TIDMICP
ICG plc
Interim Results Statement for the six months ended 30 September
2023
Delivering growth today, visibility on future opportunities
Highlights
-- Total AUM of $81.0bn, up 3%1 compared to 31 March
2023
-- Fee-earning AUM of $64.2bn, up 4%1 compared to 31
March 2023, and $14.3bn of AUM not yet earning fees
-- Fundraising in line with our expectations at $5.0bn,
with demand both for our flagship strategies ($3.2bn)
and scaling strategies ($1.8bn); remain on track to
meet our medium-term fundraising guidance
-- Management fee income of GBP234m (H1 FY23: GBP252m),
up 5% YoY excluding catch-up fees (H1 FY23: GBP29.3m,
H1 FY24: nil)
-- Performance fee income of GBP29m (H1 FY23: GBP14m)
-- FMC PBT of GBP162.7m (H1 FY23: GBP143.7m), operating
margin of 55%
-- Balance sheet investment performance delivering an
annualized NIR of 11% (five year average: 11%)
-- Group profit before tax of GBP241.9m (H1 FY23:
GBP35.6m) and Group EPS of 71.5p (H1 FY23: 13.5p)
-- NAV per share of 714p (31 March 2023: 694p), robust
capitalisation: net gearing of 0.48x, total available
liquidity of GBP1.0bn
-- Interim dividend of 25.8p per share, in line with
policy (H1 FY23: 25.3p per share)
Note: unless otherwise stated the financial results
discussed herein are on the basis of Alternative Performance
Measures (APM) - see page 5.
(1) On a constant currency basis.
Benoît Durteste
CEO and CIO
ICG had a strategically and financially successful
first half. We are executing on our strategy of "scaling
up" and "scaling out", and are investing in our people
and platform. Our broad waterfront of products today,
built on our 35 years' experience of managing credit,
positions us well to succeed across cycles. During
the period we made progress across flagship, scaling
and seeding strategies. Fee-earning AUM, profits from
our fund management activities, and the value of our
balance sheet all grew. Visibility on our future growth
and earnings prospects increased.
Key funds generated value for our clients and shareholders,
with low default rates, resilient NAVs, and $1.9bn
of realisations(1) . This is underpinned by portfolio
companies being appropriately capitalised and growing
their earnings. Today, clients in our debt funds are
enjoying historically high returns, and our teams
in more equity-oriented funds are successfully navigating
the impact of rising rates on those portfolios.
We are continuing to invest in further diversification,
making seed investments during the period for strategies
including LP Secondaries, Real Estate Equity, Life
Sciences, and Infrastructure Asia. We are also exploring
ways to leverage the breadth of ICG's platform to
distribute products to the HNW and UHNW market, building
on success of Strategic Equity.
In a fast-changing macro background, our long-term
business model is performing. We have the right strategic
and financial resources to execute on the substantial
growth potential embedded in ICG today, and we expect
to make further strategic and financial progress in
the second half of the year and beyond.
(1) Fee-earning AUM of direct investment funds
PERFORMANCE OVERVIEW
Unless stated otherwise, the financial results discussed herein
are on the basis of alternative performance measures (APM), which
the Board believes assists shareholders in assessing the financial
performance of the Group. See page 5 for further information.
Financial performance
Six months to Six months to Year-on-year Twelve months to Last five
30 September 2023 30 September 2022 growth(1) 30 September 2023 years CAGR(1,2)
------------ ------------------ ------------------ ------------- ------------------ ----------------
Total AUM $81.0bn $68.5bn 12% 18%
Fee-earning
AUM $64.2bn $57.3bn 7% 19%
Management
fee income GBP233.9m GBP251.5m (7) % GBP463.8m 23%
Performance
fee income GBP29.3m GBP13.8m n/m GBP35.1m 5%
Annualised
Net
Investment
Return % 11% (2) % 10% 11%(3)
Fund
Management
Company
profit
before tax GBP162.7m GBP143.7m 13% GBP329.7m 23%
Group profit
before tax GBP241.9m GBP35.6m n/m GBP464.4m 9%
Group
earnings
per share 71.5p 13.5p n/m 138.3p 4%
NAV per
share 714p 658p 9% 8%
Dividend per
share 25.8p 25.3p 2% 21%
------------ ------------------ ------------------ ------------- ------------------ ----------------
(1) AUM on constant currency basis.
(2) AUM and per share calculations based on 30 September 2018 to
30 September 2023, all other items LTM 30 September 2018 to LTM 30
September 2023. Dividend includes H1 FY24 declared dividend.
(3) Five year average.
Business activity
Six months to 30 September 2023 Fundraising Deployment(1) Realisations(1,2)
------------------------------- ----------- ------------- -----------------
Structured and Private Equity $2.6bn $0.5bn $0.4bn
Private Debt $1.4bn $1.6bn $1.0bn
Real Assets $0.6bn $1.1bn $0.5bn
Credit $0.4bn
------------------------------- ----------- ------------- -----------------
Total $5.0bn $3.2bn $1.9bn
------------------------------- ----------- ------------- -----------------
(1) Direct investment funds.
(2) Realisations of third-party fee-earning AUM.
Guidance
Our guidance remains unchanged and is set out below.
Fundraising Performance fees FMC Net Investment Returns
operating
margin
------------------------------------------------- ----------------------------------------------------- --------- -----------------------------------------------------
At least $40bn fundraising in aggregate between 1 Performance fees to represent 10 - 15% of third-party In excess Low double-digit percentage points over the
April 2021 and 31 March 2024 fee income over the medium-term of 50% medium-term
------------------------------------------------- ----------------------------------------------------- --------- -----------------------------------------------------
COMPANY PRESENTATION
A presentation for shareholders, debtholders and analysts will
be held at 09:00 GMT today: join via the link on our
https://www.globenewswire.com/Tracker?data=E2AgyQ5KslMoyRrcy0EccMwIbbgRs1MHyW7jh-utK4WkzO_uoho6WoTCOvje6eEXwUPYeU9MHlkVDONp_w9SmkUhzkwb3qRwuLavRqCiH6Iwv7rZ8IxwnSr87L0LZiHc
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 7 December 2023
Record date 8 December 2023
Last date to elect for dividend reinvestment 14 December 2023
Payment of ordinary dividend 8 January 2024
Q3 trading statement 25 January 2024
Seminar: Deep-dive on "scaling out" 21 February 2024
ENQUIRIES
Shareholders & Debtholders / analysts:
Chris Hunt, Head of Corporate Development & Shareholder
Relations, ICG +44(0)20 3545 2020
Media:
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, operating 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. 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.
FINANCIAL REVIEW
AUM
Refer to the
https://www.globenewswire.com/Tracker?data=Tn9AweSSUcFIbFB-Da24yiEynY3x0jLMyGUbjsrVvFUwNd0ySm7P7nhhN4wsA9n28K-qZz4A0iDVmTB0GwMx9STk9KDUkcPhJJNFeOhfPqSAgaGdfkyXIBvsz68olrff
Datapack issued with this announcement for further detail on AUM
(including fundraising, realisations and deployment by fund).
Total AUM
During the period, Total AUM grew 3% on a constant currency
basis (up 1% on a reported basis) and at 30 September 2023 was
$81.0bn (31 March 2023: $80.2bn). The balance sheet investment
portfolio accounted for 4.0% of the Total AUM (31 March 2023:
4.1%).
Third-party AUM and fee-earning AUM
Dry powder and AUM not yet earning fees: at 30 September 2023,
we had $22.3bn of third-party AUM available to deploy in new
investments, $14.3bn of which is not yet earning fees but will do
so when the capital is invested or enters its investment
period.
Current fundraising: at 30 September 2023, closed-end funds that
were actively fundraising included SDP V and SDP SMAs; Strategic
Equity V; North America Credit Partners III; Europe Mid-Market II;
Infrastructure Europe II; LP Secondaries I; Life Sciences I; and
various Real Estate equity and debt strategies. The timings of
closes for these funds depends on a number of factors, including
the prevailing market conditions.
Structured
and
Third-party AUM Private Private Real
($m) Equity Debt Assets Credit Total
------------------- ---------- ---------- ---------- ------------- ----------
At 1 April 2023 27,728 23,641 7,863 17,755 76,987
Additions 2,633 1,464 634 388 5,119
Realisations (428) (312) (334) (1,241) (2,315)
Net additions /
(realisations) 2,205 1,152 300 (853) 2,804
FX and other (1,137) (563) (190) (134) (2,024)
------------------- ---------- ---------- ---------- ------------- ----------
At 30 September
2023 28,796 24,230 7,973 16,768 77,767
------------------- ---------- ---------- ---------- ------------- ----------
Change $m 1,068 589 110 (987) 780
Change % 4% 3% 1% (6) % 1%
Change % (constant
exchange rate) 6% 4% 3% (4) % 3%
------------------- ---------- ---------- ---------- ------------- ----------
Structured
and
Fee-earning AUM Private Private Real
($m) Equity Debt Assets Credit Total
------------------- ---------- ---------- ---------- ------------- ----------
At 1 April 2023 23,840 14,249 6,862 17,898 62,849
Funds raised:
fees on
committed
capital 2,412 -- 405 -- 2,817
Deployment of
funds: fees on
invested
capital 79 1,620 710 490 2,899
Total additions 2,491 1,620 1,115 490 5,716
Realisations (409) (965) (497) (1,282) (3,153)
Net additions /
(realisations) 2,082 655 618 (792) 2,563
Stepdowns (220) -- (92) -- (312)
FX and other(1) (371) (253) (225) (47) (896)
------------------- ---------- ---------- ---------- ------------- ----------
At 30 September
2023 25,331 14,651 7,163 17,059 64,204
------------------- ---------- ---------- ---------- ------------- ----------
Change $m 1,491 402 301 (839) 1,355
Change % 6% 3% 4% (5) % 2%
Change % (constant
exchange rate) 9% 5% 6% (3) % 4%
------------------- ---------- ---------- ---------- ------------- ----------
(1) See page 16 for FX exposure of fee-earning AUM, fee income,
FMC expenses and Balance sheet investment portfolio.
Group financial 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. 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, including seeded strategies, and related
entities deemed to be controlled by the Group, which are included
in the UK-adopted IAS consolidated financial statements at fair
value but excluded for the APM in which the Group's economic
exposure to the assets is reported.
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
above prior period at GBP259.9m (H1 FY23: GBP30.8m). On the APM
basis it was above the prior period at GBP241.9m (H1 FY23:
GBP35.6m).
Detail of these adjustments can be found in note 3 to the
UK-adopted IAS condensed consolidated financial statements on pages
27 to 28.
Twelve months
to 30
30 September September
GBPm unless 2023 30 September 2022 2023
stated (Unaudited) (Unaudited) Change % (Unaudited)
-------------- ------------- ----------------- --------------- -------------
Management
fees 233.9 251.5 (7) % 463.8
Performance
fees 29.3 13.8 n/m 35.1
Third-party
fee income 263.2 265.3 (1) % 498.9
Movement in FV
of
derivative -- (45.6) (100) % 18.8
Other Fund
Management
Company
income 32.8 37.2 (12) % 61.3
-------------- ------------- ----------------- --------------- -------------
Fund
Management
Company
revenue 296.0 256.9 15% 579.0
-------------- ------------- ----------------- --------------- -------------
Fund
Management
Company
operating
expenses (133.3) (113.2) 18% (249.3)
-------------- ------------- ----------------- --------------- -------------
Fund
Management
Company
profit before
tax 162.7 143.7 13% 329.7
-------------- ------------- ----------------- --------------- -------------
Fund
Management
Company
operating
margin 55.0% 55.9% (0.9) % 57.0%
-------------- ------------- ----------------- --------------- -------------
Net investment
return 159.4 (26.5) n/m 288.2
Other
Investment
Company
Income (17.6) (7.7) n/m (13.8)
Investment
Company
operating
expenses (48.6) (47.7) (2) % (104.0)
Interest
income 10.0 3.9 n/m 20.0
Interest
expense (24.0) (30.1) 20% (55.7)
-------------- ------------- ----------------- --------------- -------------
Investment
Company
(loss) /
profit before
tax 79.2 (108.1) n/m 134.7
-------------- ------------- ----------------- --------------- -------------
Group profit
before tax 241.9 35.6 n/m 464.4
-------------- ------------- ----------------- --------------- -------------
Tax (37.5) 3.1 n/m (69.4)
-------------- ------------- ----------------- --------------- -------------
Group profit
after tax 204.4 38.7 n/m 395.0
-------------- ------------- ----------------- --------------- -------------
Earnings per 71.5p 13.5p n/m 138.3p
share
Dividend per 25.8p 25.3p 2% 78.0p
share
Liquidity GBP1.0bn GBP1.3bn
Balance sheet GBP3.0bn GBP2.9bn
investment
portfolio
Net gearing 0.48x 0.55x
Net asset 714p 658p
value per
share
Structured and Private Equity
Overview
Flagship strategies Scaling strategies Seeding strategies
------------------- ----------------------- ------------------
European Corporate European Mid-Market Life Sciences
Strategic Equity Asia Pacific Corporate US Mid-Market
LP Secondaries
------------------- ----------------------- ------------------
Six months to Six months to
30 September 2023 30 September 2022 Year-on-year growth(1) Twelve months to 30 September 2023 Last five years CAGR(1,2)
------------- ------------------ ------------------ ---------------------- ---------------------------------- -------------------------
Total AUM $30.9bn $25.3bn 16% 21%
Fee-earning
AUM $25.3bn $23.1bn 4% 20%
Fundraising $2.6bn $3.0bn (15) % $3.0bn
Deployment $0.5bn $1.5bn (65) % $3.3bn
Realisations $0.4bn $0.7bn (39) % $2.1bn
Effective
management
fee rate 1.25% 1.25% -- %
Management
fees GBP127m GBP154m (18) % GBP256m 25%
Performance
fees GBP22m GBP9m n/m GBP27m 6%
Balance sheet
investment
portfolio GBP1.8bn
Annualised
net
investment
return 13% 2% 16%(3)
-------------------------
(1) AUM on constant currency basis.
(2) AUM calculation based on 30 September 2018 to 30 September
2023, all other items LTM 30 September 2018 to LTM 30 September
2023.
(3) Five year average.
Performance of key funds
Refer to the
https://www.globenewswire.com/Tracker?data=Tn9AweSSUcFIbFB-Da24yowiEyrTqpDQXSxu1x8co8N5oBvAkZCjGcOKaqPHYZ4Zi6S3x9PDbODb6RkI2BOSgB_8a3O0W_TdKcTIK4foN1Rx7hnWD6ZhaB-c4bwSA9UG
(Datapack) issued with this announcement for further detail on fund
performance
Total
fund Gross Gross
Vintage size Status % deployed MOIC IRR DPI
------------ -------- --------- ------------ ---------- ----- ----- ----
Europe VI 2015 EUR3.0bn Realising 2.2x 23% 179%
Europe VII 2018 EUR4.5bn Realising 1.8x 20% 42%
Europe VIII 2021 EUR8.1bn Investing 43% 1.2x 16% --
Europe
Mid-Market
I 2019 EUR1.0bn Investing 87% 1.5x 27% 7%
Europe
Mid-Market
II Fundraising
Asia Pacific
III 2014 $0.7bn Realising 2.1x 18% 103%
Asia Pacific
IV 2020 $1.0bn Investing 44% 1.4x 24% --
Strategic
Secondaries
II 2016 $1.1bn Realising 3.0x 48% 155%
Strategic
Equity III 2018 $1.8bn Realising 2.4x 47% 29%
Strategic
Equity IV 2021 $4.3bn Investing 97% 1.7x 53% 4%
Strategic Equity V Fundraisi
ng
LP Secondaries I Fundraisi
ng
Key drivers
Business Fundraising: Strategic Equity ($1.8bn) and Europe
activity Mid-Market II ($0.8bn)
Deployment: Majority coming from European Corporate
($0.2bn) and Europe Mid -Market ($0.2bn)
Realisations: European Corporate ($0.2bn) and Strategic
Equity ($0.2bn)
-------------- --------------------------------------------------------------
Fee income Management fees: Prior period included GBP29.3m of
catch-up fees (H1 FY24: nil)
Performance fees: H1 FY24 includes inaugural recognition
of performance fees for Europe VII (GBP12.5m)
-------------- --------------------------------------------------------------
Balance sheet Investment returns: European Corporate and Strategic
investment Equity drove positive NIR, with underlying portfolio
portfolio companies in both strategies generally continuing
to grow profits, as well as some realisations
Cash flow: GBP86m cash generation, driven by net realisations
in European Corporate and Strategic Equity
-------------- --------------------------------------------------------------
Fund Portfolio continuing to demonstrate earnings growth;
performance exits during the period in Europe VIII, Strategic
Equity IV and LP Secondaries underpinning fund valuations
and DPI
-------------- --------------------------------------------------------------
Private Debt
Overview
Flagship strategies Scaling strategies Seeding strategies
-------------------- ----------------------------- ------------------
Senior Debt Partners North America Credit Partners -
-------------------- ----------------------------- ------------------
Six months to Six months to
30 September 2023 30 September 2022 Year-on-year growth(1) Twelve months to 30 September 2023 Last five years CAGR(1,2)
------------- ------------------ ------------------ ---------------------- ---------------------------------- -------------------------
Total AUM $24.4bn $18.7bn 24% 20%
Fee-earning
AUM $14.7bn $11.8bn 18% 24%
Fundraising $1.4bn $1.0bn 49% $4.3bn
Deployment $1.6bn $2.5bn (35) % $3.6bn
Realisations $1.0bn $1.5bn (37) % $1.4bn
Effective
management
fee rate 0.82% 0.85% (0.03) %
Management
fees GBP47m GBP40m 16% GBP90m 28%
Performance
fees GBP7m GBP4m 73% GBP9m 16%
Balance sheet
investment
portfolio GBP0.2bn
Annualised
net
investment
return 10% 13% 10%(3)
-------------------------
(1) AUM on constant currency basis.
(2) AUM calculation based on 30 September 2018 to 30 September
2023, all other items LTM 30 September 2018 to LTM 30 September
2023.
(3) Five year average.
Performance of key funds
Refer to the
https://www.globenewswire.com/Tracker?data=Tn9AweSSUcFIbFB-Da24ytGHV-RHeI43m4pZ8y8vWzQz5zZ8-32RsKuRGGEOZYfkDEXA6rFXrYQlB6xPR8u7d9DyT86pIWKBJNE3Z-ZYbl06-SjFStkquEMr20V48oM0
(Datapack) issued with this announcement for further detail on fund
performance
Total
fund Gross Gross
Vintage size Status % deployed MOIC IRR DPI
--------- -------- --------- ------------ ---------- ------ ------ ----
Senior
Debt
Partners
II 2015 EUR1.5bn Realising 1.3x 9% 81%
Senior
Debt
Partners
III 2017 EUR2.6bn Realising 1.3x 9% 43%
Senior
Debt
Partners
IV 2020 EUR5.0bn Investing 100% 1.1x 11% --
Senior
Debt
Partners Fundraising
V / Investing
North
American
Private
Debt I 2014 $0.8bn Realising 1.5x 16% 128%
North
American
Private
Debt II 2019 $1.4bn Investing 94% 1.3x 14% 24%
North America Credit Partners Fundraisi
III ng
Key drivers
Business Fundraising: Senior Debt Partners ($1.0bn) and North
activity America Credit Partners III ($0.4bn)
Deployment: Senior Debt Partners ($1.4bn) and North
America Credit Partners ($0.2bn)
Realisations: Senior Debt Partners ($0.9bn)
--------------- -------------------------------------------------------------
Fee income Management fees: continued net deployment driving
higher fee earning AUM
Performance fees: higher investment returns (largely
due to base rate rises) increasing performance fee
potential
--------------- -------------------------------------------------------------
Balance sheet Investment returns: higher base rate and low impairments
investment supporting NIR
portfolio Cash flow: GBP18m cash generation, driven by cash
interest received and modest net realisations
--------------- -------------------------------------------------------------
Fund High base rate, favourable supply / demand dynamics
performance and low impairments continue to drive attractive performance
across our Private Debt strategies
--------------- -------------------------------------------------------------
Real Assets
Overview
Flagship strategies Scaling strategies Seeding strategies
------------------- ---------------------------------- -------------------
- Infrastructure Europe Infrastructure Asia
Strategic Real Estate Europe Real Estate Asia
Metropolitan (Real Estate Equity)
Real Estate Debt
------------------- ---------------------------------- -------------------
Six months to Six months to
30 September 2023 30 September 2022 Year-on-year growth(1) Twelve months to 30 September 2023 Last five years CAGR(1,2)
------------- ------------------ ------------------ ---------------------- ---------------------------------- -------------------------
Total AUM $8.4bn $7.7bn -- 16%
Fee-earning
AUM $7.2bn $6.3bn 5% 18%
Fundraising $0.6bn $0.6bn (2) % $1.0bn
Deployment $1.1bn $1.0bn 6 % $1.8bn
Realisations $0.5bn $0.7bn (29) % $0.8bn
Effective
management
fee rate 0.91% 0.88% --
Management
fees GBP27m GBP25m 9% GBP51m 19%
Performance
fees -- GBP1m (100) % GBP(1)m n/m
Balance sheet
investment
portfolio GBP0.3bn
Annualised
net
investment
return 7% (4) % 6%(3)
-------------------------
(1) AUM on constant currency basis.
(2) AUM calculation based on 30 September 2018 to 30 September
2023, all other items LTM 30 September 2018 to LTM 30 September
2023.
(3) Five year average.
Performance of key funds
Refer to the
https://www.globenewswire.com/Tracker?data=Tn9AweSSUcFIbFB-Da24yhOu2OiZQFwNyACn7DJpgjmxc5kYnkjiu70jXcJQLAXQ6kQ1f6QLzvXybEYR0XsEgPh9AHPBAsZdnLl38_RXjn861WI-0tHicxfeeLhYyYT7
(Datapack) issued with this announcement for further detail on fund
performance
Total
fund Gross Gross
Vintage size Status % deployed MOIC IRR DPI
--------------- -------- --------- ------------ ---------- ----- ----- ---
Real Estate
Partnership
Capital IV 2015 GBP1.0bn Realising 1.2x 6% 97%
Real Estate
Partnership
Capital V 2018 GBP0.9bn Investing 1.2x 10% 25%
Real Estate
Partnership Fundraising
Capital VI / Investing
Infrastructure
Equity I 2020 EUR1.5bn Investing 90% 1.3x 23% 1%
Infrastructure Fundraising
II / Investing
Sale &
Leaseback I 2019 EUR1.2bn Investing 99% 1.1x 8% 8%
Strategic Real Estate II Fundraisi
ng /
Investing
Key drivers
Business Fundraising: Real Estate equity strategies ($0.3bn)
activity and Infrastructure II ($0.2bn)
Deployment: Real Estate equity and debt strategies
($0.8bn), Infrastructure Europe ($0.2bn)
Realisations: Real Estate debt strategies ($0.5bn)
---------------- ------------------------------------------------------------
Fee income Management fees: higher fee earning AUM driven by
fundraising and net deployment
Performance fees: limited given early stages of performance
fee-generating strategies
---------------- ------------------------------------------------------------
Balance sheet Investment returns: Infrastructure and Real Estate
investment Equity driving positive NIR, more than offsetting
portfolio a modest reduction in Real Estate Debt
Cash flow: GBP36m cash consumptive due to net deployments
in Infrastructure and Real Estate equity
---------------- ------------------------------------------------------------
Fund performance Strategic Real Estate and Infrastructure reporting
increases in funds NAV, generally resilient performance
in Real Estate Debt
---------------- ------------------------------------------------------------
Credit
Overview
Flagship strategies Scaling strategies Seeding strategies
------------------- ------------------ ------------------
CLOs Liquid Credit -
------------------- ------------------ ------------------
Six months to Six months to
30 September 2023 30 September 2022 Year-on-year growth(1) Twelve months to 30 September 2023 Last five years CAGR(1,2)
------------- ------------------ ------------------ ---------------------- ---------------------------------- -------------------------
Total AUM $17.2bn $16.8bn (2) % 12%
Fee-earning
AUM $17.1bn $16.0bn 2% 13%
Fundraising $0.4bn $1.0bn (62) % $1.3bn
Realisations $1.3bn $0.9bn (45) % $2.1bn
Effective
management
fee rate 0.49% 0.48% 0.01%
Management
fees GBP34m GBP33m 2% GBP66.5m 13%
Performance
fees -- -- -- -- --
Balance sheet
investment
portfolio GBP0.4bn
Annualised
net
investment
return 9% (22) % 0%(3)
-------------------------
(1) AUM on constant currency basis.
(2) AUM calculation based on 30 September 2018 to 30 September
2023, all other items LTM 30 September 2018 to LTM 30 September
2023.
(3) Five year average.
Key drivers
Business activity Fundraising: US CLO ($0.4bn), with equity tranche
supported by ICG's third-party risk retention fund
Realisations: Liquid Credit ($0.9bn) and CLOs ($0.3bn)
------------------ ----------------------------------------------------------
Fee income Management fees: Modest increase due to higher fee-earning
AUM and effective management fee rate
Performance fees: Limited performance fee-eligible
strategies within Credit
------------------ ----------------------------------------------------------
Balance sheet Investment returns: positive valuation impacts across
investment CLO equity, CLO debt and liquid funds
portfolio Cash flow: cash flow neutral, with realisations and
cash interest receipts (excluding dividends from CLO
equity) offsetting new investments
----------------------------------------------------------
Fund Management Company
The Fund Management Company (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.
Management fees
Management fees for the period totalled GBP233.9m (H1 FY23:
GBP251.5m), a year-on-year increase of 5% excluding the impact of
catch-up fees (H1 FY23: GBP29.3m, H1 FY24: nil). The effective
management fee rate on our fee-earning AUM at the period end was
0.91% (FY23: 0.90%).
Performance fees
Performance fees for the period totalled GBP29.3m (H1 FY23:
GBP13.8m). The year-on-year increase was largely due to the
inaugural recognition in the current period of performance fees
relating to Europe VII (GBP12.5m). At 30 September 2023 the Group
had an asset of GBP58.9m of accrued performance fees on its balance
sheet (31 March 2023: GBP37.5m):
GBPm
---------------------------------------------- -----
Accrued performance fees at 31 March 2023 37.5
Accruals during period 29.3
Received during period (8.0)
FX and other movements 0.1
---------------------------------------------- -----
Accrued performance fees at 30 September 2023 58.9
---------------------------------------------- -----
Other income and movements in fair value of derivatives
Other income includes dividend receipts of GBP20.3m (H1 FY23:
GBP23.8m) from investments in CLO equity, which are continuing to
be received in line with historical experiences. The FMC also
recognised GBP12.3m of revenue for managing the IC balance sheet
investment portfolio (H1 FY23: GBP12.7m), as well as other income
of GBP0.2m (H1 FY23: GBP0.7m).
During FY23 the Group decided to no longer enter into FX
transaction hedges for its fee income as a matter of course
(although it may still do so on an ad hoc basis), and economically
closed out all outstanding such hedges. For H1 FY24 the movement in
fair value of derivatives within the FMC was zero (H1 FY23:
GBP(45.6)m).
Operating expenses and margin
Operating expenses increased by 18% compared to H1 FY23 and
totalled GBP133.3m (H1 FY23: GBP113.2m). Salaries increased ahead
of headcount (which grew 6%), largely due to a number of senior
hires, while other expenses grew due to timing of expenses compared
to the prior year, a number of senior hires with higher incentives
compared to salary, and ongoing investment in our operating
platform.
Six months ended Six months ended Twelve months ended
GBPm 30 September 2023 30 September 2022 Change 30 September 2023
--------------- ------------------ ------------------ ------------- -------------------
Salaries 47.3 41.9 13% 90.4
Incentive
scheme costs 55.2 46.0 20% 101.4
Administrative
costs 27.4 22.5 22% 50.6
Depreciation
and
amortisation 3.4 2.8 21% 6.9
--------------- ------------------ ------------------ ------------- -------------------
FMC operating
expenses 133.3 113.2 18% 249.3
FMC operating
margin 55.0% 55.9% (1) % 57.0%
--------------- ------------------ ------------------ ------------- -------------------
The FMC recorded a profit before tax of GBP162.7m (H1 FY23:
GBP143.7m), a year-on-year increase of 13% and an increase of 15%
on a constant currency basis.
Investment Company
The Investment Company (IC) invests the Group's balance sheet to
seed new strategies, and invests alongside the Group's scaling and
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 was valued at GBP3.0bn at
30 September 2023 (31 March 2023: GBP2.9bn). During the period, it
generated net realisations and related interest of GBP26.6m (H1
FY23: GBP122.4m), being net realisations of GBP3.2m (H1 FY23:
GBP103.2m) and cash interest receipts of GBP23.4m (H1 FY23:
GBP19.2m).
We made seed investments totalling GBP170m, including on behalf
of LP Secondaries, Real Estate Equity, Life Sciences and
Infrastructure Asia.
As at 30
As at 31 New Gains/ (losses) FX & September
GBPm March 2023 investments Realisations in valuation other(2) 2023
------------ ----------- ------------ ------------ --------------- -------- ---------
Structured
and Private
Equity 1,751 32 (118) 111 (10) 1,766
Private Debt 169 6 (14) 8 1 170
Real Assets 289 58 (22) 11 (3) 333
Credit(1) 363 6 (7) 17 (2) 377
Seed
Investments 330 170 (138) 11 2 375
------------ ----------- ------------ ------------ --------------- -------- ---------
Total
Balance
Sheet
Investment
Portfolio 2,902 272 (299) 158 (12) 3,021
------------ ----------- ------------ ------------ --------------- -------- ---------
(1) Within Credit, at 30 September 2023 GBP71m was invested in
liquid strategies, with the remaining GBP306.4m invested in CLO
debt (GBP106.2m) and equity (GBP200.2m).
(2) See page 16 for FX exposure of fee-earning AUM, fee income,
FMC expenses and Balance sheet investment portfolio.
Net Investment Returns
For the five years to 30 September 2023, Net Investment Returns
(NIR) have been in line with our medium-term guidance, averaging
11%. For the six months to 30 September 2023, NIR were GBP159.4m
(H1 FY23: GBP(26.5)m), equating to an annualised rate of 11% (H1
FY23: 2%).
NIR were comprised of interest of GBP59.2m from interest-bearing
investments (H1 FY23: GBP53.0m), unrealised gains of GBP99.0m (H1
FY23: loss of GBP(79.5)m) and other income of GBP1.1m. NIR were
split between asset classes as follows:
Six months to 30 Six months to 30 Twelve months to 30
September 2023 September 2022 September 2023
------------------- ----------------------
NIR Annualised NIR Annualised NIR NIR
GBPm (GBPm) NIR (%) (GBPm) (%) (GBPm) NIR (%)
--------------- ------ ----------- ------ -------------- ------ ------------
Structured and
Private
Equity 111.4 13% 18.2 2 % 206.1 12%
Private Debt 8.9 10% 10.3 13 % 13.0 8%
Real Assets 11.2 7% (6.7) (4) % 38.6 12%
Credit 17.0 9% (45.9) (22) % 32.8 8%
Seed
Investments(1) 11.0 6% (2.4) (3) % (2.2) (1%)
--------------- ------ ----------- ------ -------------- ------ ------------
Total net
investment
returns 159.4 11% (26.5) (2) % 288.3 10%
--------------- ------ ----------- ------ -------------- ------ ------------
(1) FY23 NIR adjusted to reflect three assets with Seed
Investments that were previously included within Real Assets.
For further discussion on balance sheet investment performance
by asset class, refer to pages 6 - 9 of this announcement.
In addition to the NIR, the other adjustments to IC revenue were
as follows:
Six months Six months Twelve months
ended 30 ended 30 ended 30
September September September
GBPm 2023 2022 Change 2023
---------------- ------------- -------------- -------------- -------------
Changes in fair
value of
derivatives(1) (5.8) 3.8 n/m 7.2
Inter-segmental
fee (12.3) (12.7) 3 % (24.6)
Other 0.5 1.2 (58) % 3.6
---------------- ------------- -------------- -------------- -------------
Other IC revenue (17.6) (7.7) n/m (13.8)
---------------- ------------- -------------- -------------- -------------
(1) See page 16 for FX exposure of fee-earning AUM, fee income,
FMC expenses and Balance sheet investment portfolio.
As a result, the IC recorded total revenues of GBP141.8m (H1
FY23: GBP(34.2)m).
Investment Company expenses
Operating expenses in the IC of GBP48.6m increased by 2%
compared to H1 FY23 (GBP47.7m), with modest increases in salaries
and incentive scheme costs being offset by a decrease in
administrative costs:
Six months Six months Twelve months
ended 30 ended 30 ended 30
September September Change September
GBPm 2023 2022 % 2023
--------------- -------------- -------------- -------------- -------------
Salaries 9.9 9.2 8% 20.7
Incentive
scheme costs 28.6 26.6 8% 61.6
Administrative
costs 8.7 10.6 (18) % 18.8
Depreciation
and
amortisation 1.4 1.3 8% 2.9
--------------- -------------- -------------- -------------- -------------
IC operating
expenses 48.6 47.7 2% 104.0
--------------- -------------- -------------- -------------- -------------
Incentive scheme costs included DVB accrual of GBP15.4m (H1
FY23: GBP15.3m), due both to the passage of time and the impact of
underlying valuation changes.
Employee costs for teams who do not yet have a third-party fund
are allocated to the IC. For H1 FY24, the directly-attributable
costs within the Investment Company for teams that have not had a
first close of a third-party fund was GBP12.2m (H1 FY23: GBP10.7m).
When those funds have a first close, the costs of those teams are
transferred to the Fund Management Company. During the period,
certain costs within real estate were transferred from the IC to
FMC, resulting in GBP2.4m of expenses being recognised in the
FMC.
Interest expense was GBP24.0m (H1 FY23: GBP30.1m) and interest
earned on cash balances was GBP10.0m (H1 FY23: GBP3.9m).
The IC recorded a profit before tax of GBP79.2m (H1 FY23: loss
before tax GBP(108.1)m).
Group
Tax
The Group recognised a tax charge of GBP(37.5)m (H1 FY23: tax
credit of GBP3.1m), resulting in an effective tax rate for the
period of 15.5% (H1 FY23: (8.7)%). The increase compared to the
prior year is due to an increase from 19 to 25% in the UK tax rate
and positive NIR.
As detailed in note 7, 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
ICG has a progressive dividend policy, and 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.
In line with our policy of paying an interim dividend equal to
one third of the prior year's total dividend, the Board is
declaring an interim dividend of 25.8p per share (H1 FY23: 25.3p).
We continue to make the dividend reinvestment plan available.
Balance sheet
We use our balance sheet's asset base to grow our fee-earning
AUM, and do this through two routes:
-- investing alongside clients in our existing strategies to align
interests; and
-- making investments to seed new strategies.
During the year we made gross investments of GBP102m alongside
existing strategies and GBP170m in seed investments. See page 11
for more information on the performance of our balance sheet
investment portfolio during the period.
To support this asset base, we maintain a robust capitalisation
and a strong liquidity position.
GBPm (unless stated) 30 September 2023 31 March 2023
----------------------------------- ----------------- -------------
Balance sheet investment portfolio 3,021 2,902
Cash and cash equivalents 485 550
Other assets 430 424
----------------------------------- ----------------- -------------
Total assets 3,936 3,876
Financial debt (1,477) (1,538)
Other liabilities (413) (361)
Total liabilities (1,890) (1,899)
----------------------------------- ----------------- -------------
Net asset value 2,046 1,977
----------------------------------- ----------------- -------------
Net asset value per share 714p 694p
----------------------------------- ----------------- -------------
Liquidity and net debt
At 30 September 2023 the Group had total available liquidity of
GBP1,035m (31 March 2023: GBP1,100m), net financial debt of GBP992m
(31 March 2023: GBP988m) and net gearing of 0.48x (31 March 2023:
0.50x).
During the period cash reduced by GBP65m from GBP550m to
GBP485m, including the repayment of GBP51m of borrowings that
matured.
The table below sets out movements in cash:
GBPm H1 FY24 FY23
----------------------------------------------------------- ------- -----
Opening cash 550 762
Operating activities
Fee and other operating income 232 573
Net cash flows from investment activities and investment
income(1) 30 162
Expenses and working capital (153) (322)
Tax paid (1) (32)
------- -----
Group cash flows from operating activities - APM(2,3) 108 381
Financing activities
Interest paid (15) (64)
Interest received on cash balances 13 14
Purchase of own shares -- (39)
Dividends paid (150) (236)
Net repayment of borrowings (51) (195)
------- -----
Group cash flows from financing activities - APM(2) (203) (520)
Other cash flow(4) 26 (77)
FX and other movement 4 4
----------------------------------------------------------- ------- -----
Closing cash 485 550
----------------------------------------------------------- ------- -----
Available undrawn ESG-linked RCF 550 550
----------------------------------------------------------- ------- -----
Cash and undrawn debt facilities (total available
liquidity) 1,035 1,100
----------------------------------------------------------- ------- -----
(1) The aggregate cash (used)/received from balance sheet
investment portfolio (additions), realisations, and cash proceeds
received from assets within the balance sheet investment
portfolio.
(2) Interest paid, which is classified as an Operating cash flow
under UK-adopted IAS, is reported within Group cash flows from
financing activities - APM.
(3) Per note 9 of the Financial Statements, Operating cash flows
under UK-adopted IAS of GBP(75.0)m (FY23: GBP291.6m) include
consolidated credit funds. This difference to the APM measure is
driven by cash consumption within consolidated credit funds as a
result of their investing activities during the period.
(4) Cash flows in respect of purchase of intangible assets,
purchase of property, plant and equipment and net cash flow from
derivative financial instruments.
At 30 September 2023, the Group had drawn debt of GBP1,477m (31
March 2023: GBP1,538m). The change is due to the repayment of
certain facilities as they matured, along with changes in FX rates
impacting the translation value:
GBPm
--------------------------------- -----
Drawn debt at 31 March 2023 1,538
Debt (repayment) / issuance (51)
Impact of foreign exchange rates (10)
--------------------------------- -----
Drawn debt at 30 September 2023 1,477
--------------------------------- -----
Net financial debt therefore increased by GBP4m to GBP992m (31
March 2023: GBP988m):
GBPm 30 September 2023 31 March 2023
------------------- ----------------- -------------
Drawn debt 1,477 1,538
Cash 485 550
------------------- ----------------- -------------
Net financial debt 992 988
------------------- ----------------- -------------
At 30 September 2023 the Group had credit ratings of BBB (stable
outlook) / BBB (stable outlook) from Fitch and S&P,
respectively.
The Group's debt is provided through a range of facilities. All
facilities except the ESG-linked RCF are fixed-rate instruments.
The weighted-average pre-tax cost of drawn debt at 30 September
2023 was 3.07% (31 March 2023: 3.17%). The weighted-average life of
drawn debt at 30 September 2023 was 3.8 years (31 March 2023: 4.1
years). The maturity profile of our term debt is set out below:
GBPm H2 FY24 FY25 FY26 FY27 FY28 FY29 FY30
------------------- -------- ---- ---- ---- ---- ---- ----
Term debt maturing -- 259 186 496 -- 103 433
For further details of our debt facilities see Other Information
(page 38).
Net asset value
Shareholder equity increased to GBP2,046m at 30 September 2023
(31 March 2023: GBP1,977m), equating to 714p per share (31 March
2023: 694p).
Net gearing
The movements in the Group's balance sheet investment portfolio,
cash balance, debt facilities and shareholder equity resulted in
net gearing decreasing to 0.48x at 30 September 2023 (31 March
2023: 0.50x).
GBPm 30 September 2023 31 March 2023 Change %
----------------------- ----------------- ------------- ----------
Net financial debt (A) 992 988 --
Net asset value (B) 2,046 1,977 3%
----------------------- ----------------- ------------- ----------
Net gearing (A/B) 0.48x 0.50x (0.02)x
----------------------- ----------------- ------------- ----------
Foreign exchange rates
The following foreign exchange rates have been used throughout
this review:
12
months
ended 30 30
31 September September
March 2023 2022
Six months ended Six months ended 2023 Period Period 31 March 2023
30 September 2023 Average 30 September 2022 Average Average end end year end
-------- -------------------------- -------------------------- ------- --------- --------- -------------
GBP:EUR 1.1597 1.1691 1.1560 1.1541 1.1394 1.1375
GBP:USD 1.2570 1.2053 1.2051 1.2200 1.1170 1.2337
EUR:USD 1.0839 1.0306 1.0426 1.0571 0.9803 1.0846
-------- -------------------------- -------------------------- ------- --------- --------- -------------
The table below sets out the currency exposure for certain
reported items:
USD EUR GBP Other
------------------------------------------------------- ----------- ----------- ----------- -----------
Fee-earning AUM (as at 30 September 23) 33% 55% 11% 1%
Fee income (6 months to 30 September 23) 31% 59% 9% 1%
FMC expenses (6 months to 30 September 23) 19% 18% 53% 10%
Balance sheet investment portfolio (as at 30 September
23) 30% 44% 20% 6%
------------------------------------------------------- ----------- ----------- ----------- -----------
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):
NAV per share at
Impact on H1 FY24 Impact on H1 FY24 30 September 2023
management fees(1) FMC PBT(1) (2)
------------------ ------------------- ------------------ -----------------
Sterling 5% weaker
against euro and
dollar GBP11.0m GBP10.9m 13p
Sterling 5%
stronger against
euro and dollar GBP(10.0)m GBP(9.9)m (12)p
------------------ ------------------- ------------------ -----------------
(1) Impact assessed by sensitising the average H1 FY24 FX
rates.
(2) NAV / NAV per share reflects the total indicative impact as
a result of a change in FMC PBT and net currency assets.
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 H1 FY24 period end exchange rates.
This has then been compared to the H1 FY24 numbers to arrive at the
change on a constant currency exchange rate basis.
The Group does not hedge its net currency income as a matter of
course, although this is kept under review. The Group does hedge
its net balance sheet currency exposure, with the intention of
broadly insulating the NAV from FX movements. Changes in the fair
value of the balance sheet hedges are reported within the IC.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties to which the Group is
exposed for the remainder of the year have been subject to robust
assessment by the Directors and remain consistent with those
outlined in our annual report for the year ended 31 March 2023.
Careful attention continues to be paid to the elevated levels of
geopolitical and economic uncertainty and the resulting impact on
our principal risks and the overall risk profile of the Group.
There have been no material changes and we will continue to monitor
the situation and potential exposures as matters evolve.
RESPONSIBILITY STATEMENT
We confirm to the best of our knowledge:
-- The condensed set of financial statements have been prepared in
accordance with UK-adopted IAS 34 'Interim Financial Reporting' and the
Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority;
-- The interim 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 Group and the undertakings included in
the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face;
and
-- There have been no material related-party transactions that have an
effect on the financial position or performance of the Group in the first
six months of the current financial year since that reported in the 31
March 2023 Annual Report.
This responsibility statement was approved by the Board of
Directors on 14 November 2023 and is signed on its behalf by:
Benoît Durteste David Bicarregui
CEO CFO
INDEPENT REVIEW REPORT TO INTERMEDIATE CAPITAL GROUP PLC
Conclusion
We have been engaged by Intermediate Capital Group plc ('the
Group') to review the condensed consolidated financial statements
in the Interim results statement for the six months ended 30
September 2023 which comprises the condensed consolidated income
statement, condensed consolidated statement of comprehensive
income, condensed consolidated statement of financial position,
condensed consolidated statement of cash flows, condensed
consolidated statement of changes in equity and the related
explanatory notes 1 to 10 (together the 'condensed consolidated
financial statements'). We have read the other information
contained in the Interim results statement and considered whether
it contains any apparent misstatements or material inconsistencies
with the information in the condensed consolidated financial
statements.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed consolidated financial
statements in the Interim results statement for the six months
ended 30 September 2023 is not prepared, in all material respects,
in accordance with UK-adopted International Accounting Standard 34,
'Interim Financial Reporting', and the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements 2410 (UK) 'Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity' ('ISRE 2410') issued by the Financial Reporting Council. A
review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with UK-adopted international
accounting standards. The condensed consolidated financial
statements included in this Interim results statement have been
prepared in accordance with UK-adopted International Accounting
Standard 34, 'Interim Financial Reporting'.
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
Conclusion section of this report, nothing has come to our
attention to suggest that management have inappropriately adopted
the going concern basis of accounting or that management have
identified material uncertainties relating to going concern that
are not appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE 2410, however future events or conditions may
cause the entity to cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the Interim results
statement in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
In preparing the Interim results statement, the directors are
responsible for assessing the Group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the Interim results statement, we are responsible
for expressing to the Group a conclusion on the condensed
consolidated financial statements in the Interim results statement.
Our conclusion, including our 'Conclusions Relating to Going
Concern', are based on procedures that are less extensive than
audit procedures, as described in the 'Basis for Conclusion'
paragraph of this report.
Use of our report
This report is made solely to the Group in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK) 'Review of Interim Financial Information Performed by the
Independent Auditor of the Entity' issued by the Financial
Reporting Council. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the Group,
for our work, for this report, or for the conclusions we have
formed.
Ernst & Young LLP
London
14 November 2023
CONDENSED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 September 2023
Six months ended Six months ended
30 September 2023 30 September 2022
(Unaudited) (Unaudited)
Notes GBPm GBPm
--------------------------------------------------------- ----- ------------------ ------------------
Fee and other operating income 2 253.5 257.0
Finance loss (6.3) (46.1)
Net gains on investments 215.9 5.8
--------------------------------------------------------- ----- ------------------ ------------------
Total Revenue 463.1 216.7
Other income(1) 10.1 4.7
Finance costs (24.9) (31.4)
Administrative expenses (188.0) (164.1)
Share of results of joint ventures accounted for using
the equity method (0.4) 4.9
--------------------------------------------------------- ----- ------------------ ------------------
Profit before tax from continuing operations 259.9 30.8
--------------------------------------------------------- ----- ------------------ ------------------
Tax charge 7 (42.3) 3.3
--------------------------------------------------------- ----- ------------------ ------------------
Profit after tax from continuing operations 217.6 34.1
Profit/(loss) after tax on discontinued operations 4.4 (1.9)
--------------------------------------------------------- ----- ------------------ ------------------
Profit for the period 222.0 32.2
--------------------------------------------------------- ----- ------------------ ------------------
Attributable to:
Equity holders of the parent 225.0 33.4
Non-controlling interests (3.0) (1.2)
--------------------------------------------------------- ----- ------------------ ------------------
222.0 32.2
--------------------------------------------------------- ----- ------------------ ------------------
Earnings per share attributable to ordinary equity
holders of the parent
Basic (pence) 5 78.7p 11.7p
Diluted (pence) 5 77.8p 11.5p
Earnings per share for profit from continuing operations
attributable to ordinary equity holders of the parent
Basic (pence) 5 76.1p 11.9p
Diluted (pence) 5 75.2p 11.7p
1. Interest income for the period ended 30 September 2022 has been
re-presented in line with the format adopted for the period ended 31
March 2023.
The accompanying notes are an integral part of these condensed
financial statements.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 September 2023
Six months ended 30 September 2023 Six months ended 30 September 2022
(Unaudited) (Unaudited)
Group GBPm GBPm
------------------------------------------------------ ---------------------------------- ----------------------------------
Profit after tax 222.0 32.2
Items that may be subsequently reclassified to profit
or loss if specific conditions are met
------------------------------------------------------ ---------------------------------- ----------------------------------
Exchange differences on translation of foreign
operations 5.6 46.8
Deferred tax on equity investments translation (0.4) --
------------------------------------------------------ ---------------------------------- ----------------------------------
Total comprehensive income for the year 227.2 79.0
------------------------------------------------------ ---------------------------------- ----------------------------------
Attributable to:
Equity holders of the parent 230.2 80.2
Non-controlling interests (3.0) (1.2)
------------------------------------------------------ ---------------------------------- ----------------------------------
227.2 79.0
------------------------------------------------------ ---------------------------------- ----------------------------------
The accompanying notes are an integral part of these condensed
financial statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 September 2023
30
September
2023 31 March 2023
(Unaudited) (Audited)
Notes GBPm
---------------------------------------------------- ----- ----------- -------------
Non-current assets
Intangible assets 13.2 14.9
Property, plant and equipment 85.2 88.2
Investment property 0.8 0.8
Investment in Joint Venture accounted for under the
equity method -- 5.8
Trade and other receivables 48.5 37.1
Financial assets at fair value 4 6,961.6 7,036.6
Derivative financial assets 4 7.6 8.4
Deferred tax asset 19.5 17.6
---------------------------------------------------- ----- ----------- -------------
7,136.4 7,209.4
---------------------------------------------------- ----- ----------- -------------
Current assets
Trade and other receivables 304.8 232.0
Current tax debtor 16.1 57.0
Financial assets at fair value 4 9.9 4.7
Derivative financial assets 4 4.8 13.6
Cash and cash equivalents 709.5 957.5
---------------------------------------------------- ----- ----------- -------------
1,045.1 1,264.8
---------------------------------------------------- ----- ----------- -------------
Assets of disposal groups held for sale 689.5 578.3
---------------------------------------------------- ----- ----------- -------------
Total assets 8,871.0 9,052.5
---------------------------------------------------- ----- ----------- -------------
Non-current liabilities
Trade and other payables 44.8 71.1
Financial liabilities at fair value 4,8 4,376.4 4,572.7
Financial liabilities at amortised cost 8 1,237.1 1,478.2
Other financial liabilities 8 75.3 79.6
Derivative financial liabilities 4,8 -- 0.9
Deferred tax liabilities 37.7 35.5
---------------------------------------------------- ----- ----------- -------------
5,771.3 6,238.0
---------------------------------------------------- ----- ----------- -------------
Current liabilities
Trade and other payables 400.7 471.4
Current tax creditor 7.0 14.8
Financial liabilities at amortised cost 8 247.8 58.5
Other financial liabilities 8 7.4 5.8
Derivative financial liabilities 4,8 41.1 14.8
---------------------------------------------------- ----- ----------- -------------
704.0 565.3
---------------------------------------------------- ----- ----------- -------------
Liabilities of disposal groups held for sale 269.2 204.0
---------------------------------------------------- ----- ----------- -------------
Total liabilities 6,744.5 7,007.3
---------------------------------------------------- ----- ----------- -------------
Equity and reserves
Called up share capital 77.3 77.3
Share premium account 181.3 180.9
Other reserves 38.1 19.0
Retained earnings 1,813.4 1,742.6
---------------------------------------------------- ----- ----------- -------------
Equity attributable to owners of the Company 2,110.1 2,019.8
---------------------------------------------------- ----- ----------- -------------
Non-controlling interest 16.4 25.4
---------------------------------------------------- ----- ----------- -------------
Total equity 2,126.5 2,045.2
---------------------------------------------------- ----- ----------- -------------
Total equity and liabilities 8,871.0 9,052.5
---------------------------------------------------- ----- ----------- -------------
The accompanying notes are an integral part of these condensed
financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended 30 September 2023
Six months Six months
ended 30 ended 30
September September
2023 2022
Notes (Unaudited) (Unaudited)
GBPm GBPm
------------------------------------------------------ ----- ----------- -----------
Cash flows (used in)/generated from operations (73.4) 149.3
Taxes paid (1.6) (16.5)
------------------------------------------------------ ----- ----------- -----------
Net cash flows (used in)/from operating activities 9 (75.0) 132.8
------------------------------------------------------ ----- ----------- -----------
Investing activities
Purchase of intangible assets (2.1) (2.8)
Purchase of property, plant and equipment (2.0) (0.5)
Net cash flow from derivative financial instruments 33.7 (50.9)
Cash flow as a result of change in control of
subsidiary -- (7.0)
------------------------------------------------------ ----- ----------- -----------
Net cash flows from/(used in) investing activities 29.6 (61.2)
------------------------------------------------------ ----- ----------- -----------
Financing activities
Purchase of own shares -- (38.9)
Payment of principal portion of lease liabilities (3.8) (0.6)
Repayment of long-term borrowings (50.7) (34.9)
Dividends paid to equity holders of the parent (149.5) (164.4)
------------------------------------------------------ ----- ----------- -----------
Net cash flows used in financing activities (204.0) (238.8)
------------------------------------------------------ ----- ----------- -----------
Net decrease in cash and cash equivalents (249.4) (167.2)
Effects of exchange rate differences on cash and cash
equivalents 1.4 37.4
Cash and cash equivalents at 1 April 957.5 991.8
------------------------------------------------------ ----- ----------- -----------
Cash and cash equivalents at 30 September 709.5 862.0
------------------------------------------------------ ----- ----------- -----------
The Group's cash and cash equivalents include GBP224.2m (31
March 2023: GBP407.5m) of restricted cash held principally by
structured entities controlled by the Group.
The presentation of the condensed consolidated statement of cash
flows have been updated to improve the presentation of this
information. The reconciliation of cash used in/generated from
operations to profit before tax from continuing operations is now
disclosed in note 9.
The accompanying notes are an integral part of these condensed
financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 September 2023
Foreign
Capital currency
Share Share redemption Share based payments reserve Own translation Retained Non-controlling Total
capital premium reserve(1) (note 25) shares(3) reserve(2) earnings Total interest equity
Group GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------------------------- ------------ ------------- ----------- ---------------------------- --------------- ------------- --------------- --------------- --------------- ---------------
Balance at 1 April 2023 77.3 180.9 5.0 73.3 (103.4) 44.1 1,742.6 2,019.8 25.4 2,045.2
Profit after tax -- -- -- -- -- -- 225.0 225.0 (3.0) 222.0
Exchange differences on translation of foreign
operations -- -- -- -- -- 5.6 -- 5.6 -- 5.6
Deferred tax on equity investments translation -- -- -- -- -- (0.4) -- (0.4) -- (0.4)
--------------------------------------------------- ------------ ------------- ----------- ---------------------------- --------------- ------------- --------------- --------------- --------------- ---------------
Total comprehensive income/(expense) for the period -- -- -- -- -- 5.2 225.0 230.2 (3.0) 227.2
--------------------------------------------------- ------------ ------------- ----------- ---------------------------- --------------- ------------- --------------- --------------- --------------- ---------------
Adjustment of non-controlling interest on disposal
of subsidiary -- -- -- -- -- -- -- -- (6.0) (6.0)
Issue of share capital 0.0 -- -- -- -- -- -- 0.0 -- 0.0
Options/awards exercised(4) -- 0.4 -- (28.4) 20.6 -- (4.7) (12.1) -- (12.1)
Tax on options/awards exercised -- -- -- 0.5 -- -- -- 0.5 -- 0.5
Credit for equity settled share schemes -- -- -- 21.2 -- -- -- 21.2 -- 21.2
Dividends paid -- -- -- -- -- -- (149.5) (149.5) -- (149.5)
--------------------------------------------------- ------------ ------------- ----------- ---------------------------- --------------- ------------- --------------- --------------- --------------- ---------------
Balance at 30 September 2023 77.3 181.3 5.0 66.6 (82.8) 49.3 1,813.4 2,110.1 16.4 2,126.5
--------------------------------------------------- ------------ ------------- ----------- ---------------------------- --------------- ------------- --------------- --------------- --------------- ---------------
Share Foreign
Capital based currency
Share Share redemption payments Own translation Retained Non-controlling Total
capital premium reserve(1) reserve shares(3) reserve(2) earnings Total interest equity
Group GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------------------------- -------- -------- ---------- -------- ---------- ----------- --------- ------- --------------- -------
Balance at 1 April 2022 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 -- -- -- -- -- -- 33.4 33.4 (1.2) 32.2
Exchange differences on translation of foreign
operations -- -- -- -- -- 46.8 -- 46.8 -- 46.8
--------------------------------------------------- -------- -------- ---------- -------- ---------- ----------- --------- ------- --------------- -------
Total comprehensive income/(expense) for the period -- -- -- -- -- 46.8 33.4 80.2 (1.2) 79.0
--------------------------------------------------- -------- -------- ---------- -------- ---------- ----------- --------- ------- --------------- -------
Adjustment of non-controlling interest on disposal
of subsidiary -- -- -- -- -- -- -- -- (4.9) (4.9)
Acquisition of non-controlling interest -- -- -- -- -- -- -- -- 31.3 31.3
Own shares acquired in the year -- -- -- -- (38.9) -- -- (38.9) -- (38.9)
Options/awards exercised(4) -- -- -- (27.4) 25.8 -- (13.6) (15.2) -- (15.2)
Tax on options/awards exercised -- -- -- (2.6) -- -- -- (2.6) -- (2.6)
Credit for equity settled share schemes -- -- -- 20.4 -- -- -- 20.4 -- 20.4
Dividends paid -- -- -- -- -- -- (164.4) (164.4) -- (164.4)
--------------------------------------------------- -------- -------- ---------- -------- ---------- ----------- --------- ------- --------------- -------
Balance at 30 September 2022 77.3 180.3 5.0 57.9 (106.1) 67.5 1,569.4 1,851.3 55.2 1,906.5
--------------------------------------------------- -------- -------- ---------- -------- ---------- ----------- --------- ------- --------------- -------
1. The capital redemption reserve is a reserve created when a company buys
its own shares which reduces its share capital. GBP1.4m of the balance
relates to the conversion of ordinary shares and convertible shares into
ordinary shares in 1994. The remaining GBP3.6m relates to the
cancellation of treasury shares in 2015.
2. 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.
3. 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.
4. 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.
The accompanying notes are an integral part of these condensed
financial statements.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
For the six months ended 30 September 2023
1. General information and basis of preparation
Basis of preparation
The interim condensed consolidated financial statements have
been prepared in accordance with UK-adopted IAS 34 Interim
Financial Reporting (IAS 34), the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority, and on the
basis of the accounting policies and methods of computation set out
in the consolidated financial statements of the Group for the year
ended 31 March 2023.
The interim financial statements are unaudited and do not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006. Within the notes to the interim financial
statements, all current and comparative data covering period to (or
as at) 30 September 2023 is unaudited. Data given in respect of 31
March 2023 is audited. The statutory accounts for the year to 31
March 2023 have been reported on by Ernst & Young LLP and
delivered to the Registrar of Companies. The report of the auditors
was (i) unqualified, (ii) did not include a reference to any
matters which the auditors drew attention by way of emphasis
without qualifying their report, and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act
2006.
The consolidated financial statements of the Group as at and for
the year ended 31 March 2023 which were prepared in accordance with
UK-adopted International Accounting Standards (UK-adopted IAS) are
available on the Group's website, www.icgam.com.
Going concern
In making their assessment, the Directors have considered a
range of information relating to present and future conditions,
including future projections of profitability, cash flows and
capital resources through the twelve month period to 30 November
2024. The Group has good visibility on future management fees due
to the long term and diversified nature of its funds, underpinned
by a strong, well capitalised balance sheet and approximately
GBP1.0bn of liquidity in cash and undrawn facilities at 30
September 2023.
The Directors have concluded, based on the above assessment,
that the preparation of the interim condensed consolidated
financial statements on a going concern basis over the period to 30
November 2024 continues to be appropriate.
Related party transactions
There have been no material changes to the nature or size of
related-party transactions since 31 March 2023.
Changes in significant accounting policies
The accounting policies adopted in the preparation of the
interim condensed consolidated financial statements are consistent
with those followed in the preparation of the Group's annual
consolidated financial statements for the year ended 31 March 2023.
The Group has not early adopted any standard, interpretation or
amendment that has been issued but is not yet effective.
Critical judgements in the application of accounting policies
and key sources of estimation uncertainty
The critical judgements made by the Directors in the application
of the Group's accounting policies, and the key sources of
estimation uncertainty at the reporting date, are the same as those
disclosed in the Group's annual consolidated financial statements
for the year ended 31 March 2023.
Changes in the composition of the Group
The Group ceased to control 44 subsidiaries of a warehouse fund
previously reported as Discontinued operations within Disposal
groups held for sale (see note 9). The Group disposed of its
interest in ICG Nomura KK, a joint venture.
The Group acquired interests in ten controlled subsidiaries of
warehouse funds reported as Discontinued operations and six other
subsidiaries, all included within Disposal groups held for sale
with no impact on net assets.
2. 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. The significant
components of the Group's fund management revenues are as
follows:
Six months ended Six months ended
30 September 2023 30 September 2022
(Unaudited) (Unaudited)
Type of contract/service GBPm GBPm
------------------------------- ------------------ ------------------
Management fees(1) 252.7 254.3
Other income 0.8 2.7
------------------------------- ------------------ ------------------
Fee and other operating income 253.5 257.0
------------------------------- ------------------ ------------------
1. Included within management fees is GBP30.6m (H1 FY23: GBP14.3m) of
performance related fees.
Management Fees
The Group earns management fees from its performance of
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 net
asset value (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 period of
GBP222.1m (H1 FY23: GBP240.0m) 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 in the future of the revenue
recognised. 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 GBP30.6m (H1 FY23: GBP14.3m) have been
recognised in the period. 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.
3. 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, being 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 from the provision of investment
management services, including dividends from CLOs, 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.
Six months ended 30 September 2023 (Unaudited) Six months ended 30 September 2022 (Unaudited)
---------------------------------------------- -----------------------------------------------
Reportable Reportable
segments segments
FMC IC Total FMC IC Total
GBPm GBPm GBPm GBPm GBPm GBPm
---------------- -------------- -------------- -------------- -------------- --------------- --------------
External fee
income 263.2 -- 263.2 265.3 -- 265.3
Inter-segmental
fee 12.3 (12.3) -- 12.7 (12.7) --
Other operating
income 0.2 0.5 0.7 0.7 1.2 1.9
---------------- -------------- -------------- -------------- -------------- --------------- --------------
Fund management
fee income 275.7 (11.8) 263.9 278.7 (11.5) 267.2
---------------- -------------- -------------- -------------- -------------- --------------- --------------
Net investment
returns -- 159.4 159.4 -- (26.5) (26.5)
Dividend income 20.3 -- 20.3 23.8 -- 23.8
Net fair value
loss on
derivatives -- (5.8) (5.8) (45.6) 3.8 (41.8)
---------------- -------------- -------------- -------------- -------------- --------------- --------------
Total revenue 296.0 141.8 437.8 256.9 (34.2) 222.7
---------------- -------------- -------------- -------------- -------------- --------------- --------------
Interest
income(1) -- 10.0 10.0 -- 3.9 3.9
Interest expense (1.1) (24.0) (25.1) (0.9) (30.1) (31.0)
Staff costs (47.3) (9.9) (57.2) (41.9) (9.2) (51.1)
Incentive scheme
costs (55.2) (28.6) (83.8) (46.0) (26.6) (72.6)
Other
administrative
expenses (29.7) (10.1) (39.8) (24.4) (11.9) (36.3)
---------------- -------------- -------------- -------------- -------------- --------------- --------------
Profit before
tax and
discontinued
operations 162.7 79.2 241.9 143.7 (108.1) 35.6
---------------- -------------- -------------- -------------- -------------- --------------- --------------
1. Interest income for the period ended 30 September 2022 has been
re-presented in line with the format adopted for the period ended 31
March 2023.
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 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.
3. Segmental reporting continued
Consolidated income statement
Reportable Consolidated Financial
segments entities statements
Six months ended 30 September 2023 (Unaudited) GBPm GBPm GBPm
------------------------------------------------------- --------------- -------------- ---------------
Fund management fee income 263.2 (10.5) 252.7
Other operating income 0.7 0.1 0.8
Fee and other income 263.9 (10.4) 253.5
Dividend income 20.3 (20.3) --
Net fair value loss on derivatives (5.8) (0.5) (6.3)
Finance income/(loss) 14.5 (20.8) (6.3)
Net investment returns/gains on investments 159.4 56.5 215.9
------------------------------------------------------- --------------- -------------- ---------------
Total revenue 437.8 25.3 463.1
------------------------------------------------------- --------------- -------------- ---------------
Other income(1) 10.0 0.1 10.1
Finance costs (25.1) 0.2 (24.9)
Staff costs (57.2) -- (57.2)
Incentive scheme costs (83.8) -- (83.8)
Other administrative expenses (39.8) (7.2) (47.0)
Administrative expenses (180.8) (7.2) (188.0)
Share of results of joint ventures accounted for using
equity method -- (0.4) (0.4)
------------------------------------------------------- --------------- -------------- ---------------
Profit before tax and discontinued operations 241.9 18.0 259.9
------------------------------------------------------- --------------- -------------- ---------------
Tax charge (37.5) (4.8) (42.3)
Profit after tax from discontinued operations -- 4.4 4.4
------------------------------------------------------- --------------- -------------- ---------------
Profit after tax and discontinued operations 204.4 17.6 222.0
------------------------------------------------------- --------------- -------------- ---------------
Reportable Consolidated Financial
segments entities statements
Six months ended 30 September 2022 (Unaudited) GBPm GBPm GBPm
------------------------------------------------------- --------------- -------------- ---------------
Fund management fee income 265.3 (11.0) 254.3
Other operating income 1.9 0.8 2.7
Fee and other income 267.2 (10.2) 257.0
Dividend income 23.8 (23.8) --
Net fair value gain/(loss) on derivatives (41.8) (4.3) (46.1)
Finance loss (18.0) (28.1) (46.1)
Net investment returns/gains on investments (26.5) 32.3 5.8
------------------------------------------------------- --------------- -------------- ---------------
Total revenue 222.7 (6.0) 216.7
------------------------------------------------------- --------------- -------------- ---------------
Other income(1) 3.9 0.8 4.7
Finance costs (31.0) (0.4) (31.4)
Staff costs (51.1) 0.1 (51.0)
Incentive scheme costs (72.6) (0.1) (72.7)
Other administrative expenses (36.3) (4.1) (40.4)
Administrative expenses (160.0) (4.1) (164.1)
Share of results of joint ventures accounted for using
equity method -- 4.9 4.9
------------------------------------------------------- --------------- -------------- ---------------
Profit before tax and discontinued operations 35.6 (4.8) 30.8
------------------------------------------------------- --------------- -------------- ---------------
Tax charge 3.1 0.2 3.3
------------------------------------------------------- --------------- -------------- ---------------
Loss after tax from discontinued operations -- (1.9) (1.9)
------------------------------------------------------- --------------- -------------- ---------------
Profit after tax and discontinued operations 38.7 (6.5) 32.2
------------------------------------------------------- --------------- -------------- ---------------
1. Interest income for the period ended 30 September 2022 has been
re-presented in line with the format adopted for the period ended 31
March 2023.
4. 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 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
2022 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 34.
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.
-------------------------------------------------------------
4. 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 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 30 September 2023 (Unaudited) As at 31 March 2023 (Audited)
----------------------------------------------------- ------------------------------------ ------------------------------------
Level Level
1 Level 2 Level 3 Total 1 Level 2 Level 3 Total
Group GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------------------------- ----- --------- ------- --------- ----- --------- ------- ---------
Financial Assets
Investments in or alongside managed funds(1) 6.0 2.2 2,214.2 2,222.4 7.2 1.8 2,144.3 2,153.3
Investments in loans held within structured entities
controlled by the Group -- 4,064.9 454.1 4,519.0 -- 4,101.4 567.7 4,669.1
Derivative assets -- 12.4 -- 12.4 -- 22.0 -- 22.0
Investments in private companies(2) -- -- 102.3 102.3 -- -- 100.4 100.4
Investments in public companies 4.6 -- -- 4.6 5.1 -- -- 5.1
Senior and subordinated notes of CLO vehicles -- 106.1 17.1 123.2 -- 105.8 7.5 113.3
Disposal groups held for sale(3) -- -- 443.1 443.1 -- -- 163.2 163.2
----------------------------------------------------- ----- --------- ------- --------- ----- --------- ------- ---------
Total assets(4) 10.6 4,185.6 3,230.8 7,427.0 12.3 4,231.0 2,983.1 7,226.4
----------------------------------------------------- ----- --------- ------- --------- ----- --------- ------- ---------
Financial Liabilities
Liabilities of consolidated credit funds -- (4,253.6) (122.8) (4,376.4) -- (4,508.0) (64.7) (4,572.7)
Derivative liabilities -- (41.1) -- (41.1) -- (15.7) -- (15.7)
Disposal groups held for sale(5) -- -- (171.4) (171.4) -- -- -- --
----------------------------------------------------- ----- --------- ------- --------- ----- --------- ------- ---------
Total liabilities(6) -- (4,294.7) (294.2) (4,588.9) -- (4,523.7) (64.7) (4,588.4)
----------------------------------------------------- ----- --------- ------- --------- ----- --------- ------- ---------
1. Level 3 Investments in or alongside managed funds includes GBP48.5m
senior debt (31 March 2023: GBP47.8m), GBP1,337.0m subordinated debt and
equity (31 March 2023: GBP1,319.8m), GBP330.5m of real estate assets (31
March 2023: GBP284.5m), and GBP498.2m private equity secondaries (31
March 2023: GBP492.2m).
2. Level 3 Investment in private companies includes GBP93.1m subordinated
debt and equity (31 March 2023: GBP91.3m) and GBP9.2m of real estate
assets (31 March 2023: GBP9.1m).
Footnotes 3 to 6 below explain how the financial assets and
financial liabilities set out in this note reconcile to the
Statement of Financial Position (see page 22):
1. Level 3 Disposal groups held for sale financial assets include GBP193.7m
subordinated debt and equity (31 March 2023: GBP163.2m), GBP42.3m of real
assets (31 March 2023: GBP0.0m), and GBP207.1m private equity secondaries
(31 March 2023: GBP0.0m). Other Disposal groups held for sale assets (not
reported within this note) comprise the following: non-financial
(investment property) assets: GBP123.9m (31 March 2023: GBP284.0m) and
other operating assets GBP122.4m (31 March 2023: GBP131.1m)
2. Total assets comprises Non-current financial assets at fair value
(GBP6,961.6m (31 March 2023: GBP7,036.6m)); Current financial assets at
fair value (GBP9.9m (31 March 2023: GBP4.7m)); Non-current derivative
financial assets (GBP7.6m (31 March 2023: GBP8.4m)); Current derivative
financial assets (GBP4.8m (31 March 2023: GBP13.6m)) and financial assets
included within Disposal groups held for sale (GBP443.1m (31 March 2023:
GBP163.2m))
3. Level 3 Disposal groups held for sale financial liabilities include
GBP171.4m (31 March 2023: GBP0.0m) liabilities of consolidated private
equity secondaries funds. Other Disposal groups held for sale liabilities
(not reported within this note) comprise other operating liabilities
GBP97.8m (31 March 2023: GBP204.0m)
4. Total liabilities comprises Non-current financial liabilities at fair
value (GBP4,376.4m (31 March 2023: GBP4,572.7m)); Non-current derivative
financial liabilities (GBP0.0m (31 March 2023: GBP0.9m)); Current
derivative financial liabilities (GBP41.1m (31 March 2023: GBP14.8m));
and financial liabilities included within Disposal groups held for sale
(GBP171.4m (31 March 2023: GBP0.0m))
4. 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 assesses the reasonableness
of the resulting fair value measurement. The GVC reviews 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 34 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 cash flow
(DCF) approach. Fair value is determined by discounting the
expected future cash flows 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 classifies 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.
4. 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 cash flow
technique and the key inputs under this approach are detailed on
page 34.
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 cash flows,
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 2022. 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.
4. Financial assets and liabilities continued
Reconciliation of Level 3 fair value measurements of financial
assets
The following tables set out the movements in recurring
financial assets 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 gain/(losses) are included within finance costs.
Transfers between levels are determined based on the closing
valuation and therefore take place at the end of the reporting
period.
Investment Investment
in or in loans Senior and Disposal
alongside held in Investment subordinated groups
managed consolidated in private notes of CLO held for
funds entities companies vehicles sale Total
Group GBPm GBPm GBPm GBPm GBPm GBPm
----------- ---------- ------------ ---------- ------------ -------- -------
At 1 April
2023 2,144.3 567.7 100.4 7.5 163.2 2,983.1
Total gains
or losses
in the
income
statement
-- Net
investment
return(2) 134.6 1.6 3.5 4.2 63.4 207.3
---------- ------------
-- Foreign
exchange (10.6) 0.1 (1.1) (0.1) 3.4 (8.3)
Purchases 100.7 111.1 0.2 5.5 213.1 430.6
Exit
proceeds (154.8) (100.8) (0.7) -- -- (256.3)
Transfer
between
levels(1) -- (125.6) -- -- -- (125.6)
----------- ---------- ------------ ---------- ------------ -------- -------
At 30
September
2023 2,214.2 454.1 102.3 17.1 443.1 3,230.8
----------- ---------- ------------ ---------- ------------ -------- -------
1. During the year certain assets in Investments in loans held
in consolidated entities were reassessed as Level 2 (from Level 3)
as a result of a change in the number of broker quotes for these
assets, and these changes are reported as a transfer out.
2. Included within net investment returns are GBP149.7m of
unrealised gains (which includes accrued interest).
Investment Investment
in or in loans Senior and Disposal
alongside held in Investment subordinated groups
managed consolidated in private notes of CLO held for
funds entities companies vehicles sale Total
Group GBPm GBPm GBPm GBPm GBPm GBPm
----------- ---------- ------------ ---------- ------------ -------- -------
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
return(2) 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
levels(1) -- 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 or alongside
managed fund and Investments in loans held in consolidated entities
were reassessed to Level 3 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
2. Included within net investment returns are GBP141.8m 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.
Transfers between levels are determined based on the closing
valuation and therefore take place at the end of the reporting
period.
During the period ended 30 September 2023 changes in the fair
value of the assets of consolidated credit funds resulted in an
increase in the fair value of the financial liabilities of those
consolidated credit funds, reported as a 'fair value loss' in the
table below.
30 September 2023
(Unaudited) 31 March 2023 (Audited)
------------------------ -------------------------
Financial liabilities Financial liabilities
designated as FVTPL designated as FVTPL
Group GBPm GBPm
------------------------- ------------------------ -------------------------
At 1 April 64.7 239.6
Total gains or losses in
the income statement
-- Fair value loss/(gain) 52.7 (178.2)
-- Foreign exchange
(gain)/loss (0.4) 12.8
Purchases 0.0 23.8
Disposal groups held for
sale 171.4 (5.0)
Transfer between levels 5.8 (28.3)
------------------------- ------------------------ -------------------------
As at period end 294.2 64.7
------------------------- ------------------------ -------------------------
4. Financial assets and liabilities continued
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.
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:
Key Unobservable Sensitivity/ Effect on Fair Value(4)
Fair Value Fair Value Primary Valuation Technique(1) Inputs Range Weighted Average/ Fair Value Inputs Scenarios 30 September 2023
------------------------------ ---------------- -------------- ----------------------------------- ----------------
As at As at
30 September 2023 31 March 2023
------------------------------ ---------------- -------------- ----------------------------------- ----------------
Group Assets GBPm GBPm GBPm
------------------------------------------------- ------------------ -------------- ------------------------------ ---------------- -------------- ----------------------------------- ---------------- -----------------------
Earnings '+10% Earnings
Corporate - subordinated debt and equity(2) 1,623.8 1,574.4 Market comparable companies multiple 5.0x -- 30.0x 15.6x multiple(2) 201.6
------------------------------------------------- ------------------ -------------- ------------------------------ ---------------- -------------- -----------------------------------
'-10% Earnings
Discounted cash flow Discount rate 7.5% - 23.0% 11.2 % multiple(2) (201.4)
------------------------------------------------- ------------------ -------------- ------------------------------ ---------------- -------------- -----------------------------------
Earnings
multiple 6.2x -- 22.1x 11.6x
------------------------------------------------- ------------------ -------------- ------------------------------ ---------------- -------------- ----------------------------------- ---------------- -----------------------
+10% Third-party
Real Assets 382.0 293.6 Third-party valuation N/A N/A N/A valuation 38.2
------------------------------------------------- ------------------ -------------- ------------------------------ ---------------- -------------- -----------------------------------
-10% Third-party
LTV-based impairment model N/A N/A N/A valuation (38.2)
------------------------------------------------- ------------------ -------------- ------------------------------
Private Equity +10% Third-party
Secondaries 705.3 492.1 Third-party valuation N/A N/A N/A valuation 70.5
------------------------------------------------- ------------------ --------------
-10% Third-party
valuation (70.5)
Corporate - Probability of
Senior debt 48.5 47.8 Discounted cash flow default 1.2%-3.3% 1.5 % 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 vehicles(3) 17.1 7.5 Discounted cash flow Discount rate 13.0% - 14.0% 13.6 %
------------------------------------------------- ------------------ -------------- ------------------------------ ---------------- -------------- -----------------------------------
Default rate 3% - 4.5% 3.4 % Upside case(3) 24.9
------------------------------------------------- ------------------ -------------- -------------- -----------------------------------
Downside case(3) (24.3)
-------------- -----------------------------------
Prepayment rate
% 15% -20% 19.1 %
---------------- -------------- -----------------------------------
Recovery rate % 75.0 % 75.0 %
---------------- -------------- -----------------------------------
Reinvestment
price 99.5 % 99.5 %
------------------------------------------------- ------------------ -------------- ------------------------------ ---------------- -------------- ----------------------------------- ---------------- -----------------------
+10% Third-party
Investments in loans held in structured entities 454.1 567.7 Third-party valuation N/A N/A N/A valuation 45.4
------------------------------------------------- ------------------ -------------- ------------------------------ ---------------- -------------- -----------------------------------
-10% Third-party
valuation (45.4)
------------------------------------------------- ------------------ -------------- ------------------------------ ---------------- -------------- ----------------------------------- ---------------- -----------------------
Total assets 3,230.8 2,983.1
------------------------------------------------- ------------------ -------------- ------------------------------ ---------------- -------------- ----------------------------------- ---------------- -----------------------
+10% Third-party
Liabilities of consolidated credit funds (122.8) (64.7) Third-party valuation N/A N/A N/A valuation 12.3
------------------------------------------------- -------------- ------------------------------ ---------------- -------------- -----------------------------------
-10% Third-party
valuation (12.3)
------------------------------------------------- ------------------ -------------- ------------------------------ ---------------- -------------- ----------------------------------- ---------------- -----------------------
Disposal group held for sale (171.4) --
------------------------------------------------- ------------------ -------------- ------------------------------ ---------------- -------------- ----------------------------------- ---------------- -----------------------
Total liabilities (294.2) (64.7)
------------------------------------------------- ------------------ -------------- ------------------------------ ---------------- -------------- ----------------------------------- ---------------- -----------------------
1. 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.
2. For investments valued using a DCF methodology (including Infrastructure
investments) the imputed earnings multiple is used for this sensitivity
analysis.
3. 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 GBP195.1m (31 March 2023: GBP182.8m). This value includes
investments in CLOs that are not consolidated (30 September 2023:
GBP17.1m (31 March 2023: GBP7.5m)) and investments in CLOs which are
consolidated (30 September 2023: GBP178m (31 March 2023: GBP175.3m)). The
upside case is based on the default rate being lowered by 2.0% 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
by 2.0% p.a., keeping all other parameters consistent.
4. The effect of fair value across the entire investment portfolio ranges
from -GBP392.9m (downside case) to +GBP392.9m (upside case) (31 March
2023: -GBP345.4m (downside case) to +GBP343.0m (upside case).
5.
5. Earnings per share
Six months ended 30 September 2023 Six months ended 30 September 2022
(Unaudited) (Unaudited)
Earnings GBPm GBPm
-------------------------------------------------------- ---------------------------------- ----------------------------------
Earnings for the purposes of basic and diluted earnings
per share being net profit attributable to equity
holders of the Parent:
Continuing operations 217.6 34.1
Discontinued operations 7.4 (0.7)
-------------------------------------------------------- ---------------------------------- ----------------------------------
225.0 33.4
-------------------------------------------------------- ---------------------------------- ----------------------------------
Number of shares
Weighted average number of ordinary shares for the
purposes of basic earnings per share 285,752,340 286,293,727
Effect of dilutive potential ordinary share options 3,430,600 3,602,160
-------------------------------------------------------- ---------------------------------- ----------------------------------
Weighted average number of ordinary shares for the
purposes of diluted earnings per share 289,182,940 289,895,887
-------------------------------------------------------- ---------------------------------- ----------------------------------
Earnings per share for continuing operations (1)
-------------------------------------------------------- ---------------------------------- ----------------------------------
Basic, profit from continuing operations attributable
to equity holders of the parent (pence) 76.1p 11.9p
Diluted, profit from continuing operations attributable
to equity holders of the parent (pence) 75.2p 11.7p
Earnings per share for discontinued operations (1)
-------------------------------------------------------- ---------------------------------- ----------------------------------
Basic, profit/(loss) from discontinued operations
attributable to equity holders of the parent (pence) 2.6p (0.2)p
Diluted, profit/(loss) from discontinued operations
attributable to equity holders of the parent (pence) 2.6p (0.2)p
1. The prior period has been re-presented to separately disclose Earnings
per share for continuing operations and Earnings per share for
discontinued operations.
The total number of shares issued during the period to 30
September 2023 was 32,379 (H1 FY23: nil).
6. Dividends
Dividends on ordinary shares of 52.2p per share, GBP149.5m (H1
FY23 57.3p, GBP164.4m) were paid during the period to 30 September
2023.
The Board has approved an interim dividend of 25.8p per share
(H1 FY23: 25.3p).
7. Tax expense
Six months ended Six months ended
30 September 2023 30 September 2022
(Unaudited) (Unaudited)
Analysis of tax on ordinary activities GBPm GBPm
-------------------------------------- ------------------ ------------------
Current tax 37.1 (15.4)
Deferred taxation 5.2 12.1
-------------------------------------- ------------------ ------------------
Tax charge/(credit) on profit on
ordinary activities 42.3 (3.3)
-------------------------------------- ------------------ ------------------
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 30 September 2023 of 16.3% (H1 FY23: (10.8)%) is lower than
the statutory UK corporation tax rate of 25%.
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.
7. Tax expense continued
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.
8. Financial liabilities
Financial liabilities are GBP5,985.1m (31 March 2023:
GBP6,210.5m), including GBP1,484.9m (31 March 2023: GBP1,536.7m) of
financial liabilities at amortised cost. This is a decrease of
GBP(225.4)m in the period since 31 March 2023 and is driven by the
repayment of long term debt at fair value in the consolidated
structured entities GBP196.3m and at amortised cost in operating
segments GBP50.7m.
9. Net cash flows from operating activities
Six months Six months
ended 30 ended 30
September September
2023 2022
(Unaudited) (Unaudited)
GBPm GBPm
------------------------------------------------------- ----------- -----------
Profit before tax from continuing operations 259.9 30.8
Adjustments for non cash items:
Fee and other operating income (253.5) (257.0)
Net investment returns (215.9) (5.8)
Interest income (10.1) (4.7)
Net fair value loss on derivatives 1.3 86.4
Impact of movement in foreign exchange rates 5.0 (40.3)
Interest expense 24.9 31.4
Depreciation, amortisation and impairment of property,
equipment and intangible assets 9.3 7.9
Share-based payment expense 21.2 20.4
Working capital changes:
(Increase)/Decrease in trade and other receivables (23.6) 59.2
Decrease in trade and other payables (108.5) (287.7)
------------------------------------------------------- ----------- -----------
(290.0) (359.4)
Proceeds from sale of current financial assets and
disposal groups held for sale 131.9 7.3
Purchase of current financial assets and disposal
groups held for sale (169.9) (118.3)
Purchase of investments(1) (1,105.8) (662.2)
Proceeds from sales and maturities of investments 1,071.0 902.9
Interest and dividend income received(2) 218.1 151.6
Fee and other operating income received 237.3 334.1
Interest paid (166.0) (106.7)
------------------------------------------------------- ----------- -----------
Cash flows (used in)/generated from operations (73.4) 149.3
Taxes paid (1.6) (16.5)
------------------------------------------------------- ----------- -----------
Net cash flows (used in)/from operating activities (75.0) 132.8
------------------------------------------------------- ----------- -----------
1. Includes repayment of financial liabilities at FVTPL of consolidated
structured entities GBP270.6m (H1FY23: GBP28.0m).
2. Comprises Interest income received of GBP218.1m (H1FY23: GBP127.8m) and
Dividend income received of GBP nil (H1FY23: GBP23.8m).
Cash flows arising from the acquisition and disposal of assets
to seed new investment strategies (reported as disposal groups held
for sale) are classified as operating, as this activity is
undertaken to establish new sources of fund management fee income,
growing the operating activities of the Group.
Included within Proceeds from sale of current financial assets
and disposal groups held for sale is cash consideration received of
GBP113.9m in respect of the partial disposal of the Group's
interest in Metropolitan SCSp resulting in a loss of control by the
Group. Immediately prior to the partial disposal the net asset
value of Metropolitan SCSp was GBP161.3m, predominantly comprised
of investment property. Proceeds of GBP18.0m (H1FY23: GBP6.4m) were
received in respect of an interest in private equity secondaries
fund with no change of control.
Purchase of current financial assets and disposal groups held
for sale includes GBP90.1m (H1 FY23: GBP19.0m) of financial assets
and GBP71.2m (H1 FY23: GBP44.0m) of investment property held by
controlled subsidiaries.
10. Post balance sheet events
There have been no material events since the balance sheet
date.
Other information
Outstanding debt facilities
Drawn Undrawn
Currency GBPm GBPm Interest rate Maturity
---------------------- --------- ----- ------- ------------- ------------
ESG-linked RCF GBP -- 550 SONIA +1.375% January-26
Eurobond 2020 EUR 433 -- 1.63% February-27
ESG Linked Bond EUR 433 -- 2.50% January-30
Total bonds 866 --
---------------------- --------- ----- ------- ------------- ------------
PP 2015 -- Class C USD 66 -- 5.21% May-25
PP 2015 -- Class F EUR 38 -- 3.38% May-25
Private Placement 2015 104 --
PP 2016 -- Class B USD 93 -- 4.66% September-24
PP 2016 -- Class C USD 44 -- 4.96% September-26
PP 2016 -- Class E EUR 19 -- 3.04% January-27
PP 2016 -- Class F EUR 26 -- 2.74% January-25
Private Placement 2016 182 --
PP 2019 -- Class A USD 102 -- 4.76% April-24
PP 2019 -- Class B USD 82 -- 4.99% March-26
PP 2019 -- Class C USD 103 -- 5.35% March-29
PP 2019 -- Class D EUR 38 -- 2.02% April-24
Private Placement 2019 325 --
---------------------- --------- ----- ------- ------------- ------------
Total Private
Placements 611 --
---------------------- --------- ----- ------- ------------- ------------
Total 1,477 550
--------------------------------- ----- ------- ------------- ------------
Glossary
Non-IFRS alternative performance measures (APM) are defined
below:
Short
Term Form Definition
----------------------------------------- --------- --------------------------------------------------------------------------------------------
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
APM earnings per share EPS 5.
----------------------------------------- --------- --------------------------------------------------------------------------------------------
Group profit before tax adjusted for the impact of
the consolidated structured entities. As at 30 September,
APM Group profit before tax this is calculated as follows:
----------------------------------------- --------- --------------------------------------------------------------------------------------------
Six months ended Six months ended
30 September 2023 30 September 2022
----------------------------------------- --------- --------------------------------------------------- ------------------ ------------------
Profit before tax GBP228.5m GBP30.8m
Plus/Less consolidated structured entities GBP13.4m GBP4.8m
--------------------------------------------------- ------------------ ------------------
APM Group profit/(loss) before tax GBP241.9m GBP35.6m
----------------------------------------- --------- --------------------------------------------------- ------------------ ------------------
Investment Company profit adjusted for the impact
of the consolidated structured entities. As at 30
APM Investment Company profit before tax September, this is calculated as follows:
----------------------------------------- --------- --------------------------------------------------------------------------------------------
Six months ended Six months ended
30 September 2023 30 September 2022
----------------------------------------- --------- --------------------------------------------------- ------------------ ------------------
Investment Company profit before tax GBP65.8m GBP(112.9)m
Plus/Less consolidated structured entities GBP13.4m GBP4.8m
--------------------------------------------------- ------------------ ------------------
APM Investment Company profit/(loss) before tax GBP79.2m GBP(108.1)m
----------------------------------------- --------- --------------------------------------------------- ------------------ ------------------
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
Assets under management AUM end closing rate.
----------------------------------------- --------- --------------------------------------------------------------------------------------------
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
Balance sheet investment portfolio assets.
----------------------------------------- --------- --------------------------------------------------------------------------------------------
Dividend income represents distributions received
from equity investments. Dividend income reported
on an internal basis excludes the impact of the consolidated
Dividend income structured entities. See note 3 for a full reconciliation.
----------------------------------------- --------- --------------------------------------------------------------------------------------------
Profit after tax (annualised when reporting a six-month
period's results) divided by the weighted average
Earnings per share EPS number of ordinary shares as detailed in note 5.
----------------------------------------- --------- --------------------------------------------------------------------------------------------
EBITDA Earnings before interest, tax, depreciation and amortisation.
----------------------------------------- --------- --------------------------------------------------------------------------------------------
An average fee rate across all strategies based on
fee earning AUM in which the fees earned are weighted
Effective fee rate based on the relative AUM.
----------------------------------------- ---------
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
Equalisation valuation.
----------------------------------------- --------- --------------------------------------------------------------------------------------------
Interest expense excludes the cost of financing associated
Interest expense with the consolidated structured entities.
----------------------------------------- --------- --------------------------------------------------------------------------------------------
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 30 September, this is calculated as
APM net asset value per share follows:
----------------------------------------- --------- --------------------------------------------------------------------------------------------
Six months ended Six months ended
30 September 2023 30 September 2022
----------------------------------------- --------------------------------------------------- ------------------ ------------------
Total equity GBP2,045.6m GBP1,875.0m
Closing number of ordinary shares 286,443,759 284,867,428
---------------------------------------------------- -------------------------------------------------- ------------------ ------------------
Net asset value per share 714p 658p
----------------------------------------- --------- --------------------------------------------------- ------------------ ------------------
Net financial debt Net debt Net debt is defined as gross financial debt less cash.
----------------------------------------- ---------
30 September 2023 31 March 2023
----------------------------------------- --------- --------------------------------------------------- ------------------ ------------------
Gross drawn debt (see page 14) GBP1,477m GBP1,538.0m
Less cash (GBP485.0m) (GBP550.0m)
--------------------------------------------------- ------------------ ------------------
Net debt GBP992.0m GBP988.0m
----------------------------------------- --------- --------------------------------------------------- ------------------ ------------------
Short
Term Form Definition
----------------------------------------- --------- --------------------------------------------------------------------------------------------
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.
Net gearing As at 30 September, this is calculated as follows:
----------------------------------------- ---------
30 September 2023 31 March 2023
----------------------------------------- --------- --------------------------------------------------- ------------------ ------------------
Net debt GBP992.0m GBP988.0m
Shareholders' equity GBP2,045.6m GBP1,977.4m
--------------------------------------------------- ------------------ ------------------
Net gearing 0.48x 0.50x
----------------------------------------- --------- --------------------------------------------------- ------------------ ------------------
Net Investment Returns is the total of interest income,
capital gains, dividend and other income less asset
Net Investment Returns impairments.
----------------------------------------- --------- --------------------------------------------------------------------------------------------
Operating cash flow represents the cash generated
from operating activities from the statement of cash
flows, adjusted for the impact of the consolidated
Operating cash flow structured entities.
----------------------------------------- ---------
Fund Management Company profit before tax divided
by Fund Management Company total revenue. As at 30
Operating profit margin September this is calculated as follows:
----------------------------------------- --------- --------------------------------------------------------------------------------------------
Six months ended Six months ended
30 September 2023 30 September 2022
----------------------------------------- --------- --------------------------------------------------- ------------------ ------------------
Fund Management Company profit before tax GBP162.7m GBP143.7m
Fund Management Company total revenue GBP296.0m GBP256.9m
--------------------------------------------------- ------------------ ------------------
Operating profit margin 55.0 % 55.9 %
---------------------------------------------------- -------------------------------------------------- ------------------ ------------------
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.
------------------------------------------------------ -----------------------------------------------------------------------------------------
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 3 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:
------------------------------------------------------
30 September 2023 31 March 2023
------------------------------------------------------------------------------------------------------- ------------------ ------------------
Third Party AUM $77.8bn $77.0bn
Balance Sheet Investment Portfolio (excluding seed $3.2bn $3.2bn
investments)
---------------------------------------------------- -------------------------------------------------- ------------------ ------------------
Total AUM $81.0bn $80.2bn
---------------------------------------------------- -------------------------------------------------- ------------------ ------------------
Total available liquidity Total available liquidity comprises of 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.
------------------------------------------------------ -----------------------------------------------------------------------------------------
Other definitions which have not been identified as non-IFRS
GAAP alternative performance measures are as follows:
Term Short Definition
Form
---------------------- --------- ---------------------------------------------------------------
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 APM These are non-IFRS financial measures.
performance measure
---------------------- --------- ---------------------------------------------------------------
CAGR Compound Annual Growth Rate
---------------------- --------- ---------------------------------------------------------------
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 CLO CLO is a type of investment grade security backed
Obligation 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 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 which invest in self-originated transactions
funds 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 ESG Environmental, social and governance (ESG) criteria
and Governance are a set of standards for a company's operations
criteria that socially conscious investors use to screen potential
investments.
---------------------- --------- ---------------------------------------------------------------
Financial Conduct FCA Regulates conduct by both retail and wholesale financial
Authority service companies in provision of services to consumers.
---------------------- --------- ---------------------------------------------------------------
Financial Reporting FRC The UK's independent regulator responsible for promoting
Council 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 FMC The Group's fund management business, which sources
Company 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 Gross Total realised and unrealised value of investments
invested capital MOIC (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 Asset classes which are not actively traded.
---------------------- --------- ---------------------------------------------------------------
Investment Company IC 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 IRR The annualised return received by an investor in a
Return fund. It is calculated from cash drawn from and returned
to the investor together with the residual value of
the asset.
---------------------- --------- ---------------------------------------------------------------
Key Person 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 KPI A business metric used to evaluate factors that are
indicator crucial to the success of an organisation.
---------------------- --------- ---------------------------------------------------------------
Key risk indicator KRI A measure used to indicate how risky an activity is.
It is an indicator of the possibility of future adverse
impact.
---------------------- --------- ---------------------------------------------------------------
Liquid assets Asset classes with an active, established market in
which assets may be readily bought and sold.
---------------------- --------- ---------------------------------------------------------------
Term Short Definition
Form
---------------------- --------- ---------------------------------------------------------------
Money multiple MOIC or Cumulative returns divided by original capital invested.
MM
---------------------- --------- ---------------------------------------------------------------
Net currency assets 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 A fund which remains open to new commitments and where
an investor's commitment may be redeemed with appropriate
notice.
---------------------- --------- ---------------------------------------------------------------
Payment in kind PIK Also known as rolled-up interest. PIK is the interest
accruing on a loan until maturity or refinancing,
without any cash flows until that time.
---------------------- --------- ---------------------------------------------------------------
Performance fees Carried Share of profits that the fund manager is due once
interest it has returned the cost of investment and agreed
or Carry preferred return to investors.
---------------------- --------- ---------------------------------------------------------------
Realisation The return of invested capital in the form of principal,
rolled-up interest and/or capital gain.
---------------------- --------- ---------------------------------------------------------------
Realisations (of AUM) 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) 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.
---------------------- --------- ---------------------------------------------------------------
RCF Revolving credit facility
---------------------- --------- ---------------------------------------------------------------
Step-down/ Step-up Step down is 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 SASB The Sustainability Accounting Standards Board is an
Standards Board independent non-profit organisation that sets standards
to guide the disclosure of financially material sustainability
information by companies to their investors.
---------------------- --------- ---------------------------------------------------------------
SFDR Sustainable Finance Disclosure Regulation.
---------------------- --------- ---------------------------------------------------------------
Separately Managed SMA Third-party capital committed by a single investor
Account allocated to a specific investment strategy or strategies,
managed by ICG plc or its affiliates.
---------------------- --------- ---------------------------------------------------------------
Science Based Targets SBTi The Science Based Targets initiative helps drives
initiative climate action in the private sector by approving
and validating companies' science-based emissions
reduction targets (SBT).
---------------------- --------- ---------------------------------------------------------------
Structured entities 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 Task Force on Climate-related Financial Disclosures.
---------------------- --------- ---------------------------------------------------------------
Total AUM The aggregate of the Third Party AUM and the Balance
Sheet investment portfolio, excluding seed investments.
---------------------- --------- ---------------------------------------------------------------
UK Corporate The Code Sets out standards of good practice in relation to
Governance Code board leadership and effectiveness, remuneration,
accountability and relations with shareholders.
---------------------- --------- ---------------------------------------------------------------
High Net Worth HNW High-net-worth-individuals, with global wealth above
$1bn.
---------------------- --------- ---------------------------------------------------------------
Ultra High Net Worth UHNW Ultra-high-net-worth-individuals, with global wealth
above $1bn.
---------------------- --------- ---------------------------------------------------------------
UNPRI UN Principles for Responsible Investing.
---------------------- --------- ---------------------------------------------------------------
Weighted-average 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 Investments within the balance sheet investment portfolio
(previously warehoused that the Group anticipates transferring to a fund
investments) in due course, typically made where the Group is seeding
new strategies in anticipation of raising a fund.
---------------------- --------- ---------------------------------------------------------------
(END) Dow Jones Newswires
November 15, 2023 02:00 ET (07:00 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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