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A balanced and well positioned portfolio of unquoted investments generating strong and consistent returns.
In third party funds
In high conviction investments
Top 30 companies as a % of the portfolio
We focus on the buyout segment of the private equity market, in which target companies are almost invariably established, profitable and cash generative, which we believe will generate the most consistently strong returns.
We invest in companies managed by ICG and other leading private equity managers, in both cases through specialist funds as well as directly. This approach allows us to proactively increase exposure to companies that we have a high conviction will outperform, enabling us to strike the right balance between concentration and diversification. While diversification at both the manager and company level reduces risk, concentration in our high conviction investments enhances returns and allows individual portfolio companies to make a difference to performance.
Portfolio of leading private equity funds provides a base of strong diversified returns
Our third-party funds portfolio makes up 59% of the Portfolio and underpins our strategy providing a base of strong diversified returns and deal flow for the third-party direct co-investments and secondary investments in our high conviction portfolio.
The underlying funds have a bias to mid-market and large-cap European and US private equity managers and over the last five years this portfolio has generated a constant currency return of 14% p.a.1
High conviction portfolio of actively sourced investments enhance returns
Our high conviction portfolio includes investments managed directly by the five ICG investment teams that we partner with as well as our third party co-investments and secondary funds. The common theme in our high conviction portfolio is that we have selected the underlying companies and this approach is in contrast to a conventional fund of funds in which the third party managers make all the underlying investment decisions.
Our high conviction portfolio is weighted towards investments in our 30 largest underlying companies and has generated a constant currency return of 19% p.a1. over the last five years. We have a strategic goal of increasing the weighting to these investments to 50% - 60% of the Portfolio.
ICG managed investments (22% of the Portfolio)
We invest in five of ICG’s 21 strategies. A key strategic advantage for ICG Enterprise is the proprietary access we have to deal flow from ICG, and the ICG portfolio is broadly split between funds and co-investments. Many of our investments include a mixture of subordinated debt and equity, targeting returns broadly in line with our usual equity investments, but the subordinated debt element significantly reduces the overall risk.
Third party co-investments (14% of the Portfolio)
These are investments directly into a company alongside a private equity fund. These opportunities enable us to proactively increase exposure to companies we have a high conviction will outperform through the cycle.
Secondary fund investments (5% of the Portfolio)
This is when we acquire an existing interest from a seller in a private equity fund that is already substantially invested. We favour funds that are at a stage when the underlying assets’ performance is visible.
All data at 31 January 2020 except where specified otherwise
1Annualised return for five year period ended at 31 January 2020