ICG Enterprise Trust PLC (ICGT) Earnings Call Transcript & Summary

Good morning. Welcome to ICG Enterprise Trust's full year results for the 12 months to 31st of JanuarY 2025. I'm joined today by Oliver Gardey and Colm Walsh, who will discuss our investment performance and activity in more detail over the course of this presentation. The slides for the presentation, along with the accompanying results announcement are available on our website. We will have time for Q&A at the end of the presentation. [Operator Instructions] With that, Oliver, over to you.

Thank you, Martin, and good morning, everyone. We are very pleased to announce today our full year results for the 12 months to 31st of January 2025. ICG Enterprise Trust recorded an NAV per share total return of 10.5% and a share price total return of 12.5%. As a reminder, all our performance figures are reported net of fees and costs. We are pleased with the strong performance over the year on an absolute basis and also relative to the peer set as our portfolio companies continue to display resilience despite macroeconomic and geopolitical uncertainty. Whilst that uncertainty has increased recently in the post-period end, we remain very confident that our sector positioning, strong origination network and robust balance sheet position -- and strong balance sheet positions us well for the current market environment. In addition, private equity is a long-term asset class, and therefore, we hold ourselves accountable to deliver long-term returns for our shareholders. And over the past 5 years, we have recorded NAV per share total return of 97% and a share price total return of 59%. Looking back even further, we are pleased to be featured on the AIC's list of ISA millionaires. This is a list where had investors invested their full ISA allowance annually from 1999 when ISAs were launched until 2024 into ICG Enterprise Trust and reinvested the dividends, it would have resulted in a savings pot now of over GBP 1.2 million. We were one of only a handful to be featured on the list. And whilst our portfolio strategy has evolved over the 25-year period in question, it speaks to our selection and focus on delivering long-term consistent returns for our shareholders. Moving on to the next slide. As a reminder for those less familiar with us, ICG Enterprise Trust has a very clear investment strategy. We invest in profitable, cash-generative private companies in North America and Europe with the aim of generating resilient growth over the long term. As you know, private equity has a long-term track record of outperforming public markets, and our strategy has outlined -- our strategy as outlined on the slide is about maximizing our returns while simultaneously managing risk. So how do we do this? First of all, we only invest in buyouts, more mature companies, which have a more consistent return profile, and we do not invest in venture capital or growth equity, which can have loss rates of 60% to 75%. Whereas for buyouts, it is around 10%. So it is a completely different risk profile. And then we only invest in developed markets. We do not target Asia or emerging markets, only North America and Europe. These geographies have a more mature PE market with very deep knowledge, expertise and a strong pipeline of quality managers and deals. The next filter is that we only focus on mid-market and larger deals. Funds over GBP 1 billion typically have the necessary investment experience, team and resources to deliver what makes private equity perform better than other asset classes. That proactive operational management is key to generate good returns. So we look for funds that have the resources and the operational capacity to source good companies and then to transform them to better companies. Now how do we generate returns is by investing, focusing on top-tier managers. If you look at the dispersion between a top quartile fund and a bottom quartile fund, it's much larger in private equity than in any other asset class. Therefore, picking the right managers and funds is especially important in private equity. And lastly, we look at -- we look for resilient companies, companies and sectors where performance is not cyclical or seasonal. Turning on to the next slide. We believe our actively constructed portfolio positions us well for the current environment. By geography, we aim for a 50-50 split between North America and Europe, and we have very little exposure to Asia and emerging markets. By sector, whilst we do not pursue a sector-specific investment strategy, our top 3 sectors in our portfolio are well spread across technology, consumer and business services. We focus on asset-light, resilient businesses and sectors and do not have significant exposure to manufacturing. And finally, we have multiple routes to market, each of these routes being something specific to building a portfolio that delivers on ICG's investment strategy. Primaries allow us to access a deep pool of sector specialist managers. And then the secondaries reduce risk whilst enhancing the liquidity profile. And then finally, direct investments allow us to increase our exposure to the companies we really like, or the best of ideas generated from our managers. Combined, we believe we are positioned well for risk-adjusted returns. And I think this is very well underpinned by our slogan you can see on the screen, investing in resilience and delivering growth. And as our Chair said in her Chair statement, we have welcomed several new shareholders to our register over the last 12 months. And so to explain in practice, what this means for those new to us, this means we invest in companies which display the following characteristics: Such as having an established market position; being a provider of mission-critical services; thirdly, having pricing power; and lastly, with a high-margin business model. We believe our unique portfolio of private companies is an attractive proposition and can play a valuable role in many shareholders' portfolios. So we think the numbers speak for themselves, but let's turn specifically now to our full year results. There are 4 observations we can take away. Number one, the portfolio is attractive and consists of resilient private companies, which should continue to grow earnings and continue to be sold at an uplift on exit. Secondly, this translates to a strong portfolio and NAV returns for our shareholders. Thirdly, we are active. We're proactive in regards to our portfolio management, evolving our medium-term portfolio construction targets towards more secondary and direct investments during the year, and we have accessed the secondary market for sale post period end. We also have a shareholder-focused approach to capital allocation, returning 5% of opening NAV to shareholders through dividends or buybacks, which puts us on the upper end of our peers. Now let's put the numbers in -- the year into numbers. Our portfolio grew on a local currency basis by 10.2% and on a sterling basis by 10.6%. This translated to an NAV per share total return of 10.5% and a share price total return of 12.5% in the 12 months to January 2025. As you can see on the top right of the slide, GBP 59 million was returned to shareholders in the period, equivalent of about 5% of opening NAV, split approximately 1/3 in dividends and 2/3 in buybacks. And this is a significant increase on the GBP 34 million in fiscal year '24. So we've been very active in our capital allocation strategy. Finally, the 12-month period saw the net investment by GBP 30 million -- with investments above GBP 181 million and proceeds of GBP 151 million, which will -- Colm will talk about in more detail later. Next slide outlines some of the key operational and financial metrics for our underlying portfolio. Looking through to over 2/3 of our portfolio, our resilient portfolio companies recorded 11.2% revenue growth and 15.3% LTM EBITDA growth. This compares to single-digit private company earnings growth as measured by ICG's private company database of over 1,700 private companies and negative FTSE All-Share earnings growth. I think you can see by these numbers that we have our proactive management and our focus on top-tier managers have delivered high-quality assets. Our net debt multiple decreased slightly to 4.4x, whilst our EV/EBITDA multiple rose slightly to 15.2x. We are comfortable with these valuation metrics, and it reflects the quality of the underlying portfolio and the prudent debt levels. With that, I'll pass to Colm to dive a little bit deeper into our fiscal year '25 activity.

Fantastic. Thanks, Oliver, and good morning, everyone. In the next few slides, we'll take a look at what happened over the last 12 months in the portfolio. As a reminder, we break down the investment life cycle into 4 phases, and I'm going to update you on each aspect of that cycle. Firstly, making commitments to new funds of our North American and European relationships, then being called for capital or investing directly into portfolio companies. Then typically between years 4 and 8 in the fund life cycle, getting to work and adding value. And finally, most importantly, selling the businesses typically to strategic buyers or to other financial buyers. And the cycle repeats. As realizations come in, our cash balance goes up, and we can redeploy that into new commitments and investments. I said 12 months ago at our fiscal year '24 results, that broadly reflects the calendar year 2023 that these cogs in the machine, if you like, were turning a little slower. And FY '25, which [indiscernible] roughly reflects calendar year 2024 was a little different, certainly compared to the higher volumes we saw in 2021 and 2022. So despite the fact that the climate -- the macroeconomic climate is changing, there have been opportunities recently. We generated over GBP 100 million worth of proceeds in the last month following the period end, and that's from a secondary sale and from the realization of Minimax, our largest portfolio holding at the 31st of January, and I'm going to go into a bit more detail on that later on. So moving on to the next slide. And turning firstly to commitments in the year. So during the year, ICG Enterprise Trust made GBP 83 million worth of new fund commitments. The largest of those commitments was to ICG Strategic Equity V, ICG are pioneers in what is known as GP-led secondaries. And this GBP 25 million commitment aligns with our target allocation for secondaries. We also committed to Leeds Equity, Investindustrial, Oak Hill and Thoma Bravo. These are all well-established managers with whom we have long-standing pre-existing relationships. We committed in addition to this to 2 new managers who've been tracking for a while. And interestingly, there are 2 very types -- different types of primary opportunity. The American Securities is a very long-established U.S. manager with whom we've built a strong relationship across the ICG platform over the years. Valeas is a slightly different opportunity. It's a new manager, but with a very experienced team of founders who came out of Hellman & Friedman and Golden Gate Capital, so 2 very well-regarded U.S. buyout firms. And this opportunity involved investing in a fund, which was already more than 50% invested in a well-performing portfolio. Moving on to the next slide and to discuss performance. Sorry, my apologies, turning now to new investments, the second phase. We invested GBP 181 million in the period. That was an increase on the year before, but still below the 5-year trend. Just going to highlight one of those new investments, Audiotonix, which was our largest investment in the year. And that's a co-investment alongside PAI, one of our longest established manager relationships. It's a global leader in the design and manufacture of professional audio mixing consoles. These are used in live concerts and broadcasts. So think the sort of big concerts like Taylor Swift or more to my taste, Oasis. It's a very attractive high-quality business with many of the characteristics we like that Oliver alluded to earlier. It has a very long-established market position. It provides mission-critical services. It has significant pricing power, and its business model has inherently high margins. It's a really good exemplar of the kinds of characteristics we look for in the companies we invest in. So moving on to the next slide to discuss performance. Oliver has already mentioned that during the year, our portfolio grew by 10.2% on a local currency basis, and that translates into 10.6% on a sterling basis. All of our primary ways of accessing investments, the primaries, secondaries and directs performed well. Performance though was driven in particular by some strongly performing direct investments. Companies that did particularly well included Circana, which those of you who've been tracking us for a while may know as IRI, they had a recent name change and Davies Group, which is an outsourced supplier of business services to insurance companies. These are examples of companies that are not household names, but have very strong positions in their sectors, and they were able to demonstrate that with their performance over the year. With a small FX adjustment, and we ended the period with a portfolio value of a little over GBP 1.5 billion at the 31st of January 2025. Moving on now to exit activity. Realizations in the period totaled GBP 151 million. And it was another year like previous year, FY '24, of realizations being below the long-term trend as a percentage of NAV. This is not specific to ICG Enterprise Trust. It's a trend you will see reflected in overall global M&A volumes. Following the period end, though, we did announce GBP 45 million worth of proceeds for Minimax, which we mentioned earlier. The transaction was signed in FY '25, but the proceeds were received in the first quarter of FY '26. Some of the exits this period are shown by the logos on the right. Just to highlight one, VettaFi, it's a provider of financial indices and data. It was an investment alongside ICG's strategic equity strategy, the GP-led secondary strategy, and we realized a little over GBP 10 million from that transaction. Moving on to the next slide. We've talked about Minimax a few times, but I just wanted to spend a little bit of time discussing an investment, which those of you who are long-term holders will be quite familiar with the name. We first invested GBP 17 million in the company in 2018. So it's been in the portfolio for around 7 years. And as I mentioned earlier, it was our largest company exposure at the 31st of January, accounting for a little over 3% of portfolio value. It's a leading provider of fire protection systems and services. It has a very resilient business model underpinned by high levels of recurring revenue from that service provision. And it's also a mission-critical product, which in many cases -- in most cases, is mandated by increasingly complex regulation. It's a company which is a really good example of where we benefit from significant ICG institutional knowledge. ICG actually first invested in the company in 2006, so we have very strong institutional familiarity with both the company and the sector. And we were really pleased to announce last month that receipt, GBP 45 million or EUR 53 million of proceeds. We reinvested around EUR 10 million of those proceeds to allow ICG Enterprise to continue to benefit from the next stage of the company's growth. Moving on to the next slide. Very important to note. Obviously, the valuations continue to be an important focus of investors in private markets. We believe that one of the best proof points for any valuation is what a company ultimately sells for upon exit. On a weighted average basis, we are pleased to report of the 40 full exits in FY '25, they were executed at an average 19% uplift to the previous carrying value. And this continues a long-term trend of realizing exits at a material premium and also crystallize a strong return, so on average, 2.9x cost. We believe that this demonstrates the quality of our underlying companies and it's an especially strong validator of our net asset value. So moving on to next slide, the importance of active portfolio management. So that approach of actively managing the portfolio saw us tap into the secondaries market for the fourth time in 5 years. We executed a sale of 8 mature primary fund investments, and this was part of a very competitive bidding process where leading third-party managers bid on this portfolio. As we announced last month, these funds, which have delivered strong historical performance, these funds -- they have delivered strong historical performance, but we believe that they had limited future upside potential relative to other new investment opportunities. And therefore, we could deploy the cash into other opportunities where we believe we can generate additional long-term value for our shareholders. So we executed this transaction at a 5.5% discount, significantly lower than the share price discount of ICG Enterprise Trust on the open market today. And we believe that this transaction, as I say, of funds where we believe have less go-forward return potential than the remaining portfolio, we believe this provides further validation of our net asset value. The transaction was signed during the year ended 31st of January 2025, but the GBP 62 million worth of net proceeds were received post period end. I'm now going to hand back to Oliver to conclude the presentation with the final few slides.

Thank you, Colm. Well, Colm has gone through our investment activity, our investment program, and it's clearly our most important part of how we think about capital allocation and how it delivers long-term returns for our shareholders. But we also enhanced returns through a progressive dividend policy and share buybacks, and I want to spend some time on going through those numbers because we've been very active. Combining both dividends and buybacks, we returned GBP 59 million to shareholders in fiscal year '25, which is equivalent of 5% of opening NAV. And we believe that those measures demonstrate our holistic approach to optimizing returns for our shareholders. The ordinary dividend per share has increased for 12 consecutive years now. And today, the Board announces a fourth quarter dividend of 10.5p per share, bringing the fiscal year '25 dividends to 36p per share. Now regards to buybacks, we were early movers in our sector, and we announced our long-term buyback program in October 2022. And combined with the opportunistic buyback program we announced last year, we've bought back 7% of our opening share count, which I will talk in more detail on the next slide. So the 7% of opening share count bought back has been one of our highest amongst our peer group and is delivering on the aims we set out. It's been accretive to NAV per share, adding 54p and has also delivered on its aims of reducing volatility in the share price and improving trading liquidity. All 3 of these benefits are important. So enhancing immediate NAV per share should feed through the share price over time. Increasing liquidity and reducing volatility of our shares should also allow for greater market stability and investor confidence in the trading of our shares. Turning quickly to the financials. We believe we have a robust balance sheet and to withstand whatever the coming quarters has in store. At the 31st of January and pro forma for the additional proceeds we announced from the secondary sale in Minimax, we had a total liquidity of GBP 232 million. Pro forma, we also have one of the lowest gearing ratios and overcommitment ratios of all our peers. And we believe this leaves us in a very good place going forward to also benefit if and when activity returns. So let's wrap up and get to our -- to some Q&A. And the 3 key takeaways as we look ahead are: Number one, there is obviously more uncertainty in the market. And we think, particularly the secondaries market, of which ICG has a substantial experience in could present actually some compelling opportunities. And regardless of activity levels, ICG Enterprise Trust is well positioned. I think you have a good feel for today with our sector positioning, our strong origination network and our robust balance sheet that we are in a very good place. And we also have a proven track record. There are significant long-term track records of the managers we back of ICG Enterprise Trust and of the ICG Enterprise Trust Investment Committee. Combined with the breadth of our portfolio, our vintage diversification and our focus on investing in high-quality resilient businesses, we believe this underpins our ability to generate long-term returns for our shareholders. And with that, I'll -- over to you, Martin, for some Q&A.

Great. Thanks, Oliver. Thanks, Colm. We now have about 10 minutes or so for Q&A. So as a reminder, [Operator Instructions] A few have come in already. So taking them in turn, one, just to elaborate on the directs outperformance. So as we've noted, the portfolio grew strongly across primary, secondaries and directs, but in particular, from some of the directs. Were there just any recurring themes from those direct investments, which drove performance to particularly highlight?

I think the highlight is really about the importance of picking high-quality assets and our co-investment program being selective, identifying high-quality assets and get the best ideas from our managers plays well. And if you pick up some high-quality managers and high-quality assets the managers invested in as co-investments, you can find liquidity even in a more difficult environment. So good quality strategic assets always find a buyer.

Great. Thanks, Oliver. There's a few questions on our views on secondaries. So obviously, in the RNS, we said secondaries could present some compelling opportunities. A few questions in terms of can we elaborate a little bit more on our secondary strategy. We increased the target to 25% to 30% announced earlier this year. How are we planning to increase that weighting over the medium term? And what are our views on secondaries, both from the buying perspective and selling perspective?

Yes. So the secondaries market continues to grow strongly and has already over the last 3 years as liquidity in the market has been lagging historical averages. In general, private equity investors, particularly the large private equity investors, are looking into their portfolio to prune their portfolio to create some liquidity so that they can continue to invest in private equity. I think you saw some headlines in regards to that the current market volatility and uncertainty clearly means that the liquidity is going to continue to be difficult. And therefore, bigger pension funds, endowments such as Yale, for example, and Harvard, you saw in the press, are looking to continue to manage their portfolio. And therefore, we do believe that the secondaries market continues to be attractive over the next, call it, 24 to 36 months, and that will provide some good opportunities, and it will allow us, hopefully, over the next, call it, 2 to 3 years to get to the medium-term allocation. So we think it's a very attractive timing, and that's why we've also increased our allocation.

Thanks, Oliver. Just building on our new manager relationships, a question has come in, just giving some more details on the new manager relationships Colm that you mentioned, what attracted us in particular to those new managers, how do we think about our manager relationships?

Sure. So yes, and as I mentioned on the call, the 2 new relationships that we have over the period were American Securities and Valeas. They're quite different. So in the case of American Securities, a very long established, very well-known name in U.S. private equity. We've got to know them, a classic case study how we get to know our managers well ahead of fundraisings. And often during previous fundraisings, we don't necessarily always invest the first time we meet them. So that's a very well-respected name. We know them across our platform, debt, credit, secondaries. So we feel we have a very strong relationship going into that commitment. Valeas is slightly different. It's more analogous, to those of you that follow us, to [ Integra. ] As you know, we don't typically invest in first-time funds. This is a first-time fund, but it is differentiated by having a very experienced founding team who came out of very long established and respected USP houses. This is an example, a bit like [ Integra, ] where one of the key attractions was a very attractive transaction dynamic. And in particular, this was because it's a difficult fundraising market for first-time funds. They've been raising for perhaps longer than they thought they would be. And that meant they had already deployed over 50% of the fund. We were able then to look at the opportunity almost like a secondary. We were able to diligence the underlying assets and of course, relative to other first-time fund opportunities, that means you've got a lot less blind pool risk as well. So it's a very strongly performing portfolio of companies that exhibit many of the characteristics that Oliver has outlined that we look for and also where there was an uplift available. And what happens is when you invest in a new primary, even if the assets have been revalued, you effectively invest at cost. So you're investing already at a discount to what the fair value of the companies are. And we thought that was an attractive entry point, and we think that continues to be proven. So strongly performing portfolio, continues to do well and a future relationship we're excited about.

Great. Thanks, Colm. A question has come in essentially on the opposite. So that was new manager relationships. Oliver, you mentioned and Colm, the secondary sale we recently executed post-period end. Can you elaborate a little bit more in terms of the thought process for themes -- talking generically, themes of the funds that we sold? Is there particular examples? What would be the catalyst? And what are the themes of the funds that we sold?

Yes. No, I think let's start off that we are constantly evaluating our portfolio vis-a-vis market pricing. And as you've seen over the years, particularly over the last 3 to 4 years, we've been very actively managing the portfolio and particularly identifying, and this is the same theme, this secondary sale as in previous years, is that we look for assets which we have, which have performed well, and some might not have performed quite to our expectations. But where we do see that the forward-looking returns are not as strong as the kind of locked in -- as the sale price we could lock in as of today, i.e., that we can -- so on this portfolio, for example, we locked in at 1.6x, so a very decent return. And at the same time, we believe that this portfolio was getting quite mature. And therefore, going forward, we didn't see the same IRRs and multiples we can achieve with that capital at risk than if we would deploy it into new managers such as Valeas or do new co-investments and secondaries. So we're basically pruning the portfolio and reallocating it to higher generating returns and investments.

Thanks, Oliver. A question on uplifts. Obviously, we reported a 19% uplift on weighted average plus 40 full exits this period. That obviously ranges really from about 20% to 30% over the last few years. A question just in terms of what do we think is a reasonable number to expect for uplifts. The long-term trend is the 20% to 30% this period, it was 19%. Do we have a view in terms of the medium-term view in terms of uplifts going forward?

Yes. So I would say, obviously, that's the lower end of the range, but we continue to believe that historic evidence suggests that's an appropriate range to think about. What I would say is that the number you come out with is sometimes a function of the mix of realizations that you get. So for example, if we sell things that are listed, there's obviously limited uplift structurally because it's quoted on a public market. And sometimes we have investments in deals that have contractual return, and therefore, you don't get uplifts on those investments as well. So we think that in the context of current trading where the discount is in the close to 40% that these uplifts provide, as we mentioned in the presentation, a further validation of the NAV and particularly when you look at that historical trend. So yes.

Yes. I think just to add to that, you should still expect 20% to 30%. This year, we were on the lower end of that range. But that's a good number to anticipate, 20% to 30%. And as we said before, I think the secondary was a very good valuation of conservative valuation in our portfolio. So we received a 5.5% discount on mature assets. And so I think that speaks well for the NAV -- the holding values as well as the conservative valuations the NAVs are being held at.

Great. Thanks both. There's a question on the underlying portfolio company metrics that we reported. So LTM revenue growth, we reported 11.2% across our enlarged perimeter and LTM EBITDA growth, we reported 15.3%. So there's a question that the EBITDA growth has essentially grown faster, if you like, than the revenue growth, 15.3% greater than 11.2%, suggests potentially margins widening. Is there a story here? Is it just mix-driven?

Yes. So a lot of the assets we own, in particular in the top 30 are very high-quality assets, market leaders in sectors which are growing, and where -- they are also active in M&A. So add-on acquisitions on the platform. They often pick up less profitable, let's say -- still obviously profitable business, but not quite the same profit margins, but bringing in onto the platform makes them much more profitable, particularly you see that in tech-enabled business services and software. And as our overall portfolio mix has gone more towards that direction, that's what you're picking up here.

Great. Thanks, Oliver. A question on capital allocation. So some of our peers adopt a formulaic approach to buybacks, for example, a certain percentage of realizations. We don't -- readers can see from this release this morning that we distributed back about 39% of realization proceeds in FY '25, whereas Oliver said, 5% of opening NAV via dividends and buybacks. But formally, we do not link it to the percent of realization methods. Can you just explain how us and the Board think about that?

Yes. So I would say that we believe quite strongly that it's often important the buybacks are -- if we think about the aim of the buyback program being to add additional shareholder value but also to limit the volatility of the discount as well. We actually think it's important to be active in the market even when there are a limited number of realizations in our underlying portfolio. And actually, to some degree, it's a little prototypical to only do buybacks when you actually receive realizations. So we philosophically believe that, that consistency is important and that therefore, it's better not to link the 2 things explicitly, but to be able to execute buybacks when it makes sense for the objectives of the buyback program.

Great. Thanks, Colm. There's been a follow-up question on the revenue and EBITDA growth question that we just had. What do we think revenue and EBITDA growth for the enlarged perimeter would be on an organic basis, pre-M&A, if there's any?

I think that's very difficult for us to be able to give an accurate answer. We do look -- when we analyze each company, we do a detailed analysis of where the EBITDA growth has come from. Now the person asking the question is correct. There are elements of both acquired and organic growth. I'd say most of the companies in the top 30 have healthy levels of organic growth because of their market positioning. But I don't think we would be able to put certainly for -- at this point in time for public consumption, a precise level of organic growth. But the big -- the strong performers, what I would say is IRI, Davies, the companies that we cited, that's substantially an organic growth story amongst our stronger performance.

Yes. And when we look for -- and the top 30 is mainly the co-investments, direct investments, when we do underwrite and look at for co-investments, we're looking for double-digit growth in EBITDA levels. So that gives you a good indicator in terms of what we're looking for and what the companies usually start off from. And then -- but to Colm's point, very difficult to assess as an average on the portfolio to kind of adjust for organic versus M&A buy and build.

And also, spinning the question around, I think it's worth noting that when we have periods like at the moment, we have heightened volatility in certain sectors, actually, it creates a really attractive environment for accretive M&A. So those of you who have been following us for a while will remember our successful co-investment in Endeavor, it was a schools business, benefited hugely from the sector actually being relatively -- as an acquirer of choice, it was able to acquire lots of schools in the period following the COVID pandemic at very attractive valuations. We have another similar example in the portfolio at the moment. We have a U.S. business called Class Valuations. It supplies mortgage appraisal services. While, at the moment, as many of you will read, new house purchases and therefore, mortgage approvals in the U.S. are at historically low levels, which you might think would be a bad thing for that company. And to some degree, it is. But it allows it a unique opportunity to be able to consolidate the sector in a very fragmented sector at a very accretive point in the valuation cycle. So it does -- it's not -- I would guide against people thinking that organic growth is great and there's something wrong with the acquired growth. It's actually a very significant source of value accretion in the portfolio.

Thanks both. I see one final question, which is going back to the direct investments outperforming primaries and secondaries. Was this driven by ICG-managed direct investments? And more broadly, to broaden the question, what are the advantages of being part of the ICG platform?

Should I take the first one, Oliver, and you cover the platform?

Yes.

So in terms of the -- I think we noted the key contributors this period were actually mostly third-party direct investments, but that ebbs and flows. We've had very strong performance from our ICG portfolio. And obviously, in terms of liquidity, the ICG portfolio, the largest realization last year was VettaFi, which came out of an ICG-managed portfolio and obviously, Minimax more recently as well. But the big performers were, as I mentioned, Circana, Datasite that is ICG, but then Class Valuation, David Lloyd, so mostly third parties. But there's no particular -- I would say there's no particular trend in that. It's just the mix of companies that have performed particularly well in the year. And then as for the platform, Oliver, do you want to just cover how we see as an investment team that platform working for us?

Yes. I think there's 2 good examples to use. One is the secondary. We have -- we're one of the larger secondary managers on the market through the strategic equity, the GP-led secondary strategy and LP secondaries, the LP-focused strategy. So we're constantly in the market evaluating secondary assets, sourcing, evaluating underwriting. So we have a good sense of where pricing is and market pricing is at any given time, and that allowed us to put a particularly good package portfolio together for Enterprise Trust and find -- and have the right process and the right intermediaries working for us to kind of maximize pricing. And that's why we got a particularly attractive pricing because we identified, and we had the right process in place. So that's, I think, a great example for what the -- how we benefit from the platform. And the other part, which is related to the first question is we have a higher percentage of co-investments or fund investment coming from the ICG funds. And so that allows us -- so from a sourcing perspective and being offered co-investments, it's particularly attractive to be invested in some of the ICG funds because they are a constant source of attractive co-investments.

Great. Thanks, Oliver and Colm. We're close to time. If there are any follow-up questions after this webinar, please feel free to contact the e-mail address you see on your screens. And as a reminder, a recording of this event will be available on our website in the coming days. With that, Oliver, Colm, thank you very much, and thank you all for joining today.