Investors

Glossary

Alternative Performance Measures (“APMs”)

are a term defined by the European Securities and Markets Authority as “financial measures of historical or future performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework”. APMs are used in this report if considered by the Board and the Manager to be the most relevant basis for shareholders in assessing the overall performance of the Company and for comparing the performance of the Company to its peers, taking into account industry practice. Definitions and reconciliations to IFRS measures are provided in the main body of the report or in this Glossary, where appropriate.

Buyout funds

are funds that acquire controlling interests in companies with a view towards later selling those companies or taking them public. CAGR or Compound Annual Growth Rate represents the annual growth rate of an investment over a specified period of time longer than one year.

Compound Annual Growth Rate ("CAGR")

represents the annual growth rate of an investment over a specified period of time longer than one year.

Carried interest

is equivalent to a performance fee. This represents a share of the profits that will accrue to the underlying private equity managers, after achievement of an agreed preferred return.

Co-investments

are investments in a single underlying company alongside a private equity fund.

Co-investment incentive scheme accrual

is the estimated value of interests in the co-investment incentive scheme operated by the Company. At both 31 July 2018 and 31 January 2018, the accrual was estimated as the theoretical value of the interests if the Portfolio had been sold at its carrying value at those dates.

Commitment

represents the amount of capital that each limited partner agrees to contribute to the fund which can be drawn at the discretion of the general partner.

Direct investments

are investments in a single underlying company.

Discount

arises when the investment trust shares trade at a discount to NAV. In this circumstance, the price that an investor pays or receives for a share would be less than the value attributable to it by reference to the underlying assets. The discount is the difference between the share price and the NAV, expressed as a percentage of the NAV. For example, if the NAV was 100p and the share price was 90p, the discount would be 10%.

Drawdowns

are amounts invested by the Company into funds when called by underlying managers in respect of an existing commitment.

Earnings before interest, tax, depreciation and amortisation   ("EBITDA")

stands for earnings before interest, tax, depreciation and amortisation, which is a widely used performance measure in the private equity industry.

Enterprise value ("EV")

is the aggregate value of a company’s entire issued share capital and net debt.

FTSE All-Share Index Total return

is the change in the level of the FTSE All-Share Index, assuming that dividends are re-invested on the day that they are paid.

Full realisations

are exit events (e.g. trade sale, sale by public offering, or sale to a financial buyer) following which the residual exposure to an underlying company is zero or immaterial.

Funds in investment period

are those funds which are able to make new platform investments under the terms of their fund agreements, usually up to five years after the initial commitment.

General partner (“GP”)

is the entity managing a private equity fund that has been established as a limited partnership. This is commonly referred to as the Manager.

Hedging

is an investment technique designed to offset a potential loss on one investment by purchasing a second investment that is expected to perform in the opposite way.

High conviction portfolio

refers to co-investments, ICG managed funds and secondary fund investments.

Indirect investments

are investments held in a private equity fund structure.

Initial Public Offering (“IPO”)

is an offering by a company of its share capital to the public with a view to seeking an admission of its shares to a recognised stock exchange.

Internal Rate of Return (“IRR”)

is the annualised rate of 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 investment.

Last Twelve Months (“LTM”)

refers to the time frame of the immediately preceding 12 months in reference to a financial metric used to evaluate the company’s performance.

Limited partner (“LP”)

is an institution or individual who commits capital to a private equity fund established as a limited partnership. These funds are generally protected from legal actions and any losses beyond the original investment.

Limited Partnership

includes one or more general partners, who have responsibility for managing the business of the partnership and have unlimited liability, and one or more limited partners, who do not participate in the operation of the partnership and whose liability is ordinarily capped at their capital and loan contribution to the partnership. In typical fund structures, the general partner receives a priority profit share ahead of distributions to limited partners.

Management Buyin (“MBI”)

is a change of ownership, where an incoming management team raises financial backing, normally a mix of equity and debt, to acquire a business.

Management Buyout (“MBO”)

is a change of ownership, where the incumbent management team raises financial backing, normally a mix of equity and debt, to acquire a business it manages.

Net asset value per share (“NAV”)

is the value of the Company’s assets attributable to one ordinary share. It is calculated by dividing “shareholders’ funds” by the total number of ordinary shares in issue. Shareholders’ funds are calculated by deducting current and long term liabilities, and any provision for liabilities and charges, from the Company’s total assets.

Net asset value per share  ("NAV per share")

is the value of the Company’s assets attributable to one Ordinary share. It is calculated by dividing ‘shareholders’ funds’ by the total number of Ordinary shares in issue. Shareholders’ funds are calculated by deducting current and long-term liabilities, and any provision for liabilities and charges, from the Company’s total assets.

Net asset value per share Total Return

is the change in the Company’s net asset value per share, assuming that dividends are re-invested at the end of the quarter in which the dividend was paid.

Net debt

is calculated as the total short term and long term debt in a business, less cash and cash equivalents.

Net obligation

The net amount due; comprised of receivables, assets due from subsidiaries and co-investment incentive scheme accrual.

Overcommitment

refers to where private equity fund investors make commitments exceeding the amount of cash immediately available for investment. When determining the appropriate level of overcommitment, careful consideration needs to be given to the rate at which commitments might be drawn down, and the rate at which realisations will generate cash from the existing portfolio to fund new investment.

Portfolio

represents the aggregate of the investment Portfolios of the Company and of its subsidiary limited partnerships. This is consistent with the commentary in previous annual and interim reports. The Board and the Manager consider that this is the most relevant basis for shareholders to assess the overall performance of the Company and comparison with its peers.

The closest equivalent amount reported on the balance sheet is “investments at fair value”. A reconciliation of these two measures is presented below.

£m

Investments at fair value as per balance sheet

Cash held by subsidiary limited partnerships

Balances receivable  from subsidiary limited partnerships

Co-investment incentive scheme accrual

Portfolio

31 July 2018 631.3 (0.2) (1.0) 24.4 654.5
31 January 2018 576.5 - 1.4 22.5 600.7

Post-crisis investments

are defined as those completed in 2009 or later.

Pre-crisis investments

are defined as those completed in 2008 or before, based on the date the original deal was completed, which may differ from when the Company invested if acquired through a secondary.

Preferred return

is the preferential rate of return on an individual investment or a portfolio of investments, which is typically 8% per annum.

Premium

occurs when the share price is higher than the NAV and investors would therefore be paying more than the value attributable to the shares by reference to the underlying assets.

Public to private (“P2P”)

is the purchase of all of a listed company’s shares using a special-purpose vehicle funded with a mixture of debt and unquoted equity.

Quoted company

is any company whose shares are listed or traded on a recognised stock exchange.

Realisation proceeds

are amounts received by the Company in respect of the Portfolio, which may be in the form of capital proceeds or income such as interest or dividends.

Secondary investments

occur when a Company purchases existing private equity fund interests and commitments from an investor seeking liquidity.

Share price Total Return

is the change in the Company’s share price, assuming that dividends are re-invested on the day that they are paid.

Total Return

is a performance measure that assumes the notional re-investment of dividends. This is a measure commonly used by the listed private equity sector and listed companies in general.

The tables below set out the share price and the net asset value per share growth figures for periods of one, three, five and tenyears to the balance sheet date, on both an unadjusted basis (i.e. without dividends re-invested) and on a Total Return basis.

Unadjusted performance in years to 31 July 2018 1 year 3 year 5 year 10 year*
Net asset value per share 9.5% 46.5% 50.4% 97.1%
Share price 14.4% 44.4% 74.2% 102.9%
FTSE All-Share Index 5.1% 16.4% 21.2% 48.9%
Total Return performance in years to 31 January 2018 1 year 3 year 5 year 10 year*
Net asset value per share  11.9% 55.4% 66.8% 126.4%
Share price  17.3% 55.4% 97.3% 142.2%
FTSE All-Share Index  9.2% 16.4% 44.9% 113.9%

* As the Company changed its year end in 2010, the ten year figures are for the 121 month period to 31 January 2018.

Underlying valuation movement

is the change in the valuation of the Company’s Portfolio, before the effect of currency movements.

Undrawn commitments

are commitments that have not yet been drawn down (see definition of drawdowns).

Unquoted company

is any company whose shares are not listed or traded on a recognised stock exchange.

Uplift on exit

represents the increase in gross value relative to the underlying manager’s most recent valuation prior to the announcement of the disposal. Excludes a small number of investments that were public throughout the life of the investment. May differ from valuation gains in the reporting period in certain instances due to timing differences.

Valuation multiples

are earnings or revenue multiples applied in valuing a business enterprise. Venture capital refers to investing in companies at a point in that company’s life cycle that is either at the concept, start-up or early stage of development.

Venture capital

Investing in companies at a point in that company’s life cycle that is either at the concept, start-up or early stage of development.

Share price (ICGT)

843p
-1.34P (-0.16%)
6:49PM 12 Nov 2018
The share price information is delayed by at least 15 minutes

Net Asset Value

1,026p
As of 31 July 2018
Next update: January 2019 – Q3 results
Year Net assets NAV per share Share price Dividends per share
Jan 2018 £664m 959p 818p 21p
Jan 2017 £613m 871p 698p 20p
Jan 2016 £521m 731p 545p 11p
Jan 2015 £507m 695p 575p 15.5p
Jan 2014 £494m 677p 563p 15.5p
Jan 2013 £460m 631p 487p 5p
Jan 2012 £415m 569p 357p 5p
Jan 2011 £389m 534p 308p 2.25p
Dec 2009 £338m 464p 305p 2.25p
Dec 2008 £327m 449p 187p 4.5p

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