The key message from ICG Enterprise Trust plc (LON:ICGT) 3QFY’26 update (to October 2025) is strong realisations, with the 9MFY’26 run-rate double that seen through FY’24-25. In this report, we explore why realisations have increased, noting diverse buyer and seller drivers and ICGT-specific factors. The breadth of these drivers indicates a continued positive outlook. Uplifts on exit are expected to continue, potentially at a slightly higher rate than the recent past, although not at the FY’20-21 peaks. Continued good operating company EBITDA growth and uplifts on exits should drive NAV growth closer to historical levels. The realisations allow new investment, capital returns to shareholders (buybacks and dividends) and support a strong balance sheet.
- Key buyer drivers: We see increased buyer appetite from i) the need to deploy near-record dry powder, much of it raised in 2022, ii) confidence inspired by record equity market levels, iii) a more favourable interest rate environment, iv) good access to financing, and v) AI opportunities for incremental value creation.
- Key seller drivers include: i) maturing portfolios with more businesses at an exit-able stage, ii) GPs wanting cash returns, iii) rising markets supporting higher valuations, iv) evolving exit options such as continuation funds, and v) operating companies growing to a point where new owners may add more value.
- Valuation: ICG Enterprise Trust’s NAV valuations are conservative, demonstrated by continued realisations above reported book values. The ratings are undemanding. The 28% discount to NAV is anomalous, we believe, with defensive, market-beating returns, and well above the pre-COVID-19 levels. The 2026E yield is 2.6%.
- Risks: PE is an above-average cost model, but post-expense returns have consistently beaten public markets. Actual experience has been of continued NAV outperformance in economic downturns, but sentiment may be adverse. ICGT’s permanent capital structure is right for unquoted/illiquid assets.
- Investment summary: ICGT has consistently generated superior returns by adding value in an attractive market, having a strategic focus on defensive growth and leveraging synergies from being part of ICG since 2016. Valuations appear conservative, and governance is strong. ICGT focuses on delivering resilient, risk-adjusted returns, and balancing risk and reward. The risks are primarily sentiment-driven on costs, cyclicality and the underlying assets’ liquidity. A 28% discount to NAV appears anomalous with ICG Enterprise Trust’s performance.
