AIC SeminarColm Walsh, Intermediate Capital Group10 October 2019

Agenda: An introduction to Private Equity

ICG Enterprise Trust

Case Study: David Lloyd Leisure

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Investing in all stages of a company’s life cycle..but with different risk/reward characteristics

Investing in Private Markets

Seed or venture capital − Start up and/or early stage company –

backing a new idea or technology − Typically minority holdings

Development capital− Company structure in place, funding market

or product development− Typically minority holdings

Management buy-outs− Backing mature established profitable

companies− Typically control the companySeed

Venture Capital

Development capital

Managementbuy-outs

Risk

Private equity

Early stage Growth equity Maturity

0

100

200

300

400

500

600

700

1980 1984 1988 1992 1996 2000 2004 2008 2012 2016

The net asset value of private equity has grown >7x since 2002

Private markets have gone from alternative to mainstream

The number of listed companies in the US and Europe has declined and sector concentrations have risen

• Over the last 20 years the number of US publicly listed companies has reduced by c.50%1

Individual investors today have a limited ability to access directly the complete equity market

A rapidly expanding asset classThe Private Equity Market

In order to maintain their access to these opportunities, investors will need to broaden their scope and embrace private assets.Investors narrowly focused on public markets risk missing out. A more holistic approach to equity investment, where public and private market exposures sit alongside each other, is likely to be more appropriate.

The fall in the number of US IPOs since 1996…

Source: J Ritter, University of Florida, April 2019

Source: Schroders research note “What is the point of the equity market”, April 20181Source: Morgan Stanley Research

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20 year annualised time weighted returns (31 March 2018)

Target allocations to private equity

Superior performance is driving increased allocations

0%2%4%6%8%

10%12%14%

Private Equity S&P 500 Russell 3000Index

MSCI WorldIndex

Hedge Funds

0%

5%

10%

15%

20%

25%

Why Private Equity?

Source: 2019 Preqin Global Private Equity & Venture Capital Report

Private equity has generated superior returns vs. public markets, across multiple cycles

Allocations are increasing as investor appetite and confidence in the sector grows

Barriers to entry are high, driven by minimum commitment levels and the illiquid nature of holdings

Listed private equity vehicles provide access to superior PE returns but with improved liquidity

Source: Hamilton Lane Market Overview 2018/2019

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Compared to public markets, there is significant dispersion of returns

Manager selection is critical for achieving targeted returns

The best performing managers are often difficult to access for new investors

Diversification of managers leads to reduced dispersion risk

Dispersion of returns is wider than both public bond and equity marketsPrivate Equity Returns Profile

3%

0%

5%

10%

15%

20%

25%

Global equities Global bonds US Private Equity

The gap between the top and bottom quartile is 21%

top quartile

lower quartile

Source: JP Morgan Asset Management research note “Guide to Alternatives, 1Q 2019”

Public markets versus private equity dispersion

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Private Equity has a unique ownership and governance model characterised by:

Long term outlook

Strong alignment of interests and focused stakeholders

Extensive due diligence

Active engagement to drive:

― Operational improvement

― Strategic change

― Financial discipline and control

― High standards of governance

Unlocking growth through a focused and hands-on approachHow Does Private Equity Create Value?

Today’s evolving companies need investors who understand their business models...their need is better met by partnerships with sophisticated, private equity investors than with passive public investors….private equity investors create value in their investee firms by bringing [a] sophisticated knowledge base, obtaining direct access to managers’ private information, providing timely feedback on firm’s strategic plans, actively managing firms via board representation and identifying and facilitating strategic partnerships.

Today’s firms therefore prefer to stay in private equity investors’ nurturing hands longer than did capital-hungry manufacturing corporations.

Source: Professor Vijay Govindarajan and others, August 2018 (“Why we shouldn’t worry about the declining number of public companies”)

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Private equity investing Listed private equity

Providing access to a broader range of investorsThe Benefits of Listed Private Equity

High minimum commitments (typically £5m+)

10 year commitment to a fund with limited to no liquidity

Diversification requires allocation to multiple managers

Significant administrative and tax reporting burden

Ongoing cash management requirement

Low minimum investment

Closed-end structure provides liquidity, shares traded daily

Access to experienced investment teams, with access to high quality managers and/or deal flow

Benefit from a diversified underlying portfolio

Investment trust structure allows for re-investment of capital proceeds, tax free – compounding returns

Listed private equity gives private investors exposure to a market traditionally dominated by institutional investors

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ICG Enterprise TrustA leading listed private equity investor

Company Overview

> Focused on buyouts in Europe and the USA

> Flexible and differentiated approach combining in-house andthird-party managed investments, through funds and direct

> Selective investment process with strong track record ofconsistent returns while limiting downside risk

A leading listed private equity investor

£811m*Net asset value

(1,175p per share)

45xReturn on original capital raised

198138 year history of investing in

private equity

*As at 31 July 2019

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Source: ICG. Data as at 31 June 2019

A leading specialist manager in private debt, credit and equityManager Overview

New York MadridParis

London

Frankfurt

Stockholm

Amsterdam

Hong Kong

Singapore

Sydney

Tokyo

Luxembourg

Warsaw

San Francisco

30 year track record of lending to and investing in private equity backed businesses

to proprietary deal flow from the wider ICG network; partnering with five specialist in-house teams

into private equity managers and companies through local investment teams across the globe

€39

>30021

A unique perspective on private markets

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Defensive growth companies alongside leading PE managersInvestment Philosophy

All private equity

Buyouts

Developed markets

Mid-market and larger deals

Leading PE managers

Defensive growth

companies

Highly focused approach, aiming for strong and consistent returns with relatively low downside risk

Buyouts offer more consistent returns with lower risk than other private equity strategies e.g. venture capital or distressed debt

Developed markets have more established private equity sectors and more experienced managers

Mid-market and larger companies are more likely to be resilient to economic cycles and typicallyattract stronger management teams

Leading PE managers with track records of investing and adding value through cycles

Defensive growth - targeting companies with strong market positions and high barriers to entry in industries with low correlation to economic cycles, strong cash flow conversion, high recurring revenues and high margins

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High conviction investments underpinned by a portfolio of leading fundsInvestment Strategy

Third-party direct co-investments

Third-party secondary investments

Third-partyprimary funds

43% Enhances returns by increasing exposure to the most attractive

assets Underlying companies selected by ICG Increases control and enables greater flexibility in portfolio

management Targeting 50% - 60% weighting 19% p.a. net return over five years (local currency)

Provides a base of strong diversified returns Underlying companies selected by leading private equity

managers Source of deal flow and insights for co-investments and

secondaries Strong relationships in many cases over multiple fund cycles 14% p.a. net return over five years (local currency)

21%

17%

5%

Source of deal flow and insights for

the high conviction portfolio

57%

Balancing concentration and diversification

Note: Portfolio breakdown as at 31 July 2019, returns data for five year period ended 31 July 2019

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HIGH CONVICTION INVESTMENTS

THIRD PARTY FUNDS PORTFOLIO

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More diversified than the wider market with less exposure to cyclical industriesA diversified portfolio with a focus on defensive growth

Top 30 companies, 48% of the Portfolio − FTSE All-Share Top 16 companies represent 48%

of the index (by value)

Defensive growth sits at the centre of ICG Enterprise’s strategy

Focus on investing in companies that have non-cyclical drivers

We believe this leads to stronger and more consistent returns− 2018 EBITDA growth of 16% vs. 6% for the FTSE All-

Share

0

5

10

15

20

25

30

35

0

2

4

6

8

10

12

14

16

18

EBITDA Growth (2018) 5 year EBITDA growth (p.a.)

%

%

ICG Enterprise Top 30 companies

Source: Kepler Partners

Sector comparison

EBITDA growth

FTSE All-Share

1%

27%39%

172%

6%

60%71%

279%

17%57%

91%

241%

1 year 3 years 5 years 10 years

FTSE All-Share ICG Enterprise Share price ICG Enterprise NAV growth

Outperforming public markets through cyclesICG Enterprise Trust Performance

Notes:Data: Total return (Morningstar, the Company); *12, 36, 60 and 121 month periods to 31 July 2019

NAV and share price performance (total return)*

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An investment in ICG Enterprise made on the half year end date of any of the last 20 years would have outperformed

the FTSE All-Share Index if still held on 31 July 2019

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Combining defensive growth with attractive deal dynamicsFinding Value in the Current Market

Defensive growth Strong market positions in growing markets Highly resilient businesses with relatively low correlation

to economic cycles Strong recurring revenue streams, high margins and

highly cash generative

Structural downside protection Typically ICG managed assets Investing across the capital structure

Relative value Attractive pricing due to deal dynamics Fund recapitalisations alongside ICG; investing at 6-7x

EBITDA Includes certain “late primary” fund investments where we

invest at cost even if portfolio marked up in value

Demographics Pressure on public spending

Increasing regulation “Must have data” and Software as a Service

Benefitting from non-cyclical trendsSome of the Value Drivers in Our Portfolio

Significant change in population composition Ageing population increases demand for healthcare Resulting cost pressures drive search for efficiencies

Shift to private provision, e.g. early years education Public sector seeking cost savings Government policies seeking to incentivise efficiency

Trend towards increased regulation across sectors Typically a small part of cost base for customers Penalties for non-compliance are high

Use of data to optimise business processes Focus on ‘mining’ data to improve decision making Shift towards cloud based software as a service

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David Lloyd is Europe’s largest operator of premium fitness clubs

112 sites across the UK and Europe, >600k members with >8,000 staff

TDR acquired the business in 2013 from Caird Capital

David Lloyd Leisure Case Study

ICG Enterprise Trust committed to TDR III in 2013

David Lloyd was the fund’s first investment and ICG committed £7m to co-invest alongside TDR III

TDR has extensive experience in the consumer/leisure sectors with other successful investments in Center Parcs, Pizza Express and Stonegate Taverns

Value creation initiatives

Significant CapEx as well as the acquisition of 14 Virgin Active Clubs

Green field expansion with focus on developing new markets

Improvement in the customer experience

Active engagement and management

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David Lloyd LeisureCase Study Video

ICG Enterprise combines a fund-of-funds with a direct investment approach Core investment focus on ‘defensive growth’ investments Significant benefits from the ICG platform

Listed private equity gives private investors access to a growing and high-performing

asset class

Growth in private equity AUM has outpaced the growth in public markets Private equity has also outperformed the public markets Manager selection is critical to achieve target returns given wide dispersion

The private equity model

Portfolio growth of 18.1% p.a. in local currencies over 10 years Strong underlying earnings performance from largest exposures Consistent outperformance compared to the FTSE All-Share Index

…and has delivered strong, consistent returns

Our approach balances concentration and

diversification, with a focus on defensive growth

SummaryICG Enterprise Trust

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Q&A

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Appendix

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A strong combination of direct and fund investment experienceICG Enterprise Trust investment team

Emma OsborneHead of Private Equity Fund InvestmentsIC Member

Lead portfolio manager of ICG Enterprise for over 14 years 24 years of PE experience Extensive experience

across the PE market, both as a direct investor across the capital structure and as a fund investorMoving to a senior advisor

role at the end of 2019; remaining on IC

Kelly TyneVice President

Joined the team in 2014 5 years of PE experience Graphite Capital (funds,

co-investments) First NZ Capital (analyst) PricewaterhouseCoopers

(consulting)

Craig GrantPortfolio analyst

Joined the team in 2017 2 years of PE experience Primarily focused on

underlying investment performance and portfolio analysis

Benoit DurtesteCIO and CEO, ICGIC Member

Joined ICG in 2002 Over 26 years of direct

investment experience Chairman of other ICG

IC’s covering private debt, mezzanine and strategic equity Broad perspective on the

private equity landscape and on relative value and risk

Andrew HawkinsHead of Private Equity Solutions, ICGIC Member

Joined ICG in 2014 Over 26 years of direct

investment experience Long tenure in both US

and European private equity markets gives him strong insights as well as extensive manager relationships

Fiona BellPrincipal

Joined the team in 2009 12 years of PE experience Graphite Capital (funds

and co-investments) KPMG private equity

group (audit and transaction services) JP Morgan Cazenove

(corporate broking) Responsible for European

market coverage

Lili JonesAssociate

Joined the team in 2019 2 years of PE experience

working on the senior debt strategy at Ares Capital 5 years debt advisory

experience with Deloitte Chartered Accountant

Liza Lee MarchalPrincipal

Joined the team in 2019 13 years of PE experience GIC Private Equity (direct

and fund investments) Henderson Global

Investors (private equity division) PricewaterhouseCoopers

(corporate finance)

Joined the team in 2010 14 years of PE experience Graphite Capital (funds,

co-investments and finance) Terra Firma Capital

(finance) Deloitte (audit) Responsible for building

up the US portfolio since 2016

Colm WalshManaging Director

IC Member

Oliver GardeyHead of Private Equity Fund Investments

IC Member

Joined the team in September 2019. Over 20 years of private

equity investment experience at Pomona Capital, Adam Street and Rothschild. Will be succeeding Emma

Osborne as head of the investment team

Owen JonesDirector

Joined the team in May 2019. He is responsible for

Investor Relations for ICG Enterprise Trust and ICG Plc. He spent 8 years working

as a sell-side equity and credit analyst at Citigroup and Barclays

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Private equity, investment and commercial experienceICG Enterprise Trust Board

Gerhard FusenigNon-executive Director

Jeremy TigueChairman

Committees:Nominations (Chair)

Appointed to the Board in 2008 and became Chairman in 2017 Extensive financial

services experience, having spent 33 years as a fund manager, including 17 years as the lead manager of F&C Investment Trust Broad and deep

knowledge of all aspect of investment company management and corporate governance Seasoned public

company board member and chairman

Sandra PajarolaNon-executive Director

Committees:Audit Nominations

Appointed to the Board in 2013 Extensive private equity

investing experience having executed a broadly similar strategy during her time at Partners Group As the head of the team at

Partners Group, Sandra built relationships with many private equity managers in Europe and has a broad perspective on the private equity industry

Lucinda RichesSenior Independent Director

Committees:Audit Nominations

Appointed to the Board in 2011 Former global head of

equity capital markets at UBS Lucinda brings significant

capital markets experience, having advised public companies on strategy, fundraising and investor relations for many years She also brings extensive

experience as a public company non-executive director across a variety of businesses, including two FTSE 100 companies

Alastair BruceNon-executive Director

Committees:AuditNominations

Appointed to the Board in 2018 Over 25 years of private

equity experience Former Managing Partner

of Pantheon VenturesWas involved in all

aspects of Pantheon’s business, particularly the management of Pantheon International Participations PLC, the expansion of Pantheon Ventures globally and the creation of a co-investment business

Jane TufnellNon-executive Director

Committees:Audit Nominations

Appointed to the Board on 18 April 2019 Co-founder of Ruffer

Investment Management Jane brings extensive

financial services and fund management experience Seasoned investment

company and public company board member and Chair

Appointed to the Board in September 2019 Over the last 25 years,

Gerhard has held a number of senior management roles including the position of co-COO of Asset Management and CEO of Core Investments at Credit Suisse, as well as Global Head of Fund Services at UBS. Significant financial

services experience and a seasoned NED

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