Intermediate Capital Group plc : Final Results for the
financial year ended 31 March 2023
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Delivering growth through cycles |
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Highlights
- Total AUM of
$80.2bn1 and fee-earning AUM of $62.8bn1, up
14% and 10% respectively compared to FY22 on a constant-currency
basis, annualised growth of fee-earning AUM over the last five
years of 20%2
- Fundraising in
line with guidance at $10.2bn; $32.8bn raised since 31 March 2021
and on track to meet accelerated fundraising target of at least
$40bn cumulatively between FY22 - FY24
- Sustained
investment activity across our business, notable deployment in
Private Debt and Strategic Equity
- Delivering for
clients, strong fund returns across Structured and Private Equity,
Private Debt and Infrastructure
- Fee income of
£501.0m, an increase of 12% compared to FY22 with management fees
up 23%
- Record Fund
Management Company profit before tax of £310.7m, an increase of 9%
compared to FY22
- Balance sheet
investment portfolio generated NIR of 4% (five year average:
11.2%)
- Group profit
before tax of £258.1m (FY22: £568.8m) and Group EPS of 80.3p (FY22:
187.6p)
- NAV per share of
694p (31 March 2022: 696p)
- Total dividends
for FY23 of 77.5p per share, a year-on-year increase of 2.0% and
the thirteenth consecutive annual increase in ordinary dividend per
share; 21% annualised growth in dividend per share over the last
five years
1 Includes impact of policy change in FY23 which
increased Total AUM and third-party AUM by $3.1bn and fee-earning
AUM by $0.5bn
2 Five year AUM growth on reported basis. Unless
otherwise stated the financial results discussed herein are on the
basis of APM - see page 2 and page 8 |
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William
Rucker |
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Benoît
Durteste |
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Chairman |
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CEO and
CIO |
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The results ICG is reporting are
a testament to our long-term focus on building and broadening the
ICG platform.
Successfully fundraising, growing AUM, and increasing profits from
our fund management activities – all delivered against a
challenging backdrop – underline the powerful economic
characteristics that underpin ICG's resilient business model
today.
Looking ahead, we are well positioned to navigate an exciting
future, with many opportunities likely to arise as the economic
landscape continues to evolve.
I am delighted to have joined ICG as Chairman, and look forward to
working with the management team, our shareholders and wider
stakeholders in the coming years. |
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ICG has performed strongly over
the last twelve months on both a strategic and financial
level.
We have sustained business momentum across fundraising and
investing activities, and have continued to focus on delivering
value for our clients and portfolio companies. Rising interest
rates and a more uncertain economic outlook are particularly suited
to our substantial structured equity and private debt offerings –
an important strategic benefit of our scale and breadth, which
enables us to operate successfully across market cycles.
Our fund management company has delivered year-on-year growth in
fee-earning AUM, fee income and profits. At the same time, the
balance sheet has performed in line with our expectations during a
period of volatile market conditions.
We take a long-term view on investing for future growth, hiring
selectively across the firm and investing balance sheet capital in
seed assets for a number of strategies. As ICG continues to grow up
and grow out, the strategic and economic benefits of our multiple
levers of compounding growth will continue to become increasingly
visible.
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PERFORMANCE OVERVIEW
Historical performance
The Board and management monitor the financial
performance of the Group on the basis of alternative performance
measures (APM), which are non-UK-adopted IAS measures. An
explanation can be found on page 8 and a reconciliation of the APM
to the UK-adopted IAS measures on page 43, along with the
UK-adopted IAS consolidated financial statements and supporting
notes, can be found on pages 34 to 92.
The Group’s profit after tax on an UK-adopted
IAS basis was below the prior period at £278.4m (FY22: £525.1m). On
the APM basis it was below the prior period at £229.3m (FY22:
£538.0m).
Unless stated otherwise, the financial results
discussed herein are on the basis of APM, which the Board believes
assists shareholders in assessing the financial performance of the
Group.
Long-term growth
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Last five years
CAGR1 |
Third-party AUM2 |
19 % |
Fee-earning
AUM2 |
20 % |
Third-party fee income |
25 % |
Fund Management Company profit
before tax |
27 % |
Net Investment Return (five
year average) |
11 % |
NAV per share |
10 % |
Dividend per share |
21% |
1 FY18 - FY23. Dividend per share
includes proposed FY23 final dividend.
2 Includes impact of AUM policy change in FY23 which
increased Total AUM and third-party AUM by $3.1bn and fee-earning
AUM by $0.5bn - see page 8
AUM
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31 March 2023 |
31 March 2022 |
Change1 |
Total AUM2 |
$80.2bn |
$72.1bn |
14 % |
Third-party
AUM2 |
$77.0bn |
$68.5bn |
15 % |
Fee-earning
AUM2 |
$62.8bn |
$58.3bn |
10 % |
Fundraising during period |
$10.2bn |
$22.5bn |
(55) % |
Realisations during
period3,4 |
$5.3bn |
$6.4bn |
(17) % |
Deployment during period4 |
$10.5bn |
$15.0bn |
(30) % |
1 On a constant currency basis
2 Includes impact of policy change in FY23 which
increased Total AUM and third-party AUM by $3.1bn and fee-earning
AUM by $0.5bn - see page 8
3 Realisations of third-party fee-earning AUM;
4 From direct investment funds
Financial
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31 March 2023 |
31 March 2022 |
Change |
Third-party fee income |
£501.0 m |
£448.7 m |
12 % |
Fund Management Company profit
before tax |
£310.7 m |
£286.2 m |
9 % |
Investment Company
profit/(loss) before tax |
£(52.6)m |
£282.6 m |
(119) % |
Group profit before tax |
£258.1 m |
£568.8 m |
(55) % |
Group earnings per share |
80.3 p |
187.6 p |
(57) % |
Dividend per share |
77.5p |
76.0 p |
2 % |
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31 March 2023 |
31 March 2022 |
Change |
Balance sheet investment portfolio |
£2,902 m |
£2,822 m |
3 % |
Net asset value per share |
694 p |
696 p |
(0.3) % |
Net
gearing |
0.50 x |
0.45 x |
0.05x |
Medium-term guidance
Our medium-term guidance remains unchanged and
is set out below:
Fundraising |
Performance fees |
FMC operating margin |
Net Investment Returns |
- At least $40bn
fundraising in aggregate between 1 April 2021 and 31 March
2024
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- Performance
fees to represent 10 - 15% of third-party fee income over
medium-term
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- Low
double-digit percentage points over the medium-term
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COMPANY PRESENTATION
A presentation for investors and analysts will
be held at 09:00 BST today: sign up via the link on our website.
A recording and transcript of the presentation
will be available on demand from the same location in the coming
days.
COMPANY TIMETABLE
Ex-dividend date |
15 June 2023 |
Record date |
16 June 2023 |
Last date to elect for
dividend reinvestment |
14 July 2023 |
AGM and Q1 trading
statement |
20 July 2023 |
Payment of ordinary
dividend |
4 August 2023 |
Half year results
announcement |
15 November 2023 |
ENQUIRIES
Shareholders / analysts: |
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Chris Hunt, Head of
Shareholder Relations, ICG |
+44(0)20 3545 2020 |
Media: |
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Fiona Laffan, Global Head of
Corporate Affairs, ICG |
+44(0)20 3545 1510 |
This results statement may contain forward
looking statements. These statements have been made by the
Directors in good faith based on the information available to them
up to the time of their approval of this report and should be
treated with caution due to the inherent uncertainties, including
both economic and business risk factors, underlying such forward
looking information.
ABOUT ICG
ICG provides flexible capital solutions to help
companies develop and grow. We are a global alternative asset
manager with over 30 years' history, managing $80bn of assets and
investing across the capital structure. We operate across four
asset classes: Structured and Private Equity, Private Debt, Real
Assets, and Credit.
We develop long-term relationships with our
business partners to deliver value for shareholders, clients and
employees, and use our position of influence to benefit the
environment and society. We are committed to being a net zero asset
manager across our operations and relevant investments by 2040.
ICG is listed on the London Stock Exchange
(ticker symbol: ICP). Further details are available at
www.icgam.com.
LETTER FROM THE CHAIRMAN
To my fellow shareholders,
It is a pleasure to write to you as Chairman of
ICG, a role I am honoured to have taken on in January 2023. I would
like to start by expressing my gratitude on behalf of the Board to
Andrew Sykes, who fulfilled the duties of Interim Chairman while
the search for a permanent Chairman was undertaken. I look forward
to his continued insight and guidance around the Board table in his
role as Senior Independent Director.
Since Andrew’s letter last year, geopolitical
and economic uncertainty has continued to rise. The economic
landscape has become increasingly complex, with inflation reaching
multi-year highs in a number of countries, which has in turn forced
central banks to raise interest rates at a time when many economies
are slowing down. Today, the outlook remains nuanced. Certain
countries and sectors are more vulnerable, while others are
demonstrating significant resilience.
Elevated levels of uncertainty present
difficulties for Boards. Many businesses, ICG included, can react
tactically in the short term as opportunities present themselves.
However, to create long-term value, they are required to make
strategic decisions around allocating economic and intellectual
capital, and then to pursue these vigorously and consistently over
a number of years. An unclear outlook and an increasing cost of
capital make these decisions more challenging, and we have seen
some of the implications of this during the last twelve months in
elevated volatility within public markets, a transfer of value from
equity to debt, reduced valuations in many sectors, and a slowdown
in M&A activity globally.
Against this background, I am comforted that
private markets have shown a remarkable ability to adapt and
innovate across economic cycles. Indeed, ICG’s business model today
is the result of a strategic decision taken over a decade ago to
pivot to being a third-party asset manager – a transition that was
pursued with determination and to great effect. There have been a
number of periods of economic uncertainty during that time since
the Global Financial Crisis, including the Euro crisis, Brexit, and
of course Covid-19 pandemic. Throughout all of these we have
focused on executing a clear strategy of expanding our product
offering, client base, and AUM. This has been delivered
consistently and successfully, and in doing so we have grown and
diversified the sources and robustness of our fee income.
There is always the risk that long-term
ambitions get forgotten during periods of short-term challenge.
Concerted efforts to reduce our environmental impact and to enhance
diversity, equity and inclusion in the workplace must not be seen
as optional and “only for the good times”. I am proud to Chair in
ICG an organisation that is action-orientated in these areas, being
amongst the first group of alternative asset managers to commit to
net zero (by 2040) and exceeding its commitment made under the UK
Women in Finance Charter two years earlier than planned. Of course,
many other initiatives in these areas continue and I am pleased
with the progress we have made over the last 12 months.
As a direct result of these decisions and
actions, ICG today is better positioned – strategically,
financially, operationally and culturally – than at any time in our
history. We manage our clients’ assets across a broad range of
products, spanning the entire capital structure from common equity
to senior debt. From the perspective of our portfolio companies, we
are a partner who can provide the most appropriate form of capital
to meet their needs. For our clients, this diversification allows
us to help them achieve their investment objectives in their
alternative asset allocations – whether in Structured and Private
Equity, Private Debt, Real Assets, or Credit. For shareholders, the
diversity of our business is a powerful driver of resilience and
growth, providing multiple avenues to increase our AUM and thereby
develop further long-term streams of management fee income.
A consequence of our business and financial
model is that we are able to sustain business activity across
economic cycles, and this is visible in the results we report for
FY23. We continued to deploy and realise our clients’ capital, and
recorded year-on-year growth across AUM, fee income, FMC PBT and
the distributions made to our shareholders1.
Our confidence in the long-term and
through-cycle prospects of ICG is underlined by our simplification
of the dividend policy to being progressive. We are also stating
the we intend over the long-term to increase the dividend per share
by at least mid-single digit percentage points on an annualised
basis. The breadth and scale of ICG today allows us to have this
dividend policy as an integral part of our approach to capital
allocation, running alongside commitments to our funds and using
our balance sheet to seed new strategies.
None of this is instant. Building and scaling a
platform that generates compounding growth over the long-term takes
time, and that is precisely what we are doing at ICG. In recent
months, Andrew Sykes and I have had a number of discussions with
shareholders in a variety of forums. We have both been encouraged
by the level of engagement around ICG; the clear understanding our
shareholders have of the business; and the thoughtful, long-term
view with which they approach ICG’s strategy and our potential to
generate long-term equity value. I look forward to more discussions
with shareholders and our broader stakeholders in the coming
months.
Post year-end there were two changes to the
Board. Kathryn Purves stepped down after nine years as a
Non-Executive Director, during which time she made a wide-ranging
contribution including chairing the Risk Committee and more
recently serving as Senior Independent Director. We also announced
the appointment of David Bicarregui, who joined ICG in April and
who will take up the role of CFO in July, replacing Vijay Bharadia.
I would like to pass on my and the Board's thanks to Kathryn and to
Vijay for their significant contributions to ICG.
The last twelve months have demonstrated the
strategic and financial benefits of our scale and diversification.
Notwithstanding our strong historical growth, I believe the
investments we have made give us substantial runway to continue to
grow in the coming years, and that in many respects ICG is still at
the beginning of its journey. Mindful of the uncertainty and
volatility we may face in the future, we are well positioned to
navigate complex markets for the benefit of our clients, portfolio
companies and shareholders.
Over a number of decades I have watched and
admired ICG’s growth and development from afar. I am excited at the
prospect of being actively involved in its future, and look forward
to working with the ICG team, our shareholders and other
stakeholders in the years to come.
William Rucker
Chairman
CHIEF EXECUTIVE OFFICER’S REVIEW
The last twelve months have been a busy and
successful period for ICG. Our scale and breadth have enabled us to
capture opportunities in a dynamic market environment. The
investment landscape and client appetite have shifted towards our
areas of particular expertise such as structured transactions,
private debt and infrastructure. We have continued to execute
successfully on our strategy of growing up and growing out, and
have invested selectively across the organisation to augment our
investment teams, marketing and client relations offering, and to
enhance our operating platform. By investing today, we are
positioning ourselves to benefit from what could be a rapid and
significant rebound in private markets activity when conditions
become less volatile, and when the market could continue to further
concentrate around scaled, broad managers.
Over the last year we have developed
opportunities that embed further long-term growth potential. The
single largest contributor to fundraising this year was our direct
lending strategy, Senior Debt Partners, which raised $3.3bn during
the financial year ended 31 March 2023 (FY23) and which is
continuing to fundraise – an already-successful strategy that
became incrementally attractive both to clients and portfolio
companies given its exposure to floating rate debt and its ability
to provide debt financing when many other sources were not
available. The year saw the final closes of three funds (all at or
above their original hard-caps) which in aggregate account for
$13.2bn of third-party AUM2 at 31 March 2023, including
Europe VIII closing with almost twice as much capital committed
from clients as the previous vintage. We launched second vintages
of Infrastructure, Europe Mid-Market and Sale and Leaseback;
marketed a number of first-time funds; hired new teams for future
strategies, including Infrastructure Asia and Real Estate Asia; and
invested £214m of our balance sheet capital to seed a number of
future strategies.
The financial results we are reporting today
reflect this strong strategic performance. Third-party fee income
for the year was £501.0m, up 12% compared to FY22 (with management
fees up 23%), and record Fund Management Company (FMC) profit
before tax was £310.7m, up 9% compared to FY22. Our diversified and
robust balance sheet is performing in line with our expectations,
generating NIR of 4% over the twelve months. At 31 March 2023 the
balance sheet had net gearing of 0.50x and total available
liquidity of £1.1bn. The Board has declared a final dividend of
52.2p per share, bringing total dividends for the year to 77.5p per
share, an increase of 2% compared to FY22. Over the last five
years, ordinary dividends per share have grown at an annualised
rate of 21%, and the Board is reaffirming its commitment to a
progressive dividend policy.
The nature of our business is that we generate
growth and value over the long-term, and in recent years we have
successfully scaled and broadened our product offering and client
franchise. We have raised a total of $33bn so far in this
fundraising cycle since the beginning of FY22, and are on track to
meet our accelerated fundraising guidance of at least $40bn
cumulatively from FY22 to FY24. We now manage $77bn of client
capital, up 15%3 in the year and 19%2 on an
annualised basis over the last five years. Over the same period our
third-party fee income has grown at an annualised rate of 25% and
our FMC profit before tax at 27%. Our balance sheet has delivered
long-term value for our shareholders, generating a five-year
average net investment return of 11.2% and a NAV per share
annualised growth rate of 9.7% over the same period.
ICG's business model today therefore provides a
high degree of stability and visibility, which is particularly
powerful during periods of volatility such as we have experienced
over the last twelve months. At 31 March 2023 we had $62.8bn of
fee-earning AUM, with an indicative annualised management fee
generation potential of ~£459m, and a further $14.7bn of AUM that
is not yet fee-earning which, when deployed, has the indicative
potential to generate ~£116m of annualised management fees.
Our ability to deliver attractive returns for
our clients underpins our future success. Our portfolio companies
are generally continuing to show strong operational performance,
with those in our European Corporate strategy for example showing
LTM EBITDA growth of 13% and those in direct lending (SDP) showing
LTM EBITDA growth of 20%. We are reporting increases in fund
valuations across many of our strategies for the period; very low
loss ratios with historically high returns in debt strategies; and
attractive life-to-date IRRs, MOICs and DPIs in strategies with
equity exposure. During the year we realised $6.9bn of third-party
fee-earning AUM at a realised annualised return of
18.7%3, further anchoring the performance of our funds.
The track records we are developing today are important components
of marketing future vintages, and we continue to pay very close
attention to portfolio management to reinforce our track
record.
Successful execution of our strategies around
Sustainability and Diversity, Equity and Inclusion (DE&I) are
important components of our ability to generate value for our
clients and portfolio companies. In January we published our latest
Sustainability and People Report, detailing our achievements over
the last twelve months and our areas of future focus. I was
delighted to welcome a new Global Head of Sustainability and ESG in
an enhanced role during FY23, and we are rapidly building on an
already-strong position. At the first anniversary of ICG’s
commitment to be net zero by 2040, nine portfolio companies have
set science-based greenhouse gas (GHG) emissions reduction targets:
15% of relevant investments in our first year alone. Furthermore,
many other portfolio companies have advanced their target-setting
plans, placing us on track to achieve our interim target of 50% of
relevant investments having such targets by 2026. Our achievements
in the areas of Sustainability and ESG are recognised in our public
ESG ratings, and for the first time ICG became a member of DJSI
Europe as a result of our assessment by S&P Global CSA. In the
related area of DE&I, we were delighted to be top-ranked for
Private Equity globally in the Honordex, measuring DE&I efforts
and outcomes. This sits alongside extensive work around enhancing
DE&I not just for ICG but across our industry, including
through a comprehensive charity framework designed to increase
career access to our industry for underprivileged groups.
Looking to FY24 and beyond, I remain excited by
our prospects. We reiterate our fundraising target of at least
$40bn cumulatively from FY22 to FY24, and we will be marketing a
number of first-time and follow-on vintages in the coming year. We
will invest for the future, across our product offering, client
franchise and operating platform.
We are well placed to deploy capital in dynamic
market conditions, with $20.9bn of dry powder at 31 March 2023 and
local origination teams with exceptional market access, supported
by a disciplined investment process. We have hundreds of companies
across our portfolio, giving us access to a large number of
datapoints on the performance of businesses across geographies and
sectors, enabling us to spot trends early and understand more
holistically how investment opportunities might perform. In the
near-term, transaction volumes might remain slower in the broader
market. ICG is well positioned to execute on opportunities that are
particularly attractive today, including in structured
transactions, private debt and real assets.
Longer-term, I expect the structural demand for
private markets to remain intact, and it was good to welcome many
of you to our shareholder seminar in January on fundraising and
client strategy. For portfolio companies, the attractions of
private capital are largely unimpacted by the broader macroeconomic
context: bilateral bespoke agreements; being capitalised by
investors with substantial dry powder to support future growth; and
an ability to focus on longer-term value creation. For clients,
lower volatility, higher returns, longer duration, and investments
in parts of the economy that cannot be accessed through public
markets continue to make allocations to private markets an
important component of a long-term asset allocation strategy. Our
strategy of "growing up" and "growing out" has enabled us to
capture a growing breadth of the market and has generated
significant value for shareholders, accelerated by our strong
balance sheet. I see ample runway for many years of profitable
growth by continuing to execute successfully on our strategy.
I believe there will be substantial rewards for
the winners emerging from this era of higher interest rates,
inflation and macro uncertainty. To be amongst that group, private
markets managers will need sufficient scale to be relevant, a broad
product offering, a differentiated origination capability, a track
record of managing portfolios to generate value through cycles, and
a sophisticated client strategy and operating platform.
ICG possesses all of those qualities. Today we
are larger, broader, more financially resilient, and the FMC more
profitable than at any point in our history, and I believe we are
well positioned to navigate the future for the benefit of our
clients, portfolio companies and shareholders.
Benoît Durteste
FINANCIAL REVIEW
The Board and management monitor the financial
performance of the Group on the basis of Alternative Performance
Measures (APM), which are non-UK-adopted IAS measures. The APM form
the basis of the financial results discussed in this review, which
the Board believes assist shareholders in assessing their
investment and the delivery of the Group’s strategy through its
financial performance.
The substantive difference between APM and
UK-adopted IAS is the consolidation of funds and related entities
deemed to be controlled by the Group, which are included in the
UK-adopted IAS consolidated financial statements but excluded for
the APM.
Under IFRS 10, the Group is deemed to control
(and therefore consolidate) entities where it can make significant
decisions that can substantially affect the variable returns of
investors. This has the impact of including the assets and
liabilities of these entities in the consolidated statement of
financial position and recognising the related income and expenses
of these entities in the consolidated income statement.
The Group’s profit before tax on an UK-adopted
IAS basis was below the prior period at £251.0m (FY22: £565.4m). On
the APM basis it was below the prior period at £258.1m (FY22:
£568.8m).
Detail of these adjustments can be found in note
4 to the UK-adopted IAS consolidated financial statements on pages
34 to 92.
AUM
Refer to the Datapack
issued with this announcement for further detail on AUM
(including fundraising, realisations and
deployment).
Total AUM
During the period, total AUM grew 14% on a constant currency basis
(up 11% on a reported basis) and at 31 March 2023 was $80.2bn (31
March 2022: $72.1bn). The balance sheet investment portfolio
accounted for 4.1% of the Total AUM (31 March 2022: 5.0%).
Third-party AUM and
fee-earning AUM
Third-party AUM grew 15% on a constant currency basis during the
period, and stood at $77.0bn at 31 March 2023 (31 March 2022:
$68.5bn).
Fee-earning AUM grew 10% on a constant currency
basis during the period, and stood at $62.8bn at 31 March 2023 (31
March 2022: $58.3bn).
At 31 March 2023 we had $20.9bn of third-party
AUM available to deploy in new investments (dry powder), $14.7bn of
which is not-yet-fee-earning, but will be when the capital is
invested or enters its investment period.
With effect from 31 March 2023, the methodology
for calculating third-party AUM was updated in line with industry
practice to include i) all uncalled capital commitments until they
are legally expired (previously, uncalled capital commitments were
removed from third-party AUM as a ‘step-down’ despite the fund
being legally able to call such capital); and ii) permanent
fund-level leverage where such leverage has been signed with the
leverage provider and where we charge fees on the leverage. The
aggregate impact of these changes is to increase third-party AUM by
$3.1bn and fee-earning AUM by $0.5bn.
At 31 March 2023 56% of our fee-earning AUM was
in euros; 31% in dollars; 12% in sterling; and 1% in other
currencies. Our funds pay fees in their fund currency. Third-party
AUM reduced by $1.6bn during the period due to FX movements,
partially offset by positive market moves of $0.7bn impacting funds
that charge fees on NAV. For more details on the impact of FX rates
on our reported financials, see page 20.
Third-party AUM ($m) |
Structured and Private Equity |
Private Debt |
Real Assets |
Credit |
Total |
At 1 April 2022 |
22,507 |
19,806 |
8,028 |
18,127 |
68,468 |
Additions1 |
3,747 |
3,864 |
1,064 |
1,895 |
10,570 |
Realisations |
(1,513) |
(391) |
(439) |
(1,928) |
(4,271) |
Policy change |
2,381 |
712 |
(7) |
42 |
3,128 |
FX and
other |
606 |
(350) |
(783) |
(381) |
(908) |
At 31 March 2023 |
27,728 |
23,641 |
7,863 |
17,755 |
76,987 |
Change $m |
5,221 |
3,835 |
(165) |
(372) |
8,519 |
Change % |
23 % |
19 % |
(2) % |
(2) % |
12 % |
Change
% (constant exchange rate)2 |
26 % |
20 % |
3 % |
(1) % |
15 % |
-
Includes $0.3bn of steps-up;
- See page
20 for an explanation of constant exchange rate calculation
Fee-earning AUM ($m) |
Structured and Private Equity |
Private Debt |
Real Assets |
Credit |
Total |
At 1 April 2022 |
22,100 |
11,953 |
6,873 |
17,409 |
58,335 |
Funds raised: fees on committed capital |
3,367 |
— |
414 |
422 |
4,203 |
Deployment of funds: fees on invested capital |
436 |
4,451 |
928 |
1,411 |
7,226 |
Total additions |
3,803 |
4,451 |
1,342 |
1,833 |
11,429 |
Policy change |
(38) |
(10) |
(11) |
534 |
475 |
Realisations |
(2,327) |
(1,937) |
(1,005) |
(1,654) |
(6,923) |
FX and
other |
302 |
(208) |
(337) |
(224) |
(467) |
At 31 March 2023 |
23,840 |
14,249 |
6,862 |
17,898 |
62,849 |
Change $m |
1,740 |
2,296 |
(11) |
489 |
4,514 |
Change % |
8 % |
19 % |
— % |
3 % |
8 % |
Change
% (constant exchange rate)1 |
10 % |
22 % |
5 % |
4 % |
10 % |
-
See page 20 for an explanation of constant exchange rate
calculation
Business activity
$bn
|
Fundraising |
Deployment1 |
Realisations1,2 |
FY23 |
FY22 |
FY23 |
FY22 |
FY23 |
FY22 |
Structured and Private Equity |
3.5 |
10.4 |
4.3 |
8.0 |
2.3 |
2.6 |
Private Debt |
3.8 |
4.1 |
4.5 |
4.9 |
2.0 |
2.8 |
Real Assets |
1.0 |
3.0 |
1.7 |
2.1 |
1.0 |
1.0 |
Credit |
1.9 |
5.0 |
n/a |
n/a |
n/a |
n/a |
Total |
10.2 |
22.5 |
10.5 |
15.0 |
5.3 |
6.4 |
- Direct
investment funds;
-
Realisations of third-party fee-earning AUM
Fundraising
- We attracted
$10.2bn of new money during the period, in line with our guidance
and bringing the total raised since 31 March 2021 to $32.8bn, on
track to meet accelerated fundraising target of at least $40bn
cumulatively between FY22 - FY24
- Structured and
Private Equity attracted $3.5bn of capital. Within this, Strategic
Equity IV raised $1.3bn, Europe VIII raised $1.2bn and Asia Pacific
IV raised $450m. All three of these funds had final closes during
the period at or above their original hard caps. During the year,
we also raised for Strategic Equity V, LP Secondaries I and Europe
Mid-Market II
- Private Debt was
the largest contributor to fundraising during the period amongst
our asset classes, attracting a total of $3.8bn, $3.3bn of which
was in SDP V and SDP SMAs. During the period we launched North
America Credit Partners III and had closed $427m of third-party
commitments at 31 March 2023
- Real Assets raised
$1.1bn, with the majority ($591m) coming from Real Estate Debt
strategies. In addition we raised $414m for Sale and Leaseback
II
- Credit raised
$1.9bn, of which $1.2bn was from new CLOs (two in Europe and one in
the US) and the remainder was within our liquid credit funds
- At 31 March 2023
funds that were actively fundraising included: SDP V and SDP SMAs;
Strategic Equity V; North America Credit Partners III; Europe
Mid-Market II; Infrastructure II; Sale and Leaseback II; LP
Secondaries I; Life Sciences I; and various credit strategies. The
timings of closes for those funds depends on a number of factors,
including the prevailing market conditions
Deployment
- During the period
we deployed a total of $10.5bn of AUM on behalf of our direct
investment funds
- Within Structured
and Private Equity, Strategic Equity saw strong activity, deploying
$2.6bn (FY22: $2.5bn), with the remainder across European Corporate
including Europe Mid-Market I and various other strategies
- Within Private
Debt, deployment was driven by our direct lending strategy, Senior
Debt Partners, which deployed $3.9bn. The Australia Senior Loan
fund deployed $0.3bn and North American Private Debt $0.2bn
- Within Real
Assets, real estate debt strategies deployed $0.9bn, Infrastructure
Equity I deployed $0.5bn and Sale and Leaseback deployed
$0.3bn
Realisations
- Despite the
slowdown in transaction activity across the market, we continued to
realise investments, with $5.3bn fee-earning AUM realised from our
direct investment funds (FY22: $6.4bn)
- Structured and
Private Equity accounted for $2.3bn of realisations within
fee-earning AUM, with the majority of activity coming from Europe
VI and Europe VII (2015 and 2018 vintages' respectively)
- Realisations of
fee-earning AUM in Private Debt were $2.0bn, with the vast majority
($1.7bn) being within direct lending (Senior Debt Partners)
- Real assets
accounted for $1.0bn of realisations within fee-earning AUM, almost
all of which was across a range of real estate debt strategies
Performance of key funds
Refer to the Datapack
issued with this announcement for further detail on fund
performance.
A summary of selected ICG drawdown funds that
have had a final close at 31 March 2023 is set out below:
|
Vintage |
Total fund size 3 |
% deployed2 |
Gross MOIC
31 March 2023 |
Gross MOIC
31 March 2022 |
DPI
31 March 2023 |
Structured and Private Equity |
|
|
|
|
|
|
Europe V |
2011 |
€2.5bn |
|
1.8x |
1.8x |
151% |
Europe VI |
2015 |
€3.0bn |
|
2.2x |
2.1x |
171% |
Europe VII |
2018 |
€4.5bn |
|
1.8x |
1.7x |
42% |
Europe VIII |
2021 |
€8.1bn |
43% |
1.1x |
1.1x |
—% |
Europe Mid-Market I |
2019 |
€1.0bn |
78% |
1.4x |
1.2x |
—% |
Asia Pacific III |
2014 |
$0.7bn |
|
2.1x |
2.1x |
103% |
Asia Pacific IV |
2020 |
$1.0bn |
43% |
1.4x |
1.4x |
—% |
Strategic Secondaries II |
2016 |
$1.1bn |
|
2.9x |
2.8x |
136% |
Strategic Equity III |
2018 |
$1.9bn |
|
2.3x |
2.2x |
28% |
Strategic Equity IV |
2021 |
$4.2bn |
95% |
1.6x |
1.3x |
5% |
Private
Debt |
|
|
|
|
|
|
Senior Debt Partners II |
2015 |
€1.5bn |
|
1.3x |
1.3x |
75% |
Senior Debt Partners III |
2017 |
€2.6bn |
|
1.2x |
1.2x |
43% |
Senior Debt Partners IV |
2020 |
€5.0bn |
100% |
1.1x |
1.1x |
9% |
North American Private Debt I |
2014 |
$0.8bn |
|
1.5x |
1.4x |
128% |
North American Private Debt II |
2019 |
$1.4bn |
92% |
1.3x |
1.2x |
19% |
Real
Assets |
|
|
|
|
|
|
Real Estate Partnership Capital IV1 |
2015 |
£1.0bn |
|
1.3x |
1.3x |
82% |
Real Estate Partnership Capital V1 |
2018 |
£1.0bn |
|
1.2x |
1.2x |
16% |
Infrastructure Equity I |
2020 |
€1.5bn |
90% |
1.3x |
1.2x |
1% |
Sale & Leaseback I |
2019 |
€1.2bn |
99% |
1.3x |
1.3x |
7% |
Note co-mingled funds only. Where there are
funds with multiple currencies, FX rates at 31 March 2023 used to
convert
-
Gross MOIC as at 31 March 2023
-
For current vintages only
-
Third-party AUM plus ICG plc commitment at point of final close.
MOICs and DPI for SDP III and SDP IV shown for EUR sleeves
Overview: Group financial
performance
Fund Management Company (FMC) revenue was
£539.9m (FY22: £512.8m) and FMC profit before tax was £310.7m
(FY22: £286.2m), an increase of 9% compared to FY22, resulting
in an FMC operating margin of 57.5% (FY22: 55.8%).
Net investment returns (NIR) for the Investment
Company (IC) of 4%, or £102.3m, and over the last five years have
averaged 11%. The IC as a whole recorded a (loss) of £(52.6)m
(FY22: profit of £282.6m).
The Group generated a Group profit before tax of
£258.1m (FY22: £568.8m) and Group earnings per share were 80.3p
(FY22: 187.6p).
ICG has a progressive dividend policy, and the
proposed final dividend of 52.2p per share brings the total
dividend per share to 77.5p for FY23, an increase of 2% compared to
FY22. Over the last five years the dividend per share has grown at
an annualised rate of 21%.
Our balance sheet remains strong and well
capitalised, with net gearing of 0.50x, total available liquidity
of £1.1bn and a net asset value per share of 694p.
Our medium-term financial guidance, set out on
page 3, remains unchanged from 31 March 2022.
£m unless stated |
31 March 2023 |
31 March 2022 |
Change % |
Third-party management fees |
481.4 |
392.7 |
23% |
Third-party performance fees |
19.6 |
56.0 |
(65%) |
Third-party fee
income |
501.0 |
448.7 |
12% |
Movement in FV of
derivative |
(26.8) |
(0.4) |
n/m |
Other
income |
65.7 |
64.5 |
2% |
Fund Management Company revenue |
539.9 |
512.8 |
5 % |
Fund Management Company operating expenses |
(229.2) |
(226.6) |
1% |
Fund Management Company profit before tax |
310.7 |
286.2 |
9 % |
Fund Management Company operating margin |
57.5 % |
55.8 % |
3% |
Investment Company revenue |
98.4 |
451.7 |
(78%) |
Investment Company operating
expenses |
(103.1) |
(118.6) |
(13%) |
Interest income |
13.9 |
— |
>100% |
Interest expense |
(61.8) |
(50.5) |
22% |
Investment Company (loss) / profit before tax |
(52.6) |
282.6 |
(119) % |
Group profit before tax |
258.1 |
568.8 |
(55) % |
Tax |
(28.8) |
(30.8) |
(6%) |
Group profit after tax |
229.3 |
538.0 |
(57) % |
Earnings per share |
80.3 p |
187.6p |
(57%) |
Dividend per share |
77.5p |
76.0p |
2 % |
|
31 March 2023 |
31 March 2022 |
Change % |
Liquidity |
£1.1bn |
£1.3bn |
(16%) |
Net gearing |
0.50x |
0.45x |
0.05x |
Net
asset value per share |
694p |
696p |
—% |
Fund Management Company
The FMC is the Group’s principal driver of
long-term profit growth. It manages our third-party AUM, which it
invests on behalf of the Group’s clients.
Third-party fee income
Third-party fee income grew to £501.0m in FY23
(FY22: £448.7m), a year-on-year increase of 12% (an increase of 7%
on a constant currency basis).
£m |
Year ended
31 March 2023 |
Year ended
31 March 2022 |
Change
% |
Structured and Private Equity – management fees |
283.1 |
206.2 |
37% |
Structured and Private Equity – performance fees |
13.4 |
47.3 |
(72)% |
Structured and Private
Equity |
296.5 |
253.5 |
17% |
Private Debt – management fees |
83.7 |
66.5 |
26% |
Private Debt – performance fees |
6.3 |
6.1 |
3% |
Private
Debt |
90.0 |
72.6 |
24% |
Real Assets – management fees |
48.9 |
61.4 |
(20)% |
Real Assets – performance fees |
(0.1) |
0.1 |
n/m |
Real
Assets |
48.8 |
61.5 |
(21)% |
Credit – management fees |
65.7 |
58.6 |
12% |
Credit – performance fees |
— |
2.5 |
n/m |
Credit |
65.7 |
61.1 |
8% |
Third-party fee income |
501.0 |
448.7 |
12 % |
Of which management fees |
481.4 |
392.7 |
23% |
Of which performance
fees |
19.6 |
56.0 |
(65)% |
Our third-party fee income is largely comprised
of management fees, which have a high degree of visibility and are
directly linked to our fee-earning AUM.
The increase in management fees during FY23 was
due to a number of factors including fundraising for Europe VIII
and Strategic Equity IV (both of which charge fees on committed
capital); net deployment within Private Debt (which charges fees on
invested capital); and changes in foreign exchange rates. The
£12.7m reduction in fee income for Real Assets was due to the prior
period including £14.3m of catch-up fees (largely for
Infrastructure Equity I and Sale and Leaseback I), which are
non-recurring. Excluding those catch-up fees, third-party fee
income for Real Assets is up approximately 3.4%.
Management fees during FY23 include a total of
£30.6m catch-up fees (FY22: £14.3m). We do not expect significant
catch-up fees for FY24 given the funds we have in market and the
potential timing of first closes.
The effective management fee rate on our
fee-earning AUM at the period end was 0.90% (FY22: 0.88%). The
increase was due to the fundraising within Structured and Private
Equity in strategies with higher fee rates charging fees on
committed capital as well as a positive mix effect in other asset
classes. The fee rate is split between asset classes as
follows:
|
31 March 2023 |
31 March 2022 |
Structured and Private Equity |
1.26 % |
1.24 % |
Private Debt |
0.82 % |
0.83 % |
Real Assets |
0.91 % |
0.87 % |
Credit |
0.49 % |
0.47 % |
Group |
0.90 % |
0.88 % |
Performance fees are a relatively small part of
our revenue, and during the five years to 31 March 2023 have
accounted for an average of 10.2% of our third-party fee income.
With lower transaction activity in the broader market, timing
expectations for various exits within our funds have been extended.
This has resulted in a lower level of performance fees being
recognised in this period, although does not impact the absolute
level of performance fees we expect to receive if our funds perform
in line with expectations. At 31 March 2023 the Group had an asset
of £37.5m of accrued performance fees on its balance sheet (FY22:
£91.0m):
£m |
|
Accrued performance fees at 1 April 2022 |
91.0 |
Accruals during period |
19.4 |
(Received) during period |
(74.9) |
FX and
other movements |
2.0 |
Accrued performance fees at 31 March 2023 |
37.5 |
Our funds charge fees in the fund currency, and
third-party fee income for the period was 56% in euros, 32% in US
dollars, 11% in sterling and 1% in other currencies. On a constant
currency basis our third-party fee income grew by 7% compared to
FY22.
Movements in Fair value of derivatives
and other income
During the year the Group changed its policy
regarding hedging of non-sterling fee income. Previously the
Group’s policy was to hedge non-sterling fee income to the extent
that it was not matched by costs and was predictable (transaction
hedges). For FY23 FMC revenue included a negative impact of
£(26.8)m due to changes in the fair value of these transaction
hedges (FY22: £(0.4)m). During the financial year the Group decided
to no longer enter into transaction hedges as a matter of course
(although it may still do so on an ad hoc basis), and economically
closed out all outstanding transaction hedges. Further detail on
our hedging policy and sensitivities can be found on page 20.
Other income includes recorded dividend receipts
of £40.2m (FY22: £38.0m) from investments in CLO equity, which are
continuing to be received in line with historical experiences. The
FMC also recognised £25.0m of revenue for managing the IC balance
sheet investment portfolio (FY22: £24.8m), as well as other income
of £0.5m (FY22: £1.7m).
Operating expenses and
margin
During the year we remained focussed on managing costs, resulting
in operating expenses increasing by only 1% compared to FY22 and
totalling £229.2m (FY22: £226.6m). Salaries increased broadly in
line with headcount (which grew 11%), while incentive scheme costs
grew by only 6%. Both administrative costs and depreciation and
amortisation recorded absolute reductions compared to FY22.
Administrative costs reduced due to lower professional and
consulting costs, lower placement agent fees and lower recruitment
costs given the lower hiring in FY23 compared to FY22.
Operating expenses for the period were 70% in
sterling, 9% in euros, 14% in US dollars and 7% in other
currencies.
£m |
Year ended
31 March 2023 |
Year ended
31 March 2022 |
Change
% |
Salaries |
85.0 |
76.0 |
12 % |
Incentive scheme costs |
92.2 |
87.2 |
6 % |
Administrative costs |
45.7 |
55.1 |
(17 %) |
Depreciation and amortisation |
6.3 |
8.3 |
(24 %) |
FMC operating expenses |
229.2 |
226.6 |
1 % |
FMC
operating margin |
57.5 % |
55.8 % |
2 % |
The FMC recorded a profit before tax of £310.7m
(FY22: £286.2m), a year-on-year increase of 9% and an increase of
14% on a constant currency basis (excluding the change in fair
value of derivatives).
The FMC operating margin of 57.5% (FY22: 55.8%)
was above our medium-term guidance of above 50%, driven in part by
a combination of catch-up fees and a strong focus on cost
control.
Investment Company
The Investment Company (IC) invests the Group’s
proprietary capital to seed and accelerate emerging strategies, and
invests alongside the Group’s more established strategies to align
interests between our shareholders, clients and employees. It also
supports a number of costs, including for certain central
functions, a part of the Executive Directors’ compensation, and the
portion of the investment teams’ compensation linked to the returns
of the balance sheet investment portfolio (Deal Vintage Bonus, or
DVB).
Balance sheet investment
portfolio
The balance sheet investment portfolio grew 3%
in absolute terms during the year and was valued at £2.9bn at 31
March 2023 (31 March 2022: £2.8bn). It experienced net realisations
during the period of £128m (FY22: £253m), being new investments of
£666m (FY22: £952m) and realisations of £794m (FY22: £1,205m).
Realisations in FY23 include £101m of proceeds received when we
sold down a portion of the balance sheet's exposure to ICG's liquid
credit funds.
We made a number of new seed investments
totalling £214m, including on behalf of Life Sciences, LP
Secondaries, US Mid-Market and Real Estate Opportunistic Equity
Europe. These investments are held in anticipation of being
transferred to a third-party fund. At 31 March 2023 the balance
sheet held £330m of seed investments (31 March 2022: £178m).
At 31 March 2023 the balance sheet investment
portfolio was 45% euro denominated, 27% US dollar denominated, 21%
sterling denominated and 7% in other currencies.
£m |
As at 31
March 2022 |
New
investments |
Realisations |
Gains/ (losses)
in valuation |
FX & other |
As at 31
March 2023 |
Structured and Private Equity |
1,826 |
260 |
(513) |
112 |
66 |
1,751 |
Private Debt |
149 |
31 |
(33) |
14 |
8 |
169 |
Real Assets |
222 |
130 |
(88) |
20 |
5 |
289 |
Credit1 |
447 |
31 |
(109) |
(30) |
24 |
363 |
Seed
Investments2 |
178 |
214 |
(51) |
(16) |
5 |
330 |
Total Balance Sheet Investment
Portfolio |
2,822 |
666 |
(794) |
100 |
108 |
2,902 |
-
Within Credit, at 31 March 2023 £65m was invested in liquid
strategies, with the remaining £298m invested in CLO debt (£106m)
and equity (£192m)
-
Formerly referred to as Warehouse investments. Adjusted to include
three assets previously reported with Real Assets, with a combined
value of £83m at 31 March 2022
Net Investment Returns
For the five years to 31 March 2023, Net
Investment Returns (NIR) have been in line with our medium-term
guidance, averaging 11.2%. For the twelve months to 31 March 2023,
NIR were £102.3m (FY22: £485.7m), or 4% (FY22: 18%).
NIR was comprised of interest of £113.2m from
interest-bearing investments (FY22: £76.8m), unrealised losses of
£(13.2)m (FY22: gain of £404.0m) and other income of £2.3m. NIR
were split between asset classes as follows:
|
Twelve months to 31 March 2023 |
Twelve months to 31 March 2022 |
£m |
NIR (£m) |
NIR (%) |
NIR (£m) |
NIR (%) |
Structured and Private Equity |
112.9 |
6% |
457.7 |
27 % |
Private Debt |
14.4 |
9% |
24.9 |
16 % |
Real Assets |
20.7 |
8% |
9.7 |
5 % |
Credit |
(30.1) |
(7%) |
(0.5) |
— % |
Seed
Investments1 |
(15.6) |
(6%) |
(6.1) |
(4) % |
Total net investment returns |
102.3 |
4 % |
485.7 |
18 % |
-
FY22 NIR adjusted to reflect three assets with Seed Investments
that were previously included within Real Assets
- Structured and
Private Equity, which accounted for 60% of the total balance sheet
investment portfolio at 31 March 2023, saw a positive NIR driven by
European Corporate and Strategic Equity
- Within Private
Debt, SDP is performing resiliently and a strong performance during
year within North America Credit Partners2 driving the
majority of the positive NIR
- Real Assets -
which as noted above now excludes three investments that have been
moved to Seed investments - saw a strong return within
Infrastructure, offsetting valuation reductions within Sale and
Leaseback. The Real Estate debt strategies have continued to
perform well, recording positive NIR during the year
- Credit NIR of
£(30.1)m includes a reduction of £(40.2)m in the value of the
balance sheet's holdings of CLO equity to reflect CLO dividend
receipts recorded in the FMC and a reduction of £(6.3)m in respect
of changes in the value of CLO debt and co-investments in our
liquid credit funds. This is partially offset by a £16.4m valuation
gain on CLO equity, driven by gains arising from actual defaults
being lower than projections as well as by the passage of time
increasing the current value of discounted future cashflows
-
Formerly North America Private Debt
In addition to the NIR, the IC recorded other
revenue as follows:
£m |
Year ended
31 March 2023 |
Year ended
31 March 2022 |
Change
% |
Changes in fair value of derivatives |
16.8 |
(11.8) |
n/m |
Fee paid to FMC |
(25.0) |
(24.8) |
1 % |
Other |
4.3 |
2.6 |
65 % |
Other IC revenue |
(3.9) |
(34.0) |
n/m |
As a result, the IC recorded total revenues of
£98.4m (FY22 revenue: £451.7m).
Investment Company expenses
Operating expenses in the IC of £103.1m
decreased by 13% compared to FY22 (£118.6m), which was largely due
to a £22.9m reduction in incentive scheme costs:
£m |
Year ended
31 March 2023 |
Year ended
31 March 2022 |
Change
% |
Salaries |
20.0 |
16.7 |
20 % |
Incentive scheme costs |
59.6 |
82.5 |
(28 %) |
Administrative costs |
20.7 |
16.0 |
29 % |
Depreciation and amortisation |
2.8 |
3.4 |
(18 %) |
IC operating expenses |
103.1 |
118.6 |
(13
%) |
Lower incentive scheme costs were predominantly
the result of lower accrual of DVB during the period: £36.6m
compared to £66.5m in FY22. DVB, which is linked to the performance
of certain investments within the balance sheet investment
portfolio, only pays out upon cash realisations.
Employee costs for teams who do not yet have a
third-party fund are allocated to the IC. For FY23, the
directly-attributable costs within the Investment Company for teams
that have not had a first close of a third-party fund was £24.4m
(FY22: £15.4m). When those funds have a first close, the costs of
those teams are transferred to the Fund Management Company.
Interest expense was £61.8m (FY22: £50.5m) and
interest earned on cash balances was £13.9m (FY22: nil).
The IC therefore recorded a (loss) before tax of
£(52.6)m (FY22: profit before tax £282.6m).
Group
Tax
The Group recognised a tax charge of £(28.8)m
(FY22: tax charge of £(30.8)m), resulting in an effective tax rate
for the period of 11.2% (FY22: 5.4%). The increase compared to the
prior year is due to the change in composition of our earnings and
the lower NIR in FY23 compared to FY22.
As detailed in note 14, the Group has a
structurally lower effective tax rate than the statutory UK rate.
This is largely driven by the Investment Company, where certain
forms of income benefit from tax exemptions. The effective tax rate
will vary depending on the income mix.
Dividend
The Board of ICG is simplifying our dividend
policy and reaffirming it as a progressive dividend policy,
demonstrating our confidence in the long-term growth prospects of
the business. Over the long-term, the Board intends to increase the
dividend per share by at least mid-single digit percentage points
on an annualised basis. The dividend will continue to be paid in
two instalments, with the interim dividend being one third of the
prior year’s total dividend.
For FY23, in addition to the 25.3p per share
interim dividend, the Board is proposing a 52.2p per share final
dividend. This would result in a total dividend of 77.5p per share
being paid for the year, an increase of 2.0% compared to FY22
(76.0p). Over the last five years, ordinary dividends per share
have increased at an annualised rate of 21%. We continue to make
the dividend reinvestment plan available.
Balance sheet
Balance sheet strategy
Delivering our strategy and maximising
shareholder value requires a clear approach to managing our balance
sheet. We have a robust, diversified balance sheet and a strong
liquidity position that allows us to invest in the business through
economic cycles. This provides us with significant strategic and
financial flexibility, enabling us to take advantage of
opportunities to generate future incremental fee income.
Our approach to managing our balance sheet is
structured around three priorities. These ensure we have the
financial and operational flexibility to successfully execute our
strategic objectives:
Align the Group's interests with its
clients:
- co-invest in our strategies
alongside our clients, whilst seeking to reduce the Group's
commitments over time where appropriate
Grow third-party fee income in the FMC:
- fund and warehouse seed investments
to launch new strategies that will be a source of future
incremental management fees in the FMC
Maintain robust capitalisation:
- retain strong liquidity
- long-term objective of zero net
gearing
Liquidity and net debt
At 31 March 2023 the Group had total available
liquidity of £1,100m (FY22: £1,312m), net financial debt of £988m
(FY22: £893m) and net gearing of 0.50x (FY22: 0.45x).
During the period cash reduced by £212m from
£762m to £550m, including the repayment of £195m of borrowings that
matured.
The table below sets out movements in cash,
including certain APM metrics, which management believes will help
shareholders understand where cash is being generated and used
within the Company. The Glossary sets out the reconciliations from
the APM cash measures in the table below to the UK-adopted IAS
measures of Net cash flows from/(used in) operations; Net cash
flows from/(used in) investing activities; and Net cash flows
from/(used in) financing activities.
£m |
FY23 |
FY22 |
Opening cash |
762 |
297 |
|
|
|
Operating
activities |
|
|
Fee and other operating income |
573 |
388 |
Net cashflows from investment activities and investment
income1 |
176 |
292 |
Expenses and working capital |
(322) |
(242) |
Tax paid |
(32) |
(44) |
Group cashflows from
operating activities -
APM2 |
395 |
394 |
|
|
|
Financing
activities |
|
|
Interest paid |
(64) |
(56) |
Purchase of own shares |
(39) |
(21) |
Dividends paid |
(236) |
(166) |
Net (repayment of) / proceeds from borrowings |
(195) |
302 |
Group cashflows from
financing activities -
APM2 |
534 |
59 |
Other
cashflow3 |
(77) |
7 |
FX and
other movement |
4 |
5 |
Closing cash |
550 |
762 |
Available undrawn ESG-linked RCF |
550 |
550 |
Cash and undrawn debt facilities (total available
liquidity) |
1,100 |
1,312 |
-
The aggregate cash (used)/received from balance sheet investment
portfolio (additions), realisations, and cash proceeds received
from assets within the balance sheet investment portfolio
-
Interest paid, which is classified as an Operating cash flow under
UK-adopted IAS, is reported within Group cashflows from financing
activities - APM
-
Investing cashflows (UK-adopted IAS) in respect of purchase of
intangible assets, purchase of property, plant and equipment and
net cashflow from derivative financial instruments ("Net cash flows
used in financing activities" per Note 4) and "Payment of principal
portion of lease liabilities" (see Note 4)
At 31 March 2023, the Group had drawn debt of
£1,538m (31 March 2022: £1,655m). The change is due to the
repayment of certain facilities as they matured, along with changes
in FX rates impacting the translation value:
|
£m |
Drawn debt at 31 March 2022 |
1,655 |
Debt (repayment) /
issuance |
(195) |
Impact
of foreign exchange rates |
78 |
Drawn debt at 31 March 2023 |
1,538 |
Net financial debt therefore increased to £988m
(31 March 2022: £893m):
£m |
31 March 2023 |
31 March 2022 |
Drawn debt |
1,538 |
1,655 |
Cash |
550 |
762 |
Net financial debt |
988 |
893 |
During the period the Group's credit rating
provided by S&P was upgraded to BBB, and at 31 March 2023 the
Group had credit ratings of BBB (stable outlook) / BBB (stable
outlook) from Fitch and S&P, respectively.
The Group’s drawn debt is provided through a
range of facilities. All facilities except the ESG-linked RCF are
fixed-rate instruments. The weighted average cost of drawn debt at
31 March 2023 was 3.17% (31 March 2022: 3.29%). The
weighted-average life of drawn debt at 31 March 2023 was 4.1 years
(31 March 2022 4.6 years). The maturity profile of our term debt is
set out below:
£m |
FY24 |
FY25 |
FY26 |
FY27 |
FY28 |
FY29 |
FY30 |
Term debt maturing |
51 |
258 |
185 |
503 |
— |
101 |
440 |
For further details of our debt facilities see
Other Information (page 93).
Net asset value
Shareholder equity increased to £1,977m at 31
March 2023 (31 March 2022: £1,995m), equating to 694p per share (31
March 2022: 696p):
£m |
31 March 2023 |
31 March 2022 |
Balance sheet investment portfolio |
2,902 |
2,822 |
Cash and cash equivalents |
550 |
762 |
Other
assets |
424 |
419 |
Total assets |
3,876 |
4,003 |
Financial debt |
(1,538) |
(1,655) |
Other liabilities |
(361) |
(353) |
Total liabilities |
(1,899) |
(2,008) |
Net asset value |
1,977 |
1,995 |
Net asset value per share |
694p |
696p |
Net gearing
The movements in the Group’s cash position, debt
facilities and shareholder equity resulted in net gearing
increasing to 0.50x at 31 March 2023 (31 March 2022: 0.45x). We
maintain our long-term objective of having zero net gearing.
£m |
31 March 2023 |
31 March 2022 |
Change % |
Net financial debt (A) |
988 |
893 |
11% |
Shareholder equity (B) |
1,977 |
1,995 |
(1)% |
Net gearing (A/B) |
0.50 x |
0.45 x |
0.05x |
Foreign exchange rates
The following foreign exchange rates have been
used throughout this review:
|
Average rate
for FY23 |
Average rate
for FY22 |
31 March 2023
year end |
31 March 2022
year end |
GBP:EUR |
1.1560 |
1.1755 |
1.1375 |
1.1876 |
GBP:USD |
1.2051 |
1.3626 |
1.2337 |
1.3138 |
EUR:USD |
1.0426 |
1.1595 |
1.0846 |
1.1063 |
We report our AUM in dollars: 56.1% of our
fee-earning AUM at 31 March 2023 was in euros; 30.6% in dollars;
11.5% in sterling; and 1.8% in other currencies.
At 31 March 2023 our third-party AUM was
$77.0bn, based on FX rates at 31 March 2023. If GBP:USD had been 5%
higher (1.2954) our reported third-party AUM would have been $0.5bn
higher. If EUR:USD had been 5% higher (1.1388) our reported
third-party AUM would have been $2.2bn higher.
Where noted, this review presents changes in
AUM, third-party fee income and FMC PBT on a constant exchange rate
basis. For the purposes of these calculations, prior period numbers
have been translated from their underlying fund currencies to the
reporting currencies at the respective FY23 period end exchange
rates. This has then been compared to the FY23 numbers to arrive at
the change on a constant currency exchange rate basis.
During the year the Group changed its policy
regarding hedging of non-sterling net fee income. Previously the
Group’s policy was to hedge non-sterling fee income to the extent
that it was not matched by costs and was predictable (transaction
hedges). For FY23 FMC revenue included a negative impact of
£(26.8)m due to changes in the fair value of these transaction
hedges (FY22: £(0.4)m). During the financial year the Group decided
to no longer enter into transaction hedges as a matter of course
(although it may still do so on an ad hoc basis), and economically
closed out all outstanding transaction hedges.
The table below sets out the indicative impact
on our reported management fees, FMC PBT and NAV per share had
sterling been 5% weaker or stronger against the euro and the dollar
in the period (excluding the impact of any legacy hedges):
|
Impact on FY23 management
fees1 |
Impact on FY23
FMC PBT1 |
NAV per share at 31 March
20232 |
Sterling 5% weaker against euro and dollar |
+22.5m |
+£22.7m |
+15p |
Sterling 5% stronger against euro and dollar |
-(20.3)m |
-£(20.5)m |
-(14)p |
-
Impact assessed by sensitising the average FY23 FX rates. Excluding
impact of legacy hedges
- NAV / NAV per share reflects the total indicative impact as a
result of a change in FMC PBT and net currency assets
RISK MANAGEMENT
Managing risk
Effective risk management is a core competence
underpinned by a strong control culture.
Our approach
The Board is accountable for the overall
stewardship of ICG’s Risk Management Framework (RMF), internal
control assurance, and for determining the nature and extent of the
risks it is willing to take in achieving the Group’s strategic
objectives. In so doing the Board sets a preference for risk within
a strong control environment to generate a return for investors and
shareholders and protect their interests.
The risk appetite is reviewed by the Risk
Committee, on behalf of the Board, and covers the principal risks
that the Group seeks to take in delivering the Group’s strategic
objectives.
The Risk Committee is provided with management
information regularly and monitors performance against set
thresholds and limits to support the achievement of the Group’s
strategic objectives, within the boundaries of the agreed risk
appetite. The Board also seeks to promote a strong risk management
culture by encouraging acceptable behaviours, decisions, and
attitudes toward taking and managing risk throughout the Group.
Managing risk
Risk management is embedded across the Group
through ICG’s RMF, which ensures that current and emerging risks
are identified, assessed, monitored, controlled, and appropriately
governed based on a common risk taxonomy and methodology. The RMF
is designed to protect the interests of stakeholders and meet our
responsibilities as a UK listed company and the parent company of a
number of regulated entities.
The Board’s oversight of risk management is
proactive, ongoing and integrated into the Group’s governance
processes. The Board receive regular reports on the Group’s risk
management and internal control systems. These reports set out any
significant risks facing the Group, and changes made to the
systems. Evaluating risk events and corrective actions supports the
Board’s assessment of the Group’s effectiveness at mitigating event
impacts. The Board also meet regularly with the internal and
external auditors to discuss their findings and recommendations,
which helps it gain insight into areas that require improvement.
The Board reviews the Risk Management Framework regularly, and it
forms the basis on which the Board reaches its conclusions on the
effectiveness of the Group’s system of internal controls.
Taking risk opens up opportunities to innovate
and further enhance our business, for example new investment
strategies or new approaches to managing our client relationships.
Therefore, we maintain a risk culture that provides entrepreneurial
leadership within a framework of prudent and effective controls to
enable effective risk management.
Taking responsibility and managing risk is one
of our key values that drive our success.
Lines of defence
We operate a risk framework consistent with the
principles of the ‘three lines of defence’ model. This ensures
clarity over responsibility for risk management and segregation of
duties between those who take on risk and manage risk, those who
oversee risk and those who provide assurance.
- The first line of
defence is the business functions and their respective line
managers, who own and manage risk and controls across the processes
they operate.
- The second line of
defence is made up of the control and oversight functions who
provide assurance that risk management policies and procedures are
operating effectively.
- The third line of
defence is Internal Audit who provide independent assurance over
the design and operation of controls established by the first and
second lines to manage risk.
Assessing risk
The Group adopts both a top-down and a bottom-up
approach to risk assessment:
- The Risk Committee
undertakes a top-down review of the external environment and the
strategic planning process to identify the most consequential and
significant risks to the Group’s businesses. These are referred to
as the principal risks.
- The business
undertakes a bottom-up review which involves a comprehensive risk
assessment process designed to facilitate the identification and
assessment of key risks and controls related to each business
function’s most important objectives and processes. This is
primarily achieved through the risk and control self-assessment
process (RCSA).
The risk assessment process is supported by the
Group’s Risk Taxonomy which is a top-down comprehensive set of risk
categories designed to encourage those involved in risk
identification to consider all types of risks that could affect the
Group’s strategic objectives.
Key developments in FY23
During the year the Group undertook its first
Internal Capital Adequacy and Risk Assessment (ICARA) under the
requirements of the UK Investment Firm’s Prudential Regulation
(IFPR). The new regime sets new capital and liquidity requirements,
revised remuneration and governance standards and requires ICG to
complete an ICARA for our relevant UK entities. The Group is now
identifying, assessing, and managing risk of harm to clients,
markets, and the Group itself.
Other key initiatives included:
- Monitoring the
Russia-Ukraine crisis for potential risks to people, assets,
operations, and supply chains in the region and globally.
- Monitoring the
macro-economic environment – the inflationary pressure, rising
interest rates and ongoing disruption to international supply
chains – and adapting our approach as appropriate.
- Supporting the
Audit Committee in its oversight of the Group’s plans to implement
the UK Government’s audit reform proposals and strengthening
internal controls.
- Monitoring risks
associated with the Group’s transformation agenda, recognising the
challenges of implementation and successful delivery.
- Enhancing the
combined assurance process to provide an integrated and coordinated
approach to align the Group’s assurance activities across the
Group.
- Monitoring the
Group’s technology and resiliency requirements to ensure that the
management of cyber risk remains appropriate to mitigate the
continued and changing nature of the threat and to support the
growth of the business.
- Further embedding
ESG into the Risk Management Framework.
- Improving the use
of risk information and incorporating risk connectivity into the
Group’s Risk Management Framework to allow for more proactive
management of risk.
Principal risks and uncertainties
The Group’s principal risks are individual
risks, or a combination of risks, that can seriously affect the
performance, future prospects or reputation of the Group. These
include those risks that would threaten the Group’s business model,
future performance, solvency, or liquidity. The Group considers its
principal risks across three categories:
- Strategic and
business risks
The risk of failing to respond to developments
in our industry sector, client demand or the competitive
environment, impacting the successful delivery of our strategic
objectives.
- Financial
risks
The risk of an adverse impact on the Group due
to market fluctuations, counterparty failure or having insufficient
resources to meet financial obligations.
- Operational
risks
The risk of loss resulting from inadequate or
failed internal processes, people or systems and external
events.
Reputational risk is not in itself one of the
principal risks. However, it is an important consideration and is
actively managed and mitigated as part of the wider risk management
framework.
We use a principal and emerging risks process to
provide a forward-looking view of the potential risks that can
threaten the execution of the Group’s strategy or operations over
the medium to long term. We proactively assess the internal and
external risk environment, as well as review the themes identified
across our global businesses for any risks that may require
escalation, updating our principal and emerging risks as necessary.
The Board, Risk Committee and Executive Directors continue to
monitor relevant impacts on the business which are considered
further below.
Within the three categories noted above, the
Group’s RMF identifies eight principal risks which are accompanied
by the associated responsibilities and expectations around risk
management and control. Each of the principal risks is overseen by
an accountable Executive Director, who is responsible for the
framework, policies and standards that detail the related
requirements.
The Directors confirm that they have undertaken
a robust assessment of the principal risks in line with the
requirements of the UK Corporate Governance Code, and that no
significant failings or weaknesses in internal controls has been
identified. In making this assessment the Directors consider the
likelihood of each risk materialising, in the short and long term.
This is supported by an annual Material Controls assessment and
Fraud Risk Assessment, facilitated by the Group Risk Function,
which provides the Directors with a detailed assessment of related
internal controls. Additionally, Internal Audit findings,
Compliance Monitoring findings, and risk events reported during the
period are reviewed to assess whether any deficiency has been
identified which is a significant failing or weakness.
External environment risk
Risk appetite: Moderate
Executive Director Responsible: Benoît
Durteste
Risk
Description |
Key Controls and Mitigation |
Trend and Outlook |
Geopolitical and macroeconomic
concerns and other global events such as pandemics and natural
disasters that are outside the Group’s control could adversely
affect the environment in which we, and our fund portfolio
companies, operate, and we may not be able to manage our exposure
to these conditions and/or events. In particular, these events have
contributed, and may continue to contribute, to volatility in
financial markets which can adversely affect our business in many
ways, including by reducing the value or performance of the
investments made by our funds, making it more difficult to find
opportunities for our funds to exit and realise value from existing
investments and to find suitable investments for our funds to
effectively deploy capital. This could in turn affect our ability
to raise new funds and materially reduce our profitability. |
The Group’s business model is predominantly based on illiquid funds
which are closed-ended and long-term in nature. Therefore, to a
large extent the Group’s fee streams are ‘locked in’. This provides
some mitigation in relation to profitability and cashflows against
market downturn.
Additionally, given the nature of closed-end funds, they are not
subject to redemptions.
A range of complementary approaches are used to inform strategic
planning and risk mitigation, including active management of the
Group’s fund portfolios, profitability and balance sheet scenario
planning and stress testing to ensure resilience across a range of
outcomes.
The Board, the Risk Committee and the Risk function monitor
emerging risks, trends, and changes in the likelihood of impact.
This assessment informs the universe of principal risks faced by
the Group. |
Inflationary pressure, rising interest rates and ongoing disruption
to international supply chains means the macro-economic environment
remains dynamic and the outlook unclear. The Group has proven
expertise in navigating complex and uncertain market conditions,
with our business model providing a high degree of stability. We
have substantial dry powder across a range of strategies following
our strong fundraising in the last 24 months. We have stable and
visible management fee income, are not under pressure to deploy or
realise, and can capitalise on opportunities that emerge across our
asset classes.
We are actively supporting our portfolio companies as they seek to
take advantage of the current market dislocation by growing
organically and inorganically, as well as ensuring that they have
the people, systems, and capital structures in place to navigate a
period of potentially protracted uncertainty, including to ensure
they are appropriately hedged against interest rate risks. Our
portfolios remain fundamentally well positioned, with robust
operational performance and reasonable leverage.
We remain alert to the current macroeconomic and geopolitical
uncertainty and continue to monitor the potential impact on our
investment strategies, clients, and portfolio companies, as well as
the broader markets. While the uncertainty remains elevated, we do
not see an increased risk to our operations, strategy, performance,
or client demand as a result. |
Fund performance risk
Risk appetite: Moderate
Executive Director Responsible: Benoît
Durteste
Risk
Description |
Key Controls and Mitigation |
Trend and Outlook |
Current and potential clients
continually assess our investment fund performance. There is a risk
that our funds may not meet their investment objectives, that there
is a failure to deliver consistent performance, or that prolonged
fund underperformance could erode our track record. Consequently,
existing investors in our funds might decline to invest in funds we
raise in future and might withdraw their investments in our
open-ended strategies. Poor fund performance may also impact our
ability to raise subsequent vintages or new strategies impacting
our ability to compete effectively. This could in turn materially
affect our profitability and impact our plans for growth. |
A
robust and disciplined investment process is in place where
investments are selected and regularly monitored by the Investment
Committees for fund performance, delivery of investment objectives,
and asset performance
All proposed investments are subject to a thorough due diligence
and approval process during which all key aspects of the
transaction are discussed and assessed. Regular monitoring of
investment and divestment pipelines is undertaken on an ongoing
basis
Monitoring of all portfolio investments is undertaken on a
quarterly basis focusing on the operating performance and liquidity
of the portfolio
Material ESG and climate-related risks are assessed for each
potential investment opportunity and presented to, and considered
by, the Investment Committees of all investment strategies. Further
analysis is conducted for opportunities identified as having a
higher exposure to climate related risks. |
Against a fast-moving global economic backdrop, we have continued
to successfully manage our clients’ assets. As expected, given our
focus on downside protection, our funds are showing attractive
performance through a period of volatility. In particular, our debt
strategies are generating historically high returns for
clients.
Fund valuations have remained stable during the period, with strong
underlying performance of our portfolio companies and income from
our interest-bearing investments largely offsetting reductions in
valuation multiples or increasing costs of capital. Despite the
slowdown in transaction activity across the market, we have
continued to anchor the performance of key vintages through a
disciplined approach to realisations.
The Group saw continued and significant client demand for our
established and new strategies. We have held final closes for
Europe VIII, Strategic Equity IV, and Asia Pacific IV, all above
target size; launched the fifth vintage of our flagship direct
lending strategy (SDP) and the second vintage of Sale and Leaseback
launched the marketing of Europe Mid-Market II, Infrastructure II
and Life Sciences I - a new strategy. We have seeded investments
for - amongst others – Real Estate Opportunistic Equity Europe and
Life Sciences. Our closed-end-funds model also provides visibility
of future long term fee income and therefore Fund Management
Company profits.
Looking ahead the outlook remains very positive. We continue to
hire selectively to help drive future growth within our investment
teams, and within Marketing and Client Relations, focussed on
product and end-client expertise. We have a powerful local sourcing
network and a diversified product offering of successful investment
strategies that enable us to navigate dynamic market conditions,
which helps to mitigate this risk. |
Financial Risk
Risk appetite: Low to moderate
Executive Director Responsible: Vijay
Bharadia
Risk
Description |
Key Controls and Mitigation |
Trend and Outlook |
The Group is exposed to liquidity
and market risks. Liquidity risks refer to the risk that the Group
may not have sufficient financial resources to meet its financial
obligations when they fall due. Market risk refers to the
possibility that the Group may suffer a loss resulting from the
fluctuations in the values of, or income from, proprietary assets
and liabilities. The Group does not deliberately seek exposure to
market risks to generate profit; however, on an ancillary basis we
will co-invest alongside clients into our funds, seed assets in
preparation for new fund launches or hold investments in
Collateralised Loan Obligations (CLOs) in accordance with
regulatory requirements. Consequently, the Group is exposed to
having insufficient liquidity to meet its financial obligations,
including its commitments to its fund co-investments. In addition,
adverse market conditions could impact the carrying value of the
Group’s investments resulting in losses on the Group’s balance
sheet. |
Debt funding for the Group is obtained from diversified sources and
the repayment profile is managed to minimise material repayment
events. The profile of the debt facilities available to the Group
is reviewed frequently by the Treasury Committee.
Hedging of non-sterling net exposure of income and expenditure, and
net assets is undertaken to minimise short-term volatility in the
financial results of the Group.
Market and liquidity exposures are reported monthly and reviewed by
the Group’s Treasury Committee.
Long-term forecasts and stress tests are prepared to assess the
Group’s future liquidity as well as compliance with the regulatory
capital requirements.
Investment Company (IC) commitments are reviewed and approved by
the CEO and the CFOO on a case-by-case basis assessing the risks
and return on capital.
Valuation of the balance sheet investment portfolio is monitored
quarterly by the Group Valuation Committee, which includes
assessing the assumptions used in valuations of underlying
investments. |
Global markets remain susceptible to volatility from a number of
macro-economic and geopolitical factors. We continue to implement
measures to mitigate the impact of market volatility and interest
rate fluctuations in line with Group policy, and we will respond to
the prevailing market environment where appropriate.
Our balance sheet remains strong and well capitalised, with net
gearing of 0.50x, and with £1.1bn available cash and unutilised
bank lines as of 31 March 2023. In addition, the Group has
significant headroom to its debt covenants. All of the Group’s debt
is fixed rate, with the exception of the RCF, which was undrawn as
of 31 March 2023 and which is only intended to provide short-term
working capital for the Group if required. Additionally, Standard
& Poor carried out their year-end assessment of the Group’s
financial status and upgraded ICG to BBB (Stable), aligning them to
Fitch at the BBB Stable level. |
Key Personnel Risk
Risk appetite: Low to moderate
Executive Director Responsible: Antje
Hensel-Roth
Risk
Description |
Key Controls and Mitigation |
Trend and Outlook |
The Group depends upon the
experience, skill and reputation of our senior executives and
investment professionals. The continued service of these
individuals, who are not obligated to remain employed with us, is
uniquely valuable and a significant factor in our success.
Additionally, a breach of the governing agreements of our funds in
relation to ‘Key Person’ provisions could result in the Group
having to stop making investments for the relevant fund or impair
the ability of the Group to raise new funds if not resolved in a
timely manner.
As such, the loss of key personnel could have a material adverse
effect on our long-term prospects, revenues, profitability and
cashflows and could impair our ability to maintain or grow assets
under management in existing funds or raise additional funds in the
future. |
An
active and broad-based approach to attracting, retaining, and
developing talent, supported by a range of complementary approaches
including a well-defined recruitment process, succession planning,
a competitive and long-term approach to compensation and
incentives, and a focus on development through the appraisal
process and mentoring programmes which is supported by a dedicated
Learning and Development team.
Continued focus on the Group’s culture by developing and delivering
initiatives that reinforce appropriate behaviours to generate the
best possible long-term outcomes for our employees, clients, and
shareholders.
Promotion of a diverse and inclusive workforce with active support
across a wide range of health and wellbeing activities.
Regular reviews of resourcing and key person exposures are
undertaken as part of business line reviews and the fund and
portfolio company review processes.
The Remuneration Committee oversees the Directors’ Remuneration
Policy and its application to senior employees, and reviews and
approves incentive arrangements to ensure they are appropriate and
in line with market practice. |
Attracting and retaining key people remains a significant
operational priority. Strategic hiring across the organisation has
continued during the period to ensure we have the breadth and depth
of expertise to execute on the long-term opportunities ahead.
Building on the investments we made in FY22, we have continued to
welcome a number of senior hires within the organisation across our
investment and ESG and Sustainability teams, helping to
future-proof ICG as we continue to market and invest in a larger
range of products.
Within our marketing and client relations teams a number of key
positions have recently been filled, including a new Head of Client
Relations and marketing specialists for insurance clients and real
estate. These are notable hires as we continue to evolve our
fundraising team, moving beyond our historical geographic
organisation towards a more nuanced structure incorporating product
specialisms where appropriate.
Staff turnover continues to be somewhat elevated in certain areas
of finance and operations, where the hiring market remains
particularly candidate driven.
Against this backdrop we are still able to hire at the levels of
experience and calibre required for ICG, and are meeting our
recruitment objectives. We expect the candidate-driven dynamic to
shift in the coming months as the financial industry adapts to a
more challenging period. |
Legal, Regulatory and Tax Risk
Risk appetite: Low
Executive Director Responsible: Vijay
Bharadia
Risk Description |
Key Controls and Mitigation |
Trend and Outlook |
Regulation defines the overall
framework for the marketing and investment management and
distribution of the Group’s strategies and supporting our business
operations. The failure of the Group to comply with the relevant
rules of professional conduct and laws and regulations could expose
the Group to regulatory censure, penalties or legal or enforcement
action.
Additionally, the increase in demand for tax-related transparency
means that tax rules are continuing to be designed and implemented
globally in a more comprehensive manner. This raises a complex mix
of tax implications for the Group, in particular for our transfer
pricing, permanent establishment and fund structuring processes.
The tax authorities could challenge our interpretation of these tax
rules, resulting in additional tax liabilities.
Changes in the legal and regulatory and tax framework applicable to
our business may also disrupt the markets in which we operate and
affect the way we conduct our business. This could in turn increase
our cost base, lessen our competitiveness, reduce our future
revenues and profitability, or require us to hold more regulatory
capital. |
Compliance and Legal functions are dedicated to understanding and
fulfilling regulatory and legal expectations on behalf of the
Group, including interactions with our regulators and relevant
industry bodies. The functions provide guidance to, and oversight
of, the business in relation to regulatory and legal
obligations
Compliance undertakes routine monitoring and deep-dive activities
to assess compliance with relevant regulations and
legislation
The Tax function has close involvement with significant Group
transactions, fund structuring and business activities, both to
proactively plan the most tax efficient strategy and to manage the
impact of business transactions on previously taken tax
positions.
Regulatory, legislative and tax developments are continually
monitored to ensure we engage early in any areas of potential
change |
ICG operates in highly regulated markets, and as the nature and
focus of regulation and laws evolve, the complexity of regulatory
compliance continues to increase and represents a challenge for our
global business. Regulatory engagement through 2022 has focused on
the Group’s implementation of the IFPR, strategic transformation
and regulatory initiatives. Proactive engagement on emerging focus
areas has helped the regulatory risk profile remain broadly
stable.
Legal risk continues to be impacted by the evolving UK legal and
regulatory landscape due to the UK’s exit from the EU and other
changing regulatory standards as well as uncertainty arising from
the current and future litigation landscape.
In December 2022 the Organisation for Economic Co-operation and
Development published an implementation package in respect of the
Pillar Two Model rules (also referred to as the ‘Anti Global Base
Erosion’ or ‘GloBE’ rules), which are expected to come into force
for the financial year commencing 1 April 2024. The Group’s trading
activities within the FMC are subject to tax at the relevant
statutory rates in the jurisdictions in which income is earned.
Pillar One is not expected to apply for the Group based the
worldwide revenue threshold. The Group has performed an impact
analysis on the Pillar Two proposals for a global minimum tax rate
of 15% and does not expect the implementation to be
significant.
The Group remains responsive to a wide range of developing
regulatory areas and the increase in regulatory scrutiny around
private markets more generally, and continues to invest in our
Legal, Compliance and Tax teams to recruit specialist roles that
optimise our coverage and enhance our monitoring and oversight
capabilities. |
Operational Resilience Risk
Risk appetite: Low to moderate
Executive Director Responsible: Vijay
Bharadia
Risk Description |
Key Controls and Mitigation |
Trend and Outlook |
The Group is exposed to a wide
range of threats which can impact our operational resilience.
Natural disasters, cyber threats, terrorism, environmental issues,
and pandemics have the potential to cause significant disruption to
our operations and change our working environment. Our disaster
recovery and business continuity plans may not be sufficient to
mitigate the damage that may result from such a disaster or
disruption. Additionally, the failure of the Group to deliver an
appropriate information security platform could result in
unauthorised access by malicious third parties, breaching the
confidentiality, integrity and availability of our data and
systems. Regardless of the source, any critical system failure or
material loss of service availability could negatively impact the
Group’s reputation and our ability to maintain continuity of
operations and provide services to our clients. |
Operational resilience, in particular cyber security, is top of the
Group’s Board and Leadership agenda, and the adequacy of the
Group’s response is reviewed on an ongoing basis.
Business Continuity and Disaster Recovery plans are reviewed and
approved on at least an annual basis by designated plan owners, and
preparedness exercises are complemented by an automated Business
Continuity Planning tool.
Providing laptops for all employees globally removes the physical
dependency on the office and allows employees to work securely from
home.
The Group’s technology environment is continually maintained and
subject to regular testing, such as penetration testing,
vulnerability scans and patch management. Technology processes and
controls are also upgraded where appropriate to ensure ongoing
technology performance and resilience.
An externally managed security operations centre supplies the Group
with skilled security experts and technology to proactively detect
and prevent potential threats and to recover from security
incidents, including cyber attacks |
The Group continually seeks to increase operational resilience
through adaptation, planning, preparation and Testing of
contingency plans, and our ability to respond effectively to
disruptive incidents and significant global events like the
Covid-19 pandemic and Russia’s invasion of Ukraine. We actively
manage relationships with key strategic technology suppliers to
avoid any disruption to service provision that could adversely
affect the Group’s businesses. Business continuity and contingency
planning processes are regularly reviewed and tested.
The Group continues to strengthen its robust information security
management framework and progress our programme to enhance and
maintain levels of cyber hygiene. We implement ongoing training,
phishing campaigns and disaster recovery exercises, aligned with
threat intelligence, to support data privacy and operational
resilience.
We maintain heightened vigilance for cyber intrusion. The Group’s
technology and resiliency requirements will continue to be kept
under review to ensure that the management of our cyber risk
provides appropriate mitigation and supports the growth of the
business. |
Third-Party Provider Risk
Risk appetite: Moderate
Executive Director Responsible: Vijay
Bharadia
Risk Description |
Key Controls and Mitigation |
Trend and Outlook |
The Group outsources a number of
functions to Third-Party Service Providers (TPP) as part of our
business model, as well as managing outsourcing arrangements on
behalf of our funds. The risk that the Group’s key TPPs fail to
deliver services in accordance with their contractual obligations
could compromise our operations and impair our ability to respond
in a way which meets client and stakeholder expectations and
requirements. Any future over reliance on one or a very limited
number of TPPs in a specific and important business area could also
expose the Group to heightened levels of risk, particularly if the
service is not easily substitutable. Additionally, the failure of
the Group to maintain sufficient knowledge, understanding and
oversight of the controls and processes in place to proactively
manage our TPPs could damage the quality and reliability of these
TPP relationships. |
The TPP oversight framework consists of policies, procedures, and
tools to govern the oversight of key suppliers, including our
approach to selection, contracting and on-boarding, management and
monitoring, and termination and exit. In particular, we undertake
initial and ongoing due diligence of our TPPs to identify and
effectively manage the business risks related to the delegation or
outsourcing of our key functions.
Ongoing monitoring of the services delivered by our TPPs is
delivered through regular oversight interactions where service
levels are compared to the expected standards documented in service
agreements and agreed-upon standards. |
The Group has continued to embed the TPP Governance and Oversight
Framework during the course of the year, which has increased the
resilience of our outsourced arrangements. The regular monitoring
coordinated by the TPP Oversight Team has provided tangible
measurement of performance to ICG’s operational management and has
allowed the correct focus to be applied to improve the day to day
activities provided by our TPPs. The KPI reporting has provided an
improved understanding of the performance themes across our TPPs
and allowed us to benchmark the quality of services from across the
supplier base. The Group will continue to embed the framework and
gather further performance reporting ahead of potential
rationalisation of the portfolio to those TPPs providing the most
consistent services to the Group. |
Key Business Process Risk
Risk appetite: Low to moderate
Executive Director Responsible: Vijay
Bharadia
Risk
Description |
Key Controls and Mitigation |
Trend and Outlook |
All operational activities at the
Group follow defined business processes. We face the risk of errors
in existing processes, or from new processes as a result of the
growth of the business and ongoing change activity which inherently
increases the profile of operational risks across our business. The
Group operates within a system of internal controls that provides
oversight of business processes, which enables our business to be
transacted and strategies and decision making to be implemented
effectively. The risk of failure of significant business processes
and controls could compromise our operations and disadvantage our
clients, or expose the Group to unanticipated financial loss,
regulatory censure, or damage to our reputation. This could in turn
materially reduce our profitability. |
Key business processes are regularly reviewed, and the risks and
controls are assessed through the RCSA process.
A ‘three lines of defence’ model is in place, which ensures clarity
over individual and collective responsibility for process risk
management and to ensure policies, procedures and activities have
been established and are operating as intended.
Regular reporting and ongoing monitoring of underlying causes of
operational risk events, to identify enhancements that require
action.
A well-established incident management processes for dealing with
system outages that impact important business processes.
An annual review of the Group’s material controls is undertaken by
senior management and Executive Directors. |
Our Operational Risk Framework defines our approach to the
identification, assessment, management and reporting of operational
risks and associated controls across the business. There were no
significant changes to the Group’s RMF’s overall approach to risk
governance or its operation in the period.
We monitor underlying causes of errors to identify areas for
action, promoting a culture of accountability and continuously
improving how we address issues. We also continue to enhance the
Risk Management Framework. Against the backdrop of macroeconomic
uncertainty, and growth of the business, the operational risk
profile has remained broadly stable with operational losses in line
with previous years.
Investment Operations, Fund Accounting and Finance continue to be
the most material operational risk areas.
The Group continues to make progress on improving the scalability
of our operations platform by implementing systems and enhancing
infrastructure to manage our growth plans more effectively.
Transformation and project activity, including workflow automation,
is yielding more efficient and automated processes and a reduction
in operational risk. |
Climate Risk
The Group’s risk management framework defines
how climate risk, and broader ESG risks, are assessed for their
proximity and significance to the Group. Climate risk is considered
a cross-cutting risk type that manifests through all of ICG’s
established principal risks. While our direct operations have very
limited exposure to climate-related risk, it is integrated into the
Group-wide operational risk management framework through existing
policies, processes, and controls. We consider the climate-related
risks and opportunities surrounding our third-party funds and our
fund management activities as a key part of our business.
Climate-related risk for both our own operations and our fund
management activity are addressed in greater detail in ICG’s TCFD
disclosures.
Please refer to note 1 of the financial
statements on page 39 which sets out how this risk has been
considered in the basis of preparation.
Emerging risks
Emerging risks are thematic risks with
potentially material unknown components that may form and
crystallise beyond a one-year time horizon. If an emerging risk
were to materialise, it could have a material effect on the Group’s
long-term strategy, profitability, and reputation. Existing
mitigation plans are likely to be minimal, reflecting the uncertain
nature of these risks at this stage.
Emerging risks are identified through
conversations and workshops with stakeholders throughout the
business, attending industry events, and other horizon scanning by
Group Risk and Compliance. The purpose of monitoring and reporting
emerging risks is to give assurance that the Group is prioritising
our response to emerging risks appropriately in our strategy, which
is the primary risk management tool for longer-term strategic
risks.
Examples of emerging risks which have been
considered during the year include; current and developing macro
challenges, including the elevated levels of inflation and interest
rate rises that could impact the Group and our fund investments;
ongoing risks related to the transformation programmes underway to
deliver our strategy for growth; implications of IFPR; and the
increased importance of diversity and other social issues.
Risk appetite for the principal risks
Risk appetite is defined as the level of risk
which the Group is prepared to accept in the conduct of our
activities. It sets the ‘tone from the top’ and provides a basis
for ongoing dialogue between management, Executive Directors, and
the Board with respect to the Group’s current and evolving risk
profile, allowing strategic and financial decisions to be made on
an informed basis. The risk appetite framework is implemented
through the Group’s operational policies and procedures and
internal controls and supported by limits to control exposures and
activities that have material risk implications.
RESPONSIBILITY STATEMENT
The responsibility statement below has been
prepared in connection with the Company's full annual report for
the year ending 31 March 2023. Certain parts thereof are not
included within this announcement.
We confirm to the best of our knowledge:
- the financial
statements, prepared in accordance with UK-adopted international
accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company
and the undertakings included in the consolidation taken as a
whole; and
- the management
report, which is incorporated into the directors' report, includes
a fair review of the development and performance of the business
and the position of the Company and the undertakings included in
the consolidation taken as a whole, together with a description of
the principal risks and uncertainties they face.
This responsibility statement was approved by
the Board of Directors on 24 May 2023 and is signed on its behalf
by:
|
|
|
Benoît Durteste |
|
Vijay Bharadia |
CEO |
|
CFOO |
CONSOLIDATED INCOME STATEMENT
For the year ended 31 March 2023
|
Year ended
31 March 2023 |
Year ended
31 March 2022 |
|
£m |
£m |
Fee and other operating income |
483.6 |
434.0 |
Finance loss |
(17.1) |
(7.4) |
Net
gains on investments |
172.5 |
555.5 |
Total Revenue |
639.0 |
982.1 |
Other income |
15.5 |
— |
Finance costs |
(64.6) |
(53.1) |
Administrative expenses |
(343.3) |
(363.1) |
Share
of results of joint ventures accounted for using the equity
method |
4.4 |
(0.5) |
Profit before tax and discontinued operations |
251.0 |
565.4 |
Tax charge |
(29.4) |
(31.1) |
Profit after tax before discontinued
operations |
221.6 |
534.3 |
Profit/ (loss) after tax on discontinued operations |
56.8 |
(9.2) |
Profit for the year after discontinued
operations |
278.4 |
525.1 |
|
|
|
Attributable
to: |
|
|
Equity holders of the
parent |
280.6 |
526.8 |
Non-controlling interests |
(2.2) |
(1.7) |
|
278.4 |
525.1 |
|
|
|
Earnings per share (pence) |
98.2p |
183.7p |
Diluted earnings per share (pence) |
97.0p |
181.1p |
Other than for amounts reported as discontinued operations, all
activities represent continuing operations.
The accompanying notes 1 to 34 are an integral
part of these financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
For the year ended 31 March 2023
|
Year ended
31 March 2023 |
Year ended
31 March 2022 |
Group |
£m |
£m |
Profit after tax |
278.4 |
525.1 |
Items that may be subsequently
reclassified to profit of loss if specific conditions are
met |
|
|
Exchange differences on translation of foreign operations |
19.5 |
6.9 |
Deferred tax on equity investments translation |
3.9 |
— |
Total comprehensive income for the year |
301.8 |
532.0 |
|
|
|
Attributable
to: |
|
|
Equity holders of the
parent |
304.0 |
533.7 |
Non
controlling interests |
(2.2) |
(1.7) |
|
301.8 |
532.0 |
The accompanying notes 1 to 34 are an integral part of these
financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
As at 31 March 2022
|
31 March 2023 |
31 March 2022
(Restated)1 |
|
£m |
£m |
Non-current assets |
|
|
Intangible assets |
14.9 |
17.1 |
Property, plant and
equipment |
88.2 |
60.4 |
Investment property |
0.8 |
1.5 |
Investment in Joint Venture
accounted for under the equity method |
5.8 |
2.2 |
Trade and other
receivables |
37.1 |
91.1 |
Financial assets at fair
value |
7,036.6 |
6,973.1 |
Derivative financial
assets |
8.4 |
1.3 |
Deferred tax asset |
17.6 |
25.0 |
|
7,209.4 |
7,171.7 |
Current assets |
|
|
Trade and other
receivables |
232.0 |
283.1 |
Current tax debtor |
57.0 |
31.9 |
Financial assets at fair
value |
4.7 |
— |
Derivative financial
assets |
13.6 |
137.3 |
Cash
and cash equivalents |
957.5 |
991.8 |
|
1,264.8 |
1,444.1 |
Assets of disposal groups held for sale |
578.3 |
256.7 |
Total assets |
9,052.5 |
8,872.5 |
Non-current liabilities |
|
|
Trade and other payables |
71.1 |
76.4 |
Financial liabilities at fair
value |
4,572.7 |
4,364.7 |
Financial liabilities at
amortised cost |
1,478.2 |
1,452.3 |
Other financial
liabilities |
79.6 |
52.2 |
Derivative financial
liabilities |
0.9 |
2.9 |
Deferred tax liabilities |
35.5 |
15.1 |
|
6,238.0 |
5,963.6 |
Current liabilities |
|
|
Trade and other payables |
471.4 |
434.4 |
Current tax creditor |
14.8 |
14.5 |
Financial liabilities at
amortised cost |
58.5 |
201.1 |
Other financial
liabilities |
5.8 |
6.5 |
Derivative financial liabilities |
14.8 |
153.4 |
|
565.3 |
809.9 |
Liabilities of disposal groups held for sale |
204.0 |
97.2 |
Total liabilities |
7,007.3 |
6,870.7 |
Equity and reserves |
|
|
Called up share capital |
77.3 |
77.3 |
Share premium account |
180.9 |
180.3 |
Other reserves |
19.0 |
0.2 |
Retained earnings |
1,742.6 |
1,714.0 |
Equity attributable to owners of the
Company |
2,019.8 |
1,971.8 |
Non-controlling interest |
25.4 |
30.0 |
Total equity |
2,045.2 |
2,001.8 |
Total equity and liabilities |
9,052.5 |
8,872.5 |
-
Retained earnings and Non-controlling interest have been restated.
See Note 2 for more details.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the year ended 31 March 2022
|
Year ended
31 March 2023 |
Year ended
31 March 2022 |
|
£m |
£m |
Cash flows generated from operations |
324.0 |
287.3 |
Taxes
paid |
(32.4) |
(43.9) |
Net cash flows from operating
activities |
291.6 |
243.4 |
Investing
activities |
|
|
Purchase of intangible
assets |
(4.7) |
(4.3) |
Purchase of property, plant
and equipment |
(6.5) |
(3.5) |
Net cashflow from derivative
financial instruments |
(58.8) |
22.4 |
Cashflow as a result of change in control of subsidiary |
200.8 |
30.9 |
Net cash flows from investing activities |
130.8 |
45.5 |
Financing activities |
|
|
Purchase of own Shares |
(38.9) |
(20.9) |
Payment of principal portion
of lease liabilities |
(6.8) |
(4.1) |
Proceeds from borrowings |
— |
413.5 |
Repayment of long-term
borrowings |
(194.6) |
(111.5) |
Dividends paid to equity holders of the parent |
(236.4) |
(165.7) |
Net cash flows (used in)/generated from financing
activities |
(476.7) |
111.3 |
Net (decrease)/increase in cash and cash equivalents |
(54.3) |
400.2 |
Effects of exchange rate
differences on cash and cash equivalents |
20.0 |
10.4 |
Cash
and cash equivalents at 1 April |
991.8 |
581.2 |
Cash and cash equivalents at 31 March |
957.5 |
991.8 |
The Group’s cash and cash equivalents include
£407.5m (2022: £230.3m) of restricted cash held principally by
structured entities controlled by the Group (see note 6).
The presentation of the consolidated statement
of cash flows have been updated to improve the presentation of this
information. The reconciliation of cash generated from/used in
operations to profit before tax from continuing operations is now
disclosed in note 32.
The accompanying notes 1 to 34 are an integral
part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2022
|
Share
capital |
Share
premium |
Capital
redemption reserve1 |
Share based payments reserve
(note 25) |
Own
shares3 |
Foreign currency
translation reserve2 |
Retained
earnings |
Total |
Non-controlling
interest |
Total
equity |
Group |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
Balance at 1 April 2022 |
77.3 |
180.3 |
5.0 |
67.5 |
(93.0) |
20.7 |
1,688.9 |
1,946.7 |
55.1 |
2,001.8 |
Prior
year adjustment5 |
— |
— |
— |
— |
— |
— |
25.1 |
25.1 |
(25.1) |
— |
Balance at 1 April 2022 (as
restated) |
77.3 |
180.3 |
5.0 |
67.5 |
(93.0) |
20.7 |
1,714.0 |
1,971.8 |
30.0 |
2,001.8 |
Profit after tax |
— |
— |
— |
— |
— |
— |
280.6 |
280.6 |
(2.2) |
278.4 |
Exchange differences on
translation of foreign operations |
— |
— |
— |
— |
— |
19.5 |
— |
19.5 |
— |
19.5 |
Deferred tax on equity investments translation |
— |
— |
— |
— |
— |
3.9 |
— |
3.9 |
— |
3.9 |
Total comprehensive income/(expense) for the
year |
— |
— |
— |
— |
— |
23.4 |
280.6 |
304.0 |
(2.2) |
301.8 |
Adjustment of non-controlling interest on disposal of
subsidiary |
— |
— |
— |
— |
— |
— |
(1.3) |
(1.3) |
(31.1) |
(32.4) |
Acquisition of non-controlling
interest |
— |
— |
— |
— |
— |
— |
— |
— |
28.7 |
28.7 |
Issue of share capital |
0.0 |
— |
— |
— |
— |
— |
— |
0.0 |
— |
0.0 |
Own shares acquired in the
year |
— |
— |
— |
— |
(38.9) |
— |
— |
(38.9) |
— |
(38.9) |
Options/awards
exercised4 |
— |
0.6 |
— |
(31.3) |
28.5 |
— |
(14.3) |
(16.5) |
— |
(16.5) |
Tax on options/awards
exercised |
— |
— |
— |
(2.4) |
— |
— |
— |
(2.4) |
— |
(2.4) |
Credit for equity settled
share schemes |
— |
— |
— |
39.5 |
— |
— |
— |
39.5 |
— |
39.5 |
Dividends paid |
— |
— |
— |
— |
— |
— |
(236.4) |
(236.4) |
— |
(236.4) |
Balance at 31 March 2023 |
77.3 |
180.9 |
5.0 |
73.3 |
(103.4) |
44.1 |
1,742.6 |
2,019.8 |
25.4 |
2,045.2 |
|
Share
capital |
Share
premium |
Capital redemption
reserve1 |
Share based payments reserve |
Own
shares3 |
Foreign currency translation
reserve2 |
Retained
earnings |
Total |
Non-controlling interest |
Total
equity |
Group |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
Balance at 1 April 2021 |
77.2 |
180.2 |
5.0 |
60.5 |
(82.2) |
13.8 |
1,362.7 |
1,617.2 |
5.0 |
1,622.2 |
Profit after tax |
— |
— |
— |
— |
— |
— |
526.8 |
526.8 |
(1.7) |
525.1 |
Exchange differences on translation of foreign operations |
— |
— |
— |
— |
— |
6.9 |
— |
6.9 |
— |
6.9 |
Total comprehensive income/(expense) for
the year |
— |
— |
— |
— |
— |
6.9 |
526.8 |
533.7 |
(1.7) |
532.0 |
Issue of share capital |
0.1 |
— |
— |
— |
— |
— |
— |
0.1 |
— |
0.1 |
Movement in control of
subsidiary5 |
— |
— |
— |
— |
— |
— |
— |
— |
26.7 |
26.7 |
Own shares acquired in the
year |
— |
— |
— |
— |
(20.9) |
— |
— |
(20.9) |
— |
(20.9) |
Options/awards
exercised4 |
— |
0.1 |
— |
(27.8) |
10.1 |
— |
(9.8) |
(27.4) |
— |
(27.4) |
Tax on options/awards
exercised |
— |
— |
— |
5.2 |
— |
— |
— |
5.2 |
— |
5.2 |
Credit for equity settled
share schemes |
— |
— |
— |
29.6 |
— |
— |
— |
29.6 |
— |
29.6 |
Dividends paid |
— |
— |
— |
— |
— |
— |
(165.7) |
(165.7) |
— |
(165.7) |
Balance at 31 March 2022 |
77.3 |
180.3 |
5.0 |
67.5 |
(93.0) |
20.7 |
1,714.0 |
1,971.8 |
30.0 |
2,001.8 |
- The capital
redemption reserve is a reserve created when a company buys its own
shares which reduces its share capital. £1.4m of the balance
relates to the conversion of ordinary shares and convertible shares
into ordinary shares in 1994. The remaining £3.6m relates to the
cancellation of treasury shares in 2015.
- Other comprehensive
income/(expense) reported in the foreign currency translation
reserve represents foreign exchange gains and losses on the
translation of subsidiaries reporting in currencies other than
sterling.
- The movement in the
Group Own shares reserve in respect of Options/awards exercised,
represents the employee shares vesting net of personal taxes and
social security.
- The associated
personal taxes and social security liabilities are settled by the
Group with the equivalent value of shares retained in the Own
shares reserve.
- Retained earnings
and Non-controlling interest brought forward as at 1 April 2022
have been restated. See Note 2 for more details.
The accompanying notes 1 to 34 are an integral part of these
financial statements.
NOTES TO THE FINANCIAL STATEMENTS
1. General information and basis of preparation
General information
Intermediate Capital Group plc (the ‘Parent
Company’, ‘Company’ or ‘ICG plc’) is a public company limited by
shares, incorporated, domiciled and registered in England and Wales
under the Companies Act, with the company registration number
02234775. The registered office is Procession House, 55 Ludgate
Hill, New Bridge Street, London EC4M 7JW.
The consolidated financial statements for the
year to 31 March 2023 comprise the financial statements of the
Parent Company and its consolidated subsidiaries (collectively, the
‘Group’). The nature of the Group’s operations and its principal
activities are detailed in the Strategic Report.
Basis of preparation
The consolidated financial statements of the
Group and Company are prepared in accordance with UK-adopted
international accounting standards (‘UK-adopted IAS’) and, as
regards the Parent Company financial statements, as applied in
accordance with the provisions of the Companies Act 2006. The
Company has taken advantage of section 408 of the Companies Act
2006 not to present the Parent Company profit and loss account.
The financial statements have been prepared on a
going concern basis and under the historical cost convention,
except for financial instruments that are measured at fair value
through profit and loss at the end of the reporting period, as
detailed in note 5, and certain investments in associates and joint
ventures held for venture capital purposes, as detailed in note
30.
In the application of the Group’s accounting
policies, the Directors are required to make judgements, estimates
and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The judgements, estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision
affects both current and future periods. Details of the critical
judgements made, and key sources of estimation uncertainty, are
included in note 1 and in the note to which the critical judgement
or source of estimation uncertainty relates.
In preparing the financial statements, the
Directors have considered the impact of climate change,
particularly in the context of the climate change risks identified
in the TCFD Report. The Directors’ considerations included the
medium and longer-term cash flow impacts of climate change on a
number of key estimates within the financial statements,
including:
- the valuation of financial assets;
and
- the application of the Group’s
revenue recognition policy, primarily the impact on the net asset
value (‘NAV’) of funds on which performance-related fees are
generated.
These considerations did not have a material
impact on the financial reporting judgements and estimates in the
current year. This reflects the conclusion that climate change is
not expected to have a significant impact on the Group’s short-term
cash flows including those considered in the going concern and
viability assessments.
The accounting policies as set out in the notes
to the accounts have been applied consistently to all periods
presented in these consolidated financial statements.
Basis of consolidation
The Group’s financial statements consolidate the
results of Intermediate Capital Group plc and entities controlled
by the Company for the period to 31 March each year. Control is
achieved when the Company has power over the relevant activities,
exposure to variable returns from the investee, and the ability to
affect those returns through its power over the investee.
The assessment of control is based on all
relevant facts and circumstances and the Group reassesses its
conclusion if there is an indication that there are changes in
facts and circumstances. Subsidiaries are included in the
consolidated financial statements from the date that control
commences, until the date that control ceases. See note 28 which
lists the Group’s subsidiaries and controlled structured
entities.
Each component of other comprehensive income and
profit or loss is attributed to the owners of the Company and to
the non-controlling interests.
Adjustments are made where required to the
financial statements of subsidiaries for consistency with the
accounting policies of the Group. All intra-group transactions,
balances, unrealised income and expenses are eliminated on
consolidation.
1. General information and basis of preparation
continued
Critical judgements in the application of
accounting policies and key sources of estimation uncertainty
Critical judgement
In preparing the financial statements, apart
from those involving estimations, two critical judgements have been
made by the Directors in the application of the Group’s accounting
policies:
- The Group’s assessment as to
whether it controls certain investee entities, including
third-party funds and carried interest partnerships, and is
therefore required to consolidate the investee, as detailed above.
The Group’s assessment of this critical judgement is discussed
further in note 28.
- The application of the Group’s
revenue recognition policy in respect of the performance fee
component of management fees. Judgement is primarily applied in
considering the timings of when expected performance conditions
will be met and the appropriate constraint to be applied. The
Group’s assessment of this critical judgement is discussed further
in note 3.
Key sources of estimation
uncertainty
The key sources of estimation uncertainty at the
reporting date, that may have a significant risk of causing a
material adjustment to the carrying amounts of assets and
liabilities within the next financial year, results from the
Group’s assessment of fair value of its financial assets and
liabilities (discussed further in note 5 and note 7) and the impact
of this assessment on trade and other payables related to the Deal
Vintage Bonus (‘DVB’) - see notes 13 and 21.
Critical judgements and key sources of
estimation uncertainty are reviewed by the Audit Committee during
the year.
Foreign currencies
The functional currency of the Company is
sterling as the Company’s shares are denominated in sterling and
the Company’s costs are primarily incurred in sterling. The Group
has determined the presentational currency of the Group is the
functional currency of the Company. Information is presented to the
nearest million (£m).
Transactions denominated in foreign currencies
are translated using the exchange rates prevailing at the date of
the transactions. At each reporting date, monetary assets and
liabilities denominated in a foreign currency are retranslated at
the rates prevailing at the reporting date. Non-monetary assets and
liabilities denominated in foreign currencies that are measured at
fair value are translated at the rate prevailing at the date the
fair value was determined. Non-monetary items that are measured at
historical cost are translated using rates prevailing at the date
of the transaction.
The assets and liabilities of the Group’s
foreign operations are translated using the exchange rates
prevailing at the reporting date. Income and expense items are
translated using the average exchange rates during the year.
Exchange differences arising from the translation of foreign
operations are taken directly to the foreign currency translation
reserve. On disposal of a foreign operation, exchange differences
previously recognised in other comprehensive income are
reclassified to the income statement.
Going concern
The Directors have, at the time of approving the
financial statements, a reasonable expectation that the Company and
the Group have adequate resources to continue in operational
existence for the foreseeable future. Therefore, they continue to
adopt the going concern basis of preparing the financial
statements.
In assessing the Group’s ability to continue in
its capacity as a going concern, the Board and the Executive
Directors of the Group considered:
- The impact of conflict in Ukraine
and the macro-inflationary backdrop on investment performance
- The impact on the Group’s fee
income. Specifically, performance-related revenue, as part of this
assessment the Group performed additional sensitivity analysis
around performance fees and the impact this would have on overall
fee income. This is discussed in note 3
- The adequacy of the Group’s capital
and liquidity and potential shortfalls in access to capital. As at
31 March 2023 the Group has available liquidity of £1.1bn,
including £550m of undrawn debt facilities. The macro-economic
stress scenarios were in line with those used in the Internal
Capital Adequacy and Risk Assessment (‘ICARA’) stress test
- The operational resilience of the
Group’s critical functions and key service providers to maintain
risk management and compliance, including IT, finance, treasury and
operations
- The regulatory and legal
environment and any potential conduct risks which could arise
- The appropriateness of valuation
techniques applied to determine the fair value of investments that
are not quoted in an active market. This is discussed further in
note 5
1. General information and basis of preparation
continued
- Those entities which are not
controlled by the Group but where the Group has a joint venture
relationship or has significant influence over an associate and
whether they have the ability to continue as a going concern. These
risks have been captured in the Group’s overall fair value
assessments of the underlying assets described in note 5
The Directors have concluded based on the above assessment that
the preparation of the financial statements on a going concern
basis, to 30 November 2024, a 18 month from the date of signing of
the financial statements, continues to be appropriate.
2. Changes in accounting policies and disclosures
New and amended standards and
interpretations
The new and amended standards and
interpretations that are issued, but not yet effective, up to the
date of issuance of the Group’s financial statements are disclosed
below. The Group intends to adopt these standards, if applicable,
when they become effective. These new standards are not expected to
have a material impact on the Group.
IFRS/IAS |
|
Accounting periods commencing
on or after |
IAS 8 |
Definition of Accounting Estimates |
1 January 2023 |
IAS 1 and IFRS Practice Statement 2 |
Disclosure of Accounting Policies |
1 January 2023 |
IAS 12 |
Deferred Tax related to Assets and Liabilities arising from a
Single Transaction |
1 January 2023 |
IAS 1 |
Classification of Liabilities as Current or Non-current |
1 January 2024 |
IFRS 16 |
Lease Liability in a Sale and Leaseback |
1 January 2024 |
Changes in significant accounting policies
No changes to significant accounting policies
were implemented.
Group restatements
The Group has restated the Consolidated
Statement of Financial Position and Consolidated Statement of
Changes in Equity as a result of the reversal of an allocation of
retained earnings to non-controlling interest. As a result of the
reversal the following has been restated:
- Retained Earnings increased by
£25.1m from £1,688.9m to £1,714.0m; and
- Non-controlling interest reduced by
£25.1m from £55.1m to £30.0m
3. Revenue
Revenue and its related cash flows, within the scope of IFRS 15
‘Revenue from Contracts with Customers’, are derived from the
Group’s fund management company activities and are presented net of
any consideration payable to a customer in the form of rebates. The
significant components of the Group’s fund management revenues are
as follows:
|
Year ended
31 March 2023 |
Year ended
31 March 2022 |
Type of contract/service |
£m |
£m |
Management fees1 |
481.6 |
429.4 |
Other
income |
2.0 |
4.6 |
Fee and other operating income |
483.6 |
434.0 |
4Included within management fees is
£22.4m (2022: £57.5m) of performance related fees.
Management fees
The Group earns management fees from its
investment management services. Management fees are charged on
third-party capital managed by the Group and are based on an agreed
percentage of either committed capital, invested capital or NAV,
dependent on the fund. Management fees comprise both
non-performance and performance-related fee elements related to one
contract obligation . Non-performance-related management fees for
the year of £459.2m (2022: £371.9m) are charged in arrears and are
recognised in the period services are performed.
Performance-related management fees (performance
fees) are recognised only to the extent it is highly probable that
there will not be a significant reversal of the revenue recognised
in the future. This is generally towards the end of the contract
period or upon early liquidation of a fund. The estimate of
performance fees is made with reference to the liquidation profile
of the fund, which factors in portfolio exits and timeframes. For
certain funds the estimate of performance fees is made with
reference to specific requirements. A constraint is applied to the
estimate to reflect uncertainty of future fund performance.
Performance fees of £22.4m (2022: £57.5m) have been recognised in
the year. Performance fees will only be crystallised and received
in cash when the relevant fund performance hurdle is met.
There are no other individually significant
components of revenue from contracts with customers.
Critical judgement
A critical judgement for the Group is whether
performance fees will meet their expected performance conditions
within the expected timeframes. The Group bases its assessment on
the best available information pertaining to the funds and the
activity of the underlying assets within that fund. The valuation
of the underlying assets within a fund will be subject to
fluctuations in the future, including the impact of macroeconomic
factors outside the Group’s control. The information on which this
judgement is based is the liquidation NAV of the relevant funds
(which are subject to annual audit).
The Directors base their projected views on a
24-month look-forward basis, the ‘forecast period’, from the year
end. The Directors believe they have a reasonable basis on which to
judge expected exits and value within a 24-month horizon, but not
beyond that.
Within this forecast period, the Directors will
consider funds that have either reached their hurdle rate or are
expected to reach the hurdle rate in the forecast period. In
determining whether a fund is expected to reach the hurdle rate,
the key inputs are the latest expected repayment dates of the
underlying assets and expected proceeds on realisation, as approved
by the Fund Investment Committees.
Where the hurdle date is expected to be reached
within 24 months of the year end but performance fees are not yet
paid, a constraint will be applied within the determination of the
performance fee receivable. Application of the constraint limits
the revenue recognised. This is assessed by on a case-by-case
basis.
The weighted-average constraint at the reporting
date is 43% (2022: 46%). If the average constraint were to increase
by 10 percentage points to 53% (2022: 56%) this would result in a
reduction in revenue of £1.13m (2022: £0.62m). Conversely, a 10%
decrease in constraint would result in an increase in revenue of
£1.13m (2022: £0.55m) being recognised in the income statement. In
certain limited circumstances performance fees received may be
subject to clawback provisions if the performance of the fund
deteriorates materially following the receipt of performance
fees.
4. Segmental reporting
For management purposes, the Group is organised
into two operating segments, the Fund Management Company (‘FMC’)
and the Investment Company (‘IC’) which are also reportable
segments. In identifying the Group’s reportable segments,
management considered the basis of organisation of the Group’s
activities, the economic characteristics of the operating segments,
and the type of products and services from which each reportable
segment derives its revenues. Total reportable segment figures are
alternative performance measures (‘APM’).
The Executive Directors, the chief operating
decision makers, monitor the operating results of the FMC and the
IC for the purpose of making decisions about resource allocation
and performance assessment. The Group does not aggregate the FMC
and IC as those segments do not have similar economic
characteristics. Information about these segments is presented
below.
The FMC earns fee income for the provision of
investment management services and recognises the fair value
movement on any associated hedging derivatives and incurs the
majority of the Group’s costs in delivering these services,
including the cost of the investment teams and the cost of support
functions, primarily marketing, operations, information technology
and human resources.
The IC is charged a management fee of 1% of the
carrying value of the average balance sheet investment portfolio by
the FMC and this is shown below as the Inter-segmental fee. It
recognises the fair value movement on any associated hedging
derivatives. The costs of finance, treasury and legal teams, and
other Group costs primarily related to being a listed entity, are
allocated to the IC. The remuneration of the Executive Directors is
allocated equally to the FMC and the IC.
The amounts reported for management purposes in
the tables below are reconciled to the UK-adopted IAS reported
amounts on the following pages.
|
Year ended 31 March 2023 |
|
Year ended 31 March 2022 |
|
FMC |
IC |
Reportable segments Total |
|
FMC |
IC |
Reportable segments Total |
|
£m |
£m |
£m |
|
£m |
£m |
£m |
External fee income |
501.0 |
2.6 |
503.6 |
|
448.7 |
0.5 |
449.2 |
Inter-segmental fee |
25.0 |
(25.0) |
— |
|
24.8 |
(24.8) |
— |
Other
operating income |
0.5 |
1.7 |
2.2 |
|
1.7 |
2.1 |
3.8 |
Fund management fee income |
526.5 |
(20.7) |
505.8 |
|
475.2 |
(22.2) |
453.0 |
Net investment returns |
— |
102.3 |
102.3 |
|
— |
485.7 |
485.7 |
Dividend income |
40.2 |
— |
40.2 |
|
38.0 |
— |
38.0 |
Net
fair value loss on derivatives |
(26.8) |
16.8 |
(10.0) |
|
(0.4) |
(11.8) |
(12.2) |
Total revenue |
539.9 |
98.4 |
638.3 |
|
512.8 |
451.7 |
964.5 |
Interest income |
— |
13.9 |
13.9 |
|
— |
— |
— |
Interest expense |
(2.2) |
(61.8) |
(64.0) |
|
(1.7) |
(50.5) |
(52.2) |
Staff costs |
(85.0) |
(20.0) |
(105.0) |
|
(76.0) |
(16.7) |
(92.7) |
Incentive scheme costs |
(92.2) |
(59.6) |
(151.8) |
|
(87.2) |
(82.5) |
(169.7) |
Other
administrative expenses |
(49.8) |
(23.5) |
(73.3) |
|
(61.7) |
(19.4) |
(81.1) |
Profit before tax and discontinued operations |
310.7 |
(52.6) |
258.1 |
|
286.2 |
282.6 |
568.8 |
Reconciliation of APM amounts reported for
management purposes to the financial statements reported under
UK-adopted IAS
Included in the following tables are statutory
adjustments made to the following:
- All income
generated from the balance sheet investment portfolio is presented
as net investment returns for reportable segments purposes, whereas
under UK-adopted IAS it is presented within gains on investments
and other operating income.
- The structured
entities controlled by the Group are presented as fair value
investments for reportable segments (APM), whereas the statutory
financial statements present these entities on a consolidated basis
under UK-adopted IAS. The impact of this consolidation on profit
before tax is shown in the table on the following page.
- The warehouse
funds, their investments and other current assets within controlled
entities are presented as fair value investments for reportable
segments (APM), whereas the statutory financial statement present
these entities on a consolidated basis under UK-adopted IAS. The
impact of this consolidation is disclosed within ‘Gain/(loss) after
tax from discontinued operations’ on the following page with
further detail in note 29.
4. Segmental reporting continued
Consolidated income statement
|
Reportable segments |
Consolidated entities |
Financial statements |
Year ended 31 March 2023 |
£m |
£m |
£m |
Fund management fee income |
503.6 |
(22.0) |
481.6 |
Other operating income |
2.2 |
(0.2) |
2.0 |
Fee and other
income |
505.8 |
(22.2) |
483.6 |
Dividend income |
40.2 |
(40.2) |
— |
Net fair value loss on
derivatives |
(10.0) |
(7.1) |
(17.1) |
Finance
income/(loss) |
30.2 |
(47.3) |
(17.1) |
Net investment returns/gains on investments |
102.3 |
70.2 |
172.5 |
Total revenue |
638.3 |
0.7 |
639.0 |
Other income |
13.9 |
1.6 |
15.5 |
Finance
costs |
(64.0) |
(0.6) |
(64.6) |
Staff costs |
(105.0) |
(0.1) |
(105.1) |
Incentive scheme costs |
(151.8) |
0.2 |
(151.6) |
Other administrative
expenses |
(73.3) |
(13.3) |
(86.6) |
Administrative
expenses |
(330.1) |
(13.2) |
(343.3) |
Share of results of joint ventures
accounted for using equity method |
— |
4.4 |
4.4 |
Profit before tax and discontinued operations |
258.1 |
(7.1) |
251.0 |
Tax charge |
(28.8) |
(0.6) |
(29.4) |
Profit
after tax from discontinued operations |
— |
56.8 |
56.8
|
Profit after tax and discontinued
operations |
229.3 |
49.1 |
278.4
|
|
Reportable segments |
Consolidated entities |
Financial statements |
Year ended 31 March 2022 |
£m |
£m |
£m |
Fund management fee income |
449.2 |
(19.8) |
429.4 |
Other operating income |
3.8 |
0.8 |
4.6 |
Fee and other
income |
453.0 |
(19.0) |
434.0 |
Dividend income |
38.0 |
(38.0) |
— |
Net fair value gain/(loss) on
derivatives |
(12.2) |
4.8 |
(7.4) |
Finance
income/(loss) |
25.8 |
(33.2) |
(7.4) |
Net investment returns/gains on investments |
485.7 |
69.8 |
555.5 |
Total revenue |
964.5 |
17.6 |
982.1 |
Finance costs |
(52.2) |
(0.9) |
(53.1) |
Staff costs |
(92.7) |
0.3 |
(92.4) |
Incentive scheme costs |
(169.7) |
— |
(169.7) |
Other administrative
expenses |
(81.1) |
(19.9) |
(101.0) |
Administrative
expenses |
(343.5) |
(19.6) |
(363.1) |
Share of results of joint ventures accounted for using
equity method |
— |
(0.5) |
(0.5) |
Profit before tax and discontinued operations |
568.8 |
(3.4) |
565.4 |
Tax charge |
(30.8) |
(0.3) |
(31.1) |
Loss after tax from discontinued operations |
— |
(9.2) |
(9.2) |
Profit after tax and discontinued operations |
538.0 |
(12.9) |
525.1 |
4. Segmental reporting continued
Consolidated statement of financial position
|
2023 |
|
Reportable segments |
Consolidated entities |
Financial statements |
Year ended 31 March 2023 |
£m |
£m |
£m |
Non-current financial assets |
2,642.2 |
4,402.8 |
7,045.0 |
Other non-current assets |
158.4 |
6.0 |
164.4 |
Cash |
550.0
|
407.5 |
957.5 |
Current financial assets |
282.4
|
(264.1) |
18.3 |
Other
current assets |
243.7
|
623.6 |
867.3 |
Total assets |
3,876.7
|
5,175.8 |
9,052.5 |
Non-current financial liabilities |
1,558.0
|
4,573.4 |
6,131.4 |
Other non-current
liabilities |
104.5
|
2.1 |
106.6 |
Current financial
liabilities |
79.1
|
— |
79.1 |
Other
current liabilities |
157.7
|
532.5 |
690.2
|
Total liabilities |
1,899.3
|
5,108.0 |
7,007.3
|
Equity |
1,977.4
|
67.8 |
2,045.2
|
Total equity and liabilities |
3,876.7
|
5,175.8 |
9,052.5
|
|
2022 |
|
Reportable segments |
Consolidated entities |
Financial statements |
Year ended 31 March 2022 |
£m |
£m |
£m |
Non-current financial assets |
2,728.4 |
4,246.0 |
6,974.4 |
Other non-current assets |
193.3 |
4.0 |
197.3 |
Cash |
761.5 |
230.3 |
991.8 |
Current financial assets |
126.4 |
10.9 |
137.3 |
Other
current assets |
193.2 |
378.5 |
571.7 |
Total assets |
4,002.8 |
4,869.7 |
8,872.5 |
Non-current financial liabilities |
1,507.4 |
4,364.7 |
5,872.1 |
Other non-current
liabilities |
91.2 |
0.3 |
91.5 |
Current financial
liabilities |
256.4 |
104.6 |
361.0 |
Other
current liabilities |
152.8 |
393.3 |
546.1 |
Total liabilities |
2,007.8 |
4,862.9 |
6,870.7 |
Equity |
1,995.0 |
6.8 |
2,001.8 |
Total equity and liabilities |
4,002.8 |
4,869.7 |
8,872.5 |
4. Segmental reporting continued
Consolidated statement of cash flows
|
2023 |
|
Reportable segments |
Consolidated structured entities |
Financial Statements |
|
£m |
£m |
£m |
Profit/(loss) before tax from continuing
operations |
258.1 |
(7.1) |
251.0 |
Adjustments for non cash
items: |
|
|
|
Fee and other operating
(income)/expense |
(505.8) |
22.2 |
(483.6) |
Net investment returns |
(102.3) |
(70.2) |
(172.5) |
Net fair value loss on
derivatives |
34.9 |
— |
34.9 |
Impact of movement in foreign
exchange rates |
(24.9) |
7.1 |
(17.8) |
Interest income |
(13.9) |
(1.6) |
(15.5) |
Interest expense |
64.0 |
0.6 |
64.6 |
Depreciation, amortisation and
impairment of property, equipment and intangible assets |
18.2 |
— |
18.2 |
Share-based payment
expense |
39.5 |
— |
39.5 |
Working capital
changes: |
|
|
|
(Increase)/Decrease in trade
receivables |
(48.3) |
36.3 |
(12.0) |
Decrease in trade and other
payables |
(41.3) |
(155.6) |
(196.9) |
Change
in disposal groups held for sale |
— |
(8.8) |
(8.8) |
|
(321.8) |
(177.1) |
(498.9) |
Proceeds from sale of current financial assets and disposal groups
held for sale |
45.5 |
— |
45.5 |
Purchase of current financial
assets and disposal groups held for sale |
(211.9) |
— |
(211.9) |
Purchase of investments |
(453.8) |
(966.4) |
(1,420.2) |
Proceeds from sales and
maturities of investments |
689.4 |
1,032.8 |
1,722.2 |
Interest and dividend income
received |
106.8 |
256.0 |
362.8 |
Fee and other operating income
received |
573.3 |
14.6 |
587.9 |
Interest paid |
(63.5) |
(199.9) |
(263.4) |
Cash flow generated from/(used in) operations |
363.9 |
(39.9) |
324.0
|
Taxes paid |
(32.4) |
— |
(32.4) |
Net cash flows from/(used in) operating
activities |
331.5 |
(39.9) |
291.6
|
Investing activities |
|
|
|
Purchase of intangible
assets |
(4.7) |
— |
(4.7) |
Purchase of property, plant
and equipment |
(6.5) |
— |
(6.5) |
Net cashflow from derivative
financial instruments |
(58.8) |
— |
(58.8) |
Cashflow as a result of acquisition of subsidiaries |
— |
200.8 |
200.8 |
Net cash flows (used in)/from investing
activities |
(70.0) |
200.8 |
130.8 |
Financing activities |
|
|
|
Purchase of Own Shares |
(38.9) |
— |
(38.9) |
Payment of principal portion
of lease liabilities |
(6.8) |
— |
(6.8) |
Repayment of long-term
borrowings |
(194.6) |
— |
(194.6) |
Dividends paid to equity holders of the parent |
(236.4) |
— |
(236.4) |
Net cash flows used in financing activities |
(476.7) |
— |
(476.7) |
Net (decrease)/increase in cash and cash equivalents |
(215.2) |
160.9 |
(54.3) |
Effects of exchange rate
differences on cash and cash equivalents |
3.7 |
16.3 |
20.0 |
Cash
and cash equivalents at 1 April |
761.5 |
230.3 |
991.8 |
Cash and cash equivalents at 31 March |
550.0 |
407.5 |
957.5 |
4. Segmental reporting continued
|
2022 |
|
Reportable segments |
Consolidated structured entities |
Financial Statements |
|
£m |
£m |
£m |
Profit/(loss) before tax from continuing operations |
568.8 |
(3.4) |
565.4 |
Adjustments for non cash items: |
|
|
|
Fee and other operating
(income)/expense |
(453.0) |
19.0 |
(434.0) |
Net investment returns |
(485.7) |
(69.8) |
(555.5) |
Net fair value loss/(gains) on
derivatives |
12.1 |
(4.8) |
7.3 |
Impact of movement in foreign
exchange rates |
0.1 |
— |
0.1 |
Interest expense |
52.2 |
0.9 |
53.1 |
Depreciation, amortisation and
impairment of property, equipment and intangible assets |
19.5 |
— |
19.5 |
Share-based payment
expense |
29.6 |
0 |
29.6 |
Working capital changes: |
|
|
|
Increase in trade
receivables |
(21.5) |
(11.0) |
(32.5) |
Increase/(Decrease) in trade and other payables |
35.5 |
(62.9) |
(27.4) |
|
(242.4) |
(132.0) |
(374.4) |
Proceeds from sale of current financial assets and disposal groups
held for sale |
185.2 |
— |
185.2
|
Purchase of current financial
assets and disposal groups held for sale |
(204.0) |
— |
(204.0) |
Purchase of investments |
(748.3) |
(2,784.5) |
(3,532.8) |
Proceeds from sales and
maturities of investments |
958.8 |
2,785.0 |
3,743.8 |
Interest and dividend income
received |
100.3 |
159.5 |
259.8 |
Fee and other operating income
received |
387.8 |
5.2 |
393.0 |
Interest paid |
(55.7) |
(127.6) |
(183.3) |
Cash flow generated from/(used in) operations |
381.8 |
(94.5) |
287.3 |
Taxes paid |
(43.9) |
— |
(43.9) |
Net cash flows from/(used in) operating activities |
337.9 |
(94.5) |
243.4 |
Investing activities |
|
|
|
Purchase of intangible
assets |
(4.3) |
— |
(4.3) |
Purchase of property, plant
and equipment |
(3.5) |
— |
(3.5) |
Net cashflow from derivative
financial instruments |
17.3 |
5.1 |
22.4 |
Cashflow as a result of acquisition of subsidiaries |
1.6 |
29.3 |
30.9 |
Net cash flows from investing activities |
11.1 |
34.4 |
45.5 |
Financing activities |
|
|
|
Purchase of Own Shares |
(20.9) |
— |
(20.9) |
Payment of principal portion
of lease liabilities |
(4.1) |
— |
(4.1) |
Proceeds from borrowings |
413.5 |
— |
413.5 |
Repayment of long-term
borrowings |
(111.5) |
— |
(111.5) |
Dividends paid to equity holders of the parent |
(165.7) |
— |
(165.7) |
Net cash flows from financing activities |
111.3 |
— |
111.3 |
Net increase/(decrease) in cash and cash equivalents |
460.2 |
(60.0) |
400.2 |
Effects of exchange rate
differences on cash and cash equivalents |
4.4 |
6.0 |
10.4 |
Cash
and cash equivalents at 1 April |
296.9 |
284.3 |
581.2 |
Cash and cash equivalents at 31 March |
761.5 |
230.3 |
991.8 |
4. Segmental reporting continued
Geographical analysis of non-current financial
assets at fair value
|
Year ended
31 March 2023 |
Year ended
31 March 2022 |
Asset Analysis by
Geography |
£m |
£m |
Europe |
3,730.3 |
3,613.8 |
Asia Pacific |
247.2 |
244.0 |
North
America |
3,059.1 |
3,115.3 |
Total |
7,036.6 |
6,973.1 |
Geographical analysis of Group revenue
|
Year ended
31 March 2023 |
Year ended
31 March 2022 |
Income Analysis by
Geography |
£m |
£m |
Europe |
415.3 |
693.3 |
Asia Pacific |
58.6 |
84.0 |
North
America |
165.1 |
204.8 |
Total |
639.0 |
982.1 |
5. Financial assets and liabilities
Accounting policy
Financial assets
Financial assets can be classified into the following categories:
Amortised Cost, Fair Value Through Profit and Loss (‘FVTPL’) and
Fair Value Through Other Comprehensive Income (‘FVOCI’). The Group
has classified all invested financial assets as FVTPL.
Financial assets at FVTPL are initially recognised and subsequently
measured at fair value. A valuation assessment is performed on a
recurring basis with gains or losses arising from changes in fair
value recognised through net gains on investments in the
consolidated income statement. Dividends or interest earned on the
financial assets are also included in the net gains on
investments.
Where the Group holds investments in a number of financial
instruments such as debt and equity in a portfolio company, the
Group views their entire investment as a unit of account for
valuation purposes. Industry standard valuation guidelines such as
the International Private Equity and Venture Capital (’IPEV’)
Valuation Guidelines - December 2022, allow for a level of
aggregation where there are a number of financial instruments held
within a portfolio company.
Recognition of financial assets
When the Group invests in the capital structure of a portfolio
company, these assets are initially recognised and subsequently
measured at fair value, and transaction costs are recognised in the
consolidated income statement immediately.
Derecognition of financial assets
The Group derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or when
substantially all the risks and rewards of ownership of the asset
are transferred to another party. On derecognition of a financial
asset in its entirety, the difference between the asset’s carrying
value amount and the sum of the consideration received and
receivable, is recognised in profit or loss.
Key sources of estimation uncertainty on financial
assets
Fair value is the amount for which an asset could be exchanged, or
liability settled, between knowledgeable, willing parties in an
arm’s length transaction at the reporting date. The fair value of
investments is based on quoted prices, where available. Where
quoted prices are not available, the fair value is estimated in
line with IFRS and industry standard valuation guidelines such as
IPEV for direct investments in portfolio companies, and the Royal
Institute of Chartered Surveyors Valuation – Global Standards 2020
for investment property. These valuation techniques can be
subjective and include assumptions which are not supportable by
observable data. Details of the valuation techniques and the
associated sensitivities are further disclosed in this note on page
54.
Given the subjectivity of investments in private companies, senior
and subordinated notes of Collateralised Loan Obligation vehicles
and investments in investment property, these are key sources of
estimation uncertainty, and as such the valuations are approved by
the relevant Fund Investment Committees and Group Valuation
Committee. The unobservable inputs relative to these investments
are further detailed below. |
5. Financial assets and liabilities continued
Fair value measurements recognised in the
statement of financial position
The information set out below provides
information about how the Group and Company determines fair values
of various financial assets and financial liabilities, grouped into
Levels 1 to 3 based on the degree to which the fair value is
observable.
- Level 1 fair value measurements are
those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities
- Level 2 fair value measurements are
those derived from inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from
prices)
- Level 3 fair value measurements are
those derived from valuation techniques that include inputs for the
asset or liability that are not based on observable market data
(i.e. unobservable inputs)
The following table summarises the valuation of the Group’s
financial assets and liabilities by fair value hierarchy:
|
As at 31 March 2023 |
As at 31 March 2022 |
|
Level 1 |
Level 2 |
Level 3 |
Total |
Level 1 |
Level 2 |
Level 3 |
Total |
Group |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
Financial Assets |
|
|
|
|
|
|
|
|
Investment in or alongside
managed funds1 |
7.2 |
1.8 |
2,144.3 |
2,153.3 |
9.8 |
— |
2,112.9 |
2,122.7 |
Investments in loans held
within structured entities controlled by the Group |
— |
4,101.4 |
567.7 |
4,669.1 |
— |
4,467.4 |
145.2 |
4,612.6 |
Derivative assets |
— |
22.0 |
— |
22.0 |
— |
138.6 |
— |
138.6 |
Investment in private
companies2 |
— |
— |
100.4 |
100.4 |
— |
— |
122.7 |
122.7 |
Investment in public
companies |
5.1 |
— |
— |
5.1 |
0.4 |
— |
— |
0.4 |
Senior and subordinated notes
of CLO vehicles |
— |
105.8 |
7.5 |
113.3 |
— |
105.6 |
9.1 |
114.7 |
Disposal groups held for sale |
— |
— |
163.2 |
163.2 |
12.7 |
— |
89.2 |
101.9 |
Total assets |
12.3 |
4,231.0 |
2,983.1 |
7,226.4 |
22.9 |
4,711.6 |
2,479.1 |
7,213.6 |
|
|
|
|
|
|
|
|
|
Financial
Liabilities |
|
|
|
|
|
|
|
|
Liabilities of consolidated
credit funds |
— |
(4,508.0) |
(64.7) |
(4,572.7) |
— |
(4,130.1) |
(234.6) |
(4,364.7) |
Derivative liabilities |
— |
(15.7) |
— |
(15.7) |
— |
(156.3) |
— |
(156.3) |
Disposal groups held for sale |
— |
— |
— |
— |
— |
— |
(5.0) |
(5.0) |
Total liabilities |
— |
(4,523.7) |
(64.7) |
(4,588.4) |
— |
(4,286.4) |
(239.6) |
(4,526.0) |
-
Level 3 Investments in or alongside managed funds includes £47.8m
senior debt (2022: £41.1m), £1,319.8m subordinated debt and equity
(2022: £1,487.7m), £284.5m of real estate assets (2022: £215.1m),
and £492.2m private equity secondaries (2022: £369.0m).
-
Level 3 Investment in private companies includes £91.3m
subordinated debt and equity (2022: £96.2m) and £9.1m of real
estate assets (2022: £26.5m).
5. Financial assets and liabilities continued
Valuations
Valuation process
The Group Valuation Committee ('GVC') oversees
the valuation processes and provides independent review of the
methodologies, models and assumptions used to value the Level 3
assets and liabilities, in accordance with the principles and
guidelines set out in the Group Valuation Policy, and to assess the
reasonableness of the resulting fair value measurement. The GVC
reviewed valuations on a quarterly basis and reports to the Audit
Committee semi-annually. The GVC is independent of the boards of
directors of the funds and no member of the GVC is a member of
either the Group’s investment teams or Investment Committees
(‘IC’s).
Valuation methodologies are identified for each
category of Level 3 assets, based on the specific characteristics
of each asset and liability and considering factors such as the
nature, complexity, and risk profile of the investment. Each asset
is attributable to a fund or investment strategy managed by the
Group.
The IC of that fund or strategy is responsible
for the review, challenge, and approval of the related funds’
valuations of the assets managed by that strategy investment team.
Sources of the valuation include the ICG investment team,
third-party valuation services and third-party fund administrators.
The IC provides those valuations to the Group, as an investor in
the fund assets.
The IC is also responsible for escalating
significant events regarding the valuation to the Group (as an
investor in the fund assets), e.g. change in valuation
methodologies, potential impairment events, material judgements
etc.
The table in page 54 outlines in more detail the
range of valuation techniques, as well as the key unobservable
inputs for each category of Level 3 assets and liabilities.
Investment in or alongside managed
funds
When fair values of publicly traded closed-ended
funds and open-ended funds are based on quoted market prices in an
active market for identical assets without any adjustments, the
instruments are included within Level 1 of the hierarchy. The Group
values these investments at bid price for long positions and ask
price for short positions.
The Group also co-invests with funds, including
credit and private equity secondary funds, which are not quoted in
an active market. The Group considers the valuation techniques and
inputs used by these funds to ensure they are reasonable,
appropriate and consistent with the principles of fair value. The
latest available NAV of these funds are generally used as an input
into measuring their fair value. The NAV of the funds are adjusted,
as necessary, to reflect restrictions on redemptions, and other
specific factors relevant to the funds. In measuring fair value,
consideration is also given to any transactions in the interests of
the funds. The Group classifies these funds as Level 3.
Investment in private
companies
The Group takes debt and equity stakes in
private companies that are, other than on very rare occasions, not
quoted in an active market and uses either a market-based valuation
technique or a discounted cash flow technique to value these
positions.
The Group’s investments in private companies are
held at fair value using the most appropriate valuation technique
based on the nature, facts and circumstances of the private
company. The first of two principal valuation techniques is a
market comparable companies technique. The enterprise value (‘EV’)
of the portfolio company is determined by applying an earnings
multiple, taken from comparable companies, to the profits of the
portfolio company. The Group determines comparable private and
public companies, based on industry, size, location, leverage and
strategy, and calculates an appropriate multiple for each
comparable company identified. The second principal valuation
technique is a discounted cashflow (‘DCF’) approach. Fair value is
determined by discounting the expected future cashflows of the
portfolio company to the present value. Various assumptions are
utilised as inputs, such as terminal value and the appropriate
discount rate to apply. Typically, the DCF is then calibrated
alongside a market comparable companies approach. Alternate
valuation techniques may be used where there is a recent offer or a
recent comparable market transaction, which may provide an
observable market price and an approximation to fair value of the
private company. The Group classified these assets as Level 3.
Investment in public
companies
Quoted investments are held at the last traded
bid price on the reporting date. When a purchase or sale is made
under contract, the terms of which require delivery within the
timeframe of the relevant market, the contract is reflected on the
trade date.
5. Financial assets and liabilities continued
Investment in loans held in
consolidated structured
entities
The loan asset portfolios of the consolidated
structured entities are valued using observable inputs such as
recently executed transaction prices in securities of the issuer or
comparable issuers and from independent loan pricing sources. To
the extent that the significant inputs are observable the Group
classifies these assets as Level 2 and other assets are classified
as Level 3. Level 3 assets are valued using a discounted cashflow
technique and the key inputs under this approach are detailed on
page 54.
Derivative assets and liabilities
The Group uses market-standard valuation models
for determining fair values of over-the-counter interest rate
swaps, currency swaps and forward foreign exchange contracts. The
most frequently applied valuation techniques include forward
pricing and swap models, using present value calculations. The
models incorporate various inputs including both credit and debit
valuation adjustments for counterparty and own credit risk, foreign
exchange spot and forward rates and interest rate curves. For these
financial instruments, significant inputs into models are market
observable and are included within Level 2.
Senior and subordinated notes of CLO
vehicles
The Group holds investments in the senior and
subordinated notes of the CLOs it manages, predominately driven by
European Union risk-retention requirements. The Group employs DCF
analysis to fair value these investments, using several inputs
including constant annual default rates, prepayments rates,
reinvestment rates, recovery rates and discount rates.
The DCF analysis at the reporting date shows
that the senior notes are typically expected to recover all
contractual cashflows, including under stressed scenarios, over the
life of the CLOs. Unobservable inputs are used in determining the
fair value of subordinated notes, which are therefore classified as
Level 3 instruments. Observable inputs are used in determining the
fair value of senior notes and these instruments are therefore
classified as Level 2.
Liabilities of consolidated credit funds
Rated debt liabilities of consolidated CLOs are
generally valued at par plus accrued interest, which we assess as
fair value, as evidenced by the general availability of market
prices and discounting spreads for rated debt liabilities of CLOs.
This is consistent with the valuation approach of the rated debt
assets held in the unconsolidated CLOs. As a result we deem these
liabilities as Level 2.
Unrated/subordinated debt liabilities of
consolidated CLOs are valued directly in line with the fair value
of the CLOs’ underlying loan asset portfolios. These underlying
assets comprise observable loan securities traded in active
markets. The underlying assets are reported in both Level 2 and
Level 3. As a result of this methodology deriving the valuation of
unrated/subordinated debt liabilities from a combination of Level 2
and Level 3 asset values, we deem these liabilities to be Level
3.
Real estate assets
To the extent that the Group invests in real
estate assets, whether through an investment in a managed fund or
an investment in a private company, the underlying assets may be a
debt instrument or property classified as investment property in
accordance with IAS 40 ‘Investment Property’. The fair values of
the directly held investment properties have been recorded based on
independent valuations prepared by third-party real estate
valuation specialists in line with the Royal Institution of
Chartered Surveyors Valuation – Global Standards 2020. At the end
of each reporting period, the Group reviews its assessment of the
fair value of each property, taking into account the most recent
independent valuations. The Directors determine a property value
within a range of reasonable fair value estimates, based on
information provided.
All resulting fair value estimates for
properties are included in Level 3.
5. Financial assets and liabilities continued
|
Investment in or alongside managed funds |
Investment in loans held in consolidated entities |
Investment in private companies |
Senior and subordinated notes of CLO vehicles |
Disposal groups held for sale |
Total |
Group |
£m |
£m |
£m |
£m |
£m |
£m |
At 1 April 2022 |
2,112.9 |
145.2 |
122.7 |
9.1 |
89.2 |
2,479.1 |
Total gains or losses in the
income statement |
|
|
|
|
|
|
– Net investment
return2 |
172.9 |
(9.6) |
(21.2) |
(1.3) |
(7.1) |
133.7 |
- Foreign exchange |
67.4 |
15.5 |
13.2 |
0.5 |
5.8 |
102.4 |
Purchases |
416.2 |
60.2 |
6.7 |
— |
158.7 |
641.8 |
Exit proceeds |
(625.1) |
(100.7) |
(21.0) |
(0.8) |
(23.8) |
(771.4) |
Transfer between levels1 |
— |
457.1 |
— |
— |
(59.6) |
397.5 |
At 31 March 2023 |
2,144.3 |
567.7 |
100.4 |
7.5 |
163.2 |
2,983.1 |
1. During the year certain assets in Investments
in loans held in consolidated entities were reassessed as Level 3
(from Level 2) and these changes are reported as a transfer in the
year. Transfers out of Disposal groups held for sale represented
the re-designation of an asset as Investment Property (see note
29)
2. Included within net investment returns are £141.8m of unrealised
gains (which includes accrued interest).
|
Investment in or alongside managed funds |
Investment in loans held in consolidated entities |
Investment in private companies |
Senior and subordinated notes of CLO vehicles |
Disposal groups held for sale |
Total |
Group |
£m |
£m |
£m |
£m |
£m |
£m |
At 1 April 2021 |
1,802.1 |
168.6 |
234.6 |
27.2 |
57.4 |
2,289.9 |
Total gains or losses in the
income statement |
|
|
|
|
|
|
– Net investment
return2 |
455.9 |
(10.8) |
17.7 |
(5.2) |
6.3 |
463.9 |
- Foreign exchange |
2.7 |
— |
4.5 |
0.5 |
0.7 |
8.4 |
Purchases |
680.4 |
54.8 |
0.4 |
13.2 |
106.9 |
855.7 |
Exit proceeds |
(824.2) |
(37.6) |
(134.5) |
(26.6) |
(82.1) |
(1,105.0) |
Transfer between levels |
(4.0) |
(29.8) |
— |
— |
— |
(33.8) |
At 31 March 2022 |
2,112.9 |
145.2 |
122.7 |
9.1 |
89.2 |
2,479.1 |
1. During the year certain assets in Investments
in or alongside managed fund and Investments in loans held in
consolidated entities were reassessed from Level 3 and these
changes are reported as a transfer in the year
2. Included within net investment returns are £439.7m of unrealised
gains (which includes accrued interest)
.
Reconciliation of Level 3 fair value
measurements of financial liabilities
The following tables sets out the movements in
reoccurring financial liabilities valued using the Level 3 basis of
measurement in aggregate. Within the income statement, realised
gains and fair value movements are included within gains on
investments, and foreign exchange gains/(losses) are included
within finance costs.
During the year ended 31 March 2023 changes in
the fair value of the assets of consolidated credit funds resulted
in a reduction in the fair value of the financial liabilities of
those consolidated credit funds, reported as a ‘fair value gain’ in
the table below.
|
2023 |
2022 |
|
Financial liabilities designated as FVTPL |
Financial liabilities designated as FVTPL |
Group |
£m |
£m |
At 1 April |
239.6 |
268.2 |
Total gains or losses in the
income statement |
|
|
– Fair value gains |
(178.2) |
(31.8) |
– Foreign exchange losses |
12.8 |
— |
Purchases |
23.8 |
25.9
|
Disposal groups held for
sale |
(5.0) |
5.0
|
Transfer between levels |
(28.3) |
(27.7)
|
At 31 March |
64.7 |
239.6 |
Transfers in and out of Level 3 financial liabilities were due
to changes to the observability of inputs used in the valuation of
these liabilities.
5. Financial assets and liabilities continued
Valuation inputs and sensitivity analysis
The following table summarises the inputs and
estimates used for items categorised in Level 3 of the fair value
hierarchy together with a quantitative sensitivity analysis:
|
Fair Value |
Fair Value |
Primary Valuation Technique1
|
Key Unobservable
Inputs
|
Range
|
Weighted Average/ Fair Value Inputs
|
Sensitivity/
Scenarios
|
Effect on Fair
Value4
31 March 2023
|
|
As at
31 March 2023 |
As at
31 March 2022 |
Group
Assets |
£m |
£m |
£m |
Corporate
- subordinated debt and equity2
|
1,574.4
|
1,598.4
|
Market comparable companies |
Earnings multiple |
5.0x – 29.0x |
15.1x |
'+10% Earnings multiple2 |
192.5 |
Discounted cash flow
|
Discount rate |
7.5% - 26.4% |
10.4 % |
'-10% Earnings
multiple2 |
(192.7) |
Earnings multiple |
6.6x – 19.8x |
12.4x |
|
|
Real
Assets
|
293.6
|
316.3
|
Third-party valuation |
N/A |
N/A |
N/A |
+10% Third-party valuation |
29.4 |
LTV-based
impairment model
|
N/A |
N/A |
N/A |
-10% Third-party valuation |
(29.4) |
|
|
|
|
|
Private
Equity
Secondaries
|
492.1
|
369.0
|
|
|
|
|
|
|
Third-party valuation |
N/A |
N/A |
N/A |
+10% Third-party valuation |
49.2 |
|
|
|
|
-10% Third-party valuation |
(49.2) |
|
|
|
|
|
|
Corporate
-
Senior debt
|
47.8
|
41.1
|
Discounted cash flow |
Probability of default |
2.0%-5.4% |
2.4 % |
Upside case |
0.1 |
|
Loss given default |
25.4 % |
25.4 % |
Downside case |
(0.8) |
|
Maturity of loan |
3 years |
3 years |
|
|
Effective interest rate |
8.7%-9.5% |
8.7 % |
|
|
Subordinated notes of CLO vehicles3
|
7.5
|
9.1
|
Discounted cash flow |
Discount rate |
13.0% - 14.0% |
13.5 % |
|
|
|
Default rate
|
3% - 4.5%
|
3.4 %
|
Upside case3 |
21.6 |
|
Downside case3 |
(23.0) |
|
Prepayment rate % |
15% -20% |
18.9 % |
|
|
|
Recovery rate % |
75.0 % |
75.0 % |
|
|
|
Reinvestment price |
99.5 % |
99.5 % |
|
|
Investments in loans held in structured entities
|
567.7
|
145.2
|
Third-party valuation
|
N/A
|
N/A
|
N/A
|
+10% Third-party valuation |
56.8 |
-10% Third-party valuation |
(56.8) |
Total assets |
2,983.1 |
2,479.1 |
|
|
|
|
|
|
Liabilities of consolidated credit funds
|
(64.7) |
(234.6)
|
Third-party valuation
|
N/A
|
N/A
|
N/A
|
+10% Third-party valuation |
(6.5) |
|
-10% Third-party valuation |
6.5 |
Disposal
group held for sale
|
—
|
(5.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
(64.7) |
(239.6) |
|
|
|
|
|
|
-
Where the Group has co-invested with its managed funds, it is the
type of the underlying investment, and the valuation techniques
used for these underlying investments, that is set out here.
-
For investments valued using a DCF methodology (including
Infrastructure investments) the imputed earnings multiple is used
for this sensitivity analysis.
-
The sensitivity analysis is performed on the entire portfolio of
subordinated notes of CLO vehicles that the Group has invested in
with total value of £182.8m (2022: £174.2m). This value includes
investments in CLOs that are not consolidated (2023: £7.5m (2022:
£9.1m)) and investments in CLOs which are consolidated (2023:
£175.3m (2022: £165.3m)). The upside case is based on the default
rate being lowered to 2.5% p.a. for the next 24 months, keeping all
other parameters consistent. The downside case is based on the
default rate being increased over the next 24 months to 6.5% p.a.,
keeping all other parameters consistent.
-
The effect of fair value across the entire investment portfolio
ranges from -£345.4m (downside case) to +£343.0m (upside case)
(2022: -£281.0m (downside case) to +£279.3m (upside case).
5. Financial assets and liabilities continued
Derivative financial instruments
Accounting policy
Derivative financial instruments for economic
hedging
The Group holds derivative financial instruments to hedge foreign
currency and interest rate exposures. Derivatives are recognised at
fair value determined using independent third-party valuations or
quoted market prices. Changes in fair values of derivatives are
recognised immediately in Finance loss in the Income
Statement.
A derivative with a positive fair value is recognised as a
financial asset while a derivative with a negative fair value is
recognised as a financial liability. A derivative is presented as a
non-current asset or non-current liability if the remaining
maturity of the instrument is more than 12 months from the
reporting date, otherwise a derivative will be presented as a
current asset or current liability.
|
|
2023 |
2022 |
|
Contract or underlying principal amount
|
Fair values |
Contract or underlying principal amount
|
Fair values |
Group
|
Asset |
Liability |
Asset |
Liability |
£m |
£m |
£m |
£m |
£m |
£m |
Cross currency swaps |
121.6 |
7.5 |
(8.5) |
306.1 |
28.4 |
(30.1) |
Forward foreign exchange
contracts (excl those held in consolidated credit funds) |
1,365.1 |
14.5 |
(7.2) |
1,113.6 |
4.7 |
(22.5) |
Forward
foreign exchange contracts held in consolidated credit funds |
— |
— |
— |
102.6 |
105.5 |
(103.7) |
Total |
1,486.7 |
22.0 |
(15.7) |
1,522.3 |
138.6 |
(156.3) |
The Group holds £8.5m of cash pledged as collateral by its
counterparties as at 31 March 2023. As at 31 March 2022 the value
of cash held in margin accounts and therefore pledged as collateral
by the Group was £27.0m. The counterparties were: Citigroup Global
Markets Limited, Citibank NA, Lloyds Bank Corporate Markets Plc and
ANZ. All the Credit Support Annexes that have been agreed with our
counterparties are fully compliant with European Market
Infrastructure Regulation ‘EMIR’.
There was no change in fair value related to
credit risk, in relation to derivatives as at 31 March 2023 (31
March 2022: £nil).
Under the relevant International Swaps and
Derivatives Association (‘ISDA’) Master Agreements in place with
our counterparties, the close-out netting provision would result in
all obligations under a contract with a defaulting party being
terminated and there would be a subsequent combining of positive
and negative replacement values into a single net payable or
receivable. This reduces the credit exposure from gross to net.
6. Cash and cash equivalents
|
Group |
|
2023 |
2022 |
|
£m |
£m |
Cash and cash
equivalents |
|
|
Cash at
bank and in hand |
957.5 |
991.8 |
Cash and cash equivalents comprise cash and short-term bank
deposits with an original maturity of three months or less. The
carrying amount of these assets approximates to their fair value.
Cash and cash equivalents at the end of the reporting period as
shown in the consolidated statement of cash flows can be reconciled
to the related items in the consolidated statement of financial
position as shown above.
The Group’s cash and cash equivalents include
£407.5m (2022 : £230.3m) of restricted cash, held principally by
structured entities controlled by the Group. The Group does not
have legal recourse to these balances as their sole purpose is to
service the interests of the investors in these structured
entities.
In the current year £5.5m cash and cash
equivalents were included in disposal groups held for sale (2022:
£11.1m) (note 29).
7. Financial liabilities
Accounting policy
Financial liabilities, which include borrowings and listed notes
and bonds (with the exception of financial liabilities designated
as FVTPL), are initially recognised at fair value net of
transaction costs and subsequently measured at amortised cost using
the effective interest rate method.
Included within financial liabilities held at amortised cost is the
Group’s present value of its future lease payments. Lease
liabilities are initially measured at the present value of all the
future lease payments. The present value at the inception of the
lease is determined by discounting all future lease payments at the
Group’s centrally determined incremental borrowing rate at the date
of inception of the lease. In calculating the present value of
lease payments, the Group uses its incremental borrowing rate
because the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the lease
payments or a change in the assessment of an option to purchase the
underlying asset.
Financial liabilities at FVTPL are initially recognised and
subsequently measured at fair value on a recurring basis with gains
or losses arising from changes in fair value and interest paid on
the financial instruments recognised through gains on investments
in the income statement. Interest paid on the financial instruments
is included within net gains on investments. A financial instrument
is designated as FVTPL if it is a derivative that is not designated
and effective as a hedging instrument, or the designation
eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise.
Included within financial liabilities at FVTPL are derivative
liabilities and other financial liabilities designated as FVTPL
within structured entities controlled by the Group.
The Group derecognises financial liabilities when, and only when,
the Group’s obligations are discharged, cancelled or expire. |
7. Financial liabilities continued
|
|
|
|
2023 |
|
2022 |
|
Interest rate
Interest rate |
Maturity |
Current |
Non-current |
Current |
Non-current |
Group |
|
|
£m |
£m |
£m |
£m |
Liabilities held at amortised
cost |
|
|
|
|
|
|
- Private placement |
2.02% - 6.25% |
2023 - 2029 |
56.8 |
604.8 |
39.2 |
617.2 |
- Listed notes and bonds |
1.63% - 2.5% |
2027 - 2030 |
2.5 |
874.9 |
162.9 |
836.8 |
-
Unsecured bank debt¹ |
SONIA +1.40% |
2026 |
(0.8) |
(1.5) |
(1.0) |
(1.7) |
Total Liabilities held at
amortised cost |
|
|
58.5 |
1,478.2 |
201.1 |
1,452.3 |
Other financial
liabilities2 |
2.85% - 7.09% |
2023 - 2034 |
5.8 |
79.6 |
6.5 |
52.2 |
Liabilities held at
FVTPL: |
|
|
|
|
|
|
- Derivative financial
liabilities |
|
|
14.8 |
0.9 |
153.4 |
2.9 |
-
Structured entities controlled by the Group |
0.6% - 9.93% |
2030-2036 |
— |
4,572.7 |
— |
4,364.7 |
|
|
|
79.1 |
6,131.4 |
361.0 |
5,872.1 |
1 Unsecured bank debt represents the value of
associated fees which are amortised over the life of the
facility.
- Financial liabilities held at amortised cost within Disposal
Groups Held for Sale are disclosed in Note 29.
Other financial liabilities are lease liabilities. Details of
the cash outflows related to leases are in the Consolidated
statement of cash flows, interest expenses associated with lease
liabilities are in note 11, the Right of Use (‘ROU’) assets and the
income from subleasing ROU assets are in note 18.
The fair value of the Listed notes and bonds, being the market
price of the outstanding bonds, is £613.1m (2022: £956.4m) .
Private placements and unsecured bank debt is held at amortised
cost which the Group has determined to be the fair value of these
liabilities.
Movement in financial liabilities arising from
financing activities
The following tables sets out the movements in
total liabilities held at amortised cost arising from financing
activities undertaken during the year.
|
Group |
|
2023 |
2022 |
|
£m |
£m |
At 1 April |
1,712.1 |
1,380.1 |
Proceeds from borrowings |
— |
413.5 |
Repayment of long term
borrowings |
(194.6) |
(111.5) |
Payment of principal portion
of lease liabilities |
(6.8) |
(4.1) |
Establishment of lease
liability |
33.0 |
2.1 |
Net interest movement |
1.0 |
6.2 |
Foreign
exchange movement |
77.4 |
25.8 |
At 31 March |
1,622.1 |
1,712.1 |
8. Finance loss
Accounting policy
Changes in the fair value of derivatives used for economic hedging
are recognised as finance income/loss (as appropriate) in the
income statement as incurred. |
|
2023 |
2022 |
|
£m |
£m |
Fair value movements on derivatives |
(17.1) |
(7.4) |
|
(17.1) |
(7.4) |
9. Other income
Accounting
policy
The Group earns interest on its bank deposits. These amounts are
recognised as income on receipt. |
|
2023 |
2022 |
|
£m |
£m |
Interest income on bank deposits |
15.5 |
— |
|
15.5 |
— |
10. Net gains on investments
Accounting
policy
The Group recognises net gains and losses on investments comprising
realised and unrealised gains and losses from disposals and
revaluations of financial assets and financial liabilities measured
at fair value. |
|
2023 |
2022 |
|
£m |
£m |
Financial assets |
|
|
Change in fair value of financial
instruments designated at FVTPL |
167.6 |
643.1 |
|
|
|
Financial
liabilities |
|
|
Change in fair value of
financial instruments designated at FVTPL |
4.9 |
(87.6) |
|
|
|
Net gains arising on investments |
172.5 |
555.5 |
11. Finance costs
Accounting
policy
Interest expense on the Group’s debt, excluding financial
liabilities within structured entities controlled by the Group, is
recognised using the effective interest rate method based on the
expected future cash flows of the liabilities over their expected
life. Arrangement and commitment fees amortised here are included
within the carrying value of financial liabilities. Financial
liabilities within structured entities controlled by the Group are
accounted for within Net gains and losses arising on investment
(see note 10).
Interest expense associated with lease obligations represents the
unwinding of the lease liability discount, accounted for in
accordance with IFRS 16 (see note 18). |
Finance costs |
2023 |
2022 |
|
£m |
£m |
Interest expense recognised on financial liabilities held at
amortised cost |
57.3 |
45.4 |
Arrangement and commitment
fees |
4.7 |
5.7 |
Interest expense associated with lease obligations |
2.6 |
2.0 |
|
64.6 |
53.1 |
12. Expenses
Further detail in respect of material
administrative expenses reported on the income statement is set out
below:
|
2023 |
2022 |
|
£m |
£m |
Staff costs |
256.7 |
262.1 |
Amortisation and
depreciation |
18.2 |
18.1 |
Operating lease expenses |
2.8 |
3.8 |
Auditor's remuneration |
2.3 |
2.1 |
12. Expenses continued
Auditor’s remuneration includes fees for audit and non-audit
services payable to the Group’s auditor, Ernst and Young LLP, and
are analysed as below.
|
2023 |
2022 |
|
£m |
£m |
ICG
Group |
|
|
Audit fees |
|
|
Group audit of the annual
accounts |
1.5 |
1.3 |
The audit of subsidiaries' annual accounts |
0.4 |
0.5 |
Total audit fees |
1.9 |
1.8 |
|
|
|
Non audit fees |
|
|
Non audit fees in capacity as
auditor |
0.3 |
0.2 |
Other non audit fees |
0.1 |
— |
Total non audit fees |
0.4 |
0.2 |
Total auditor's remuneration incurred by the Group |
2.3 |
2.0 |
13. Employees and Directors
Accounting
policy
The Deal Vintage Bonus (‘DVB’) scheme forms part of the Group’s
Remuneration Policy for investment executives. DVB is reported
within Wages and salaries.
Payments of DVB are made in respect of plan years, which are
aligned to the Group’s financial year. Payments of DVB are made
only when the performance threshold for the plan year has been
achieved on a cash basis and proceeds are received by the Group. An
estimate of the DVB liability for a plan year is developed based on
the following inputs: expected realisation proceeds; expected
timing of realisations; and allocations of DVB to qualifying
investment professionals. The Group accrues the estimated DVB cost
associated with that plan year evenly over five years, reflecting
the average holding period for the underlying investments. Payments
of DVB are not subject to clawback. |
|
2023 |
2022 |
|
£m |
£m |
Directors’ emoluments |
4.9 |
4.8 |
|
|
|
Employee costs during the year
including Directors: |
|
|
Wages and salaries |
228.7 |
229.9 |
Social security costs |
20.5 |
26.2 |
Pension
costs |
7.5 |
6.0 |
Total employee costs (note 12) |
256.7 |
262.1 |
|
|
|
The monthly average number of
employees (including Executive Directors) was: |
|
|
|
|
|
Investment Executives |
268 |
244 |
Marketing and support
functions |
293 |
260 |
Executive Directors |
3 |
3 |
|
564 |
507 |
13. Employees and Directors continued
ICG plc, the Company, does not have any employees but relies on the
expertise and knowledge of employees of ICG FMC Limited,
Intermediate Capital Group Inc., Intermediate Capital Group SAS,
Intermediate Capital Asia Pacific Limited and Intermediate Capital
Group Polska Sp. z.o.o, subsidiaries of ICG plc.
Contributions to the Group’s defined
contribution pension schemes are charged to the consolidated income
statement as incurred.
The performance related element included in
employee costs is £151.6m (2022: £169.7m) which represents the
annual bonus scheme, Omnibus Scheme, the Growth Incentive Scheme
and the DVB Scheme.
In addition, during the year, third-party funds
have paid £46.0m (2022: £62.0m) to former employees and £93.4m
(2022: £123.2m) to current employees, including Executive
Directors, relating to distributions from investments in carried
interest partnerships made by these employees in prior periods.
Such amounts become due over time if, and when, specified
performance targets are ultimately realised in cash by the funds
and paid by the carried interest partnerships (‘CIPs’) of the funds
(see note 28). As these funds and CIPs are not consolidated, these
amounts are not included in the Group’s consolidated income
statement.
14. Tax expense
Accounting policy
The tax expense comprises current and deferred tax.
Current tax assets and liabilities comprise those obligations to,
or claims from, tax authorities relating to the current or prior
reporting periods, that are unpaid at the reporting date.
Deferred tax is provided in respect of temporary differences
between the carrying amounts of assets and liabilities and their
tax bases. Deferred tax liabilities are recognised for all taxable
temporary differences. Deferred tax assets are recognised to the
extent that it is probable that future taxable profits will be
available against which the deferred tax assets can be
utilised.
Deferred tax is not recognised if the temporary difference arises
from the initial recognition of goodwill or from the initial
recognition of other assets and liabilities in a transaction, other
than a business combination, that affects neither the tax nor the
accounting profit.
Deferred tax assets and liabilities are calculated at the tax rates
that are expected to be applied to their respective period of
realisation, provided they are enacted or substantively enacted at
the reporting date.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right of set off, when they relate to income
taxes levied by the same tax authority and the Group intends to
settle on a net basis.
Changes in deferred tax assets or liabilities are recognised as a
component of tax expense in the income statement, except where they
relate to items that are charged or credited directly to equity, in
which case the related deferred tax is also charged or credited
directly to equity. |
|
2023 |
2022 |
|
£m |
£m |
Current
tax: |
|
|
Current year |
16.9 |
37.5
|
Prior year adjustment |
(9.7) |
(3.5) |
|
7.2
|
34.0
|
Deferred
tax: |
|
|
Current year |
14.1
|
1.9
|
Prior
year adjustments |
8.1
|
(4.8) |
|
22.2
|
(2.9) |
|
|
|
Tax on profit on ordinary activities |
29.4
|
31.1 |
14. Tax expense continued
The Group is an international business and operates across many
different tax jurisdictions. Income and expenses are allocated to
these jurisdictions based on transfer pricing methodologies set out
both (i) in the laws of the jurisdictions in which the Group
operates, and (ii) under guidelines set out by the Organisation for
Economic Co-operation and Development (‘OECD’).
The effective tax rate reported by the Group for
the period ended 31 March 2023 of 11.7% (2022: 5.5%) is lower than
the statutory UK corporation tax rate of 19%.
The FMC activities are subject to tax at the
relevant statutory rates ruling in the jurisdictions in which the
income is earned. The lower effective tax rate compared to the
statutory UK rate is largely driven by the IC activities. The IC
benefits from statutory UK tax exemptions on certain forms of
income arising from both foreign dividend receipts and gains from
assets qualifying for the substantial shareholdings exemption. The
effect of these exemptions means that the effective tax rate of the
Group is highly sensitive to the relative mix of IC income, and
composition of such income, in any one period.
Due to the application of tax law requiring a
degree of judgement, the accounting thereon involves a level of
estimation uncertainty which tax authorities may ultimately
dispute. Tax liabilities are recognised based on the best estimates
of probable outcomes and with regard to external advice where
appropriate. The principal factors which may influence the Group’s
future tax rate are changes in tax legislation in the territories
in which the Group operates, the relative mix of FMC and IC income,
the mix of income and expenses earned and incurred by jurisdiction
and the timing of recognition of available deferred tax assets and
liabilities. The Group accounts for future legislative change, to
the extent that is enacted at the reporting date, in its
recognition of deferred tax.
A reconciliation between the statutory UK corporation tax rate
applied to the Group’s profit before tax and the reported effective
tax rate is provided below.
|
2023 |
2022 |
|
£m |
£m |
Profit on ordinary activities before tax |
251.0 |
565.4 |
Tax at 19% thereon |
47.7 |
107.4 |
Effects
of |
|
|
Prior year adjustment to
current tax |
(9.6) |
(3.5) |
Prior
year adjustment to deferred tax |
8.1 |
(4.8) |
|
46.2 |
99.1 |
Non-taxable and non-deductible
items |
(0.3) |
(2.5) |
Non-taxable investment company
income |
(22.5) |
(69.6) |
Trading income generated by
overseas subsidiaries subject to different tax rates |
4.0 |
1.0 |
Effect of changes in statutory
rate changes |
2.0 |
6.4 |
Release
of Luxembourg tax provision |
— |
(3.3) |
Tax charge for the period |
29.4 |
31.1 |
14. Tax expense continued
Deferred tax
Deferred tax
(asset)/liability |
Investments |
Share based payments and compensation deductible as
paid |
Derivatives |
Other temporary differences |
Total |
Group |
£m |
£m |
£m |
£m |
£m |
As at 31 March 2021 |
11.9 |
(24.8) |
1.2
|
3.7
|
(8.0) |
Prior year adjustment |
5.1 |
(0.5) |
—
|
(9.4)
|
(4.8) |
Impact of changes to statutory
tax rates |
8.7 |
(3.7) |
(0.2)
|
1.6
|
6.4 |
Charge / (Credit) to
equity |
— |
1.4
|
— |
— |
1.4
|
Charge / (Credit) to
income |
10.4 |
(10.5) |
(1.8)
|
(2.6) |
(4.5) |
Movement in Foreign Exchange on retranslation |
— |
— |
— |
(0.4) |
(0.4) |
As at 31 March 2022 |
36.1 |
(38.1) |
(0.8) |
(7.1) |
(9.9) |
Prior year adjustment |
2.0 |
0.2
|
— |
7.4 |
9.6 |
Impact of changes to statutory
tax rates |
0.3 |
(1.1) |
0.4 |
1.0 |
0.6 |
Charge / (Credit) to
equity |
2.2 |
3.4
|
— |
|
5.6 |
Charge / (Credit) to
income |
5.2 |
(0.7) |
1.6 |
8.0 |
14.1 |
Movement in foreign exchange
on retranslation |
— |
— |
— |
(0.4) |
(0.4) |
Reclassification to current tax |
— |
— |
— |
(1.7) |
(1.7) |
As at 31 March 2023 |
45.8 |
(36.3) |
1.2 |
7.2 |
17.9 |
During the year deferred tax assets that reversed, due to timing
differences, were mainly due to the utilisation of tax losses and
unpaid interest expense in the Group’s US business. As set out in
the table above in column ‘Share based payments and compensation
deductible as paid’, deferred tax assets at the reporting date were
solely due to employee remuneration schemes in the UK and US.
The Group has undertaken a review of the level of recognition of
deferred tax assets and is satisfied they are recoverable and
therefore have been recognised in full.
Deferred tax (assets)/liabilities have been accounted for at the
applicable tax rates enacted or substantively enacted, in the
relevant jurisdictions at the reporting dated. There are no
deferred tax assets recognised on the basis of losses.
In its March 2021 Budget, the UK Government announced that the UK
rate of corporation tax would increase from 19% to 25% from 1 April
2023 . This legislative change has been substantively enacted, and
has been considered when calculating the closing deferred tax
balances at the reporting date.
The OECD Pillar II proposals for a global minimum tax rate of 15%
are due to be implemented from 1 April 2024 (financial year ending
31 March 2025). The Group has performed an impact analysis and does
not expect the implementation to be significant. It is expected
that the IASB will treat any impact as a ‘permanent
in-the-year'’difference for financial year ending 31 March 2025
onwards.
15. Dividends
Accounting policy
Dividends are distributions of profit to holders of Intermediate
Capital Group plc’s share capital and as a result are recognised as
a deduction in equity. Final dividends are announced with the
Annual Report and Accounts and are recognised when they have been
approved by shareholders. Interim dividends are announced with the
Half Year Results and are recognised when they are paid.
|
|
2023 |
|
2022 |
|
Per share pence
|
£m
|
Per share pence
|
£m
|
|
Ordinary dividends
paid |
|
|
|
|
Final |
57.3 |
164.4 |
39 |
112.1 |
Interim |
25.3 |
72 |
18.7 |
53.6 |
|
82.6 |
236.4 |
57.7 |
165.7 |
Proposed final dividend |
52.2 |
148.8 |
57.3 |
162.0 |
Of the £236.4m (2022: £165.7m) of ordinary dividends paid during
the year, £4.3m (2022: £6.0m) were reinvested under the dividend
reinvestment plan offered to shareholders.
16. Earnings per share
|
Year ended
31 March 2023 |
Year ended
31 March 2022 |
Earnings |
£m |
£m |
Earnings for the purposes of basic and diluted earnings per share
being net profit attributable to equity holders of the Parent |
280.6 |
526.8 |
Number of shares |
|
|
Weighted average number of
ordinary shares for the purposes of basic earnings per share |
285,613,961 |
286,759,806 |
Effect
of dilutive potential ordinary share options |
3,698,954 |
4,194,481 |
Weighted average number of ordinary shares for the purposes
of diluted earnings per share |
289,312,915 |
290,954,286 |
Earnings per share (pence) |
98.2p |
183.7p |
Diluted
earnings per share (pence) |
97.0p |
181.1p |
17. Intangible assets
Accounting
policy
Business combinations
Business combinations are accounted for using the acquisition
method. The acquisition method involves the recognition of all
assets, liabilities and contingent liabilities of the acquired
business at their fair value at the acquisition date.
The excess of the fair value at the date of acquisition of the cost
of investments in subsidiaries over the fair value of the net
assets acquired which is not allocated to individual assets and
liabilities is determined to be goodwill. Goodwill is reviewed at
least annually for impairment.
Investment management contracts
Intangible assets with finite useful lives that are acquired
separately, including investment management contracts, are carried
at cost less accumulated depreciation and impairment losses. These
are measured at cost and are amortised on a straight line basis
over the expected life of the contract.
Computer software
Research costs associated with computer software are expensed as
they are incurred.
Other expenditure incurred in developing computer software is
capitalised only if all of the following criteria are
demonstrated:
- An asset is created that can be
separately identified;
- It is probable that the asset
created will generate future economic benefits; and
- The development cost of the asset
can be measured reliably.
Following the initial recognition of development expenditure, the
cost is amortised over the estimated useful life of the asset
created, which is determined as three years. Amortisation commences
on the date that the asset is brought into use. Work-in-progress
assets are not amortised until they are brought into use and
transferred to the appropriate category of intangible assets.
Amortisation of intangible assets is included in administrative
expenses in the income statement and detailed in note 12. |
Impairment of non-financial assets and goodwill
The Group assesses, at each reporting date,
whether there is an indication that an asset may be impaired. If
any indication exists, or when annual impairment testing for an
asset is required, the Group estimates the asset’s recoverable
amount. An asset’s recoverable amount is the higher of an asset’s
fair value less costs of disposal and its value in use. The
recoverable amount is determined for an individual asset, unless
the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. When
the carrying amount of an asset exceeds its recoverable amount, the
asset is considered impaired and is written down to its recoverable
amount.
|
Computer software |
Goodwill1 |
Investment management |
Total |
|
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
Group |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
Cost |
|
|
|
|
|
|
|
|
At 1 April |
20.5 |
20.8 |
4.3 |
4.3 |
26.3 |
25.5 |
51.1 |
50.6 |
Reclassified2 |
— |
— |
— |
— |
— |
(0.3) |
— |
(0.3) |
Additions |
4.7 |
3.4 |
— |
2.5 |
— |
1.1 |
4.7 |
7.0 |
Derecognised3 |
(0.3) |
(3.8) |
— |
(2.4) |
(7.1) |
— |
(7.4) |
(6.2) |
Exchange differences |
0.1 |
0.1 |
— |
(0.1) |
(0.1) |
— |
— |
— |
At 31
March |
25.0 |
20.5 |
4.3 |
4.3 |
19.1 |
26.3 |
48.4 |
51.1 |
Amortisation |
|
|
|
|
|
|
|
|
At 1 April |
12.4 |
10.1 |
— |
— |
21.6 |
19.0 |
34.0 |
29.1 |
Charge for the year |
4.0 |
6.1 |
— |
— |
2.7 |
2.6 |
6.7 |
8.7 |
Derecognised |
— |
(3.8) |
— |
— |
(7.2) |
— |
(7.2) |
(3.8) |
At 31
March |
16.4 |
12.4 |
— |
— |
17.1 |
21.6 |
33.5 |
34.0 |
Net book value |
8.6 |
8.1 |
4.3 |
4.3 |
2.0 |
4.7 |
14.9 |
17.1 |
-
Goodwill was acquired in the ICG-Longbow Real Estate Capital LLP
business combination and represents a single cash generating unit.
The recoverable amount of the real estate cash generating unit is
based on fair value less costs to sell where the fair value equates
to a multiple of adjusted net income, in line with the original
consideration methodology. The significant headroom on the
recoverable amount is not sensitive to any individual
assumption.
-
During the prior year the Group carried out a review of its
intangible assets relating to investment management contracts.
£0.3m was reclassified from intangible assets to financial
assets.
-
Investment management contracts derecognised represented fully
amortised balances.
17. Intangible assets continued
During the financial year ended 31 March 2023, the Group recognised
an expense of £0.5m (2022: £0.6m) in respect of research and
development expenditure.
18. Property, plant and equipment
Accounting
policy
The Group’s property, plant and equipment provide the
infrastructure to enable the Group to operate. Assets are initially
stated at cost, which includes expenditure associated with
acquisition. The cost of the asset is recognised in the income
statement as an amortisation charge on a straight line basis over
the estimated useful life, determined as three years for furniture
and equipment and five years for short leasehold premises. Right of
Use (‘ROU’) assets are amortised over the full contractual lease
term.
Group as a lessee
Included within the Group’s property, plant and equipment are its
ROU assets. ROU assets are the present value of the Group’s global
leases and comprise all future lease payments, and all expenditure
associated with acquiring the lease. The Group’s leases are
primarily made up of its global offices. The Group has elected to
capitalise initial costs associated with acquiring a lease before
commencement as a ROU asset. The cost of the ROU asset is
recognised in the income statement as an amortisation charge on a
straight line basis over the life of the lease term.
Short-term leases and leases of low value assets
The Group applies the short-term lease recognition exemption to its
leasehold improvements and short-term leases (those that have a
lease term of 12 months or less from the commencement date which do
not contain a purchase option). The Group also applies the
recognition exemption to leases that are considered to be low
value. Leasehold improvements are amortised on a straight line
basis over the lease term. Lease payments on short-term leases and
leases of low-value assets are recognised as expense on a straight
line basis over the lease term. |
|
Furniture and equipment |
|
ROU asset |
|
Leasehold improvements |
|
Total |
|
2023 |
2022 |
|
2023 |
2022 |
|
2023 |
2022 |
|
2023 |
2022 |
Group |
£m |
£m |
|
£m |
£m |
|
£m |
£m |
|
£m |
£m |
Cost |
|
|
|
|
|
|
|
|
|
|
|
At 1 April |
4.5 |
3.8 |
|
67.7 |
73.0 |
|
11.3 |
10.6 |
|
83.5 |
87.4 |
Additions |
3.1 |
0.6 |
|
33.8 |
2.4 |
|
3.4 |
0.7 |
|
40.3 |
3.7 |
Disposals |
(0.4) |
— |
|
(11.7) |
(7.7) |
|
— |
— |
|
(12.1) |
(7.7) |
Exchange differences |
0.3 |
0.1 |
|
0.2 |
— |
|
— |
— |
|
0.5 |
0.1 |
At 31 March |
7.5 |
4.5 |
|
90.0 |
67.7 |
|
14.7 |
11.3 |
|
112.2 |
83.5 |
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
At 1 April |
2.9 |
1.6 |
|
18.2 |
17.7 |
|
2.0 |
1.1 |
|
23.1 |
20.4 |
Charge for the year |
1.4 |
1.2 |
|
9.1 |
7.3 |
|
1.0 |
0.9 |
|
11.5 |
9.4 |
Disposals |
(0.1) |
0.1 |
|
(10.5) |
(6.8) |
|
— |
— |
|
(10.6) |
(6.7) |
At 31
March |
4.2 |
2.9 |
|
16.8 |
18.2 |
|
3.0 |
2.0 |
|
24.0 |
23.1 |
Net book value |
3.3 |
1.6 |
|
73.2 |
49.5 |
|
11.7 |
9.3 |
|
88.2 |
60.4 |
Group as Lessor
Accounting
policy
Leases in which the Group does not transfer substantially all the
risks and rewards incidental to ownership of an asset are
classified as operating leases. Rental income arising is accounted
for on a straight-line basis over the lease term and is included in
other income in the consolidated income statement due to its
operating nature. Initial direct costs incurred in negotiating and
arranging an operating lease are added to the carrying amount of
the leased asset and amortised over the lease term on the same
basis as rental income. Contingent rents are recognised as revenue
in the period in which they are earned.
The Group has entered into sub-lease agreements of certain office
buildings (see Note 18 above). These leases have terms of between
two and five years. Rental income recognised by the Group during
the year was £0.4m (2022: £0.3m). Future minimum rentals receivable
under non-cancellable operating leases as at 31 March are as
follows |
18. Property, plant and equipment continued
|
2023 |
2022 |
Group |
£m |
£m |
Within one year |
0.4 |
0.4 |
After
one year but not more than five years |
0.8 |
1.1 |
At 31 March |
1.2 |
1.5 |
- The prior year
figures have been re-presented to £0.4m receivable within one year,
£1.1m receivable from one to five years.
19. Investment property
Accounting
policy
The Group holds investment property for the development of the
Group’s long-term real assets strategy. Properties are being held
with a purpose to earn rental income and/or for capital
appreciation and are not occupied by the Group. IAS 40 Investment
Property requires that the property be measured initially at cost,
including transaction costs, and subsequently measured at fair
value. The fair value of the investment properties has been
recorded based on independent valuations prepared by third-party
real estate valuation specialists in line with the Royal
Institution of Chartered Surveyors Valuation – Global Standards
2020. A market and income approach was performed to estimate the
fair value of the Group’s investments. These valuation techniques
can be subjective and include assumptions which are not supportable
by observable data. Details of the valuation techniques and the
associated sensitivities are further disclosed in note 5. |
|
2023 |
2022 |
Group |
£m |
£m |
Investment property at fair value |
|
|
At 1 April |
1.5 |
1.8 |
Fair
value loss |
(0.7) |
(0.3) |
At 31 March |
0.8 |
1.5 |
During the year, the Group held £284.0m (2022: £59.3m) of
investment property within disposal groups held for sale (see note
29).
20. Trade and other receivables
Accounting
policy
Trade and other receivables represent amounts the Group is due to
receive in the normal course of business and are held at amortised
cost. Trade and other receivables excluding structured entities
controlled by the Group include performance fees, which are
considered contract assets under IFRS 15 and will only be received
after realisation of the underlying assets, see note 3. Trade and
other receivables within structured entities controlled by the
Group relate principally to unsettled trades on the sale of
financial assets.
Amounts owed by Group companies are non-interest bearing and
repayable on demand. Trade and other receivables from Group
entities are considered related party transactions as stated in
note 27.
The carrying value of trade and other receivables reported within
current assets approximates fair value as these are short-term and
do not contain any significant financing components. The carrying
value of trade and other receivables reported within non-current
assets approximates fair value as these do not contain any
significant financing components.
The Company has adopted the simplified approach to measuring the
loss allowance as lifetime Expected Credit Loss (ECL), as permitted
under IFRS 9. The ECL of trade and other receivables arising from
transactions with Group entities or its affiliates are expected to
be nil or close to nil. The assets do not contain any significant
financing components, therefore the simplified approach is deemed
most appropriate. |
20. Trade and other receivables continued
|
Group |
|
2023 |
2022 |
|
£m |
£m |
Trade and other receivables within structured entities controlled
by the Group |
43.7 |
125.3 |
Trade and other receivables
excluding structured entities controlled by the Group |
178.3 |
155.0 |
Amount owed by Group
companies |
— |
— |
Prepayments |
10.0 |
2.8 |
Total current trade and other receivables |
232.0 |
283.1 |
Non-current assets |
|
|
Trade and other receivables
excluding structured entities controlled by the Group |
37.1 |
91.1 |
Amounts
owed by Group companies |
— |
— |
Total non-current trade and other receivables |
37.1 |
91.1 |
Non-current trade and other receivables
excluding structured entities controlled by the Group comprises
performance-related fees (see note 3).
21. Trade and other payables
Accounting
policy
Trade and other payables are held at amortised cost and represent
amounts the Group is due to pay in the normal course of business.
Other payables in the table below relate principally to unsettled
trades on the purchase of financial assets within structured
entities controlled by the Group. Accruals represent costs,
including remuneration, that are not yet billed or due for payment,
but for which the goods or services have been received. Amounts
owed to Group companies are non-interest bearing and repayable on
demand. The carrying value of trade and other payables approximates
fair value as these are short-term and do not contain any
significant financing components.
Trade and other payables from Group entities are considered related
party transactions as stated in note 27.
Key sources of estimation uncertainty on trade and other payables
excluding structured entities controlled by the Group.
Payables related to the DVB scheme (see note 13 ) are critical
estimates based on the expected realisation proceeds; expected
timing of realisations; and allocations of DVB to executives. |
|
Group |
|
2023 |
2022 |
|
£m |
£m |
Trade and other payables within structured entities controlled by
the Group |
328.1 |
293.4 |
Trade and other payables
excluding structured entities controlled by the Group |
140.2 |
138.7 |
Amounts owed to Group
companies |
— |
— |
Social
security tax |
3.1 |
2.3 |
Total current trade and other payables |
471.4 |
434.4 |
Non-current liabilities |
|
|
Trade and other payables excluding structured entities controlled
by the Group |
71.1 |
76.4 |
Total non-current trade and other payables |
71.1 |
76.4 |
Current trade and other payables excluding structured entities
controlled by the Group includes £31.4m (2022: £69.4m) in respect
of DVB, (see note 13) and non-current Trade and other payables
excluding structured entities controlled by the Group is entirely
comprised of amounts payable in respect of DVB
22. Financial risk management
The Group has identified financial risk, comprising market and
liquidity risk, as a principal risk. Further details are set out on
page 26. The Group has exposure to market risk (including exposure
to interest rates and foreign currency), liquidity risk and credit
risk arising from financial instruments.
Interest rate risk
The Group’s assets include both fixed and
floating rate loans and non-interest-bearing equity
investments.
The Group’s operations are financed with a
combination of its shareholders’ funds, bank borrowings, private
placement notes, public bonds, and fixed and floating rate notes.
The Group manages its exposure to market interest rate movements by
matching, to the extent possible, the interest rate profiles of
assets and liabilities and by using derivative financial
instruments.
The sensitivity of floating rate financial
assets to a 100 basis points interest rate increase is £56.5m
(2022: £55.5m) and to a decrease is £(56.5)m (2022: £(55.5)m). The
sensitivity of financial liabilities to a 100 basis point interest
rate increase is £47.1m (2022: £46.0m) and to a decrease is
£(47.1)m (2022: £(46.0)m). These amounts would be reported within
Net gains on investments. There is an indirect exposure to interest
rate risk through the impact on the performance of the portfolio
companies of the funds that the Group has invested in, and
therefore the fair valuations. There is no interest rate risk
exposure on fixed rate financial assets or liabilities.
Exposure to interest rate risk
|
2023 |
2022 |
|
Floating |
Fixed |
Total |
Floating1 |
Fixed1 |
Total |
Group |
£m |
£m |
£m |
£m |
£m |
£m |
Financial assets (excl investments in loans held in consolidated
entities) |
744.4 |
3,049.1 |
3,793.5 |
995.2 |
2,719.1 |
3,714.3 |
Investments in loans held in
consolidated entities |
4,901.1 |
253.9 |
5,155.0 |
4,599.7 |
479.5 |
5,079.2 |
Financial liabilities (excl
borrowings and loans held in consolidated entities) |
— |
(1,929.2) |
(1,929.2) |
— |
(1,892.1) |
(1,892.1) |
Borrowings and loans held in consolidated entities |
(4,706.6) |
(371.5) |
(5,078.1) |
(4,604.1) |
(374.5) |
(4,978.6) |
|
938.9 |
1,002.3 |
1,941.2 |
990.8 |
932.0 |
1,922.8 |
Foreign exchange risk
The Group is exposed to currency risk in
relation to non-sterling currency transactions and the translation
of non-sterling net assets. The Group’s most significant exposures
are to the euro and the US dollar. Exposure to market currency risk
is managed by matching assets with liabilities to the extent
possible and through the use of derivative instruments.
The Group regards its interest in overseas
subsidiaries as long-term investments. Consequently, it does not
normally hedge the translation effect of exchange rate movements on
the financial statements of these businesses.
The Group is also exposed to currency risk
arising on the translation of fund management fee income receipts,
which are primarily denominated in euro and US dollar.
The effect of fluctuations in other currencies
is considered by the Directors to be insignificant in the current
and prior year. The net assets/(liabilities) by currency and the
sensitivity of the balances to a strengthening of foreign
currencies against sterling are shown below:
22. Financial risk management continued
Market risk - Foreign exchange risk
|
2023 |
Net statement of financial Position exposure |
Forward exchange contracts |
Net exposure |
Sensitivity to strengthening |
Increase in net assets |
£m |
£m |
£m |
% |
£m |
Sterling |
726.8 |
772.7 |
1,499.5 |
|
— |
Euro |
552.0 |
(259.3) |
292.7 |
15 % |
43.9 |
US dollar |
564.5 |
(324.9) |
239.6 |
20 % |
47.9 |
Other
currencies |
195.6 |
(182.2) |
13.4 |
10-25% |
— |
|
2,038.9 |
6.3 |
2,045.2 |
— |
91.8 |
|
|
|
|
|
|
|
2022 |
|
Net statement of financial Position exposure |
Forward exchange contracts |
Net exposure |
Sensitivity to strengthening |
Increase in net assets |
|
£m |
£m |
£m |
% |
£m |
Sterling |
688.1 |
1,057.9 |
1,746.0 |
— |
— |
Euro |
718.1 |
(624.3) |
93.8 |
15 % |
14.1 |
US dollar |
326.9 |
(251.0) |
75.9 |
20 % |
15.2 |
Other
currencies |
207.4 |
(200.3) |
7.1 |
10-25% |
— |
|
1,940.5 |
(17.7) |
1,922.8 |
— |
29.3 |
The weakening of the above currencies would have
resulted in an equal but opposite impact, being a decrease in net
assets.
Liquidity risk
The Group makes commitments to its
managed funds in advance of that capital being invested. These
commitments are typically drawn over a five-year investment period
(see note 26 for outstanding commitments). Funds typically have a
10-year contractual life. The Group manages its liquidity risk by
maintaining headroom on its financing facilities, particularly its
bank facilities.
The table below shows the liquidity profile of
the Group’s financial liabilities, based on contractual repayment
dates of principal and interest payments. Future interest and
principal cash flows have been calculated based on exchange rates
and floating rate interest rates as at 31 March 2023. It is assumed
that Group borrowings under its senior debt facilities remain at
the same level as at 31 March 2023 until contractual maturity.
Included in financial liabilities are contractual interest
payments. All financial liabilities, excluding structured entities
controlled by the Group, are held by the Company.
Liquidity profile
|
Contractual maturity analysis |
|
Less than one year |
One to two years |
Two to five years |
More than five years |
Total |
As at
31 March 2023 |
£m |
£m |
£m |
£m |
£m |
Financial liabilities |
|
|
|
|
|
Private placements |
78.2 |
273.5 |
282.2 |
106.7 |
740.6 |
Listed notes and bonds |
18.1 |
18.1 |
486.8 |
461.5 |
984.5 |
Debt issued by controlled
structured entities |
176.3 |
204.6 |
2,430.4 |
3,748.0 |
6,559.3 |
Derivative financial
instruments |
(1.6) |
(3.1) |
(4.4) |
0.0 |
(9.1) |
Other financial
liabilities |
8.5 |
11.3 |
32.0 |
46.1 |
97.9 |
|
279.5 |
504.4 |
3,227.0 |
4,362.3 |
8,373.2 |
Other financial liabilities are lease liabilities.
As at 31 March 2023 the Group has liquidity of £1,099.9m (2022:
£1,311.5m) which consists of undrawn debt facility of £550m (2022:
£550m) and £549.9m (2022: £761.5m) of unencumbered cash.
Unencumbered cash excludes £407.6m (2022: £230.3m) of restricted
cash held principally by structured entities controlled by the
Group.
22. Financial risk management continued
|
Contractual maturity analysis |
|
Less than one year |
One to two years |
Two to five years |
More than five years |
Total |
As at
31 March 2022 |
£m |
£m |
£m |
£m |
£m |
Financial liabilities |
|
|
|
|
|
Private placements |
59.1 |
76.1 |
519.2 |
105.3 |
759.8 |
Listed notes and bonds |
185.4 |
17.4 |
473.1 |
452.6 |
1,128.4 |
Debt issued by controlled
structured entities |
499.9 |
79.7 |
239.2 |
4,656.5 |
5,475.3 |
Derivative financial
instruments |
22.1 |
(2.5) |
(4.7) |
0.0 |
14.9 |
Other
financial liabilities1 |
8.4 |
7.8 |
21.4 |
28.9 |
66.5 |
|
774.9 |
178.5 |
1,248.2 |
5,243.3 |
7,445.0 |
1 Disclosure now includes liquidity
profile of Other Financial Liabilities and the prior year has been
re-presented accordingly.
The Group’s policy is to maintain continuity of funding. Due to
the long-term nature of the Group’s assets, the Group seeks to
ensure that the maturity of its debt instruments is matched to the
expected maturity of its assets.
Credit risk
Credit risk is the risk of financial loss to the
Group as a result of a counterparty failing to meet its contractual
obligations. This risk is principally in connection with the
Group’s investments.
This risk is mitigated by the disciplined credit
procedures that the relevant Fund Investment Committees have in
place prior to making an investment and the ongoing monitoring of
investments throughout the ownership period. In addition, the risk
of significant credit loss is further mitigated by the Group’s
policy to diversify its investment portfolio in terms of geography
and industry sector and to limit the amount invested in any single
company.
The Group is exposed to credit risk through its
financial assets (see note 5) and investment in joint ventures
reported at fair value.
Exposure to credit risk
|
Group |
|
Company |
2023 |
2022 |
|
2023 |
2022 |
£m |
£m |
|
£m |
£m |
Investment in private companies |
267.3 |
225.0 |
|
86.1 |
171.6 |
Investment in managed
funds |
2,153.4 |
2,122.7 |
|
178.8 |
271.4 |
Senior and subordinated notes
of CLO vehicles |
113.3 |
114.7 |
|
23.8 |
0.2 |
Investments in loans held
within consolidated entities |
4,669.1 |
4,612.6 |
|
— |
— |
Derivatives assets |
22.0 |
138.6 |
|
22.0 |
40.0 |
Investment in joint venture |
5.8 |
2.2 |
|
— |
— |
|
7,230.9 |
7,215.8 |
|
310.7 |
483.2 |
22. Financial risk management continued
The Group manages its operational cash balance by the regular
forecasting of cashflow requirements, debt management and cash
pooling arrangements. Credit risk exposure on cash and derivative
instruments is managed in accordance with the Group’s treasury
policy which provides limits on exposures with any single financial
institution. The majority of the Group’s surplus cash is held in
AAA-rated Money Market funds. Other credit exposures arise from
outstanding derivatives with financial institutions rated from BBB
to AA-.
The Group is exposed to credit risk as a result
of financing guarantees provided. The maximum exposure to
guarantees is £7.9m (2022: £7.4m). No liability has been recognised
in respect of these guarantees.
The Directors consider the Group’s credit
exposure to trade and other receivables and current assets held for
sale to be low and as such no further analysis has been presented.
The Directors consider the credit risk of the investments within
the structured entities controlled by the Group to be low.
The Group’s investments in CLOs and loans held
within structured entities controlled by the Group principally
comprise senior loans. The Group’s exposure to the credit risk of
this collateral, in these consolidated entities, is limited to its
investment into these entities, which at 31 March 2023 was £339.4m
(2022: £426.0m).
The carrying amount of financial assets
represents the Directors’ assessment of the maximum credit risk
exposure of the Group and Company at the balance sheet date.
Decreases in fair value during the year reflect the decline in
prices on individual assets, as a result either of company specific
or of general macroeconomic conditions.
Other than the Group investments in CLOs and
loans held within structured entities controlled by the Group, the
Group has no direct exposure to defaulted and past due financial
assets.
Capital management
Managing capital is the ongoing process of
determining and maintaining the quantity and quality of capital
appropriate for the Group and ensuring capital is deployed in a
manner consistent with the expectations of our stakeholders. The
primary objectives of the Group’s capital management are (i) align
the Group’s interests with its clients, (ii) grow third-party fee
income in the FMC and (iii) maintain robust capitalisation,
including ensuring that the Group complies with externally imposed
capital requirements by the Financial Conduct Authority (the FCA).
The Group’s strategy has remained unchanged from the year ended 31
March 2022.
(i)
Regulatory capital requirements
The Group is required to hold capital resources
to cover its regulatory capital requirements. The Group’s capital
for regulatory purposes comprises the capital and reserves of the
Company, comprising called up share capital, reserves and retained
earnings as disclosed in the Statement of Changes in Equity (see
page 38). The full Pillar 3 disclosures are available on the
Group’s website: www.icgam.com.
(ii) Capital and risk management policies
The formal procedures for identifying and
assessing risks that could affect the capital position of the Group
are described in Risk Management on page 21. The capital structure
of the Group under UK-adopted IAS consists of cash and cash
equivalents, £957.5m (2022: £991.8m) (see note 6); debt, which
includes borrowings, £1,536.7m, (2022: £1,653.4m) (see note 7) and
the capital and reserves of the Company, comprising called up share
capital, reserves and retained earnings as disclosed in the
Statement of Changes in Equity, £825.8m (2022 : £943.9m). Details
of the Reportable segment capital structure are set out in note
4.
23. Called up share capital and share premium
Share capital represents the number of issued
ordinary shares in Intermediate Capital Group plc multiplied by
their nominal value of 26¼p each.
Under the Company’s Articles of Association, any
share in the Company may be issued with such rights or
restrictions, whether in regard to dividend, voting, transfer,
return of capital or otherwise as the Company may from time to time
by ordinary resolution determine or, in the absence of any such
determination, as the Board may determine. All shares currently in
issue are ordinary shares of 26¼p each carrying equal rights. The
Articles of Association of the Company cannot be amended without
shareholder approval.
The Directors may refuse to register any
transfer of any share which is not a fully paid share, although
such discretion may not be exercised in a way which the Financial
Conduct Authority regards as preventing dealings in the shares of
the relevant class or classes from taking place on an open and
proper basis. The Directors may likewise refuse to register any
transfer of a share in favour of more than four persons
jointly.
The Company is not aware of any other
restrictions on the transfer of ordinary shares in the Company
other than:
- Certain
restrictions that may from time to time be imposed by laws and
regulations (for example, insider trading laws or the UK Takeover
Code)
- Pursuant to the
Listing Rules of the Financial Conduct Authority whereby certain
employees of the Company require approval of the Company to deal in
the Company’s shares
The Company has the authority limited by
shareholder resolution to issue, buy back, or cancel ordinary
shares in issue (including those held in trust, described below).
New shares are issued when share options are exercised by
employees. The Company has 294,332,182 authorised shares (2022:
294,285,804)
Group and Company |
Number of ordinary
shares of 26¼p allotted,
called up and fully paid |
Share Capital
£m |
Share Premium
£m |
1 April 2022 |
294,285,804 |
77.3 |
180.3 |
Shares
issued |
46,378.0 |
— |
0.6 |
31 March 2023 |
294,332,182 |
77.3 |
180.9 |
Group and Company |
Number of ordinary
shares of 26¼p allotted,
called up and fully paid |
Share Capital
£m |
Share Premium
£m |
1 April 2021 |
294,276,532 |
77.2 |
180.2 |
Shares
issued |
9,272 |
0.1 |
0.1 |
31 March 2022 |
294,285,804 |
77.3 |
180.3 |
24. Own shares reserve
Accounting
policy
Own shares are recorded by the Group when ordinary shares are
purchased in the market by ICG plc or through the ICG Employee
Benefit Trust 2015 (‘EBT’).
The EBT is a special purpose vehicle, with the purpose of
purchasing and holding shares of the Company for the hedging of
future liabilities arising as a result of the employee share-based
compensation schemes, (see note 25) in a way that does not dilute
the percentage holdings of existing shareholders.
Own shares are held at cost and their purchase reduces the Group’s
net assets by the amount spent. When shares vest or are cancelled,
they are transferred from own shares to the retained earnings
reserve at their weighted average cost. No gain or loss is
recognised on the purchase, sale, issue or cancellation of the
Company’s own shares. |
The movement in the year is as follows:
24. Own shares reserve continued
|
2023 |
2022 |
2023 |
2022 |
|
£m |
£m |
Number |
Number |
1 April |
93 |
82.2 |
7,734,849 |
8,389,246 |
Purchased (ordinary shares of
26¼p) |
38.9 |
20.9 |
3,000,000 |
1,000,000 |
Options/awards exercised |
(28.5) |
(10.1) |
(1,484,954) |
(1,654,397) |
As at 31 March |
103.4 |
93 |
9,249,895 |
7,734,849 |
Of the total shares held by the Group, 3,733,333 shares were
held by the Company in the Own Share Reserve at 31 March 2023 and
31 March 2022 at a cost of £21.3m. These shares were purchased
through a share buy back programme in prior years.
The number of shares held by the Group at the
balance sheet date represented 3.1% (2022: 2.6%) of the Parent
Company’s allotted, called up and fully paid share capital.
25. Share-based payments
Accounting
policy
The Group issues compensation to its employees under equity-settled
share-based payment plans.
Equity-settled share-based payments are measured at the fair value
of the awards at grant date. The fair value includes the effect of
non-market based vesting conditions. The fair value determined at
the date of grant is expensed on a straight line basis over the
vesting period.
At each reporting date, the Group revises its estimate of the
number of equity instruments expected to vest as a result of
non-market based vesting conditions. The impact of the revision of
the original estimates, if any, is recognised in the income
statement with a corresponding adjustment to equity. |
The total charge to the income statement for the
year was £39.5m (2022: £29.6m) and this was credited to the
share-based payments reserve. Details of the different types of
awards are as follows:
Intermediate Capital Group plc Omnibus Plan
The Omnibus Plan provides for three different
award types: Deferred Share Awards, PLC Equity Awards and Special
Recognition Awards.
Deferred Share Awards
Awards are made after the end of the financial
year (and in a small number of cases during the year) to reward
employees for delivering cash profits, managing the cost base, and
employing sound risk and business management. These share awards
typically vest one-third at the end of the first, second and third
years following the year of grant, unless the individual leaves for
cause or to join a competitor. Dividend equivalents accrue to
participants during the vesting period and are paid at the vesting
date. Awards are based on performance against the individual’s
objectives. There are no further performance conditions.
PLC Equity Awards
Awards are made after the end of the financial
year to reward employees, including Executive Directors, for
increasing long-term shareholder value. These share awards
typically vest one-third at the end of the third, fourth and fifth
years following the year of grant, unless the individual leaves for
cause or to join a competitor. Dividend equivalents accrue to
participants during the vesting period and are paid at the vesting
date. Awards are based on performance against the individual’s
objectives. There are no further performance conditions.
Special Recognition Awards
Awards are made after the end of the financial
year to reward employees for delivering cash profits, managing the
cost base, and employing sound risk and business management. These
share awards vest at the end of the first year following the year
of grant, unless the individual leaves for cause or to join a
competitor. Dividend equivalents accrue to participants during the
vesting period and are paid at the vesting date. Awards are based
on performance against the individual’s objectives. There are no
further performance conditions.
25. Share-based payments continued
Share awards outstanding under the Omnibus Plan
were as follows:
Deferred share awards
|
Number |
Weighted average fair value |
2023 |
2022 |
2023 |
2022 |
Outstanding at 1 April |
2,470,280 |
2,958,483 |
16.52 |
12.47 |
Granted |
1,811,061 |
1,048,813 |
14.27 |
21.63 |
Vested |
(1,316,825) |
(1,537,016) |
15.00 |
12.21 |
Outstanding as at 31 March |
2,964,516 |
2,470,280 |
15.75 |
16.52 |
|
Number |
Weighted average fair value |
PLC
Equity awards |
2023 |
2022 |
2023 |
2022 |
Outstanding at 1 April |
2,139,210 |
2,680,734 |
10.33 |
10.22 |
Granted |
777,577 |
374,477 |
14.27 |
21.63 |
Vested |
(774,535) |
(916,001) |
9.84 |
8.12 |
Outstanding as at 31 March |
2,142,252 |
2,139,210 |
12.21 |
10.33 |
|
Number |
Weighted average fair value |
Special
Recognition Awards |
2023 |
2022 |
2023 |
2022 |
Outstanding as at 1 April |
— |
0 |
— |
— |
Granted |
46,154 |
— |
14.27 |
— |
Vesting |
— |
— |
— |
— |
Outstanding as at 31 March |
46,154 |
— |
14.27 |
— |
The fair values of awards granted under the ICG plc Omnibus Plan
are determined by the average share price for the five business
days prior to grant.
Intermediate Capital Group plc Buy Out
Awards
Buy Out Awards are shares awarded to new
employees in lieu of prior awards forfeited. These share awards
shall vest or be forfeited according to the schedule and terms of
the forfeited awards, and any performance conditions detailed in
the individual’s employment contract. Buy Out Awards may be cash
settled.
Buy Out Awards outstanding were as follows:
Buy Out Awards
|
Number |
Weighted average fair value |
2023 |
2022 |
2023 |
2022 |
Outstanding as at 1 April |
155,940 |
245,423 |
12.85 |
12.06 |
Granted |
1,294,801 |
33,965 |
12.68 |
13.85 |
Vesting |
(366,768) |
(123,448) |
13.35 |
10.67 |
Outstanding as at 31 March |
1,083,973 |
155,940 |
12.96 |
12.85 |
The fair values of the Buy Out Awards granted are determined by
the average share price for the five business days prior to
grant.
Save As You Earn
The Group offers a Sharesave Scheme (‘SAYE’) to
its UK employees. Options are granted at a 20% discount to the
prevailing market price at the date of issue. Options to this
equity-settled scheme are exercisable at the end of a three year
savings contract. Participants are not entitled to dividends prior
to the exercise of the options. The maximum amount that can be
saved by a participant in this way is £6,000 in any tax year.
Fair value is measured using the Black–Scholes
valuation model, which considers the current share price of the
Group, the risk-free interest rate and the expected volatility of
the share price over the life of the award. The expected volatility
was calculated by analysing three years of historic share price
data of the Group.
The total amount to be expensed over the vesting
period is determined by reference to the fair value of the share
awards and options at grant date, which is remeasured at each
reporting date. The total amount to be expensed during the year is
£210,031 (2022: £187,660).
25. Share-based payments continued
Save As You Earn
|
Number |
Weighted average fair value |
2023 |
2022 |
2023 |
2022 |
Outstanding as at 1 April |
199,737 |
137,395 |
4.54 |
3.19 |
Granted |
— |
96,136 |
— |
5.95 |
Vesting |
(46,378) |
(9,272) |
3.26 |
2.27 |
Forfeited |
(49,541) |
(24,522) |
4.30 |
3.35 |
Outstanding as at 31 March |
103,818 |
199,737 |
5.00 |
4.54 |
Growth Incentive Award
The Growth Incentive Award ('GIA’) is a
market-value share option. Grants of options are made following the
end of the financial year to reward employees for performance and
to enhance alignment of interests. The GIA is a right to acquire
shares during the exercise period (seven years following the
vesting date) for a price equal to the market value of those shares
on the grant date. These options vest at the end of the third year
following the year of grant, unless the individual leaves for cause
or to join a competitor. Awards are based on performance against
the individual’s objectives. .
Growth Incentive Award
|
Number |
Weighted average fair value |
2023 |
2022 |
2023 |
2022 |
Outstanding as at 1 April |
— |
— |
— |
— |
Granted |
463,000 |
— |
3.13 |
— |
Vesting |
— |
— |
— |
— |
Forfeited |
— |
— |
— |
— |
Outstanding as at 31 March |
463,000 |
— |
3.13 |
— |
26. Financial commitments
As described in the Strategic Report, the Group invests balance
sheet capital alongside the funds it manages to grow the business
and create long-term shareholder value. Commitments are made at the
time of a fund’s launch and are drawn down with the fund as it
invests (typically over five years). Commitments may increase where
distributions made are recallable. Commitments are irrevocable. At
the balance sheet date the Group had undrawn commitments, which can
be called on over the commitment period, as follows:
26. Financial commitments continued
|
2023 |
2022 |
|
£m |
£m |
ICG Europe Fund V |
29.9 |
27.8 |
ICG
Europe Fund VI |
82.0 |
95.5 |
ICG
Europe Fund VII |
111.7 |
44.8 |
ICG
Europe Fund VIII |
185.5 |
191.6 |
ICG
Mid-Market Fund |
25.1 |
34.6 |
Intermediate Capital Asia Pacific Fund III |
45.4 |
42.6 |
ICG Asia
Pacific Fund IV |
93.5 |
31.2 |
Nomura
ICG Investment Business Limited Partnership A |
— |
18.8 |
ICG
Strategic Secondaries Fund II |
33.1 |
12.9 |
ICG
Strategic Equity Fund III |
72.3 |
28.2 |
ICG
Strategic Equity Fund IV |
38.8 |
91.3 |
ICG
Recovery Fund II |
34.3 |
58.4 |
LP
Secondaries |
47.4 |
— |
ICG
Senior Debt Partners II |
3.8 |
5.4 |
ICG
Senior Debt Partners III |
5.8 |
5.5 |
ICG
Senior Debt Partners IV |
7.3 |
15.3 |
Senior
Debt Partners V |
42.3 |
— |
ICG North
American Private Debt Fund |
27.5 |
30.4 |
ICG North
American Private Debt Fund II |
27.9 |
46.3 |
ICG North
American Credit Partners III |
38.1 |
— |
ICG-Longbow UK Real Estate Debt Investments V |
0.2 |
6.0 |
ICG-Longbow UK Real Estate Debt Investments VI |
13.9 |
6.0 |
ICG-Longbow Development Fund |
6.8 |
4.6 |
ICG
Living |
21.8 |
— |
ICG
Infrastructure Equity Fund I |
59.8 |
128.8 |
ICG
Private Markets Pooling - Sale and Leaseback |
35.9 |
22.7 |
ICG Sale & Leaseback II |
17.0 |
— |
|
1,107.1 |
948.7 |
27. Related party transactions
Subsidiaries
The Group is not deemed to be controlled or
jointly controlled by any party directly or through intermediaries.
The Group consists of the Parent Company, Intermediate Capital
Group plc, incorporated in the UK, and its subsidiaries listed in
note 28. All entities meeting the definition of a controlled entity
as set out in IFRS 10 are consolidated within the results of the
Group. All transactions between the Parent Company and its
subsidiary undertakings are classified as related party
transactions for the Parent Company financial statements and are
eliminated on consolidation. Significant transactions with
subsidiary undertakings relate to dividends received, the aggregate
amount received during the year is £386.6m (2022: £163.0m) and
recharge of costs to a subsidiary of £168.5m (2022: £166.7m)
Associates and joint ventures
An associate is an entity over which the Group
has significant influence, but not control, over the financial and
operating policy decisions of the entity. As the investments in
associates are held for venture capital purposes they are
designated at fair value through profit or loss. A joint venture is
an arrangement whereby the parties have joint control over the
arrangements, see note 30. Where the investment is held for venture
capital purposes they are designated as fair value through profit.
These entities are related parties and the significant transactions
with associates and joint ventures are as follows:
27. Related party transactions continued
|
2023 |
2022 |
|
£m |
£m |
Income statement |
|
|
Net
losses on investments |
(17.2) |
(15.8) |
|
(17.2) |
(15.8) |
|
2023 |
2022 |
|
£m |
£m |
Statement of financial position |
|
|
Trade and other
receivables |
66.8 |
119.5 |
Trade
and other payables |
(52.3) |
(60.4) |
|
14.5 |
59.1 |
Unconsolidated structured entities
The Group has determined that, where the Group
holds an investment, loan, fee receivable, guarantee or commitment
with an investment fund, carried interest partnership or CLO, this
represents an interest in a structured entity in accordance with
IFRS 12 Disclosure of Interest in Other Entities (see note 31). The
Group provides investment management services and receives
management fees (including performance-related fees) and dividend
income from these structured entities, which are related parties.
Amounts receivable and payable from these structured entities
arising in the normal course of business remain outstanding. At 31
March 2023, the Group’s interest in and exposure to unconsolidated
structured entities are as follows:
|
2023 |
2022 |
|
£m |
£m |
Income statement |
|
|
Management fees |
473.5 |
382.2 |
Performance fees |
19.4 |
55.4 |
Dividend income |
0.1 |
3.4 |
|
493.0 |
441.0 |
|
|
|
|
2023 |
2022 |
|
£m |
£m |
Statement of financial position |
|
|
Performance fees
receivable |
37.5 |
91.0 |
Trade and other
receivables |
781.9 |
680.6 |
Trade
and other payables |
(718.3) |
(621.1) |
|
101.1 |
150.5 |
Key management personnel
Key management personnel are defined as the
Executive Directors. The Executive Directors of the Group are Vijay
Bharadia, Benoît Durteste and Antje Hensel-Roth.
The compensation of key management personnel
during the year was as follows:
|
2023 |
2022 |
|
£m |
£m |
Short-term employee
benefits |
3.7 |
3.5 |
Post-employment benefits |
0.1 |
0.1 |
Other long-term benefits |
0.9 |
1.5 |
Share-based payment benefits |
7.0 |
6.9 |
|
11.7 |
12.0 |
Fees paid to Non-Executive Directors were as follows:
27. Related party transactions continued
|
2023 |
2022 |
|
£000 |
£000 |
Andrew Sykes |
290.5 |
132.3 |
Amy Schioldager |
125.0 |
121.6 |
Kathryn Purves |
134.5 |
113.8 |
Lord Davies of Abersoch |
— |
302.9 |
Matthew Lester |
116.5 |
101.1 |
Rosemary Leith |
113.9 |
101.1 |
Rusty Nelligan |
108.5 |
113.8 |
Stephen Welton |
90.5 |
88.8 |
Virginia Holmes |
120.5 |
113.8 |
William
Rucker |
63.9 |
— |
The remuneration of Directors and key executives and
Non-Executive Directors is determined by the Remuneration Committee
having regard to the performance of individuals and market
rates.
28. Subsidiaries
Accounting
policy
Investment in subsidiaries
The Group consists of the Parent Company, Intermediate Capital
Group plc, and its subsidiaries, described collectively herein as
‘ICG’ or the ‘Group’. Investments in subsidiaries in the Parent
Company statement of financial position are recorded at cost less
provision for impairments or at fair value through profit or
loss.
Critical judgement
A critical judgement for the Group is whether the Group controls an
investee or fund and is required to consolidate the investee or
fund into the results of the Group. Control is determined by the
Directors’ assessment of decision making authority, rights held by
other parties, remuneration and exposure to returns.
When assessing whether the Group controls any fund it manages (or
any entity associated with a fund) it is necessary to determine
whether the Group acts in the capacity of principal or agent for
the third-party investor. An agent is a party primarily engaged to
act on behalf and for the benefit of another party or parties,
whereas a principal is primarily engaged to act for its own
benefit.
A critical judgement when determining that the Group acts in the
capacity of principal or agent is the kick-out rights of the
third-party fund investors. We have reviewed these kick-out rights,
across each of the entities where the Group has an interest. Where
fund investors have substantive rights to remove the Group as the
investment manager it has been concluded that the Group is an agent
to the fund and thus the fund does not require consolidation into
the Group. We consider if the Group has significant influence over
these entities and, where we conclude it does, we recognise them as
associates. Where the conclusion is that the Group acts in the
capacity of principal the fund has been consolidated into the
Group’s results.
Where the Group has Trust entities in investment deals or fund
structures, a key judgement is whether the Trust is acting on
behalf of the Group or another third party. Where the Trust is
considered to act as an agent of the Group, the Trust and its
related subsidiaries have been consolidated into the Group.
As a fund manager ICG participates in carried interest partnerships
(CIPs), the participants of which are the Group, certain of the
Group’s employees and others connected to the underlying fund.
These vehicles have two purposes: 1) to facilitate payments of
carried interest from the fund to carried interest participants,
and 2) to facilitate individual co-investment into the funds. The
Directors have undertaken a control assessment of each CIP in
accordance with IFRS10 and have considered whether the CIP
participants were providing a service for the benefit of the Group.
In undertaking this assessment the Directors took account of the
following key considerations:
- the Group’s exposure to the
variable returns of the CIP is limited to the amounts allocated to
the Group (see page 201). Such allocations are typically 20% or
less of total returns realised by the CIP with the balance
attributable to other participants
- CIPs are used to facilitate
substantial co-investment by individuals in the underlying funds.
These individuals are exposed to the risk of personal financial
loss
- fund investors can, in certain
conditions, veto changes in the key persons managing the fund
The Directors have assessed that certain CIPs are controlled, and
they are included within the list of controlled structured entities
below. The Directors conclude that other CIPs are not controlled by
the Group. |
28. Subsidiaries continued
The Group consists of a Parent Company, Intermediate Capital Group
plc, incorporated in the UK, and a number of subsidiaries held
directly or indirectly by ICG plc, which operate and are
incorporated around the world. The subsidiary undertakings of the
Group are shown below. All are wholly owned, and the Group’s
holding is in the ordinary share class, except where stated. The
Companies Act 2006 requires disclosure of certain information about
the Group’s related undertakings. Related undertakings are
subsidiaries, joint ventures and associates.
The registered office of all related
undertakings at 31 March 2023 was Procession House, 55 Ludgate
Hill, New Bridge Street, London EC4M 7JW, unless otherwise
stated.
The financial year end of all related
undertakings is 31 March, unless otherwise stated.
All entities are consolidated as at 31 March
Directly held subsidiaries
Name |
Ref |
Country of incorporation |
Principal activity |
Share class |
% Voting rights held |
ICG Carbon Funding Limited |
|
England & Wales |
Investment company |
Ordinary shares |
100 % |
ICG Debt Advisors (Cayman)
Ltd |
4 |
Cayman Islands |
Advisory company |
Ordinary shares |
100 % |
ICG FMC Limited |
|
England & Wales |
Holding company |
Ordinary shares |
100 % |
ICG Global Investment UK
Limited |
|
England & Wales |
Holding company |
Ordinary shares |
100 % |
ICG IC Holdco Limited |
|
England & Wales |
Holding company |
Ordinary shares |
100 % |
ICG Japan (Funding 2)
Limited |
|
England & Wales |
Holding company |
Ordinary shares |
100 % |
ICG Longbow Development
(Brighton) Limited |
|
England & Wales |
Holding company |
Ordinary shares |
100 % |
ICG Longbow Richmond
Limited |
|
England & Wales |
Holding company |
Ordinary shares |
100 % |
ICG Longbow Senior Debt I GP
Limited |
|
England & Wales |
General partner |
Ordinary shares |
100 % |
ICG Re Holding (Germany)
GmbH |
11 |
Germany |
Special purpose vehicle |
Ordinary shares |
100 % |
ICG Watch Jersey GP
Limited |
19 |
Jersey |
General partner |
Ordinary shares |
100 % |
ICG-Longbow BTR Limited |
|
England & Wales |
Holding company |
Ordinary shares |
100 % |
Intermediate Capital Group
Espana SL |
33 |
Spain |
Advisory company |
Ordinary shares |
100 % |
Intermediate Capital
Investments Limited |
|
England & Wales |
Investment company |
Ordinary shares |
100 % |
Intermediate Capital Nominees
Limited |
|
England & Wales |
Nominee company |
Ordinary shares |
100 % |
Intermediate Investments
Jersey Limited |
19 |
Jersey |
Investment company |
Ordinary shares |
100 % |
LREC
Partners Investments No. 2 Limited |
|
England
& Wales |
Investment company |
Ordinary shares |
54.8 % |
28. Subsidiaries continued
Indirectly held subsidiaries
Name |
Ref |
Country of incorporation |
Principal activity |
Share class |
% Voting rights held |
Avanton Richmond Developments Limited |
7 |
England and Wales |
Special purpose vehicle |
Ordinary shares |
70 % |
ICG - Longbow Fund V GP S.à
r.l. |
26 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG (DIFC) Limited |
35 |
United Arab Emirates |
Service company |
Ordinary shares |
100 % |
ICG Alternative Credit
(Cayman) GP Limited |
5 |
Cayman Islands |
General Partner |
Ordinary shares |
100 % |
ICG Alternative Credit
(Jersey) GP Limited |
19 |
Jersey |
General Partner |
Ordinary shares |
100 % |
ICG Alternative Credit
(Luxembourg) GP S.A. |
25 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Alternative Credit
LLC |
38 |
United States |
Advisory company |
Ordinary shares |
100 % |
ICG Alternative Credit
Warehouse Fund I GP, |
38 |
United States |
General Partner |
Ordinary shares |
100 % |
ICG Alternative Investment
(Netherlands) B.V. |
30 |
Netherlands |
Advisory company |
Ordinary shares |
100 % |
ICG Alternative Investment
Limited |
|
England and Wales |
Advisory company |
Ordinary shares |
100 % |
ICG Asia Pacific Fund III GP
Limited |
19 |
Jersey |
General Partner |
Ordinary shares |
100 % |
ICG Asia Pacific Fund III GP
LP |
19 |
Jersey |
Limited Partner |
N/A |
— % |
ICG Asia Pacific Fund IV GP LP
SCSp |
27 |
Luxembourg |
Limited Partner |
N/A |
— % |
ICG Asia Pacific Fund IV GP
S.à r.l. |
27 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Augusta Associates
LLC |
37 |
United States |
General Partner |
Ordinary shares |
100 % |
ICG Augusta GP LP |
5 |
Cayman Islands |
Limited Partner |
N/A |
— % |
ICG Australian Senior Debt GP
Limited |
5 |
Cayman Islands |
General Partner |
Ordinary shares |
100 % |
ICG Centre Street Partnership
GP Limited |
18 |
Jersey |
General Partner |
Ordinary shares |
100 % |
ICG Debt Administration
LLC |
38 |
United States |
Service company |
Ordinary shares |
100 % |
ICG Debt Advisors LLC –
Holdings Series |
38 |
United States |
Investment company |
Ordinary shares |
100 % |
ICG Debt Advisors LLC -
Manager Series |
38 |
United States |
Advisory company |
Ordinary shares |
100 % |
ICG EFV MLP GP LIMITED |
|
England and Wales |
General Partner |
Ordinary shares |
100 % |
ICG EFV MLP Limited |
18 |
Jersey |
General Partner |
Ordinary shares |
100 % |
ICG Employee Benefit Trust
2015 |
12 |
Guernsey |
N/A |
Ordinary shares |
100 % |
ICG Enterprise Carry GP
Limited |
19 |
Jersey |
General Partner |
Ordinary shares |
100 % |
ICG Enterprise Co-Investment
GP Limited |
|
England and Wales |
General Partner |
Ordinary shares |
100 % |
ICG Europe Fund V GP
Limited |
18 |
Jersey |
General Partner |
Ordinary shares |
100 % |
ICG Europe Fund V GP LP |
18 |
Jersey |
Limited Partner |
N/A |
— |
ICG Europe Fund VI GP
Limited |
18 |
Jersey |
General Partner |
Ordinary shares |
100 % |
ICG Europe Fund VI GP Limited
Partnership |
18 |
Jersey |
Limited Partner |
N/A |
— |
ICG Europe Fund VI Lux GP S.à
r.l. |
20 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Europe Fund VII GP LP
SCSp |
28 |
Luxembourg |
Limited Partner |
N/A |
— |
ICG Europe Fund VII GP S.à
r.l. |
28 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Europe Fund VIII GP LP
SCSp |
29 |
Luxembourg |
Limited Partner |
N/A |
— |
ICG Europe Fund VIII GP S.à
r.l. |
29 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Europe Mid-Market Fund GP
LP SCSp |
28 |
Luxembourg |
Limited Partner |
N/A |
— % |
ICG Europe Mid-Market Fund GP
S.à r.l. |
28 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Europe Mid-Market Fund II
GP S.à r.l. |
29 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Europe S.à r.l. |
23 |
Luxembourg |
Advisory company |
Ordinary shares |
100 % |
ICG European Credit Mandate GP
LP SCSp |
28 |
Luxembourg |
Limited Partner |
N/A |
— |
ICG European Credit Mandate GP
S.à r.l. |
28 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG European Fund 2006 B GP
Limited |
19 |
Jersey |
General Partner |
Ordinary shares |
100 % |
ICG EXCELSIOR GP LP SCSp |
29 |
Luxembourg |
Limited Partner |
N/A |
— % |
ICG Excelsior GP S.à r.l. |
29 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Executive Financing
Limited |
19 |
Jersey |
Service company |
Ordinary shares |
100 % |
ICG Fund Advisors LLC |
38 |
United States |
Advisory company |
Ordinary shares |
100 % |
ICG Global Investment Jersey
Limited |
18 |
Jersey |
Investment company |
Ordinary shares |
100 % |
ICG Global Nominee Jersey 2
Limited |
18 |
Jersey |
Special purpose vehicle |
Ordinary shares |
100 % |
ICG Global Nominee Jersey
Limited |
18 |
Jersey |
Special purpose vehicle |
Ordinary shares |
100 % |
ICG Infrastructure Equity Fund
I GP LP SCSp |
29 |
Luxembourg |
Limited Partner |
N/A |
— |
ICG Infrastructure Equity Fund
I GP S.a.r.l |
29 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Infrastructure Fund II GP
S.à r.l |
29 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Japan Cayman Performance
GP Limited |
5 |
Cayman Islands |
General Partner |
Ordinary shares |
100 % |
ICG Japan KK |
16 |
Japan |
Advisory company |
Ordinary shares |
100 % |
ICG Life Sciences GP LP
SCSp |
27 |
Luxembourg |
Limited Partner |
N/A |
— % |
ICG Life Sciences GP S.à
r.l. |
27 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Living GP S.a r.l. |
22 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Longbow Development Debt
Limited |
|
England and Wales |
Investment company |
Ordinary shares |
100 % |
ICG LP Secondaries Associates
I LLC |
37 |
United States |
General Partner |
Ordinary shares |
100 % |
ICG LP Secondaries Fund
Associates I S.a. r.l. |
29 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG LP Secondaries I GP LP
SCSp |
29 |
Luxembourg |
Limited Partner |
N/A |
— % |
ICG MF 2003 No. 3 EGP 1
Limited |
|
England and Wales |
General Partner |
Ordinary shares |
100 % |
ICG MF 2003 No.1 EGP 1
Limited |
|
England and Wales |
General Partner |
Ordinary shares |
100 % |
ICG MF 2003 No.1 EGP 2
Limited |
|
England and Wales |
General Partner |
Ordinary shares |
100 % |
ICG MF 2003 No.3 EGP 2
Limited |
|
England and Wales |
General Partner |
Ordinary shares |
100 % |
ICG NA Debt Co-Invest
Limited |
|
England and Wales |
Investment company |
Ordinary shares |
100 % |
ICG Nordic AB |
34 |
Sweden |
Advisory company |
Ordinary shares |
100 % |
ICG North America Associates
II LLC |
38 |
United States |
General Partner |
Ordinary shares |
100 % |
ICG North America Associates
III LLC |
38 |
United States |
General Partner |
Ordinary shares |
100 % |
ICG North America Associates
LLC |
38 |
United States |
General Partner |
Ordinary shares |
100 % |
ICG North American Private
Debt (Offshore) GP Limited Partnership |
5 |
Cayman Islands |
Limited Partner |
N/A |
— % |
ICG North American Private
Debt Fund GP LP |
38 |
United States |
Limited Partner |
N/A |
— % |
ICG North American Private
Debt II (Offshore) GP LP |
5 |
Cayman Islands |
Limited Partner |
N/A |
— % |
ICG North American Private
Debt II GP LP |
38 |
United States |
Limited Partner |
N/A |
— % |
ICG North American Private
Equity I GP LP |
36 |
United States |
Limited Partner |
N/A |
— % |
ICG Private Credit GP S.à
r.l. |
28 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Private Markets General
Partner SCSp |
27 |
Luxembourg |
General Partner |
N/A |
— % |
ICG Private Markets GP S.à
r.l. |
27 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG RE AUSTRALIA GROUP PTY
LTD |
3 |
Australia |
Service company |
Ordinary shares |
100 % |
ICG RE CAPITAL PARTNERS
AUSTRALIA PTY LTD |
3 |
Australia |
Advisory company |
Ordinary shares |
100 % |
ICG RE CORPORATE AUSTRALIA PTY
LTD |
3 |
Australia |
Service company |
Ordinary shares |
100 % |
ICG RE FUNDS MANAGEMENT
AUSTRALIA PTY LTD |
3 |
Australia |
Service company |
Ordinary shares |
100 % |
ICG Real Estate Debt VI GP LP
SCSp |
22 |
Luxembourg |
Limited Partner |
N/A |
— % |
ICG Real Estate Debt VI GP S.à
r.l. |
22 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG REO GP S.à r.l. |
22 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Real Estate Senior Debt V
GP S.à r.l. |
27 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Recovery Fund 2008 B GP
Limited |
19 |
Jersey |
General Partner |
Ordinary shares |
100 % |
ICG Recovery Fund II GP LP
SCSp |
29 |
Luxembourg |
Limited Partner |
N/A |
— % |
ICG Recovery Fund II GP S.à
r.l. |
29 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG SDP LG |
28 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Senior Debt Partners |
28 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Senior Debt Partners GP
S.à r.l. |
21 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Senior Debt Partners
Performance GP Limited |
19 |
Jersey |
General Partner |
Ordinary shares |
100 % |
ICG Senior Debt Partners UK GP
Limited |
|
England and Wales |
General Partner |
Ordinary shares |
100 % |
ICG SLB GP II S.À R.L |
22 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Strategic Equity Advisors
LLC |
38 |
United States |
Advisory company |
Ordinary shares |
100 % |
ICG Strategic Equity
Associates II LLC |
37 |
United States |
General Partner |
Ordinary shares |
100 % |
ICG Strategic Equity
Associates III LLC |
37 |
United States |
General Partner |
Ordinary shares |
100 % |
ICG STRATEGIC EQUITY
ASSOCIATES IV LLC |
37 |
United States |
General Partner |
Ordinary shares |
100 % |
ICG Strategic Equity
Associates IV S.à r.l |
29 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Strategic Equity III
(Offshore) GP LP |
5 |
Cayman Islands |
Limited Partner |
N/A |
— |
ICG Strategic Equity III GP
LP |
37 |
United States |
Limited Partner |
N/A |
— |
ICG Strategic Equity IV GP
LP |
37 |
United States |
Limited Partner |
N/A |
— |
ICG Strategic Equity IV GP LP
SCSp |
29 |
Luxembourg |
Limited Partner |
N/A |
— |
ICG Strategic Equity Side Car
(Onshore) GP LP |
37 |
United States |
Limited Partner |
N/A |
— |
ICG Strategic Equity Side Car
GP LP |
5 |
Cayman Islands |
Limited Partner |
N/A |
— |
ICG Strategic Equity Side Car
II (Onshore) GP LP |
37 |
United States |
Limited Partner |
N/A |
— |
ICG Strategic Equity Side Car
II GP LP |
5 |
Cayman Islands |
Limited Partner |
N/A |
— |
ICG Strategic Secondaries
Carbon (Offshore) GP LP |
5 |
Cayman Islands |
Limited Partner |
N/A |
— % |
ICG Strategic Secondaries
Carbon Associates LLC |
38 |
United States |
General Partner |
Ordinary shares |
100 % |
ICG Strategic Secondaries II
(Offshore) GP LP |
5 |
Cayman Islands |
Limited Partner |
N/A |
— % |
ICG Strategic Secondaries II
GP LP |
37 |
United States |
Limited Partner |
N/A |
— % |
ICG Structured Special
Opportunities GP Limited |
5 |
Cayman Islands |
General Partner |
Ordinary shares |
100 % |
ICG Total Credit (Global) GP,
S.à r.l. |
24 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG US Senior Loan Fund GP
Ltd |
5 |
Cayman Islands |
General Partner |
Ordinary shares |
100 % |
ICG Velocity Co-Investor
(Offshore) GP LP |
5 |
Cayman Islands |
Limited Partner |
N/A |
— % |
ICG Velocity Co-Investor
Associates LLC |
37 |
United States |
General Partner |
Ordinary shares |
100 % |
ICG Velocity Co-Investor GP
LP |
37 |
United States |
Limited Partner |
N/A |
— % |
ICG Velocity GP LP |
37 |
United States |
Limited Partner |
N/A |
— % |
ICG-Longbow B Investments
L.P. |
|
England and Wales |
Investment company |
N/A |
50 % |
ICG-Longbow Development GP
LLP |
|
England and Wales |
General Partner |
N/A |
— % |
ICG-Longbow Investment 3
LLP |
|
England and Wales |
Special purpose vehicle |
N/A |
— % |
ICG-Longbow IV GP S.à
r.l. |
20 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG-LONGBOW SENIOR GP LLP |
|
England and Wales |
General Partner |
N/A |
— % |
Intermediate Capital Asia
Pacific 2008 GP Limited |
19 |
Jersey |
General Partner |
Ordinary shares |
100 % |
Intermediate Capital Asia
Pacific Limited |
13 |
Hong Kong |
Advisory company |
Ordinary shares |
100 % |
Intermediate Capital Asia
Pacific Mezzanine 2005 GP Limited |
19 |
Jersey |
General Partner |
Ordinary shares |
100 % |
Intermediate Capital Asia
Pacific Mezzanine Opportunities 2005 GP Limited |
19 |
Jersey |
General Partner |
Ordinary shares |
100 % |
Intermediate Capital Australia
PTY Limited |
1 |
Australia |
Advisory company |
Ordinary shares |
100 % |
Intermediate Capital GP 2003
Limited |
19 |
Jersey |
General Partner |
Ordinary shares |
100 % |
Intermediate Capital GP 2003
No.1 Limited |
19 |
Jersey |
General Partner |
Ordinary shares |
100 % |
Intermediate Capital Group
(Italy) S.r.l |
15 |
Italy |
Advisory company |
Ordinary shares |
100 % |
Intermediate Capital Group
(Singapore) Pte. Limited |
32 |
Singapore |
Advisory company |
Ordinary shares |
100 % |
Intermediate Capital Group
Benelux B.V. |
30 |
Netherlands |
Advisory company |
Ordinary shares |
100 % |
Intermediate Capital Group
Beratungsgesellschaft GmbH |
11 |
Germany |
Advisory company |
Ordinary shares |
100 % |
Intermediate Capital Group
Dienstleistungsgesellschaft mbH |
11 |
Germany |
Service company |
Ordinary shares |
100 % |
Intermediate Capital Group
Inc. |
38 |
United States |
Advisory company |
Ordinary shares |
100 % |
Intermediate Capital Group
Polska Sp. z.o.o |
31 |
Poland |
Service company |
Ordinary shares |
100 % |
Intermediate Capital Group
SAS |
9 |
France |
Advisory company |
Ordinary shares |
100 % |
Intermediate Capital Inc |
38 |
United States |
Dormant |
Ordinary shares |
100 % |
Intermediate Capital Managers
(Australia) PTY Limited |
2 |
Australia |
Advisory company |
Ordinary shares |
100 % |
Intermediate Capital Managers
Limited |
|
England and Wales |
Advisory company |
Ordinary shares |
100 % |
Longbow Real Estate Capital
LLP |
|
England and Wales |
Advisory company |
N/A |
— % |
Wise Living Homes Limited |
6 |
England and Wales |
Special purpose vehicle |
Ordinary shares |
83 % |
Wise Limited Amber Langley
Mill Limited |
6 |
England and Wales |
Special purpose vehicle |
Ordinary shares |
83 % |
ICG Strategic Equity GP V
Sarl |
29 |
Luxembourg |
General Partner |
Ordinary shares |
100 % |
ICG Life Sciences Debt
Limited |
19 |
Jersey |
Special purpose vehicle |
Ordinary shares |
100 % |
ICG Life Sciences Feeder
SCSp |
27 |
Luxembourg |
Special purpose vehicle |
N/A |
— % |
ICG Life Sciences SCSp |
27 |
Luxembourg |
Limited Partner |
N/A |
— % |
ICG North American Private
Equity Associates I LLC |
36 |
United States |
General Partner |
Ordinary shares |
100 % |
ICG North American Private
Equity Debt Limited |
19 |
Jersey |
Special purpose vehicle |
Ordinary shares |
100 % |
ICG North American Private
Equity Fund I LP |
36 |
United States |
Special purpose vehicle |
N/A |
— % |
Seaway Buyer, LLC |
38 |
United States |
Special purpose vehicle |
Ordinary shares |
73 % |
Seaway Parent, LLC |
38 |
United States |
Special purpose vehicle |
Ordinary shares |
73 % |
Seaway Plastics Engineering,
LLC |
38 |
United States |
Special purpose vehicle |
Ordinary shares |
73 % |
Seaway Plastics Holdings,
LLC |
38 |
United States |
Special purpose vehicle |
Ordinary shares |
73 % |
Seaway Topco, LP |
38 |
United States |
Special purpose vehicle |
N/A |
— % |
Seaway, Guarantor, LLC |
38 |
United States |
Special purpose vehicle |
Ordinary shares |
73 % |
Sertic Deal Co S.à.r.l. |
22 |
Luxembourg |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Mezz Co S.à.r.l. |
22 |
Luxembourg |
Special purpose vehicle |
Ordinary shares |
100 % |
Wright Engineered Plastics
LLC |
38 |
United States |
Portfolio Company |
Ordinary shares |
73 % |
Wright Plastics Holdings,
Inc. |
38 |
United States |
Portfolio Company |
Ordinary shares |
73 % |
ICG REO (EUR) SCSp |
22 |
Luxembourg |
Special purpose vehicle |
N/A |
— % |
AG Thames Investment
Limited |
8 |
England and Wales |
Special purpose vehicle |
Ordinary shares |
100 % |
Chessington Propco
Limited |
17 |
Jersey |
Special purpose vehicle |
Ordinary shares |
100 % |
Crayford Holdco Limited |
17 |
Jersey |
Special purpose vehicle |
Ordinary shares |
100 % |
Crayford Limited |
17 |
Jersey |
Special purpose vehicle |
Ordinary shares |
100 % |
Harlow Holdco Limited |
17 |
Jersey |
Special purpose vehicle |
Ordinary shares |
100 % |
Harlow Propco Limited |
17 |
Jersey |
Special purpose vehicle |
Ordinary shares |
100 % |
ICG Metropolitan Co-invest
SCSp |
22 |
Luxembourg |
Special purpose vehicle |
N/A |
— % |
ICG Metropolitan Last Mile
Management Limited |
17 |
Jersey |
Special purpose vehicle |
Ordinary shares |
100 % |
ICG Real Estate E Debt
Limited |
19 |
Jersey |
Special purpose vehicle |
Ordinary shares |
100 % |
Metropolitan Investment S.à
r.l. |
22 |
Luxembourg |
Special purpose vehicle |
Ordinary shares |
100 % |
Metropolitan SCSp |
22 |
Luxembourg |
Special purpose vehicle |
N/A |
— % |
MME Group International
IC-DISC, Inc. |
38 |
United States |
Portfolio Company |
Ordinary shares |
73 % |
MME Group LLC |
38 |
United States |
Portfolio Company |
Ordinary shares |
73 % |
New Orbit Holdco Sarl |
22 |
Luxembourg |
Special purpose vehicle |
Ordinary shares |
80 % |
New Orbit JVCo Sarl |
22 |
Luxembourg |
Special purpose vehicle |
Ordinary shares |
80 % |
New Orbit PropCo 1 Sarl |
22 |
Luxembourg |
Special purpose vehicle |
Ordinary shares |
80 % |
New Orbit PropCo 2 Sarl |
22 |
Luxembourg |
Special purpose vehicle |
Ordinary shares |
80 % |
Sertic Agen SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Alfortville SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Auray SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Cestas SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Coignieres SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Corbas SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Croissy SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Démouville SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Drancy SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Fleury SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic French Mid Co 1
SNC |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic French Mid Co II
SNC |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic French Mid Co III
SNC |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic La Chapelle SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Lanester SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Le Meux SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Le Rheu SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Lisses SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Osny SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Perpignan SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Pontault Combault
SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Raismes SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Saint Laurent SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Saint Pierre SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Saint-Mitre SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Scherwiller SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Valenton SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
Sertic Vemars SCI |
10 |
France |
Special purpose vehicle |
Ordinary shares |
100 % |
ICG Seed Asset Founder LP
Limited |
19 |
Jersey |
Special purpose vehicle |
Ordinary shares |
100 % |
28. Subsidiaries continued
|
Registered offices |
1 |
Level 18, 88 Phillip Street, Sydney, NSW 2000, Australia |
2 |
Level 31, 88 Phillip Street,
Sydney, NSW 2000, Australia |
3 |
Level 9, 88 Phillip Street,
Sydney, NSW 2000, Australia |
4 |
75 Fort Street, Clifton House,
c/o Estera Trust (Cayman) Limited, PO Box 1350, Grand Cayman,
KY1-1108, Cayman Islands |
5 |
PO Box 309, Ugland House, C/o
Maples Corporate Services Limited, Grand Cayman, KY1-1104, Cayman
Islands |
6 |
17 Regan Way, Chetwynd
Business Park, Chilwell, Nottingham, NG9 6RZ, England &
Wales |
7 |
Ground Floor Office South, 51
Welbeck St, London, W1G 9HL, England, United Kingdom |
8 |
6th Floor 140 London Wall,
London, England, EC2Y 5DN |
9 |
1 rue de la Paix, Paris,
75002, France |
10 |
36 rue Scheffer 75116 Paris 16
France |
11 |
12th Floor, An der Welle 5,
Frankfurt, 60322, Germany |
12 |
c/o Zedra Trust Company
(Guernsey) Limited, 3rd Floor, Cambridge House, Le Truchot, St
Peter Port, GY1 1WD, Guernsey |
13 |
Suites 1301-02, 13/F, AIA
Central, 1 Connaught Road Central, Hong Kong |
14 |
6th Floor South Bank House,
Barrow Street, Dublin 4, Ireland |
15 |
Corso Giacomo Matteotti 3,
Milan, 20121, Italy |
16 |
Level 23, Otemachi Nomura
Building, 2-1-1 Otemachi, Chiyoda-ku, Tokyo, 100-0004, Japan |
17 |
12 Castle Street, St. Helier,
JE2 3RT, Jersey |
18 |
IFC 1, The Esplanade, St.
Helier, JE1 4BP, Jersey |
19 |
Ogier House,44 The Esplanade, St.
Helier, JE4 9WG, Jersey |
20 |
12E, rue Guillaume Kroll, L -
1882 Luxembourg |
21 |
2-4 Rue Eugène Ruppert, Grand
Duchy of Luxembourg, L-2453, Luxembourg |
22 |
3, rue Gabriel Lippmann, L -
5365 Munsbach, Luxembourg |
23 |
32-36, boulevard d'Avranches L
- 1160 Luxembourg, 1160, Luxembourg |
24 |
49 Avenue John F. Kennedy,
Luxembourg, L-1855, Luxembourg |
25 |
5 Allée Scheffer, Luxembourg,
L-2520, Luxembourg |
26 |
5, Heienhaff, L - 1736
Senningerberg, Luxembourg |
27 |
6, rue Eugene Ruppert,
Luxembourg, L-2453, Luxembourg |
28 |
60, Avenue J.F. Kennedy,
Luxembourg, L-1855, Luxembourg |
29 |
6H Route de Trèves,
Senningerberg, L-2633, Luxembourg |
30 |
Paulus Potterstraat 20, 2hg.,
Amsterdam, 1071 DA, Netherlands |
31 |
Spark B, Aleja Solidarności
171, Warsaw, 00-877, Poland |
32 |
#21-01, 20 Collyer Quay,
049319, Singapore |
33 |
Serrano 30-3º, 28001 Madrid,
Spain |
34 |
David Bagares Gata 3, 111 38
Stockholm |
35 |
Index Tower, Floor 4, Unit
404, Dubai International Financial Centre, Dubai, United Arab
Emirates |
36 |
c/o Intertrust Corporate
Services Delaware LTD, Suite 210, 200 Bellevue Parkway, Wilmington,
DE, 19809, United States |
37 |
c/o Maples Fiduciary Services
(Delaware) Inc., Suite 302, 4001 Kennett Pike, Wilmington, DE,
19807, United States |
38 |
c/o The Corporation Trust
Company, 1209 Orange Street, Wilmington, DE, 19801, United
States |
28. Subsidiaries continued
The table below shows details of structured entities that the Group
is deemed to control:
Name of subsidiary |
Country of incorporation |
|
ICG Newground RE Finance Trust 1 |
Australia |
100% |
ICG US CLO 2014-1, Ltd. |
Cayman Islands |
50% |
ICG US CLO 2014-2, Ltd. |
Cayman Islands |
72% |
ICG US CLO 2014-3, Ltd. |
Cayman Islands |
51% |
ICG US CLO 2015-1, Ltd. |
Cayman Islands |
50% |
ICG US CLO 2015-2R, Ltd. |
Cayman Islands |
83% |
ICG US CLO 2016-1, Ltd. |
Cayman Islands |
63% |
ICG US CLO 2017-1, Ltd. |
Cayman Islands |
60% |
ICG US CLO 2020-1, Ltd. |
Cayman Islands |
52% |
ICG US Senior Loan Fund |
Cayman Islands |
100% |
ICG Euro CLO 2021-1 DAC |
Ireland |
67% |
ICG Euro CLO 2023-1 DAC |
Ireland |
100% |
ICG High Yield Bond Fund |
Ireland |
100% |
St. Paul's CLO II DAC |
Ireland |
85% |
St. Paul's CLO III-R DAC |
Ireland |
62% |
St. Paul's CLO VI DAC |
Ireland |
53% |
St. Paul's CLO VIII DAC |
Ireland |
53% |
St. Paul's CLO XI DAC |
Ireland |
57% |
ICG Enterprise Carry (1)
LP |
Jersey |
100% |
ICG Enterprise Carry (2)
LP |
Jersey |
50% |
ICG
Total Credit (Global) SCA |
Luxembourg |
100% |
The structured entities controlled by the Group include
£5,160.8m (2022: £5,057.2m) of assets and £5,109.2m (2022:
£4,992.8m) of liabilities within 21 funds listed above. These
assets are restricted in their use to being the sole means by which
the related fund liabilities can be settled. All other assets can
be accessed or used to settle the other liabilities of the Group
without significant restrictions.
The Group has not provided contractual or
non-contractual financial or other support to a consolidated
structured entity during the period. It is not the current
intention to provide such support, including the intention to
assist the structured entity in obtaining financial support
Subsidiary audit exemption
For the period ended 31 March 2023, the
following companies were entitled to exemption from audit under
section 479A of the Companies Act 2006 relating to subsidiary
companies. The member(s)1 of the following companies
have not required them to obtain an audit of their financial
statements for the period ended 31 March 2023.
Company |
Registered
number |
Member(s) |
ICG FMC Limited |
7266173 |
Intermediate Capital Group
plc |
ICG Global Investment UK
Limited |
7647419 |
Intermediate Capital Group
plc |
ICG Japan (Funding 2)
Limited |
9125779 |
Intermediate Capital Group
plc |
ICG Longbow Development
(Brighton) Limited |
8802752 |
Intermediate Capital Group
plc |
ICG Longbow Richmond
Limited |
11210259 |
Intermediate Capital Group
plc |
ICG Longbow BTR Limited |
11177993 |
Intermediate Capital Group
plc |
ICG Longbow Senior Debt I GP
Limited |
2276839 |
Intermediate Capital Group
plc |
Intermediate Capital
Investments Limited |
2327070 |
Intermediate Capital Group
plc |
LREC Partners Investments No.
2 Limited |
7428335 |
Intermediate Capital Group
plc |
ICG Longbow Development Debt
Limited |
9907841 |
ICG-Longbow Development GP
LLP |
Longbow Real Estate Capital
LLP |
OC328457 |
Intermediate Capital Group
plc, ICG FMC Limited |
ICG IC Holdco Limited |
14542130 |
Intermediate Capital Group
plc |
ICG NA Debt Co-invest
Limited |
10091367 |
ICG Carbon Funding
Limited |
ICG-Longbow Development GP
LLP |
OC396833 |
Intermediate Capital Group
plc, ICG FMC Limited |
ICG-Longbow Investment 3
LLP |
OC395389 |
ICG FMC Limited, Intermediate
Capital Managers Limited |
ICG-Longbow Senior GP LLP |
OC427634 |
Intermediate Capital Group
plc, ICG FMC Limited |
1 Shareholders or Partners, as appropriate
29. Disposal groups held for sale and discontinued
operations
Accounting policy
Non-current financial assets held for sale and disposal
groups
The Group may make an investment and hold the asset on its balance
sheet prior to it being transferred into a fund or sold to
third-party investors. The assets are expected to be held for a
period for up to a year, during which the asset will be classified
as held for sale. Where the investment is held through a controlled
investee the investee entity is classified as a disposal group held
for sale.
The conditions for disposal groups held for sale are regarded as
met only when the asset is available for immediate sale, the
Directors are committed to the sale, and the sale is expected to be
completed within one year from the date of classification.
Disposal groups held for sale are recognised at the lower of fair
value less cost to sell and their carrying amount as required by
IFRS 5 Non-Current Assets Held for Sale and Discontinued
Operations, except where the asset is a financial instrument or
investment property. The measurement of these assets is determined
by IFRS 9 Financial Instruments and IAS 40 Investment Property
respectively. The Group’s measurement of these assets is detailed
in note 5.
The Group holds interests in various disposal groups held for sale
assets (“Warehouse Funds”), of which some have subsidiaries which
are expected to be sold. These subsidiaries are therefore assessed
as discontinued operations. |
Financial year ended 31 March 2023
During the year the Group has acquired interests in disposal groups
held for sale assets and discontinued operations. Other than as
described below, all interests have been acquired at fair value and
therefore no loss or gain has been recognised on acquisition.
Management have assessed that it is highly probably that all
investments reported within disposal groups held for sale and
discontinued operations will be realised within 12 months.
During the year, one of the Group’s Warehouse Funds, the US
Mid-Market (“USMM”) Warehouse Fund, ceased to control its
subsidiary Ambient Enterprises LLC (“Ambient” – formerly Gil-bar
Parent LLC) and subsequently retained a financial asset in respect
of its investment in Ambient. The Group recognised a profit of
£3.5m relating to Ambient over the period of control. Ambient was
deemed a discontinued operation until the USMM Warehouse Fund
ceased control.
As part of the cessation of control, the USMM Warehouse Fund has
valued its investment in Ambient in accordance with IFRS 9,
applying IPEV guidelines, and this has resulted in the Group
recognising a post-tax gain of £64m, comprising £3.5m gain on
disposal and £60.5m net fair value gain, which is recorded in the
Consolidated entities segments of our Consolidated income
statement, within ‘Profit after tax on discontinued operations’
(see note 4).
In the next 12 months, Management intends to sell the Group’s
interest in the USMM Warehouse Fund to third-party investors
investing into the fund. The Group has a debt interest in the USMM
Warehouse Fund and expects to sell its interest in the fund at cost
plus an interest charge, where cost represents the original cost of
the USMM Warehouse Funds’ investments. As a result, the Group
expects to receive less than the current fair value of Ambient
recognised in the USMM Warehouse Fund and consequently, under APM,
the Group has not recognised the fair value gain reported under
UK-adopted IAS. This is therefore not included within the Group’s
Reportable segment (see note 4). |
The assets and liabilities of the discontinued operations and
disposal groups held for sale together with their contribution to
the Group’s profit after tax are as follows:
29. Disposal groups held for sale and discontinued operations
continued
The non-current assets and liabilities of the disposal groups held
for sale are as follows:
|
2023 |
2022 |
|
Discontinued Operations |
Disposal Groups |
Total |
Discontinued Operations |
Disposal Groups |
Total |
Group |
£m |
£m |
£m |
£m |
£m |
£m |
Non-current assets |
|
|
|
|
|
|
Intangible assets |
92.4 |
— |
92.4 |
101.0 |
— |
101.0 |
Property, plant and
equipment |
7.2 |
— |
7.2 |
0.3 |
— |
0.3 |
Investment property |
284.0 |
— |
284.0 |
— |
59.3 |
59.3 |
Financial assets at fair
value |
0.9 |
162.3 |
163.2 |
— |
36.9 |
36.9 |
Other
debtors |
0.3 |
— |
0.3 |
— |
— |
— |
|
384.8 |
162.3 |
547.1 |
101.3 |
96.2 |
197.5 |
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
Inventory |
12.3 |
— |
12.3 |
0.8 |
— |
0.8 |
Cash |
5.5 |
— |
5.5 |
5.4 |
5.7 |
11.1 |
Trade and other
receivables |
12.2 |
— |
12.2 |
47.1 |
— |
47.1 |
Other
debtors |
1.2 |
— |
1.2 |
0.2 |
— |
0.2 |
|
31.2 |
— |
31.2 |
53.5 |
5.7 |
59.2 |
|
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
|
Financial liabilities at
amortised |
174.8 |
— |
174.8 |
65.8 |
5.0 |
70.8 |
Deferred tax liability |
— |
14.0 |
14.0 |
— |
— |
— |
Other
financial liabilities |
3.0 |
— |
3.0 |
(9.7) |
— |
(9.7) |
|
177.8 |
14.0 |
191.8 |
56.1 |
5.0 |
61.1 |
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Trade and other payables |
6.1 |
— |
6.1 |
35.8 |
0.2 |
36.0 |
Other
financial liabilities |
6.1 |
— |
6.1 |
— |
0.1 |
0.1 |
|
12.2 |
— |
12.2 |
35.8 |
0.3 |
36.1 |
|
|
|
|
|
|
|
Statement of
comprehensive |
|
|
|
|
|
|
Sales |
69.2 |
— |
69.2 |
122.8 |
— |
122.8 |
Cost of sales |
(55.6) |
— |
(55.6) |
(88.2) |
— |
(88.2) |
Gross
profit |
13.6 |
— |
13.6 |
34.6 |
— |
34.6 |
Net gains on investments |
78.0 |
— |
78.0 |
— |
— |
— |
Operating expenses |
(8.6) |
— |
(8.6) |
(22.9) |
— |
(22.9) |
Depreciation and
amortisation |
— |
— |
— |
(6.6) |
— |
(6.6) |
Other expenses |
(12.2) |
— |
(12.2) |
(10.5) |
— |
(10.5) |
Transaction costs |
— |
— |
— |
(3.8) |
— |
(3.8) |
Gain /
(loss) before tax |
70.8 |
— |
70.8 |
(9.2) |
— |
(9.2) |
Tax expense |
(14.0) |
— |
(14.0) |
— |
— |
— |
Gain / (loss) after tax |
56.8 |
— |
56.8 |
(9.2) |
— |
(9.2) |
30. Associates and joint ventures
Accounting policy
Investment in associates
An associate is an entity over which the Group has significant
influence, but no control, over the financial and operating policy
decisions of the entity. As the investments in associates are held
for venture capital purposes they are designated at fair value
through profit or loss.
Investment in joint
ventures
A joint venture is a joint arrangement whereby the parties that
have joint control over the arrangement have rights to the net
assets of the arrangements. The results and assets and liabilities
of joint ventures are incorporated in these financial statements
using the equity method of accounting from the date on which the
investee becomes a joint venture, except when the investment is
held for venture capital purposes in which case they are designated
as fair value through profit and loss. Under the equity method, an
investment in a joint venture is initially recognised in the
consolidated statement of financial position at cost, and adjusted
thereafter to recognise the Group’s share of the joint venture’s
profit or loss.
The nature of some of the activities of the Group associates and
joint ventures are investment related which are seen as
complementing the Group’s operations and contributing to achieving
the Group’s overall strategy. The remaining associates and joint
ventures are portfolio companies not involved in investment
activities.
Details of associates and joint ventures
Details of each of the Group’s associates at the
end of the reporting period are as follows:
Name of associate
|
Principal activity
|
Country of incorporation
|
Proportion of ownership interest/voting rights held by the
Group |
Income distributions received from associate |
Proportion of ownership interest/voting rights held by the
Group |
Income distributions received from associate |
2023 |
2023 |
2022 |
2022 |
ICG Europe Fund V Jersey Limited1 |
Investment company |
Jersey |
20% |
11 |
20% |
58.6 |
ICG Europe Fund VI Jersey
Limited1 |
Investment company |
Jersey |
17% |
24.7 |
17% |
114.2 |
ICG North American Private Debt
Fund2 |
Investment company |
United States of America |
20% |
5.5 |
20% |
5.4 |
ICG Asia Pacific Fund III
Singapore Pte. Limited3 |
Investment company |
Singapore |
20% |
(1.2) |
20% |
32.1 |
Ambient Enterprises
LLC4 |
Investment company |
United States of America |
50% |
— |
—% |
— |
KIK
Equity Co-invest LLC4 |
Investment company |
United
States of America |
25% |
— |
—% |
— |
During the year the Group’s investments in Ambient Enterprises
LLC (see note 29) and KIK Equity Co-invest LLC were assessed as
associates. All associates are accounted for at fair value.
-
The registered address for this entity is IFC 1 – The Esplanade, St
Helier, Jersey JE1 4BP.
-
The registered address for this entity is 600, Lexington Avenue,
24th Floor, New York, NY 10022, United States of America.
-
The registered address for this entity is #13-01 One Raffles Place,
Singapore, 048616.
-
The registered address for this entity is c/o The Corporation Trust
Company, 1209 Orange Street, Wilmington, DE, 19801, United
States.
The Group has a shareholding in each of ICG Europe Fund V Jersey
Limited, ICG Europe Fund VI Jersey Limited, ICG North American
Private Debt Fund, ICG Asia Pacific Fund III Singapore Pte. Limited
and KIK Equity Co-invest LLC arising from its co-investment with a
fund. The Group appoints the General Partner (GP) to each of these
fund. The investors have substantive rights to remove the GP
without cause. The Funds also each have an Advisory Council,
nominated by the investors, whose function is to ensure that the GP
is acting in the interest of investors. As the Group has a 17%–25%
holding, and therefore significant influence in each entity, they
have been considered as associates
Details of each of the Group’s joint ventures at the end of the
reporting period are as follows:
30. Associates and joint ventures continued
Name of associate |
Principal activity |
Country of incorporation |
Proportion of voting rights held by the Group
2023 |
Proportion of voting rights held by the Group
2022 |
Nomura ICG KK |
Advisory company |
Japan |
50 % |
50 % |
Brighton Marina Group |
Investment Company |
United
Kingdom |
70 % |
50 % |
Nomura ICG KK is equity accounted as a joint venture in
accordance with IFRS 11. Nomura ICG KK is not a portfolio company
and was established to operate the Group’s core business of fund
management activities in Japan. Management therefore considers it
more appropriate to equity account for this entity in the financial
statements.
Brighton Marina Group Limited is accounted for
at fair value in accordance with IAS28 and IFRS9 and the Group’s
accounting policy in note 5 to the financial statements.
The Group holds 70% of the ordinary shares of
Brighton Marina Group Limited and the management of this entity is
jointly controlled with a third party who the Group does not
control and therefore the Group is unable to execute decisions
without the consent of the third party.
Significant restriction
There are no significant restrictions on the
ability of associates and joint ventures to transfer funds to the
Group other than having sufficient distributable reserves.
Summarised financial information for
associates material to the reporting entity
The Group’s only material associates are ICG
Europe Fund V Jersey Limited and ICG Europe Fund VI Jersey Limited
which are associates measured at fair value through profit and
loss. The information below is derived from the IFRS financial
statements of the entities. Materiality has been determined by the
carrying value of the associate as a percentage of total Group
assets.
The entities allow the Group to co-invest with
ICG Europe Fund V and ICG Europe Fund VI respectively, aligning
interests with other investors. In addition to the returns on its
co-investment the Group receives performance-related fee income
from the funds (see note 3). This is industry standard and is in
line with other funds in the industry.
|
ICG Fund VI Jersey Limited |
ICG Fund V Jersey Limited |
|
2023 |
2022 |
2023 |
2022 |
|
£m |
£m |
£m |
£m |
Current assets |
8.1 |
24.9 |
3.8 |
6.1 |
Non-current assets |
1,023.9 |
1,910.0 |
129.8 |
122.5 |
Current
liabilities |
(55.8) |
(49.7) |
(1.5) |
(1.6) |
|
976.2 |
1,885.2 |
132.1 |
127.0 |
Revenue |
47.3 |
685.8 |
(2.0) |
27.3 |
Profit
from continuing operations |
23.2 |
667.0 |
(3.6) |
26.4 |
Total comprehensive income |
23.2 |
667.0 |
(3.6) |
26.4 |
Summarised financial information for
equity accounted joint ventures
Nomura ICG KK made a profit from continuing
operations and total comprehensive income of £8.8m for the year
ended 31 March 2023 (2022: £1.0m), of which the Group’s share of
results accounted for using the equity method is £4.4m for the year
ended 31 March 2023 (2022: £0.5m).
31. Unconsolidated structured entities
A structured entity is an entity that has been designed so that
voting or similar rights are not the dominant factor in deciding
who controls the entity, such as when any voting rights relate to
administrative tasks only and the relevant activities are directed
by means of contractual arrangements. The Group has determined that
it has an interest in a structured entity where the Group holds an
investment, loan, fee receivable or commitment with an investment
fund or CLO. Where the Group does not hold an investment in the
structured entity, management has determined that the
characteristics of control, in accordance with IFRS 10, are not
met.
The Group, as fund manager, acts in accordance
with the pre-defined parameters set out in various agreements. The
decision-making authority of the Group and the rights of third
parties are documented. These agreements include management fees
that are commensurate with the services provided and performance
fee arrangements that are industry standard. As such, the Group is
acting as agent on behalf of these investors and therefore these
entities are not consolidated into the Group’s results.
Consolidated structured entities are detailed in note 28.
At 31 March 2023, the Group’s interest in and
exposure to unconsolidated structured entities including
outstanding management and performance fees are detailed in the
table below, and recognised within financial assets at FVTPL and
trade and other receivables in the statement of financial
position:
|
2023 |
Funds
|
Investment in Fund |
Management fees receivable |
Management fee rates |
Performance fees receivable |
Performance fee rates |
Maximum exposure to loss |
£m |
£m |
% |
£m |
% |
£m |
CLOs |
298.3 |
4.1 |
0.19% to 0.50% |
— |
0.05% to 0.20% |
302.4 |
Credit Funds |
65.9 |
8.6 |
0.29% to 1.50% |
(0.3) |
20% of returns in excess of 0% for Alternative Credit Fund
only |
74.2 |
Corporate Investment Funds |
1,341.5 |
55.9 |
0.43% to 1.50% |
37.6 |
20%–25% of total performance fee of 20% of profit over the
threshold |
1,435.0 |
Real Asset Funds |
288.5 |
12.0 |
0.30% to 1.24% |
— |
20% of returns in excess of 9% IRR |
300.5 |
Secondaries Funds |
441.1 |
20.2 |
0..75% to 1.37% |
0.2 |
10%–20% of total performance fee of 8%–20% of profit over the
threshold |
461.5 |
Total |
2,435.3 |
100.8 |
|
37.5 |
|
2,573.6 |
|
2022 |
Funds
|
Investment in Fund |
Management fees receivable |
Management fee rates |
Performance fees receivable |
Performance fee rates |
Maximum exposure to loss |
£m |
£m |
% |
£m |
|
£m |
CLOs |
285.5 |
3.6 |
0.35% to 0.65% |
— |
0.05% to 0.20% |
289.1 |
Credit Funds |
162.0 |
9.7 |
0.40% to 1.50% |
— |
20% of returns in excess of 0%
for Alternative Credit Fund only |
171.7 |
Corporate Investment Funds |
1,505.5 |
54.7 |
0.60% to 2.0% |
86.1 |
20%–25% of total performance
fee of 20% of profit over the threshold |
1,646.3 |
Real Asset Funds |
203.1 |
14.3 |
0.38% to 1.50% |
0.1 |
20% of returns in excess of 9%
IRR |
217.5 |
Secondaries Funds |
341.7 |
26.0 |
1.25% to 1.50% |
4.9 |
10%–20%
of total performance fee of 8%–20% of profit over the
threshold |
372.6 |
Total |
2,497.8 |
108.3 |
|
91.0 |
|
2,697.2 |
The Group’s maximum exposure to loss is equal to the value of
any investments held and unpaid management fees and performance
fees.
The Group has not provided non-contractual
financial or other support to the unconsolidated structured
entities during the year. It is not the current intention to
provide such support, including the intention to assist the
structured entity in obtaining financial support.
32. Net cash flows from operating activities
|
Year ended
31 March 2023
Group |
Year ended
31 March 2022
Group |
|
£m |
£m |
Profit before tax from continuing operations |
251.0 |
565.4 |
Adjustments for non cash
items: |
|
|
Fee and other operating
income |
(483.6) |
(434.0) |
Net investment returns |
(172.5) |
(555.5) |
Interest income |
(15.5) |
— |
Net fair value loss on
derivatives |
34.9 |
7.3 |
Impact of movement in foreign
exchange rates |
(17.8) |
0.1 |
Interest expense |
64.6 |
53.1 |
Depreciation, amortisation and
impairment of property, equipment and intangible assets |
18.2 |
19.5 |
Share-based payment
expense |
39.5 |
29.6 |
Working capital
changes: |
|
|
Increase in trade and other
receivables |
(12.0) |
(32.5) |
Decrease in trade and other
payables |
(196.9) |
(27.4) |
Change
in disposal groups held for sale |
(8.8) |
— |
|
(498.9) |
(374.4) |
Proceeds from sale of current
financial assets and disposal groups held for sale |
45.5 |
185.2 |
Purchase of current financial
assets and disposal groups held for sale |
(211.9) |
(204.0) |
Purchase of investments |
(1,420.2) |
(3,532.8) |
Proceeds from sales and
maturities of investments |
1,722.2 |
3,743.8 |
Interest and dividend income
received1 |
362.8 |
259.8 |
Fee and other operating income
received |
587.9 |
393.0 |
Interest paid |
(263.4) |
(183.3) |
Cash flows generated from operations |
324.0 |
287.3 |
Taxes
paid |
(32.4) |
(43.9) |
Net cash flows from operating activities |
291.6 |
243.4 |
1 Comprises Interest income received
of £322.6m (2022: £221.8m) and Dividend income received of £40.2m
(2022: £38.0m).
33. Contingent liabilities
The Parent Company and its subsidiaries may be
party to legal claims arising in the course of business. The
Directors do not anticipate that the outcome of any such potential
proceedings and claims will have a material adverse effect on the
Group’s financial position and at present there are no such claims
where their financial impact can be reasonably estimated. The
Parent Company and its subsidiaries may be able to recover any
monies paid out in settlement of claims from third parties.
There are no other material contingent
liabilities.
34. Post balance sheet events
There have been no material events since the
balance sheet date.
Other information
Outstanding debt facilities
|
Currency |
Drawn
£m |
Undrawn
£m |
Total
£m |
Interest rate |
Maturity |
ESG-linked RCF |
GBP |
— |
550.0 |
550.0 |
SONIA +1.375% |
January-26 |
|
|
|
|
|
|
|
Eurobond 2020 |
EUR |
440.0 |
— |
440.0 |
1.60% |
February-27 |
ESG Linked Bond |
EUR |
440.0 |
— |
440.0 |
2.50% |
January-30 |
Total bonds |
|
880.0 |
— |
880.0 |
|
|
|
|
|
|
|
|
|
PP2013 – Class B |
USD |
51.0 |
— |
51.0 |
6.30% |
May-23 |
Private Placement
2013 |
|
51.0 |
– |
51.0 |
|
|
PP 2015 – Class C |
USD |
64.9 |
— |
64.9 |
5.20% |
May-25 |
PP 2015 – Class F |
EUR |
38.7 |
— |
38.7 |
3.40% |
May-25 |
Private Placement
2015 |
|
103.5 |
— |
103.5 |
|
|
PP 2016 – Class B |
USD |
91.6 |
— |
91.6 |
4.70% |
September-24 |
PP 2016 – Class C |
USD |
43.8 |
— |
43.8 |
5.00% |
September-26 |
PP 2016 – Class E |
EUR |
19.3 |
— |
19.3 |
3.00% |
January-27 |
PP 2016 – Class F |
EUR |
26.4 |
— |
26.4 |
2.70% |
January-25 |
Private Placement
2016 |
|
181.1 |
— |
181.1 |
|
|
PP 2019 – Class A |
USD |
101.3 |
— |
101.3 |
4.80% |
April-24 |
PP 2019 – Class B |
USD |
81.1 |
— |
81.1 |
5.00% |
March-26 |
PP 2019 – Class C |
USD |
101.3 |
— |
101.3 |
5.40% |
March-29 |
PP 2019 – Class D |
EUR |
38.7 |
— |
38.7 |
2.00% |
April-24 |
Private Placement 2019 |
|
322.4 |
— |
322.4 |
|
|
Total Private Placements |
|
658.0 |
— |
658.0 |
|
|
|
|
|
|
|
|
|
Total |
|
1,538.0 |
550.0 |
2,088.0 |
|
|
Glossary
Non-IFRS alternative performance measures (APM)
are defined below:
Term |
|
Short Form |
|
Definition |
APM earnings per share |
|
EPS |
|
APM profit
after tax (annualised when reporting a six-month period’s results)
divided by the weighted average number of ordinary shares as
detailed in note 16. |
APM Group
profit before tax
|
|
|
|
Group profit before
tax adjusted for the impact of the consolidated structured
entities. As at 31 March, this is calculated as follows: |
|
|
2023 |
2022 |
Profit before tax |
|
£251.0m |
£565.4m |
Plus/Less consolidated structured entities |
|
£7.1m |
£3.4m |
APM Group profit/(loss) before tax |
|
£258.1m |
£568.8m |
APM
Investment Company profit before tax
|
|
|
|
Investment Company
profit adjusted for the impact of the consolidated structured
entities. As at 31 March, this is calculated as follows: |
|
|
2023 |
2022 |
Investment Company profit before tax |
|
(£69.7m) |
£279.2m |
Plus/Less consolidated structured entities |
|
£7.1m |
£3.4m |
APM Investment Company profit/(loss)
before tax |
|
(£52.6m) |
£282.6m |
APM return
on equity
|
|
ROE
|
|
APM profit after tax
(annualised when reporting a six month period’s results) divided by
average shareholders’ funds for the period. As at 31 March, this is
calculated as follows: |
|
|
2023 |
2022 |
APM
profit after tax |
|
£229.3m |
£538.0m |
Average shareholders’ funds |
|
£1,911.3m |
£1,745.9m |
APM return on equity |
|
12.0 % |
30.8 % |
Assets under management |
|
AUM |
|
Value of
all funds and assets managed by the FMC. During the investment
period third-party AUM is measured on the basis of committed
capital. Once outside the investment period third-party AUM is
measured on the basis of invested cost. AUM is presented in US
dollars, with non-US dollar denominated converted at the period end
closing rate. |
Balance
sheet investment portfolio
|
|
|
|
The
balance sheet investment portfolio represents financial assets from
the statement of financial position, adjusted for the impact of the
consolidated structured entities and excluding derivatives and
other financial assets. |
|
|
2023 |
2022 |
Total non current and current
financial assets |
Note 4 |
£2,924.6m |
£2,854.8m |
Derivative (assets) |
|
(£22.6m) |
(£32.8m) |
Total balance sheet investment portfolio |
|
£2,902m |
£2,822m |
Cash
profit
|
|
PICP
|
|
Cash profit is defined as internally reported profit before tax and
incentive schemes, adjusted for non-cash items |
|
|
2023 |
2022 |
APM profit before tax |
|
£258.1m |
£568.8m |
Add back incentive schemes |
|
£151.8m |
£169.7m |
Other adjustments |
|
£121.9m |
(£172.4m) |
Cash profit |
|
£531.8m |
£566.1m |
Dividend income |
|
|
|
Dividend
income represents distributions received from equity investments.
Dividend income reported on an internal basis excludes the impact
of the consolidated structured entities.
See note 4 for a full reconciliation. |
Earnings per share |
|
EPS |
|
Profit
after tax (annualised when reporting a six-month period’s results)
divided by the weighted average number of ordinary shares as
detailed in note 16. |
EBITDA |
|
|
|
Earnings
before interest, tax, depreciation and amortisation. |
Equalisation |
|
|
|
When new
third-party clients subscribe to a closed-end fund after the first
close, they pay a pre-agreed return to clients who subscribed to
the fund at an earlier close. This compensates those clients for
their capital being tied up for longer. This is referred to as
'equalisation' and can result in gain or loss for earlier investors
compared to the latest fund valuation. |
Group
cashflows from operating activities- APM
|
|
|
|
Group cashflows from
operating activities – APM is net cash flows from operating
activities adjusted for interest paid |
|
|
2023 |
2022 |
Group cashflows from operating
activities- APM |
|
£395.0m |
£393.6 |
Interest paid |
|
(£63.5)m |
(£55.7)m |
Net cash flows from/(used in) operating
activities |
Note 4 |
£331.5m |
£337.9m |
Term |
|
Short Form |
|
Definition |
Group cashflows from
financing activities - APM
|
|
|
|
Group cashflows from
financing activities – APM is net cash flows from financing
activities adjusted for interest paid and the payment of principal
portion of lease liabilities |
|
|
2023 |
2022 |
Group cashflows from financing
activities - APM |
|
(£533.4)m |
£59.3m |
Interest paid |
|
£63.5m |
£55.7m |
Payment of principal portion of lease liabilities |
|
(£6.8)m |
(£4.1)m |
Net cash flows from/(used in) financing
activities |
Note 4 |
(£476.7)m |
£110.9m |
Net cash
flows used in investing activities
|
|
|
|
Other operating
cashflows is net cash flows from investing activities adjusted for
the payment of principal portion of lease liabilities |
|
|
2023 |
2022 |
Net cash flows used in investing activities |
|
(£70.0)m |
£11.3m |
Payment of principal portion of lease liabilities |
|
(£6.8)m |
(£4.1)m |
Other operating cashflows |
|
(£76.8)m |
£7.1m |
Interest expense |
|
|
|
Interest
expense excludes the cost of financing associated with the
consolidated structured entities. See note 11 for a full
reconciliation. |
APM net
asset value per share
|
|
|
|
Total equity from the
statement of financial position adjusted for the impact of the
consolidated structured entities divided by the closing number of
ordinary shares. As at 31 March, this is calculated as
follows: |
|
|
2023 |
2022 |
Total equity |
|
£1,977.4m |
£1,995.0m |
Closing number of ordinary shares |
|
285,082,287 |
286,550,955 |
Net asset value per share |
|
694p |
696p |
Net
current assets
|
|
|
|
The total of cash,
plus current financial assets, plus other current assets, less
current liabilities as internally reported. This excludes the
consolidated structured entities. As at 31 March, this is
calculated as follows: |
|
|
2023 |
2022 |
Cash |
|
£550.0m |
£761.5m |
Current financial assets |
|
£282.4m |
£126.1m |
Other current assets |
|
£243.7m |
£193.2m |
Current financial
liabilities |
|
(£79.1m) |
(£256.4m) |
Other current liabilities |
|
(£157.7)m |
(£152.8m) |
Net current assets |
|
£839.3m |
£671.6m |
|
|
|
|
On an IFRS basis net current assets are as follows: |
|
|
|
|
|
2023 |
2022 |
Cash |
|
£957.5m |
£991.8m |
Current financial assets |
|
— |
— |
Other current assets |
|
£307.3m |
£452m |
Disposal groups held for
sale |
|
£578.3m |
£256.7m |
Current financial
liabilities |
|
(£64.3m) |
(£207.6m) |
Other current liabilities |
|
(£501.0m) |
(£602.3m) |
Liabilities directly associated with disposal groups held for
sale |
|
(£204.0m) |
(£97.2m) |
Net current assets |
|
£1,073.8m |
£793.4m |
Net
financial debt
|
|
|
|
Net debt, along with
gearing, is used by management as a measure of balance sheet
efficiency. Net debt includes unencumbered cash whereas
gearing uses gross borrowings and is therefore not impacted by
movements in cash balances.
Gross drawn debt less unencumbered cash of the Group, as at 31
March is calculated as follows: |
|
|
2023 |
2022 |
Total liabilities held at unamortised cost |
|
£1,536.7m |
£1,653.4m |
Impact of upfront fees/unamortised discount |
|
£1.3m |
£1.6m |
Gross drawn debt (see page 18) |
|
£1,538.0m |
£1,655.0m |
Less unencumbered cash |
|
(£550.0m) |
(£761.5m) |
Net debt |
|
£988.0m |
£893.5m |
Term |
|
Short Form |
|
Definition |
Net
gearing
|
|
|
|
Net gearing is used
by management as a measure of balance sheet efficiency. Net debt,
excluding the consolidated structured entities, divided by total
equity from the statement of financial position adjusted for the
impact of the consolidated structured entities. As at 31 March,
this is calculated as follows: |
|
|
2023 |
2022 |
Net
debt |
|
£988.0m |
£893.5m |
Shareholders’ equity |
|
£1,977.4m |
£1,995.0m |
Net gearing |
|
0.50x |
0.45x |
Net Investment Returns |
|
|
|
Net
Investment Returns is the total of interest income, capital gains,
dividend and other income less asset impairments. |
Operating cashflow |
|
|
|
Operating
cashflow represents the cash generated from operating activities
from the statement of cashflows, adjusted for the impact of the
consolidated structured entities. See note 4 for a full
reconciliation. |
Operating expenses of the Investment Company |
|
|
|
Investment
Company operating expenses are adjusted for the impact of the
consolidated structured entities. See note 4 for a full
reconciliation. |
Operating
profit margin
|
|
|
|
Fund Management
Company profit before tax divided by Fund Management Company total
revenue. As at 31 March this is calculated as follows: |
|
|
|
2023 |
2022 |
|
Fund Management Company profit before tax |
|
£310.7m |
£286.2m |
|
Fund Management Company total revenue |
|
£539.9m |
£512.8m |
|
Operating profit margin |
|
57.5 % |
55.8 % |
Third Party AUM |
|
|
|
Value of
all funds and assets managed by the Group (including both invested
and uninvested capital) on which the Group earns, or has the
potential to earn, fees. During the investment period third-party
AUM is measured on the basis of committed capital. Once outside the
investment period, it is measured on the basis of invested
cost. |
Third Party Fee Income |
|
|
|
Fees
generated on fund management activities as reported in the Fund
Management Company including fees generated by consolidated
structured entities which are excluded from the IFRS consolidation
position. See note 4 for a full reconciliation. |
Total
AUM
|
|
|
|
Total AUM
is calculated by adding Third Party AUM and the value of the
Balance Sheet Investment Portfolio, excluding seed
investments: |
|
|
|
2023 |
2022 |
|
Third Party AUM |
|
$77.0bn |
$68.5bn |
|
Balance Sheet Investment Portfolio (excluding seed
investments) |
|
$3.2bn |
$3.6bn |
|
Total AUM |
|
$80.2bn |
$72.1bn |
Total available liquidity |
|
|
|
Total
available liquidity comprises unencumbered cash and available
undrawn debt facilities. |
Total fund size |
|
|
|
Total fund
size is the sum of third-party AUM and ICG plc’s commitment to that
fund. The aggregate of all total fund sizes is equal to Total
AUM |
Weighted-average fee rate |
|
|
|
An average
fee rate across all strategies based on fee earning AUM in which
the fees earned are weighted based on the relative AUM. |
Other definitions which have not been identified as non-IFRS
GAAP alternative performance measures are as follows:
Term |
|
Short Form |
|
Definition |
Additions (of AUM) |
|
|
|
Within third-party AUM: the aggregate of new commitments of capital
by clients, and calls of capital from funds that have previously
had a step-down and are therefore reflected in third-party AUM on a
net invested capital basis. Within third-party fee-earning AUM: the
aggregate of new commitments of capital by clients that pay fees on
committed capital, and deployment of capital that charges fees on
invested capital (including calls of capital from funds that have
previously had a step-down and therefore charge fees on a net
invested capital basis). |
AIFMD |
|
|
|
The EU Alternative Investment Fund Managers Directive. |
Alternative performance measure |
|
APM |
|
These are non-IFRS financial measures. |
CAGR |
|
|
|
Compound Annual Growth Rate |
Term |
|
Short Form |
|
Definition |
Catch-up fees |
|
|
|
Fees charged to investors who commit to a fund after its first
close. This has the impact of backdating their commitment thereby
aligning all investors in the fund. |
Client base |
|
|
|
Client base includes all direct investment fund and liquid credit
fund investors. |
Closed-end fund |
|
|
|
A fund where investor’s commitments are fixed for the duration of
the fund and the fund has a defined investment period. |
Co-investment |
|
Co-invest |
|
A direct investment made alongside or in a fund taking a pro-rata
share of all instruments. |
Collateralised Loan Obligation |
|
CLO |
|
CLO is a type of investment grade security backed by a pool of
loans . |
Close |
|
|
|
A stage in fundraising whereby a fund is able to release or draw
down the capital contractually committed at that date. |
Default |
|
|
|
An ‘event of default’ is defined as:
A company fails to make timely payment of principal and/or interest
under the contractual terms of any financial obligation by the
required payment date
A restructuring of the company’s obligations as a result of
distressed circumstances
A company enters into bankruptcy or receivership |
Deal Vintage Bonus |
|
|
|
DVB awards are a long-term employee incentive, enabling certain
investment teams, excluding Executive Directors, to share in the
future realised profits from certain investments within the Group's
balance sheet portfolio. |
Direct investment funds |
|
|
|
Funds which invest in self-originated transactions for which there
is a low volume, illiquid secondary market. |
DPI |
|
|
|
Distribution to Paid- In Capital |
Employee Benefit Trust |
|
EBT |
|
Special purpose vehicle used to purchase ICG plc shares which are
used to satisfy share options and awards granted under the Group’s
employee share schemes. |
Environmental, Social and Governance criteria |
|
ESG |
|
Environmental, social and governance (ESG) criteria are a set of
standards for a company’s operations that socially conscious
investors use to screen potential investments. |
Financial Conduct Authority |
|
FCA |
|
Regulates conduct by both retail and wholesale financial service
companies in provision of services to consumers. |
Financial Reporting Council |
|
FRC |
|
The UK’s independent regulator responsible for promoting high
quality corporate governance and reporting. |
Fund |
|
|
|
A pool of third-party capital allocated to a specific investment
strategy or strategies, managed by ICG plc or its affiliates. |
Fund Management Company |
|
FMC |
|
The
Group’s fund management business, which sources and manages
investments on behalf of the IC and third-party funds. |
Fund level leverage |
|
|
|
Debt facilities utilised by funds to finance assets. |
Gross money on invested capital |
|
Gross MOIC |
|
Total realised and unrealised value of investments (before
deduction of any fees), divided by the total invested cost. |
HMRC |
|
|
|
HM Revenue & Customs, the UK tax authority. |
IAS |
|
|
|
International Accounting Standards. |
IFRS |
|
|
|
International Financial Reporting Standards as adopted by the
United Kingdom. |
Illiquid assets |
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Asset classes which are not actively traded. |
Investment Company |
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IC |
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The Investment Company invests the Group’s balance sheet to seed
and accelerate emerging strategies, and invests alongside the
Group's more established funds to align interests between the
Group's client, employees and shareholders. It also supports a
number of costs including for certain central functions, a part of
the Executive Directors' compensation and the portion of the
investment teams' compensation linked to the returns of the balance
sheet investment portfolio. |
Internal Rate of Return |
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IRR |
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The annualised 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 asset. |
LTM EBITDA |
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Last twelve month's earning before interest, tax, depreciation and
amortisation |
Key Person |
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Certain funds have a designated Key Person. The departure of a Key
Person without adequate replacement triggers a contractual right
for investors to cancel their commitments or kick-out of the Group
as fund manager. |
Key performance indicator |
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KPI |
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A business metric used to evaluate factors that are crucial to the
success of an organisation. |
Key risk indicator |
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KRI |
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A measure used to indicate how risky an activity is. It is an
indicator of the possibility of future adverse impact. |
Liquid assets |
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Asset classes with an active, established market in which assets
may be readily bought and sold. |
Money multiple |
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MOIC or MM |
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Cumulative returns divided by original capital invested. |
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Term |
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Short Form |
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Definition |
Net currency assets |
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Net assets excluding certain items including; trade and other
receivables, trade and other payables, property plant and
equipment, cash balances held by the Group’s fund management
entities, derivative financial assets and liabilities on management
fee FX hedges, and current and deferred tax assets and
liabilities. |
Open-ended fund |
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A fund which remains open to new commitments and where an
investor’s commitment may be redeemed with appropriate notice. |
Payment in kind |
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PIK |
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Also known as rolled-up interest. PIK is the interest accruing on a
loan until maturity or refinancing, without any cashflows until
that time. |
Performance fees |
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Carried interest or Carry |
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Share of profits that the fund manager is due once it has returned
the cost of investment and agreed preferred return to
investors. |
Realisation |
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The return of invested capital in the form of principal, rolled-up
interest and/or capital gain. |
Realisations (of AUM) |
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Reductions in AUM due to capital being returned to investors and /
or no longer able to be called by the fund, and the reduction in
AUM due to step-downs. |
Recycle (of AUM) |
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Where the fund is able to re-invest capital that has previously
been invested and then realised. This is typically only within a
defined period during the fund's investment period and is generally
subject to certain requirements. |
Relevant investments |
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Relevant investment includes all investments within Structured and
Private Equity and Real Assets where ICG has significant
influence. |
RCF |
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Revolving credit facility |
Step-down/ Step-up |
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A reduction in AUM resulting from the end of the investment period
in an existing fund or when a subsequent fund starts to invest.
Funds that charge fees on committed capital during the investment
period will normally shift to charging fees on net invested capital
post step-down. There is generally the ability to continue to call
further capital from funds that have had a step-down in certain
circumstances. In this instance, fees will be earned on that
invested capital and it will be added to AUM through Additions and
this is termed as step-up. |
Sustainable Accounting Standards Board |
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SASB |
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The Sustainability Accounting Standards Board is an independent
non-profit organisation that sets standards to guide the disclosure
of financially material sustainability information by companies to
their investors. |
Securitisation |
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A form of financial structuring whereby a pool of assets is used as
security (collateral) for the issue of new financial
instruments. |
SFDR |
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Sustainable Finance Disclosure Regulation |
Separately Managed Account |
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SMA |
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Third-party capital committed by a single investor allocated to a
specific investment strategy or strategies, managed by ICG plc or
its affiliates. |
Science Based Targets initiative |
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SBTi |
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The Science Based Targets initiative helps drives climate action in
the private sector by approving and validating companies'
science-based emissions reduction targets (SBT). |
Structured entities |
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Entities which are classified as investment funds, credit funds or
CLOs and are deemed to be controlled by the Group, through its
interests in either an investment, loan, fee receivable, guarantee
or commitment. These entities can also be interchangeably referred
to as credit funds. |
TCFD |
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Task Force on Climate-related Financial Disclosures |
Term |
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Short Form |
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Definition |
Total AUM |
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The aggregate of the Third Party AUM and the Balance Sheet
investment portfolio. |
UK Corporate Governance Code |
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The Code |
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Sets out standards of good practice in relation to board leadership
and effectiveness, remuneration, accountability and relations with
shareholders. |
UNPRI |
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UN Principles for Responsible Investing. |
Weighted average |
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An average in which each quantity to be averaged is assigned a
weight. These weightings determine the relative importance of each
quantity on the average. |
Seed investments (previously warehoused investments) |
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Investments within the balance sheet investment portfolio that the
Group anticipates transferring to a fund in due course, typically
made where the Group is seeding new strategies in anticipation of
raising a fund. |
1 Including the proposed final
dividend of 52.2p for the year ending 31 March 2023
2 Europe VIII ($8.3bn), Asia Pacific IV ($0.9bn),
Strategic Equity IV ($4.0bn)
3 Includes the impact of a policy change in FY23 which
increased third-party AUM by $3.1bn and fee-earning AUM by $0.5bn -
see page 8
3 Return achieved on full realisations, weighted on
original invested cost
4
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