldager
• Andrew Sykes (from 30 January 2023)
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ICG | ANNUAL REPORT & ACCOUNTS 2023
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.
Dear shareholders
I am pleased to present the Committee’s report for the year ended
31 March 2023. Separate sections on Committee governance, Review
of the year, External audit, Internal controls and Internal audit follow.
I would like to thank my predecessor, Rusty Nelligan, for his service
as Chair of the Committee over the last six years. He has overseen
significant enhancements to the system of internal controls, ensuring
this matured appropriately to reflect the underlying business
activities, and the successful transition of the external audit to EY.
My focus, as incoming Chair, is the effective oversight of the system
of internal controls over financial reporting. The Committee works
closely with the Risk Committee to assess any potential deficiencies
identified by management, internal and external audit, the
remediation of any issues and considers whether disclosure is
required in accordance with the Corporate Governance Code.
The Group has grown significantly, and this backdrop, together with
the nature of the underlying activities, has resulted in a complex
operating environment which includes a number of manual
processes. The financial reporting and audit risks which result are
well understood, and the Committee is actively monitoring the
changes being implemented by management to mitigate and manage
these. The Committee notes that, while those changes will mitigate
the risks arising, these risks cannot be completely eliminated, as we
have seen this year. I would like to acknowledge the work done by
management to further enhance the control environment, which
continues to be materially effective, and look forward to working
closely with the business as it continues to streamline and
systematise in support of growth. I will report on progress in future
years.
For the year ended 31 March 2023 a particular consideration of the
Committee is the valuation of assets. In the light of considerable
mark-downs in public markets during this period we have challenged
management to demonstrate the effectiveness of controls over
valuation and satisfied ourselves that those valuations are fair.
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.
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.
Matthew Lester
Chair of the Audit Committee
24 May 2023
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 Matthew Lester (Chair of the Committee), Rosemary
Leith, Rusty Nelligan, Kathryn Purves (until 1 April 2023), Amy
Schioldager and Andrew Sykes. Biographical details can be found on
pages 78.
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
Committee has the relevant sector competence to enable it to fulfil
its terms of reference in a robust and independent manner. In
particular, Matthew Lester has considerable experience as a CFO,
Chair and Audit and Risk Committee Chair. The Board considers that
he has 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 2023. 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 March 2022; the
Committee was found to be operating effectively. For more details
of this exercise, please see page 83.
Summary of meetings in the year
The Committee held four meetings during the year. The Committee
members attending each of the meetings can be found on page 82.
ICG | ANNUAL REPORT & ACCOUNTS 2023
85
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:
Work undertaken
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
207. Strategic KPIs that are alternative
performance measures are detailed on page 18.
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.
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.
The matter and its significance
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 18 and the Finance
review on page 54
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 133
Comments and conclusion
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 63
warehouse-related entities, 19 funds and two
carried interest partnerships. The Group
exercised significant influence over six 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
increased by £5.2bn (2022: £4.8bn) and total
liabilities increased by £5.1bn (2022: £4.8bn).
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 151) 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 2023
Work undertaken
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.
The matter and its significance
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
84.2% 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 133
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 133
Comments and conclusion
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 also considered the impact of an operational error reported by
management which led to understatements of revenue and cash and overstatements of trade receivables and financial assets in the prior year.
The Committee carefully reviewed the nature and quantum of the errors and took external advice. The Committee was satisfied that the impact
was not material to users of the accounts and consequently these immaterial items, where relevant, were reported in the current year. In
addition, the Committee maintained a rolling agenda of items for its review including auditor independence and external audit effectiveness,
internal audit, capital strategy, risk and treasury management capabilities, financial and management reporting (including any changes to the
Group’s accounting policies), accounting developments, relevant people changes, the going concern concept of accounting (see pages 127
and 151), the viability statement (see page 73), the Auditor’s Report (see page 133), the Auditor’s management letter and the fair, balanced and
understandable assessment of the Annual Report. No issues of significance arose.
ICG | ANNUAL REPORT & ACCOUNTS 2023
87
AUDIT COMMITTEE REPORT CONTINUED
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 10
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. The
next tender must be completed for the financial year ended 31 March
2031.
Execution, quality and effectiveness
The Committee discusses and agrees the scope of the audit prior to
its commencement.
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 the lead audit partner regularly during
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 assessing the quality and effectiveness of the external audit, the
Committee considers 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 2022.
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 £1.9m
(2022: £1.8m) appropriately reflected the scope and complexity of
the work undertaken by EY
On the basis of this review and our ongoing interactions and
observations, the Committee remains confident in EY’s work and 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.
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. A copy of the policy can be found on the Group’s website,
www.icgam.com. The Committee monitors non-audit services
provided to the Group by EY to ensure there is no impairment to
their independence or objectivity.
During the year, the Group paid £0.4m (2022: £0.2m) to EY for the
provision of corporate non-audit services. Of the fees, £0.3m
(2022: £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 0.15:1 (2022: 0.13:1). A detailed analysis of fees
paid by the Group to EY is shown in note 12 on page 169.
The Committee is satisfied that the services provided do not impair
the independence of the external auditors.
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ICG | ANNUAL REPORT & ACCOUNTS 2023
Execution
The Committee considered and approved the updated internal audit
strategy and plan for fiscal years 2023 and 2024. 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, 20 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 and independence
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 independent part to
perform and external quality assessment of Internal Audit.
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.
The Committee also reviewed the independence of the Internal
Audit function and concluded that it remained so.
Internal controls
Risk management and internal control matters are the responsibility
of the Group’s Risk Committee. Its report is set out on page 90.
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 of controls
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,
taking into consideration the reports from internal audit, any areas
where there has been a reported breach of an internal control and
input from external sources, in particular the auditors. The
Committee works closely with the Risk Committee to review the
system of internal controls (see page 92).
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.
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.
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89
RISK COMMITTEE REPORT
Risk Committee Report
Rosemary Leith
Chair of the Risk Committee
AREAS OF FOCUS
Principal and emerging risks
• Identification and management of principal risks
• Risk appetite and tolerances
• Identification and monitoring 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
• The operational resilience of the Group and asssessment of
the Group’s control environment
• Risk function resourcing
Regulatory risks
• Impact and implementation of regulatory change
• ICARA
• Compliance function resourcing
Committee members
• Rosemary Leith (Chair since 1 April 2023)
• Kathryn Purves (Chair and member until 1 April 2023)
• Rusty Nelligan
• Virginia Holmes
• Amy Schioldager
• Matthew Lester
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The role of the Committee is to support
the Board in identifying and managing risk,
complying with regulations, and promoting
good conduct.
Dear shareholders
I am pleased to present the Risk Committee Report for the year
ended 31 March 2023.
The Committee’s role and primary focus is to support the Group’s
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.
I would like to express my gratitude to Kathryn Purves for her service
as Chair of the Risk Committee. Under her stewardship, the Group
has implemented significant enhancements to the Risk Management
Framework (RMF) and system of internal controls, ensuring that
these matured in line with the growth of the business. Over her
nine-year tenure, Kathryn also oversaw and helped the Group
effectively navigate the evolving regulatory landscape.
In recent months, the Committee has worked closely with
management to support the Group to identify and mitigate emerging
risks arising from the macroeconomic environment, given the
currently elevated interest rate and inflation environment. The Group
has proven expertise in navigating complex and uncertain market
conditions and our business model provides a high degree of
stability. As a result, ICG and its portfolio companies are well
positioned to navigate and take advantage of opportunities that
arise in the current macroeconomic environment. Notwithstanding
the short-term uncertainty, we do not see a materially increased risk
to our operations, strategy, or investor demand in the longer term.
The extension of the conflict in Ukraine into its second year
continues to impact the geopolitical environment. Our thoughts
remain with people of Ukraine and with our colleagues and investors
affected by the crisis. We are alert to the considerable uncertainty
surrounding the ongoing conflict, and the scope for unpredictable
geopolitical outcomes. We continue to monitor developments and
potential ramifications for ICG. To date the implications for ICG have
been minimal as the business 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.
As a Committee we have closely monitored global regulatory
developments to understand and anticipate potential implications
for the Group and the wider alternative asset management sector.
During the period ICG implemented the UK FCA’s new prudential
regime (the Investment Firms Prudential Regulatory Regime) and
continues to evolve our approach to ESG in line with the developing
sustainability regulations. The Committee continues to monitor
future regulatory developments, including UK initiatives to
reposition UK financial regulation.
Through continued transformation, the Group continues to
enhance internal processes and controls to position the
business for future growth. We are working closely with senior
management to oversee the ongoing improvement and
refinement of our internal controls in order that they remain
relevant, robust, adaptable, and scalable.
This has been a period of transition and there have been a
number of key people changes over the past 12 months. Risk
and Compliance have been aligned under the leadership of
Greg O’Connor to support the growth of the second line of
defence and Group’s evolution into a larger business. William
Rucker has been appointed as the Chair of the Company Board.
I have been appointed as Chair of the Risk Committee,
replacing Kathryn Purves.
Looking ahead to the next financial year, it is anticipated that
the Committee will continue to monitor the impacts and
associated risks arising from the regulatory landscape, global
climate change and sustainability, with a particular focus on
consideration of emerging risks. The Group will continue to
refine its cyber risk framework to ensure that ICG maintains
robust procedures and controls that effectively mitigate
cyber-related risks. There will also continue to be a focus on
strengthening the wider risk and control environment.
ESG remains an important focus for the Committee as a source
of risk; it also presents opportunities to strengthen resilience
and market competitiveness of our investee companies. The
Group recognises that divergent views on ESG among our
Fund investors could affect our ability to raise funds from such
stakeholders. ESG will be formally integrated into the RMF over
the course of next year to position the Group to meet evolving
regulatory requirements, and to successfully manage ESG-
related expectations across the varied interests of our existing
and prospective investors.
Finally, the Group is attentive to the challenges arising from the
global turbulence and the impacts on our local communities.
ICG recently completed a “Million Meals” initiative through
which it supported six charities in the cities in which ICG has
major operations worldwide to provide free meals to
individuals and families in need due to the cost-of-living crisis.
The Committee will continue to ensure that we are adopting a
proactive response to the challenges, risks, and opportunities
for the Group and our wider stakeholders.
I would be pleased to discuss the Committee’s work with any
shareholder.
Rosemary Leith
Chair of the Risk Committee
24 May 2023
Governance of risk
The Committee is mandated by the Board to encourage, and seek to
safeguard, high standards of risk management and effective internal
controls across the Group.
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 and Risk Assessment (ICARA) at least
annually, 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
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91
RISK COMMITTEE REPORT CONTINUED
Composition
The current members are Rosemary Leith (Chair of the Committee),
Virginia Holmes, Rusty Nelligan, Amy Schioldager, and Matthew
Lester. Biographical details can be found on pages 78 to 80. The
Committee members have a wide range of business and financial
experience, including risk management, fund management and
investment, regulation and compliance, M&A, tax, and international
business practices. These skills enable the Committee to fulfil its
terms of reference in a robust and independent manner.
Rosemary replaced Kathryn Purves on her retirement as Chair of the
Committee at year end. Rosemary joined the Company as a NED in
February 2021 and has been an active member of the Committee
since.
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 and Risk,
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 2023.
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 March 2022; the
Committee was found to be operating effectively. For more details
of this exercise, please see page 83.
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, including the risk and control self-assessment
process, 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. No system of controls can be infallible. The Risk
Committee and the Audit Committee review breaches as appropriate
and consider these in reporting to the Board.
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.
Summary of meetings in the year
The Committee held four meetings during the year. In the ordinary
course of business, the Committee receives a report from 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 ongoing activity to enhance and
develop the Group’s RMF; and from the Group Head of Compliance
and Risk on global compliance and implementation of relevant
regulatory developments.
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ICG | ANNUAL REPORT & ACCOUNTS 2023
Over the course of the year the Committee considered and
discussed the following significant matters:
• The Committee continued to closely monitor a number of
significant regulatory change and oversight programmes to
ensure successful execution, notably the evolution of regulatory
responsibilities under the Investment Firm Prudential Regime
(IFPR), which came into effect on 1 January 2022. The Committee
held a dedicated ICARA session to understand more fully the
requirements of the regime in order that we could effectively
challenge the assumptions used in preparation of the 2022 ICARA
process
• The Committee carried out a detailed review of the Group’s 2022
ICARA 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
ICARA will support the Committee in understanding changes to
the risk profile of the Group and the capital position over the
course of the year ahead
• The Committee welcomed an update from the Group’s Global
Head of Compliance and Risk regarding the control process the
Group uses to identify, manage, and evidence conflicts of interest
in relation to secondary transaction activity in continuation funds
or other sales between ICG-managed funds. The Committee was
satisfied that the conflicts that may arise are managed
appropriately
• The Group’s Cyber Security Lead presented the annual
Information Technology and Cyber update to the Committee,
which covered the cyber security standards, security protection
tools, ongoing detection, and monitoring of threats, and testing of
cyber response and recovery procedures
• The Committee reviewed an assessment of the operational and
regulatory implications related to the potential expansion of the
Group’s wealth channel. The Committee recognises that finding
new markets, distribution channels and investors for ICG funds is
key for profitable growth and looks forward to receiving more
detailed assessments of the Group’s readiness to carefully
capitalise this potential opportunity
• The Committee received an update on the Group’s outsourced
service providers and considered further resourcing plans to
support the future growth of the business
• The Committee acknowledged the continued efforts to enhance
the Group’s annual Material Controls Assessment, and Fraud Risk
Assessment and discussed with the Head of Risk the positive work
undertaken to increase the scope and assurance coverage of
these important risk processes. The Committee considers that
these activities will ensure the ongoing improvement of the
Group’s control environment
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
Global Head of Compliance and Risk 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 89), 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.
ICG | ANNUAL REPORT & ACCOUNTS 2023
93
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.
Dear shareholders
I am pleased to present the Nominations and Governance Committee
report for the financial year ending 31 March 2023.
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 and effectiveness.
The Committee’s main focus during the year was in respect of my
appointment as Chair of the Board; please see the letter from Andrew
Sykes on the facing page in respect of this exercise.
Shortly after my appointment, the Committee met to discuss the
composition of the Board and concluded that the Board remains well
balanced and of an appropriate size and diverse skillset. The
Committee noted the strong contribution to the Board of all Directors,
regardless of their tenure. It was agreed that one or more further NED
appointments should be made to replace Kathryn Purves following her
retirement, to ensure adequate long-term succession planning and to
enhance the diversity of the Board while maintaining its current skillset.
We have commenced a process to search for appropriate candidates.
The Committee also carried out its search with Russell Reynolds for the
replacement of Vijay Bharadia as CFO on the basis of maintaining an
appropriate spread of skills and experience on the Board and, after a
thorough search, David Bicarregui was welcomed to the Group on
2 April 2023 and is working closely with Vijay in preparation for his
handover in July 2023. The Committee has continued to monitor
feedback received from employees gained through focus group
sessions led by Amy Schioldager, the NED responsible for liaising with
employees in order to gain insight into the culture of the Company.
Employee views are always important to Committee and Board
discussions, and I look forward to hearing more insight from her as we
work together in the coming years.
During the year, the Committee also heard from management on the
results of a detailed exercise on executive succession planning for key
individuals and ensuring development and training opportunities for our
key talent. NEDs have worked closely with the Chief People and External
Affairs Officer with a focus on developing and growing our employees,
particular emphasis has been placed on enhancing bench strength
across the organisation, including the development of targeted
development programmes for leadership, newly promoted individuals
and emerging future leaders. ICG is a people business and developing
our talent is crucial in helping to deliver the Group’s strategic objectives.
William Rucker
Chair of the Nominations and Governance Committee
AREAS OF FOCUS
Culture, diversity and inclusion
• Employee engagement and development
• Gender diversity considerations
Succession planning
• NED, Executive and senior management succession planning
• Talent development
Director skills and experience
• Director induction
• Director training
Appointments
• New Chairman, New CFO
• Board composition
Committee members
• William Rucker (Chair since 31 January 2023)
• Virginia Holmes
• Matthew Lester
• Andrew Sykes (Chair until 31 January 2023)
• Stephen Welton
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ICG | ANNUAL REPORT & ACCOUNTS 2023
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 in the context of our business
and strategy. We will bear the results of the forthcoming evaluation in
mind as we continue to plan for long-term succession for our Board.
I would be pleased to respond to any shareholder questions about the
Committee’s work either at the AGM or otherwise.
William Rucker
Chair of the Nominations and Governance Committee
24 May 2023
Dear shareholders
Throughout the year being reported on, I acted as Chair of
the Board and the Committee until the commencement of
William Rucker’s tenure as Chair on 31 January 2023. The
primary activity of the Committee during this period was to
conduct a search for a long term Chair of the Company
following the unanticipated retirement of Lord Davies of
Abersoch in January 2022.
This search was conducted with regard to a range of skillset,
experience and diversity criteria, and taking into account the
profiles of the existing Board members. The search, conducted
with support from Russell Reynolds Associates, was thorough
and robust. Members of the Committee and Executive
Directors met with a number of candidates; after an extensive
process, we were unanimously satisfied that William Rucker was
the best possible candidate for the role given his extensive
financial services industry expertise and his significant
experience on boards of other listed companies.
I would like to thank my fellow Committee and Board members
for their contribution to this process, including Kathryn Purves
who acted as Senior Independent Director on an interim basis
until 31 January 2023.
I would be happy to discuss the matters set out above with any
shareholder.
Andrew Sykes
Senior Independent Director
24 May 2023
Committee governance
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 inclusion, 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 the Senior Managers and Certification Regime
(SM&CR)
• Ensuring the Group is managed to high standards of corporate
governance
Composition
The Nominations and Governance Committee consists of NEDs:
William Rucker (Chair of the Committee), Andrew Sykes, Virginia
Holmes, Matthew Lester and Stephen Welton. Biographical details
can be found on pages 78 to 80.
The Company Secretary acts as Secretary to the Committee.
Kathryn Purves served as a member of the Committee until her
retirement from the Board on 1 April 2023.
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 2023.
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 March 2022; the
Committee was found to be operating effectively. For more details
of this exercise, please see page 83.
ICG | ANNUAL REPORT & ACCOUNTS 2023
95
NOMINATIONS AND GOVERNANCE COMMITTEE REPORT CONTINUED
Summary of meetings in the year
The Committee held five meetings during the year. Over the course
of the year the Committee considered and discussed the following
significant matters:
• The search for, and appointment of, William Rucker as Chair of the
Company. The Committee set parameters for a search (having
discussed desired skills and experience and the importance of
diversity to the Board), reviewed long-lists and short-lists of
candidates provided by Russell Reynolds Associates, conducted
interviews with a number of candidates and approved the offer of
the role to Mr Rucker.
• The search with Russell Reynolds for, and recruitment of, David
Bicarregui to succeed Vijay Bharadia, who will retire from the
Board and his role as CFOO in July 2023. The Committee’s search
was focused on ensuring the ongoing balance of skillsets and
experience on the Board.
• Whether it may be appropriate to appoint further NEDs to the
Board to supplement the existing skillsets of the Board and to
assist with long-term succession planning. It was concluded that in
the current year no further appointments were needed, but this
should be reviewed in the coming months by the Committee under
the leadership of the new Chair.
• The appointment of Rosemary Leith as Chair of the Risk
Committee following the retirement of Kathryn Purves from the
Board.
• A detailed review of succession planning in respect of senior
executive positions, including each Executive Director and other
key leadership personnel within the organisation.
• 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 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 22.
Other matters considered
The Committee also conducted a review of the size and composition
of the Board and its Committees, the skillset of all Directors, their
ongoing training and development and the independence of NEDs.
No points of concern were raised.
Non Executive Director area of expertise
Diversity is very important to our Board. For the financial year ending
31 March 2023, we were compliant in respect of all Listing Rule
requirements for board diversity – the percentage of female Board
members was above 40%, we had a female SID (until Kathryn Purves
stepped down as SID on 31 January 2023) and one Director from an
ethnic minority background. At the date of publication, as a result of
changes to the Board (namely the departure of Kathryn Purves in
April 2023 and the retirement of Vijay Bharadia in July 2023), we are
focusing efforts on hiring further Directors to increase diversity on
the Board. The Committee monitors the diversity of the Group with a
specific focus on senior management roles and their direct reports
(see page 28). We are aware of the Listing Rules requirements for
gender diversity in senior board roles and are factoring this in to our
considerations.
Board gender diversity
2023 figures are as at publication date - throughout the year ended
31 March 2023 female Board representation was above 40%,
see page 82 for more details.
2023
2022
Female: 4 (36%)
Male: 7 (64%)
Female: 5 (42%)
Male: 7 (58%)
Number of senior positions on the board at current date: Male: 4; Female: 0
Reporting table on ethnicity representation
Number of Board
members
Percentage of the
Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
9
1
1
82%
9%
9%
3
1
White British or other
White (Including
minority-white groups)
Asian/Asian British
Not specified/ prefer
not to say
Asset
Management
Investment
UK
Corporate
Governance
International
Risk
Management
Financial
Name
William Rucker (Chair)
Virginia Holmes
Rusty Nelligan
Amy Schioldager
Andrew Sykes (SID)
Stephen Welton
Rosemary Leith
Matthew Lester
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REMUNERATION COMMITTEE REPORT
LETTER FROM THE COMMITTEE CHAIR
Remuneration Committee Report
The role of the Committee is to support the Board
in developing and implementing the remuneration
policy, ensuring alignment with shareholders and
company strategy, identifying and managing risk,
complying with regulations, and promoting good
conduct.
Dear shareholders
I am pleased to present the Committee’s Report (the Report) for the
year ended 31 March 2023.
The Report comprises three parts:
• This introductory statement, which explains the key decisions
made by the Committee during, and in respect of FY23;
• The Annual Report on Remuneration for FY23. This details the
performance and remuneration outcomes, and the governance
process, together with my introductory statement and the ‘at a
glance section’. It is subject to the usual advisory vote at the AGM;
and
• The Directors’ Remuneration Policy (the Policy), including details
of proposed modifications to the Policy. The Policy is subject to
the usual triennial shareholder vote at the AGM.
Directors’ Remuneration Policy and shareholder
consultation
Our Directors’ Remuneration Policy was last 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. The Committee has undertaken
a thorough review of the Policy in preparation for the triennial vote
at the AGM this year.
We consulted widely with shareholders on a number of possible
changes to the Policy and its implementation. These included a
proposal to introduce a ‘Super Stretch’ performance level, above
maximum, in the financial performance metrics used in the variable
pay plan. This was intended to help drive outstanding levels of
performance and return to shareholders, and to assist in recruitment
and retention of talent. It was to be accompanied by a higher
variable pay maximum above the current maximum levels.
The Committee also consulted on a proposal to re-position the base
salary of the CEO/CIO (currently £410k) over a two-year period, as
it is far adrift from benchmark levels (which are typically
£750k-£800k). The need to re-position base salary has also been
highlighted by our recent recruitment of a new CFO, where, to
attract the preferred candidate, it was necessary to offer a base
salary that is 46% higher than the current CEO/CIO base salary.
Modest changes were also proposed to the base salaries of the
other Executive Directors for FY24, to recognise the breadth of their
roles and market levels of base salary.
ICG | ANNUAL REPORT & ACCOUNTS 2023
97
AREAS OF FOCUS
Remuneration policy
• Continuous assessment of the effectiveness of the Group’s
remuneration policy
• Consideration of shareholder and representative
shareholder bodies’ feedback
• Consideration of business requirements and competitive
landscape
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
• Determination of variable pay awards from the Annual Award
Pool (AAP)
• Review of market data on award levels
Committee members
• Virginia Holmes (Chair)
• William Rucker
• Andrew Sykes
• Rosemary Leith
• Stephen Welton
Contents:
97
101
103
115
116
Letter from the Committee Chair
Remuneration at a glance
Annual report on remuneration
Governance of remuneration
Directors’ Remuneration Policy
REMUNERATION COMMITTEE REPORT CONTINUED
LETTER FROM THE COMMITTEE CHAIR CONTINUED
We are grateful for the time and attention shareholders gave to the
consultation. Some shareholders were fully supportive of all the
proposals. Others felt that, whilst they understood the Committee’s
rationale, a higher variable pay maximum (even with the additional
Super Stretch performance requirement), was difficult in the current
economic and cost -of- living context. However, the majority supported
the re-positioning of the CEO/CIO’s base salary, given its substantial
discount both to market benchmark levels and internal comparators.
Following the consultation process, the Committee carefully
considered the feedback received, and in light of it, has decided not
to proceed with the proposal to introduce the Super Stretch
performance level or the accompanying increase in the higher
variable pay maximum. We shall continue to monitor the effectiveness
of the Policy going forward in enabling ICG to compete effectively
for talent and support the business strategy. We may need to
reconsider the question of variable remuneration levels for
outstanding performance in future Policy periods.
The Committee decided that it should proceed with a phased
re-positioning of the CEO/CIO’s base salary, as it has become so far
removed from market norms for CEOs in listed companies of ICG’s
size and scope, and this change was supported by the majority of
respondents to the consultation. The original proposal was to
re-position the base salary from the current level of £410k, to £750k
in two steps: to £600k (46%) for FY24 and to £750k (25%) for
FY25. We have decided to re-position more gradually, staging the
increases over three years rather than two, and spreading these
more evenly than in the original proposal. The proposed increases
are now in the following three steps: to £500k (21.95%) for FY24; to
£615k (23%) for FY25; and, to £750k (21.95%) for FY26. We had also
proposed to move the base salary of the CPEAO (currently £442k)
to £500k in FY24, to recognise the breadth of this role. However,
we have also decided to spread this over two years, and to set the
increase to £467,500 for FY24 (i.e. 5.77%), below the average
increase for the wider workforce (6.52%), with the balance to
£500,000 in FY25.
For the CFO role and CPEAO role, the Committee proposes to
express the total variable pay maximum as a multiple of base salary
rather than a monetary amount, from FY24 onwards. This approach
is the norm for other listed companies. These multiples will be 4x
base salary for the CFO role and 3.5x base salary for the CPEAO role.
These are the same as the effective multiple that applied for the
CFOO role, and slightly less than the effective multiple that applied
to the CPEAO role, when the Policy was last approved by
shareholders in 2020.
For the CEO/CIO, the Committee proposes to retain the current
variable pay maximum of £6m for the Policy period FY24-26, but to
transition to express this as a multiple of base salary from the start of
FY26 once the phased base salary increases, described above, have
been completed. The planned increases will take the base salary to
£750k for FY26. The total variable pay maximum for the CEO/CIO
would be 8x base salary (i.e. £6m) for FY26 and will then be
reviewed as part of the next Policy review.
The Committee will continue to defer a high percentage (at least
70%) of total variable pay into ICG shares, vesting in thirds after 3, 4
and 5 years from the date when the variable pay is awarded.
98
ICG | ANNUAL REPORT & ACCOUNTS 2023
Pension levels for current and future Executive Directors are already
set no higher than the level for the majority of our UK employees
(12.5% of base salary).
Further details of these Policy changes can be found on page 118.
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 are 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. This remains
unchanged under the proposal for our Policy update. The scorecard
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
alignment. 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.
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 surveys, which
during this financial year were conducted in June and November,
enable 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 across various locations. 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: a focus on long-term performance and
leadership
Our remuneration approach encourages and reflects sustained,
long-term performance, 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’).
The AAP is funded from 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.
Prior to setting the targets for FY23, the Committee again completed
an extensive review of the quantitative KPIs and refined the
deliverables for the qualitative KPIs to ensure both were
appropriately stretching and linked to strategic priorities. 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.
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 scale and
diversification, as well as leadership on Diversity, Equity & Inclusion
and Sustainability. They also reflect our position in the alternative
investment industry as a leader of sustainable, inclusive business
practices.
Each Executive Director has a target variable pay level and a
maximum cap, the latter payable for outstanding performance only,
relative to the annual targets set in the context of the evolution of the
firm and its market environment. 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 FY23
Against the backdrop of a complex and dynamic economic landscape
and growing geopolitical and economic uncertainty, we are proud
that business performance in the year ended 31 March 2023
continues to be very strong. ICG raised $10.2bn in new funds (which
means that the three-year stretch KPI target was exceeded by
$500m). The FMC (Fund Management Company) operating margin
was 57.5%, which is an outstanding result given the investments the
Group continues to make as it delivers on its growth strategy and the
pressures of a high-inflation environment. Pre-Incentive Cash Profit
(PICP) showed commensurately strong results for this year, at
£531.8m.
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 £109.9m should be
awarded to eligible employees under the AAP for the year ended
31 March 2023, compared with £115.9m in the prior year. This is the
result of continued strong individual and corporate performance
and also takes into account an increase in bonus-eligible staff of
10.1% 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 rewarding certain investment
staff, excluding Executive Directors, for intra-year capital
deployment.
The Committee has allocated 22.6% of PICP to the AAP on a
five-year cumulative rolling percentage basis, which is 7.4
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 even out some of the potential
volatility in remuneration, where appropriate, and this, as well as the
use of our Business Growth Pool (BGP), provides capacity to
continue to develop the business through market cycles.
In addition to the AAP, and in accordance with the Policy, the
Committee allocated £10.7m to the BGP to fund incentive awards
during the year for teams developing new investment strategies
which have not yet completed a fundraise. These include our Life
Sciences, Infrastructure Equity Asia, Real Estate Opportunistic
Equity for both Europe and Asia and US Mid-Market strategies. This
pool excludes Executive Directors. This year’s BGP award compares
with £6.7m awarded in the prior year.
Executive Director variable remuneration for FY23
The total remuneration for the year for each Executive Director is
shown in the table on page 107.
The variable pay awards reflect the very strong and continued
performance across the Executive Director KPIs, as detailed in full in
this Report. The targets and stretch levels for each KPI were set at a
demanding level – especially in the more challenging fundraising and
investment environment in FY23. The KPIs were weighted 65% on
financial performance and 35% on non-financial criteria reflecting an
increase in the weighting on financial performance for the CFOO and
CPEAO which has previously been 60%. The total variable pay award
for the CEO/CIO was determined in line with the performance
achieved relative to the KPIs and target ranges that were set. 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/CIO. Consequently, the Committee made variable pay awards
of £5,850,000, £1,900,000 and £1,425,000 respectively to the CEO/
CIO, CFOO and CPEAO this year.
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.
ICG | ANNUAL REPORT & ACCOUNTS 2023
99
REMUNERATION COMMITTEE REPORT CONTINUED
LETTER FROM THE COMMITTEE CHAIR CONTINUED
Board Changes
We were delighted to welcome William Rucker to the Board as Chair
in January 2023. The annual fee for the role was set at £375k, in line
with the median for comparable, listed financial services companies
in the UK.
As previously announced, Vijay Bharadia will step down from the
Board and his role of CFOO at the FY23 AGM. His 12-month notice
period commenced on the date of the announcement (21 February
2023). He receives contractual payment in lieu of notice paid in
monthly instalments for the remainder of his 12-month period,
subject to mitigation. Although he is continuing to perform the
Board CFOO role during the period from 1 April 2023 to the AGM in
July, he will not receive variable pay in respect of this period. As a
good leaver, he retains the deferred variable pay awards he earned
in respect of performance in previous years. These will vest on the
normal vesting dates (in thirds after 3, 4 and 5 years from grant),
subject to a non-compete agreement. He is also required to retain
his in-employment shareholding requirement of 2x base salary for
two years post-employment. Further details of his leaving
arrangements are provided in this Report.
I would like to take this opportunity to thank Vijay Bharadia for his
valuable service over the past four years and we are looking forward
to welcoming David Bicarregui as his successor. David has joined
ICG in April and will stand for election to the Board at the AGM. To
secure his appointment, the Committee agreed to a base salary of
£600k, which is lower than his previous salary. David’s maximum
variable pay will be 4x base salary, which is the same effective
multiple that applied to Vijay Bharadia when the Policy was last
approved by shareholders in 2020 and is in line with the market,
median total variable pay multiple for listed companies of our size.
Total Shareholder Return (TSR)
ICG has continued to deliver strong TSR performance. For the ten
years to 31 March 2023, TSR was 327.3% versus 23.0% for the FTSE
All Share Index.
Conclusion
Our Policy provides a clear, simple and predictable remuneration
model, which helps drive and sustain the achievement of our
corporate strategy as well as a prudent approach to risk. We believe
that the updated Policy proposal recognising shareholder feedback,
represents a natural continuation of these principles, taking into
account the evolving landscape of alternative asset management and
ICG’s very strong position within it.
I hope you will provide your support for the proposed Directors’
Remuneration Policy, and for the Directors’ Remuneration Report
for FY23.On behalf of the Remuneration Committee, I would like to
thank all of our shareholders for their continued support.
Virginia Holmes
Chair of the Remuneration Committee
24 May 2023
100 ICG | ANNUAL REPORT & ACCOUNTS 2023
ANNUAL REPORT ON REMUNERATION
Remuneration at a glance
Executive Remuneration Framework and Policy Summary for FY23
Purpose and link to strategy
Operation
Maximum opportunity
Outcomes for FY23
Base Salary
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
For FY24, the CEO’s salary is increased
by 21.95% to £500,000 as explained in
the introduction to this Report. The
CPEAO’s salary is increased by 5.77% to
£467,500, which is below the average
for the wider workforce of 6.52% . The
current CFOO’s salary remains
unchanged as he is stepping down from
the Board in July.
Benefits
Adequate to recruit and retain
Executive Directors to deliver the
strategic objectives of the Group
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
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 the
current CFOO at 10%; there have been
no changes this year
Variable pay awards for the CEO,
CFOO and CPEAO were £5.85m, £1.9m
and £1.425m 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
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
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
Total variable pay award
Adequate to recruit and retain
Executive Directors to deliver the
strategic objectives of the Group
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
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
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
Business performance
Profit
Before Tax
£251.0m
(2022: £565.4m)
Five-year AAP overview
Third-Party Assets
under Management1
$77.0bn
(2022: $68.5bn)
Ordinary Dividend
per Share
77.5p
(2022: 76.0p)
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 £109.9m should be awarded to eligible employees under the AAP for the year ended 31 March 2023,
compared with £115.9m in the prior year.
Percentage of PICP over five years rolling
Spend on incentives (£m)
Number of employees
1. During the year the Group updated its AUM measurement policy, see page 54.
FY19
23.6%
78.0
336
FY20
22.2%
70.8
408
FY21
23.6%
87.2
470
FY22
24.4%
115.9
525
FY23
Cumulative
22.6%
109.9
582
22.6%
461.8
ICG | ANNUAL REPORT & ACCOUNTS 2023
101
REMUNERATION COMMITTEE REPORT CONTINUED
REMUNERATION AT A GLANCE CONTINUED
KPI performance outcomes
KPI
Quantitative KPIs
Fundraising (three-year annualised)
Realised Portfolio Returns
FMC Operating Margin
Net Gearing
Qualitative KPIs (% of max)
Strategic Development
Culture, DE&I and Sustainability
Operating Platform & Risk Management
Link to strategic
objectives
Threshold
Target
Stretch
FY23 Outcome
1
3
3
2
1 2
N/A
1 2
1 2
1 2
3
3
3
$12.4bn
$13.2bn
$14.0bn
$14.5bn
4%
45%
5.2%
47%
<0.75x
7%
50%
18.7%
57.5%
0.50x
95%
95%
85%
Strategic alignment:
1
Grow AUM
2
Invest selectively
3
Manage portfolios to maximise value
Read more about performance on page 104.
Total remuneration (actual vs target)
Benoît Durteste
Vijay Bharadia
Antje Hensel-Roth
£k
470
470
o
n
y
l
F
i
x
e
d
p
a
y
6,470 6,320
,
4
2
0
0
,
4
6
8
0
1
,
1
7
0
4,070
2
5
2
0
,
1
,
8
0
0
1
,
0
8
0
£k
2,583
1
,
4
0
0
2,483
1
,
3
3
0
1,583
7
0
0
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5
8
3
3
0
0
5
8
3
6
0
0
5
8
3
5
7
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3
£k
2,007
1
,
0
5
0
1,932
9
9
7
1,257
5
2
5
507
5
0
7
2
2
5
5
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7
4
5
0
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470
470
470
T
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Fixed pay
Cash Bonus Award
ICG PLC Equity
102 ICG | ANNUAL REPORT & ACCOUNTS 2023
ANNUAL REPORT ON REMUNERATION
Executive Director performance
Awards in respect of annual performance1
KPI
Quantitative KPIs
Fundraising
(Three-year annualised)
Realised portfolio
returns
FMC
operating margin
Link to
strategic
objectives
Threshold
Target
Stretch
FY23 Outcome
CEO
weighting
CFOO
weighting
CPEAO
weighting
1
$12.4bn
$13.2bn
$14.0bn
$14.5bn
27.5%
20.0%
27.5%
2
3
4%
5.2%
7%
18.7%
15.0%
10.0%
10.0%
1 2
3
45%
47%
50%
57.5%
20.0%
27.5%
25.0%
Net gearing2
N/A
<0.75x
0.50x
2.5%
7.5%
2.5%
Qualitative KPIs
Strategic
development
1 2
3
Culture, DE&I and
Sustainability
1 2
3
Operating platform
and risk management
1 2
3
% of max
95.0%
15.0%
10.0%
15.0%
95.0%
12.5%
12.5%
12.5%
85.0%
7.5%
12.5%
7.5%
Strategic objectives
1
2
Grow AUM
Invest selectively
3 Manage portfolios to maximise value
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.
ICG | ANNUAL REPORT & ACCOUNTS 2023
103
REMUNERATION COMMITTEE REPORT CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
Executive Director Performance continued
At the outset of FY23, the Committee set stretching targets across all
KPIs, commensurate with the continued growth and success of ICG
and taking into account deteriorating market conditions. The
Committee also reviewed the weightings between financial and
non-financial KPIs and brought these in line for each Executive
Director at a 65% weighting towards financial and a 35% weighting
towards non-financial KPIs (previously, that split had been 60% to
40% for the CFOO and CPEAO). Individual KPIs within the two
sections have been weighted differently to take account of the
differences in executive roles.
Market conditions notwithstanding, ICG has delivered another very
strong year, distinguishing itself further as a leader and high
performer across market cycles. Stretch targets for the financial KPIs
have been exceeded and performance against non-financial KPIs,
which lay the foundations for sustainable success over the long-
term, has been similarly strong.
Financial KPIs:
1. Fundraising
How performance is measured
Given the increased guidance to the market in June 2021 of
US$40bn to be raised over four years with a minimum of US$7bn in
any given year and our exceptional record fundraising in FY22, we
increased the targets for our fundraising KPI as follows:
• The threshold target was raised from $6bn to $12.4bn annualised
over three years
• The on-target was raised from $8bn to $13.2bn annualised over
three years
• The stretch target was raised by ~20% from $11.5bn to $14bn
annualised over three years
Performance achieved this year
ICG has exceeded its annualised target of $13.2bn by 9.6%, reaching
$14.5bn annualised over three years and $10.3bn intra-year. This
exceeds the KPI stretch target by $500mn / 3.6%.
We note that this very strong performance has been achieved
against the backdrop of this being the lowest market fundraising
year in Europe since 2015, with private equity down 37% year-on-
year (source: Preqin/Evercore). The denominator effect, LPs’
risk-off considerations in light of macro-economic and geo-political
uncertainties, and a high saturation of funds competing for capital
are well documented. Amid these challenges, ICG’s multi-year
strategy and client diversification continues to pay off, with
particular success in the US, the Middle East and Asia.
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 measure as a clear expression of performance relative to the
targets we agree with our clients for each investment strategy.
104 ICG | ANNUAL REPORT & ACCOUNTS 2023
Despite the more difficult market context this year, the Committee
retained the previous target levels for threshold, target and stretch.
Performance achieved this year
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. This has been tested and confirmed during this
year’s fundraising environment, and ICG’s success despite the
external headwinds is a strong reflection of its investment excellence
– this year, Realised Portfolio Returns reached 18.7%.
3. Operating Margin
How performance is measured
Given that ICG’s fundraising cycle had always planned for FY23 to be
a year during which there would be naturally fewer funds in the
market with fees on committed capital and thus lower fee flow;
compounded by economic uncertainty, and significant inflation, the
Committee adjusted the FY23 FMC Operating Margin KPI thresholds
as follows vs FY22:
• Threshold from 47% to 45% (which was still higher than FY21 at
43%);
• On-target from 49% to 47% (which was still higher than FY21 at
45%); and
• Stretch from 51% to 50% (equal to FY21).
We consider these to be highly stretching, both relative to the wider
UK market and our global competitors with a similar asset class mix
and fee base as well as given the continued need to invest in what
remains a high-growth business.
Performance achieved this year
Based on strong fundraising, significant revenue growth and a
disciplined approach to cost management, the outperformance
target was significantly exceeded with an FMC operating margin of
57.5% . We note that this includes catch-up fees which are not
expected to repeat next year to the same extent.
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 retained this KPI at <0.75x. The net gearing as at
the end of FY23 is 0.50x, demonstrating prudent balance sheet
management.
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 geographies and distribution channels; and
furthering our bench strength in terms of capabilities across all areas
of the firm. This year, the Committee has set an additional focus on
managing deteriorating market conditions.
Performance achieved this year
ICG has performed very well in upholding fundraising, growing new
markets and clients, deploying selectively, exiting transactions very
successfully thus enhancing its reputation for delivering for LPs, as
well as continuing to future-proof its business infrastructure.
To further enhance our geographical footprint, two new investment
teams were recruited in Asia focusing on Infrastructure Equity and
Real Estate Equity respectively; the firm’s Northern European
coverage through establishing presence on the ground in
Copenhagen; and, in the US, continuing to drive for growth in
investment impact, assets and clients, underlined by the opening of a
new, ambitious New York office.
Bench strength continues to be a critical component of strategic
planning. Succession planning is very strong, with exceptional
progress made on external hires who are settling well into their new
roles, as well as, increasingly, internal step-up candidates coming
into their own. We have seen particularly strong succession
outcomes in the European Corporate team, Strategic Equity, SDP,
Real Estate and MCR. Comprehensive talent development
programmes are now strongly embedded. Pro-active engagement
with external talent continues across all business units, with a view to
selectively taking advantage of changing market conditions.
6. Culture, DE&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 cement our position as a DE&I leader within the
alternative investment industry and uphold the significant progress
made on diversity, including having at least 30% of senior leadership
roles held by women; 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 and progressing towards
our net zero goal.
Performance achieved this year
Culture
ICG is moving to a more inclusive leadership model, away from
narrow committee structures and towards somewhat larger, more
representative groups sharing a vision, ideas and challenge as well
as to create more cultural cohesion amongst senior leaders.
Engagement continues to be strong: our internal communication
platform has a high 85% participation rate across the firm; several
staff roundtables were held with NEDs to share views with the
board; and two engagement pulse surveys were conducted over the
year, showing continuously good scores, in particular in terms of
Leadership, Inclusion and Recognition.
Opportunities to participate financially in the success of the firm
have been very well received: the participation rate for our
Sharesave plan is 63% and our fund co-investment programme is
open to all permanent employees, with high take-up.
DE&I
ICG was delighted to be ranked #1 globally in Honordex, measuring
DE&I efforts, initiatives and outcomes in the Private Equity industry,
as well as ranked as a global leader in each sub-category. DE&I
reporting, including our Sustainability & People Report, continues to
be positively reviewed and the extent of our disclosures has
contributed to high external rankings.
Our external visibility on DE&I initiatives continues to increase,
positioning the firm as a thought leader across the industry.
In the UK, senior women in global leadership roles currently account
for 32% of total, thus continuing to fulfil the goals set under the
Women in Finance Charter; and our ethnic diversity outstrips the
underlying UK population1.
Employee networks play an integral part in the success of integrating
DE&I fully and deeply in the firm. They are very well supported,
visibly showcased and events are numerous and well-attended. This
is complemented by a top-down approach which holds leaders at all
levels to account culturally, financially and in career terms for their
DE&I efforts and outcomes.
Hiring across all business units is approaching balance: women
constituted 46% of global new joiners and 52% of new joiners in the
UK, where the majority of our corporate functions are based. 33% of
new hires in the UK identified as an ethnic minority.
Sustainability
Very strong progress has been made in further cementing ICG’s
position as a Sustainability leader, and we were delighted to further
upscale and enhance the team under excellent leadership.
Progress towards net zero:
15% of relevant investments, by invested capital, and 28% by number,
have set Science Based Targets (SBTs) within the first year across
all five strategies in scope. There is a strong pipeline of submitted
SBTs expected in FY24 as result of the work done this year.
99% of raised capital in scope of Sustainable Finance Disclosure
Regulation (SFDR), since March 2021, has been in products that
promote environmental and/or social characteristics (Article 8).
Additionally, all relevant fund bridge financing, i.e. that for Europe
VIII and Real Estate Debt VI, was linked to Sustainability KPIs, leading
to a benefit in margin reductions of 5bps and 2bps respectively.
1. Our UK population make-up by the end of FY23 was 66% white, 23% BAME and 11%
not specified; whereas the UK population according to ONS 2021 is 81% white, 13.8%
Asian and Black, and 5.2% other.
ICG | ANNUAL REPORT & ACCOUNTS 2023
105
Improvements in fund operations continue, with a particular focus on
enhancing client service. This has included establishing a new,
dedicated client onboarding function as well as upskilling and
consolidating middle office and operations management.
Risk Management
Control functions were further enhanced in line with the firm’s
growth and complexity, and a Combined Assurance map was
implemented to enable an assessment of governance, risk
management and control processes provided by ICG’s three lines of
defence. The Compliance and Risk functions were combined under
one leadership, with internal promotions into both the Head of
Compliance and Risk and the Head of Risk roles.
No material control breakdowns during FY23 were noted by Risk,
Compliance or Internal Audit.
Executive Director remuneration:
In considering the awards to be made to the Executive Directors, the
Committee took into account overall performance as a leadership
team as well as 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
£5,850,000, comprising an annual Cash Bonus Award of £1,170,000
and a deferred PLC Equity Award of £4,680,000, reflecting his
performance relative to the KPIs and targets set in his dual role as
CEO and CIO of the Group.
For Vijay Bharadia, the Committee made a total variable pay award of
£1,900,000. This comprises an annual Cash Bonus Award of
£570,000 and a deferred PLC Equity Award of £1,330,000. For
Antje Hensel-Roth, the Committee determined that an award of
£1,425,000 was appropriate, comprising an annual Cash Bonus
Award of £427,500 and a deferred PLC Equity Award of £997,500.
These were slightly below the strictly formulaic calculation resulting
from the performance relative to the KPIs and targets set.
REMUNERATION COMMITTEE REPORT CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
Executive Director Performance continued
Report quality and thought leadership:
ICG’s third TCFD report was published and recognised as a leading
example by the BVCA & KPMG TCFD guidance for the Private Equity
sector. ICG continued to take part in Carbon Disclosure Project
Climate Change Assessment, regaining its A- leadership score, and
S&P Corporate Sustainability Assessment, increasing its score from
59 to 65 which resulted in ICG’s inclusion in the DJSI Europe Index
for the first time. Our 2022 Sustainability & People report published
to positive reactions, drawing on established sustainability/ESG
reporting standards (GRI, SASB).
ICG maintained its leadership role in industry initiatives such as
co-chairing the iCI Carbon Footprinting and Private Credit working
groups and and joined the Taskforce on Nature-related Financial
Disclosures (TNFD) Forum, which is developing and delivering a risk
management and disclosure framework for organisations to report
and act on evolving nature-related risks.
Charity
The Committee was especially pleased with the firm’s commitment to
developing and expanding the support provided by ICG and its staff
individually for a range of charities in the countries where the firm
operates.
ICG successfully implemented its new charity framework focusing on
education for talented, disadvantaged young people as well as on
enhancing access to the investment industry for underprivileged
groups. These programmes were implemented in partnership with
The Access Project and UpReach in the UK, as well as SEO in the UK,
France and the US. This was complemented by grass-roots efforts
for local charities in local offices, individual donation matching and
other ad-hoc donations such as to the Earthquake appeal.
In addition, through its #MillionMeals initiative, ICG provided free
meals to individuals and families in need in the UK, continental
Europe, the US and Singapore.
More than a third of all staff globally volunteered their time, with
commitments ranging from one-off events in foodbanks to year-
long, regular tutoring of underprivileged students.
In total, donations of £2.5mn were made to these efforts.
7. Operating Platform and 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
Efficiency and Scalability
To future-proof and scale our operational infrastructure efficiently,
ICG has set up a hub in India through an outsourcing provider. First
staff members, who will operate as members of our international
teams, have joined, supporting a range of corporate functions.
106 ICG | ANNUAL REPORT & ACCOUNTS 2023
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 2023 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
410.0
394.0
520.0
500.0
442.0
425.0
14.8
23.8
16.6
18.6
15.8
16.7
45.3
43.8
45.9
44.4
48.8
47.2
470.1
461.6
1,170.0
1,176.0
1,640.1
1,637.6
4,680.0
4,704.0
5,850.0
5,880.0
6,320.1
6,341.6
947.5
1,509.4
7,267.6
7,851.0
582.5
563.0
506.6
488.9
570.0
552.0
427.5
405.0
1,152.5
1,115.0
1,330.0
1,288.0
1,900.0
1,840.0
2,482.5
2,403.0
934.1
893.9
997.5
945.0
1,425.0
1,350.0
1,931.6
1,838.9
–
–
–
–
2,482.5
2,403.0
1,931.6
1,838.9
Executive Directors
Benoît Durteste
2023
2022
Vijay Bharadia
2023
2022
Antje Hensel-Roth
2023
2022
See page 113 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 2023.
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 2023 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. FY12, FY14 and FY17 Deal Vintage Bonus awards were distributed in FY23.
5. Share price movements do not have any impact on the value of long-term incentives vesting during the current year (legacy awards).
ICG | ANNUAL REPORT & ACCOUNTS 2023
107
REMUNERATION COMMITTEE REPORT CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
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 2013 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 UK listed companies.
The TSR for the Company during this period has been 327.3%, compared to 23.0% for the Index.
Total shareholder return
900
800
700
600
500
400
300
200
100
0
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
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 107) 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
2023
2022
2021
2020
2019
20181
20181
2017
2016
2015
2014
7,268
7,851
7,530
5,886
9,526
3,412
183
6,888
4,295
5,103
4,797
97.5%
98%
95%
84%
87%
77%
0%
102%
76%
80%
97%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
160%
98%
98%
20%
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 110.
108 ICG | ANNUAL REPORT & ACCOUNTS 2023
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.
Ordinary dividend paid (£m)
Permanent headcount at year end
Employee costs (£m)
Year ended 31 March
2022
Year ended 31 March
2023
Percentage change
165.7
525
262.1
236.4
582
256.7
42.7%
10.9%
(2.0)%
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
William Rucker
Virginia Holmes
Rosemary Leith
Matthew Lester
Rusty Nelligan
Kathryn Purves
Amy Schioldager
Andrew Sykes
Stephen Welton
Shares held outright
as at 31 March 2022
Shares held outright
as at 31 March 2023
Unvested ICG PLC
Equity Award/DSA
interests
Unvested or unexercised
SAYE
options
Shareholding requirement
met?
As at 31 March 2023
1,141,580
29,744
2,434
Nil
10,000
1,705
4,863
150,000
10,737
20,000
15,000
60,000
1,367,310
39,170
10,071
7,000
10,000
1,705
4,863
180,000
20,737
30,000
20,000
60,000
1,318,526
237,125
116,881
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Nil
Nil
1,468
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Yes
Yes
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 2023 with a
build-up period for new Executive Directors. Antje Hensel-Roth is 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 24 May 2023, 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 23 of the Group’s closed-end strategies. At times, other Executive Directors may also make co-
investments from their own resources to demonstrate alignment.
ICG | ANNUAL REPORT & ACCOUNTS 2023
109
REMUNERATION COMMITTEE REPORT CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
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 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 2023 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 215.
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 2023:
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
26 May 2022
26 May 2022
26 May 2022
4,704.0
1,288.0
945.0
329,688
90,271
66,232
On 26 May 2022, ICG PLC Equity awards were granted to Executive Directors who had served in the year ended 31 March 2022 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 £14.268. This was the middle
market quotation for the five dealing days prior to 26 May 2022.
CEO pay ratio
The table below compares the CEO’s single total remuneration figure for FY23 to the remuneration of the Group’s UK workforce as at
31 March 2023.
2023
2022
2021
Method
25th percentile pay ratio
Median pay ratio
75th percentile pay ratio
Option A
Option A
Option A
56:1
66:1
74:1
34:1
42:1
46:1
20:1
21:1
24:1
Our ratio is lower than many FTSE companies due to a consistent remuneration approach. The median pay ratio has decreased from 42:1 to
34:1.
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 2023, 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
75,000
129,951
110,000
213,185
157,000
358,138
110 ICG | ANNUAL REPORT & ACCOUNTS 2023
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
Benoît Durteste
Vijay Bharadia
Antje Hensel-Roth
William Rucker
Andrew Sykes
Virginia Holmes
Rosemary Leith
Matthew Lester
Rusty Nelligan
Kathryn Purves
Amy Schioldager
Stephen Welton
All employees
FY21
FY22
Salaries/
fees
0.0%
0.0%
N/A
N/A
0.0%
0.0%
N/A
N/A
0.0%
0.0%
0.0%
0.0%
1.6%
Taxable
benefits
1.7%
52.3%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
27.4%
Short-term
incentives
Salaries/
fees
Taxable
benefits1
Short-term
incentives2
22.9%
23.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
4.1%
0.0%
0.0%
0.0%
N/A
0.0%
4.1%
N/A
N/A
4.1%
4.1%
0.0%
0.0%
4.3%
-9.5%
26.7%
26.7%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
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%
Salaries/
fees1
4.1%
4.0%
4.0%
N/A
119.6%
5.9%
12.7%
15.2%
-4.7%
18.2%
2.8%
1.9%
6.5%
FY23
Taxable
benefits2
20.4%
Short-term
incentives3
-0.5%
6.3%
6.3%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
12.5%
3.3%
5.6%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
3.9%
1. The year-on-year increase in fees for the NEDs reflects the various movements in roles, in addition to any increase in underlying fee rates. Further details can be found in the Fees
paid to NEDs table on page 113.
2. Excludes taxable business expenses for the Directors and all employees. The significant increase in taxable benefits for Benoît Durteste is due to an increase in medical insurance
premiums largely as a result of a change in the GBP/EUR conversion of this premium.
3. 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.
ICG | ANNUAL REPORT & ACCOUNTS 2023
111
REMUNERATION COMMITTEE REPORT CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
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 decreased marginally during the financial year. The mean pay gap is now 34.4% and the mean bonus gap is
74.3%.
There has been an increase in women in all parts of the Group and promotions as a percentage of the overall population have been marginally
higher for women. However, we note that given our relatively small headcount, small year-on-year changes in headcount at senior levels can
have a significant impact on our gender pay gap.
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.
Therefore, our year-on-year gender pay gap comparison can change significantly as a function of long-term incentives granted several years
ago and only being paid out now. As a result, whilst the underlying make-up of the firm continues to evolve towards greater balance, this is not
necessarily reflected in the gender pay gap.
Mean pay gap
Mean bonus gap
2019
28.9%
78.3%
2020
26.2%
66.6%
2021
30.9%
68.8%
2022
35.7%
77.2%
2023
34.4%
74.3%
The Group is pleased with the overall progress which continues to be made and continues to be committed to addressing our gender balance
with a number of initiatives which are now well established. It continues to increase talent diversity and foster a culture of inclusivity:
• ICG was delighted to be ranked #1 globally in Honordex, measuring DE&I efforts, initiatives and outcomes in the Private Equity industry, as
well as being ranked as a global leader in each sub-category
• 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 continue to exceed this target already and are pleased to report that 32% of our UK
senior roles are currently 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 market-leading offering in terms of parental benefits, mental and physical wellbeing, and career sustainability
112
ICG | ANNUAL REPORT & ACCOUNTS 2023
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
William Rucker1
Andrew Sykes2
Virginia Holmes
Rusty Nelligan3
Rosemary Leith
Matthew Lester3
Kathryn Purves4
Amy Schioldager5
Stephen Welton
Date appointed
January 2023
March 2018
March 2017
September 2016
February 2021
April 2021
October 2014
January 2018
September 2017
Board
membership
fees
£000
Board and
Committee
Chair fees
£000
Senior
Independent
Director fee
£000
Audit
Committee
£000
Remuneration
Committee
£000
Risk
Committee
£000
Total for
year ended
2022
£000
Total for
year ended
2023
£000
63.9
270.0
30.0
7.5
22.5
30.0
20.5
13.1
76.5
76.5
76.5
76.5
76.5
76.5
76.5
2.6
2.4
2.4
10.5
9.4
3.5
14.0
14.0
14.0
14.0
14.0
14.0
14.0
14.0
14.0
14.0
N/A
132.3
113.8
113.8
101.1
101.1
113.8
121.6
88.8
63.9
290.5
120.5
108.5
113.9
116.5
134.5
125.0
90.5
1. The Board Chair does not receive a fee in respect of his membership of the Remuneration Committee. William Rucker joined as Board Chair effective 31 January 2023.
2. Andrew Sykes was appointed as Interim Board Chair effective from 5 March 2022. For the period during which he was Interim Board Chair, Andrew Sykes received the same fee rate
as the outgoing Board Chair at the time in lieu of the fees he previously received as a Non-Executive Director and SID. From 31 January 2023 and following the appointment of William
Rucker, Andrew returned to his previous role as a Non-Executive and SID and his fees returned to this relevant rate from this date.
3. Matthew Lester became Chair of the Audit Committee on 1 July 2022, at which point Rusty Nelligan stepped down to become a member of the Audit Committee. The fees in the table
above reflect this change.
4. Kathryn Purves took on the responsibilities of the SID for the period Andrew Sykes was interim Board Chair, and received the relevant fees for this responsibility. This was effective
from 23 March 2022. From 31 January 2023, Kathryn’s fees returned to the previous rate.
5. This fee relates to Amy Schioldager’s role as Board Director of Employee Engagement.
6. For the year ended 31 March 2023, there were £6.4k 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 2022.
ICG | ANNUAL REPORT & ACCOUNTS 2023
113
REMUNERATION COMMITTEE REPORT CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
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 2023 to former directors. These are deferred awards for performance in previous years and were retained on leaving
service.
Employee
Philip Keller
Christophe Evain
£
633,671
230,250
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. There have been no
changes to the Board Chair or NED fees this year.
The salaries for the Executive Directors and fees for the NEDs for the coming year are set out below.
Role
CEO
CFOO
CPEAO
Board Chair
Non-Executive Director base fee (other than Board Chair)
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 2023
Year ended
31 March 2024
410.0
520.0
442.0
375.0
76.5
15.5
30.0
30.0
30.0
14.0
20.5
500.0
520.0
467.5
375.0
76.5
15.5
30.0
30.0
30.0
14.0
20.5
Committee composition is set out on pages 78 to 80 and in the relevant Committee reports on pages 84 to 124.
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 65% on
financial KPIs as for FY24. 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 2022 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
96.42%
3.58%
14,014
94.43%
5.57%
242,894
114 ICG | ANNUAL REPORT & ACCOUNTS 2023
Governance of Remuneration
Committee governance
The Committee is authorised by the Board to determine and agree
the remuneration of the Board Chair 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 Chair or as an Executive Director and, in
consultation with the Board Chair, 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 KPIs (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 Board Chair and, having
taken advice from the Board Chair, 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 Board Chair, 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), William Rucker, Rosemary Leith, Andrew Sykes and
Stephen Welton.
Rosemary Leith (and formerly Kathryn Purves) and Matthew Lester
(and formally Rusty Nelligan) are also able to provide relevant
feedback to ensure that risk and audit matters are taken into account
in determining the remuneration of Directors.
Biographical details can be found on pages 78 to 80
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 82).
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 March 2022; the
Committee was found to be operating effectively. For more details
of this exercise, please see page 83.
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 2023, 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 £143,444
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
24 May 2023
ICG | ANNUAL REPORT & ACCOUNTS 2023
115
REMUNERATION COMMITTEE REPORT CONTINUED
Directors’ Remuneration Policy
The ongoing appropriateness of the 30% limit for the existing
business is kept under review.
Awards to the Executive Directors are funded from this pool, but are
subject to specific KPIs, with detailed targets set by the Committee.
They 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.
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, which does not apply to Executive Directors, 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.
This section describes the remuneration policy we propose to adopt
from the date of the 2023 AGM, subject to shareholder approval at
that meeting; it includes a note of the changes to the current policy
that has been in operation since the 2020 AGM.
Further explanation of the background to the Policy, and the
Committee’s extensive consultation with shareholders on proposed
changes is provided in the Committee Chair’s introductory
statement to this Report.
A copy of the previous Directors’ Remuneration Policy approved by
shareholders at the 2020 AGM is available in the shareholder centre
on the ICG website at www.icgam.com.
Annual Award Pool (AAP) and Business Growth Pool
(BGP)
A central feature of the Group’s overall 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.
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.
116 ICG | ANNUAL REPORT & ACCOUNTS 2023
The following charts show the key elements of our proposed Remuneration Policy to apply
for FY24, subject to approval at our 2023 AGM. Full details of the proposed Remuneration
Policy are provided in the next section.
Executive Directors
Benoît Durteste
Fixed pay
only
Target
Maximum
Maximum with
50% share
price growth
100%
14%
26%
60%
9%
6%
27%
21%
64%
73%
0
1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
David Bicarregui
Fixed pay
only
Target
Maximum
Maximum with
50% share
price growth
100%
37%
44%
19%
22% 23%
55%
18% 18%
64%
0
1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
Antje Hensel-Roth
Fixed pay
only
Target
Maximum
100%
40%
42%
18%
25%
53%
22%
Maximum with
50% share
price growth
20%
18%
62%
0
1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
Fixed pay
Cash Bonus Award
ICG PLC Equity Award
£000
£577
£4,177
£6,577
£8,677
£000
£691
£1,891
£3,091
£3,931
£000
£543
£1,361
£2,179
£2,752
Illustration of application of
Directors’ Remuneration Policy
The total remuneration which could be
awarded to each Executive Director under
the proposed remuneration policy to apply
from the year ended 31 March 2024 is
shown in the charts under three different
performance scenarios.
The annual variable award is split between
the following elements:
• Cash Bonus Award
• ICG PLC Equity Award
The value of on-target variable
remuneration for each Executive Director is
based on the level which the Committee has
agreed should be receivable to the extent
to which the Group achieves its targets.
Following David Bicarregui’s proposed
appointment as an Executive Director at the
AGM in July 2023, we have included the
illustration of the application of the
Directors’ Remuneration Policy on his
remuneration in the charts. Should any
further Executive Directors be appointed
during the period of the next policy, an
illustrative chart will be published in the
subsequent Annual Report.
It remains possible that remuneration
earned over more than one financial year
will be disclosed in future years’ single
figure table for the CEO, emanating from
previous awards of Deal Vintage Bonus
(DVB), (formerly known as Balance Sheet
Carry (BSC)) or Shadow Carry. Since the
adoption of the Remuneration Policy in
2017, Executive Directors have not been
eligible to participate in these plans.
The charts above incorporate the following assumptions:
Fixed pay – Includes base salary (for the financial year ended 31 March 2024, benefits and a pension allowance of 12.5% for Benoît Durteste, David Bicarregui and Antje Hensel-Roth.
The benefits figure is based on the 2023 single figure total for Benoît Durteste (excluding any future grant of SAYE options) and assuming a similar level of coverage for all Executive
Directors in future years.
Target – Fixed pay plus the value that would arise from the incentives for achieving on-target performance (with an assumed deferral of 80% for Benoît Durteste and 70% for the other
Executive Directors). The Target level of total variable pay for Benoît Durteste is unchanged from the current policy and practice, at £3.6m. The Target total variable pay for David
Bicarregui is 2x base salary (or £1.2m) and the Target total variable pay for Antje Hensel-Roth is 1.75x base salary (or £818,125).
Maximum – Fixed pay plus the value that would arise from the incentives for achieving maximum performance with an assumed deferral of 80% for Benoît Durteste and 70% for the other
Executive Directors). The Maximum level of total variable pay for Benoît Durteste is unchanged from the current policy and practice, at £6m (this will transition to a multiple of 8x salary
from FY26 onwards). The Maximum total variable pay for David Bicarregui is 4x base salary (or £2.4m) and the Maximum total variable pay for Antje Hensel-Roth is 3.5x base salary (or
£1,636,250).
Maximum with 50% share price growth – Maximum remuneration increased for the assumption that the share components of the package (ICG PLC Equity Award) increase in value by
50% from the share price at grant.
ICG | ANNUAL REPORT & ACCOUNTS 2023
117
REMUNERATION COMMITTEE REPORT CONTINUED
DIRECTORS’ REMUNERATION POLICY CONTINUED
Directors’ 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
• 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
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
Performance
conditions
• None
2. Benefits
• Adequate to recruit and retain
Executive Directors to deliver
the strategic objectives of
the Group
• Reflects local competitive
market levels
• Benefits currently
• Provision and level of benefits
• None
receivable 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
• Adequate to recruit and
retain Executive Directors to
deliver the strategic objectives
of the Group Purpose and link
to strategy
• All Executive Directors are
• A pension allowance of no
• None
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 majority of the
UK workforce is up to 12.5% of
base salary
118 ICG | ANNUAL REPORT & ACCOUNTS 2023
Changes from
previous Policy
• The salary for
the CEO/CIO
will be
increased in
the following
three steps:
£500k for
FY24; £615k
for FY25; and
£750k for
FY26.
• The salary for
the new CFO
has been set at
£600k for
FY24.
• The salary for
the CPEAO will
be increased in
the following
two steps:
£467.5k for
FY24; and
£500k for
FY25.
• None
• The pension
for the new
CFO will be
12.5% of base
salary (i.e.
equal to the
current level
for the majority
of the UK
workforce).
Purpose and link to
strategy
4. Total variable pay
award
• The Total Variable Pay
Award is split
between Cash Bonus
Award (4a) and ICG
PLC Equity Award
(4b) (see below)
Operation
Maximum opportunity
• The total variable
pay award
consists of the
Cash Bonus
Award and ICG
PLC Equity Award
• 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
(from FY26 onwards,
this will be 8x base
salary), 4x base salary
for the CFO and 3.5x
base salary for the
CPEAO.
• Target variable awards
to Executive Directors
are £3.6m for the CEO/
CIO, 2x base salary for
the CFO and 1.75x base
salary for the CPEAO
Performance
conditions
• An Executive
Director’s annual
variable award is
drawn from the AAP,
and so is directly
funded by reference
to the Group’s cash
profit for the relevant
financial year
• Executive Director’s
annual variable award
entitlement is
determined by
reference to
performance against
performance
objectives, which are
derived from the
Group’s KPIs
Changes from previous
Policy
• For the CFO and CPEAO,
we will from FY24, express
the total variable pay
maximum as a multiple of
base salary rather than a
monetary amount.These
multiples will be 4x base
salary for the CFOO role
and 3.5x base for the
CPEAO role.
• For the CEO, we will retain
the current variable pay
maximum of £6m for the
Policy period FY2024-26,
but transition to express this
as a multiple of base salary
from the start of FY26 once
the phased salary increases,
described above, have been
completed. The planned
increases will take the salary
to £750k for FY26. The total
variable pay maximum for
the CEO will be 8x base
salary (ie. £6m) for that
year. This will then be
reviewed for the next Policy.
ICG | ANNUAL REPORT & ACCOUNTS 2023
119
Performance
conditions
• See details above
in relation to the
overall annual
variable award
Changes from
previous Policy
• See details
above in relation
to the overall
annual variable
award
REMUNERATION COMMITTEE REPORT CONTINUED
DIRECTORS’ REMUNERATION POLICY CONTINUED
Directors’ Remuneration policy table continued
Purpose and link to
strategy
4a. Cash Bonus Award
• Rewards achievement of
business KPIs, cash profits
and employing sound risk
and business management
Operation
Maximum opportunity
• See details above in relation to
the overall annual variable
award
• 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
120 ICG | ANNUAL REPORT & ACCOUNTS 2023
Operation
Maximum opportunity
• See details above in
relation
to the overall annual
variable award
Performance
conditions
• See details
above in relation
to the overall
annual
variable award
Changes from
previous Policy
• See details
above in
relation to the
overall annual
variable award
Purpose and link to
strategy
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
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
• 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
• Executive Directors are 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
• N/A
• N/A
• None
ICG | ANNUAL REPORT & ACCOUNTS 2023
121
REMUNERATION COMMITTEE REPORT CONTINUED
DIRECTORS’ REMUNERATION POLICY CONTINUED
Directors’ Remuneration policy table continued
Purpose and link to
strategy
6. The Intermediate
Capital Group PLC
SAYE Plan 2014
• Provides an opportunity for
all employees to participate
in the success of the Group
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
Operation
Maximum opportunity
• Employees may save the
maximum permitted by
legislation each month
• 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
Changes from
previous Policy
• N/A
Performance
conditions
• The Plan is not
subject to any
performance
conditions, as
this is not
permitted by
the relevant
legislation
• Fees are payable to Non
• Non Executive Directors
• None of the
• N/A
Non Executive
Directors’
remuneration is
subject to
performance
conditions
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.
Supllementary fees may be
paid to reflect additional
time commitments required
of Non Executive Directors.
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 Chair are
determined and reviewed
annually by the Committee
and fees for Non Executive
Directors are determined by
the Board Chair 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
122 ICG | ANNUAL REPORT & ACCOUNTS 2023
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 101).
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 103. 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
• the size of annual salary increases, subject to the principles set out in the Policy table. In exceptional circumstances, the Committee may
apply salary increases that are different from those set out in the table.
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
Benoît
Durteste
Date of service
contract
21 May 2012
Last re-elected
July 2022
Re-election
frequency
Annual
Vijay Bharadia
20 May 2019
July 2022
Annual
Antje Hensel-
Roth
16 April 2020
July 2022
Annual
Notice period
Non-compete
provisions
12 months Restraint
period of
12 months
12 months Restraint
period of
9 months
12 months Restraint
period of
9 months
Compensation on termination by the Company without notice or cause
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
Deferred Share Award
Status
Unvested
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
Forfeit, subject to
discretion
Retain, subject to
discretion
Retain, subject to
discretion
ICG | ANNUAL REPORT & ACCOUNTS 2023
123
REMUNERATION COMMITTEE REPORT CONTINUED
DIRECTORS’ REMUNERATION POLICY CONTINUED
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 base salary multiple 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.
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 Board Chair 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
used to seek the opinions of employees when setting the Directors’
Remuneration Policy by seeking feedback through a designated
NED.
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.
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.
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.
124 ICG | ANNUAL REPORT & ACCOUNTS 2023
DIRECTORS’ REPORT
Directors’ Report
The Directors present their Annual Report and the audited financial statements for the financial year
ended 31 March 2023. The risks to which the Group is subject, and the policies in respect of such risks,
are set out on pages 66 to 72 and are incorporated into this report by reference. The Corporate
Governance section set out on pages 75 to 124 is incorporated into this report by reference. The
Strategic Report section set out on pages 2 to 74 is also incorporated by reference.
Throughout the financial year ended 31 March 2023 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
(the Code) is available on the Financial Reporting Council’s website: www.frc.org.uk. The Governance
section of this report (page 75) sets out how we have applied the Code’s principles and provisions
throughout the year.
Significant shareholdings
As at 19 May 2023 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
abrdn Plc
The Vanguard Group Inc
Ameriprise/Threadneedle
Franklin Resources Inc
J.P. Morgan Asset Management
Legal & General Investment Management
Number of
shares
Percentage of
voting rights
24,777,479
20,074,565
13,917,347
13,156,962
11,758,785
11,747,190
9,978,802
9,695,973
8.41%
6.82%
4.73%
4.47%
4.00%
3.99%
3.39%
3.29%
Directors
The profiles of the Directors currently serving are shown on pages
78 to 80; those details are incorporated into this report by
reference. All of the Directors served throughout the year. Kathryn
Purves also served on the Board until 1 April 2023.
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 84 to 124.
Directors’ interests
The interests of Directors who held office at 31 March 2023 and their
connected persons, as defined by the Companies Act 2006, are
disclosed in the report of the Remuneration Committee on page 109.
During the financial year ended 31 March 2023, 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 Chairman, William Rucker, 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.
ICG | ANNUAL REPORT & ACCOUNTS 2023
125
DIRECTORS’ REPORT CONTINUED
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. Vijay’s responsibilities will pass to
David Bicarregui when Vijay steps down in July 2023.
Antje Hensel-Roth is Chief People and External Affairs Officer and is
responsible for human resources, communications and external
affairs.
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.
126 ICG | ANNUAL REPORT & ACCOUNTS 2023
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 84 to 124 and
for further details of the Board, page 78.
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 125.
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 66 and the report of the
Risk Committee on page 90.
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 74. 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 66. 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 2023, liquidity, which consists
of unencumbered cash and undrawn debt facilities, was £1.1bn
(31 March 2022: £1.3bn). 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 2023. 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 November 2024, a 18 month from the date of 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, among
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 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,
$80m and €44m dated 11 May 2015, $167m and €52m dated
29 September 2016, and $225m dated 26 March 2019 and $125m
and €44m dated 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 employee share schemes, details of which can be found in the
report of the Remuneration Committee on note 25, and the 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.
ICG | ANNUAL REPORT & ACCOUNTS 2023
127
DIRECTORS’ REPORT CONTINUED
4. 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 (page 66); engagement with
employees (page 22) and engagement with suppliers and other
stakeholders (pages 22).
Dividend
The Directors recommend a final net ordinary dividend payment in
respect of the ordinary shares of the Company at a rate of 52.2
pence per share (2022: 57.3 pence per share), which when added to
the interim net dividend of 25.3 pence per share (2022: 18.7 pence
per share) gives a total net dividend for the year of 77.5 pence per
share (2022: 76.0 pence per share). The recommendation is subject
to the approval of shareholders at the Company’s AGM in July 2023.
The amount of ordinary dividend paid in the year was £236.4m
(2022: £165.7m).
Distributable reserves
The distributable reserves of the Parent Company at 31 March 2023
were £448.5m (£564.6m at 31 March 2022).
Political contributions
No contributions were made during the current and prior year for
political purposes.
Greenhouse gas emissions
All disclosures required by the 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
50 which forms part of the Directors’ Report disclosures.
Research and development activities
Details of the research and development activities undertaken are
set out in note 17.
Disclosures required under Listing Rule 9.8.4
The Group’s Employee Benefit Trust (EBT) has lodged standing
instructions to waive dividends on shares held by it. Dividend
waivers have also been issued for shares held as treasury shares.
The total amount of dividends waived during the year ended
31 March 2023 was £6.6m.
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
Governance
Strategy
Risk
management
Metrics and
targets
Page
31
34
39
43
Disclosure
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 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
Read more on our TCFD disclosures on pages 30 to 52
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 2023. A
resolution for the appointment of EY as the auditor was passed at
the AGM held on 21 July 2022. 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 84
Complex supplier arrangements
The Group does not use supplier financing arrangements.
128 ICG | ANNUAL REPORT & ACCOUNTS 2023
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
34 and form 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.
Diversity policy
The Group has adopted a Group Diversity policy, as can be found on
the Group’s website, www.icgam.com.
ICG as a group is committed to promoting equality and diversity as
well as a culture that actively values differences and recognises that
people from different backgrounds and experiences can bring
valuable insights to the workplace and enhance the way we work.
ICG expects its people to treat each other with dignity and respect,
creating an inclusive culture to support equal opportunities.
ICG’s firm principle is that each member of its Board and each
Committee must have the skills, experience, knowledge and overall
suitability that will enable each Director to contribute individually,
and as part of the board team, to the effectiveness of the body on
which they sit. Subject to that overriding principle, ICG believes that
diversity of experience and approach, including background,
gender, age and geographic provenance amongst board members is
of great value when considering overall board balance in making new
appointments to the boards. ICG’s priority is to ensure that the
board continues to have strong leadership and the right mix of skills
to deliver the business strategy. Within this context, the composition
of the Board and its Committees will necessarily vary from time to
time. Currently 36% of the Board are women, which is a reduction
from 42% in FY22 as a result of Kathryn Purves stepping down as a
NED in March 2023 after over eight years of service. Her succession
is currently being considered.
ICG was pleased to achieve its UK Women in Finance Charter
commitment two years early in FY22. In FY23, the Group continues to
exceed its commitment and currently 32% of senior employees with
global leadership roles in the UK are women. ICG continues to make
progress internally through recruitment, development and retention
strategies, as well as 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.
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 2023 the issued share capital of the Company was
294,332,182 ordinary shares of 26¼p each (including 3,733,333
shares held by the Company as treasury shares).
ICG | ANNUAL REPORT & ACCOUNTS 2023
129
DIRECTORS’ REPORT CONTINUED
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
• 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 have 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
130 ICG | ANNUAL REPORT & ACCOUNTS 2023
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 2022 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 £25,423,341 and, in
the case of a fully pre-emptive rights issue only, up to a total amount
of £50,846,682.
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
24 May 2023 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 24 May 2023. 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 2022 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 19 May 2022.
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).
All Directors are standing for re-election at the upcoming AGM on
21 July 2023, the Chairman is satisfied that, following the conclusion
of the Board evaluation described on page 83, 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.
Results of resolutions proposed at 2022 Annual General Meeting
Resolution
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 2022.
2. To approve the Directors’ Remuneration Report as set out on pages 98 to 109 of the annual report and
accounts for the financial year ended 31 March 2022 (the “Annual Report and Accounts”).
3. To re-appoint Ernst & Young LLP as auditor of the Company, to hold office from the conclusion of this Annual
General Meeting until the conclusion of the next general meeting of the Company at which accounts are laid.
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 57.3 pence per ordinary share for the financial year ended 31 March 2022.
6. To reappoint Vijay Bharadia as a Director of the Company.
7. To reappoint Benoît Durteste as a Director of the Company.
8. To reappoint Virginia Holmes as a Director of the Company.
9. To reappoint Michael Nelligan as a Director of the Company.
10. To reappoint Kathryn Purves as a Director of the Company.
11. To reappoint Amy Schioldager as a Director of the Company.
12. To reappoint Andrew Sykes as a Director of the Company.
13. To reappoint Stephen Welton as a Director of the Company.
14. To reappoint Antje Hensel-Roth as a Director of the Company.
15. To reappoint Rosemary Leith as a Director of the Company.
16. To reappoint Matthew Lester as a Director of the Company.
17. That, in substitution for all existing authorities, the Directors be generally and unconditionally authorised for
the purposes of section 551 of the Companies Act 2006 (the “Act”), to exercise all the powers of the Company
to allot shares in the Company.
18. That, in substitution for all existing authorities and subject to the passing of Resolution 17, the Directors be
generally empowered pursuant to section 570 of the Act to allot equity securities (as defined in section 560(1)
of the Act) for cash and/ or pursuant to section 573 of the Act to sell ordinary shares held by the Company as
treasury shares for cash, in each case free of the restriction in section 561 of the Act.
19. That, in addition to any authority granted under Resolution 18, and subject to the passing of Resolution 17,
the Directors be generally empowered pursuant to section 570 of the Act to allot equity securities (as defined in
section 560(1) of the Act) for cash and/or pursuant to section 573 of the Act to sell ordinary shares held by the
Company as treasury shares for cash, in each case free of the restriction in section 561 of the Act.
20. That the Company be generally and unconditionally authorised for the purposes of section 701 of the Act to
make one or more market purchases of ordinary shares in the capital of the Company.
21. To authorise the Directors to call a general meeting of the Company other than an annual general meeting on
not less than 14 clear days’ notice.
Votes for
Votes against
Votes withheld
229,841,357
774
1,705,519
223,244,545
8,289,091
14,014
230,085,269
1,414,285
48,362
231,459,946
231,503,584
230,611,056
231,257,022
225,146,513
231,397,257
229,712,456
231,389,086
227,635,876
229,715,656
231,252,984
231,397,557
229,473,266
44,253
774
934,263
288,297
6,355,868
148,062
1,829,363
156,233
2,545,150
1,829,663
288,835
147,762
2,072,053
43,717
43,558
2,597
2,597
45,535
2,597
6,097
2,597
1,366,890
2,597
6,097
2,597
2,597
222,154,378
9,390,516
3,022
229,234,587
814,833
1,498,496
223,715,707
6,332,261
1,499,948
229,932,866
1,384,953
230,097
210,058,849 21,444,809
43,658
The issued share capital of the Company at the date of the Annual General Meeting was 290,522,471 ordinary shares of 26¼p each (excluding
3,733,333 treasury shares held by the Company).
2023 Annual General Meeting
The AGM of the Company is scheduled to take place at the Head Office of the Company on 20 July 2023 at 10:00am; 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 2023 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
24 May 2023
ICG | ANNUAL REPORT & ACCOUNTS 2023
131
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 section 408 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 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
24 May 2023
132 ICG | ANNUAL REPORT & ACCOUNTS 2023
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INTERMEDIATE CAPITAL GROUP PLC
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 2023 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 2023 which comprise:
Group
Consolidated income statement for the year ended 31 March 2023
Consolidated statement of comprehensive income for the year ended
31 March 2023
Consolidated statement of financial position as at 31 March 2023
Parent Company
Parent Company statement of financial position as at 31 March 2023
Parent Company statement of cash flows for the year ended 31 March
2023
Parent Company statement of changes in equity for the year ended
31 March 2023
Consolidated statement of cash flows for the year ended 31 March
2023
Consolidated statement of changes in equity for the year ended
31 March 2023
Related notes 1 to 34 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.
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 management and the Directors’ processes for determining the appropriateness of the use of the going
concern basis. This included discussions with management, corroborating our understanding with the Audit Committee and obtaining
management’s going concern assessment covering the period to 30 November 2024, which is eighteen months from the date these financial
statements were authorised for issue;
• reviewing the Group’s cashflow forecasts, considering if the appropriateness of the assumptions used in the models are appropriate to
enable the Directors to make an assessment in respect of going concern, including the availability of existing and forecast cash resources
and undrawn facilities;
• evaluating the regulatory capital and liquidity position of the Group, including reviewing the Internal Capital Adequacy and Risk Assessment
(‘ICARA’). This included verifying credit facilities available to the Group by obtaining third party confirmations;
• reviewing the appropriateness of the stress and reverse stress test scenarios, including assessing the completeness of the severe scenarios
that consider the key risks identified by the Group, our understanding of the business and the external market environment. We also
evaluated the analysis by testing the clerical accuracy and assessed the conclusions reached in the stress and reverse stress test scenarios;
ICG | ANNUAL REPORT & ACCOUNTS 2023
133
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INTERMEDIATE CAPITAL GROUP PLC CONTINUED
• 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 the
Audit Committee and made enquiries of management and the Board; and
• assessed the appropriateness of the going concern disclosures by comparing them with management’s 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 to
30 November 2024.
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 248 consolidated subsidiaries, including 21 consolidated structured entities.
• The Group audit team based in London, performed audit procedures on all balances material to the
Group and Parent Company financial statements.
Key audit matters
• Valuation of investments in portfolio companies and real estate assets (including those held via fund
Materiality
structures and assets held for sale)
• Valuation of investments in Collateralised Loan Obligations (‘CLOs’), including debt (senior) and
equity (subordinated) tranches and the assets and liabilities held by consolidated CLOs
• Calculation and recognition of management and performance fees
• Overall Group materiality of £21.3m which represents 5% of normalised profit before tax. Normalised
profit before tax is calculated as the sum of the 2023 Fund Management Company’s (‘FMC’) profit
before tax and an average of the Investment Company (‘IC’) profit/loss before tax for the past five
financial years. Our basis for calculating materiality has been updated for the current year to reflect
stakeholder focus on the FMC and accounts for year-on-year fluctuations within the IC’s profit/loss
before tax resulting from fluctuations in investment valuation gains/losses.
134 ICG | ANNUAL REPORT & ACCOUNTS 2023
An overview of the scope of the Parent Company and Group audits
Tailoring the scope
Our assessment of audit risk and our evaluation of materiality determine our audit scope for the Group and Parent Company. 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, the potential impact of climate change and other
factors such as recent Internal Audit results when assessing the level of work to be performed for the Group.
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 performed direct audit procedures on all items material to the Group and Parent Company
financial statements. Our Group testing covered account balances material to the Group including balances of entities within the United
Kingdom, Luxembourg, United States of America and Jersey, which represent the principal business units within the Group. The audit scope
of these legal entities may not have included testing of all significant accounts of the component but will have contributed to the coverage
of significant accounts tested for the Group.
As part of our Group audit procedures, we also perform 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.
Involvement with component teams
All audit work performed for the purposes of the Group audit was undertaken by the Group audit team.
Climate change
Stakeholders are increasingly interested in how climate change will impact the Group. The Group has determined that the most significant
future impacts from climate change on their operations will be from the adverse effects of the underlying portfolio investments. This is
explained on pages 30-49 in the Task Force for Climate related Financial Disclosures and on page 72 in the Managing Risk section. All of these
disclosures form part of the ‘Other information’, rather than the audited financial statements. Our procedures on these unaudited 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, in line with our responsibilities on ‘Other information’.
In planning and performing our audit we assessed the potential impacts of climate change on the Group’s business and any consequential
material impact on its financial statements.
The Group has explained in the General Information and basis of preparation section in Note 1 to the financial statements, on pages 150-151,
their articulation of how climate change has been reflected in the financial statements, and how they have reflected the impact of climate
change in their financial statements.
Our audit effort in considering the impact of climate change on the financial statements was focused on assessing whether the effects of
climate risks have been appropriately reflected by management in reaching their judgments and in relation to the assessment of the fair value of
investments and the impact on performance fees. As part of this evaluation, we performed our own risk assessment, supported by our climate
change internal specialists, to determine the risks of material misstatement in the financial statements from climate change which needed to be
considered in our audit.
We also challenged the Directors’ considerations of climate change risks in their assessment of going concern and viability and associated
disclosures. Where considerations of climate change were relevant to our assessment of going concern, these are described above.
Based on our work, we have not identified the impact of climate change on the financial statements to be a key audit matter.
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.
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135
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INTERMEDIATE CAPITAL GROUP PLC CONTINUED
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) of £1,560.1m, (2022: £1,642.5m) are included in
Financial assets at fair value. Assets held for sale of
£158.6m (2022: £79.2m) are included in Disposal groups
held for sale.
Refer to the Audit Committee Report (page 84-89);
Accounting policies and Note 5 of the financial statements
(page 158-165)
The Group’s investment portfolio contains unquoted debt
and equity securities, that are held either directly or
through funds. These investments are held at fair value
through profit and loss or investments held for sale in
accordance with International Financial Reporting
Standards (‘IFRS’) 5 — Non-current Assets Held for Sale
and Discontinued Operations (‘IFRS 5’).
The Group adopts a valuation methodology based on the
International Private Equity and Venture Capital Valuation
Guidelines 2022 (‘IPEV guidelines’) and Royal Institution
of Chartered Surveyors (‘RICS’) in conformity with IFRS
13 — Fair Value Measurements (‘IFRS 13’) and IAS 40 –
Investment Property (‘ISA 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 judgements
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
judgements made by management, the final sales value
may differ materially from the valuation at the year end.
There is the risk that inaccurate judgements made in the
assessment of fair value could lead to the incorrect
valuation of investments in portfolio companies. 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.
Our response to the risk
We have:
• Obtained an understanding of management’s processes and controls for the
valuation of investments in portfolio companies (including co-investments or
alongside funds managed by ICG) 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.
• 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 valuations specialists, we formed an independent
view on the appropriateness of the key assumptions and inputs 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.
• On a sample basis, we agreed key inputs in the valuation models to source data,
including portfolio company financial information. We also performed
procedures on key judgements 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 our procedures
performed on the valuation of portfolio companies, by challenging whether the
valuation methodologies and assumptions used are appropriate.
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.
There is also a risk that management may influence the
judgements and estimations in respect of the portfolio
companies’ valuations in order to meet market
expectations of the Group.
Key observations communicated to the Audit Committee
All valuations reviewed, were found to be materially carried 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.
136 ICG | ANNUAL REPORT & ACCOUNTS 2023
Risk
Valuation of investments in Collateralised Loan
Obligations (‘CLOs’), including debt (senior) and
equity (subordinated) 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) (2023: £105.8m, 2022: £105.6m) and equity
(subordinated debt) tranches (2023: £7.5m,
2022: £12.2m), and investments held by consolidated
CLOs (2023: £4,669.1m, 2022: £4,612.6m) are included in
Financial assets at fair value. The liabilities held by
consolidated CLOs (2023: £4,572.7m, 2022: £4,364.7m)
are included in Financial liabilities at fair value.
Refer to the Audit Committee Report (page 84-89);
Accounting policies and Note 5 of the Financial Statements
(page 158-165)
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’).
In particular, significant judgements are required where
there is limited market activity to provide reliable
observable inputs.
There is the risk that inaccurate judgements 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.
Our response to the risk
Unconsolidated CLOs — Investments in Debt and Equity
We have:
• 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;
• Agreed each tranche size to observable market data (i.e., Fitch Ratings);
• Obtained the available observable market data (i.e., Markit) and compared it to
management’s fair valuations for positions with observable inputs;
• Formed an independent range of fair values for a sample of the debt and
equity tranches with the assistance of our valuation specialists where
observable market data is not available. This included:
• 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;
• performing independent comparative calculations using the cash flows and
yields; and
• recalculating the unrealised gain/loss on revaluation of investments
impacting the Net gains on investments in the Consolidated income
statement;
• Assessed the mathematical accuracy of the equity models; and
• Considered the impact of climate change throughout the procedures
performed on the valuation by challenging whether the valuation
methodologies and assumptions used remain appropriate.
Consolidated CLO balances
We have:
• Agreed consolidated balances to underlying administrator accounts;
• Reviewed the material assets and liabilities associated with each of the
consolidated CLOs and tested the underlying balances;
• Obtained the available observable market data (i.e., Markit) and compared it to
management’s fair valuations for a sample of the financial assets and financial
liabilities of the consolidated CLOs;
There is also a risk that management may influence the
judgements and estimations of the investments in CLO
debt and equity tranches in order to meet market
expectations of the Group.
• Assessed the mathematical accuracy of the equity models; and
• Considered the impact of climate change throughout the procedures
performed on the valuation by challenging whether the valuation
methodologies and assumptions used remain appropriate.
Key observations communicated to the Audit Committee
The valuation of the CLOs, including debt and equity tranches reviewed by EY, were found to carried 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.
ICG | ANNUAL REPORT & ACCOUNTS 2023
137
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INTERMEDIATE CAPITAL GROUP PLC CONTINUED
Risk
Calculation and recognition of management fees and
performance fees
In the Consolidated income statement, management fees
(2023: £481.6m, 2022: £429.4m), including performance fees
(2023: £22.4m, 2022: £57.5m), are included in Fee and other
operating income.
Refer to the Audit Committee Report (page 84-89); Accounting
policies and Note 3 of the Financial Statements (page 152)
The Group manages funds across numerous domiciles and
investment strategies and 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 third-party administrators
or ICG. Due to the manual nature of the process, there is a risk that
management fees are incorrectly calculated.
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.
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 of the recognition of performance fees:
• inappropriate judgments are made by management in the
process, including whether a constraint is applied and in
determining the forecast exit dates of underlying investments;
• errors are made in performing complex manual calculations
within the model; and
• inappropriate inputs are 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.
Our response to the risk
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;
• reconciled the closing management fee debtor in the statement of
financial position; 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;
• challenged 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;
• 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; and
• reconciled the closing performance fee debtor in the statement of
financial position.
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.
We have performed journal entry testing and have made enquiries of
management in order to address the residual risk of management override.
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.
Key observations communicated to the Audit Committee
Our audit procedures did not identify any material matters regarding the calculation and recognition of management fees and performance
fees. Revenue has been recorded in accordance with UK-adopted international accounting standards.
Based on our procedures performed we had no material matters to report to the Audit Committee.
138 ICG | ANNUAL REPORT & ACCOUNTS 2023
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 £21.3m (2022: £28.3m), which is 5% of normalised profit before tax (2022: 5% of profit before
tax). Normalised profit before tax is calculated as the sum of the 2023 FMC profit before tax and an average of the IC profit/loss before tax for
the past five financial years. Our basis for calculating materiality has been updated in the current year to reflect fluctuations within the IC’s
profit/loss before tax resulting from fluctuations in investment valuation gains/losses. We believe that normalised profit before tax provides us
with an appropriate basis for materiality due to stakeholder focus on the FMC and its contribution to business performance.
We determined materiality for the Parent Company to be £7.8m (2022: £9.4m), which is 1% (2022: 1%) of net assets.
During the course of our audit, we reassessed initial materiality based on 31 March 2023 normalised 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 judgment was that
performance materiality was 50% (2022: 50%) of our planning materiality, namely £10.6m (2022: £14.1m). 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 £1.1m (2022: £1.4m), which is
set at 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.
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.
ICG | ANNUAL REPORT & ACCOUNTS 2023
139
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INTERMEDIATE CAPITAL GROUP PLC CONTINUED
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 those reports 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.
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 127;
• Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the period is appropriate
set out on page 73;
• 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 127;
• Directors’ statement on fair, balanced and understandable set out on page 132;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 66;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems set out on page
92; and;
• The section describing the work of the Audit Committee set out on pages 84-89
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement set out on page 132, 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.
140 ICG | ANNUAL REPORT & ACCOUNTS 2023
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.
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, General Counsel and Company Secretary, Global Head of Compliance and 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 with 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 hybrid 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: inquiries of management, internal audit and those responsible for legal and compliance matters. In addition, we performed 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 three years, covering the years ended
31 March 2021 to 31 March 2023.
• The audit opinion is consistent with the additional report to the Audit Committee.
Use of our report
This report is made solely to the 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 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
company and the 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
24 May 2023
Notes:
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 2023
141
FINANCIAL STATEMENTS
Consolidated income statement
For the year ended 31 March 2023
Fee and other operating income
Finance loss
Net gains on investments
Total Revenue
Other income
Finance costs
Administrative expenses
Share of results of joint ventures accounted for using the equity method
Profit before tax and discontinued operations
Tax charge
Profit after tax before discontinued operations
Profit/ (loss) after tax on discontinued operations
Profit for the year after discontinued operations
Attributable to:
Equity holders of the parent
Non-controlling interests
Earnings per share (pence)
Diluted earnings per share (pence)
Year ended
31 March 2023
Year ended
31 March 2022
£m
483.6
(17.1)
172.5
639.0
15.5
(64.6)
(343.3)
4.4
251.0
(29.4)
221.6
56.8
278.4
280.6
(2.2)
278.4
98.2p
97.0p
£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
183.7p
181.1p
Notes
3
8
10
9
11
12
30
14
29
16
16
Other than for amounts reported as discontinued operations, all activities represent continuing operations.
The accompanying notes 1 to 34 are an integral part of these financial statements.
142 ICG | ANNUAL REPORT & ACCOUNTS 2023
Consolidated statement of comprehensive income
for the year ended 31 March 2023
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
Deferred tax on equity investments translation
Total comprehensive income for the year
Attributable to:
Equity holders of the parent
Non controlling interests
The accompanying notes 1 to 34 are an integral part of these financial statements.
Year ended
31 March 2023
Year ended
31 March 2022
£m
278.4
19.5
3.9
301.8
304.0
(2.2)
301.8
£m
525.1
6.9
—
532.0
533.7
(1.7)
532.0
ICG | ANNUAL REPORT & ACCOUNTS 2023
143
FINANCIAL STATEMENTS CONTINUED
Consolidated statement of financial position
as at 31 March 2023
Non-current assets
Intangible assets
Property, plant and equipment
Investment property
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
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 2023
Group
31 March 2022
Group
(Restated)1
Notes
£m
£m
17
18
19
30
20
5
5
14
20
5
5
6
29
21
5, 7
7
7
5,7
14
21
7
7
5,7
29
23
23
14.9
88.2
0.8
5.8
37.1
7,036.6
8.4
17.6
7,209.4
232.0
57.0
4.7
13.6
957.5
1,264.8
578.3
9,052.5
71.1
4,572.7
1,478.2
79.6
0.9
35.5
6,238.0
471.4
14.8
58.5
5.8
14.8
565.3
204.0
7,007.3
77.3
180.9
19.0
1,742.6
2,019.8
25.4
2,045.2
9,052.5
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
77.3
180.3
0.2
1,714.0
1,971.8
30.0
2,001.8
8,872.5
1. Retained earnings and Non-controlling interest have been restated. See Note 2 for more details.
The accompanying notes 1 to 34 are an integral part of these financial statements.
The financial statements of Intermediate Capital Group plc (Company Registration Number: 02234775) were approved and authorised
for issue by the Board of Directors on 24 May 2023 and were signed on its behalf by:
William Rucker Chairman
Vijay Bharadia Chief Financial and Operating Officer
144 ICG | ANNUAL REPORT & ACCOUNTS 2023
Consolidated statement of cash flows
For the year ended 31 March 2023
Cash flows generated from operations
Taxes paid
Net cash flows from 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
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)/generated from financing activities
Net (decrease)/increase 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 2023
Group
Year ended
31 March 2022
Group
Notes
32
17
18
15
6
6
£m
324.0
(32.4)
291.6
(4.7)
(6.5)
(58.8)
200.8
130.8
(38.9)
(6.8)
—
(194.6)
(236.4)
(476.7)
(54.3)
20.0
991.8
957.5
£m
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
The Group’s cash and cash equivalents include £407.5m (2022: £230.3m) of restricted cash held principally by structured entities
controlled by the Group (see note 6).
The presentation of the consolidated statement of cash flows have been updated to improve the presentation of this information. The
reconciliation of cash generated from/used in operations to profit before tax from continuing operations is now disclosed in note 32.
The accompanying notes 1 to 34 are an integral part of these financial statements.
ICG | ANNUAL REPORT & ACCOUNTS 2023
145
FINANCIAL STATEMENTS CONTINUED
Consolidated statement of changes in equity
For the year ended 31 March 2023
£m
5.0
—
5.0
—
—
—
—
—
—
—
—
—
—
—
5.0
£m
5.0
—
—
—
—
—
—
Group
Balance at 1 April 2022
Prior year adjustment5
Balance at 1 April 2022 (as restated)
Profit after tax
Exchange differences on translation
of foreign operations
Deferred tax on equity investments
translation
Total comprehensive income/
(expense) for the year
Adjustment of non-controlling
interest on disposal of subsidiary
Acquisition of non-controlling
interest
Issue of share capital
Own shares acquired in the year
Options/awards exercised4
Tax on options/awards exercised
Credit for equity settled share
schemes
Dividends paid
Share
capital
(note 23)
£m
77.3
—
77.3
Share
premium
(note 23)
£m
180.3
—
180.3
—
—
—
—
—
—
0.0
—
—
—
—
—
—
—
—
—
—
—
—
—
0.6
—
—
—
Balance at 31 March 2023
77.3
180.9
Capital
redemption
reserve1
Share based
payments
reserve
(note 25)
Own
shares3
(note 24)
Foreign
currency
translation
reserve2
Retained
earnings5
£m
£m
£m
£m
Non-
controlling
interest5
£m
Total
£m
Total
equity
£m
67.5
(93.0)
20.7
1,688.9
1,946.7
55.1
2,001.8
—
—
—
25.1
25.1
(25.1)
—
67.5
(93.0)
20.7
1,714.0
1,971.8
30.0
2,001.8
—
—
—
—
280.6
280.6
(2.2)
278.4
—
19.5
—
3.9
—
—
19.5
3.9
—
—
19.5
3.9
—
23.4
280.6
304.0
(2.2)
301.8
—
(1.3)
(1.3)
(31.1)
(32.4)
—
—
—
—
—
—
—
—
—
(14.3)
—
—
0.0
(38.9)
(16.5)
(2.4)
28.7
—
—
—
—
28.7
0.0
(38.9)
(16.5)
(2.4)
—
39.5
—
39.5
—
(236.4)
(236.4)
—
(236.4)
—
(38.9)
(31.3)
(2.4)
39.5
—
28.5
—
—
—
73.3
(103.4)
44.1
1,742.6
2,019.8
25.4
2,045.2
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 subsidiary5
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 20225
Share
capital
(note 23)
£m
77.2
Share
premium
(note 23)
£m
180.2
—
—
—
0.1
—
—
—
—
—
—
—
—
—
—
—
—
0.1
—
—
—
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
—
—
526.8
526.8
(1.7)
525.1
—
6.9
—
6.9
—
6.9
—
6.9
526.8
533.7
(1.7)
532.0
—
—
—
—
—
—
—
—
—
(9.8)
—
—
0.1
—
(20.9)
(27.4)
5.2
29.6
—
26.7
—
—
—
—
0.1
26.7
(20.9)
(27.4)
5.2
29.6
—
(165.7)
(165.7)
—
(165.7)
—
(20.9)
—
(27.8)
10.1
—
—
—
5.2
29.6
—
—
—
—
77.3
180.3
5.0
67.5
(93.0)
20.7
1,714.0
1,971.8
30.0
2,001.8
1. The capital redemption reserve is a reserve created when a company buys its own shares which reduces its share capital. £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.
5. Retained earnings and Non-controlling interest brought forward as at 1 April 2022 have been restated. See Note 2 for more details.
The accompanying notes 1 to 34 are an integral part of these financial statements.
146 ICG | ANNUAL REPORT & ACCOUNTS 2023
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Parent company statement of financial position
as at 31 March 2023
Non-current assets
Intangible assets
Property, plant and equipment
Investment in subsidiaries
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
Total assets
Non-current liabilities
Trade and other payables
Financial liabilities at amortised cost
Other financial liabilities
Derivative financial liabilities
Deferred tax liabilities
Current liabilities
Trade and other payables
Financial liabilities at amortised cost
Other financial liabilities
Derivative financial liabilities
Total liabilities
Equity and reserves
Called up share capital
Share premium account
Other reserves
Retained earnings
Equity attributable to owners of the Company
Total equity
Total equity and liabilities
31 March 2023
Company
31 March 2022
Company
Notes
£m
£m
17
18
28
20
5
5
14
20
5
5
6
21
7
7
5,7
14
21
7
7
5, 7
23
23
9.2
44.0
1,868.9
766.3
288.7
8.4
—
12.1
49.9
1,871.4
574.1
362.8
2.1
0.9
2,985.5
2,873.3
210.5
35.3
—
13.6
409.8
669.2
3,654.7
71.3
1,478.2
39.3
0.9
2.9
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
—
1,592.6
1,576.6
1,158.7
58.5
4.3
14.8
1,236.3
2,828.9
77.3
180.9
44.5
523.1
825.8
825.8
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
3,654.7
3,933.8
The Parent Company’s total profit for the year was £109.5m (2022: Profit of £46.7m). The accompanying notes 1 to 34 are an integral
part of these financial statements.
The financial statements of Intermediate Capital Group plc (Company Registration Number: 02234775) were approved and authorised
for issue by the Board of Directors on 24 May 2023 and were signed on its behalf by:
William Rucker Chairman
Vijay Bharadia Chief Financial and Operating Officer
ICG | ANNUAL REPORT & ACCOUNTS 2023
147
FINANCIAL STATEMENTS CONTINUED
Parent company statement of cash flows
For the year ended 31 March 2023
Cash flows used in operations
Taxes paid
Net cash flows used in operating activities
Investing activities
Purchase of intangible assets
Purchase of property, plant and equipment
Net cashflow from derivative financial instruments
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 used in investing activities
Financing activities
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 financing activities
Net (decrease)/increase 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 2023
Company
Year ended
31 March 2022
Company
£m
(314.3)
(20.8)
(335.1)
(3.6)
(0.7)
(58.8)
(216.6)
109.5
(147.7)
—
(317.9)
(4.1)
—
(194.6)
(236.4)
483.2
(239.7)
543.8
352.2
(300.8)
3.5
707.1
409.8
£m
(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
Notes
32
17
18
20, 21
20, 21
20, 21
15
20, 21
20, 21
20, 21
6
6
The presentation of the Parent Company statement of cash flows have been updated to improve the presentation of this information.
The reconciliation of cash generated from/used in operations to profit before tax from continuing operations is disclosed in note 32. The
prior year comparatives are consistent with those presented in the Parent Company statement of cash flows for the period to March
2022.
The accompanying notes 1 to 34 are an integral part of these financial statements.
148 ICG | ANNUAL REPORT & ACCOUNTS 2023
Parent company statement of changes in equity
For the year ended 31 March 2023
Company
Balance at 1 April 2022
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 2023
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
Share
capital
(note 23)
£m
77.3
Share
premium
(note 23)
£m
180.3
—
—
—
—
—
—
—
0.6
—
—
77.3
180.9
Share
capital
(note 23)
£m
77.2
Share
premium
(note 23)
£m
180.2
—
—
0.1
—
—
—
—
—
—
0.1
—
—
77.3
180.3
Capital
redemption
reserve1
£m
5.0
—
—
—
—
—
5.0
Capital
redemption
reserve1
£m
5.0
—
—
—
—
—
—
5.0
Share -based
payments
reserve
(note 25)
£m
Own
shares2
(note 24)
£m
52.6
(21.3)
—
—
(31.3)
39.5
—
Retained
earnings
£m
650.0
109.5
109.5
—
—
—
Total
equity
£m
943.9
109.5
109.5
—
(30.7)
39.5
—
—
—
—
—
(236.4)
(236.4)
60.8
(21.3)
523.1
825.8
Share- based
payments
reserve
(note 25)
£m
Own
shares2
(note 24)
£m
Retained
earnings
£m
Total
equity
£m
50.8
(21.3)
769.0
1,060.9
—
—
—
(27.8)
29.6
—
—
—
—
—
—
46.7
46.7
—
—
—
46.7
46.7
0.1
(27.7)
29.6
—
(165.7)
(165.7)
52.6
(21.3)
650.0
943.9
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. The movement in the Parent Company Own shares reserve in respect of Options/awards exercised, represents the employee shares vesting net of personal taxes and social
security.
The accompanying notes 1 to 34 are an integral part of these financial statements.
ICG | ANNUAL REPORT & ACCOUNTS 2023
149
FINANCIAL STATEMENTS CONTINUED
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
2023 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 (‘UK-adopted 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.
150 ICG | ANNUAL REPORT & ACCOUNTS 2023
1. General information and basis of preparation
continued
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.
ii. The application of the Group’s revenue recognition policy in
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 (‘DVB’) - 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 84.
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.
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 127) and
viability statement (page 73).
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 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 and potential
shortfalls in access to capital. As at 31 March 2023 the Group
has available liquidity of £1.1bn, including £550m of undrawn
debt facilities. The macro-economic stress scenarios were in
line with those used in the Internal Capital Adequacy and Risk
Assessment (‘ICARA’) stress test and are discussed in the
viability statement on page 73
• The operational resilience of the Group’s critical functions and
key service providers 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 November 2024, an 18 month period from the date of
signing of the financial statements, continues to be appropriate.
ICG | ANNUAL REPORT & ACCOUNTS 2023
151
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.
IFRS/IAS
IAS 8
IAS 1 and IFRS
Practice
Statement 2
IAS 12
IAS 1
IFRS 16
Definition of Accounting
Estimates
Disclosure of Accounting
Policies
Accounting periods
commencing on or after
1 January 2023
1 January 2023
Deferred Tax related to Assets
and Liabilities arising from a
Single Transaction
Classification of Liabilities as
Current or Non-current
Lease Liability in a Sale and
Leaseback
1 January 2023
1 January 2024
1 January 2024
Changes in significant accounting policies
No changes to significant accounting policies were implemented.
Group restatements
The Group has restated the Consolidated Statement of Financial
Position and Consolidated Statement of Changes in Equity as a
result of the reversal of an allocation of retained earnings to non-
controlling interest. As a result of the reversal the following has
been restated:
a. Retained Earnings increased by £25.1m from £1,688.9m to
£1,714.0m; and
b. Non-controlling interest reduced by £25.1m from £55.1m to
£30.0m.
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:
Type of contract/service
Management fees1
Other income
Fee and other operating income
Year ended
31 March 2023
Year ended
31 March 2022
£m
481.6
2.0
483.6
£m
429.4
4.6
434.0
1. Included within management fees is £22.4m (2022: £57.5m) of performance
related fees.
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,
152 ICG | ANNUAL REPORT & ACCOUNTS 2023
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 £459.2m (2022: £371.9m) 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
£22.4m (2022: £57.5m) 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.
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 24-month 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 on a case-by-case basis.
The weighted-average constraint at the reporting date is 43%
(2022: 46%). If the average constraint were to increase by 10
percentage points to 53% (2022: 56%) this would result in a
reduction in revenue of £1.13m (2022: £0.62m). Conversely, a
10% decrease in constraint would result in an increase in revenue
of £1.13m (2022: £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.
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. Total reportable segment figures are alternative performance
measures (‘APM’).
The Executive Directors, the chief operating decision makers, 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 recognises the fair value movement on any
associated hedging derivatives 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. It recognises the fair value movement on any associated hedging derivatives. 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 UK-adopted IAS reported amounts on the
following pages.
Year ended 31 March 2023
Year ended 31 March 2022
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 income
Interest expense
Staff costs
Incentive scheme costs
Other administrative expenses
Profit before tax and discontinued operations
FMC
£m
501.0
25.0
0.5
526.5
—
40.2
(26.8)
539.9
—
(2.2)
(85.0)
(92.2)
(49.8)
310.7
IC
£m
2.6
(25.0)
1.7
(20.7)
102.3
—
16.8
98.4
13.9
(61.8)
(20.0)
(59.6)
(23.5)
(52.6)
Reportable
segments Total
£m
503.6
—
2.2
505.8
102.3
40.2
(10.0)
638.3
13.9
(64.0)
(105.0)
(151.8)
(73.3)
258.1
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
Reconciliation of APM amounts reported for management purposes to the financial statements reported under UK-
adopted IAS
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 UK-adopted IAS it is presented within gains on investments and other operating income.
• 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 UK-adopted IAS. The impact of this consolidation
on profit before tax is shown in the table on the following page.
• The warehouse funds, their investments and other current assets within controlled entities are presented as fair value investments for
reportable segments (APM), whereas the statutory financial statement present these entities on a consolidated basis under UK-
adopted IAS. The impact of this consolidation is disclosed within ‘Gain/(loss) after tax from discontinued operations’ on the following
page with further detail in note 29.
ICG | ANNUAL REPORT & ACCOUNTS 2023
153
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
4. Segmental reporting continued
Consolidated income statement
Year ended 31 March 2023
Fund management fee income
Other operating income
Fee and other income
Dividend income
Net fair value loss on derivatives
Finance income/(loss)
Net investment returns/gains on investments
Total revenue
Other income
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 and discontinued operations
Tax charge
Profit after tax from discontinued operations
Profit after tax and discontinued operations
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 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 and discontinued operations
Tax charge
Loss after tax from discontinued operations
Profit after tax and discontinued operations
154 ICG | ANNUAL REPORT & ACCOUNTS 2023
Reportable
segments
Consolidated
entities
Financial
statements
£m
503.6
2.2
505.8
40.2
(10.0)
30.2
102.3
638.3
13.9
(64.0)
(105.0)
(151.8)
(73.3)
(330.1)
—
258.1
(28.8)
—
229.3
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
£m
(22.0)
(0.2)
(22.2)
(40.2)
(7.1)
(47.3)
70.2
0.7
1.6
(0.6)
(0.1)
0.2
(13.3)
(13.2)
4.4
(7.1)
(0.6)
56.8
49.1
£m
481.6
2.0
483.6
—
(17.1)
(17.1)
172.5
639.0
15.5
(64.6)
(105.1)
(151.6)
(86.6)
(343.3)
4.4
251.0
(29.4)
56.8
278.4
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
4. Segmental reporting continued
Consolidated statement of financial position
Year ended 31 March 2023
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
Year ended 31 March 2022
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
Reportable
segments
£m
2,642.2
158.4
550.0
282.4
243.7
3,876.7
1,558.0
104.5
79.1
157.7
1,899.3
1,977.4
3,876.7
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
2023
Consolidated
entities
£m
4,402.8
6.0
407.5
(264.1)
623.6
5,175.8
4,573.4
2.1
—
532.5
5,108.0
67.8
5,175.8
Financial
statements
£m
7,045.0
164.4
957.5
18.3
867.3
9,052.5
6,131.4
106.6
79.1
690.2
7,007.3
2,045.2
9,052.5
2022
Consolidated
entities Financial statements
£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
£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
ICG | ANNUAL REPORT & ACCOUNTS 2023
155
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
4. Segmental reporting continued
Consolidated statement of cash flows
Profit/(loss) before tax from continuing operations
Adjustments for non cash items:
Fee and other operating (income)/expense
Net investment returns
Net fair value loss on derivatives
Impact of movement in foreign exchange rates
Interest income
Interest expense
Depreciation, amortisation and impairment of property, equipment and intangible assets
Share-based payment expense
Working capital changes:
(Increase)/Decrease in trade receivables
Decrease in trade and other payables
Change in disposal groups held for sale
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 flow 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 (used in)/from investing activities
Financing activities
Purchase of Own Shares
Payment of principal portion of lease liabilities
Repayment of long-term borrowings
Dividends paid to equity holders of the parent
Net cash flows used in financing activities
Net (decrease)/increase 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
156 ICG | ANNUAL REPORT & ACCOUNTS 2023
Reportable
segments
£m
258.1
(505.8)
(102.3)
34.9
(24.9)
(13.9)
64.0
18.2
39.5
(48.3)
(41.3)
—
(321.8)
45.5
(211.9)
(453.8)
689.4
106.8
573.3
(63.5)
363.9
(32.4)
331.5
(4.7)
(6.5)
(58.8)
—
(70.0)
(38.9)
(6.8)
(194.6)
(236.4)
(476.7)
(215.2)
3.7
761.5
550.0
2023
Consolidated
structured entities Financial Statements
£m
(7.1)
22.2
(70.2)
—
7.1
(1.6)
0.6
—
—
36.3
(155.6)
(8.8)
(177.1)
—
—
£m
251.0
(483.6)
(172.5)
34.9
(17.8)
(15.5)
64.6
18.2
39.5
(12.0)
(196.9)
(8.8)
(498.9)
45.5
(211.9)
(966.4)
(1,420.2)
1,032.8
256.0
14.6
(199.9)
(39.9)
—
(39.9)
—
—
—
200.8
200.8
—
—
—
—
—
160.9
16.3
230.3
407.5
1,722.2
362.8
587.9
(263.4)
324.0
(32.4)
291.6
(4.7)
(6.5)
(58.8)
200.8
130.8
(38.9)
(6.8)
(194.6)
(236.4)
(476.7)
(54.3)
20.0
991.8
957.5
4. Segmental reporting continued
Profit/(loss) before tax from continuing operations
Adjustments for non cash items:
Fee and other operating (income)/expense
Net investment returns
Net fair value loss/(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
Working capital changes:
Increase in trade 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 flow 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
structured entities Financial Statements
2022
Consolidated
£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
£m
(3.4)
19.0
(69.8)
(4.8)
—
0.9
—
0
(11.0)
(62.9)
(132.0)
—
—
£m
565.4
(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
159.5
5.2
(127.6)
(94.5)
—
(94.5)
—
—
5.1
29.3
34.4
—
—
—
—
—
—
(60.0)
6.0
284.3
230.3
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
ICG | ANNUAL REPORT & ACCOUNTS 2023
157
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
4. Segmental reporting continued
Geographical analysis of non-current financial assets at fair value
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 and liabilities
Accounting policy
Year ended
31 March 2023
Year ended
31 March 2022
£m
3,730.3
247.2
3,059.1
7,036.6
£m
3,613.8
244.0
3,115.3
6,973.1
Year ended
31 March 2023
Year ended
31 March 2022
£m
415.3
58.6
165.1
639.0
£m
693.3
84.0
204.8
982.1
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 2022, 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.
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 164.
Given the subjectivity of investments in private companies, senior and subordinated notes of Collateralised Loan Obligation 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.
158 ICG | ANNUAL REPORT & ACCOUNTS 2023
5. Financial assets and liabilities 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:
As at 31 March 2023
As at 31 March 2022
Group
Financial Assets
Investment in or alongside managed funds1
Investments in loans held within structured
entities controlled by the Group
Derivative assets
Investment in private companies2
Investment in public companies
Senior and subordinated notes of CLO vehicles
Disposal groups held for sale
Total assets
Financial Liabilities
Liabilities of consolidated credit funds
Derivative liabilities
Disposal groups held for sale
Total liabilities
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
£m
£m
£m
£m
Total
£m
Total
£m
£m
7.2
—
—
—
5.1
—
—
1.8
2,144.3
2,153.3
4,101.4
567.7
4,669.1
22.0
—
—
105.8
—
100.4
—
7.5
—
163.2
22.0
100.4
5.1
113.3
163.2
12.3
4,231.0
2,983.1
7,226.4
£m
9.8
—
—
—
0.4
—
12.7
22.9
—
2,112.9
2,122.7
4,467.4
145.2
4,612.6
138.6
—
—
105.6
—
—
122.7
—
9.1
89.2
138.6
122.7
0.4
114.7
101.9
4,711.6
2,479.1
7,213.6
—
—
—
—
(4,508.0)
(64.7)
(4,572.7)
(15.7)
—
—
—
(15.7)
—
(4,523.7)
(64.7)
(4,588.4)
—
—
—
—
(4,130.1)
(234.6)
(4,364.7)
(156.3)
—
(156.3)
—
(5.0)
(5.0)
(4,286.4)
(239.6)
(4,526.0)
1. Level 3 Investments in or alongside managed funds includes £47.8m senior debt (2022: £41.1m), £1,319.8m subordinated debt and equity (2022: £1,487.7m), £284.5m of real
estate assets (2022: £215.1m), and £492.2m private equity secondaries (2022: £369.0m).
2. Level 3 Investment in private companies includes £91.3m subordinated debt and equity (2022: £96.2m) and £9.1m of real estate assets (2022: £26.5m).
ICG | ANNUAL REPORT & ACCOUNTS 2023
159
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
5. Financial assets and liabilities continued
Fair value hierarchy
The following table summarises the valuation of the Company’s financial assets and liabilities by fair value hierarchy.
Company
Financial Assets
Investment in or alongside managed funds
Derivative assets
Investment in private companies
Senior and subordinated notes of CLO vehicles
Total assets
Financial Liabilities
Derivative liabilities
Total liabilities
Valuations
7.2
—
—
—
7.2
—
—
As at 31 March 2023
As at 31 March 2022
Level 1
Level 2
Level 3
£m
£m
£m
Total
£m
Level 1
Level 2
Level 3
£m
£m
£m
—
22.0
—
—
171.6
178.8
110.7
—
86.1
23.8
22.0
86.1
23.8
—
12.7
—
—
40.0
—
—
22.0
281.5
310.7
123.4
40.0
160.7
—
158.9
0.2
319.8
Total
£m
271.4
40.0
171.6
0.2
483.2
15.7
15.7
—
—
15.7
15.7
—
—
56.7
56.7
—
—
56.7
56.7
Valuation process
The Group Valuation Committee ('GVC') oversees the valuation processes and provides independent review of the methodologies,
models and assumptions used to value the Level 3 assets and liabilities, in accordance with the principles and guidelines set out in the
Group Valuation Policy, and to assess the reasonableness of the resulting fair value measurement. The GVC reviewed valuations on a
quarterly basis and reports to the Audit Committee semi-annually. The GVC is independent of the boards of directors of the funds and no
member of the GVC is a member of either the Group’s investment teams or Investment Committees (‘IC’s).
Valuation methodologies are identified for each category of Level 3 assets, based on the specific characteristics of each asset and liability
and considering factors such as the nature, complexity, and risk profile of the investment. Each asset is attributable to a fund or
investment strategy managed by the Group.
The IC of that fund or strategy is responsible for the review, challenge, and approval of the related funds’ valuations of the assets
managed by that strategy investment team. Sources of the valuation include the ICG investment team, third-party valuation services and
third-party fund administrators. The IC provides those valuations to the Group, as an investor in the fund assets.
The IC is also responsible for escalating significant events regarding the valuation to the Group (as an investor in the fund assets), e.g.
change in valuation methodologies, potential impairment events, material judgements etc.
The table in page 164 outlines in more detail the range of valuation techniques, as well as the key unobservable inputs for each category
of Level 3 assets and liabilities.
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.
160 ICG | ANNUAL REPORT & ACCOUNTS 2023
5. Financial assets and liabilities continued
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 public companies
Quoted investments are held at the last traded bid price on the reporting date. When a purchase or sale is made under contract, the terms
of which require delivery within the timeframe of the relevant market, the contract is reflected on the trade date.
Investment in loans held in consolidated structured entities
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 and the key inputs under this approach are detailed on page 164.
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.
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.
Liabilities of 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.
ICG | ANNUAL REPORT & ACCOUNTS 2023
161
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
5. Financial assets and liabilities continued
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. Transfers between levels are determined based on the year-end valuation and therefore
take place at the end of the reporting period.
Group
At 1 April 2022
Total gains or losses in the income statement
– Net investment return2
- Foreign exchange
Purchases
Exit proceeds
Transfer between levels1
At 31 March 2023
Investment in or
alongside
managed funds
£m
2,112.9
Investment in
loans held in
consolidated
entities
£m
145.2
Investment in
private companies
£m
122.7
Senior and
subordinated
notes of CLO
vehicles
£m
9.1
172.9
67.4
416.2
(9.6)
(21.2)
(1.3)
15.5
60.2
13.2
6.7
(625.1)
(100.7)
(21.0)
—
2,144.3
457.1
567.7
—
100.4
Disposal groups
held for sale
£m
89.2
(7.1)
5.8
158.7
(23.8)
(59.6)
163.2
Total
£m
2,479.1
133.7
102.4
641.8
(771.4)
397.5
2,983.1
0.5
—
(0.8)
—
7.5
1. During the year certain assets in Investments in loans held in consolidated entities were reassessed as Level 3 (from Level 2) and these changes are reported as a transfer in
the year. Transfers out of Disposal groups held for sale represented the re-designation of an asset as Investment Property (see note 29)
2. Included within net investment returns are £141.8m of unrealised gains (which includes accrued interest).
Group
At 1 April 2021
Total gains or losses in the income statement
– Net investment return2
- Foreign exchange
Purchases
Exit proceeds
Transfer between levels
At 31 March 2022
Investment in or
alongside
managed funds
£m
1,802.1
Investment in
loans held in
consolidated
entities
£m
168.6
455.9
2.7
680.4
(824.2)
(4.0)
2,112.9
(10.8)
—
54.8
(37.6)
(29.8)
145.2
Investment in
private companies
Senior and
subordinated
notes of CLO
vehicles
Disposal groups
held for sale
£m
234.6
17.7
4.5
0.4
£m
27.2
(5.2)
0.5
13.2
£m
57.4
6.3
0.7
106.9
Total
£m
2,289.9
463.9
8.4
855.7
(134.5)
(26.6)
(82.1)
(1,105.0)
—
122.7
—
9.1
—
89.2
(33.8)
2,479.1
1. During the year certain assets in Investments in or alongside managed fund and Investments in loans held in consolidated entities were reassessed from Level 3 and these
changes are reported as a transfer in the year
2. Included within net investment returns are £439.7m of unrealised gains (which includes accrued interest)
.
162 ICG | ANNUAL REPORT & ACCOUNTS 2023
5. Financial assets and liabilities continued
Company
At 1 April 2022
Total gains or losses in the income statement
– Net investment return
– Foreign exchange
Purchases
Exit proceeds
At 31 March 2023
Company
At 1 April 2021
Total gains or losses in the income statement
– Net investment return
– Foreign exchange
Purchases
Exit proceeds
Transfer between levels
At 31 March 2022
Investment in or
alongside
managed funds
Investment in
private companies
Senior and
subordinated
notes of CLO
vehicles
£m
160.7
3.1
5.9
49.8
(47.9)
171.6
£m
158.9
10.1
18.6
120.9
(222.4)
86.1
£m
0.2
(0.2)
—
23.8
—
23.8
Investment in or
alongside managed
funds
Investment in
private companies
Senior and
subordinated notes
of CLO vehicles
£m
176.3
7.6
(15.3)
22.2
(30.1)
—
160.7
£m
192.8
32.0
4.8
60.9
(128.1)
(3.6)
158.9
£m
9.2
(9.3)
0.3
—
—
—
0.2
Total
£m
319.8
13.0
24.5
194.5
(270.3)
281.5
Total
£m
378.3
30.4
(10.2)
83.1
(158.2)
(3.6)
319.8
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.
During the year ended 31 March 2023 changes in the fair value of the assets of consolidated credit funds resulted in a reduction in the fair
value of the financial liabilities of those consolidated credit funds, reported as a ‘fair value gain’ in the table below.
Group
At 1 April
Total gains or losses in the income statement
– Fair value gains
– Foreign exchange losses
Purchases
Disposal groups held for sale
Transfer between levels
At 31 March
2023
2022
Financial liabilities
designated as FVTPL
Financial liabilities
designated as FVTPL
£m
239.6
(178.2)
12.8
23.8
(5.0)
(28.3)
64.7
£m
268.2
(31.8)
—
25.9
5.0
(27.7)
239.6
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.
ICG | ANNUAL REPORT & ACCOUNTS 2023
163
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
5. Financial assets and liabilities continued
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:
comparable
companies
Discounted cash
flow
Fair Value
Fair Value
As at
31 March 2023
As at
31 March 2022
£m
£m
Primary Valuation
Technique1
Key Unobservable
Inputs
Range
Weighted
Average/ Fair
Value Inputs
Sensitivity/
Scenarios
1,574.4
1,598.4 Market
Earnings multiple
5.0x – 29.0x
15.1x
Effect on Fair
Value4
31 March 2023
£m
192.5
'+10% Earnings
multiple2
Group Assets
Corporate -
subordinated debt
and equity2
Discount rate
7.5% - 26.4%
10.4%
'-10% Earnings
multiple2
(192.7)
Real Assets
293.6
316.3 Third-party
Earnings multiple
N/A
6.6x – 19.8x
N/A
valuation
LTV-based
impairment model
N/A
N/A
12.4x
N/A
N/A
Private Equity
Secondaries
492.1
369.0 Third-party
N/A
N/A
N/A
valuation
+10% Third-
party valuation
-10% Third-
party valuation
+10% Third-
party valuation
-10% Third-
party valuation
Corporate -
Senior debt
47.8
41.1 Discounted cash
flow
Probability of
default
2.0%-5.4%
2.4%
Upside case
Loss given default
Maturity of loan
25.4%
3 years
25.4%
3 years
Downside case
Effective interest
rate
8.7%-9.5%
8.7%
29.4
(29.4)
49.2
(49.2)
0.1
(0.8)
Subordinated
notes of CLO
vehicles3
7.5
9.1 Discounted cash
Discount rate
13.0% - 14.0% 13.5%
flow
Default rate
3% - 4.5%
3.4%
Prepayment rate % 15% -20%
Recovery rate %
75.0%
Reinvestment price
99.5%
567.7
145.2 Third-party
N/A
N/A
valuation
18.9%
75.0%
99.5%
N/A
2,983.1
(64.7)
2,479.1
(234.6) Third-party
valuation
N/A
N/A
N/A
Investments in
loans held in
structured entities
Total assets
Liabilities of
consolidated credit
funds
Upside case3
Downside case3
21.6
(23.0)
+10% Third-
party valuation
-10% Third-
party valuation
+10% Third-
party valuation
-10% Third-
party valuation
56.8
(56.8)
(6.5)
6.5
Disposal group
held for sale
Total liabilities
—
(5.0)
(64.7)
(239.6)
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 £182.8m (2022:
£174.2m). This value includes investments in CLOs that are not consolidated (2023: £7.5m (2022: £9.1m)) and investments in CLOs which are consolidated (2023: £175.3m
(2022: £165.3m)). The upside case is based on the default rate being lowered to 2.5% p.a. for the next 24 months, keeping all other parameters consistent. The downside case
is based on the default rate being increased over the next 24 months to 6.5% p.a., keeping all other parameters consistent.
4. The effect of fair value across the entire investment portfolio ranges from -£345.4m (downside case) to +£343.0m (upside case) (2022: -£281.0m (downside case) to +
£279.3m (upside case).
164 ICG | ANNUAL REPORT & ACCOUNTS 2023
5. Financial assets and liabilities continued
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 Finance loss in the 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
2023
2022
Contract or
underlying principal
amount
£m
121.6
Fair values
Asset
£m
7.5
Contract or
underlying principal
amount
£m
306.1
Liability
£m
(8.5)
Fair values
Asset
£m
28.4
Liability
£m
(30.1)
1,365.1
14.5
(7.2)
1,113.6
4.7
(22.5)
—
1,486.7
—
22.0
—
(15.7)
102.6
1,522.3
105.5
138.6
(103.7)
(156.3)
Company
Cross currency swaps
Forward foreign exchange contracts
Total
2023
2022
Contract or
underlying principal
amount
£m
121.6
1,365.1
1,486.7
Fair values
Asset
£m
7.5
14.5
22.0
Contract or
underlying principal
amount
£m
306.1
1,580.3
1,886.4
Liability
£m
(8.5)
(7.2)
(15.7)
Fair values
Asset
£m
28.4
11.7
40.1
Liability
£m
(30.1)
(26.6)
(56.7)
The Group holds £8.5m of cash pledged as collateral by its counterparties as at 31 March 2023. As at 31 March 2022 the value of cash
held in margin accounts and therefore pledged as collateral by the Group was £27.0m. The counterparties were: Citigroup Global
Markets Limited, Citibank NA, Lloyds Bank Corporate Markets Plc and ANZ. 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 2023 (31 March 2022: £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 2023
165
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
2023
£m
2022
£m
Company
2023
£m
2022
£m
957.5
991.8
409.8
707.1
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 £407.5m (2022 : £230.3m) 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 £5.5m cash and cash equivalents were included in disposal groups held for sale (2022: £11.1m) (note 29).
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.
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 liabilities2
Liabilities held at FVTPL:
- Derivative financial liabilities
Interest rate
%
2023
2022
Current
Non-current
Current
Non-current
Maturity
£m
£m
£m
£m
2.02% - 6.25%
2023 - 2029
1.63% - 2.5%
2027 - 2030
SONIA +1.40%
2026
2.85% - 7.09%
2023 - 2034
56.8
2.5
(0.8)
58.5
5.8
14.8
—
79.1
604.8
874.9
39.2
162.9
(1.5)
(1.0)
1,478.2
79.6
0.9
4,572.7
6,131.4
201.1
6.5
153.4
—
361.0
617.2
836.8
(1.7)
1,452.3
52.2
2.9
4,364.7
5,872.1
- Structured entities controlled by the Group
0.6% - 9.93%
2030-2036
1. Financial liabilities held at amortised cost within Disposal Groups Held for Sale are disclosed in Note 29.
166 ICG | ANNUAL REPORT & ACCOUNTS 2023
Company
Liabilities held at amortised cost
- Private placement
- Listed notes and bonds
- Unsecured bank debt¹
Total Liabilities held at amortised cost
Other financial liabilities2
Liabilities held at FVTPL
- Derivative financial liabilities
Interest rate
%
2023
2022
Current
Non-current
Current
Non-current
Maturity
£m
£m
£m
£m
2.02% - 6.25%
2023 - 2029
1.63% - 2.5%
2027 - 2030
SONIA +1.40%
2026
2.85% - 7.09%
2023 - 2034
56.8
2.5
(0.8)
58.5
4.3
14.8
77.6
604.8
874.9
39.2
162.9
(1.5)
(1.0)
1,478.2
39.3
0.9
1,518.4
201.1
3.1
53.6
257.8
617.2
836.8
(1.7)
1,452.3
44.8
3.1
1,500.2
1. Unsecured bank debt represents the value of associated fees which are amortised over the life of the facility.
2. Lease liabilities
Other financial liabilities are lease liabilities. Details of the cash outflows related to leases are in the Consolidated statement of cash flows,
interest expenses associated with lease liabilities are in note 11, the Right of Use (‘ROU’) assets and the income from subleasing ROU
assets are in note 18.
The fair value of the Listed notes and bonds, being the market price of the outstanding bonds, is £613.1m (2022: £956.4m) . Private
placements and unsecured bank debt is held at amortised cost which the Group has determined to be the fair value of these liabilities.
Movement in financial liabilities arising from financing activities
The following tables sets out the movements in total liabilities held at amortised cost arising from financing activities undertaken during
the year.
At 1 April
Proceeds from borrowings
Repayment of long term borrowings
Payment of principal portion of lease liabilities
Establishment of lease liability
Net interest movement
Foreign exchange movement
At 31 March
8. Finance loss
Group
2023
£m
1,712.1
—
(194.6)
(6.8)
33.0
1.0
77.4
2022
£m
1,380.1
413.5
(111.5)
(4.1)
2.1
6.2
25.8
Company
2023
£m
1,701.3
—
(194.6)
(4.1)
—
0.3
77.4
2022
£m
1,369.8
413.5
(111.5)
(3.6)
1.4
5.9
25.8
1,622.1
1,712.1
1,580.3
1,701.3
Accounting policy
Changes in the fair value of derivatives used for economic hedging are recognised as finance income/loss (as appropriate) in the income
statement as incurred.
Fair value movements on derivatives
2023
£m
(17.1)
(17.1)
2022
£m
(7.4)
(7.4)
ICG | ANNUAL REPORT & ACCOUNTS 2023
167
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
9. Other income
Accounting policy
The Group earns interest on its bank deposits. These amounts are recognised as income on receipt.
Interest income on bank deposits
2023
£m
15.5
15.5
2022
£m
—
—
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
2023
£m
2022
£m
167.6
643.1
4.9
172.5
(87.6)
555.5
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. Arrangement
and commitment fees amortised here are included within the carrying value of financial liabilities. Financial liabilities within structured
entities controlled by the Group are 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
2023
£m
57.3
4.7
2.6
64.6
2022
£m
45.4
5.7
2.0
53.1
168 ICG | ANNUAL REPORT & ACCOUNTS 2023
12. Administrative expenses
Further detail in respect of material administrative expenses reported on the income statement is set out below:
Staff costs
Amortisation and depreciation
Operating lease expenses
Auditor's remuneration
2023
£m
256.7
18.2
2.8
2.3
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
2023
£m
1.5
0.4
1.9
0.3
0.1
0.4
2.3
2022
£m
262.1
18.1
3.8
2.1
2022
£m
1.3
0.5
1.8
0.2
—
0.2
2.0
ICG | ANNUAL REPORT & ACCOUNTS 2023
169
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
Total employee costs (note 12)
The monthly average number of employees (including Executive Directors) was:
Investment Executives
Marketing and support functions
Executive Directors
2023
£m
4.9
228.7
20.5
7.5
256.7
268
293
3
564
2022
£m
4.8
229.9
26.2
6.0
262.1
244
260
3
507
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 £151.6m (2022: £169.7m) which represents the annual bonus scheme,
Omnibus Scheme, the Growth Incentive Scheme and the DVB Scheme. Please refer to the report of the Remuneration Committee on page
97.
In addition, during the year, third-party funds have paid £46.0m (2022: £62.0m) to former employees and £93.4m (2022: £123.2m) 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.
170 ICG | ANNUAL REPORT & ACCOUNTS 2023
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
2023
£m
16.9
(9.7)
7.2
14.1
8.1
22.2
29.4
2022
£m
37.5
(3.5)
34.0
1.9
(4.8)
(2.9)
31.1
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 2023 of 11.7% (2022: 5.5%) 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.
Due to the application of tax law requiring a degree of judgement, the accounting thereon involves a level of estimation uncertainty which
tax authorities may ultimately dispute. Tax liabilities are recognised based on the best estimates of probable outcomes and with regard to
external advice where appropriate. The principal factors which may influence the Group’s future tax rate are changes in tax legislation in
the territories in which the Group operates, the relative mix of FMC and IC income, the mix of income and expenses earned and incurred
by jurisdiction and the timing of recognition of available deferred tax assets and liabilities. The Group accounts for future legislative
change, to the extent that is enacted at the reporting date, in its recognition of deferred tax.
ICG | ANNUAL REPORT & ACCOUNTS 2023
171
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
Non-taxable investment company income
Trading income generated by overseas subsidiaries subject to different tax rates
2023
£m
251.0
47.7
(9.6)
8.1
46.2
(0.3)
(22.5)
4.0
2.0
—
29.4
2022
£m
565.4
107.4
(3.5)
(4.8)
99.1
(2.5)
(69.6)
1.0
6.4
(3.3)
31.1
Total
£m
(8.0)
(4.8)
6.4
1.4
(4.5)
(0.4)
(9.9)
9.6
0.6
5.6
14.1
(0.4)
(1.7)
17.9
Total
£m
(2.4)
(1.7)
(0.2)
3.4
(0.9)
0.6
0.8
2.4
2.9
Share based
payments and
compensation
deductible as paid
Investments
Derivatives
Other temporary
differences
£m
11.9
5.1
8.7
—
10.4
—
36.1
2.0
0.3
2.2
5.2
—
—
45.8
£m
(24.8)
(0.5)
(3.7)
1.4
(10.5)
—
(38.1)
0.2
(1.1)
3.4
(0.7)
—
—
(36.3)
£m
1.2
—
(0.2)
—
(1.8)
—
(0.8)
—
0.4
—
1.6
—
—
1.2
£m
3.7
(9.4)
1.6
—
(2.6)
(0.4)
(7.1)
7.4
1.0
8.0
(0.4)
(1.7)
7.2
Share based
payments and
compensation
deductible as paid
Investments
Derivatives
Other temporary
differences
£m
7.1
(0.1)
2.1
(0.5)
8.6
—
0.2
(0.5)
8.3
£m
(10.7)
—
(2.0)
4.5
(8.2)
—
(0.3)
0.2
(8.3)
£m
1.2
—
(0.2)
(1.8)
(0.8)
—
0.4
1.6
1.2
£m
—
(1.6)
(0.1)
1.2
(0.5)
0.6
0.5
1.1
1.7
Effect of changes in statutory rate changes
Release of Luxembourg tax provision
Tax charge for the period
Deferred tax
Deferred tax (asset)/liability
Group
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
Prior year adjustment
Impact of changes to statutory tax rates
Charge / (Credit) to equity
Charge / (Credit) to income
Movement in foreign exchange on retranslation
Reclassification to current tax
As at 31 March 2023
Deferred tax (asset)/liability
Company
As at 31 March 2021
Prior year adjustment
Impact of changes to statutory tax rates
Charge / (Credit) to income
As at 31 March 2022
Prior year adjustment
Impact of changes to statutory tax rates
Charge / (Credit) to income
As at 31 March 2023
172 ICG | ANNUAL REPORT & ACCOUNTS 2023
14. Tax expense continued
During the year deferred tax assets that reversed, due to timing differences, were mainly due to the utilisation of tax losses and unpaid
interest expense in the Group’s US business. As set out in the table above in column ‘Share based payments and compensation deductible
as paid’, deferred tax assets at the reporting date were solely due to employee remuneration schemes in the UK and US.
The Group has undertaken a review of the level of recognition of deferred tax assets and is satisfied they are recoverable and therefore
have been recognised in full.
Deferred tax (assets)/liabilities have been accounted for at the applicable tax rates enacted or substantively enacted, in the relevant
jurisdictions at the reporting dated. There are no deferred tax assets recognised on the basis of losses.
In its March 2021 Budget, the UK Government announced that the UK rate of corporation tax would increase from 19% to 25% from 1
April 2023 . This legislative change has been substantively enacted, and has been considered when calculating the closing deferred tax
balances at the reporting date.
The OECD Pillar II proposals for a global minimum tax rate of 15% are due to be implemented from 1 April 2024 (financial year ending 31
March 2025). The Group has performed an impact analysis and does not expect the implementation to be significant. It is expected that
the IASB will treat any impact as a ‘permanent in-the-year'’difference for financial year ending 31 March 2025 onwards.
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
2023
2022
Per share pence
£m
Per share pence
£m
57.3
25.3
82.6
52.2
164.4
72.0
236.4
148.8
39.0
18.7
57.7
57.3
112.1
53.6
165.7
162.0
Of the £236.4m (2022: £165.7m) of ordinary dividends paid during the year, £4.3m (2022: £6.0m) were reinvested under the dividend
reinvestment plan offered to shareholders.
ICG | ANNUAL REPORT & ACCOUNTS 2023
173
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
16. Earnings per share
Earnings
Year ended
31 March 2023
Year ended
31 March 2022
£m
£m
Earnings for the purposes of basic and diluted earnings per share being net profit attributable to equity holders of the
Parent
280.6
526.8
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)
17. Intangible assets
Accounting policy
285,613,961
286,759,806
3,698,954
4,194,481
289,312,915
290,954,286
98.2p
97.0p
183.7p
181.1p
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 (eight years).
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.
174 ICG | ANNUAL REPORT & ACCOUNTS 2023
17. Intangible assets continued
Computer software
Group
Cost
At 1 April
Reclassified2
Additions
Derecognised3
Exchange differences
At 31 March
Amortisation
At 1 April
Charge for the year
Derecognised
At 31 March
Net book value
2023
£m
20.5
—
4.7
(0.3)
0.1
25.0
12.4
4.0
—
16.4
8.6
2022
£m
20.8
—
3.4
(3.8)
0.1
20.5
10.1
6.1
(3.8)
12.4
8.1
Goodwill1
2023
£m
4.3
—
—
—
—
4.3
—
—
—
—
4.3
2022
£m
4.3
—
2.5
(2.4)
(0.1)
4.3
—
—
—
—
4.3
Investment management contract
Total
2023
£m
26.3
—
—
(7.1)
(0.1)
19.1
21.6
2.7
(7.2)
17.1
2.0
2022
£m
25.5
(0.3)
1.1
—
—
26.3
19.0
2.6
2023
£m
51.1
—
4.7
(7.4)
—
48.4
34.0
6.7
—
(7.2)
21.6
4.7
33.5
14.9
2022
£m
50.6
(0.3)
7.0
(6.2)
—
51.1
29.1
8.7
(3.8)
34.0
17.1
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 prior 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.
3. Investment management contracts derecognised represented fully amortised balances.
Company
Cost
At 1 April
Additions
Derecognised
At 31 March
Amortisation
At 1 April
Charge for the year
Derecognised
At 31 March
Net book value
Computer software
Investment management contract
Total
2023
£m
20.4
3.6
(0.2)
23.8
12.5
4.0
—
16.5
7.3
2022
£m
20.8
3.4
(3.8)
20.4
10.2
6.1
(3.8)
12.5
7.9
2023
£m
19.9
—
(1.6)
18.3
15.7
2.3
(1.6)
16.4
1.9
2022
£m
19.9
—
—
19.9
13.4
2.3
2023
£m
40.3
3.6
(1.8)
42.1
28.2
6.3
—
(1.6)
15.7
4.2
32.9
9.2
2022
£m
40.7
3.4
(3.8)
40.3
23.6
8.4
(3.8)
28.2
12.1
During the financial year ended 31 March 2023, the Group recognised an expense of £0.5m (2022: £0.6m) in respect of research and
development expenditure.
ICG | ANNUAL REPORT & ACCOUNTS 2023
175
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. Lease payments on short-term leases and leases of low-value assets
are recognised as administrative expenses on a straight line basis over the lease term.
Group
Cost
At 1 April
Additions
Disposals
Exchange differences
At 31 March
Depreciation
At 1 April
Charge for the year
Disposals
At 31 March
Net book value
Company
Cost
At 1 April
Additions
Disposals
At 31 March
Depreciation
At 1 April
Charge for the year
Disposals
At 31 March
Net book value
Furniture and equipment
ROU asset
Leasehold improvements
Total
2023
£m
4.5
3.1
(0.4)
0.3
7.5
2.9
1.4
(0.1)
4.2
3.3
2022
£m
3.8
0.6
—
0.1
4.5
1.6
1.2
0.1
2.9
1.6
2023
£m
67.7
33.8
(11.7)
0.2
90.0
18.2
9.1
(10.5)
16.8
73.2
2022
£m
73.0
2.4
(7.7)
—
67.7
17.7
7.3
(6.8)
18.2
49.5
2023
£m
11.3
3.4
—
—
14.7
2.0
1.0
—
3.0
11.7
2022
£m
10.6
0.7
—
—
11.3
1.1
0.9
—
2.0
9.3
Furniture and equipment
ROU asset
Leasehold improvements
2023
£m
2022
£m
2.8
0.3
—
3.1
1.6
0.8
—
2.4
0.7
2.6
0.2
—
2.8
0.6
1.0
—
1.6
1.2
2023
£m
50.1
—
(2.6)
47.5
9.8
4.0
(1.6)
12.2
35.3
2022
£m
50.9
1.3
(2.1)
50.1
5.2
6.5
(1.9)
9.8
40.3
2023
£m
2022
£m
9.5
0.4
—
9.9
1.1
0.8
—
1.9
8.0
8.9
0.6
—
9.5
0.3
0.8
—
1.1
8.4
2023
£m
83.5
40.3
(12.1)
0.5
112.2
23.1
11.5
(10.6)
24.0
88.2
Total
2023
£m
62.4
0.7
(2.6)
60.5
12.5
5.6
(1.6)
16.5
44.0
2022
£m
87.4
3.7
(7.7)
0.1
83.5
20.4
9.4
(6.7)
23.1
60.4
2022
£m
62.4
2.1
(2.1)
62.4
6.1
8.3
(1.9)
12.5
49.9
176 ICG | ANNUAL REPORT & ACCOUNTS 2023
18. Property, plant and equipment continued
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 £0.4m (2022: £0.3m). 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
2023
£m
0.4
0.8
1.2
20221
£m
0.4
1.1
1.5
1. The prior year figures have been re-presented to £0.4m receivable within one year, £1.1m receivable from one to five years.
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
Fair value loss
At 31 March
2023
£m
1.5
(0.7)
0.8
2022
£m
1.8
(0.3)
1.5
During the year, the Group held £284.0m (2022: £59.3m) of investment property within disposal groups held for sale (see note 29).
ICG | ANNUAL REPORT & ACCOUNTS 2023
177
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
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 trade and other receivables
Non-current assets
Trade and other receivables excluding structured entities controlled by the Group
Amounts owed by Group companies
Total non-current trade and other receivables
Group
Company
2023
£m
43.7
178.3
—
10.0
232.0
37.1
—
37.1
2022
£m
125.3
155.0
—
2.8
283.1
91.1
—
91.1
2023
£m
—
33.2
169.2
8.1
210.5
7.6
758.7
766.3
2022
£m
—
6.9
199.4
4.9
211.2
7.4
566.7
574.1
Non-current trade and other receivables excluding structured entities controlled by the Group comprises performance-related fees (see
note 3).
178 ICG | ANNUAL REPORT & ACCOUNTS 2023
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.
Key sources of estimation uncertainty on trade and other payables excluding structured entities controlled by the Group.
Payables related to the DVB scheme (see note 13 ) are critical estimates based on the expected realisation proceeds; expected timing of
realisations; and allocations of DVB to executives.
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 trade and other payables
Non-current liabilities
Trade and other payables excluding structured entities controlled by the Group
Total non-current trade and other payables
Group
Company
2023
£m
328.1
140.2
—
3.1
471.4
71.1
71.1
2022
£m
293.4
138.7
—
2.3
434.4
76.4
76.4
2023
£m
—
121.2
1,035.0
2.5
1,158.7
71.3
71.3
2022
£m
—
114.2
1,038.6
2.7
1,155.5
76.4
76.4
Current trade and other payables excluding structured entities controlled by the Group includes £31.4m (2022: £69.4m) in respect of
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 (2022: all 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 69. 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 £56.5m (2022: £55.5m) and to a decrease is
£(56.5)m (2022: £(55.5)m). The sensitivity of financial liabilities to a 100 basis point interest rate increase is £47.1m (2022: £46.0m) and
to a decrease is £(47.1)m (2022: £(46.0)m). These amounts would be reported within Net gains on investments. 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.
ICG | ANNUAL REPORT & ACCOUNTS 2023
179
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
22. Financial risk management continued
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
744.4
4,901.1
2023
Fixed
£m
3,049.1
253.9
Total
£m
3,793.5
5,155.0
Floating1
£m
995.2
4,599.7
2022
Fixed1
£m
2,719.1
479.5
—
(1,929.2)
(1,929.2)
—
(1,892.1)
Borrowings and loans held in consolidated entities
(4,706.6)
(371.5)
(5,078.1)
(4,604.1)
(374.5)
938.9
1,002.3
1,941.2
990.8
932.0
Total
£m
3,714.3
5,079.2
(1,892.1)
(4,978.6)
1,922.8
1. The prior year has been re-presented, the Group previously reported £889.6m of floating rate financial assets and £2,824.7m of fixed rate financial assets, an increase of
£105.6m and a decrease of £105.6m respectively.
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.
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 a strengthening of foreign currencies against sterling 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
Net exposure
Sensitivity to
strengthening
Increase in net
assets
2023
£m
726.8
552.0
564.5
195.6
2,038.9
£m
772.7
(259.3)
(324.9)
(182.2)
6.3
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)
£m
1,499.5
292.7
239.6
13.4
2,045.2
2022
Net exposure
£m
1,746.0
93.8
75.9
7.1
1,922.8
%
15 %
20 %
10-25%
—
£m
—
43.9
47.9
—
91.8
Sensitivity to
strengthening
Increase in net
assets
%
—
15 %
20 %
10-25%
—
£m
—
14.1
15.2
—
29.3
The weakening of the above currencies would have resulted in an equal but opposite impact, being a decrease in net assets.
180 ICG | ANNUAL REPORT & ACCOUNTS 2023
22. Financial risk management continued
Liquidity risk
The Group makes commitments to its managed funds in advance of that capital being invested. These commitments are typically drawn
over a five-year investment period (see note 26 for outstanding commitments). Funds typically have a 10-year contractual life. 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 2023. It is assumed that Group borrowings under its senior debt facilities remain at the same level as at 31 March 2023
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 2023
Financial liabilities
Private placements
Listed notes and bonds
Debt issued by controlled structured entities
Derivative financial instruments
Other financial liabilities
Other financial liabilities are lease liabilities.
As at 31 March 2022
Financial liabilities
Private placements
Listed notes and bonds
Debt issued by controlled structured entities
Derivative financial instruments
Other financial liabilities1
Contractual maturity analysis
Less than one year
One to two years
Two to five years
More than five
years
£m
£m
£m
£m
78.2
18.1
176.3
(1.6)
8.5
279.5
273.5
18.1
204.6
(3.1)
11.3
504.4
282.2
486.8
2,430.4
(4.4)
32.0
106.7
461.5
3,748.0
0.0
46.1
3,227.0
4,362.3
8,373.2
Less than one year
One to two years
Two to five years More than five years
£m
£m
£m
£m
Contractual maturity analysis
59.1
185.4
499.9
22.1
8.4
774.9
76.1
17.4
79.7
(2.5)
7.8
178.5
519.2
473.1
239.2
(4.7)
21.4
105.3
452.6
4,656.5
0.0
28.9
1,248.2
5,243.3
7,445.0
Total
£m
740.6
984.5
6,559.3
(9.1)
97.9
Total
£m
759.8
1,128.4
5,475.3
14.9
66.5
As at 31 March 2023 the Group has liquidity of £1,099.9m (2022: £1,311.5m) which consists of undrawn debt facility of £550m (2022:
£550m) and £549.9m (2022: £761.5m) of unencumbered cash. Unencumbered cash excludes £407.6m (2022: £230.3m) of restricted
cash held principally by structured entities controlled by the Group.
1. Disclosure now includes liquidity profile of Other Financial Liabilities and the prior year has been re-presented accordingly.
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 reported at fair value.
ICG | ANNUAL REPORT & ACCOUNTS 2023
181
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
22. Financial risk management continued
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
2023
£m
267.3
2,153.4
113.3
4,669.1
22.0
5.8
7,230.9
2022
£m
225.0
2,122.7
114.7
4,612.6
138.6
2.2
7,215.8
Company
2023
£m
86.1
178.8
23.8
—
22.0
—
310.7
2022
£m
171.6
271.4
0.2
—
40.0
—
483.2
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 majority of the Group’s surplus cash is held in AAA-rated Money
Market funds. Other credit exposures arise from outstanding derivatives with financial institutions rated from BBB to AA-.
The Group is exposed to credit risk as a result of financing guarantees provided. The maximum exposure to guarantees is £7.9m (2022:
£7.4m). 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 2023 was £339.4m (2022: £426.0m).
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.
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 2022.
(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 146). The full Pillar 3 disclosures are available on the Group’s website: www.icgam.com.
(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 66. The capital structure of the Group under UK-adopted IAS consists of cash and cash equivalents, £957.5m (2022:
£991.8m) (see note 6); debt, which includes borrowings, £1,536.7m, (2022: £1,653.4m) (see note 7) and 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, £825.8m
(2022 : £943.9m). Details of the Reportable segment capital structure are set out in note 4.
182 ICG | ANNUAL REPORT & ACCOUNTS 2023
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.
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.
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 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 294,332,182
authorised shares (2022: 294,285,804)
Group and Company
1 April 2022
Shares issued
31 March 2023
Group and Company
1 April 2021
Shares issued
31 March 2022
Number of ordinary
shares of 26¼p allotted,
called up and fully paid
294,285,804
46,378.0
294,332,182
Number of ordinary
shares of 26¼p allotted,
called up and fully paid
294,276,532
9,272
294,285,804
Share Capital
£m
Share Premium
£m
77.3
—
77.3
180.3
0.6
180.9
Share Capital
£m
Share Premium
£m
77.2
0.1
77.3
180.2
0.1
180.3
ICG | ANNUAL REPORT & ACCOUNTS 2023
183
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
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:
1 April
Purchased (ordinary shares of 26¼p)
Options/awards exercised
As at 31 March
2023
£m
93.0
38.9
(28.5)
103.4
2022
£m
82.2
20.9
2023
Number
7,734,849
3,000,000
2022
Number
8,389,246
1,000,000
(10.1)
(1,484,954)
(1,654,397)
93.0
9,249,895
7,734,849
Of the total shares held by the Group, 3,733,333 shares were held by the Company in the Own Share Reserve at 31 March 2023 and 31
March 2022 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 3.1% (2022: 2.6%) of the Parent Company’s allotted, called
up and fully paid share capital.
25. Share-based payments
Accounting policy
The Group issues compensation to its employees under both equity-settled and cash-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 £39.5m (2022: £29.6m) 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 three different award types: Deferred Share Awards, PLC Equity Awards and Special Recognition 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 typically 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 typically 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.
184 ICG | ANNUAL REPORT & ACCOUNTS 2023
25. Share-based payments continued
Special Recognition Awards
Awards are made after the end of the financial year to reward employees for delivering cash profits, managing the cost base, and
employing sound risk and business management. These share awards vest at the end of the first year 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
Special Recognition Awards
Outstanding as at 1 April
Granted
Vesting
Outstanding as at 31 March
Number
2023
2,470,280
1,811,061
2022
2,958,483
1,048,813
(1,316,825)
(1,537,016)
2,964,516
2,470,280
Number
2023
2,139,210
777,577
2022
2,680,734
374,477
(774,535)
(916,001)
2,142,252
2,139,210
Weighted average fair value
2023
16.52
14.27
15.00
15.75
Weighted average fair value
2023
10.33
14.27
9.84
12.21
2022
12.47
21.63
12.21
16.52
2022
10.22
21.63
8.12
10.33
Number
Weighted average fair value
2023
—
46,154
—
46,154
2022
—
—
—
—
2023
0.00
14.27
0.00
14.27
2022
—
—
—
—
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.
Intermediate Capital Group plc Buy Out Awards
Buy Out Awards are shares awarded to new employees in lieu of prior awards forfeited. 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
2023
155,940
1,294,801
2022
245,423
33,965
(366,768)
(123,448)
1,083,973
155,940
Weighted average fair value
2023
12.85
12.68
13.35
12.96
2022
12.06
13.85
10.67
12.85
The fair values of the Buy Out Awards granted are determined by the average share price for the five business days prior to grant.
ICG | ANNUAL REPORT & ACCOUNTS 2023
185
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
25. Share-based payments continued
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 £210,031 (2022: £187,660).
Save As You Earn
Outstanding as at 1 April
Granted
Vesting
Forfeited
Outstanding as at 31 March
Number
Weighted average fair value
2023
199,737
—
(46,378)
(49,541)
103,818
2022
137,395
96,136
(9,272)
(24,522)
199,737
2023
4.54
—
3.26
4.30
5.00
2022
3.19
5.95
2.27
3.35
4.54
Growth Incentive Award
The Growth Incentive Award ('GIA’) is a market-value share option. Grants of options are made following the end of the financial year to
reward employees for performance and to enhance alignment of interests. The GIA is a right to acquire shares during the exercise period
(seven years following the vesting date) for a price equal to the market value of those shares on the grant date. These options vest at the
end of the third year following the year of grant, unless the individual leaves for cause or to join a competitor. Awards are based on
performance against the individual’s objectives. .
Growth Incentive Award
Outstanding as at 1 April
Granted
Vesting
Forfeited
Outstanding as at 31 March
Number
2023
—
463,000
—
—
463,000
2022
—
—
—
—
—
Weighted average fair value
2023
—
3.13
—
—
3.13
2022
—
—
—
—
—
186 ICG | ANNUAL REPORT & ACCOUNTS 2023
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
(typically over five years). Commitments may increase where distributions made are recallable. Commitments are irrevocable. 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
LP Secondaries
ICG Senior Debt Partners II
ICG Senior Debt Partners III
ICG Senior Debt Partners IV
Senior Debt Partners V
ICG North American Private Debt Fund
ICG North American Private Debt Fund II
ICG North American Credit Partners III
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 Living
ICG Private Markets Pooling - Sale and Leaseback
ICG Sale & Leaseback II
2023
£m
29.9
82.0
111.7
185.5
25.1
45.4
93.5
—
33.1
72.3
38.8
34.3
47.4
3.8
5.8
7.3
42.3
27.5
27.9
38.1
0.2
13.9
6.8
59.8
21.8
35.9
17.0
1,107.1
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
15.3
—
30.4
46.3
—
6.0
6.0
4.6
128.8
—
22.7
—
948.7
ICG | ANNUAL REPORT & ACCOUNTS 2023
187
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 any 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 financial statements and are
eliminated on consolidation. Significant transactions with subsidiary undertakings relate to dividends received, the aggregate amount
received during the year is £386.6m (2022: £163.0m) and recharge of costs to a subsidiary of £168.5m (2022: £166.7m)
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 losses on investments
Statement of financial position
Trade and other receivables
Trade and other payables
2023
£m
(17.2)
(17.2)
2023
£m
66.8
(52.3)
14.5
2022
£m
(15.8)
(15.8)
2022
£m
119.5
(60.4)
59.1
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 2023, the Group’s
interest in and exposure to unconsolidated structured entities are as follows:
Income statement
Management fees
Performance fees
Dividend income
Statement of financial position
Performance fees receivable
Trade and other receivables
Trade and other payables
188 ICG | ANNUAL REPORT & ACCOUNTS 2023
2023
£m
473.5
19.4
0.1
493.0
2023
£m
37.5
781.9
(718.3)
101.1
2022
£m
382.2
55.4
3.4
441.0
2022
£m
91.0
680.6
(621.1)
150.5
27. Related party transactions continued
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
William Rucker
2023
£m
3.7
0.1
0.9
7.0
11.7
2023
£000
290.5
125.0
134.5
—
116.5
113.9
108.5
90.5
120.5
63.9
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
—
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 97.
ICG | ANNUAL REPORT & ACCOUNTS 2023
189
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 ’Other information’).
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 2023 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.
190 ICG | ANNUAL REPORT & ACCOUNTS 2023
28. Subsidiaries continued
Directly held subsidiaries
Name
ICG Carbon Funding Limited
Ref
Country of incorporation
Principal activity
Share class
England & Wales
Investment company
Ordinary shares
ICG Debt Advisors (Cayman) Ltd
4
Cayman Islands
Advisory company
ICG FMC Limited
ICG Global Investment UK Limited
ICG IC Holdco Limited
ICG Japan (Funding 2) Limited
England & Wales
Holding company
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
England & Wales
Holding company
ICG Longbow Senior Debt I GP Limited
England & Wales
General partner
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
ICG Re Holding (Germany) GmbH
ICG Watch Jersey GP Limited
ICG-Longbow BTR Limited
11
19
Germany
Jersey
England & Wales
Holding company
General partner
Special purpose vehicle
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Intermediate Capital Group Espana SL
33
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
19
Jersey
Investment company
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 2023
191
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
28. Subsidiaries continued
Indirectly held subsidiaries
Name
Avanton Richmond Developments Limited
ICG - Longbow Fund V GP S.à r.l.
ICG (DIFC) Limited
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 Australian 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 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 Mid-Market Fund II 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
192 ICG | ANNUAL REPORT & ACCOUNTS 2023
Ref
7
26
35
5
19
25
38
38
30
19
19
27
27
37
5
5
18
38
38
38
18
12
19
18
18
18
18
20
28
28
29
29
28
28
29
23
28
28
19
29
29
19
38
Country of incorporation
Principal activity
Share class
England and Wales
Special purpose vehicle
Ordinary shares
General Partner
Ordinary shares
Cayman Islands
Limited Partner
N/A
Cayman Islands
General Partner
Investment company
Ordinary shares
Luxembourg
United Arab
Emirates
Service company
Cayman Islands
General Partner
Jersey
Luxembourg
United States
United States
Netherlands
General Partner
General Partner
Advisory company
General Partner
Advisory company
England and Wales
Advisory company
Jersey
Jersey
Luxembourg
Luxembourg
General Partner
Limited Partner
Limited Partner
General Partner
United States
General Partner
Jersey
United States
United States
United States
General Partner
Service company
Advisory company
England and Wales
General Partner
Jersey
Guernsey
Jersey
General Partner
N/A
General Partner
England and Wales
General Partner
Jersey
Jersey
Jersey
Jersey
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Jersey
Luxembourg
Luxembourg
Jersey
General Partner
Limited Partner
General Partner
Limited Partner
General Partner
Limited Partner
General Partner
Limited Partner
General Partner
Limited Partner
General Partner
General Partner
Advisory company
Limited Partner
General Partner
General Partner
Limited Partner
General Partner
Service company
United States
Advisory company
% Voting rights
held
70 %
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 %
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
N/A
N/A
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
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
Ordinary shares
N/A
Ordinary shares
Ordinary shares
N/A
Ordinary shares
Ordinary shares
Ordinary shares
Name
ICG Global Investment Jersey Limited
ICG Global Nominee Jersey 2 Limited
ICG Global Nominee Jersey Limited
ICG Infrastructure Equity Fund I GP LP SCSp
ICG Infrastructure Equity Fund I GP S.a.r.l
ICG Infrastructure Fund II GP S.à r.l
ICG Japan Cayman Performance GP Limited
ICG Japan KK
ICG Life Sciences GP LP SCSp
ICG Life Sciences GP S.à r.l.
ICG Living GP S.a r.l.
ICG Longbow Development Debt Limited
ICG LP Secondaries Associates I LLC
ICG LP Secondaries Fund Associates I S.a. r.l.
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 III LLC
ICG North America Associates LLC
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 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 LTD
ICG RE CAPITAL PARTNERS AUSTRALIA PTY LTD
ICG RE CORPORATE AUSTRALIA PTY LTD
Ref
18
18
18
29
29
29
5
16
27
27
22
37
29
29
34
38
38
38
5
38
5
38
36
28
27
27
3
3
3
ICG RE FUNDS MANAGEMENT AUSTRALIA PTY LTD 3
ICG Real Estate Debt VI GP LP SCSp
ICG Real Estate Debt VI GP S.à r.l.
ICG REO GP S.à r.l.
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 SDP LG
ICG Senior Debt Partners
ICG Senior Debt Partners GP S.à r.l.
ICG Senior Debt Partners Performance GP Limited
22
22
22
27
19
29
29
28
28
21
19
Country of incorporation
Principal activity
Share class
% Voting rights
held
Investment company
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Jersey
Jersey
Jersey
Luxembourg
Luxembourg
Luxembourg
Limited Partner
General Partner
General Partner
Cayman Islands
General Partner
Japan
Luxembourg
Luxembourg
Luxembourg
Advisory company
Limited Partner
General Partner
General Partner
N/A
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
N/A
Ordinary shares
Ordinary shares
England and Wales
Investment company
Ordinary shares
United States
General Partner
Luxembourg
Luxembourg
General Partner
Limited Partner
England and Wales
General Partner
England and Wales
General Partner
England and Wales
General Partner
England and Wales
General Partner
Ordinary shares
Ordinary shares
N/A
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
England and Wales
Investment company
Ordinary shares
Sweden
United States
United States
United States
Advisory company
General Partner
General Partner
General Partner
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Cayman Islands
Limited Partner
United States
Limited Partner
Cayman Islands
Limited Partner
United States
United States
Luxembourg
Luxembourg
Luxembourg
Australia
Australia
Australia
Australia
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Jersey
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Jersey
Limited Partner
Limited Partner
General Partner
General Partner
General Partner
Service company
Advisory company
Service company
Service company
Limited Partner
General Partner
General Partner
General Partner
General Partner
Limited Partner
General Partner
General Partner
General Partner
General Partner
General Partner
N/A
N/A
N/A
N/A
N/A
Ordinary shares
N/A
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
N/A
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
N/A
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
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 %
100 %
ICG | ANNUAL REPORT & ACCOUNTS 2023
193
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
Name
Ref
Country of incorporation
Principal activity
Share class
% Voting rights
held
ICG Senior Debt Partners UK GP Limited
England and Wales
General Partner
ICG SLB GP II S.À R.L
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 (Offshore) GP LP
ICG Strategic Secondaries Carbon Associates LLC
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-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
22
38
37
37
37
29
5
37
37
29
37
5
37
5
5
38
5
37
5
24
5
5
37
37
37
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
Intermediate Capital Group Dienstleistungsgesellschaft
mbH
Intermediate Capital Group Inc.
19
13
19
19
1
19
19
15
32
30
11
11
38
194 ICG | ANNUAL REPORT & ACCOUNTS 2023
Luxembourg
United States
United States
United States
United States
Luxembourg
General Partner
Advisory company
General Partner
General Partner
General Partner
General Partner
Cayman Islands
Limited Partner
United States
United States
Luxembourg
United States
Limited Partner
Limited Partner
Limited Partner
Limited Partner
Cayman Islands
Limited Partner
United States
Limited Partner
Cayman Islands
Limited Partner
Cayman Islands
Limited Partner
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
N/A
United States
General Partner
Ordinary shares
Cayman Islands
Limited Partner
United States
Limited Partner
Cayman Islands
General Partner
Luxembourg
General Partner
Cayman Islands
General Partner
N/A
N/A
Ordinary shares
Ordinary shares
Ordinary shares
Cayman Islands
Limited Partner
N/A
United States
United States
United States
General Partner
Limited Partner
Limited Partner
England and Wales
Investment company
England and Wales
General Partner
England and Wales
Special purpose vehicle
Ordinary shares
N/A
N/A
N/A
N/A
N/A
England and Wales
General Partner
N/A
Jersey
Hong Kong
General Partner
Advisory company
Ordinary shares
Ordinary shares
Jersey
General Partner
Ordinary shares
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
Germany
Advisory company
Ordinary shares
Germany
Service company
United States
Advisory company
Ordinary shares
Ordinary shares
20
Luxembourg
General Partner
Ordinary shares
100 %
100 %
100 %
100 %
100 %
100 %
100 %
— %
— %
— %
— %
— %
— %
— %
— %
— %
100 %
— %
— %
100 %
100 %
100 %
— %
100 %
— %
— %
50 %
— %
— %
100 %
— %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
Country of incorporation
Principal activity
Share class
% Voting rights
held
Name
Intermediate Capital Group Polska Sp. z.o.o
Intermediate Capital Group SAS
Intermediate Capital Inc
Ref
31
9
38
Poland
France
Service company
Advisory company
United States
Dormant
Intermediate Capital Managers (Australia) PTY Limited 2
Australia
Advisory company
Intermediate Capital Managers Limited
England and Wales
Advisory company
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Longbow Real Estate Capital LLP
Wise Living Homes Limited
Wise Limited Amber Langley Mill Limited
ICG Strategic Equity GP V Sarl
ICG Life Sciences Debt Limited
ICG Life Sciences Feeder SCSp
ICG Life Sciences SCSp
ICG North American Private Equity Associates I LLC
ICG North American Private Equity Debt Limited
ICG North American Private Equity Fund I LP
Seaway Buyer, LLC
Seaway Parent, LLC
Seaway Plastics Engineering, LLC
Seaway Plastics Holdings, LLC
Seaway Topco, LP
Seaway, Guarantor, LLC
Sertic Deal Co S.à.r.l.
Sertic Mezz Co S.à.r.l.
Wright Engineered Plastics LLC
Wright Plastics Holdings, Inc.
ICG REO (EUR) SCSp
AG Thames Investment Limited
Chessington Propco Limited
Crayford Holdco Limited
Crayford Limited
Harlow Holdco Limited
Harlow Propco Limited
ICG Metropolitan Co-invest SCSp
ICG Metropolitan Last Mile Management Limited
ICG Real Estate E Debt Limited
Metropolitan Investment S.à r.l.
Metropolitan SCSp
MME Group International IC-DISC, Inc.
MME Group LLC
New Orbit Holdco Sarl
New Orbit JVCo Sarl
New Orbit PropCo 1 Sarl
New Orbit PropCo 2 Sarl
Sertic Agen SCI
Sertic Alfortville SCI
Sertic Auray SCI
Sertic Cestas SCI
Sertic Coignieres SCI
Sertic Corbas SCI
Sertic Croissy SCI
England and Wales
Advisory company
N/A
England and Wales
Special purpose vehicle
Ordinary shares
England and Wales
Special purpose vehicle
Ordinary shares
Luxembourg
General Partner
Ordinary shares
Jersey
Luxembourg
Luxembourg
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Limited Partner
N/A
N/A
United States
General Partner
Ordinary shares
Jersey
United States
United States
United States
United States
United States
United States
United States
Luxembourg
Luxembourg
United States
United States
Luxembourg
Special purpose vehicle
Ordinary shares
Special purpose vehicle
N/A
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
N/A
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Portfolio Company
Portfolio Company
Ordinary shares
Ordinary shares
Special purpose vehicle
N/A
England and Wales
Special purpose vehicle
Ordinary shares
Jersey
Jersey
Jersey
Jersey
Jersey
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Luxembourg
Special purpose vehicle
N/A
Jersey
Jersey
Luxembourg
Luxembourg
United States
United States
Luxembourg
Luxembourg
Luxembourg
Luxembourg
France
France
France
France
France
France
France
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
N/A
Portfolio Company
Portfolio Company
Ordinary shares
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
6
6
29
19
27
27
36
19
36
38
38
38
38
38
38
22
22
38
38
22
8
17
17
17
17
17
22
17
19
22
22
38
38
22
22
22
22
10
10
10
10
10
10
10
100 %
100 %
100 %
100 %
100 %
— %
83 %
83 %
100 %
100 %
— %
— %
100 %
100 %
— %
73 %
73 %
73 %
73 %
— %
73 %
100 %
100 %
73 %
73 %
— %
100 %
100 %
100 %
100 %
100 %
100 %
— %
100 %
100 %
100 %
— %
73 %
73 %
80 %
80 %
80 %
80 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
ICG | ANNUAL REPORT & ACCOUNTS 2023
195
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
Name
Sertic Démouville SCI
Sertic Drancy SCI
Sertic Fleury SCI
Sertic French Mid Co 1 SNC
Sertic French Mid Co II SNC
Sertic French Mid Co III SNC
Sertic La Chapelle SCI
Sertic Lanester SCI
Sertic Le Meux SCI
Sertic Le Rheu SCI
Sertic Lisses SCI
Sertic Osny SCI
Sertic Perpignan SCI
Sertic Pontault Combault SCI
Sertic Raismes SCI
Sertic Saint Laurent SCI
Sertic Saint Pierre SCI
Sertic Saint-Mitre SCI
Sertic Scherwiller SCI
Sertic Valenton SCI
Sertic Vemars SCI
ICG Seed Asset Founder LP Limited
Ref
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
19
Country of incorporation
Principal activity
Share class
% Voting rights
held
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
Jersey
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
Ordinary shares
Special purpose vehicle
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 %
196 ICG | ANNUAL REPORT & ACCOUNTS 2023
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
Level 18, 88 Phillip Street, Sydney, NSW 2000, Australia
Level 31, 88 Phillip Street, Sydney, NSW 2000, Australia
Level 9, 88 Phillip Street, Sydney, NSW 2000, Australia
75 Fort Street, Clifton House, c/o Estera Trust (Cayman) Limited, PO Box 1350, Grand Cayman, KY1-1108, Cayman Islands
PO Box 309, Ugland House, C/o Maples Corporate Services Limited, Grand Cayman, KY1-1104, Cayman Islands
17 Regan Way, Chetwynd Business Park, Chilwell, Nottingham, NG9 6RZ, England & Wales
Ground Floor Office South, 51 Welbeck St, London, W1G 9HL, England, United Kingdom
6th Floor 140 London Wall, London, England, EC2Y 5DN
1 rue de la Paix, Paris, 75002, France
36 rue Scheffer 75116 Paris 16 France
12th Floor, An der Welle 5, Frankfurt, 60322, Germany
c/o Zedra Trust Company (Guernsey) Limited, 3rd Floor, Cambridge House, Le Truchot, St Peter Port, GY1 1WD, Guernsey
Suites 1301-02, 13/F, AIA Central, 1 Connaught Road Central, Hong Kong
6th Floor South Bank House, Barrow Street, Dublin 4, Ireland
Corso Giacomo Matteotti 3, Milan, 20121, Italy
Level 23, Otemachi Nomura Building, 2-1-1 Otemachi, Chiyoda-ku, Tokyo, 100-0004, Japan
12 Castle Street, St. Helier, JE2 3RT, Jersey
IFC 1, The Esplanade, St. Helier, JE1 4BP, Jersey
Ogier House,44 The Esplanade, St. Helier, JE4 9WG, Jersey
12E, rue Guillaume Kroll, L - 1882 Luxembourg
2-4 Rue Eugène Ruppert, Grand Duchy of Luxembourg, L-2453, Luxembourg
3, rue Gabriel Lippmann, L - 5365 Munsbach, Luxembourg
32-36, boulevard d'Avranches L - 1160 Luxembourg, 1160, Luxembourg
49 Avenue John F. Kennedy, Luxembourg, L-1855, Luxembourg
5 Allée Scheffer, Luxembourg, L-2520, Luxembourg
5, Heienhaff, L - 1736 Senningerberg, Luxembourg
6, rue Eugene Ruppert, Luxembourg, L-2453, Luxembourg
60, Avenue J.F. Kennedy, Luxembourg, L-1855, Luxembourg
6H Route de Trèves, Senningerberg, L-2633, Luxembourg
Paulus Potterstraat 20, 2hg., Amsterdam, 1071 DA, Netherlands
Spark B, Aleja Solidarności 171, Warsaw, 00-877, Poland
#21-01, 20 Collyer Quay, 049319, Singapore
Serrano 30-3º, 28001 Madrid, Spain
David Bagares Gata 3, 111 38 Stockholm
Index Tower, Floor 4, Unit 404, Dubai International Financial Centre, Dubai, United Arab Emirates
c/o Intertrust Corporate Services Delaware LTD, Suite 210, 200 Bellevue Parkway, Wilmington, DE, 19809, United States
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
ICG | ANNUAL REPORT & ACCOUNTS 2023
197
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
28. Subsidiaries continued
The table below shows details of structured entities that the Group is deemed to control:
Name of subsidiary
Country of incorporation
% of ownership interests and voting rights
ICG Newground RE Finance Trust 1
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 Euro CLO 2023-1 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
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
100 %
50 %
72 %
51 %
50 %
83 %
63 %
60 %
52 %
100 %
67 %
100 %
100 %
85 %
62 %
53 %
53 %
57 %
100 %
50 %
100 %
The structured entities controlled by the Group include £5,160.8m (2022: £5,057.2m) of assets and £5,109.2m (2022: £4,992.8m) of
liabilities within 21 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.
198 ICG | ANNUAL REPORT & ACCOUNTS 2023
28. Subsidiaries continued
Subsidiary audit exemption
For the period ended 31 March 2023, the following companies were entitled to exemption from audit under section 479A of the
Companies Act 2006 relating to subsidiary companies. The member(s)1 of the following companies have not required them to obtain an
audit of their financial statements for the period ended 31 March 2023.
Company
ICG FMC Limited
ICG Global Investment UK Limited
ICG Japan (Funding 2) Limited
ICG Longbow Development (Brighton) Limited
ICG Longbow Richmond Limited
ICG Longbow BTR Limited
ICG Longbow Senior Debt I GP Limited
Intermediate Capital Investments Limited
LREC Partners Investments No. 2 Limited
ICG Longbow Development Debt Limited
Longbow Real Estate Capital LLP
ICG IC Holdco Limited
ICG NA Debt Co-invest Limited
ICG-Longbow Development GP LLP
ICG-Longbow Investment 3 LLP
ICG-Longbow Senior GP LLP
1. Shareholders or Partners, as appropriate
Registered number
Member(s)
7266173
7647419
9125779
8802752
11210259
11177993
2276839
2327070
7428335
9907841
OC328457
14542130
10091367
OC396833
OC395389
OC427634
Intermediate Capital Group plc
Intermediate Capital Group plc
Intermediate Capital Group plc
Intermediate Capital Group plc
Intermediate Capital Group plc
Intermediate Capital Group plc
Intermediate Capital Group plc
Intermediate Capital Group plc
Intermediate Capital Group plc
ICG-Longbow Development GP LLP
Intermediate Capital Group plc, ICG FMC Limited
Intermediate Capital Group plc
ICG Carbon Funding Limited
Intermediate Capital Group plc, ICG FMC Limited
ICG FMC Limited, Intermediate Capital Managers Limited
Intermediate Capital Group plc, ICG FMC Limited
ICG | ANNUAL REPORT & ACCOUNTS 2023
199
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
29. Disposal groups held for sale and discontinued operations
Accounting policy
Non-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 for 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.
The Group holds interests in various disposal groups held for sale assets (“Warehouse Funds”), of which some have subsidiaries which
were acquired with a view to resale and are expected to be sold. These subsidiaries are therefore assessed as discontinued operations.
Financial year ended 31 March 2023
During the year the Group has acquired interests in disposal groups held for sale assets and discontinued operations. Other than as
described below, all interests have been acquired at fair value and therefore no loss or gain has been recognised on acquisition.
Management have assessed that it is highly probable that all investments reported within disposal groups held for sale and discontinued
operations will be realised within 12 months.
During the year, one of the Group’s Warehouse Funds, the US Mid-Market (“USMM”) Warehouse Fund, ceased to control its subsidiary
Ambient Enterprises LLC (“Ambient” – formerly Gil-bar Parent LLC) and subsequently retained a financial asset in respect of its
investment in Ambient. The Group recognised a profit of £3.5m relating to Ambient over the period of control. Ambient was deemed a
discontinued operation until the USMM Warehouse Fund ceased control.
As part of the cessation of control, the USMM Warehouse Fund has valued its investment in Ambient in accordance with IFRS 9,
applying IPEV guidelines, and this has resulted in the Group recognising a post-tax gain of £64m, comprising £3.5m gain on disposal and
£60.5m net fair value gain, which is recorded in the Consolidated entities segments of our Consolidated income statement, within ‘Profit
after tax on discontinued operations’ (see note 4).
In the next 12 months, Management intends to sell the Group’s interest in the USMM Warehouse Fund to third-party investors
investing into the fund. The Group has a debt interest in the USMM Warehouse Fund and expects to sell its interest in the fund at cost
plus an interest charge, where cost represents the original cost of the USMM Warehouse Funds’ investments. As a result, the Group
expects to receive less than the current fair value of Ambient recognised in the USMM Warehouse Fund and consequently, under APM,
the Group has not recognised the fair value gain reported under UK-adopted IAS. This is therefore not included within the Group’s
Reportable segment (see note 4).
200 ICG | ANNUAL REPORT & ACCOUNTS 2023
29. Disposal groups held for sale and discontinued operations continued
The assets and liabilities of the discontinued operations and disposal groups held for sale together with their contribution to the Group’s
profit after tax are as follows:
Group
Non-current assets
Intangible assets
Property, plant and equipment
Investment property
Financial assets at fair value
Other debtors
Current assets
Inventory
Cash
Trade and other receivables
Other debtors
Non-current liabilities
Financial liabilities at amortised cost
Deferred tax liability
Other financial liabilities
Current liabilities
Trade and other payables
Other financial liabilities
Statement of comprehensive income
Sales
Cost of sales
Gross profit
Net gains on investments
Operating expenses
Depreciation and amortisation
Other expenses
Transaction costs
Gain / (loss) before tax
Tax expense
Gain / (loss) after tax
Discontinued
Operations
£m
92.4
7.2
284.0
0.9
0.3
384.8
12.3
5.5
12.2
1.2
31.2
174.8
—
3.0
177.8
6.1
6.1
12.2
69.2
(55.6)
13.6
78.0
(8.6)
—
(12.2)
—
70.8
(14.0)
56.8
2023
Disposal
Groups
£m
—
—
—
162.3
—
162.3
—
—
—
—
—
—
14.0
—
14.0
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Total
£m
92.4
7.2
284.0
163.2
0.3
547.1
12.3
5.5
12.2
1.2
31.2
174.8
14.0
3.0
191.8
6.1
6.1
12.2
69.2
(55.6)
13.6
78.0
(8.6)
—
(12.2)
—
70.8
(14.0)
56.8
Discontinued
Operations
£m
101.0
0.3
—
—
—
101.3
0.8
5.4
47.1
0.2
53.5
65.8
—
(9.7)
56.1
35.8
—
35.8
122.8
(88.2)
34.6
—
(22.9)
(6.6)
(10.5)
(3.8)
(9.2)
—
(9.2)
2022
Disposal
Groups
£m
—
—
59.3
36.9
—
96.2
—
5.7
—
—
5.7
5.0
—
—
5.0
0.2
0.1
0.3
—
—
—
—
—
—
—
—
—
—
—
Total
£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)
34.6
—
(22.9)
(6.6)
(10.5)
(3.8)
(9.2)
—
(9.2)
ICG | ANNUAL REPORT & ACCOUNTS 2023
201
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
Ambient Enterprises LLC4
Principal activity
Country of incorporation
Investment company
Investment company
Jersey
Jersey
Investment company
Investment company
Investment company
United States of
America
Singapore
United States of
America
United States of
America
KIK Equity Co-invest LLC4
Investment company
Proportion of
ownership
interest/voting
rights held by the
Group
Income
distributions
received from
associate
Proportion of
ownership
interest/voting
rights held by the
Group
Income
distributions
received from
associate
2023
20%
17%
20%
20%
50%
25%
2023
11
24.7
5.5
(1.2)
—
—
2022
20%
17%
20%
20%
—%
—%
2022
58.6
114.2
5.4
32.1
—
—
During the year the Group’s investments in Ambient Enterprises LLC (see note 29) and KIK Equity Co-invest LLC were assessed as
associates. All associates are accounted for at fair value.
1. The registered address for this entity is IFC 1 – The Esplanade, St Helier, Jersey JE1 4BP.
2. The registered address for this entity is 600, Lexington Avenue, 24th Floor, New York, NY 10022, United States of America.
3. The registered address for this entity is #13-01 One Raffles Place, Singapore, 048616.
4. The registered address for this entity is c/o The Corporation Trust Company, 1209 Orange Street, Wilmington, DE, 19801, United States.
The Group has a shareholding in each of ICG Europe Fund V Jersey Limited, ICG Europe Fund VI Jersey Limited, ICG North American
Private Debt Fund, ICG Asia Pacific Fund III Singapore Pte. Limited and KIK Equity Co-invest LLC arising from its co-investment with a
fund. The Group appoints the General Partner (GP) to each of these 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%–25% 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
Brighton Marina Group Limited
Accounting method
Principal activity
Country of incorporation
Equity
Fair value
Advisory company
Japan
Investment
Company
United Kingdom
Proportion of ownership
interest held by the Group
2023
Proportion of voting
rights held by the Group
2023
50 %
70 %
50 %
50 %
202 ICG | ANNUAL REPORT & ACCOUNTS 2023
30. Associates and joint ventures continued
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 IFRS9 and the Group’s accounting policy in
note 5 to the financial statements.
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 and ICG Europe Fund VI 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
2023
£m
8.1
2022
£m
24.9
1,023.9
1,910.0
(55.8)
976.2
47.3
23.2
23.2
(49.7)
1,885.2
685.8
667.0
667.0
2023
£m
3.8
129.8
(1.5)
132.1
(2.0)
(3.6)
(3.6)
2022
£m
6.1
122.5
(1.6)
127.0
27.3
26.4
26.4
Summarised financial information for equity accounted joint ventures
Nomura ICG KK made a profit from continuing operations and total comprehensive income of £8.8m for the year ended 31 March 2023
(2022: £1.0m), of which the Group’s share of results accounted for using the equity method is £4.4m for the year ended 31 March 2023
(2022: £0.5m).
ICG | ANNUAL REPORT & ACCOUNTS 2023
203
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 2023, 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:
Funds
CLOs
Credit Funds
Investment in
Fund
Management
fees receivable
Management fee rates
£m
298.3
65.9
£m
4.1
8.6
%
0.19% to 0.50%
0.29% to 1.50%
Corporate Investment Funds
1,341.5
55.9
0.43% to 1.50%
37.6
Performance fee rates
Maximum exposure
to loss
%
0.05% to 0.20%
Real Asset Funds
288.5
12.0
0.30% to 1.24%
Secondaries Funds
441.1
20.2
0.75% to 1.37%
Total
2,435.3
100.8
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%
Corporate Investment Funds
1,505.5
54.7
0.60% to 2.0%
Real Asset Funds
Secondaries Funds
203.1
341.7
14.3
26.0
0.38% to 1.50%
1.25% to 1.50%
(0.3) 20% of returns in excess of 0% for
Alternative Credit Fund only
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
2023
Performance fees
receivable
£m
—
—
0.2
37.5
2022
Performance fees
receivable
£m
—
Performance fee rates
Maximum exposure
to loss
0.05% to 0.20%
— 20% of returns in excess of 0% for
Alternative Credit Fund only
86.1 20%–25% of total performance fee
of 20% of profit over the threshold
0.1 20% of returns in excess of 9% IRR
4.9 10%–20% of total performance fee
of 8%–20% of profit over the
threshold
£m
302.4
74.2
1,435.0
300.5
461.5
2,573.6
£m
289.1
171.7
1,646.3
217.5
372.6
2,697.2
Total
2,497.8
108.3
91.0
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.
204 ICG | ANNUAL REPORT & ACCOUNTS 2023
32. Net cash flows from operating activities
Profit before tax from continuing operations
Adjustments for non cash items:
Fee and other operating income
Net investment returns
Interest income
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
Decrease in trade and other payables
Change in disposal groups held for sale
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 received1
Fee and other operating income received
Interest paid
Cash flows generated from operations
Taxes paid
Net cash flows from operating activities
1. Comprises Interest income received of £322.6m (2022: £221.8m) and Dividend income received of £40.2m (2022: £38.0m).
Notes
3
7
17, 18
25
20
21
Year ended
31 March 2023
Group
Year ended
31 March 2022
Group
£m
251.0
(483.6)
(172.5)
(15.5)
34.9
(17.8)
64.6
18.2
39.5
(12.0)
(196.9)
(8.8)
(498.9)
45.5
(211.9)
£m
565.4
(434.0)
(555.5)
—
7.3
0.1
53.1
19.5
29.6
(32.5)
(27.4)
—
(374.4)
185.2
(204.0)
(1,420.2)
(3,532.8)
1,722.2
3,743.8
362.8
587.9
(263.4)
324.0
(32.4)
291.6
259.8
393.0
(183.3)
287.3
(43.9)
243.4
ICG | ANNUAL REPORT & ACCOUNTS 2023
205
FINANCIAL STATEMENTS CONTINUED
Notes to the financial statements continued
32. Net cash flows from operating activities continued
Profit before tax from continuing operations
Adjustments for non cash items:
Fee and other operating income
Dividend income
Interest 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
Write-down of intercompany loan balance
Share-based payment expense
Intragroup reallocation of incurred costs
Working capital changes:
Decrease/(Increase) in trade and other receivables
(Decrease)/Increase in trade and other payables
Proceeds from sale of current financial assets
Purchase of current financial assets
Purchase of investments
Proceeds from sales and maturities of investments
Interest received
Fee and other operating income received
Interest paid
Cash flows used in operations
Taxes paid
Net cash flows used in operating activities
Notes
3
7
17, 18
25
20
21
Year ended
31 March 2023
Company
Year ended
31 March 2022
Company
£m
51.5
(3.9)
(386.6)
(53.7)
(0.7)
7.5
141.1
124.9
12.0
12.7
39.5
£m
23.8
(10.5)
(163.0)
(50.5)
(30.0)
13.5
1.1
102.0
24.9
—
29.6
(152.0)
(113.2)
4.5
(15.8)
(219.0)
34.2
(134.6)
(73.1)
127.5
6.0
5.0
(60.3)
(314.3)
(20.8)
(335.1)
(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)
33. 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.
34. Post balance sheet events
There have been no material events since the balance sheet date.
206 ICG | ANNUAL REPORT & ACCOUNTS 2023
OTHER INFORMATION
Glossary
Non-IFRS alternative performance measures (APM) are defined below:
Term
Short Form
Definition
APM earnings per
share
APM Group profit
before tax
APM Investment
Company profit
before tax
EPS
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:
Profit before tax
Plus/Less consolidated structured entities
APM Group profit/(loss) before tax
2023
£251.0m
£7.1m
£258.1m
2022
£565.4m
£3.4m
£568.8m
Investment Company profit adjusted for the impact of the consolidated structured entities. As at 31 March,
this is calculated as follows:
Investment Company profit before tax
Plus/Less consolidated structured entities
APM Investment Company profit/(loss) before tax
2023
(£69.7m)
£7.1m
(£52.6m)
2022
£279.2m
£3.4m
£282.6m
APM return on equity
ROE
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:
Assets under
management
AUM
Balance sheet
investment portfolio
APM profit after tax
Average shareholders’ funds
APM return on equity
2023
£229.3m
£1,911.3m
12.0 %
2022
£538.0m
£1,745.9m
30.8 %
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
converted 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.
Total non current and current financial assets
Note 4
Derivative (assets)
Total balance sheet investment portfolio
2023
£2,924.6m
2022
£2,854.8m
(£22.6m)
£2,902m
(£32.8m)
£2,822m
Cash profit
PICP
Cash profit is defined as internally reported profit before tax and incentive schemes, adjusted for non-cash
items
APM profit before tax
Add back incentive schemes
Other adjustments
Cash profit
2023
£258.1m
£151.8m
£121.9m
£531.8m
2022
£568.8m
£169.7m
(£172.4m)
£566.1m
Dividend income
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.
Earnings per share
EPS
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.
EBITDA
Equalisation
Group cashflows from
operating activities-
APM
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.
Group cashflows from operating activities – APM is net cash flows from operating activities adjusted for
interest paid
Group cashflows from operating activities- APM
Interest paid
Net cash flows from/(used in) operating activities
Note 4
2023
£395.0m
(£63.5)m
£331.5m
2022
£393.6
(£55.7)m
£337.9m
ICG | ANNUAL REPORT & ACCOUNTS 2023
207
OTHER INFORMATION CONTINUED
Glossary continued
Term
Short Form
Definition
Group cashflows from
financing activities -
APM
Group cashflows from financing activities – APM is net cash flows from financing activities adjusted for
interest paid and the payment of principal portion of lease liabilities
Group cashflows from financing activities - APM
Interest paid
Payment of principal portion of lease liabilities
2023
(£533.4)m
£63.5m
(£6.8)m
2022
£59.3m
£55.7m
(£4.1)m
Net cash flows used in
investing activities
Other operating cashflows is net cash flows from investing activities adjusted for the payment of principal
portion of lease liabilities
Net cash flows from/(used in) financing activities
Note 4
(£476.7)m
£110.9m
Net cash flows used in investing activities
Payment of principal portion of lease liabilities
Other operating cashflows
2023
(£70.0)m
(£6.8)m
(£76.8)m
2022
£11.3m
(£4.1)m
£7.1m
Interest expense
Net asset value
per share
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:
Total equity (See note 4 )
Closing number of ordinary shares
Net asset value per share
On an IFRS basis Net Asset Value as follows:
Total equity (See note 4 )
Closing number of ordinary shares
Net asset value per share
2023
2022
£1,977.4m
£1,995.0m
285,082,287
286,550,955
694p
696p
2023
2022
£2,045.2m
£2,001.8m
285,082,287
286,550,955
717p
699p
Net current assets
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:
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
2023
£550.0m
£282.4m
£243.7m
(£79.1m)
(£157.7)m
2022
£761.5m
£126.1m
£193.2m
(£256.4m)
(£152.8m)
£839.3m
£671.6m
2023
£957.5m
—
£307.3m
£578.3m
(£64.3m)
(£501.0m)
(£204.0m)
£1,073.8m
2022
£991.8m
—
£452m
£256.7m
(£207.6m)
(£602.3m)
(£97.2m)
£793.4m
208 ICG | ANNUAL REPORT & ACCOUNTS 2023
Net financial debt
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.
Gross drawn debt less unencumbered cash of the Group, as at 31 March is calculated as follows:
Total liabilities held at unamortised cost
Impact of upfront fees/unamortised discount
Gross drawn debt (see page 64)
Less unencumbered cash
Net debt
2023
2022
£1,536.7m
£1653.4m
£1.3m
£1,538.0m
(£550.0m)
£1.6m
£1,655.0m
(£761.5m)
£988.0m
£893.5m
Net gearing
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:
Net Investment
Returns
Operating cashflow
Operating expenses
of the Investment
Company
Operating profit
margin
Third Party AUM
Third Party Fee
Earning AUM
Third Party
Fee Income
Total AUM
Total available
liquidity
Total fund size
Weighted-average
fee rate
Net debt
Shareholders’ equity
Net gearing
2023
2022
£988.0m
£893.5m
£1,977.4m
£1,995.0m
0.50x
0.45x
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.
Fund Management Company profit before tax divided by Fund Management Company total revenue. As at
31 March this is calculated as follows:
Fund Management Company profit before tax
Fund Management Company total revenue
Operating profit margin
2023
2022
£310.7m
£539.9m
£286.2m
£512.8m
57.5 %
55.8 %
Value of all funds and assets managed by the Group (including both invested and uninvested capital) on which
the Group earns, or has the potential to earn, fees. During the investment period third-party AUM is
measured on the basis of committed capital. Once outside the investment period, it is measured on the basis
of invested cost.
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 seed investments:
Third Party AUM
Balance Sheet Investment Portfolio (excluding seed investments)
Total AUM
2023
$77.0bn
$3.2bn
$80.2bn
2022
$68.5bn
$3.6bn
$72.1bn
Total available liquidity comprises unencumbered cash and available undrawn debt facilities.
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 fee earning AUM in which the fees earned are weighted
based on the relative AUM.
ICG | ANNUAL REPORT & ACCOUNTS 2023
209
OTHER INFORMATION CONTINUED
Glossary continued
Other definitions which have not been identified as non-IFRS GAAP alternative performance measures are as follows:
Term
Short Form
Definition
Additions (of AUM)
AIFMD
Alternative
performance measure
CAGR
Catch-up fees
Client base
Closed-end fund
Within third-party AUM: the aggregate of new commitments of capital by clients, and calls of capital from funds
that have previously had a step-down and are therefore reflected in third-party AUM on a net invested capital
basis. Within third-party fee-earning AUM: the aggregate of new commitments of capital by clients that pay fees
on committed capital, and deployment of capital that charges fees on invested capital (including calls of capital
from funds that have previously had a step-down and therefore charge fees on a net invested capital basis).
The EU Alternative Investment Fund Managers Directive.
APM
These are non-IFRS financial measures.
Compound Annual Growth Rate
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.
Client base includes all direct investment fund and liquid credit fund investors.
A fund where investor’s commitments are fixed for the duration of the fund and the fund has a defined
investment period.
Co-investment
Co-invest
A direct investment made alongside or in a fund taking a pro-rata share of all instruments.
Collateralised Loan
Obligation
Close
Default
Deal Vintage Bonus
Direct investment
funds
DPI
Employee Benefit
Trust
Environmental, Social
and Governance
criteria
Financial Conduct
Authority
Financial Reporting
Council
Fund
Fund Management
Company
Fund level leverage
Gross money on
invested capital
HMRC
IAS
IFRS
Illiquid assets
Internal Rate of
Return
CLO
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
DVB awards are a long-term employee incentive, enabling certain investment teams, excluding Executive
Directors, to share in the future realised profits from certain investments within the Group's balance sheet
portfolio.
Funds which invest in self-originated transactions for which there is a low volume, illiquid secondary market.
Distribution to Paid- In Capital
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.
A pool of third-party capital allocated to a specific investment strategy or strategies, managed by ICG plc or its
affiliates.
The Group’s fund management business, which sources and manages investments on behalf of the IC and third-
party funds.
Debt facilities utilised by funds to finance assets.
EBT
ESG
FCA
FRC
FMC
Gross MOIC Total realised and unrealised value of investments (before deduction of any fees), divided by the total invested
cost.
HM Revenue & Customs, the UK tax authority.
International Accounting Standards.
International Financial Reporting Standards as adopted by the United Kingdom.
Asset classes which are not actively traded.
IRR
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.
210 ICG | ANNUAL REPORT & ACCOUNTS 2023
Term
Short Form
Definition
Investment Company
IC
LTM EBITDA
Key Person
Key performance
indicator
Key risk indicator
KPI
KRI
The Investment Company invests the Group’s balance sheet to seed and accelerate emerging strategies, and
invests alongside the Group's more established funds to align interests between the Group's client,
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.
Last twelve month's earning before interest, tax, depreciation and amortisation
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 of the Group as fund
manager.
A business metric used to evaluate factors that are crucial to the success of an organisation.
A measure used to indicate how risky an activity is. It is an indicator of the possibility of future adverse
impact.
Liquid assets
Asset classes with an active, established market in which assets may be readily bought and sold.
Money multiple
MOIC or MM
Cumulative returns divided by original capital invested.
Net currency assets
Open-ended fund
Payment in kind
PIK
Net assets excluding certain items including; trade and other receivables, trade and other payables,
property plant and equipment, cash balances held by the Group’s fund management entities, derivative
financial assets and liabilities on management fee FX hedges, and current and deferred tax assets and
liabilities.
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.
Carried interest
or Carry
Share of profits that the fund manager is due once it has returned the cost of investment and agreed
preferred return to investors.
Performance fees
Realisation
Realisations (of
AUM)
Recycle (of AUM)
Relevant investments
Step-down/ Step-up
Sustainable
Accounting
Standards Board
Securitisation
SFDR
Separately Managed
Account
Science Based
Targets initiative
Structured entities
SASB
SMA
SBTi
The return of invested capital in the form of principal, rolled-up interest and/or capital gain.
Reductions in AUM due to capital being returned to investors and / or no longer able to be called by the
fund, and the reduction in AUM due to step-downs.
Where the fund is able to re-invest capital that has previously been invested and then realised. This is
typically only within a defined period during the fund's investment period and is generally subject to certain
requirements.
Relevant investment includes all investments within Structured and Private Equity and Real Assets where
ICG has significant influence.
A reduction in AUM resulting from the end of the investment period in an existing fund or when a
subsequent fund starts to invest. Funds that charge fees on committed capital during the investment period
will normally shift to charging fees on net invested capital post step-down. There is generally the ability to
continue to call further capital from funds that have had a step-down in certain circumstances. In this
instance, fees will be earned on that invested capital and it will be added to AUM through Additions and this
is termed as step-up.
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
Third-party capital committed by a single investor allocated to a specific investment strategy or strategies,
managed by ICG plc or its affiliates.
The Science Based Targets initiative helps drives climate action in the private sector by approving and
validating companies' science-based emissions reduction targets (SBT).
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.
TCFD
Total AUM
Task Force on Climate-related Financial Disclosures
The aggregate of the Third Party AUM and the Balance Sheet investment portfolio.
ICG | ANNUAL REPORT & ACCOUNTS 2023
211
OTHER INFORMATION CONTINUED
Glossary continued
Short Form
The Code
Term
UK Corporate
Governance Code
UNPRI
Weighted average
Seed investments
(previously
warehoused
investments)
Definition
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.
Investments within the balance sheet investment portfolio that the Group anticipates transferring to a fund
in due course, typically made where the Group is seeding new strategies in anticipation of raising a fund.
212 ICG | ANNUAL REPORT & ACCOUNTS 2023
Basis of preparation for GHG emissions statement
The Greenhouse gas emissions of the Group and Company are
prepared in accordance with the GHG Protocol Corporate
Accounting and Reporting Standard, aligned with the Scope 2
Guidance, and Corporate Value Chain (Scope 3) Standard. ICG has
attempted to use as much actual data to calculate the carbon
footprint as possible, but there are circumstances where data has
been estimated through a variety of methods according to the
emissions source and the data available. The information below
provides further detail into the calculations, estimation
approaches and limitations of data we had to calculate our
operational CO2e.
Reporting Period
ICG’s GHG reporting period of 1 April to 31 March is in line with
our Annual Filings and Accounts, however the carbon footprint
was completed prior to 31 March for the purpose of disclosure in
the Annual Report FY23. To align the periods, ICG calculated the
footprint by utilising actual data across the determined emissions
sources for the calendar year (1 January – 31 December 2022).
The January – March 2022 data was then used as a proxy for the
January – March 2023 period. This method was conducted in line
with previous ICG GHG footprints and therefore provides
comparability between each year. The exception for this approach
was for the New York office data. This exception was driven by the
relocation of the New York office during FY23. ICG began a new
office lease on 31 August 2022, and occupied this property on the
1 February 2023. The lease of the old office expired on 31 January
2023. To ensure accuracy and account for the fact that ICG
operated 2 large offices over a 6-month period (which would not
happen under the calendar year methodology) we utilised actual
data for the old office and measured from the 1 April 2022 –
31 January 2023 (site closure). We estimated the future
consumption of the new office for the 31 August 2022 till
31 March 2023 period by using an energy profile model that was
conducted by external consultants. At the time of conducting the
footprint ICG had no access to actual data from the new site.
Fuel, electricity, water and waste
For all sites except for the newly opened New York office, we used
actual data from periodic utility bills, and secondary data provided
by landlords for service charge costs that were split by floor space
rented. We acquired data for all sites except for the new facility in
New York. In periods where we were unable to obtain actual data,
we utilised an extrapolation method which calculated the average
daily use from actual data and extrapolated it to replace missing
data to ensure a full 365 days of readings. This approach was used
for gas heating (when present), electricity, water and waste (when
available). Serviced offices unable to obtain waste and water data
from landlords were not included in this statement and are
insignificant to the footprint.
Business travel
Business travel data is split into 4 groups – air, rail, taxis and hotels.
At ICG, Air, rail and hotel bookings are booked through the
company’s central business travel booking agent providers who
provide ICG with all necessary data as an output (individual trips,
distance travelled, and stays in hotels, hotel locations) for
calculating emissions. The booking systems have become the
primary platform for booking air, rail and hotels at ICG and
therefore has resulted in a shift in the data inputs and therefore
emissions factors used to calculate some emissions activities from
previous years (detailed below). The platform allows ICG to
understand distances and origins rather than using spend based
expenses claimed. Note that taxis continue to be measured
through expense claims.
Air travel
Data such as the flight origin and destination cities, distances
travelled, and class of travel were provided by the booking agent
via the travel booking systems. ICG sourced the relevant emissions
factors from the UK Government, DEFRA (a UK government
department responsible for environmental protection) – GHG
Conversion Factors for Company Reporting – Business travel – Air
2022. Flights were organised by haul length (domestic, short, long
and international), along with the relevant class of travel. As per
DEFRA guidance, we assumed those flights travelling from UK to
continental Europe were short haul and used the appropriate
emissions factor. Long haul emissions factors were used for flights
from the UK to outside of Europe. For travel between other
countries the international flights DEFRA factors were used. The
class of travel was also used to associate the correct emissions
factor. If DEFRA did not hold a seat class specific factor (for
example, there is no class of travel factor for Domestic UK flights),
then the average flight factor was used for the haul length. There
were limitations on data quality from one of the central booking
systems. The booking system output cannot differentiate which
flights were upgraded and which flights were exchanged for new
flights or had amended dates (but kept the same travel class).
Therefore, in the carbon conversions the original travel class was
kept for the calculations. 10% of flights in the data are labelled as
“upgrade/exchange/reissue” – making it impossible to determine
which flights were solely upgrades over reissues or flight
exchanges. There were also limitations regarding the classification
of “miscellaneous” costs from the data provider which could not be
associated with additional travel beyond the current list of flights.
These “miscellaneous” data points were excluded from the
inventory as the provider stated that they were not related to
travel but were additional costs associated with prior bookings.
ICG | ANNUAL REPORT & ACCOUNTS 2023
213
OTHER INFORMATION CONTINUED
Basis of preparation for GHG emissions statement continued
Purchased goods and services
The baseline for emissions stemming from purchased goods and
services were calculated using a purely spend-based approach.
While the spend data is 100% actual data provided by the ICG
procurement team for the period 1 January – 31 December. The
emissions conversion factors are not based on actual supplier
emissions in this baseline year. Therefore, emissions represent an
estimate based on the industry that suppliers are categorised as
rather than being specific to each supplier. The ICG suppliers were
categorised based on the SICS industry that they reside within and
were then mapped against BEIS emissions factors which are based
on the UK carbon footprint from 2019. Approximately 98% of
supplier spend was categorised to a SIC code. However, the 2% of
small spend that was uncategorised was allocated an “office
admin / business support” emissions factor because the majority of
ICG suppliers will be business support service providers.
Rail Travel
Data utilised from booking providers included travel origins and
destinations, and distances travelled. In previous carbon
statements, carbon for rail travel was calculated by converting
$ spend on rail travel in to carbon using a general inland travel
emission factor. As the centralised booking system became the
primary platform for booking trains in 2022 for rail travel in the
USA, we were able to use more accurate distance based carbon
emissions factors in place of the spend-based approach. For USA
specific rail travel we used EPA emissions factors for the Amtrak
Intercity rail – National average Northeast corridor. This was used
because the ICG office is located in New York and rail travel is
focussed within this region. For EU related travelled, we utilised
the NTM for EU average rail emissions factors over spend based
factors as European staff also have migrated to the central booking
platform. The NTM emissions factor is more accurate than using
spend factors or DEFRA factor international rail travel as it is
focussed on EU travel and electricity grids, while incorporating
well to wheel emissions as well. For rail travel in the UK, DEFRA
factors were used.
Hotel stays
Emissions from hotel stays are included in the business travel
activities. The travel bookings agent provided booking data that
consisted of the country of the hotel, the number of nights stayed
and the number of rooms. DEFRA sourced factors for hotel stays in
specific countries were aligned with the country data. Any
countries that did not have a DEFRA sourced emissions factor
were allocated a “default factor”. This default factor was calculated
as an average of the 29 countries that had factors. 3.1% of hotel
stays fell into this default group.
Taxi travel
Travel by taxi was calculated differently to other business travel
based on the limitations of the data. Taxi travel was also new to the
business travel inventory in FY23. The data limitations were based
on not having information pertaining to distance, origin to
destination or type of vehicle data to estimate the emissions that
stem from this source. Taxi travel is claimed by staff through the
expenses system. Therefore, the total spend on travel from
countries around the world was used as the basis for calculation.
This spend on taxi travel was converted to GBP using FX rates for
31 December 2022, then converted to CO2e using an
international spend-based carbon emissions factor for land-based
travel.
214 ICG | ANNUAL REPORT & ACCOUNTS 2023
Carried interest earning funds
(unaudited)
Fund
ICG Europe Fund IV 2006B
ICG Europe Fund V
ICG Europe Fund VI
ICG Europe Fund VII
ICG Europe Fund VIII
Intermediate Capital Asia Pacific 2008
Intermediate Capital Asia Pacific Fund III
Intermediate Capital Asia Pacific Fund IV
ICG Recovery Fund 2008B
ICG Recovery Fund II
ICG Strategic Secondaries Fund II
ICG Strategic Equity Fund III
ICG Strategic Equity Fund IV
ICG Strategic Equity Fund V (USD Sleeve)
ICG Strategic Equity Fund V (EUR Sleeve)
ICG Europe Mid-Market Fund I
ICG Europe Mid-Market Fund II
ICG LP Secondaries
ICG Enterprise Trust
ICG Senior Debt Partners Fund II
ICG Senior Debt Partners III
ICG Senior Debt Partners IV
ICG Senior Debt Partners V
North American Private Debt Fund I
North American Private Debt Fund II
ICG Alternative Credit Fund
ICG Alternative Credit Warehouse fund I
ICG Structured Special Opportunities
ICG-Longbow Fund III
ICG-Longbow Fund IV
ICG-Longbow Fund V
ICG-Longbow Fund VI
ICG-Longbow Development Fund I
ICG-Longbow Development Fund II
ICG Living Development Fund
ICG Sale and Leaseback Fund I
ICG Sale and Leaseback Fund II
ICG Infrastructure Equity Fund I
ICG Infrastructure Equity Fund II
Third-party
capital
€940m
€2,000m
€2,500m
€4,000m
€7,705m
$600m
$491m
$905m
€308m
€440m
$866m
$1,650m
$4,047m
$155m
€35m
€898m
€129m
$202m
£946.6m
€1,492m
€2,535m
€4,941m
€973m
$590
$1,200m
€826m
$100m
$161m
£650m
£945m
£927m
£555m
£214m
£107m
£250m
€1,100m
€398m
€1,269m
€38m
Target
money
multiple
1.8x
1.6x
1.6x
1.8x
1.8x
N/A
1.7x
1.8x
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1.8x
1.8x
N/A
N/A
N/A
N/A
N/A
1.31
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
% Carried interest1
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 20 over 7
20% of 20 over 7
20% of 12.5 over 8 up to 20% of 15 over 20
20% of 20 over 8 up to 20
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 and 1.5x money multiple
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 and 1.5x money multiple
20% of 20 over 8
20% of 20 over 8
20% of 10 over 8 up to 20% of 12.5 over 11
50% or 100% of 10% subject to an 8% compound return on an
investment by investment basis
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 15 over 4 up to 20% of 20 over 7
20% of 10 over 4
20% of 20 over 8
20% of 20 over 8
20% of return on capital
20% of realised investments
20% of realised investments
20% of 20 over 9
10% of 20 over 8
20% of 20 over 6
20% of 20 over 6
20% of 20 over 7
20% of 20 over 8
20% of 20 over 8
20% of 20 over 8
20% of 20 over 7
20% of 15 over 7
20% of 10 over 8
1. Total carried interest is a fixed percentage of the fund gains. For example, in Intermediate Capital Asia Pacific 2005 the carry is 20% of gains and the Group is entitled to 25%
of this. Carried interest is triggered when fund returns exceed a hurdle; for Intermediate Capital Asia Pacific 2005 this is 8%.
ICG | ANNUAL REPORT & ACCOUNTS 2023
215
OTHER INFORMATION CONTINUED
Third-Party AUM (unaudited)
Status
Fully invested
Fully invested
Fully invested
Fully invested
Investing
—
Fully invested
Fully invested
Investing
Fully invested
Fully invested
Investing
Fully invested
Fully invested
Investing
Fundraising
Fundraising
—
Investing
Fundraising
Fundraising
Investing
Fully invested
Investing
Fundraising
—
Fully invested
Fully invested
Investing
Fundraising
—
Investing
—
Fully invested
Fully invested
Fully invested
Fundraising
Investing
Fully invested
Investing
Investing
Investing
Fundraising
Investing
Fundraising
Open-ended
Open-ended
Open-ended
Investing
Investing
Third-party AUM by fund ($m)
Structured and Private Equity
ICG Europe Fund V
ICG EF 2006B
ICG Europe Fund VI
ICG Europe Fund VII
ICG Europe Fund VIII
Europe Co-investment
Intermediate Capital Asia Pacific Fund 2008
Intermediate Capital Asia Pacific Fund III
Intermediate Capital Asia Pacific Fund IV
Nomura ICG Fund
ICG Recovery Fund 2008B
ICG Recovery Fund II
ICG Strategic Secondaries Fund II
ICG Strategic Equity Fund III
ICG Strategic Equity Fund IV
ICG Strategic Equity Fund V (USD Sleeve)
ICG Strategic Equity Fund V (EUR Sleeve)
Strategic Equity Co-investment
ICG Europe Mid-Market I
ICG Europe Mid-Market II
ICG LP Secondaries Fund I
ICG Enterprise Trust – listed fund
Structured and Private Equity total
Private Debt funds
North American Private Debt Fund
North American Private Debt Fund II
North American Private Debt Fund III
North American Private Debt co-invest
ICG Senior Debt Partners II
ICG Senior Debt Partners III
ICG Senior Debt Partners IV
ICG Senior Debt Partners V
Senior Debt Partners Co-investment
ICG Australia Senior Loan Fund
Australian loans Co-investment
Private Debt funds total
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-Longbow UK Real Estate Debt Investments VI
ICG Real Estate Debt Investments V
ICG-Longbow Senior Debt – listed fund
ICG-Longbow Senior Debt programme
ICG-Longbow Development Fund
ICG Private Markets Pooling – Sale & Leaseback
ICG Sale and Leaseback Fund II
Infrastructure Equity I
Infrastructure Equity II
Real Asset funds total
Credit funds
Structured credit strategies
European credit strategies
Global credit strategies
European CLOs
US CLOs
Credit funds total
Total third-party AUM
216 ICG | ANNUAL REPORT & ACCOUNTS 2023
FY23 AUM ($m)
FY22 AUM ($m)
230.0
—
1,073.0
3,915.0
8,310.0
847.1
—
366.0
905.0
—
339.0
578.0
727.0
1,534.0
4,022.0
154.8
35.0
1,822.2
967.0
140.0
202.0
1,562.0
27,729.1
168.6
1,190.0
427.0
75.0
1,016.0
2,400.5
5,250.0
1,637.0
10,521.5
943.0
12.0
23,640.6
—
281.0
1,135.0
682.2
618.9
100.3
1,280.0
728.0
1,207.0
424.0
1,365.0
41.0
7,862.4
1,434.9
3,467.0
781.7
5,958.2
6,113.7
17,755.5
76,987.6
219.5
4.4
877.9
3,862.4
7,216.4
833.6
60.1
250.8
454.8
14.0
290.5
589.4
211.7
1,155.7
2,755.0
—
—
1,336.4
986.8
—
60.0
1,328.0
22,507.4
101.2
1,200.0
—
75.0
777.5
1,961.6
5,381.5
—
9,287.3
1,022.0
—
19,806.1
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
18,127.1
68,468.7
Outstanding debt facilities
ESG-linked RCF
Eurobond 2020
ESG Linked Bond
Total bonds
PP2013 – Class B
Private Placement 2013
PP 2015 – Class C
PP 2015 – Class F
Private Placement 2015
PP 2016 – Class B
PP 2016 – Class C
PP 2016 – Class E
PP 2016 – Class F
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
USD
USD
EUR
USD
USD
EUR
EUR
USD
USD
USD
EUR
Drawn
£m
—
440.0
440.0
880.0
51.0
51.0
64.9
38.7
103.5
91.6
43.8
19.3
26.4
181.1
101.3
81.1
101.3
38.7
322.4
658.0
Undrawn
£m
550.0
Total
£m
Interest rate
Maturity
550.0
SONIA +1.375%
January-26
—
—
—
—
–
—
—
—
—
—
—
—
—
—
—
—
—
—
—
440.0
440.0
880.0
51.0
51.0
64.9
38.7
103.5
91.6
43.8
19.3
26.4
181.1
101.3
81.1
101.3
38.7
322.4
658.0
1.60%
2.50%
February-27
January-30
6.30%
May-23
5.20%
3.40%
May-25
May-25
4.70% September-24
5.00% September-26
January-27
3.00%
January-25
2.70%
4.80%
5.00%
5.40%
2.00%
April-24
March-26
March-29
April-24
1,538.0
550.0
2,088.0
ICG | ANNUAL REPORT & ACCOUNTS 2023
217
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
• 15June 2023
• 16 June 2023
• 14 July 2023
• 10.00am, 20 July 2023
• 20July 2023
• 4 August 2023
• 15 November 2023
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
218 ICG | ANNUAL REPORT & ACCOUNTS 2023
Notes
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