2024 reflections from our Portfolio Managers

As 2024 draws to a close, it’s a good time to reflect on the answers to the two questions we posed in our January newsletter:

1) how will 2024 play out in terms of interest rates, economic growth and geopolitics; and

2) what are the consequences for private equity and ICG Enterprise Trust?

Factually, the answer to the first question is clear: elections in the UK and US have been settled (see this note from ICG’s Chief Economist discussing the US election), central banks are generally in a rate-reducing cycle, and optimism more broadly is returning. Future trajectory is a constant question, but we certainly feel in a more stable macroeconomic environment today than we did in January.

The response to the second question is more nuanced. 2024 activity levels remained muted relative to recent history. Market-wide, operating company performance has generally remained strong and Portfolio valuations have held up well. Against this backdrop, ICGT’s Portfolio has generated a 5.9% return on a local currency basis over the last 12 months*. Looking ahead, there has been a lot of commentary within private markets about “green shoots”, and indeed we made the point in our H1 results that “we are experiencing an increased level of transaction activity”. Credit and capital markets have continued to improve in recent months and that is likely to, over time, support an increase in transaction activity within private equity.

A positive macroeconomic trajectory during the year, combined with our clear investment strategy and disciplined capital allocation policy, has provided a constructive backdrop to our increased engagement with shareholders. We have met a record number of shareholders and analysts over the last 12 months across the UK, discussing private equity and our long-term approach to investing. These discussions are always informative and interesting, and on behalf of the entire team at ICG Enterprise Trust, thank you for your support over the past year.

We wish you a restful holiday.

Best wishes,

Oliver Gardey & Colm Walsh

*Last 12 months to 31 July 2024

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