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Graphite to sell listed funds-of-funds manager to ICG for £20m

José Rojo
23 December 2015

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British GP Graphite Capital has sold the managing entity of Graphite Enterprise Trust (GET), a listed fund-of-funds arm it set up in 1981, to debt specialist ICG.

According to a filing published on London stock exchange's website, ICG will purchase GET for around £20m.

Pending regulatory approval, the transaction will see ICG incorporate the six-strong team that manages GET's investment portfolio. The group is headed by senior partner Emma Osborne and includes fellow senior partner Tim Spence, partner Kane Bayliss and investment director Fiona Bell.

Currently trading with a £419m market cap, GET listed on the London stock exchange after being created by Graphite Capital in 1981. According to the GP, the funds-of-funds manager was set up via a first £23m injection and has since grown to raise £681m and returned £180m to investors, equivalent to a 29x multiple.

In spite of the growth witnessed by GET, a point had come where the trust would benefit from being managed by a business with greater scale and with an international network, Graphite managing partner Rod Richards told unquote".

The GP, which also runs a £500m direct buyout mid-market portfolio in the UK, decided to re-focus on that line of business and began seeking a buyer for GET's manager. According to Richards, ICG was a logical fit as its direct investment focus mirrored Graphite's own.

Under ICG's tenure, GET will build on an investment portfolio that is presently split between direct investments (23%), third-party funds (59%) and third-party co-investments (17%). Notable managers backed by the firm as an LP include ICG itself, as well as PAI Partners, CVC Capital Partners, Cinven, Activa Capital and Advent International.

GET is one of a growing number of funds-of-funds managers that operate on the public markets. As contributions from traditional LPs such as pension funds dwindle, funds-of-funds are increasingly turning to listings to open up new sources of liquidity.