ICG Enterprise Trust PLC GBP · LSE:ICGT

ICG Enterprise Trust PLC GBP — Graphite Enterprise Trust — Shareholder Meeting (June 2011)

50 slides from ICG Enterprise Trust PLC GBP's shareholder meeting presentation, Jun 15, 2011

  1. Slide 1: 30th Annual General Meeting

    30th Annual General Meeting 15 June 2011 0

  2. Slide 2: Annual General Meeting – June 2011

    Annual General Meeting – June 2011 1. Introduction 2. Results 3. Investment activity 4. The portfolio 5. Share price and discount 6. Dividend 7. Outlook and conclusions 1

  3. Slide 3: 1. Introduction

    1. Introduction GRAPHITE ENTERPRISE

  4. Slide 4: Graphite Enterprise – overview

    Introduction Graphite Enterprise – overview Hybrid fund of funds / direct investor Focus on European buy-outs Experienced and focused team Strong performance record 3

  5. Slide 5: Hybrid fund of funds and direct investor

    Introduction Hybrid fund of funds and direct investor Third Third party Third party funds party investments 68% co- 78% invests 10% Graphite investments 22%  Graphite Capital directly manages 5 of the 10 largest investments at 30 April 2011 – Third party co-investments make up 2 of the remaining 5

  6. Slide 6: Focus on European buy-outs

    Introduction Focus on European buy-outs  The focus is on established, top performing European buy-out managers – UK mid-market mainly through Graphite Capital funds (in which it is the largest investor) – Overseas markets and other UK sectors covered through third-party funds – Mezzanine funds inve

  7. Slide 7: Experienced and focused team – Graphite Capital

    Introduction Experienced and focused team – Graphite Capital  Graphite is a leading UK mid-market private equity firm with £1.2 billion under management – Graphite Enterprise is the only fund of funds managed by Graphite Capital  Graphite has been independently owned since 2001 and is based in one

  8. Slide 8: The combination of fund and direct investments gives an unusually broad perspective

    Introduction The combination of fund and direct investments gives an unusually broad perspective  The funds team has extensive direct investing experience – Well positioned to judge other private equity managers  We benefit from the insight and market knowledge of the direct investment team – More

  9. Slide 9: 2. Results

    2. Results GRAPHITE ENTERPRISE

  10. Slide 10: Net asset value per share increased by 15.1% to a record 534.0p

    Results The net asset value per share increased by 15.1% in the Period* to a record 534.0p 31 December 31 January Change 2009 2011 Net asset value per share 464.1p 534.0p +15.1% Share price 305.0p 308.0p +1.0% FTSE All-Share Index 2,761 3,044 +10.3% Discount 34.3% 42.3%  The portfolio increased in

  11. Slide 11: NAV had outperformed the Index over 1, 3, 5 and 10 years

    Results At 31 January 2011, NAV had outperformed the Index over 1, 3, 5 and 10 years years* 1 3 5 10 Net asset value per share +15.1% +2.8% +34.0% +59.9% FTSE All-Share Index +10.3% -7.4% +6.9% +2.0%  The net asset value per share has outperformed the FTSE All-Share in 16 of the last 20 years − It

  12. Slide 12: Graphite was the best performing fund of funds during the downturn

    Results In NAV terms, Graphite was the best performing fund of funds during the downturn Peak to trough 2010 1 NAV performance (2007-2008) 20101 2007-20101 as % of peak % Graphite Enterprise -24.8% +15.1% +2.8% +0.5% Peer Group average 2 -33.9% +15.5% -11.6% -15.9%  At 31 January 2011 Graphite Ente

  13. Slide 13: In the quarter to April 2011, NAV and share price outperformed the Index

    Results In the quarter to 30 April 2011, the NAV and share price outperformed the Index April January Change 2011 2011 Net asset value per share 556.9p 534.0p +4.3% Share price 370.5p 308.0p +20.3% Discount 33.5% 42.3% FTSE All-Share Index 3,155 3,044 +3.6%  Increases in the underlying value of the

  14. Slide 14: Adjusting for recent disposals, the Company is 80% invested

    Results Adjusting for recent disposals, the Company is 80% invested April January April January Pro forma Pro forma 2011 2011 2011 2011 £m £m £m % % % Investments 334 360 357 80% 86% 89% Cash and near cash 83 57 43 20% 14% 11% Total assets 417 417 400 100% 100% 100% Undrawn bank facility 30 30 - Tot

  15. Slide 15: 3. Investment activity

    3. Investment activity SESE] * GRAPHITE ENTERPRISE

  16. Slide 16: New investment increased significantly in 2010

    Investment activity New investment increased significantly in 2010 and activity remains relatively high 15

  17. Slide 17: Disposal proceeds are also increasing

    Investment activity Disposal proceeds are also increasing after three years at very low levels £ million 140 70% 120 60% 100 50% 80 40% 60 30% 40 20% 20 10% - 0% Dec 2001 Dec 2002 Dec 2003 Dec 2004 Dec 2005 Dec 2006 Dec 2007 Dec 2008 Dec 2009 Jan 2011 Apr 2011 Disposal proceeds Known proceeds* Dispo

  18. Slide 18: Recent examples – Vue Entertainment co-investment

    Investment activity Recent examples – Vue Entertainment co-investment  UK’s third largest cinema chain  Acquired by Doughty Hanson in a £450 million buy-out in December 2010  We were invited to co-invest alongside Doughty Hanson V as we: i. Were able to invest only a small amount (as capacity was

  19. Slide 19: Recent examples – Kwik-Fit co-investment and disposal

    Investment activity Recent examples – Kwik-Fit co-investment and disposal  Leading European provider of automotive fast-fit services  Co-investment of £3.4 million in August 2005 alongside PAI Partners  In a rights issue in April 2010, we took up four times our pro rata share for a total of £2.0

  20. Slide 20: Recent examples – Kurt Geiger disposal

    Investment activity Recent examples – Kurt Geiger disposal  A leading UK-based luxury footwear and accessories retailer  Acquired by Graphite Capital in a £95 million secondary buy-out in 2008  Turnover increased by 70% to £205 million at April 2011  In May 2011 the business was sold to a US tra

  21. Slide 21: 4. The portfolio

    4. The portfolio GRAPHITE ENTERPRISE

  22. Slide 22: The portfolio remained balanced and well diversified

    Portfolio The portfolio remained balanced and well diversified  At 30 April 2011, the portfolio comprised 42 funds and 23 direct investments – exposure to 302 underlying companies  The portfolio is more concentrated than most funds of funds, more diversified than most direct funds – Top 30 investm

  23. Slide 23: Graphite Capital directly manages five of the top ten holdings

    Portfolio At 30 April 2011, Graphite Capital directly manages five of the top ten holdings  The top 10 underlying investments represented 22.5% of portfolio value Value % of Country Notes £m portfolio 1 Distributor and retailer of tyres UK 2 15.8 4.4% 2 Retailer and distributor of luxury footwear U

  24. Slide 24: Top 30 companies accounted for 43.6% of the portfolio

    Portfolio At April 2011 the Top 30 companies accounted for 43.6% of the portfolio  These companies performed well in 2010 − revenues grew by an average of 14% − and EBITDA by an average of 39%  At December they were valued at 8.6x EBITDA and had leverage of 3.5x EBITDA 23

  25. Slide 25: Considerable scope for future upside as the portfolio matures

    Portfolio There is considerable scope for future upside as the portfolio matures  The portfolio was valued at 1.3 times cost* and had an average maturity of over 4 years * Including amounts realised by current portfolio companies 24

  26. Slide 26: 5. Share price and discount

    5. Share price and discount 25

  27. Slide 27: The share price has outperformed the index since 31 January 2011

    Share price The share price has outperformed the index since 31 January 2011 31 January 30 April 2011 2011 130 NAV per share 125 120 Share price 115 FTSE All-Share 110 105 100 95 90 85 80 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11  In the 13 months to 31 January 11 the share price rose by 1.0

  28. Slide 28: The discount remains well above the long term average

    Discount The discount remains well above the long term average 0% 31 31 January January (5)% 2011 2011 (10)% (15)% (15)% (20)% (20)% (25)% (25)% Discount(%) (30)% Discount(%) (30)% (35)% (35)% (40)% (40)% Pre financial crisis discount (45)% (45)% (50)% 10 year average discount (50)% (55)% Pre financ

  29. Slide 29: Private equity discounts remain wide relative to the investment trust sector

    Discount Private equity discounts remain wide relative to the investment trust sector 20% 3500 10% 3000 0% Discount/premium to Net Asset Value 2500 -10% FTSE All-Share Index -20% 2000 -30% 1500 Private Equity discount -40% Investment Trust discount 1000 FTSE All Share Periods where PE -50% was at a

  30. Slide 30: 6. Dividend

    6. Dividend GRAPHITE ENTERPRISE

  31. Slide 31: Board recommending dividend be maintained at 2.25p per share

    Dividend The board is recommending that the dividend be maintained at 2.25p per share  The decision to maintain the dividend at the same level as last year took account of: – the likely levels of future income – the level of available income reserves  Income is difficult to predict as it is driven

  32. Slide 32: 7. Outlook and conclusions

    7. Outlook and conclusions 31

  33. Slide 33: Outlook: The private equity market

    Outlook The private equity market  Activity levels are recovering – The number of new investments in 2010 was more than 50% higher than in 2009 – In the first quarter of 2011 new investments fell back slightly  The availability of debt is increasing – But remains below the very levels in 2006-2007

  34. Slide 34: Graphite Enterprise is well positioned to generate future growth

    Outlook Graphite Enterprise is well positioned to generate future growth  The portfolio is growing strongly – The top 30 investments (43.6% of the portfolio) performed well in 2010 – Valuation multiples are reasonable given recent performance – Debt levels are falling  Many companies are being pos

  35. Slide 35: Questions

    Questions GRAPHITE ENTERPRISE

  36. Slide 36: Graphite Enterprise

    GRAPHITE ENTERPRISE GRAPHITE ENTERPRISE

  37. Slide 37: Results of proxy votes

    Results of proxy votes GRAPHITE ENTERPRISE

  38. Slide 38: Resolution: Annual report and accounts

    Results of proxy votes Resolution 1 Annual report and accounts For: 21,148,217 99.77% Chairman’s discretion: 36,077 0.17% Against: 12,420 0.06% 21,184,294 100.00% Withheld: 16,594 37

  39. Slide 39: Resolution: Final dividend

    Results of proxy votes Resolution 2 Final dividend For: 21,166,999 99.78% Chairman’s discretion: 36,077 0.17% Against: 9,906 0.05% 21,203,076 100.00% Withheld: 4,977 38

  40. Slide 40: Resolution: Elect A Pomfret

    Results of proxy votes Resolution 3 Elect A Pomfret For: 20,903,282 99.19% Chairman’s discretion: 38,266 0.18% Against: 131,795 0.63% 20,941,548 100.00% Withheld: 121,419 39

  41. Slide 41: Resolution: Re-elect P Dicks

    Results of proxy votes Resolution 4 Re-elect P Dicks For: 20,223,100 95.86% Chairman’s discretion: 36,077 0.17% Against: 837,912 3.97% 20,259,177 100.00% Withheld: 106,801 40

  42. Slide 42: Resolution: Re-elect J Tigue

    Results of proxy votes Resolution 5 Re-elect J Tigue For: 20,928,669 99.09% Chairman’s discretion: 36,077 0.17% Against: 157,103 0.74% 20,964,746 100.00% Withheld: 87,396 41

  43. Slide 43: Resolution: Re-elect M Cumming

    Results of proxy votes Resolution 6 Re-elect M Cumming For: 20,158,687 95.61% Chairman’s discretion: 36,077 0.17% Against: 889,468 4.22% 20,194,764 100.00% Withheld: 122,000 42

  44. Slide 44: Resolution: Re-elect M Fane

    Results of proxy votes Resolution 7 Re-elect M Fane For: 20,344,211 96.50% Chairman’s discretion: 36,077 0.17% Against: 702,851 3.33% 20,380,288 100.00% Withheld: 123,160 43

  45. Slide 45: Resolution: Re-appoint auditors

    Results of proxy votes Resolution 8 Re-appoint auditors For: 20,849,301 98.84% Chairman’s discretion: 36,077 0.17% Against: 207,841 0.99% 20,885,378 100.00% Withheld: 112,007 44

  46. Slide 46: Resolution: Directors remuneration

    Results of proxy votes Resolution 9 Directors remuneration For: 20,464,033 97.94% Chairman’s discretion: 43,004 0.20% Against: 388,056 1.86% 20,507,037 100.00% Withheld: 273,684 45

  47. Slide 47: Resolution: Authority to allot shares

    Results of proxy votes Resolution 10 Authority to allot shares For: 20,770,051 98.72% Chairman’s discretion: 43,004 0.20% Against: 227,303 1.08% 20,813,055 100.00% Withheld: 118,829 46

  48. Slide 48: Resolution: Allot shares for cash

    Results of proxy votes Resolution 11 Allot shares for cash For: 17,210,076 81.85% Chairman’s discretion: 36,238 0.17% Against: 3,780,887 17.98% 17,246,314 100.00% Withheld: 137,346 47

  49. Slide 49: Resolution: Purchase Company shares

    Results of proxy votes Resolution 12 Purchase Company shares For: 20,891,432 98.92% Chairman’s discretion: 36,238 0.17% Against: 192,700 0.91% 20,927,670 100.00% Withheld: 52,092 48

  50. Slide 50: Resolution: Notice for general meetings

    Results of proxy votes Resolution 13 Notice for general meetings For: 20,721,584 98.37% Chairman’s discretion: 36,238 0.17% Against: 307,345 1.46% 20,757,822 100.00% Withheld: 107,737 49

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