ICG Enterprise Trust Newsletter – April 2024

Good morning, and we hope you had an enjoyable long weekend. Two things we thought we’d flag in this month’s newsletter.

Firstly, we were delighted to be named a “next generation dividend hero” by the AIC. We have increased our ordinary dividend per share for 10 consecutive years, and over the last five years our dividend per share has grown at an annualised rate of 7.4%1. For the year ending 31 January 2024, our Board has publicly communicated its intention that the dividends will total at least 32p per share (FY23: 30p). 

ICG Enterprise Trust has a progressive dividend policy with distributions quarterly, and it is an integral part of the sustainable approach to capital allocation. The Board has maintained this policy through changes in the cycle and periods of market volatility.

As many of you will know, in October 2022 the Board also introduced a long-term share buyback programme. To-date 2.6% of ICG Enterprise Trust’s share capital2 has been bought back under this programme for a total of £21m, with shares having been acquired on over 100 separate days. There has been a lot of noise about buybacks in the market recently. The Board is focused on substance – we were early movers in developing this policy, and are consistently executing what has been announced. 

Secondly, this is the time of year when a lot of annual reviews of the state of private equity are published. One particularly caught our eye, by Hamilton Lane, one of the world’s leading private markets advisory firms. You can read it here: 2024 Market Overview (hamiltonlane.com). It’s not short, but is very accessible. For those who want to skip to the bits that resonated with us, we would highlight the below and the relevance to ICG Enterprise Trust:

  • Over the worst five-year period in developed markets buyout.. you didn’t lose any money” (pg 19) >> We focus exclusively on investing in buyouts in the US and Europe
  • Whatever you think the macro environment will be doing over the next couple of years, history tells you that private equity will outperform the public markets” (pg 42) >> We provide our shareholders with exposure to private equity
  • Secondaries: an investment for all seasons” (pg 75) >> We target to have ~25% of our Portfolio in Secondary investments
  • The private wealth channel is extremely underpenetrated when it comes to alternatives exposure. Estimates by McKinsey put current allocations to alternatives at just 2% on average” (pg 50) >> Our structure gives investors exposure to private equity through a tradable security

Happy reading!

Oliver & Colm

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1Source: Eight investment trusts join AIC’s next generation of ‘dividend heroes’ | Market News | The AIC
2Based on the number of shares outstanding prior to the long-term buyback programme being announced