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Emma Osborne takes ‘adviser’ role at Intermediate Capital

15 April 2019

Fund manager of ICG Enterprise is stepping back to take senior adviser role at Intermediate Capital Group, three years after specialist asset manager added the private equity investment trust to its fold.

Emma Osborne is stepping back as fund manager of ICG Enterprise (ICGT) to take a senior adviser role at Intermediate Capital Group (ICP), three years after specialist asset manager added the private equity investment trust to its fold.

Osborne has led the investment team of ICGT, formerly known as Graphite Enterprise, since 2004. The company said she would remain on its investment committee and was assisting ICG in picking her successor to take over in the second half of this year.

Senior members of her seven-strong private equity team include managing director Colm Walsh, who broker Numis Securities said had driven ICGT’s increased investment in the US since 2016; and Fiona Bell, a principal responsible for European market coverage.

News of the changeover came as ICGT’s chairman Jeremy Tigue appointed Jane Tufnell as non-executive director to replace Andrew Pomfret, the former Rathbone Brothers chief executive who retired from the board in February.

Tufnell, a co-founder of Ruffer, chairs GVQ Investment Management and already sits on the boards of Odyssean (OIT), Diverse Income (DIVI) and JPMorgan Claverhouse (JCH) investment trusts.

The reshuffle came as ICGT reported its annual results with a 12.4% growth in net asset value (NAV) for the year to 31 January with a final dividend of 7p lifting the total pay-out by 4.8% to 22p per share.

The company has £731 million invested in a mix of private equity funds and direct investments in private companies alongside other fund managers including ICG. However, like many of its rivals, its share price tends to lag the underlying growth in the portfolio.

Shareholders saw a total return, including dividends, of just 3% although that was better than the 3.9% decline in the FTSE All-Share in what was a turbulent period for stock markets.

As a result the shares trade nearly 21% below NAV, giving it a market value of just £583 million. This compares to an average discount of the past year of 15% and, said analysts, looked out of step with the robust performance, sending the shares 15p or 1.8% higher to 857.9p.

Conor Finn of Liberum said: ‘The company generated proceeds of £153 million from exits taking advantage of the favourable exit environment. The realisation of 60 companies completed at an average uplift of 35% to the previous carrying value.

‘The average return multiple of 2.4 times cost was also strong, reflecting a number of highly successful investments realised in the year with over a third by number being sold for more than three times cost. Over the last five years exits have averaged 33% uplift to carrying value and a multiple of 2.3 times cost.’

In recent years Osborne’s team has lifted its weighting to high conviction investments. According to the company, these have generated a 19% annual return in the past five years and have risen from 42% to 50% of the portfolio in the past 12 months. The target is to increase this to up to 60%.

‘Against the current backdrop of high valuations for new investments and continuing macro uncertainties we remain highly selective in redeploying cash generated by the portfolio. We have a strong pipeline of new opportunities and believe the portfolio is well positioned to continue to generate shareholder value,’ said Osborne.

In the past five years ICGT has delivered a total return of 67.9% to shareholders, below the average 99.2% return in the AIC Private Equity sector. One factor in the shares's wide discount is the larget stake held by the investment trust savings plan of BMO Global Asset Management, formerly F&C, which previously marketed the trust.

Investment company news brought to you by Citywire Financial Publishers Limited.

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