In this section

Glossary
Glossary of terms
Term Short form ​Definition
​Accounting period ​A calendar year ending 31 March.
​Carried Interest ​Carry ​Share of profits that the fund manager is due once it has returned cost of investment and agreed preferred return to investors.
​​Cash core income ​CCI ​​​​Profit before tax excluding fair value movement on derivatives, unrealised capital gains, impairments and unrealised rolled up interest.
​Catch up fees Fees not previously accrued on basis of income being uncertain or fees payable by mezzanine fund investors for periods prior to current close.
​Collateralised Debt Obligation ​CDO Investment grade security backed by pool of non mortgage based bonds, loans and other assets. CDO values and payment are derived from a portfolio of fixed income underlying assets.
​Collateralised Loan Obligation ​CLO CLO is a type of CDO, which is backed by a portfolio of loans.
​Close A stage in fundraising whereby fund is able to release or draw down the money raised to that date, to enable it to begin investing.
EBITDA Earnings Before Interest, Taxes, Depreciation and Amortisation.
Employee Benefit Trust EBT Special purpose vehicle used to purchase ICG plc shares which is used to satisfy share options and awards granted under the Group’s employee share schemes.
​Financial Conduct Authority ​FCA Successor to the FSA which regulates conduct by both retail and wholesale financial service firms in provision of services to consumers.
​Financial Reporting Council ​FRC UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.
Fund Management Company ​FMC Group’s operating vehicle, which sources and manages investments on behalf of the IC and third party funds.
​High Yield Sub investment grade bond that have higher risk of default but pays higher yields.
​Investment Company IC The investment unit of ICG plc. It co-invests alongside third party funds.
Internal Rate of Return IRR Internal Rate of Return is an annualised effective compounded return rate which can be earned on the invested capital, i.e., the yield on the investment.
​Leveraged Buy Out MTIS Old incentive scheme closed in FY12.
​Mezzanine Mezzanine refers to a subordinated debt or preferred equity instrument that represents a claim on a company’s assets which is senior only to equity.
​Minority equity A non controlling equity stake in a business.
Payment in Kind PIK Also known as rolled up interest. PIK is to be interpreted as interest accruing until maturity or refinancing, without any cash flows until that time.
Performance fees Incentive fees based on the performance of CDO assets and carried interest income based on the performance on mezzanine funds.
Pre-incentive cash profit PICP Profit before tax adjusted for non cash items, fair value movement of derivatives, unrealised capital gains and unrealised rolled up interest.
Return on equity ROI Profit after tax divided by average shareholders’ funds for the period.
Seed equity Initial funding into the fund usually prior to third party commitments.
Senior loan A form of debt that is rated below BBB-/Baa3 by any of the three major ratings agencies hence referred to as sub-investment grade. Most sub-investment grade debt pays a high cash yield and many of the issuers are high quality companies, albeit more geared than investment grade companies.
Turnbull Committee guidance Guidance published by the FRC setting out best practice on internal control for UK listed companies.
UK Corporate Governance Code The Code Sets out standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders.
Warrants In finance, a warrant is a security that entitles the holder to buy stock of the company that issued it at a specified price, which is usually higher than the stock price at time of issue.