Slide 1: Full year results presentation
Full year results presentation 4 June 2020
Slide 2: Highlights
2 Highlights AUM up 22% on 31 March 2019 to €45.3bn, with €10.2bn of new money raised Fund Management Company profits up 27% to £183.1m (2019 : £143.8m); average fee rates maintained Investment Company loss of £72.3m (2019: £134.5m profit) reflecting lower unrealised valuations of portfolio in the f
Slide 3: Our response to Covid-19
3 Our response to Covid-19 Remained fully operational across all our functions globally Firm & Wellbeing and mental health support provided to employees operations Developing strategy for return to offices In active dialogue with our portfolio companies Portfolio Working with management teams to add
Slide 4: Resilient business model
4 Resilient business model Leading diversified global alternative asset manager Closed-end and long duration nature of funds Long-term visibility of management fees Fund Management Company profit is the key driver of shareholder value Business model is underpinned by a strong, well-capitalised balan
Slide 5: Operating Review
Operating Review iCG
Slide 6: Market fundamentals remain strong
6 Market fundamentals remain strong We expect long-term trends to continue and, as after the GFC, potentially further accelerate in the wake of the current crisis Impact of Covid-19 results in expectation that fundraising, realisation and investments will be slower in the near term Existing strategi
Slide 7: ESG fully embedded across our business
7 ESG fully embedded across our business ICG charitable donations aimed at reducing impact of Covid-19 Covid-19 Number of portfolio companies directing operations and resources response towards response efforts in their respective regions Climate risk assessment targeted across all strategies Climat
Slide 8: Strong fund performance
8 Strong fund performance Target Realised Fund 1 IRR on realised assets 1 MM MM ICG Minority Partners Fund 2008 (fully realised January 2016) 1.9x 2.0x ICG Recovery Fund 2008 (fully realised March 2017) 2.0x 1.9x Longbow UK Real Estate Debt Investments II (fully realised April 2017) 1.4x 1.6x ICG St
Slide 9: Conservative structuring underpins consistent fund performance
9 Conservative structuring underpins consistent fund performance Debt / EBITDA level for US buyout transactions in 2019 Avg. Net Debt / EBITDA for ICG strategies 100% 90% Greater than 7x 4 - 6x 100% 80% Less than 6x 50% 70% 6 - 7x 60% 50% 4.6x Debt strategies 2 - 4x 40% 37% 30% Less than 6x 20% 3.7x
Slide 10: Disciplined approach to realisations anchors performance
10 Disciplined approach to realisations anchors performance FY20 realised assets; performance against hurdle Gross distributions relative to paid in capital 2 174% 180% 1 +20% above hurdle 160% 149% 140% 10-20% above hurdle 120% 13 100% 79% 5-10% above hurdle 80% 57% 60% 0-5% above hurdle 40% 8 20%
Slide 11: Selective approach to deployment
11 Selective approach to deployment €m Fund invested at 31 March 2020 6,500 100% 5,991 5,934 6,000 297 90% 5,500 745 613 5,000 4,876 80% 411 891 4,500 70% Real Estate V 4,046 Europe Fund VII 678 4,000 140 60% 579 3,500 50% 3,000 Inf rastructure Equity 2,500 5,081 40% Sale & Leaseback 4,298 2,000 Str
Slide 12: Very strong fundraising year
12 Very strong fundraising year 5 year trend Funds raised in FY20 by strategy (€m) 68 €bn 131 212 North America Private Debt 12 449 481 Asia Pacific Corporate €10.2bn 737 10 Infrastructure Equity 892 4.0 Australian Senior Debt 8 1,009 Sale & Leaseback 6 1,128 1.6 CLOs 10.0 European Mid-Market 4 7.8
Slide 13: Substantial dry powder €11.4bn
13 Substantial dry powder 3 year trend Dry powder by strategy €bn 12 €11.4bn 1.2 10 1.6 €8.0bn 0.7 8 0.8 €11.4bn 0.7 €5.8bn 0.4 6 0.7 4 7.9 6.1 5.1 European Senior Debt European Corporate 2 Real Estate Funds Strategic Equity North America Private Debt Credit Funds Australian Senior Debt Sale & Lease
Slide 14: Fundraising outlook and focus on future growth
14 Fundraising outlook and focus on future growth FY21 was always going to be a low point in our natural fundraising cycle Senior Debt Partners, Sale & Leaseback and Infrastructure Equity will continue to fundraise throughout the year Able to answer client demand with three opportunistic strategies
Slide 15: Financial Review: Fund Management Company
15 Financial Review Fund Management Company
Slide 16: Strong growth in FMC performance
16 Strong growth in FMC performance Fundraising AUM Profit €42.8bn Record £183m €10.0bn €10.2bn €34.5bn £144m €7.8bn €26.5bn £95m FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20 Corporate Investments Capital Market Investments Third party AUM Real Asset Investments Secondary Investments Fee earning AUM
Slide 17: Resilient management fees
17 Resilient management fees £254m £198m 50% £144m 56% 52% £1.8bn Management fee visibility 50% 10 years 1 48% 44% FY18 FY19 FY20 Committed Invested 1 Assumes fee rates remain constant and deployment and realisations are in line with our standard assumptions
Slide 18: Other income
18 Other income CLO dividends Performance fees Represent 12% of FY20 total FMC income Represent 7% of FY20 total FMC income Dependent on funds meeting leverage Only recognised when highly probable covenant tests Expected to be temporarily lower in FY21 Due to Covid-19, recognition deferred as depend
Slide 19: Operating margin continues to improve
19 Operating margin continues to improve £m Operating margin 400 60% 53.6% 52.3% Target 350 45.4% 50% 41.9% 41.2% 300 40% 250 200 30% 150 20% 100 10% 50 - 0% FY16 FY17 FY18 FY19 FY20 Costs (LHS) Income (LHS) Operating margin (RHS)
Slide 20: Financial Review: Investment Company
20 Financial Review Investment Company
Slide 21: Entering crisis with strong, diversified balance sheet
21 Entering crisis with strong, diversified balance sheet FY09 FY20 Diversification 4 STRATEGIES 21 STRATEGIES Net gearing 2.67x 0.76x Liquidity £0.3bn £1.2bn
Slide 22: Net investment returns impacted by Covid-19
22 Net investment returns impacted by Covid-19 Net investment returns trend 12.6% 13.7%1 12.1% 12.6% 2.2% £237m £258m £240m £275m £49m FY16 FY17 FY18 FY19 FY20 1 Net investment returns in FY17 exclude realised gains recycled from AFS
Slide 23: Portfolio value impacted by 6.4% in Q4
23 Portfolio value impacted by 6.4% in Q4 Balance sheet portfolio £m £152.4m 2,400 Q4 unrealised losses 3.7% (32) 13 2,350 17.7% (51) Liquids 2,300 (32) 188 (173) 2,250 (57) 1.6% 4.7% (4) (8) 2,200 18.6% 2,381 2,366 CLOs 2,150 2,100 2,210 2,050 2,000 FY19 balance Net realisations, NIR Q3 balance Net
Slide 24: Robust valuation governance
24 Robust valuation governance Investment team Investment team Business Head CEO, CFOO Stage 1: Stage 2: Stage 3: Stage 4: Asset level Strategy level Group valuation Final valuation valuation review assessment valuation preparation CEO, CFOO, Investment Heads of Finance, External Auditors, Committee
Slide 25: Valuation methodologies
25 Valuation methodologies % of Portfolio Valuation approach at 31 March 2020 Valuation based on IPEV guidelines Subordinated Debt and Equity1 Earnings based valuation methodology with multiples derived from set of comparable listed and private market transactions 71% DCF methodology applied where c
Slide 26: Heavily diversified investment portfolio
26 Heavily diversified investment portfolio Capital market funds Direct investment funds 13% 300+ Companies Risk retention investments £2.2bn* 36 Sectors 7% Investment in liquid strategies 34 Countries Corporate Investments Capital Market Investments Real Asset Investments Secondary Investments *Inc
Slide 27: Low exposure to sectors directly impacted by Covid-19
27 Low exposure to sectors directly impacted by Covid-19 Balance sheet split by sector1 5% Directly impacted by Covid-192 Top 10 sectors Healthcare services IT Services Diversified services 36 Real estate Fire Products Food Products Sectors Manufacturing Infrastructure Software Telecommunications 71
Slide 28: Strong liquidity
28 Strong liquidity Debt maturities £m 600 £514m £917m Unencumbered cash £444m £420m 400 £250m £250m £300m Undrawn facilities £184m 200 £101m £52m - 4.2 years FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 Average debt maturity Private placements Bonds Drawn bank facilities Undrawn bank facilities
Slide 29: Well capitalised with significant headroom
29 Well capitalised with significant headroom 2.5x £910m 41% Gearing covenant Headroom Of closing portfolio
Slide 30: Cost discipline maintained
30 Cost discipline maintained Operating costs by type £86.2m £83.4m 5.6 2.0 £68.1m 2.7 68.0 69.2 52.6 12.6 12.2 12.8 FY18 FY19 FY20 Fixed costs Variable costs Business development
Slide 31: Guidance
31 Guidance Guidance - subject to Covid-19 developments Fundraising: Was expected to be lower than prior year as no flagship fund in the market in FY21. Fundraising expected to be slower given Covid-19 No change to guidance of an average €6bn per annum over 3 year rolling period FMC operating margin
Slide 32: Wrap up
Wrap up iCG
Slide 33: Well placed for significant long-term growth and shareholder value creation
33 Well placed for significant long-term growth and shareholder value creation Resilient business model with long-term capital and fee visibility Dry powder of €11.4bn to take advantage of market opportunities Balance sheet is heavily diversified, robust and has significant liquidity Alternative ass
Slide 34: Disclaimer
34 Disclaimer The materials being provided to you are intended only for informational purposes and convenient reference and may not be relied upon for any purpose. This information is not intended to provide, and should not be relied upon, for accounting, legal, tax advice or investment recommendati