ICG Strategic Partnership Presentation to State of Connecticut Retirement Plans and Trust Funds (CRPTF)
PREPARED FOR CRPTF. PRIVATE AND CONFIDENTIAL.
Certain Risk Factors and Potential Conflicts of
Interest
ICG
The following information describes certain key risks of investing in the Fund. The complete summary of the risks of investing in the Fund is set out in the Offering Documents.
There are significant risk factors associated with an investment in the Partnership. An investment in the Partnership will involve a high degree of risk due to, among other things, the nature
of the Partnership's investments and potential conflicts of interest. There can be no assurance that the Partnership will realize its investment objectives or return any investor capital.
Investors should have the financial ability and willingness to accept the risks (including, among other things, the risk of loss of investment and the lack of liquidity) characteristic of
investments in entities such as the Partnership. Past performance do not guarantee future results. Prospective investors should carefully review the "Certain Risk Factors and Potential
Conflicts of Interest" section of the Private Placement Memorandum which will set forth important considerations that may affect an investment in the Partnership, including (but not limited
to) the following:
NO ASSURANCE OF INVESTMENT RETURN. THE FUND CANNOT PROVIDE ASSURANCE THAT IT WILL BE ABLE TO CHOOSE, MAKE AND REALIZE INVESTMENTS IN ANY PARTICULAR COMPANY OR PORTFOLIO OF COMPANIES.
INVESTMENT IN THE FUND REQUIRES A LONG-TERM COMMITMENT, WITH NO CERTAINTY OF RETURN. MOST OF THE FUND'S INVESTMENTS WILL GENERALLY BE IN PRIVATE, SUBORDINATED, ILLIQUID SECURITIES, WHICH ARE
TYPICALLY SUBJECT TO RESTRICTIONS ON TRANSFER OR RESALE. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO GENERATE RETURNS FOR ITS INVESTORS, THAT THE RETURNS WILL BE COMMENSURATE
WITH THE RISKS OF INVESTING IN THE TYPE OF COMPANIES AND TRANSACTIONS DESCRIBED HEREIN OR THAT THE ADVISOR'S METHODOLOGY FOR EVALUATING RISK-ADJUSTED RETURN PROFILES FOR INVESTMENTS WILL
ACHIEVE ITS OBJECTIVES. THERE MAY BE LITTLE OR NO NEAR-TERM CASH FLOW AVAILABLE TO THE LIMITED PARTNERS FROM THE FUND AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL MAKE ANY DISTRIBUTION
TO THE LIMITED PARTNERS. PARTIAL OR COMPLETE SALES, TRANSFERS, OR OTHER DISPOSITIONS OF INVESTMENTS WHICH MAY RESULT IN A RETURN OF CAPITAL OR THE REALIZATION OF GAINS, IF ANY, ARE GENERALLY
NOT EXPECTED TO OCCUR FOR A NUMBER OF YEARS AFTER AN INVESTMENT IS MADE. IN SOME CASES, THE FUND MAY BE LEGALLY, CONTRACTUALLY OR OTHERWISE PROHIBITED FROM SELLING SUCH SECURITIES FOR A
PERIOD OF TIME OR OTHERWISE BE RESTRICTED FROM DISPOSING OF THEM, AND ILLIQUIDITY MAY ALSO RESULT FROM THE ABSENCE OF AN ESTABLISHED MARKET FOR SUCH SECURITIES. THE REALIZABLE VALUE OF A
HIGHLY ILLIQUID INVESTMENT AT ANY GIVEN TIME MAY BE LESS THAN ITS INTRINSIC VALUE. IN ADDITION, CERTAIN TYPES OF INVESTMENTS MADE BY THE FUND WILL REQUIRE A SUBSTANTIAL LENGTH OF TIME TO LIQUIDATE.
AS A RESULT THE FUND MAY BE UNABLE TO REALIZE ITS INVESTMENT OBJECTIVES BY SALE OR OTHER DISPOSITION AT ATTRACTIVE PRICES; THUS, THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
IMPLEMENT ITS INVESTMENT STRATEGY AND INVESTMENT APPROACH, ACHIEVE ITS INVESTMENT OBJECTIVE OR COMPLETE ANY EXIT STRATEGY. THE FUND'S PERFORMANCE OVER A PARTICULAR PERIOD MAY NOT
NECESSARILY BE INDICATIVE OF THE RESULTS THAT MAY BE EXPECTED IN FUTURE PERIODS. AN INVESTMENT IN THE FUND SHOULD ONLY BE CONSIDERED BY PERSONS WHO CAN AFFORD A LOSS OF THEIR ENTIRE
INVESTMENT. PAST PERFORMANCE OF INVESTMENT ENTITIES ASSOCIATED WITH THE ADVISOR, ICG OR THEIR RESPECTIVE INVESTMENT PROFESSIONALS AND/OR AFFILIATES IS NOT NECESSARILY INDICATIVE OF FUTURE
RESULTS AND PROVIDES NO ASSURANCE OF FUTURE RESULTS.
RISK OF LIMITED NUMBER OF INVESTMENTS. THE FUND IS SUBJECT TO RESTRICTIONS ON THE SIZE OF INVESTMENTS SUCH THAT THE FUND WILL NOT INVEST IN ANY SINGLE PORTFOLIO COMPANY IF IMMEDIATELY AFTER
GIVING EFFECT TO SUCH INVESTMENT, MORE THAN 15% OF AGGREGATE CAPITAL COMMITMENTS WOULD BE INVESTED IN SUCH PORTFOLIO COMPANY AND ITS AFFILIATES (OTHER THAN AFFILIATES THAT ARE AFFILIATES
SOLELY BECAUSE THEY ARE CONTROLLED BY A COMMON PRIVATE EQUITY FUND PARENT). ACCORDINGLY, THE FUND MAY PARTICIPATE IN A LIMITED NUMBER OF INVESTMENTS AND, AS A CONSEQUENCE, THE AGGREGATE
RETURN OF THE FUND MAY BE SUBSTANTIALLY ADVERSELY AFFECTED BY THE UNFAVORABLE PERFORMANCE OF EVEN A SINGLE INVESTMENT. IN ADDITION, OTHER THAN AS SET FORTH IN THE PARTNERSHIP AGREEMENT,
INVESTORS HAVE NO ASSURANCE AS TO THE DEGREE OF DIVERSIFICATION OF THE FUND'S INVESTMENTS, EITHER BY GEOGRAPHIC REGION, ASSET TYPE OR SECTOR. TO THE EXTENT THE FUND CONCENTRATES
INVESTMENTS IN A PARTICULAR ISSUER, INDUSTRY, SECURITY OR GEOGRAPHIC REGION, ITS INVESTMENTS WILL BECOME MORE SUSCEPTIBLE TO FLUCTUATIONS IN VALUE RESULTING FROM ADVERSE ECONOMIC AND/OR
BUSINESS CONDITIONS WITH RESPECT THERETO. AS A CONSEQUENCE, THE AGGREGATE RETURN OF THE FUND MAY BE ADVERSELY AFFECTED BY THE UNFAVORABLE PERFORMANCE OF ONE OR A SMALL NUMBER OF
INVESTMENTS, GEOGRAPHIC REGIONS OR INDUSTRIES OR UNFAVORABLE DEVELOPMENTS IN ONE OR A SMALL NUMBER OF GEOGRAPHIC REGIONS. MOREOVER, SINCE ALL OF THE FUND'S INVESTMENTS CANNOT
REASONABLY BE EXPECTED TO PERFORM WELL OR EVEN RETURN CAPITAL, FOR THE FUND TO ACHIEVE ABOVE-AVERAGE RETURNS ONE OR A FEW OF ITS INVESTMENTS MUST PERFORM VERY WELL. THERE ARE NO
ASSURANCES THAT THIS WILL BE THE CASE.
ILLIQUID AND LONG-TERM INVESTMENTS. IT IS ANTICIPATED THAT THERE WILL BE A SIGNIFICANT PERIOD OF TIME BEFORE THE FUND WILL HAVE COMPLETED ITS INVESTMENTS IN PORTFOLIO COMPANIES. ALTHOUGH
INVESTMENTS BY THE FUND ARE EXPECTED TO GENERATE CURRENT INCOME, PRIVATE DEBT INVESTMENTS TYPICALLY WILL NOT PROVIDE FOR LIQUIDITY PRIOR TO REPAYMENT UPON A REFINANCING EVENT, AND THE
RETURN OF CAPITAL AND THE REALIZATION OF GAINS, IF ANY, FROM AN INVESTMENT GENERALLY WILL OCCUR ONLY UPON THE PARTIAL OR COMPLETE DISPOSITION OF SUCH INVESTMENT. IN LIGHT OF THE FOREGOING, IT
IS LIKELY THAT NO SIGNIFICANT RETURN FROM THE DISPOSITION OF THE FUND'S INVESTMENTS WILL OCCUR FOR A SUBSTANTIAL PERIOD OF TIME FROM THE DATE OF THE INITIAL CLOSING. WHILE AN INVESTMENT MAY BE
SOLD AT ANY TIME, IT IS NOT GENERALLY EXPECTED THAT THIS WILL OCCUR FOR A NUMBER OF YEARS AFTER SUCH INVESTMENTS ARE MADE. IT IS UNLIKELY THAT THERE WILL BE A PUBLIC MARKET FOR THE ILLIQUID
AND/OR LONG-TERM SECURITIES HELD BY THE FUND AT THE TIME OF THEIR ACQUISITION. THEREFORE, NO ASSURANCE CAN BE GIVEN THAT, IF THE FUND IS DETERMINED TO DISPOSE OF A PARTICULAR INVESTMENT, IT
COULD DISPOSE OF SUCH INVESTMENT AT A PREVAILING MARKET PRICE, AND THERE IS A RISK THAT DISPOSITION OF SUCH INVESTMENTS MAY REQUIRE A LENGTHY TIME PERIOD OR MAY RESULT IN DISTRIBUTIONS IN-KIND
TO INVESTORS. ALTHOUGH THE GENERAL PARTNER EXPECTS THAT INVESTMENTS WILL EITHER BE DISPOSED OF PRIOR TO THE FUND BEING PUT INTO LIQUIDATION OR BE SUITABLE FOR IN-KIND DISTRIBUTION AT
LIQUIDATION, THE FUND MAY HAVE TO SELL, DISTRIBUTE OR OTHERWISE DISPOSE OF INVESTMENTS AT A DISADVANTAGEOUS TIME AS A RESULT OF LIQUIDATION. THE FUND GENERALLY WILL NOT BE ABLE TO SELL ITS
INVESTMENTS THROUGH THE PUBLIC MARKETS UNLESS THEIR SALE IS REGISTERED UNDER APPLICABLE SECURITIES LAWS, OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE.
ADDITIONALLY, THERE CAN BE NO ASSURANCES THAT THE FUND'S INVESTMENTS CAN BE SOLD ON A PRIVATE BASIS. IN ADDITION, THE FUND MAY BE PROHIBITED FROM SELLING CERTAIN SECURITIES FOR A PERIOD OF TIME
BECAUSE OF CONTRACTUAL, LEGAL, REGULATORY OR OTHER SIMILAR REASONS AND, AS A RESULT, MAY NOT BE PERMITTED TO SELL AN INVESTMENT AT A TIME IT MIGHT OTHERWISE DESIRE TO DO SO.
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