ICG Enterprise Trust Regulatory News (ICGT)

27 April 2015

GRAPHITE ENTERPRISE TRUST PLC

AUDITED RESULTS FOR THE

YEAR ENDED 31 JANUARY 2015

Following the Company's voluntary disclosure of its unaudited results for the year ended 31 January 2015 by way of a preliminary announcement dated 25 March 2015, the Company now releases its audited results for the year ended 31 January 2015. This announcement contains the information previously disclosed in the preliminary announcement, with some additional updates. These include updates to the "Events since year end" section of the Portfolio Review to reflect cash flows which have occurred since the preliminary announcement, and a breakdown of the Company's capital reserve between realised and unrealised in the Consolidated Statement of Changes in Equity note. 

The financial information set out below does not constitute the Company's statutory accounts for the year ended 31 January 2015 or for the year ended 31 January 2014. The full annual report and accounts is now available on the website at www.graphite-enterprise.com

The 2015 Annual General Meeting will be held at 3.30pm on 11 June 2015 at theWestbury Hotel, Bond Street, London W1S 2YF.

Graphite Enterprise made further progress in the year to January 2015, with the net asset value per share, including the dividend, rising by 5%. The portfolio continued to perform well and the net asset value growth would have been higher if the fall in the euro had not reduced the value of our euro-denominated investments.

Both realisations and new investments increased materially over the previous year, with the portfolio generating £142 million of cash of which £125 million was re-invested. As a result cash is higher than anticipated and we are considering a programme of share buy-backs to help reduce the balance.

Our flexible strategy, our investment discipline and the strong underlying performance of the portfolio position Graphite Enterprise well for future growth.

* Excluding secondary sales of fund interests. ** Subject to approval by shareholders.

Chairman's statement

Summary

Graphite Enterprise made further progress in the year to 31 January 2015. The portfolio performed well once more, advancing by more than 12% in local currencies, with the net asset value per share rising by 5.0% including the dividend. The impact of the portfolio growth on the net asset value would have been greater if the fall in the value of the euro had not reduced the sterling value of our euro-denominated investments. The net asset value per share has nonetheless risen in each of the last five years and over that period has increased by well over 50%.

The share price, inclusive of the dividend, rose by marginally less than the net asset value, increasing by 4.6% in the year and closing at 575p. Reflecting this small differential, the discount to the net asset value per share widened slightly from 16.8% to 17.3%. The rise in the share price compares with a rise of 7.1% in the FTSE All-Share Index over the same period. Over three, five and ten years, the share price has comfortably outperformed the Index.

The portfolio has been performing consistently well for many years. This was the sixth consecutive year in which it has increased strongly in local currencies, with the underlying rate of growth averaging almost 17% annually over this period. As a result of the fall in the euro against sterling, the 12.3% rise in local currencies in the year converted into growth in the portfolio of 8.4% in sterling. The effect of holding relatively high levels of cash and of management costs and expenses limited the overall increase in the net asset value to 5.0%.

At 31 January, total assets had risen to £517 million of which 84% was invested in the portfolio and the balance held in cash. The value of the portfolio remained virtually unchanged at £432 million, with very high levels of realisations balanced by high levels of investment and the growth in value of the assets. Cash balances rose by £22 million in the year to £90 million and we also have undrawn bank facilities of £96 million. As liquidity is now more than sufficient, we are considering a programme of share buy-backs to reduce the cash balance over the next twelve months.

Economic and market environment

The Company's investment programme continues to be focused on the more mature private equity markets in Western Europe. At the year end, the largest exposures were to the UK, which accounted for 50% of the portfolio and to continental Europe which accounted for 37%. Over three-quarters of our continental European exposure was to France, Germany, Benelux and Scandinavia.

The UK's economic performance was relatively strong in 2014, with the recovery expected to continue over the next two to three years. The UK is the largest and most developed of the European private equity markets and, although always highly competitive, has continued to perform well, with the environment for realisations remaining highly favourable.

The performance of the major continental European economies has remained weak with the major economies growing at half the rate of the UK, at best. Although the programme of quantitative easing announced in January may increase activity levels in the longer term, in the short term it has contributed to the sharp fall in the sterling value of our euro-denominated portfolio. The timing of a sustained recovery is still uncertain, with aggregate growth expected to remain subdued for some time.

High quality private equity managers should be able to generate returns throughout the economic cycle. As commitments to funds are typically drawn down over three to five years, managers are able to adjust their rate of investment to the underlying conditions in the markets in which they operate. For this reason it is particularly important that the selection of fund investments is based on the quality of the manager rather than on the macro-economic environment in which they operate. The performance of the investment portfolio in recent years, both in the UK and in continental Europe, has demonstrated the ability of the managers we have backed to identify attractive opportunities even when the economic background has been less than favourable.

Performance

Overview

The investment portfolio continued to perform well, increasing in value by 12.3% in the year in local currencies. As discussed earlier, adverse currency movements limited the increase in the sterling value of the portfolio to 8.4%. As 40% of our opening portfolio was in continental Europe, the 8.4% fall in the value of the euro against sterling had the greatest impact during the year. Partially offsetting this, 14% of the opening portfolio was in North America, which benefited from the US dollar rising by 9.4% against sterling.

As the investment portfolio accounted for just over 85% of net assets at the start of the year, the rise in the portfolio increased the net asset value by 7.2%. After deducting the costs of running the Company, the net asset value per share increased by 5.0%. Payment of last year's dividend accounted for slightly under half of this increase, with the result that the net asset value at the end of the year was 2.7% higher.

Portfolio

Valuation uplifts achieved on realisation activity accounted for 56% of the growth in the portfolio, which is consistent with our experience over recent years. Full realisations continue to be achieved at levels well above their most recent carrying values, with the uplift averaging 35% in the year.

Increases in the valuations of the unrealised portfolio accounted for the remaining growth. This was principally driven by continued earnings growth, although valuation multiples also increased slightly.

As the largest 30 underlying companies accounted for 47% of the portfolio at 31 January, their performance will have a substantial impact on that of the Company. These investments performed strongly, with EBITDA2 growing on average by 8% in the 12 months to December 2014, and were valued at an average of 9.0 times EBITDA. By comparison, the FTSE 250 increased aggregate EBITDA by just 2% in the same period and was valued at an average of 10.6 times EBITDA.

A more detailed analysis of the performance of the investment portfolio is given in the Manager's Review.

Long term performance3

We have always measured performance against the benchmark of the FTSE All-Share Index as we believe that this is the most relevant index for most of our shareholders, over 50% of whom are private individuals. While short term relative performance will always be influenced by the timing of realisations in our portfolio and by fluctuations in exchange rates and in the stock market, we aim to outperform this index over the medium to long term.

Over three, five and ten years the share price has materially outperformed the Index, while the net asset value has outperformed over five years and materially outperformed over ten years. The relative performance over three years reflects the volatility of the Index in 2011, just prior to the start of the three year period, when the Index fell while the Company's net asset value continued to rise steadily.

The Company's performance against the listed private equity sector continues to be strong. The net asset value total return has outperformed the peer group average4 over three, five and ten years and the share price has outperformed the average over three and ten.

Balance sheet, cash flows and commitments

As discussed earlier, cash balances increased by £22 million in the year, closing at £90 million. However the level of cash would have been virtually unchanged had three fund interests not been sold in the secondary market.

Both realisations and new investment continued at historically high levels. Realisations5 rose by 20% to £142 million, equivalent to 33% of the value of the opening portfolio, while new investment increased at a greater rate, rising by 38% to £125 million. The closing cash balance was higher than we had anticipated, reflecting this continued high level of realisations.

The strong growth in new investment was principally achieved through greater discretionary investment, although drawdowns by funds also increased, reflecting the high level of commitments made last year and a faster pace of investment. The Company has been steadily increasing the rate of discretionary investment, in the form of co-investments and secondary purchases of fund interests, and for the first time these accounted for more than 40% of the total invested. The Manager's Review gives further details.

Over the last three years, realisations have been at particularly high levels, with almost 90% of the opening portfolio converting into cash. The total proceeds over this period of £335 million compare with £127 million received over the previous three years.

In the medium term we are able to adjust the rate of new investment to take account of a sharp increase in the rate of realisations. It is more difficult to do so in the short term, primarily because new commitments to funds are drawn down over a number of years.Secondary purchases and co-investments are therefore important tools in managing cash in the short term, but must be used selectively if the quality of the portfolio is to be maintained.

In response to the higher level of realisations, we have substantially increased the rate of new investment, with £270 million invested in the last three years, compared with £190 million over the previous three. Discretionary investment accounted for £99 million of this, which was double the level of the previous three years.

After the very high level of the previous year, the level of new commitments made was relatively low. This was primarily because few of our preferred managers were raising funds. As this was combined with the substantial increase in drawdowns discussed earlier, the level of outstanding commitments to funds fell by 16% in the year, closing at £234 million. We estimate that approximately £70-£90 million of these commitments will be drawn down over the next twelve months.

The Company's sterling and euro bank facilities were put in place in 2011 and the first tranche of £58 million had been due to expire in April 2015. We recently took advantage of favourable conditions in credit markets to extend this tranche for a further four years on improved terms. The remaining £38 million currently expires in 2017.

The cash balance is now £89 million and when this is added to the undrawn bank facility we have more than £180 million of liquidity. This would be sufficient to meet commitments for two to three years, even if we were to receive no further realisation proceeds. As realisations are likely to remain strong, we are considering share buy-backs to reduce the cash balance over the next twelve months, as discussed further in the Outlook section below.

 Revenue return and dividend

As discussed in previous reports, most of our income is recognised when underlying portfolio companies are sold and the accumulated interest on our yield-bearing instruments is received. It is not easy to predict either the timing of realisations or the amount of income which will be included in these realisations. To illustrate the second point, despite realisation proceeds in the year to January 2015 being 20% higher than in the previous year, net revenue was more than 30% lower at £9.4 million or 13.0p per share.

The exceptionally high level of income generated by the portfolio in the previous year allowed us to pay a record dividend of 15.5p, of which 7.5p was declared as a final dividend and 8.0p as a special dividend.

Despite the fall in net revenues, the Board is recommending that the total dividend should be maintained at 15.5p per share, and that this should again be split between final and special payments. The total would represent a distribution to shareholders of £11.3 million. As this slightly exceeds the net revenue for the year, £1.9 million or 2.5p per share of this will be funded from the brought forward revenue reserve. After this payment, we will continue to have substantial revenue reserves of £9.7 million or 13.3p per share.

In determining the final dividend, we believe that it should be set at a level likely to be covered by net revenues over the short to medium term. After reviewing the level of income likely to be generated by the portfolio over the next few years, we are recommending that the final dividend should be increased by 33% to 10.0p. The balance of 5.5p would be paid as a special dividend. Provided net revenues do not fall substantially and no significant balance sheet risk is involved, we would aim to maintain a similar level of final dividend in the future.

The proposed total dividend represents a yield of 2.7% on the share price at 31 January. If approved by shareholders, both the final and special dividends will be paid on 18 June 2015.

Outlook

We have been pleased with the underlying performance of the portfolio in recent years. Against a challenging economic background it has increased in value at an average rate of 13.1% in local currencies over the last four years. Growth in the last two years has been in line with the four year average, but a combination of adverse currency movements and relatively high levels of cash have reduced the impact on the net asset value by an average of 4.5%.

After three years of very high realisations, our cash balance is higher than we anticipated. To address this we have made increased commitments to new funds and have directed significant resources to making co-investments and secondary purchases of fund interests. However, with substantial equity and debt capital available for private equity investment, particularly for secondaries, competition is high and pricing is increasing. In this environment, we believe that it is important to maintain discipline and to invest only if pricing reflects the quality of the opportunity.

We currently have cash balances of nearly £89 million and bank facilities of a further £94 million. Although the facilities are required to cover undrawn commitments, cash is higher than we would like. With realisations expected to continue at high levels, the proceeds are likely to be sufficient to finance our investment programme over the next twelve months. As a result, in the absence of a substantial increase in discretionary investment, cash balances may remain high.

We may therefore use share buy-backs as a means of reducing the cash balance over that period. In 2007/8, when we believed the market to be over-heated, we completed approximately £40 million of share buy-backs in order to reduce cash. Although market conditions are different in many ways, we are currently considering a programme of a similar size.

Two thirds of the portfolio is now in investments made since the financial crisis. While the most recent investments are unlikely to contribute to performance in the short term, almost half the portfolio is in companies acquired from 2009 and 2013. These are likely to be the main driver of growth over the next few years and it is encouraging that they are performing well. If the current favourable conditions persist, we would expect many of these investments to be realised in the next three years. As realisations continue to be achieved at substantial premiums to the previous holding values, we would expect the uplifts on these exits to be an important driver of future performance.

Mark Fane

24 April 2015

1. Throughout the report, all performance figures are stated on a total return basis (i.e. including the effect of re-invested dividends).

2. EBITDA is earnings before interest, tax, depreciation and amortisation.

3. As the Company changed its year end in 2010, the five and ten year figures are for the 61 and 121 month periods to 31 January 2015.

4. 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 (funds-of-funds); 3i, Better Capital 2009 and 2012, Candover Investments, Dunedin Enterprise, Electra Private Equity, HgCapital Trust, NB Private Equity Partners, SVG Capital (direct funds).

5. The figures for realisations exclude the impact of sales of fund interests in the secondary market.

Manager's Review of the Portfolio

Portfolio performance overview

The portfolio performed well in the year to 31 January 2015, rising in value by 12.3% in local currencies. After adjusting for the impact of foreign currency movements on the value of our overseas investments, the sterling value of the portfolio rose by 8.4%.

* In these accounts 92% of the portfoliois valued using 31 December 2014 valuations.

At the end of the year the portfolio was valued at £431.9 million. This was £1.4 million lower than at the start as valuation gains of £53.5 million were more than offset by net realisations of £37.9 million and adverse currency movements of £17.0 million.

Gains generated by realisations and IPOs accounted for 56% of the underlying valuation increase. Unrealised valuation gains were primarily driven by earnings growth but there was also a slight increase in valuation multiples.

Realisations

The portfolio generated cash of £142.2 million (excluding secondary sales) which is 20% higher than in the previous year. Proceeds were equivalent to 33% of the opening value of the portfolio which is the highest conversion rate since 2007.

Proceeds from full realisations increased by 25% to £98.4 million while partial realisations increased by 10% to £43.8 million.

Full realisations

Investments in 39 portfolio companies were fully realised in the year, compared with 33 in the previous year. These accounted for two thirds of total proceeds and were achieved at average uplifts of 35%. It is reassuring that full realisations continue to be completed at substantial uplifts to their previous holding values and that the average return has remained strong at 2.1 times the original cost.

The vintage year in which realised investments were made was evenly spread, with investments made before and after the financial crisis each generating around half of the proceeds from full realisations. However, the uplifts on the latter were almost twice as high as those on pre-crisis investments. It is encouraging to see more recent investments starting to generate strong returns.

The largest realised gains were generated by Graphite Capital Partners VII's disposals of Education Personnel, a provider of supply teachers and support staff to schools, and London Square, a London based housebuilder. These generated proceeds of £14.9 million and £9.8 million respectively. As Education Personnel was acquired by Intermediate Capital Group, a manager we have successfully invested with for many years, we re-invested part of the proceeds in their transaction. The largest cash inflow was the £15.4 million generated by Euromezzanine Fund 5's sale of CEVA, the leading animal health specialist.

CEVA, Education Personnel and London Square were all sold in the first half of the year. The number of realisations completed in the second half was almost 50% higher than in the first but they were on average much smaller. The two largest cash inflows in the second half were of £6.6 million from Doughty Hanson's sale of Quiron, the Spanish hospital operator; and of £4.2 million from Cinven's sale of Sebia, the blood testing equipment provider.

Further details of the ten largest underlying realisations are set out in the Supplementary Information section.

Partial realisations

Refinancings accounted for £16.1 million of the £43.8 million received from partial realisations as a number of portfolio companies took advantage of strong credit markets to recapitalise their balance sheets. This amount was almost 40% higher than was received from refinancings in the prior year.

In a strong IPO market 15 companies achieved flotations, compared with 8 in the previous year. Proceeds of £9.0 million were received from IPOs in the year and a further £5.7 million from sales of listed holdings by underlying funds. At the end of the year the portfolio included holdings in 29 quoted companies valued at £44.7 million. These were in companies which had floated in the year or in previous years. Details of these are set out in the Supplementary Information section.

Secondary sales

An additional £21.1 million was received from the sale in the secondary market of interests in three funds. In a strong secondary market, these were sold at attractive prices which represented a small uplift to their original cost.

New investment

New investment of £125.4 million was 38% higher than in the previous year and the highest ever annual amount.

Fund investments

Funds drew down commitments of £68.0 million in the year, an increase of 25%, with both third-party and Graphite Capital funds investing at a significantly higher rate than in the previous year. However, as we made a large number of commitments to new funds last year, the higher level of drawdowns also reflects the greater number of funds now investing.

Drawdowns of commitments to Graphite Capital funds rose by 30% in the year to£23.0 million. Most of this was to finance two new buy-outs led by our direct investment team. These were of ICR, a provider of maintenance services to the oil and gas industry, and Human Capital Investment Group, a provider of recruitment services. The Company invested £13.0 million in the former, some of which was used to fund a subsequent add-on acquisition, and £8.7 million in the latter.

Third-party funds drew down commitments of £45.0 million. Although this was 22% higher than in the previous year, it represented only 38% of total new investment in the year, reflecting our continuing emphasis on direct co-investments and secondary purchases of fund interests ("secondaries").

A total of 74 new underlying investments were added to the portfolio in the year compared with 58 in the year to January 2014. Further details of the ten largest underlying new investments are set out in the Supplementary Information section of this report.

Discretionary investments

Discretionary investments are those over which we have control of both the amount and timing of investment and includes both direct co-investments and secondaries. This is in contrast to investments in funds, where we typically commit to fund a five year investment programme but the manager selects the underlying investments and controls the timing of cashflows. We invested a total of £57.4 million in discretionary investments which was 57% higher than in the previous year and represented 46% of the total invested.

We invested £30.8 million directly in seven underlying companies in the year. Of this £20.9 million was in three co-investments alongside managers in our fund portfolio, one of which was the reinvestment in Education Personnel noted above. The other £9.9 million was invested in four companies directly managed by our buy-out team, the largest of which was the £5.5 million investment in The Laine Pub Company.

We completed five secondaries in the year totalling £26.6 million. All were in funds managed by firms with whom the Company had already invested, of which four were in funds already in the portfolio. The largest secondary investment was the £10.3 million acquisition of an interest in Graphite Capital Partners VI, our 2003 fund, from a US investor which was selling a large portfolio of European funds. Secondary investments in our in-house funds can be attractive as we have access to a far greater level of information on the portfolio than would be the case for the purchase of a third-party fund and the risk is therefore commensurately lower.

If investments made by our direct buy-out team are added to co-investments and secondaries, the proportion of new investment in the year over which we had discretion was 64%. This is materially higher than that of a typical investor in private equity funds which will tend to have less control over the selection of the underlying companies in its portfolio. We believe this gives the Company a distinctive position in the listed fund-of-funds sector.

New commitments

Commitments to new funds fell considerably as we made an exceptionally high level of new commitments in the year to January 2014. This was broadly as anticipated and reflected the timing of fundraisings by our preferred managers.

We made three primary commitments to funds in the year totalling £22.0 million. Two of these were raised by managers which are new to the portfolio: Silverfleet Capital Partners II (£11.8 million) and Bain Capital Europe IV (£6.3 million). We also increased the commitment to PAI Europe VI by £3.9 million having committed £12.5 million to the first closing in November 2013. Further details of new fund commitments are set out in the Supplementary Information section.

When we acquire a secondary interest in a fund, we take on the obligation to fund our pro-rata share of any undrawn commitments. The secondaries completed in the year increased commitments by £21.6 million, the most significant of which was £17.6 million committed to fund the acquisition of the ICG European Fund 2006 portfolio alongside Landmark Partners, a specialist secondary fund manager.

Closing portfolio

At 31 January, the portfolio was valued at £431.9 million and was broadly diversified with investments in more than 380 underlying companies across a wide range of sectors, geographies and years of investment.

We believe the portfolio strikes an attractive balance between diversification and concentration which is one of our strategic aims. While the level of diversification within the portfolio reduces risk, many individual investments are large enough to have an impact on overall performance, as demonstrated by the sales of Education Personnel and London Square.

The top ten underlying companies accounted for 25% of the value of the portfolio at the year end, while the top 30 accounted for 47%. The performance of these 30 investments is therefore likely to be a key driver of future growth and their performance in 2014 was relatively strong with revenues and EBITDA growing by an average of 5.8% and 8.4% respectively.

The top 30 companies were valued on an average multiple of 9.0 times EBITDA at December 2014. We consider this to be reasonable for the level of growth being achieved. In comparison, the FTSE 250 Index was valued at 10.6 times EBITDA at the period end, while the EBITDA of its component companies increased by only 2% in the last 12 months.

The leverage of the top 30 companies averaged 3.8 times EBITDA. While this has increased slightly in the year, it remains relatively modest and should enhance future equity returns without involving undue financial risk.

We directly manage 25% of the portfolio including six of the top ten underlying investments and ten of the top 30. This gives us a high level of influence over the development of a large part of the portfolio. It also provides valuable insights which help us to make more informed strategic and short term decisions on the management of the portfolio as a whole.

While the third-party portfolio represented 75% of value, 13% of this was acquired through secondary purchases and 15% through co-investments. A total of 53% of the portfolio is therefore in investments over which we had full discretion at the time of investment. This has increased from 43% at the start of the year as a result of the high level of discretionary investments in the year.

Approximately two thirds of the portfolio is in investments made since the financial crisis, compared with half at the start of the year. This reflects a combination of a high level of realisations of earlier vintages and the value of new investments added to the portfolio in recent years. We expect post-crisis investments to generate the most significant uplifts and it is therefore encouraging that the portfolio is now concentrated in these vintages.

At 31 January the portfolio was valued at an average of 140% of original cost in local currencies, of which 40% of cost had already been returned. At these levels, and with a higher proportion of the portfolio in more recent investments, there is potential for considerable further growth as the portfolio matures.

Events since the period end

Since the period end, realisations of £25.6 million have slightly exceeded cash invested in the portfolio of £23.8 million. The new investments include a £7.0 million secondary purchase of an interest in BC European Capital IX and a £3.2 million co-investment in PetSmart alongside the same fund.

After taking account of other net outflows of £2.9 million, the cash balance has fallen to £89.0 million while outstanding commitments have fallen to £225.0 million. Cash as a percentage of net assets has therefore increased to 17.6% while overcommitment, after taking account of the undrawn bank facility, currently stands at approximately 8.2% of net assets.

Prospects

With the portfolio continuing to generate high levels of cash, re-investing these proceeds while maintaining pricing discipline remains challenging.

Fund drawdowns are unlikely to be sufficient on their own to absorb expected cash inflows. If outstanding commitments are drawn down at a constant rate between now and the end of each fund's investment period, drawdowns in the next 12 months would be approximately £70 million. In the last 12 months our managers have invested at a faster rate than this which, if sustained, would imply that drawdowns in the current year will be approximately £90 million.

To become more fully invested, we plan to continue making co-investments and secondaries. However, the market for secondary interests has become increasingly competitive and demand for co-investment from investors is high. As a result, sourcing appropriately priced opportunities has become more difficult over the last 12 months.

We believe it is important not to compromise pricing discipline in order to invest cash balances and we are therefore considering returning excess cash to shareholders through share buy-backs if we cannot find attractive re-investment opportunities in the near term. We took a similar approach in 2007 when we returned cash rather than acquire secondaries at a time when the market was pricing these at a premium to already full valuations.

Although cash is higher than we would have liked, it is reassuring that the portfolio continues to perform well. We are encouraged by the performance of the investments made since the financial crisis which are now generating strong realisations. In the last12 months our managers have continued to realise investments at material uplifts to previous carrying values. There is no reason to believe that these trends will not persist and this should be positive for future growth in the net asset value.

Graphite Capital Management LLP

24 April 2015

SUPPLEMENTARY INFORMATION

The 30 largest FUND INVESTMENTS

The table below summarises the 30 largest funds by value at 31 January 2015.

* Includes the associated top up funds

** All or part of interest acquired through a secondary fund purchase

+ A further interest in this fund has been acquired since the period end for consideration of £7.0m.

The 30 largest UNDERLYING investments

The tables below present the 30 companies in which Graphite Enterprise had the largest investments by value at 31 January 2015. These investments may be held directly or through funds, or in some cases in both ways. The valuations are gross and are shown as a percentage of the total investment portfolio.

+ All or part of this investment is held directly as a co-investment or other direct investment.

* Quoted company.

** We are not permitted to disclose the details of this co-investment under the terms of a confidentiality agreement.

* Excludes Guardian Financial Services where revenue is not a meaningful measure of performance.

** Excludes Intermediate Capital Group and Guardian Financial Services where these metrics are not relevant.

Portfolio analySIS

The following four tables analyse the closing portfolio by value at 31 January 2015.

Investment type

Underlying companies - geographic distribution*

* Location of headquarters of underlying companies in the portfolio. Does not necessarily reflect countries to which companies have economic exposure.

Underlying companies - year of investment and valuation as a multiple of original cost

Underlying companies - sector analysis

The following table analyses the closing portfolio by value.

Graphite and third party investments at 31 January 2015

*Includes Graphite Capital funds, all secondary fund interests and all direct investments

Investment activity

Investments into the portfolio

Largest new underlying investments in the year ended 31 January 2015

* Sold by Graphite Capital to ICG. The Company re-invested alongside ICG.

** Formerly InnBrighton, which was realised in the period. The Company re-invested in the rebranded business, The Laine Pub Company.

*** We are not permitted to disclose the details of this co-investment under the terms of a confidentiality agreement.

Realisations from the portfolio *

*Excluding secondary sales of fund interests.

Largest underlying realisations in the year ended 31 January 2015

* Sold by Graphite Capital to ICG. The Company re-invested alongside ICG.

*\* The Company re-invested in the rebranded business, The Laine Pub Company.

Quoted equity holdings at 31 January 2015

All quoted holdings, other than Intermediate Capital Group, are held indirectly through third party funds and may have restrictions on their sale. The timing of any disposal of these indirect interests is determined by the managers of those funds.

Commitments analysis

1 Original commitments are at 31 January 2015 exchange rates

* Includes £68.0 million of drawdowns in the normal course and £6.0 million in respect of the commitment to Landmark Acquisition Fund VIII to acquire the secondary portfolio of ICG European Fund 2006.

New commitments during the year to 31 January 2015

CURRENCY EXPOSURE

*Currency exposure is calculated by reference to the location of the underlying portfolio companies' headquarters.

 AUDITED RESULTS

Consolidated Income Statement

The columns headed 'Total' represent the income statement for the relevant financial years and the columns headed 'Revenue return' and 'Capital return' are supplementary information. There is no Other Comprehensive Income.

Consolidated Balance Sheet

Consolidated Cash Flow Statement