Martin Li
Good morning and welcome to ICG Enterprise Trust’s half year results for the six months to 31st of July, 2026. As you’ll hear over the next 15 minutes or so, it was a six-month period demonstrating growth across multiple investment areas with positive net portfolio cash flow and selective investment. Our portfolio companies continue to perform well, we’ve realized assets above carrying values, and we’ve returned capital to shareholders through both dividends and buybacks. Today, portfolio manager Colm Walsh will take you through the half-year performance, the activity in the portfolio, and how we are positioned for the current environment.
The slides and the results announcement are available on our website. We’ll leave time for Q&A at the end, you can submit your questions at any point using the Q&A box on your screens.
With that, I’ll hand over to Colm.
Colm Walsh
Thanks, Martin, and thank you everyone for joining this call. First of all, let me just take a few minutes to outline our investment strategy, particularly for newer shareholders, but also just to recap for existing shareholders as well. Broadly speaking, we aim to deliver private equity returns whilst managing risk through a focused investment strategy. Firstly, we focus on buyouts, that’s to say profitable cash generative companies. Typically relatively mature companies or companies which have the scope to grow. Secondly, we invest primarily in developed markets, and in terms of private equity, that’s North America and Europe, where we believe that the depth and quality of the managers available in those markets is the strongest. Thirdly, we focus on mid-market deals, that’s companies with enterprise values approximately between $250 million and $2 billion. Obviously, they’re big numbers, but small by public market standards.
We think though that companies of this size offer a particular sweet spot. They are companies who have the ability to be transformed into market leading companies. And finally, and really critically, we partner with top tier private equity managers, managers with proven track records, experience through cycles, and a really strong institutional framework. Put together, that gives us a diversified portfolio of resilient companies with a more consistent return profile where performance is less cyclical, less seasonal, more resilient. So, moving on to the next slide, what has that delivered in practice? Let’s just take a quick look at the data. On this slide, a little bit technical, we plot ICG Enterprise and our peers on a risk return graph, simply the NAV per share total return against the standard deviation of those returns. It’s not a standard industry measure, but we think it’s a useful way to illustrate how ICG Enterprise compares with peers from a portfolio construction perspective.
And since January 2020, ICG Enterprise ranks first amongst its peer group, delivering sector leading returns per unit of risk, or thinking in another way, sector leading returns on a risk adjusted basis. And we also rank first over the last 10 years. For us, the critical point is not just about the absolute level of return, but it’s the balance of return and risk. And that’s very consistent with our approach, our resilient growth strategy, which I just talked about, delivering strong returns, but also at the same time managing risk. So, moving on to the next slide, we show that this strong risk adjusted return performance is supported by diversified vintage exposure. So, around 23% of the portfolio is in the older vintages, that’s 2017 to 2020, 31% in newer vintages, ’23 to ’25, and what you see here is that 41% of the portfolio is in the 2021 and 2022 vintages.
Now, that’s to some degree what you would expect, you would expect the three to five year old vintages to be a high percentage of the portfolio given that they’re in the growth phase and typically before they are likely to be realized. We often get asked a really consistent question in recent quarters has been about our thoughts on the ’21 and ’22 vintages. It was a period of very high levels of activity, and that’s particularly in the context of market volatility in some of the sectors like tech and software that were especially favored in those vintages. 16 of our top 30 companies are from those vintages, but as you can see from these logos, and some of them less familiar companies, but as you can see from the logos, it’s a very diversified portfolio, and it’s substantially underweight what a typical private equity portfolio for those vintages would’ve looked like.
We invested in the likes of theater operators, retirement home operators, mortgage appraisal providers. So, a very wide range of themes and underlying external growth factors. And even in the four software investments listed, they’re typically in sub-sectors of software that are resilient to defensive. So, example, Ping Identity provides cybersecurity solutions, it’s actually a sub-sector of software that benefits from the secular trend that is AI. We also have a number of these such as Precisely, which have downside protection within the structure. In other words, we’re not just investing in common equity, we invest in a structure which offers downside protection, which is very much part of the heritage and DNA, if you like, of ICG. So, when we look through the headline vintage, as I say, we see a very diversified group of companies, it’s not a concentrated bet on any single investment thesis or any single secular trend, and we think that supports the resilience of our long-term growth.
So, moving on to the next slide and turning to the period, firstly, I want to frame the discussion with three key points. Firstly, our portfolio performance, which strengthened in the second quarter with growth across a range of companies. Secondly, exits continue to anchor our strong returns. We had 24 full exits in the half year period, and collectively those investments generated a 3.0x cost return. And finally, whilst macro events post-period likely will extend a period of slower sector-wide activity, ICG Enterprise has a robust balance sheet and that gives us significant flexibility. So, let’s go through each in turn, moving on to the next slide. So, whilst the first quarter’s return was relatively flat, we saw 3.5% portfolio return on a sterling basis in the second quarter. Some of the key contributors to our second quarter portfolio growth are shown on the slide.
But just to pick up on a few, Ambassador Theatre Group and Exail, some of our largest exposures in our top 30 companies were both marked up to the expected sale price. In fact, that makes Exail our largest underlying company exposure. Brooks Automation is benefiting from demand for semiconductors. This is, if you like, a kind of picks and shovels business, it benefits from the derived demand for semiconductors without being exposed to the much more volatile demand cycle for those semiconductors. So, that AI-driven demand continues to support strong growth, and in fact, Brooks has recently filed for an IPO in the US. And Greenix, again, illustrating this trend of having a very diverse range of companies, Greenix is a provider of pest control services, and that continues to report strong EBITDA growth. So, everything from semiconductors to catching pests, it’s quite a broad range of activities. And we think it’s really encouraging is that breadth of that growth and how our portfolio is tapping into a very wide variety of long-term growth trends across multiple different sectors and multiple different business models, multiple different geographies.
We also received, as you can see on the slide here, significant liquidity from two of our top 30 companies in the period, as Curium and Yudo, and we’re expecting approximately £70 million of additional proceeds in the coming quarters from two further large exits, Exail and Ambassador Theatre Group. Our approach of investing in high quality market leading companies has seen in recent periods a number of successful exits from our larger exposures. You would’ve seen that reflected in our results for last year as well. So, moving on now to look at our balance sheet, that realization activity leaves our balance sheets in a good position. At the 31st of July 2026, we have £190 million in terms of total available liquidity, and we had a net debt of £66 million. And that’s against a portfolio, which is almost £1.4 billion, so really strong coverage. We believe that positions us strongly with one of the lowest gearing ratios in our peer group.
And so financial flexibility we think is really important in this environment. It’s a core strength of ICG Enterprise, it gives us the ability to continue to invest in high quality new investments, to maintain vintage diversification, which will support in turn our long-term growth, but it also gives us the resources to continue to enhance shareholder returns through buybacks and through dividends. Moving on now to activity in the half year, and over the next few slides I’m going to run through what we’ve seen in the portfolio over the last 12 months. As a reminder, we break down the investment life cycle into four phases. Firstly, we make commitments to new funds alongside our US and European managers, mixture of old and new. Second, we’re called for capital or we invest directly into portfolio companies.
Thirdly, those companies go through a period of value creation, and we like to partner with managers as a reminder that have multiple different levers to create value, and in particular those that have significant operational expertise. And finally, and obviously very critically, we and our managers exit the businesses, thus generating proceeds. So, the cycle repeats, proceeds come in, we then have to redeploy into new commitments and new investments. Starting with phase one on the next slide, commitments. So, we made 104 million of new fund commitments during the six months, most of that was alongside managers already in our portfolio, long-established managers, where we have longstanding relationships. Good examples being Gridiron, TJC, formerly known as The Jordan Company. We’ve also added some new managers to our portfolio, you can see the logos here for SkyKnight and Archimed.
Perhaps not household names, but in both cases, very highly sought after managers that had very competitive fundraisings, and where not everybody was able to secure an allocation. They have very significant domain expertise and both managers also have the potential to generate significant co-investment deal flow. And really critical parts of our co-investment program is partnering with the best managers. Moving on now to this slide about deploying capital, our new investments, we invested £65 million in the period. That’s lower than recent years, but that’s consistent with the point I made earlier that we have remained highly selective, and that activity is obviously relatively light in this market and below our five-year trend. The largest company investment was a business called Pharmacy2U, it’s an operator of an online pharmacy business predominantly in the UK. Really good example of what we look for, an established market position, but a company which has significant structural growth in online healthcare, and alongside a specialist manager that has the right level of sector domain expertise.
This was a £13 million co-investment alongside G Square, as I said, a specialist healthcare investor. Turning now to portfolio growth, during the period the portfolio return on a local currency basis was 3.2%. And this period, FX had a limited impact in the portfolio, and we ended up with a closing portfolio valuation of, as I said earlier, a little under 1.4 billion. Over the longer term, our portfolio return on a local currency basis was 10.2% on an annualized basis over the last five years, that translates to an annualized NAV per share total return of 8.4%. Moving on to the next slide, which summarizes some of the key financial metrics for the underlying portfolio. Portfolio companies remained resilient, they delivered 11% growth over the last 12 months, and 16% growth in EBITDA. So, it’s 11% revenue and 16% in EBITDA.
Valuation multiples remained broadly similar at 15.8 times, and net debt at 4.8 times EBITDA. We remain comfortable with these valuation metrics in the context of the portfolio’s high revenue and EBITDA growth, and we believe it is reflective of a focus on high quality companies with strong quality brands. Moving to the fourth and final phase, exits. Realizations in the period totaled 84 million. As with the investment slide earlier, this does reflect a drop from recent years reflecting the slower market-wide transaction environment. However, two further large exits have been signed, they’re not reflected in these numbers, but have been signed, and they’re expected to generate, as mentioned earlier, an additional £70 million worth of cash proceeds to ICG Enterprise, subject to closing process.
And on that topic, I wanted to expand on Ambassador Theatre Group, which was our fourth-largest company exposure at the 31st of July, and as I mentioned, will likely be realized in coming quarters. We invested alongside our colleagues in ICG strategic equity, that’s our GP-led secondary strategy in 2021, and that was, at the time, quite a brave decision, at a point when the live entertainment industry was still recovering from the impacts of the COVID pandemic. Since then, the company has benefited from the strong return of audiences to live theater, and in particular the return of tourism as well, and has continued to build its position as a leading international venue operator. The business has been sold to a strategic buyer with approximately £23 million worth of proceeds expected for ICG Enterprise in the coming quarters. And for us, this is a good example of backing a high quality market leading company, and a good endorsement of our diversified approach, and it will be a meaningful exit from our 2021 vintage portfolio to boot.
So, staying on exits, one of the best proof points for NAV is what a company sells for upon exit, it’s a metric we’ve tracked over a number of years. You can see the last 12 months, ICG Enterprise Trust completed 60 full exits, they were executed at a multiple of 3.1 times cost, and as an average 10% uplift to the previous carrying value. And that continues the long-term trend of crystallizing strong returns on exits. On average, exits have been around two and a half times cost, and as a premium to carrying value. We see this as a very good validation of the underlying portfolio quality and ultimately of our NAV. So, to conclude, our priorities for the second half of the financial year remain very similar to what we outlined at the start of the year. That is to say we’re going to keep a high bar for new investments, and I think you’ll have heard us say that over multiple quarters, but we think that discipline is especially important in the environment that we’re currently investing into.
Secondly, the byproduct of a strong 12 to 18 months of realizations is a number of our larger positions have been exited, and over time we intend to refresh those larger exposures because we believe that portfolio concentration helps to generate alpha. And finally, we’ll continue to balance long-term and near-term shareholder returns through a combination of investing, through executing buybacks, and also through our progressive dividend policy. All of that we believe supports resilience through market turbulence, through change, and should deliver long-term compounding growth for shareholders. And with that, I’m going to pass back to Martin, who’s going to host the Q&A.
Investments involve risks, including the risk of capital loss. Past performance is not a reliable indicator of future results.
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