ICG Enterprise Trust Regulatory News (ICGT)

13 June 2013

GRAPHITE ENTERPRISE TRUST PLC

INTERIM MANAGEMENT STATEMENT

QUARTER ENDED 30 APRIL 2013

Graphite Enterprise Trust PLC ('Graphite Enterprise' or 'the Company') presents its Interim Management Statement for the quarter ended 30 April 2013.

Unaudited net asset value

In the three months to 30 April 2013 the unaudited net asset value per share rose by 0.7% from 631.5p to 635.7p.

The increase in the underlying value of the investment portfolio, which represented 88.1% of total assets at the quarter end, generated a 1.5% increase in net asset value in the period. This was partially offset by currency movements, principally the depreciation of the euro against sterling, which reduced the net asset value by 0.5%, and by expenses and other items which accounted for a further reduction of 0.3%.

These results do not include the effect of the proposed dividend of 5.0p per share (£3.6 million in total or 0.8% of net asset value at the quarter end) which will be recorded in the second quarter if approved at the forthcoming Annual General Meeting.

Share price and discount

The share price rose by 1.0% to 492.0p in the quarter and by 20.9% over the twelve months to 30 April. The discount to net asset value improved slightly over the quarter to 22.6%.

Investment portfolio

Investment performance

The underlying value of the portfolio in local currencies increased by £7.1 million or by 1.5% of net asset value in Q1. The euro fell in value by 1.1% against sterling, reducing net asset value by 0.5%. The overall increase in net asset value generated by the portfolio was therefore 1.0%.

March valuations had only been received for 43% of the portfolio by the cut-off date and many of those managers who had reported at March do not prepare full portfolio revaluations at that date. As a result, the great majority of the portfolio remains at its reported December valuation.

The largest gain recorded in the period related to the disposal by Graphite Capital of Dominion Gas, the Company's eleventh largest underlying investment at 31 January 2013. The exit was agreed in April but completed in May. The price achieved represented an uplift of 44% to the carrying value of the investment at 31 January and generated an increase of 0.5% in the net asset value in the quarter. The carrying value of this investment at the end of April was increased to reflect the exit price.

Five full exits were completed in the quarter. The average uplift against the previous carrying value was 51%.

Proceeds

Proceeds generated by the portfolio in the quarter totalled £15.2 million or 3.7% of its opening value. The largest cash inflow was of £2.6 million from the investment in HellermanTyton which was partially exited via an IPO in March.

We expect proceeds in the second quarter to exceed those received in the first. Cash of £4.8 million has been received since the quarter end and we will receive approximately £7.8 million from the sale of Dominion Gas. We are aware of a further £5.5 million of proceeds which should be received in the next few weeks.

Additions

A total of £12.9 million was invested in the quarter. Of this amount, drawdowns from funds accounted for £9.4 million and the secondary purchase of an interest in a fund managed by GCP Capital Partners accounted for the remaining £3.5 million. The rate of drawdown was similar to the average for last year.

A total of thirteen new underlying investments were made in the quarter, none of which was large enough to enter the top 30.

Since the period end, a total of £3.1 million has been invested in the portfolio. We have exchanged contracts for a secondary purchase of a fund interest for £5.5 million and expect this to complete shortly. A further £1.5 million of drawdowns from funds are likely to be made in the next few weeks.

Cash and liquid assets

In the three months to 30 April 2013, the portfolio generated a cash inflow of £2.3 million. However, after taking account of other net outflows, cash and liquid assets fell slightly by £0.2 million to £55.0 million:

Balance sheet and commitments

The summary balance sheet and commitment position as at 30 April 2013 is set out below. The Company remains 88.1% invested.

1. £50.0 million and €58.1 million translated into sterling at period end.

2. Cash and liquid assets plus undrawn borrowing facilities.

3. Outstanding commitments less total liquidity.

As previously reported, in March the Company entered into an agreement with The Royal Bank of Scotland and Lloyds Bank Corporate Markets to increase its bank facilities by £40 million. The Company now has access to facilities totalling £99.2 million of which £50.0 million is denominated in sterling and £49.2 million is denominated in euros. These remain undrawn.

Mainly as a result of the larger facilities, total liquidity has increased from £114.7 million to £154.2 million which more than covers existing commitments.

Outstanding commitments increased by £12.2 million to £138.7 million during the quarter as new commitments exceeded drawdowns.

We made three new primary commitments totalling £20.6 million of which two were to new relationships with Towerbrook and IK Investment Partners and the third was to an existing manager, Cinven. The secondary purchase of the GCP Capital Partners fund interest increased commitments by a further £1.8 million.

Drawdowns from funds reduced commitments by £9.4 million. Other items reduced commitments by a net £0.8 million.

The strength of the balance sheet is allowing us to increase commitments in what is an attractive market for fund investors. As previously reported, the Board has decided to make a commitment of at least £70 million to the next fund to be raised by Graphite Capital which we expect to be launched later this year. We also continue to review a number of opportunities to acquire secondary interests in funds and co-investments alongside funds.

Events since the quarter end

In June, Cinven achieved a stock market listing for Partnership and Doughty Hanson disposed of Vue Entertainment. These were the Company's 19th and 20th largest underlying investments. The impact of these events has not been reflected in the net asset value at 30 April.

The Company retained the majority of its investment in Partnership after its listing. The share price of Partnership at 11 June and the exit price of Vue represent in aggregate an uplift of 71% to the carrying values at the end of the quarter, and an increase in the 30 April NAV of 1.2% on a pro-forma basis. Based on current performance, the uplift in Graphite Capital Partners VII is likely to generate a similar level of increase in net asset value in the quarter ending 31 July.

The Directors are not aware of any other events or transactions which have taken place between 30 April 2013 and the date of publication of this statement which have had a material effect on the financial position of the company.

Not audited or reviewed

This information has not been audited or reviewed by the Company's auditors.

For further information please contact:

SUPPLEMENTARY INFORMATION

The 30 largest fund investments

The 30 largest funds by value at 30 April 2013 are set out below:

* Includes Graphite Capital Partners VII Top Up Fund and Top Up Fund Plus

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

The 30 largest underlying INVESTMENTS

The table below presents the 30 companies in which Graphite Enterprise had the largest investments by value at 30 April 2013. 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.

* Quoted

** Sold after the period end

*** Floated and partially sold after quarter end

Portfolio analySIS

The following five tables analyse the companies in which Graphite Enterprise had investments at 30 April 2013.

Portfolio - Investment type

Portfolio - Geographic distribution*

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

Portfolio - Year of investment

Portfolio - Sector analysis

Portfolio - Graphite and third party investments

Investment activity

Largest new underlying investments in the quarter

* Merged with an existing underlying investment. Combined entity is the 30th largest underlying investment at 30 April.

Largest underlying realisations in the quarter

Commitments analysis

1 Original commitments are translated at 30 April 2013 exchange rates

New commitments in the quarter

NOTES

Graphite Enterprise Trust PLC

Graphite Enterprise Trust PLC ("Graphite Enterprise" or "the Company") aims to provide shareholders with long term capital growth through investment in unquoted companies. To achieve this, the Company invests in private equity funds and also directly in private companies.

The Company was listed in 1981 and has invested exclusively in private equity and been managed by Graphite Capital throughout its life.

Graphite Enterprise provides access to a diverse portfolio of buy-outs of mature, profitable companies in established European private equity markets. The Company invests in in UK-based mid-market companies through funds managed directly by Graphite Capital. Typically these will make up 20-25% of the portfolio. Investments in other UK companies and in overseas markets are made through funds managed by third parties. The Company does not invest in start ups or early stage businesses. Direct investments in companies may be made alongside both Graphite Capital and third party funds.

Shareholders of Graphite Enterprise gain exposure to a diverse portfolio of buy-outs of mature, profitable companies in established European private equity markets, with over 300 underlying companies. Graphite Capital directly manages many of the largest companies in the portfolio.

Since inception, the Company has generated a return of more than 26 times the amount subscribed.

www.graphite-enterprise.com 

Graphite Capital

Graphite Capital is one of the UK's leading mid-market private equity firms with over £1.2 billion of funds under management. It has raised and managed funds for 32 years. The senior management team has worked together for 16 years.

Graphite Capital manages both direct investments in portfolio companies and private equity fund investments.

Direct investments are predominantly made through limited life funds which have a global institutional investor base. The focus of direct investments is on UK mid-market buy-outs of companies valued at between £40 million and £150 million across a range of industry sectors.

Fund investments are made exclusively by Graphite Enterprise. Fund investments focus mainly on European buy-out funds, but there is also some exposure to the USA and to growth capital and mezzanine funds. The investment strategy is to back private equity managers with strong track records operating in mature markets, with the aim of building long term relationships.

As it has a long experience both of managing its own funds and of investing in third party funds, Graphite Capital has an unusually broad perspective when assessing fund and co-investment opportunities. Graphite Enterprise benefits from both the expertise of a dedicated fund investment team as well as the insights of Graphite Capital's direct investment team.

www.graphitecapital.com