ICG Enterprise Trust PLC GBP · LSE:ICGT
ICG Enterprise Trust PLC GBP — Graphite Enterprise Trust — Shareholder Meeting (June 2014)
33 slides from ICG Enterprise Trust PLC GBP's shareholder meeting presentation, Jun 11, 2014
Slide 1: Graphite Enterprise Trust PLC
Graphite Enterprise Trust PLC Investing in long term growth 33rd Annual General Meeting 11 June 2014
Slide 2: Agenda and speakers
33rd Annual General Meeting Agenda and speakers 1. Introduction Tim Spence Finance Director 2. Results Kane Bayliss Partner, Fund Investment 3. Investment activity 4. Portfolio 5. Discount 6. Dividend 7. Conclusions Page 1
Slide 3: 1. Introduction
1. Introduction Graphite Enterprise
Slide 4: Focused strategy of investing in European buy-outs
1. Introduction Focused strategy of investing in European buy-outs of mature, profitable companies ● The focus is on established, top performing European buy-out managers ● The Company invests in: − the UK mid-market through Graphite Capital’s in-house funds − continental Europe and other UK sectors
Slide 5: The Manager of Graphite Enterprise is Graphite Capital
1. Introduction The Manager of Graphite Enterprise is Graphite Capital, a leading UK private equity firm ● 33-year history, experienced and cohesive team ● Specialises in both direct and fund investments with funds under management of £1.5 billion: Direct investments Fund investments F.U.M. £1.1bn F
Slide 6: Ways to access managers' investment programmes
1. Introduction We can access managers’ investment programmes in a number of ways ● Primary commitments to new funds being raised – A commitment to fund a future investment programme (“blind pool”) – Forms the basis of our relationships with managers – Creates opportunities for other types of invest
Slide 7: Graphite Capital directly manages 21% of the portfolio
1. Introduction Graphite Capital directly manages 21% of the portfolio Graphite portfolio Third party portfolio 21% Funds 69% (of which secondaries :14%) Direct co- invests 10% Page 6
Slide 8: 2. Results
2. Results Graphite Enterprise
Slide 9: Share price and NAV outperformed the FTSE All-Share in year to Jan-14
2. Results The share price and NAV both outperformed the FTSE All-Share in the year to Jan-14 Jan Jan Change 2014 2013 12 months Net asset value per share 677.2p 631.5p +7.2% Share price 563.5p 487.0p +15.7% FTSE All-Share Index 3,497 3,287 +6.4% ● The share price strongly outperformed the FTSE All-
Slide 10: Activity in the quarter to April 2014 was relatively subdued
2. Results Activity in the quarter to April 2014 was relatively subdued Apr Jan Change Change 2014 2014 3 months 12 months Net asset value per share 688.1p 677.2p 1.6% +8.2% Share price 572.0p 563.5p 1.5% +16.3% FTSE All-Share Index 3,620 3,497 3.5% +6.8% ● There was little new valuation information
Slide 11: Share price outperformed the FTSE All-Share since 31 Jan 2013
2. Results The share price has outperformed the FTSE All-Share by 14.5% since 31 Jan 2013 Note To the close on 10 June 2014 (SP = 615p, FTAS = 3,675) Increases from 31 Jan 2013: SP +26.3%, Index +11.8% Page 10
Slide 12: NAV and share price outperformed over 3 and 10 years
2. Results The NAV and share price have outperformed the All-Share over 3 and 10 years Years to Jan-141 3 5 10 Total return Net asset value per share +29% +56% +164% Share price +88% +218% +196% FTSE All-Share Index +28% +89% +124% ● The net asset value has increased for five consecutive financial y
Slide 13: Consistently outperformed the fund of funds average
2. Results Graphite Enterprise has consistently outperformed the fund of funds average Years to Jan 20141 1 3 5 10 Total return Graphite Enterprise NAV growth 8% 29% 56% 164% Fund of funds2 average NAV growth 7% 19% 18% 146% ● This outperformance is despite taking lower balance sheet risk than the p
Slide 14: The balance sheet is strong with significant capacity for new investment
2. Results The balance sheet is strong and provides significant capacity for new investment Apr-14 Apr-14 £m % Investments 446 87% Net current assets 63 13% Total assets less current liabilities 509 100% Outstanding commitments 257 Undrawn bank facility1 98 Total liquidity2 161 Overcommitment3 96 Ov
Slide 15: 3. Investment activity
3. Investment activity Page 14
Slide 16: Direct investment influence produces a distinctive approach to fund investing
3. Investment activity The direct investment influence produces a highly distinctive approach to fund investing ● We understand companies and believe this gives us an edge over other investors in funds – Primary commitments: well positioned to judge / challenge other private equity managers – Second
Slide 17: Very active new investment programme in the year to Jan-14
3. Investment activity We had a very active new investment programme in the year to Jan-14 Secondary purchases Co-investments Primary commitments £201m £24m £12m Page 16
Slide 18: Record cash realisations and increased new investment
3. Investment activity Cash realisations were at a record level and new investment increased substantially Notes 1. Excludes proceeds from secondary sales. Page 17 2. Pro-forma to 31 May 2014, including expected Education Personnel disposal proceeds (£14.9m) and re-investment (£9.0m)
Slide 19: Realisations continue to generate significant uplifts
3. Investment activity Realisations continue to generate significant uplifts over prior valuations Year ended Jan-12 Jan-13 Jan-14 Valuation uplift1,2 51% 49% 36% Number of full realisations 18 14 33 Multiple of original cost 2.5x 2.7x 2.1x ● As exit conditions have improved, managers are realising
Slide 20: Disposal of Education Personnel by Graphite VII
3. Investment activity Disposal of Education Personnel by Graphite VII Background ● Leading provider of supply teachers and educational support staff in England and Wales ● Teaching Personnel acquired in a secondary management buy-out in 2010 ● Merged with a large competitor, Protocol Education, in
Slide 21: Graphite VIII's two substantial new investments
3. Investment activity Graphite VIII has made two substantial new investments in the last six months ● Graphite Enterprise has invested: ‒ £14.2 million in City & County Healthcare (C&C) in December ‒ £10.9 million in ICR in March C&C ● Fourth largest provider of home care services in the UK ● UK ho
Slide 22: 4. Portfolio
4. Portfolio Graphite Enterprise
Slide 23: Portfolio provides access to a wide range of managers
4. Portfolio The portfolio provides access to a wide range of managers across various markets Mid-market Upper mid- country UK lower mid- Other Large market specific market • Exposure to 411 companies, through 62 funds and 31 managers Page 22
Slide 24: Portfolio is well diversified by geography, sector and vintage
4. Portfolio The portfolio is well diversified by geography, sector and vintage Notes 1. Geography denotes where a company is headquartered. 2 All charts are based on underlying company data as at 30.04.14. Page 23
Slide 25: Balance between diversification and concentration
4. Portfolio The portfolio strikes a balance between diversification and concentration ● The top 30 underlying companies represent 46% of the portfolio ● This ensures individual winners can make a difference − e.g. Education Personnel added 9.5p in Q1 and 19.2p over the life of the investment ● The
Slide 26: 5. Discount
5. Discount Graphite Enterprise
Slide 27: Discounts have moved closer to historic norms
5. Discount Discounts have moved closer to historic norms • At 10 June 2014, the discount was 8.6% (share price 615p, ex-div NAV 672.6p) – The Company’s average discount in the 15 years prior to the financial crisis was 10% – The average discount from Dec 2007 to Dec 2012 was 34% Note Sector include
Slide 28: Narrowest discount of the listed PE fund of funds
5. Discount Graphite Enterprise’s discount is the narrowest of the listed PE fund of funds ● Over the past 12 months, average discounts have narrowed from 20% to 14% ● The Company’s discount has narrowed more significantly from 23% to 9% ● Graphite Enterprise has moved from in-line with the average
Slide 29: 6. Dividend
6. Dividend Graphite Enterprise
Slide 30: Board recommending a total dividend of 15.5p per share
6. Dividend The Board is recommending a total dividend of 15.5p per share ● Levels of income are linked to realisations and last year was a record year for disposals ─ As a result, income was much higher than the previous year ● As an investment trust, we are required to pay out most of our income ●
Slide 31: 7. Conclusions
7. Conclusions Graphite Enterprise
Slide 32: Graphite Enterprise is well positioned to grow further
7. Conclusion Graphite Enterprise is well positioned to grow further ● The discount is in line with the long term average – The valuation remains attractive compared with quoted markets, given relative performance: Top 30 FTSE 250 EBITDA growth 12m to 31 December 2013 14% 2% Implied EBITDA multiple
Slide 33: Graphite Enterprise
Graphite Enterprise
Graphite Enterprise Trust — Shareholder Meeting (June 2014) on 6ix