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RNS Number : 9637J
Graphite Enterprise Trust PLC
23 December 2015
23 December 2015
GRAPHITE ENTERPRISE TRUST PLC
CHANGE OF MANAGER
The Board of Graphite Enterprise Trust PLC ("the Company" or
"Graphite Enterprise") is pleased to announce that Intermediate
Capital Group plc ("ICG") has been appointed as the new manager of
the Company. This follows ICG's acquisition of the private equity
fund investment business of Graphite Capital Management LLP
("Graphite").
The change of manager is expected to take effect on 1 February
2016. Graphite Enterprise will be renamed ICG Enterprise Trust plc
on that date.
The five investment professionals currently dedicated to the
management of the Company, including two Graphite partners, Emma
Osborne and Kane Bayliss, ("the Team") will form a new business
within ICG. This will ensure that, in addition to the other
important advantages outlined below, Graphite Enterprise will
benefit from continuity of management.
ICG's appointment will provide a number of major benefits to
Graphite Enterprise, including:
- Access to a wider range of investment opportunities through
the leveraging of ICG's global office network and local
relationships.
- Access to market intelligence from ICG's large international direct investment team.
- Incremental secondary and co-investment opportunities resulting from ICG's greater scale.
- Access to ICG's infrastructure and expertise in a number of
areas including treasury, investor relations, financing and
information technology.
- A reduction in headline management fees and no fees on ICG funds.
The appointment also preserves a high level of continuity:
- The Company has had a highly successful relationship with ICG for more than 25 years.
- The relationship with Graphite will continue through our
current and future investments in Graphite's funds.
- The Team's core philosophy of applying a direct investment
skillset to private equity fund investing will be maintained.
CHAIRMAN'S COMMENT
Mark Fane commented: "Under Graphite's management, Graphite
Enterprise has been the top performing investment company across
all sectors over the last 25 years(1) . More recent performance has
also been strong, with our share price outperforming the peer group
over 1, 3, 5 and 10 years(2) . On behalf of shareholders, I would
like to thank Graphite for their highly successful management of
the Company since inception in 1981.
"The appointment of ICG as manager is an exciting new
development for Graphite Enterprise which builds on our highly
successful relationship with them for more than 25 years. ICG will
add a new dimension to the business and bring a number of major
benefits which should ensure that our excellent long term
performance record is continued in the future.
"The appointment provides us with continuity of management
through the transfer of the Graphite Enterprise Team to ICG. The
new arrangements also give us the benefit of a privileged
relationship with both ICG and Graphite as we will not be paying a
management fee on commitments to or investments in funds managed by
either party."
[1] Source: AIC. Data to 31 October 2015
[2] The peer group comprises: Aberdeen Private Equity, F&C
Private Equity, HarbourVest Global Private Equity, JPMorgan Private
Equity, Pantheon International Participations, Princess Private
Equity, Private Equity Holding, Standard Life European Private
Equity 3i, Better Capital 2009 and 2012, Candover Investments,
Dunedin Enterprise, Electra Private Equity, HgCapital Trust, NB
Private Equity Partners, SVG Capital.
BACKGROUND ON ICG
ICG is a UK-headquartered specialist investment firm and asset
manager with a strong focus on investments in private companies
across the capital structure. It currently manages EUR20 billion of
assets including its own balance sheet of GBP2.3 billion. ICG's 270
employees, which includes over 120 investment professionals,
operate from 12 offices in 11 countries covering Europe, USA and
Asia.
ICG has expertise in both private equity investment, through its
credit, mezzanine and minority equity businesses, and investment
trusts, through its real estate business, ICG-Longbow.
THE COMPANY'S RELATIONSHIP WITH ICG
Graphite Enterprise and ICG have a strong and successful
relationship dating back more than 25 years. The Company was a
founding investor in ICG in 1989 and has subsequently invested in
five ICG funds and nine ICG co-investments. The performance of
these investments has made ICG the Company's most profitable
third-party relationship.
At 31 October 2015, investments in ICG funds accounted for 4% of
the portfolio and direct investments managed by ICG for a further
3%.
THE COMPANY'S RELATIONSHIP WITH GRAPHITE
The Board and ICG intend to continue the strong and successful
relationship with Graphite. As part of the revised fee arrangements
discussed below, Graphite will continue to offer the Company a
privileged allocation to future Graphite funds and ICG will not
charge a fee on commitments to or investments in these funds.
At 31 October 2015, investments in Graphite funds accounted for
18% of the portfolio and direct investments managed by Graphite for
a further 6%.
REVISED FEE ARRANGEMENTS
Shareholders will benefit from revised fee arrangements, as set
out below:
- The headline fee rate on the portfolio will be reduced from 1.5% to 1.4% per annum.
- No fee will be charged on investments in or commitments to either ICG or Graphite funds.
The effect of the revised arrangements, when applied to the 31
October 2015 balance sheet, would be to reduce the management fee
by 12% on a pro forma annualised basis.
GRAPHITE COMMENT
Rod Richards, Managing Partner, commented: "After more than 30
years as manager, we are pleased that the management of Graphite
Enterprise and the Team, will be passing to a group as well placed
as ICG to take the Company forward in its future development. We
are extremely proud of our performance record, with Graphite
Enterprise having generated a return of over 29 times the amounts
subscribed since its inception in 1981. We wish ICG and the Team
every success in the future."
ICG COMMENT
Philip Keller, Managing Director and Chief Financial Officer,
commented: "We are delighted that the Board has appointed us as
manager of Graphite Enterprise. The acquisition of Graphite's
private equity fund investment business is consistent with our
strategy of expanding our product range through selective
acquisitions and team hires. We have been looking for an entry
point into what we believe to be an important sector of the private
equity market for some time and Graphite Enterprise represents an
excellent platform. We have known the Team for many years and are
looking forward to working with them to ensure the continued strong
performance of the Company."
FURTHER INFORMATION
ICG's press release and further information is available at:
www.icgam.com.
Contacts:
Graphite Enterprise Trust PLC 0207 825 5300
Mark Fane (Chairman) / Emma Osborne
Graphite Capital Management LLP 0207 825 5300
Rod Richards / Markus Golser
J.P. Morgan Cazenove 020 7742 4000
William Simmonds
This information is provided by RNS
The company news service from the London Stock Exchange
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