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Propelling
Performance
As a publicly listed investor in
middle-market alternative asset
managers, Petershill Partners plc
(“Petershill Partners” or the
“Company”)
1
offers Shareholders
diversified access to the growth in
private markets. Through our non-
controlling ownership in carefully
selected Partner-firms, we provide
public market investors with access
to the profitability of ambitious
private capital firms focused on the
middle-market.
Our Shareholders benefit from the
growth of over 20 firms and long-
term, stable, cash flows generated
by the fee income from over 200
funds, managed by our Partner-
firms across multiple asset classes
and investment strategies.
The Glossary of Capitalised Defined Terms on pages 134 to 135 and
Glossary of Key Operating Metrics on pages 138 to 140 include definitions
of the APMs and reconciliation to the relevant IFRS measures.
1. Includes Petershill Partners plc and its subsidiaries.
Introduction
Contents
Strategic Report
2
Performance Highlights
6
Performance Timeline
8
Chairman’s Statement
10
Business Model
14
A Letter From the Co-Heads of Petershill
16
Our Markets
20
Strategy and Investment Objectives
27
Financial and Operating Review
32
Our Stakeholders
35
Section 172 Statement
38
ESG at Petershill
40
Principal Risks and Uncertainties
Governance Report
47
Chairman’s Introduction
48
Our Board
50
Report of the Directors
53
Directors’ Remuneration Report
58
Directors’ Responsibilities Statement
59
Corporate Governance Report
67
Audit and Risk Committee Report
Financial Statements
71
Independent Auditors’ Report
81
Consolidated Financial Statements
85
Notes to the Consolidated Financial Statements
120
Company Financial Statements
123
Notes to the Company Financial Statements
Additional Information
130
Alternative Performance Measures
134
Glossary of Capitalised Defined Terms
136
The Petershill Partners Group’s Assets
138
Glossary of Key Operating Metrics
141
Company Information
142
Cautionary Statement
1 Petershill Partners plc | Annual Report 2024
Our Performance
Highlights
To measure the progress and performance of the
Company over time, we use a combination of
Key Performance Indicators, Alternative
Performance Measures and Operating Metrics.
Along with our Operator Goldman Sachs Asset
Management, we use these to help evaluate
trends and assess the performance both of our
Partner-firms and of the Company.
Performance Highlights
Strategic Report
2 Petershill Partners plc | Annual Report 2024
213
203
225
283
304
337
194
221
238
5.0
5.3
5.8
(505)
397
966
370
292
323
336
284
293
Growth KPIs
Aggregate Partner-firm AuM
At 31 Dec 2024
$337bn
2022 2023 2024
Aggregate Partner-firm AuM is a meaningful
measure of the size, scope and composition of
the Company’s Partner-firms, as well as of
their capital-raising activities. This is an
aggregated figure across all Partner-firms and
includes Partner-firm AuM outside of
Petershill Partners’ ownership interests in the
Partner-firms.
Aggregate Fee-paying
Partner-firm AuM
At 31 Dec 2024
$238bn
2022 2023 2024
Aggregate Fee-paying Partner-firm AuM is a
meaningful measure of the Partner-firms’
capital base upon which they earn
management fees, and the measure is used in
assessing the management fee-related
performance of the Partner-firms. This is an
aggregated figure across all Partner-firms and
includes Fee-paying Partner-firm AuM outside
of Petershill Partners’ ownership interests in
the Partner-firms.
Investments in Partner-firms
at Fair Value
At 31 Dec 2024
$5.8bn
2022 2023 2024
The fair value of investments in Partner-firms
represents the current value of the Company’s
investments.
Profitability KPIs
Partner Distributable
Earnings
Full year 2024
$323m
2022 2023 2024
Partner Distributable Earnings is defined as
the sum of Partner Fee-Related Earnings
(FRE), Partner Realised Performance
Revenues (PRE) and Partner Realised
Investment Income. It is a meaningful
measure of Petershill’s income from its
interests in Partner-firms.
Profit/(Loss) Before Tax
Full year 2024
$966m
2022 2023 2024
The profit before tax is a measure of the
profitability of the Company. It includes
earnings from investments in Partner-firms,
the impact of valuing those interests, and the
other income and costs of the Company.
Adjusted EBIT
Full year 2024
$293m
2022 2023 2024
Adjusted EBIT is a meaningful measure as it
enables a clear view of the Company’s
operational profitability by excluding certain
items that do not form part of the Company’s
recurring activities.
Partner FRE
Full year 2024
$225m
2022 2023 2024
Partner Fee-Related Earnings is a meaningful
measure of the management fee-related
earnings of the Partner-firms.
Key
Alternative Performance Measure
International Financial Reporting Standard
Operating Metric
Strategic Report
3 Petershill Partners plc | Annual Report 2024
220
240
262
8.6% 8.6%
9.5%
8.9
9.0
9.5
26%
13%
15%
Diversification KPIs
Partner-firm Funds
At 31 Dec 2024
262
2022 2023 2024
Partner-firm funds are defined as the number
of underlying Partner-firm funds to which the
Company is exposed.
Partner FRE Concentration
by Largest Fund
Full year 2024
9.5%
2022 2023 2024
Partner FRE Concentration by Largest Fund is
calculated as FRE from the largest fund
divided by total FRE, and highlights the
diversified nature of the Company.
Quality of Partner-firm Earnings KPIs
Weighted Average Capital
Duration
At 31 Dec 2024
9.5 years
2022 2023 2024
Weighted Average Capital Duration is a key
measure of the long-term, locked-up capital
of Aggregate Fee-paying Partner-firm AuM.
Partner Realised PRE as a
Percentage of Partner
Revenue
Full year 2024
15%
2022 2023 2024
This KPI highlights the management-fee-
centric nature of the Company’s financial
profile.
Key
Alternative Performance Measure
International Financial Reporting Standard
Operating Metric
Performance Highlights continued
Strategic Report
4 Petershill Partners plc | Annual Report 2024
415.7
430.8
471.5
(39.4)
28.4
75.8
11.0
15.0
15.5
36.0
37.3
39.7
26.0
27.7
28.6
Per Share Metrics
Book Value Per Share
At 31 Dec 2024
471.5¢
2022 2023 2024
Book value per share indicates the Company's
net asset value on a per-share basis by
dividing total Shareholders’ funds by the total
number of shares outstanding.
Earnings Per Share
Full Year 2024
75.8¢
2022 2023 2024
Earnings per share (EPS) is calculated by
dividing the net profit after tax by the
weighted average number of Ordinary Shares
in issue, to provide the portion of the
Company's profit allocated to each
outstanding share.
Ordinary Dividend Per Share
Full year 2024
15.5¢
2022 2023 2024
The Proposed Ordinary Dividend Per Share is
comprised of an interim and final dividend
each year. The interim dividend is equal to
one-third of the prior year total dividend and
the dividend is proposed by the Board and
subject to approval by Shareholders at the
Annual General Meeting.
Ownership Weighted Operating Metrics
Ownership Weighted AuM
At 31 Dec 2024
$39.7bn
2022 2023 2024
Ownership weighted AuM represents the sum
of the Company’s ownership stakes in each
Partner-firm’s AuM.
Ownership Weighted Fee-
paying AuM
At 31 Dec 2024
$28.6bn
2022 2023 2024
Ownership weighted Fee-paying AuM
represents the sum of the Company’s
ownership stakes in each Partner-firm’s Fee-
paying AuM. It is the AuM base on which we
earn management fees.
Strategic Report
5 Petershill Partners plc | Annual Report 2024
Our Strategy in Action
1 October
Admitted to the London Stock Exchange as a
premium-listed business, raising $720m
Performance Timeline
Strategic Report
6 Petershill Partners plc | Annual Report 2024
Dividend
10.4c
per share, (annualised,
equivalent to $120m)
Acquisitions
Five transactions completed
in first full quarter as a public
company (Q4)
$458m
committed
Share buyback programme
$50m
Acquisitions
New acquisitions
$180m
committed
Debt refinance
$500m
used to repay existing $350m
debt and fund future M&A
Dividend
14.5c
per share
(equivalent to $165m)
2024 marked Petershill Partners’ third full year as a publicly listed company.
During this period, we completed four acquisitions and three disposals,
returned $563 million of capital to Shareholders and maintained our
progressive dividend policy.
Strategic Report
7 Petershill Partners plc | Annual Report 2024
Acquisitions
▪ None in 2023
Share buyback programme
$50m
Completed $26m
at the end of the year
Acquisitions
Completed four
acquisitions totalling
$205m
committed
Tender offer
$103m
1
tender offer completed in
June 2024
Disposals
Completed three disposals
totalling
$575m
expected proceeds
Dividend
15.0c
per share delivered in
2024 (equivalent to
$168m)
Dividend
15.5c
per share interim and
2024 final dividend
proposed (equivalent to
$168m)
Special dividends
26.5c
per share
(equivalent to $287m)
Share buyback programme
$6m
Completed in 1H 2024
1. Excludes capitalised transaction costs of $3.4m.
Chairman’s
Statement
“Our business is well-positioned
to capitalise on the GP-stakes
opportunity we have identified
through the strong execution
both by our Partner-firms and by
the Company.”
Dear Shareholders
2024 was an active and productive year for your Company. Underlying
performance from our Partner-firms improved and we completed a
number of value creating acquisitions and disposals. The Board also
undertook a number of capital management actions including a share
buyback, a tender offer and the distribution of two special dividends. As a
result, the market has begun to better reflect the value of the business
and the total shareholder return was strong.
This was against a backdrop of a good year for global equity markets with
the US, where the majority of our businesses invest, leading the way – the
S&P500 ended the year up 23%. The headline number, however, masks
the fact that stock market index growth was concentrated in a few names
and both stock and bond markets experienced periods of heightened
volatility as a result of geopolitical events that took place throughout the
year. Periodic bouts of uncertainty around the timing and depth of
interest rate cuts in major developed markets also weighed on
sentiment. Against this improving, but still challenging backdrop, private
markets asset-raising at the industry level contracted for a third
successive year coming in 21% lower year-on-year. It is encouraging to
note that, despite the volatile environment, our Partner-firms exceeded
the aggregate guidance we set a year ago, raising $32 billion of new fee-
eligible AuM (assets under management) during the year.
High-quality Partner-firms
This is the third consecutive year that our asset-raising guidance has
either been met or exceeded. In all, 16 different firms contributed to the
overall figure this year. We view this as testament to the quality of the
alternative asset management companies we invest in, the benefits of
having a portfolio of GP stakes that is diversified across asset class,
strategy and vintage and our focus on specialist middle-market
managers, an area we believe enjoys a long runway of growth.
The quality of our Partner-firms can also be seen in Petershill Partners’
own financial performance for the year. Fee-Related Earnings (FRE) are
up 11% driven by 10% growth in Partner Net Management and Advisory
Fees, in-line with the 10% cost growth at our Partner-firms. FRE accounts
for 70% of our overall income with the remainder primarily generated
from Partner Realised Performance Revenues (PRE). Here too, we are
reporting growth of 33% for the year, driven partly by improving activity
levels as the year progressed. Overall, we are reporting an 11% increase
in our Partner Distributable Earnings for the year.
The pick-up in activity levels seen across our Partner-firms is mirrored by
Petershill Partners’ own experience. In 2023, we did not conclude a single
acquisition or divestment. By contrast, 2024 saw the Company complete
four acquisitions at a total cost of $205 million, along with three
divestments for a total consideration of $575 million, a 19% premium to
the $483 million carrying value at the transaction dates. This reflected
sales at significantly higher earnings multiples than the company trades
on, and also in excess of our carrying valuation multiples.
Chairman’s Statement
Strategic Report
8 Petershill Partners plc | Annual Report 2024
In terms of acquisitions made, we increased our interest in three existing
Partner-firm investments via a secondary transaction from a financial
investor executed at a discount to our carrying value. We also added a
new Partner-firm to our portfolio after we acquired a stake in private
credit manager Kennedy Lewis Investment Management, which operates
in the private credit space, a segment which is growing rapidly.
As for disposals, we sold a partial interest in Accel-KKR (“AKKR”) followed
by a further sale of mainly investment capital in the same manager. In
addition, we disposed of our stake in LMR Partners (“LMR”), an absolute
return manager. All the above activity was in line with our strategy of
focusing on high-quality management fee-centric earnings.
Subsequent to the year end we announced the sale of the substantial
majority of our interest in General Catalyst for a consideration of $726
million, representing a premium to its last reported carrying value of
62%. In addition, on the 14 March 2025, the Company acquired a stake
for $330 million in Frazier Healthcare Partners, a specialist mid-market
private equity firm with $5.5 billion in AuM.
Stewards of capital
As a Board, we take our role as stewards of Shareholder capital seriously.
In line with this, we are focused on optimising capital efficiency. So, as
well as funding the $205 million spent on the above acquisitions, the
operating cashflows and proceeds raised from the various sales enabled
us to return a total of $563 million to Shareholders through a
combination of a tender offer, special dividends, a buyback programme
and our progressive dividend policy. We approved all these steps over the
course of the year because, in our view, they represented efficient uses of
capital. Subsequent to year end the Board announced a special dividend
of $151 million representing the majority of the profit realised on the
General Catalyst sale. The balance of the proceeds from that transaction
will be retained for redeployment into new investments.
The tender offer serves as an example of how our focus on capital
efficiency works in practice. During the first quarter of the year, we
believed the Petershill Partners share price, which was regularly trading
at a 45-50% discount to net asset value, represented a compelling
investment opportunity. We therefore completed a tender offer of $103
million to Shareholders at a price of 214p per Ordinary Share, a 15%
premium to the previous day’s closing price of 186p. Petershill’s share
price went on to finish the year at 248p, 16% higher than the tender offer
price, highlighting how the exercise was not only significantly value
accretive but also an effective use of the Company’s capital. We will
continue to review and undertake other actions designed to continue to
narrow the discount to net asset value at which the Company’s shares
trade.
The careful stewardship of your capital can also be seen in the year end
carrying value of the Company’s investments, which increased by 11%
over the year. The increase in the value of our investments was a result of
higher multiples on comparable listed businesses which in turn was in
response to rising markets and a reduction in the cost of capital and the
revaluation of the stake in General Catalyst to the exit value.
The disposals also illustrate the value creation within our investment
model. In the 2025 disposal of General Catalyst, the blended cost of
capital implied in our holding value of GC at the time of the transaction
was approximately 17%, compared to the implied blended cost of capital
on exit of approximately 11%, which implies a higher exit multiple
relative to entry multiple. At the time we underwrite new deals, the
typical implied blended cost of capital is approximately 15-20%, and
projected returns are predicated on growth and cashflow and not
multiple expansion. The outcomes have shown the approach to
underwriting to be conservative.
Aside from the return of capital to Shareholders, there have been no
other changes to the capital structure of the Company. Our fixed-rate
debt remains relatively low cost and long term with a maturity range of
between 4 and 17 years. Based on the solid free cash flow that continues
to be generated by our Partner-firms, we have been able to increase our
dividends for the year. The Board approved an interim dividend of 5.0
cents per share and is recommending a final dividend of 10.5 cents per
share, bringing the full-year payout to 15.5 cents per share, an increase
of 3% compared to 2023’s 15.0 cents per share. We have therefore
maintained our track record of raising our regular annual payout in each
of the years since our IPO. During this year we were also able to return
26.5 cents per share to investors in the form of two special dividends
bringing total capital return from dividends in respect of 2024 to 42.0
cents per share, equivalent to approximately 33 pence per share.
Subsequent to the year end, the Board announced a special dividend of
14.0 cents per share, relating to the 2025 General Catalyst disposal.
During the year, we held 11 Board meetings and 3 Board sub-committee
meetings, supplemented by 12 meetings of Board Committees, covering
Audit and Risk, Remuneration, Nomination and Management
Engagement. As a Board, we make ourselves available to meet with our
Shareholders both via direct engagement and the investor relations
activities of the Operator and our brokers. Board members also attend
the Operator’s annual meeting for limited partners in its private funds
which invest in GP stakes. This provides an opportunity to engage with
the end investors which collectively own the majority of the Company
through funds managed by Goldman Sachs Asset Management. As part
of the Board’s continued engagement with the Company’s Partner-firms,
we met with a number of our Partner-firms during the year. In addition,
2024 saw 402 engagements between the Operator and Partner-firms via
the Operator’s GP services platform. The support and services provided
by the platform are focused on unlocking value and growing returns.
Outlook
The year under review has seen significant progress made at the portfolio
and corporate level. Whilst the higher level of economic and market
uncertainty may impact industry deal volumes, we believe our business is
well-positioned to capitalise on GP-stakes opportunities. In our view, the
market is starting to recognise the value creation opportunity that
acquiring stakes in alternative asset managers presents, as well as the
Company’s focus on capital efficiency. Despite the volatility in markets in
2025, we hope to deliver attractive risk-adjusted returns in the long
term.
Naguib Kheraj
Chairman
8 April 2025
Highlights
$575m
Nominal consideration from disposals during 2024
$563m
Total capital returned to Shareholder during 2024
$205m
Acquisitions announced during 2024
Strategic Report
9 Petershill Partners plc | Annual Report 2024
158
194
221
238
Our Model
for Growth
Petershill Partners aims to provide public
market investors with access to both the
stable and recurring income our Partner-
firms deliver and the attractive risk-adjusted
returns our diversified portfolio of interests
generates.
By investing in Partner-firms, we cultivate
long-lasting relationships supporting our
Partner-firms’ aspirations. We earn a share
of the earnings generated predominately
from management fees charged on the
funds they manage. The experience and
expertise of the Operator team provides a
platform that provides Partner-firms with
the advice and support needed to capture
growth opportunities.
200+
Alternative
Investment
Funds
with broad coverage of the
alternatives universe
Growth in FP AuM since 2021 ($bn)
2021 2022 2023 2024
Total AuM by Asset class
1
n
Private Equity - 64%
n
Private Credit - 18%
n
Private Real Assets - 13%
n
Absolute Return - 5%
1. Represents Total AuM as of 31 December 2024,
reported with a one-period (three-month) lag due
to the timing of the financial information received
by the Operator from the Partner-firms.
Business Model
Strategic Report
10 Petershill Partners plc | Annual Report 2024
$337bn
242
314
450
402
3
5
3
4
Over 20
Partner-
firms
Private Capital firms generating
stable revenue from a blend of fee
income and investment appreciation
Petershill
Partners
We deliver diversified, highly
visible, risk-adjusted returns for our
Shareholders across multiple asset classes
and investment strategies. We may invest
alongside Petershill IV, or other funds
with a substantially similar investment
policy which are managed or advised on
by the Operator or any member of the
Operator’s group, but the Company will
not be limited to such investments.
Shareholder
Returns
Our purpose is to provide
Shareholders with best-in-class
diversified access to the growth
and profitability of the alternatives
industry, focusing on the quality
of recurring cash-based earnings.
Partner Fee-Related Earnings
(FRE)
70%
Partner Realised Performance
Revenues (PRE)
23%
Partner Realised Investment
Income
7%
See page 136 for more information on
our Partner-firms
Operated by Goldman Sachs
Asset Management
A global, broad and deep platform
with diversified capabilities across
public and private asset classes.
GP Services Engagements
2021 2022 2023 2024
See page 12 for more information on
GP Services Engagements
Investment Activity
2021 2022 2023 2024
n
Number of Acquisitions
n
Number of Disposals
Dividend
15.5c
per share, inclusive of the interim and
final dividend
Special dividends
26.5c
per share, equivalent to $287m
Tender offer
$103m
Completed at 214 pence per share
Share buyback programme
$6m
Completed in 2024
Capital returned to
Shareholders since IPO
$1,008m
Inclusive of the 10.5c per share
proposed 2024 final dividend
Strategic Report
11 Petershill Partners plc | Annual Report 2024
0
How we create value
Business Model
Our business model is centred around acquiring non-controlling interests
in specialist middle-market managers operating in the alternative asset
management industry and building a portfolio of General Partner (“GP”)
stakes that delivers attractive risk-adjusted returns for Shareholders. We
look to make non-controlling investments across a wide range of
Partner-firms that are specialists in their areas of interest within the
alternative asset management space, have a track record of strong
performance, with meaningful cash flow generation and possess
attractive growth opportunities. Bringing these stakes together under
one portfolio generates a diversified, stable and growing income stream.
The experience and expertise of the Operator team provides access to
extensive insights and datasets and the Operator has a platform that
provides Partner-firms with the advice and support needed to capture
growth opportunities. The Operator carries out rigorous underwriting and
due diligence prior to investing. The combination of an an underlying
market that is growing and is expected to grow strongly in the years
ahead supports an attractive risk-adjusted return profile.
The inputs
Strategy: The alternative asset management universe is large, but we
focus on middle-market managers who have specialist knowledge of
individual sectors and asset classes. We do this because we believe the
middle-market segment benefits from having a long runway of growth
and we see more scope for middle-market managers to move the
needle in areas such as asset raising compared to larger managers.
Similarly, we believe the middle-market is more likely to benefit from
consolidation activity, providing increased scope for both growth and
exit opportunities.
Diversification: Diversity is at the centre of our business model and we
aim to build a portfolio of interests that is diversified on multiple levels –
asset class, strategy, sector and vintage.
High-quality Partner-firms: To capitalise fully on the growth
opportunities presented by a specific asset class or sector, we need to
identify high-quality Partner-firms, specifically firms that are well
established, already have multi-billion dollar AuM with significant scope
to grow further. Partner-firms have to satisfy a number of key investment
criteria. For a full list of what we look for when assessing a potential
investment please go to page 23. Our criteria include a category-leading
performance track record, strong culture, entrepreneurial spirit, a
cohesive and aligned team, strong leadership and attractive financials.
Best-in-class data and insights: Our Operator, Goldman Sachs Asset
Management (GSAM), which includes GSAM Financial Services Ltd
(GSAMFSL), pioneered GP-stakes investing. The Petershill business was
established by GSAM in 2007 as the first dedicated GP-stakes business,
and has the longest track record of delivery and therefore access to the
most extensive datasets. Through our Operator’s strategic affiliation with
GSAM, we are also able to leverage the resources of a leading global
investment bank and financial services company, The Goldman Sachs
Group, Inc, such as its extensive network of relationships, in-house
industry knowledge and leading institutional infrastructure.
GP Services platform: GSAM has a platform in place through which the
Operator can support our Partner-firms, share best practices and make
available the extensive analytics and insights at its disposal through our
strategic affiliation with The Goldman Sachs Group, Inc. The GP Services
platform is made up of experienced professionals and covers a range of
areas that are critical to our Partner-firms’ development and value
creation. These include capital formation, product development, human
capital, environment, social and governance, operations, consulting,
investment portfolio services, corporate finance and strategy, reporting
and communications, and legal and regulatory.
Listed vehicle: Our listing on the London Stock Exchange gives us
access to permanent capital that enables us to establish long-term
relationships with our Partner-firms. Our listing also delivers liquidity
for Shareholders.
Growing underlying markets
Private markets have grown rapidly in recent years from an overall value
of $3 trillion in 2010 to over $13 trillion today. This growth has been
driven by structural trends:
▪ Institutional and retail investors are increasing their respective
allocations to private markets to capture the benefits alternative
assets have to offer – track record of higher absolute and risk-
adjusted returns, reduced volatility, low correlation with
mainstream assets, such as public equity and fixed interest.
▪ Larger pools of capital being made available from private equity
groups, venture capital firms and family offices, increasing the
funding options for companies.
▪ Companies are choosing to stay private for longer or return to
being privately held.
▪ As private markets have grown, so too has trading in secondary
markets. This in turn increases liquidity, improves price discovery
and further narrows the advantages public markets have
traditionally had over private markets.
As the growth seen to date has been driven by factors that still have
further to run, private markets are expected to continue to grow in the
years ahead. According to Preqin, private markets are forecast to grow at
a compound annual growth rate (CAGR) of 12% over the next five years
to reach an overall global value of over $23 trillion.
The outputs
Key Inputs + Growing Underlying Markets = Positive Outputs
A portfolio of minority stakes in high-quality Partner-firms: Our
portfolio is diversified across asset classes, strategies and sectors,
and with Partner-firms possessing a strong platform in place for
future growth.
Stable and recurring income stream: The majority of the revenues we
earn consist of our share of recurring management fees generated by the
existing and future funds managed by our Partner-firms.
Long runway of growth: The middle-market alternative asset managers
we focus on have a large growth opportunity set in front of them, both
organic and inorganic.
Attractive risk-adjusted returns: The combination of a diversified
portfolio, a stable and recurring income stream and a long runway of
growth generates an attractive risk–adjusted return profile.
Exposure to alternative assets market: As a publicly listed dedicated
GP-stakes investor, Petershill Partners provides public investors with a
unique route to gain exposure to private markets.
Track record of delivering capital returns to Shareholders: The Board
continues to focus on capital efficiency, which has included returning
capital to Shareholders as and when it is appropriate to do so.
Business Model continued
Strategic Report
12 Petershill Partners plc | Annual Report 2024
Diversified across asset class, strategy, sector and vintage
Asset Class: Our Partner-firms are grouped
into four main categories according to the
principal assets they manage: 1. Private
Equity – acquiring controlling/co-controlling/
influential minority stakes in developing or
developed unlisted companies; 2. Private
Credit – investing in unlisted credit assets
across the credit spectrum from lower-risk
senior debt to opportunistic distressed
investments; 3. Private Real Assets –
investing in private real estate, private
infrastructure and private natural resources;
4. Absolute Return – investing in liquid
securities, such as debt and equity, as well as
derivatives and other unconventional assets
to deliver positive returns in rising and
falling markets.
By having exposure to a spread of asset
classes, factors that may negatively affect an
individual asset class can be mitigated while
allowing positive developments to be
captured wherever they may occur in the
unquoted sector.
Multiple Strategies and Sectors: When
investing, fund managers deploy a wide range
of investment strategies including buyout;
long or short equity; real estate; energy;
infrastructure; and credit. As at the end of
2024, our portfolio was exposed to 115
different strategies. Meanwhile our exposure
to a broad spread of sectors leads to a low
correlation of outcomes and a reduced
“netting” risk across firms.
Multiple Vintages: Partner-firms typically
raise funds every three to four years. The year
in which a fund closes is known as its vintage.
It follows that each vintage is subject to
different economic conditions during the
fund’s lifetime. A mix of vintages, therefore,
further diversifies the portfolio. As the
Operator has been actively investing in
minority stakes in alternative asset managers
for 18 years, our investments in Partner-firms
cover many vintages, enabling us to better
withstand some of the pressures faced by
those with shorter track records.
AuM by Duration
1
n
Permanent - 7%
n
8+ years - 77%
n
3-8 years - 7%
n
0-3 years - 9%
AuM by Strategy
n
Buyout - 50%
n
Venture capital - 6%
n
Credit - 7%
n
CLO - 5%
n
Real estate - 7%
n
Global macro - 4%
n
Growth - 6%
n
Other - 15%
AuM by Sector
n
Technology - 41%
n
Healthcare - 3%
n
Diversified - 23%
n
Energy - 3%
n
Credit - 15%
n
Infrastructure - 3%
n
Real estate - 9%
n
Other - 3%
AuM Asset Class Exposure ($bn)
n
Private equity - 64%
n
Private credit - 18%
n
Private real assets - 13%
n
Absolute return - 5%
Ownership-Weighted AuM by Asset
Class ($bn)
n
Private equity - 49%
n
Private real assets - 26%
n
Private credit - 17%
n
Absolute return - 8%
Partner Net Management and
Advisory Fees by Asset Class ($m)
2021 2022 2023 2024
n
Private equity 139 162 175 212
n
Private credit 20 20 20 27
n
Private real
assets
87 78 80 77
n
Absolute return 61 82 75 70
1. Weighted average duration of Aggregate Partner-firm total AuM.
Strategic Report
13 Petershill Partners plc | Annual Report 2024
$39.7bn$337.1bn
A Letter From the
Co-Heads of Petershill
Dear Shareholders
Last year, we ended our letter with the following sentence: “Overall, we
believe our business is well positioned with strong cash flow generation
providing flexibility for growth and capital return.” One year on and the
cash flows generated by our diversified portfolio of interests in private
alternative asset managers and the flexibility these provide have very
much been in evidence. We have posted growth across our key
performance metrics, and made strategic investments and disposals,
leading to an increase in the proportion of management fee-centric
earnings. And we have continued to return capital to Shareholders as and
when it has been appropriate to do so.
Growth: Our Partner-firms raised gross fee-eligible AuM of $32 billion
during the year, exceeding our guidance of $20-25 billion, in what was a
challenging asset-raising environment for the industry, making it the
third year in a row our Partner-firms have met or exceeded the asset-
raising guidance. Aggregate Fee-paying Partner-firm AuM ended the
year at $238 billion, an increase of 8% year-on-year, while ownership-
weighted fee-paying AuM grew 4% to $29 billion. Our headline numbers
are also in line with the guidance we provided 12 months ago, FRE up
11% year-on-year to $225 million, total income of $332 million (2023:
$319 million), Adjusted EBIT of $293 million (2023: $284 million), and
Adjusted EPS of 19.7 cents (2023 17.6 cents).
Strategic investments and disposals: We completed four acquisitions
during the year, totalling $205 million. We also disposed of our stake in
LMR, an absolute return manager and divested predominately
investment capital in AKKR through two separate transactions.
Subsequent to the year end we sold the majority of our stake in General
Catalyst at a premium of 62% to its last reported carrying value prior to
the disposal. The aggregate consideration from all the disposals during
the year including the General Catalyst disposal, represents a 40%
premium above carrying value of the assets disposed. In addition, on the
14 March 2025, the Company acquired a stake for $330 million in Frazier
Healthcare Partners, a specialist mid-market private equity firm with
$5.5 billion in AuM. The acquisitions and disposals align with our
strategy to increase exposure to management fee-centric earnings. Book
value per share ended the year at 471.5 cents compared to 430.8 cents
as at 31 December 2023, reflecting the increase in the fair value of
investments and the result of our capital management actions.
Capital return: We announced capital return of $563 million to
Shareholders during the year. Our progressive dividend policy remains
core to our annual capital returns, and during 2024, we supplemented
this with two special dividends, a tender offer and buybacks. The tender
offer was funded from the unused M&A budget from the prior year, while
the special dividends were paid using a portion of the proceeds received
from the strategic divestments highlighted above. The year’s capital
returns bring the total we have now returned to Shareholders to $1,008
million since the IPO. The Board has also announced a special dividend of
14.0 cents per share relating to the majority of the net gain on the
disposal of the stake in General Catalyst.
Resilient income
Underpinning the progress made is the resilient and largely recurring
income that our diversified portfolio generates. Management fees, which
fall under Partner Fee-Related Earnings (FRE), account for the bulk of our
income. Derived from management fees generated by the 200+ funds
managed by our Partner-firms, FRE is sustainable, diversified and visible.
FRE is growing. During the year, FRE came in at $225 million, a 11%
increase on 2023’s $203 million. Growth was driven by our Partner-firms
successfully raising $32 billion of gross fee-eligible assets supporting
growth in fee-paying AuM. That this asset growth was achieved during
what was an uncertain political and economic environment
demonstrates the resilience of our business model. As well as the tragic
conflicts in Ukraine and the Middle East that sadly continue, 2024 saw
multiple elections around the world, resulting in numerous changes in
government, while inflation proved stickier than expected, leading to
interest rates staying higher for longer. It is therefore encouraging that,
against this uncertain backdrop, Petershill Partners met and, in some
cases, exceeded guidance we set for the year.
According to Preqin, despite industry asset raising down for the third
consecutive year, with 2024 down by 21% compared to 2023, our
Partner-firms collectively raised fee-eligible assets that exceeded the
guidance range. To be able to execute in such an uncertain environment,
in our view, highlights the quality of the Partner-firms we invest in which,
in turn, is testament to our strict investment criteria and process.
Our focus
We are beneficiaries of the private markets growth story – the overall
value of assets in private markets has risen from $3 trillion in 2010 to
$13 trillion today. And more growth is expected - private assets under
management are forecast to grow by 12% per annum over the next five
years. Within private markets, we concentrate on the middle-market
sector specialist segment. Our middle-market focus is down to our belief
that this segment benefits from strong fundamentals, a long runway of
growth and the potential to benefit from consolidation. The numbers
back this up. During the year, which overall was a down for asset raising,
middle-market funds (ranging from $1 billion to $5 billion) were the only
category that bucked the trend, with fundraising flat year-on-year. The
fact that our portfolio of middle-market managers outperformed in
terms of year-on-year asset raising growth highlights the quality of the
managers themselves and the Petershill Partners’ investment process.
At the portfolio level, we seek out high-quality managers who specialise
in sectors benefiting from long-term structural drivers, such as life
sciences, healthcare and technology. Specifically, managers who have
already achieved some scale but are not sector incumbents and who still
have, in our view, their best days ahead of them. Diversified in terms of
sectors, strategies and geographies, FRE is sustainable and so more
highly valued compared to performance-based fees. The year under
review saw us make changes to our portfolio that position us to generate
a greater proportion of management fee income or FRE as a percentage
of the overall total income from private markets. In all, we completed
four acquisitions totalling $205 million, including acquiring a stake in
Kennedy Lewis Investment Management, a private credit manager, along
with additional interests in three existing Partner-firms. As a result of the
acquisitions and capital management actions, we utilised the surplus
liquidity held on our balance sheet but continue to have substantial
liquidity resources from our undrawn revolving credit facility, receipt of
deferred payments from the Partner-firm disposals and potential to
utilise additional leverage capacity.
Co-Heads Letter
Strategic Report
14 Petershill Partners plc | Annual Report 2024
“We are well positioned to
capitalise on the exciting
and significant opportunity
in the middle-market
segment”
“Strategic investments and
disposals plus capital
management underpins
Shareholder value
creation”
Ali Raissi-Dehkordy
Co-Head of Goldman Sachs
Petershill Group
Robert Hamilton Kelly
Co-Head of Goldman Sachs
Petershill Group
We also carried out sales of less FRE-centric assets. We sold a partial
interest in AKKR earlier in the year and completed a subsequent sale of
mainly investment capital in AKKR. We also completed the disposal of our
stake in LMR Partners. Subsequent to the year end, we disposed of the
majority of our stake in General Catalyst for $726 million relative to the
last reported carrying value of $447 million prior to the disposal. The
transaction further demonstrates the Petershill Partners value creation
model, where the blended discount rate implied in our holding value for
General Catalyst was approximately 17%, compared to the implied
blended discount rate on exit of approximately 11% at the transaction
date, and the typical reinvestment in new deals at an implied blended
discount rate of 15-20%. The total consideration from these disposals
including General Catalyst of $1,301 million, relative to a carrying value
of $930 million, represented a premium of approximately 40%. With all
divestments executed above carrying value, they serve to highlight the
reasonableness of our valuation process.
During 2024 while we sold $575 million of assets (LMR and AKKR in two
separate transactions). We purchased $205 million of assets ($150
million into Kennedy Lewis and additional interests in three existing
Partner-firms in a secondary transaction for $55 million - funded largely
from the difference between the disposal proceeds and investments
made). We also established a foundation to generate a larger proportion
of FRE from private markets. Following this activity, the proportion of our
income that is derived from management fees stands at 70%.
Our aim is not just to be a provider of capital to private middle-market
managers but also a provider of best-in-class support, advice and value
creation. We want our Partner-firms to maintain the entrepreneurial
spirit that got them to the point of investment in the first place, and we
also recognise we can add value by sharing the benefits of our strategic
affiliation with Goldman Sachs. We deliver this via our GP Services
offering which taps into the network and expertise of one of the world’s
leading investment banks. This year, we added external industry sector
specialists to the platform which we believe will help drive future
engagement growth among our Partner-firms and help them achieve
their objectives.
Highlights
$575m
Nominal consideration from disposal during 2024
$287m
Special dividends paid during 2024
$205m
New acquisitions completed during 2024
Outlook
We expect gross fee-eligible asset raising in 2025 of $20 – $25 billion
and realisations of $5 – $10 billion. Adjusting for disposals made during
the year, we expect FRE growth in 2025 and onwards. Whilst the higher
level of economic and market uncertainty may impact industry deal
activity and the timing of PRE, the higher private markets accrued carried
interest does bode well for the medium-term outlook.
Strong financial performance; strategic progress; GP Services expansion:
continue to lay the foundations for future growth. Together with
forecasts of underlying market growth – private markets are expected to
grow at a compound annual growth rate (CAGR) of 12% over the next
five years – and our focus on the exciting middle-market segment, we are
well positioned to capitalise on the significant opportunity in front of us.
Petershill Partners as a publicly listed vehicle offers shareholders a
unique and diversified means of getting exposure to the attractive sector
specialist mid-market private capital space. We believe that our strategic
affiliation with Goldman Sachs and our track record of delivery in this
sector positions investors in Petershill Partners well to participate in
this opportunity.
Strategic Report
15 Petershill Partners plc | Annual Report 2024
Industry Growth Dynamics
Remain Attractive
We operate in the GP-stakes market, a market our Operator,
Goldman Sachs Asset Management, pioneered 18 years
ago. By providing capital to management companies rather
than individual funds, GP-stakes investing offers an
alternative route to gaining exposure to the significant
growth opportunity that is private markets, a route with a
growing track record of delivering attractive risk-adjusted
returns for Shareholders.
Private Markets expected to deliver 12% growth per annum over the next 5 years
US $ trillion
0 5
10 15 20 25
2029F
2024F
2019
Source: Preqin, September 2024
Our Markets
Strategic Report
16 Petershill Partners plc | Annual Report 2024
13%
12%
23.5
13.3
7.3
At Petershill Partners, we are focused
on investing in private as opposed to
public markets via a diversified
portfolio of non-controlling interests in
alternative asset management
companies. The private markets in
which these asset managers invest are
growing strongly and performing well,
but they remain a fraction of the size of
global public markets.
Growing: The overall value of assets in global private markets currently
stands at around $13 trillion. That compares to $3 trillion in 2010. The
growth seen to date reflects a fundamental shift in capital flows that has
taken place across the global economy in recent years. Increasingly,
private markets are assuming the role of public markets in terms of
driving growth and innovation at both corporate and asset levels.
Despite the four-fold increase in size, private markets are expected to
continue growing. Over the next five years, they are forecast to increase
at a compound annual growth rate (CAGR) of around 12%, reaching
assets of around $23.5 trillion.
Long-term structural factors support future growth across the
alternative asset management industry. Drivers include companies
electing to stay private for longer, and investors looking to gain exposure
to alternative assets to benefit from their relatively stable income,
attractive returns and low correlation to mainstream asset classes, such
as public equity and fixed interest.
Staying private for longer: According to Pitchbook between 2000 and
2023, the number of US private equity backed companies increased
more than fivefold, while the number of US publicly traded firms
decreased by 34%.
Historically, public markets have been the primary source of growth
capital for companies. Today with the increase in assets raised and held
by private capital funds, businesses are able to access the finance they
need via private markets. In parallel with this, institutional investors, such
as public pension funds, endowments, and sovereign wealth funds have
been increasing their allocations to private market investments. With
private markets now offering an alternative source of capital, companies
are able to avoid the costs and more burdensome disclosure obligations
associated with public markets. The result is that more companies have
been electing to stay private for longer.
Stable income and low correlation to mainstream assets: Institutions
have been upping their exposure to alternative assets and in particular
private market assets to capture the diversification benefits on offer.
The returns generated by alternative assets tend to be less correlated to
mainstream asset classes, such as public equity and fixed-income markets.
Furthermore, with developments in fund structures such as semi-liquid
products combined with new distribution channels, including wealth
management and investment platforms, this presents opportunities for
retail investors to access private markets too, providing another potential
source of demand.
Performing: The long-term annualised investment performance of the
private capital industry since the end of 2000 compares favourably to
public market equivalents. In particular, the mid-market buyout segment
has delivered the strongest annualised investment performance over the
period at 13%. The mid-market segment is where the majority of our
Partner-firms operate.
Annualised investment performance since end 2000
13%
11%
10%
10%
9%
7%
7%
4%
–%
2% 4% 6% 8%
10%
12% 14%
Buyout - Mid
Private Equity
Private Capital
Private Debt
S&P 500
MSCI World TR
Private Real Estate
Venture Capital
Source: Preqin
Private market investments also have a track record of delivering higher
absolute and risk-adjusted returns compared to public equity and fixed-
income markets, thanks largely to the stable income generated and low
volatility observed.
Strategic Report
17 Petershill Partners plc | Annual Report 2024
GP stakes investing
Rather than invest in individual assets or funds, as the majority of
investors in the private markets space do, we invest in the asset
management companies that run private markets funds. We provide the
management companies with capital to grow. In return, Petershill
Partners gains a share of both the income generated by these private
market asset management companies and participates in their future
growth. We also gain diversified exposure to the private markets space
via the 200+ funds managed by the management companies we invest in
– diversified in terms of asset class, investment strategy and vintage. As
our overall income is largely derived from the management fees
generated by the funds our Partner-firms manage, our earnings are
relatively stable, largely recurring and well-diversified.
As private markets have grown, so too has the number of sophisticated
asset managers who operate across a wide range of asset classes and
geographies within the private markets space. Our investable universe is
therefore growing – the number of private equity asset managers has
increased to around 18,500 at the end of 2024 from approximately
4,500 in 2010, representing an annualised growth rate over the period of
10%. As a result, the secondary trading market is also growing, which, in
turn, has positive implications for liquidity and price discovery within
private markets.
As a pioneer in GP-stakes investing, our Operator identified an
opportunity to provide the same financing and support that private
equity provides to other sectors to the alternative asset management
industry itself. We, therefore, have access to our Operator’s extensive
datasets, expertise and insights, and we believe we are well-placed to
capitalise on the expected future growth of our industry.
Middle-market focus
The 20+ Partner-firms in which we have acquired minority stakes largely
operate in the middle-market segment, an area that has seen strong
investment performance and more resilient asset raising.
The middle-market benefits from attractive fundamentals and
consolidation opportunities and this is reflected in the numbers. The
mid-market has outperformed the overall private markets sector. The
mid-market buyout sector, since the end of 2000 has delivered
annualised investment performance of 13% which compares to the
private equity industry delivering annualised investment performance of
11% over the same period. Turning to asset raising, according to the
McKinsey Global Private Markets Report 2025, mid-market private equity
funds ($1-5bn in size) have seen broadly stable cumulative average
growth rates (“CAGR”) in fund raising between 2019-24. This compares
to negative growth rates in fundraising for the overall private equity
industry over the same period, with -15% CAGR (2019-24) for funds
smaller than $250m in size and -6% CAGR (2019-24) for funds larger
than $10bn in size.
Based on the success seen to date, we expect the number of middle-
market asset managers to continue to grow in the years ahead, as they
look to take advantage of the more compelling deal valuations, greater
availability of debt, more diversified return strategies and multiple exit
avenues on offer.
Medium-term outlook
Macro uncertainty has led to headwinds in the near term for industry
asset raising, deployment and realisations. Despite these near-term
challenges, the long-term growth for the alternative investments
industry remains underpinned by a number of secular trends that we
expect will continue to benefit the Company.
Economic growth
The economic outlook for 2024 remained challenging as we started the
year with political uncertainty, lack of a clear direction on the path for
interest rates and a subdued environment for GDP growth globally.
According to Bloomberg consensus, US Real GDP growth in 2024 was
forecast to be around 2.8%, broadly flat compared to 2023. The level of
Real GDP growth in the Euro Zone and in the UK during 2024 was
forecast to be at 0.8%. The stronger Real GDP growth in the US is
expected to continue in 2025, forecast to be around 2.1%, which is
considerably higher than the projected Real GDP growth in the Euro Area
and in the UK at 1.0% and 1.3% respectively.
Implications for Petershill Partners
Our diversified exposure across a range of investment strategies and
asset classes positions the Company well to navigate economic cycles. As
part of our due diligence and underwriting process when making
investments, we assess how Partner-firms are likely to perform during a
range of scenarios including a downturn. Consequently, lower or a
reduction in global growth is factored into our underwriting for new
deals. Most of our Partner-firms are exposed to North America, with the
region representing over 90% of our Partner-firm AuM, with the stronger
Real GDP growth in the US potentially supporting growth across our
Partner-firms.
Petershill Partners portfolio AuM exposure by region
based on 2024 data
96%
4%
n
US - 96%
n
Europe - 4%
Our Markets continued
Strategic Report
18 Petershill Partners plc | Annual Report 2024
2.9%
2.8%
2.1%
2.0%
0.4%
0.8%
1.0%
1.2%
0.4%
0.8%
1.3%
1.4%
Real GDP growth
2023 2024F 2025F 2026F
n
United States
Source: Bloomberg
n
Eurozone
n
UK
Inflation
In the US, the Eurozone and the UK, the rate of inflation has continued to
trend downwards since the end of 2022. The rate of inflation at the end
of 2024 in the US, Eurozone and the UK stood at 3.0%, 2.4% and 2.5%
respectively. The inflation rate in 2025 is forecast to be broadly similar
across the three regions, at around 2.5% in the US and the UK, and
modestly lower at 2.1% in the Eurozone. Whilst the rate of inflation is
declining, the environment may still pose a headwind for companies to
enhance operating margins and increase profitability.
Implications for Petershill Partners
Higher inflation can have an impact on the cost growth at our Partner-
firms which can affect the level of Fee-related Earnings that are
generated. In addition, certain strategies including credit, real assets and
absolute return may potentially benefit from increases in inflation and
interest rates, as these asset classes have historically provided a hedge to
rising rates and inflation. As at 31 December 2024, real assets and
absolute return firms made up 18% of our Aggregate Partner-firm AuM
at $59 billion. Most of our Partner-firms’ activity is based in North
America, where the level of inflation, according to Bloomberg consensus
in 2025 is expected to be in the region of 2.5%.
Interest rates
Central bank interest rates across the US, Eurozone and the UK declined
during 2024, although there were fewer rate cuts compared to
expectations at the start of 2024. Lower interest rates should support a
reduction in the uncertainty across markets and lead to a recovery in
asset raising, deployment and realisation activity. According to
Bloomberg consensus, central banks are forecast to reduce interest rates
further during 2025, although there remains some uncertainty around
the pace at which interest rates decline, partly dependent on the
outcome for inflation.
Implications for Petershill Partners
Despite interest rates staying higher for longer, our Partner-firms’ capital
raising has exceeded our expectations for 2024. Our revenues are largely
derived from management fees on committed long-duration capital,
which is not directly impacted by movements in interest rates. The
current level and future expectations for interest rates may affect the
level of realisations which can have an impact on the timing rather than
the absolute level of performance-related fees over time. The Company’s
long-term debt has a fixed rate and is consequently not impacted by
changes in interest rates. The expectation is for rates to decline during
2025, which could prove to be a positive catalyst for asset raising,
deployments and realisation for our Partner-firms.
Strategic Report
19 Petershill Partners plc | Annual Report 2024
Asset Raising by Partner-
firms Remained Resilient
Partner-firm fee-eligible AuM raised
across asset classes
$32bn
2024 Fee-eligible Assets Raised
(2023: $23bn)
56%
Percentage of Assets Raised in PE
(2023: $60%)
56%
8%
36%
n
Private Equity - 56%
n
Private real assets - 8%
n
Private credit - 36%
104
121
150
234
283
304
337
2018 2019 2020 2021 2022 2023 2024
0
50
100
150
200
250
300
350
Delivering on our Strategy and Investment Objectives
Strategic Report
20 Petershill Partners plc | Annual Report 2024
22% CAGR
Aggregate Partner-firm AuM
($bn)
22%
Growth in Aggregate Partner-firm
AuM From 2018 to 2024
Private markets and the management
companies that operate in them are
expected to continue to grow strongly
in the years ahead. As the alternative
asset management industry grows,
Petershill Partners also has the
opportunity to grow its portfolio of
stakes in high-quality, specialist,
middle-market managers. Key to
capturing this growth and generating
attractive risk-adjusted returns is the
continued execution of our strategy to
acquire stakes in, and build long-term
partnerships with, specialist middle-
market managers.
Sourcing New Partner-Firms
The Partner-firms we look to invest in and partner with are
predominantly alternative asset managers with long-term track
records of strong performance and cash flow generation. We seek
established firms with billions of dollars in assets under management
(AuM) with a proven platform in place to expand their fund range and
product offerings.
What our typical Partner-firm looks like:
▪ An operational history of more than 10 years
▪ Already have between $2 billion and $15 billion of AuM
▪ Generate $50 million+ of run-rate management fee income
▪ Have attractive fee margins
Our asset base is diversified across multiple investment strategies, but
increasingly, the focus is on real assets, private credit and private equity,
specifically sectors, such as healthcare, which we believe offer the
potential for accelerated growth. Whether real assets, private credit or
private equity, we aim to invest in high-quality specialist middle-market
managers. As a result, we and our Operator have a number of key
investment criteria that potential Partner-firms must satisfy:
▪ Performance: Firms that are category leaders with proven track
records of generating attractive risk-adjusted returns for clients.
Performance must rank in the top or second quartile across
multiple vintages
▪ Sector: A focus on sectors that are benefiting from positive and
sustainable tailwinds that have the potential to develop further
▪ Opportunity: Room to grow and develop in a sustainable way by
capitalising on the attractive opportunity set in front them
▪ Culture: A strong and cohesive culture embedded across the team
with a focus on generational development and on apprenticeship.
Furthermore, the entrepreneurial spirit behind the business’ success
needs to be evident
▪ Alignment: Firms defined by their entrepreneurial spirit and majority-
employee ownership, and with a high-degree of alignment with other
stakeholders including LPs
▪ Stability: High-quality, stable and diversified capital bases with an
emphasis on building enduring client relationships across the platform
▪ Financials: Strong profitability and cash conversion centred around
attractive recurring earnings
▪ Goals and responsibilities: A focus on building an enduring, diverse
platform and instilling best practices of corporate responsibility, ethics
and transparency throughout the underlying portfolio companies
▪ ESG engagement: A commitment to socially responsible investing and
actively working to elevate ESG issues as focal points
▪ Leadership: Highly capable management teams with a proven ability
to manage and develop their platforms
Healthy Acquisition Pipeline
Expanding private markets generate both organic and M&A growth
opportunities. The size of the private markets industry has already
increased to around $13 trillion in 2024 from $7 trillion in 2019 and is
forecast to continue to grow. The private markets industry is expected to
manage around $23.5 trillion of aggregate AuM by 2029, representing
12% CAGR between 2024 and 2029.
Private markets industry aggregate AuM by 2029
$23.5tn
Private markets CAGR (2024-2029)
12%
As private markets grow so does the total addressable market for private
alternative asset management firms as well as the number of investable
assets. Based on growth seen to date and that which is expected in the
future, significant scope remains for Petershill Partners to add new
Partner-firms to its portfolio of GP stakes.
In addition, with the number of private asset managers growing in
tandem with the alternative asset management industry, the GP stakes
market is becoming more active as more firms are looking to buy and sell
GP stakes. This generates deeper liquidity, which in turn, provides a
further driver of activity and growth within the GP-stakes market.
We target those management companies that are best placed to take
advantage of the opportunity, and our Operator has a robust, repeatable
evaluation process that leverages significant proprietary data and
processes to identify best-in-class businesses.
Strategic Report
21 Petershill Partners plc | Annual Report 2024
Highly Experienced Operator Team
Ali Raissi-Dehkordy – Partner Goldman Sachs
Asset Management, Co-head of Goldman Sachs
Petershill Group
Ali is Global Co-Head of the Goldman Sachs Asset Management
Petershill Group, leading initiatives for Petershill Partners as well as the
Petershill private funds. He is chair of the Goldman Sachs Asset
Management Petershill Investment Committee, directing investing in
leading established private-market and public-market alternative asset
management companies and in newly established private-market
managers. Ali first joined Goldman Sachs in 1999 in the Financial
Institutions Group in the Investment Banking Division and rejoined the
firm in Goldman Sachs Asset Management, helping found the existing
Petershill Group in 2007 as a portfolio manager for the first Petershill
Fund. He earned a BA in Economics and a general honours degree
from the University of Pennsylvania, where he was a Benjamin
Franklin Scholar.
Robert Hamilton Kelly – Partner Goldman Sachs
Asset Management, Co-head of Goldman Sachs
Petershill Group
Robert is Global Co-Head of the Goldman Sachs Asset Management
Petershill Group, leading initiatives for Petershill Partners as well as the
Petershill private funds. He is a member of the Goldman Sachs Asset
Management Petershill Investment Committee, directing investing in
leading established private-market and public-market alternative asset
management companies and in newly established private-market
managers. Prior to joining Goldman Sachs, Robert worked at Gleacher &
Co./Gleacher Shacklock in investment banking and in special situations.
Robert earned a BA (Hons) and a MA from the University of Oxford.
Our Acquisition Strategy and Investment Policy
The Company seeks to make growth capital investments in the general
partnerships of alternative asset management businesses (“Partner-
firms”, with such stakes in Partner-firms being referred to as “Alternative
Asset Manager Stakes”). The Company’s structured investments
represent non-controlling ownership positions in such Partner-firms in
which the Company has an Alternative Asset Manager Stake.
The Company seeks to invest in Alternative Asset Manager Stakes
primarily across the following four asset classes:
Private equity
Private credit
Private real assets
(including real estate,
infrastructure and
natural resources)
Absolute return strategies
invested principally in
publicly traded securities
The Company may also invest in adjacent businesses that involve
investment management, including traditional asset management firms,
wealth managers and insurance businesses. As part of partnering with
the Partner-firms, the Company may be required, or choose, to invest in
funds and products that are managed by Partner-firms in which it holds
an Alternative Asset Manager Stake. The amount the Company invests in
the Partner-firms’ funds and products will typically be significantly less
than the amounts the Company invests in Alternative Asset Manager
Stakes. The investment restrictions set out in this policy support the
Company’s objective of spreading investment risk by limiting the
Company’s ability to invest in individual Partner-firms and in the funds
and products that are managed by those Partner-firms in which the
Company has an Alternative Asset Manager Stake.
The Company targets well-established alternative asset managers with a
track record of strong performance and meaningful cash flow generation
who are well-positioned to develop their business across future fund and
product offerings.
The Company’s portfolio will comprise investments in Partner-firms
globally, with a primary focus on North America and Europe, and a lesser
focus on Asia. The geographic scope and asset class focus will evolve
according to the investment opportunities identified. The Company
expects to ensure that at least 30% of annual Partner FRE is derived from
investments in Partner-firms that primarily manage or advise on
investments in assets in North America.
The Company’s initial investment into any one Partner-firm will typically
range from $10 million to $400 million, although secondary transactions
involving a portfolio or number of different stakes may cause the
resulting aggregate investment to be larger than this.
The Company will seek to spread Alternative Asset Manager Stake
investments by segment in order to ensure it has a diverse portfolio.
The Company’s investments in Partner-firms will typically take the form
of unlisted ordinary equity and partnership interests (but may also take
other forms, including unlisted preferred equity and unlisted debt
investments). What form an investment takes will be determined by the
Operator and will be the form that, in its reasonable opinion, is the most
appropriate for the investment in question. As a result of realisations
from the funds managed by Partner-firms, as well as the Partner-firms
themselves, the Company may hold shares in listed businesses, which
would typically be on a temporary basis.
From time to time, a portion of the Company’s assets may be held in the
form of cash. Pending the identification of new investment opportunities
by the Operator, and the application of some or all of that cash as part of
any such investment or for working capital purposes, it may be invested
in cash deposits, cash equivalents or investments including, but not
limited to, gilts, money market funds, government securities and/or
other investment grade securities. Investment ratings shall be “AA” rated
or higher and the duration of any investment shall not exceed two years
at the time of purchase.
There is no limit on the amount of cash that the Company may, from
time to time, hold in cash, cash deposits, money market funds and/or
cash equivalents and investments. No more than the lesser of $250m or
5% of the Company’s gross assets will be deposited in any single bank for
longer than two weeks at a time. Excluding US Government investments,
investments in money markets and investments in Partner-firms, no
more than 5% of gross assets will be invested in any single issuer at the
time of purchase. The Company may, from time to time, (but shall not be
required to) enter into hedging or other derivative arrangements which
are, in the reasonable opinion of the Operator, considered appropriate
for the purposes of efficient portfolio management (including without
limitation for interest rate hedging purposes) and managing
investment exposures.
The Company will not conduct a trading activity which is significant in the
context of the Company and its investments as a whole.
Delivering on our Strategy and Investment Objectives continued
Strategic Report
22 Petershill Partners plc | Annual Report 2024
Investment Restrictions
Investments will be selected with a view to diversifying risk. In addition,
the Company will invest and manage its assets in compliance with the
restrictions set out below, also with the objective of spreading
investment risk:
▪ The Company will only make an investment in a Partner-firm if such
Partner-firm will contribute no more than 20% of annual Partner FRE
measured in reference to the 12-month period ended on the latest
practicable date prior to the date of the investment. Shareholders
should note that such Partner FRE data will be unaudited. For the
avoidance of doubt, the limits in this paragraph exclude any
investment in a fund or product that is managed or advised on by such
Partner-firm and any returns from any such fund or product.
▪ The Company will only make an additional investment in a Partner-
firm that is already within the Company’s portfolio if such Partner-firm
will contribute no more than 20% of annual Partner FRE measured in
reference to the 12-month period ended on the latest practicable date
prior to the date of the additional investment. Shareholders should
note that such Partner FRE data will be unaudited. For the avoidance
of doubt, the limits in this paragraph exclude any investment in a fund
or product that is managed or advised on by such Partner-firm and any
returns from any such fund or product.
▪ The Company will ensure that no investment will be made in a fund or
product managed or advised on by a Partner-firm unless the
aggregate value of all such investments, including the amount
proposed to be invested, is no more than 20% of the Company’s gross
assets, as shown in its most recently published balance sheet.
▪ The Company will invest in funds or products only if they are managed
or advised on by a Partner-firm within the Company’s portfolio.
▪ For so long as required by the Listing Rules, the Company will, at all
times, seek to ensure that the Operator invests and manages its
assets in a way which is consistent with the Company’s objective of
spreading risk and in accordance with its Acquisition Strategy and
Investment Policy.
The investment restrictions are measured at the time at which the
Company makes the relevant investment. There will be no requirement
to sell any investment (in whole or in part) to the extent subsequent
changes to the Company’s gross assets valuation result in any investment
exceeding the limits set by the above restrictions. Where the Company
holds its investments indirectly, including through one or more
holding entities, the investment restrictions will be applied on a look-
through basis.
Unfunded further payment commitments in respect of investments in
Partner-firms or funds or products managed or advised on by a Partner-
firm will be treated as forming part of the original investment and will
not be considered an additional investment in the relevant Partner-firm
or in the relevant funds or products for the purposes of any of the above
investment restrictions.
Strategic Report
23 Petershill Partners plc | Annual Report 2024
Investment Performance
Supports Fund Growth
109%
104%
100%
38%
31%
76%
Clearlake²
Kayne
Anderson Real
Estate²
Harvest²
Francisco
Partners²
ArcLight²
Average⁴
–%
25%
50%
75%
100%
125%
24%
19%
17%
13%
12%
17%
Clearlake²
Harvest²
Francisco
Partners²
Kayne
Anderson Real
Estate²
ArcLight²
Average⁴
–%
5%
10%
15%
20%
25%
30%
Delivering on our Strategy and Investment Objectives continued
Strategic Report
24 Petershill Partners plc | Annual Report 2024
5 Largest Firms - Average growth
in fund size
1
5 Largest Firms - Average realised net
IRR against benchmark performance
3
Benchmark Net IRR%
5
1. Largest 5 Partner-firms by Ownership Weighted AuM for the year ended 31 December 2024 for private markets. General Catalyst is excluded due to sale of
Petershill Partner's majority stake in January 2025. Source: Preqin, on February 2025.
2. Clearlake represents funds I to VII, Kayne Anderson Real Estate represents funds I to VI, Harvest represents funds II to IX, Francisco Partners represents funds I
to VII, ArcLight represents funds I to VII.
3. Performance represents Flagship Funds older than 5 years as at 30-Sept-2024 and benchmark performance as a factor of vintage year and asset class.
4. Average growth in funds and Average growth in net IRR of the largest 5 Partner-firms by Ownership Weighted AUM (FY24) for private markets.
5. Benchmark Net IRR, corresponds to the Partner-firm’s fund vintage year and asset class.
Co-Investment and Co-Financing
The Company may invest alongside Petershill IV, or other funds with a
substantially similar investment policy which are managed or advised on
by the Operator or any member of the Operator’s group at the relevant
time, but for the avoidance of doubt the Company will not be limited
solely to such investments.
Borrowing Policy and Gearing
The Company may incur indebtedness (less available cash) of up to a
maximum of three times the Company’s adjusted EBITDA as published in
the Company’s last financial statements, calculated at the time of
drawdown, for the purposes of financing investments, share buybacks,
general working capital purposes or any other purpose approved by the
Board. Adjusted Earnings Before Interest Tax Depreciation and
Amortisation (“EBITDA”) will be defined as earnings before interest, tax,
depreciation and amortisation, less net gain on investment transactions
and non-recurring items.
Intra-group indebtedness will not be included for the purposes of
calculating the Company’s indebtedness. Any indebtedness of any
holding entity through which the Company makes investments will not
be included for the purposes of calculating the Company’s indebtedness
for so long as either: (a) the creditor of such indebtedness only has
recourse to the assets of the holding entity and does not have recourse to
the other assets of the Company or any of the Company’s investments; or
(b) that debt is owed to the Company or its subsidiaries.
The Company may borrow funds for general purposes, including to make
investments, to leverage existing investments and to pay expenses and
other obligations. Any such borrowings may be secured by the Company’s
investments (as described below under “EU AIFMD Leverage Limit”). The
Company may, directly or indirectly, through wholly or partially owned
subsidiaries of the Company (including an investment vehicle), or
otherwise, incur indebtedness or enter into guarantees, provided that the
Company complies with its Acquisition Strategy and Investment Policy.
Credit facilities may be secured by the Company’s assets.
The Company may also, subject to the overall limitations set out in this
Acquisition Strategy and Investment Policy, guarantee or pledge its
assets in support of or otherwise provide credit support (including by
giving equity commitments) for the obligations of Partner-firms in which
it is invested, which may be structured as a guarantee in full or by
providing collateral or other credit support for the full value (and not just
a pro rata portion) of the obligations of a Partner-firm.
EU Alternative Investment Fund Managers
Directive (“AIFMD”) Leverage Limit
In accordance with its risk management function and the investment
objectives of the Company, the Operator has set a maximum level of
leverage which the Operator may employ on behalf of the Company. For
the avoidance of doubt, this maximum level of leverage only applies at
the level of the Company (including, where applicable, financial or legal
structures involving third parties controlled by the Company and
specifically set up to directly or indirectly increase leverage at the level of
the Company).
The methods used for the determination of the maximum level of
leverage of the Company and the circumstances in which borrowings are
treated as leverage for these purposes, are prescribed under EU AIFMD
and are the gross method (as such term is defined in article 7 of the
AIFMD Delegated Regulation) and the commitment method (as such
term is defined in article 8 of the AIFMD Delegated Regulation). The
Operator has determined that leverage, for this purpose and calculated
in this manner, will not exceed 1,500% (expressed as percentage and
calculated using the gross method of calculation) and 1,500% (expressed
as percentage and calculated using the commitment method of
calculation), other than if and to the extent that leverage for these
purposes results from borrowings under revolving credit facilities on a
short-term basis to make investments pending the drawdown of (and
covered by) capital commitments of Shareholders (“Subscription Facility
Borrowings”) which, due to the way in which such borrowings can impact
the calculation of leverage for the purposes of the EU AIFMD, may be
unlimited. Such limits should not be viewed as indicative of the amount
of leverage that will be employed on behalf of the Company or as a
target for the Company, and it may be that such leverage will be
significantly lower in practice. Shareholders should note that in
exceptional circumstances, the Central Bank of Ireland may impose limits
on the level of leverage (calculated in this manner) that the Operator is
entitled to employ or other restrictions on the management of the
Operator with respect to the Company.
Shareholders should note that the level of leverage as calculated under
the gross method of calculation does not necessarily provide any
reasonable illustration of the overall risk profile of the Company as
financial derivative instruments and borrowing of cash or securities are
used to manage risk as well as to seek return. This is largely due to the
fact that the gross method simply aggregates the absolute sum of all
long and short financial derivative instrument positions, even if they are
for hedging or offsetting purposes, and further uses just notional values
rather than measures that calculate the overall contributions to risk
which will often explain why the leverage levels under this method
appear high. Shareholders should also note that the incurrence of
Subscription Facility Borrowings can lead to very high reported leverage
levels for the purposes of the EU AIFMD, for reasons including the
inability to include undrawn capital commitments in determining the net
asset value of the Company for these purposes and the inability to
exclude drawdowns under revolving facility agreements as “temporary”
in nature. Further details on the leverage level are disclosed in Note 13 of
the consolidated financial statements for the relevant accounting period.
Shareholders should not expect that the Operator can or will lend money
to the Petershill Partners Group for the purposes of paying interest,
financing, transaction and other costs or for any other purpose.
For the risks related to the Petershill Partners Group’s incurrence of
leverage, please see the risk factor entitled “The Operator may cause
the Petershill Partners Group to incur indebtedness pursuant to the
Acquisition Strategy and Investment Policy” in Part 1 (Risk Factors) of
the Prospectus.
Changes to Investment Policy
The Company must at all times comply with its published investment
policy. Whilst the Ordinary Shares are listed on the closed-ended funds
category of the Official List of the Financial Conduct Authority (the
“FCA”), no material change may be made to the Company’s investment
policy other than with the prior approval of both the Company’s
Shareholders and the FCA in accordance with the Listing Rules.
Strategic Report
25 Petershill Partners plc | Annual Report 2024
Case Study:
Kennedy Lewis
Delivering on our intention
to increase exposure to
private credit
AuM split at IPO (2024)
The outer circle represents AuM split at the end of
2024 and the inner circle represents AuM split at IPO
64%
18%
13%
5%
n
Private Equity
n
Private Credit
n
Real Assets
n
Absolute Return
When Petershill Partners first listed on the London Stock Exchange in 2021, we
highlighted the intention of the Company to increase exposure to private credit,
given the benefits from recurring returns, diversification and future growth
potential. According to Preqin, private credit is expected to deliver AuM CAGR of
over 10% in the next five years.
At the time of the Company’s IPO, 10% of our portfolio of GP-stakes was invested in
private credit. In April 2024, we took a major step in growing our private credit
exposure with the $150 million acquisition of a non-controlling stake in alternative
credit manager Kennedy Lewis Investment Management. The acquisition increased
our exposure to private credit to 18%.
Kennedy Lewis fits our investment criteria well. The business is a leading
opportunistic credit manager - the team specialises in investing in complex
situations and providing clients with income streams that can deliver attractive
returns as well as diversification from other credit managers. The investment
process has a track record of growth – since it was established in 2017, Kennedy
Lewis has increased assets under management to $14 billion. And the manager
sees a significant runway for future growth – through our GP Services platform, we
can offer our newest Partner-firm support to capture this growth.
David K. Chene and Darren L. Richman, Co-Founders and
Co-Managing Partners of Kennedy Lewis, said, “We are
honoured to welcome Petershill. Their experience and
track record of supporting marquee alternative asset
managers will be helpful to us as we continue to grow”.
Case Study: Kennedy Lewis
Strategic Report
26 Petershill Partners plc | Annual Report 2024
49%
10%
22%
19%
Financial and
Operating Review
The Company’s purpose is to provide investors with access to the growth
of the alternative asset management industry via a diversified portfolio
of minority interests in private asset management companies. The
Company earns a share of management fees generated by over 200
funds managed by 20+ Partner-firms operating across the alternative
assets space. The Company’s overall income is diversified by asset class,
strategy, sector and vintage and is largely stable and recurring.
Alternative Performance Measures and
Operating Metrics
To assist readers, we refer throughout this section to adjusted measures
which the Company considers to be Alternative Performance Measures or
APMs and Operating Metrics. APMs are non-IFRS measures that analyse
our performance, using a variety of measures that are not specifically
defined under IFRS; while Operating Metrics are non-IFRS measures that
are based on the performance of the Partner-firms which are not related
to the Company’s financial statements.
APMs and Operating Metrics are used by the Directors and the Operator
to analyse the business and financial performance, track the Company’s
progress, and help develop long-term strategic plans and they also
reflect more closely the cash flow of the Company. The Directors believe
that these APMs and Operating Metrics are useful to investors, analysts
and other interested parties as supplemental measures of performance
and liquidity.
Definitions of APMs and Operating Metrics, along with reconciliations to
the relevant IFRS measures for APMs, where appropriate, can be found in
the Glossary of Key Operating Metrics on pages 138 to 140 and
Alternative Performance Measures on pages 130 to 133.
The IFRS and APM basis numbers discussed and presented below include
changes in fair value of investments, and it should be noted that, while
permitted, it is not the Company’s core strategy to exit or realise these
investments. Therefore, management results are also presented,
excluding the change in investments at fair value through profit and loss
and related divestment fee.
Management Results
Year ended 31
December 2024
$m
Year ended 31
December 2023
$m
Income
Partner Fee-Related Earnings¹
224.7 203.0
Partner Realised Performance
Revenues¹
72.9 54.7
Partner Realised Investment Income¹
25.2 34.4
Total Partner Distributable Earnings
322.8 292.1
Interest income
9.5 27.3
Total Income²
332.3 319.4
Operating costs
Board of Directors’ fees and expenses
(1.7) (1.7)
Operator charge
(24.2) (21.9)
Profit sharing charge
(1.5) (0.1)
Other operating expenses³
(11.7) (11.3)
Total operating costs
(39.1) (35.0)
Adjusted Earnings before interest
and tax (EBIT)²
293.2 284.4
Finance income
2.4 –
Finance cost
(36.7) (37.1)
Adjusted Earnings before tax (EBT)²
258.9 247.3
Tax and tax related expenses²
(42.7) (47.7)
Adjusted profit after tax²
216.2 199.6
Reconciliation of Adjusted profit
after tax to IFRS profit for the year
after tax
Adjusted profit after tax²
216.2 199.6
Movement in financial assets and
liabilities held at fair value⁴
873.6 220.6
Divestment fee expense
(152.5) (50.5)
Transaction costs⁵
(6.2) –
Non-recurring operating (expense)/
credit⁶
(0.5) 1.2
Change in liability for Tax Receivables
Agreement
(7.8) (21.5)
Adjustment for Tax and tax related
expenses⁷
(90.4) (28.3)
IFRS profit for the year after tax
832.4 321.1
1. Partner-firm key operating metrics and IFRS. Refer to the glossary on pages 138 to 140 for additional information.
2. Financial measure defined as Alternative Performance Measure, or (“APM”). Further information on pages 130 to 133.
3. 2024 amount excludes transaction costs of $6.2 million and non-recurring expenses of $0.5 million. 2023 amount excludes $1.2 million VAT reclaim.
4. Includes $837.6million (31 December 2023: $227.0million) relating to unrealised gain on fair value of current and non-current investments held at year end,
$29.1 million (31 December 2023: $nil) relating to year-to-date realised gain on fair value of investments disposed of during the year and $6.9 million (2023: loss
of $6.4 million) relating to net unrealised gain on the fair value of contingent consideration at fair value through profit or loss.
5. 2024 amount includes deal transaction costs of $6.2 million related to acquisitions and disposals.
6. 2024 amount includes non-recurring operating expense of $0.5 million. 2023 amount includes $1.2 million VAT reclaim.
7. Includes deferred tax expense related to movement in financial assets and liabilities held at fair value.
Operator’s Report
Strategic Report
27 Petershill Partners plc | Annual Report 2024
Company Performance
The Company’s income increased in 2024 as earnings generated by our
Partner-firms grew over the course of the year. Partner-firm FRE and PRE
increased 11% and 33% respectively over the prior year, while Partner
Realised Investment Income decreased (26)% in 2024, resulting in an
overall increase in Partner Distributable Earnings of 11% over the prior
year. Fund-raising by Partner-firms continued to be robust despite a
challenging environment. The $32 billion fee-eligible AuM raised in 2024
is attributable to the high quality of our Partner-firms and the
diversification of our portfolio. Aggregate Partner-firm AuM grew 11%
and Aggregate Fee-paying AuM grew 8% for the year. Ownership
weighted AuM increased 8% year-over-year to $40 billion and Fee-paying
ownership-weighted AuM increased 4% year-over-year to $29 billion.
The Company’s results for 2024 cover the period from 1 January 2024
through 31 December 2024 and are presented with comparative data
for 2023.
The Company’s revenue model is comprised of three types of income
from Partner-firms: management fee income, performance fee income
and investment income. Of these three, management fee income in
particular provides stable, recurring profits. FRE Margin was flat at 58%
(2023: 58%), the management fee income for the year was $225 million
(2023: $203 million), performance fee income $73 million (2023: $55
million), and investment income $25 million (2023: $34 million).
The IFRS Profit and total comprehensive income for the year after tax
was $832 million (2023: profit of $321 million) equating to an Earnings
Per Share (EPS) of 75.8 cents (2023: 28.4 cents). This includes an
increase in financial assets and liabilities held at fair value of $874
million (2023: $221 million increase), a divestment fee expense of $153
million (2023: $51 million), non-recurring operating expenses of $1
million (2023: $1 million credit), transaction costs of $6 million (2023:
$nil), change in liability for Tax Receivables Agreement of $8 million
(2023: $22 million), an increase in deferred tax of $120 million (2023:
$53 million increase) and excludes an expected payment towards the Tax
Receivables Agreement of $30 million (2023: $24 million).
The Company’s Adjusted Profit after tax
1
was $216 million (2023: $200
million). The Company’s Adjusted EBIT
1
for the year was $293 million
(2023: $284 million), resulting in an Adjusted EBIT margin
1
of 88%
(2023: 89%).
The Company’s results continue to highlight Petershill Partners’ key
characteristics as a business with significant growth of durable capital,
delivering stable and recurring revenues with a highly efficient Adjusted
EBIT margin and significant cash flow.
Dividends
Petershill Partners has set a progressive dividend policy which will reflect
earnings growth over time. The Board reviews the distributable reserves
periodically, including consideration of any material changes since the
most recent audited financial statements, ahead of proposing any
dividend. The interim dividend is set to one-third of the prior year’s annual
dividend amount, and the final dividend proposed is set to reach the
target for the year. Shareholders will be given the opportunity to approve
the final dividend for the year at the Company’s Annual General Meeting.
During the year ended 31 December 2024, the Company paid a final
dividend with respect of the year ended 31 December 2023 of 10.1 cents
per share, an interim dividend in respect of the year ended 31 December
2024 of 5.0 cents per share and two special dividends in relation to the
disposals of LMR Partners and Accel-KKR LLC of 9.0 cents per share and
17.5 cents per share respectively.
Based on the financial results for the year, the Board has proposed a final
dividend of 10.5 cents per Ordinary Share to be approved by
Shareholders at the AGM on 22 May 2025. This dividend, when combined
with the interim dividend declared of 5.0 cents per Ordinary Share, totals
15.5 cents per Ordinary Share for 2024.
The Board has approved a special dividend payment of 14.0 cents (USD)
per share payable on 13 June 2025 to shareholders on the register as at
close of business on 9 May 2025, with ex-dividend date of 8 May 2025.
Given our financials are primarily driven by USD denominated economics
(management fees and USD denominated funds, and performance fees
and balance sheet income on USD denominated funds), our dividends are
proposed and paid in USD. However, Shareholders have the option to
elect for payment in either GBP or EUR.
Investments at Fair Value through Profit or Loss
2024
$m
2023
$m
At beginning of year
5,255 4,959
Investments (includes new, follow on, and prior
commitments, net of disposals)
(310) 69
Change in investments at fair value through profit
and loss
867 227
At end of year
5,812 5,255
The fair value of the Company’s investments in Partner-firms at 31
December 2024 was $5,812 million (31 December 2023: $5,255 million).
The fair value of the Company’s investments in Partner-firms is
determined using both earnings multiples and discounted cash flow
techniques, which are common industry approaches. In valuing the
investments, key assumptions include estimates of future AuM growth,
expected management and performance fee margins, expected current
and future underlying fund returns and timing of realisations.
There was an increase in the fair value of investments through profit and
loss of $867 million (2023: $227 million increase) for the year ended 31
December 2024. The increase in fair value was predominantly due to a
decrease in the weighted average discount rate used to value private
markets fee-related earnings and private markets performance fee-related
earnings to 11.9% and 24.1% in 2024 from 13.0% and 25.2% in 2023
respectively, as a result of lower risk premiums for individual managers
driven by de-risked cash flow projections, an increase in valuations
multiples of comparable businesses and the uplift in relation to the fair
valuation of General Catalyst to exit price. Refer to Note 4, Investments at
fair value through profit or loss, beginning on page 98 for additional
details.
The fair valuation uplift was offset by the impact of net investment
activity. During the year ended 31 December 2024, the Company made
an acquisition in Kennedy Lewis Investment Management and additional
investments in three other existing Partner-firms, disposed fully of its
holdings of FORT Investment Management and LMR Partners LLP and
disposed partially its holdings in Accel-KKR LLC.
See Note 4 in the Notes to the consolidated financial statements on page
98 for additional information.
Cash and Investments in Money Market Funds
The Company’s balance sheet continues to be strong and well-capitalised.
On 14 December 2023, the Company entered into a fixed term deposit of
$150 million, which matured on 15 March 2024. At 31 December 2024
the Company had $15 million in cash and cash equivalents (2023: $243
million) and $9 million invested in money market funds (31 December
2023: $62 million) with an AAA credit rating. The reduction in cash and
cash equivalents was mainly the result of dividends declared and paid,
tender offer, and the acquisitions during the year.
1. Financial measure defined as Alternative Performance Measure, or (“APM”).
Further information on pages 130 to 133.
Operator’s Report continued
Strategic Report
28 Petershill Partners plc | Annual Report 2024
Borrowing
The Company has $500 million of long-term, unsecured debt with an
effective interest rate of 6.2% and a range of maturities between 7 and
20 years. This debt was issued in 2022 and the proceeds were used to
retire $350 million of notes outstanding at the time.
On 6 January 2023, the Company entered into a $100 million revolving
credit facility with a term of three years. The Company is subject to a fee
on the drawn and undrawn amounts. The rate for any drawn amount is
based on reference rate plus a spread. The interest rate on the revolving
credit facility is subject to changes in market interest rates. In 2024, the
Company did not draw down on the revolving credit facility. Any interest
expense incurred is included in finance cost.
Deferred Payment Obligations
Certain investments in Partner-firms are purchased with deferred
payment terms. These deferred payment obligations represent amounts
payable by the Company at various dates in the future. When the
Company enters into deferred payment obligations, a portion of the
purchase price is recognised as finance cost through the settlement of
the payables under the effective interest method. The interest rate used
is based on the reasonable borrowing rate for the Company at the time of
the transaction. At 31 December 2024, the Company has recorded
deferred payment obligations of $88 million (31 December 2023: $52
million). In 2024, $6 million was included in finance costs (2023: $6
million), which was associated with deferred payment obligations.
Deferred Consideration Receivable
Certain investments in Partner-firms have been sold in the year ended 31
December 2024 with deferred payment terms. This deferred
consideration represent amounts owed to the Company at various dates
in the future. When the Company enters into a deferred consideration
agreement, a portion of the sale price is recognised as finance income
through the settlement of the receivables under the effective interest
method. The interest rate used is based on the reasonable borrowing rate
for the Company at the time of the transaction. At 31 December 2024,
the Company has recorded deferred consideration receivable of $152
million (31 December 2023: $nil). In 2024, the Company earned finance
income including $2 million (2023: $nil) arising from deferred
consideration receivable.
Contingent assets and liabilities at fair value
through profit or loss
When certain investments in Partner-firms are purchased or sold, it is
probable that the Company may have to pay or receive additional
consideration based on the underlying terms of the purchase or sale
agreement respectively. As a result of investment activity, the Company
has recorded a contingent liability of $8 million (31 December 2023: $6
million) representing a portion of the total consideration payable which
is probable in connection with its purchase of investments in certain
Partner-firms, based on the Partner-firms’ ability to raise capital or meet
certain revenue thresholds as defined in the relevant investment
agreement. In addition, the Company has recorded a contingent asset of
$96 million (31 December 2023: $nil) representing a portion of the total
consideration receivable which is probable in connection with its sale of
investments in certain Partner-firms.
Tax Receivables Agreement
The Company entered into a Tax Receivables Agreement as part of the
Initial Acquisition on 28 September 2021. The agreement provides for
the payment of 75% of cash tax savings, if any, in US federal, state and
local income tax that the Company actually realises. The cash tax savings
are defined as the difference between the taxes actually due, and the
taxes due had there been no step-up in tax basis from the Initial
Acquisition. The Company expects these payments to arise over a period
of 15 to 20 years from 31 December 2024. The value of these estimated
payments at 31 December 2024 is $159 million (31 December 2023:
$175 million) assuming an 18% discount rate and using the Company’s
most recent projections relating to the estimated timing of the
payments. The expected payment for 2024 related to the Tax
Receivables Agreement is approximately $30 million (2023: $24 million).
Refer to Note 3 in the Notes to the consolidated financial statements on
page 97 for additional information.
Operating Expenses
Operating expenses were $198 million (2023: $84 million). Included in
the operating expenses for 2024 was a $153 million expense (2023: $51
million) related to the fee payable on the divestment of investments and
$6 million (2023: $nil) related to transaction costs during the year. The
accrual is calculated and charged to the income statement based on the
fair value of the Company’s investment in Partner-firms at the balance
sheet date. Divestment fees only become payable once gains are realised.
The Operator is entitled to such divestment fee calculated at 20% of the
realised profit on the exit of an investment. Although the Company does
not intend to exit all of its investments, an accrual is reflected
representing an amount that would be payable if the Company were to
exit all of its investments at carrying value. At 31 December 2024, the fee
payable on divestment of investments was $247 million (31 December
2023: $95 million). No payment was made in 2023 or 2024.
The Operator is entitled to a fee (Operator charge) of 7.5% of Income
from investments in Partner-firms. The Operator charge for the year was
$24 million (2023: $22 million).
The Operator is entitled to a Profit Sharing Charge on a quarterly basis.
The Profit-Sharing Charge is equal to 20% of total income from
investments in Partner-firms, as defined under IFRS, from new
investments made post admission, in the relevant quarter and only after
a two-year ownership period from the date on which the investment is
closed, and subject to the relevant investment achieving an investment
return of at least 6.0%. The Profit Sharing Charge for the year was $2
million (2023: $0.1 million).
The Directors’ fees for the year were $1.7 million (2023: $1.7 million).
Fees paid to Directors for the year are unchanged in local currency.
The Adjusted EBIT margin
1
for 2024 was 88% (2023: 89%) reflecting the
relatively low cost to operate the Company.
Finance Cost
The finance cost for the year ended 31 December 2024 was $37 million
(2023: $37 million). Included in the finance cost for 2024 is an amount
of $28 million (2023: $28 million) of interest associated with the $500
long-term, unsecured debt and $6 million (2023: $6 million) of imputed
interest relating to deferred payment obligations. Refer to Note 10 on
page 107 in the Notes to the consolidated financial statements for
further breakdown.
Tax Expense
The Company’s tax charges are comprised primarily of certain taxes in
the United States (where the 2024 federal corporate tax rate was 21.0%
and state and local taxes may vary) as well as certain taxes in the United
Kingdom (where the 2024 corporate tax rate was 25.0%). Accordingly,
the effective tax rate payable by the Company may vary from year to year
based on the geographic mix and nature of the income earned by the
Company. Notably, a substantial amount of income derived from
Management fee income will be subject to United States federal
corporate tax as well as applicable state and local taxes. Income derived
from Performance fee income and Investment income may be subject to
taxes in the jurisdiction in which the investment in the Partner-firm is
held, including the United Kingdom.
1. Financial measure defined as Alternative Performance Measure, or (“APM”).
Further information on pages 130 to 133.
Strategic Report
29 Petershill Partners plc | Annual Report 2024
As a result of the above considerations, as well as the items discussed
above under “Tax Receivables Agreement”, the Company calculates tax
and tax related expenses
1
and its Adjusted tax and tax related expense
rate
1
by combining the estimated payment under the Tax Receivables
Agreement and the current tax.
Current tax expenses comprise obligations to tax authorities related to
current period reporting. Deferred tax expenses arise with respect to
temporary differences between carrying amounts of assets and liabilities
and their tax bases.
Analysis of Tax
2024 $m 2023 $m
Analysis of tax on profit
Current tax
13.1 23.5
Deferred taxation
120.0 52.5
Tax expense
133.1 76.0
The tax expense does not include the related expected payments under
the Tax Receivables Agreement for the current year. The expected
payment under the Tax Receivables Agreement for the year ended 31
December 2024 was $30 million (2023: $24 million).
The tax and tax related expenses
1
for the year, which considers both the
current tax and the expected payment under the Tax Receivables
Agreement (“TRA”) were $43 million (2023: $48 million) and the
adjusted tax and tax related expense rate
1
was 16.5% (2023: 19.3%).
These amounts represent current taxes payable in addition to any
expected payments under the Tax Receivables Agreement for the year
and exclude deferred taxes.
Capital
As at 31 December 2024, the Company’s issued share capital comprised
of 1,081,708,167 Ordinary Shares (31 December 2023: 1,122,202,824).
During the year ended 31 December 2024, the Company undertook a
tender offer and share buyback programme, purchasing an aggregate
40.5 million shares at an average price of 214p per share.
Total Shareholders’ funds was $5,100 million at 31 December 2024 (31
December 2023: $4,834 million). As at 31 December 2024, there were
retained earnings of $3,399 million (31 December 2023: $3,133 million).
Retained earnings included the change in fair value of investments for
the year of $867 million (2023: $227 million).
In 2024, the Company paid dividends totalling $454 million and bought
back Ordinary Shares via the tender offer and buyback programme
totalling $113 million, including transaction costs.
Approximately 80% of Petershill Partners shares are held by long-dated
private funds managed by Goldman Sachs Asset Management. Goldman
Sachs Asset Management is the manager of these shares and exercises
discretion over how and when they could be sold in the future, on behalf
of the investors in those funds.
Petershill Partners Operating Metrics
31 December
2024 2023 △
Aggregate Partner-firm AuM
($bn) 337 304 11%
Aggregate Fee-paying Partner-firm AuM
($bn) 238 221 8%
Ownership Weighted Partner-firm AuM
($bn) 40 37 8%
Ownership Weighted Fee-paying Partner-firm AuM
($bn) 29 28 4%
Partner Blended Net Management Fee Rate
(%) 1.34% 1.31% +3 bps
Implied Blended Partner-firm FRE Ownership
(%) 12.4% 13.3% -90 bps
Partner Net Management and Advisory Fees
($m) 386 350 10%
Management Fees
($m) 395 356 11%
Fee Offsets
($m) (17) (18) (6)%
Transaction and Advisory Fees
($m) 8 12 (33)%
Partner Fee-Related Expenses
($m) (161) (147) 10%
Partner FRE
($m) 225 203 11%
Partner Realised Performance Revenues (PRE)
($m) 73 55 33%
Partner Realised Investment Income
($m) 25 34 (26)%
Partner Distributable Earnings
($m) 323 292 11%
Partner FRE Margin
(%) 58% 58% – pts
Partner Distributable Earnings Margin
(%) 67% 67% – pts
Partner Realised PRE as a percentage of Partner Revenue
(%) 15% 13% +2 pts
Partner Realised PRE over Average Aggregate Performance Fee Eligible Partner-firm AuM²
(bps) 2.6 bps 2.0 bps +0.6 bps
Additional Metrics:
Partner Private Markets Accrued Carried Interest
($m) 702 615 14%
Investment Capital
($m) 274 423 (35) %
1. Financial measure defined as Alternative Performance Measure, or (“APM”). Further information on pages 130 to 133.
2. Realised Performance Fee Revenues for the period divided by the Average Aggregate Performance Fee Eligible Partner-firm AuM. The Average Aggregate
Performance Fee Eligible Partner-firm AuM represents the average of the beginning and ending period stated.
Operator’s Report continued
Strategic Report
30 Petershill Partners plc | Annual Report 2024
Partner-firm Full Year Performance
Key Operating Metrics
We provide significant detail on our Partner-firms in our key Operating
Metrics as this gives investors insight into the revenues and revenue
model of the Company.
In 2024, fundraising continued across the Company’s Partner-firms with
Aggregate Fee-paying Partner-firm AuM growing 8% year-on-year to
$238 billion. Ownership weighted AuM grew 8% to $40 billion (2023:
$37 billion). Strong aggregate Partner-firm AuM and Aggregate Fee-
paying AuM growth are the basis for future earnings development and
highlight the positive operating dynamics and pricing power of our
Partner-firms. This growth has translated into recurring, and high-quality
earnings from our Partner-firms, with full year Partner Distributable
Earnings of $323 million, despite the challenging environment.
Petershill Partners is not reliant on any one firm, track record or brand.
Our approach is to invest in a range of high-quality, high-performing
alternative asset management firms, who manage a diverse range of
funds, giving the Company stable, high-quality, recurring earnings.
The total AuM at year end comprised over 200 funds, spanning private
equity, absolute return and other private capital funds, with an average
life cycle of 9+ years. That means capital is locked in for an average
duration of 9+ years, generating recurring management fees and the
opportunity for meaningful profit participation throughout this time. We
believe our long-term approach differentiates us and provides for
enhanced alignment with the key principals at each Partner-firm and, as
a result, allows the Company to participate in their income streams in a
way that provides high-margin, diversified and stable cash flows for our
Shareholders.
Partner Fee-Related Earnings (FRE)
Partner FRE, drawn from management fees, increased 11% year-over-
year to $225 million (2023: $203 million), primarily reflecting continued
growth in Aggregate AuM. Partner Fee-Related Expenses were $161
million in 2024, up from $147 million in 2023. The higher costs were due
to Partner-firm fundraising and team expansions, although the Partner
FRE margin was flat year-over-year at 58% (2023: 58%).
Transaction and advisory fees were $8 million in 2024 compared to $12
million in the prior year. The lower transaction and advisory fees reflected
the subdued transaction environment that impacted global markets in
2024. In 2024, the Partner Blended Net Management Fee Rate was
1.34% (2023: 1.31%).
Partner Realised Performance Revenues (PRE)
PRE, which represents direct participation in the upside performance of
Partner-firms’ funds and products, increased year-over-year to $73
million for 2024 (2023: $55 million) as we saw the realisation
environment picking up in the year. Performance of the absolute return
strategies was lower compared to the prior year, driven by our increasing
focus on private market alternative asset firms. $8 million was
attributable to the absolute return strategy in 2024 (2023: $10 million).
15% of total Partner Revenue in 2024 was derived from PRE (2023:
13%).
Partner-firms manage a variety of performance fee-eligible funds at
different stages of their life cycle. Due to this diversification, the
Company anticipates that Realised Performance Revenues will be earned
regularly from a wide range of funds going forward, with a range of 20–
30% of total Partner Revenues over the medium term, assuming market
conditions and environment are broadly supportive.
Partner Private Markets Accrued Carried Interest was $702 million at 31
December 2024, compared to $615 million at 31 December 2023.
Partner Realised Investment Income
As an owner in the Partner-firms, the Company shares in a percentage of
the investment and balance sheet income of the Partner-firms and
realises this through a number of direct positions in the funds of
underlying Partner-firms, known as Realised Investment Income. This
totalled $25 million in 2024, compared to $34 million in 2023, the
decrease is partly driven by the sale of stake in AKKR consisting of the
entirety of its balance sheet investment capital.
Strategic Report
31 Petershill Partners plc | Annual Report 2024
Stakeholder Engagement
The Company’s stakeholders are key to our long-term success. The importance of each key stakeholder and the Board’s engagement with them are
described below. Highlights of some of the principal decisions that have been made as a result of this engagement can be found within the section 172
statement as outlined on pages 35 and 37. Given the Company has no employees and the Directors have all been appointed on a Non-Executive basis, it
must rely upon the Operator to perform certain executive functions and other third-party service providers, including the Administrator, to perform other
administrative and operational functions.
Stakeholder How the Board engages
Shareholders, prospective
Shareholders and lenders
Continued Shareholder support,
engagement and attracting new
investors critical to the success of the
Company and the delivery of its long-
term strategy
▪ Receives updates from the Operator at every Board meeting on investor relations
▪ Engages regularly with the Company’s corporate brokers, and receives frequent market and trading
updates
▪ Receives Shareholder reports from the Company’s Registrar and regularly monitors the views of
Shareholders and the Shareholder profile of the Company
▪ Communicates with Shareholders and lenders through the Operator; with financial reporting and
updates published on the Company’s website
▪ Meets Shareholders through general meetings
▪ The Chairman has met a number of Shareholders at their request during the year and continues to be
available to meet with Shareholders
▪ Several Directors attended the Petershill Alternative Funds Summit and AGM, where Directors have the
opportunity to meet underlying LPs
▪ Holds strategy meetings to ensure the Board is acting in Shareholders’ and lenders’ best interests
Goldman Sachs Asset
Management (the Operator)
Fundamental to the business model,
overall strategy and long-term success
of the Company
▪ Oversees the performance of investment management services that are integral to the Company’s
operations and financial performance
▪ Active dialogue and regular meetings with the Operator
▪ Open, respectful, and clear communication, with constructive challenge and a strong partnership ethos
▪ Detailed monitoring of the Partner-firms and investment process
▪ Strategic planning with the common goal of helping the Company fulfil its purpose
▪ Visits the Operator’s offices
▪ Requests ad-hoc meetings and updates as necessary
▪ Works with the Operator to evolve Board reports and share insights
Community
Full support of ESG as integral to the
Company’s success
▪ Reviews service providers’ ESG policies and initiatives
▪ For additional information on the impact of the Company’s operations on the community and the
environment, please refer to pages 38 and 39
Partner-firms
Effective relations to facilitate growth
▪ Maintains regular dialogue with the Operator on Partner-firms
▪ Receives formal Partner-firm performance review from the Operator
▪ When opportunity arises, meets with leaders of Partner-firms, to hear direct presentations and
feedback from them
Service providers
Effective relations to provide advice and
support and foster compliant and
efficient operations
▪ Maintains regular interaction as part of the provision of services
▪ Receives reports from core service providers at Board meetings
▪ Formal performance review conducted annually
▪ Receives updates from the Operator on dialogue with lenders and service providers
Regulators
Effective relations to comply with all
regulations
▪ Engages with regulators in a transparent manner, completing required filings and other
submissions and acts responsively and thoughtfully in relation to any inbound queries
Lenders
Availability of funding and liquidity is
important to the Company’s ability to
take advantage of investment
opportunities as they arise
▪ Regular updates provided on covenant compliance and current positioning from the Operator
Our Stakeholders
Strategic Report
32 Petershill Partners plc | Annual Report 2024
Engagement with Shareholders
The Company reports to Shareholders in a number of formal ways,
including its Annual Report, interim report and regulatory news
releases, all of which are approved by the Board and are made available
on the Company’s website. In addition, the Company’s website contains
comprehensive information, including Company notifications, share
information, financial reports, investor contacts and information on
the Board and corporate governance. Shareholders and other
interested parties can subscribe to email news updates by registering
on the website.
The AGM, detailed below, is used as a forum for the Board and the
Operator to communicate Company performance and future plans and
prospects. It is expected that all members of the Board will be in
attendance and will be available to answer any Shareholder questions.
The Company’s website contains comprehensive information for
Shareholders and provides regular market commentary at
www.petershillpartners.com.
In addition, the Chairman, the Administrator and the Operator’s contact
email addresses are also available for Shareholders to contact the
Company outside of the AGM. The Board invites representatives from its
brokers to provide regular analysis of Shareholder movements, industry
changes and contact with investors. The Company Secretary also receives
informal feedback via queries submitted through the Company’s website,
and these are addressed by the Board, the Operator or the Company
Secretary, as applicable.
Employees, Social, Human Rights, Environment
and Community Issues
The Board has a responsibility to help protect, preserve and promote
human rights around the world. The Board supports statements made by
the Operator’s parent company, The Goldman Sachs Group, Inc., on
human rights, modern slavery, and human trafficking. The Board also
published its Modern Slavery and Human Trafficking Statement on 3
June 2024 on the Company’s website at www.petershillpartners.com.
As the Company has outsourced operations to third parties, there are no
significant greenhouse gas emissions or other environmental matters to
report in relation to the operation of the Company. The Board encourages
all service providers associated with the Company to consider matters of
ESG, including diversity and inclusion, and report on progress to the
Board annually.
Acquisition Strategy and Investment Policy
The Company seeks to achieve its investment objective through acquiring
stakes in alternative asset managers, via direct investments representing
a non-controlling ownership position. The Operator adopts a responsible
investing approach which takes into account the Company’s ESG
principles and strategy, as outlined on pages 38 and 39. The Board has
reviewed and approved the Acquisition Strategy and Investment Policy
on pages 22 to 23. The Company reports to Shareholders through
regulatory news releases, using the London Stock Exchange Regulatory
News Service and interim and annual reports. Significant new
investments are announced promptly, and portfolio updates, realisations,
valuation updates and distribution announcements are all
communicated in a timely manner through these means.
Dividend Policy
The Board has reviewed the Company’s dividend policy, as set out on
page 52, and agreed that it remained appropriate. The Board proposes a
final dividend of 10.5 cents per share to be approved by Shareholders at
the AGM on 22 May 2025, delivering a full year dividend of 15.5 cents per
share to the Company’s Shareholders.
2025 Dividend Timetable
Dividend Announcement Monday, 31 March 2025
Ex-Dividend Date Thursday, 8 May 2025
Record Date Friday, 9 May 2025
Currency election Friday, 23 May 2025
Payment Date Friday, 13 June 2025
The Board has approved a special dividend payment of 14.0 cents (USD)
per share, payable on 9 May 2025 to shareholders on the register as at
close of business on 11 April 2025, with ex-dividend date of 10 April
2025. Shareholders should note that the default payment currency is
USD, however, shareholders can elect to have their dividends paid in
either GBP or EUR. The last day for currency elections to be registered is
25 April 2025. Currency elections should be submitted via CREST in the
usual manner.
Board Committees
The Audit and Risk Committee, Nomination Committee, Remuneration
Committee and Management Engagement Committee were formed in
order to establish a good corporate governance framework for the
Company. The Chairperson of each Committee attends the AGM to
answer any questions on their Committee’s activities. More information
on the Committees’ activities can be found on pages 61 to 63.
AGM
The AGM of the Company will be held at 1.00 pm (BST) on Thursday, 22
May 2025 at the Goldman Sachs London office. Details of the resolutions
to be proposed at the AGM, together with explanations, will appear in the
notice of meeting which will be made available on the Company’s
website www.petershillpartners.com in due course. As a matter of good
practice, all resolutions will be conducted on a poll and the results will be
announced to the market as soon as possible after the AGM.
Employees and Officers of the Company
The Company does not have any employees and therefore employee
policies are not required and a statement detailing the split between
employees and senior managers is not relevant. The Directors of the
Company are detailed on page 48 and 49. As at the date of this report,
the Board comprises three men and two women, all of whom are Non-
Executive Directors who are considered to be independent of the
Operator and free from any business or other relationship that could
materially interfere with the exercise of their independent judgement.
Strategic Report
33 Petershill Partners plc | Annual Report 2024
Case study:
Capital Management
When it comes to the
allocation of capital, we
take a holistic approach.
Where we see an
opportunity to invest in a
high-quality specialist,
middle-market alternative
asset manager that
matches our investment
criteria, we will pursue it.
Where we see an
opportunity to implement
a value-accretive corporate
action, such as a tender
offer, share buyback or
special dividend, we will
look to do this too.
Total Shareholder Return in 2024
69%
1
Highest TSR in UK Investment Trust universe
2
Share price discount
34%
3
Total return
$563m
4
FRE Alignment
The year ended 31 December 2024 serves to demonstrate how our approach to capital
management works in practice and how delivering on our strategy to lay the foundations
for future growth and returning capital to Shareholders can go hand in hand.
In line with our objective to increase the proportion of our income generated from
management fee earnings as opposed to performance-based earnings, we made changes
to the composition of our portfolio of GP-stakes. We sold our interests in absolute return
manager LMR Partners and a predominately balance sheet interest in AKKR, raising total
consideration of $575 million. We committed $205 million of the proceeds to increase our
interest in three existing Partner-firms at a discount to carrying value and to add a new
Partner-firm to our portfolio through the acquisition of a stake in Kennedy Lewis
Investment Management, a private credit manager.
Value-Accretion
The disposal proceeds also enabled us to take advantage of a value-accretive opportunity
we saw in our own shares. When we announced our intention to return up to $100 million
to Shareholders via a tender offer, Petershill Partners’ share price was trading at a 45-50%
discount to the net asset value. We viewed this as representing excellent value, and we set
the tender offer price at 214p per share, a 15% premium to the previous closing price of
186p per share. The Company successfully completed the tender offer returning $103
million, excluding transaction costs and adjusted for foreign exchange. By the end of the
year, our share price had increased to 248p, a 16% premium to the tender offer price,
while the share price discount to the book value per share had narrowed to 34%.
Significant Shareholder Returns
In all, this year we returned a total of $563 million to Shareholders through a combination
of a tender offer, special dividends, a buyback programme and our progressive dividend
policy. Despite returning such a large sum to Shareholders, we still managed to post
earnings growth for the year, report a marginal increase in the carrying value of our
investments and meet our financial targets.
Case Study: Capital Management
Strategic Report
34 Petershill Partners plc | Annual Report 2024
1. Source: Bloomberg. The Total Shareholder Return is expressed as a percentage, including the price appreciation of the share plus any dividends paid and
reinvested during the performance period. This is a non-recurring APM, further information on page 133.
2. Patrick, H (2025) The Times - Petershill crowned UK’s best-performing investment trust. Available at: https://www.thetimes.com/business-money/companies/
article/petershill-crowned-uks-best-performing-investment-trust-0bzhc7whv (Accessed: 26 February 2025).
3. Share price discount defined if the share price is lower than the Net Asset Value. This is a non-recurring metric.
4. Total return is a metric that represents all returns on an investment, including dividends. This is a non-recurring metric.
Directors’ Responsibilities
Pursuant to Section 172 of
the Companies Act 2006
The Directors are responsible for acting in a way that they consider, in
good faith, is most likely to promote the success of the Company for the
benefit of its members as a whole. In doing so, they have had regard to
the factors set out in section 172(1)(a) to (f) of the UK Companies Act
2006, which includes the needs of stakeholders and the wider society.
Details of the Company’s key stakeholders are set out on page 32. In
particular, the Directors recognise the importance of acting in a way that
promotes the long-term success of the Company for the benefit of its
members as a whole.
The Board considers that the interests of the Company and its
stakeholders must be balanced for the Company to succeed. Key
decisions are those that are material or of strategic importance to the
Company or are significant to any of the Company’s key stakeholders, as
described on page 32. The below key decisions were made or approved
by the Directors during the year, with the overall aim of promoting the
long-term success of the Company for the benefit of its members as a
whole, while considering the impact on its members, stakeholders and
the wider society. For more information on the approach to ESG please
see pages 38 to 39.
Capital structure:
Tender offer
During the year, the Board undertook a review of the Company’s capital
structure, cash generation prospects and cash requirements, both now and
in the future, and concluded that the Company had structurally surplus
cash. On 23 April 2024, the Company announced a tender offer to return up
to $100 million to Shareholders, subject to Shareholder approval at the
Company’s 2024 AGM. With the support of Shareholders via a special
resolution passed at the AGM on 23 May 2024, the Company successfully
completed the tender offer in June, returning approximately £81 million
($103 million excluding transaction costs and adjusted for foreign
exchange) to Shareholders, representing 3.38% of the Company's issued
ordinary share capital at such time.
The Board was mindful of the regulatory requirements involved and
engaged advisors such as corporate brokers, external legal counsel, and
other service providers to provide advice and support throughout the
process and it was determined that the most appropriate mechanism for
the return of capital was by way of a tender offer.
The primary outcome of the tender
offer was the ability to return capital
to Shareholders and therefore
contribute to the long-term strategy
and success of the Company.
More information on the tender
offer can be found on page 50.
Capital structure:
Share buyback
programme
The Board is focused on the efficient and disciplined management of capital
with the overriding objective of driving Shareholder value. The conclusion to
commence a further buyback programme on 17 May 2023 involved careful
consideration by the Board after evaluating the likely impact on the
Company's net asset value per share, capital structure and leverage as well
as the cost associated with the share buyback programme.
The Board was mindful of the regulatory requirements involved and
engaged advisors such as corporate bankers, external legal counsel
and other service providers to provide advice and support throughout
the process.
The buyback programme ended on 11 April 2024 and in the period from
1 January 2024 to 11 April 2024, the Company purchased a total of
approximately 2.6 million shares at an aggregate cost of $6 million.
In addition to the tender offer announced in June 2024 and the buyback
programme, the ordinary dividend and special dividends, resulted in a total
capital return of $563 million announced and completed during 2024.
Undertaking a share buyback
programme was beneficial in
returning capital to Shareholders and
creating some additional market
liquidity.
More information concerning the
programme can be found on page
109 and 110.
Decisions made by the
Board in 2024
Considerations of factors set out in section 172(1)
in the decision-making process
Outcomes as a result
of these considerations
Section 172 Statement
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35 Petershill Partners plc | Annual Report 2024
ESG
Whilst the Company’s operations are limited (with all substantive
operations being conducted by its third-party service providers), ESG is an
important area of focus for the Company and the Board considers it
important to ensure that steps taken are sensible and proportionate in
order to ensure compliance and competitiveness of the Company and to
avoid green washing.
As a Shareholder value-focused Company, the Board is interested in
understanding how a broader ESG strategy could fit into its unique
operating model. Transparency and integrity in reporting is a top priority
for the Board, for the benefit of investors and the wider stakeholder base.
The Board is interested in the indirect impact of the Company’s operations
and has discussed minimum standards expected of our service providers
and suppliers, ensuring these are incorporated into the Company’s
onboarding processes.
The Company intends to stay ahead of the ever-changing regulatory
environment, with the view that this readiness will ensure a smooth
transition into compliance or early adoption in future. As such, ESG
continues to be an important standing agenda item for the Board.
The current primary outcome, taking
the long-term aspirations of the
Board into consideration, was
embedding ESG as a strategic
objective.
The desired outcome is to manage a
considerate and low-impact
Company, attracting the discerning
investor through a best practice
approach to ESG.
More information concerning ESG
can be found on pages 38 to 39.
Dividend policy
and payments
The Board reviewed the Company’s dividend policy and agreed that it
remained appropriate. In determining the appropriateness of the dividend
policy, the Board considered the interests of all its stakeholders, ensuring a
balance between the short-term expectation of returns to Shareholders and
the longer-term growth opportunities and capital needs of the Company.
Given the Board’s continued focus on capital efficiency, the Company also
announced payment of two special dividends during the period, on
17 September 2024 of 9.0 cents (USD) per share, equivalent to $97m,
and on 14 November 2024 of 17.5 cents (USD) per share, equivalent to
$189 million.
In 2025, the Board has approved a special dividend payment of 14.0 cents
(USD) per share, payable on 9 May 2025 to shareholders on the register as
at close of business on 11 April 2025, with ex-dividend date of 10 April
2025.
The Board continues to maintain a
progressive dividend policy which will
reflect earnings growth over time.
The Board proposes a final dividend
of 10.5 cents per share to be
approved by Shareholders at the
AGM on 22 May 2025.
The payment of special dividends
throughout the year enabled further
capital to be returned to
Shareholders, in addition to the
tender offer completed during the
period and the progressive dividend.
More information on the dividend
policy can be found on page 33.
Management of
investment
portfolio
The Company has appointed the Operator to manage its investments on a
discretionary basis. In considering proposals put forward by the Operator,
the Board considered its strategic focus in relation to the management of
the Company’s portfolio. During the year, the Company completed selective
disposals of investments in line with the Operator’s focus on private market
alternative asset firms and towards increasing the proportion of
management fee-centric earnings and demonstrated the ability to exit
positions or partial positions at attractive valuations relative to the carrying
value. The Company also completed four acquisitions during the year,
including a stake in a new Partner-firm and additional interests in three
existing Partner-firms.
The Board continues to focus on capital efficiency and will consider the most
appropriate use for the proceeds received from the sales going forward.
Selective disposals and effective
management of the Company’s
portfolio assists with the Company’s
strategic focus.
More information on the delivery of
strategy can be found on page 12.
More information on investment
disposals can be found on page 98.
Carry plan
In consultation with the Operator, on 1 January 2024, new subsidiaries were
introduced into the Group structure to enable employees of the Operator to
be direct beneficiaries of a portion of the Profit-Sharing Charge payable by
the Company to the Operator. The Operator Agreement was amended and
restated, and acceded to by Petershill Partners II Ltd and Petershill Partners
II, Inc., on 1 January 2024 in order to implement those arrangements. There
is not expected to be any impact on the Company from existing contracts.
The main objective of the
implementation of the Carry Plan was
to further improve the alignment of
the incentives of the Company, the
Operator and the employees of the
Operator to better promote the
success of the Company.
More information on the Carry Plan
can be found on page 95.
Approval of the
interim and annual
financial
statements and
AuM statements
The Audit and Risk Committee is responsible for monitoring the integrity of
the Group and the Company’s financial statements and regulatory
announcements relating to its financial performance. As part of this, the
Company’s interim and annual financial statements and AUM statements
are prepared by the Operator and thoroughly reviewed by the Audit and
Risk Committee ahead of recommendation to the Board for approval. The
Operator and the independent auditors were in attendance at these
meetings to provide further insight and comfort and address queries as
necessary.
The primary outcome was to provide
Shareholders with accurate and
understandable high-quality
financial statements that met all
applicable requirements.
More information on the Audit and
Risk Committee can be found on
pages 67 to 69.
Decisions made by the
Board in 2024
Considerations of factors set out in section 172(1)
in the decision-making process
Outcomes as a result
of these considerations
Section 172 Statement continued
Strategic Report
36 Petershill Partners plc | Annual Report 2024
Strategy session
In October 2024, the Board held a strategy session with the Operator
outside of the scheduled quarterly Board meetings, including a meeting
with Partner-firm Caxton. Topics discussed included industry updates,
portfolio management considerations, investor engagement strategy and
Shareholder roadshow feedback, Partner-firm updates and addressing the
Company’s liquidity and discount to NAV. In November 2024, several Board
members also attended the Goldman Sachs Alternative Investment Summit
in New York as well as meetings with key personnel from some of the
Company’s Partner-firms and considered areas such as business and
industry updates, and strategic options for value creation.
The primary outcome was a clear and
collaborative vision for the strategic
direction of the Company, while
taking into account the views and
needs of stakeholders. The Board will
continue to conduct a strategy
session annually.
More information on the strategy
and investment objective can be
found on page 12.
Annual review of
service providers
The Management Engagement Committee met during the year to review
the Company’s external service providers, including the Operator and the
Administrator, and, in particular, the quality and costs of the services
provided (details of the review are included on pages 32 and 62). The
Management Engagement Committee was mindful of the importance to the
Company of fostering positive business relationships with service providers
for Shareholder value creation.
The Management Engagement
Committee concluded that the
interests of the Company’s
Shareholders would be best served
by the ongoing appointments of the
Operator, the Administrator and
other key service providers on the
existing terms.
More information on the annual
review of service providers can be
found on page 62.
Non-Executive
Director
Recruitment
Following the conclusion of the external Board effectiveness review in
October 2024, the Board commenced a Non-Executive Director recruitment
process with the assistance of external recruitment consultants. In
consideration of the Board’s skillset and succession planning, as well as
continuing to enhance sector and industry knowledge, the Board believes it
is an appropriate time to conduct a Non-Executive Director recruitment
process. Maintaining a diverse culture on the Board is very important and so
this will also be a key consideration during the recruitment process. The
Company is currently in the process of reviewing potential candidates with
the assistance of external recruitment consultants, Spencer Stuart &
Associates Limited and Nurole Ltd. The Company had engaged Spencer
Stuart & Associates Limited during the director recruitment process at IPO.
There are no previous connections with Nurole Ltd with the Company or any
individual Directors.
The recruitment of one or more Non-
Executive Director(s) will serve to
strengthen the skills and knowledge
of the Board and enable the Board to
act in the best interests of the
Company as a whole.
More information on Board
composition can be found on
page 59.
Decisions made by the
Board in 2024
Considerations of factors set out in section 172(1)
in the decision-making process
Outcomes as a result
of these considerations
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37 Petershill Partners plc | Annual Report 2024
Environmental, Social and
Governance (“ESG”) at
Petershill Partners
We recognise that, even though Petershill Partners does not have any
physical operations or employees that directly impact the environment,
we can still contribute to the global shift towards ESG and sustainability
that is underway. We can do this through the support we give and the
advice we provide to the management companies we invest in.
We believe a trade-off does not exist between embracing ESG and
generating attractive returns. Rather, the Board believes that businesses
that promote and embrace sustainable practices will be more successful
over time.
As Petershill Partners is an investment company with no employees or
physical operations and therefore does not itself engage in activities that
directly impact the environment or the community, we are not required
to make climate-related financial disclosures under the Listing Rules,
Companies Act 2006 or the EU Sustainable Finance Disclosure
Regulation ((EU) 2019/2088) (“SFDR”). Petershill Partners instead relies
on the policies, processes and procedures of the Operator, Goldman
Sachs Asset Management Limited.
Goldman Sachs Asset Management has been a signatory to the
United Nations Principles for Responsible Investing (UNPRI) since
December 2011. As a signatory, the Operator is committed to
considering the investment implications of ESG issues within its
portfolio management and investment decision-making processes
where appropriate. The Operator reports annually to the UNPRI on
its ESG and impact-investing commitment and activities and
publicly discloses the report on its website.
In terms of Petershill Partners, the Board supports the Operator’s efforts
to incorporate an ESG-strategy across the full range of the Company’s
activities from the investment process to ongoing Partner-firm
engagement and dealings with the supply chain.
ESG integration into the investment process
ESG is a consideration at the due diligence stage of the acquisition
process for potential new Partner-firms. ESG is one of several investment
criteria included in the assessment of a proposal that is submitted to the
Petershill Investment Committee for consideration. Included among the
ESG risks and opportunities that are considered by the investment team
at this stage of the process are the firm’s ethos, investment philosophy/
process, resources and portfolio engagement. Where appropriate,
potential acquisitions are quantitatively assessed against an internal
five-factor ESG framework which in turn is used to derive a blended
ESG score.
ESG at Petershill
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38 Petershill Partners plc | Annual Report 2024
The five-factor ESG framework
When assessing a potential acquisition, the investment committee
may reflect diversity, equity and inclusion considerations in its
investment process where appropriate, applicable and such information
is reliably available.
In addition, pursuant to the Operator Agreement, the Operator from time
to time consults with the Petershill Investment Committee, who abide by
regulations set forth in the Operator’s broader Goldman Sachs policies.
Goldman Sachs’ Firmwide Reputational Risk Committee (“FRRC”), for
example, maintains a List of Prohibited Transactions, which sets out
transactions that are prohibited by Goldman Sachs. The FRRC also
maintains an Escalation Criteria Grid (the “Grid”), which sets out the types
of transactions that would need to be escalated to the FRRC. The List of
Prohibited Transactions and the Grid are constantly monitored and may
be amended from time to time.
ESG integration and ongoing engagement with
Partner-firms
Once an investment has been made, a new Partner-firm is able to access
the Petershill General Partner (GP) Services team for support on a range
of ESG issues such as integrating best-practice ESG policies, processes
and systems within their business. Our GP-Services team, for example,
produce ESG-focused modules centred on value creation. As with all the
advice and support it gives, the GP-Services team is able to draw on the
extensive resources of Goldman Sachs through its strategic affiliation
with the Operator.
To help identify, monitor and share industry best practices, the Operator
carries out diagnostic exercises and is currently developing a framework
that will facilitate the collection of information on ESG practices across
the Partner-firms. This in turn will be used in the ongoing monitoring of
investment performance.
ESG integration into the supply chain
The Board recognises it can reflect an acknowledgement of, or a
commitment to, sustainability in its choice of the vendors or service
providers it selects to act on its behalf. In line with this, all vendors
selected by recommendation of the Operator are subject to the Goldman
Sachs vendor management system and selected in accordance with
Goldman Sachs policies on Vendor Diversity, Modern Slavery and
Anti-Corruption.
Please note that the Petershill Partners portfolio does not
promote environmental or social characteristics and does not have
sustainable investment as its investment objective. It does not
commit to environmental or social targets and does not score or
assess its portfolio assets with reference to any sustainability
themes including environmental or social factors. For the
purposes of the EU Sustainable Finance Disclosure Regulation,
disclosure is made with reference only to the integration of
sustainability risk in the investment decision-making process. The
above information should be read in this context.
Strategic Report
39 Petershill Partners plc | Annual Report 2024
Firm ethos
The extent to which the Partner-firm is committed to ESG and
incorporates sustainable practices into the management of its
business
Investment philosophy
The degree to which ESG is viewed as a material driver of risk
and returns
Team and resources
The depth, breadth and organisation of the team incorporating
ESG, and the level and use of other external resources
Investment process
The degree to which ESG-related factors are formally
incorporated into the investment process with the objective of
enhancing risk-adjusted returns
Portfolio engagement
The level and type of engagement with portfolio companies on
ESG and the ability to add value post-investment and the
degree to which this is reflected in outcomes
Principal Risks and
Uncertainties
Risk Management
Our Risk Management Approach
The Board believes comprehensive and effective risk management is key
to the Company delivering on its long-term strategic objectives. The
enablers behind effective risk management include a strong risk culture
as well as an open and transparent operating environment that
encourages the Operator and the Company’s other service providers to
embrace risk management. Further details on our cultural framework can
be found on page 59.
Delegated by the Board, the Audit and Risk Committee (“the Committee”)
reviews the effectiveness of the Company’s risk management processes.
Key areas of focus include the assessment of current identified principal
risks and the process to identify emerging risks. Supported by the
Operator, the Committee carries out a robust assessment of the principal
and emerging risks facing the Company. The Committee presents a risk
matrix to the Board for review and discussion on an annual basis, but also
as and when it is thought necessary by the Committee and the Board.
The risk matrix, which is prepared by the Operator primarily through a
Risk and Control Self-Assessment (“RCSA”) process, sets out the key risks
faced by the Company, their likelihood and impact and the associated
control procedures and mitigating measures. The Committee then
reviews the risk matrix and provides an independent assessment,
oversight and challenge of the risks identified. The Committee also
monitors and reviews the adequacy and effectiveness of internal control
and risk management systems and advises the Board on the Company’s
overall risk appetite.
The Operator, as delegated by the Board, provides portfolio management
and risk management services to the Company. The Operator is
accountable for the application and execution of the Company’s
investment strategy, and therefore has a key role in managing the
Company’s risk. The Operator, in its normal course of business, faces
various risks and leverages the “three lines of defence” model employed
by Goldman Sachs to delineate the roles and responsibilities for risk-
taking, risk management and risk assurance activities for the Company.
The three lines of defence model
▪ The first line of defence is The Petershill
Group within Goldman Sachs Asset
Management, which is responsible for
implementing effective internal controls and
maintaining processes for managing risks of
the Operator.
▪ The second line of defence is the
independent risk oversight and control
functions of Goldman Sachs, which provide
independent assessment, oversight and
challenge of the risks taken by the first
line of defence. Independent risk oversight
and control functions include Goldman
Sachs’ Conflicts Resolution Group,
Controllers, Global Compliance, Legal,
Risk, and Tax functions.
▪ The third line of defence is Goldman Sachs’
Internal Audit division, which provides
independent risk assurance to senior
management, the Board of Goldman Sachs
and regulators that the governance,
risk management, and control activities
of the first and second lines of defence
are effective.
Principal Risks and Uncertainties
The Company’s underlying investments are high-risk, illiquid assets
within the alternative investment industry. Principal risks therefore
relate to revenue generated by the alternative asset managers in which
the Company invests and the performance of the Partner-firms, their
funds and the products they manage. The Operator seeks to mitigate
these risks through active engagement and action, as outlined in the
Acquisition Strategy and Investment Policy (pages 22 to 23) and by
carrying out due diligence work on potential targets before entering into
any investments. The Company’s business model involves the acquisition
of non-controlling investments in independent Partner-firms, and,
although the Company has certain controls as part of contractual rights,
the Company does not control the risk tolerance of the underlying
Partner-firms.
The Board thoroughly considers the process for identifying, evaluating
and managing any significant risks faced by the Company on an ongoing
basis, and these risks are reported and discussed at Board meetings. The
Board ensures that effective controls are in place to mitigate these risks
and that a satisfactory compliance regime exists to ensure all applicable
local and international laws and regulations are upheld.
For each risk, the likelihood and impact are identified, management
controls and frequency of monitoring are confirmed and results are
reported to and discussed by the Audit and Risk Committee on a
quarterly basis. The Audit and Risk Committee has reviewed the
Company’s risk management process and has evaluated the principal and
emerging risks, which are discussed on pages 41 to 43.
Risk Management
Strategic Report
40 Petershill Partners plc | Annual Report 2024
The key areas of risk faced by the Company and mitigating measures are summarised below:
1. Alternative
Assets Industry
Risk
The alternative investments industry may not
grow at the same rate as it has in the past, in line
with forecasts or at all. If the alternative
investments industry does not grow sufficiently,
whether as a result of evolving laws and
regulation or any other risk, the Company’s
investments may not produce attractive returns
and the Operator may not be able to identify
additional investment targets on suitable terms
or at all. In addition, industry dynamics could
negatively impact the fee rates that managers in
the alternative investments industry are able to
charge, which could negatively impact the
Company’s income from Partner-firms derived
from management fees.
The Company’s revenue streams are diverse and
are composed substantially of income from
Partner-firms derived from management fee
income on contractually committed, long-dated
assets, therefore minimising the concentration of
risk. Investments in Partner-firms span multiple
asset classes providing diversification within the
alternative asset management industry. The
Company has limits on how much any new
investment may represent as a percentage of
Partner FRE or the Company's gross assets. Board
approval is required when proposed acquisitions
exceed 12% of the Company's market
capitalisation. The Company monitors its
exposure to the different asset classes which it is
exposed to.
2. Partner-firm
Revenue Risk
The Company’s revenue is largely dependent on
the management fees generated by the Partner-
firms in which the Company invests. The
Company’s revenue is also dependent on the
performance of their funds and the products they
manage, as well as the growth and profitability of
their businesses. The Company is therefore
exposed to the risk that the Partner-firms may not
be able to generate adequate management fees
and performance fee-related earnings.
Additionally, the investments made by the
Partner-firms include high-risk, illiquid assets. The
Partner-firms may not be able to sell or otherwise
dispose of investments in their funds when they
desire and therefore may not be able to realise
the full value of such investments, resulting in an
impact to performance-related fees.
While Partner-firm specific revenue risk cannot
be eliminated, it can be reduced by diversifying
the Company’s investments across different
Partner-firms. The Operator monitors the
concentration of revenue quarterly. A significant
amount of the Company’s revenues are derived
from a capital base that is long term. The
Company has limits on how much any new
investment may represent as a percentage of
Partner FRE or the Company's gross assets. Board
approval is required when proposed acquisitions
or disposals exceed 12% of the Company's market
capitalisation. The Company monitors its
exposure to the different asset classes which it is
exposed to.
3. Investment
Diligence Risk
The due diligence process that the Operator
undertakes in connection with investments
may not reveal all facts that may be relevant in
connection with an acquisition. Any shortcomings
in the due diligence process in respect of the
Company’s investments, including as a result
of fraud by the seller or target, could result in
diminished returns or losses on the acquisitions by
the Company compared to the financial projections
used when evaluating such partnership.
Investment decisions are underpinned by an
established and rigorous investment due
diligence process to determine the feasibility and
attractiveness of an investment. The Operator has
a track record of evaluating and undertaking due
diligence exercises on non-controlling stakes in
alternative asset managers, and also extensive
expertise in negotiating and structuring bilateral
contracts which govern the minority investor
rights. For each potential acquisition, the
Operator conducts due diligence of the following
types: Partner-firm, product, asset-level,
operational, legal and audit and tax.
Strategy/
Investment Risk Description/Impact Mitigating Measures
Residual
Risk Trend
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41 Petershill Partners plc | Annual Report 2024
4.
Macroeconomic
Risk
Macroeconomic uncertainty on a global basis due
to rising inflation and interest rates that may
result in increased costs to the Partner-firms,
further driven by the changing political landscape.
The possibility of softer fundraising assumptions
and portfolio realisations for individual Partner-
firms can lead to lower expectations of future
income from Partner-firms. In addition, volatility
and disruption in the equity and credit markets
can adversely affect the underlying earnings of
the Partner-firms and the value of their earnings,
and therefore the Company’s balance sheet
and income.
Rising interest rates may result in reduced
Partner-firm PRE both in frequency as assets are
held for longer, and in quantum as multiples of
realisation are lower. The impact of inflation on
returns may challenge the ability of Partner-firms
to enhance operating margins given the
challenges of rising costs and may potentially
impact profitability. The Company uses leverage
as part of its overall operating strategy, which
may be impacted by changes in interest rates.
The Company’s revenue streams are diverse and
are composed substantially of contractually
committed, high and stable income derived from
Partner-firms’ management fee income on long-
dated assets. Additionally, there is a rigorous
investment due diligence process which includes
detailed financial and valuation analysis and
stress testing to ensure an investment is resilient
across varying factors and outcomes. The
Company monitors its ongoing risks to interest
rates and foreign exchange. The Company’s long-
term debt is at fixed rates. Partner-firms
operating within the private credit, private real
assets, credit and some absolute return asset
classes may potentially benefit from increases in
rates and inflation, as these asset classes have
historically presented a hedge to rising rates
and inflation.
5. Regulatory
Risk
The Company and the Operator are subject to
extensive laws and regulations in various
jurisdictions. These laws and regulations (and the
interpretations thereof) may change, and the
imposition of stricter laws and regulations could
result in increased compliance costs for the
Partner-firms and the Operator or could limit their
operational flexibility and efficiency.
The Company is also subject to Listing Rules and
UK-Adopted International Accounting Standards.
Moreover, governmental policy changes and
regulatory or tax reform (for example, in relation
to prevailing tax rates, the treatment of a foreign
corporation as such, or the treatment of carried
interest) could also have a material effect on the
Operator and/or the Partner-firms and their funds
and the products they manage.
In 2023, the UK enacted certain provisions of the
Organisation for Economic Co-operation and
Development’s Global Anti-Base Erosion Model
Rules (Pillar Two) to ensure that UK
headquartered multinational enterprises pay a
minimum tax of 15% on UK and overseas profits
arising after 31 December 2023. The legislation
applies to groups with revenues in excess of €750
million in at least two of the four previous periods
and therefore the Group is not currently expected
to be within scope for 2024. The Group meets the
revenue threshold for the 2024 period and will
continue to assess whether Pillar Two rules will
apply for future periods.
The Operator, Board, Administrator and Company
Secretary have established policies, procedures
and oversight functions to ensure compliance
with applicable laws and regulations. Changes to
the regulatory framework, as well as compliance
with all reporting, notifications and filing
requirements are closely monitored. The Operator
also leverages the expertise of its external tax
and legal counsel and other advisors as needed to
analyse the impact of potential governmental
policy changes and regulatory or tax reform.
Strategy/
Investment Risk Description/Impact Mitigating Measures
Residual
Risk Trend
Risk Management continued
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42 Petershill Partners plc | Annual Report 2024
6. Key Persons
Risk
The Operator relies on highly skilled qualified
investment professionals. Because the Operator
will perform investment management services
that are integral to the Company’s operations and
financial performance, a failure by the Operator to
retain its senior leadership or to recruit and retain
additional qualified investment, sales and other
professionals could have a material adverse effect
on the Company’s investment performance and,
as a result, its business, financial condition, results
and the value of its assets.
The Operator benefits from the global footprint
of Goldman Sachs, whose professional employees
possess a combination of deep industry
knowledge, financial expertise and operating
capabilities. The Board believes that the Operator
has appropriate experience and expertise to
implement the Company’s investment policy and
strategies successfully. A strong culture of
excellence is essential to attract and retain the
best talent. The Operator’s strategy for its human
resources is focused on attracting individuals
with drive and values aligned with its wider
team and retaining and rewarding those
individuals who make an exceptional contribution
to the team.
7. Operator,
Administrator
and Service
Provider
Resiliency and
Performance Risk
The Company has no employees and relies on the
Operator, Administrator, and other service
providers. Failure by the Operator or other third-
party service providers to the Operator, the
Administrator and other service providers to carry
out their obligations could have a material
adverse effect on the Company’s performance.
The Company has entered into detailed
agreements with the Operator, Administrator and
other service providers and the performance of all
service providers is formally reviewed annually.
The Board believes this risk is mitigated by the
fact that the Operator and the Administrator are
well-established and resourced companies with
robust track records. Both have robust business
continuity plans in place, which are updated and
tested on an ongoing basis, to ensure the
continued ability to service the Company in the
event there are disruptions of normal operations.
8. Partner-firm
Reporting Risk
The Operator depends on the continuation of its
relationships with Partner-firms in order to
maintain current data on its investments and
private market activity. Restrictions on the
Operator’s ability to use the data it obtains for its
reporting and monitoring processes could
adversely affect its ability to provide the same
level of disclosure for the Company, which could
have a material adverse effect on the Company.
The Operator has contractual information rights
in place for all Partner-firms, which all specify
timing in relation to communicating information,
to provide the Company with sufficient
information for its regulatory reporting
requirements. The Operator has implemented
processes to review certain financial and other
information reported by the Partner-firms and
assess for reasonableness.
9. Cyber/
Information
Security Risk
Cyber and security risks could adversely affect the
Operator and the Company. The Operator and the
Company rely on its information technology
infrastructure to conduct daily business
operations, and any cybersecurity attacks or
threats to this infrastructure could result in
business disruption and the breach of confidential
and proprietary information.
The Operator is committed to implementing the
highest standards of information security to
protect the privacy and confidentiality of
information related to its activities.
The Operator has implemented processes,
procedures and internal controls designed to
mitigate cybersecurity risks and cyber intrusions,
including maintaining physical, electronic and
procedural safeguards to protect the information
against loss, misuse, damage or modification and
unauthorised access or disclosure. Additionally,
the Operator has a dedicated Security Incident
Response Team which handles information
security threats and incidents that may have an
impact on the confidentiality, integrity or
availability of the Operator’s information and
technology environment.
10. Liquidity Risk
The risk that the Company is not able to meet its
financial obligations as they fall due or can do so
only at an excessive cost.
To protect the Company, the Operator monitors
its liquidity needs including those under stressed
conditions. The liquidity is monitored to ensure
there are sufficient liquid assets at all times to
cover cash flow movements and fluctuations in
funding and enable the Company to meet all
financial obligations and to support anticipated
growth. Liquidity conditions under stressed
conditions are considered as part of the
Guidelines on liquidity stress testing in UCITS and
AIFS by the European Securities and Markets
Authority (“ESMA”).
Strategy/
Investment Risk Description/Impact Mitigating Measures
Residual
Risk Trend
Strategic Report
43 Petershill Partners plc | Annual Report 2024
Emerging Risks
Emerging risks are those to which the Company is exposed and are
uncertain in terms of their impact and timelines. These risks have the
potential to become principal risks but are not yet considered to be so.
The Audit and Risk Committee is responsible for carrying out an
assessment of emerging risks and overseeing procedures for identifying
and managing these risks. The Audit and Risk Committee, as part of its
responsibilities, identifies and assesses emerging risks to be referred to
the Board for review. This process includes monitoring the external
environment for global trends or potential changes that may impact the
drivers of growth and performance of the Company.
Emerging risks may also arise from internal factors. Monitoring pressure
points on operational processes, personnel and third-party vendors is
another avenue through which emerging risks can be identified. The
monitoring and management of emerging risks include ongoing
assessments of the time horizon in which an emerging risk may
potentially become a principal risk and the level of impact to the
Company if it were to become a principal risk.
The Board, via the Audit and Risk Committee, has discussed several
emerging risks over the course of the year. These include geopolitical
risks, elevated levels of inflation, higher interest rates and implications of
the UK Government’s audit and Corporate Governance reform.
Viability Statement
In accordance with the UK Corporate Governance Code (the “UK Code”)
and the Association of Investment Companies Code of Corporate
Governance (the “AIC Code”), the Board has assessed the viability of the
Company. The Board has considered the Company’s strategic plan as well
as the Company’s principal risks in its assessment. The Board has chosen
a period of three years to 31 December 2027 for its formal assessment of
viability on the basis that assumptions made during this period are the
most reliable due to the visibility of earnings from investments in
Partner-firms. The Board is satisfied that this forward-looking
assessment of the Company is sufficient to enable a reasonable
statement of viability.
The assessment reflects the Company’s Acquisition Strategy and
Investment Policy as outlined on pages 22 to 23. Key considerations in
the assessment are:
▪ the investments in Partner-firms are long-term investments with no
plan to exit;
▪ the amount and timing of returns from investments in Partner-firms
comprises management fee income, performance fee income and
investment income;
▪ the fixed operational costs of the Company are low relative to its
recurring revenues; and
▪ the Operator charge is variable based on the income from investments
in Partner-firms.
The assessment of viability requires the Board to consider the principal
risks to the Company, which appear on pages 40 to 43.
While all of the risks outlined may have an impact on the Company’s
performance, there are certain risks that are more likely to have a greater
impact on the future solvency and liquidity of the Company in the three-
year period considered:
▪ Partner-firm revenue risk – the risk that Partner-firms are unable to
generate adequate fees, which would result in lower-than-expected
revenue for the Company.
▪ Macroeconomic risks – volatility in the markets may affect the Partner-
firms’ ability to realise investments, which could delay or reduce the
income the Company is expected to earn.
The Company’s investments in Partner-firms are long term. As a result,
the Company expects long-term recurring revenues from its investments
in Partner-firms. Income from investments in Partner-firms is derived
from management fee income, performance fee income and investment
income. Management fee income is typically based on committed capital
on private capital funds managed by the Partner-firms that are locked up
for a period of eight or more years.
The income from management fees is therefore stable and recurring.
Income derived from performance fee income and investment income
from Partner-firms is dependent on underlying fund and underlying
investment performance of the Partner-firms.
The Company has a low, and relatively stable, cost structure. The
Operator charge is variable and based on the income earned by the
Company from its investments in Partner-firms. The other operating
expenses and finance costs are considerably lower than the income
derived from management fee income. The Company has a strong
balance sheet with substantial funding headroom in place. The
Company’s unsecured loan notes are long term in duration and the
interest rates are fixed.
The Board reviewed the key risks and considered options available to
the Company to mitigate these risks and to ensure the viability of
the Company.
Stress testing has been performed, which considers the impact of the
Company’s key risks over the three-year period to 31 December 2027. A
severe but plausible downside scenario was assessed, which includes:
▪ a 90% reduction in income from Partner-firms derived from
performance fee income and investment income because of
underlying fund and underlying investment performance risk of the
Partner-firms. This translates to a substantial reduction in overall
income from Partner-firms over the three years. Such a reduction
might be a result of Partner-firm revenue and macroeconomic risks;
▪ a 20% decline in the fee-paying AuM held by absolute return funds,
while private market funds AuM remains relatively stable. This would
have a slight impact on the management fee income;
▪ the Operator charge is based on the amount of income from Partner-
firms and therefore changes commensurate with the change in income
from Partner-firms;
▪ the Company’s access to the revolving credit facility which expires in
January 2026, is assumed as not renewed. The $500 million private
placement debt and associated financial covenants remain unchanged;
▪ if interest rates were to increase in the future, this would not have a
material negative effect since the Company's long-term debt has fixed
interest rates; and
▪ any reduction in the valuation of investments at fair value through
profit and loss would not impact free cash flow, debt covenants or
leverage limitations.
The severe but plausible downside scenario also included putting a hold
on additional investments in Partner-firms and other capital
management activities, if the circumstances determined this to be
necessary.
The Company’s ability to pay its expenses, including the Operator charge,
can continue under the severe but plausible downside scenario. The
Company would remain in compliance with its financial covenants, satisfy
the requirements under ESMA’s liquidity stress tests guidelines for
alternative investment funds and continue to conform to the leverage
limits prescribed in the Acquisition Strategy and Investment Policy.
The Board has concluded that it has a reasonable expectation that the
Company will be able to continue in operation and meet its liabilities as
they fall due. The Board’s assessment has been made with reference to
the Company’s current position, the Company’s outlook, its strategy and
the Company’s principal risks.
Risk Management continued
Strategic Report
44 Petershill Partners plc | Annual Report 2024
Going Concern Statement
In accordance with the Companies Act 2006, the Board has a
responsibility to evaluate whether the Company has adequate
resources to continue its operational existence for the foreseeable
future and at least for the 12 months following the issuance of the
financial statements.
The Company’s business activities are set out in the Strategic Report on
pages 2 to 9. The financial position of the Company is described in the
Operator’s Report on pages 27 to 31. The Board has taken into account
the Company’s risk management process set out on page 40. The Board
has made an assessment of going concern, which takes into account the
current performance and the Company’s outlook, using information that
is available as of the date of these financial statements.
The Company’s business model involves earning income from
investments in Partner-firms. The Company’s investments in Partner-
firms are long term and the Company has no exit strategy for its
investments. As a result, the Company expects long-term recurring
revenues from its investments in Partner-firms. Income from
investments in Partner-firms is derived from management fee income,
performance fee income and investment income. Management fee
income is typically based on private capital commitment funds managed
by the Partner-firms that are locked up for a period of eight or more
years. The income from management fees is therefore stable and
recurring. Income derived from performance fee income and investment
income from Partner-firms is dependent on underlying fund and
underlying investment performance of the Partner-firms. The Company
has good visibility into the income from investments in Partner-firms.
The Company has a low, and relatively predictable, cost structure. When
taken together with the visibility into the income from investments in
Partner-firms the Company has reasonably stable earnings.
As at 31 December 2024, there was $9 million invested in money market
investments and $15 million of cash and cash equivalents, and the
Company had a revolving credit facility of $100 million which remained
undrawn, reflecting a strong liquidity position to meet operating costs.
There were gross liabilities related to notes payable of $500 million at 31
December 2024.
In making the assessment of going concern, the Board has considered
the severe but plausible downside scenario prepared in conjunction with
the viability statement. Testing has been performed, which considers the
impact of the Company’s key risks for the 12 months from the date of the
approval of the annual report.
The Board acknowledges its responsibilities related to the financial
statements. based on the analysis outlined above, the Board of Directors
are comfortable that the Company has sufficient cash to support its
ongoing operations and meet its liquidity requirements in the downside
scenario. After making an assessment of going concern, the Board has
concluded that the preparation of the financial statements on a going
concern basis for at least 12 months from the date of the approval of the
financial statements is appropriate.
The 2024 Annual Report and Financial Statements for Petershill
Partners incorporates:
▪ the Strategic Report;
▪ the Report of the Directors;
▪ the Corporate Governance Report;
▪ the Directors’ Remuneration Report; and
▪ the Consolidated Financial Statements.
Each of which have been approved by the Board of Directors of
Petershill Partners.
Naguib Kheraj
Chairman
Strategic Report
45 Petershill Partners plc | Annual Report 2024
Governance Report
Governance Report
47 Chairman’s Introduction
48 Our Board
50 Report of the Directors
53 Directors’ Remuneration Report
58 Directors’ Responsibilities Statement
59 Corporate Governance Report
67 Audit and Risk Committee Report
Governance Report
46 Petershill Partners plc | Annual Report 2024
Chairman’s Introduction
Dear Shareholder
I am pleased to introduce the Corporate Governance section of this year’s
Annual Report which describes the activities of the Board during the year,
along with our governance framework and how we have complied with
the AIC Code of Corporate Governance. The Board believes that a strong
corporate governance culture is essential for the Company to achieve its
investment objectives, to mitigate downside risk, and to take account of
the interests of key stakeholders as part of its decision-making process.
Further information on the Company’s engagement with stakeholders
and the key decisions made with the aim of promoting the long-term
success of the Company can be found on pages 32 to 33.
The Board in 2024
The Board focused on a number of important topics throughout the year
and, whilst the below list is by no means exhaustive, it provides an
overview of the key subjects addressed at Board meetings:
▪ Capital structure and allocation, including share buybacks, dividends
(including special dividends), and tax strategy
▪ Consideration and approval of the tender offer as a means to return
capital to Shareholders
▪ Financial disclosures by way of trading statements, financial
statements, and the Company’s tax statement, based on the
recommendations of the Audit and Risk Committee
▪ The governance framework, including the application of the updated
AIC Corporate Governance Code and updated UK Listing Rules, policies,
terms of reference, and the structure and conduct of meetings
including the quality of reporting to the Board
▪ The annual review of service providers, including the Operator and
the Administrator
▪ The review of Board effectiveness, conducted by external consultants
as per the AIC Code
▪ The identification of risk, risk management, internal controls and
oversight
▪ The commencement of a Non-Executive Director recruitment process
▪ Monitoring and reviewing the performance of Partner-firms;
▪ Investor relations and how we communicate with stakeholders
▪ Strategic options for value creation and recognition for the
Shareholder base
▪ Discussions related to M&A activity
▪ Considerations around succession planning
The Board formally met 11 times during the year to consider the above
topics which involved significant contribution from all Directors and a full
list of meetings can be found on page 63.
The external review of Board effectiveness raised no significant issues
and more information about the process and outcomes can be found on
page 37.
Corporate Governance
The Board recognises the role it has in ensuring the Company operates in
a manner that is consistent with the highest standards of corporate
governance. We have continued to strengthen Board governance this
year, which has included reviewing and updating governance processes
and policies in light of the changes to the UK Listing Rules and upcoming
changes to the AIC Corporate Governance Code and will continue to
develop reporting on risk management and internal controls.
Relations with Shareholders
The Board welcomes Shareholders’ views and places great importance on
communication with its Shareholders. The Company’s AGM in particular
provides a forum for Shareholders to meet and discuss issues with the
Directors of the Company, who are also available to meet with
Shareholders to hear their views and discuss any issues or concerns,
including in relation to Board composition, governance and strategy. The
Board values the insight it gains from Shareholder engagement and I
have been delighted to have been able to meet with a range of
Shareholders this year alongside the Operator.
The Company’s Annual General Meeting will be held at 1.00 p.m. on
22 May 2025 at Plumtree Court, 25 Shoe Lane, London and details of the
resolutions to be proposed at the AGM, together with explanations, will
appear in the Notice of Meeting to be distributed to Shareholders
together with this Annual Report.
Looking Ahead
Looking forward to 2025, the Board intends to continue to focus on the
execution of the Company’s strategy and investment objectives to drive
forward key growth initiatives whilst taking into consideration the wider
macroeconomic environment. With the assistance of the Operator and
the Administrator, the Board is confident that the Company is well
positioned to realise future opportunities in order to promote the success
of the Company as a whole.
I would like to take this opportunity to extend my thanks to all the
members of the Board and to all our service providers for their continued
dedication to the Company this year. To our Shareholders and wider
stakeholders, I thank you for your continued support.
Naguib Kheraj
Chairman
8 April 2025
Chairman’s Introduction
Governance Report
47 Petershill Partners plc | Annual Report 2024
An Experienced and
Independent Board
The Board comprises five
individuals from relevant
and complementary
backgrounds. The
Directors are of the
opinion that the Board
as a whole comprises an
appropriate balance of
skills, experience and
diversity. The Directors
of the Company who
were in office during
the year and up to the
date of signing the
financial statements are
listed as follows.
Naguib Kheraj,
CBE
Chairman of the
Board
Appointed 4
September 2021
Mr Kheraj is Chairman of Rothesay Limited,
a specialist pensions insurer and is a Senior
Adviser to the Aga Khan Development
Network where he serves on the boards of a
number of entities within its network and
chairs its Endowment Committee. He is also
an advisor to the Queensway Group Ltd, a
hospitality focused business.
Mr Kheraj began his career at Salomon
Brothers in 1986 and went on to hold
senior positions at a number of leading
financial institutions. Over the course of 12
years at Barclays, Mr Kheraj served as Group
Finance Director and Vice-Chair and in
various business leadership positions in
wealth management, institutional asset
management and investment banking. He
also served as Chief Executive Officer of JP
Morgan Cazenove. Mr Kheraj was also
Deputy Chairman of Standard Chartered plc,
a major international bank. During his tenure
of over eight years at Standard Chartered he
served as Chairman of the Board Risk
Committee and the Board Audit Committee
and as Senior Independent Director.
Mr Kheraj is a former Non-Executive
Director of NHS England and served as a
Senior Adviser to Her Majesty’s Revenue and
Customs and to the Financial Services
Authority in the United Kingdom. He has
also served as a member of the Investment
Committee of the Wellcome Trust, the
Finance Committee of Oxford University
Press and the Finance Committee of the
University of Cambridge.
Mr Kheraj was educated at Dulwich College
London and Cambridge University where he
graduated with a degree in Economics.
Everard Barclay
Simmons
Senior Independent
Director
Appointed 4
September 2021
Mr Simmons practised as an attorney in
Bermuda before moving to the United
States for business school and joining
Goldman Sachs as an investment banker.
Returning to Bermuda, he became Chief
Executive Officer of a reinsurance law firm.
Mr Simmons is currently Chair and Chief
Executive Officer of Rose Investment
Limited, a Bermuda-based advisory business
focused on financial services.
Mr Simmons was Lead Director and then
Chairman of the Board of the Bank of N.T.
Butterfield & Son Limited during its listing
on the NYSE. Mr. Simmons served on the
board of Bermuda’s financial services
regulator, the Bermuda Monetary Authority
and serves as a Director at Eight Roads,
the international venture capital platform
of Fidelity.
Mr Simmons serves as a Senior Advisor at
Further Global Capital Management,is Chair
of the Public Funds Investment Committee,
responsible for Bermuda’s pension funds
andleads the Bermuda Pension Fund
Reform Committee. Mr Simmons sits on the
Board of theArgus Group, a Bermuda
multiline insurer, was appointed as a
Director to the Ivy Group of companies and
most recently was appointed as a Director of
Soteria Reinsurance and as a Director of
Hamiliton Insurance Group.
Mr Simmons attended the University of Kent
at Canterbury where he graduated with a law
degree, the Inns of Court School of Law
where he qualified as a barrister, and Harvard
Business School where he graduated with a
Masters in Business Administration.
Committee Membership
Audit and Risk
Committee
Remuneration
Committee
Nomination
Committee
Management Engagement
Committee
Chair
Our Board
Governance Report
48 Petershill Partners plc | Annual Report 2024
Annemarie
Durbin
Non-Executive
Director
Appointed 4
September 2021
Ms Durbin has 35 years of international
business and banking experience with ANZ
Banking Group and Standard Chartered PLC.
Having qualified and practised as a
commercial barrister and solicitor, in New
Zealand, she moved into banking in 1987
with ANZ. Ms Durbin joined Standard
Chartered PLC, a FTSE 100 international
banking group, in 1995 and went on to hold
a number of senior positions including being
CEO and Executive Director of a large,
publicly listed banking subsidiary in
Thailand and, separately, as CEO in the
Philippines. Latterly she served as Group
Company Secretary of Standard Chartered
and as a member of the banking Group
Executive Committee with a broad portfolio
of responsibilities.
Ms Durbin has served on public company
boards since 2012 and is Chair of Yorkshire
Building Society and is a Non-Executive
Director and Chair of the Remuneration
Committee at Persimmon Plc. She is also an
executive coach/mentor.
Until December 2023 Ms Durbin was the
senior ringfence bank director and
Remuneration Committee Chair for
Santander UK plc and Chair of Cater Allen
Private Bank.
Other former roles included being Chair of
the Listing Authority Advisory Panel (LAAP)
in the United Kingdom (advising the
Financial Conduct Authority on the
effectiveness of primary markets), Non-
Executive Director & Remuneration
Committee Chair of WHSmith PLC, Non-
Executive Director of Ladbrokes Coral PLC
and Fleming Family & Partners Ltd.
Ms Durbin has degrees in Law and Commerce
from the University of Auckland, is a qualified
barrister and solicitor and has a Masters
(MSc) in Executive Coaching from Ashridge
Business School. She is also a Fellow of The
Chartered Governance Institute.
Erica Handling
Non-Executive
Director
Appointed 4
September 2021
Ms Handling began her career in 1988 at
Allen & Overy LLP before moving to Weil,
Gotshal & Manges LLP to help open their
office in London. She became a partner
there in 1998 and moved a team to Ashurst
LLP in 2001 where she founded a securities
and structured finance practice. After 10
years at Ashurst she moved to take on the
role of General Counsel in Europe for
Barclays Investment Bank from 2011 to
2015, where she served on the EMEA
Executive Committee and Global Operating
Committee. She then moved to BlackRock
from 2015 to 2019 as European General
Counsel, where she served on various boards
and committees.
Ms Handling left BlackRock in 2019 to
develop a career as an executive coach, non-
executive director and charity trustee. In
addition to the Petershill Partners Board, Ms
Handling is a member of the Supervisory
Board of Dutch market maker Optiver
Holding B.V.
Ms Handling also spends time working with
various charities in the criminal justice sector
and is currently Deputy Chair of St Giles Trust,
as well as Chair of Spark Inside which provides
coaching in prisons.
Ms Handling was educated at Wycombe
High School and Exeter University where she
graduated with a degree in Law (LLB) before
attending Guildford Law School.
Mark Merson
Non-Executive
Director
Appointed 4
September 2021
Mr Merson began his career in the financial
services division of Arthur Andersen in
London in 1989, becoming a partner in
1999. He provided audit and advisory
services to banking and investment
businesses throughout Europe before
moving to Tokyo as steward of Andersen’s
investment into its financial services
business in Japan. He subsequently returned
to London to become a partner in Deloitte
Business Consulting.
In 2003, Mr Merson joined Barclays PLC as
Group Financial Controller, as the bank
adopted International Accounting
Standards. In a 14-year career at Barclays he
went on to become Head of Investor
Relations; CFO for Corporate & Investment
Banking; and, latterly, Deputy Group Finance
Director, in which role he was leader of the
global finance function.
Mr Merson was a founding partner of
Veritum Partners Limited, advisors to
European financial services companies on
their interaction with the equity market.
In a non-executive capacity, Mr Merson is
Chair of Absa Securities UK Limited and a
governor of Sevenoaks School. He was
formerly an independent Non-Executive
Director of Absa Group Limited, chairing the
Board Finance Committee, the Group Risk
and Capital Management Committee and
the Group Credit Risk Committee.
Mr Merson is a chartered accountant and a
graduate of Oxford University.
Governance Report
49 Petershill Partners plc | Annual Report 2024
Report of the Directors
The Directors present their Annual Report and Audited Financial
Statements of the Company for the year ended 31 December 2024. The
Corporate Governance Report on pages 59 to 66 forms part of this report.
Throughout the financial year, the Board was comprised of five Non-
Executive Directors, whose details can be found on pages 48 and 49.
Capital Structure
The Company is incorporated and registered in England and Wales under
the Companies Act 2006 with registered number 13289144 as a public
limited company under the name Petershill Partners plc.
As at 31 December 2024, the Company’s issued share capital comprised
1,081,708,167 Ordinary Shares (31 December 2023: 1,122,202,824). No
shares were allotted during the year.
Shareholders are entitled to all dividends paid by the Company. On a
winding up, provided the Company has satisfied all its liabilities,
Shareholders are entitled to the surplus assets of the Company.
Shareholders are entitled to attend and vote at all general meetings of
the Company and, on a poll, to one vote for each Ordinary Share held.
Tender Offer
On 23 April 2024, the Company announced a proposed return of up to
$100 million to Shareholders by way of tender offer for up to 37,870,955
Ordinary Shares, subject to Shareholder approval at the 2024 AGM. The
Company successfully completed the tender offer in June, returning
approximately £81 million ($103 million excluding transaction costs and
adjusted for foreign exchange) to Shareholders.
At the AGM held on 23 May 2024, the Company was generally and
unconditionally authorised for the purposes of section 701 of the
Companies Act 2006 to make market purchases (within the meaning of
section 693(4) of Companies Act 2006) of its own Ordinary Shares
pursuant to, for the purposes of, or in connection with a tender offer for
Ordinary Shares, provided that:
1. the maximum number of Ordinary Shares authorised to be purchased
was 37,870,955;
2. the minimum price, exclusive of all expenses, which may be paid for an
Ordinary Share was £2.14;
3. the maximum price, exclusive of all expenses, which may be paid for an
Ordinary Share was £2.14; and
4. the authority expired on 31 July 2024, save that the Company may
before the expiry of such authority make a contract to purchase
Ordinary Shares which will or may be executed wholly or partly after
such expiry and the Company may make a purchase of such Ordinary
Shares after such expiry pursuant to such contract.
On 5 June 2024, the Company announced that 37,870,952 Ordinary
Shares had been purchased at a price per Ordinary Share of £2.14, for a
total cost of £81,043,837, representing approximately 3.38% of the
Company's issued ordinary share capital. The purchased shares were
subsequently cancelled.
More information may be found in Note 15 to the consolidated financial
statements on pages 109 and 110.
Authority to Purchase Own Shares
At the AGM held on 23 May 2024, the Company was generally and
unconditionally authorised to make market purchases (within the
meaning of section 693(4) of the Companies Act 2006) of its Ordinary
Shares of $0.01 each in the capital of the Company, subject to the
following conditions:
1. the maximum number of Ordinary Shares authorised to be purchased
is 108,170,816, representing 10% of the Company’s issued Ordinary
Share capital as at 22 April 2024;
2. the minimum price (excluding expenses) which may be paid for an
Ordinary Share is $0.01;
3. the maximum price (excluding expenses) which may be paid for each
Ordinary Share is the higher of: (i) an amount equal to 105% of the
average of the middle-market quotations of an Ordinary Share as
derived from the London Stock Exchange Daily Official List for the five
business days immediately preceding the day on which the Ordinary
Share is contracted to be purchased; and (ii) an amount equal to the
higher of the price of the last independent trade of an Ordinary Share
and the highest current independent bid for an Ordinary Share on the
trading venue where the purchase is carried out;
4. the authority shall expire at the close of the AGM of the Company held
in 2025 or 30 June 2025, whichever is earlier; and
5. a contract to purchase Ordinary Shares under the authority may be
made before the expiry of the authority (as per paragraph 4 above),
and concluded in whole or in part after the expiry of the authority (as
per paragraph 4 above).
During the year, 2.6 million shares were purchased for a total cash
consideration of $6 million under the above authority following a share
buyback programme announced on 17 May 2023 and the purchased
shares were cancelled. More information may be found in Note 15 on
pages 109 and 110.
In total, 40.5 million shares were purchased during the year for a total
cash consideration of $109.4 million between the tender offer and the
share buyback programme.
Special resolution 15 will be proposed at the forthcoming AGM seeking
renewal of the buyback authority until the 2026 AGM or 30 June 2026,
whichever is the earlier. The Directors believe that the renewal of the
Company’s authority to purchase shares is in the best interests of
Shareholders as a whole and therefore recommend Shareholders to vote
in favour of special resolution 15.
Report of the Directors
Governance Report
50 Petershill Partners plc | Annual Report 2024
Major Interests in Shares
Significant shareholdings as at 31 December 2024 are detailed below.
Ordinary Shares held %
31 December 2024
Petershill Funds
79.50%
The Vanguard Group Inc
1.24%
Alberta Investment Management Corp
1.23%
The Company has not been notified of any changes to the significant
shareholdings detailed above between 31 December 2024 and the date
of this report.
Shares held by Goldman Sachs Asset
Management’s Private Funds
Approximately 80% of Petershill Partners shares are held by the
Petershill Funds’ private funds and funds managed for certain co-
investors. Teams within Goldman Sachs Asset Management manage
these shares and exercise discretion over how and when they could be
sold in future, on behalf of the investors in the Petershill Funds.
The following table provides further details on the holdings of the
Petershill Funds as at 31 December 2024.
As at 31 December 2024
Amount %
PH PE IM Aggregator LP
273,135,529 31.8
PH PE GP Aggregator LP
143,267,721 16.7
PH II IM Aggregator LP
128,249,969 14.9
PH II GP Aggregator LP
108,330,412 12.6
VF VII IM Aggregator LP
84,910,220 9.9
Co-Invest IM Aggregator LP
51,760,204 6.0
VF VII GP Aggregator LP
43,906,398 5.1
Co-Invest GP Aggregator LP
26,242,364 3.0
The Petershill II fund complex holds shares in Petershill Partners
through PH II GP Aggregator LP and PH II IM Aggregator LP, the
Petershill PE and the Petershill III fund complex hold shares in Petershill
Partners through PH PE GP Aggregator LP and PH PE IM Aggregator LP,
the Vintage VII fund complex holds shares in Petershill Partners through
VF VII GP Aggregator LP and VF VII IM Aggregator LP and certain co-
investor structures hold shares in Petershill Partners through Co-Invest
GP Aggregator LP and Co-Invest IM Aggregator LP.
The interests of the Petershill II fund complex, the Petershill PE fund
complexes and the co-investor structures, on the one hand, and the
interests of the Vintage VII fund complex, on the other hand,
are managed on a day-to-day basis by distinct teams within the larger
Goldman Sachs Asset Management platform.
Co-investors are able to withdraw their shares from within the pertinent
management structures at any time, subject to notice, lock-up and
other customary requirements.
Vintage VII Funds (VF VII)
While the management structure of each of the Vintage VII Funds is
slightly distinct due to the difference in jurisdiction of incorporation and
applicable legal requirements, Goldman Sachs Asset Management, L.P.,
which forms part of Goldman Sachs Asset Management, has the role of
an investment manager/investment advisor, as applicable.
Within Goldman Sachs Asset Management, L.P., there is (a) a specific
team (Vintage Team) responsible for day-to-day management of
investments to pursue the investment objective of Vintage VII Funds and
(b) a specific investment committee responsible for oversight and final
say on investments. These teams are distinct from those responsible for
the Petershill family of funds, including the Company.
With respect to co-investments with the Petershill Funds, including
holdings in the Company, the Vintage Team seeks input from (and may
give weight to the views of) the Petershill team within the Operator but
does not delegate decision-making to such team.
For FTSE purposes, we believe that this setup is analogous to more
conventional equity funds managed by a single asset management
institution but with distinct and different portfolio managers.
Companies Act 2006 Disclosures
In accordance with Schedule 7 of the Large and Medium Sized
Companies and Groups (Accounts and Reports) Regulations 2008, the
Directors disclose the following information:
▪ the Company’s capital structure is detailed in Note 15 to the
Consolidated Financial Statements. Ordinary Shareholders are entitled
to attend and vote at all general meetings of the Company. On a show
of hands, every holder of Ordinary Shares in the capital of the
Company who is present in person shall have one vote and, on a poll,
every holder of Ordinary Shares present in person or by proxy shall
have one vote per Ordinary Share. All Ordinary Shares are non-
redeemable;
▪ There are no restrictions on voting rights and the Company is not
aware of any agreement between holders of securities that would
result in restrictions on the transfer of securities or on voting rights;
▪ Other than as described below, there are no restrictions on the transfer
of securities of the Company, subject to applicable law and regulation
and contractual lock-ups for certain Shareholders;
▪ The Board may, in its absolute discretion, decline to transfer, convert
or register any transfer of Ordinary Shares to any person:
▪ whose ownership of Ordinary Shares may cause the Company’s
assets to be deemed “plan assets” for the purposes of the US
Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) or the US Internal Revenue Code of 1986, as amended
(“the US Tax Code”);
▪ whose ownership of Ordinary Shares may cause the Company to
be required to register as an “investment company” under the
US Investment Company Act of 1940, as amended (“the US
Investment Company Act”) or to lose an exemption or a status
thereunder to which it might otherwise be entitled (including
because the holder of Ordinary Shares is not a “qualified
purchaser” as defined in the US Investment Company Act);
▪ whose ownership of Ordinary Shares may cause the Company to
be required to register under the US Exchange Act of 1934, as
amended (“the US Exchange Act”) or any similar legislation;
▪ whose ownership of Ordinary Shares may cause the Company to
be a “controlled foreign corporation” for the purposes of the US
Tax Code or may cause the Company to suffer any pecuniary
disadvantage (including any excise tax, penalties or liabilities
under ERISA or the US Tax Code);
▪ whose ownership of Ordinary Shares may cause the Company to
cease to be considered a “foreign private issuer” for the purposes
of the US Securities Act of 1933, as amended or the US Exchange
Act; or
▪ whose ownership of Ordinary Shares would or might result in the
Company not being able to satisfy its obligations on the
Common Reporting Standard developed by the Organisation for
Economic Co-Operation and Development, the Foreign Account
Tax Compliance Act or such similar reporting obligations on
account of, inter alia, non-compliance by such person with any
information request made by the Company (each person
described in (i) to (vi) above, being a “Non-Qualified Holder”).
Under the Company’s Articles of Association, the Directors have
the power to require the sale or transfer of Ordinary Shares, or
refuse to register a transfer of Ordinary Shares, in respect of any
Non-Qualified Holder;
Governance Report
51 Petershill Partners plc | Annual Report 2024
▪ Subject to consultation with the Operator and within certain
restrictions, the Directors may determine changes to the Company’s
capital structure, including any reduction of capital, share buybacks
(including the use of treasury shares) or issue of shares or other
securities (subject to the existing Shareholder authority granted on 23
May 2024 and which the Company will seek to renew at its
forthcoming AGM);
▪ There exist no securities carrying special rights with regard to the
control of the Company;
▪ The Company does not have an employees’ share scheme;
▪ The rules concerning the appointment and replacement of Directors
are contained in the Company’s Articles of Association and the
Companies Act 2006;
▪ There are no provisions in the Company’s Articles of Association
relating to amendments to the Articles of Association; there exist no
agreements to which the Company is party that may affect its control
following a takeover bid;
▪ There exist no agreements between the Company and its Directors
providing for compensation for loss of office that may occur because
of a takeover bid;
▪ The Directors’ responsibilities pursuant to section 172 of the
Companies Act 2006 are as detailed in the Strategic Report on pages
35 to 37; and
▪ No political or charitable donations have been made during the year.
Business Review and Diversity
A business review is detailed in the Operator’s Report on pages 27 to 31,
and the Company’s policy on diversity is detailed in the Corporate
Governance Report on page 62.
Directors’ Indemnity
Directors’ and Officers’ liability insurance cover is in place in respect of
the Directors. The Company’s Articles of Association state that each
Director is entitled to be indemnified out of the assets of the Company
against any liability incurred by them for negligence, default, breach of
duty or breach of trust in relation to the affairs of the Company to the
extent permitted by law against any loss or liability incurred by them in
the execution of their duties in relation to the affairs of the Company.
Third-party indemnity provisions in favour of the Directors were in force
for the financial year and up to the date of this report which conform to
the requirements for qualifying third-party indemnity provision under
the Companies Act 2006.
Global Greenhouse Gas Emissions
All of the Company’s activities are outsourced to third parties.
The Company therefore has no greenhouse gas emissions to report from
its operations, nor does it have responsibility for any other emissions-
producing sources under the Companies Act 2006 (Strategic Report and
Directors’ Reports) Regulations 2013. For the same reasons as set out
above, the Company considers itself to be a low energy user under the
UK Streamlined Energy and Carbon Reporting regulations and
therefore is not required to disclose energy and carbon information
under those regulations.
Stakeholder Engagement
The stakeholders of the Company comprise its Shareholders and
prospective Shareholders, lenders, the Operator, the Administrator, the
Company Secretary, other Service Providers, Partner-firms, regulators
and the community, and the Board recognises and values these
stakeholders and gives regular consideration to the need to foster the
Company’s business relationships with them. As a public limited
company with no employees, trade suppliers or customers, the
Company’s relationship with its service providers is of particular
importance. The effect of this consideration upon the key decisions taken
by the Company during the year is set out in further detail in the
Strategic Report on pages 32 and 33.
Risks and Risk Management
The Company is exposed to financial risks such as price risk, interest
rate risk, credit risk and liquidity risk, and the management and
monitoring of these risks are detailed in Note 19 to the Consolidated
Financial Statements.
Strategic Report
A review of the business and future outlook, the going concern statement
and the principal risks and uncertainties of the Company have not been
included in this report as they are disclosed in the Strategic Report on
pages 2 to 9. In accordance with section 414C (11) of the Companies Act
2006, the Company has chosen to include in its Strategic Report the
following information, which would otherwise be disclosed in this Report
of the Directors:
▪ Our engagement with suppliers, customers and others in a business
relationship with the Company; and
▪ Future developments in the business of the Company.
Independent Auditors
The Directors recommend the reappointment of
PricewaterhouseCoopers LLP as the Company’s independent auditors,
and resolutions concerning this and the remuneration of the Company’s
independent auditors will be proposed at the AGM.
At the time that this report was approved:
▪ so far as each of the Directors is aware, there is no relevant audit
information of which the independent auditors are unaware; and
▪ each Director has taken all the steps they ought to have taken as a
Director in order to make themselves aware of any relevant audit
information and to establish that the independent auditors are aware
of that information.
Annual Report
After due consideration, the Directors believe that the Annual Report and
Financial Statements, taken as a whole, are fair, balanced and
understandable and therefore are of the opinion that the Annual Report
provides the information necessary for Shareholders to assess the
position, performance, strategy and business model of the Company.
The Board recommends that the Annual Report, the Report of the
Directors and the independent auditors’ Report for the year ended 31
December 2024 are received and adopted by the Shareholders and a
resolution concerning this will be proposed at the AGM.
Dividend
The Board has recommended a final dividend of 10.5 cents per share,
with respect to the year ended 31 December 2024. For more information
on the Company’s dividend policy see page 28.
Subsequent Events
Significant subsequent events have been disclosed in note 22 to the
Consolidated Financial Statements.
On behalf of the Board
Naguib Kheraj
Chairman
8 April 2025
Report of the Directors continued
Governance Report
52 Petershill Partners plc | Annual Report 2024
Directors’ Remuneration
Report
Chair’s Statement
The Directors’ Remuneration Report that follows has been prepared in
accordance with the Listing Rules, the Large and Medium-sized
Companies and Groups (Accounts and Reports) (Amendment)
Regulations 2013 and the Companies Act 2006.
We were pleased with the support given for the remuneration resolution
passed at the Company’s AGM on 24 May 2024, with almost 100% of
votes in favour approving the Directors’ Remuneration Report for the
period ended 31 December 2023.
This Directors’ Remuneration Report covers the year ended 31 December
2024. As a reminder, the Company does not have any executive directors,
management or employees, so this report relates solely to the Chairman
and other Non‑Executive Directors.
This Directors’ Remuneration Report consists of three parts:
▪ The Directors’ Remuneration Policy (the “Policy”) which sets out the
remuneration framework that applies to the Chairman and the other
Non-Executive Directors. This was approved by Shareholders at the
Company’s AGM on 31 May 2022 and the Policy will next be put to a
vote by Shareholders at the upcoming AGM on 22 May 2025;
▪ The Annual Report on Remuneration. This explains how the Directors
have been paid in the financial year and will be subject to an advisory
vote at the Company’s forthcoming AGM; and
▪ The Annual Statement, which summarises the Remuneration
Committee’s activities, including our approach to remuneration, key
decisions made and the context for those decisions.
The Context of Remuneration Decisions
The Board’s remuneration remains consistent with the
disclosures contained in the Company’s Prospectus dated 28
September 2021. Since the IPO in September 2021, there have been no
changes to the remuneration of the Directors, all of whom are
independent Non-Executive Directors. With effect from 1 January 2025, a
limited adjustment has been made to the Audit and Risk Committee
chairman’s fee. As noted in last year’s Annual Report, the complexity of
the Company’s business combined with the fact that there are no finance
executives directly employed by the Company, means that additional
burdens and time commitments are placed on the Audit and Risk
Committee chairman. These have not abated since the IPO and are
unlikely to do so going forward. In recognition of this, the Board deemed
it appropriate to increase the fee paid for chairing the Audit and Risk
Committee by £15,000 from £35,000 to £50,000 per annum. Further
details can be found on pages 55 and 56.
The Board also noted that the time commitment for other Non-Executive
Directors, particularly the Company Chairman, remained elevated
although this has abated to some degree since the IPO. On balance, the
Board decided not to make any changes to the fees for the Company
Chairman or the other Non-Executive Directors (other than stated above)
for 2025. The Board noted that the Board fees benchmark competitively
with the very small number of observable comparators. This was a
deliberate decision at the time of the IPO to attract the right calibre of
Directors given the nature and complexity of the Company’s business. It
was noted that several other companies in the industry had been making
inflation-related adjustments to Board fees over the past few years and
consideration will be given to this in coming years to ensure that, on a
relative basis, the Company Chairman and Director fees continue to
benchmark appropriately.
In accordance with best practices, in Q1 2025, the committee’s
remuneration policy advisor, FT Remuneration Consultants LLP (“FIT”),
reported on remuneration market trends, including benchmarking data
for the Chairman’s and the Non-Executive Director’s fees.
Directors’ Remuneration Policy
The Directors’ Remuneration Policy was approved by Shareholders at the
Company’s AGM on 31 May 2022 and will be put to a vote by
Shareholders at the upcoming AGM on 22 May 2025. When designing the
Policy, the Remuneration Committee was mindful of the six factors listed
in the UK Code: clarity, simplicity, risk, predictability, proportionality and
alignment to culture. The Company has no employees and, therefore, the
Policy relates solely to the fees which are payable to the Chairman and
other Non-Executive Directors. No elements of the fees are linked to
financial or other performance of the Company.
Implementing the Policy for Full Year 2024
Details on the adjustments made to Board remuneration levels for 2025
can be found on page 56.
Conclusions
We will continue to engage with our Shareholders and other stakeholders
on an ongoing basis. I welcome any feedback or comments on the
Directors’ Remuneration Report more generally.
Annemarie Durbin
Chair of the Remuneration Committee
8 April 2025
Directors’ Remuneration Report
Governance Report
53 Petershill Partners plc | Annual Report 2024
Directors’ Remuneration Policy
The Directors’ Remuneration Policy was approved by Shareholders at the Company’s AGM on 31 May 2022 with almost 100% of Shareholders voted in
favour to approve the Remuneration Policy. The Remuneration Committee intends that the Policy will continue to operate for three years without any
amendments and will be put to a vote by Shareholders at the upcoming AGM on 22 May 2025. The details of the Company’s Remuneration Policy are set
out in full below.
It is not part of the Company’s strategy to appoint executive directors (or indeed any employees). However, in the highly unlikely event that the Company
subsequently chooses to appoint executive directors, it would then develop a policy which would be subject to Shareholder approval before such Board
appointments could be made.
Fees Policy for Chairman and Non-Executive Directors
The following table summarises the fees policy for the Chairman and the Non-Executive Directors.
Element of pay Purpose/link to strategy Operation/performance Maximum
Fees
To provide a competitive fee to
attract Non-Executive Directors
who have the requisite skills
and experience to oversee the
implementation of the
Company’s strategy.
Fees for the Chairman are set by the Committee. Fees for
the other Non-Executive Directors are set by the Board.
Directors are recused from any decision relating to their
fees.
Fees are reviewed, but not necessarily increased, annually.
Fee levels are determined based on expected time
commitments for each role and by reference to
comparable fee levels in other similar-sized companies.
Additional fees are payable to the Senior Independent
Director and Chairs of Board Committees to reflect their
additional responsibilities.
Additional fees may be paid for other responsibilities
which include a higher time commitment than normal.
The overall aggregate annual
limit for fees payable to the
Chairman and Non-Executive
Directors is £2 million.
Expenses
To facilitate the performance of
their duties.
Reasonable business expenses (including any tax thereon)
will be reimbursed.
Variable pay
Bonuses, shares and long-term
incentives.
There is no provision for the payment of variable pay. The
Chair and Non-Executive Directors do not receive bonuses
or LTIP awards from the Company. Therefore, there are no
recoupment (malus or clawback) provisions relating to
variable pay. There is no minimum shareholding
requirement. Actual shareholdings are shown on page 57.
Statement of Consideration of
Shareholder Views
The Committee is advised on investor views and continues to engage
with Shareholders and to respond to Shareholder feedback.
Material changes to the Policy will be subject to prior consultation with
major Shareholders.
The Company has no employees and, therefore, there were no such
persons with whom to consult.
Recruitment Policy
The remuneration package for any new Chairman or Non-Executive
Director will be set in accordance with the terms of the Policy in place at
the time of appointment, including the overall cap on fees.
Non-Executive Directors’ Terms of Appointment
The Non-Executive Directors do not have service contracts with the
Company, but instead have letters of appointment. The date of
appointment and length of service for each Non-Executive Director up to
the year end are shown in the table below:
Date of appointment
Length of service
Naguib Kheraj (Chairman)
4 September 2021
40 months
Everard Barclay Simmons
4 September 2021
40 months
Annemarie Durbin
4 September 2021
40 months
Erica Handling
4 September 2021
40 months
Mark Merson
4 September 2021
40 months
Each Non-Executive Director is subject to annual re-election by
Shareholders at the AGM in accordance with the AIC Code. None of the
Non-Executive Directors are appointed for a fixed term. The appointment
of the Chairman may be terminated by either the Chairman or the
Company giving six months’ notice. The appointment of each of the other
Non-Executive Directors may be terminated by either that Non-Executive
Director or the Company giving three months’ notice. Payment may be
made in lieu of providing the full notice period.
Directors’ Remuneration Report continued
Governance Report
54 Petershill Partners plc | Annual Report 2024
Annual Report on Remuneration
Single Total Figure of Remuneration (Audited)
For the year ended 31 December 2024 For the year ended 31 December 2023
2024 Fees
(£’000)
Taxable
1
Benefits
(£’000)
Total 2024
(£’000)
2023 Fees
(£’000)
Taxable
1
Benefits
(£’000)
Total 2023
(£’000)
Naguib Kheraj
475 – 475 475 – 475
Everard Barclay Simmons
175 38 213 175 28 203
Annemarie Durbin
155 – 155 155 – 155
Erica Handling
150 – 150 150 – 150
Mark Merson
170 – 170 170 – 170
Total
1,125 38 1,163 1,125 28 1,153
2024 Fee
% change
2024 Taxable
Benefits
% change
1
2023 Fee
% change
2023 Taxable
Benefits
% change
1
2022 Fee
% change
2022 Taxable
Benefits
% change
1
Naguib Kheraj
– % – % – % – % – % – %
Everard Barclay Simmons
– % 36 % – % 211 % – % (69) %
Annemarie Durbin
– % – % – % – % – % – %
Erica Handling
– % – % – % – % – % – %
Mark Merson
– % – % – % – % – % – %
Notes to Single Total Figure of Remuneration Table
1. Taxable benefits relate to reimbursement of travel and accommodation expenses to attend Board meetings, together with associated taxes.
Statement of voting on remuneration at Annual General Meeting
The table below shows votes cast by proxy at the AGM held on 23 May 2024 in respect of the Directors’ Remuneration Report.
Votes for Votes against
Votes withheld
number
Number Number
2023 Remuneration Report (at the 2024 AGM)
970,964,461 99.997% 31,980 0.003% 36,995
The table below shows votes cast by proxy at the AGM held on 31 May 2022 in respect of the Directors’ Remuneration Policy.
Votes for Votes against
Votes withheld
number
Number Number
Remuneration Policy (at the 2022 AGM)
1,098,799,848
99.9999 875 0.0001 843
Fees
The Company is operationally complex and, in the absence of any employees, the expectation on the Company’s Board members is considerably greater
when compared to traditional investment companies. This is reflected in the fees paid to the Chairman and other Non-Executive Directors. The Board’s
skills matrix reflects the balance of the knowledge, skills, qualifications, and experience required to discharge its duty of stewardship over the Company.
The Chairman and Non-Executive Director fees for the year ended 2024 are outlined below:
Fees
(£’000)
Chairman of the Board fee
475
NED base fee
120
Senior Independent Director fee
25
Chair of the Audit and Risk Committee
35
Chair of the Remuneration Committee
10
Member of the Audit and Risk Committee
15
Member of the Nomination, Remuneration or Management Engagement Committees (per Committee)
5
Governance Report
55 Petershill Partners plc | Annual Report 2024
With effect from 1 January 2025, the fee for the role of chairman of the Audit and Risk Committee increased by £15,000. No other amendments have
been made. Accordingly, the Chairman and Non-Executive Director fees effective from 1 January 2025 are set out below:
Fees
(£’000)
Chairman of the Board
475
NED base fee
120
Senior Independent Director fee
25
Chair of the Audit and Risk Committee
50
Chair of the Remuneration Committee
10
Member of the Audit and Risk Committee
15
Member of the Nomination, Remuneration or Management Engagement Committees (per Committee)
5
It should also be noted that, with the exception of the one fee change, no other fees have been increased since IPO and represent a real fall over the
period after taking inflation into account. Fees will continue to be monitored on an annual basis and it is envisaged that the Board will consider modest
annual increases going forwards in line with comparative data.
Expenses
Expenses include the reimbursement (including any tax payable) of business-related costs.
Directors’ Remuneration Report continued
Governance Report
56 Petershill Partners plc | Annual Report 2024
Annual Statement on the
Role and Activities of the
Remuneration Committee
Role and Responsibilities of the
Remuneration Committee
Whilst the Board is ultimately responsible for setting the Directors’
remuneration, the Remuneration Committee is responsible for
determining the remuneration of the Chairman and setting the fees
accordingly and reviewing the ongoing appropriateness and relevance
of remuneration levels of the Board as a whole. Any remuneration
consists only of fees and expenses. The Committee is also responsible
for appointing external remuneration consultants. Directors do not set
their own levels of remuneration and are expected to recuse themselves
from discussions pertaining to their fees. The Committee is responsible
for recommending the Remuneration Policy for approval by
Shareholders every three years, and approval of the annual disclosures
in relation to the implementation of the Remuneration Policy. FIT
Remuneration Consultants LLP remain as advisors to the Committee on
remuneration matters.
The Remuneration Committee meets at least once a year. The members
of the Remuneration Committee are Annemarie Durbin (Chair), Naguib
Kheraj, Everard Barclay Simmons, Erica Handling and Mark Merson. As all
of the Directors are independent and there are no executives, the
Committee’s membership comprises the whole Board.
Advisors
The Committee appointed FIT as its independent advisor early in 2022.
FIT is a member of the Remuneration Consultants’ Group and complies
with its Code of Conduct which sets out guidelines to ensure that its
advice is independent and free of undue influence. Fees charged for time
incurred in respect of the year ended 31 December 2024 amounted to
£5,000 ($6,260) (2023: £12,970 ($15,970)). FIT has no other connection
with the Company and its only connection with its Non-Executive
Directors is as advisor to other remuneration committees on which they
may serve.
Key Activities During the Year
The Committee held a meeting on 18 January 2024 in which the
remuneration of the Chairman was reviewed and the remuneration of the
other Board members was considered. The Committee also reviewed the
Committee terms of reference, which were recommended for approval by
the Board.
Other Statutory Requirements
Share Interests (Audited)
There is no requirement for Directors to hold shares in the Company.
The Directors who held office during the year and had interests in
the Ordinary Shares of the Company as at 31 December 2024 are set
out below.
Shares owned
31 December 2024
Shares owned
31 December 2023
Naguib Kheraj*
970,000 895,000
Everard Barclay Simmons
– –
Annemarie Durbin
– –
Erica Handling
85,714 85,714
Mark Merson
114,285 114,285
* 307,000 of Mr Kheraj’s shares are held directly and the balance is held
through a Self-Invested Personal Pension.
As Independent Non-Executive Directors, no Director participates in any
form of incentives. The Company’s mid-market share price at the close of
business on 31 December 2024 was 248p (31 December 2023: 170p)
and the range of the mid-market price during the year was 156p to 258p
(from year end 2022 to year end 2023: 142p to 179p).
Total Shareholder Return Performance
The following chart shows the value of £100 invested in the Company (at
the date of Admission) compared with the value of £100 invested in the
FTSE 250 Index. We have chosen the FTSE 250 Index as it provides the
most appropriate and widely recognised index for benchmarking the
Company’s corporate performance since Admission.
Total Shareholder Return
Value of a 100 unit investment made at Admission
0
20
40
60
80
100
120
Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 2024 2024 2024 2024
n
Petershill Partners
n
FTSE 250 Index
Relative Importance of Spend on Pay
The table below shows amounts paid to the Company’s Non-Executive
Directors compared to amounts distributed to Shareholders by way of
dividends and share buybacks.
Non-Executive
Director Fees
$m
Distributions by way
of dividends and
share buybacks
$m
For the year ended
31 December 2024 of £1.1
million
1.4 563.2
For the year ended
31 December 2023 of £1.1
million
1.4 206.5
Percentage change
0.0 % 272.7 %
CEO Pay Ratio
The Company has no Chief Executive or any equivalent executives and no
employees, so no such ratio is required.
Payments for Loss of Office and/or Payments to
Former Directors (Audited)
No payments for loss of office, nor payments to former Directors, were
made during the year.
On behalf of the Remuneration Committee
Annemarie Durbin
Chair of the Remuneration Committee
8 April 2025
Governance Report
57 Petershill Partners plc | Annual Report 2024
Directors’ Responsibilities
Statement
The Directors are responsible for preparing the Annual Report and
Financial Statements in accordance with applicable law and regulations.
Company Law requires the Directors to prepare financial statements for
each financial year. Under that law the Directors have prepared the
Group and the Company financial statements in accordance with UK-
adopted International Accounting Standards (“IFRS”). Under company
law the Directors must not approve the financial statements unless they
are satisfied that they give a true and fair view of the state of affairs of
the Group and Company and of the profit or loss for the Group and
Company for that period.
In preparing these financial statements, the Directors are required to:
▪ select suitable accounting policies in accordance with International
Accounting Standard 8 “Accounting Policies, Changes in Accounting
Estimates and Errors” and then apply them consistently;
▪ make judgements and accounting estimates that are reasonable and
prudent;
▪ present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable
information;
▪ provide additional disclosures when compliance with the specific
requirements of IFRS are insufficient to enable users to understand
the impact of particular transactions, other events and conditions on
the Group and Company financial position and performance;
▪ state whether applicable UK-adopted International Accounting
Standards have been followed, subject to any material departures
disclosed and explained in the financial statements; and
▪ prepare the financial statements on a going concern basis unless it is
inappropriate to presume that the Company and/or the Group will
continue in business.
The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Group and Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the Group and Company and enable them to ensure
that the financial statements and the Directors’ Remuneration Report
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
In the case of each Director in office at the date the Report of the
Directors is approved:
▪ so far as the Director is aware, there is no relevant audit information
of which the Group’s and Company’s independent auditors are
unaware; and
▪ they have taken all the steps that they ought to have taken as a
Director in order to make themselves aware of any relevant audit
information and to establish that the Group’s and Company’s
independent auditors are aware of that information.
Under applicable law and regulations, the Directors are also responsible
for preparing a Strategic Report, Report of the Directors, Directors’
Remuneration Report and Corporate Governance Report that comply
with that law and those regulations.
The Directors are also responsible under section 172 of the Companies
Act 2006 for promoting the success of the Company for the benefit of its
members as a whole and in doing so having regard for the needs of wider
society and other stakeholders.
Website Publication
The Directors are responsible for the maintenance and integrity of the
Company’s website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Directors’ Responsibilities Pursuant to DTR4
The Directors confirm that to the best of their knowledge:
▪ the Group and Company financial statements, which have been
prepared in accordance with UK-adopted International Accounting
Standards, give a true and fair view of the assets, liabilities and
financial position and profit or loss of the Group and Company, and of
the profit or loss of the Group;
▪ the Annual Report and Financial Statements, including the Strategic
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 that they face; and
▪ they consider that this Annual Report and Financial Statements, taken
as a whole, is fair, balanced and understandable and provides the
information necessary for Shareholders to assess the Company’s and
the Group’s position and performance, business model and strategy.
On behalf of the Board
Naguib Kheraj
Chairman
8 April 2025
Directors’ Responsibilities Statement
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58 Petershill Partners plc | Annual Report 2024
Corporate Governance
Report
This Corporate Governance Report forms part of the Report of the
Directors as disclosed on pages 50 to 52. The Board operates under a
framework for corporate governance which is appropriate for closed-
ended investment funds. This report describes how the Company has
applied the principles identified in the Association of Investment
Companies Code of Corporate Governance (the AIC Code) during the year
ended 31 December 2024.
The AIC Code
The Board is committed to the highest standards of corporate
governance and operates under an appropriate framework for corporate
governance for a listed investment company. The Company is required
under the UK Listing Rules to report on how it has applied its governance
code in this Annual Report and financial statements. The Company
became a member of the AIC with effect from 1 October 2021 and has
put in place arrangements to comply with the AIC Code unless otherwise
disclosed. In August 2024, the AIC Code was updated and endorsed by
the FRC and the 2024 AIC Code applies to accounting periods beginning
on or after 1 January 2025, with the exception of Provision 34 which will
apply to accounting periods beginning on or after 1 January 2026. It
includes an explanation of how the AIC Code adapts the principles and
provisions set out in the UK Code to make them relevant for listed closed-
ended investment companies. By reporting against the AIC Code, as
explained by the AIC Guide, the Company meets its obligations in relation
to the UK Corporate Governance Code and the associated disclosure
requirements of the Disclosure Rules. The AIC Code and the related AIC
Guide are available on the AIC’s website, www.theaic.co.uk.
The Company has complied with the recommendations and relevant
principles and provisions of the AIC Code, during the year ended
31 December 2024.
Purpose and Culture
The Company’s purpose is to provide Shareholders with best-in-class
access to the growth and profitability of the alternative asset
management industry, focusing on the quality of recurring earnings.
As the Company has no employees, the Board has agreed that its culture
and values should be aligned with those of the Operator to encourage a
culture that is responsive to the views of its stakeholders. This is reflected
in the way in which Board meetings are conducted. The Chairman
promotes and facilitates a strong culture of open debate on topics,
encouraging participation and input from all Directors, the Operator and
other advisors and service providers to ensure a wide exchange of views.
The Directors are committed to providing the highest standards of
diligence in governance and reporting and to maintaining a constructive
and collaborative relationship with the Operator, while ensuring that the
Operator manages conflicts of interest appropriately. The Company has
delegated its operating responsibilities to the Operator and is reassured
by and supportive of the Operator’s values.
The Board sets the strategy for the Company to align with its purpose.
Having a strong culture of collaboration and transparency will help the
Company achieve its strategy to offer high-quality Partner-firms a “win-
win” solution as a source of partnership and capital. It will also help
Partner-firms build enduring businesses that are responsive to the
trends we expect to shape the future, while maintaining alignment with
our Shareholders, Operator, Partner-firms and service providers. The
Board has focused on ensuring that this culture is embedded across the
Company’s operations and monitors progress in that regard.
The Board undertakes continued engagement with the Operator and
other advisors and service providers to ensure that practices and
behaviour throughout the business are aligned with the Company’s
purpose and strategy. They are also formally reviewed as part of the
Board and the Operator evaluation processes.
The Board
The Company is led and controlled by an independent Board of Directors,
which is collectively responsible for the long-term success of the
Company. It does this by creating and preserving value and has acting in
the interests of Shareholders, other stakeholders and wider society as its
foremost principle. The importance of the Board’s role to the delivery of
the Company’s purpose, values and strategy is further outlined within the
Strategic Report, in the Chairman’s Statement (pages 8 and 9) and in our
Business Model (pages 10 to 13).
The Company believes that the composition of the Board will be a
fundamental driver of its success, as the Board must provide strong and
effective governance of the Company. The Directors, as their biographies
on pages 48 and 49 illustrate, bring a breadth of knowledge, skills and
business experience to the Company. The Non-Executive Directors
provide independent challenge and review, bringing wide experience,
specific expertise and a fresh objective perspective. The Company is also
conducting a Non-Executive Director recruitment process, with a focus on
succession planning and maintaining the appropriate balance of skills,
knowledge and experience to complement those already on the Board,
further details on this process can be found on page 61.
The Company has no employees, and all five Directors, who were
appointed on a Non-Executive basis on 4 September 2021, are
independent of the Company’s Operator and free from any business or
Corporate Governance Report
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59 Petershill Partners plc | Annual Report 2024
other relationship that could materially interfere with the exercise of
their independent judgement.
The AIC Code requires that Directors be subject to an annual re-election
by Shareholders, and the Directors comply with this requirement. All of
the Directors, including the Chairman, shall offer themselves for re-
election at the forthcoming AGM. Having considered their effectiveness,
demonstration of commitment to the role, length of service, attendance
at meetings and contribution to the Board’s deliberations, the Board
approves the nomination for re-election of all of the Directors at the
forthcoming AGM.
The Chairman of the Board is independent and is appointed in
accordance with the Company’s Articles of Association. Mr Kheraj is
considered to be independent because he, among other criteria:
▪ has no current or historical employment with the Operator;
▪ has not provided services to the Operator within the last three
years; and
▪ has no current Directorships or partnerships in any other investment
fund managed by the Operator.
The responsibilities of the Chairman are available on the Company’s
website. The terms and conditions of appointment of Non-Executive
Directors are available for inspection from the Company’s
registered office.
The Board has regular planned formal meetings at least four times
during a full year and holds such additional ad-hoc meetings as are
necessary to fulfil its duties. See page 63 for a full list of meetings that
have taken place during the year. Directors are given access to the
information necessary to assist them in the performance of their duties.
An agenda and Board papers are circulated to the Directors in advance of
Board meetings to allow them adequate opportunity for review and
preparation for Board meetings.
Duties and Responsibilities
The Directors have adopted a formal schedule of matters specifically
reserved for Board approval, which are set out on the Company’s website.
The primary focus at Board meetings is a review of investment activity,
performance, business conduct and policy and associated matters such
as asset allocation, share price discount/premium management, investor
relations, acquisitions, acquisition policies, peer group information,
capital structure, industry issues and principal risks and uncertainties – in
particular those identified in the Strategic Report on pages 2 to 9.
The Directors have overall responsibility for overseeing the performance
of the Operator and the Group’s activities. The Company has entered into
the Operator Agreement with the Operator, pursuant to which the
Operator is responsible for the risk and portfolio management of the
Group’s assets, and has full discretionary authority to enter into
transactions for and on behalf of the Group provided they are permitted
by the Company’s Acquisition Strategy and Investment Policy, subject to
the following:
▪ Where the value of a proposed acquisition of an Alternative Asset
Manager Stake represents between 5% and 12% of the Company’s
market capitalisation, the Operator will submit such proposal to the
Board for review and consultation; and
▪ Where the value of a proposed acquisition of an Alternative Asset
Manager Stake represents more than 12% of the Company’s market
capitalisation, the Operator will submit such proposal to the Board for
approval and will publicly announce the acquisition with such
announcement also subject to Board approval.
The Directors also review and supervise the Company’s advisors and
service providers, including the Operator. The Directors may delegate
certain functions to other parties. In particular, the Directors have
delegated responsibility for management of the Company’s portfolio of
investments to the Operator. Between meetings there is regular contact
with the Operator and the Administrator. The Board is supplied with
information by the Operator, the Administrator and other advisors in a
form appropriate to enable it to discharge its duties.
The Board has responsibility for ensuring that the Company keeps proper
accounting records which disclose with reasonable accuracy at any time
the financial position of the Company and which enable it to ensure that
the financial statements comply with applicable regulation. It is the
Board’s responsibility to present a fair, balanced and understandable
Annual Report, which provides the information necessary for
Shareholders to assess the position, performance, strategy and business
model of the Company. This responsibility extends to the interim results
and other price-sensitive public reports.
The Directors have access to Ocorian as Administrator, a third-party
service provider that provides company secretarial and governance
advice and services and is responsible to the Board for ensuring that
Board procedures are followed and that it complies with applicable law
and regulations of the London Stock Exchange and the provisions of the
AIC Code. Where necessary, in carrying out their duties, the Directors
may seek independent professional advice and services at the expense
of the Company. The Company maintains Directors’ and Officers’
liability insurance in respect of legal action against its Directors on an
ongoing basis.
UK Market Abuse Regulation
The Company has adopted a code of securities dealings based on the
requirements of the UK Market Abuse Regulation. The Directors are
responsible for taking all proper and reasonable steps to ensure
compliance with this code.
The Board also considers whether the Company has inside information
and if an announcement obligation has arisen. The Board reviews the
scope and content of disclosures in order to ensure that information
released to the market by the Company is appropriate. It is responsible
for reviewing the systems, procedures and controls in place to enable the
Company to comply with its legal and regulatory obligations in relation
to inside information.
Conflicts of Interest
The Board is also responsible for reviewing and considering any actual or
potential conflicts of interest referred to it in accordance with the
Company’s conflicts of interest policy and for approving any such
conflicts. At least annually, the Board reviews the adequacy of disclosure
to Shareholders regarding potential conflicts of interest and the
effectiveness of the Company’s conflicts of interest policy. In addition, the
Board is responsible for reviewing and approving any related party
transactions pursuant to the Company’s related party transactions policy
(which was updated during the year to reflect the updated UK Listing
Rules). Other key matters requiring Board approval include capital
allocation and capital structure, the Company’s dividend policy and
changes to the Acquisition Strategy and Investment Policy.
In accordance with Provision 9 of the AIC Code, the appointment of any
Director has included consideration of the time they have available to the
role. Any additional external appointments will be submitted by Directors
to the Board for approval before the appointment is accepted.
Communicating with Shareholders
In the performance of its duties, the Board is committed to maintaining a
good understanding of the views of Shareholders and considerable
importance is attached to communicating with Shareholders. The Board’s
responsibilities for the Annual Report are set out in the Directors’
Responsibilities Statement.
Corporate Governance Report continued
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60 Petershill Partners plc | Annual Report 2024
Senior Independent Director
The Company has appointed Everard Barclay Simmons as Senior
Independent Director. The Senior Independent Director acts as a
sounding board for the Chairman, serves as an intermediary for the other
Directors and Shareholders, and leads the annual review of the
Chairman’s performance. The responsibilities of the Senior Independent
Director are available on the Company’s website.
Board Committees
The Company has established an Audit and Risk Committee, a
Remuneration Committee, a Nomination Committee and a Management
Engagement Committee, each of which has formally delegated duties
and responsibilities and written terms of reference that have been
approved by the Board. The terms of reference for each Committee are
available on the Company’s website and reviewed on an annual basis.
The Directors believe that the Board and its Committees have an
appropriate composition and blend of skills, experience, independence
and diversity of backgrounds to discharge their duties and
responsibilities effectively. The Directors are of the view that no one
individual or small group dominates decision-making. The Board keeps
its membership, and that of its Committees, under review to ensure that
an acceptable balance is maintained, and that the collective skills and
experience of its members continue to be refreshed. It is satisfied that all
Directors have sufficient time to devote to their roles and that undue
reliance is not placed on any individual.
All Committee members are provided with appropriate induction on
joining their respective Committees, as well as ongoing access to
training. Minutes of all meetings of the Committees are made available
to all Directors, and feedback from each of the Committees is provided to
the Board by the respective Committee Chairs at the next Board meeting.
The Chair of each Committee attends the AGM to answer any questions
on their Committee’s activities.
The Board and its Committees are provided with information that
enables the Directors to discharge their duties effectively. All Directors
are able to make further enquiries of the Operator whenever necessary
and have access to the services of the Company Secretary.
Audit and Risk Committee
The members of the Audit and Risk Committee are Mark Merson (Chair),
Everard Barclay Simmons, Annemarie Durbin and Erica Handling. The
Audit and Risk Committee, the Operator, the Administrator and the
independent auditors have held discussions regarding the audit
approach and identified risks. The Audit and Risk Committee meets at
least four times a year pursuant to its terms of reference. Further details
on the roles and responsibilities of the Audit and Risk Committee and its
key activities during the year are contained in the Audit and Risk
Committee Report on pages 67 to 69.
Remuneration Committee
The members of the Remuneration Committee are Annemarie Durbin
(Chair), Naguib Kheraj, Everard Barclay Simmons, Erica Handling and
Mark Merson. In accordance with the recommendations of the AIC Code,
all members of the Remuneration Committee are Non-Executive
Directors, and the Chair of the Remuneration Committee has the relevant
experience and understanding of the Company. Given the small size of
the Board, all members of the Board are members of the Remuneration
Committee. Further details on the roles and responsibilities of the
Remuneration Committee and its key activities during the year are
contained in the Directors’ Remuneration Report on pages 53 to 57.
Nomination Committee
The members of the Nomination Committee are Naguib Kheraj (Chair),
Everard Barclay Simmons, Annemarie Durbin, Erica Handling and Mark
Merson. Given the small size of the Board, all members of the Board are
members of the Nomination Committee. The Nomination Committee
meets at least once a year pursuant to its terms of reference.
Roles and Responsibilities
The Nomination Committee leads the process for Board appointments,
reappointments and the succession planning process. The Nomination
Committee is responsible for monitoring and assessing the structure, size
and composition of the Board, including the skills, knowledge,
independence, experience and diversity of its members, and making
recommendations to the Board with regard to any changes. With regard
to Board appointments, the Nomination Committee prepares
specifications of the roles and responsibilities, including expected time
commitments, and consideration is given to the existing experience,
knowledge and background of current Board members, as well as the
strategic and business objectives of the Company. The Committee uses
open advertising and/or an external search consultancy to facilitate
recruitment. The appointment of any new Director is made on merit and
against objective criteria with the aim of bringing complementary skills
and different perspectives to the Board, while promoting diversity of
gender, and of social and ethnic background. Any additional external
appointments are submitted for Board approval before the appointment
is accepted. The Nomination Committee is responsible for ensuring an
annual Board evaluation process is conducted detailing the nature and
extent of any external evaluator’s contact with the Board and individual
Directors (once every three years), the outcomes and actions taken and
how it influences Board composition. As a result, the Nomination
Committee also makes recommendations to the Board in relation to the
composition of the Audit and Risk Committee and Remuneration
Committee, and any other Board committees as appropriate.
Key Activities During the Year
The Nomination Committee held a meeting on 18 January 2024 to
consider Board composition and succession planning and the approval of
the Nomination Committee’s policies and Board skills matrix, as well as
discussing the recommendations following the 2023 internal Board
evaluation review and the external Board effectiveness review process to
be conducted during 2024. On 15 October 2024, the Nomination
Committee met to discuss the recommendations following the external
Board effectiveness review process and more information on the process
and outcomes of the external review are contained on page 64. As a
result of recommendations received from the external Board
effectiveness review process relating to Board composition and
succession, the Company decided to commence a Non-Executive
recruitment process, and this is currently ongoing with the assistance of
external recruitment consultants, Spencer Stuart & Associates Limited
and Nurole Ltd. The Company had engaged Spencer Stuart & Associates
Limited during the director recruitment process at IPO. There are no
previous connections with Nurole Ltd with the Company or any individual
Directors. The Nomination Committee also reviewed the Committee
terms of reference, which were recommended for approval by the Board.
Management Engagement Committee
The members of the Management Engagement Committee are Naguib
Kheraj (Chair), Everard Barclay Simmons, Annemarie Durbin, Erica
Handling and Mark Merson. Given the small size of the Board, all
members of the Board are members of the Management Engagement
Committee. The Management Engagement Committee meets at least
once a year pursuant to its terms of reference.
Roles and Responsibilities
The role of the Management Engagement Committee is to provide a
formal mechanism for the review of the performance of the Operator and
the Company’s other advisors and service providers. It carries out this
review through consideration of a number of objective criteria and
through a review of the terms and conditions of the advisors’ and service
providers’, appointments with the aim of evaluating performance,
identifying any weaknesses and ensuring value for money for
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61 Petershill Partners plc | Annual Report 2024
Shareholders. The Management Engagement Committee specifically
considers matters such as:
▪ monitoring and evaluating the Operator’s investment performance
and, if necessary, providing appropriate guidance;
▪ regularly reviewing the scope and the continued retention of the
Operator’s services;
▪ considering the merit of obtaining, on a regular basis, an independent
appraisal of the Operator’s services; and
▪ reviewing the level and method of remuneration, the basis of Profit
Sharing Charge and the notice period.
The Management Engagement Committee is responsible for reviewing
the terms of the Operator Agreement and monitoring and evaluating
the performance of the Operator and its compliance with the
Operator Agreement.
Key Activities During the Year
The Management Engagement Committee held 2 meetings on 23 May
2024 and 15 October 2024. During these meetings, the Management
Engagement Committee formally reviewed the performance of the key
service providers, including the evaluation of the Operator, the
Administrator and the Company Secretary. The Management
Engagement Committee concluded that no material issues were raised
as part of the service provider review and overall performance of the key
service providers was satisfactory and were continuing to deliver in line
with the terms of their engagements. Furthermore, the service provider
review process produced several action points for the Operator,
Administrator and Company Secretary to enhance their support to the
Board and these proposed improvements are being monitored regularly.
Directors’ Attendance at Board and
Committee Meetings
One of the key criteria the Board uses when selecting Non-Executive
Directors is their confirmation prior to their appointment that they will be
able to allocate sufficient time to the Company to discharge their
responsibilities in a timely and effective manner.
The Board formally met 11 times during the year ended 31 December 2024.
Directors are encouraged when they are unable to attend a meeting to
give the Chairman their views and comments on matters to be discussed,
in advance. In addition to their meeting commitments, the Directors also
liaise with the Operator whenever required and there is regular contact
outside the Board meeting schedule.
Board Diversity Policy
The Board acknowledges the importance of all aspects of diversity for the
effective functioning of the Board and commits to supporting diversity in
the boardroom. During the year, the Board approved a Company-specific
diversity policy which will be reviewed at least once a year. It is the
Board’s ongoing aspiration to have a diverse Board, and the Board
broadly complies with gender and ethnicity guidelines currently.
Appointments to the Board are based on merit and objective criteria and
within this context promote diversity of gender, of social and ethnic
background and of cognitive and personal strengths. The Board also
values diversity of business skills and experience because Directors with
diverse skill sets, capabilities and experience gained from different
geographical backgrounds enhance the Board by bringing a wide range
of perspectives to the Company.
The Company’s compliance with the FCA’s diversity disclosure
requirements is set out below. These targets are:
▪ At least 40% of the Board are women;
▪ At least one of the senior Board positions (Chair, Chief Executive
Officer (CEO), Senior Independent Director (SID) or Chief Financial
Officer (CFO) is a woman; and
▪ At least one member of the Board is from a minority ethnic background.
The Board is cognisant that the positions of Chairman and Senior
Independent Director are both currently occupied by men, which does
not meet the FCA's targets on board diversity set out at UK Listing Rule
6.6.6R(9)(a)(ii) relating to a senior board position being held by a woman.
However, the Board notes that such requirements were not specifically
designed with companies which may not have any executive directors in
mind, which is specifically acknowledged by the FCA in UK Listing Rule
11.4.23R. Notwithstanding this, the Company has met, or exceeded, the
targets contained in UK Listing Rule 6.6.6R(9)(a)(i) and (iii) relating to
gender and ethnic diversity. The Board has committed to setting criteria
for future appointments and, in considering succession planning, to
ensure that the targets relating to a senior board position being held by a
woman are met in future. However, given the short tenure of the Board
and in the interest of continuity, this target cannot reasonably be met at
this time.
As at the date of this report, and as explained above, the composition of
the Board is as follows (for the purposes of Listing Rule 6.6.6R(10)):
Number
of Board
members
in scope
Percentage
of the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)*
Men
3 60% 2
Women
2 40% –
Not specified/prefer not to say
– –% –
* The positions of CEO and CFO are not applicable to the Company as an
externally managed investment fund with no employees. Senior Board
positions will continue to be reviewed.
Number
of Board
members
in scope
Percentage
of the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)*
White British or other White
(including minority-White
groups)
3 60% 0
Mixed/Multiple Ethnic Groups
1 20% Chairman
Asian/Asian British
– –% –
Black/African/Caribbean /Black
British
1 20%
Senior
Independent
Director
Other ethnic group, including
Arab
– –% –
Not specified/prefer not to say
– –% –
The above information is based on voluntary self-declaration from the
Directors, who were asked to indicate which of the categories specified in
the prescribed tables were most applicable to them.
The Operator has a diverse employee base and continues to dedicate
recruiting resources to increasing diversity across all positions and
levels. The Operator recognises that diversity at senior management
level is an area for improvement, particularly female representation at
executive level.
The Board recognises the importance of an inclusive and diverse Board in
facilitating a collaborative culture and enhancing the delivery of the
Company’s strategic objectives. The Board will continue to monitor and
actively work on ensuring that it maintains and nurtures a Board that is
as diverse as possible. This baseline representation and understanding
will help inform the development of future initiatives on diversity
and inclusion.
Corporate Governance Report continued
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62 Petershill Partners plc | Annual Report 2024
Board Tenure and Re-Election
As the Company was incorporated on 24 March 2021 and all Directors
were appointed on 4 September 2021, no issues have arisen to be
considered by the Board with respect to long tenure. In accordance with
the AIC Code, in the event that any Director shall have been in office (or
on re-election would have been in office at the end of that term of office)
for more than nine years, the Directors will consider further whether
there is a risk that such a Director might reasonably be deemed to have
lost independence through such long service. In accordance with the AIC
Code, the Board recognises that Directors serving nine years or more may
appear to have their independence impaired. However, the Board may
nonetheless consider Directors to remain independent beyond nine
years’ tenure and in such circumstances would provide a clear
explanation within a future annual report and financial statements as to
its reasoning.
The Board approved the Chair Tenure Policy in November 2024. The
Company’s policy on Chair tenure is that the Chair should normally serve
no longer than nine years as a Director and Chair but, where it is in the
best interests of the Company, its Shareholders and stakeholders, the
Chair may serve for a limited time beyond that. In such circumstances,
the independence of the other Directors will ensure that the Board as a
whole remains independent. The Board's view is that the continuity and
experience of its Directors is important and that a suitable balance needs
to be struck with the need for independence and the refreshing of the
skills and expertise of the Board. The Directors believe that some limited
flexibility in its approach to Chair tenure will enable it to manage
succession planning more effectively.
The Board considers its composition and succession planning on an
ongoing basis. All Directors will stand for re-election at the Company’s
AGM on 22 May 2025. A Director who retires at an AGM may, if willing to
continue to act, be elected or re-elected at that meeting. If, at a general
meeting at which a Director retires, the Company neither re-elects that
Director nor appoints another person to the Board in the place of that
Director, the retiring Director shall, if willing to act, be deemed to have
been re-elected unless at the general meeting it is resolved not to fill the
vacancy or unless a resolution for the re-election of the Director is put to
the meeting and not passed.
See page 61 for a description of the Board appointment process.
Following a full review of the effectiveness of the Board, its Committees
and each Director, the Board considers that each Director continues to
make an effective contribution to the running of the Company and
therefore recommends that Shareholders vote in favour of the re-
election of all Directors at the forthcoming AGM.
The number of meetings of the full Board and Committees during the year ended 31 December 2024 and attendance by each Director are set out below:
Board
Meetings*
(min 4)
Remuneration
Committee
Meetings
(min 1)
Audit and Risk
Committee
Meetings
(min 4)
Nomination
Committee
Meetings
(min 1)
Management
Engagement
Committee
Meetings
(min 1)
Tenure as at
31 December
2024
Director
A B A B A B A B A B
Naguib Kheraj
11 11 1 1 7 7 2 2 2 2 40 months
Everard Barclay Simmons
11 11 1 1 7 7 2 2 2 2 40 months
Annemarie Durbin
11 11 1 1 7 7 2 2 2 2 40 months
Erica Handling
11 11 1 1 7 7 2 2 2 2 40 months
Mark Merson
11 11 1 1 7 7 2 2 2 2 40 months
Column A: indicates the number of meetings held during the year.
Column B: indicates the number of meetings attended by the Director during the year.
A quorum comprises any two members of the Board or Committee from time to time, to perform administrative and other routine functions on behalf of the Board,
subject to such limitations as the Board may expressly impose on a Committee from time to time.
Naguib Kheraj is not a member of the Audit and Risk Committee but attends as an observer.
*This was supplemented by 3 Board sub-commitee meetings.
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63 Petershill Partners plc | Annual Report 2024
Board Performance and Effectiveness
In accordance with Provision 26 of the AIC Code, the Board is required to
undertake a formal and rigorous evaluation of its performance on an
annual basis. Such an evaluation of the performance of the Board as a
whole, the Audit and Risk Committee, the Nomination Committee, the
Remuneration Committee, the Management Engagement Committee,
individual Directors and the Chairman was carried out under the mandate
of the Nomination Committee.
As a FTSE 250 company, in keeping with the provisions of the AIC Code, a
formal review of the Board’s performance is carried out by an external
consultant every three years. During the year, this formal review was
conducted by Lintstock Ltd. (“Lintstock”) and Manchester Square
Partners LLP (“MSP”), who were independent from the Board. This review
was conducted during 2024 and involved the completion of
questionnaires, Board and Committee meeting observation by Lintstock
and interviews conducted by MSP. This process commenced in May 2024
and the results were considered by the Nomination Committee in
October. This independent review concluded that while the Board and its
committees were committed and appropriately composed to promote
the success of the Company, there were a number of areas in which
performance could be improved. A number of recommendations were
made, all of which were embraced by the Board, such as (i) consideration
of succession planning and maintaining an appropriate skill and
knowledge level within the Board; (ii) continued insight of Company
activities and investment decisions; (iii) engagement with Shareholders
and Partner-firms, to gain a holistic view of performance; and (iv)
enhancement of information provided to the Board. Certain changes
were implemented as a result of this review and will be monitored during
2025. The Board believes that the current mix of skills, experience,
knowledge and age of the Directors is appropriate to the requirements of
the Company, and in consideration of future succession planning and the
development of the Board, considerations related to the Non-Executive
Director recruitment process are ongoing with external recruitment
consultants, Spencer Stuart & Associates Limited and Nurole Ltd.
An internal evaluation of the Board, its committees and the individual
Directors will be conducted during 2025 in the form of annual
performance appraisals, questionnaires and discussions to determine
effectiveness and performance in various areas, as well as the Directors’
continued independence and tenure. This process will be facilitated by
the Company Secretary and the results of this review will be reported in
the next Annual Report.
Directors regularly meet with senior management employed by the
Operator and Administrator, both formally and informally, to ensure that
the Board remains regularly updated on all issues. Members of the Board
are members of professional bodies and/or serve on other boards, which
ensures they keep abreast of the latest technical developments in their
areas of expertise.
The Board arranges for presentations from the Operator, the Company’s
brokers and other advisors and service providers on matters relevant to
the Company’s business. The Board will assess the training needs of
Directors on an annual basis as set out in the terms of reference of the
Nomination Committee.
Internal Control and Financial Reporting
The Directors acknowledge that they are responsible for establishing and
maintaining the Company’s system of internal control and reviewing its
effectiveness. Internal control systems are designed to manage rather
than eliminate the failure to achieve business objectives and can only
provide reasonable, not absolute, assurance against material
misstatements or loss. However, the Board’s objective is to ensure that
the Group has appropriate systems in place for the identification and
management of risks. The Directors carry out a robust assessment of the
Group’s principal and emerging risks, including events or circumstances
that might threaten its business model, future performance, solvency or
liquidity and reputation. As further explained in the Audit and Risk
Committee Report, the principal risks and uncertainties in relation to the
Group are outlined in a risk matrix set out on pages 41 to 43 of the
Strategic Report.
The Board continually reviews its policy setting. The risk register is
reviewed quarterly and the risk framework is reviewed at least annually
to ensure that procedures are in place with the intention of identifying,
mitigating and minimising the impact of risks should they crystallise.
The key procedures which have been established to provide internal
control are that:
▪ the Board has delegated the oversight of internal controls and
financial reporting to the Operator and relies on the Operator to
perform such functions;
▪ the Board has delegated the day-to-day operations of the Company to
the Administrator, Company Secretary and Operator; however, it
retains accountability for all functions it delegates. Each contract was
entered into after detailed consideration of the quality and cost of
services provided;
▪ the Board clearly defines the duties and responsibilities of the
Company’s advisors and service providers and appointments are
made by the Board after due and careful consideration. The Board
monitors the ongoing performance of such advisors and service
providers and will continue to do so through the Management
Engagement Committee;
▪ the Operator Agreement details defined duties and responsibilities
with lines of control and reporting. There is a formal structure in place
to review the Operator through the Management Engagement
Committee which then makes recommendations to the Board.
The Board is also given updates on developments arising from
the operations and strategic direction of the underlying
investee companies;
▪ the Administrator provides administration services to the Company
and maintains a system of internal control on which it reports to the
Board; and
▪ the Audit and Risk Committee monitors risks, including those of the
Administrator and Operator.
The Board, via the Audit and Risk Committee, has reviewed the need for
an internal audit function and has decided that the systems and
procedures employed by the Administrator and Operator, including their
own internal controls and procedures, provide sufficient assurance that
an appropriate level of risk management and internal control, which
safeguards Shareholders’ investments and the Company’s assets, is
maintained. The Board has also considered that the Operator leverages
the risk management framework of Goldman Sachs, which includes an
internal audit function responsible for independently assessing and
validating the effectiveness of key controls undertaken by the Operator.
During the year, the Operator’s internal audit function engaged directly
with the Directors providing assurance reports which were discussed at
the Company’s Audit and Risk Committee meetings held in May and
November 2024. Additional information on the risk framework of
Goldman Sachs is set out on page 40.
An internal audit function specific to the Company is therefore
considered unnecessary.
The Board is cognisant that the implementation of Provision 34 of the
AIC Code will be effective from the accounting period beginning after
1 January 2026 and work is currently being undertaken by the relevant
advisors to ensure the appropriate detail in relation to the review of the
risk management and internal control systems reported by the Operator
will be implemented by the period ended 31 December 2026.
Internal controls over financial reporting are designed to provide
reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external reporting purposes.
The Administrator and Operator both operate risk-controlled frameworks
on a continual ongoing basis within a regulated environment. The
Administrator formally reports to the Board, via the Audit and Risk
Corporate Governance Report continued
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64 Petershill Partners plc | Annual Report 2024
Committee, quarterly through a compliance report and holds
International Standard on Assurance Engagements (ISAE) 3402 Type 2
certification. This entails an independent rigorous examination and
testing of its controls and processes. The Operator formally reports to the
Board quarterly and also engages with the Board on an ad-hoc basis as
required. No weaknesses or failings within the Administrator or Operator
have been identified.
The systems of control referred to above, which have been in place to
date, are designed to ensure that the Company can effectively identify
and manage its risks as well as ensuring that it is in compliance with all
applicable laws and regulations. In establishing the systems of internal
control, regard is paid to the materiality of relevant risks, the likelihood of
costs being incurred and the costs of control. It follows therefore that the
systems of internal control can only provide reasonable, not absolute,
assurance against the risk of material misstatement or loss. The Board
has reviewed the effectiveness of the risk management and internal
control processes and is satisfied that they are in accordance with the
FRC’s internal control publication titled Guidance on Risk Management,
Internal Control and Related Financial and Business Reporting.
Operator Agreement
The Company and Goldman Sachs Asset Management Fund Services
Limited entered into an agreement originally dated 28 September 2021,
as amended on 1 January 2024, pursuant to which the Operator was
appointed as the Company’s exclusive alternative investment fund
manager and is responsible for the day-to-day operation and portfolio
management of the Group’s investment portfolio. The Operator is subject
at all times to the overall supervision of the Board in accordance with the
terms of the Operator Agreement, as well as the Company’s Acquisition
Strategy and Investment Policy (adopted by the Board in September
2021), the UK Listing Rules and applicable law. The Company undertakes
in the Operator Agreement to authorise no one other than the Operator
to deal in the Company’s assets for the duration of the Operator
Agreement, except on the advice of the Operator. A summary of the fees
paid to the Operator is given in note 6 to the financial statements. In
accordance with the UK Listing Rules, the Directors confirm that the
continued appointment of the Operator under the current terms of the
agreement is in the interests of Shareholders. The Board also reviewed
the performance of other service providers and examined the
effectiveness of the Company’s internal control systems during the year.
As set out in more detail in the Company’s last Annual Report, certain
new subsidiaries were introduced into the Group structure on 1 January
2024 to enable employees of the Operator to be direct beneficiaries of a
portion of the Profit Sharing Charge and Divestment Fee (if any) payable
by the Company to the Operator. The Operator Agreement was amended
and restated, and acceded to by Petershill Partners II Ltd and Petershill
Partners II, Inc., on 1 January 2024 in order to implement those
arrangements.
Authority of the Operator
Pursuant to the Operator Agreement, the Operator has discretion to
acquire, dispose of and manage the direct and indirect assets of the
Company subject to and in accordance with the Company’s Acquisition
Strategy and Investment Policy. All activities engaged in under the
Operator Agreement by the Operator are at all times subject to the
overall policies, supervision, review and control of the Board.
The authority granted to the Operator pursuant to the Operator
Agreement is subject to the Company’s Acquisition Strategy and
Investment Policy, pursuant to which the Operator is required to notify
the Board or to seek approval from the Board or the Shareholders before
undertaking acquisitions or disposals or incurring leverage at certain
thresholds established by the Board from time to time.
The Operator may delegate certain of its functions, powers and duties
under the Operator Agreement to any affiliate of the Operator. The
Operator has exercised this power and has delegated its portfolio
management functions to Goldman Sachs Asset Management
International Ltd. which has further delegated the provision of portfolio
management services to Goldman Sachs Asset Management
International, LP as the Investment Advisor. The Operator has also
established an Investment Committee to oversee portfolio construction
and monitoring. Currently, the members of the Investment Committee
are senior executives of Goldman Sachs Asset Management selected by
the Operator and serve without direct compensation for their services.
The Operator is liable for the acts or omissions of any person to whom
any of its functions, powers and duties may be delegated to the extent
that it would itself have been liable for such acts or omissions.
Term and Termination
The Operator Agreement has an initial term of seven years, after which it
will automatically renew on an annual basis until terminated in
accordance with its terms.
During the initial term of seven years (the Initial Term), the Operator
Agreement is terminable by the Company on three months’ written
notice if, in the opinion of the independent members of the Board acting
reasonably, the Operator is in material breach of the Operator Agreement
and such breach is incapable of remedy or has not been remedied to the
reasonable satisfaction of the Company during this three-month notice
period. Additionally, during the Initial Term, the Operator Agreement may
be terminated on immediate written notice if (a) in the opinion of the
independent members of the Board acting reasonably, the Operator has
(i) committed an act of wilful misconduct in relation to the Company
which has resulted in material harm to the Company’s business or (ii)
committed an act of fraud, or (b) the Operator has ceased to have the
necessary authorisations to provide the services it has agreed to provide
under the Operator Agreement and there is no suitable replacement, in
the sole judgement of Goldman Sachs, within the Goldman Sachs Group.
After the Initial Term, the Operator Agreement is terminable by the
Company if, in the opinion of the independent members of the Board
acting reasonably, (i) the Operator is in material breach of the Operator
Agreement and such breach is incapable of remedy or has not been
remedied to the reasonable satisfaction of the Company within three
months of providing written notice to the Operator, or (ii) the Operator
has committed an act of (a) wilful misconduct in relation to the Company
which has resulted in material harm to the Company’s business or (b)
fraud, or (iii) the Operator has failed to provide the Company with
services to the standard or with the due care and attention that would be
expected of an Operator of a comparable listed company where such
failure has not been remedied to the reasonable satisfaction of the
Company within six months of the Company giving notice to the Operator
specifying such failure. Additionally, after the Initial Term, the Operator
Agreement may also be terminated without cause with the approval of at
least three-quarters of the independent members of the Board, subject
to the payment referred to below.
The Operator may terminate the Operator Agreement at any time:
(i) by giving 12 months’ notice to the Company, if the Company is in
material breach of its obligations under the Operator Agreement,
(ii) if the Company undergoes a change of control, (iii) if the Company
undertakes a material action, or declines to act, and such action or
inaction is against the advice of the Operator and where the Operator
notified the Company in writing of its disagreement with such proposed
action or inaction or (iv) the Company materially amends its Acquisition
Strategy and Investment Policy without the prior consent of the Operator.
The Operator Agreement may also be terminated by either party at any
time if the other party is subject to a bankruptcy or other similar
insolvency event (other than in the context of a scheme for solvent
amalgamation or reconstruction).
Other than the payment required to be made in the event that the
Company terminates the Operator Agreement without cause and
described below, termination of the Operator Agreement in accordance
with its terms does not require payment of a penalty or other additional
payment from either party save that the Company shall pay any
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65 Petershill Partners plc | Annual Report 2024
outstanding portion of the Recurring Operating Charge (defined below
under Operator Charges and Alignment) to the Operator pro-rated to the
date of termination of the Operator Agreement and the Company shall
honour any authorised transactions entered into before the date of any
such termination. In the event the Company terminates the Operator
Agreement without cause after the Initial Term, the Operator will be
entitled to receive (i) payment of an amount equal to the aggregate
Recurring Operating Charge for the most recent four fiscal quarters
multiplied by three, and (ii) crystallisation of the Profit Sharing Charge
and Divestment Fee (defined below under Operator Charges and
Alignment) based on the immediately prior fiscal quarter’s holding
values.
During the year, the Board as a whole reviewed the Company’s
compliance with the UK Code, the UK Listing Rules, the Disclosure
Guidance and Transparency Rules and the AIC Code. In accordance with
UK Listing Rule 11.7.2R(2) and having formally appraised the
performance and resources of the Operator prior to the IPO, as outlined
under the roles and responsibilities of the Management Engagement
Committee on page 61, in the opinion of the Directors, the continuing
appointment of the Operator on the terms agreed is in the interests of
Shareholders as a whole.
Operator Charges and Alignment
The Operator fee structure is designed to align with performance against
the strategic objectives, taking into consideration the Company’s culture
and values. The fee structure is underpinned by the level of investments
in Partner-firms, encouraging the Operator’s focus on long-term
relationships, collaboration and the success of the Partner-firms and
aligning with Company and Shareholder interests.
As consideration for its services pursuant to the Operator Agreement, the
Company pays the Operator a Recurring Operating Charge in respect of
the management of its assets. The Recurring Operating Charge is payable
quarterly in arrears in an amount equal to 7.5% of the Group’s income
from investments in Partner-firms, as defined under IFRS, for the
relevant quarter.
The Company also pays the Operator a Profit Sharing Charge on a
quarterly basis. The Profit Sharing Charge comprises a profit sharing
charge of 20% of total income from investments in Partner-firms, as
defined under IFRS, from new investments made by them post
Admission, in the relevant quarter (net of any Recurring Operating
Charge in respect of such new investments), chargeable only after a two-
year ownership period from the date on which the investment closed,
and subject to the relevant investment achieving an investment return of
at least 6.0%. The Profit Sharing Required Investment Return is
calculated at the end of each quarter only on the total invested capital
funded to date; in other words, it excludes any potential deferred
consideration embedded in the total investment amount, if not yet paid.
The Profit Sharing Charge is only applicable if the average annual return,
comprising income from investments in Partner-firms and change in fair
value of the investment since the date of acquisition, as defined under
IFRS, exceeds the Profit Sharing Required Investment Return of 6.0%.
While the Group does not typically seek to exit its assets, in the event that
there are realisations, the Company will pay to the Operator a Divestment
Fee of 20% of the total profits from the divestment (in respect of any
investments which pre-date the Initial Acquisition, to be based upon the
contribution value of such asset pursuant to the Initial Acquisition).
The total profits from the divestment, which represent the capital return
of the investment, will be calculated as the sale price minus the
contribution value of such asset as defined at the Initial Acquisition,
excluding any income from investments in Partner-firms received over
the holding period (and on which the Company has already paid
Recurring Operating Charges and, in the case of new investments made
by them following Admission, Profit Sharing Charges).
On 1 January 2024, new subsidiaries were introduced into the Group
structure to enable employees of the Operator to be direct beneficiaries
of a portion of the Profit Sharing Charge and Divestment Fee (if any)
payable by the Company to the Operator. This was done to further
improve the alignment of the interests of the Company, the Operator and
the employees of the Operator. There is no change to the amount or
timing of any Profit Sharing Charge payable by the Company under the
original Operator Agreement. Furthermore, this arrangement is not
expected to give rise to any material tax consequences for the Company
and all initial and ongoing costs of implementing this arrangement have
been and will be borne by the Operator. Further details on the Profit
Sharing Charge and Divestment Fee are provided in Note 6 of the
consolidated financial statements.
Engagement with Other Stakeholders
The Board places great importance on communication with
Shareholders, as well as with the Operator, Administrator and other key
stakeholders. Service providers have been selected and engaged based
on due diligence and references including consideration of their internal
controls and expertise. The Management Engagement Committee
reviews the performance of each service provider annually and provides
feedback as appropriate, to maintain good working relationships.
More information on stakeholder engagement may be found on pages
32 and 33 of this report.
The Board recognises that relationships with suppliers are enhanced by
prompt payment and the Operator, in conjunction with the
Administrator, ensures all payments are processed within the contractual
terms agreed with the individual suppliers.
Consumer Duty
On 31 July 2023 the FCA introduced a new Principle for Businesses
(Principle 12) applicable to authorised firms in the UK which carry on
“retail market business” and who can determine, or materially influence
retail customer outcomes. This new Principle 12 was accompanied by a
package of rules and guidance, which are collectively known as the
Consumer Duty.
The Company is not subject to the Consumer Duty as it is not an FCA
authorised firm. However, the Company is aware that its shares may be
held by or on behalf of retail customers, and that other firms within the
distribution chain of its shares are within scope of the Consumer Duty
requirements. Accordingly, it is the Board’s intention that the Company
will respond to information and other requests from UK authorised firms
in the distribution chain of the Company’s shares.
Whistleblowing
As the Company has no employees, it does not have a formal
whistleblowing policy concerning the raising, in confidence, of any
concerns about possible improprieties for appropriate independent
investigation. The Board relies on the Operator and Administrator’s
whistleblowing policies and It has concluded that adequate
arrangements are in place for the proportionate and independent
investigation of such matters and, where necessary, for appropriate
follow-up action to be taken within their organisations. However, any
matters concerning the Company may be raised with the Chairman or
Senior Independent Director.
By order of the Board
Naguib Kheraj
Chairman
8 April 2025
Corporate Governance Report continued
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66 Petershill Partners plc | Annual Report 2024
Audit and Risk Committee
Report
The Audit and Risk Committee, chaired by Mark Merson, operates within
clearly defined terms of reference which are available on the Company’s
website and include all matters indicated by Disclosure Guidance and
Transparency Rule 7.1, the AIC Code and the UK Code. Its other members
are Everard Barclay Simmons, Annemarie Durbin and Erica Handling.
Advisors and department heads from the Operator are invited to attend
meetings from time to time and, in line with corporate governance best
practice, the Chairman of the Board is not a member of the Committee
but attends in an advisory capacity. The Chair of the Audit and Risk
Committee also acts as the Company’s Senior Accounting Officer from a
tax perspective.
Members of the Audit and Risk Committee must be, and are, independent
of the Company’s independent auditors and Operator. The Audit and Risk
Committee meet no less than four times in a year at appropriate points in
the reporting and auditing cycle and at such other times as the Audit and
Risk Committee Chair shall require. The independent auditors attend the
Audit and Risk Committee meetings and meets at least once a year with
the Audit and Risk Committee without the presence of the Operator or
the Administrator. The Chair of the Audit and Risk Committee also
regularly and routinely meets the Senior Statutory Auditor to discuss the
progress of the audit and related activities.
The Committee members have considerable financial and business
experience, and the Board has determined that the membership as a
whole has sufficient recent and relevant sector and financial experience
to discharge its responsibilities and that at least one member has
competence in accounting or auditing. The biographies of each member
of the Committee, detailing their relevant qualifications and experience,
are on pages 48 and 49.
Responsibilities
The main duties of the Audit and Risk Committee are:
▪ to monitor the integrity of the Group and Company’s financial
statements and regulatory announcements relating to its financial
performance, and to review significant financial reporting judgements;
▪ to report to the Board on the appropriateness of the Company’s
accounting policies and practices;
▪ to consider the ongoing assessment of the Group as a going concern
and the assessment of longer-term viability;
▪ to be responsible for discharging governance responsibilities in
respect of audit, risk and internal control, and to assist the Board in
fulfilling its responsibilities regarding all matters related to external
and internal financial reporting;
▪ to review the valuations of the Company’s investments prepared by
the Operator, and provide a recommendation to the Board on the
valuation of the Company’s investments;
▪ to oversee and assess the Company’s relations with the independent
auditors, including agreeing their remuneration and terms of
engagement, reviewing reporting, monitoring independence,
objectivity and effectiveness, ensuring that any non-audit services are
appropriately considered, and making recommendations to the Board
on the independent auditors’ appointment, reappointment or removal,
for the Board to put to the Shareholders in general meeting;
▪ to communicate regularly and openly with the independent auditors
to ensure that the independent auditors have full access to relevant
individuals and records and to seek to ensure co-ordination with the
independent auditors;
▪ to discuss and agree with the independent auditors the nature and
scope of the audit;
▪ to work to create a work culture which recognises the work of, and
encourages challenge by the independent auditors, giving due
consideration to points raised and making changes to financial
statements in response, where appropriate;
▪ to monitor and consider annually whether there is a need for the
Company to have its own internal audit function;
▪ to keep under review the effectiveness of the Group’s risk
management and internal control frameworks, including the internal
financial control systems of the Operator and the Administrator;
▪ to review and consider applicable requirements of the UK Code, the
AIC Code, the AIC Guidance on Audit;
▪ to follow the Audit Committees and the External Audit: Minimum
Standard published by the FRC; and
▪ to report to the Board on how it has discharged its responsibilities.
The Audit and Risk Committee is aware that certain sections of the
Annual Report are not subject to formal statutory audit, including the
Chairman’s Statement, the Operator’s Report and certain sections of the
Directors’ Remuneration Report. Financial information in these sections
is reviewed by the Audit and Risk Committee as part of its review of the
overall Annual Report.
The Company continues to comply with the Statutory Audit Services for
Large Companies Market Investigation (Mandatory Use of Competitive
Tender Processes and Audit Committee Responsibilities) Order 2014 for
the financial year under review.
The Audit and Risk Committee reports its findings to the Board,
identifying any matters on which it considers that action or improvement
is needed, and making recommendations on the steps to be taken.
Financial Reporting
The primary role of the Audit and Risk Committee in relation to financial
reporting is to review with the Administrator, the Operator and the
independent auditors the appropriateness of the Annual Report and
Financial Statements and interim results and to report to the Board,
concentrating on, among other matters:
▪ the quality and acceptability of accounting policies and practices;
▪ the clarity of the disclosures and compliance with financial reporting
standards and relevant financial and governance reporting requirements;
▪ material areas in which significant judgements have been applied or
where there has been discussion with the independent auditors,
including the going concern and viability statement;
▪ whether the Annual Report and Financial Statements, taken as a
whole, are fair, balanced and understandable and provide the
information necessary for Shareholders to assess the Company’s
position and performance, business model and strategy;
▪ the consideration of disclosure and governance matters relating to
financial reporting by the Chair of the Audit and Risk Committee in the
first instance in consultation with the Operator, and the engagement
of the wider Board if necessary; and
▪ any correspondence from regulators in relation to financial reporting.
Audit and Risk Committee Report
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67 Petershill Partners plc | Annual Report 2024
To aid its review, the Audit and Risk Committee considers reports from
the Administrator and the Operator and also reports from the
independent auditors on the outcomes of the half-year review and
annual audit.
Meetings
During the year, the Audit and Risk Committee met seven times, and
there was ongoing liaison and discussion between the Senior Statutory
Auditor and the Audit and Risk Committee Chair with regard to the audit
approach and the identified risks. The matters discussed at those
meetings included:
▪ review of the accounting policies, content and format of the
financial statements;
▪ review of all proposed communications to Shareholders by the
Company, for approval by the Board;
▪ review and approval of the budget and other financial projections
and estimates;
▪ review and approval of the Company’s tax strategy;
▪ consideration of the independent auditors’ audit report on the 2023
financial statements and review of the 2024 Interim Report;
▪ review and approval of the independent auditors’ audit plan for 2024;
▪ review of the internal audit plan of the Operators’ internal audit
function in respect of Petershill Partners;
▪ review of the results of the work of the Operator’s internal audit
function as it pertains to the Company;
▪ consideration of the independent auditors’ fee for the external audit
and half-year review;
▪ monitoring the provision of non-audit services by the independent
auditors;
▪ governance and compliance responsibilities of the Company, including
consideration of the application of Provision 34 of the AIC Code which
will apply to accounting periods beginning on or after 1 January 2026;
▪ assessment of the independence of the independent auditors;
▪ adherence of the Company’s processes to the requirements set out in
the FRC’s Minimum Audit Standard through the completion of the
Company’s checklist, including the assessment of the effectiveness of
the external audit process;
▪ the requirement for climate-related financial disclosures; and
▪ review of the Group’s key risks and internal controls, including reports
from the Operator’s control functions and internal audit function;
▪ review of the terms of reference of the Audit and Risk Committee, for
approval by the Board.
After the year ended 31 December 2024, the Audit and Risk Committee
met on 16 January 2025 and 28 March 2025 to consider the significant
areas of judgement, estimates and assumptions in the draft financial
statements; to review the results of the external audit; and to consider and
approve the preliminary results announcement and the Annual Report.
Significant Areas of Judgement Considered by
the Audit and Risk Committee
The significant areas of judgement, as well as estimates and
assumptions, considered by the Audit and Risk Committee are outlined in
note 3 to the Consolidated Financial Statements.
The revenue recognition, valuations and tax receivable agreement were
discussed with the Operator and with the independent auditors at the
Audit and Risk Committee meetings held on 18 November 2024, 16
January 2025 and 28 March 2025. The value of investments and other
financial assets and liabilities of the Company is determined periodically
by the Operator, with the assistance of Goldman Sachs & Co. acting as
Valuer, and is subject to review by the Valuation Committee of the
Operator.
The independent auditors have explained the results of their audit work
on valuations in the independent auditors’ Report on pages 73 to 75.
There were no adjustments proposed and uncorrected that were material
in the context of the Annual Report and Financial Statements as a whole.
Risk Management
On behalf of the Board, the Audit and Risk Committee has carried out a
robust assessment of the principal and emerging risks facing the Group,
including those threatening its business model, future earnings
potential, and operational resilience. It has also reviewed the Group’s risk
assessment process, the way in which significant business risks are
managed and the overall effectiveness of the Group’s risk management
processes. The Audit and Risk Committee received reports from the
Operator on the Group’s risk evaluation process and reviewed changes to
significant risks identified. The work of the Audit and Risk Committee was
driven primarily by the Board’s assessment of its principal risks and
uncertainties as set out on pages 40 to 43 of the Strategic Report.
Internal Audit
Currently, the Audit and Risk Committee does not consider there to be a
need for the Company to maintain its own internal audit function. There
are no employees in the Company and all outsourced functions are with
service providers who have their own internal controls and procedures.
The Operator is subject to internal audit by the Goldman Sachs internal
audit function. The Audit and Risk Committee reviewed reports from the
Goldman Sachs internal audit function on the work of the Operator,
including in relation to the operation of the outsourced functions. The
Audit and Risk Committee reviewed and approved the internal audit plan
and received assurance reports and updates from the Goldman Sachs
internal audit function. During the year, the Audit and Risk Committee
was apprised of the methods and systems in place at the Operator and
how they apply to the Company. The Audit and Risk Committee was
satisfied that the systems in place were robust and that the team was
qualified to perform adequate monitoring and oversight activities. The
Operator’s internal audit function is aware of the Audit and Risk
Committee’s responsibilities and will bring all matters requiring its
consideration to its attention. There is also ongoing liaison through the
year between the Operator’s internal audit team and the Chair of the
Audit and Risk Committee.
The Committee recognises that the implementation of Provision 34 of
the AIC Code will be effective from the accounting period beginning after
1 January 2026 and work is currently being undertaken by the relevant
advisors to ensure the appropriate detail in relation to the review of the
risk management and internal control systems reported by the Operator
will be included within the Annual Report for the period ended 31
December 2026.
Independent Audit
PricewaterhouseCoopers LLP has been the Company’s independent
auditors since 4 August 2021. There are no contractual obligations
restricting the choice of independent auditors, and the Company will put
the audit services contract out to tender at least every ten years. Under
the Companies Act 2006, the reappointment of the independent auditors
is subject to Shareholder approval at the AGM. The Senior Statutory
Auditor responsible for the audit will be rotated at least every five years
in accordance with professional and regulatory standards in order to
protect independence and objectivity and to provide fresh challenge to
the Company. Richard McGuire, the current Senior Statutory Auditor, has
held this role for four years and intends to continue as Senior Statutory
Auditor until the conclusion of the 2025 audit. The Audit and Risk
Committee will continue to monitor the performance of the independent
auditors on an annual basis and will consider independence and
objectivity, taking account of appropriate guidelines. In addition, the
Committee Chair will continue to maintain regular contact with the
Senior Statutory Auditor outside of the formal Committee meeting
schedule, not only to discuss formal agenda items for upcoming
meetings, but also to review any other significant matters. The Audit and
Risk Committee reviews the scope and results of the audit, its cost-
effectiveness and the independence and objectivity of the independent
auditors, with particular regard to the level of any non-audit fees.
Audit and Risk Committee Report continued
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68 Petershill Partners plc | Annual Report 2024
Notwithstanding such services, the Audit and Risk Committee considers
PricewaterhouseCoopers LLP to be independent of the Company and
that the provision of such non-audit services is not a threat to the
objectivity and independence of the conduct of the audit.
To further safeguard the objectivity and independence of the
independent auditors from becoming compromised, the Audit and Risk
Committee is aware of the cap on fees that may be charged by a
company’s independent auditors for non-audit services at 70% of the
average statutory audit fees for the previous three years. This cap is
applicable to the Group for the year ending 31 December 2024 onwards.
PricewaterhouseCoopers LLP is precluded from providing, and does not
provide, certain services such as valuation work or accounting services.
There is also a presumption that PricewaterhouseCoopers LLP should
only be engaged for non-audit services where it is best placed to provide
those services; for example engagement as Reporting Accountant prior
to the Company’s listing and a review of the Interim Report. Note 7 to the
consolidated financial statements details services provided by
PricewaterhouseCoopers LLP during the year. Fees payable for audit
services for the year, including prior year overruns and excluding VAT,
were: £1,085k (2023: £905k). Fees payable for non-audit services for the
year excluding VAT were: £110k (2023: £105k excluding VAT).
The Audit and Risk Committee approved these fees after a review of the
level and nature of work to be performed, and was satisfied that they are
appropriate for the scope of the work required. The Audit and Risk
Committee sought to ensure that any non-audit services provided by the
independent auditors did not conflict with the auditors’ statutory and
regulatory responsibilities, as well as their independence, before giving
written approval prior to their engagement. The Audit and Risk
Committee was satisfied that provision of these non-audit services did
not provide threats to the auditors’ independence.
To fulfil their responsibility regarding the independence of the
independent auditors, the Audit and Risk Committee considered:
▪ discussions with or reports from the independent auditors describing
its arrangements to identify, report and manage any conflicts of
interest; and
▪ the extent of non-audit services provided by the independent auditors.
To assess the effectiveness of the independent auditors, the Committee
considered the nature and quality of the engagement with the Senior
Statutory Auditor through the year and reviews:
▪ the independent auditors’ fulfilment of the agreed audit plan, through
review of the audit plan, including the audit approach to significant
risks and monitoring any changes in response to new issues identified
and any variations from the audit plan;
▪ discussions or reports highlighting the major issues that arose during
the course of the audit; and
▪ feedback from other service providers evaluating the performance of
the audit team.
The Audit and Risk Committee is satisfied with PricewaterhouseCoopers
LLP’s effectiveness and independence as independent auditors, having
considered the degree of diligence and professional scepticism
demonstrated. Having carried out the review described above and having
satisfied itself that the independent auditors remain independent and
effective, the Audit and Risk Committee has recommended to the Board
that PricewaterhouseCoopers LLP be reappointed as independent
auditors for the year ending 31 December 2025. Accordingly, a resolution
proposing the reappointment of PricewaterhouseCoopers LLP as the
Group’s independent auditors will be put to Shareholders at the AGM.
On behalf of the Audit and Risk Committee
Mark Merson
Audit and Risk Committee Chair
8 April 2025
Governance Report
69 Petershill Partners plc | Annual Report 2024
Financial Statements
Financial Statements
71 Independent Auditors’ Report
81 Consolidated Financial Statements
85 Notes to the Consolidated Financial Statements
120 Company Financial Statements
123 Notes to the Company Financial Statements
Additional Information
130 Alternative Performance Measures
134 Glossary of Capitalised Defined Terms
136 The Petershill Partners Group’s Assets
138 Glossary of Key Operating Metrics
141 Company Information
142 Cautionary Statement
Financial Statements
70 Petershill Partners plc | Annual Report 2024
Report on the audit of the financial statements
Opinion
In our opinion, Petershill Partners plc’s Group financial statements and Company financial statements (the “financial statements”):
▪ give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 December 2024 and of the Group’s profit and the Group’s and
Company’s cash flows for the year then ended;
▪ have been properly prepared in accordance with UK-adopted international accounting standards as applied in accordance with the provisions of the
Companies Act 2006; and
▪ have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated and Company Statement of Financial
Position as at 31 December 2024; the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statement of Changes in Equity,
and the Consolidated and Company Statement of Cash Flows for the year then ended; and the Notes to the financial statements, comprising material
accounting policy information and other explanatory information.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK)
are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in Note 7 to the Consolidated Financial Statements, we have provided no non-audit services to the Company or its controlled
undertakings in the period under audit.
Independent auditors’ report to the members of Petershill Partners plc
Financial Statements
71 Petershill Partners plc | Annual Report 2024
Our audit approach
Context
In planning for our audit of Petershill Partners plc and its subsidiaries (the “Group”), we met with the Audit and Risk Committee, the Board of Directors
and the Operator to discuss and confirm our understanding of significant business activities during the year, and to understand their perspectives on
associated business risks. We used this insight when forming our own views regarding the business, as part of developing our audit plan and when
scoping and performing our audit procedures. The Group was formed with the objective of investing in Partner-firms to achieve capital growth and to
generate income. Given the complexity and judgements required in determining the value of the investments we considered this a significant risk to both
the Group and the Company. Income from investments in Partner-firms derived from management fee income, performance fee income and investment
income is based on contractual terms in place with the Partner-firms and is the majority of the Group’s income, and therefore considered a key audit
matter. We have considered the valuation of the liability for the Tax Receivables Agreement, which arose on the initial acquisition of the stakes in the
Partner-firms on 28 September 2021 to remain a significant risk to the Group, due to the complexity of the underlying tax laws and the magnitude of the
balance.
Overview
Audit scope
▪ We audited the consolidated financial information of the Group as a whole. As part of designing our audit, we determined materiality and assessed the
risks of material misstatement in the financial statements. In particular, we looked at where the Directors made significant judgements and estimates.
As in all of our audits we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias
by the Directors that represented a risk of material misstatement due to fraud.
Key audit matters
▪ Valuation of unlisted investments at fair value through profit and loss (Group)
▪ Valuation of the liability for the Tax Receivables Agreement (Group)
▪ Valuation of investments in subsidiary undertakings (Company)
▪ Income from Investments in Partner-firms (Group)
Materiality
▪ Overall Group materiality: $51.0m (2023: $48.3m) based on 1% of net assets.
▪ Overall Company materiality: $48.5m (2023: $46.0m) based on 1% of net assets, capped at 95% of Group materiality.
▪ Performance materiality: $38.3m (2023: £36.3m) (Group) and $36.3m (2023: $34.4m) (Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
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Financial Statements
72 Petershill Partners plc | Annual Report 2024
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements of the
current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, including
those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement
team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Valuation of unlisted investments at fair value
through profit and loss (Group)
Refer to the Audit and Risk Committee Report,
Notes to the Consolidated Financial Statements –
Note 2, 3 and 4.
The investments at fair value through profit or loss
for the Group were $5,812.0m as at 31 December
2024. The investments in Partner-firms held by the
Group are not quoted or traded in an active market
and as such their fair values are determined using
valuation techniques, such as the market approach
or income approach. A third-party valuation advisor
(“Valuer”) is engaged to assist the Operator in the
preparation of the fair valuation of a selection of
investments.
In valuing the investments, key assumptions
include estimates around future fundraise timing
and sizes, expected management and performance
fee rates, margins of the Partner-firms, expected
current and future fund returns and timing of
realisations. The inputs in the market approach
include observable data, such as market multiples
of comparable companies to the relevant Partner-
firms, and unobservable data, such as forecast
earnings for the Partner-firms. In discounted cash
flow models, unobservable inputs are the projected
cash flows of the relevant Partner-firms and the
discount rates applied. The valuation of the Group
investments at fair value through profit and loss
was identified as a key audit matter given the
valuation is inherently subjective due to, among
other factors, the individual nature of each
investment and the expected future cash flows and
the significance of the estimates and judgements
involved.
We understood and evaluated the valuation methodologies applied, by reference to
industry practice and applicable accounting standards, and tested the techniques used
by management in determining the fair value of the investments.
We performed the following over the fair value of investments as at 31 December 2024:
▪ Discussed and challenged the Operator and Valuer’s approach to valuations and
significant estimates;
▪ Undertook further investigations by holding further discussions with the Operator
and Valuer and obtained evidence to support explanations received where
assumptions were outside the expected range or showed unexpected movements
based on our knowledge;
▪ Observed that alternative assumptions had been considered and evaluated by the
Operator and the Valuer before determining the final valuation.
▪ Challenged management about the rationale of any non-observable inputs or
significant estimates used in valuations and obtained corroborative evidence such as
past performance of the Partner-firms or data provided by the Partner-firm. We
concluded that the assumptions used in the valuations were supportable in light of
available and comparable market evidence;
▪ Obtained confirmations directly from the Partner-firms to corroborate ownership
and other interests held;
▪ Performed recalculations of valuation workings to ensure mathematical accuracy;
▪ Agreed data inputs in the valuation model, such as fee rates and assets under
management, to supporting documentation on a sample basis; and
▪ Agreed the amounts per the valuation reports to the accounting records and the
financial statements.
In addition, given the inherent subjectivity involved in the valuation of the investments,
and therefore the need for specialised market knowledge when determining the most
appropriate assumptions and the technicalities of the valuation methodology, we
engaged our internal valuation experts to assist us in our audit of this area. The experts
performed the following procedures for a sample of investments:
▪ Reviewed the appropriateness of valuation methodology;
▪ Reviewed key valuation inputs and estimates used, such as comparable company
multiples and discount rates at 31 December 2024; and
▪ Reported their findings and conclusions to the Group audit team for overall
consideration and conclusions.
We considered the appropriateness and adequacy of the disclosures around the
estimation uncertainty and sensitivities on the accounting estimates.
Our testing did not identify any evidence of material misstatement.
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Financial Statements
73 Petershill Partners plc | Annual Report 2024
Key audit matter How our audit addressed the key audit matter
Valuation of the liability for the Tax Receivables
Agreement (Group)
Refer to the Audit and Risk Committee Report,
Notes to the Consolidated Financial Statements –
Note 2 and 3.
The Group recorded a Liability for the Tax
Receivables Agreement (“TRA”) of $159.0m as at
31 December 2024. The Operator, with the support
of an external tax specialist, has estimated the
step-up tax basis of the acquired assets based on
tax information provided by the Partner-firms,
projected the amortisation of the step-up tax basis,
applied an effective interest rate of 18% and
utilised the current effective tax rate of Petershill
Partners Inc in calculating the future tax benefits
and resulting payments under the TRA. The
valuation of the Liability for the Tax Receivables
Agreement is identified as a key audit matter due
to the complexity of the underlying tax laws and
the magnitude of the balance.
We understood and evaluated the calculation and methodologies applied, by reference
to industry practice and relevant tax laws, and tested the techniques used by
management in determining the liability for the TRA.
We obtained management’s computations and workings relating to the amounts
recognised for the liability of the TRA as at 31 December 2024.We performed the
following procedures:
▪ Checked the mathematical accuracy of management’s calculation;
▪ On a sample basis agreed the inputs used in the computations to supporting
documentation;
▪ Challenged management about the rationale of assumptions used in the calculation
and obtained corroborative evidence;
▪ Confirmed management had appropriately reflected US federal and state tax rates in
the calculations; and
▪ Agreed the disclosures made in the financial statements back to supporting
documentation.
Given the complexity of tax laws, and therefore the need for specialised market
knowledge when determining the most appropriate assumptions and the technicalities,
we engaged our internal tax experts to assist us in our audit of this area.
Our testing did not identify any evidence of material misstatement.
Valuation of investment in subsidiary undertakings
(Company)
Refer to the Notes to the Company Financial
Statements– Note 1, 2, 3 and 6.
The investments in subsidiary undertakings relate
to the direct ownerships in Petershill Partners Inc.,
Petershill Partners II, Inc., Petershill Partners Ltd
and Petershill Partners II Ltd. These entities hold,
either directly or indirectly, interests in stakes in
the Partner-firms. The investments in subsidiary
undertakings are held at fair value which is their
net asset value. The valuation of the investments in
subsidiary undertakings was identified as a key
audit matter given the components of the
underlying valuation such as investments in
Partner-firms are inherently subjective as noted in
the key audit matter above.
We obtained management’s calculations of the fair value of the investments in subsidiary
undertakings. We performed the following procedures:
▪ Agreed inputs to supporting documentation and other audit work performed over
areas such as the valuation of investments at fair value through profit and loss as
noted in the key audit matter above;
▪ Tested the mathematical accuracy of the calculation; and
▪ Agreed ownership to supporting documentation.
Our testing did not identify any evidence of material misstatement.
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Financial Statements
74 Petershill Partners plc | Annual Report 2024
Key audit matter How our audit addressed the key audit matter
Income from Investments in Partner-firms (Group)
Refer to the Audit and Risk Committee Report,
Notes to the Consolidated Financial Statements –
Note 2x.
The income from investments in Partner-firms for
the Group was $322.8m and is based on
contractual terms in place with the Partner-firms,
and is the majority of the Group’s income.
We confirmed our understanding of and evaluated the accounting policies relating to
recognition and measurement of the income from investments in Partner-firms, as well
as confirmed our understanding of the nature of each principal income stream on a
disaggregated basis.
We understood and evaluated the design of the relevant controls over income
recognition. We performed the following procedures over income from investments in
Partner-firms:
▪ Reviewed the contracts of the Group with each Partner-firm to ensure that income
receivable from the Partner-firms is recognised in line with the contractual terms;
▪ Tested a sample of journals to supporting documentation, focusing on unusual
account combinations;
▪ Agreed the income from the Partner-firms booked by the Group for the reporting
year, to confirmations received directly from the Partner-firms;
▪ Agreed the settlement of income received during the reporting year to the
distribution notices and bank statements. Confirmed the year-end balance of income
receivable to confirmations received directly from the Partner-firms;
▪ Tested post year-end settlements of the income receivable to the bank
statements; and
▪ Challenged the Operator on the appropriateness of the assumptions used in the
computation of the expected credit losses on the amounts receivable from the
Partner-firms.
Our testing did not identify any evidence of material misstatement.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking
into account the structure of the Group and the Company, the accounting processes and controls, and the industry in which they operate.
We audited the consolidated financial information of the Group as a whole. As part of designing our audit, we determined materiality and assessed the
risks of material misstatement in the Group and Company financial statements. In particular, we looked at where the Directors made significant
judgements and estimates. As in all of our audits we also addressed the risk of management override of internal controls, including evaluating whether
there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the Group’s and Company’s
financial statements, and we remained alert when performing our audit procedures for any indicators of the impact of climate risk. In particular, we
understood management’s consideration of the impact of climate change in the valuation of investments in so far as they are able. We also considered
the consistency of the climate change disclosures included in the Strategic Report with the financial statements and our knowledge from our audit. Our
procedures did not identify any material impact as a result of climate risk on the Group’s and Company’s financial statements.
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75 Petershill Partners plc | Annual Report 2024
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial
statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements - Group Financial statements - Company
Overall
materiality
$51.0m (2023: $48.3m).
$48.5m (2023: $46.0m).
How we
determined it
1% of Net assets
1% of Net assets, capped at 95% of Group materiality
Rationale for
benchmark
applied
Given the objective of the Group is to hold stakes in
Partner-firms, which will then generate returns, the
primary focus of the financial statements is the fair
value of investments at fair value through profit or
loss. Therefore we consider that the net assets of
the Group is the appropriate benchmark for
calculating overall materiality.
Consistent with the Group’s objective to hold stakes in Partner-firms,
which will then generate returns, the primary focus for the financial
statements is the valuation of the investments in subsidiary
undertakings. Therefore we consider that the net assets of the
Company is the appropriate benchmark for calculating overall
materiality. This was restricted to 95% of the Group’s total materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements
exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of
account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2023: 75%)
of overall materiality, amounting to $38.3m (2023: £36.3m) for the Group financial statements and $36.3m (2023: $34.4m) for the Company
financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation risk and
the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.
In addition to overall Group materiality, a specific materiality was also applied to the Consolidated Statement of Comprehensive Income line items that
impact Adjusted EBIT, namely Income from investments in Partner-firms; Interest Income; Board of Directors’ fees and expenses; Operator charge; Other
operating expenses; Profit sharing charge; Finance income and Finance cost. We set a specific materiality level of $11.5m (2023: $11.4m). In arriving at
this judgement, we considered the fact that Adjusted EBIT is a secondary financial indicator of the Group.
We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above $2.55m (Group audit)
(2023: $2.42m) and $2.42m (Company audit) (2023: $2.30m) as well as misstatements below those amounts that, in our view, warranted reporting for
qualitative reasons.
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76 Petershill Partners plc | Annual Report 2024
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group's and the Company’s ability to continue to adopt the going concern basis of accounting included:
▪ Obtained the Directors’ going concern assessment and corroborated key assumptions to underlying documentation and ensured this was consistent
with our audit work in these areas;
▪ Assessed the appropriateness of the key assumptions used both in the base case and in the severe but plausible downside scenario, including assessing
whether we considered the downside sensitivities to be appropriately severe;
▪ Tested the integrity of the underlying formulae and calculations within the going concern and cash flow models;
▪ Considered the appropriateness of the mitigating actions available to management in the event of the downside scenario materialising. Specifically, we
focused on whether these actions are within the Group’s control and are achievable; and
▪ Reviewed the disclosures provided relating to the going concern basis of preparation and found that these provided an explanation of the Directors’
assessment that was consistent with the evidence we obtained.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively,
may cast significant doubt on the Group's and the Company’s ability to continue as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial
statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group's and the Company's ability to
continue as a going concern.
In relation to the Directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention to
in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt the going concern basis
of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The
Directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do
not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether
there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report
based on these responsibilities.
With respect to the Strategic Report and Report of the Directors, we also considered whether the disclosures required by the UK Companies Act 2006
have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.
Strategic Report and Report of the Directors
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and Report of the Directors for the
year ended 31 December 2024 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the audit, we did not identify any
material misstatements in the Strategic Report and Report of the Directors.
Directors’ Remuneration
In our opinion, the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.
Independent auditors’ report to the members of Petershill Partners plc continued
Financial Statements
77 Petershill Partners plc | Annual Report 2024
Corporate governance statement
The Listing Rules require us to review the Directors’ statements in relation to going concern, longer-term viability and that part of the corporate
governance statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code specified for our review. Our
additional responsibilities with respect to the corporate governance statement as other information are described in the Reporting on other information
section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance statement,
included within the Governance Report and Strategic Report are materially consistent with the financial statements and our knowledge obtained during
the audit, and we have nothing material to add or draw attention to in relation to:
▪ The Directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
▪ The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an explanation of
how these are being managed or mitigated;
▪ The Directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in
preparing them, and their identification of any material uncertainties to the Group’s and Company’s ability to continue to do so over a period of at least
twelve months from the date of approval of the financial statements;
▪ The Directors’ explanation as to their assessment of the Group's and Company’s prospects, the period this assessment covers and why the period is
appropriate; and
▪ The Directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in operation and meet its
liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary qualifications or
assumptions.
Our review of the Directors’ statement regarding the longer-term viability of the Group and Company was substantially less in scope than an audit and
only consisted of making inquiries and considering the Directors’ process supporting their statement; checking that the statement is in alignment with
the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent with the financial statements and our
knowledge and understanding of the Group and Company and their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance
statement is materially consistent with the financial statements and our knowledge obtained during the audit:
▪ The Directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the information
necessary for the members to assess the Group’s and Company's position, performance, business model and strategy;
▪ The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
▪ The section of the Annual Report describing the work of the Audit and Risk Committee.
We have nothing to report in respect of our responsibility to report when the Directors’ statement relating to the Company’s compliance with the Code
does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by the auditors.
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78 Petershill Partners plc | Annual Report 2024
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Directors' Responsibilities Statement, the Directors are responsible for the preparation of the financial statements in
accordance with the applicable framework and for being satisfied that they give a true and fair view. The Directors are also responsible for such internal
control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate
the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due
to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations related to UK
regulatory principles, such as those governed by the Financial Conduct Authority’s Listing Rules, and we considered the extent to which non-compliance
might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial
statements such as the Companies Act 2006, as well as US State and Federal Tax rules. We evaluated management’s incentives and opportunities for
fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to
posting inappropriate journal entries, management bias in accounting estimates such as the valuation of unlisted investments and the valuation of the
liability for the Tax Receivables Agreement. Audit procedures performed by the engagement team included:
▪ Discussions with the Audit and Risk Committee, the Directors, the Administrator and the Operator, including consideration of known or suspected
instances of non-compliance with laws and regulations and fraud, and review of the reports made by management;
▪ Reviewing Board minutes as well as the relevant meeting minutes, including those of the Audit and Risk Committee;
▪ Performing audit procedures over the tax computations;
▪ Designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing;
▪ Challenging assumptions and judgements made by management in their significant areas of estimation identified in our key audit matters in respect
of the valuation of unlisted investments and the valuation of the liability for the Tax Receivables Agreement; and
▪ Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and
regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example,
forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it
typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items
for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population
from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of Part 16 of the
Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Independent auditors’ report to the members of Petershill Partners plc continued
Financial Statements
79 Petershill Partners plc | Annual Report 2024
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
▪ we have not obtained all the information and explanations we require for our audit; or
▪ adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited
by us; or
▪ certain disclosures of Directors’ remuneration specified by law are not made; or
▪ the Company financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records
and returns.
We have no exceptions to report arising from this responsibility.
Appointment
We were appointed by the Directors on 4 August 2021 to audit the financial statements for the year ended 31 December 2021 and subsequent financial
periods. The period of total uninterrupted engagement is 4 years, covering the years ended 31 December 2021 to 31 December 2024.
Other matter
The Company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to include these financial statements in an
annual financial report prepared under the structured digital format required by DTR 4.1.15R - 4.1.18R and filed on the National Storage Mechanism of
the Financial Conduct Authority. This auditors’ report provides no assurance over whether the structured digital format annual financial report has been
prepared in accordance with those requirements.
Richard McGuire (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
8 April 2025
Independent auditors’ report to the members of Petershill Partners plc continued
Financial Statements
80 Petershill Partners plc | Annual Report 2024

|  | For the year ended | For the year ended
|  | 31 December 2024 | 31 December 2023
| Note | $m | $m
Income |  |  |
Income from investments in Partner-firms derived from: | 2(x) |  |
Management fee income |  | 224.7 | 203.0
Performance fee income |  | 72.9 | 54.7
Investment income |  | 25.2 | 34.4
Total income from investments in Partner-firms |  | 322 .8 | 292 .1
Interest income from investments in money market funds | 2(x) | 7. 7 | 24 . 7
Interest income from other assets | 2(x) | 1. 8 | 2 . 6
Total interest income |  | 9. 5 | 2 7 . 3
Total income |  | 332 .3 | 319 .4
Movement in financial assets and liabilities held at fair value |  |  |
Change in investments at fair value through profit or loss | 2(vi), 4 | 866.7 | 227.0
Change in contingent consideration at fair value through profit or loss | 2(vi), 4 | 6.9 | (6 .4)
Total movement in financial assets and liabilities held at fair value |  | 873 .6 | 220 .6
Expenses | 2(xi) |  |
Board of Directors' fees and expenses |  | (1.7) | (1.7)
Operator charge | 6, 20 | (24 .2) | (21.9)
Profit sharing charge | 6, 20 | (1.5) | (0 . 1)
Divestment fee expense | 6, 20 | (152. 5) | (5 0 .5)
Other operating expenses |  | (18.4) | (1 0 . 1)
Total expenses |  | (198. 3) | (84.3)
Operating profit for the year |  | 1,0 07.6 | 455.7
Finance income/(expense) |  |  |
Finance income | 4 | 2.4 | –
Finance cost | 10 | (3 6 . 7) | (3 7. 1)
Change in liability for Tax Receivables Agreement | 2(v), 3 | (7.8) | (21 .5)
Total finance income/(expense) |  | (42.1) | (58 .6)
Profit for the year before tax |  | 965 .5 | 397 .1
Tax expense | 8 | (133 .1) | (7 6. 0)
Profit for the year after tax |  | 832 .4 | 321 .1
Profit and total comprehensive income for the year |  | 832 .4 | 321 .1
Profit and total comprehensive income attributable to: |  |  |
Equity holders of the Company |  | 832 .4 | 321 .1
Earnings per share |  |  |
Basic and diluted earnings per share (cents) | 11 | 75. 81 | 28.38

The accompanying notes on pages 85 to 119 form an integral part of these consolidated financial statements.
Consolidated Financial Statements
Financial Statements
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2024
81 Petershill Partners plc | Annual Report 2024

|  | 31 December 2024 | 31 December 2023
| Note(s) | $m | $m
Non-current assets |  |  |
Investments at fair value through profit or loss | 2(vi), 3, 4 | 5, 085.8 | 5,25 4.7
Contingent consideration at fair value through profit or loss | 2(vi), 3, 4 | 65. 1 | –
|  | 5,1 50.9 | 5,254 .7
Current assets |  |  |
Investments at fair value through profit or loss | 2(vi), 3, 4 | 726 .2 | –
Investments in money market funds at fair value through profit or loss | 4 | 8 .9 | 62. 3
Cash and cash equivalents | 2(xii), 5 | 1 4.5 | 242 .9
Contingent consideration at fair value through profit or loss | 2(vi), 3, 4 | 30 .7 | –
Deferred consideration receivable | 2(vi), 4 | 15 2. 8 | –
Trade and other receivables | 12 | 165 .6 | 127.4
Total current assets |  | 1,0 98.7 | 432.6
Total assets |  | 6,2 49.6 | 5,687 .3
Non-current liabilities |  |  |
Unsecured Notes payable | 13, 14 | 494 .4 | 493.8
Deferred payment obligations | 2(vi), 4 | 3 2. 5 | 7. 3
Liability for Tax Receivables Agreement | 2(v), 3 | 129.4 | 150. 5
Contingent consideration at fair value through profit or loss | 2(vi), 3, 4 | – | 3 . 9
Deferred tax liability | 9 | 1 2 8 . 2 | 8 . 2
Fee payable on divestment of investments | 6, 20 | 247 .3 | 9 4. 8
|  | 1,0 31.8 | 758.5
Current liabilities |  |  |
Trade and other payables |  | 7. 2 | 6.9
Deferred payment obligations | 2(vi), 4 | 5 5.3 | 44 .6
Interest payable | 14 | 1 0 . 0 | 1 0 . 0
Operator charge payable | 6, 20 | 7 . 0 | 6 . 6
Profit sharing charge payable | 6, 20 | 0.6 | 0. 1
Contingent consideration at fair value through profit or loss | 2(vi), 3, 4 | 8. 1 | 2. 5
Liability for Tax Receivables Agreement | 2(v), 3 | 29. 6 | 24.2
Total current liabilities |  | 117 .8 | 94. 9
Total liabilities |  | 1,1 49.6 | 853.4
Net assets |  | 5,100.0 | 4,833.9
Equity |  |  |
Share capital | 2(ix), 15 | 10. 8 | 11.2
Share premium | 2(ix), 15 | – | –
Other reserve | 2(ix), 15 | 1, 689.6 | 1,68 9.6
Capital redemption reserve | 2(ix), 15 | 0 .9 | 0.5
Retained earnings | 16 | 3, 398.7 | 3,13 2.6
Total Shareholders' funds |  | 5,1 00.0 | 4,833 .9
Number of Ordinary Shares in issue at year end | 15 | 1,081,708,167 | 1,122,202,824
Net assets per share (cents) | 17 | 471.48 | 430.75

The financial statements on pages 81 to 84 of the Group were approved and authorised for issue by the Board of Directors on 8 April 2025 and signed on
its behalf by:
Naguib Kheraj
Mark Merson
Chairman
Director
The accompanying notes on pages 85 to 119 form an integral part of these consolidated financial statements.
Consolidated Financial Statements continued
Financial Statements
Consolidated Statement of Financial Position
As at 31 December 2024
82 Petershill Partners plc | Annual Report 2024

|  |  |  |  | Capital |  |
|  | Share | Share | Other | redemption | Retained |
|  | capital | premium | reserve | reserve | earnings | Total
| Note | $m | $m | $m | $m | $m | $m
Opening net assets attributable to Shareholders |  |  |  |  |  |  |
at 1 January 2024 |  | 11.2 | – | 1,689.6 | 0.5 | 3,132.6 | 4,833.9
Repurchase and cancellation of Ordinary Shares | 15 | (0.4) | – | – | 0.4 | (112.5) | (112.5)
Dividends paid | 18 | – | – | – | – | (453.8) | (453.8)
Profit and total comprehensive income for the year |  | – | – | – | – | 832.4 | 832 .4
Closing net assets attributable to Shareholders |  |  |  |  |  |  |
at 31 December 2024 |  | 10. 8 | – | 1, 689.6 | 0. 9 | 3,3 98.7 | 5, 100.0

For the year ended 31 December 2023

|  |  |  |  |  | (Accumulated |
|  |  |  |  | Capital | losses)/ |
|  | Share | Share | Other | redemption | Retained |
|  | capital | premium | reserve | reserve | earnings | Total
| Note | $m | $m | $m | $m | $m | $m
Opening net assets attributable to Shareholders |  |  |  |  |  |  |
at 1 January 2023 |  | 11.4 | 3,3 46.7 | 1,6 89.6 | 0.3 | (32 8.7) | 4, 719.3
Repurchase and cancellation of Ordinary Shares | 15 | (0.2) | – | – | 0.2 | (26.3) | (2 6.3)
Share premium cancellation | 15 | – | (3,34 6.7) | – | – | 3,346 .7 | –
Dividends paid | 18 | – | – | – | – | (180 .2) | (1 80.2)
Profit and total comprehensive income for the year |  | – | – | – | – | 32 1.1 | 3 21.1
Closing net assets attributable to Shareholders |  |  |  |  |  |  |
at 31 December 2023 |  | 11.2 | – | 1,689. 6 | 0.5 | 3,13 2.6 | 4,8 33.9

The accompanying notes on pages 85 to 119 form an integral part of these consolidated financial statements.
Financial Statements
Consolidated Statement of Changes in Equity
For the year ended 31 December 2024
83 Petershill Partners plc | Annual Report 2024

|  | For the year ended | For the year ended
|  | 31 December 2024 | 31 December 2023
| Note | $m | $m
Cash flows from operating activities |  |  |
Profit for the year before tax |  | 965. 5 | 397. 1
Adjustments to reconcile operating profit for the year to net cash flows from operating activities: |  |  |
Reinvestment of income from investments in Partner-firms |  | (2.2) | (57 .0)
Movement in investments at fair value through profit and loss | 4 | (866. 7) | (2 28.8)
Movement in trade and other receivables |  | (49. 0) | 14. 6
Movement in trade and other payables |  | 0.8 | (2.8)
Movement in fee payable on divestment of investments | 6 | 152. 5 | 50. 5
Movement in operator charge payable | 6 | 0.4 | (1 4.4)
Movement in profit sharing charge payable | 6 | 0 . 5 | 0 . 1
Movement in contingent consideration at fair value through profit or loss | 4 | (6 . 9) | 6 . 4
Finance income |  | (2 . 4) | –
Finance expense |  | 44. 5 | 58 .6
Purchase of investments in money market funds | 4 | (1 ,258. 0) | (7 81.4)
Sale of investments in money market funds | 4 | 1,3 19.0 | 1,22 7.1
Reinvested interest income from investments in money market funds | 4 | (7.6) | (24 .6)
Taxes paid |  | (10. 1) | (28.2)
Net cash flows from operating activities |  | 280. 3 | 617. 2
Cash flows from investing activities |  |  |
Purchase of investments at fair value through profit or loss |  | (154.7) | (20 4.2)
Disposal of investments at fair value through profit or loss |  | 26 5. 8 | –
Net cash flows from investing activities |  | 111. 1 | (20 4.2)
Cash flows from financing activities |  |  |
Dividends paid | 18 | (453. 8) | (1 80.2)
Interest expense payments |  | (28. 3) | (28.3)
Repayment of share capital | 15 | (113. 3) | (25.4)
Payment under Tax Receivables Agreement | 20 | (2 4 . 4) | (3 3 . 8)
Net cash flows from financing activities |  | (619.8) | (26 7.7)
Net (decrease)/increase in cash and cash equivalents during the year |  | (228.4) | 145. 3
Cash and cash equivalents at the beginning of the year |  | 242. 9 | 97.6
Cash and cash equivalents at the end of the year |  | 14. 5 | 24 2. 9
Non-cash investing activities |  |  |
In kind distribution of investments at fair value through profit or loss |  | 6 . 1 | 0 . 2

The accompanying notes on pages 85 to 119 form an integral part of these consolidated financial statements.
Consolidated Financial Statements continued
Financial Statements
Consolidated Statement of Cash Flows
For the year ended 31 December 2024
84 Petershill Partners plc | Annual Report 2024
Notes to the Consolidated Financial Statements
For the year ended 31 December 2024
1. General information
Petershill Partners plc (the “Company”) is a company limited by shares, incorporated and registered in England and Wales whose shares are publicly
traded on the Main Market of the London Stock Exchange. The consolidated financial statements of Petershill Partners plc for the year ended 31
December 2024 comprise the Company, its subsidiaries and its indirect subsidiaries together referred to as the “Group”.
The Company was incorporated and registered in England and Wales under the UK Companies Act 2006 (as amended) as a private company limited by
shares under the name Delta Epsilon Limited on 24 March 2021 with the registered number 13289144. On 12 August 2021, the Company was re-
registered as a public limited company as Delta Epsilon plc, and on 2 September 2021, the Company was renamed Petershill Partners plc.
2. Basis of preparation, material accounting policies and other explanatory information
i. Basis of preparation
The consolidated financial statements of the Group have been prepared and approved by the Board of Directors in accordance with UK- adopted international
accounting standards (“IFRS”) and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The financial
statements are presented to the nearest million United States Dollar ($m), the functional and presentational currency of the Company.
The consolidated financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation
of financial assets and liabilities at fair value through profit or loss. The preparation of the financial statements requires estimates and assumptions to be
made that may affect the amounts reported in the financial statements and accompanying notes. Actual amounts could differ from the estimates
included in the financial statements herein. The preparation of the consolidated financial statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires judgement to be exercised in the process of applying the accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in
Note 3.
Refer to Note 2(xiv) for discussion on new and amended standards and interpretations that are applicable to the Company and the Group.
The principal accounting policies are set out below.
ii. Segmental reporting
The Operator serves as the Group’s alternative investment fund manager for purposes of the UK AIFMR and EU AIFMD, which pursuant to the Operator
Agreement has delegated its portfolio management functions to the Investment Manager, which has further delegated the provision of portfolio
management services to the Investment Advisor. The Investment Advisor, acting as the chief operating decision-maker, is responsible for allocating
resources and assessing performance of the operating segments. The key measure of performance used by the Investment Advisor to assess the Group’s
performance and to allocate resources is the Group’s income from investments in Partner-firms.
The Group is engaged in holding interests in and investing into Partner–firms for the purpose of generating revenues derived from the share of
management fees, performance fees and investment income. The management of the Group, including assessment of performance, budgets and liquidity
is managed for the portfolio as a whole and not by discrete segments. Hence, the Board, as recommended by the Investment Advisor, has concluded that
the Group is organised into one main operating segment.
The Group derives 88% (2023: 85%) of its income from North America and the remaining 12% (2023: 15%) from Europe for the year ended 31 December
2024. 94% (31 December 2023: 91%) of the Group’s fair value of investments are located in North America and the remaining 6% (31 December 2023:
9%) are located in Europe as at 31 December 2024.
Notes to the Consolidated Financial Statements
Financial Statements
85 Petershill Partners plc | Annual Report 2024
iii. Functional currency and foreign currency transactions
The Board of Directors has determined that the functional currency of the Company and its subsidiaries is United States Dollar (US$), as this is the
currency of the primary economic environment in which the Company and its subsidiaries operates and is the currency of the majority of the Group’s
Investments in Partner-firms. If indicators of the primary economic environment are mixed, then management uses its judgement to determine the
functional currency that most closely represents the economic effect of the underlying transactions, events and conditions. Although the Company is
listed in the UK, the Group’s investments are mostly held in the USA and transactions are mostly denominated in US$. Expenses (including the Operator
charge, Divestment fee and Profit sharing charge) are denominated and paid mostly in US$.
Transactions in currencies other than US$ during the period, including income and expenses, are translated into US$ at the rate of exchange prevailing on
the date of the transaction. Monetary assets and liabilities denominated in currencies other than US$ are retranslated at the functional currency rate of
exchange ruling at the reporting date. Non-monetary items that are measured in terms of historical cost in a currency other than US$ are translated using
the exchange rates as at the dates of the initial transaction. Non-monetary items measured at fair value in a currency other than US$ are translated using
the exchange rates at the date when the fair value was determined.
Foreign currency translation gains and losses on financial instruments classified at fair value through profit or loss are included in the Consolidated
Statement of Comprehensive Income as part of the change in fair value of investments at fair value through profit or loss. Exchange differences on other
financial instruments are included in the Statement of Comprehensive Income as Foreign exchange gain/(loss). Gains and losses on foreign exchange
during the year were immaterial and have been included under Other operating expenses in the Consolidated Statement of Comprehensive Income.
iv. Financial instruments
i. Classification
Financial assets are classified based on the business model for managing those financial assets and the contractual cash flow characteristics of the
financial assets.
All investments have been classified as financial assets at fair value through profit or loss as they are managed, and performance is evaluated on a fair
value basis. The primary focus is on fair value information and the use of that information to assess the assets’ performance and to make decisions.
Investments which meet the classification and presentation requirements of IFRS 5 - Non-Current Assets Held for Sale and Discontinued Operations,
taking into account post balance sheet events consistent with IAS 10 - Events after the Reporting Period, are classified and presented as current assets in
the Consolidated Statement of Financial Position.
Financial assets classified as receivables are carried at amortised cost less expected credit losses (“ECL”).
ii. Impairment
The Group has adopted the general approach to measuring the loss allowance as required by IFRS 9 – Financials Instruments. A 12-month ECL is
recognised for all financial assets within Stage 1 of the Group’s impairment model and lifetime ECL for all other financial assets and is deducted from the
gross carrying value of the receivables. ECL is determined as a product of Loss Given Default (“LGD”), Probability of Default (“PD”), and Exposure at
Default (“EAD”), discounted at an effective interest rate.
The methodology is structured around three core steps: i) Risk differentiation, ii) Risk quantification, and iii) whether there has been a significant increase
in credit risk since origination and/or exposures are considered to be credit impaired. In implementing this methodology, Partner-firms are distinguished
for riskiness by leveraging key risk indicators through a comprehensive credit risk review framework.
Risk differentiation
1. The Partner-firms’ liquidity position, indebtedness and ability to generate future cash flows are considered the key risk indicators, with weights
assigned to each indicator that is informed by experience. A higher weight is attributed to the Liquidity Indicator on the basis that it is considered to be
a strong reflection of a firm’s ability to meet immediate cash obligations. The latter driver of “Cashflow adequacy Indicator” relies on the Partner-firm’s
ability to generate cash and incorporates forward-looking information.
2. The overall score for each Partner-firm is estimated by combining the risk indicator weights with the values for each selected risk indicator.
Risk quantification
1. The median risk score serves as the benchmark for quantifying risk across all Partner-firms.
2. This benchmark is a “BBB” rating, which is classified as an investment grade by S&P and indicates an adequate capacity to meet financial commitments
but is also susceptible to adverse economic conditions.
3. The median risk score obtained is compared to the scores of all other Partner-firms, resulting in Partner-firms with lower comparative risk being rated
as “A”, and those with higher comparative risk as “BB”.
Once the ratings are assigned using the above two steps, the scores are calibrated to a corresponding PD rate. The PDs are informed by using average
cumulative default rates for US corporates from S&P publicly available data. To recognise the increased risk on absolute return Partner-firms which are
considered to be volatile, a nominal increase is applied to the PD rates.
A LGD value is applied for exposures in all stages, albeit where considered appropriate the LGD for Stage 3 exposures will be adjusted to reflect the
specific circumstances of the exposure. The LGD rate is consistent with the Basel II framework for corporates, sovereigns, and banks on senior
subordinate claims.
Notes to the Consolidated Financial Statements continued
Financial Statements
86 Petershill Partners plc | Annual Report 2024
Significant increase in credit risk
The Group assesses whether a significant increase in credit risk has occurred for an exposure through a comprehensive credit risk assessment framework.
This framework employs both qualitative and quantitative indicators which includes days past due, review and reconciliation of aged receivables and
periodic review of financials and cashflow data with Partner-firms. In addition, the Group considers that there has been a significant increase in credit risk
when contractual payments are more than 30 days past due.
Credit impaired exposure
The Group considers a financial asset in default when contractual payments are 90 days past due unless there is sufficient evidence from comprehensive
credit risk assessment which suggests otherwise.
The Group applies the following stages when considering credit exposure:
▪ Stage 1 includes financial instruments that have not had a significant increase in credit risk since initial recognition or that have low credit risk at the
reporting date;
▪ Stage 2 includes financial instruments that have had a significant increase in credit risk since initial recognition (unless they have low credit risk at the
reporting date) but that do not have objective evidence of impairment; and
▪ Stage 3 includes financial assets that have objective evidence of impairment at the reporting date.
The Group also considers a financial asset to be in default when the comprehensive credit risk assessment indicates that the Group is unlikely to receive
the outstanding contractual amounts in full (“Stage 3”).
The calculated ECL is detailed in Note 19.
iii. Write-off policy
The Group writes off financial assets, in whole or in part, when it has concluded that the amount is uncollectable and has therefore deemed that there is
no reasonable expectation of recovery. The Group may seek to recover amounts it is legally owed in full, but which have been wholly or partially written
off due to no reasonable expectation of full recovery.
iv. Recognition and derecognition
Financial assets and financial liabilities are initially recorded at their transaction price, (which is representative of fair value), plus transaction costs that
are directly attributable to their acquisition or issue other than those classified as at fair value through profit or loss in which case transaction costs are
recognised directly in profit or loss, and then measured at fair value subsequent to initial recognition. Gains and losses arising from changes in financial
assets and financial liabilities at fair value through profit or loss are presented in the Consolidated Statement of Comprehensive Income in the period in
which they arise. Assets and liabilities, other than those at fair value through profit or loss, are measured at amortised cost.
Realised gains and losses are recognised upon sale or disposal of investments. Unrealised gains and losses from financial assets and liabilities at
fair value through profit or loss are included in the change in fair value of investments through profit or loss in the Consolidated Statement of
Comprehensive Income.
Financial assets are derecognised when the rights to receive cash flows have expired or substantially all risks and rewards of ownership have transferred.
Financial liabilities are derecognised when the obligation specific in the contract is cancelled or expires.
The carrying amounts of assets comprised of cash and cash equivalents, deferred consideration receivable and trade and other receivables are held at
amortised cost.
The carrying amounts of liabilities comprised of Unsecured Notes payable, Deferred payment obligations, Fee payable on divestment of investments,
Liability for Tax Receivables Agreement, Interest payable, Profit sharing charge payable, Operator charge payable and Trade and other payables are held
at amortised cost. The carrying value of assets and liabilities, except Unsecured Notes payable and the liability for Tax Receivables Agreement held at
amortised cost, listed here approximates fair value as these do not contain any significant financing components. The fair value of the Unsecured Notes
payable is estimated at $478.7 million based on interest rates as at 31 December 2024 (31 December 2023: $467.0 million). The fair value of the liability
for Tax Receivables Agreement is estimated at $154.1 million (31 December 2023: $166.6 million).
Financial Statements
87 Petershill Partners plc | Annual Report 2024
v. Material accounting policies and other explanatory information
i. Notes payable and interest expense
Unsecured Notes payable are initially recognised at fair value. After initial recognition, these are subsequently measured at amortised cost using the
effective interest method; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Consolidated
Statement of Comprehensive Income over the period of the loans or borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the
facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent that there is no evidence that it is probable that
some or all of the facility will be drawdown, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to
which it relates.
Borrowing costs including interest expense are recognised in the period in which they are incurred using the effective interest method.
ii. Liability for Tax Receivables Agreement
The Group’s initial acquisition of the Partner–firms from the Petershill Funds increased the tax basis, for US tax purposes, of the acquired assets, as
compared with their pre-acquisition tax basis. This increase in tax basis is expected to increase the amortisation of such assets in the hands of Petershill
Partners, Inc., a wholly owned subsidiary of the Company, and therefore reduce the amount of US tax that the Group would otherwise be required to pay in
the future. This increase in tax basis may also decrease a taxable gain (or increase taxable loss) on future dispositions of certain assets to the extent this
tax basis is allocated to those assets.
As part consideration for the Initial Transaction, Petershill Partners, Inc. entered into a Tax Receivables Agreement (the “Tax Receivables Agreement” or
“TRA”) with certain Petershill Funds and their subsidiaries, which will require Petershill Partners, Inc. to pay 75% of the amount of cash tax savings, if any,
in US federal, state and local income tax that Petershill Partners, Inc. realises. The computation of the tax savings is based on the actual US federal tax
savings realised on the tax returns of Petershill Partners, Inc. over the amount that would have been paid if the increase in tax basis had not occurred.
State and local income tax savings are based on the assumption that the state and local tax rate is 6% of the reduction in federal taxable income due to
the increased tax basis. In addition, any such savings that Petershill Partners, Inc. realises as a result of the tax benefits associated with the increases in
tax basis that arise due to payments under the Tax Receivables Agreement, are assumed to result in additional increases in tax basis that will result in
future tax benefits. The Group expects that, as a result of the size of the increases in the tax basis of the investments described above, the payments that
it will be required to make under the Tax Receivables Agreement may be substantial. The majority of these incremental payments are expected to arise
over the next 15 years.
The Group has estimated the future tax savings payable under the TRA based on information that has been provided by the underlying Partner-firms as to
the amount of the step-up in tax basis and future expected amortisation. To the extent that a step-up did not result in a future amortisation deduction it
has been assumed that no tax benefit will be payable under the TRA agreement. In addition, the Group has assumed that any amortisation will result in an
immediate tax benefit in the year of the amortisation. As at 31 December 2024, the Group has recorded a liability of $159.0 million (31 December 2023:
$174.7 million), representing the Operator’s best estimate of the amounts currently expected to be owed to certain of the Petershill Funds and certain of
their subsidiaries under the Tax Receivables Agreement. The liability that is recorded is associated with the expected future tax benefits related to the
aggregate step-up in tax basis.
The Liability for the TRA was initially recognised at fair value of the expected liability. Any changes to the carrying value of the expected liability are
recognised in the Consolidated Statement of Comprehensive Income at each reporting date. Refer to Note 3 for detailed discussion of the TRA.
The payable is subsequently carried at amortised cost based on assumptions discussed below and may be adjusted. These assumptions are based on the
Operator’s judgement and information provided by the Partner-firms. The Operator has estimated the step-up tax basis of the acquired assets based on
tax information provided by the Partner-firms, and to the extent amortisable projected the amortisation of the step-up tax basis to occur over 15 years,
applied an effective interest rate of 18% (31 December 2023: 18%) and utilised the current effective tax rate of Petershill Partners, Inc. in calculating the
future tax benefits and resulting payments under the TRA.
In addition, the TRA provides for the payment on the TRA to become due on the original due date of the US federal income tax return and an interest that
is payable on the final payment from the due date of the return until actual payment is made. The interest is recognised as a Finance cost in the
Consolidated Statement of Comprehensive Income at each reporting date.
Notes to the Consolidated Financial Statements continued
Financial Statements
88 Petershill Partners plc | Annual Report 2024
vi. Investments held at fair value through profit or loss
Investments are designated upon initial recognition as held at fair value through profit or loss. Gains or losses resulting from the movement in fair value
are recognised in the Consolidated Statement of Comprehensive Income at each valuation point.
Financial assets are recognised/derecognised at the date of the purchase/disposal. Investments are initially recognised at fair value, which is the total fair
value of upfront consideration and deferred consideration and approximates cost. Transaction costs are recognised in the Consolidated Statement of
Comprehensive Income as incurred.
The Group measures its investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e.
the exit price) in an orderly transaction between market participants at the measurement date. In the absence of quoted market prices, fair value is
determined by the Operator. Due to the inherent uncertainties of valuation, these estimated fair values may differ significantly from the values that
would have been realised had a readily available market for these investments existed, and these differences could be material.
The Operator is responsible for the implementation and maintenance of internal controls and procedures related to the valuation of the Group's
investments. Valuations are prepared in accordance with the Operator's valuation policy and subject to verification procedures. A third-party valuation
advisor is engaged to assist in the preparation of the valuation proposals including certain market data driven assumptions. The valuation proposals are
reviewed by the Operator’s functionally independent Valuation Oversight Group (“VOG”).
Periodically, VOG presents the valuation proposals and their independent price verification review results to the Operator’s valuation committee
(“Valuation Committee”) which convenes to approve and oversee the application of valuation policies and review fair value estimates for the investments.
Subsequently, the Operator reports the valuation results to the Board of Directors.
Per the valuation policy, the Operator initially values the Group's investments based on their purchase price and thereafter values them using valuation
methods that it determines, in its sole discretion. The Operator uses a number of different valuation techniques, including the market approach, which
applies a multiple to current operating income of Partner-firms and the income approach, which applies discounted cash flow techniques based upon
estimated future cash flows and discount rates. Since observable prices are generally not available for such investments, the Operator considers all
available market evidence in determining fair value. Certain investments are valued at the most recent Net Asset Value per unit or capital account
information available and the Operator considers such value to be an appropriate measure of fair value. Further information about investments held at
fair value through profit and loss is included in Note 4.
Deferred payment obligations
Certain financial assets are purchased under various contracts containing deferred payment terms. These deferred payment obligations are initially
recorded on the contractual purchase date with a discount being imputed for an effective interest rate that will be the equivalent rate of interest due on
borrowings and subsequently carried at amortised cost.
Any difference between the initially recorded deferred payment obligations and the final contractual liability payable is recognised in the Consolidated
Statement of Comprehensive Income as a finance cost over the period of the deferred payment obligation using the effective interest method.
Deferred consideration receivable
Certain financial assets are disposed under various contracts containing deferred payment terms. This deferred consideration receivable is initially
recorded on the contractual disposal date with a discount being imputed for an effective interest rate that will be the equivalent rate of interest earned
on lending and subsequently carried at amortised cost less ECL.
Any difference between the initially recorded deferred consideration receivable and the financial contractual payment is recognised in the Consolidated
Statement of Comprehensive Income as a finance income over the period of the deferred consideration receivables using the effective interest rate method.
Contingent consideration
Certain financial assets are purchased and sold under various contracts containing contingent payment terms. These contingent payment obligations are
initially recorded at fair value on the contractual purchase date, subject to probability of payment and time value of money, with a discount being
imputed for an effective interest rate that will be the equivalent date of interest due on borrowings or lending and subsequently carried at fair value. Any
change in fair value is recorded as a change in contingent consideration at fair value through profit or loss in the Consolidated Statement of
Comprehensive Income.
The fair value of contingent consideration obligations represents the present value of the future expected payments and receipts based on an assessment
of the likelihood of those payments and receipts against their contractual thresholds. The Operator uses a number of different valuation techniques, at its
discretion, but primarily relies on the income approach which applies discounted cash flow techniques based on the estimated future payments and
discount rates. Further information about contingent consideration is included in Note 4.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the Consolidated Statement of Financial Position when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability
simultaneously. The legally enforceable right must not be contingent on future events, and it must be enforceable in the normal course of business and in
the event of default, insolvency or bankruptcy of the Group or the counterparty.
Financial Statements
89 Petershill Partners plc | Annual Report 2024
vii. Dividends
Dividends payable are recognised as distributions in the financial statements when the dividend is approved by Shareholders or when paid.
viii. Related parties
Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making
financial or operational decisions. Enterprises and individuals that directly, or indirectly through one or more intermediary, control, or are controlled by, or
under common control with, the Group, including subsidiaries and fellow subsidiaries, are related parties of the Group. This includes its key management
personnel, including directors and officers of the Operator, other affiliated entities of the Operator and the Petershill Funds. In considering related party
relationships, attention is directed to the substance of the relationship and not merely the legal form.
ix. Share capital
Financial instruments issued by the Company are treated as equity if the holder has only a residual interest in the assets of the Company after the
deduction of all liabilities. The Company’s Ordinary Shares are classified as equity instruments.
For the issue of each Ordinary Share for cash, $0.01 has been recognised in Share capital and the remaining cash amount received has been recognised in
Share premium and Other reserve. For the issue of each Ordinary Share issued to Petershill Funds in exchange for financial assets and liabilities, $0.01 has
been recognised in Share capital and the remaining amount recognised in Share premium, and Other reserve such that the aggregate of the amount
recognised in Share capital, Share premium and Other reserve is equal to the fair value of the financial assets and liabilities transferred to the Group.
Under Section 612 of the Companies Act, where an issuing company has secured at least 90% equity holding of another company in return for shares of
the issuing company, then merger relief shall be applied requiring the premium, with respect to the shares issued, to be recorded to Other reserve as
merger relief. The acquisition of Petershill Partners Ltd by the Company fell under the ambit of Section 612 of the Companies Act and hence merger relief
was applied to the excess over the nominal value of shares.
The Company’s Shareholders approved the cancellation of the amount standing to the credit of the Company's share premium account in full (the
“Reduction of Capital") at its Annual General Meeting held on 24 May 2023. A formal approval of the same was obtained on 20 June 2023 by His Majesty's
High Court in England (the "Court"). Accordingly, the Reduction of Capital has become effective and has created additional distributable reserves of
approximately $3,346.7 million. Accordingly, the amounts standing to the credit of the share premium account have been transferred to Retained
earnings. Refer to Note 15 for more information.
Incremental costs directly attributable to the issue of new shares (“Share issue costs”) are shown as a deduction against proceeds from Share premium.
Incremental costs include those incurred in connection with the placing and admission which include fees payable under a placing agreement, legal costs
and any other applicable expenses.
The cost of repurchasing Ordinary Shares including the related stamp duty and transactions costs is charged to Retained earnings and dealt with in the
Consolidated Statement of Changes in Equity. Share repurchase transactions are accounted for on a trade date basis. The nominal value of Ordinary Share
capital repurchased and cancelled is transferred out of Share capital and into the Capital redemption reserve.
Notes to the Consolidated Financial Statements continued
Financial Statements
90 Petershill Partners plc | Annual Report 2024
x. Income from Investments in Partner-firms and interest income
Cumulative income and returns from Financial assets at fair value through profit or loss is made up of the Income from Investments in Partner-firms
which comprises the current year income (including accruals where applicable) and the changes in fair value on financial assets at fair value through
profit or loss which comprises the fair value changes of the future returns of the Investments in Partner-firms.
Income from Investments in money market funds and other assets is accounted for on an accrual basis. Income from Investments in Partner-firms is
generally recognised when the rights to receive payment from the Financial assets at fair value through profit or loss have been established, and
comprises three underlying components, as follows:
I. Income from Investments in Partner-firms derived from Management fee income (“FRE”) is based on the net management fees earned by the
underlying Partner-firms and is reported in the Consolidated Statement of Comprehensive Income. This comprises the portion of the income in
respect of the Partner-firms’ management fees that is due to the Group for each relevant current period. This arises from the investments held to
earn a share of the underlying investee’s management fee revenue.
Typically, the investments entitle the Group to a set percentage share of the net management fee revenue earned by the underlying Partner-firm.
Depending on the nature of the operations of the underlying Partner-firm, income arising will be accounted for on an accrual basis only when the
right to receive payment has been established under the terms of the agreement with the Partner-firms.
II. Income from Investments in Partner-firms derived from Performance fee income (“PRE”) is based on the realised performance fees earned by
the underlying Partner-firms and is reported in the Consolidated Statement of Comprehensive Income. This comprises the portion of the income in
respect of the Partner-firms’ performance fees. Typically, these investments entitle the Group to a set percentage share of the performance fee
revenue earned by the underlying investee. Depending on the nature of the operations of the underlying Partner-firm, income arising will be
accounted for on an accrual basis only when the right to receive payment has been established under the terms of the agreement with the
Partner-firms.
III. Income from Investments in Partner-firms derived from Investment Income is based on the investment income earned by the underlying Partner-
firms and is reported in the Consolidated Statement of Comprehensive Income. This comprises the portion of the income in respect of the Partner-
firms’ realised gains and losses or any distributed income from the investments held on Partner-firms’ balance sheets. Investment income arising will
be accounted for on an accrual basis only when the right to receive payment has been established under the terms of the agreement with the
Partner-firms.
Gains or losses resulting from the movement in fair value of the Group’s investments held at fair value through profit or loss are recognised in the
Consolidated Statement of Comprehensive Income at each valuation point.
xi. Expenses
Expenses are accounted for on an accruals basis. Share issue costs of the Company directly attributable to the issue and listing of shares are charged to
the share premium account.
Operator charges, profit sharing charges, professional fees, divestment fees and other expenses incurred are recognised on an accruals basis and
expensed to the Consolidated Statement of Comprehensive Income. Certain professional fees are transaction costs incurred to structure a deal to acquire
or dispose of investments designated as financial assets at fair value through profit or loss. These transaction costs, when incurred, are immediately
recognised in the Consolidated Statement of Comprehensive Income as an expense.
xii. Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term investments in an active market with original
maturities of three months or less, and bank overdrafts.
Financial Statements
91 Petershill Partners plc | Annual Report 2024
xiii. Taxation
Income tax comprises current tax and deferred tax and is recognised in the Consolidated Statement of Comprehensive Income except to the extent that it
relates to items recognised directly in equity, in which case it is recognised in Equity.
The current income tax payable on profits is recognised as an expense based on the applicable tax laws in each jurisdiction in the period in which profits
arise, calculated using tax rates enacted or substantively enacted by the balance sheet date. Deferred tax is recognised on temporary differences between
the carrying amounts of assets and liabilities for accounting and tax purposes. A deferred income tax asset or liability is recognised for each temporary
difference, except for temporary differences subject to initial recognition exemption and earnings related to subsidiaries where the temporary differences
will not reverse in the foreseeable future and the Group has the ability to control the timing of their reversal. Deferred tax assets and liabilities are
determined based on the tax rates that are expected to be in effect in the period that the asset is expected to be realised or the liability is settled, based
on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.
Current tax assets and liabilities are offset when they are levied by the same taxation authority on either the same taxable entity or within the same tax
reporting group (which intends to settle on a net basis), and when there is a legal right to offset. Deferred tax assets and liabilities are offset when the
same conditions are satisfied.
Deferred income tax assets are recognised to the extent it is probable that the benefits associated with these assets will be realised. The determination as
to if it is probable that a deferred income tax asset will be recognisable is dependent on a number of factors including the expectations of future taxable
income in the period the deferred income tax asset is realised. Further, in certain jurisdictions the character of the loss or deduction as either ordinary or
capital may impact the ability to offset future income. As such, significant judgements may be required in determining the Group's ability to realise the
future tax assets.
The Group is subject to income tax laws in various jurisdictions where it operates, and the complex tax laws are potentially subject to different
interpretations by the Company and the relevant taxation authorities. Judgements may be required in the interpretation of the relevant tax laws and in
assessing the probability of acceptance of tax positions. A tax reserve related to uncertainty over income taxes is recognised when a payment to tax
authorities is considered probable.
xiv. New and amended standards and interpretations
Accounting standards and interpretations have been published and will be mandatory for the Group’s and Company’s accounting periods beginning on or
after 1 January 2024 or later periods. The following are the new or amended accounting standards or interpretations applicable to the Group and the
Company.
▪ Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2 - Non-current Liabilities with Covenants (issued October 2022
and effective for annual periods beginning on or after 1 January 2024); and
▪ Amendments to IAS 1 - Classification of Liabilities as Current or Non-current (issued January 2020 and effective for annual periods beginning on or
after 1 January 2024).
These amendments have been adopted and the impact of these amendments to the Group and the Company is not material.
Certain amendments to accounting standards have been published that are not mandatory for 31 December 2024 reporting periods and have not been
early adopted by the Group and the Company. These amendments are not expected to have a material impact on the entity in the current or future
reporting periods and on foreseeable future transactions.
▪ Amendments to IFRS 9 and IFRS 7 - Classification and Measurement of Financial Instruments (issued May 2024 and effective for annual periods
beginning on or after 1 January 2026);
▪ IFRS 18 - Presentation and Disclosure in Financial Statements (issued April 2024 and effective for annual periods beginning on or after 1 January
2027); and
▪ Annual Improvements to IFRS Accounting Standards - Volume 11- IFRS 10, IFRS 9, IFRS 1, IAS 7 and IFRS 7 (issued July 2024 and effective for annual
periods beginning on or after 1 January 2026).
Notes to the Consolidated Financial Statements continued
Financial Statements
92 Petershill Partners plc | Annual Report 2024
xv. Assessment of investment entity
The Board of Directors has determined that the Company and its subsidiaries are not an investment entity and therefore the Company’s financial
statements have been prepared on a consolidated basis, as required by IFRS 10 - Consolidated Financial Statements.
The Board of Directors has assessed if the Company and its subsidiaries satisfy the three essential criteria to be regarded as an investment entity as
defined in IFRS 10, IFRS 12 - Disclosure of Interests in Other Entities and IAS 27 - Consolidated and Separate Financial Statements. The three essential
criteria are such that the entity must:
1. obtain funds from one or more investors for the purpose of providing these investors with professional investment management services;
2. commit to its investors that its business purpose is to invest its funds solely for returns from capital appreciation, investment income or both; and
3. measure and evaluate the performance of substantially all of its investments on a fair value basis.
Also as set out in IFRS 10, further consideration should be given to the typical characteristics of an Investment Entity, which are that:
▪ it should have more than one investment, to diversify the risk portfolio and maximise returns;
▪ it should have multiple investors, who pool their funds to maximise investment opportunities;
▪ it should have investors that are not related parties of the entity; and
▪ it should have ownership interests in the form of equity or similar interests.
B85F of IFRS 10 that deals with exit strategies, stipulates that an entity’s investment plans also provide evidence of its business purpose. One feature
that differentiates an investment entity from other entities is that an investment entity does not plan to hold its investments indefinitely; it holds them
for a limited period. Given equity investments and non-financial asset investments have the potential to be held indefinitely, an investment entity shall
have an exit strategy documenting how the entity plans to realise capital appreciation from substantially all of its equity investments and non-financial
asset investments.
The Company and its subsidiaries hold their investments primarily for income generation purposes and do not have plans to realise capital appreciation
from substantially all of the investments in Partner-firms and non-financial assets in the normal course of operations. The Company and its subsidiaries
do not have an exit strategy as defined by IFRS 10 and therefore do not meet one of the essential criteria to be treated as an investment entity.
Accordingly, the Company has not applied the provisions of Para 31 of IFRS 10 that requires an investment company to measure its investment in
subsidiaries at fair value through profit or loss. Instead, the Company consolidates the subsidiaries that it controls as discussed in the next section.
xvi. Basis of consolidation of subsidiaries
IFRS 10 requires a parent to consolidate its subsidiaries that it controls. Consolidation of the subsidiaries shall begin from the date the parent obtains
control of the subsidiaries and ceases when the parent loses control of the subsidiaries. A parent controls the subsidiaries when the parent is exposed, or
has rights, to variable returns from its involvement with the subsidiaries and has the ability to affect those returns through its power over the subsidiaries.
The Company consolidates its subsidiaries to the extent it is exposed, or has rights, to variable returns from its involvement with the subsidiaries and has
the ability to affect those returns through its power over the subsidiaries. The consolidated financial statements of the Group include the results of the
Company and its wholly owned subsidiaries listed below.
Financial Statements
93 Petershill Partners plc | Annual Report 2024

|  |  |  | Interest as at | Interest as at
|  |  |  | 31 December | 31 December
Name of Subsidiary | Registered office |  | Purpose | 2024 | 2023
Held directly |  |  |  |  |
Petershill Partners Ltd¹ | One Nexus Way Camana Bay, KY1-9005, |  | Investment holding company | 100% | 100%
| Cayman Islands |  |  |  |
Petershill Partners II Ltd¹ | One Nexus Way Camana Bay, KY1-9005, |  | Investment holding company | 100% | 100%
| Cayman Islands |  |  |  |
Petershill Partners, Inc.¹ | 251 | Little Falls Drive, Wilmington, DE 19808, | Investment holding company | 100% | 100%
| United States of America |  |  |
Petershill Partners II, Inc.¹ ³ | 251 | Little Falls Drive, Wilmington, DE 19808, | Investment holding company | 100% | –
| United States of America |  |  |
Held indirectly |  |  |  |  |
PHP DE 1 LP² ³ | 251 | Little Falls Drive, Wilmington, DE 19808, | Investment holding company | 100% | –
| United States of America |  |  |
PHP DE 2 LP² ³ | 251 | Little Falls Drive, Wilmington, DE 19808, | Investment holding company | 100% | –
| United States of America |  |  |
PHP C1 LP² ³ | One Nexus Way Camana Bay, KY1-9005, Cayman | Investment holding company | 100% | –
| Islands |  |  |  |
PHP C2 LP² ³ | One Nexus Way Camana Bay, KY1-9005, Cayman | Investment holding company | 100% | –
| Islands |  |  |  |
Petershill Partners GP Sub I | 251 | Little Falls Drive, Wilmington, DE 19808, | Investment holding company | 100% | 100%
Series LLC⁴ | United States of America |  |  |
Petershill Partners GP Sub II | 251 | Little Falls Drive, Wilmington, DE 19808, | Investment holding company | 100% | 100%
Series LLC⁴ | United States of America |  |  |
Petershill Partners GP Sub III | 251 | Little Falls Drive, Wilmington, DE 19808, | Investment holding company | 100% | 100%
Series LLC⁴ | United States of America |  |  |
Petershill Partners GP Sub IV | 251 | Little Falls Drive, Wilmington, DE 19808, | Investment holding company | 100% | 100%
Series LLC⁴ | United States of America |  |  |
PHP Aggregator GP Ltd⁵ | One Nexus Way Camana Bay, KY1-9005, Cayman | General Partner of Cayman | 100% | 100%
| Islands |  | domiciled Petershill holding |  |
|  |  | companies |  |
Cook Holdings Series LLC⁶ | 251 | Little Falls Drive, Wilmington, DE 19808, | Investment holding company | 100% | 100%
| United States of America |  |  |
Knight Holdings Series LLC⁶ | 251 | Little Falls Drive, Wilmington, DE 19808, | Investment holding company | 100% | 100%
| United States of America |  |  |  |
Lyndhurst Holdings LP⁶ | One Nexus Way, Camana Bay, KY1-9005 |  | Investment holding company | 100% | 100%
| Cayman Islands |  |  |  |
Plum Holdings LP⁶ | One Nexus Way, Camana Bay, KY1-9005 |  | Investment holding company | 100% | 100%
| Cayman Islands |  |  |  |
Peasy Holdings LP⁶ | One Nexus Way, Camana Bay, KY1-9005 |  | Investment holding company | 100% | 100%
| Cayman Islands |  |  |  |

1. Referred to as Petershill Subsidiaries.
2. Referred to as Petershill Splitter Subsidiaries.
3. Acquired by the Group on 1 January 2024.
4. Held through the Petershill Splitter Subsidiaries and referred to as Petershill Blockers.
5. Held through Petershill Partners Ltd.
6. Held through the Petershill Blockers and the Petershill Splitter Subsidiaries and referred to as Petershill holding companies.
Notes to the Consolidated Financial Statements continued
Financial Statements
94 Petershill Partners plc | Annual Report 2024
I. Consolidation of Petershill Subsidiaries and Petershill Blockers
The Company wholly owns the issued interests of the Petershill Subsidiaries and is able to exercise control and power over the Petershill Subsidiaries.
Petershill Partners Ltd wholly owns the shares of the Petershill Blockers listed above indirectly through the respective Petershill Splitter Subsidiaries. The
financial statements of the Petershill Subsidiaries and Petershill Blockers are consolidated in preparing the financial statements of the Group.
II. Consolidation of Petershill Splitter Subsidiaries
On 1 January 2024, new subsidiaries (the “Petershill Splitter Subsidiaries”) were introduced into the Group structure to enable employees of the Operator
to be direct beneficiaries of a portion of the Profit Sharing Charge and Divestment Fee (if any) payable by the Group to the Operator. This was done to
align the interests in the incentives of the Group, the Operator and the employees of the Operator. There is no change to the amount or timing of any
Profit Sharing Charge or Divestment Fee payable by the Group under the original Operator Agreement. Furthermore, this arrangement is not expected to
give rise to any material tax consequences for the Group and all initial and ongoing costs of implementing this arrangement are borne by the Operator.
Effective from 1 January 2024, each of the Petershill Subsidiaries entered into a Contribution Agreement with the appropriate Petershill Splitter
Subsidiary whereby the Petershill Subsidiaries transferred all of their investments, including their interest in the Petershill Blockers and Petershill holding
companies, to the Petershill Splitter Subsidiaries in return for interest in the Petershill Splitter Subsidiaries at the carrying value on the same date (the
“Restructure”). The Petershill Splitter Subsidiaries are substantially owned by the respective Petershill Subsidiaries and are fully consolidated into the
Group’s net asset value. The remainder of the Petershill Splitter Subsidiaries are owned by the respective special limited partners (the “Special Limited
Partners”). The Special Limited Partners are invested in the Petershill Splitter Subsidiaries to share a portion of the Profit Sharing Charge and the
Divestment Fee along with the Operator and do not have any other economic interest in the Petershill Splitter Subsidiaries (refer to Notes 6 and 20). The
transaction is not considered to be a business combination due to the nature of involving entities under common control, which falls outside of the scope
of IFRS 3.
III. Consolidation of Petershill holding companies
The Company has consolidated its investment in series and classes of assets that it wholly owns and controls in the Petershill holding companies. Such
assets and liabilities are ring-fenced from the overall legal entity and treated as a silo in line with IFRS 10. Specified assets of the series or class are the
only source of payment for specified liabilities in that series or class. Holders of other series or class do not have rights or obligations related to the
specified assets or to residual cash flows from those assets. Silos that are not directly or indirectly controlled by the Company are not considered to be
Subsidiaries and are accordingly not consolidated.
The Petershill Subsidiaries, Petershill Splitter Subsidiaries, Petershill Blockers and Petershill holding companies are collectively referred to as
the Subsidiaries.
IV. Accounting for investments in Partner-firms
The Group’s investments in Partner-firms are in the nature of non-controlling stakes that do not give rise to control or significant influence over the
investees. The Group has assessed and concluded that the provisions contained in IAS 28 and IFRS 9 relating to joint control or accounting for associates
are not applicable.
V. Elimination of intra-group balances and transactions
Intra-group balances and any unrealised gains arising from intra-group transactions are eliminated in preparing the consolidated financial statements.
Unrealised losses are eliminated unless the costs cannot be recovered. The financial results of Subsidiaries that are included in the consolidated financial
statements are included from the date that control commences until the date that control ceases.
xvii. Going Concern
In accordance with the Companies Act 2006, the Board of Directors has a responsibility to evaluate whether the Group has adequate resources to
continue its operational existence for the foreseeable future and at least for the 12 months following the issuance of the financial statements.
The Board of Directors has made an assessment of going concern, which takes into account the current performance and the Group’s outlook, including
future projections of profitability and cash flows as well as a downside scenario using information that is available as of the date of these financial
statements, and the Group’s access to the revolving credit facility and its debt arrangements, details of which are set out in the Financial and Operating
Review on page 29. An analysis regarding settlement of liabilities within 12 months after the report date (current) and more than 12 months after the
reporting date (non-current) is presented in Note 19.
After making reasonable inquiries and assessing all data relating to the Group’s liquidity, the Board has concluded that the Group will be able to continue
in operation and meet its liabilities as they fall due, for the 12 months from the date of signing the financial statements. For these reasons, the Company
has adopted a going concern basis in preparing the financial statements.
Further information on the Board’s going concern statement and viability statement is set out in the Strategic Report on pages 44 to 45.
Financial Statements
95 Petershill Partners plc | Annual Report 2024
xviii. Climate change
Climate change and other ESG-related issues may affect the Partner-firms in a variety of ways. The impacts can include items such as fundraising
demand, which may have either headwinds or tailwinds depending on the strategy of the fund. The diversity of investments in Partner-firms, and related
underlying funds, mitigates the risk to the Group if any, that climate change may have on any one underlying investment made by a Partner-firm.
In preparing the financial statements, the Operator considers the impact of climate change in the valuation of investments, insofar as they are reasonably
able. For the years ended 31 December 2024 and 2023, in determining the fair value of the investments in Partner-firms, based on inputs provided by the
third-party valuation advisor and discussions with Partner-firms, the Operator concluded that the impact of climate change to valuations is not material
at this time and hence did not use climate change as an input for valuations.
Notes to the Consolidated Financial Statements continued
Financial Statements
96 Petershill Partners plc | Annual Report 2024
3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires the Board to make judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses.
Estimates and judgements are continually evaluated and are based on Board experience and other factors, including expectations of future events that
are believed to be reasonable under the circumstances.
Judgements
Information about judgements made in applying accounting policies that have the most significant effect on the amounts recognised in the financial
statements is included in the following note:
Assessment as an investment entity
The Board of Directors has determined that the Company and its Subsidiaries are not an investment entity and therefore the Company’s financial
statements have been prepared on a consolidated basis, as required by IFRS 10 “Consolidated Financial Statements”.
The Board of Directors has determined that the Company and its Subsidiaries do not have an exit strategy as required by IFRS 10 and fail to meet one of
the essential criteria to be treated as an Investment Entity. The Company and its Subsidiaries hold their investments primarily for income generation
purposes and do not have plans to realise capital appreciation from substantially all of its investments in Partner-firms and non-financial assets in the
normal course of operations. Refer to Note 2(xv) for detailed discussion.
Estimates and assumptions
The Group makes estimates and assumptions, which are reviewed by the Board of Directors, that affect the reported amounts of assets and liabilities in
the future. Estimates and assumptions are regularly evaluated and are based on historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
Fair value of investments not quoted in an active market
The Group was formed with the objective of investing in Partner-firms. The targeted Partner-firms are typically well-established multi-billion-dollar
alternative investment firms with a track record of strong performance and meaningful cash flow generation and are well-positioned to develop their
platform across future fund and product offerings.
The Group participates in the management fee income, performance fee income and investment income earned by the Partner-firms.
The investments in Partner-firms held by the Group are not quoted or traded in an active market and as such their fair values are determined using
valuation techniques, primarily earnings multiples, discounted cash flows and recent comparable transactions. The fair values of certain Partner-firms are
fair valued with the assistance of a third-party valuation advisor engaged by the Operator.
The models used to determine fair values, which are individually bespoke and have individual assumptions applied to them, are the responsibility of the
Operator and are validated and periodically reviewed by appropriately skilled and functionally independent teams within the Operator. In valuing the
investments, key assumptions include estimates around future fundraise timing and sizes, expected management and performance fee rates and
margins of the Partner-firms, expected current and future fund returns and timing of realisations. These assumptions are driven by factors including data
provided by the Partner-firms, guidance provided by management of each Partner-firm, benchmarking analysis of related market data points, and other
qualitative and quantitative factors assessed by the Operator for each period.
The inputs in the earnings multiple models include observable data, such as earnings multiples of companies comparable to the relevant Partner-firms,
and unobservable data, such as forecast earnings for the Partner-firms and unobservable adjustments, such as those made to multiples. In discounted
cash flow models, unobservable inputs are the projected cash flows of the relevant Partner-firms and the risk premium for liquidity and credit risk that
are incorporated into the discount rate. The discount rates used for valuing investments are determined based on historical returns for other entities
operating in the same industry for which market returns are observable.
Fair value of contingent consideration
The fair value of contingent consideration obligations is assessed leveraging the inputs, assumptions and estimates used for the corresponding Partner-
firm valuations. These can include estimates around future fundraise timing and sizes, expected management and performance fee rates and margins of
the Partner-firms, expected current and future fund returns and timing of realisations. The models include estimates of probabilities of the likelihood of
those contingent payments and receipts against their contractual thresholds and milestones. The Operator uses a number of different valuation
techniques, at its discretion, but primarily relies on the income approach which applies discounted cash flow techniques based on the estimated future
payments and discount rates. Discount rates are determined based on the risk profile of the potential future payments which can be based on the returns
applied to the same Partner-firm valuations or an effective interest rate on similar borrowings.
Liability for Tax Receivables Agreement
This estimate assumes that Petershill Partners, Inc. utilises the deductions arising from the increase in tax basis and any interest imputed with respect to
its payment obligations under the Tax Receivables Agreement based on projections of its taxable income, and that there would be no future changes to
the 21% US statutory federal tax rate. To the extent that the stepped-up tax basis is amortisable the Group has projected the amortisation of the step-up
tax basis to occur over 15 years. To the extent that the step-up tax basis is not amortisable, the realisation of a benefit is outside of the Group’s control
and would only occur if the Partner-firm disposes of or otherwise realises a taxable gain or loss on the sale of the asset, and therefore the Group has
estimated there would be no tax benefit in computing the payment obligation under the Tax Receivables Agreement with respect to that stepped-up tax
basis. The Group applied a discount rate of 18%.
It should be noted that in certain circumstances if Petershill Partners, Inc. disposes of an underlying investment, it is possible that Petershill Partners, Inc.
will not be obligated to make payments under the Tax Receivables Agreement. The likelihood of such an event has been considered in estimating the
amount of the liability under the Tax Receivables Agreement.
Financial Statements
97 Petershill Partners plc | Annual Report 2024
The Group is not aware of any issue that would cause the taxing authorities to challenge a tax basis increase. However, the applicable Petershill Funds and
their Subsidiaries will not reimburse Petershill Partners, Inc. for any payments previously made under the Tax Receivables Agreement if the related tax
benefits that it claims arising from such increase, are successfully challenged by the applicable taxing authorities. As a result, in certain circumstances,
payments under the Tax Receivables Agreement could be in excess of the relevant cash tax savings derived from the Tax Receivables Agreement.
In arriving at the liability for Tax Receivables Agreement, the Operator has assumed the applicable US federal and state combined tax rate to be 25.7%
(31 December 2023: 25.7%) and considers the same as a significant estimate used in accruing the liability. For every change in tax rate by 5%, the liability
for Tax Receivables Agreement would change by $32.2 million (31 December 2023: $36.8 million).
As indicated above, the Operator has projected both the current and future taxable income of Petershill Partners, Inc. that would be available to utilise the
deductions arising from the increase in tax basis and any interest imputed with respect to the payment obligations under the Tax Receivables Agreement.
However, if the final tax returns filed for the year do not result in sufficient current taxable income to fully utilise the deductions as projected, there would
be a reduction in the amount actually paid under the Tax Receivables Agreement. The reductions in payment obligations as a result of insufficient current
taxable income will ultimately be paid in future years if taxable income exceeds the amount that is offset by the amortisation of the stepped-up tax basis
in that year. The Operator expects the Group to have sufficient taxable income available in future years based on its best estimate of income projections
available at 31 December 2024 to fully utilise the deductions arising from the increase in tax basis and any interest imputed with respect to the payment
obligations under the Tax Receivables Agreement.
As at 31 December 2024, the carrying value of the liability for Tax Receivables Agreement was reported at amortised cost at a value of $159.0 million (31
December 2023: $174.7 million). The fair value of the liability for Tax Receivables Agreement is estimated at $154.1 million (31 December 2023:
$166.6 million). The fair value of the liability for Tax Receivables Agreement would be classified as Level 3 in the fair value hierarchy due to the use of
unobservable inputs. A 3.0% increase/decrease in the underlying discount rate would result in a decrease/increase in fair value of approximately
$15.9 million and $19.7 million respectively (31 December 2023: $21.0 million and $25.1 million respectively). The discount rate was determined based
on the cost of capital adjusted for risks related to the potential elimination of the payments due to possible future disposal of the underlying investments.
4. Financial assets at fair value through profit or loss
Investments at fair value through profit or loss
The Group’s investments include investments in Partner-firms, which hold a diversified portfolio of investments in private equity, absolute return, private
credit and private real assets. This includes both current and non-current investments.

| For the year ended | For the year ended
| 31 December 2024 | 31 December 2023
| $m | $m
Opening balance | 5,254.7 | 4,958.9
Additions¹ | 192.1 | 66.8
Disposals | (507.6) | –
In kind distribution of Investments in Partner-firms | 6.1 | 0.2
Other movements | – | 1.8
Change in investments at fair value through profit or loss² | 866.7 | 227.0
Closing balance | 5,812.0 | 5,254.7

1. Of the above, $85.1 million (31 December 2023: $nil) relates to consideration payable on a deferred basis, -$4.1 million relates to returns of dividend
reinvestments (31 December 2023: $57.0 million relates to dividend reinvestments) and $111.1 million (31 December 2023: $9.8 million) relates to consideration
payable on an upfront basis.
2. Of the above, an amount of $837.6 million (31 December 2023: $227.0 million) relates to unrealised gain on fair value of current and non-current investments
held at year end and $29.1 million (31 December 2023: $nil) relates to year-to-date realised gain on fair value of investments disposed of during the year.
On 15 January 2025, the Group closed on the sale of a portion of one of its investments in Partner-firms, which was originally acquired by the Group in
2021, for a total consideration of $726.2 million. As at 31 December 2024, the portion of the investment sold is classified as held for sale and recorded as
a current asset, at its fair value of $726.2 million, within Investments at fair value through profit or loss in the Consolidated Statement of Financial
Position. Refer to Note 2(iv) for more details on the Group’s policy.
Notes to the Consolidated Financial Statements continued
Financial Statements
98 Petershill Partners plc | Annual Report 2024
Fair value measurements
IFRS 13 requires disclosure of fair value measurement by level. The level of fair value hierarchy within the financial assets or financial liabilities is
determined on the basis of the lowest level input that is significant to the fair value measurement. Financial assets and financial liabilities are classified in
their entirety into only one of the following three levels:
▪ Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
▪ Level 2 – inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and
▪ Level 3 – inputs for assets or liabilities that are not based on observable market data (unobservable inputs).
The determination of what constitutes “observable” requires significant judgement by the Group. The Board of Directors considers observable data to be
market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that
are actively involved in the relevant market.
The following tables analyse within the fair value hierarchy the assets and liabilities (by class) measured at fair value:

| Level 1 | Level 2 | Level 3 | Total
31 December 2024 | $m | $m | $m | $m
Assets |  |  |  |
Investments in money market funds at fair value through profit or loss | – | 8.9 | – | 8.9
Contingent consideration at fair value through profit or loss (current and non-current) | – | – | 95.8 | 95.8
Investments at fair value through profit or loss (current and non-current) | 2.1 | – | 5,809.9 | 5,812.0
Liabilities |  |  |  |
Contingent consideration at fair value through profit or loss (current and non-current) | – | – | (8.1) | (8.1)

| Level 1 | Level 2 | Level 3 | Total
31 December 2023 | $m | $m | $m | $m
Assets |  |  |  |
Investment in money market funds at fair value through profit or loss | – | 62.3 | – | 62.3
Investments at fair value through profit or loss | 0.2 | – | 5,254.5 | 5,254.7
Liabilities |  |  |  |
Contingent consideration at fair value through profit or loss (current and non-current) | – | – | (6.4) | (6.4)

The fair value of investments in money market funds is based on the daily published net asset value of each fund and is therefore considered Level 2.
Investments in listed stocks are classified as Level 1. Due to the nature of the investments in Partner-firms, they are always expected to be classified as
Level 3. The fair value of contingent consideration is determined based on a combination of unobservable inputs, including discounted cash flow models,
probability-weighted scenarios, and the Operator’s assessment of performance targets. Given the reliance on significant judgement and estimation, the
fair value can be classified as Level 3. However, if observable market data significantly influences the valuation, it may be classified as Level 2.
There have been no transfers between levels during the year. Any transfers between the levels would be accounted for on the last day of each financial year.
Financial Statements
99 Petershill Partners plc | Annual Report 2024
Sensitivity analysis to significant changes in unobservable inputs within Level 3 hierarchy
Key assumptions including the timing and size of future fund raises by Partner-firms, future performance of funds managed by the Partner-firms, the
timing of exits of investments managed by Partner-firms and margins of the Partner-firms are estimates made by the Operator and are not certain. The
choice of discount rate or market multiple is somewhat correlated to the assumptions made above. The discount rates and multiples are therefore
considered to be the significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy. These,
together with a quantitative sensitivity analysis as at 31 December 2024 and 31 December 2023, are as shown below:

|  |  | Range of |  |  |  |
|  |  | significant |  |  |  |
|  | Significant | unobservable |  |  |  |
| Market value as of | unobservable inputs | inputs as of | Weighted | Reasonable |  |
Level 3 investments | 31 December 2024 | by valuation technique ¹ | 31 December 2024 | average | shift ⁴ |  | Valuation sensitivity
Investments in | Market Approach: |  |  |  | -/+ | - | +
Management Companies: | $1,398.1 | Profit Multiple - FRE² | 12.0x - 24.0x | 16.1x | 1.0x | ($89.6) | $89.6
Private Markets | $258.4 | Asset Based Multiple | 1.0x | 1.0x | 10.0% | ($25.8) | $25.8
| Income Approach: |  |  |  |  |  |
| $1,463.3 | Terminal Multiple - FRE² | 5.4x - 19.0x | 15.4x | 0.7x | ($37.1) | $38.8
|  | Discount Rate - FRE | 8.0% - 18.4% | 11.9% | 1.0% | ($100.6) | $112.3
| $1,617.6 | Terminal Multiple - PRE³ | 3.6x - 10.5x | 6.6x | 0.8x | ($28.0) | $28.5
|  | Discount Rate - PRE | 13.0% - 34.0% | 24.1% | 2.0% | ($110.7) | $127.4
Investments in | Market Approach: |  |  |  | -/+ | – | +
Management Companies: | $115.1 | Profit Multiple - FRE² | 7.9x | 7.9x | 1.7x | ($24.9) | $24.9
Absolute Return | $14.0 | Profit Multiple - PRE³ | 4.4x | 4.4x | 2.0x | ($6.4) | $6.4
| $15.8 | Asset Based Multiple | 1.0x | 1.0x | 10.0% | ($1.6) | $1.6
| Income Approach: |  |  |  |  |  |
| $170.0 | Terminal Multiple - FRE² | 5.7x - 7.4x | 7.3x | 1.1x | ($13.1) | $17.1
|  | Discount Rate - FRE | 13.5% - 17.6% | 13.7% | 2.0% | ($13.2) | $17.4
| $31.4 | Terminal Multiple - PRE³ | 3.4x - 4.1x | 4.0x | 0.6x | ($2.8) | $3.6
|  | Discount Rate - PRE | 24.2% - 29.8% | 24.9% | 3.6% | ($2.4) | $3.2

The above table excludes an amount of $726.2 million as at 31 December 2024 in relation to Level 3 investments, for which the Operator did not have
significant estimation uncertainty.
Notes to the Consolidated Financial Statements continued
Financial Statements
100 Petershill Partners plc | Annual Report 2024

|  |  | Range of |  |  |  |
|  | Significant | significant unobservable |  |  |  |
| Market value as of | unobservable inputs | inputs as of | Weighted | Reasonable |  |
Level 3 investments | 31 December 2023 | by valuation technique ¹ | 31 December 2023 | average | shift ⁴ |  | Valuation sensitivity
Investments in | Market Approach: |  |  |  | -/+ | - | +
Management Companies: | $1,201.9 | Profit Multiple - FRE² | 10.0x - 23.5x | 14.5x | 1.0x | ($87.3) | $87.4
Private Markets | $405.6 | Asset Based Multiple | 1.0x | 1.0x | 10.0% | ($40.6) | $40.6
| Income Approach: |  |  |  |  |  |
| $1,670.3 | Terminal Multiple - FRE² | 4.7x - 17.5x | 13.2x | 0.7x | ($42.0) | $43.4
|  | Discount Rate - FRE | 8.0% - 21.4% | 13.0% | 1.0% | ($110.1) | $122.3
| $1,460.9 | Terminal Multiple - PRE³ | 2.7x - 10.0x | 5.5x | 0.8x | ($32.9) | $34.1
|  | Discount Rate - PRE | 13.0% - 37.0% | 25.2% | 2.0% | ($107.0) | $123.6
Investments in | Market Approach: |  |  |  | -/+ | – | +
Management Companies: | $135.2 | Profit Multiple - FRE² | 8.2x | 8.2x | 1.6x | ($10.1) | $10.1
Absolute Return | $82.8 | Profit Multiple - PRE³ | 4.5x - 5.0x | 4.7x | 2.0x | ($14.2) | $14.2
| $17.5 | Asset Based Multiple | 1.0x | 1.0x | 10.0% | ($1.7) | $1.7
| Income Approach: |  |  |  |  |  |
| $178.1 | Terminal Multiple - FRE² | 6.1x - 7.5x | 7.4x | 1.1x | ($13.2) | $17.4
|  | Discount Rate - FRE | 13.3% - 16.4% | 13.6% | 2.0% | ($13.2) | $17.4
| $102.0 | Terminal Multiple - PRE³ | 3.3x - 5.3x | 4.5x | 0.7x | ($7.6) | $10.1
|  | Discount Rate - PRE | 19.0% - 30.3% | 22.9% | 3.4% | ($7.5) | $10.1

1. The fair value of any one instrument may be determined using multiple valuation techniques. For example, market comparable and discounted cash flows may be
used together to determine fair value. Therefore, the Level 3 balance encompasses both of these techniques.
2. The range consists of multiples on management fee-related earnings ("FRE") and may represent historical or forward-looking multiples.
3. The range consists of multiples on performance-related earnings ("PRE") and may represent historical or forward-looking multiples.
4. The increase or decrease in the unobservable inputs may not be shifted negatively and positively by an equal amount. For the asset categories that have different
reasonable possible shifts, the above table discloses the weighted average of the respective negative and positive shift.
As the Group’s investments are generally not publicly quoted, valuations require meaningful judgement to establish a range of values and the ultimate
value at which an investment is realised may differ from its most recent valuation and the difference may be significant.
The below is a reconciliation of Level 3 assets held at fair value through profit or loss:

| For the year ended | For the year ended
| 31 December 2024 | 31 December 2023
Level 3 Instrument | $m | $m
Assets |  |
Opening balance | 5,254.5 | 4,958.9
Additions¹ | 192.1 | 66.8
Disposals | (503.9) | –
Other movements | – | 1.8
Change in investments at fair value through profit or loss² | 867.2 | 227.0
| 5,809.9 | 5,254.5

1. Of the above, $85.1 million (31 December 2023: $nil) relates to consideration payable on a deferred basis, -$4.1 million relates to returns of dividend
reinvestments (31 December 2023: $57.0 million relates to dividend reinvestments) and $111.1 million (31 December 2023: $9.8 million) relates to consideration
payable on an upfront basis.
2. Of the above, an amount of $837.9 million (31 December 2023: $227.0 million) relates to unrealised gain on fair value of current and non-current investments
held at year end and $29.3 million (31 December 2023: $nil) relates to year-to-date realised gain on fair value of investments disposed of during the year.
Financial Statements
101 Petershill Partners plc | Annual Report 2024
Contingent consideration at fair value through profit or loss
In addition to above, the Group has $95.8 million (31 December 2023: $nil) of Level 3 assets and $8.1 million (31 December 2023: $6.4 million) of Level 3
liabilities as at 31 December 2024. The assets represent a portion of the total consideration which is probable under contingent consideration
agreements in connection with its sale of investments in certain Partner-firms, wherein the Group may receive additional consideration based on the
underlying terms of the sale agreement. The liabilities represent a portion of the total consideration which is probable under the contingent
consideration agreements in connection with its investments in certain Partner-firms wherein the Group may have to pay additional consideration based
on the underlying Partner-firms’ ability to raise capital or meet certain revenue thresholds as defined in the relevant investment agreement. For the year
ended 31 December 2024, the Group recorded a net fair value gain of $6.9 million (2023: loss of $6.4 million) on contingent consideration in the
Consolidated Statement of Comprehensive Income, comprising of $8.6 million increase (2023: $nil) in contingent consideration assets and $1.7 million
increase (2023: $6.4 million increase) in contingent consideration liabilities.
As at 31 December 2024, an increase/decrease in the underlying discount rate of 2.9% (31 December 2023: n/a) would result in a decrease/increase in
the fair value of contingent consideration assets of -$4.3 million/+$5.0 million (31 December 2023: n/a) respectively.
As at 31 December 2024, an increase/decrease in the underlying discount rate of 1.9% (31 December 2023: 1.0%) would result in a decrease/increase in
the fair value of the contingent consideration liabilities of -$0.1 million/+$0.1 million (31 December 2023: -$0.04 million/+$0.02 million) respectively.
Deferred consideration receivable
The Group has $152.8 million (31 December 2023: $nil) of deferred consideration receivable recorded in the Consolidated Statement of Financial
Position as at 31 December 2024 and the carrying amount is imputed at an effective interest rate of 7.0% (31 December 2023: n/a). The assets represent
a portion of the total consideration which is due to the Group on a deferred basis in connection with its sales of investments in certain Partner-firms. The
assets are held at amortised cost. During the year ended 31 December 2024, the Group recorded $2.4 million (2023: $nil) of finance income in the
Consolidated Statement of Comprehensive Income in relation to the accretion of the assets.
As at 31 December 2024, an increase/decrease in the underlying discount rate of 1.0% would result in a decrease/increase in the carrying amount of
deferred consideration receivable of -$0.7 million/+$0.7 million (31 December 2023: n/a) respectively.
Deferred payment obligations
The Group has $87.8 million (31 December 2023: $51.9 million) of deferred payment obligations recorded in the Consolidated Statement of Financial
Position as at 31 December 2024 and the carrying amount is imputed at an effective interest rate of 3.2% (31 December 2023: 2.4%). These liabilities
represent a portion of the total consideration which is due from the Group on a deferred basis in connection with its purchases of investments in certain
Partner-firms wherein the Group is required to pay additional consideration on an agreed future date. The liabilities are held at amortised cost. During the
year ended 31 December 2024, the Group recorded $6.1 million (2023: $6.0 million) of finance cost in the Consolidated Statement of Comprehensive
Income in relation to the amortisation of the liabilities.
As at 31 December 2024, an increase/decrease in the underlying discount rate of 1.0% would result in a decrease/increase in the carrying amount of
deferred payment obligations of -$0.6 million/+$0.6 million (31 December 2023: -$0.5 million/+$0.5 million) respectively.
Investments in money market funds
The Group invests its overnight cash balance in money market funds representing a collective investment scheme promoted by an affiliate of the
Operator. As at 31 December 2024, the money market funds were AAA (31 December 2023: AAA) rated. These investments are redeemable at short
notice and have been classified as debt investments. As at 31 December 2024, the Group held investments in money market funds of $8.9 million (31
December 2023: $62.3 million) and during the year ended 31 December 2024 earned interest of $7.7 million (2023: $24.7 million).
5. Cash and cash equivalents

| 31 December 2024 | 31 December 2023
| $m | $m
Cash at bank | 14.5 | 92.9
Fixed term deposit | – | 150.0
| 14.5 | 242.9

On 14 December 2023, the Company entered into a fixed term deposit of $150.0 million, which matured on 15 March 2024. Interest was earned on the
fixed term deposit at a rate of 5.4% per annum. During the year ended 31 December 2024, the Company earned $1.7 million (2023: $0.4 million) of
interest which is included in Interest income from other assets in the Consolidated Statement of Comprehensive Income.
6. Operator charges
On 1 January 2024, the Special Limited Partners contributed to each of the Petershill Splitter Subsidiaries as part of the Restructure (see Note 2) in return
for a share in the Profit Sharing Charge and Divestment Fee previously due solely to the Operator. The total fees due to the paid by the Group did not
change as a result.
Recurring Operating Charges
Under the Operator Agreement, the Operator is entitled to Recurring Operating Charges on a quarterly basis, such Recurring Operating Charges
consisting of, in aggregate, 7.5% of the Group’s relevant income from investments, as defined under IFRS, for the relevant quarter. For the year ended 31
December 2024, the income attributable to assets owned by the Group on which Recurring Operating Charges was earned amounted to $322.8 million
(2023: $292.1 million).
Notes to the Consolidated Financial Statements continued
Financial Statements
102 Petershill Partners plc | Annual Report 2024
Amounts recorded as Recurring Operating Charges during the year ended 31 December 2024 were $24.2 million (2023: $21.9 million), of which
$7.0 million (31 December 2023: $6.6 million) was outstanding as at 31 December 2024. These amounts will be paid in accordance with the terms of the
Operator Agreement.
Profit Sharing Charge
The Operator and Special Limited Partners are entitled to a profit sharing charge (the “Profit Sharing Charge”) on a quarterly basis in arrears, which in
aggregate shall be an amount equal to 20% of the total dividend income from each new investment (“New Investment”) made by the Group after the
Admission in the relevant fiscal quarter (net of any Recurring Operating Charges in respect of such New Investment), beginning in the ninth fiscal quarter
from the date on which the New Investment closed and subject to such New Investment having achieved a return of 6% per annum calculated using the
total invested capital funded to the pertinent date. These amounts will be paid in accordance with the terms of the Operator Agreement.
The aggregate of the Recurring Operating Charges and the Profit Sharing Charge is capped at 15% of the Group’s income from investments in Partner-
firms for the relevant quarter excluding any Divestment Fee payable for such quarter.
Amounts recorded as Profit Sharing Charge during the year ended 31 December 2024 were $0.6 million and $0.9 million (2023: $0.1 million and $nil) to
the Operator and Special Limited Partners respectively, and an amount of $0.3 million and $0.3 million (31 December 2023: $0.1 million and $nil) was
outstanding to the Operator and Special Limited Partners as at 31 December 2024 respectively. These amounts will be paid in accordance with the terms
of the Operator Agreement.
Divestment Fee
The Operator and Special Limited Partners are entitled to a divestment fee (“Divestment Fee”) calculated at 20% of the total Divestment Profit in the
relevant quarter in relation to the Group’s investments. Divestment Profit refers to the cash flows realised from the sale or divestment of assets
calculated as the sale price minus the contribution value of such asset, excluding any dividend income received over the holding period and on which the
Group has already paid Recurring Operating Charges and, in the case of New Investments, Profit Sharing Charge.
Although the Group does not have an exit strategy for its investments, it may be subject to exits or realisations at underlying Partner-firms and as such an
accrual is reflected in the accounts representing an amount that would be payable if the Group were to exit all of its investments at the fair value
reflected in these financial statements. As at 31 December 2024, an amount of $247.3 million (31 December 2023: $94.8 million), of which
$119.5 million and $127.8 million would be due to the Operator and Special Limited Partners respectively (31 December 2023: $94.8 million and $nil),
has been accrued towards fee payable on divestment of investments, of which $1.2 million (2023: $nil) related to disposals during the year ended 31
December 2024 and will be paid in accordance with the terms of the Operator Agreement.
7. Audit fees
Other operating expenses include fees payable to the Group’s Auditors and its affiliates, which can be analysed as follows:

| For the year ended | For the year ended
| 31 December 2024 | 31 December 2023
| $m | $m
Fees to the Company’s Auditors¹ |  |
for audit of the statutory financial statements of £1.1million (2023: £0.9million)² | 1.4 | 1.2
for audit-related assurance services of £0.1million (2023: £0.1million) | 0.1 | 0.1
| 1.5 | 1.3

1. All fees are excluding VAT.
2. The audit fee of £1.1 million for the year ended 31 December 2024 includes an amount of £54 thousand (excluding VAT) or £65 thousand (including VAT) relating
to additional billing for the 2023 audit.
For the year ended 31 December 2024, the Company’s Auditors were paid £0.1 million (2023: £0.1 million) in relation to its review of the Group’s
condensed interim consolidated financial statements and the same is included under audit-related assurance services.
Financial Statements
103 Petershill Partners plc | Annual Report 2024
8. Tax
The Group’s income tax expense can be analysed as follows:

| For the year ended | For the year ended
| 31 December 2024 | 31 December 2023
Amounts recognised in profit and loss | $m | $m
Current tax expense: |  |
Adjustments for current tax of prior periods | 0.9 | 12.7
Tax charge at standard US corporation tax rate | 1.9 | 1.3
Tax charge at standard UK corporation tax rate | 4.9 | 9.5
Withholding tax | 5.4 | –
Total current tax expense | 13.1 | 23.5
Deferred tax expense: |  |
Origination and reversal of temporary differences | 152.0 | 65.3
Adjustments for deferred tax of prior periods | (12.2) | 5.9
Movements in unrecognised tax benefits | (19.3) | (16.7)
Other | 1.8 | –
Effect of changes in tax rates | (2.3) | (2.0)
Total deferred tax expense | 120.0 | 52.5
Total income tax expense | 133.1 | 76.0

The differences in the effective tax rate for the period and the standard rate of corporation tax in the UK at 25.0% (2023: 23.5%) are as follows:

|  |  |  | For the year ended |
| US | UK | Other | 31 December 2024 |
Reconciliation of effective tax rate | $m | $m | $m | $m | %
Profit/(loss) before tax | 654.1 | 834.2 | (522.8) | 965.5 |
Tax charge/(credit) at standard UK corporation tax rate | 163.5 | 208.6 | (130.7) | 241.4 | 25.0%
Foreign rate differential | (26.2) | – | (76.8) | (103.0) | (10.7%)
Intra-group dividend income not taxable | – | (65.9) | 65.9 | – | –%
US tax expense related to PLC income | 0.5 | – | – | 0.5 | 0.1%
State and Local taxes | 14.2 | – | – | 14.2 | 1.5%
Adjustments for prior periods | 4.1 | (1.1) | – | 3.0 | 0.3%
Tax on partnership profits | – | 3.9 | – | 3.9 | 0.4%
Other | 1.8 | – | 5.3 | 7.1 | 0.7%
Deferred tax adjustment, net of Initial Recognition | (14.7) | – | – | (14.7) | (1.5%)
Exemption ("IRE") |  |  |  |  |
Movements in unrecognised deferred tax | (19.3) | (141.6) | 141.6 | (19.3) | (2.0%)
Total income tax expense | 123.9 | 3.9 | 5.3 | 133.1 | 13.8%

| For the year ended |
| 31 December 2024 |
Reconciliation of effective tax rate US jurisdiction | $m | %
Profit before tax | 654.1 |
Total tax at the standard local country corporation tax rate | 137.3 | 21.0%
US tax expense related to PLC income | 0.5 | 0.1%
State and Local taxes | 14.2 | 2.2%
Adjustments for prior periods (US Tax) | 4.1 | 0.6%
Other | 1.8 | 0.3%
Deferred tax adjustment, net of IRE | (14.7) | (2.2%)
Movements in unrecognised deferred tax | (19.3) | (3.0%)
Total income tax expense | 123.9 | 19.0%

Notes to the Consolidated Financial Statements continued
Financial Statements
104 Petershill Partners plc | Annual Report 2024

|  |  |  | For the year ended |
| US | UK | Other | 31 December 2023 |
Reconciliation of effective tax rate | $m | $m | $m | $m | %
Profit/(loss) before tax | 207.7 | 328.5 | (139.1) | 397.1 |
Tax charge at standard UK corporation tax rate | 48.8 | 77.3 | (32.7) | 93.4 | 23.5%
Foreign rate differential | (5.2) | – | (28.6) | (33.8) | (8.5%)
Intra-group dividend income not taxable | 10.5 | (23.5) | 13.0 | – | –%
US tax expense related to PLC income | 1.3 | – | – | 1.3 | 0.3%
State and Local taxes | 9.3 | – | – | 9.3 | 2.3%
Adjustments for prior periods | 6.3 | 12.1 | – | 18.4 | 4.6%
Tax on partnership profits | – | 4.1 | – | 4.1 | 1.0%
Movements in unrecognised deferred tax | (16.7) | (48.3) | 48.3 | (16.7) | (4.2%)
Total income tax expense | 54.3 | 21.7 | – | 76.0 | 19.0%

| For the year ended |
| 31 December 2023 |
Reconciliation of effective tax rate US jurisdiction | $m | %
Profit before tax | 207.7 |
Total tax at the standard local country corporation tax rate | 43.6 | 21.0 %
Intra-group dividend income not taxable | 10.5 | 5.1 %
US tax expense related to PLC income | 1.3 | 0.6 %
State and Local taxes | 9.3 | 4.5 %
Adjustments for prior periods (US Tax) | 6.3 | 3.0 %
Movements in unrecognised deferred tax | (16.7) | (8.0) %
Total income tax expense | 54.3 | 26.2 %

The tax disclosures for the years ended 31 December 2024 and 31 December 2023 have been updated such that the tax impact of items which are
eliminated on consolidation (being intercompany dividends and gains/losses on subsidiary investments) is offset in the tax reconciliation. There is no
change in the tax expense in either year.
The Investments in Partner-firms were a purchase of assets for income tax purposes. Due to differences in the computation of the purchase price of the
Partner-firms as well as the impact of the Tax Receivables Agreement, temporary differences arose on the acquisition. Due to initial recognition exception
under paragraphs 15 and 24 of IAS 12 – Income Taxes no deferred tax is recognised in respect of these original temporary differences.
The UK statutory corporation tax rate increased from 19% to 25% with effect from 1 April 2023. The UK statutory rate for the year ended 31 December
2024 is therefore 25.00% (2023: blended rate of 23.54%). Deferred tax assets and liabilities in the UK as at 31 December 2024 have been calculated
based on the 25% rate (31 December 2023: 25%). Deferred tax assets and liabilities in the US as at 31 December 2024 have been calculated based on the
US federal statutory rate of 21% (31 December 2023: 21%) and estimated effective state tax rate of 2.93% (31 December 2023: 5.48%).
In 2023, the Finance (No. 2) Act 2023 enacted certain provisions of the G20-Organisation for Economic Co-operation and Development (OECD) Global
Anti-Base Erosion Model Rules (Pillar Two), including a Domestic Minimum Top-up Tax and Income Inclusion rule. This legislation seeks to ensure that UK
headquartered multinational enterprises pay a minimum tax rate of 15% on UK and overseas profits arising after 31 December 2023. The legislation
applies for a period to groups with revenues in excess of €750 million in at least two of the previous four periods. The Group is not within the scope of
Pillar Two in the year ended 31 December 2024. The application of Pillar Two to the Group shall continue to be closely monitored.
Financial Statements
105 Petershill Partners plc | Annual Report 2024
9. Deferred tax liability
Movement in deferred tax balances

| Net balance | Recognised in | Recognised in | Foreign | Net balance 31 | Deferred tax | Deferred tax
| 1 January 2024 | profit or loss | OCI/equity | exchange | December 2024 | assets | liabilities
| $m | $m | $m | $m | $m | $m | $m
Investment in Partner-firms | (70.4) | (150.0) | – | – | (220.4) | – | (220.4)
Tax Receivables Agreement | 23.6 | 2.9 | – | – | 26.5 | 26.5 | –
Deferred payment obligations | (0.1) | 0.1 | – | – | – | – | –
Divestment fee | 16.6 | 23.0 | – | – | 39.6 | 39.6 | –
Other | 6.9 | 3.3 | – | – | 10.2 | 10.2 | –
Losses | 15.2 | (0.9) | – | – | 14.3 | 14.3 | –
Capital loss | – | 1.6 | – | – | 1.6 | 1.6 | –
| (8.2) | (120.0) | – | – | (128.2) | 92.2 | (220.4)

| Net balance | Recognised in | Recognised in | Foreign | Net balance 31 | Deferred tax | Deferred tax
| 1 January 2023 | profit or loss | OCI/equity | exchange | December 2023 | assets | liabilities
| $m | $m | $m | $m | $m | $m | $m
Investment in Partner-firms | 18.4 | (88.8) | – | – | (70.4) | – | (70.4)
Tax Receivables Agreement | 17.3 | 6.3 | – | – | 23.6 | 23.6 | –
Deferred payment obligations | (0.6) | 0.5 | – | – | (0.1) | – | (0.1)
Divestment fee | 7.1 | 9.5 | – | – | 16.6 | 16.6 | –
Other | 0.8 | 6.1 | – | – | 6.9 | 6.9 | –
Losses | 1.0 | 14.2 | – | – | 15.2 | 15.2 | –
| 44.0 | (52.2) | – | – | (8.2) | 62.3 | (70.5)

After considering jurisdictional netting, the deferred tax balances shown above are presented on a net basis on the Consolidated Statement of
Financial Position.
The gross deferred tax asset as at 31 December 2024 was $92.2 million (31 December 2023: $62.3 million). As at 31 December 2024, it is expected that
$30.7 million (31 December 2023: $7.6 million) of the deferred tax asset will be recovered within the next 12 months and the remaining $61.5 million (31
December 2023: $54.7 million) of the deferred tax asset will be recovered after 12 months.
Losses carried forward as at 31 December 2024 will expire as follows:

| US | UK | Total
| $m | $m | $m
2025 | – | – | –
2026 and onwards | – | – | –
Unlimited | 63.8 | – | 63.8
| 63.8 | – | 63.8

Losses carried forward as at 31 December 2023 will expire as follows:

| US | UK | Total
| $m | $m | $m
2024 | – | – | –
2025 and onwards | – | – | –
Unlimited | 58.0 | – | 58.0
| 58.0 | – | 58.0

Notes to the Consolidated Financial Statements continued
Financial Statements
106 Petershill Partners plc | Annual Report 2024
Unrecognised deductible temporary differences and unused tax losses
Deferred tax liabilities/assets have not been recognised in respect of the following items:

| 31 December 2024 | 31 December 2023
| $m | $m
(Taxable)/deductible temporary differences (UK) - no expiration | (75.2) | 66.4
Deductible temporary differences (US) - subject to initial recognition exception | 10.4 | 35.4
| (64.8) | 101.8

Unrecognised taxable temporary differences associated with investments and interests in Partner-firms
The Investments in Partner-firms were a purchase of assets for income tax purposes. Due to differences in the computation of the purchase price of the
Investments in Partner-firms as well as the impact of the Tax Receivables Agreement, temporary differences arose on the acquisition. Under the Initial
Recognition Exemption under paragraphs 15 and 23 of IAS 12, these temporary differences were not recognised at the time of the original purchase.
Consequently, as the unrecognised temporary differences reverse there will be no net impact to tax expense in the financial statements.
Further, to the extent that the Group has recognised unrealised losses with respect to the investments and interests in Partner-firms, such losses may
result in a deferred tax asset to the extent that the unrealised losses are not currently deductible for income tax purposes. To the extent the recovery of
these deferred tax assets will only result in future losses that may offset a future capital gain, the Group has not recognised the associated deferred tax
assets unless it is probable that there will be sufficient income of the appropriate character in the future to utilise the associated tax benefits. As of 31
December 2024, the amount recognised is $1.6 million related to capital losses that are expected to offset capital gains arising from future disposals.
Uncertainty over income tax treatments
The Group has not identified any reserves related to uncertainty over income tax treatments as of 31 December 2024 or 31 December 2023.
10. Finance cost

| 31 December 2024 | 31 December 2023
| $m | $m
Interest on Unsecured Notes | 28.3 | 28.3
Interest on Deferred payment obligations | 6.1 | 6.0
Commitment fees | 0.4 | 0.4
Borrowing cost amortisation | 0.6 | 0.6
Other finance charges | 1.3 | 1.8
| 36.7 | 37.1

11. Earnings per share

| For the year ended | For the year ended
| 31 December 2024 | 31 December 2023
Profit attributable to equity holders of the Company ($m) | 832.4 | 321.1
Weighted average number of Ordinary Shares in issue | 1,098,004,286 | 1,131,506,310
Basic and diluted earnings per share from continuing operations in the year (cents) | 75.81 | 28.38

The weighted average number of shares for the year ended 31 December 2024 and 31 December 2023 is calculated on a time weighted basis based on
the timing of issue and redemption of Ordinary Shares. There are no dilutive shares in issue.
Financial Statements
107 Petershill Partners plc | Annual Report 2024
12. Trade and other receivables

| 31 December | 31 December
| 2024 | 2023
| $m | $m
Amounts receivable from Investments | 147.6 | 105.9
Tax recoverable | 12.5 | 10.4
Prepayments | 1.3 | 1.9
Other receivables | 4.2 | 9.2
| 165.6 | 127.4

13. Unsecured Notes payable
On 24 August 2022, Petershill Partners, Inc. issued US private placement senior unsecured notes (the "Unsecured Notes") to a group of institutional
investors. The Unsecured Notes issued by Petershill Partners, Inc. are guaranteed by the Company.
The Unsecured Notes are comprised of five tranches:

Unsecured Notes | Notional (US$) | Tenor (years) | Maturity | Fixed Coupon
Series A | 125,000,000 | 7 | 2029 | 5.51%
Series B | 175,000,000 | 10 | 2032 | 5.54%
Series C | 80,000,000 | 12 | 2034 | 5.69%
Series D | 80,000,000 | 15 | 2037 | 5.84%
Series E | 40,000,000 | 20 | 2042 | 6.14%

Petershill Partners, Inc. may be subject to pay a Make-Whole Amount (as contained in the Note Purchase Agreement) contingent upon certain principal
repayment, prepayment or redemption of the Unsecured Notes in accordance with the provisions of the Note Purchase Agreement. Absent an intent by
the Group to prepay the Unsecured Notes, no accrual for such Make-Whole Amount has been made as at 31 December 2024 or 31 December 2023.
In accordance with the Note Purchase Agreement, the Petershill Partners, Inc. is subject to various financial and non-financial covenants. The two
financial covenants that the Petershill Partners, Inc. must adhere to are 1) the leverage ratio shall not exceed 4:1 and 2) the AuM shall not be less than the
required minimum AUM amount (as defined in the Note Purchase Agreement). The Operator monitors the covenant requirements on at least a six-
monthly basis. There have been no breaches of these covenants during the year.
As at 31 December 2024, the outstanding amount of the Unsecured Notes was $500.0 million (31 December 2023: $500.0 million). The carrying value of
the Unsecured Notes was reported at amortised cost and was net of unamortised debt issuance costs of $5.6 million (31 December 2023: $6.2 million) in
an amount of $494.4 million (31 December 2023: $493.8 million). For the year ended 31 December 2024, the effective interest rate on the Unsecured
Notes was 6.2% per annum (2023: 6.2% per annum).
As of 31 December 2024, the fair value of the Unsecured Notes payable is estimated at $478.7 million (31 December 2023: $467.0 million) calculated
based on discounted cash flows using the discount rate of 6.4% at 31 December 2024 and 6.6% at 31 December 2023 respectively. The Unsecured Notes
payable would be classified as Level 3 in the fair value hierarchy due to the use of unobservable inputs, including the Group’s own credit risk. A 3.0%
increase/decrease in the underlying discount rate would result in a movement in fair value of approximately -$82.2 million / +$107.4 million respectively
(31 December 2023: -$87.0 million/+$113.6 million) or -17.2%/+22.4% (31 December 2023: -18.6%/+24.3%).
Notes to the Consolidated Financial Statements continued
Financial Statements
108 Petershill Partners plc | Annual Report 2024
14. Net Debt Reconciliation

| 31 December | 31 December
| 2024 | 2023
| $m | $m
Unsecured Notes payable | 494.4 | 493.8
Interest payable | 10.0 | 10.0
| 504.4 | 503.8

Liabilities from financing activities for the year ended 31 December 2024

| Unsecured Notes | Interest
| Payable | Payable
| $m | $m
Net debt at 1 January 2024 | 493.8 | 10.0
Repayment of interest | – | (28.3)
Interest expense | – | 28.3
Borrowing costs amortised | 0.6 | –
Net debt as at 31 December 2024 | 494.4 | 10.0

Liabilities from financing activities for the year ended 31 December 2023

| Unsecured Notes | Interest
| Payable | Payable
| $m | $m
Net debt at 1 January 2023 | 493.2 | 10.0
Repayment of interest | – | (28.3)
Interest expense | – | 28.3
Borrowing costs amortised | 0.6 | –
Net debt as at 31 December 2023 | 493.8 | 10.0

15. Share capital and other reserve
For the year ended 31 December 2024

|  |  |  |  |  | Capital |
|  |  | Share | Share | Other | redemption |
|  | Number of | capital | premium | reserve | reserve | Total
Date | Issued and fully paid | Shares Issued | $m | $m | $m | $m | $m
Shares at 1 January 2024 |  | 1,122,202,824 | 11.2 | – | 1,689.6 | 0.5 | 1,701.3
| Repurchase of Ordinary Shares – $0.01 | (40,494,657) | (0.4) | – | – | 0.4 | –
Closing balance as at 31 December 2024 |  | 1,081,708,167 | 10.8 | – | 1,689.6 | 0.9 | 1,701.3

Financial Statements
109 Petershill Partners plc | Annual Report 2024
For the year ended 31 December 2023

|  |  |  |  |  | Capital |
|  |  | Share | Share | Other | redemption |
|  | Number of | capital | premium | reserve | reserve | Total
Date | Issued and fully paid | Shares Issued | $m | $m | $m | $m | $m
Shares at 1 January 2023 |  | 1,135,399,597 | 11.4 | 3,346.7 | 1,689.6 | 0.3 | 5,048.0
| Share premium cancellation | – | – | (3,346.7) | – | – | (3,346.7)
| Repurchase of Ordinary Shares – $0.01 | (13,196,773) | (0.2) | – | – | 0.2 | –
Closing balance as at 31 December 2023 |  | 1,122,202,824 | 11.2 | – | 1,689.6 | 0.5 | 1,701.3

On 17 May 2023, the Company commenced a share buyback programme of up to $50 million. During the year ended 31 December 2024, the Group
repurchased and cancelled 2,623,705 Ordinary Shares (2023: 13,196,773) as part of its buyback programme for a total consideration of $5.8 million
(2023: $26.3 million) including transaction costs. The programme was subsequently terminated on 11 April 2024.
The Company’s Shareholders approved the cancellation of the amount standing to the credit of the Company's share premium account in full (the
"Reduction of Capital") at its Annual General Meeting held on 24 May 2023. A formal approval of the same was obtained on 20 June 2023 from His
Majesty's High Court in England (the "Court"), Accordingly, the Reduction of Capital became effective which created additional distributable reserves of
approximately $3,346.7 million and the amounts standing to the credit of the share premium account have been transferred to Retained earnings.
On 23 April 2024, the Company proposed a tender of up to $100 million of Ordinary Shares. On 31 May 2024, the tender offer closed and 37,870,952
Ordinary Shares were purchased and cancelled for a total consideration of $106.7 million, including transaction costs.
As at 31 December 2024, the Company’s issued share capital comprised 1,081,708,167 of Ordinary Shares (31 December 2023: 1,122,202,824) of $0.01
each. Ordinary Shareholders are entitled to all dividends paid by the Company. The Company does not have a limited amount of authorised capital.
16. Retained earnings

| For the year ended | For the year ended
| 31 December 2024 | 31 December 2023
| $m | $m
Opening balance | 3,132.6 | (328.7)
Profit and total comprehensive income in the year | 832.4 | 321.1
Dividends paid | (453.8) | (180.2)
Repurchase of Ordinary Shares | (112.5) | (26.3)
Share premium cancellation | – | 3,346.7
Closing balance | 3,398.7 | 3,132.6

17. Net assets per share

| 31 December 2024 | 31 December 2023
Net Assets ($m) | 5,100.0 | 4,833.9
Number of Ordinary Shares issued | 1,081,708,167 | 1,122,202,824
Net assets per share (cents) | 471.48 | 430.75

Notes to the Consolidated Financial Statements continued
Financial Statements
110 Petershill Partners plc | Annual Report 2024
18. Dividends declared and paid
For the year ended 31 December 2024

|  | Dividend |
|  | per share | Total dividend
Dividends declared and paid | Paid on | cents | $m
Final dividend with respect to the year ended 31 December 2023 | 14 June 2024 | 10.1 | 113.1
Interim dividend with respect to the year ended 31 December 2024 | 31 October 2024 | 5.0 | 54.1
Special dividend with respect to the year ended 31 December 2024¹ | 31 October 2024 | 9.0 | 97.3
Special dividend with respect to the year ended 31 December 2024¹ | 20 December 2024 | 17.5 | 189.3
Total |  | 41.6 | 453.8

1. Special dividends relate to the distribution of proceeds from investment activity.
For the year ended 31 December 2023

|  | Dividend |
|  | per share | Total dividend
Dividends declared and paid | Paid on | cents | $m
Final dividend with respect to the year ended 31 December 2022 | 13 June 2023 | 11.0 | 124.9
Interim dividend with respect to the year ended 31 December 2023 | 27 October 2023 | 4.9 | 55.3
Total |  | 15.9 | 180.2

Financial Statements
111 Petershill Partners plc | Annual Report 2024
19. Financial risk management
Financial risk management objectives
The Group’s investing activities expose it to various types of risks that are associated with the Partner-firms. The Group makes the investments with the
goal of generating returns in accordance with its Acquisition Strategy and Investment Policy.
The most important types of financial risks to which the Group is exposed are market risk (including price, interest rate and foreign currency risk), liquidity
risk and credit risk. The Board of Directors has delegated portfolio management and risk management responsibilities to the Operator. Accordingly, the
Operator has overall responsibility for the determination of the Group’s risk management and sets policy to manage that risk at an acceptable level to
achieve those objectives. The policy and process for measuring and mitigating each of the main risks are described below.

| 31 December | 31 December
| 2024 | 2023
| $m | $m
Financial assets |  |
Non-current assets: |  |
Investments at fair value through profit or loss | 5,085.8 | 5,254.7
Contingent consideration at fair value through profit or loss | 65.1 | –
Current financial assets: |  |
Investments at fair value through profit or loss | 726.2 | –
Investments in money market funds at fair value through profit or loss | 8.9 | 62.3
Cash and cash equivalents | 14.5 | 242.9
Contingent consideration at fair value through profit or loss | 30.7 | –
Deferred consideration receivable | 152.8 | –
Trade and other receivables (excluding prepayments) | 164.3 | 125.5
Financial liabilities |  |
Non-current liabilities: |  |
Unsecured Notes payable | (494.4) | (493.8)
Deferred payment obligations | (32.5) | (7.3)
Liability for Tax Receivables Agreement | (129.4) | (150.5)
Contingent consideration at fair value through profit or loss | – | (3.9)
Fee payable on divestment of Investments | (247.3) | (94.8)
Current liabilities: |  |
Trade and other payables | (7.2) | (6.9)
Deferred payment obligations | (55.3) | (44.6)
Interest payable | (10.0) | (10.0)
Operator charge payable | (7.0) | (6.6)
Profit sharing charge payable | (0.6) | (0.1)
Contingent consideration at fair value through profit or loss | (8.1) | (2.5)
Liability for Tax Receivables Agreement | (29.6) | (24.2)

Notes to the Consolidated Financial Statements continued
Financial Statements
112 Petershill Partners plc | Annual Report 2024
Categories of financial instruments
Capital risk management
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the returns to Shareholders. The Board of
Directors approves the level of dividend distributions to Shareholders. The Group may purchase its own shares within the limits defined by the Board of
Directors subject to restrictions imposed by applicable laws.
The capital structure of the Group consists of issued share capital, retained earnings and other reserves as stated in the Consolidated Statement of
Financial Position.
Market risk
Market risk includes price risk, foreign currency risk and interest rate risk.
a) Price risk
The majority of the Group’s investments are held in Partner-firms which presents a potential risk of loss of capital to the Group. Price risk arises from
changes in fair value of the investments in Partner-firms held by the Group. As discussed in Note 3, the fair value of these investments is determined
using valuation techniques including earnings multiples, discounted cash flows and recent comparable transactions. In valuing the investments, key
assumptions include estimates around future fundraise timing and sizes, expected management and performance fee rates and margins of the Partner-
firms, expected current and future fund returns and timing of realisations. Periodically, the Valuation Oversight Group of the Operator presents the
valuation proposals and their independent price verification review results to the Operator’s Valuation Committee which convenes to approve and
oversee the application of valuation policies, and review fair value estimates for the investments. Subsequently, the Operator reports the valuation results
to the Board of Directors. As new information surfaces on these key assumptions, the valuation techniques may be adjusted causing the fair value of these
investments to change.
As at 31 December 2024, the fair value of investments was $5,812.0 million (31 December 2023: $5,254.7 million). As presented in the Sensitivity analysis
to significant changes in unobservable inputs table, the valuation of the non-current investments could vary from -$456.2 million to +$496.6 million (31
December 2023: -$487.4 million to +$532.4 million) depending on the valuation techniques used while keeping the key assumptions constant.
The Group is exposed to a variety of risks which may have an impact on the carrying value of the Group’s investments. The Group’s risk factors are set
out below:
i. Not actively traded
The majority of the Group’s investments are held in Partner-firms. These investments are not generally traded in an active market but are indirectly
exposed to market price risk arising from uncertainties about future values of the investments held. The Group investments vary as to industry sub-sector,
geographic distribution of operations and size, all of which may impact the susceptibility of their valuation to uncertainty.
Although the investments are in the same industry, this risk is managed through careful selection of investments within the specified limits of the
investment policy. The investments are monitored on a regular basis by the Operator.
ii. Concentration
The Group invests in the alternative asset sector, with a focus on investments in asset managers with asset classes such as private equity, private credit,
private real assets and absolute return strategies. Concentration risk may relate to a subsector, relative size of an investment and geography. The Group is
exposed to geographic concentration risk from its investments in the asset management sector as detailed in Note 2(ii) of these financial statements and
page 85 of the Annual Report.
The Board of Directors and the Operator monitor the concentration of the investments on a quarterly basis to ensure compliance with the investment policy.
For the year ended 31 December 2024, the Group received a maximum of 17.9% (2023: 18.5%) of its total income from investments in Partner-firms
from one single Partner-firm.
Financial Statements
113 Petershill Partners plc | Annual Report 2024
b) Foreign currency risk
The Group transacts in currencies other than US$. Consequently, the Group is exposed to risks that the exchange rate of its currency relative to other
foreign currencies may change in a manner that has an adverse effect on the value of that portion of the Group’s assets or liabilities denominated in
currencies other than the US$. Any exposure to foreign currency risk at the underlying investment level is captured within price risk.
The following table sets out, in US$, the Group’s total exposure to foreign currency risk and the net exposure to foreign currencies of the monetary assets
and liabilities:

| US$ | CAD$ | GBP£ | Total
As at 31 December 2024 | $m | $m | $m | $m
Non-current assets |  |  |  |
Investments at fair value through profit or loss | 4,979.1 | 106.0 | 0.7 | 5,085.8
Contingent consideration at fair value through profit or loss | 65.1 | – | – | 65.1
Total non-current assets | 5,044.2 | 106.0 | 0.7 | 5,150.9
Current assets |  |  |  |
Investments at fair value through profit or loss | 726.2 | – | – | 726.2
Investments in money market funds at fair value through profit or loss | 8.9 | – | – | 8.9
Cash and cash equivalents | 14.3 | – | 0.2 | 14.5
Contingent consideration at fair value through profit or loss | 30.7 | – | – | 30.7
Deferred consideration receivable | 152.8 | – | – | 152.8
Trade and other receivables (excluding prepayments) | 158.2 | 5.6 | 0.5 | 164.3
Total current assets | 1,091.1 | 5.6 | 0.7 | 1,097.4
Non-current liabilities |  |  |  |
Unsecured Notes payable | (494.4) | – | – | (494.4)
Deferred payment obligations | (32.5) | – | – | (32.5)
Liability for Tax Receivables Agreement | (129.4) | – | – | (129.4)
Contingent consideration at fair value through profit or loss | – | – | – | –
Fee payable on divestment of investments | (247.3) | – | – | (247.3)
Total non-current liabilities | (903.6) | – | – | (903.6)
Current liabilities |  |  |  |
Trade and other payables | (5.1) | – | (2.1) | (7.2)
Deferred payment obligations | (55.3) | – | – | (55.3)
Interest payable | (10.0) | – | – | (10.0)
Operator charge payable | (7.0) | – | – | (7.0)
Profit sharing charge payable | (0.6) | – | – | (0.6)
Contingent consideration at fair value through profit or loss | (8.1) | – | – | (8.1)
Liability for Tax Receivables Agreement | (29.6) | – | – | (29.6)
Total current liabilities | (115.7) | – | (2.1) | (117.8)

Notes to the Consolidated Financial Statements continued
Financial Statements
114 Petershill Partners plc | Annual Report 2024

| US$ | CAD$ | GBP£ | Total
As at 31 December 2023 | $m | $m | $m | $m
Non-current assets |  |  |  |
Investments at fair value through profit or loss | 5,149.2 | 102.9 | 2.6 | 5,254.7
Total non-current assets | 5,149.2 | 102.9 | 2.6 | 5,254.7
Current assets |  |  |  |
Investments at fair value through profit or loss | – | – | – | –
Investments in money market funds at fair value through profit or loss | 62.3 | – | – | 62.3
Cash and cash equivalents | 241.1 | – | 1.8 | 242.9
Trade and other receivables (excluding prepayments) | 123.1 | – | 2.4 | 125.5
Total current assets | 426.5 | – | 4.2 | 430.7
Non-current liabilities |  |  |  |
Unsecured Notes payable | (493.8) | – | – | (493.8)
Deferred payment obligations | (7.3) | – | – | (7.3)
Liability for Tax Receivables Agreement | (150.5) | – | – | (150.5)
Contingent consideration at fair value through profit or loss | (3.9) | – | – | (3.9)
Fee payable on divestment of investments | (94.8) | – | – | (94.8)
Total non-current liabilities | (750.3) | – | – | (750.3)
Current liabilities |  |  |  |
Trade and other payables | (4.7) | – | (2.2) | (6.9)
Deferred payment obligations | (44.6) | – | – | (44.6)
Interest payable | (10.0) | – | – | (10.0)
Operator charge payable | (6.6) | – | – | (6.6)
Profit sharing charge payable | (0.1) | – | – | (0.1)
Contingent consideration at fair value through profit or loss | (2.5) | – | – | (2.5)
Liability for Tax Receivables Agreement | (24.2) | – | – | (24.2)
Total current liabilities | (92.7) | – | (2.2) | (94.9)

The Board of Directors does not consider that the foreign currency exchange risk at the balance sheet date is material and therefore sensitivity analysis
for the foreign currency risk has not been provided.
c) Interest rate risk
The Group’s exposure to interest rate risk relates to the Group’s cash and cash equivalents and money market investments. The Group is subject to risk
due to fluctuations in the prevailing levels of market interest rates. Any excess cash and cash equivalents are invested at short-term market interest rates.
As at the date of the Consolidated Statement of Financial Position, the majority of the Group’s cash and cash equivalents were held in interest bearing
fixed deposit accounts. The Group is not exposed to interest rate risk on debt due to fixed interest arrangements in place.
The Group’s investment in money market funds is variable and is subject to fluctuations. Any exposure to interest rate risk at the underlying investment
level is captured within price risk. An increase of 100 basis points, based on the closing balance sheet position over a 12-month period, would lead to an
approximate increase in total profit before tax of $0.1 million (31 December 2023: $0.6 million) for the Group.
In addition, the Group has indirect exposure to interest rates through changes to the financial performance and the valuation of investments in Partner-
firms caused by rate fluctuations.
Financial Statements
115 Petershill Partners plc | Annual Report 2024
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting its obligations associated with its financial liabilities that are settled by
delivering cash or another financial asset.
The Group’s policy and the Operator’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stress conditions, including estimated redemption of shares, without incurring unacceptable losses or risking
damage to the Company’s reputation.
The Group’s financial assets include investments in Partner-firms which are generally illiquid. As a result, the Group may not be able to liquidate its
investments in time to meet its liquidity requirements. The Operator has a liquidity management policy which is designed to enable it to monitor the
liquidity risk of the Group. The systems and procedures employed by the Operator in this regard allow it to apply various tools and arrangements
necessary to respond appropriately to liquidity concerns. As part of the policy, the Operator prepares estimates of projected cash flows of the Group from
its investment in Partner-firms, and evaluates them against the projected expenses, investment opportunities and potential distributions to the
Company’s Shareholders. Any surplus liquidity, as it arises, is invested into money market funds. As at 31 December 2024 and 31 December 2023, the
Group had an undrawn $100 million revolving credit facility to manage the liquidity requirements.
The Operator updates the Board of Directors on its findings on a regular basis and highlights any risks from a liquidity management perspective.
The following tables detail the Group’s expected maturity for its financial assets (excluding equity) and liabilities together with the contractual
undiscounted cash flow amounts:

| Less than 1 year | 1-5 years | 5+ years | Total
As at 31 December 2024 | $m | $m | $m | $m
Assets |  |  |  |
Investments at fair value through profit and loss | 726.2 1 | – | 5,085.8 | 5,812.0
Contingent consideration at fair value through profit or loss | 32.2 | 95.0 | – | 127.2
Deferred consideration receivable | 155.1 | – | – | 155.1
Investments in money market funds at fair value through profit and loss | 8.9 | – | – | 8.9
Cash and cash equivalents | 14.5 | – | – | 14.5
Trade and other receivables (excluding prepayments) | 164.3 | – | – | 164.3
Liabilities |  |  |  |
Trade and other payables | (7.2) | – | – | (7.2)
Unsecured Notes payable | (28.3) | (235.8) | (489.2) | (753.3)
Operator charge payable | (7.0) | – | – | (7.0)
Profit sharing charge payable | (0.6) | – | – | (0.6)
Contingent consideration at fair value through profit or loss | (8.1) | – | – | (8.1)
Deferred payment obligations | (56.5) | (35.8) | – | (92.3)
Liability for Tax Receivables Agreement | (29.6) | (126.1) | (320.8) | (476.5)
Fee payable on divestment of investments | – | (95.4) | (151.9) | (247.3)

1. $726.2 million represents the held for sale classification as at 31 December 2024 related to the sale of the majority of the Group’s stake in General Catalyst on 15
January 2025 (see Note 22).
Notes to the Consolidated Financial Statements continued
Financial Statements
116 Petershill Partners plc | Annual Report 2024
1

| Less than 1 year | 1-5 years | 5+ years | Total
As at 31 December 2023 | $m | $m | $m | $m
Assets |  |  |  |
Investments at fair value through profit and loss | – | – | 5,254.7 | 5,254.7
Investments in money market funds at fair value through profit and loss | 63.2 | – | – | 63.2
Cash and cash equivalents | 243.9 | – | – | 243.9
Trade and other receivables (excluding prepayments) | 125.5 | – | – | 125.5
Liabilities |  |  |  |
Trade and other payables | (6.9) | – | – | (6.9)
Unsecured Notes payable | (28.3) | (113.1) | (640.2) | (781.6)
Operator charge payable | (6.6) | – | – | (6.6)
Profit sharing charge payable | (0.1) | – | – | (0.1)
Contingent consideration at fair value through profit or loss | (2.5) | (3.9) | – | (6.4)
Deferred payment obligations | (44.6) | (7.3) | – | (51.9)
Liability for Tax Receivables Agreement | (24.2) | (137.0) | (393.3) | (554.5)
Fee payable on divestment of investments | – | – | (94.8) | (94.8)

Credit risk
Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the
Group, resulting in financial loss to the Group. Credit risk arises in the ordinary course of our business from deferred consideration and other receivables
arising from disposals of investments in Partner-firms; from income receivable from Partner-firms; from investments of surplus liquidity as it arises from
time to time in money market funds; and also from derivative financial assets and cash and cash equivalents. The Group’s policy over credit risk is to
minimise its exposure to counterparties with perceived higher risk of default by dealing only with counterparties that meet the credit standards set out in
the Company’s prospectus. Further information of the Group’s policy is detailed in Note 2(iv).
As at 31 December 2024, the Group has income receivables of $148.0 million (31 December 2023: $101.9 million), which is included within amounts
receivable from Investments in Note 12, and deferred consideration receivable of $152.8 million (31 December 2023: $nil). Of the total outstanding
receivables, 1.9% (31 December 2023: 2.2%) is classified as Stage 2 and 98.1% (31 December 2023: 97.7%) is classified as Stage 1. The counterparty
ratings, where available, ranged from A to BBB in respect of both years. The calculated ECL as at 31 December 2024 is $0.4 million (31 December 2023:
$0.1 million).
Credit risk is monitored on an ongoing basis by the Operator in accordance with the procedures and policies in place. The table below details the Group’s
exposure to credit risk:

| 31 December 2024 | 31 December 2023
| $m | $m
Interest bearing |  |
Investments in money market funds at fair value through profit or loss | 8.9 | 62.3
Cash and cash equivalents | 14.5 | 242.9
Non-interest bearing |  |
Deferred consideration receivable (current and non-current) | 152.8 | –
Trade and other receivables (excluding prepayments) | 164.3 | 125.5

Financial Statements
117 Petershill Partners plc | Annual Report 2024
The table below shows the cash and money market deposit balances and the credit rating for each counterparty:

|  |  | 31 December | 31 December
| Location | Rating | 2024 | 2023
|  |  | $m | $m
Counterparty |  |  |  |
State Street Bank and Trust Company | USA | A-1+ | 14.5 | 92.9
US$ Treasury Liquid Reserves Fund - Institutional Shares | USA | AAA | 2.5 | 0.2
Financial SquareSM Government Fund – Institutional Shares | USA | AAA | 6.4 | 10.5
Financial SquareSM Treasury Instruments Fund – Institutional Shares | USA | AAA | – | 51.6
Goldman Sachs Bank USA | USA | A-1 | – | 150.0

The Group’s maximum exposure to loss of capital at the year end is shown below:

| 31 December | 31 December
| 2024 | 2023
| $m | $m
Investments at fair value through profit or loss (current and non-current) | 5,812.0 | 5,254.7
Other financial assets (excluding prepayments) | 436.3 | 430.7

20. Related party transactions
Board of Directors
The Company has five Non-Executive Directors. Directors’ fees for the year ended 31 December 2024 amounted to $1.7 million (2023: $1.7 million), of
which $nil (31 December 2023: $nil) was outstanding at year end. Amounts paid to the Board of Directors as reimbursement of travel and other incidental
expenses during the year amounted to $78 thousand (2023: $32 thousand), of which, $nil (31 December 2023: $nil) was outstanding at year end.
The Board of Directors held beneficial interests in 1,169,999 (31 December 2023: 1,094,999) Ordinary Shares in the Company. Refer to the Directors’
Remuneration Report on pages 53 to 57.
Money Market Funds
On 31 December 2024, the Group held an investment of $8.9 million (31 December 2023: $62.3 million) in money market funds that are managed by
affiliates of the Operator. During 2024, the Group earned interest income of $7.7 million (2023: $24.7 million) from investments held in such money
market funds managed by affiliates of the Operator.
Transactions with Petershill Funds
As at 31 December 2024, the Petershill Funds, managed by wholly-owned subsidiaries of the Goldman Sachs Group acting as the investment manager,
owned approximately 79.5% (31 December 2023: 76.6%) of the Company. As at 31 December 2024, the Group had amounts payable to the Petershill
Funds of $0.8 million (31 December 2023: $0.2 million) and amounts receivable from the Petershill Funds of $2.3 million (31 December 2023:
$6.1 million). These amounts will be settled in the ordinary course of business.
Tax Receivables Agreement
As discussed in Note 2(v), the Group has entered into a Tax Receivables Agreement with Petershill Funds, an affiliate of the Operator and the Goldman
Sachs Group, which will require the Group to pay 75% of the amount of cash tax savings, if any, in US federal, state and local income tax that the Group
realises as a result of the tax benefits associated with this increase in tax basis. As of 31 December 2024, the carrying value of the liability for Tax
Receivables Agreement was $159.0 million (31 December 2023: $174.7 million). During the year ended 31 December 2024, principal payments totaling
$23.5 million (2023: $32.5 million) were made in relation to the liability for Tax Receivables Agreement.
Operator
The Operator is an affiliate and wholly-owned subsidiary of the Goldman Sachs Group and provides advice to the Group on the origination and completion
of new investments, the management of the portfolio and on realisations, as well as on funding requirements, subject to approval by the Board of
Directors. For the provision of services under the Operator Agreement, the Operator earns a Profit Sharing Charge, Recurring Operating Charges and
Divestment Fee, as detailed in Note 6.
The Operator may, in its discretion, pay certain of the Group’s fees or expenses and the Group will reimburse the Operator for the payment of any such fee
or expense. For the year ended 31 December 2024, the Group incurred $0.1 million (2023: $0.1 million) of expenses under this arrangement, of which $nil
(31 December 2023: $0.1 million) was outstanding at year end.
Notes to the Consolidated Financial Statements continued
Financial Statements
118 Petershill Partners plc | Annual Report 2024
Special Limited Partners
The Special Limited Partners are affiliates of the Goldman Sachs Group and acts as a special limited partners to the respective Petershill Splitter
Subsidiaries. The Special Limited Partners earns a Profit Sharing Charge and Divestment Fee, as detailed in Note 6.
Transactions with Goldman Sachs Bank USA
Goldman Sachs Bank USA (“GSBUSA”) is an affiliate and wholly owned subsidiary of the Goldman Sachs Group. On 14 December 2023, the Company
placed a fixed term deposit with GSBUSA for $150.0 million. The fixed term deposit matured on 15 March 2024 and accrued interest at a rate of 5.4% per
annum. During the year ended 31 December 2024, the Company earned interest of $1.7 million (2023: $0.4 million), which settled at maturity.
21. Ultimate controlling party
The Board of Directors has reviewed the Shareholders of the Company and has concluded that there is no ultimate controlling party. The Company has a
diversified investor base that does not cede control to any single investor or a group of investors. Although the Petershill Funds own 79.5% (31 December
2023: 76.6%) of the Company, Goldman Sachs Asset Management and its affiliates were the beneficial owner of less than 1% of the Ordinary Shares of
the Company as at 31 December 2024.
The Petershill Funds are managed by Goldman Sachs Asset Management and its affiliates acting as the investment manager of the Petershill Funds.
Goldman Sachs Asset Management and its affiliates act in in their capacity as an agent for the Equity Shareholders of the Company and such a
relationship does not give rise to controlling ownership.
22. Subsequent events
The Group has evaluated activity through 8 April 2025, the date that the consolidated financial statements were available to be issued.
On 15 January 2025, the Group closed on the sale of the majority of its stake in General Catalyst for a total consideration of $726.2 million, in the form of
interest-bearing loan notes. $207.0 million in relation to the first tranche of the outstanding principal amount of the loan notes was received before
approval of the consolidated financial statements. The remaining $519.2 million outstanding principal amount is due to be repaid over time.
On 14 March 2025, the Group closed on the acquisition of the minority stake investment in Frazier Healthcare Partners for a total consideration of $330.0
million, in the form of $15.9 million of upfront and $314.1 million of deferred consideration, due primarily in 2026 and 2027.
On 28 March 2025, the Board of Directors approved a special dividend payment of 14.0 cents (USD) per share. The record date for the dividend is 11 April
2025 and the payment date is 9 May 2025.
The Group concluded that no other events took place that would require material adjustments to the amounts recognised in these consolidated
financial statements.
Financial Statements
119 Petershill Partners plc | Annual Report 2024
31 December 2024 31 December 2023
Note $m $m
Non-current assets
Investments in Subsidiary undertakings at fair value through profit or loss
6 5,088.5 4,496.5
Intercompany note receivable
6 – 112.2
5,088.5 4,608.7
Current assets
Investments in money market funds at fair value through profit or loss
6 0.4 61.3
Trade and other receivables
7 17.6 12.2
Cash and cash equivalents
4 0.2 156.3
18.2 229.8
Total assets
5,106.7 4,838.5
Current liabilities
Trade and other payables
6.7 4.6
6.7 4.6
Total liabilities
6.7 4.6
Net assets
5,100.0 4,833.9
Equity
Share capital
8 10.8 11.2
Share premium
8 – –
Other reserve
8 1,689.6 1,689.6
Capital redemption reserve
8 0.9 0.5
Retained earnings
3,398.7 3,132.6
Total Shareholders' funds
5,100.0 4,833.9
Number of Ordinary Shares in issue at year end
8 1,081,708,167 1,122,202,824
Net assets per share (cents)
471.48 430.75
The Board of Directors has taken advantage of the exemption available under section 408 of the Companies Act 2006 and has not presented a Statement
of Comprehensive Income for the Company. The Company’s profit for the year ended 31 December 2024 was $832.4million (2023: $321.1million).
The financial statements of the Company were approved and authorised for issue by the Board of Directors on 8 April 2025 and signed on its behalf by:
Naguib Kheraj Mark Merson
Chairman Director
The accompanying notes on pages 123 to 129 form an integral part of these financial statements.
Company Financial Statements
Financial Statements
Company Statement of Financial Position
As at 31 December 2024
120 Petershill Partners plc | Annual Report 2024

Share
capital
Share
premium
Other
reserve
Capital
redemption
reserve
Retained
earnings Total
 Note $m $m $m $m $m $m
Opening net assets attributable to Shareholders
at 1 January 2024
 11.2 – 1,689.6 0.5 3,132.6 4,833.9
Repurchase and cancellation of Ordinary Shares
8 (0.4) – – 0.4 (112.5) (112.5)
Dividends paid
9 – – – – (453.8) (453.8)
Profit and total comprehensive income for the year
 – – – – 832.4 832.4
Closing net assets attributable to Shareholders
at 31 December 2024
 10.8 – 1,689.6 0.9 3,398.7 5,100.0
For the year ended 31 December 2023
Share
capital
Share
premium
Other
reserve
Capital
redemption
reserve
(Accumulated
losses)/
Retained
earnings Total
Note $m $m $m $m $m $m
Opening net assets attributable to Shareholders
at 1 January 2023
11.4 3,346.7 1,689.6 0.3 (328.7) 4,719.3
Repurchase and cancellation of Ordinary Shares
8 (0.2) – – 0.2 (26.3) (26.3)
Share premium cancellation
8 – (3,346.7) – – 3,346.7 –
Dividends paid
9 – – – – (180.2) (180.2)
Profit and total comprehensive income for the year
– – – – 321.1 321.1
Closing net assets attributable to Shareholders
at 31 December 2023
11.2 – 1,689.6 0.5 3,132.6 4,833.9
The accompanying notes on pages 123 to 129 form an integral part of these financial statements.
Financial Statements
Company Statement of Changes in Equity
For the year ended 31 December 2024
121 Petershill Partners plc | Annual Report 2024
For the year ended
31 December 2024
For the year ended
31 December 2023
Note $m $m
Cash flows from operating activities
Profit for the year before tax
834.2 328.5
Adjustments to reconcile operating profit for the year to net cash flows from operating activities:
Movement in investments in Subsidiary undertakings at fair value through profit and loss
(566.6) (205.5)
Movement in trade and other receivables
7 (3.9) 9.9
Movement in trade and other payables
2.9 (6.8)
Finance income
(2.3) (3.1)
Finance expense
0.2 –
Purchase of investments in money market funds
6 (516.1) (396.4)
Sale of investments in money market funds
6 580.6 770.1
Reinvested interest income from investments in money market funds
6 (3.6) (20.8)
Taxes paid
(3.5) (7.9)
Net cash flows from operating activities
321.9 468.0
Cash flows from investing activities
Purchase of investments in Subsidiary undertakings at fair value through profit or loss
(25.4) (165.0)
Issuance of Intercompany note receivable
6 – (25.0)
Repayment of Intercompany note receivable
6 108.8 –
Intercompany note interest received
6 5.7 –
Net cash flows from investing activities
89.1 (190.0)
Cash flows from financing activities
Dividends paid
9 (453.8) (180.2)
Repayment of share capital
8 (113.3) (25.4)
Net cash flows from financing activities
(567.1) (205.6)
Net (decrease)/increase in cash and cash equivalents during the year
(156.1) 72.4
Cash and cash equivalents at the beginning of the year
156.3 83.9
Cash and cash equivalents at the end of the year
0.2 156.3
The accompanying notes on pages 123 to 129 form an integral part of these financial statements.
Company Financial Statements continued
Financial Statements
Company Statement of Cash Flows
For the year ended 31 December 2024
122 Petershill Partners plc | Annual Report 2024
Notes to the Company Financial Statements
1. Basis of preparation and material accounting policies
The annual financial statements of the Company have been prepared and approved by the Board of Directors in accordance with UK-adopted international
accounting standards (“IFRS”) and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The
financial statements are presented to the nearest million United States Dollar ($m), being the functional and reporting currency of the Company.
The financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of financial
assets and liabilities at fair value through profit or loss. The preparation of the financial statements requires estimates and assumptions to be made that
may affect the amounts reported in the financial statements and accompanying notes. Actual amounts could differ from the estimates included in the
financial statements herein. It also requires judgement to be exercised in the process of applying the accounting policies.
The material accounting policies and basis of preparation of the annual financial statements of the Company follow those as disclosed for the Group in
Note 2 of the consolidated financial statements unless otherwise described below.
2. Critical accounting estimates and judgements
The Board of Directors has made judgements and estimates with respect to those items that have the most significant effect on the carrying amounts of
the assets and liabilities in the financial statements. The Board of Directors has concluded that in arriving at the net asset value of the Subsidiaries,
significant judgement is required in estimating the fair value of investments held by the Subsidiaries in Partner-firms as discussed in Note 3.
3. Investments in Subsidiary undertakings at fair value through profit or loss
The Company measures its investments in Subsidiaries at fair value. Fair value is defined as the price that would be received to sell an asset or paid to
transfer a liability (i.e. the exit price) in an orderly transaction between market participants at the measurement date. In the absence of quoted market
prices, fair value is determined by the Operator. Gains and losses arising from changes in financial assets and financial liabilities at fair value through
profit or loss are recognised in the period in which they arise.
For the years ended 31 December 2024 and 31 December 2023, the Investments in Subsidiary undertakings were valued at the most recent NAV per unit
which represents the fair value of these investments. The Board of Directors believe that it is appropriate to measure the investments in Subsidiaries at
their net asset value which has taken into account risks to fair value, inclusive of liquidity discounts, through appropriate discount rates.
Investments in Partner-firms held by the subsidiary undertakings are held at fair value through profit and loss. Further details can be found in Note 4 of
the consolidated financial statements.
4. Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term investments in an active market with original
maturities of three months or less.
5. Audit fees
The Auditors’ remuneration for audit services and other audit-related services is disclosed in Note 7 to the consolidated financial statements.
6. Investments held at fair value through profit or loss
Non-current investments
Investments in Subsidiary undertakings at fair value through profit or loss
The Company’s non-current investments comprise investments in Subsidiaries.
31 December 2024 31 December 2023
$m $m
Opening balance
4,496.5 4,125.9
Additions
25.4 165.1
Change in investments in Subsidiary undertakings at fair value through profit or loss
566.6 205.5
5,088.5 4,496.5
Notes to the Company Financial Statements
Financial Statements
123 Petershill Partners plc | Annual Report 2024
The Company's investments in Subsidiaries is comprised of the below entities:
Name of Subsidiary
Registered office
Purpose
Interest as at 31
December
2024
Interest as at 31
December
2023
Petershill Partners, Inc.
251 Little Falls Drive Wilmington, DE 19808
Investment holding company
100% 100%
Petershill Partners Ltd
One Nexus Way Camana Bay, KY1-9005 Cayman Islands
Investment holding company
100% 100%
Petershill Partners II Ltd
One Nexus Way Camana Bay, KY1-9005, Cayman Islands
Investment holding company
100% 100%
Petershill Partners II, Inc.¹
251 Little Falls Drive Wilmington, DE 19808
Investment holding company
100% –
1. Acquired by the Group on 1 January 2024.
Refer to Note 2(xvi) of the consolidated financial statements for a full list of the Company's related Subsidiary undertakings.
Fair value measurements
IFRS 13 requires disclosure of fair value measurement by level. The level of fair value hierarchy within the financial assets or financial liabilities is
determined on the basis of the lowest level input that is significant to the fair value measurement. Financial assets and financial liabilities are classified in
their entirety into only one of the following three levels:
▪ Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
▪ Level 2 – inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and
▪ Level 3 – inputs for assets or liabilities that are not based on observable market data (unobservable inputs).
The determination of what constitutes “observable” requires significant judgement by the Group. The Board of Directors consider observable data to be
market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that
are actively involved in the relevant market.
The following tables analyse within the fair value hierarchy the assets and liabilities (by class) measured at fair value:
Level 1 Level 2 Level 3 Total
31 December 2024
$m $m $m $m
Assets
Investments in money market funds at fair value through profit or loss
– 0.4 – 0.4
Investments in Subsidiary undertakings at fair value through profit or loss
– – 5,088.5 5,088.5
Level 1 Level 2 Level 3 Total
31 December 2023
$m $m $m $m
Assets
Investments in money market funds at fair value through profit or loss
– 61.3 – 61.3
Investments in Subsidiary undertakings at fair value through profit or loss
– – 4,496.5 4,496.5
The fair value of investments in money market funds is based on the daily published net asset value of each fund and is therefore considered Level 2. Due
to the nature of the Company’s investments in its Subsidiaries, they are always expected to be classified as Level 3. There have been no transfers between
levels during the year. Any transfers between the levels would be accounted for on the last day of each financial year.
Quantitative information of significant unobservable inputs – Level 3 – Investments
The Board of Directors believe that it is appropriate to measure the Investments in Subsidiaries at their net asset value which has taken into account risks
to fair value, inclusive of liquidity discounts, through appropriate discount rates.
Sensitivity analysis to significant changes in unobservable inputs within Level 3 hierarchy
Significant unobservable inputs are used in the fair value measurement categorised within Level 3 of the fair value hierarchy. If the fair value of the
investments in Subsidiaries was to increase or decrease by 10% then the fair value of investments would increase/decrease by +/- $508.9million
respectively (31 December 2023: +/- $449.7million).
As the Company’s investments are not publicly quoted, valuations require meaningful judgement to establish a range of values, and the ultimate value at
which an investment is realised may differ from its most recent valuation and the difference may be significant.
Notes to the Company Financial Statements continued
Financial Statements
124 Petershill Partners plc | Annual Report 2024
Intercompany note receivable
The Company and Petershill Partners Ltd entered into a loan agreement (“Intercompany Note”) with a maturity date of 9 November 2031 under which
the Company provided loans to Petershill Partners Ltd. The Intercompany Note carried an annual interest rate of 3% to be paid at the end of every month.
Any unpaid interest was capitalised and added to the amount of principal outstanding. The Intercompany Note was fully repaid as at 31 December 2024
following the repayment of outstanding principal and interest during the year (31 December 2023: $112.2 million outstanding, capitalised interest of
$3.1 million).
Current investments
The Company invests its overnight cash balance in money market funds representing a collective investment scheme promoted by an affiliate of the
Operator. The Company holds these investments for cash management purposes with the intent to manage excess cash and ensure these can be readily
liquidated to meet the Company’s investment commitments. These investments are redeemable at short notice and have been classified as debt
investments. As at 31 December 2024, the Company held investments in money market funds of $0.4 million (31 December 2023: $61.3 million) and
earned interest during 2024 of $3.6 million (2023: $20.8 million).
7. Trade and other receivables
31 December
2024
31 December
2023
$m $m
Amounts receivable from Investments
13.3 6.7
Prepayments
1.4 1.8
Tax recoverable
2.9 3.1
Other receivables
– 0.6
17.6 12.2
8. Share capital and other reserves
For the year ended 31 December 2024
Issued and fully paid
Number of
Shares Issued
Share
capital
$m
Share
premium
$m
Other
reserve
$m
Capital
redemption
reserve
$m
Total
$m
Shares at 1 January 2024
1,122,202,824 11.2 – 1,689.6 0.5 1,701.3
Repurchase of Ordinary Shares – $0.01
(40,494,657) (0.4) – – 0.4 –
Closing balance as at 31 December 2024
1,081,708,167 10.8 – 1,689.6 0.9 1,701.3
For the year ended 31 December 2023
Issued and fully paid
Number of
Shares Issued
Share
capital
$m
Share
premium
$m
Other
reserve
$m
Capital
redemption
reserve
$m
Total
$m
Shares at 1 January 2023
1,135,399,597 11.4 3,346.7 1,689.6 0.3 5,048.0
Share premium cancellation
– – (3,346.7) – – (3,346.7)
Repurchase of Ordinary Shares – $0.01
(13,196,773) (0.2) – – 0.2 –
Closing balance as at 31 December 2023
1,122,202,824 11.2 – 1,689.6 0.5 1,701.3
On 17 May 2023, the Company commenced a share buyback programme of up to $50 million. During the year ended 31 December 2024, the Company
repurchased and cancelled 2,623,705 Ordinary Shares (2023: 13,196,773) as part of its buyback programme for a total consideration of $5.8million
(2023: $26.3million) including transaction costs. The programme was subsequently terminated on 11 April 2024.
The Company’s Shareholders approved the cancellation of the amount standing to the credit of the Company's share premium account in full (the
"Reduction of Capital") at its Annual General Meeting held on 24 May 2023. A formal approval of the same was obtained on 20 June 2023 from His
Majesty's High Court in England (the "Court"), Accordingly, the Reduction of Capital became effective which created additional distributable reserves of
approximately $3,346.7 million and the amounts standing to the credit of the share premium account have been transferred to Retained earnings.
On 23 April 2024, the Company proposed a tender of up to $100 million of Ordinary Shares. On 31 May 2024, the tender offer closed and 37,870,952
Ordinary Shares were purchased and cancelled for a total consideration of $106.7 million, including transaction costs.
As at 31 December 2024, the Company’s issued share capital comprised 1,081,708,167 of Ordinary Shares (31 December 2023: 1,122,202,824) of $0.01
each. Ordinary Shareholders are entitled to all dividends paid by the Company. The Company does not have a limited amount of authorised capital.
Financial Statements
125 Petershill Partners plc | Annual Report 2024
9. Dividends declared and paid
For the year ended 31 December 2024
Dividends declared and paid
Paid on
Dividend
per share
cents
Total dividend
$m
Final dividend with respect to the year ended 31 December 2023
14 June 2024
10.1 113.1
Interim dividend with respect to the year ended 31 December 2024
31 October 2024
5.0 54.1
Special dividend with respect to the year ended 31 December 2024¹
31 October 2024
9.0 97.3
Special dividend with respect to the year ended 31 December 2024¹
20 December 2024
17.5 189.3
Total
41.6 453.8
1. Special dividends relate to the distribution of proceeds from investment activity.
For the year ended 31 December 2023
Dividends declared and paid
Paid on
Dividend
per share
cents
Total dividend
$m
Final dividend with respect to the year ended 31 December 2022
13 June 2023
11.0 124.9
Interim dividend with respect to the year ended 31 December 2023
27 October 2023
4.9 55.3
Total
15.9 180.2
10. Tax
As at 31 December 2024 and 31 December 2023, no deferred tax asset or liability is recognised by the Company in relation to the Company’s investments
and interests in Subsidiaries. This is because the Company controls the reversal of this deferred tax balance and it is expected that it will not reverse in the
foreseeable future.
11. Financial instruments risk
In the normal course of business, the Company uses certain financial instruments including cash, trade and other receivables and investments. The
Company is exposed to a number of risks through the performance of its normal operations. Refer to Note 19 to the consolidated financial statements for
further details.
31 December
2024
31 December
2023
$m $m
Financial assets
Non-current assets:
Investments in Subsidiary undertakings at fair value through profit or loss 5,088.5 4,496.5
Intercompany note receivable – 112.2
Current assets:
Investments in money market at fair value through profit or loss 0.4 61.3
Trade and other receivables (excluding prepayments) 16.2 10.4
Cash and cash equivalents 0.2 156.3
Financial liabilities
Current liabilities:
Trade and other payables (6.7) (4.6)
Capital risk management
The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the returns to the Company’s
Shareholders. The Board of Directors recommends to the Company’s Shareholders the level of dividend distributions to the Company’s Shareholders. The
Company may purchase its own shares within the limits defined by the Board of Directors subject to restrictions imposed by applicable laws.
The capital structure of the Company consists of issued share capital, retained earnings and other reserves, as stated in the Statement of Financial Position.
Notes to the Company Financial Statements continued
Financial Statements
126 Petershill Partners plc | Annual Report 2024
Market risk
Market risk includes price risk, foreign currency risk and interest rate risk.
(a) Price risk
The investments, held by the Company's Subsidiaries, in Partner-firms present a potential risk of loss of capital to the Company. Price risk arises from
changes in fair value of the investments in Partner-firms held by the Group. As discussed in Note 4 of the consolidated financial statements, the fair value
of these investments is determined using valuation techniques including earnings multiples, discounted cash flows and recent comparable transactions.
In valuing the investments, key assumptions include estimates around future fundraise timing and sizes, expected management and performance fee
rates and margins of the Partner-firms, expected current and future fund returns and timing of realisations. Such valuations are reviewed and approved
semi-annually by committees and working groups functionally independent of the Operator prior to being incorporated into the Group's NAV. As new
information surfaces on these key assumptions, the valuation techniques may be adjusted causing the fair value of these investments to change.
As at 31 December 2024, the fair value of investments in Partner-firms held by the Subsidiaries was $5,812.0million (31 December 2023:
$5,254.7million). As presented in the Sensitivity analysis to significant changes in unobservable inputs table in Note 4 of the consolidated financial
statements, the valuation of these investments could vary from -$456.2 million to +$496.6 million (31 December 2023: -$487.4million to +
$532.4million) depending on the valuation techniques used while keeping the key assumptions constant.
The Company is exposed to a variety of risks which may have an impact on the carrying value of the Company’s investments. The Company’s risk factors
are set out below.
(i) Not actively traded
The Company’s investments are not generally traded in an active market but are indirectly exposed to market price risk arising from uncertainties about
future values of the investments held. The investments held by the Company’s Subsidiaries vary as to industry sub-sector, geographic distribution of
operations and size, all of which may impact the susceptibility of their valuation to uncertainty. Although the investments are in the same industry, this
risk is managed through careful selection of investments within the specified limits of the investment policy. The investments are monitored on a regular
basis by the Operator.
(ii) Concentration
The Group invests in the alternative asset sector, with a particular focus on asset classes such as private equity, private credit, private real assets and
absolute return strategies. This means that the Group is exposed to the concentration risk of only making investments in the alternative asset sector,
which concentration risk may further relate to sub-sector, geography and the relative size of an investment or other factors.
The Board of Directors and the Operator monitor the concentration of the investments on a quarterly basis to ensure compliance with the investment policy.
(iii) Liquidity
The Company and Group’s liquidity risk arises from its investment commitments to Partner-firms and the flexibility for the Partner-firms to call capital as
required. The Company and Group will maintain flexibility in funding by keeping sufficient liquidity in cash and cash equivalents, which may be invested
on a temporary basis in line with the cash management policy as agreed by the Board of Directors from time to time.
As at 31 December 2024, $0.6 million or 0.01% (31 December 2023: $217.6million or 4.40%) of the Company’s financial assets, were investments in
money market funds and cash balances held on deposit with several AAA or higher rated banks.
Financial Statements
127 Petershill Partners plc | Annual Report 2024
(b) Foreign currency risk
The Company transacts in currencies other than US$. Consequently, the Company is exposed to risks that the exchange rate of its currency relative to
other foreign currencies may change in a manner that has an adverse effect on the value of that portion of the Company’s assets or liabilities
denominated in currencies other than the US$. Any exposure to foreign currency risk at the underlying investment level is captured within price risk.
The following table sets out, in US$, the Company’s total exposure to foreign currency risk and the net exposure to foreign currencies of the monetary
assets and liabilities:
As at 31 December 2024
US$
$m
GBP£
$m
Total
$m
Non-current assets
Investments in Subsidiary undertakings at fair value through profit or loss
5,088.5 – 5,088.5
Total non-current assets
5,088.5 – 5,088.5
Current assets
Investments in money market funds at fair value through profit or loss
0.4 – 0.4
Trade and other receivables (excluding prepayments)
15.8 0.4 16.2
Cash and cash equivalents
– 0.2 0.2
Total current assets
16.2 0.6 16.8
Current liabilities
Trade and other payables
(4.6) (2.1) (6.7)
Total current liabilities
(4.6) (2.1) (6.7)
US$ GBP£ Total
As at 31 December 2023
$m $m $m
Non-current assets
Investments in Subsidiary undertakings at fair value through profit or loss
4,496.5 – 4,496.5
Intercompany note receivable
112.2 – 112.2
Total non-current assets
4,608.7 – 4,608.7
Current assets
Investments in money market funds at fair value through profit or loss
61.3 – 61.3
Trade and other receivables (excluding prepayments)
7.3 3.1 10.4
Cash and cash equivalents
154.5 1.8 156.3
Total current assets
223.1 4.9 228.0
Current liabilities
–
Trade and other payables
(2.4) (2.2) (4.6)
Total current liabilities
(2.4) (2.2) (4.6)
The Board of Directors does not consider that the foreign currency exchange risk at the balance sheet date is material and therefore sensitivity analysis
for the foreign currency risk has not been provided.
(c) Interest rate risk
The Company’s exposure to interest rate risk relates to the Company’s cash and cash equivalents and money market investments. The Company is subject
to risk due to fluctuations in the prevailing levels of market interest rates. Any excess cash and cash equivalents are invested at short-term market
interest rates. As at the date of the Statement of Financial Position, the majority of the Company's cash and cash equivalents were held on interest
bearing fixed deposit accounts.
The Company's investment in money market funds is variable and is subject to fluctuations. Any exposure to interest rate risk at the underlying
investment level is captured within price risk. An increase of 100 basis points, based on the closing balance sheet position over a 12-month period, would
lead to an approximate increase in total profit before tax of $0.1million (2023: $0.6million) for the Company.
In addition, the Company has indirect exposure to interest rates through changes to the financial performance and the valuation of investments in
Partner-firms caused by rate fluctuations held through the Subsidiaries.
Notes to the Company Financial Statements continued
Financial Statements
128 Petershill Partners plc | Annual Report 2024
12. Related party transactions
Transactions with Goldman Sachs Bank USA
Goldman Sachs Bank USA (“GSBUSA”) is an affiliate and wholly owned subsidiary of the Goldman Sachs Group. On 14 December 2023, the Company
placed a fixed term deposit with GSBUSA for $150.0 million. The fixed term deposit matured on 15 March 2024 and accrued interest at a rate of 5.4%
per annum. During the year ended 31 December 2024, the Company earned interest of $1.7 million (2023: $0.4 million), which settled at maturity of
the deposit.
Subsidiaries
The Company entered into a consultancy agreement (the “Consultancy Agreement”) with the Subsidiaries whereby the Company will provide services
including but not limited to acquisition advice and review, and advice on strategy setting. During the year ended 31 December 2024, an amount of
$13.2million (2023: $6.7million) was earned by the Company under this arrangement of which $10.6million (2023: $5.4million) was charged to
Petershill Partners, Inc. and $2.6million (2023: $1.3million) was charged to Petershill Partners Ltd. An amount of $13.2million was outstanding as at 31
December 2024 (31 December 2023: $6.7million).
On 24 August 2022, Petershill Partners, Inc. issued US private placement senior unsecured notes (the "Unsecured Notes") to a group of institutional
investors in the amount of $500m and the Unsecured Notes are guaranteed by the Company. These contracts are accounted for under IFRS 9 and no
liability has been recognised in respect of these guarantees on the basis of materiality. The likelihood of these guarantees being called upon is considered
remote. Refer to Note 13 of the consolidated financial statements for further information.
The Company and Petershill Partners Ltd entered into an Intercompany Note agreement with a maturity date of 9 November 2031 under which the
Company provided loans to Petershill Partners Ltd. The Intercompany Note was fully repaid as at 31 December 2024 following the repayment of
outstanding principal and interest during the year. Refer to Note 6 for additional details.
Board of Directors
The details of each individual Director’s remuneration, as set out in the tables contained in the Directors’ Remuneration Report on pages 53 to 57, form
part of these financial statements.
Please refer to Note 20 to the consolidated financial statements for further details on related party transactions.
13. Subsequent events
The Company has evaluated activity through 8 April 2025, the date that the financial statements were available to be issued.
On 28 March 2025, the Board of Directors approved a special dividend payment of 14.0 cents (USD) per share. The record date for the dividend is 11 April
2025 and the payment date is 9 May 2025.
The Company concluded that no other events took place that would require material adjustments to the amounts recognised in these consolidated
financial statements.
Financial Statements
129 Petershill Partners plc | Annual Report 2024
Alternative Performance Measures
(“APMs”)
The APM basis, which presents the financial information on a non IFRS basis, excluding the impact of the assets, liabilities, income, investment gain and
finance cost which do not affect Shareholder returns, aids Shareholders in assessing their investment in the Company. There is one additional APM called
Total Shareholder Return, provided as part of the capital management case study for 2024. This is a one-off APM for the year ended 31 December 2024.
The IFRS and APM basis numbers discussed and presented below include significant “unrealised” and non-cash items that include unrealised change in
fair value of investments, and it should be noted that while permitted, it is not the Company’s core strategy to exit or realise these investments.
Therefore, management results are also presented excluding the change in fair value of investments at fair value through profit and loss and the related
divestment fee.
APMs are used by the Directors and the Operator to analyse the business and financial performance, track the Company’s progress, and help develop
long-term strategic plans and they also reflect more closely the cash flow of the Company. The Directors believe that these APMs are used by investors,
analysts and other interested parties as supplemental measures of performance and liquidity.
Alternative Performance Measures
Additional information
130 Petershill Partners plc | Annual Report 2024
Net cash position at end of year
Cash and cash equivalents plus investments in money market funds and deferred consideration receivable less deferred payment obligations, long-term
debt and contingent consideration at fair value through profit or loss (net).
31 December
2024
31 December
2023
$m $m
Cash and cash equivalents
14.5 242.9
Investments in money market funds at fair value through profit or loss
8.9 62.3
Deferred consideration receivable
152.8 –
Deferred payment obligations
(87.8) (51.9)
Unsecured Notes payable (gross)
(500.0) (500.0)
Contingent consideration at fair value through profit or loss (net)
87.7 (6.4)
Net cash position at end of year
(323.9) (253.1)
Free cash flow conversion
Free cash flow conversion is calculated as Free cash flow as a percent of the Adjusted EBIT. The Free cash flow is calculated as the net cash flows from
operating activities adjusted for Purchase of investments in money market funds, Sale of investments in money market funds, Reinvestment of income
from investments in Partner-firms and money market funds and Taxes paid.
31 December
2024
31 December
2023
$m $m
Net cash inflows from operating activities
280.3 617.2
Purchase of investments in money market funds
1,258.0 781.4
Sale of investments in money market funds
(1,319.0) (1,227.1)
Reinvestment of income from investments in Partner-firms
2.2 57.0
Reinvestment of interest income from investments in money market funds
7.6 24.6
Taxes paid
10.1 28.2
Free cash flow
239.2 281.3
Adjusted EBIT
293.2 284.4
Free cash flow conversion
81.6 % 98.9%
Book value
Total Shareholders’ funds.
31 December
2024
31 December
2023
$m $m
Total Shareholders’ funds
5,100.0 4,833.9
Book value per share
Total Shareholders’ funds divided by the number of Ordinary Shares in issue at year end.
31 December
2024
31 December
2023
Total Shareholders’ funds ($m)
5,100.0 4,833.9
Number of Ordinary Shares in issue at year end
1,081,708,167 1,122,202,824
Book value per share (cents)
471.48 430.75
Additional information
131 Petershill Partners plc | Annual Report 2024
Adjusted Earnings Before Interest and Tax (“EBIT”)
Sum of total income and expenses excluding transaction costs and non-recurring operating expense/(credit) before net finance result and before income
taxes, change in investments at fair value through profit or loss, change in contingent consideration at fair value through profit or loss and divestment fee
expense.
For the year ended
31 December 2024
For the year ended
31 December 2023
$m $m
Total income
332.3 319.4
Board of Directors’ fees and expenses
(1.7) (1.7)
Operator charge
(24.2) (21.9)
Profit sharing charge
(1.5) (0.1)
Other operating expenses
(18.4) (10.1)
Transaction costs
6.2 –
Non-recurring operating expense/(credit)
0.5 (1.2)
Adjusted Earnings before interest and tax (EBIT)
293.2 284.4
Adjusted EBIT margin
Adjusted EBIT divided by total income.
For the year ended
31 December 2024
For the year ended
31 December 2023
$m $m
Total income
332.3 319.4
Adjusted EBIT
293.2 284.4
Adjusted EBIT margin
88.2% 89.0%
Adjusted Earnings Before Tax (“EBT”)
Sum of total income and expenses excluding divestment fee expense, income taxes, change in liability for Tax Receivables Agreement, change in
investments at fair value through profit or loss, change in contingent consideration at fair value through profit or loss, transaction costs and non-
recurring operating expense/(credit).
For the year ended
31 December 2024
For the year ended
31 December 2023
$m $m
Total income
332.3 319.4
Board of Directors’ fees and expenses
(1.7) (1.7)
Operator charge
(24.2) (21.9)
Profit sharing charge
(1.5) (0.1)
Other operating expenses
(18.4) (10.1)
Finance income
2.4 –
Finance cost
(36.7) (37.1)
Transaction costs
6.2 –
Non-recurring operating expense/(credit)
0.5 (1.2)
Adjusted Earnings before tax (EBT)
258.9 247.3
Tax and tax related expenses
The current tax plus the actual/expected payment under the Tax Receivables Agreement for the current year.
For the year ended
31 December 2024
For the year ended
31 December 2023
$m $m
Current tax
(13.1) (23.5)
Expected payment under the Tax Receivables Agreement
(29.6) (24.2)
Tax and tax related expenses
(42.7) (47.7)
Alternative Performance Measures continued
Additional information
132 Petershill Partners plc | Annual Report 2024
Adjusted tax and tax related expense rate
The Tax and tax related expenses divided by the Adjusted EBT.
For the year ended
31 December 2024
For the year ended
31 December 2023
$m $m
Tax and related expenses
42.7 47.7
Adjusted Earnings before tax (EBT)
258.9 247.3
Adjusted tax and tax related expense rate
16.5% 19.3%
Adjusted Profit After Tax
Sum of total income and expense excluding divestment fee expense, income taxes, change in liability for Tax Receivables Agreement, change in
investments at fair value through profit or loss, change in contingent consideration at fair value through profit or loss, transaction costs and non-
recurring operating expense/(credit) and including tax and related expenses under the Tax Receivables Agreement.
For the year ended
31 December 2024
For the year ended
31 December 2023
$m $m
Total income
332.3
319.4
Board of Directors’ fees and expenses
(1.7)
(1.7)
Operator charge
(24.2)
(21.9)
Profit sharing charge
(1.5)
(0.1)
Other operating expenses
(18.4)
(10.1)
Finance income
2.4
–
Finance cost
(36.7)
(37.1)
Transaction costs
6.2
–
Non-recurring operating expense/(credit)
0.5
(1.2)
Tax and tax related expenses
(42.7)
(47.7)
Adjusted profit after tax
216.2
199.6
Adjusted Earnings Per Share (“EPS”)
Adjusted profit after tax divided by weighted average number of Ordinary Shares in issue.
For the year ended
31 December 2024
For the year ended
31 December 2023
Adjusted profit after tax ($m)
216.2 199.6
Weighted average number of Ordinary Shares in issue
1,098,004,286
1,131,506,310
Adjusted Earnings per share (EPS) (cents)
19.69 17.64
Total Shareholder Return (“TSR”)
Sum of closing share price, dividends paid and reinvestment of dividends divided by opening share price. Total Shareholder Return is provided as part of
the capital management case study for 2024. This is a non-recurring APM.
For the year ended
31 December 2024
pence per share
Closing share price
248.0
Dividends paid
32.4
Reinvestment of dividends
6.0
Adjusted closing share price
286.4
Opening share price
169.6
Total Shareholder Return
68.9%
Additional information
133 Petershill Partners plc | Annual Report 2024
Glossary of Capitalised Defined Terms
Acquisition Strategy and Investment Policy means the Company’s
acquisition strategy and investment policy as detailed on pages 25 to 27
of the Strategic Report
Administrator means Ocorian Administration (UK) Limited
Admission means admission of all of the Ordinary Shares issued and to
be issued in connection with the Offer to the closed-ended investment
funds category of the Official List and to trading on the London Stock
Exchange’s main market for listed securities
AGM means Annual General Meeting
AIC means the Association of Investment Companies
AIC Code means the AIC’s Code of Corporate Governance, as amended
from time to time
AIFM means alternative investment fund manager, within the meaning
of the EU AIFMD and the UK AIFMR
Annual Report means the Company’s report and financial statements for
the period from 1 January 2023 to 31 December 2023
Articles of Association means the articles of association of the Company
from time to time
Auditors means PricewaterhouseCoopers LLP or PwC and its affiliates
BEIS means the Department for Business, Energy and Industrial Strategy
of the UK Government
Board means the Board of Directors of the Company
Capital Amount means the amount of gross proceeds of the IPO, plus the
net proceeds of any future issues of Ordinary Shares, less any amounts
expended by the Company on share repurchases and redemptions or,
following a Realisation Election, attributable to Realisation Shares
Closed-ended Investment Fund means closed-ended investment fund
as per the Financial Conduct Authority’s definition
Companies Act means the Companies Act 2006 which forms the primary
source of UK company law
Company means Petershill Partners Plc
Company Secretary means Ocorian Administration (UK) Limited
Directors means the Directors of the Company
DTR means the Disclosure Guidance and Transparency Rules sourcebook
issued by the Financial Conduct Authority
ESG means Environmental, Social and Governance
EU AIFMD means Directive 2011/61/EU of the European Parliament and
of the Council of 8 June 2011 on Alternative Investment Fund Managers
and amending Directives 2003/41/EC and 2009/65/EC and Regulations
(EC) No 1060/2009 and (EU) No. 1095/2010 as supplemented by the
AIFMD Delegated Regulation and, where applicable, as transposed (i)
in Ireland by the European Union (Alternative Investment Fund
Managers) Regulations 2013 (as amended) and (ii) in any other
European Economic Area member state by the corresponding
national implementing measures
Existing Petershill Group means the current and historic Petershill
Funds being Petershill I, Petershill II, Petershill III, Petershill PE Seeding,
Petershill IV and Vintage VII, as well as certain co-investment vehicles
and GSAM
FCA means the UK Financial Conduct Authority (or its successor bodies)
FRC means the UK Financial Reporting Council
Goldman Sachs or Goldman Sachs group means Goldman Sachs Group,
Inc. and its subsidiaries and subsidiary undertakings
GP means general partner
GP Services means the assistance provided to Partner-firms by the
Operator through the GP Services Team including in the following areas:
(a) Human Capital, (b) Operational Consulting & Digital Transformation,
(c) Investment Portfolio Services, (d) Capital Formation, (e) Strategy,
Corporate Finance and M&A, (f) Product Development & Peer
Benchmarking, (g) Environment, Social & Governance, (h) Legal, Tax &
Regulatory, and (i) Portfolio Monitoring, Reporting & Communication
Group or Petershill Partners Group means the Company together with
its subsidiaries and its indirect subsidiaries
IFRS means the International Financial Reporting Standards, being the
accounting standards issued by the International Accounting Standards
Board (IASB). The Company’s Consolidated Financial Statements have
been prepared in accordance with UK-adopted International
Accounting Standards
Initial Acquisition means the acquisition that occurred prior to
Admission, which saw the transfer of a portfolio of assets from the
Petershill Funds to the Group
Investment Advisor means Goldman Sachs Asset Management, L.P.
Investment Manager means Goldman Sachs Asset Management
International
IPEV Valuation Guidelines means the International Private Equity and
Venture Capital Valuation Guidelines
Glossary of Capitalised Defined Terms
Additional information
134 Petershill Partners plc | Annual Report 2024
Listing Rules means the listing rules made by the UK Listing Authority
under section 73A of the Financial Services and Markets Act 2000
London Stock Exchange means London Stock Exchange plc
Main Market means the main market of the London Stock Exchange
Money Market Funds means open-ended mutual funds, that the
Operator may or may not manage, which invest in cash and cash-
equivalent securities
NAV or Net Asset Value means the value of the assets of the Company
less its liabilities as calculated in accordance with the Company’s
valuation policy and expressed in US dollars
Offer or IPO means the offer of the new Ordinary Shares by the Company
and existing Ordinary Shares by the Selling Shareholders
Official List means the official list maintained by the FCA
Operator means Goldman Sachs Asset Management Fund Services
Limited
Operator Agreement means the Operator Agreement entered into
between the Operator and the Company
Ordinary Shares means Ordinary Shares of $0.01 in the capital of the
Company issued and designated as “Ordinary Shares” and having the
rights, restrictions and entitlements set out in the Company’s articles
of incorporation
Partner-firms means the alternative asset managers in which the
Group holds, from time to time, investments representing minority
ownership positions and rights to certain revenue streams of the
alternative asset managers
Profit Sharing Charge means the profit sharing charge payable to the
Operator pursuant to the Operator Agreement, as described in the Notes
to the Consolidated Financial Statements
Profit Sharing Required Investment Return means the investment
return required in respect of certain investments in order for the Profit
Sharing Charge to become chargeable, as described in the Notes to the
Consolidated Financial Statements
Recurring Operating Charges means the recurring operating charges
payable to the Operator pursuant to the Operator Agreement, as
described in the Notes to the Consolidated Financial Statements
Redeemable Deferred Shares means redeemable deferred shares
having a nominal value of £1.00 each in the capital of the Company
Redeemable Shareholders means the holders of the Redeemable
Deferred Shares
SFDR means Regulation (EU) 2019/2088 of the European Parliament
and of the Council on sustainability-related disclosures in the financial
services sector
Shareholders means the holders of the Ordinary Shares
Special Limited Partners means PHP PRE Aggregator SLP LP and PHP
FRE Aggregator SLP LP
Tax Receivables Agreement or TRA means the tax receivables
agreement entered into prior to Admission between Delta Epsilon
Delaware Inc. and various subsidiaries of the Petershill Funds
TCFD means the Task Force on Climate-related Financial Disclosures
issued by the Financial Stability Board to develop consistent climate-
related financial risk disclosures for use by companies, banks and
investors in providing information to stakeholders
Transfer Vehicles means the transfer vehicles established by the
Petershill Funds to transfer a portfolio of assets to the Petershill Partners
Group pursuant to the Initial Acquisition
UK AIFMR means the Alternative Investment Fund Managers Regulation
2013 (as amended) and supplemental measures relating thereto,
including rules contained in the FCA’s Handbook
UK Code means the UK Corporate Governance Code issued by the
Financial Reporting Council
United Kingdom or UK means the United Kingdom of Great Britain and
Northern Ireland
United States or US means the United States of America, its territories
and possessions, any state of the United States and the District
of Columbia
Additional information
135 Petershill Partners plc | Annual Report 2024
The Petershill Partners Group's Assets
Accel-KKR
Accel-KKR is a technology-focused investment firm that focuses on
middle-market software and IT-enabled companies and provides a broad
range of capital solutions including buyout capital, minority-growth
investments and credit alternatives across its buyout, growth capital and
credit investment strategies. On 27 April 2017, the Existing Petershill
Group acquired an equity stake in Accel-KKR. The investment was
structured as a primary commitment and no capital was distributed to
Accel-KKR principals as part of the transaction. The investment is being
used by Accel-KKR to increase its capital commitments to current
strategies and to support potential new initiatives in the future.
ArcLight Capital Partners
Founded in 2001, ArcLight Capital Partners is a Boston-based energy-
and-infrastructure-focused private equity manager that currently
manages a single fund family and primarily invests in the midstream,
infrastructure and power sectors. ArcLight helped pioneer an asset-
based private equity approach to investing in the dynamic energy sector,
targeting midstream power and production. On 23 December 2016, the
Existing Petershill Group acquired an equity stake in ArcLight. The
investment was used by ArcLight to fund current and future general
partner commitments to ArcLight funds, as well as to facilitate
leadership succession at the firm.
Arlington Capital Partners
Arlington Capital Partners is a North American middle-market private
equity firm focused on investing in regulated industries and their
adjacent markets. Arlington was founded in 1999 and is headquartered
in Washington, DC.
Arsenal Capital Partners
Arsenal Capital Partners is a North American private equity firm
specialising in buyout and growth investments in middle-market
industrials and healthcare companies. Arsenal was founded in 2000 and
is headquartered in New York, NY.
Caxton Associates
Founded in 1983, Caxton Associates is a New York-based trading and
investment management firm specialising in global macro hedge fund
strategies across a variety of global markets and instruments, with
offices in New York, London, Princeton and Singapore. On 30 September
2014, the Existing Petershill Group acquired an equity stake in Caxton
Associates. The investment provided secondary proceeds and facilitated
generational succession.
Clearlake
Clearlake is a Santa Monica, California-based buyout and distressed debt
investment firm founded in 2006. Clearlake’s core sectors of focus are
energy, industrials, and TMT. The firm targets investments in private
equity, special situations and credit in the middle-market under three
product platforms: Clearlake Capital Partners, Clearlake Opportunities
Partners and Clearlake Credit Partners. On 25 May 2018, the Existing
Petershill Group acquired a passive minority equity stake in Clearlake.
The primary portion of the investment is being used by Clearlake as
strategic capital to further invest in the business and fund future
development initiatives.
Francisco Partners
Francisco Partners is a San Francisco, California-based middle-market
technology buyout investment firm founded in 1999. Francisco Partners’
core sectors include healthcare, IT, communications, security, software
and fintech, with a focus on providing transformational capital for North
American, European and Israeli technology companies under two product
platforms: Francisco Partners Private Equity and Agility. Francisco
Partners targets businesses ranging from $20 million to more than $3
billion across a wide range of transaction types. On 9 July 2018, the
Existing Petershill Group acquired a minority equity stake in Francisco
Partners, with proceeds being used by Francisco Partners to further
increase its capital commitments to current and future funds as well as
future development initiatives.
General Catalyst
General Catalyst is a Cambridge, Massachusetts-based growth and
venture capital firm founded in 2000. General Catalyst has additional
offices in New York, Palo Alto and San Francisco and is managed by the
two founding partners as well as Hemant Taneja and Ken Chenault.
General Catalyst targets early stage venture and growth investments in
technology or tech-enabled businesses. On 21 November 2018, the
Existing Petershill Group acquired a passive minority revenue share in
General Catalyst. The investment is being used by General Catalyst to
fund future GP commitments and facilitate the continued growth of the
General Catalyst platform.
Harvest Partners
Harvest Partners is a New York-based middle-market leveraged buyout
firm founded in 1981. Harvest is focused on the industrials, business
services, healthcare, manufacturing and distribution and consumer
sectors. Harvest targets control and non-controlling investments in
the middle-market under two product platforms: Harvest Partners and
the Harvest Partners Structured Capital Fund. On 12 October 2018,
the Existing Petershill Group acquired a passive minority equity stake
in Harvest. The investment is being used by Harvest to fund future
GP commitments and facilitate the continued growth of the
Harvest platform.
Industry Ventures
Industry Ventures is a venture capital investment firm that focuses on
investing in companies and venture capital partnerships directly and via
secondary transactions, from early stage to growth stage, and seeks to
address inefficiencies in venture capital with flexible solutions for
entrepreneurs, venture funds and limited partners. Industry Ventures
was founded in 1999 and is headquartered in San Francisco, CA, with
additional offices in Washington, DC and London.
Kayne Anderson Real Estate
Kayne Anderson Real Estate (“KARE”) was founded in 2007 and is a US
real estate asset management platform, focusing on opportunistic, core
equity and debt investments in alternative sectors, including medical
office, senior housing, multi-family housing, student housing and self-
storage. KARE targets investments ranging from $30 million to $500
million, with an aim to enhance value through asset consolidation and
the creation of geographically diverse portfolios. On 17 January 2020,
the Existing Petershill Group acquired a minority interest in KARE. The
investment is being used by KARE to fund GP commitments and facilitate
employee retention through equalisation and long-term commitments
to the business.
The Petershill Partners Group's Assets
Additional information
136 Petershill Partners plc | Annual Report 2024
Kennedy Lewis Investment Management LLC
Kennedy Lewis Investment Management LLC (“Kennedy Lewis”) is a
credit focused alternative asset manager founded in 2017 by David
Kennedy Chene and Darren Lewis Richman. The firm manages private
funds, a business development company (Kennedy Lewis Capital
Company), and collateralised loan obligations (Generate Advisors, LLC).
Knighthead Capital Management
Founded in 2008, Knighthead Capital Management is a New York-based
hedge fund specialising in long/short event-driven, distressed credit and
other special situations across a broad array of industries. On 6 January
2014, the Existing Petershill Group acquired an equity stake in
Knighthead, with the proceeds being used by Knighthead to simplify
Knighthead’s capital structure.
Lakewood
Founded in 2007, Lakewood is a value-oriented equity long/short
investment firm. It employs a broad investment strategy with the
flexibility to capitalise on opportunities in all parts of the capital
structure and across geographies, market capitalisations and industries.
Lakewood makes investments in long equity, short equity and fixed
income. Its long equity strategy comprises a concentrated portfolio of
companies with attractive long-term appreciation potential with a
minimised risk of capital loss. The short equity strategy seeks to generate
profits in all market environments through a focus on a prudently
diversified portfolio of significantly overvalued securities. The Existing
Petershill Group acquired an equity stake in Lakewood on 27 June 2017,
which provided necessary capital to transition out an existing minority
partner while also increasing the Lakewood partner’s capital
commitment to the investment fund.
Littlejohn & Co.
Founded in 1996, Littlejohn & Co. is a Greenwich, Connecticut-based mid-
market private equity manager. Littlejohn & Co.’s flagship private equity
programme is focused on investing in middle-market companies that are
undergoing a fundamental change in capital structure, strategy,
operations or growth that can benefit from its operational and strategic
approach. In addition, Littlejohn & Co. has built out a distressed credit
product and a performing credit platform. On 8 August 2016, the
Existing Petershill Group acquired an equity stake in Littlejohn & Co. The
investment was structured as a primary capital contribution to build a
balance sheet that enables Littlejohn & Co. to grow its private equity and
credit strategies, including funding GP commitments and CLO equity
retention tranches.
LLR Partners
LLR Partners is a lower middle-market private equity firm investing in
technology and healthcare businesses. LLR was founded in 1999 and is
based in Philadelphia, USA.
Pelham Capital
Founded in 2007, Pelham Capital is a London-based European equity
long/short hedge fund that invests across a range of sectors and
specialises in event-driven distressed credit and special situation
opportunity funds. On 2 January 2014, the Existing Petershill Group
acquired an equity stake in Pelham Capital. The investment was used by
Pelham Capital for investment in its business or its funds.
Piney Lake Partners
Piney Lake Partners, a Greenwich, Connecticut firm, is an opportunistic
private credit manager and focuses on lending capital to middle-market
business, primarily in North America, that are either stressed or in a
period of transition. On 21 June 2018, the Existing Petershill Group
acquired a revenue share in Piney Lake Partners, with capital provided to
help fund its initial credit portfolio.
Riverstone Holdings LLC
Riverstone Holdings LLC, founded in 2000, is one of the world’s largest
energy-focused private equity firms. Riverstone manages a portfolio of
more than 200 energy, natural resources and renewables companies in
15 countries across a diversified product platform including private
equity funds, private credit funds and permanent capital vehicles.
On 4 May 2017, the Existing Petershill Group acquired a passive minority
revenue interest in Riverstone. The investment provided Riverstone with
strategic capital to further invest in the business, fund business
development and address certain capital commitments.
Slate Asset Management
Slate Asset Management, founded in 2005 with offices in Toronto,
Chicago, Frankfurt and London, is a real estate-focused alternative
investment platform. Slate is a value-oriented manager across private
and publicly traded investment vehicles, investing across Canada, the
United States and Europe, through multiple vehicles, including co-
investments with global institutional partners, private equity funds and
publicly traded Real Estate Investment Trusts. On 26 September 2019,
the Existing Petershill Group acquired a minority interest in Slate. The
investment is being used by Slate as balance sheet capital to simplify its
capital structure and fund current and future GP commitments to
facilitate development of the Slate platform.
SLR Capital Partners
SLR Capital Partners LLC is an independent boutique asset manager
focused on direct lending with expertise across a range of primarily
senior secured financing solutions for US middle-market companies. SLR
was founded in 2006 and is based in New York, USA.
Symphony Technology Group
Symphony Technology Group is a North American, technology-focused
private equity buyout firm, focusing on investments in middle-market
enterprise software companies. Symphony Technology Group targets
opportunities in the value-focused enterprise software market.
Symphony Technology Group was founded in 2002 and is headquartered
in Menlo Park, CA.
Westbrook Partners
Westbrook Partners is a value-added global real estate investment
platform. Westbrook’s strategy is focused on value-added investments in
global gateway cities, investing across property types and the capital
structure. On 5 October 2018, the Existing Petershill Group acquired a
passive minority stake in Westbrook. The investment is being used by
Westbrook to fund future GP commitments and facilitate the further
institutionalisation of the Westbrook platform.
Wind Point Partners
Wind Point Partners is a North American private equity firm focusing on
buyout investments in middle-market consumer products, industrial
products and business services companies. Wind Point was founded in
1984 and is headquartered in Chicago, IL.
Additional information
137 Petershill Partners plc | Annual Report 2024
Glossary of Key Operating Metrics
The Operator and the Directors use key operating metrics to help
evaluate trends, assess the performance of the Partner-firms and the
Company, analyse and test dividends received from the Partner-firms
and inform operating, budgeting and reinvestment decisions. The
Directors believe that these metrics, which present certain operating and
other information in respect of the Partner- firms, provide an enhanced
understanding of the underlying portfolios and performance of the
Partner-firms and are therefore essential to assessing the investments
and performance of the Company.
The key operating metrics described in this section are derived from
financial and other information reported to the Operator by the Partner-
firms. The Operator, with the assistance of an independent accounting
firm, performs due diligence procedures on the information provided by
the Partner-firms. It should be noted, however, that these due diligence
procedures do not constitute an audit.
In addition, each Partner-firm may account for and define certain
financial and other information differently from one another. For
example, each Partner-firm may calculate its fee-paying AuM differently,
the result of which being that the inputs of the Company’s Aggregate
Fee-paying AuM are not consistently calculated.
Whilst the operating metrics described in this section are similar to those
used by other alternative asset managers, there are no generally
accepted principles governing their calculation, and the criteria upon
which these metrics are based can vary from firm to firm. These metrics,
by themselves, do not provide a sufficient basis to compare the Partner-
firms’ or the Company’s performance with that of other companies.
None of Partner Distributable Earnings, Partner FRE, Partner Realised
Performance Revenues or Partner Realised Investment Income are
measures of or provide any indication of profits available for the purpose
of a distribution by the Company within the meaning of section 830 of
the Companies Act 2006, or of any Partner-firm in accordance with the
equivalent applicable rules.
Aggregate Fee-paying AuM
Aggregate Fee-paying AuM is defined as the portion of Aggregate
Partner-firm AuM for which Partner-firms are entitled to receive
management fees, as reported by the Partner-firms to the Operator. The
principal difference between Aggregate Fee-paying AuM and Aggregate
Partner-firm AuM is that Aggregate Fee-paying AuM typically excludes
co-investment on which Partner- firms generally do not charge fees and,
to a lesser extent, fund commitments in Partner-firm funds (i) on which
fees are only earned on investment, rather than from the point of
commitment and (ii) where capital has been raised but fees have not yet
been activated. This may also include legacy assets where fees are no
longer being charged.
The Operator and the Directors consider Aggregate Fee-paying AuM to
be a meaningful measure of the Partner-firms’ capital base upon which
they earn management fees and use the measure in assessing the
management fee-related performance of the Partner-firms and to
inform operating, budgeting and reinvestment decisions.
Aggregate Partner-firm AuM
Aggregate Partner-firm AuM is defined as the sum of (a) the net asset
value of the Partner-firms’ underlying funds and investment vehicles,
and in most cases includes co-investment vehicles, GP commitments and
other non fee-paying investment vehicles and (b) uncalled commitments
from these entities, as reported by the Partner-firms to the Operator
from time to time and aggregated by the Operator without material
adjustment. This is an aggregated figure across all Partner-firms and
includes Partner-firm AuM outside of the Company’s ownership interest
in the Partner-firms.
The Operator and the Directors consider Aggregate Partner-firm AuM to
be a meaningful measure of the size, scope and composition of the
Partner-firms, as well as of their capital-raising activities. The Operator
uses Aggregate Partner-firm AuM to inform operating, budgeting and
reinvestment decisions.
Aggregate Performance Fee Eligible Partner-
firm AuM
The amount of Aggregate Partner-firm AuM that is eligible for
performance fees.
AuM and Associated Data
The data presented in this document for the following key operating
metrics reflects AuM data reported to the Operator on a three-month lag.
This three-month data lag is due to the timing of the financial
information received by the Operator from the Partner-firms, which
generally require at least 90 days following each period end to present
final financial information to the Operator. The key operating metrics
reflected on a three-month lag are:
▪ Aggregate Partner-firm AuM
▪ Aggregate Fee-paying Partner-firm AuM
▪ Average Aggregate Fee-paying Partner-firm AuM
▪ Aggregate Performance Fee Eligible Partner-firm AuM
▪ Average Aggregate Performance Fee Eligible Partner-firm AuM
▪ Partner Blended Net Management Fee Rate
▪ Implied Blended Partner-firm FRE Ownership
▪ Investment Capital
Implied Blended Partner-firm FRE Ownership
Implied Blended Partner-firm FRE Ownership is defined as the weighted
average of the Company’s ownership stake in the Partner-firms’
management fee-related earnings and is calculated based on the
contribution of average Aggregate Fee-paying AuM from Partner-firms
in each period. It will therefore be expected to change to some degree
from period to period based on the contribution to average Aggregate
Fee-paying AuM of each Partner-firm, even if the actual ownership of
each underlying Partner-firm does not change. Excludes new acquisitions
where Petershill has not yet started to receive or have only received
partial period amounts of Partner Net Management and Advisory Fees.
The Operator and the Directors consider Implied Blended Partner-firm
FRE Ownership to be a meaningful measure of the composition of the
Company’s investments.
Glossary of Key Operating Metrics
Additional information
138 Petershill Partners plc | Annual Report 2024
Intermediary Entities
Intermediary Entities comprise the following entities – PH Offshore GP
Aggregator, PH Offshore IM Aggregator, PH Onshore GP Aggregator, PH
Onshore IM Aggregator.
Investment Capital
Investment Capital is defined as the sum of the reported value of the
balance sheet investments from the Partner-firms. The Operator and the
Directors consider Investment Capital to be a meaningful measure of the
performance of the Partner-firms’ balance sheet investments and
potential future Partner Realised Investment Income. The Operator
therefore uses Investment Capital to assess future expected Partner
Realised Investment Income and inform operating, budgeting and
reinvestment decisions.
In respect of Investment Capital, the data may be adjusted for any known
valuation impacts following the reporting date of the information
received from the Partner-firms.
Issuer SPVs
Issuer SPVs comprise the following entities – PH Offshore GP Issuer, PH
Offshore IM Issuer, PH Onshore GP Issuer, PH Onshore IM Issuer.
Ownership weighted AuM
Ownership weighted AuM represents the sum of the Company’s
ownership stakes in each Partner-firm’s AuM.
Ownership weighted Fee-paying AuM
Ownership weighted Fee-paying AuM represents the sum of the
Company’s ownership stakes in each Partner-firm’s Fee-paying AuM.
Please refer to Aggregate Fee-paying AuM on page 138.
Partner Blended Net Management Fee Rate
Partner Blended Net Management Fee Rate is defined as Partner Net
Management and Advisory Fees for the period, divided by the average
Aggregate Fee-paying AuM weighted for the Company’s ownership
interests in each Partner-firm. The average Aggregate Fee-paying AuM is
calculated as the mean of the Aggregate Fee-paying AuM at the start
and the end of the reporting period and excludes new acquisitions where
the Company has not yet started to receive or have only received partial
period amounts of Partner Net Management and Advisory Fees.
The Operator and the Directors consider Partner Blended Net
Management Fee Rate to be a key metric in assessing the Company’s
overall management fee-related performance.
Partner Distributable Earnings and Partner
Distributable Earnings Margin
Partner Distributable Earnings is defined as the sum of Partner FRE,
Partner Realised Performance Revenues and Partner Realised
Investment Income. Partner Distributable Earnings Margin is defined as
Partner Distributable Earnings divided by the sum of Partner Net
Management and Advisory Fees, Partner Realised Performance Revenues
and Partner Realised Investment Income.
The Operator and the Directors consider Partner Distributable Earnings
and Partner Distributable Earnings Margin to be meaningful measures of
the overall performance of the Partner-firms and key performance
indicators of the Company’s total income from investments in
management companies. The Operator uses this metric to analyse and
test dividends received from the Partner-firms, as well as to inform
operating, budgeting and reinvestment decisions. These measures
reflect any contractual margin protections or revenue share interests
that the Company may have with the Partner-firms, which means that
the Partner Distributable Earnings Margin may differ from the margins
achieved by other Shareholders or partners of the Partner-firms.
Partner Fee-Related Earnings (FRE) and
Partner FRE Margin
Partner FRE is defined as Partner Net Management and Advisory Fees,
less the Partner-firms’ operating expenses, fixed and bonus
compensation, net interest income/(expense) and taxes (but not
performance fee-related expenses) allocable to the Company’s share of
Partner Net Management and Advisory Fees, as reported by the
Partner-firms to the Operator, and subject to applicable contractual
margin protections in respect of certain Partner-firms. Partner FRE
Margin is defined as Partner FRE divided by Partner Net Management
and Advisory Fees.
The Operator and the Directors consider Partner FRE and Partner FRE
Margin to be meaningful measures of the management fee-related
earnings of the Partner-firms and key performance indicators of the
Company’s income from investments in management companies derived
from management fee income. The Operator uses this metric to analyse
and test dividends received from the Partner-firms, as well as to inform
operating, budgeting and reinvestment decisions.
Partner Net Management and Advisory Fees
Partner Net Management and Advisory Fees is defined as the Company’s
aggregate proportionate share of the Partner-firms’ net management
fees (as reported by the Partner-firms to the Operator), including
monitoring and advisory fees and less any management fee offsets,
payable by the Partner-firms’ funds to their respective Partner-firms for
the provision of investment management and advisory services.
Certain Partner-firms provide transaction and advisory services, as well
as services to monitor ongoing operations of portfolio companies.
Management fees paid to the Partner-firms may be subject to fee
offsets, which are reductions to management fees and are based on a
percentage of monitoring fees and transaction and advisory fees paid by
portfolio companies to the Partner-firms.
The Operator and the Directors consider Partner Net Management and
Advisory Fees to be a meaningful measure of the management fee-
related performance of the Partner-firms, and the Operator uses this
metric to analyse and test income received from the Partner-firms and to
inform operating, budgeting and reinvestment decisions.
Partner Private Markets Accrued Carried
Interest
Partner Private Markets Accrued Carried Interest is defined as the
Company’s proportionate share of the Partner-firms’ balance sheet
accrued carry (as reported by the Partner-firms to the Operator) and
represents the Company’s proportionate share of the accumulated
balance of unrealised profits from the Partner-firms’ funds.
The Operator and the Company consider Partner Accrued Carried Interest
to be a meaningful measure of the performance of the private markets
Partner-firms and potential future private markets Partner Realised
Performance Revenues. Absolute return performance fees are not
accrued and are instead realised annually. The Operator uses Partner
Accrued Carried Interest to assess future expected carried interest
payments and inform operating, budgeting and reinvestment decisions.
This key operating metric reflects data reported to the Operator on a
three-month lag.
Additional information
139 Petershill Partners plc | Annual Report 2024
Partner Realised Investment Income
Partner Realised Investment Income is defined as the Company’s
aggregate proportionate share of Partner-firm earnings resulting from
the realised gains and losses, or any distributed income, from the
investments held on Partner-firms’ balance sheets, as reported by the
Partner-firms to the Operator. Partner Realised Investment Income is
also realised by the Company through a limited number of direct stakes
in certain Partner-firms’ funds. Realised Investment Income includes
income that has been realised but not yet paid, as well as amounts that
are realised and either fully or partially reinvested.
The Company’s share of the Partner-firms’ investment and balance sheet
income will be lower than its share of the Partner-firms’ management
fee-related earnings because the Company’s ownership stake in the
Partner-firms’ investment and balance sheet income is lower than its
ownership stake in the Partner- firms’ management fee-related earnings.
The Operator and the Directors consider Partner Realised Investment
Income to be a meaningful measure of the investment performance of
certain assets held by the Partner-firms and key performance indicator of
the Company’s income from investments in management companies
derived from investment income. The Operator uses this metric to
analyse and test dividends received from the Partner-firms, as well as to
inform operating, budgeting and reinvestment decisions.
Partner Realised Performance Revenues
Partner Realised Performance Revenues is defined as the Company’s
aggregate proportionate share of the Partner-firms’ realised carried
interest allocations and incentive fees payable by the Partner-firms’
funds to their respective Partner-firms, less any realised performance
fee-related expenses of the Partner-firms allocable to the Company’s
share of performance fee-related revenues, as reported by the Partner-
firms to the Operator.
The Company’s share of the Partner-firms’ performance fee-related
earnings will be lower than its share of the Partner-firms’ management
fee-related earnings because the Company’s ownership stake in the
Partner-firms’ performance fee-related earnings is lower than its
ownership stake in the Partner-firms’ management fee-related earnings.
The Operator and the Directors consider Partner Realised Performance
Revenues to be a meaningful measure of the performance fee-related
earnings of the Partner-firms and key performance indicator of the
Company’s income from investments in management companies derived
from performance fee income. The Operator uses this metric to analyse
and test dividends received from the Partner-firms, as well as to inform
operating, budgeting and reinvestment decisions.
Partner Revenues
Partner Revenues is defined as the sum of Partner Net Management and
Advisory Fees, Partner Realised Performance Revenues and Partner
Realised Investment Income.
The Operator and the Directors consider Partner Revenues to be a
meaningful measure of the overall performance of the Partner-firms. The
Operator uses this metric to inform operating, budgeting and
reinvestment decisions.
Petershill Funds
The Petershill Funds refers to the following entities: Petershill II L.P. and
Petershill II Offshore L.P., Petershill Private Equity L.P., Petershill Private
Equity Offshore L.P., Vintage VII L.P. and related entities and certain co-
investment vehicles.
Weighted Average Capital Duration
Weighted Average Capital Duration is a key measure of the long-term,
locked-up capital of Aggregate Fee-paying Partner-firm AuM. It is
defined as the average life of the underlying Partner-firm funds
weighted based on Fee-paying AuM.
Glossary of Key Operating Metrics continued
Additional information
140 Petershill Partners plc | Annual Report 2024
Company Information
Board of Directors (all Non-Executive)
Naguib Kheraj CBE (Chairman)
Everard Barclay Simmons
Annemarie Durbin
Erica Handling
Mark Merson
All independent and of the registered office below.
Registered Office
5
th
Floor
20 Fenchurch Street London
EC3M 3BY
United Kingdom
Operator
Goldman Sachs Asset Management Fund Services Limited
1
47–49 St. Stephen’s Green
Dublin
D02 W634
Republic of Ireland
Investment Manager
Goldman Sachs Asset Management International
1
Plumtree Court
25 Shoe Lane
London
EC4A 4AU
United Kingdom
Investment Advisor
Goldman Sachs Asset Management, L.P.
1
200 West Street
New York
NY 10282
United States
Independent Auditors
PricewaterhouseCoopers LLP
7 More London Riverside
London
SE1 2RT
United Kingdom
Company Secretary and Administrator
Ocorian Administration (UK) Limited 5
th
Floor
20 Fenchurch Street London
EC3M 3BY
United Kingdom
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road Bristol
BS13 8AE
United Kingdom
Depositary
Ocorian Depositary (UK) Limited
5
th
Floor
20 Fenchurch Street
London
EC3M 3BY
United Kingdom
1. Wholly owned affiliates of the Goldman Sachs Group.
Website: www.petershillpartners.com
ISIN GB00BL9ZF303
Ticker PHLL
Sedol BL9ZF30
Registered Company Number 13289144
Company information
Additional information
141 Petershill Partners plc | Annual Report 2024
Cautionary Statement
The Chairman’s Statement and Operator’s Report have been prepared
solely to provide additional information for Shareholders to assess the
Company’s strategies and the potential for those strategies to succeed.
These should not be relied on by any other party or for any other purpose.
The Chairman’s Statement and Operator’s Report may include
statements that are, or may be deemed to be, “forward-looking
statements”. These forward-looking statements can be identified by the
use of forward-looking terminology, including the terms “believes”,
“estimates”, “anticipates”, “expects”, “intends”, “may”, “will” or “should”
or, in each case, their negative or other variations or comparable
terminology.
These forward-looking statements include all matters that are not
historical facts. They appear in a number of places throughout this
document and include statements regarding the intentions, beliefs or
current expectations of the Board of Directors and the Operator,
concerning, among other things, the investment objectives and
investment policy, financing strategies, investment performance, results
of operations, financial condition, liquidity, prospects, and distribution
policy of the Company and the markets in which it invests.
By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. Forward-looking
statements are not guarantees of future performance.
The Group’s actual investment performance, results of operations,
financial condition, liquidity, distribution policy and the development of
its financing strategies may differ materially from the impression created
by the forward-looking statements contained in this document.
Subject to their legal and regulatory obligations, the Board of Directors
and the Operator expressly disclaim any obligations to update or revise
any forward-looking statement contained herein to reflect any change in
expectations with regard thereto or any change in events, conditions or
circumstances on which any statement is based.
Cautionary Statement
Additional information
142 Petershill Partners plc | Annual Report 2024
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with the FSC® (Forest Stewardship Council®) and is
recyclable and acid-free.
Pureprint Ltd is FSC certified and ISO 14001 certified
showing that it is committed to all round excellence and
improving environmental performance is an important
part of this strategy.
Pureprint Ltd aims to reduce at source the effect its
operations have on the environment and is committed to
continual improvement, prevention of pollution and
compliance with any legislation or industry standards.
Pureprint Ltd is a Carbon / Neutral® Printing Company.
Consultancy and design by Black Sun Global.
www.blacksun-global.com