4 June 2020

Final results for the financial year ended 31 March 2020

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Fund management profits up 27%, �10.2bn of new money raised.

Total dividend up 13%

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Highlights

• AUM up 22% on 31 March 2019 to �45.3bn, with �10.2bn of new money raised
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• Fund Management Company profits up 27% to �183.1m (2019: �143.8m); average fee rates maintained
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• Investment Company loss of �68.6m (2019: �39.1m profit) reflecting lower valuations of unrealised assets in the final quarter as a result of Covid-19, leading to Group profit before tax on an IFRS basis down 37% to �114.5m (2019: �182.9m)
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• Earnings per share of 38.2p (2019: 63.4p); Fund Management Company 63.4p (2019: 49.0p) and Investment Company a loss of 25.2p (2019: 14.4p profit)
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• Final ordinary dividend up 2% to 35.8p per share; total ordinary dividends in the year up 13% to 50.8p per share
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• Business remains fully operational with colleagues adapting rapidly to new ways of working and interacting closely with portfolio companies, investments and clients
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• Outlook: despite the challenges of Covid-19, our business remains resilient with good visibility on future management fees due to the long-term nature of our funds, underpinned by a strong and well-capitalised balance sheet, with �1.2bn of available liquidity

Commenting on the results, Benoit Durteste, CEO, said:

�This has been another strong year for ICG, and with our strategic focus on the growth and performance of our fund management business, we raised �10.2bn during the year. Despite the impact of the Covid-19 pandemic on the latter part of our fiscal year, we continue to drive long-term value creation for our shareholders. We are in a resilient position with long-term contracted fee streams, a strong balance sheet and �1.2bn of available liquidity.

We expect lower fundraising and investment activity in the short term, but our market fundamentals remain strong, our exposure to the most affected sectors is limited, and we are working closely with all our investments and portfolio companies to help them adapt to this new environment. We believe that the long-term drivers of increased allocations to the alternative asset class will continue and the current conditions will present investment opportunities for private capital to help bolster economies.��

Given our strengthened business model, �11.4bn of investment capacity and disciplined investment capabilities, we are well placed to benefit from these opportunities and continue to create value for our shareholders and clients.���

Commenting on the results, Lord Davies of Abersoch, Chairman, said:

�In these unprecedented times, ICG has an essential role to play in supporting business success, thereby generating financial returns for its fund investors and its shareholders. ICG is in an excellent position, with a resilient business model underpinned by a strong, well-capitalised balance sheet. We are therefore well placed to weather the current economic storm and to emerge in a stronger position than before. It is this backdrop that enabled the Board to recommend a 2% increase in the final ordinary dividend to 35.8p.�

Financials

� These are non IFRS alternative performance measures and exclude the impact of the consolidation of certain funds and CLOs following the adoption of IFRS 10. In the prior year, under IFRS the valuation of CLO loan notes held by the Group was aligned with the valuation technique used for the alternative performance measure resulting in a one-off reduction to the IFRS reported profit after tax. Further details and a reconciliation of the numbers can be found on page 38.

Assets under management�

The following foreign exchange rates have been used:

Enquiries

A presentation for investors and analysts will be held at 13:00 BST today on our website via the Webcast link under Latest Results https://www.icgam.com/shareholders. For those unable to dial in it will be available on demand https://www.icgam.com/shareholders later in the day.

Investor enquiries:

Ian Stanlake, Investor Relations, ICG����������������������������������������������������������������������������� +44 (0) 20 3201 7880

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Media enquiries:

Alicia Wyllie, Corporate Communications, ICG��������������������������������������������������������������� +44 (0) 20 3201 7994
Neil Bennett, Sam Turvey, Maitland������������������������������������������������������������������������������� +44 (0) 20 7379 5151

This results statement has been prepared solely to provide additional information to shareholders and meets the relevant requirements of the UK Listing Authority�s Disclosure and Transparency Rules. The results statement should not be relied on by any other party or for any other purpose.

This results statement may contain forward looking statements. These statements have been made by the Directors in good faith based on the information available to them up to the time of their approval of this report and should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward looking information.

These written materials are not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption therefrom. The issuer has not and does not intend to register any securities under the US Securities Act of 1933, as amended, and does not intend to offer any securities to the public in the United States. No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in these written materials, will not be accepted.

This Results statement contains information which prior to this announcement was insider information.

About ICG

ICG is a global alternative asset manager with over 30 years' history.�

We manage �45.3bn of assets in private debt, credit and equity, principally in closed-end funds. We provide capital to help companies grow through private and public markets, developing long-term relationships with our business partners to deliver value for shareholders, clients and employees.

We operate across four asset classes � corporate, capital market, real asset and secondary investments. In addition to growing existing strategies, we are committed to innovation and pioneering new strategies across these asset classes where the market opportunity exists.

ICG is listed on the London Stock Exchange (ticker symbol: ICP). Further details are available at: www.icgam.com. You can follow ICG on LinkedIn https://www.linkedin.com/company/52126.

Business review

We have continued to grow our global alternative asset management business in line with our strategic objectives, delivering:

• Strong fundraising: �10.2bn raised across a diverse range of strategies and well in excess of our target
• Stable fee rates: weighted average fee rate� at 0.86% in line with the prior year
• Substantial investment capacity: after deploying �5.9bn across our strategies we have �11.4bn of capital available to support portfolio companies and take advantage of market opportunities
• Robust financial position: strong balance sheet, with �1.2bn of available liquidity

Notwithstanding the above, the year-end unrealised valuation of the portfolio has been negatively impacted by the market dislocation due to the Covid-19 pandemic.

Resilient business model

The human consequences of the Covid-19 pandemic are of the utmost importance to management and the Board and will remain a focus for some time to come. We have remained fully operational throughout the lockdowns imposed by many governments and are proud of the way our teams have responded and adapted to new working practices. We remain alert to the practical challenges for some, as well as the increased mental and physical health risks, and have put in place comprehensive support for our people. We have been in contact with our key outsourced providers and have been reassured that they have sufficient, robust processes in place. We have also supported two charities who are working to soften the wider impact of Covid-19 around the world.

As a result of the pandemic and measures to manage it, the global economy has contracted sharply in recent weeks. We have entered a period of significant uncertainty. The timing and nature of any economic recovery, as well as the potential longer-lasting effects on countries, policies and industries, remain highly unpredictable. Since the emergence of the pandemic, we have been in active dialogue with our portfolio companies and working with their management teams to understand, and address, the specific challenges they are facing. We have discussed remediation measures and exit strategies, as well as the buy-and-build opportunities which we anticipate will arise with some sector consolidation.

Resilience becomes the new watchword, and over the decade since the Global Financial Crisis (GFC), we have transformed and strengthened our business model. We have evolved from being a balance sheet investor to become a leading global alternative asset manager. We now have a diversified product offering from which we derive dependable recurring fee streams from a broad and global institutional client base, supported by a strong and well-capitalised balance sheet. These are the foundations of our resilient business model. In addition, as our funds are primarily closed-ended, long in duration, and with no redemption option, we are differentiated from traditional asset managers, and better able to withstand economic cycles.

The alternative asset management industry has also evolved over the last decade to become an integral part of the global financial system. Institutional investors, attracted by enhanced returns, lower volatility and diversification opportunities, have increased their allocations to alternative investment strategies year-on-year. At the same time, the investment market has grown, with companies staying private for longer, benefiting from alternative sources of financing. We expect these long-term trends to continue and, as after the GFC, potentially further to accelerate in the wake of the current crisis.

Fundraising increases recurring fee streams

At �10.2bn (2019: �10.0bn), this has been an exceptional year for fundraising, the lead indicator for future fees and profitability. Of this, �2.5bn was raised in the last two months of the year by which time the potential impact of Covid-19 was already becoming evident. With 86% of our AUM in closed end funds, investor commitments and related fee streams are fixed for the life of the fund (typically 6-12 years) and are unaffected by valuation movements.

We had significant success during the year in raising �1.6bn across our three new strategies: Sale & Leaseback, Infrastructure Equity and European Mid-Market. Fees on all three are payable on committed capital from the first close, and hence have already started to contribute to our profits. We continue to fundraise for our Sale & Leaseback and Infrastructure Equity funds.

We had further success with Senior Debt Partners. We decided to bring forward fundraising for this, one of our largest strategies, to take advantage of favourable market conditions and raised �3.3bn in the year, across Fund IV and segregated mandates. Our liquid open-ended credit strategies raised �1.8bn, continuing the momentum of prior years. We also raised money for our real estate strategies; the fourth vintage of our Asia Pacific Fund; completed the fundraising for our Strategic Equity strategy; closed two CLOs; and raised money for our Australian Senior Loans fund, demonstrating the depth and diversity of our product offering.

As at the end of March 2020, we had �11.4bn of capital available to deploy across all strategies. This places us in a strong position to access the attractive deal opportunities that are emerging.

During the year, we deployed �5.9bn across our direct investment strategies, in line with the prior year. Of note, deployment in the current year was weighted more to our senior secured debt strategies as we adopted a more conservative approach to investing amid changed market conditions.

We have had no significant outflows from our open-ended funds (which represent 14% of total AUM) during the year or up to the date of this report. Indeed, these funds have experienced net inflows since the year end, reflecting the relevance of our strategies to fund investors and our increasingly established track record in this market.

Diversified portfolios support resilient long-term performance

To date, the negative effect of the economic shock caused by Covid-19 on our portfolios has been reduced by diversification, the nature of the instruments we invest in, and our conservative approach to structuring. We are investing across 21 strategies globally and have very little exposure to industries which are most exposed to the Covid-19 crisis. Private debt consists a significant proportion of our portfolios which is structurally less susceptible to valuation swings when compared to private or indeed public equity. We do not leverage our funds, even for our senior debt strategies.

We continue to adopt a robust valuation methodology taking account of the longer-term prospects for our portfolios as assessed at the year end. In addition, our disciplined approach to realising assets when possible in order to anchor performance means we already have good visibility over the likely outcomes for many of our vintages. Our clients assess our performance on the returns we generate over the life of a fund, and we still expect to meet or exceed our fund return hurdle rates over the longer term.

Our balance sheet capital is invested alongside our funds and is both an enabler and an accelerator of the growth of our fund management business. Our balance sheet portfolio is widely diversified, investing in over 300 companies, across 36 industries and 34 countries through the funds it has invested in. Although we experienced unrealised losses on our balance sheet portfolio due to the market dislocation caused by the Covid-19 pandemic, these were moderate due to our diversification. Only 5% of the balance sheet portfolio is exposed to oil and gas, and other industries currently most exposed to a downturn. A further 13% is invested in CLOs managed by our team, in line with regulatory minimums. We believe this level of diversification increases the resilience of the portfolio.

Robust financial position and progressive dividend

The Group maintains conservative financial leverage, and we continuously manage our sources of balance sheet financing to ensure we have appropriate diversification, and had liquidity of over �1.2bn at year-end. The weighted average life of drawn debt at 31 March 2020 was 4.2 years with �250m of maturities in the financial year ending 31 March 2021, in part funded by raising a �500m seven-year Eurobond with a coupon of 1.625% in February 2020.

In line with our dividend policy, and reflecting the performance of our Fund Management Company, our resilient business model and our robust financial position, the Board recommends a final dividend of 35.8p per share (2019: 35.0p) equating to a total for the year of 50.8p per share (2019: 45.0p), an increase of 13%. This represents 80% of the post-tax profits of the Fund Management Company, using the Group�s effective tax rate. It is also covered 0.75 times by total adjusted earnings. We continue to make the dividend reinvestment plan available.

Board changes

We have seen a number of changes at board level, welcoming Lord Davies of Abersoch as Chair and Vijay Bharadia and Antje Hensel-Roth (in April 2020) as Executive Directors. They bring with them a wide variety of experience and perspectives and are already making valuable contributions to board proceedings. We are grateful to Kevin Parry (former Chair) and Philip Keller (former CFOO) who have left the Board having contributed to the Group�s strategy over many years.�

Outlook: significant long-term growth potential

It is likely to be some time before the full social and economic impact of Covid-19 is known. During this time the Board and management will continue to work closely together to manage the business in the best interests of our people, our shareholders, our clients and other stakeholders.

We have made a strong start to the fundraising year, but overall fundraising will be slower in the current financial year. In addition to the wider market challenges, this is in part because once Senior Debt Partners is fully raised, we will have none of our larger funds in the market in the coming year, in line with our well-established, long-term fundraising plan.

Since the outbreak of the pandemic, both investment and realisation activity have slowed materially. While we do not expect significant realisations in the coming financial year, we have already signed a number of new investments across strategies and geographies. Once lockdown measures are eased further and there is greater clarity around the economic outlook, we expect investment activity to pick up. We will, as always, remain disciplined in our approach, but expect to find attractive opportunities for investments which will support business recovery and success over the long investment horizons of our strategies.

We will continue to manage our portfolios closely, and while we take a robust approach to portfolio valuations, it is too early to take a view on the extent of further unrealised write downs which might be required if conditions further deteriorate during the year. However, our focus on closed-end funds, with clients committed over a long term, enables us to manage our portfolios through economic cycles, with the aim of continuing to deliver superior returns for all our investors.

Our market fundamentals remain strong and we expect the current environment to present further opportunities for us to innovate and increase diversification by asset class and geography. We have a proven track record of launching and scaling up new strategies, making us an attractive proposition for new teams. During the year, we began the process for developing a global secondaries fund strategy as well as a US private equity fund strategy, with high profile hires. The teams will use balance sheet capital to make initial investments and demonstrate proof of concept for these scalable strategies, before commencing preparations for launching dedicated third-party funds.

These are unprecedented times, but with our resilient business model underpinned by a strong, well-capitalised balance sheet, we are in a strong position from which to navigate the challenges and capitalise on the opportunities that this crisis will present. We have transformed into a leading global alternative asset manager and are well placed for significant long-term growth and shareholder value creation.

� These are non IFRS GAAP alternative performance measures. Please see the glossary on page 38 for further information.

Finance and operating review

The financial information prepared for, and reviewed by, management and the Board is on a non-IFRS basis. These are alternative performance measures as defined in the glossary on page 38. The IFRS financial statements are on pages 22 to 37.

Under IFRS the Group is deemed to control funds where it can make significant decisions that can substantially affect the variable returns of investors. There are 16 credit funds and CLOs that are required to be consolidated under this definition of control. This has the impact of including all of the assets and liabilities of these funds in the consolidated statement of financial position and recognises all the related interest income and gains or losses on investments in the consolidated income statement. However, the legal and economic structure of these funds means that shareholders are only exposed to the Group�s own investment into these funds and CLOs.

The Board believes that presenting the financial information in this review on a non-IFRS basis, and therefore excluding the impact of the consolidated credit funds and CLOs, assists shareholders in assessing their investment and the delivery of the Group�s strategy through its financial performance. This is consistent with the approach taken by management, the Board and other stakeholders.

The Group�s profit after tax on an IFRS basis was below the prior year at �110.6m (2019: �184.5m). On the alternative performance measurement basis, it was also below the prior year at �109.2m (2019: �269.3m). The reconciliation is as follows:�

The prior year difference between internal and IFRS financial information is primarily in the valuation of the CLO loan notes within the Investment Company. The adoption of IFRS 9 in the prior year prompted the Group to reconsider the valuation technique used to determine the valuation of the CLO loan notes in the IFRS financial information. The IFRS valuation of CLO loan notes has been aligned with the valuation technique used under the alternative performance measure basis resulting in a one-off reduction to the IFRS reported profit after tax. Going forward we do not anticipate profit, or earnings per share, on an alternative performance measure basis to be materially different to that on an IFRS basis. �

The Group has adopted IFRS 16 �Leases� with effect from 1 April 2019, with the impact of adoption detailed in note 1 to the financial statements.

Alternative performance measures are denoted by � throughout this review. The definition, and where appropriate, reconciliation to the IFRS measure, is included in the glossary on page 38.

Overview

The Group�s profit before tax� for the period under the alternative performance measurement basis was 60% lower at �110.8m (2019: �278.3m), with Fund Management Company (FMC) profit of �183.1m (2019: �143.8m) and Investment Company (IC) loss� of �72.3m (2019: �134.5m profit).

Our principal profit metric is FMC profit which has benefited from the increase in assets under management, increased fee income and a slower increase in operating costs. The IC has reported a loss reflecting lower net investment returns due to unrealised losses recognised in March 2020 arising from the year end portfolio valuations which have been negatively impacted by the market dislocation due to the Covid-19 pandemic.

The IC loss includes a gain of �26.6m (2019: gain of �17.2m) arising from the fair value of hedging derivatives. We use derivatives to match the currency exposure of our Investment Company assets and related liabilities; the fair value movement reflects the average unhedged net asset position in the period.

The effective tax rate is lower than the standard corporation tax rate of 19%, as detailed on page 35. This is due to a significant proportion of the Investment Company�s assets being invested directly into funds based outside the United Kingdom. Investment returns from these funds are paid to the Group in the form of non-taxable dividend income. This outcome is in line with other UK investment companies. The Investment Company�s taxable costs offset the taxable profits of our UK Fund Management business, reducing the overall Group charge.

Based on the alternative performance measurement profit above, the Group generated a ROE� of 7.9% (2019: 20.0%) and earnings per share� for the period of 38.3p (2019: 94.9p).

Net current assets� of �762.3m are up from �328.1m at 31 March 2019, with a �784.7m increase in cash, partially offset by financial liabilities maturing within one year increasing by �256.0m.�

Fund Management Company

Assets under management

A key measure of the success of our strategy to generate value from our fund management business is our ability to grow assets under management (AUM). New AUM, or fundraising, is our best lead indicator to recurring future fee streams and therefore increasing sustainable profits. In the year to 31 March 2020, the net impact of fundraising and realisations increased third party AUM� by 24% to �42.8bn. AUM by strategic asset class is detailed below.

Corporate Investments
Corporate Investments third party funds under management increased 21% to �20.7bn in the year, with new AUM of �4.8bn, including �3.3bn for Senior Debt Partners and �0.9bn for the new Europe Mid-Market Fund, exceeding the realisations from our older funds.

Capital Market Investments
Capital Market Investments third party funds under management increased 20% to �13.8bn, with new AUM of �2.5bn raised in the year. During the year we raised two CLOs, one each in Europe and the US, raising a total �0.7bn. The remaining �1.8bn was raised across our other liquid credit funds and multi-asset mandates.

Real Asset Investments
Real Asset Investments third party funds under management increased 38% to �4.9bn, with new AUM of �1.7bn raised in the year, primarily for ICG-Longbow Fund V, our UK real estate partnership capital strategy, and our UK real estate senior debt strategy. Included in this strategic asset class is our new Sale & Leaseback strategy which raised �0.5bn during the year and Infrastructure Equity which raised �0.2bn. As both these strategies charge fees on committed capital they are immediately contributing to the Group�s profit.

Secondary Investments
Secondary Investments third party funds under management increased 51% to �3.4bn, with new AUM of �1.1bn raised in the year for our Strategic Equity strategy, including �0.8bn for Strategic Equity Fund III and �0.3bn of segregated mandates.

Fee earning AUM

The investment rate for our Senior Debt Partners strategy, Real Estate funds and North American Private Debt Fund has a direct impact on FMC income as fees are charged on an invested capital basis. The total amount of third-party capital deployed on behalf of the direct investment strategies was �5.9bn in the year compared to �6.0bn in the last financial year. The direct investment funds are investing as follows, based on third party funds raised at 31 March 2020:

*Co-mingled fund, excluding mandates and undrawn commitments

Fee earning AUM has increased 21% to �35.9bn since 1 April 2019 primarily due to the immediate impact of those funds which charges fees on committed capital and the deployment of Senior Debt Partners and real estate funds. New investments made are partially offset by realisations in our older funds as detailed below:

Fee income
Third party fee income� of �277.8m was 26% higher than the prior year due to the successful fundraising of funds which charge fees on committed capital and investments made by other funds that charge fees on invested capital. Details of movements are shown below:

Third party fees include �23.5m of performance fees (2019: �21.9m), of which �19.9m (2019: �16.4m) related to Corporate Investments and �3.3m (2019: �5.3m) to our Strategic Equity fund strategy. At 8.5% (2019: 10.0%) of total third-party fees, the amount of performance fees recognised in relative terms has reduced from the prior year reflecting the expected slowdown in realisations in the near term due to the Covid-19 pandemic. Performance fees remain a small but integral part of the fee income profile and profitability of the Group.

Third party fees are 85% denominated in Euros or US dollars. The Group�s policy is to hedge non-Sterling fee income to the extent that it is not matched by costs and is predictable. Total fee income included a �4.0m (2019: �2.0m) FX benefit in the year.

The weighted average fee rate�, excluding performance fees, across our fee earning AUM is 0.86% (2019: 0.86%).

Other income
In addition to fees, the FMC recorded dividend receipts� of �41.2m (2019: �34.4m) from the increased number and performance of CLOs. CLOs are structured so that dividends can only be paid if the fund is meeting its leverage covenant test. If the credit ratings of the underlying portfolios were to be sufficiently downgraded, the level of dividends received from CLOs in the short term would reduce.

Operating expenses
Operating expenses of the FMC were �158.3m (2019: �130.9m), including salaries and incentive scheme costs.

Salaries were �55.7m (2019: �47.3m) as average headcount increased 20% from 282 to 337, with continued investment across our platform. Increased headcount also increased incentive scheme costs to �56.8m (2019: �44.5m). Other administrative costs have increased to �45.8m (2019: �39.1m) reflecting the growth of the business, with no individually significant increases.

The FMC operating margin� was 53.6% up from 52.3% in the prior year, as a result of average fee earning AUM increasing 26% to �33.1bn for the year thereby increasing the operating leverage of our existing strategies.

Investment Company

Balance sheet investments

The balance sheet investment portfolio� reduced 3% in the year to �2,197m at 31 March 2020, representing 5.5% (2019: 7.1%) of total assets under management, as illustrated in the investment portfolio bridge below.

Realisations comprise the return of �262.7m of principal and the crystallisation of �212.5m of net investment returns.

In the period �128.5m was invested alongside our Corporate Investments strategies for new and follow on investments. Of the remaining �200.9m, �45.1m was invested in new and reset CLOs, �111.9m in our Real Asset Investment strategies and �43.9m in our Strategic Equity strategy.�

The Sterling value of the portfolio increased by �58.6m due to FX movements. The portfolio is 49% Euro denominated, 24% US dollar denominated and 16% Sterling denominated.

The balance sheet investment portfolio is weighted towards the higher returning asset classes as illustrated below:

In addition, �12.8m (2019: �110.7m) of current assets are held on the balance sheet prior to being transferred to third party investors or funds.

Net investment returns
Net investment returns� of �49.4m (2019: �275.1m) represent the total return generated from the balance sheet portfolio in the year and represent 2.2% of the average balance sheet portfolio (2019: 12.6%). In the first eleven months of the financial year net investment returns were �201.8m, but have been reduced by net unrealised losses of �152.4m recognised in March 2020 as a result of the year end portfolio valuations which have been negatively impacted by the market dislocation due to the Covid-19 pandemic. However, recognised unrealised losses do not result in cash outflows. The Group�s long-term business model, involving management of predominantly closed-end funds, means that teams are not forced to exit investments to meet liquidity needs. They have the benefit of time and can wait for valuations to potentially recover. ICG�s funds are structured to perform through economic cycles.

Net investment returns by asset class were as follows:

The fair value of the Group�s Corporate Investments is determined in line with industry guidelines and uses both earnings multiple and discounted cash flow valuation techniques. The reduction in net investment return is due to the unrealised losses arising from the year-end valuations which reflected weaker market conditions arising from the expected economic impact of the Covid-19 pandemic.

Within Capital Market Investments is the Group�s regulatory investment in the CLOs it manages. The fair value of the CLO equity assets is assessed using discounted cash flow models, a key assumption of which is the expected default rate. In light of recent developments, the expected default rate was increased to 8% from 3% per annum. The CLO debt assets are valued based on observable market prices which during March 2020 experienced considerable decline due to Covid-19. This has resulted in a reduction in the carrying value of the Group�s investments in CLO�s and liquid funds.

We take a robust approach to valuations, but given the uncertainty arising from the Covid-19 crisis it is not possible to determine the extent of any further unrealised or realised losses that may arise in the future if conditions deteriorate further. Conversely, if conditions improve, we may experience recoveries.

Interest expense
Interest expense� of �57.8m was �3.9m higher than the prior year (2019: �53.9m), following the issuance of a �500m bond in February 2020 and of private placement debt in the current and prior year.

Operating expenses
Operating expenses� of the IC amounted to �68.1m (2019: �83.4m), of which incentive scheme costs of �47.5m (2019: �66.4m) were the largest component. The �18.9m decrease is due to a reduction in the value of our deal vintage bonus scheme and a lower cash bonus. Other staff and administrative costs were �20.6m compared to �17.0m last year, a �3.6m increase.

Group cash flow and debt
The balance sheet remains well-capitalised, with �1.2bn of available cash and debt facilities at 31 March 2020, excluding the consolidated funds and CLOs. During the year, the Group issued new US private placement debt and a �500m bond, to refinance upcoming debt maturities and extend the overall debt maturity profile. The bond has a coupon of 1.625% and a maturity of seven years. The movement in the Group�s unutilised cash and debt facilities during the year is detailed as follows:

Total drawn debt at 31 March 2020 was �1,915m compared to �1,184m at 31 March 2019, with unencumbered cash of �917m compared to �163m at 31 March 2019. The increase in unencumbered cash is due to the �500m bond issuance, and the drawdown of �250m on the Group�s bank facilities in early March as a precautionary measure.

Capital position
Shareholders� funds reduced by �74.2m to �1,309.2m (31 March 2019: �1,383.4m), as the retained profits in the period were offset by the payment of the ordinary dividend and purchase of own shares. Total net debt� to shareholders� funds (net gearing�) as at 31 March 2020 increased to 0.76x from 0.74x at 31 March 2019. Gross gearing� of 1.46x (2019: 0.86x) is a less meaningful measure in the current year given the level of unencumbered cash on the balance sheet.

Principal risks and uncertainties

MANAGING RISK

Effective risk management is key to our success and is recognised as an essential part of delivering the Group�s corporate strategy.

Our approach

The Board is accountable for the overall stewardship of the risk management framework, internal control assurance, and for determining the nature and extent of the risks it is willing to take in achieving the Group�s strategic objectives. In doing so, the Board sets a preference for risk within an effective control environment, to generate a return for clients and investors and protect their interests.

The risk appetite is reviewed by the Risk Committee, on behalf of the Board, and covers the principal risks that the Group expects to encounter in delivering its strategic objectives. The Committee is provided with management information on a quarterly basis and monitors performance against set thresholds and limits to ensure that the Group�s strategic objectives can be achieved, within the boundaries of the risk appetite.

The Board also seeks to promote a strong risk management culture by encouraging acceptable behaviours, decisions and attitudes toward taking and managing risk throughout the Group.

Managing risk

Risk management is embedded across the Group through the risk management framework, which ensures that current and emerging risks are identified, assessed, monitored, controlled and appropriately governed based on a common risk taxonomy and methodology. The risk management framework is designed to protect the interests of all stakeholders and meet our responsibilities as a UK listed company and parent of a number of regulated entities.

The Board reviews the risk management framework regularly and it forms the basis on which the Board reaches its conclusions on the effectiveness of the Group�s system of internal controls.

Lines of defence

We operate a risk framework consistent with the principles of the �three lines of defence� model. This ensures clarity over responsibility for risk management and segregation of duties between those who take on risk, those who oversee risk and those who provide assurance.

• The first line of defence is the business functions and their respective line managers, who own and manage risk and controls across the processes they operate
• The second line of defence is made up of the control and oversight functions, Legal, Risk and Compliance, who provide assurance that risk management policies and procedures are operating effectively
• Internal Audit is the third line of defence and provides independent assurance over the design and operation of controls established by the first and second lines to manage risk

Assessing risk

We have adopted a bottom-up and top-down approach to risk assessment:

• The Risk Committee undertakes a top-down review of the external environment and the strategic planning process to identify the most consequential and significant risks to the Group�s activities. These are referred to as the principal risks
• The business undertakes a bottom-up review which involves a comprehensive risk assessment process designed to facilitate the identification and assessment of key risks and controls related to each business function�s most important objectives and processes. This is assessed through the emerging risk and control self- assessment process (RCSA) and the Risk Taxonomy

The Risk Taxonomy which is a top-down comprehensive set of risk categories designed to encourage those involved in risk identification to consider all types of risks that could affect the Group�s strategic objectives.

Key developments

In August, a new Head of Risk was appointed, presenting the Group with an opportunity to further develop the risk management framework, ensuring it keeps pace with industry standards and reflects the risk profile of the Group.

During the year, progress has been made to further deliver and embed the risk management development plan (RMDP) that commenced the previous year, focusing on the implementation of the RCSA program. The Head of Risk has expanded the RMDP into a three-year program to further strengthen risk management and embed the framework in the activities of the business.

During the financial year, other key initiatives included:

• Testing our business continuity and recovery plans, which have been invoked in response to Covid-19
• Mitigating the impact of Brexit on the business by strengthening EU operations and obtaining the required permissions to enable continuity of marketing services
• Enhancing our product approval process to continue to ensure risks are identified and mitigated and that new products are operationally feasible
• Undertaking a review of our supplier management framework to improve the management of our third-party administrators
• Refining our risk appetite by enhancing our risk appetite statements and metrics
• Implementing the Senior Management and Certification Regime (SMCR), including training and support for senior managers and certified staff

Principal risks and uncertainties

The Group considers its principal risks across three categories:

1.������������ Strategic and external risks

The risk of failing to deliver on our strategic objectives, resulting in a negative impact on investment performance and Group profitability.

2.�������� Financial risks

The risk of an adverse impact on the Group due to market fluctuations, counterparty failure or having insufficient resources to meet financial obligations.

3.�������� Operational risks

The risk of loss resulting from inadequate or failed internal processes, people or systems and external events.

Reputational risk is not in itself one of the principal risks, however, it is an important consideration and is actively managed and mitigated as part of the wider risk management framework.

The Group continuously monitors internal and external environments to identify new and emerging risks. Following the year end, there have been significant developments in relation to the Covid-19 outbreak. These developments are unprecedented and likely to have a material impact on a number of our principal risks, most notably on external environment risk, sustained investment underperformance risk including valuation risk, and adverse market fluctuation risk.

Covid-19

The global impact of the Covid-19 outbreak continues to rapidly evolve and has caused severe disruption, thereby adversely impacting many global economies across many industries. The full scale of the impact is not yet known, and unpredictable and uncontrollable outcomes may still have the potential to materially impact a number of our principal risks. It remains uncertain as to how quickly economic activity will resume and accordingly it is impossible to gauge the longer-term impact of the crisis to our business, or industry performance more generally. Much will depend on the duration of the lockdown and the shape of the subsequent economic recovery. The Board, Risk Management Committee and Executive Directors continue to closely monitor the impacts on our business as a result of the crisis, which are considered within the relevant principal risks on the following pages.

The magnitude of the Covid-19 crisis is unprecedented and has provided valuable insights to the Group�s risk management framework and our business continuity arrangements. We intend to apply this experience into developing our risk framework to incorporate more severe scenario planning, with revised assumptions and sensitivities. Our risk reporting will also be enhanced to provide a more dynamic profile of emerging risks and the potential impact to our principal risks.

The Directors confirm that they have undertaken a robust assessment of principal risks in line with the requirements of the UK Corporate Governance Code. The principal risks are described on the following pages:

Responsibility statement

The responsibility statement below has been prepared in connection with the Company's full annual report for the year ending 31 March 2020. Certain parts thereof are not included within this announcement.

We confirm to the best of our knowledge:

• the financial statements, prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
  �
• the management report, which is incorporated into the directors' report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face.

This responsibility statement was approved by the Board of Directors on 3 June 2020 and is signed on its behalf by:

Benoit Durteste ���������� Vijay Bharadia
CEO ��������������������������� CFOO

Consolidated income statement����������

For the year ended 31 March 2020

The Group has adopted IFRS 16 �Leases� from 1 April 2019. As permitted under the transition rules the prior year comparatives have not been restated. Further information can be found in note 1.

All activities represent continuing operations.

Consolidated statement of comprehensive income

For the year ended 31 March 2020

Consolidated statement of financial position

As at 31 March 2020

�

Consolidated statement of cash flows

For the year ended 31 March 2020

The Group�s cash and cash equivalents includes �172.2m (31 March 2019: �191.3m) of restricted cash held principally by structured entities controlled by the Group.

Consolidated statement of changes in equity

For the year ended 31 March 2020

Notes to the financial statements

For the year ended 31 March 2020

1.���� Basis of preparation

The financial information set out in the announcement does not constitute the Company's statutory accounts for the years ended 31 March 2020 or 2019. The financial information for the years ended 31 March 2020 and 2019 is derived from the statutory accounts for those years. The statutory accounts for 2019 have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain a statement under s498(2) or (3) Companies Act 2006. The audit of the statutory accounts for the year ended 31 March 2020 is not yet complete. These statutory accounts will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

While the financial information included in this announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs) as adopted by the European Union, this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRSs in June 2020.

Changes in significant accounting policies

During the year the Group has adopted IFRS 16 �Leases� with effect from 1 April 2019. As permitted under the transition rules, comparative figures for the year ended 31 March 2019 have not been restated. The impact of adopting these new accounting standards on the Group�s significant accounting policies are summarised below.

IFRS 16 �Leases�

IFRS 16 introduces changes to lease accounting by removing the distinction between operating and finance leases. This requires the Group to recognise a �right-of-use� (ROU) asset and a lease liability at the commencement of all leases, except for short-term leases, those leases that are contractually less than 12 months, and leases of low value.

Under the new standard, the present value of total rentals payable over the life of the lease is recognised as a liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease; if this rate cannot be readily determined, the Group uses its incremental borrowing rate. On transition to IFRS 16 the weighted average incremental borrowing rate applied to lease liabilities recognised under IFRS 16 was 4.5%. The lease liability is offset by an asset comprising the initial measurement of the corresponding lease liability, and any other initial direct costs, lease incentives and any costs to dismantle or return the asset to its original form. The ROU asset is subsequently measured at cost less accumulated depreciation and impairment losses.

The standard therefore increases debt liabilities on the balance sheet and the income statement expense is represented as depreciation and finance cost, rather than rent.

On transition, those leases previously accounted for as operating leases with a remaining lease term of less than 12 months and for leases of low-value, as described below, the Group has elected not to recognise a right-of-use asset. The Group has accounted for the lease expense on a straight line basis over the remaining lease term.

The Group has assessed low value assets to be those with a value of less than �10,000 (or local currency equivalent). As a result, the Group�s material leases impacted by the adoption of this accounting standard are its rented office spaces.

The Group has elected not to include initial direct costs in the measurement of the right-of-use asset for operating leases in existence at the date of initial application of IFRS 16. The Group has also elected to measure the right-of-use assets at an amount equal to the lease liability adjusted for any prepaid or accrued lease payments that existed at the date of transition. There were no critical judgements or estimates applied in adopting the standard.

The new Standard has been applied using the modified retrospective approach, with the cumulative effect of adopting IFRS 16 being recognised in equity as an adjustment to the opening balance of retained earnings for the

Notes to the financial statements continued

For the year ended 31 March 2020

current period. Prior periods have not been restated. The impact on the consolidated statement of financial position is as follows:

The following is a reconciliation of total operating lease commitments as disclosed in the financial statement for the
year ended 31 March 2019, to the lease liabilities recognised at 1 April 2019:

2.���� Business segments

For management purposes, the Group is currently organised into the Fund Management Company (FMC) and the Investment Company (IC). Segment information about these businesses is presented below and is reviewed by the Executive Directors.

The Group reports the profit of the FMC separately from the profits generated by the IC. The FMC is defined as the operating unit and as such incurs the majority of the Group�s costs, including the cost of the investment network, i.e. the Investment Executives and the local offices, as well as the cost of most support functions, primarily information technology, human resources and marketing.

The IC is charged a management fee of 1% of the carrying value of the average investment portfolio by the FMC and this is shown below as fee income. The costs of finance, treasury and portfolio administration teams, and the costs related to being a listed entity, are�allocated to the IC. The remuneration of the Executive Directors is allocated equally to the FMC and the IC.

Notes to the financial statements continued

For the year ended 31 March 2020

�

Analysis of income and profit before tax by operating segment

�

Reconciliation of financial statements reported to the Executive Directors to the position reported under IFRS

Included in the table below are adjustments made from operating segments, which are equivalent to alternative performance measurers �APM� to IFRS:

• All income generated from Investment Company investments is presented as net investment returns for operating segments purposes whereas under IFRS it is presented within gains on investments and other operating income.
• The structured entities controlled by the Group are presented as fair value investments for operating segments purposes, whereas the statutory financial statements present these entities on a fully consolidated basis.

Notes to the financial statements continued

For the year ended 31 March 2020

Consolidated Income Statement

�

Notes to the financial statements continued

For the year ended 31 March 2020

�

Consolidated Income Statement

Notes to the financial statements continued

For the year ended 31 March 2020

�

Consolidated Statement of Financial Position

�

Notes to the financial statements continued

For the year ended 31 March 2020

Consolidated Statement of Cash Flows

Notes to the financial statements continued

For the year ended 31 March 2020

3.���� Dividends

The proposed final ordinary dividend for the year ended 31 March 2020 is 35.8 pence per share (2019: 35.0 pence per share), which will amount to �101.6m (2019: �100.0m). The total dividend in respect of the year ended 31 March 2020 was 50.8 pence per share (2019: 45.0 pence per share)

Of the �142.8m (2019: �88.3m) of ordinary dividends paid during the year, �0.7m were reinvested under the dividend reinvestment plan that was offered to shareholders (2019: �1.3m).�

Notes to the financial statements continued

For the year ended 31 March 2020

4.������������ Earnings per share

Reconciliation of total number of shares allotted, called up and in issue

5.������������ Tax

Notes to the financial statements continued

For the year ended 31 March 2020

The Group is an international business and operates across many different tax jurisdictions. Income and expenses are allocated to these jurisdictions based on transfer pricing methodologies set out both (i) in the laws of the jurisdictions in which ICG operates, and (ii) under guidelines set out by the Organisation for Economic Co-operation and Development (OECD).� The effective tax rate results from the consolidation of taxes paid or credited on earnings attributable to the tax jurisdictions in which they arise.� The vast majority of the Group�s operating profits in the period arose in the UK.��

The current effective tax rate reported by the Group of 3.4% (FY19: (0.9%) credit) is lower than the statutory UK corporation tax rate of 19%. The FMC activities are subject to tax at the relevant statutory rates ruling in the jurisdictions in which the income is earned.�The lower effective tax rate compared to the statutory UK rate is largely driven by the IC activities.� The IC benefits from statutory UK tax exemptions on certain forms of income arising from both foreign dividend receipts and gains from assets qualifying for the substantial shareholdings exemption. The effect of these exemptions means that the effective tax rate of the Group is highly sensitive to the relative mix of IC income, and composition of such income, in any one period.���

Accounting for tax involves a level of estimation uncertainty given that the application of tax law requires a degree of judgment, which tax authorities may ultimately dispute. Tax liabilities are recognised based on the best estimates of probable outcomes, with regard to external advice where appropriate.�The principal factors which may influence the Group�s future tax rate are changes in tax legislation in the territories in which the Group operates, the relative mix of FMC and IC income, the mix of income and expenses earned and incurred by jurisdiction, and the timing of recognition of available deferred tax assets.

A reconciliation between the theoretical statutory tax rate applicable to the Group and the reported effective tax rate is provided below.

Notes to the financial statements continued

For the year ended 31 March 2020

6.������������ Post balance sheet events

Since the year end, the outbreak of Covid-19 has continued to cause major global uncertainty and continues to impact global financial markets. The Group has implemented its business continuity plan, and its critical teams and functions continue to work remotely to support the business.

The overall financial impact of Covid-19 is uncertain; however, the Group determined that its key sensitivity was in relation to fair value assessment of its financial assets. The principal source of uncertainty concerns estimates applied in determining such assessments. The Group has an established policy and robust process where valuations are challenged by the Group Valuation Committee both qualitatively and quantitively.� All investments are subject to review at a minimum quarterly, and those which have been identified to have a significant reduction in fair value are subject to enhanced monitoring and review.

As a result of Covid-19, the Group placed enhanced focus on its valuation assessment and the effectiveness of methodologies applied. The Group has included additional sensitivities to its valuations and stress-testing for the potential impact of Covid-19-related market dislocation. Since 31 March 2020, the Group continued to monitor estimates and valuations that may have had a significant risk of causing a material adjustment to fair value assessments as of the balance sheet date. The Group has not identified any material changes requiring adjustment subsequent to year end.

As part of the Board�s assessment of the going concern basis and viability of the Group, a range of stressed scenarios and sensitivity analyses were examined to identify conditions that might result in the Group�s covenants being breached. This included the consideration of possible remedial action that the Group could undertake to avoid such breaches. The nature of the diversification and defensive characteristics of the Group�s closed-end funds were also considered.

The results from the scenario analysis is that the Group is sensitive to the reduction in the fair value of its investments which are dependent on external factors; however, due to the long-term nature of the Group�s funds, a reduction to the fair value of an investment does not result in an outflow of cash. Therefore, this does not impact the liquidity of the Group.

The Group has sufficient liquidity following the issuance of a �500m Eurobond, and private placement debt during the year. The Group is not in breach of any of its facility covenants and has sufficient headroom.

Based on the Board�s review and drawing on its skills and experience it expects that, even in the identified extreme scenario, the Group would have the capacity to continue as a viable entity.

As of 15 May 2020, the Group has taken occupation of Procession House, 55 Ludgate Hill, New Bridge Street, London EC4M 7JW. This site is currently in the process of being fitted out and will be the new London Headquarters where the Group�s London staff will be based later on in the year.

Glossary

Items denoted with a � throughout this document have been identified as non IFRS alternative performance measures. These are defined below:

Term
Short form
Definition
Adjusted earnings per share
Adjusted EPS
Adjusted profit after tax divided by the weighted average number of ordinary shares as detailed in note 4.
Adjusted Group profit before tax

Group profit before tax adjusted for the impact of the consolidated structured entities. As at 31 March, this is calculated as follows:���������

Adjusted Investment Company profit before tax

Investment Company profit adjusted for the impact of the consolidated structured entities. As at 31 March, this is calculated as follows:�

Adjusted return on equity

Adjusted profit after tax (annualised when reporting a six month period�s results) divided by average shareholders� funds for the period. As at 31 March, this is calculated as follows:

Assets under management
AUM
Value of all funds and assets managed by the FMC. During the investment period third party (external) AUM is measured on the basis of committed capital. Once outside the investment period third party AUM is measured on the basis of cost of investment. AUM is presented in Euros, with non-Euro denominated at the period end closing rate.
Balance sheet investment portfolio

The balance sheet investment portfolio represents non-current financial assets from the Statement of Financial Position, adjusted for the impact of the consolidated structured entities. See note 2 for a full reconciliation.
Cash profit
PICP
Cash profit is defined as profit before tax and incentive schemes, adjusted for non-cash items on an alternative performance measure basis.

Dividend income

Dividend income represents distributions received from equity investments. Dividend income reported on an alternative performance measure basis excludes the impact of the consolidated structured entities. See note 2 for a full reconciliation.
Earnings per share

Profit after tax divided by the weighted average number of ordinary shares as detailed in note 4.
EBITDA

Earnings before interest, tax, depreciation and amortisation.
Gross gearing��

Gross gearing is used by management as a measure of balance sheet efficiency. Gross borrowings, excluding the consolidated structured entities, divided by closing shareholders� funds. Gross borrowings represent the cash amount repayable to debt providers. As at 31 March, this is calculated as follows:

Interest expense

Interest expense excludes the cost of financing associated with the consolidated structured entities.
Liquidity

Liquidity represents the Group�s unencumbered cash and available undrawn debt facilities.
Net asset value per share

Total equity from the Statement of Financial Position divided by the closing number of ordinary shares. As at 31 March, this is calculated as follows:

Net current assets

The total of cash, plus current financial assets, plus other current assets, less current liabilities as reported on the alternative performance measure basis. This excludes the consolidated structured entities. As at 31 March, this is calculated as follows:

On an IFRS basis net current assets are as follows:

Net debt

Net debt, along with gearing, is used by management as a measure of balance sheet efficiency. Net debt includes unencumbered cash whereas gearing uses gross borrowings and is therefore not impacted by movements in cash balances.
Total drawn debt less unencumbered cash of the Group. As at 31 March, this is calculated as follows:

Net gearing������

Net gearing is used by management as a measure of balance sheet efficiency. Net debt, excluding the consolidated structured entities, divided by closing shareholders� funds. Gross borrowings represent the cash amount repayable to debt providers. As at 31 March, this is calculated as follows:

Net investment returns

Net investment returns is the total of interest income, capital gains, dividend and other income less asset impairments.
Operating cashflow

Operating cashflow represents the cash generated from operating activities from the Statement of Cash Flows, adjusted for the impact of the consolidated structured entities. See note 2 for a full reconciliation.
Operating expenses of the Investment Company���������

Investment Company operating expenses are adjusted for the impact of the consolidated structured entities.� See note 2 for a full reconciliation.
Operating profit margin

Fund Management Company profit divided by Fund Management Company total revenue. As at 31 March this is calculated as follows:

Return on equity
ROE
Profit after tax (annualised when reporting a six month period�s results) divided by average shareholders� funds for the period.
Third party fee income

Fees generated on fund management activities as reported in the Fund Management Company including fees generated on consolidated structured entities which are excluded from the IFRS consolidation position. See note 2 for a full reconciliation.
Weighted average fee rate

An average fee rate across all strategies based on fee earning AUM in which the fees earned are weighted based on the relative AUM.

Other definitions which have not been identified as non IFRS GAAP alternative performance measures are as follows:

Company timetable

Ex-dividend date���������� ����������� ����������� ����������� 18 June 2020

Record date����� ����������� ����������������������� ����������� 19 June 2020

Last date for dividend reinvestment election������ 15 July 2020

AGM and Trading statement������ ����������������������� 21 July 2020

Payment of ordinary dividend��� ����������� ����������� 5 August 2020

Half year results announcement������������������������� 17 November 2020