ICG Enterprise Trust Q2 2025 Earnings Report

ICG Enterprise Trust EPS Results

• Actual EPS: -GBX 2.70
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

ICG Enterprise Trust Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

ICG Enterprise Trust Announcement Details

• Quarter: Q2 2025
• Date: 10/8/2024
• Time: Before Market Opens
• Conference Call Date: Tuesday, October 8, 2024
• Conference Call Time: 5:00AM ET

ICG Enterprise Trust (LON:ICGT) is focused exclusively on investing in buyouts in North America and Europe. Through our experience, global network and focus on defensive growth, we seek to deliver attractive long-term returns.

ICG Enterprise Trust Q2 2025 Earnings Call Transcript

Key Takeaways

• The portfolio delivered a 4% LTM NAV per share total return to 31 July 2024 and achieved a 2.8% H1 NAV return alongside a 10.3% share price return, outperforming the FTSE All Share Index.
• Nine full exits generated £86 million in realizations with a weighted average uplift of 26% to carrying value and an average 3.1x money multiple.
• Underlying portfolio companies grew LTM revenues by 9.4% and EBITDA by 13.9%, with quarterly growth accelerating from 0.5% in Q1 to 3.2% in Q2.
• Capital returned to shareholders totaled £33 million in H1—split one-third in dividends and two-thirds in buybacks—with a commitment to maintain a minimum FY25 dividend of £0.35 per share.
• Transaction activity is increasing as the market trends back to normalization, but net gearing rose to 6% amid lower exit volumes and is expected to revert as more realizations crystallize.

Presentation

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

Good morning. Welcome to ICG Enterprise Trust's half-year results for the six months to 31 July 2024. I'm joined today by Oliver Gardey and Colm Walsh, who will discuss our investment performance and activity in more detail over the course of this presentation. The slides for the presentation, along with the accompanying results announcement, are available on our website. We will have time for Q&A at the end of the presentation, so if you would like to submit a question, please do so through the online portal at any point in the Q&A box on your screens. We will then aim to answer those questions at the end of the session. With that, Oliver, over to you.

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

Thanks, Martin, and good morning, everyone. I thought it makes sense to kick off the presentation with a quick reminder of our investment strategy and what we're actually trying to achieve for our investors. In summary, we're trying to provide our investors with top-tier private equity returns, but with less risk and more liquidity. And this slide is really our guide for strong risk-adjusted returns. And let me explain a little bit more in detail. As many of you are aware, private equity has a long-term track record of outperforming public markets. And our strategy, as outlined on the slide, is about maximizing our returns while simultaneously managing risk. So how do we do this? First of all, we only invest in buyouts. Why?

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

Because more mature companies, which have a more consistent return profile, and we do not invest in venture capital or growth equity, which can have loss rates of 60%-75%. Whereas for buyouts, it is around 10%. So it's a completely different risk profile. We only invest in developed markets, not Asia or emerging markets, only North America and Europe, because these `geographies have a more mature private equity market with very deep knowledge, expertise, and strong pipeline of quality managers and deals. We invest only in mid-market and larger deals, funds typically over $1 billion in size. And they have the necessary investing experience, team resources to deliver what makes private equity perform better than other asset classes. We look for funds that have the resources, the operational capacity to source good companies, and then to transform them into market leaders. Furthermore, we invest only in top-tier managers.

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

As many of you are aware, the dispersion between a top quartile fund and a bottom quartile fund is larger in private equity than in any other asset class. Therefore, picking the right managers and funds is especially important in private equity. We have a long demonstrable track record for over 40 years in picking top-tier funds. Finally, we look for managers and companies that are aligned with our defensive growth theme, focused on companies and sectors where performance is not cyclical or seasonal, but not so defensive that there is very limited growth potential, so we are looking for companies with good growth potential, but are just non-cyclical. Now, important on the slide are the three little circles all the way on the right-hand side, and this is about our fund selection process.

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

In addition to the fund selection process, we have the ability to outsize returns by making discretionary investments and actively construct our portfolio. We invest 50% directly in secondaries and co-investments alongside our fund managers, which brings me to the next slide. And you'll see here the 50/50 split between fund investments and direct investments or discretionary investments, as well as having a dedicated investment team. And this allows us to actively construct and diversify a portfolio of companies which are market leaders in their sectors and have defensive growth characteristics. By geography, we aim 50/50 North America and Europe. And by sector, we do not pursue a sector-specific investment strategy. However, we look for sectors with defensive growth characteristics, like software or subscription-based businesses. Our top three sectors in our portfolio are well spread across technology, consumer, and business services.

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

Noteworthy to flag, technology was 24% of our portfolio last year, and it is now 29% of our portfolio and 34% of our top 30. And we will talk later about this in the presentation, but this is one of the reasons for continuing strength of our valuation multiple. Towards the bottom of the slide, we list out our top five underlying company exposures. Many of you will be very familiar with many of these. Colm will talk later of the new entrant to this list, which is Datasite. But overall, you can see a top five spread across country and sector, all benefiting from long-term structural growth trends in areas such as digital transformation and tech-enabled business services. Quick reminder, the top 10 portfolio companies represent 19% of our portfolio, top 30 represent 40%, and top 50 represent 50%.

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

We're happy with the construction and diversity of the portfolio, and we believe it positions us well to deliver attractive returns for our shareholders. On the next slide, you see our active portfolio construction has translated to an LTM NAV per share total return of 4% to July 31, 2024. Private equity, as I said before, is a long-term asset class, and looking for the longer term, you can see from the slide our NAV per share total return and our share price total return over three- to five- and 10-year are all double-digit and all outperformed the FTSE All-Share Index total return. As a reminder, all our performance figures are reported net of fees and cost. Some observations. Let's turn specifically now to our H1 results.

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

This is a six-month period maintaining our momentum with our portfolio companies continuing to grow revenue and EBITDA with LTM earnings growth about 14%. There's also a strong quarter-on-quarter upward growth trajectory from Q1 to Q2, with Q1 growing 0.5% on a local currency basis and Q2 growing at a strong 3.2%. In terms of activity, very contrasting years for private equity activity levels between 2021 and 2022, which saw very high activity, and then in 2023, we saw very low activity. We would characterize the start of 2024, which is what this period reflects essentially, as a period of trending back to normalization. We're experiencing an increased level of transaction activity. Our portfolio companies are realized, and we're generating meaningful value. We had nine full exits in the period that were realized at a weighted average uplift carrying value of 26%.

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

Our focus on the wider shareholder experience is yielding benefits. The volatility of our share price has reduced. Trading liquidity has increased over the last five years, and finally, we welcome the recent announcement by the FCA regarding costs and our reviewing our disclosures. Let's put the half-year into numbers. Our portfolio grew on a local currency basis by 3.8%, and most of the growth came in from the second quarter, and on a sterling basis by 2.6%. That translated our NAV per share total return of 2.8% and a share price total return of 10.3% in the six months to the 31st of July, and as you can see on the top right of the slide, GBP 33 million was returned to shareholders in the period, split approximately one-third in dividends, two-thirds in buybacks, and we intend to continue both these mechanisms on a long-term basis.

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

Finally, the six-month period saw the net investment of GBP 18 million, with investments of GBP 104 million and proceeds of GBP 86 million, which Colm will talk in more detail. Moving on to the next slide. This slide outlines some of the key operational and financial metrics of our underlying portfolio. The top row represents our top 30 companies, which is about 40% of our portfolio. And the bottom row, our enlarged data set representing nearly two-thirds of our portfolio, where you can see 9.4% LTM revenue growth and 13.9% LTM EBITDA growth. This has moderated down marginally, but in a sense, reflects the absence now of the COVID rebound and our very strong growth figures, in particular if you compare it to the GDP growth or to the FTSE S&P 500 average.

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

On valuation metrics, the weighted average EV/EBITDA multiple increased to 14.9 across our large portfolio and with average debt marginally down at 4.4x. This reflects the quality of our underlying portfolio companies and prudent debt levels. You will see the valuation multiple of our top 30 companies has gone up from 14.6 to 15.3, and this increase is caused by mainly the inclusion of Chewy, which is now a very profitable business and being valued on the EV/EBITDA metrics we usually use for the top 30. Secondly, due to the increasing tech exposure of our top 30, now 33% compared to 27% of our top 30 by value as of the 31st of July, and then lastly, the overall rise in valuation in the public equities market and the high quality of earnings of our portfolio companies caused some of that increase.

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

With that opening, I'll pass to Colm to discuss our H1 activity more specifically.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

Fantastic. Thanks, Oliver. And good morning, everyone. So in the next few slides, we're going to take a look at what happened, as Oliver was saying, over the last six months in the portfolio. And I'm sure none of you need reminding of a period of continued market adjustment and heightened geopolitical risks. As a reminder, we like to break down the investment cycle into four phases, and I'm going to update you on each aspect of that cycle. Just to give you an overview, first phase, we make commitments to new funds. We'll call for capital, and then we'll reinvest directly into portfolio companies. Then typically, that's our new investments. Then typically, between years four and eight in the fund lifecycle, our managers get to work adding value. That's, if you like, the kind of growth phase.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

And finally, and most importantly, selling the businesses, typically to strategic buyers or to other financial buyers. And the cycle continuously repeats. Those realizations come in, our cash balance will increase, and we redeploy those proceeds into new commitments and investments. Now, I said six months ago in our full-year results that the cogs in the machine were turning a little slower in 2023. And if I carry that analogy forward to today, the engine, as Oliver was saying, is beginning to pick up a little bit of pace, but we're far from being at full throttle. And we can see that in the global buyout market. Volumes are annualizing at similar levels to 2023, but we can see pickup and some momentum in recent quarters. We care about this higher activity as higher transaction activity obviously gives investors confidence in our valuations.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

As well as that, realizations help to boost our NAV growth given the history of uplifts on exit, which I'll cover in a later slide. We remain optimistic about those transaction volumes, particularly given some very positive news following recent rate cuts. Moving on to the next slide, looking at our new commitment activity, we made GBP 72 million worth of new fund commitments over the half-year. The largest was to an ICG Strategic Equity. This is our GP-led secondary strategy. ICG are pioneers in this space, and the $25 million commitment aligns with our target allocation for secondaries, which you've already seen. We also committed to Leeds Equity, Investindustrial, Oak Hill, and Thoma Bravo. They are all well-established managers, and in each case, we already have long-standing relationships with them.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

Just to give you a little bit of color on one of those manager relationships, moving on to the next slide, I'd like to talk about Oak Hill. Oak Hill, it was one of our first U.S. managers when we decided to start investing in the U.S. back in 2016. It's a long-standing manager with roots dating back to 1986, and we've made commitments of over $50 million since we commenced our U.S. investment program to Oak Hill Funds. The latest of which, which you saw from the previous slide, was a $15 million commitment to Oak Hill VI. We've also successfully co-invested alongside Oak Hill in a business called Berlin Packaging, which you may recall. That was a highly successful exit for us with a strong money multiple and IRR performance. Oak Hill, in our view, is a top-tier manager.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

It's got a strong track record, and it's got a very good history of returning capital to investors quickly. As a reminder, this is very important for an evergreen fund like ICG Enterprise, as funds which offer that strong IRR performance help to optimize NAV growth. One full exit which occurred this period was an Oak Hill holding, one of the last in the fund, a business called Safe Fleet, which is a provider of safety products for fleet vehicles. This actually makes Oak Hill IV, a fund we committed to in 2017, almost fully realized. That's not bad for a commitment which we made a little over seven years ago. Moving on to the next slide and turning our attention to new investments in the period. During the period, we invested GBP 104 million, a relatively low volume, which is consistent with trends in the broader market.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

Just to pick on two notable examples of new investments in the period, Datasite was our largest investment. We invested GBP 25 million in the period alongside ICG Strategic Equity and their partner, CapVest. And as Oliver noted earlier, that's a new entrant into our top 10 investments. It's a provider of software as a service, or in the jargon, SaaS software, focusing on virtual data rooms. We believe it's an attractive, high-quality, typical, great exemplar of a defensive growth business. And very importantly, it's one where ICG has significant institutional knowledge. Many of you will also know Visma, the largest provider of European, again, to use the jargon, SaaS Enterprise Resource Planning software. This was our second largest investment in the period. It's a co-investment alongside HgCapital.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

It has, again, typical for many of our larger exposures, a leading position in its market, really strong secular growth trends, and very consistent revenue and EBITDA growth track record. It also has a very highly experienced management team and a sponsor which has particular domain expertise. Moving on to the next slide, where we discuss portfolio performance. Our portfolio this period grew by 3.8% on a local currency basis, and this was spread across primary, secondary, and direct investments, and that performance was overwhelmingly skewed to the second quarter. The direct portion of our portfolio marginally outperformed. Companies that did particularly well include Davies Group and Chewy. Chewy, as a listed company, that was a reflection of share price performance. Davies Group, as a reminder, is a supplier of insurance claims outsourcing services.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

Definitely not a household name, but again, another example of one of our larger investments which has a leading position in its sector. There was some FX headwinds in the period. The sterling appreciated against the U.S. dollar and euro. And we therefore ended the period with a portfolio value of just over GBP 1.4 billion as at the 31st of July 2024. Moving on now to the final phase, realizations. Just like new investments, reflecting slightly lower transaction volumes, but as Oliver noted, we're definitely seeing some momentum. Realizations in the period totaled GBP 86 million. If we split it out by quarter, as you can see on the chart, the trajectory is clearly upward. So you can see Q2 this year was notably higher. Sorry, you can see Q2 this year was notably higher than Q1 and also compares very well to some of the recent historical quarters.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

To put numbers on that, Q2 this year, that's the months of May, June, and July, we saw around GBP 60 million worth of realizations, whereas the four quarters before that were hovering around GBP 30 million worth of realizations for each quarter. Some of the exits this period are shown by the logos on the right. Just to pick on the top three, VettaFi is a provider of financial indices and data. That was an investment alongside our colleagues at ICG Strategic Equity, so that GP-led secondary strategy. Visma and Datasite, you can actually see are on both lists of new investments and largest realizations. This reflects where companies have been recapped and where we've opted to reinvest the proceeds we've had from those transactions.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

We like, obviously, investing in companies where we have strong institutional knowledge and where there's a really clear ICG edge, and we believe that's the case with both of those companies. So we decided to elect part of our proceeds. Moving on to the next slide. Touched on this earlier. As we talk about realizations, I wanted to review our performance on exit. And obviously, the best proof point for any valuation is what a company sells for when it's ultimately exited. In the period, we had nine full exits at a weighted average uplift to carrying value of 26%. And that continues a long-term trend of realizing exits at a material premium to their previous carrying value. And worth noting, too, that these exits have also crystallized strong returns, so averaging 3.1x money, 3 x 1 on cost.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

This performance and this track record demonstrates the quality of our investments as we continue to generate meaningful value across the portfolio. Moving on to the next slide, where I'd just like to spend some time on capital allocation, which remains a very important component of the wider shareholder experience. ICG Enterprise Trust has a long-standing progressive dividend policy, which you can see on chart number one here, a long-term share buyback program, which we instituted in 2022. And during the period, the board introduced an opportunistic buyback program to take advantage of current trading and discount levels, with the opportunity to purchase shares in meaningful size and at a significant discount presents itself. All three combined and inclusive of the intended FY 2025 dividend of at least GBP 0.35 a share, that totals GBP 48 million, which is equivalent to nearly 4% of opening NAV.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

We believe that these measures demonstrate our holistic approach to optimizing returns for our shareholders, and it's also delivered on its aims of reducing volatility in the share price and improving trading liquidity, and finally, and before we move on to some Q&A, just some takeaways that we wanted to leave you with from this set of results, so firstly, our portfolio is continuing to grow. We continue to deliver long-term defensive growth despite a low transaction environment and despite that backdrop of ever-increasing geopolitical risk. We are seeing an increased level of transaction activity, and we're hopeful that the conditions are in place to return to more normal volumes given an improved macroeconomic outlook and given recent rate cuts, and finally, we're continuing to implement our capital allocation policy to optimize the shareholder experience to better align our portfolio and share price performance.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

And with that, I'm going to pass back to Martin, who's going to handle the Q&A.

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

Thanks, Oliver, and thanks, Colm. We now have about 10 minutes or so for Q&A. So as a reminder, please feel free to submit questions via the Q&A box you see on the webinar platform. A few have come in already, so just to take them in turn. One on that Q2 performance. So encouragingly, as both of you have said, Q2 performance was stronger than Q1, both in terms of growth and also the investment and realization numbers. Is this a sign that markets are incrementally improving quarter on quarter?

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

Yes, we do see much more activity coming through in terms of the pipeline of potential realizations. And certainly, in the American markets, certainly the drop in interest rates is helping and stirring up some more activity.

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

We already saw more activity in the first two quarters, and we're expecting more activity in the next couple of quarters. However, we do not think it's going to be back to normal pre-2021, let's say pre-2022 levels. We see this as a trend to normalization. It does take some time to work through these processes to get companies lined up and to build builders, sorry, buyers and processes. We don't think there's going to be an immediate jump. This would be a slow, gradually growing trend in terms of activity and back to normalization.

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

Thanks, Oliver. Maybe just to build on that question on realizations. Earlier in the year, we said we expected mid to high teens of realization rates. Halfway through this financial year, people see an annualized rate of 12% realization rate.

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

Are we still confident of the mid to high teens for realization rate?

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

Yep, we remain confident, and partly due to what I said earlier, because we do see an increase in activity levels. It is a little bit back-ended as the market and as a lot of buyers and sellers have kind of waited to see where interest rate policy will end up on the Fed side. But we do have good visibility on quite a lot of activity. So we do think that we will catch up in the last two quarters. So we remain confident of the mid to high teens level of realization.

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

Thanks, Oliver. A clarification question just on Visma has come in. So Visma is shown as a top new investment in the last six-month period as well as a top realization.

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

Colm, I think you covered this in your remarks, but could we just please elaborate on them appearing on both tables?

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

Yes. I did mention this in my presentation. This is an example of where a business is recapped. So some proceeds come out, and then we have the option to reinvest those proceeds. Visma is actually a company that we've invested in, actually through different managers alongside Cinven and ICG, Hg, since, I think, 2013. And it's been very successful. So it's not the first time where you would have seen both a realization coming out of Visma and then a reinvestment of part of those proceeds. And this is an example of a business where we have, where a the business has demonstrated, ticks all of the, it's a very good example of the characteristics we look for in a company. It's a company we know really well.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

It's also a business where ICG has a really strong institutional knowledge of that business. Therefore, we believe that allows us to make a more informed investment decision. Hence the reason to continue investing in that company.

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

Thanks, Colm. A question's come in on our portfolio metrics, the enlarged perimeter. LTM, you would argue growth of the enlarged perimeter was 13.9% last 12 months. It is marginally down or decelerating versus the figure last year. Is this a reflection of anything, or as Oliver said, is this more just a base effect with the COVID rebounds now out of the denominator, essentially?

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

I think that's a large, I think Oliver, you know, sort of covered that. I think that's a really large contributor to that trend. We think that actually these numbers represent a really strong performance.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

You think about where GDP growth, trend GDP growth is in our core economies. We think in absolute terms, it's a very, very strong performance from the portfolio.

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

Building on the portfolio company metrics, there's a question here on, can you give us some more color on the valuation multiples used to value the portfolio? So if I take the enlarged perimeter, the EV to EBITDA multiple is 14.9%. The net debt multiple has come down to 4.4x. Just some more color on the valuation multiples used to value the portfolio.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

Yeah, actually, we disclose in the R&S, which is on page 14, you can see the distribution of those metrics. The top 30 metrics are much tighter dispersion, whereas the enlarged perimeter is obviously, as you would expect, a bigger sample has got a broader spread.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

I mean, it's been, even though obviously companies are coming in and out of our portfolio, it has been around this mark for quite a long time. People who've invested with us for a while will have seen that metric, the valuation multiple tick up. We would argue that you can almost deduce that from looking at the larger exposures. So we've definitely, over the last eight years since coming to ICG, focused on investing in companies that have higher quality of earnings, that are in more attractive sectors. So we've gone away from more kind of cyclical assets towards those defensive growth assets. And that's been a lot, it's that change in mix, which has been a large contributor to that valuation multiple going up.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

As we compare both the individual companies and the portfolio in aggregate to the public markets, we think it's actually very well priced when you consider that, I think, the average EV/EBITDA multiple of the S&P 500 is over 18x. That's for lower levels of revenue and earnings growth.

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

Just the inclusion of Chewy gave it also a little bit of a tick up. Chewy, as you might remember, was excluded in the top 30 from the EV/EBITDA valuation because it was on a different metric. The management team and the business has now been incredibly profitable, and so they have switched it now also and are reporting now a strong profitability. Therefore, the metric EV/EBITDA is now much more applicable.

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

And therefore, we have now included it in the top 30, which gives you also a little bit of a tick up.

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

Thanks, Oliver. Thanks, Colm. The final question I see on the portal is one on the cost disclosure announcement. So what are the implications for us of the recent cost disclosure announcement? I think if I start, clearly it's good news for our sector and investment trusts more generally. As we said in today's announcement, we are reviewing our disclosures. There's clearly a lot of practical implementation points to iron out between platforms, data providers. And we're discussing, as you can imagine, with our advisors. We're awaiting guidance from the AIC as well in terms of industry practice and standards. And we'll update the market when we can. Oliver and Colm, I don't know if there's anything more to add on that.

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

Yeah, I think we believe it makes sense not to be a pioneer on this topic. We're waiting for more clarity and a market standard being delivered and recommended. Then, but we are ready. We're working on all the documents so that whenever there is clarity, that we can move fast and have the right appropriate disclosures.

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

But irrespective of where it falls out, it's clearly a very, very positive development for the vehicle and the broader investment trust sector.

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

There's just one more question that has come in before we wrap up, which goes back to the portfolio company metrics. Any signs of weaknesses in any particular sectors? You referenced Colm to page 13 and 14 of the RNS, where people have to break out and disclose earnings and revenues growth.

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

Any sectors or any particular companies that are a cause for concern, trends that you're seeing?

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

I think many of our companies are quite well shielded. So as you think of our larger exposures, the likes of Minimax, Datasite are shielded from a lot of pressures. I think it's fair to say that some consumer-facing companies, we've invested in businesses that are in the consumer sector that have been handpicked, have defensive growth characteristics. On the margins, maybe seeing some pressure with this high labor component. Obviously, some input costs have gone up, but nothing material and nothing systemic, I would say, which impacts across the portfolio. And it's really just in a few small number of examples, a little bit of softness. But as I say, we're not seeing anything beyond that. I think there's one where we see some divergences between Europe and the U.S.

[Colm Walsh, Portfolio Manager at ICG Enterprise Trust]

The U.S. economy continues to be an incredibly strong engine versus European-based companies or based companies obviously have a little bit less tailwind and facing more headwinds than the U.S. companies. So we do see some softness there, not in terms of, or let's put it differently, not growing as strongly as our U.S. companies. However, nothing specifically or big top 30 exposure, which we are worried about.

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

Super. And maybe if we end on one final question that has come in on the balance sheets, someone's commented that our net gearing level has marginally increased. It was 1% at the full years. It's now 6%, but still the lowest of our peer group. Just a comment on the increased drawdown of debt. Is it simply a reflection of low exit volume despite those good uplifts? And how do we expect that 6% net gearing figure to evolve?

[Oliver Gardey, Portfolio Manager at ICG Enterprise Trust]

No, that's exactly right. It is our overall goal to be somewhere around zero. So we are not, our mission is to be not leveraged. But however, in a period with lower realization activity, we don't want to be out of the market and we're going to be drawing more. But as I said, we are expecting more realizations to come through in the next six-to-nine months. And therefore, we will see a right size back towards the zero number. So that's just where we are in the point of the cycle between capital calls, contributions versus realizations.

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

Super. I see no further questions online. If there are any follow-up questions after the webinar, please feel free to contact the email address that you see on your screens. As a reminder, a recording of this event will be available on our website in the coming days.

[Martin Li, Head of Investor Relations at ICG Enterprise Trust]

And with that, Oliver, Colm, thank you very much. And thank you all for joining today.

Participants

Executives

• Oliver Gardey, Portfolio Manager
• Martin Li, Head of Investor Relations
• Colm Walsh, Portfolio Manager