Annual Report and Financial Statements for the year ended 30 November 2024
Polar Capital Global Financials Trust plc
2024 Annual Report and Financial Statements for the year ended 30 November 2024
Contents
Your Company at a Glance 1
Financial Highlights 2
Performance 3
Performance Highlights 4
Chair’s Statement 5
Board Apprentice Q&A 8
Board of Directors 10
Investment Managers 12
Manager’s Report
Investment Manager’s Report 14
Attribution Analysis 22
Top Ten Investments 23
Full Investment Portfolio 24
Portfolio Review 27
Environmental, Social and Governance (“ESG”)
Corporate Responsibility for ESG 29
Investment Perspective 31
ESG Dashboard 33
Governance
Strategic Report 36
Section 172 Statement 45
Report of the Directors 49
Report on Corporate Governance 51
Audit Committee Report 58
Directors’ Remuneration Report 64
Report of the Management Engagement Committee 69
Statement of Directors’ Responsibilities 71
Independent Auditors’ Report 72
Financial Statements and Notes
Statement of Comprehensive Income 81
Statement of Changes in Equity 82
Balance Sheet 83
Cash Flow Statement 84
Notes to the Financial Statements 85
Shareholder Information
Alternative Performance Measures (APMs) 112
Glossary of Terms 115
Corporate Information – AGM 118
Corporate Information – Other 120
Contact Information 125
Polar Capital Global Financials Trust plc
(the Company) is a UK investment trust
launched in July 2013. The Company
initially had a fixed seven-year life but in
April 2020, with Shareholder approval,
moved to five-yearly tender offers with no
fixed end of life.
The Company has appointed Polar Capital LLP (“Polar Capital” or
the “Manager”) as its Investment Manager. Since its foundation
in 2001, Polar Capital has grown steadily and currently has
14 autonomous investment teams managing specialist, active and
capacity constrained portfolios, with a collegiate and meritocratic
culture where capacity of investment strategies is managed to
enhance and protect performance.
S
ee more at:
polarcapitalglobalfinancialstrust.com
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 1
Your Company at a Glance
Investment Objective
The Company’s investment objective
is to generate for investors a growing
dividend income* together with
capital appreciation.
Investment Policy
The Company seeks to achieve its objective by investing
primarily in a global portfolio consisting of listed or quoted
securities issued by companies in the financial sector
operating in its various subsectors. The portfolio is diversified
by factors including geography, industry sub-sector and stock
market capitalisation. Full details of the investment policy are
set out on page 36 of the Strategic Report.
Benchmark
In April 2020, following the reconstruction of the Company,
the benchmark was changed to the MSCI ACWI Financials
Net Total Return Index in recognition of the Company’s level
of portfolio exposure to emerging market financials equities
and its limited portfolio exposure to real estate equities.
Prior to this, the Company was benchmarked against the
MSCI World Financials + Real Estate Net Total Return Index.
See page 37 for more information.
Life of the Company – Tender Offer/
Reconstruction
The Company was launched in July 2013 with a fixed
seven-year life. Shareholders approved changes to the
Company’s Articles of Association to make a tender offer
to all Shareholders and to extend the Company’s life
indefinitely at the Company’s General Meeting held on
7 April 2020 (“the Reconstruction”). The new Articles of
Association removed the fixed life and require the Company
to make tender offers at five-yearly intervals, with the first to
commence on or before 30 June 2025.
Management
The Company operates as an investment trust with an
independent board and third-party investment manager.
The Company has appointed Polar Capital LLP (the
“Manager”) as its AIFM and Investment Manager under the
terms of an Investment Management Agreement (“IMA”).
The IMA provides for a broad range of services including
portfolio management. The portfolio is jointly managed by
Nick Brind, George Barrow and Tom Dorner. Details of the
fees payable to the Manager can be found on pages 37 and
92. The Management Fee is charged 80% to capital and 20%
to revenue; the Performance Fee, when payable, is charged
100% to capital.
Gearing and use of Derivatives
Under the Articles of Association the Company may use an
overall maximum leverage (gearing) limit of 20 per cent of
NAV at the time at which the relevant borrowing is taken out
or increased.
In July 2022, the Company entered into a contract with RBS,
for a three-year revolving credit facility in the amount of
£50m, and two three-year term loans for £15m and $18.4m
respectively. At the period end, the term loans had been fully
drawn down; £40m in sterling and $12m in US dollars had
been also drawn down under the RBS revolving credit facility.
As at 14 February 2025, the Company had drawn down a
total of £79.1m across the term loan and RCF, equating to
5.4% net gearing.
Details of how the borrowings may be used are given in the
Strategic Report on page 36.
Capital Structure
As at 30 November 2024, the Company had 331,750,000
ordinary shares of 5 pence each in issue of which 28,530,635
shares were held in treasury. No ordinary shares were bought
back or issued following the year end.
* Please refer to the Chair’s Statement for information on the proposed changes to the Company’s future Dividend Policy.
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 2
Financial Highlights
Financial Highlights as at and for the year ended 30 November
Net gearing*
Total net assets NAV per ordinary share
2023
2024
2023
2024
207.7p
158.1p
-5.5%
-12.2%
2023
2024
196.2p
138.8p
£488,198,000
£629,678,000
Ordinary share price (total return)*
Discount per ordinary share*Ordinary share price
2023
2024
2023
2023
2024
5.1%
34.8%
6.5%
Net gearing*
2023
2024
2024
2023
2024
4.70p
4.55p
net asset value per ordinary share (total return)* Total dividend per ordinary share paid or declared for the year
-2.8%
-7.5%
45.4.%
Ordinary share price (+41.4%)
Total net assets NAV per ordinary share
2023
2024
2023
2024
207.7p
158.1p
-5.5%
-12.2%
2023
2024
196.2p
138.8p
£488,198,000
£629,678,000
Ordinary share price (total return)*
Discount per ordinary share*Ordinary share price
2023
2024
2023
2023
2024
5.1%
34.8%
6.5%
Net gearing*
2023
2024
2024
2023
2024
4.70p
4.55p
net asset value per ordinary share (total return)* Total dividend per ordinary share paid or declared for the year
-2.8%
-7.5%
45.4.%
Discount per ordinary share*
Total net assets NAV per ordinary share
2023
2024
2023
2024
207.7p
158.1p
-5.5%
-12.2%
2023
2024
196.2p
138.8p
£488,198,000
£629,678,000
Ordinary share price (total return)*
Discount per ordinary share*Ordinary share price
2023
2024
2023
2023
2024
5.1%
34.8%
6.5%
Net gearing*
2023
2024
2024
2023
2024
4.70p
4.55p
net asset value per ordinary share (total return)* Total dividend per ordinary share paid or declared for the year
-2.8%
-7.5%
45.4.%
Total net assets (+29%)
Total net assets NAV per ordinary share
2023
2024
2023
2024
207.7p
158.1p
-5.5%
-12.2%
2023
2024
196.2p
138.8p
£488,198,000
£629,678,000
Ordinary share price (total return)*
Discount per ordinary share*Ordinary share price
2023
2024
2023
2023
2024
5.1%
34.8%
6.5%
Net gearing*
2023
2024
2024
2023
2024
4.70p
4.55p
net asset value per ordinary share (total return)* Total dividend per ordinary share paid or declared for the year
-2.8%
-7.5%
45.4.%
NAV per ordinary share (+31.4%)
Total net assets NAV per ordinary share
2023
2024
2023
2024
207.7p
158.1p
-5.5%
-12.2%
2023
2024
196.2p
138.8p
£488,198,000
£629,678,000
Ordinary share price (total return)*
Discount per ordinary share*Ordinary share price
2023
2024
2023
2023
2024
5.1%
34.8%
6.5%
Net gearing*
2023
2024
2024
2023
2024
4.70p
4.55p
net asset value per ordinary share (total return)* Total dividend per ordinary share paid or declared for the year
-2.8%
-7.5%
45.4.%
Ordinary share price (total return)*
Total net assets NAV per ordinary share
2023
2024
2023
2024
207.7p
158.1p
-5.5%
-12.2%
2023
2024
196.2p
138.8p
£488,198,000
£629,678,000
Ordinary share price (total return)*
Discount per ordinary share*Ordinary share price
2023
2024
2023
2023
2024
5.1%
34.8%
6.5%
Net gearing*
2023
2024
2024
2023
2024
4.70p
4.55p
net asset value per ordinary share (total return)* Total dividend per ordinary share paid or declared for the year
-2.8%
-7.5%
45.4.%
Total dividend per ordinary share paid or declared
for the year (+3.3%)
Total net assets NAV per ordinary share
2023
2024
2023
2024
207.7p
158.1p
-5.5%
-12.2%
2023
2024
196.2p
138.8p
£488,198,000
£629,678,000
Ordinary share price (total return)*
Discount per ordinary share*Ordinary share price
2023
2024
2023
2023
2024
5.1%
34.8%
6.5%
Net gearing*
2023
2024
2024
2023
2024
4.70p
4.55p
net asset value per ordinary share (total return)* Total dividend per ordinary share paid or declared for the year
-2.8%
-7.5%
45.4.%
Net asset value (NAV) per ordinary share (total return)*
Total net assets NAV per ordinary share
2023
2024
2023
2024
207.7p
158.1p
-5.5%
-12.2%
2023
2024
196.2p
138.8p
£488,198,000
£629,678,000
Ordinary share price (total return)*
Discount per ordinary share*Ordinary share price
2023
2024
2023
2023
2024
5.1%
34.8%
6.5%
Net gearing*
2023
2024
2024
2023
2024
4.70p
4.55p
net asset value per ordinary share (total return)* Total dividend per ordinary share paid or declared for the year
-2.8%
-7.5%
45.4.%
* Alternative Performance Measure, see pages 112 to 114 for further explanations.
~ Refer to Note 12 on pages 94 to 95 for more details.
Data sourced by HSBC Securities Services Limited, Polar Capital LLP.
Dividends
~
The Company has paid or declared the following dividends relating to the financial year ended 30 November 2024:
Pay date
Amount per
Ordinary share
Ordinary Shares
in Issue Record Date Ex-Date Declared Date
First interim: 30 August 2024 2.50p 304,272,705 2 August 2024 1 August 2024 27 June 2024
Second interim: 28 February 2025 2.20p
303,219,365
7 February 2025 6 February 2025 20 January 2025
Total (2023: 4.55p) 4.70p
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 3
Performance since Inception
Rebased to 100 at 1 July 2013
Discrete Performance (%)
For the year ended 30 November
2013~ 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
NAV per share (TR)* 3.7 9.8 5.3 22.2 16.4 -1.5 10.4 -6.5 27.9 1.9 -2.8 34.8
Ordinary share price (TR)* 5.8 -2.2 6.2 21.4 16.7 -1.7 12.4 -1.6 29.7 -7.6 -7.5 45.4
MSCI ACWI Financials (TR)^ 7.6 9.8 -2.4 25.9 15.8 -0.4 8.0 -8.2 27.0 6.8 0.3 36.1
* See page 4 note 1 and note 2 for NAV and share price total return (TR) calculation respectively.
~ Performance total return (TR) for the period was from inception date of 1 July 2013 to 30 November 2013.
^ The performance of the MSCI ACWI Financials Net Total Return Index (£) excluding Real Estate prior to August 2016 is shown for illustrative purposes only.
Source: Polar Capital
Performance
PCFT NAV per share (TR)* Ordinary share price (TR)* MSCI ACWI Financials (TR)^
50
100
150
200
250
300
350
Nov
2013
Nov
2014
Nov
2015
Nov
2016
Nov
2017
Nov
2018
Nov
2019
Nov
2020
Nov
2021
Nov
2022
Nov
2024
Jul
2013
Nov
2023
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 4
Performance (Sterling total return) Note
For the year ended
30 November 2024
%
Since
Inception
%
NAV per ordinary share
*
1 34.8 199.2
Ordinary share price
*
2 45.4 173.1
Ordinary share price including subscription share value
*
3 - 174.9
Benchmark (Sterling total return) 4
For the year ended
30 November 2024
%
Since
Inception
%
MSCI ACWI Financials 36.1 204.8
Other Indices and peer group (Sterling total return)
MSCI World Index 26.8 285.7
FTSE All Share Index 15.8 104.3
Lipper Financial Sector 5 37.1 161.8
Performance since Reconstruction on 22 April 2020
(Sterling total return)
Since
Reconstruction
%
NAV per ordinary share
*
6 129.9
Benchmark 4 128.1
Earnings per Ordinary share 7
For the year ended
30 November 2024
For the year ended
30 November 2023
Revenue Return 5.31p 4.97p
Capital Return 48.62p (9.84p)
Total 53.93p (4.87p)
Expenses
*
For the year ended
30 November 2024
For the year ended
30 November 2023
Ongoing charges 0.85% 0.86%
Ongoing charges including performance fee 8 0.85% 0.86%
Note 1 The total return NAV performance for the period is calculated by reinvesting the dividends in the assets of the Company from the relevant ex-dividend
date. Performance since inception has been calculated using the initial NAV of 98p and the NAV on 30 November 2024. Dividends are deemed to be reinvested on the
ex-dividend date as this is the protocol used by the Company’s benchmark and other indices.
Note 2 The total return share price performance is calculated by reinvesting the dividends in the shares of the Company from the relevant ex-dividend date.
Performance since inception has been calculated using the launch price of 100p to the closing price on 30 November 2024.
Note 3 The total return share price performance since inception includes the value of the subscription shares issued free of payment at launch on the basis of one
for every five Ordinary shares and assumes such were held throughout the period from launch to the final conversion date of 31 July 2017. Performance is calculated by
reinvesting the dividends in the shares of the Company from the relevant ex-dividend date and uses the launch price of 100p per Ordinary share and the closing price
per Ordinary share on 30 November 2024.
Note 4 Effective from 1 June 2024, the Board agreed to remove the chain linked benchmark which had historically been provided as a point of reference for
information purposes only. The chain linked benchmark was a combination of 3 benchmarks which were in operation during the life of the Company. From inception
until 31 August 2016, the Company’s benchmark was the MSCI World Financials Index Net Total Return Index, which included Real Estate as a constituent until its
removal that year. From 1 September 2016 to 23 April 2020 the benchmark was the MSCI World Financials + Real Estate Net Total Return Index. From 23 April 2020,
the benchmark changed to MSCI ACWI Financials Net Total Return Index due to the Company’s exposure to emerging market equities and its limited exposure to real
estate equities. Performance and any associated calculations that include the Benchmark, which is now the MSCI ACWI Financials Net Total Return Index, as a reference
point, remain unchanged.
Note 5 Dynamic average of open ended funds in the Lipper Financial Sector Universe which comprised 59 open ended funds in the year under review.
Note 6 The total return NAV performance since Reconstruction is calculated by reinvesting the dividends in the assets of the Company from the relevant ex-dividend
date. The new performance fee period runs from the date of the Reconstruction. The opening NAV for the performance fee of 102.8p is the closing NAV the night
before the tender offer was completed.
Note 7 Refer to Note 11 on page 94 for more details.
Note 8 There was no performance fee provision in the current or prior year.
* Alternative Performance Measure, see pages 112 to 114 for further explanations.
Data sourced by HSBC Securities Services Limited, Polar Capital LLP.
Performance Highlights
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 5
Chair’s
Statement
Simon Cordery
Chair
Dear Shareholders,
On behalf of myself and the Board I am pleased to provide
to you the Annual Report of the Company for the year to
30 November 2024.
The Company was able to take advantage of the strength
of the financials markets over the period, returning a net
asset value per share of 34.8%, the best annual investment
performance in the Company’s history. Moreover, the
Company’s share price discount to NAV narrowed during
the financial year, ending at 5.5% compared to the prior
year of 12.2%. This strong investment performance and
the narrowing of the discount resulted in a total share price
return for the year of 45.4%.
The investment return was marginally behind the Benchmark
which rose 36.1% during the period. About 6.5% of the
Company’s portfolio is invested in fixed income securities
which returned 12%. Excluding the fixed income portfolio
the investment return would have exceeded the Benchmark
which includes only equities. Longer term investment
performance remains good with NAV total return measured
from the Company’s reconstruction in April 2020 to the year
ending 30 November 2024 at 129.9% versus the Benchmark
of 128.1%. The share price total return for the same period
was 128.3%.
Investment Performance
Headline performance figures disguise the ebb and flow of
the market: markets do not tend to progress evenly, there
are many twists and turns and global events that influence
investor sentiment over any period. The financial year under
review in this set of report and accounts is no exception. Our
managers have been active with the portfolio, adjusting by
country or region and by sector as they deem appropriate.
They have made some very good calls (being overweight
alternative asset managers for example) which have
benefitted the Trust but, as is typical of any active manager,
not everything went their way.
The last few months of the period under review were
particularly challenging. The knife-edge US election, more
muted reductions in interest rates and the potential for
slower economic growth across many regions led to a more
defensive positioning of our portfolio. Being underweight
large cap US banks meant we slightly underperformed as
Trump was voted in for a second term as US President.
Overall, the Manager navigated these bouts of volatility
extremely well and delivered a good investment performance.
As in previous years, the Manager has provided a detailed
account of the team’s activity and their views and outlook.
I encourage Shareholders to read this to gain a fuller
understanding of the investment environment in which
the managers operate and how they evolved the portfolio
throughout the year. The Manager’s report is provided on
pages 14 to 21.
2025 Tender Offer
The Company was launched in July 2013 with a fixed
seven-year life. Shareholders approved changes to the
Company’s Articles of Association to make regular tender
offers to all Shareholders and to extend the Company’s
life indefinitely at the Company’s General Meeting held on
7 April 2020. The Articles of Association require the Company
to make tender offers for up to 100 per cent of the shares
held by each Shareholder at five-yearly intervals, with the first
to commence on or before 30 June 2025 (the “2025 Tender
Offer”).
Shareholders who wish to realise their investment in the
Company (in whole or in part) pursuant to the 2025 Tender
Offer will be offered the opportunity to tender their shares
for sale at the prevailing NAV per ordinary share less costs
and other appropriate adjustments. A further announcement
setting out the full details, timetable of events and terms of
the 2025 Tender Offer will be published in due course.
NAV Discount Management
The Company continued to pursue a substantial share
buyback policy during the year which was positive for the
NAV and helped support liquidity in the shares. The Company
bought back a total of 5,642,322 ordinary shares, equivalent
to 1.7% of the shares in issue at the start of the period, at an
average discount of 8.9%. These buybacks had an accretive
effect on the NAV of 0.26p per share. No ordinary shares
were bought back following the year end.
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 6
The Board issues a delegated authority to the Manager
and the Corporate Broker to buy shares under defined
parameters. These are designed to ensure that the Company
does not displace any market demand for shares but provides
liquidity, if required, once market demand has been satisfied.
The Board has reconfirmed its authority to the Manager to
continue the policy of share repurchases under appropriate
parameters to ensure liquidity for Shareholders and reduce
the discount at which the Company’s shares trade. The
Company’s share price traded in a discount range of 4.7% to
12.4%, ending at a discount of 5.5%.
Dividends
The Company currently adopts a progressive dividend policy,
whereby dividends may increase on an annual basis (the
Existing Policy). There is no guarantee, however, that such
increases will be achieved. The aim is to pay two interim
dividends each year, in February and August however these
interim dividends will not necessarily be of equal amounts as
dividends from the Company’s underlying investments arrive
irregularly throughout the financial year.
The Board continually monitors the dividend outlook from
its equity holdings, interest income from cash and from fixed
income securities. In August 2024 the Company paid an
interim dividend of 2.50p per ordinary share. The Board has
declared a further interim dividend of 2.20p per ordinary
share payable to Shareholders on the register as at 7 February
2025. This will bring the total dividend paid for the financial
year under review to 4.70p per ordinary share, an increase of
3.3% on the previous financial year.
Following feedback from shareholders and engagement with
our advisors and the manager, the Board is mindful that
many investors now seek investments that offer a regular
and attractive dividend. As such, the Board is proposing the
adoption of an “enhanced dividend” policy under which it
will aim to pay, in the absence of unforeseen circumstances,
a regular dividend equivalent to approximately 4% of the
Company’s NAV in a given year. It is proposed that dividends
will be paid quarterly at a level of 1% of the Company’s
NAV, calculated on the last business day of each prior
financial quarter. Under this proposal, Dividends will be paid
from available revenue and topped up, if necessary, from
distributable capital reserves. Further details in respect of
the payment of dividends from distributable capital reserves
can be found in Notes 22 and 23 in the financial statements.
The ability to use other distributable capital reserves to help
smooth the level of dividend payments over the longer term
is a feature of investment trusts. Any dividend distributions by
the Company will result in a decrease in NAV.
Shareholders will have the opportunity to vote on the
proposed dividend policy at the Annual General Meeting
taking place on 10 April 2025. Should there be sufficient
support, and the new dividend policy be approved, it will
be effective for the financial year commencing 1 December
2025. In the absence of unforeseen circumstances and if
approved, the first dividend payable on the new basis will
be calculated by reference to the Company’s NAV for the
quarter ending 27 February 2026. It is anticipated that
the dividend will be announced in mid-March 2026 and
subsequently paid in April 2026. Subsequent dividends will
follow a similar pattern.
Should the proposed new dividend policy not be approved by
Shareholders at the AGM, the Board will maintain the Existing
Policy as outlined above until a dividend policy is proposed to
shareholders again at the AGM to be held in 2026.
Cancellation of Share Premium Account
The Companies Act 2006 permits the Company (subject to
the approval of Shareholders and the consent of the Court)
to cancel its share premium account and credit the balance
to the Company’s distributable reserves. The share premium
account has accumulated over time as the result of the
Company issuing shares at a premium to their nominal value.
The net proceeds are apportioned to the Company’s share
premium account, which is a non-distributable reserve that
the Company is unable to use for the purpose of making
distributions to Shareholders.
By cancelling the share premium account, the Company
further increases its flexibility to meet tender requests under
the 2025 Tender Offer, apply such reserves for the return of
capital to Shareholders and for any other general corporate
purposes. The Company is seeking to cancel the entire
amount of its share premium account, being £311,369,000
as at 30 November 2024, in order to benefit from this
flexibility and primarily to create a surplus of distributable
reserves to permit future distributions to Shareholders.
The cancellation of the share premium account requires the
passing of a special resolution at the AGM and subsequent
approval of the Court. Shareholder approval will be sought
for a special resolution to cancel the Company’s share
premium account at the AGM taking place on 10 April 2025.
The cancellation will not be effective until the order of the
Court confirming the cancellation has been registered with
the registrar of companies.
Share Capital
As at 30 November 2024, the Company had 331,750,000
ordinary shares of 5 pence each in issue, of which
28,530,635 shares (this represents 8.6% of the issued share
capital) were held in treasury (2023: 331,750,000 ordinary
shares of 5 pence each in issue of which 22,888,313 were
held in treasury).
No ordinary shares were bought back or issued following the
year end.
Chair’s Statement continued
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 7
The Board
As referenced in my statement to Shareholders last year,
the Board is aware of the FCA’s Diversity and Inclusion
Policy and notes that its current composition meets two of
the three ‘comply or explain’ targets with three of the four
members being female and one of the two senior positions
being occupied by a female. Whilst we do not meet the
recommended ethnicity requirements, the Board has put
in place a succession plan based on the recommended
nine-year tenure of Directors. A key objective for the Board
is to have an appropriate blend of skills and diversity of
experience and thought around the table. When the Board
next embarks upon a director search it will set criteria that
ensures candidates are sourced from a broad pool such
that the Board can consider candidates with minority ethnic
backgrounds. Further information on this can be found in the
Corporate Governance Report on page 55.
As reported in the last interim report, we have been joined
by a board apprentice, Ada Okpe. The Board Apprentice
program is an initiative designed to develop aspiring board
members and boost diversity in boardrooms. Ada is spending
around 12 months with the Board to gain experience which
we hope he will be able to use in his executive career and in
future director roles. See page 8 for an interview with Ada on
his experience as a board apprentice.
There have been no other changes to the membership of
the Board during the year under review. The Directors’
biographical details are available on the Company’s website
and are provided on pages 10 and 11.
Cost Disclosures
The Board notes the Government’s stated intention to reform
UK retail disclosure rules.
The Board has engaged with the Manager to understand
the potential implications to retail disclosure rules following
the publication of the FCA’s consultation paper on the new
product information framework for Consumer Composite
Investments (“CCIs”) in December 2024. The final rules under
the new CCI framework are expected to be published later
in 2025.
Annual General Meeting
The Company’s Annual General Meeting (“AGM”) will be
held at 16 Palace Street at 2:00pm on Thursday, 10 April
2025. The notice of AGM has been provided to Shareholders
and will be available on the Company’s website. Detailed
explanations of the formal business and the resolutions
proposed at the AGM are contained within the Shareholder
Information section on pages 118 and 119 and in the Notice
of AGM. We will upload a copy of the Manager’s Investment
Presentation to the Company’s website ahead of the AGM
and will hold only the formal business of the meeting in
person. We have provided a zoom link in the Notice of
AGM which will enable interested parties to view the formal
business and ask questions via the on-line chat function.
The Manager will be available to answer questions and meet
Shareholders present. All formal business resolutions will be
voted on by a poll and we therefore encourage Shareholders
to submit their votes ahead of the meeting by proxy card
which is provided with the Notice of Meeting. Shareholders
who hold shares via an online stockbroker or platform are
encouraged to exercise their vote through their respective
platforms and where possible attend the AGM proceedings.
Further information can be found on the AIC’s website and in
the Shareholder information section on page 123.
We are conscious of the importance of Shareholder
engagement and encourage Shareholders to engage with
the Board and the Investment Manager. As such, the Board
invites Shareholders to submit questions in writing to which
we will respond, as far as possible, ahead of the AGM date.
Please send your questions to cosec@polarcapital.co.uk on
or before 7 April 2025 with the subject heading PCFT AGM.
Outlook
We are enthusiastic about the outlook for the global financial
sector; this is a large and diverse sector which has been
overlooked by investors for many years and where large
sections of the market still trade at very attractive valuations.
We have started to see a positive change in sentiment with an
improvement in fundamentals that should drive a re-rating.
Interest rates are normalising; personal and corporate balance
sheets are in good shape; and earnings are recovering.
Whether these developments are a result of lighter touch
regulation, net interest margins, insurance rates picking up
or increased fee income for asset managers, all of these
factors should lead to investors increasing their exposure to
this exciting part of the investment universe. While we will be
offering Shareholders an opportunity to tender their shares
during 2025, we anticipate that most will wish to continue
investing with us and retain their exposure at what may be a
pivotal point in time.
Simon Cordery
Chair
19 February 2025
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 8
Ada, you joined us as our board
apprentice around 10 months ago,
let’s talk about your experience so
far?
Ada Okpe
Board Apprentice
Why did you decide to become a board
apprentice?
After a corporate career in a range of industries from oil
and gas to financial services and tech, I was looking for an
opportunity to apply my experience to corporate governance
and positively effect change from a position of oversight. The
key thing here is being an “apprentice”, I start this journey
from the very beginning - the ‘apprentice’ label allows me to
ask questions that for others may be assumed knowledge,
and share experience from my world that can bring new
thinking to the board community.
You have chosen the Financials Trust –
is this a particular interest of yours?
Yes, I graduated during the 2008 Financial Crisis. The impact
this had on my generation was the catalyst to my interest in
how global financial markets and institutions operate. I took
£50 and invested it in Barclays Bank to learn about equities
and understand what caused movements in its price. Since
then my understanding (and my investment in Barclays) has
thankfully come a long way!
What do you think of the process so far –
has it met your expectations?
The process has exceeded my expectations - from my initial
interview to participating in meetings, I have come a long way
in a short time. Joining a board that has been together for a
while was nerve wracking but the NEDs, Company Secretary
and Investment Managers have been very accommodating
with me. This has had the benefit of accelerating my learning
about the Trust and how it navigates market forces to deliver
returns for its Shareholders.
What potential benefits do you see from
the process – for yourself / for Boards /
for the industry?
The process is an alternative channel to finding new voices
with different experiences in an established NED industry,
enriching the community with new energy and ideas. It allows
the apprentices to experience active boards with the guidance
and support of the existing NEDs. This helps develop a Board
Apprentice community of others doing the same thing. For
myself as an apprentice, the process has allowed me to use
my experience in a completely new way, while pursuing a
keen interest with the ultimate goal of securing a seat on a
board in future. In addition, I will have worked with some
very experienced NEDs and can count them as mentors
through this process and hopefully beyond.
Do you think you will feel ‘board ready’
at the end of the process?
Absolutely, my ambition at the start of this apprenticeship
was to experience an active Board and come out with a
clear vision of how to articulate the sum of my Board and
Corporate experience to make me a viable candidate for
future NED opportunities. I believe I am well on track to
achieve this when the process concludes.
Is there any advice you would give to
future candidates?
Having a natural interest in the Board you join is a huge
advantage. Being a keen follower of financial markets and
equities, this has made me curious in every session. It helps
you connect global events and politics to its impact on the
performance of the Trust. Ask questions and embrace the
informal conversations around the meetings and go to follow
up sessions. Lastly, be yourself. My own experience which is
unique to me has got me here. I readily talk about it and use
it to explain points I make in board meetings.
Board
Apprentice Q&A
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 9
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 10
Board of Directors
Biography & Other Appointments Biography & Other Appointments
Independent Non-executive Chair Independent Non-executive Director
Appointed to the Board on 1 July 2019 and as Chair on 30 March
2023.
Appointed to the Board on 1 November 2021, and with effect from
7 April 2022 Chair of the Audit Committee.
Skills and Experience Skills and Experience
Simon has over 40 years’ experience working within financial
services of which nearly 30 years have been focused on the wealth
management industry. Most recently he was Head of Investor
Relations and Sales at BMO Global Asset Management, where he
spent almost 25 years in senior roles, and previously he held roles
with Invesco Fund Managers, Jefferies & Co, Kleinwort Benson
Securities and Rea Bros Merchant Bank. Simon has considerable
and detailed knowledge of the investment trust industry and
remains actively involved with the AIC.
Cecilia is an experienced non-executive director with almost
30 years’ investment and financial services experience. Her
executive career included senior investing roles with Royal Bank of
Scotland, Barclays Capital and Centaurus Capital and encompassed
a broad range of asset classes including public and private debt and
equity. Her non-executive roles are Senior Independent Director
at Northern 2 VCT PLC, a listed investment trust investing private
equity in early stage companies, NED and Chair of the Valuation
Committee of RIT Capital Partners plc, an investment trust with
a global mandate to invest across a range of asset classes and an
INED to Eurobank Cyprus Limited. She qualified as a chartered
accountant with KPMG.
Committee Memberships Committee Memberships
Chair of the Board, Nomination and Remuneration Committees.
Member of the Audit and Management Engagement Committees.
Chair of the Audit Committee. Member of the Nomination,
Remuneration and Management Engagement Committee.
Other Appointments Other Appointments
No other current appointments. Cecilia is a non-executive director of Northern 2 Venture Capital
Trust plc, RIT Capital Partners plc and Eurobank Cyprus Limited.
Rationale for supporting re-election Rationale for supporting re-election
Simon has extensive wealth management and marketing experience
and detailed knowledge of the investment trust market having
previously held the position of Head of Investor Relations & Sales for
BMO Global’s Investment Trust business. Since assuming the role of
the Chair, Simon has actively sought to engage with Shareholders to
understand any concerns and leads the Board with an inclusive and
engaging manner. Simon’s re-election as a Chair and non-executive
Director is supported by the Board and the Manager.
Cecilia brings to the Board her extensive experience of investing
strategies. This is complemented by her current and previous
NED roles, including chairing roles in Audit and Valuation
Committees. As a NED of two other listed investment trusts, she
is knowledgeable of the governance aspects of these vehicles and
highly attuned to the need to act in the interest of investors. This
experience and her qualification as a Chartered Accountant is
viewed as highly relevant. Cecilia’s re-election as a non-executive
Director is supported by the Board and the Manager.
PCFT Share Interests 42,497 shares (0.01%
of ISC)
PCFT Share Interests 40,000 shares (0.01% of
ISC)
Annual Remuneration £43,000 Annual Remuneration £36,750
(including Audit Committee
Chair supplement)
Simon Cordery
Independent Non-Executive Chair
Cecilia McAnulty
Independent Non-Executive Director and
Audit Committee Chair
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 11
Susie Arnott
Independent Non-Executive Director and
Chair of the Management Engagement Committee
Angela Henderson
Independent Non-Executive Director
Biography & Other Appointments
Biography & Other Appointments
Independent Non-executive Director Independent Non-executive Director
Appointed to the Board on 1 December 2022. Appointed to the Board on 1 December 2022
Skills and Experience Skills and Experience
Susie started her career in fund management over 20 years ago
and was primarily focused on the financial sector; including
periods focused on emerging markets investments and global
financial portfolios. She also spent a number of years working
in impact investing, combining her experience and passion for
social investment and impact measurement. In her current roles,
Susie continues to focus on investment with a global impact
incorporating ESG as a mainstream consideration.
Angela has over 30 years of experience in the financial services
sector having started out as a corporate and banking solicitor and
then moving into roles at global investment banks. Since 2015 she
has held non-executive board seats at operating and investment
companies in various sectors including financial services.
Committee Memberships Committee Memberships
Chair of the Management Engagement Committee and member of
the Audit, Nomination and Remuneration Committees
Member of the Audit, Nomination, Remuneration and
Management Engagement Committees.
Other Appointments Other Appointments
Susie is a director of Sableknight Limited and Lockfold
Communications.
Angela is currently a NED for Macquarie Capital (Europe) Limited
and Wells Fargo Securities International Limited and has various
other private interests.
Rationale for supporting re-election Rationale for supporting re-election
Susie was appointed to the Board in December 2022 and brings to the
Board a wealth of investment management and ESG experience. She
brings in-depth investment experience, particularly in financials to this
role, while also ensuring the Board is kept abreast of the latest ESG
development. Susie has been an advocate for clearer ESG reporting to
both the Board and stakeholders ensuring that the quality of reporting
remains at a high standard. Susie is currently Chair of the Management
Engagement Committee and her re-election as a non-executive
Director is supported by the Board and the Manager.
Angela was appointed to the Board on 1 December 2022 and is
an experienced non-executive director with a legal and financial
services background developed over her 30 year career. She has
non-executive experience particularly chairing risk committees of
operating companies. Since joining the Board, Angela has been
a keen participant in meetings bringing a new perspective to
discussions. Angela’s re-election as a non-executive Director is
supported by the Board and the Manager.
PCFT Share Interests 20,000 shares (0.01% of
ISC)
PCFT Share Interests –
Annual Remuneration £31,000 Annual Remuneration £31,000
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 12
Investment Managers
Date appointed
Nick joined Polar Capital following the acquisition of HIM Capital in September 2010.
Skills and Experience
Nick has 30 years’ investment experience across a wide range of asset classes and for the last 20 years
has focused on the financials sector. His previous experience includes portfolio manager roles at
New Star Asset Management where he managed the New Star Financial Opportunities Fund which
concentrated on the equity and fixed-income securities of European financial companies. Previously
he worked at Exeter Asset Management and Capel-Cure Myers. Nick has co-managed the Company’s
investments since launch in 2013.
He is also the manager of the Polar Capital Financial Credit Fund.
Nick Brind Co-Fund Manager
Date appointed
George joined Polar Capital in September 2010 as an analyst on the Financials Team.
Skills and Experience
George has over 15 years’ experience analysing financial companies in Europe, Asia and emerging
markets. Prior to joining Polar Capital, he was an analyst at HIM Capital from 2008 where he completed
his Investment Management Certificate. George was appointed co-manager of the Company in
December 2020. He also co-manages the Polar Capital Financial Opportunities Fund with Nick Brind.
George Barrow Co-Fund Manager
Polar Capital provides a team of financial specialists and the portfolio is jointly managed by Nick Brind, George Barrow and
Tom Dorner, supported by other financials specialists within the team.
The Manager has investment resources which support the investment team and has experience in administering and managing other
investment companies.
Date appointed
Tom joined Polar Capital as a Fund Manager in the Financials team in December 2023.
Skills and Experience
Tom has over 23 years investment experience and joined from abrdn where he was a Senior Investment
Director in the Developed Markets team and managed the abrdn Europe ex UK Income Equity Fund.
He was responsible for analytical coverage of European financials and managed a number of other
European investment funds during his nine years there. Prior to this, he was an analyst specialising in
the European Insurance sector at Citi and Lehman Brothers in London.
Tom Dorner Co-Fund Manager
Manager’s Report
Manager’s
Report
13
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 14
Manager’s Report
George Barrow
Co-Fund Manager
Nick Brind
Co-Fund Manager
Tom Dorner
Co-Fund Manager
Investment Manager’s
Report
Global equity market sector returns
Financials
36.1%
Materials
6.0%
Com Svs
32.8%
Consumer Disc
23.3%
Consumer Staples
11.3%Energy
9.5%
Industrials
27.5%
Info Tech
35.6%
Utilities
23.2%
ACWI
25.6%
Healthcare
11.6%
Global equities
25.6%
Source: MSCI; size of each section is representative of the sector’s size in the MSCI ACWI
Index. Returns are in sterling total return with gross dividends reinvested. Past performance
is not a reliable guide to future performance.
Credit markets were buoyant as investors took advantage
of the more positive outlook for risk and the higher yields
offered by corporate bonds relative to government bonds.
Consequently, the subordinated debt
1
of banks and
insurance companies returned 11.6% over the 12 months
as credit spreads contracted. As the cost of issuing debt
fell there was a sharp increase in bond issuance in the
period as companies looked to take advantage of the better
environment.
Investment review
Performance
The Trust delivered excellent returns in the year to
30 November 2024, with its net asset value rising by 34.8%
after adding back dividends. Excluding the fixed income
positions, the equity portfolio returned 36.4% before fees.
This compares to the wider equity markets as measured
by the MSCI ACWI index which rose 25.6% over the same
period, but was slightly behind our equity benchmark return
of 36.1%, reflecting our allocation to fixed income and our
more defensive positioning in the US in the run-up to the US
election.
Financials was the best performing sector of the global equity
markets in the period, beating information technology into
second place. Following the more dovish commentary by
US Federal Reserve (the “Fed”) Chair, Jerome Powell, in
December 2023, markets priced in the expectation of much
lower interest rates in 2024. While the speed and number of
interest rate cuts has been slower and fewer than expected, it
has been on the back of largely stronger economic data.
The election of Donald Trump in November with the
Republicans taking control of both houses of Congress led to
US equities significantly outperforming wider equity markets
as the prospect of less regulation, lower taxes and concern
about the impact of tariffs on countries reliant on exports
to the US, led to a rotation into US equities out of non-US
equities. Consequently, US financials have erased the balance
of their underperformance from 2022 and 2023.
1
The most junior debt security in a financial company’s capital structure. It ranks ahead of
equity but behind senior debt and depositors of a bank or policyholders of an insurance
company.
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 15
Manager’s Report
Portfolio performance
This table shows the achieved returns of the portfolio against subsector indices:
Global equity markets
Benchmark
performance
Portfolio
gross return
Benchmark
average
weight
Portfolio
average
weight
MSCI AWI Index 25.6%
Global Financials
MSCI ACWI Financials Index 36.1% 36.4%~
-Diversified Financials 39.2% 40.8% 38.1% 36.4%
-Banks 36.6% 39.3% 42.5% 35.1%
-Insurance 29.1% 26.4% 19.4% 20.7%
Subordinated Financials
ICE BofA Euro Subordinated Financial Index 11.6% 12.1% 0.0% 7.8%
~ Excludes fixed-income holdings
Source: Bloomberg, ICE and Polar Capital, 30 November 2024.
Note: The figures are in sterling total return with gross dividends reinvested. Past performance is not a reliable guide to future performance.
A significant driver of investment activity over the year was
aimed at taking advantage of the potential ramifications
of the US Federal Reserve signalling that interest rates had
peaked. Against that background, we took the opportunity to
significantly increase the Trust’s exposure to those companies
we believed would benefit the most from the increased
likelihood of a soft landing for the US economy and a better
background for financial markets.
The Trust was more defensively positioned than the index in
the second half, with allocations to fixed income and some
specific stocks which resulted in a modest underperformance
overall. However, our stock selections helped us outperform
the subsector indices in most cases. At the subsector level,
the Trust benefited from overweight positions in, for
example, alternative asset managers and US banks. However,
against the risk-on background for financial markets, our
overweight exposure to the more defensive payment and
insurance companies and a small underweight in investment
banks dragged on performance. Our fixed income holdings
generated returns of 12.1% and unsurprisingly lagged
the very strong performance of equity markets although
outperformed the relevant credit markets.
Historical sub-sector weightings
On a geographical basis, while the US and Japan were the
strongest performing regions over the year, the Trust’s
allocation to US insurance stocks was a relative drag on our
US performance. In Asia, the relative underperformance
was due to underweights in Australia and China, both of
which delivered better than expected performance. We were
cautious on Australia due to high valuations while on China
we had no exposure when the market rallied sharply on
hopes of a significant stimulus program by the Chinese
government.
At the single stock level, holdings in Interactive Brokers
Group a US retail broker, Rakuten Bank a Japanese bank, and
Barclays were the largest single contributors to performance.
The first was a beneficiary of interest rates not being cut as
had been expected and a continued increase in retail trading.
Rakuten benefited from the higher outlook for interest rates
in Japan, while Barclays rallied from depressed levels as it
benefited from higher earnings expectations in both its retail
and investment banking arms.
The largest individual detractors were Sabre Insurance Group,
a UK motor insurer, BFF Bank, an Italian bank, and Wells
Fargo, a US bank. Sabre is one of the smallest UK motor
insurers but one of the most profitable due to its focus
on underwriting higher risk drivers. However, increased
competition led to a fall in customers, and this weighed on
its share price. A holding in BFF Bank was bought following
a sharp fall in its share price on the back of an intervention
from the Bank of Italy but lack of clarity on a resolution led to
its shares treading water. The decision to sell Wells Fargo was
a relative drag as the stock continued to perform well on the
expectation that the incoming Trump administration would
lift restrictions on the bank, first imposed back in 2015.
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 16
Manager’s Report
Investment Manager’s Report continued
We discuss performance and investment activity by subsector
below:
Diversified financials
Diversified financials is a broad category comprising
alternative asset managers, consumer finance companies,
stock exchanges, investment banks, retail brokers, payment
companies, holding companies and information services
companies. As a subsector, diversified financial stocks was
the best performing category, generating portfolio returns
of 40.2% against 39.2% for the index with most of its
constituents benefitting from the “risk on” sentiment.
Alternative asset managers, consumer finance companies,
investment banks and retail brokers saw the biggest rise in
share prices.
We were overweight alternative asset managers which
was a strong contributor to performance. They continued
to benefit from fund inflows increasing management fees,
and expectations of a pick-up in M&A activity, which would
increase performance fees. Also, a number of them have
been added to the S&P 500 Index – KKR & Co joined in June
2024 and Apollo after the financial year end.
At the start of the year our largest holdings were Ares
Management and Intermediate Capital Group as they were
both focused on private credit where we felt rising interest
rates and bond yields would provide a tailwind to demand.
However, with the more positive outlook for financial
markets, we felt private equity-focused alternative asset
managers would begin to perform better.
As a result, we bought holdings in EQT and Antin
Infrastructure Partners then rotated into new positions in
KKR and Blue Owl Capital on the back of a sharp move in
the share prices of the former. KKR is one of the largest
alternative asset managers globally. A new holding was also
purchased in CVC Capital Partners when it listed on the
Amsterdam Stock Exchange on its third attempt. Later in the
period, we sold Blue Owl Capital in favour of a holding in
Blackstone which we saw as having greater upside.
We also purchased a holding in BlackRock. BlackRock is
the largest asset manager in the world with over $11.5trn
in assets under management. It is possibly best known for
the passive iShares ETF (Exchanged Traded Funds) business
it acquired from Barclays during the global financial crisis,
albeit it is a very large active manager of equity and fixed
income funds. In the past year, it has made several large
acquisitions, notably Global Infrastructure Partners (GIP),
an infrastructure-focused asset manager, Preqin, one of
the largest data businesses in the alternative asset industry,
and HPS, a private credit asset manager.
Payment companies, exchanges and information services
companies saw strong returns but lagged the subsector
reflecting their more defensive characteristics and lower
sensitivity to financial markets. Payment companies are large
constituents of the sector, notably Visa and MasterCard.
We have long liked them for their high level of profitability,
low-risk business model and growth prospects from
e-commerce spending and the shift from cash to cards.
Nevertheless, we reduced our holdings in both during
the period and purchased a holding in Fidelity National
Information Services which is best known for providing core
banking software for many banks.
Information services companies such as Moody’s and S&P
Global, the two largest credit rating agencies, trade on
some of the highest multiples in the sector reflecting their
oligopolistic characteristics and while a pickup in bond
issuance was supportive for both companies, on average they
lagged the sector. Holdings in both MSCI and S&P Global
were sold during the year, due to these high valuations as we
saw them as vulnerable to any disappointment on growth.
On exchanges, we added to our holding in Intercontinental
Exchange, the largest exchange holding in the portfolio. Its
2022 purchase of Black Knight, a mortgage software, data
and analytics company, had weighed on its share price but
with interest rates predicted to fall we expected to see an
improvement in the outlook for the business. Also a new
holding was purchased in Nasdaq, which operates a number
of stock exchanges in the US and Europe. Similarly, an
acquisition, in this instance, of Adenza, a software company,
in 2023, had been an overhang on its share price.
Consumer finance companies performed well as employment
data reduced concerns around delinquencies on credit card
loans while the incoming Trump administration was viewed
as favourable to changes in late payment fees. Our main
exposure to the subsector had been to American Express, and
we added a new holding in Discover following the election, in
the expectation that its acquisition by Capital One would be
approved and would be very accretive.
Banks
The Trust’s portfolio generated an 39.3% return from
its banks’ exposure compared with 36.6% for the index.
Bank share prices were strong as the reduced tail risk of an
economic downturn resulted in most banks performing well.
US banks saw the largest gains over the period as markets
anticipated an easing in capital requirements, higher fee
income from a pick-up in M&A activity helping investment
banking revenues and an improving outlook for net interest
income, further fuelled by the election of Donald Trump.
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 17
Manager’s Report
Banks’ Performance by region
North America
US banks 66.7%
US regional banks 46.0%
Canadian banks 29.8%
Latin American banks -12.4%
Europe
UK banks 45.2%
Eurozone banks 23.4%
Asia
Australian banks 51.7%
Japanese banks 41.0%
Chinese banks 32.2%
Indian banks 15.6%
Source: Bloomberg, 30 November 2024.
Note: The figures are in sterling total return terms. Past performance is not a reliable guide
to future performance.
At the beginning of the period, the portfolio was marginally
overweight US banks against the Benchmark and, while
we had a cautious outlook, we felt valuations more than
discounted the risks. We therefore increased our exposure,
adding to holdings in US Bancorp, Citizens Financial Group
and East West Bancorp and also started a new holding in
Citigroup where we saw significant upside if management
could hit financial targets.
Following a sharp rally, we remained overweight large US
banks given their much stronger balance sheets and the likely
benefit of any watering down of proposed new regulatory
requirements, but reduced our holdings in US regional banks,
due to concerns around the US office commercial real estate
market.
We saw good opportunities in UK and European banks
where rising interest rates have led to a substantial increase
in profitability. UK banks performed extremely well over the
year, mostly as a result of a sharp rerating in valuations, while
sentiment on the subsector was supported by a relatively
resilient outlook versus European peers. This reflects the
outlook for relatively higher interest rates in the UK versus
other European economies, and a greater contribution from
interest rate hedges which offset a lot of the impact of
declining interest rates on earnings.
We purchased a new holding in Barclays which has
performed very poorly over the past 10+ years due to legacy
issues and structurally low profitability in parts of its core
businesses. With its valuation at the low end of its historical
range and low expectations for management to hit targets it
was felt there was an attractive risk/reward payoff with the
added benefit of a pickup in activity in its investment banking
businesses.
In Europe our largest holdings included Unicredit, Italy’s
second largest bank, Erste Group, one of Austria’s largest
banks and AIB Group, Ireland’s second largest bank.
European banks saw very strong performance in the first half
of the reporting period but lagged their peers in the second
half over weakness in the outlook for the Eurozone economy
and worries about the impact of lower interest rates. This led
us to sell our holdings in AIB Group and Banco Santander and
reduce a holding in Bank of Cyprus.
Europe saw a pickup in bank M&A activity. BBVA, Spain’s
second largest bank, made an offer for Banco Sabadell,
a smaller peer while Unicredit, took a significant stake in
Commerzbank, a German bank publicly stating its interest
in acquiring it before making an offer for Banco BPM, the
fourth largest Italian bank. After the financial year end Credit
Agricole, one of France’s largest banks, with operations
in Italy, announced it was looking to increase its stake in
Banco BPM.
We added to the Trust’s exposure to Mexican banks in
the first half, by adding to an existing position in Grupo
Financiero Banorte and starting a new holding in Gentera,
a smaller bank that offers loans to lower-income customers.
We saw Mexico as continuing to benefit from so-called
‘friendshoring’ as multinational companies look to build
more manufacturing operations there to circumvent
increasing trade barriers between the US and China. Later
in the period, we sold our exposure due to concerns around
upcoming elections in the US and Mexico. While Mexico
should continue to be a net beneficiary of rising trade friction
between the US and China, that sentiment could change
quickly.
We started new holdings in two South Korean banks which,
as with Japanese and southern European banks, have traded
for some time at the lowest valuations of the banking sector
and below our estimate of fair value. We had remained
cautious due to an interventionist regulator and no obvious
catalysts for a rerating. However, a push for corporate reform
in South Korea around transparency and capital return, which
has had reasonable support across the political spectrum,
has resulted in more interest from investors. Following
good performance, we reduced our exposure and sold our
remaining holding at a profit after the period end due to the
political crisis in South Korea.
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 18
Manager’s Report
Investment Manager’s Report continued
Indian banks have consistently been one of the best
performing banking sectors globally due to their strong
profitability and good growth. However we reduced our
exposure due to the outlook being less favourable around
a tighter liquidity environment and a more interventionist
regulator. Consequently, we sold the Trust’s holding in HDFC
Bank, India’s largest private bank, which had underperformed
following its merger with parent HDFC. While the merger
offers long-term synergies, a requirement to raise deposits
is a headwind to growth and profitability in the short to
medium term.
Insurance
The Trust’s insurance portfolio returned 26.4% compared to
29.1% for the subsector. Insurance stocks performed well,
outperforming wider equity markets over the period, but
were held back by their defensive characteristics in the “risk
on” market environment. While there has been some concern
around the strength of liability reserves and the worsening
outlook for property catastrophe rates, US insurers still
benefited from the twin drivers of rising investment income
and improved underwriting returns.
At the beginning of the period we made some small reductions
to our insurance holdings. The most significant change was
to reduce our exposure to China and Hong Kong by selling
holdings in AIA Group and Prudential, both of which had been
significant detractors from performance over 2023.
Large European reinsurance companies performed well,
but in contrast, Lloyds of London and Bermudan reinsurers
saw more mixed performance. US insurers, with large car
and home insurance businesses, where we have holdings
in Progressive Corp and Allstate, performed well, but UK
motor insurers performed poorly. UK car insurance premiums,
having risen significantly in recent years to counter the rising
cost of claims, fell and even though there were two bids for
Direct Line Group the first from Ageas, a Belgian insurer,
and then by Aviva, which looks likely to succeed, they still
underperformed the wider insurance sector.
We purchased a new holding in Munich Re Group as we saw
it as one of the best positioned to continue to benefit from the
strong reinsurance market due to the strength of its balance
sheet. We later switched the holding into Hannover Rueck,
a smaller peer, and less exposed to large catastrophe events.
2024 was expected to see a much larger number of hurricanes
in the Atlantic make landfall and with it, the risk of large losses.
During the year we added a number of holdings where there
has been a regulatory intervention or a short report has been
published, so-called as the research firm involved believes
the shares are overvalued and should be sold or shorted.
Short reports can vary from the salacious to dogged hard
work. Not surprisingly, this leads to shares of the companies
falling, often quite sharply. Assuming that the issues raised
are overstated or of a temporary nature the publication of a
short report can be an excellent opportunity to buy. Globe
Life, a US life assurance company, and Steadfast Group, an
Australian insurance broker, fell into this category as we
believe they are two high quality businesses now trading
below what we see as fair value.
Fixed-income and unquoted holdings
Our fixed income exposure reduced slightly over the period
from 9.4% to 6.3%, as we took profits on a number of
the positions we had bought in 2023 and prior. We still see
attractive risk/reward from holding a selective mixture of
senior and subordinated bonds of European financials but
yields generally no longer look as compelling as they did so
returns going forward will be much more modest.
The Trust has two holdings in unquoted companies, of which
the largest is Moneybox, a UK savings and wealth platform.
Founded in 2015, Moneybox, has performed very well,
surpassing £10bn in assets under administration and more
than a million customers. Consequently, due to a secondary
share sale that brought in new investors, including Amundi,
one of the largest European asset managers, the holding was
written up to reflect the price at which shares were sold.
Outlook
We remain confident on the outlook for the financials sector.
It is the second largest sector globally and highly varied across
banks, insurance companies and diversified financials with
companies that have significant moats to their business models.
We show below the evolution of the Trust portfolio since
inception:
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 19
Manager’s Report
Evolution of Trust Portfolio
Source: Polar Capital; December 2024. Note: Until May 2023 MSCI classified payments as part of the technology sector so for historical purposes they are shown as separate to the diversified
financials sub-sector. Excludes fixed-income holdings.
We continue to believe the investment background has fundamentally changed from the challenges of the last decade. Interest rates
are ‘normalising’ and there is demand for significant investment in reshoring, defence and decarbonisation. We believe the sector will
be a key beneficiary of these trends and is underpinned by household and corporate balance sheets being in healthy shape.
Composition of the global financials sector
US Banks
13%
European
Banks
9%
Asian Banks
13%
Other Banks
8%
Insurance
Brokers
2%
P&C
Insurance
7%
Reinsurance
1%
Multi-line
Insurance
4%
Life & Health
Insurance
6%
Asset Management
6%
Consumer Finance
3%
Diversified Capital
Markets
2%
Diversified Financial
Services
1%
Financial Exchanges
& Data
6%
Investment Banking &
Brokerage
4%
Multi-Sector
Holdings
6%
Payments
10%
Source: MSCI, Polar Capital; December 2024
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 20
Manager’s Report
Investment Manager’s Report continued
Over the last year we have consciously reduced the portfolio’s
exposure to banks. The reasons for this are two-fold: while
we believe many banks have huge incumbency advantages
so are well positioned looking forward, in the shorter-term
we have seen more attractive opportunities in diversified
financials. We have to be conscious that the share prices of
banks are also prone to sharp corrections when sentiment for
deteriorates.
Banks have not grown their loan books materially over recent
years so it would take a significant economic downturn to
generate losses that could justify the lowly current multiples
that some of them trade on. Equally they are not risk-free
and not immune from a downturn. As a UK banks analyst
from KBW, a research firm summed it up succinctly in a
recent note (and the analogy can be extrapolated to other
banking markets), “In recent years UK banks have survived a
fall in GDP of 10%, interest rates rising by 5% and inflation
peaking at more than 11% with zero credit problems.”
Consequently, we continue to believe the market is not giving
banks the credit they deserve for that reduction in risk.
The Trust’s largest geographical exposure is to US financials
which should be beneficiaries of a lighter regulatory regime
and a more favourable environment for M&A. Lighter
regulation has its risks but the increased regulation of the
past 15 years has weighed heavily on economic activity and
often increased costs for little or no economic benefit. The
proposals in 2023 for a substantial increase in US bank capital
requirements would have resulted in JP Morgan requiring a
25% increase in capital despite its performance during the
global financial crisis and the recent rise in interest rates.
The playbook from Trump 1.0 following the 2016 US
election was a significant rally in financials but also broader
equity markets which lasted around 18 months. The starting
point for valuations is higher this time and much higher
for wider equity markets which may temper the size of any
sustained rally from Trump 2.0. There is concern that Trump
will double-down on tariffs, negatively impacting non-US
markets. Understandably, US equities have benefited already
from being seen as more defensive versus other regional
markets with significant inflows into US-focused ETFs.
In November 2016, US equity markets outperformed non-US
equity markets by ‘only’ 5.9%, compared to 7.2% this time,
but a year after the election US equities had given back
that outperformance, albeit still rising by a very credible
24.3%. Will US equities give back the outperformance we
have seen in 2024? US financials did not give back their
relative performance in 2017 but the permutations this time,
exacerbated by ongoing wars in Ukraine and the Middle East,
and a president who has unfinished business, are bigger
so will likely make 2025 a more volatile year for financial
markets than 2024.
Against this background, the Fed is pushing back further on
the number of interest rate cuts amid concerns that inflation
is stickier than central banks’ forecasts. This will require
us to be pro-active in positioning the Trust’s portfolio to
benefit from the sector’s tailwinds and to navigate the risks.
Nevertheless, it is worthwhile reminding ourselves that high
quality financial companies continue to compound earnings
and/or book value despite the significant economic and
geopolitical noise. The evolution of some of the Trust’s largest
positions are shown below.
This is for one-on-one use with non-US professional investors. Please refer to the Important Information at the end of this presentation.
0
Financials With Compounding Attributes
Stocks we own with strong track records of value creation
Past performance is not indicative or a guarantee of future returns.
Source: Polar Capital Global Financials Team, 29 November 2024, Bloomberg. Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital.
Neither Polar Capital nor any other party involved makes any express or implied warranties or representations. All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof, but are subject to
change without notice, and do not necessarily represent the views of Polar Capital. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list
of all recommendations made within the immediately preceding 12 months is available upon request. Portfolio data is “as at” the date indicated and should not be relied upon as a complete or current listing of the holdings (or top
holdings) of the fund and are subject to change. Information on particular holdings may be withheld if it is in the fund’s best interest to do so. A historic complete list of the portfolio holdings may be made available upon request.
JPMorgan – Book Value Per Share
(7.1% portfolio)
Arch Capital – Book Value Per Share
(1.5% portfolio)
Mastercard – Earnings Per Share
(4.5% portfolio)
ICE – Earnings Per Share
(1.7% portfolio)
0
5
10
15
20
25
30
35
40
45
50
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Dec-23
0
10
20
30
40
50
60
70
80
90
100
110
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Dec-23
0
1
2
3
4
5
6
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Dec-23
0
2
4
6
8
10
12
14
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Dec-23
Source: Bloomberg, Polar Capital
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 21
Manager’s Report
We draw
Shareholders’ attention to
https://www.polarcapital
globalfinancialstrust.com/
for monthly fact sheets, regular
investment commentary and
portfolio updates.
These regulations have been watered down already and are
expected to see further revision.
One of our largest overweight positions has been to
alternative asset managers. The successful ones have a
business model where good investment performance leads to
inflows into their funds which are multi-year in nature. Unlike
traditional asset managers, capital entrusted to them is locked
up in funds that rarely offer short-term liquidity to investors
and so their assets under management offer a steady stream
of income with the possibility of performance fees on top.
Also, they do not suffer from competition and fee pressure
from passive investments and ETFs.
Payment companies continue to offer an attractive
counterbalance to the more cyclical parts of the portfolio,
reflecting their much lower economic sensitivity. They do not
take balance sheet risks like banks or insurance companies;
the switch from cash to cards and growth in e-commerce
continues to drive revenues and profits over and above what
would be expected from the cyclical growth in spending.
We continue to like the insurance sector, in particular
reinsurance companies, which remain the Trust’s largest
overweight against the Benchmark. While close to or at
peak profitability, which we expect to decline, valuations
imply that profitability will fall rapidly, which we think will be
proved wrong. Furthermore, we like the defensive nature of
the insurance businesses to market volatility. For insurance
companies, claims are largely the result of accidents and
weather, not the economic cycle. Furthermore, the float that
insurance companies hold to pay claims is mostly invested in
cash and short-term bonds, therefore large losses are unlikely
should equity markets fall sharply.
Unsurprisingly, there has been an increase in M&A activity
during 2024; we had a holding in Anima, an Italian asset
manager, that was in receipt of a bid from Banco BPM. We
expect the M&A trend to continue and note that even large
financial companies are susceptible to bids as evidenced by
Unicredit’s approaches to Commerzbank and Banco BPM.
The ‘Danish Compromise’ that allows banks to hold less
capital against their insurance subsidiaries could be a catalyst
for further bids in the sector. This was key to the bids by
Banco BPM for Anima and BNP Paribas’s acquisition of AXA
Investment Managers through BNP’s insurance subsidiary.
Small-cap financials have materially derated over the past
10 years against their larger peers. As a result, we see a
great deal of value in some of the Trust’s smaller company
holdings. These have been a modest drag on relative
performance to date but ultimately we believe valuations will
mean revert as either strategic or private equity investors look
to take advantage of this disconnect.
Finally, a key attraction of the sector overall is its value
characteristics. Financial companies on average have nearly
always traded on lower price-to-book ratios, lower price-to-
earnings ratios and higher dividend yields than the wider
equity market and consequently are the largest constituent
of value indices. The discount at which the sector has traded
widened materially in the lead up to the pandemic reaching
its peak of around 45% in October 2020. Today the discount
has reduced to just under 30%, where it was trading pre-
pandemic, versus around 15% in July 2013 when the Trust
was launched, albeit today profitability is higher than where it
was at the end of 2019 and in 2013.
Against this background, financials have delivered a
compound return of around 9.5%pa since launch in 2013
and 20.0%pa since the last tender offer in 2020. With
valuations for global equity markets at the high end of
historical averages and highly concentrated around a small
number of US technology companies, returns from the wider
market are likely to be lower going forward, all things being
equal. In contrast, the lower valuations at which the financials
sector trades offer some downside protection, should markets
sell-off, and is also a likely beneficiary of any rotation from
growth to value strategies.
Nick Brind, George Barrow
and Tom Dorner
19 February 2025
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 22
Manager’s Report
Attribution Analysis
The top ten relative contributors to, and
the bottom ten relative detractors from
performance versus the Benchmark
For the year ended 30 November 2024
Since inception to 30 November 2024
Top Ten Overweight and Bottom Ten
Underweight Positions
For the year ended 30 November 2024
Arch Capital Group
Fiserv
Bank Rakyat Indonesia
Allfunds Group
Morgan Stanley
BDO Unibank
Marsh & McLennan
Wells Fargo
BFF Bank
Sabre Insurance Group
Interactive Brokers Group
Rakuten Bank
Barclays
JP Morgan Chase
Banco Bilbao Vizcaya Argentaria
NASDAQ Group
U.S. Bancorp
Virtu Financial
SPDR S&P Regional Banking ETF
Axis Capital Holding
-0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 0.8 1.0
1.2
0.98
0.61
0.55
0.54
0.50
0.38
0.38
0.36
0.35
0.33
-0.25
-0.25
-0.28
-0.28
-0.29
-0.33
-0.33
-0.39
-0.43
-0.48
%
Royal Bank of Canada
Fiserv
Morgan Stanley
UBS Group
Charles Schwab
Mitsubishi UFJ Financial Group
HSBC Holdings
Commonwealth Bank of Australia
Bank of America
Berkshire Hathaway
CHUBB
Mastercard
JPMorgan Chase
Intermediate Capital Group
RenaissanceRe Holdings
Arch Capital Group
Beazley
Bank of Cyprus Holdings
UniCredit
Intercontinental Exchange
-3.5 -2.5 -1.5 -0.5 0.5 1.5 2.5 3.5
2.39
2.04
1.88
1.77
1.70
1.59
1.48
1.39
1.38
1.33
-0.79
-0.82
-0.83
-0.85
-0.90
-0.94
-0.97
-1.20
-1.38
-2.53
%
Allocation Effect
Selection Effect (Incl. Interaction) Currency Effect Total Attribution Effect
30-Nov-13 30-Nov-14 30-Nov-15 30-Nov-16 30-Nov-17 30-Nov-18 30-Nov-19 30-Nov-20 30-Nov-21 30-Nov-22 30-Nov-23
30-Nov-24
Since
Inception
-20
-15
-10
-5
0
10
15
20
25
30
5
35
Note: This represents the gross return of the Company’s portfolio minus the benchmark return. This reflects the attribution effect where the Company’s gross return is compared to the
benchmark return. Total Attribution Effect is derived from the Relative Attribution Analysis, which decomposes the Excess Return (Gross) into the Allocation Effect and stock Selection Effect
(Inc. Interaction). Allocation Effect refers to the portion of the Company’s overall performance attributable to the Manager’s decision on taking different asset categories weights. Stock
Selection Effect refers to the portion of the Company’s overall performance attributable to the Manager’s decision on selecting individual securities.
Note: The Attribution Analysis of the relative and active positions represents the gross return of the Company’s portfolio minus the benchmark return.
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 23
Top Ten Investments
As at 30 November
Ranking Market Value £'000 % of total net assets
2024 2023 Stock Sector Country 2024 2023 2024 2023
1 (1)
JP Morgan Chase & Co
Banks North America 45,025 31,432 7.1% 6.4%
JP Morgan Chase is the largest bank in the US and has a presence in over 100 markets. It is the result of a combination of several banks including JP Morgan,
Chase Manhattan, Bank One, Chemical Bank and Manufacturers Hanover. During the financial crisis the company also acquired Bear Stearns, one of the largest
investment banks in the US and Washington Mutual, which at the time was the largest savings and loans bank in the US.
2 (2) Financial Services North America 28,254 27,136 4.5% 5.6%
Mastercard is the 2nd largest payments company in the world. Its principal business is to process payments between the banks of merchants and individuals or
corporations who use the Mastercard branded debit, credit and prepaid cards to make purchases. It was founded in 1966 by a number of Californian banks as a
competitor to what is today Visa.
3 (7) Banks North America 25,594 13,002 4.1% 2.7%
Bank of America is the 2nd largest bank in the US. The bank’s history dates to 1904 when it was founded as the Bank of Italy to service Italian immigrants in
California. It was acquired by Nations Bank in 1998 and its name changed to Bank of America. During the financial crisis the bank acquired Merrill Lynch, one of
the largest investment banks in the US.
4 (3) Financial Services North America 23,130 21,140 3.7% 4.3%
Visa is the largest payments company in the world. Visa was founded by Bank of America in 1958 when it launched BankAmericard, the first card with a revolving
credit feature before licensing it to other institutions in 1966. It was renamed Visa in 1976.
5 (5) Berkshire Hathaway Financial Services North America 17,466 16,764 2.8% 3.4%
Berkshire Hathaway is the largest financial company globally. It owns US auto insurer GEICO and General Re, a reinsurance company and has operations in a diverse
range of industries from railroads to confectionary. It also has large investments in American Express, Bank of America, the Coca-Cola company and Apple. It has been
managed by Warren Buffett since 1964.
6 (-) Financial Services North America 16,785 - 2.7% -
Goldman Sachs is the second largest investment bank in the US. It offers services in investment banking (advisory for mergers and acquisitions and restructuring),
securities underwriting, prime brokerage, asset management as well as wealth management and investment management
7 (-) Financial Services North America 15,329 - 2.4% -
Nasdaq is an American multinational financial services corporation that owns and operates three stock exchanges in the United States: the namesake Nasdaq stock
exchange, the Philadelphia Stock Exchange, and the Boston Stock Exchange, and seven European stock exchanges. It is headquartered in New York City.
8 (-) Citigroup Banks North America 13,914 - 2.2% -
Citigroup Inc is an American multinational investment bank and financial services company based in New York City. Citigroup operates with two major divisions
which offer investment and corporate banking services, as well as treasury, trade solutions and securities services.
9 (-) Banks
United
Kingdom 13,689 - 2.2% -
Barclays plc is a British multinational universal bank, headquartered in London, England. It is a diversified bank with comprehensive UK consumer, corporate and
wealth and private banking franchises, a leading investment bank and a strong, specialist US consumer bank.
10 (44) Sumitomo Mitsui Financial Banks Japan 13,526 4,329 2.1% 0.9%
Sumitomo Mitsui Financial Group, Inc or SMBC is a major Japanese multinational financial services group. SMBC Group operates in retail, corporate, and
investment banking segment worldwide. It provides financial products and services to a wide range of clients, including individuals, small and medium-sized
enterprises, large corporations, financial institutions and public sector entities.
Total - 10 Largest Investments 212,712 33.8%
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 23
Manager’s Report
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 24
Manager’s Report
Full Investment Portfolio
As at 30 November 2024
Ranking
Market Value
£’000
% of total net
assets
2024 2023 Stock Sector Country 2024 2023 2024 2023
1 (1) JP Morgan Chase Banks North America 45,025 31,432 7.1% 6.4%
2 (2) Mastercard Financial Services North America 28,254 27,136 4.5% 5.6%
3 (7) Bank of America Banks North America 25,594 13,002 4.1% 2.7%
4 (3) Visa Financial Services North America 23,130 21,140 3.7% 4.3%
5 (5) Berkshire Hathaway Financial Services North America 17,466 16,764 2.8% 3.4%
6 (-) Goldman Sachs Group Financial Services North America 16,785 - 2.7% -
7 (-) NASDAQ Group Financial Services North America 15,329 - 2.4% -
8 (-) Citigroup Banks North America 13,914 - 2.2% -
9 (-) Barclays Banks United Kingdom 13,689 - 2.2% -
10 (44) Sumitomo Mitsui Financial Banks Japan 13,526 4,329 2.1% 0.9%
Top 10 investments 212,712 33.8%
11 (-) Fidelity National Information Services Financial Services North America 13,458 - 2.1% -
12 (-) Globe Life Insurance North America 12,845 - 2.0% -
13 (-) Progressive Corp Insurance North America 12,744 - 2.0% -
14 (43) ICICI Bank Banks Asia (ex-Japan) 12,617 4,363 2.0% 0.9%
15 (-) Erste Bank Banks Europe 12,214 - 2.0% -
16 (-) Axis Capital Holding Insurance North America 12,136 - 1.9% -
17 (-) BlackRock Financial Services North America 11,821 - 1.9% -
18 (-) Allstate Corp Insurance North America 11,677 - 1.9% -
19 (10) RenaissanceRe Holdings Insurance North America 11,508 11,237 1.8% 2.3%
20 (-) NatWest Group Banks United Kingdom 11,060 - 1.8% -
Top 20 investments 334,792 53.2%
21 (39) Intact Financial Corporation Insurance North America 10,911 4,871 1.7% 1.0%
22 (59) IG Group Financial Services United Kingdom 10,876 2,940 1.7% 0.6%
23 (23) Beazley Insurance United Kingdom 10,844 7,422 1.7% 1.5%
24 (32) Ares Management Corporation Financial Services North America 10,828 5,932 1.7% 1.2%
25 (30) Intermediate Capital Group Financial Services United Kingdom 10,786 6,676 1.7% 1.4%
26 (-) BFF Bank Financial Services Europe 10,782 - 1.7% -
27 (25) Intercontinental Exchange Financial Services North America 10,766 7,271 1.7% 1.5%
28 (-) Interactive Brokers Group Financial Services North America 10,714 - 1.7% -
29 (13) U.S. Bancorp Banks North America 10,618 8,845 1.7% 1.8%
30 (-) Allfunds Group Financial Services Europe 10,140 - 1.7% -
Top 30 investments 442,057 70.2%
31 (9) Arch Capital Insurance North America 9,956 11,356 1.5% 2.3%
32 (-) Hannover Rueck Insurance Europe 9,261 - 1.5% -
33 (-) UniCredit Banks Europe 8,940 - 1.4% -
34 (-) Tryg Insurance Europe 8,790 - 1.4% -
35 (-) Deutsche Boerse Financial Services Europe 8,704 - 1.4% -
36 (-) BlackStone Group Financial Services North America 8,220 - 1.3% -
37 (-) Steadfast Group Insurance Asia (ex-Japan) 7,410 - 1.2% -
38 (-) Equitable Holdings Financial Services North America 7,370 - 1.2% -
39 (19) American Express Financial Services North America 7,286 7,987 1.2% 1.6%
40 (-) Rakuten Bank Banks Japan 7,076 - 1.1% -
Top 40 investments 525,070 83.4%
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 25
Manager’s Report
Ranking
Market Value
£’000
% of total net
assets
2024 2023 Stock Sector Country 2024 2023 2024 2023
41 (-) Discover Financial Services Financial Services North America 6,724 - 1.1% -
42 (-) Regions Financial Banks North America 6,444 - 1.0% -
43 (-) KB Financial Group Banks Asia (ex-Japan) 6,197 - 1.0% -
44 (-) First Horizon National Banks North America 6,154 - 1.0% -
45 (-) Mercadolibre Financial Services Latin America 6,086 - 0.9% -
46 (-) Zions Bancorp Banks North America 5,859 - 0.9% -
47 (-) Bank of Cyprus Holdings Banks Europe 5,609 - 0.9% -
48 (-) Sabre Insurance Group Insurance United Kingdom 5,584 - 0.9% -
49 (-) Hong Leong Bank Banks Asia (ex-Japan) 5,539 - 0.9% -
50 (-) BDO Unibank Banks Asia (ex-Japan) 5,467 - 0.9% -
Top 50 investments 584,733 92.9%
51 (49) Moneybox (unquoted) Financial Services United Kingdom 5,418 3,773 0.9% 0.8%
52 (-) CVC Capital Partners Financial Services Europe 5,414 - 0.9% -
53 (37) Bank Central Asia Indonesia Banks Asia (ex-Japan) 5,370 4,946 0.8% 1.0%
54 (48) Macquarie Group Financial Services Asia (ex-Japan) 5,202 4,125 0.8% 0.8%
55 (-) Irish Residential Properties REIT Equity Real Estate
Investment Trusts
(REITs)
Europe 4,412 - 0.7% -
56 (-) International Personal Finance 10.75% 2029
Bond
Fixed Income Fixed Income 4,328 - 0.6% -
57 (60) Lancashire 5.625% 2041 Bond Fixed Income Fixed Income 3,167 2,820 0.5% 0.6%
58 (62) Rothesay Life 4.875% Perp Bond Fixed Income Fixed Income 2,987 2,487 0.5% 0.5%
59 (63) Pension Insurance 7.375% Perp Bond Fixed Income Fixed Income 2,696 2,480 0.4% 0.5%
60 (-) Deutsche Beteiligungs 5.5% 2030
Convertible Bond
Fixed Income Fixed Income 2,373 - 0.4% -
Top 60 investments 626,100 99.4%
61 (78) VEF Financial Services Europe 2,372 1,526 0.4% 0.3%
62 (71) Aviva 6.875% Perp Bond Fixed Income Fixed Income 2,203 2,008 0.4% 0.4%
63 (79) Investec preference Fixed Income Fixed Income 2,181 1,391 0.3% 0.3%
64 (-) Atom Bank 11.5% 2035 Bond Fixed Income Fixed Income 2,103 - 0.3% -
65 (90) Litigation Capital Management Financial Services Asia (ex-Japan) 1,898 1,049 0.3% 0.2%
66 (75) Rothesay Life 6.875% Perp Bond Fixed Income Fixed Income 1,853 1,672 0.3% 0.3%
67 (74) CaixaBank 8.25% Perp Bond Fixed Income Fixed Income 1,821 1,747 0.3% 0.4%
68 (72) Riverstone Credit Opportunities Fixed Income Fixed Income 1,761 1,939 0.3% 0.4%
69 (80) Rothesay Life 5% Perp Bond Fixed Income Fixed Income 1,624 1,386 0.3% 0.3%
70 (-) Jackson Financial Insurance North America 1,572 - 0.2% -
Top 70 investments 645,488 102.5%
71 (77) Vanquis Banking
Group 8.875% 2032 Bond
Fixed Income Fixed Income 1,424 1,535 0.2% 0.3%
72 (83) Nationwide Building Society 5.75% Perp
Bond
Fixed Income Fixed Income 1,377 1,258 0.2% 0.3%
73 (96) Permanent TSB Group 13.25% Perp Bond Fixed Income Fixed Income 1,375 195 0.2% 0.0%
74 (84) Shawbrook Group 9% 2030 Bond Fixed Income Fixed Income 1,313 1,246 0.2% 0.3%
75 (92) Personal Group Insurance United Kingdom 1,302 566 0.2% 0.1%
76 (87) Shawbrook Group 12.25% 2034 Bond Fixed Income Fixed Income 1,284 1,194 0.2% 0.2%
77 (82) Atom Bank (unquoted) Banks United Kingdom 1,281 1,281 0.2% 0.3%
78 (89) Chesnara 4.75% 2032 Bond Fixed Income Fixed Income 1,222 1,049 0.2% 0.2%
79 (88) Hellenic Bank 10.25% 2033 Bond Fixed Income Fixed Income 1,134 1,065 0.2% 0.2%
80 (-) Coventry Building Society 8.75% Perp Bond Fixed Income Fixed Income 1,029 - 0.2% -
Top 80 investments 658,229 104.5%
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 26
Manager’s Report
Ranking
Market Value
£’000
% of total net
assets
2024 2023 Stock Sector Country 2024 2023 2024 2023
81 (70) VPC Specialty Lending Investments Fixed Income Fixed Income 1,014 2,014 0.2% 0.4%
82 (-) National Westminster 9% Pref Share Fixed Income Fixed Income 700 - 0.1% -
Total investments 659,943 104.8%
Other net liabilities (30,265) (4.8%)
Total net assets 629,678 100.0%
Note: Figures in brackets denote comparative rankings as at 30 November 2023.
Full Investment Portfolio continued
As at 30 November 2024
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 27
Manager’s Report
Portfolio Review
As at 30 November 2024
Geographical Exposure*
Benchmark weighting
as at 30 November
2024**
30 November
2024
30 November
2023
North America 58.9% 61.0% 52.2%
Europe 12.6% 14.0% 16.2%
United Kingdom 4.0% 11.3% 11.6%
Asia (ex-Japan) 15.4% 7.9% 13.3%
Fixed Income - 6.5% 9.7%
Japan 4.5% 3.2% 1.7%
Latin America 0.9% 0.9% 1.4%
Other net liabilities - (4.8%) (6.1%)
Total 100.0% 100.0%
Sector Exposure*
Benchmark weighting
as at 30 November
2024**
30 November
2024
30 November
2023
Financial services 39.5% 42.4% 31.2%
Banks 41.3% 35.3% 43.3%
Insurance 18.7% 19.9% 21.9%
Fixed Income - 6.5% 9.7%
Equity Real Estate Investment Trusts (REITs) - 0.7% -
Other net liabilities - (4.8%) (6.1%)
Total 100.0% 100.0%
Market Capitalisation*~
Benchmark weighting
as at 30 November
2024**
30 November
2024
30 November
2023
Mega Cap 39.7% 33.5% 37.8%
Large Cap 34.2% 24.5% 32.5%
Mid Cap 17.5% 12.8% 10.8%
Small Cap 7.5% 15.6% 7.6%
Smallest Cap 0.7% 11.9% 7.7%
Fixed Income - 6.5% 9.7%
Other net liabilities - (4.8%) (6.1%)
Total 100.0% 100.0%
* Based on the net assets as at 30 November 2024 of £629.7m (2023: £488.2m)
** The classifications are derived from the Benchmark as far as possible. Not all geographical areas or sectors of the Benchmark are shown, only those in which the Company had an investment
at the year end.
~ With effect from January 2024, the market capitalisation bandings were changed to “dynamic” and are therefore subject to change. The dynamic market capitalisation is determined based
on the percentiles of the total index market capitalisation. The mega caps correspond to the 40th percentile, large caps to the 70th percentile, mid caps to the 90th percentile, and small
caps to the 99th percentile. The year ended 30 November 2023 data has been re-presented based on the dynamic market capitalisation.
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 28
Environmental, Social and Governance
Environmental,
Social and
Governance
28
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 29
Environmental, Social and Governance
Corporate Responsibility for ESG
As an investment trust with a wholly non-executive,
independent Board of Directors the operations of
the Company are delegated to third parties, primarily
the Manager. However, the ultimate responsibility to
Shareholders remains with the Board. The Board recognises
that this includes ESG factors and over recent years ESG
(Environmental, Social and Governance principles collectively
known as “ESG”) has become ever more important from
an impact, risk and cost perspective across all aspects of the
Company.
Despite investment trusts currently having relatively few
regulatory reporting requirements, ESG is important to the
Board and the Manager reports to the Board its assessment
of the portfolio in ESG terms and the associated operations
of Polar Capital. Whilst the Portfolio Managers integrate
ESG considerations into their investment process, they are
not required to have consideration of ESG factors when
reviewing new, continuing or exiting investments; they are
not required to take an investment decision solely on the
basis of ESG factors.
The Board recognises that ESG is an evolving area, and
intends to adopt emerging best practice in its analysis
and reporting in line with regulatory requirements. ESG is
separated into those areas on which the Board can have a
direct influence, and those areas where it is reliant on others.
ESG and Third-Party Service Providers
The Manager receives assurance on an annual basis that,
where required, third party service providers comply with
the requirements of the Modern Slavery Act and adhere to a
zero-tolerance policy to bribery and corruption. Considering
the growing requirements surrounding ESG, third party
service providers have been engaged in providing copies of
their ESG, Diversity and Inclusion and other related policies
to the Company. The Board, via the Company Secretary and
Manager will continue to monitor the practices of service
providers and seek to assure itself that suitable policies and
procedures are in place.
Corporate Responsibility
The Company’s core investment and administrative activities
are undertaken by the Manager which seeks to limit the
use of non-renewable resources and reduce waste where
possible. The Manager has a corporate ESG policy, which is
available in the document library of the Company’s website,
and wherever possible and appropriate, the parameters of
such are considered and adopted by the investment team
in relation to the Company’s management and portfolio
construction. The Manager uses a number of third-party data
sources and reference points to build an ESG rating of each
stock. It is recognised however that these ratings may deviate
from the ratings determined by the investment team because
of direct market intelligence and contact with the companies
involved.
The Board monitors the Manager’s approach to ESG
and considers ESG factors in the management of the
Company. The Companies Act 2006 (Strategic Report and
Directors’ Reports) Regulations 2013 require companies
listed on the Main Market of the London Stock Exchange
to report on the greenhouse gas (‘GHG’) emissions for
which they are responsible. The Company is an investment
trust, with neither employees nor premises, nor has it any
financial or operational control of the assets which it owns.
Consequently, it has no GHG emissions to report from its
operations nor does it have responsibility for any other
emissions. Information on the GHG emissions of the Manager
can be found within the ESG and Sustainability area of their
website www.polarcapital.co.uk.
Taskforce for Climate-Related Financial
Disclosures (“TCFD”)
The Company notes the TCFD recommendations on
climate-related financial disclosures. Whilst TCFD is
currently not applicable to the Company, the Manager
has produced a product level report on the Company
in accordance with the FCA’s rules and guidance
regarding the disclosure of climate-related financial
information consistent with TCFD Recommendations
and Recommended Disclosures. The report can be found
within the corporate information section of the Company’s
website: www.polarcapitalglobalfinancialstrust.com
The Board will continue to work alongside its Investment
Manager to provide more information as it becomes available.
Polar Capital supports TCFD’s recommendations and is in the
process of applying the guidance to ensure compliance going
forward.
Diversity Policy and Gender Reporting
The Company has no employees and the Board is comprised
of one male and three female independent non-executive
Directors.
The Board is cognisant of the requirements of the FCA
Diversity and Inclusion Policy published in April 2022 and,
while the Board meets the gender requirements, being a
minimum of 40% female Board members and having at least
one senior female appointment, the current composition does
not satisfy the ethnicity requirements. The Board has put in
place a succession plan based on the recommended nine-year
tenure of Directors with allowance for an extended period of
up to 12 years for the role of the Chair (in line with the Chair
Tenure Policy).
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 30
Environmental, Social and Governance
The Board will continue to consider the benefits of diversity
throughout any recruitment process, especially when
compiling a shortlist of candidates and selecting individuals
for interview in order to ensure that there is a wide group of
diverse candidates. The Board has taken care to take account
of this when developing job specifications and in the use of
head-hunters who demonstrate an ability to widen the pool
of candidates. The Board’s Diversity Policy is discussed further
in the Report on Corporate Governance on page 55.
Modern Slavery Act
As an investment company, the Company does not provide
goods or services in the normal course of business and does
not have any customers. Accordingly, the Company does not
fall within the scope of the Modern Slavery Act 2015 and
therefore does not meet the criteria requiring it to produce
a statement under such Act. The Company considers its
supply chains to be of low risk as its suppliers are typically
professional advisers.
A statement by the Manager under the Act has been
published on the Managers’ website at www.polarcapital.
co.uk. The Company has not adopted a policy on human
rights as it has no employees or operational control of its
assets.
Anti-Bribery, Corruption and Tax Evasion
The Board has adopted a zero-tolerance policy (which is
available on the Company’s website) to bribery, corruption and
the facilitation of tax evasion in its business activities. The Board
uses the principles of the policies formulated and implemented
by the Investment Manager and expects the same standard of
zero-tolerance to be adopted by third-party service providers.
The Company has implemented a Conflicts of Interest policy
to which the Directors adhere. The Company is committed to
acting with integrity and in the interests of Shareholders at all
times.
Risk and Responsibility
The Board has a schedule of principal risks and uncertainties
and addresses how these are mitigated on pages 40 to 44;
additionally an explanation of how the directors have
undertaken their duties in compliance with s172 of the
Companies Act 2006 is provided on pages 45 to 48.
Simon Cordery
Chair
19 February 2025
Corporate Responsibility for ESG continued
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 31
Environmental, Social and Governance
Investment Perspective
Statement
The Company does not use a UK sustainability label
pursuant to the FCA’s Sustainability Disclosure Requirements
and Labelling Regime. Sustainability labels help investors
find products that have a specific sustainability goal. The
Company does not use a sustainability label because it does
not have a sustainability investment objective and does not
commit to investing a minimum proportion of its assets in
companies that display positive environmental and/or social
characteristics.
Investment Policy and Strategy
The Investment Manager integrates the consideration of
environmental, social and governance (‘ESG’) factors into its
investment process for the Company in three steps:
1. Exclusionary screening
2. ESG analysis
3. Engagement
Each of the three steps is described in further detail below.
Please note that they are undertaken in conjunction with
financial analysis carried out by the Investment Manager,
the details of which are not provided in this disclosure.
Exclusions
In accordance with applicable international treaties and
laws, the Company adheres to formal exclusions on all
companies that are linked to the production and/or marketing
of controversial weapons (such as cluster munitions and
anti-personnel mines).
In addition, prior to investment in a company, the Investment
Manager screens its performance against norms-based
standards using third party data. The norms-based standards
considered are the UN Global Compact, the UN Guiding
Principles on Business and Human Rights and the International
Labour Organisation’s Conventions.
The Investment Manager assesses whether an existing or
potential investee company has committed a material breach
of the norms-based standards, using third party data where
appropriate. If the Investment Manager concludes that there
has been a material breach by a potential investee company,
it will not invest in that company until such time as the breach
is remedied. If the Investment Manager concludes that there
has been a material breach by an existing investee company,
the Investment Manager will either work with the company
to remedy the breach or reduce or exit the position taking
account of the best interests of investors.
The Company also seeks to exclude from investment
companies which derive more than 5% of their revenues from:
• thermal coal extraction, production and generation;
• oil exploration and production;
• tobacco production and distribution;
• conventional weapons productions; and
• adult entertainment.
For the avoidance of doubt, the exclusions set out above
do not apply to the Company’s investments in other funds,
whether closed ended or open ended, or to any cash or cash
equivalent investments held by the Company.
ESG Analysis
Typically, the Investment Manager seeks to carry out ESG
analysis on companies on a pre-investment basis in accordance
with the process set out below, although it may not always be
practicable for the Investment Manager to do so. Where the
Investment Manager has not carried out its ESG analysis on a
pre-investment basis, the Investment Manager seeks to carry
out its ESG analysis on a post-investment basis.
The Investment Manager uses the Financials Team ESG
Framework and third-party research to assess the ESG
profiles of companies. The Financials Team ESG Framework
evaluates companies based on three overarching categories,
‘Environmental’, ‘Social’ and ‘Governance’. The indicators
assessed under each category include, but are not limited to:
Consideration of the factors listed above will depend on how
material they are to each company and, therefore, companies
may not be assessed on them all.
The Investment Manager may use primary sources, such as
company filings, sustainability reports, sell-side research, news
reports and governmental websites, and third party research as
inputs to the Financials Team ESG Framework.
The Investment Manager acknowledges the limitation of
primary sources by virtue of inconsistent global sustainability
standards, lack of underlying data quality and availability, the
resources of the company concerned and the lack of availability
of primary sources altogether.
Environmental
Carbon emissions, climate-related targets and environmental
disclosures.
Social
Labour management, human capital development, privacy and data
security, business ethics and sales practices.
Governance
Board composition, tax compliance, Shareholder alignment,
disclosure and remuneration.
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 32
Environmental, Social and Governance
The Investment Manager recognises that limitations of third-party assessments can include issues around data accuracy and
timeliness, the use of inappropriate peer groups, lack of coverage and/or a failure to consider the full context around some ESG
issues.
More significantly, third parties do not always reflect the most material ESG risks and opportunities faced by a company when
considered through the Investment Manager’s own knowledge and industry experience.
Where the Investment Manager deems that risks identified by the Financials Team ESG Framework and third party research and
data are significant or material, the Investment Manager may engage with the company to gain a greater understanding of their
ESG philosophy and practices and, where it feels it appropriate, to encourage improvement.
The Investment Manager may carry out these engagements through meetings with company management, emails to company
investor relations teams or through Shareholder voting.
For the avoidance of doubt, no binding criteria is applied to the outcome of the Investment Manager’s ESG assessment and no
minimum standards are set for investment or engagement. The Investment Manager’s ESG analysis is intended to address material
and financially relevant ESG risks and not to improve the ESG performance of investments.
Internal Oversight and Monitoring
The Investment Manager’s Sustainability team, who are independent of the portfolio management team, carry out four-monthly
oversight meetings during which the Company’s ESG profile, including its climate risk profile and norms and controversies profile,
is assessed with reference to third party data.
Metrics
Given that third party data is used as a starting point for the Investment Manager’s assessment of the Company’s portfolio and any
prospective holdings, the Investment Manager reports on the following third party ESG metrics:
• Company Portfolio ESG Rating
• Top 5 rated holdings
• Bottom 5 rated holdings
• Third party coverage
• Distribution of Portfolio holdings ESG ratings
Please note that investee companies may not all be covered by the third party ESG data and ratings providers used by the
Investment Manager. Investee companies that are unrated will not be considered in the top 5 rated holdings and bottom 5 rated
holdings metrics provided and therefore these metrics may not be fully representative of the portfolio.
The Investment Manager’s reporting shall contain a year-on-year comparison (i.e. a comparison of the current reporting year
against the prior reporting year) for all metrics listed except for the distribution of portfolio holdings ESG ratings. However, the
Investment Manager does not commit to improving any of these metrics over time and this comparative analysis is provided for
information purposes only.
Further, where the Investment Manager has engaged with companies on ESG matters over the reporting period, the Investment
Manager will provide information related to those engagements including, but not limited to, engagement case studies and voting
statistics.
Investment Perspective continued
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 33
Environmental, Social and Governance
Corporate governance
As at 30 November 2024, the weighted average percentage
of independent board of directors in the portfolio’s investee
companies is 81.0%, and the weighted average percentage of
women on boards is 37.6%.
ESG Dashboard
MSCI ESG Rating
2024 Portfolio Benchmark
Weighted Average ESG Score /
Quality Score
6.86 6.96
Letter Rating A A
MSCI
ESG Fund Rating
for PCFT
CCC B BB BBB A AA AAA
A
The MSCI ESG Rating for funds is designed to measure the
resiliency of portfolios to long-term ESG risks and opportunities.
The most highly rated funds consist of issuers with leading or
improving management of key ESG risks. The ESG Rating is
calculated as a direct mapping of ESG Quality Scores to letter
rating categories (e.g. AAA = 8.6-10). The ESG Ratings range
from leader (AAA, AA), average (A, BBB, BB) to laggard (B,
CCC). The dashboard allows the Board to review the ratings of
investee companies within the portfolio and informs discussions
between the Board and Manager at Board meetings. All charts
provided below are in respect of the portfolio as at 30 November
2024 / 30 November 2023.
2023 Portfolio Benchmark
Weighted Average ESG Score /
Quality Score
6.56 6.62
Letter Rating A A
Weighted Average
percentage of women on boards
Weighted Average
Board Independence
81.0%
83.2%
37.6%
35.0%
30-Nov-2024
30-Nov-2023
Top 5 Overweights
2024
Polar
Rating
MSCI
Rating
Nasdaq AA AA
Globe Life BBB BBB
JP Morgan A A
Axis Capital AA A
Renaissance Re BBB BB
Bottom 5 Ratings
2024
Polar
Rating
MSCI
Rating
Bank Central Asia BB A
VPC Specialty Lending BB N.A.
Blackstone BB BB
ICICI Bank BB A
Permanent TSB BB N.A.
Bottom 5 Ratings
2023
Polar
Rating
MSCI
Rating
Bank Rakyat Indonesia Persero BB A
ICICI Bank BB A
VPC Specialty Lending BB N.A.
Berkshire Hathaway BB BB
Axis Bank BB A
Top 5 Overweights
2023
Polar
Rating
MSCI
Rating
Chubb A BBB
Renaissance Re BBB BB
Mastercard AA AA
Arch Capital Group A BBB
JP Morgan A A
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 34
Environmental, Social and Governance
2024 Voting Statistics
Category Percentage
Number of votes FOR 92.6
Number of votes AGAINST 6.6
Number of votes ABSTAIN 0.0
Number of votes WITHHELD 0.7
Number of votes on Management say on pay 0.1
2023 Voting Statistics
Category Percentage
Number of votes FOR 90.7
Number of votes AGAINST 7.0
Number of votes ABSTAIN 0.3
Number of votes WITHHELD 0.4
Number of votes on Management say on pay 1.7
2024 Meeting Overview
Category Number Percentage
Number of votable meetings 70
Number of meetings voted 68 97.1
Number of meetings with at least 1 vote
Against, Withheld or Abstain
26 37.1
2023 Meeting Overview
Category Number Percentage
Number of votable meetings 77
Number of meetings voted 75 97.4
Number of meetings with at least 1 vote
Against, Withheld or Abstain
27 35.1
Weighted Average Carbon Intensity (tCO2e / Sales)
The Trust’s holdings have very low carbon intensity (scope 1 and 2 emissions), based on the weighted average carbon emissions per
USD million sales.
2024
8.0
2023
13.0
VERY HIGH HIGH MODERATE LOW VERY LOW VERY HIGH HIGH MODERATE LOW VERY LOW
Portfolio Letter Rating Distribution
36.9% of the Trust’s holdings receive an MSCI ESG Rating of AAA or AA (ESG Leaders) while 0% receive an MSCI ESG Rating of B or CCC
(ESG Laggards).
7.3%
4.2%
5.4%
8.2%
31.5%
34.2%
36.3% 35.7%
22.6%
10.2%
0.0%
4.4%
0.0%0.0% 0.0%0.0%
Unrated
CCC
BBBBBBAAAAAA
0
10
20
30
40
Polar
MSCI
ESG Dashboard continued
Governance
Governance
A system of rules,
processes and practices by
which the Company
is governed.
35
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 36
Strategic Report
The Strategic Report section of this Annual Report comprises
the Chair’s Statement, the Investment Manager’s Report,
including information on the portfolio, and this Strategic
Report. This Report has been prepared to provide information
to Shareholders on the Company’s strategy and the potential
for this strategy to succeed, including a fair review of the
Company’s performance during the year ended 30 November
2024, the position of the Company at the year end and a
description of the principal risks and uncertainties, including
both economic and business risk factors, underlying any such
forward-looking information.
Business Model and Regulatory
Arrangements
The Company’s business model follows that of an externally
managed investment trust providing Shareholders with access
to a portfolio of mostly listed or quoted securities issued by
companies in the financial sector. Its shares are listed on the
main market of the London Stock Exchange.
The Company is designated an Alternative Investment Fund
(‘AIF’) under the Alternative Investment Fund Management
Directive (‘AIFMD’) and, as required by the Directive, has
contracted with Polar Capital LLP to act as the Alternative
Investment Fund Manager (‘AIFM’) and HSBC Bank Plc to act
as the Depositary.
Both the AIFM and the Depositary have responsibilities
under AIFMD for ensuring that the assets of the Company
are managed in accordance with the investment policy and
are held in safe custody. The Board remains responsible for
setting the investment strategy and operational guidelines as
well as meeting the requirements of the Financial Conduct
Authority (‘FCA’) Listing Rules and the Companies Act 2006.
The AIFMD requires certain information to be made available
to investors in AIFs before they invest and requires that
material changes to this information be disclosed in the
Annual Report of each AIF. Investor Disclosure Documents,
which set out information on the Company’s investment
strategy and policies, gearing, risk, liquidity, administration,
management, fees, conflicts of interest and other Shareholder
information are available on the Company’s website.
There have been no material changes to the information
requiring disclosure. Any information requiring immediate
disclosure pursuant to the AIFMD will be disclosed to the
London Stock Exchange. Statements from the Depositary and
the AIFM can be found on the Company’s website.
Investment Objective and Policy
The Company’s investment objective is to generate for
investors a growing dividend income together with capital
appreciation. The Company seeks to achieve its objective by
investing in a global portfolio primarily consisting of listed or
quoted securities issued by companies in the financial sector
operating in various subsectors. The portfolio is diversified
by geography, industry subsectors and stock market
capitalisation.
The Company may have a small exposure to unlisted and
unquoted companies, but in aggregate, this is not expected
to exceed 10% of total assets at the time of investment.
The Company will not invest more than 10% of total assets,
at the time of investment, in other listed closed-ended
investment companies and no single investment will account
for more than 10% of the portfolio at the time of investment.
The Company may employ levels of borrowing from time
to time with the aim of enhancing returns. This is currently
subject to an overall maximum of 20% (increased from 15%
at the time of the reconstruction in April 2020) of net assets
at the time the relevant borrowing is taken out. Actual levels
of borrowing may change from time to time based on the
Manager’s assessment of risk and reward. The Company
may invest through equities, index-linked and other debt
securities, cash deposits, money market instruments, foreign
currency exchange transactions, forward transactions, index
options and other instruments including derivatives. Forward
transactions, derivatives (including put and call options on
individual positions or indices) and participation notes may
be used to gain exposure to the securities of companies
falling within the Company’s investment policy or to seek
to generate income from the Company’s position in such
securities, as well as for efficient portfolio management. Any
use of derivatives for investment purposes is made based on
the same principles of risk spreading and diversification that
apply to the Company’s direct investments. The Company
may hedge exposure to foreign currencies if considered
appropriate for efficient portfolio management.
Strategy and Investment Approach
The Manager’s investment process is primarily driven by a
bottom-up fundamental analysis of individual companies,
with macroeconomic inputs. The Manager uses both
quantitative and qualitative screens to rank companies
on a risk-adjusted basis using a number of variables such
as profitability, risk, growth and ESG metrics which is in
addition to more detailed stock or sector-specific research.
The Portfolio Managers undertake trips to the US, Europe
and Asia to meet companies as well as regularly meeting
companies at various conferences and at the Polar offices.
The portfolio is primarily invested in companies with a market
capitalisation greater than US$5bn. There are no limits on
the exposure of the investment portfolio to either small or
mid-cap companies where the Managers take positions on an
opportunistically basis. The Manager has discretion to invest
up to 10% of the portfolio in debt securities.
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 37
The investment portfolio is invested in a variety of companies
that offer both income and capital growth. This is balanced in
order to meet the Company’s objective of growing dividends
to Shareholders over time. The Board, together with the
Manager will continue to assess the likely income capability
of the portfolio to determine the appropriate longer-term
distribution level. Please refer to the Chair’s Statement for
information on the proposed changes to the Company’s
future Dividend Policy.
Service Providers
Polar Capital LLP has been appointed to act as the Investment
Manager and AIFM as well as to provide or procure company
secretarial, marketing and administrative services, including
accounting and portfolio valuation which it has arranged to
deliver through HSBC Securities Services (“HSS”).
The Company also contracts directly, on terms agreed
periodically, with several third parties for the provision of
specialist services:
• HSBC Bank plc as Custodian and Depositary;
• Stifel Nicolaus Europe Limited as Corporate Broker;
• Equiniti Limited as Share Registrars;
• PricewaterhouseCoopers LLP as Independent Auditors;
• RD:IR for Investor Relations and Shareholder Analysis;
• Marten & Co as third-party research providers;
• Camarco as PR advisors;
• Perivan as Designers and Printers for Shareholder
communications; and
• Huguenot Limited as Website Designers and internet
hosting services.
Benchmark
The Company measures the Manager’s performance against
the MSCI ACWI Financials Net Total Return Index (‘the
Benchmark’). This has been used to measure the performance
of the Company since 23 April 2020. The Manager does not
seek to replicate the index in constructing the Company’s
portfolio. The portfolio may, therefore, diverge substantially
from the constituents of the Benchmark.
Although the Company evaluates its performance against
the Benchmark, this is neither a target nor a determinant of
investment strategy. The purpose of the Benchmark is to set
out a reasonable measure of performance for Shareholders
and an appropriate base which, together with an additional
hurdle, forms the level above which the Manager earns a
performance fee.
Investment Management Company and
Management of the Portfolio
As the Company is an investment vehicle for Shareholders,
the Directors have sought to ensure that the business of
the Company is managed by a leading specialist investment
management team and that the investment strategy is attractive
to Shareholders. The Directors believe that a strong working
relationship with the Manager will achieve the optimum return
for Shareholders. As such, the Board and Manager operate in a
supportive, co-operative and open environment.
The Investment Manager is Polar Capital LLP (“Polar Capital”)
which is authorised and regulated by the Financial Conduct
Authority, to act as Investment Manager and AIFM of
the Company with sole responsibility for the discretionary
management of the Company’s assets (including uninvested
cash) and sole responsibility for decisions as to the purchase
and sale of individual investments. The Manager also has
responsibility for asset allocation within the limits of the
investment policy and guidelines established and regularly
reviewed by the Board, all subject to the overall control and
supervision of the Board. Polar Capital provides a team of five
financial specialists with the portfolio jointly managed by Nick
Brind, George Barrow and Tom Dorner. The Manager has other
investment resources which support the investment team and
has experience in administering and managing other investment
companies.
Fee Arrangements
Management Fee
Under the terms of the IMA, the Manager is entitled to a
management fee together with reimbursement of reasonable
expenses incurred by it in the performance of its duties. The
Management fee is payable monthly in arrears and, with effect
from 7 April 2020, is charged at a rate of 0.70% per annum of
the Company’s NAV. In accordance with the Directors’ policy on
the allocation of expenses between income and capital, in each
financial year 80% of the management fee payable is charged
to capital and the remaining 20% to revenue.
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 38
Strategic Report continued
Performance Fee
The Manager may be entitled to a performance fee equal
to 10% of the excess of the performance fee hurdle and
payable at the end of each five-year period, the first period
being from 23 April 2020 to 30 June 2025 and at five yearly
intervals thereafter.
For the purpose of calculating the performance fee, the
Company’s NAV (adjusted to reflect dividends paid, and
any performance impact caused by the issue or buyback
of ordinary shares) at 30 June 2025, being the end of the
relevant Performance Period, will be used. No performance
fee has been paid or accrued as at 30 November 2024.
Where a performance fee becomes payable it will be charged
100% to capital.
Termination Arrangements
The IMA may be terminated by either party giving 12 months’
notice. The IMA may be terminated earlier by the Company with
immediate effect on the occurrence of certain events, including:
(i) if an order has been made or an effective resolution passed
for the liquidation of the Manager; (ii) if the Manager ceases
or threatens to cease to carry on its business; (iii) where the
Company is required to do so by a relevant regulatory authority;
(iv) on the liquidation of the Company; or (v) subject to certain
conditions, where the Manager commits a material breach of
the IMA. In the event the IMA is terminated by the Company,
except in the event of termination by the Company for certain
specified causes, the base fee and the performance fee will be
calculated pro rata for the period up to and including the date of
termination.
Governance
Performance and Key Performance Objectives
The Board appraises the performance of the Company and the Manager as the key supplier of services to the Company against
key performance indicators (‘KPIs’). The objectives of the KPIs comprise both specific financial and Shareholder related measures.
These KPIs have not differed from the prior year.
KPI Control Process Outcome
The provision of
investment returns to
Shareholders measured
by long-term NAV
total return relative to
the Benchmark and a
comparator group.
The Board reviews at each meeting the performance
of the portfolio and considers the views of the
Manager and the value delivered to Shareholders
through NAV growth and dividends paid.
The Company’s NAV total return, over the year ended 30 November
2024, was 34.8%* while the Benchmark delivered 36.1% over the
same period. Since inception the NAV total return was 199.2%*
compared to 204.8% for the Benchmark and 161.8% for a
comparator group.
The Board also receives monthly reports on
performance against both the Benchmark and a
comparator group of open-ended investment funds.
As at 30 November 2024 the Company ranks 9 out of a comparator
group of 31 open ended funds within the Lipper Financial Sector
universe since inception and 4 out of 6 within a smaller comparable
group of funds regularly considered by the Board.
The achievement of a
progressive dividend
policy.~
Financial forecasts are reviewed to track income and
distributions.
A total of two interim dividends amounting to 4.70p (2023: 4.55p)
per ordinary share have been paid or declared in respect of the
financial year ended 30 November 2024. While the aim to achieve
dividend growth remains there is no guarantee that this can be
achieved.
Monitoring and
reacting to issues
created by the discount
or premium of the
ordinary share price to
the NAV per ordinary
share with the aim of
reducing volatility for
Shareholders.
The Board receives regular information on the
composition of the share register including trading
patterns and discount/premium levels of the
Company’s ordinary shares. The Board discusses
and authorises the issue or buy back of shares when
appropriate.
The discount of the ordinary share price to the NAV per ordinary
share at the year-end was 5.5%* compared with a discount of
12.2% at the year ended 30 November 2023. The average discount
for the investment trust sector at 30 November 2024 was 15.6%.
The Board is aware of the vulnerability of a sector
specialist investment trust to a change in investor
sentiment towards that sector. While there is no
formal policy the Board discusses the market factors
giving rise to any discount or premium, the long or
short-term nature of those factors and the overall
benefit to Shareholders of any mitigating actions. The
market liquidity is also considered when authorising
the issue or buy back of shares when appropriate
market conditions prevail.
A daily NAV per share, calculated in accordance with
the AIC guidelines is issued to the London Stock
exchange.
During the year under review, the Company bought back 5,642,322
ordinary shares at an average discount of 8.9%. No ordinary shares
were bought back following the year end. All shares bought back
have been placed into treasury for reissue to the market under the
appropriate conditions.
To qualify and
continue to meet
the requirements for
Sections 1158 and 1159
of the Corporation Tax
Act 2010 (‘investment
trust status’).
The Board receives regular financial information
which discloses the current and projected financial
position of the Company against each of the tests set
out in Sections 1158 and 1159.
The Company has been granted investment trust status annually since
its launch on 1 July 2013 and is deemed to be granted such status for
each subsequent year subject to the Company continuing to satisfy
the conditions of Section 1158 of the Corporation Tax Act 2010 and
other associated ongoing requirements. The Directors believe that the
tests have been met in the financial year ended 30 November 2024
and will continue to be met.
Efficient operation
of the Company with
appropriate investment
management resources
and services from
third party suppliers
within a stable
and risk-controlled
environment.
Annually the Board considers the services provided
by the Manager, both investment and administrative,
and reviews the provision of services from third
parties including the costs of their services.
The Board, through the Audit Committee has received and
considered satisfactory the internal controls report of the Manager
and other key suppliers including contingency arrangements to
facilitate the ongoing operations of the Company in the event of
withdrawal or failure of services.
The annual operating expenses are reviewed and any
non-recurring project related expenditure is approved
by the Board.
The ongoing charges for the year ended 30 November 2024
excluding the performance fee were 0.85% of net assets
(2023: 0.86%)*. The ongoing charges including the performance
fee payable were 0.85% (2023: 0.86%)*.
*See Alternative Performance Measures
~ Please refer to the Chair’s Statement for information on the proposed changes to the Company’s future Dividend Policy.
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 39
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 40
Strategic Report continued
Principal Risks and Uncertainties
The Board is responsible for the management of risks
faced by the Company. Through delegation to the Audit
Committee, it has established procedures to manage risk,
oversee the internal control framework and determine the
nature and extent of the principal risks the Company is willing
to take to achieve its long-term strategic objectives.
The established risk management process the Company
follows identifies and assesses various risks, their likelihood,
and possible severity of impact, considering both internal and
external controls and factors that could provide mitigation.
A post mitigation risk impact score is then determined for
each principal risk.
The Audit Committee carries out, at least annually, a robust
assessment of the principal risks and uncertainties. With the
assistance of the Manager, it monitors identified risks and
meets to discuss both long-term and emerging risks.
During the year the Audit Committee, in conjunction with
the Board and the Manager, undertook a full review of the
Company’s Risk Map including the mitigating factors and
controls to reduce the impact of the risks. The Committee
continues to closely monitor these risks along with any other
emerging risks as they develop and implements mitigating
actions as necessary.
The Committee is mindful of the geopolitical political
landscape, specifically the ongoing military activity in Ukraine
and the Middle East. Geopolitical events such as these can
have a significant impact on global financial markets, and
hence on the Company’s portfolio performance. Further
information on how the Committee has assessed the
Company’s ability to operate as a going concern and the
Company’s longer-term viability can be found on pages 62
and 63 of the Report of the Audit Committee.
The principal risks are detailed on the following pages along
with a high-level summary of their management through
mitigation over the past financial year.
Risk Cycle
Monitor
and Review
Identify Risk
Analyse Risk
Build Risk
Strategy
Manage
Risks
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 41
Investment Manager Performance
Principal Business Risks and Uncertainties Management of Risks through Mitigation & Controls
Failure to achieve investment objective, investment
performance below agreed benchmark objective or market/
industry average.
The Board seeks to manage the impact of such risks through
regular reporting and monitoring of investment performance
against a comparator group of open-ended funds, the
Benchmark and other agreed indicators of relative performance.
In months when the Board is not scheduled to meet, it receives a
monthly report containing financial information on the Company
including gearing and cash balances.
Performance and strategy are reviewed throughout the year
at regular Board meetings where the Board can challenge the
Manager. The Board also receives a monthly commentary from
the Manager in the form of factsheets for all the specialist
financial sector funds managed by Polar Capital.
The Board is committed to a clear communication programme
to ensure Shareholders understand the investment strategy. This
is maintained using monthly factsheets which have a market
commentary from the Manager as well as portfolio data, an
informative website as well as annual and half year reports. The
Management Engagement Committee considers the suitability of
the Manager based on performance and other services provided.
Loss of portfolio manager or other key staff. The strength and depth of investment team provides comfort
that there is not over-reliance on one person with alternative
portfolio managers available to act if needed. For each key
business process roles, responsibilities and reporting lines are
clear and unambiguous. Key personnel are incentivised by equity
participation in the investment management company.
The ability to continue the dividend policy* may be
compromised due to poor investment selection or portfolio
construction leading to lower investment income, changes
in underlying companies’ dividend policies, regulatory
intervention, local taxes, currency exposure and other factors.
This could result in a lower level of dividend being paid than
intended or previously paid.
The Board monitors the level of investment income through
monthly management accounts and discussion. In the event of
there being insufficient income during the financial year, the
Company has built up revenue reserves on which to draw to pay
dividends. Equally, in the event of the revenue reserves being
fully utilised the Company may use other distributable reserves.
See notes 22 to 24 on pages 101 and 102.
The Board and the Manager will continue to assess the income
capability of the portfolio and determine the appropriate
longer-term dividend level based on how economies and
businesses perform.
Risk of regular five yearly tenders being taken up at a level
which leaves size of the Company unviable.
Under the Articles of Association, the Company is required
to make tender offers at five-yearly intervals, with the first to
commence on or before 30 June 2025. There is a risk that the
size of the Company following the tender offer may not meet
the minimum size condition to continue in existence.
The Board, Investment Manager and Corporate Broker maintain a
close relationship with Shareholders. Regular reports are provided
to the Board on communications with Shareholders and feedback
received is discussed at Board meetings. Ahead of the tender,
further engagement will be held with Shareholders and an
assessment will be undertaken to determine Shareholders likely to
remain invested in the Company post tender.
Increase Decrease Unchanged
* Please refer to the Chair’s Statement for information on the proposed changes to the Company’s future Dividend Policy.
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 42
Strategic Report continued
Principal Risks and Uncertainties continued
Market, Economic and Political Risk
Principal Business Risks and Uncertainties Management of Risks through Mitigation & Controls
While the portfolio is diversified across several stock markets
worldwide, the investment mandate is focused on financials
and thus the portfolio is more sensitive to investor sentiment
and the commercial acceptance of the sector than a general
investment portfolio.
The Company’s portfolio is exposed to risks such as market
price, credit, liquidity, foreign currency and interest rates.
The portfolio is actively managed. The Manager’s style
focuses primarily on the investment opportunity of individual
stocks and, accordingly, may not follow the makeup of the
Benchmark. This may result in returns which are not in line
with the Benchmark.
The degree of risk which the Manager incurs to generate the
investment returns and the effect of gearing on the portfolio
by borrowed funds can magnify the portfolio returns per
share positively or negatively.
The Board has set appropriate investment limits against which it
monitors the position of the portfolio. They include guidelines on
exposures to certain investment markets and sectors. The Board
discusses with the Manager at each Board meeting its views on
the sector.
At each Board meeting the composition and diversification of
the portfolio by geographies, sectors and capitalisations are
considered along with sales and purchases of investments.
Individual investments are discussed with the Manager as well as
the Manager’s general views on the various investment markets
and the financial sector.
Analytical performance data and attribution analysis is presented
by the Manager.
The policies for managing the risks posed by exposure to market
prices, interest rates, foreign currency exchange rates, credit
and liquidity are set out in Note 27 to the financial statements.
Shareholders have sight of the entire portfolio and geographic
exposure of investments.
There is significant exposure to the economic cycles of the
markets in which the underlying investments conduct their
business operations as well as the economic impact on
investment markets where such investments are listed.
The fluctuations of exchange rates can have a material impact
on Shareholder returns.
The Board regularly discusses global geopolitical issues and
general economic conditions and developments.
The impact on the portfolio from other geopolitical changes and
the overall economic and geopolitical environment in which the
Company operates is monitored through existing control systems
and discussed regularly by the Board.
Note 27 describes the risks posed by changes in foreign
exchange rates. The Manager can hedge foreign currency if it is
thought appropriate at the time.
Increase Decrease Unchanged
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 43
Operational and Regulatory Risk
Principal Business Risks and Uncertainties Management of Risks through Mitigation & Controls
There are risks from the failure of, or disruption to, operational
and accounting systems and processes provided by the
Manager, including any subcontractors to which the Manager
has delegated a task and directly appointed suppliers.
The mis-valuation of investments or the loss of assets from
the custodian or sub custodians could affect the NAV per
share or lead to a loss of Shareholder value.
There is taxation risk that the Company may fail to
continue as an investment trust and suffer capital gains tax
or fail to recover as fully as possible withholding taxes on
overseas investments.
The legal and regulatory risks include failure to comply
with the FCA’s Prospectus Rules, UK Listing Rules and
Disclosure Guidance and Transparency Rules; not meeting
the provisions of the Companies Act 2006 and other UK
and overseas legislation affecting UK companies and not
complying with accounting standards. Further risks arise
from not keeping abreast of changes in legislation and
regulations which have in recent years been substantial.
At each Board meeting the Board receives an administration
report that provides details on general corporate matters
including legislative and regulatory developments and changes.
The Board conducts an annual review of suppliers and their
internal control reports, which includes the disaster recovery
procedures of the Manager.
Regular reporting from the Depositary on the safe custody of the
Company’s assets and the operation of control systems related
to the portfolio reconciliation is monitored. Specialist advice
is sought on taxation issues as and when required. The Audit
Committee has oversight of such work.
Information and guidance on legal and regulatory risks is
given by the Manager or professional advisers where necessary
and reports are submitted to the Board for discussion and,
if required, any remedial action or changes. The Board monitors
new developments and changes in the regulatory environment
and seeks to ensure that their impact on the Company is
understood and complied with.
Cyber-attack causing disruption to, or failure of,
operational and accounting systems and processes provided
by the Investment Manager creating an unexpected event
and/or adverse impact on personnel or the portfolio.
The number, severity and success rate of cyber-attacks have
increased considerably over recent years. Detailed controls
are in place and the Board proactively seeks to keep abreast
of developments through updates with representatives of the
Investment Manager who undertakes meetings with relevant
service providers.
Increase Decrease Unchanged
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 44
Governance
Strategic Report continued
Investor Relations and Stewardship
Principal Risks and Uncertainties continued
Principal Business Risks and Uncertainties Management of Risks through Mitigation & Controls
Persistent excessive share price premium/discount to NAV. In consultation with its advisors, including the corporate broker,
the Board regularly considers the level of the share price premium/
discount to the NAV and the Board reviews ways to enhance
Shareholder value, including share issuance and buy backs.
Failure to communicate effectively and timeously with
investors or the issuance of erroneous or misleading
information.
Polar Capital’s Sales Team and the Corporate Broker provide
periodic reports to the Board on communications with
Shareholders and feedback received.
The Investment Manager also has regular interaction with clients,
Shareholders and investors. This is through a combination of
channels including one to one meetings, presentations at retail,
professional events or at Polar’s Annual Investor conference.
The Board is committed to a clear communication programme
to ensure Shareholders understand the investment strategy.
This is maintained using monthly factsheets which have market
commentary from the Investment Manager portfolio data, an
informative website and annual and half year reports. Contact
details and how to contact the Board are provided in regulatory
announcements and the Board will be present at the AGM to
speak to Shareholders.
Increase Decrease Unchanged
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 45
Governance
Section 172 Statement
The statutory duties of the Directors are listed in s171-177 of the Companies Act 2006. Under s172, Directors have a
duty to promote the success of the Company for the benefit of its members (its Shareholders) as a whole and in doing
so have regard to the consequences of any decision in the long term, as well as having regard to the Company’s
wider stakeholders amongst other considerations. The fulfilment of this duty not only helps the Company achieve its
Investment Objective but ensures decisions are made in a responsible and sustainable way for Shareholders.
To ensure that the Directors are aware of, and understand, their duties, they are provided with an induction when
they first join the Board, including details of all relevant regulatory and legal duties as a director and continue to
receive regular and ongoing updates on relevant legislative and regulatory developments. They have continued
access to the advice and services of the Company Secretary and, when deemed necessary, the Directors can seek
independent professional advice. The Schedule of Matters Reserved for the Board, and the Terms of Reference of its
committees, are reviewed annually and further describe Directors’ responsibilities and obligations and include any
statutory and regulatory duties.
The Board seeks to understand the needs and priorities of the Company’s stakeholders and these are taken into
account during discussions and as part of the decision-making process. As an externally managed investment
company, the Company does not have any employees or customers, however the key stakeholders and a summary
of the Board’s consideration and actions where possible in relation to each group of stakeholders are described in the
table below.
Stakeholder Group How we engage with them
Shareholders
The Directors have considered this duty when making the strategic decisions during the year that affect
Shareholders, including the continued appointment of the Investment Manager and the recommendation
that Shareholders vote in favour of the resolutions for the Company to continue and to renew the allotment
and buy back authorities at the AGM. The Directors have engaged with and taken account of Shareholders’
interests during the year.
The Company’s AGM will be held at 2:00pm on Thursday 10 April 2025 at the offices of Polar Capital,
16 Palace Street, London SW1E 5JD. The Board recognises that the AGM is an important event for
Shareholders and the Company and is keen to ensure that Shareholders can exercise their right to vote and
participate. Any changes to these arrangements will be communicated through the Company’s website and
via a Regulatory Information Service announcement.
The Board believes that Shareholder engagement remains important and is keen that the AGM be a
participative event for all. Shareholders will have the opportunity to hear a pre-recorded presentation
from the Manager, reviewing the Company’s performance in the year and the outlook for
2024-2025 in advance of the AGM. The presentation will be uploaded to the Company’s website
ahead of the AGM. In addition, Shareholders will be able to watch the proceedings of the AGM
live via Zoom Conference. Details of how to access the online link are provided in the Notice of
AGM. The AGM in-person meeting will comprise the formal business and questions only. All formal
business resolutions will be voted on by a poll and we therefore encourage Shareholders to submit their votes
ahead of the meeting by proxy card which is provided with the Notice of Meeting. Shareholders who hold
their shares via an online stockbroker or platform are encouraged to exercise their vote in advance
of the meeting through their respective platforms. Further information can be found on the AIC’s
website and in the Shareholder information section on page 123.
Shareholders are encouraged to send any questions (on or before 7 April 2025) ahead of the AGM to the
Board via the Company Secretary at cosec@polarcapital.co.uk stating the subject matter as PCFT-AGM.
The Chair of the Board and of the Committees, along with the Managers, will attend the AGM and will be
available to respond to questions and concerns from Shareholders.
Should any significant votes be cast against a resolution, the Board will engage with Shareholders and explain
in its announcement of the results of the AGM the actions it intends to take to consult Shareholders to
understand the reasons behind the votes against. Following the consultation, an update will be published no
later than six months after the AGM and the Annual Report will detail the impact the Shareholder feedback
has had on any decisions the Board has taken and any actions or resolutions proposed.
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 46
Governance
Section 172 Statement continued
Strategic Report continued
Stakeholder Group How we engage with them
Shareholders
continued
Relations with Shareholders
The Board and the Manager consider maintaining good communications and engaging with
Shareholders through meetings and presentations a key priority. The Board regularly considers the
share register of the Company and receives regular reports from the Manager and the Corporate
Broker on meetings attended with Shareholders and any concerns that are raised in those meetings.
The Board reviews any correspondence from Shareholders and members of the Board attend Manager
presentations to investors.
Shareholders are kept informed by the publication of annual and half year reports, monthly fact sheets,
access to commentary from the Manager via the Company’s website and attendance at events at which
the Manager presents.
Shareholders can raise any concerns directly with the Chair or the Board without intervention of the
Manager or Company Secretary. They may do this either in person at the AGM or at other events,
or in writing either via the registered office of the Company or to the Chair’s specific email address
Chair.PCFT@polarcapital.co.uk.
The Company, through the sales and marketing efforts of the Manager, encourages retail investment
platforms to engage with underlying Shareholders in relation to Company communications and enable
those Shareholders to cast their votes on Shareholder resolutions; the Company however has no
responsibility over such platforms. The Board therefore encourages Shareholders invested via platforms
to regularly visit the Company’s website or to contact the Company directly to obtain copies of
Shareholder communications.
The Company has made arrangements with its registrar for Shareholders who own their shares directly
rather than through a nominee or share scheme to view their account online at www.shareview.co.uk.
Other services are available via this website.
Outcomes and strategic decisions during the year
2025 Tender Offer
Ahead of the Tender Offer to be made to Shareholders in 2025, Directors continue to engage with
the Manager, Polar Sales and the Company's Brokers to understand Shareholder views, the proposed
mechanisms and timetable for the Tender.
Buybacks
Further to Shareholder authority being granted, the Company has the facility to conduct share buy backs
when, in normal market conditions, it is in the best interests of Shareholders to do so. The Company bought
back a total of 5,642,322 shares during the year under review. No ordinary shares were bought back
following the year end.
AGM
To enable more Shareholders the opportunity to hear the Investment Manager’s AGM presentation, the
Board has opted to pre-record and upload this to the website ahead of the voting deadline and in-person
formal business AGM. In addition, Shareholders can watch the proceedings of the AGM live via Zoom
Conference. Details of how to access the online link are provided in the Notice of AGM.
Manager
Through the Board meeting cycle, regular updates and the work of the Management Engagement Committee
in reviewing the services of the Manager annually, the Board is able to safeguard Shareholder interests by:
• Ensuring excessive risk is not undertaken in the pursuit of investment performance;
• Ensuring adherence to the Investment Policy;
• Ensuring adherence to the Investment Management Agreement and reviewing the agreed management
and performance fees;
• Ensuring compliance with statutory legal requirements, regulations and other advisory guidance such as
consumer duty and aspects of operational resilience; and
• Reviewing the Manager’s decision making and consistency of its investment process.
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 47
Stakeholder Group How we engage with them
Manager
continued
Maintaining a close and constructive working relationship with the Manager is crucial as the Board and the
Manager both aim to continue to deliver consistent, long-term returns in line with the Investment Objective.
The culture which the Board maintains to achieve this involves encouraging open discussion with the Manager,
ensuring that the interests of Shareholders and the Manager are aligned, providing constructive challenge and
making Directors’ experience available to support the Manager. This culture is aligned with the collegiate and
meritocratic culture which Polar Capital has developed and maintains.
Outcomes and strategic decisions during the year
ESG
The Board continued to engage with the Investment Manager to oversee how ESG has been integrated into
the overall house methodology as well as the bespoke financials team investment approach, engagement
and decision making. The Board receives information on how ESG affects Polar Capital as a business and the
financials team.
Consumer Duty
The Board has worked with the Investment Manager to ensure the obligations of the new Consumer
Duty regulations are appropriately applied to the Company. In light of the obligations, all communications
including the website, fact sheets and other published documentation, have been reviewed to ensure they are
appropriate for all end users. A ‘value for money’ assessment has also been undertaken and is made available
to distributors on request for their due diligence processes.
Cost Disclosures
The Board has engaged with the Manager to understand the implications of the FCA’s forbearance statement
and explore any changes that could be applied to key documentation to take advantage of the exemption
from PRIIPs and the cost disclosure aspects of MiFID. The Board has reviewed the changes to the Company’s
Key Information Document and Factsheet, both of which have been updated in line with industry guidance.
Management
On the recommendation of the Management Engagement Committee the Board has resolved to continue the
appointment of the Manager on the terms agreed within the Investment Management Agreement.
Investee
Companies
The Board has instructed the Manager to consider the published corporate governance policies of the
companies in which they invest.
The Board has also considered the Investment Manager’s Stewardship Code and Proxy Voting Policy.
The Voting Policy is for the Investment Manager to vote at all general meetings of companies in favour
of resolutions proposed by the management where it believes that the proposals are in the interests of
Shareholders. However, in exceptional cases, where the Investment Manager believes that a resolution
would be detrimental to the interests of Shareholders or the financial performance of the Company,
appropriate notification will be given and abstentions or a vote against will be lodged.
The Manager voted at 68 company meetings over the year ended 30 November 2024, with 37% of
meetings having at least one vote against, withheld or abstained. The Manager reports to the Board,
when requested, on the application of the Stewardship Code and Voting Policy. The Manager’s
Stewardship Code and Voting Policy can be found on the Manager’s website in the Corporate
Governance section (www.polarcapital.co.uk). Further information on how the Manager considers ESG
in its engagement with investee companies can be found in the ESG Report on pages 29 and 34.
Outcomes and strategic decisions during the year
The Board receives information on the ratings of investee companies and uses this as a tool to inform
discussions with the Manager during Board meetings.
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 48
Stakeholder Group How we engage with them
Service
Providers
The Directors oversee the Company’s service providers through the annual cycle of reporting and due
diligence meetings or site visits undertaken by the Manager. This engagement is undertaken with the aim
of having effective oversight of delegated services, seeking to improve the processes for the benefit of the
Company and to understand the needs and views of the Company’s service providers, as stakeholders in the
Company. Further information on the Board’s engagement with service providers is included in the Corporate
Governance Statement and the Report of the Audit Committee. During the year under review, due diligence
meetings have been undertaken by the Investment Manager and where possible, service providers have
joined meetings to present their reports directly to the Board or the Audit Committee as appropriate.
Outcomes and strategic decisions during the year
The reviews of the Company’s service providers have been positive, and the Directors believe their
continued appointment is in the best interests of Shareholders. The accounting and administration services
of HSBC Securities Services (HSS) are contracted through Polar Capital and provided to the Company
under the terms of the IMA. However, the Board continues to conduct due diligence service reviews in
conjunction with the Company Secretary and is satisfied that the services received continue to be of a
satisfactory standard.
Proxy
Advisors
The support of the major institutional investors and proxy adviser agencies is important to the Directors,
as the Company seeks to retain a reputation for high standards of corporate governance, which the
Directors believe contributes to the long-term sustainable success of the Company. The Directors consider
the recommendations of these various proxy voting agencies when contemplating decisions that will affect
Shareholders and when reporting to Shareholders through the Half Year and Annual Reports.
Recognising the principles of stewardship, as promoted by the UK Stewardship Code, the Board
welcomes engagement with all its investors. The Board recognises that the views, questions from, and
recommendations of many institutional investors and proxy adviser agencies provide a valuable feedback
mechanism and play a part in highlighting evolving Shareholders’ expectations and concerns.
Outcomes and strategic decisions during the year
Where possible the Chair and other representatives of the Company have engaged with the stewardship
teams of some larger investors to understand and address their expectations in terms of board governance,
recruitment and diversity. Prior to AGMs, the Company engages with proxy advisor agencies to fact check
their advisory reports and clarify any areas or topics contained within the report. This aims to ensure that
whilst the proxy advisory reports provided to Shareholders are objective and independent, the Company’s
actions and intentions are represented as clearly as possible to assist with Shareholders’ decision making
when considering the resolutions proposed at the AGM.
The AIC
The Company is a member of the AIC and has supported various lobbying activities. Representatives
of the Manager sit on a variety of forums run by the AIC which aids development and understanding
of new policies and procedures. The Directors may cast votes in the AIC Board Elections each year and
regularly attend AIC events.
Approved by the Board on 19 February 2025
By order of the Board
Jumoke Kupoluyi, ACG
Polar Capital Secretarial Services Limited
Company Secretary
Section 172 Statement continued
Strategic Report continued
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 49
Report of the Directors
Report of the Directors
The Directors, who are listed on pages 10 and 11, present
their annual report, together with their Report on Corporate
Governance and the Audited Financial Statements for the
year ended 30 November 2024. In addition, the attention
of Shareholders is drawn to the Strategic Report Section
(Chair’s Statement, the Investment Manager’s Report,
Strategic Report, ESG and Section 172 Statements) which
provide further commentary on the activities and outlook for
the Company.
Introduction and Status
The Company is incorporated in England and Wales as a public
limited company and is domiciled in the United Kingdom.
It is an investment company as defined in section 833 of the
Companies Act 2006, operating as an investment trust in
accordance with sections 1158 and 1159 of the Corporation
Tax Act 2010 (as amended by section 42(2) of the Finance
Act 2011). As an approved investment trust the close company
provisions do not apply. Its ordinary shares are listed and
traded on the main market of the London Stock Exchange.
As an investment trust the Company’s ordinary shares
are excluded from the FCA’s restrictions which apply to
non-mainstream investment products. The Company conducts
its affairs and intends to do so for the foreseeable future so
that the exclusion continues to apply. The Company’s ordinary
shares are eligible for inclusion in a stocks and shares ISA.
Life of the Company
The Company was launched in July 2013 with a fixed
seven-year life. Shareholders approved changes to the
Company’s Articles of Association to make a tender offer
to all Shareholders and to extend the Company’s life
indefinitely at a General Meeting held on 7 April 2020
(the ‘Reconstruction’). The new Articles of Association
removed the fixed life and instead require the Company to
make tender offers at five-yearly intervals, with the first to
commence on or before 30 June 2025.
Shareholders who wish to realise their investment in the
Company (in whole or in part) will be offered the opportunity
to tender their shares for sale at the prevailing NAV per
ordinary share less costs and other appropriate adjustments.
A further announcement setting out the full details, timetable
of events and terms of the tender will be published in due
course.
Dividends
The Company has an income and growth mandate, and
the Board is aware of the importance of income to some
Shareholders as part of their total return. The Board will
be cautious in balancing its objective of growing dividends
for Shareholders with sustainable earnings prospects and
the availability of distributable reserves to support dividend
payments. Shareholders should be aware that circumstances
may arise when it is necessary to reduce the level of dividend
payment or equally there may be instances when the level
of dividend must be increased to comply with Sections 1158
and 1159 of the Corporation Tax Act 2010. Where this
would result in paying a dividend beyond the Board’s policy,
a ‘special dividend’ may be declared and paid.
The Company currently adopts a progressive dividend policy,
whereby dividends may increase on an annual basis. The aim
is to, where possible, pay two interim dividends each year, in
February and August however these interim dividends may
not necessarily be of equal amounts. The Directors do not
recommend, and the Company does not pay, a final dividend.
Details of the dividends paid and declared are set out on
pages 2 and 39 and in Note 12 on page 95.
As reported in the Chair’s Statement, the Board is proposing
the adoption of an “enhanced dividend” policy under which
it will aim to pay, in the absence of unforeseen circumstances,
a regular dividend equivalent to approximately 4% of the
Company’s NAV in a given year.
In addition to the above, the Company is also proposing the
cancellation of its share premium account to increase the
distributable reserves available to the Company and provide
the Board with additional flexibility to return capital to
Shareholders or to apply such reserves for any other general
corporate purposes.
The Company is seeking to cancel the entire amount of
its share premium account, being £311,369,000 as at
30 November 2024. The cancellation of the share premium
account requires the passing of a special resolution at the
AGM and subsequent approval of the High Court. The
cancellation will not be effective until the order of the Court
confirming the cancellation has been registered with the
registrar of companies.
Shareholders will have the opportunity to vote on the
proposed change to the dividend policy and the cancellation
of the share premium account at the Annual General
Meeting taking place on 10 April 2025. Further information
is provided in the Chair's Statement on page 6 and the
Shareholder Information Section on pages 118 and 119.
Annual General Meeting (‘AGM’)
The Company’s AGM will be held at 2:00pm on Thursday
10 April 2025. Please see pages 118 and 119 for further
information on the resolutions to be proposed.
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 50
Powers to issue shares and make market
purchases of ordinary shares
At the AGM held in 2024, the Board was granted by
Shareholders the power to allot equity securities for cash
without first offering those shares to Shareholders in
accordance with their statutory pre-emption rights, up to
a nominal value of £1,623,020, equivalent to 10% of the
Company’s issued ordinary share capital. The Board was
also granted authority by Shareholders to make market
purchases of up to 48,658,139 ordinary shares of the
Company, equivalent to 14.99% of the issued share capital
in accordance with the terms and conditions set out in the
Shareholder resolution. In the financial year under review,
a total of 5,642,322 shares were repurchased into Treasury.
No ordinary shares were bought or issued back following the
year end.
These authorities will expire at the 2025 AGM and renewal
of these authorities will be sought at that AGM. Details of
the resolutions and the Directors’ policies for the issue and
purchase of shares will be set out in the separate Notice
of Annual General Meeting which will be distributed to
Shareholders in February 2025. New ordinary shares will only
be allotted and issued at or above the prevailing net asset
value per share after considering the costs of issue.
Further information on transferability and the voting rights
attached to these shares can be found in the Shareholder
information section on page 120.
Major Interests in Ordinary Shares
As at the year end of 30 November 2024, the Company had received notifications from the following Shareholders in respect of
their own and their clients’ interests in the voting rights of the Company:
Shareholder Type of Holding Number of shares
% of voting
rights*
Rathbones Investment Management Limited~ Indirect 45,474,334 15.0
1607 Capital Partners LLC Indirect 33,477,685 11.0
City of London Investment Management Direct 30,081,688 9.9
RBC Brewin Dolphin Ltd Indirect 21,781,666 7.2
Quilter Cheviot Investment Management Indirect 16,128,869 5.3
JM Finn & company Ltd Direct 15,899,293 5.2
Charles Stanley Indirect 15,306,117 5.1
Canaccord Genuity Indirect 10,091,107 3.3
~ position following the all-share combination of Rathbones Group Plc with Investec Wealth & Investment Limited
Since the year end and up to the date of this report, the Company has been notified of the following:
Shareholder Type of Holding Number of shares
% of voting
rights*
1607 Capital Partners LLC Indirect 28,708,923 9.5
* The above percentages are calculated by applying the shareholdings as notified to the issued share capital at 19 February 2025 of 303,219,365 ordinary shares being all the issued ordinary
shares excluding those held in treasury where voting rights are suspended.
UK Listing Rule 6.6
UK Listing Rule 6.6 requires the Company to include certain further information in relation to the Company which is not
otherwise disclosed. The only disclosure to be made is regarding the amount of interest capitalised and can be found in Note 9
on page 93.
Financial Instruments
The Company’s financial risk management objectives and policies arising from its financial instruments and its exposure to risk
are disclosed in note 27 to the Financial statements.
By order of the Board
Jumoke Kupoluyi, ACG
Polar Capital Secretarial Services Limited
19 February 2025
Report of the Directors continued
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 51
Corporate Governance Framework
The Directors are ultimately accountable to the Company and its Shareholders for the Company’s affairs and are therefore
responsible for the governance of the Company. The Company has no employees and relies on third parties to administer the
Company. The following diagram demonstrates the governance framework within which the Company is managed.
Shareholders
Board of Directors
Chair: Simon Cordery
Audit
Committee
Management
Engagement Committee
Nomination
Committee
Remuneration
Committee
Third Party
Service Providers
Investment Manager
and AIFM
Chair: Cecilia McAnulty
Members: all independent
NEDs.
Chair: Susie Arnott
Members: all independent
NEDs.
Functions carried
out by the
Board as a whole.
Functions carried
out by the
Board as a whole.
As an externally managed investment trust, some provisions of the FRC UK Code of Corporate Governance (the UK Code)
are not relevant, including those relating to the roles of chief executive, executive directors’ remuneration, statement of gas
emissions and the requirement to have an internal audit function, therefore the Board has considered the Principles and
Provisions of the Association of Investment Companies Code of Corporate Governance 2019 (the AIC Code) and considers that
reporting against the Principles and Provisions of the AIC Code provides more relevant information to Shareholders.
The AIC Code addresses the relevant principles set out in the Financial Report Council (‘FRC’) UK Code as well as additional
principles and recommendations on issues that are specific to investment trust companies. The FRC has endorsed the AIC Code
and confirmed that by following the AIC Code, boards of investment companies (including those structured as investment
trusts) will meet their obligations under the UK Code.
The AIC Code is available on the AIC website (www.theaic.co.uk). 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 investment companies.
The Board is aware of the recent revisions to the AIC Code to reflect the recent changes made to the UK Code and will report
on any applicable changes in the Annual Report following the effective date.
Statement of Compliance and Application of the AIC Code’s Principles
The Board believes that the Company’s current practices are consistent in all material respects in applying the principles and
complying with the provisions of the AIC Code.
The AIC Code’s principles and provisions are structured into five sections: Board leadership and purpose; division of
responsibilities; composition, succession and evaluation; audit, risk and internal control; and remuneration. The Company’s
application of the principles and compliance with the provisions of each section is detailed on the following pages.
Report on Corporate Governance
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 52
Report on Corporate Governance continued
BOARD LEADERSHIP AND PURPOSE (Principles A-E, Provisions 1-7)
Board Leadership and Purpose
The Company’s purpose is to provide a vehicle for investment in which assets are invested across a global portfolio of listed
or quoted securities issued by companies in the financial sector operating in various subsectors which generate for investors a
growing dividend income* together with capital appreciation. The purpose is achieved through the Investment Objective and
Policy incorporating parameters to ensure excessive risk is not taken.
The portfolio is diversified by factors including geography, industry subsector and stock market capitalisation. As an externally
managed investment trust, the culture of the Company is a consequence of the Board’s composition, decisions and behaviours
which are aligned with the values and behaviours of the Manager, interaction between the two and engagement with the
Company’s stakeholders. The Board monitors this culture, including the policies and practices it implements to maintain it.
In promoting the long-term sustainable success of the Company, the performance of the Company’s portfolio is constantly
reviewed in pursuit of generating value for Shareholders by achievement of the investment objective. Investment management
fees are reviewed periodically, with the last change occurring in April 2020 following the reconstruction of the Company and
the introduction of the current fee structure. The Investment Manager is entitled to a management fee at the rate of 0.70%
(previously 0.85%) per annum based on the Company’s net asset value. The Company’s performance since launch in July 2013
can be found on page 3. How the Board views its engagement with stakeholders and Shareholders and how this contributes to
strategic decision making is set out in the s172 statement on pages 45 to 48. Participation from all stakeholders is encouraged
and the Board can be contacted through the Company Secretary. The Company’s service providers are subject to periodic
site visits and attend service reviews and other meetings throughout the year, ensuring effective engagement. Fulfilling the
Investment Objective and monitoring the Company’s performance is the primary focus of the Board’s discussions.
The Board’s effectiveness, including how it promotes the long-term sustainable success of the Company, is reviewed annually.
The process and outcomes of the Board evaluation are detailed on page 56.
Role, Responsibilities and Committees of the Board
The Board has delegated to the Audit and Management Engagement Committees specific remits for consideration and
recommendation but the final responsibility in these areas remains with the Board. The Board has determined that, due to its
size and the fact that all the Directors are non-executive and independent, the functions of the nomination committee and
remuneration committee are carried out by the full Board. The Board creates ad hoc committees from time to time to enact
policies or actions agreed in principle by the whole Board.
Separate reports of the work of the Audit Committee and Management Engagement Committee over the year are set out on
pages 58 to 63 and page 69 respectively.
The Directors’ Remuneration Report, including the processes undertaken when reviewing remuneration, can be found on
pages 64 to 68.
The number of formal meetings of the Board and its Committees held during the year ended 30 November 2024 and the
attendance of individual Directors are shown below:
Board
Audit
Committee
Management
Engagement
Committee
2024
Annual General
Meeting
Number of Formal Meetings
8 3 2 1
Simon Cordery 8 3 2 1
Cecilia McAnulty 8 3 2 1
Susie Arnott 8 3 2 1
Angela Henderson 8 3 2 1
* Please refer to the Chair’s Statement for information on the proposed changes to the Company’s future Dividend Policy.
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 53
Service Provider Performance Evaluation Process
Investment Manager (the Manager)
The Board has contractually delegated the management of the portfolio to the Manager. It is the Manager’s sole responsibility
to take decisions as to the purchase and sale of individual investments subject to the Investment Management Agreement. The
Manager has responsibility for asset allocation and stock selection within the limits established and regularly reviewed by the Board.
The Manager is responsible for providing or procuring accountancy services, company secretarial, marketing and administrative
services including the monitoring of third-party suppliers who are directly appointed by the Company. The Manager also ensures
that all Directors receive in a timely manner all relevant management, regulatory and financial information. Representatives of the
Manager attend all Board meetings in a variety of capacities including investment management, accounting, compliance, risk and
marketing, enabling the Directors to probe further on matters of concern or seek clarification on any issues.
The whole Board reviews the performance of the Manager in all service disciplines and, at each Board meeting, the Company’s
investment performance against the market and a peer group of funds with similar investment objectives is reviewed. The
investment team provided by the Manager has long experience of investment in the financial sector. In addition, the Manager
has other investment resources that support the investment team and have experience in managing and administering other
investment companies.
The Board and Manager work in a collaborative manner and the Chair encourages open discussion and debate.
DIVISION OF RESPONSIBILITIES (Principles F-I, Provisions 8-21)
Chair
The Chair is responsible for the leadership of the Board and works with the Company Secretary to set the Board’s meeting agendas
and balance the issues presented to each meeting. Open and honest debate is encouraged at each Board meeting and the Chair
keeps in touch with both the Company Secretary and other Directors between Board meetings. Simon Cordery was appointed to
the Board in 2019 and appointed as Chair in March 2023. The Chair was independent on appointment and continues to meet the
criteria for independence. The Board considers the competence and independence of the Directors on an annual basis.
The Board considers that in the specific circumstances of an investment company, where corporate knowledge and continuity can
add value, there may be merit in appointing one of its members to the Chair. In addition, there may be situations where succession
plans are disrupted such that an internal candidate with some years’ existing experience is the most appropriate candidate for the
Chair. In other circumstances an external candidate may be more appropriate.
As per provision 24 of the AIC Code, the Board’s policy is that the maximum tenure for its Chair is up to twelve years where up to
nine years have been served as a non-executive Director.
Senior Independent Director
Due to the size and structure of the Board it is considered unnecessary to appoint a senior independent non-executive director.
The Board considers that all Directors have different qualities and areas of expertise on which they may lead where issues arise
and to whom concerns may be conveyed. As and when required, the Chair of the Audit Committee leads on specific matters
such as the annual evaluation of the Chair.
Board Responsibilities
The Board currently comprises four non-executive Directors who are all considered to be independent in character and judgement.
No Director has any former or current connection with the Manager. A formal schedule of matters specifically reserved for decision
by the full Board has been defined and a procedure has been adopted for Directors, in the furtherance of their duties, to take
independent professional advice at the expense of the Company. No such advice has been sought during the year.
Company Secretary
The Directors have access to the advice and services of the Company Secretary which is provided in compliance with the IMA
through Polar Capital Secretarial Services Limited. An appointed representative, Jumoke Kupoluyi, ACG, is responsible to the
Board for ensuring that Board procedures are followed, and that applicable rules and regulations are complied with. The Board
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 54
Report on Corporate Governance continued
and Manager operate in a supportive, cooperative and open environment. The Board acknowledges that PIRC’s (Pensions
and Investment Research Consultants Limited, an independent corporate governance and Shareholder advisory consultancy)
voting guidelines recommend voting against the laying of the Annual Report at an AGM where the Manager provides company
secretarial services to the Company. The Board believes that the benefits gained by utilising the services of a Company Secretary
provided by the Manager significantly outweigh the potential for a conflict of interest perceived by PIRC. The Company
Secretary is provided to the Company as an independent service and the appointed representative acts as an officer of the
Company and not an employee of the Manager when working with the Board and the Company.
Meetings
The Board has a schedule of regular meetings throughout the year and meets at additional times as required. During the
year, Board and Committee meetings were held to deal with the ongoing stewardship of the Company and other matters,
including the share buyback and issuance program, the setting and monitoring of investment strategy and performance, review
of financial statements, ESG and considering any Shareholder feedback. The level of share price discount or premium to the
net asset value together with policies for issuance or repurchase of ordinary shares are kept under review, along with matters
affecting the industry and the evaluation of third-party service providers. The Board is responsible for considering, reviewing and
implementing appropriate policies in respect of regulatory changes that impact the Company.
The Company’s investment strategy was reviewed during the reconstruction undertaken in early 2020. The Board continues
to consider the Company’s strategy and its relevance to the market and Shareholders at each Board meeting. Through this
process the Board supervises the management of the investment portfolio, the risks to which the Company is exposed and their
mitigation, and the quality of services received by the Company.
Directors’ Professional Development
When new Directors are appointed, they undertake an induction program provided by the Manager. Directors are welcome to
visit the Manager at any time to receive an update on any aspect of interest or a refresher on the Manager’s operations both
generally and those which are specific to the Company. Directors are provided regularly with key information on the Company’s
policies, regulatory and statutory obligations and internal controls. Changes affecting Directors’ responsibilities are advised
to the Board as they arise. Directors may participate in professional and industry seminars and may use the Manager’s online
compliance training resources to ensure they maintain their knowledge.
Conflicts of Interest
The Board has in place a policy to govern situations where a potential conflict of interest may arise, for example where a
Director is also a director of a company in which the Company invests or may invest. The Company’s Articles contain provisions
to permit the Board to authorise acceptable conflicts or potential conflicts. Where a conflict situation arises, the conflicted
Director may be excluded from any discussions, decisions or votes relating to the matter of conflict.
Each Director has provided the Company with a statement of all conflicts of interest and potential conflicts of interest, which
have been approved by the Board and recorded in a register. The Conflicts Register is reviewed at every Board meeting and the
Directors are reminded of their obligations for disclosure. No Director has declared receipt of any benefits from the Company
other than their emoluments in their capacity as a Director of the Company.
The Board as part of its year-end review has considered the register of conflicts, any conditions imposed on such conflicts or
potential conflicts and the operation of the notification and authorisation process. It concluded that the process has operated
effectively since its introduction. There were no contracts subsisting during or at the end of the year in which a Director is or
was interested and which is or was significant in relation to the Company’s business or the Director.
The Directors’ interests in the ordinary shares of the Company are set out on page 67 of the Directors’ Remuneration Report.
Capacity and Overboarding
Prior to appointment, current and planned commitments of board candidates are considered, and it is determined before
interview stage whether the Board feels that the candidate has the capacity to dedicate to the Company. Once appointed,
all Directors are required to seek permission and approval from the Board prior to accepting any new appointments, including
a change of role. Following notification, the Board will consider the type of role, expected time commitments and the impact
on the Director’s ability to discharge their duties to the Company. Directors are also required to provide a list of their existing
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 55
significant external commitments and estimated time commitments for each for the Board to assess any risk of insufficient
capacity or over boarding.
The Board continues to be satisfied that the external commitments of all non-executive Directors serve to enhance their skills
and experience and do not affect their ability to commit sufficient time to their roles as Directors of the Company, as evidenced
by their attendance records and contributions in meetings.
COMPOSITION, SUCCESSION AND EVALUATION (Principles J-L, Provisions 22-28)
Board Composition, Diversity and Recruitment
The Board is responsible to Shareholders for the overall management of the Company’s affairs. For the year under review there
were four non-executive Directors.
Each Director has different qualities and areas of expertise on which they may lead when issues arise. The Board has a policy to
consider diversity and seeks to follow the diversity recommendations of the Hampton-Alexander and Parker Reviews, amongst
other factors. Consideration is given to all forms of diversity to balance both the expertise on, and the structure of, the Board as
a whole.
The Board notes the reporting requirements of the FCA Diversity and Inclusion Policy and has chosen to align its diversity
reporting reference date with the Company’s financial year end, 30 November 2024. The Board’s current composition meets
two of the three ‘comply or explain’ targets with three of the four members being female and one of the two senior positions
being occupied by a female. The Board is conscious that it does not meet the FCA’s ethnicity recommendations; however, it
believes it has followed a stringent process and appointed the appropriate candidates with the requisite skillsets required of
the wider Board. The Board will continue to consider diversity at all stages of recruitment to the Board and will work to ensure
the broadest range of candidates are found when recruiting new directors. In support of increasing diversity and expanding
the pool of potential NED candidates of the future, the Board welcomed a board apprentice during the year under review. The
board apprentice is invited to attend all Board and Committee meetings as an observer and is mentored through the process by
a Board member. See page 8 for an interview with board apprentice, Ada Okpe.
As required under UKLR 16.3.29R, further details in respect of the diversity targets as at 30 November 2024 are provided in the
tables below. As an externally managed investment trust, the Company has no executive directors or employees therefore columns
relating to executive roles/management have been omitted from the tables. As per the AIC’s Guidance, the Company considers the
roles of Board Chair and Chair of the Audit Committee as senior board positions and the disclosures are made on this basis.
Number of
board members
Percentage of
the board
Number of senior
positions on the board
(Chair and Audit Chair)
Men 1 25% 1
Women 3 75% 1
Number of
board members
Percentage of
the board
Number of senior
positions on the board
(Chair and Audit Chair)
White British or other (including minority-white groups) 4 100% 2
Minority Ethnic – – –
The Board as the Nomination Committee met in October 2024 and considered the near-term recruitment needs of the Board.
Having considered a variety of factors, the Committee concluded that at the present time, the Board worked efficiently and had
the requisite skill sets to lead the Company effectively.
The Board via the Nomination Committee considered the contribution and performance of each Director as part of the annual
Director and Board performance evaluation. The Board believes that the Directors demonstrate a breadth of experience
across the investment and financial services industry. Each Director effectively contributes to the operation of the Board and
demonstrates independent views on a range of subjects. All the Directors were considered independent of the Manager and
had no relationship or conflicts which were likely to affect their judgement.
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 56
Report on Corporate Governance continued
Succession
The Board believes that retaining Directors with sufficient experience of the Company, investment industry and financial
markets is of benefit to Shareholders while recognising that regular refreshment of approach is equally of benefit and
importance. Following the reconstruction of the Company, the Board formulated a succession plan which gave due regard
to the recommended maximum of nine years’ tenure for a non-executive director and a formal tenure policy, allowing for
a reasonable extension to the nine years for the role of Chair where the Chair has been appointed from the role of the
non-executive director. The refreshment of the Board was undertaken in two phases which completed in March 2023.
Following the completion of this process the Board considers that its overall composition is well placed for the effective
governance of the Company.
Evaluation
The evaluation of the Board, its committees and individual Directors is carried out annually. The process involves the use of a
written questionnaire to assess the balance of skills, experience, knowledge, independence and effectiveness of the Board,
including how the Directors interact as a unit on the Board. The responses to the questionnaire are reviewed and discussed
by the full Board and, should it be deemed necessary, additional reporting measures or operations would be put in place. The
review of the Chair’s performance is conducted by the Board led by the Chair of the Audit Committee. The Chair of the Board
does not participate in this discussion.
In carrying out these evaluations, each Director is assessed on their relevant experience, their strengths and weaknesses in
relation to the overall requirements of the Board and their commitment to the Company in terms of time by regular attendance
and participation at Board meetings. The process is constructed to assess the contribution of individual Directors to the overall
operation of the Board and its Committees. The Board, through the work of the Nomination Committee, has determined that
each Director standing for re-election continues to offer relevant experience, effectively contributes to the operation of the
Board and has demonstrated independent views on a range of subjects. The Committee is satisfied that the structure, mix of
skills and operation of the Board continue to be effective and relevant for the Company.
Performance and Re-election
In accordance with the Company’s adopted practices, all Directors will retire and offer themselves for re-election at the AGM
of the Company to be held in April 2025. Having undertaken a Board Evaluation process and discussed the areas of expertise
required to run the Company, the Board has confirmed its support and rationale for each Directors’ re-election. The Directors
believe that they have a balance of experience, expertise and sufficient diversity and that they work well together, each director
bringing multiple qualities and areas of expertise to the Board. The Board rationale for re-appointment of each Director is given
on page 6 and in the letter accompanying the Notice of AGM.
AUDIT, RISK AND INTERNAL CONTROL (Principles M-O, Provisions 29-36)
Internal Controls
The Board has overall responsibility for the Company’s system of internal control, for reviewing its effectiveness and ensuring
that risk management and control processes are embedded in the Company’s day-to-day operations.
The Manager has an internal control framework to provide assurance on the effectiveness of the internal controls operated on
behalf of its clients. The Manager is authorised and regulated by the Financial Conduct Authority and its compliance department
monitors the Company’s compliance with the various rules and regulations applicable to it, including the FCA’s rules, AIFMD,
MiFID II and GDPR.
The Board, through the Audit Committee, has established a process for identifying, evaluating, monitoring and managing
any major risks faced by the Company. This is documented using a risk map which is subject to regular review by the Audit
Committee and accords with the Guidance on Risk Management, Internal Control and Related Financial and Business Reporting
issued by the Financial Reporting Council. The controls are embedded within the business and aim to ensure that identified risks
are managed and systems are in place to report on such risks. The internal controls seek to ensure the assets of the Company
are safeguarded, proper accounting records are maintained, and the financial information used by the Company and for
publication is reliable. Controls covering the risks identified, including financial, operational, compliance and risk management
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 57
controls, are monitored by a series of regular reports covering investment performance, attribution analysis, reports from various
third parties and from the Manager.
As the Company has no employees and its operational functions are carried out by third parties, the Audit Committee does not
consider it necessary for the Company to establish its own internal audit function.
Contracts with suppliers are entered into after full and proper consideration by the Board of the quality and cost of the services
offered, including the control systems in operation in so far as they relate to the affairs of the Company.
Operation of Internal Controls
The internal controls process was active throughout the year under review and up to the date of approval of this Annual Report.
However, such an internal controls system is designed to manage rather than eliminate risks of failure to achieve the Company’s
objective and can only provide reasonable and not absolute assurance against material misstatement or loss. The Board will
continue to monitor the system of internal controls to provide assurance that they operate as intended.
The Board, in assessing the effectiveness of the Company’s internal controls has, through the Audit Committee, received formal
reports on the policies and procedures in operation. These reports from the Manager include results of tests on the policies
and procedures in operation during the year under review, with details of any known internal control failures. The Manager
has subsequently provided confirmation that there has been no material change to the control environment up to the date of
signing these Financial Statements.
The Board considers ad hoc reports from the Manager and third-party suppliers and information is supplied to the Board as
required. In addition to the regular internal control’s reports provided by the Manager and various third-party suppliers, when
required, the Board receives assurances on the status of the business and operational functions.
The Manager has delegated the provision of accounting, portfolio valuation and trade processing to HSBC Securities Services
but remains responsible to the Company for these functions and provides the Board with information on these services.
The principal risks and uncertainties to which the Company is subject are detailed in the Strategic Report. Based on the work
of the Audit Committee and the reviews of the reports received by the Audit Committee on behalf of the Board, the Board has
concluded that there were no material control failures during the year under review and up to the date of this report.
REMUNERATION (Principles P-R, Provisions 37-42)
Due to the fully independent non-executive Board comprising four Directors, the Board has deemed it appropriate for the full
Board to fulfil the role of the Remuneration Committee. The Board, acting as the Committee, meets at least annually and is
responsible for consideration and recommendations in relation to Directors’ remuneration.
The remuneration of the Directors is reviewed on an annual basis but will not necessarily lead to a change in remuneration
level awarded. Industry guidance, peer investment trust companies’ remuneration, the work undertaken by the Board in the
prior year along with plans for the current year and the overall regulatory environment are all considered when reviewing
remuneration.
Remuneration levels are set to attract candidates of high calibre to the Board. The Company’s remuneration policy was
approved by Shareholders at the AGM in March 2023, is detailed within the Directors’ Remuneration Report on page 64 and
explains how the policy is designed to support strategy and promote long-term sustainable success.
Jumoke Kupoluyi, ACG
Polar Capital Secretarial Services Limited
Company Secretary
19 February 2025
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 58
As Chair of the Audit Committee, I am pleased to present my Report to you
The Committee comprises all the Directors and the Board is
satisfied that the Committee has sufficient recent and relevant
financial experience and has competence relevant to the
sector in which the Company operates for the Committee
to discharge its functions effectively. The experience of
the members of the Committee can be assessed from the
Directors’ biographies on pages 10 and 11. The Committee has
written terms of reference which are available to view on the
Company’s website www.polarcapitalglobalfinancialstrust.com
During the year ending 30 November 2024, the Audit
Committee met three times, with a quorum of members of the
Committee attending each meeting.
Matters Considered during the Financial Year
Ended 30 November 2024:
During the year the Audit Committee considered a variety of
matters, including:
Audit Regulation
Since my last report to you, the Committee has not had to
consider any new material regulations, although it continues
to follow developments in the regulatory environment to
ensure any new and ongoing requirements are applied
appropriately to the Company. The Committee is aware
of the recent revisions to the UK Code, specifically those
relating to risk management, material and internal controls
which are applicable to accounting periods beginning on
or after 1 January 2026. The AIC has recently updated the
AIC Code of Corporate Governance to reflect these changes
and the Committee will report on the impact of these in the
Annual Report following the effective date. In addition, the
Committee continues to review the outcomes of the FRC’s
annual Audit Quality Reviews and discuss the findings with
the Auditors.
Annual External Audit
• The appointment of the Auditors;
• The scope of the annual audit and agreement with the
Auditors of the key areas of focus;
• The reports from the Auditors concerning their audit of
the annual Financial Statements of the Company;
• The performance of the Auditors and the level of fees
charged for their services;
• The independence and objectivity of the Auditors;
• The financial disclosures in the annual and interim reports
to Shareholders;
• The policy and extent of any non-audit services (including
fees paid) in line with the FRC guidance;
• The going concern statement, longer-term viability
statement, including the impact of the 2025 Tender Offer
and future tender offers to be made to Shareholders at
five-yearly intervals; and
• The requirement to confirm that the Annual Report and
Financial Statements when taken as a whole are fair,
balanced and understandable.
Internal Audit
As the Company is an externally managed investment trust
we continue to conclude that the need for an internal audit
function is unnecessary but will keep this under review.
Accounting Policies and related matters
• The appropriateness of and any changes to the
accounting policies of the Company including
any judgements required by such policies and the
reasonableness of such. During the year the Committee
ensured that the accounting policies as set out on
pages 85 to 110 were applied consistently throughout
the year. The Committee confirmed there have been
no changes to currently adopted policies and no
new UK-adopted international accounting standards
(“UK-adopted IAS”) or amendments to UK-adopted
IAS which had any significant impact on the Company’s
Financial Statements;
Audit Committee
Report
Cecilia McAnulty
Chair of the Audit Committee
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 59
• The financial disclosures contained in the Annual Report
and Half Year Report to Shareholders; and
• The going concern statement, longer-term viability
statement and the requirement that the Annual Report
and Financial Statements, when taken as a whole, are fair,
balanced and understandable.
Investment Matters
• The investment management process, including
confirmation of the existence and ownership of
investments through the review of quarterly Depositary
reports and meeting with the Depositary in relation to the
safeguarding of the Company’s assets; and
• The valuation of unquoted investments and the provision
of associated recommendations to the Board.
Internal Controls and Risk
• The risk map covering the identification of new and
emerging risks, adjustments to existing risks and the
mitigation and controls in place to manage those risks; and
• Reports from the Manager and its external auditors on the
effectiveness of the system of internal financial controls
including the risk map.
Dividend Policy
• The Committee considered the Company’s dividend policy
as approved by Shareholders at the AGM held in March
2023 and recommended to the Board that it should
continue. The Board seeks to balance its objective of
growing dividends for Shareholders with future earnings
prospects and the availability of revenue reserves.
As reported in the Chair’s Statement, an “enhanced
dividend” policy will be proposed for approval by
Shareholders at the AGM to be held on 10 April 2025.
Consideration of the Half Year Report and
Financial Statements
• Prior to publication, the Committee considered, reviewed
and confirmed the half year report and financial
statements, which are not audited or reviewed by the
Auditors, to ensure they were prepared on a basis
consistent with the accounting policies used in the Annual
Report and Financial Statements for the year ended
30 November 2023.
Consideration of the Annual Report and
Financial Statements
• The Committee performed this role through monitoring
the integrity of the financial statements of the Company
and the system of accounting to ensure compliance with
relevant and appropriate accounting standards. The scope
of the audit was agreed in advance, with a focus on areas
of audit risk and the appropriate level of audit materiality.
• The Auditors reported on the results of the audit work
to the Committee and highlighted any issues which
the audit work had discovered, or the Committee
had previously identified as significant or material in
the context of the financial statements. Following a
comprehensive review process the Committee presented
its conclusions to the Board.
Tax matters
• The Committee is responsible for reviewing the
outstanding tax reclaims and where necessary the
payment or receipt of overseas tax. In the year under
review, £38,000 was received by the Company from
overseas tax reclaims and there remained £1,618,000
(2023: £1,487,000) of outstanding reclaims at the year
end. This increase in the tax receivable balance reflects
new reclaims submitted since the last year end and
continuing delays experienced in processing tax reclaims
due to the pandemic when some markets suspended
the processing of reclaims. In addition, some tax offices
are in the course of changing their reclaim processes
from paper to digital which has resulted in a hiatus in
recovery of claims. As at the year ended 30 November
2024, the outstanding tax reclaims were aged between
0.1 to 6.6 years and have been filed with the relevant
tax authorities. The outstanding reclaims at the year-end
are within the statute of limitations and we anticipate
these will be received soon. In addition, the Committee
reviewed the provision for the Indian capital gains tax.
The Indian capital gains tax provision represents an
estimate of the amount of tax payable by the Company.
This additional tax only becomes payable at the point at
which the underlying investments are sold and any profit
crystallised. Further details of the Indian capital gains tax
can be found on pages 86 to 87 and 93.
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 60
Audit Committee Report continued
Conclusions in Respect of the Annual Report
and Financial Statements
To reach the conclusion that the Annual Report and
Financial Statements when taken are fair, balanced and
understandable, the Board has requested that the Committee
advise on whether it considers these criteria satisfied. In so
doing the Committee has considered the following:
• The ongoing comprehensive control framework over
the production of the Annual Report, including the
verification processes in place to deal with the factual
content;
• The extensive levels of review undertaken in the
production process by the Manager and the Committee;
• The internal control environment as operated by the
Manager and other suppliers including any checks and
balances within those systems; and
• The unqualified audit report from the Auditors confirming
their work based on substantive testing on the Financial
Statements.
As a result of the work performed, the Committee has
concluded that the Annual Report for the year ended
30 November 2024, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
Shareholders to assess the Company’s position, performance,
business model and strategy, and it has reported on these
findings to the Board.
External Audit – Year Ended 30 November
2024
Appointment of Auditors, Fees and Tenure
The Committee considers by way of meetings and reports,
the appointment, remuneration and work of the Auditors.
PricewaterhouseCoopers LLP (PwC or the ‘Auditors’) have
provided audit services to the Company from its incorporation
in 2013 to date and the audit partner who led our statutory
audit for the year under review was Kevin Rollo. There are no
contractual obligations restricting the choice of external auditor.
In accordance with current legislation, the Company is required
to instigate an audit tender process at least every 10 years and
will have to change its auditor after a maximum of 20 years’
engagement. The Company’s last audit tender was completed
in December 2021 ahead of PwC’s ten-year anniversary as
Auditors of the Company. Following the tender process which
included an assessment of several providers on a range of
criteria including independence, proposed audit approach,
sector experience, fee level, depth and quality of team, and
the result of any FRC quality control reviews, the incumbent
auditors PwC were re-appointed as the Company’s Auditors.
PwC have confirmed their continued independence and have
expressed their willingness to be appointed, in accordance with
s487 of the Companies Act 2006. A resolution proposing their
re-appointment and authorising the Directors to determine their
remuneration will therefore be proposed at the AGM.
As part of the year end process, the Committee considered
the level of fees paid to the Auditors, bearing in mind the
nature of the audit, the quality of services received and
the market rate for similar services. The fees paid to PwC
in respect of the audit of the annual Financial Statements
Significant Matters in Relation to the Financial Statements for the Year Ended
30 November 2024
In addition to the matters considered by the Committee in forming its opinions on the Going Concern and longer-term viability
statements described below, and in concluding that the Annual Report is fair, balanced and understandable, the Committee
also considered the following matters in relation to the financial statements:
Significant matter How the issue was addressed
Valuation, existence and ownership of investments The valuation is carried out in accordance with the accounting
policy described in note 2(g). The Depositary has reported on
its work and safe keeping of the Company’s investments. The
Depositary's report is provided on the Company’s website.
Compliance with s1158 and s1159 of the Corporation Tax
Act 2010
Consideration of compliance with the requirements of
investment trust status is carried out at each Board meeting
throughout the year.
There were no adverse matters brought to the Committee’s attention in respect of the 2024 audit which were material or
significant, or which should be brought to Shareholders’ attention.
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 61
amounted to £53,500 (2023: £49,980). The fee represents
a 6.6% increase on the prior year and reflects the phased
increase related to additional work required by the Auditors
due to new auditing standards, specifically IAS 315, inflation
and the level of audit work required to perform a robust
quality audit. The audit fees continue to be in line with
increases experienced across the investment trust sector. The
Audit Committee continues to keep fee levels under close
review and insists that all fee increases are justified.
Effectiveness of Audit Process
The Committee, on behalf of the Board, is responsible
for overseeing the relationship with the external Auditors
including ensuring the quality and effectiveness of the audit.
The Committee monitored and evaluated the effectiveness
of the Auditors and any changes in the terms of their
appointment, based on an assessment of their performance,
qualification, knowledge, expertise and resources. The
Auditors’ independence was also considered, along with
other factors such as audit planning and interpretations
of accounting standards. This evaluation was carried out
throughout the year by meetings held with the Auditors,
by review of the audit process and by comments from the
Manager and others involved in the audit process. Based
on its review the Audit Committee concluded that the
Auditors remained independent and continued to act in an
independent manner. The Auditors are provided with an
opportunity to address the Committee without the Manager
present, to raise any concerns or discuss any matters relating
to the audit work and the co-operation of the Manager
and others in providing any information, and the quality of
that information including the timeliness in responding to
audit requests.
Non-Audit Work
The Committee’s policy on the provision of non-audit services
by the Auditors is to ensure that there is a clear separation of
audit work and non-audit work and that the cost of any non-
audit work is justified and is not disproportionate to the audit
fees, to the extent that the independence of the Auditors
would be compromised. The Company’s policy on the
provision of non- audit services by the Auditors is available
on the Company’s website and is in line with FRC Ethical
Standards (updated in March 2020). Any non-audit services
are required to be pre-approved by the Audit Committee.
In the event of non-audit services being proposed, the
Committee undertakes a review of the services proposed to
satisfy itself that these fall within the terms of the policy and
are efficient and cost-effective. In the year under review, no
non-audit services were provided by the Auditors.
Overview of Risk and Internal Controls
The Board has ultimate responsibility for the management of
risk throughout the Company and has asked the Committee
to assist in maintaining an effective internal control
environment. The Company maintains a risk map which
seeks to identify, monitor and control principal risks as well
as identifying emerging risks. The Committee frequently
reviews the risk map to identify the principal and emerging
risks facing the business including those that might threaten
the Company's business model, future performance, liquidity
and reputation. Alongside this, the Committee considered the
likelihood, impact, mitigating factors and controls available
to reduce the impact of such risks, as described on pages 40
to 44. The risk map is monitored and updated regularly to
reflect any changes to the risks and their mitigants.
The system of internal controls is monitored through the
regular review of the risk map and through the review of
the internal control environment. As an investment company
reliant on the systems used by external suppliers, the
Committee meets with the Manager and other key service
providers, receives presentations from them, reviews control
reports for these providers and considers the independent audit
opinions thereon. This process gives comfort that key providers
are fulfilling their obligations to the Company by adhering to
appropriate systems of internal control within their businesses.
In addition, the Manager also conducted a due diligence site
visit with the Administrator and Depositary where they received
thorough presentations from representatives covering the work
of the Operations, Risk Administration and Accounting Teams,
and the Custodian and Depositary. No matters of concern with
any areas of service were raised at any of the meetings or on
reviewing the internal controls reports.
The Committee has discussed with the Investment Manager
policies on whistleblowing, cyber security, anti-bribery and
the Modern Slavery Act and is satisfied that the Manager has
controls and monitoring processes to implement its policies
across the main contractors which supply goods and services
to the Manager and to the Company. The Company has
adopted an anti-corruption policy which refers to anti-bribery,
anti-slavery and the corporate criminal offence of tax evasion.
In addition to this, the Company has issued a data privacy
notice in relation to the General Data Protection Regulation.
All such policies can be found on the Company’s website.
The Committee further considered the policy and controls used
by the Manager surrounding the use of brokerage commissions
generated from transactions in the Company’s portfolio and
the obtaining of best execution on all transactions.
There were no issues of concern arising from the reviews of
the internal controls environment on which the Company
relied during the year ended 30 November 2024 and up to
the date of this report.
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 62
Audit Committee Report continued
Other Significant Issues Considered by
the Audit Committee During the Year
Geopolitical Events
During the financial year under review, the Committee
continued to monitor the geopolitical landscape, specifically
the US elections, the 2024 UK election and budget and the
ongoing military activity in the Ukraine and the Middle East.
Events such as these can have a significant impact on global
financial markets, and hence on the Company’s portfolio
performance. The Committee continues to monitor the impact
of these and emerging events.
The Committee regularly reviews the operational resilience of
its various service providers in connection with the mitigation
of the business risks posed by geopolitical events. The
Committee is pleased to confirm that all service providers have
continued to demonstrate their ability to provide services to
the expected level, with no breaks in the services or significant
operational failures.
Going Concern and Longer-term Viability
The Company was launched in July 2013 with a fixed
seven-year life. Shareholders approved changes to the
Company’s Articles of Association to make a tender offer to
all Shareholders and to extend the Company’s life indefinitely
at the Company’s General Meeting held on 7 April 2020
(the “Reconstruction”). The new Articles of Association
removed the fixed life and replaced it with the requirement
for the Company to make tender offers at five-yearly
intervals, the first of which will be made on or before
30 June 2025.
As noted within the Chair’s Statement, Shareholders will
be offered the opportunity to tender their shares for sale at
the prevailing NAV per ordinary share less costs and other
appropriate adjustments. A further announcement setting out
the full details, timetable of events and terms of the tender
will be published in due course.
Going Concern
At the request of the Board, the Committee has considered
the ability of the Company to adopt the going concern
basis for the preparation of the Financial Statements.
The Committee has considered the performance of the
Company, its financial position, cash flows and liquidity in
addition to any material uncertainties and events that might
cast significant doubt upon the Company’s ability to continue
as a going concern including:
• The Company’s ability to liquidate its portfolio and meet
its expenses as they fall due, together with its exposure to
currency and credit risk; and
• The Company’s net current liabilities position in
connection with the bank loans being due for repayment
in July 2025;
• The impact of the tender offers at five-yearly intervals, the
first of which will be made on or before June 2025; and
• The factors impacting the forthcoming year as set out
in the Strategic Report section, comprising the Chair’s
Statement, the Investment Manager’s Report and the
Strategic Review.
The financial position of the Company and its cash flows and
liquidity position are described in the Strategic Report and
the Financial Statements. Note 27 to the Financial Statements
includes the Company’s policies and process for managing
its capital; its financial risk management objectives; details of
financial instruments and hedging activities. Should the loan
facilities not be renewed in July 2025, the Board is satisfied
that the Company could fund the repayment and ongoing
cash flow requirements through the sale of a portion of
the portfolio of listed securities in all severe but plausible
downside scenarios considered. Exposure to credit risk and
liquidity risk are also disclosed.
The Committee is mindful of the uncertainties detailed above
under Geopolitical Events and the longer-term impact these
factors may have on the market and global economy and will
continue to keep this under review. Based on the information
provided to the Committee and its assessment of the financial
position of the Company, the Directors have not identified
conditions or events that call into question the Company’s
ability to continue to be a going concern. As part of this
assessment, the Committee also considered the tender offer
taking place on or before 30 June 2025. If the resultant size
of the Company following the tender offer does not meet
a size at which its business model remains viable, the Board
may consider putting forward liquidation proposals. However,
based on extensive discussions with advisors and the long
term relative and absolute performance of the Company,
the Board believes that there is sufficient support to indicate
that the tender offer will not result in the Company failing
to reach an adequate minimum size. The Committee also
considered the results of the 2020 Tender at which c.39% of
the Company’s shares were tendered and the growth of the
Company’s NAV since then, from £127m to c.£630m. The
Director's have assessed the severe, but plausible downside
scenarios in relation to the take up of the Tender Offer and
have concluded that they expect the Trust to be able to
continue as a going concern. As such, the Audit Committee
concluded that it remained appropriate to continue to
prepare the financial statements on a going concern basis
and is satisfied that the Company can meet its financial
obligations for the foreseeable future.
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 63
Longer-Term Viability
The Board has also asked the Committee to address the
requirement that a longer-term viability statement be
provided to Shareholders. This statement should take account
of the Company’s current position, and principal risks as set
out on pages 40 to 44 together with the mitigating factors
which are assumed to operate appropriately so that the Board
may state that 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 their assessment.
The Board has selected five years from the year end
30 November 2024 as an appropriate period of assessment.
The assessment period is selected as the period post the
Company’s first five-yearly tender offer to be made to
Shareholders in accordance with the Articles of Association.
To provide this assessment the Committee has considered the
Company’s financial position as described above to liquidate
its portfolio and meet its expenses as they fall due:
• The portfolio comprises investments traded on major
international stock exchanges. There is a spread of
investments by size of company. In current market
conditions 96.2% of the portfolio could be liquidated
within seven trading days, and there is no expectation
that the nature of the investments held within the
portfolio will be materially different in future. The
Company has two unquoted investments, Atom Bank and
Moneybox, which at the year-end equated to 1.06% of
total net assets;
• The expenses of the Company are predictable and modest
in comparison with the assets of the Company and there
are no capital commitments foreseen which would alter
that position; and
• The Company has four non-executive Directors and no
employees and consequently does not have redundancy
or other employment related liabilities or responsibilities.
The Committee has also had regard to the following
assumptions in considering the Company’s longer-term viability:
• The tender offer to be put to Shareholders on or before
30 June 2025 and the likelihood of the Company remaining
viable thereafter;
• Financials will continue to be an investable sector of the
international stock markets and that investors will still wish
to have an exposure to such investments;
• Closed end investment trusts will continue to be attractive to
investors;
• Regulation will not increase to a level that makes the running
of the Company uneconomical in comparison with other
competing products;
• There will be no material or significant changes in the
principal risks and uncertainties; and
• Should the performance of the Company be less than the
Board deems acceptable it has appropriate powers to replace
the Investment Manager.
Stress Testing
In addition to the above, stress testing was undertaken in
determining the Company’s longer-term viability and the
appropriateness of preparing the Financial Statements on
a going concern basis. In conducting the stress tests, the
Company’s principal risks were grouped into three buckets
according to their post mitigation scores and, where possible,
material values were attached to the key risks materialising
and evaluated to assess the effect of this on the Company’s
ability to continue as a going concern and its viability over a
five-year period.
The stress tests also used a variety of falling parameters to
demonstrate the impact on the Company’s share price and
NAV. The results of the testing demonstrated the impact on
the NAV and confirmed the Company’s ability to meet its
liabilities as they fall due.
In light of these considerations, the Committee has
recommended to the Board that a positive statement may be
made on the Company’s longer-term prospects to continue
its operations and meet its expenses and liabilities as they
fall due. In support of such recommendation the Committee
considered the financial position, the cash flow forecast
including expenses and the portfolio liquidity position
covering the period of five years and beyond.
Effectiveness of the Audit Committee
The services provided to the Board by the Committee are
reviewed within the Annual Board Evaluation, including
consideration of actions undertaken by the Committee with
the Manager and Auditors to ensure an appropriate audit
process is undertaken.
I am pleased to confirm that the evaluation result was positive
and no matters of concern or requirements for change were
highlighted. The Committee seeks to improve its effectiveness
and follow best practice guidance from the FRC and other
bodies.
Cecilia McAnulty
Chair of the Audit Committee
19 February 2025
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 64
Directors’ Remuneration Report
Introduction
This report is submitted in accordance with the Large and Medium-Sized Companies and Groups (Accounts and Reports)
Regulations 2008 (as amended) (the ‘Regulations’) and the Listing Rules of the Financial Conduct Authority in respect of the year
ended 30 November 2024. It has been audited where indicated.
Chair’s Report
The Board has determined that due to its size, and the fact that all the Directors are non-executive and independent, the
functions normally carried out by a remuneration committee will be performed by the full Board.
Shareholders approved the current Directors’ Remuneration Policy by way of an ordinary resolution passed at the AGM on
30 March 2023. Such policy came into effect on 1 December 2023 and shall remain in force until 30 November 2026.
Company’s Policy on Directors’ Remuneration effective 1 December 2023
How policy supports strategy and promotes
long-term sustainable success Operation
The Board consists entirely of independent non-executive
Directors, who meet regularly to deal with the Company’s
affairs.
Non-executive Directors have formal letters of appointment
which contain the responsibilities and obligations of the
Directors in relation to undertaking their role and managing
conflicts of interest; their remuneration is determined by the
Board within the limits set by the Articles of Association.
The intention is that fees payable reflect the time spent by
them individually and collectively, be of a level appropriate
to their responsibilities and be in line with market practice,
sufficient to enable candidates of high calibre to be recruited
and retained.
Directors are not entitled to payment for loss of office and do
not receive any bonus, nor do they participate in any long-term
incentive schemes or pension schemes. All fees are paid in cash,
monthly in arrears, to the Director concerned or a nominated
third party.
The Company’s policy in relation to fees is to offer only a
fixed basic fee in line with equivalent roles within the sector
with additional fees for the roles of Chair of the Company
and Chair of the Audit Committee. As the Company is an
investment trust and all the Directors are non-executive, it
is considered inappropriate to have any long-term incentive
schemes or benefits.
Rates are reviewed and benchmarked annually but the
review will not necessarily result in any change to rates.
Non-executive Directors are subject to annual re-election by
Shareholders.
In accordance with the Company’s Articles of Association,
any Director who performs, or undertakes to perform,
services which the Directors consider go beyond the
ordinary duties of a Director may be paid such additional
remuneration (whether by way of fixed sum, bonus,
commission, participation in profits or otherwise) as the
Directors may determine.
No such additional remuneration was paid in 2024 or 2023.
As per previous AGM resolutions, Shareholders will be asked to consider a non-binding vote for the approval of the following
Directors’ Remuneration Implementation Report, which reports on how the current Remuneration Policy has operated during
the year ended 30 November 2024.
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 65
The result of the Shareholder votes on the Directors’ Remuneration Policy and the latest Implementation Report were as follows:
Implementation Report
for the Year ended
30 November 2023
Remuneration
Policy for the
three years ended
30 November 2026
Approved at the AGM
on 18 April 2024
Approved at the AGM
on 30 March 2023
Votes for 99.98% 99.98%
Votes against 0.02% 0.02%
Votes abstained 0.00% 0.00%
The Board considers this level of support from Shareholders a positive endorsement of both its Remuneration Policy and the policy
implementation. There has been no communication from Shareholders regarding any aspect of the Directors’ remuneration.
Implementation Report
Directors’ Remuneration Paid for the Year Ended 30 November 2024
Fees and Expenses - Annual Fees Review
The review of Directors’ fees is carried out on an annual basis and involves consideration of the time and commitment required
of the Directors, including any significant increase in requirements due to regulatory or other changes. For comparative purposes
the remuneration awarded to directors of similar companies and general market data is also considered. While such a review
will not necessarily result in any change to the rates, the Committee believes it is important that these reviews happen annually.
The appointment of an external remuneration consultant was considered unnecessary. All Directors exercise independent
judgement and discretion when considering fees.
In October 2024, the Committee carried out a review of Directors’ remuneration which included a selection of peer comparisons
and external reports. Consideration was also given to the need to attract and retain Directors, the rise in inflation, the upcoming
tender and the increased level of input and responsibility members of the Board have in relation to enhanced regulations. As a
result, the Committee decided to implement the following annual fee increases with effect from 1 December 2024:
• Chair £43,000pa to £46,000pa (7.0% increase);
• Non-executive Director £31,000pa to £32,500pa (4.8% increase); and
• Additional supplement for performing the role of Chair of the Audit Committee £5,750pa (unchanged from previous year).
Directors’ fees for the year ending 30 November 2025, based on the current board membership, are expected to total £149,250
in aggregate. Article 105, of the Company’s Articles of Association stipulates the aggregate amount available for Directors’
Remuneration as £250,000; at the rates agreed the Board falls within the aggregate limit in the Articles.
In accordance with the Shareholder Rights Directive, the Board confirms that no variable pay awards were made to the Directors
and there were no deferral periods or share based pay equivalents. The percentage change in remuneration in respect of the
five financial years prior to the current year in respect of each Director role is as follows:
Financial year to: 2019 2020 2021 2022 2023 2024 2025
Simon Cordery
~
– – – 11.3% 26.1% 15.6% 7.0%
Cecilia McAnulty
^
– – – 24.8% 5.8% 5.0% 4.1%
Susie Arnott* – – – – – 5.1% 4.8%
Angela Henderson* – – – – – 5.1% 4.8%
~ Appointed as Non-Executive Director on 1 July 2019 and as Chair on 31 March 2023. The Directors’ fee payble in respect of the financial year ended 2019 has been grossed up to a full
years’ salary to provide an accurate percentage for comparison purposes.
^ Appointed as Non-Executive Director on 1 November 2021 and as Audit Chair on 7 April 2022. The Directors’ fee payable in respect of the financial year 2022 has been grossed up to a full
years’ salary to provide an accurate percentage for comparison purposes.
* Appointed 1 December 2022.
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 66
Expenses
The Directors are entitled to be reimbursed for reasonable expenses incurred by them in connection with the performance of
their duties and attendance at Board and General Meetings. In certain circumstances, under HMRC rules, travel and other out
of pocket expenses reimbursed to the Directors may be considered as taxable benefits. Where expenses are classified as taxable
under HMRC guidance, they are paid gross and shown in the taxable column of the Directors’ remuneration table. There were
no such expenses claimed by the Directors in the year under review (2023: nil). The policy for claiming such expenses was not
changed during the year.
Letters of Appointment
In accordance with recommended practice, the Directors do not have service agreements but instead each Director has received
a letter setting out the terms of their appointment under which they provide their services to the Company. A Director may
resign by giving one month’s notice in writing to the Board at any time. The Directors are not entitled to payment for loss
of office.
New Directors are appointed and elected with the expectation that they will serve for a period of at least three years. In
accordance with the Articles of Association any new Director is required to stand for election at the first AGM following
their appointment and, in accordance with good corporate governance practice, all Directors stand for re-election every year
following their first election by Shareholders.
Directors’ and Officers’ Liability Insurance
Directors’ and Officers’ liability insurance cover is held by the Company in respect of the Directors. The Company has, to the
extent permitted by law and the Company’s Articles of Association, provided each Director with a Deed of Indemnity which,
subject to the provisions of the Articles of Association and s234 of the Companies Act 2006 qualifying third party indemnity
provisions, indemnifies the Directors in respect of costs which they may incur relating to the defence of any proceedings brought
against them arising out of their position as Directors (excluding criminal and regulatory penalties). Directors’ legal costs may be
funded up-front provided they reimburse the Company if the individual is convicted or, in an action brought by the Company,
judgment is given against them. These provisions were in force during the year and remain in force at the date of this report.
Remuneration (Audited)
In the year under review, the Directors’ fees were paid at the following fixed annual rates: the Chair £43,000; other Directors
£31,000 with the Chair of the Audit Committee receiving an extra £5,750 supplement for performing that additional role.
The fees payable in respect of each of the Directors were as follows:
Date of Appointment
Year ended
30 November
2024
£
Year ended
30 November
2023
£
Simon Cordery (Chair) 1 July 2019 43,000 37,211
Cecilia McAnulty (Chair of the Audit Committee) 1 November 2021 36,750 35,000
Susie Arnott 1 December 2022 31,000 29,500
Angela Henderson 1 December 2022 31,000 29,500
Robert Kyprianou (retired as Chair on 30 March 2023) 7 June 2013 – 13,509
Katrina Hart (retired on 1 December 2022) 7 June 2013 – 82
Total 141,750 144,802
No pension or other contributions were paid by the Company during the year to any of the Directors. Consequently, the figures
shown above comprise the single total remuneration figure.
Directors’ Remuneration Report continued
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 67
Directors’ Share Interests (Audited)
The interests of Directors in the ordinary shares of the Company on 30 November 2024 and 30 November 2023 were as follows:
30 November
2024
30 November
2023
Simon Cordery 42,497 41,358
Cecilia McAnulty 40,000 40,000
Susie Arnott 20,000 20,000
Angela Henderson – –
Total 102,497 101,358
All holdings are beneficially held. There have been no changes in these interests between the end of the financial year and
19 February 2025. While it is no longer a requirement, Directors are actively encouraged to maintain a holding of ordinary
shares in the Company.
Performance
The Regulations require a performance comparison line graph to be included in the Directors’ Remuneration Report showing
the total Shareholder return for each of the financial years in the relevant period. Each subsequent annual graph is required
to increase by one year until the maximum relevant period of ten years is reached; thereafter the relevant period will continue
to be ten years. The Company was incorporated on 17 May 2013 and commenced trading on 1 July 2013, the performance
comparison is therefore shown for the period of 10 years from 1 December 2014 to 30 November 2024.
Total return per ordinary share
80
100
120
140
160
180
200
220
240
260
280
300
Ordinary share price (TR)
Rebased to 100
* For information purposes.
NAV per share (TR)* MSCI ACWI Financials (TR)
Nov
2015
Nov
2016
Nov
2017
Nov
2018
Nov
2019
Nov
2020
Nov
2021
Nov
2022
Nov
2023
Nov
2014
Nov
2024
The chart above, in accordance with legislation, shows the total return per ordinary share, and does not consider the value
ordinary Shareholders would have received from the subscription shares they were given at launch and were able to sell or
exercise on the single conversion date of 31 July 2017.
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 68
The Company’s Benchmark for the period to 31 August 2016 was the MSCI World Financials Index. On 1 September 2016 the
constituents of the MSCI World Financials Index changed to exclude real estate. MSCI therefore provided a revised index, the
MSCI World Financials + Real Estate Net Total Return Index which was adopted for all periods from 1 September 2016 until the
General Meeting of the Company held on 7 April 2020 at which time a new index was adopted following the reconstruction of
the Company on 23 April 2020, being the MSCI ACWI Financials Net Total Return Index.
Relative Importance of Spend on Pay
Under the Regulations (Schedule 8, Part 3 (20)), the Directors’ Remuneration Report must show a comparison of all
remuneration paid to employees* to all distributions (including dividends and share buy backs) paid to Shareholders for the
current year, preceding year and the difference between those years. This is to assist the Directors in understanding the relative
importance of spend on pay.
*The Company does not have any employees therefore for the purposes of comparison the remuneration paid to the non-executive
Directors is included.
Change
2024
£’000
2023
£’000 £’000 %
Directors’ total remuneration
142
145
(3) (2%)
Dividends paid or declared in respect of the financial year* 14,278 14,191
87 1%
Profit/(loss) on ordinary activities after tax
164,575
(15,525)
180,100
1160%
Ordinary shares repurchased into treasury 9,038 23,139
(14,101) (61%)
*The total dividends paid or declared is based on the number of shares in issue on the ex-dividend date. The first interim dividend for the year ended 30 November 2024, was paid on
30 August 2024 on 304,272,705 shares (2023: 315,955,329 shares), the second interim dividend for the year ended 30 November 2024 will be paid on 28 February 2025 on 303,219,365
shares (2023: 307,160,405 shares). No payments were made in the period to any past Directors (2023: £nil).
Simon Cordery
Chair
19 February 2025
Directors’ Remuneration Report continued
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 69
Report of the Management
Engagement Committee
The Management Engagement Committee (“the Committee”)
is chaired by Susie Arnott and comprises all the Directors, all of
whom are independent and non-executive.
The Committee has written terms of reference, which
are available to view on the Company’s website,
www.polarcapitalglobalfinancialstrust.com. The terms of
reference clearly define the Committee’s responsibilities
and duties.
The Committee meets twice a year and at such other times as
may be necessary and is responsible for:
• Monitoring and reviewing the performance of the
Investment Manager along with the Company’s other
service providers;
• Keeping under review the terms of the Investment
Management Agreement (‘IMA’) and the Manager’s
appointment as AIFM, prior to making its recommendation
to the Board on whether the retention of the Investment
Manager is in the interests of Shareholders; and
• Reviewing the Manager’s investment process. This
includes ensuring environmental social and governance
principles (collectively known as “ESG”) are integrated by
Polar Capital into this process so that the Manager and
the Company are effective in meeting their social and
regulatory requirements.
Performance Evaluation Process
Investment Manager
During the year, the Management Engagement Committee
carried out the detailed review of the Investment Manager’s
services and considered its continued appointment for the
next financial year ending 30 November 2025.
In addition, the Committee reviewed the current fee
arrangements with the Manager taking into consideration
the performance of the Manager in managing the assets of
the Company, the provision of operational and administrative
services and the performance of the Company in both
absolute and relative terms against the Benchmark and peers
since launch and post the Reconstruction. No change to the
fee arrangements was proposed for the year under review or
the year ahead.
The Committee has reviewed in detail the performance of
the Investment Manager in managing the portfolio over
the longer-term, as well as assessing the impact of recent
changes within the team. The Board believes this has
further strengthened investment processes and the depth of
knowledge. The review considered the quality of the other
services provided by the Manager and the resources available
to provide such services.
The Committee considered the quality of support from the
sales, marketing and administrative functions of the Manager,
including Shareholder communications. Following the review,
the Committee concluded that it is in the best interests of
Shareholders that the appointment of Polar Capital LLP as
Investment Manager is continued.
ESG
The Board and Committee regularly monitor the Investment
Manager’s approach to ESG including its methodology and
integration into the investment process. On a quarterly basis,
the Board reviews the Company’s ESG Dashboard which
includes both metrics regarding the Company’s MSCI ESG
fund score as well as bespoke ratings derived from detailed
in-house analysis. Engagement and specific action have
become increasingly meaningful areas and the Manager’s
methodology incorporates these interactions with investee
companies into its process, through engagement reports,
trading position adjustments and sector or stock specific
exclusions.
During the year under review, the Committee considered the
developments in ESG, specifically the reporting requirements
in respect of TCFD as well as the UK Sustainability Disclosure
Requirements (SDR), both of which would impact the
Company’s disclosure requirements. The Committee has
scoped the implications of the regulations alongside the
Manager to ensure the Company complies with the relevant
regulatory requirements going forward.
As noted earlier in the Annual Report, the Manager is
required to have consideration of ESG factors when reviewing
new, continuing or exiting investments but is not required
to take an investment decision solely on the basis of ESG
factors. Further information on how the Investment Manager
considers ESG in its engagement with investee companies can
be found in the ESG report on pages 29 to 34.
Susie Arnott
Chair of the Management Engagement Committee
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 70
Other Suppliers
The Board monitors directly or through the Investment
Manager the performance of its other key service providers
and whether they continue to provide both appropriate
services and value for money.
• The Company has directly appointed HSBC Bank Plc
as Administrator, Custodian and Depositary and Stifel
Nicolaus as Corporate Broker. The Depositary reports
quarterly and makes an annual presentation to the Board.
The Corporate Broker provides reports to the Board
periodically and joins the Board on request to discuss
markets and other issues.
• The Registrar, Equiniti Limited, is directly appointed by the
Company and the performance of its duties is monitored
by the Company Secretary.
• Other suppliers such as printers, website designers and
PR agents are monitored by the Company Secretary and
each supplier reports to the Board as and when deemed
necessary.
Committee Evaluation
The activities of the Management Engagement Committee
were considered as part of the annual Board evaluation
process. This year, an internal evaluation was completed and
the findings of the evaluation processes were satisfactory with
no matters of concern or requirements for change needed.
Susie Arnott
Chair of the Management Engagement Committee
19 February 2025
Report of the Management
Engagement Committee continued
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 71
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report
and the 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 Company’s Financial Statements
in accordance with the UK-adopted International Accounting
Standards (UK-adopted IAS) and applicable law. Additionally,
the Financial Conduct Authority’s Disclosure Guidance and
Transparency Rules require the Directors to prepare the
Financial Statements in accordance with UK-adopted IAS.
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 Company and of
the profit or loss of the Company for that period. In preparing
the financial statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• state whether they have been prepared in accordance
with UK-adopted IAS, subject to any material departures
disclosed and explained in the Financial Statements;
• make judgements and accounting estimates that are
reasonable and prudent; and
• prepare the Financial Statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that the Financial Statements
and the Directors’ Remuneration Report comply with
the Companies Act 2006. They are responsible for such
internal controls as they determine is necessary to enable
the preparation of Financial Statements that are free from
material misstatement, whether due to fraud or error,
and have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets
of the Company and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the Directors are
also responsible for preparing a Strategic Report, Directors’
Report, Directors’ Remuneration Report and Corporate
Governance Statement that comply with that law and
those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing
the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the 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 position and
performance, business model and strategy.
Each of the Directors, whose names and functions are listed
in the Strategic Report confirm that, to the best of their
knowledge:
• the Company Financial Statements, which have been
prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit/loss of
the Company; and
• the Strategic Report includes a fair review of the
development and performance of the business and the
position of the Company, together with a description of
the principal risks and uncertainties that it faces.
In the case of each Director in office at the date the Directors’
Report is approved:
• so far as the Director is aware, there is no relevant
audit information of which the Company’s 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
Company’s auditors are aware of that information.
Simon Cordery
Chair
19 February 2025
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 72
Report on the audit of the financial statements
Opinion
In our opinion, Polar Capital Global Financials Trust plc’s financial statements:
• give a true and fair view of the state of the Company’s affairs as at 30 November 2024 and of its profit and cash flows for
the year then ended;
• have been properly prepared in accordance with UK-adopted international accounting standards; 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 and Financial Statements for the year ended
30 November 2024 (the “Annual Report”), which comprise: the Balance Sheet as at 30 November 2024; the Statement of
Comprehensive Income, the Statement of Changes in Equity, and the Cash Flow Statement 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 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 Company 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.
We have provided no non-audit services to the Company in the period under audit.
Independent Auditors’ Report
to the members of Polar Capital
Global Financials Trust plc
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 73
Our audit approach
Overview
Audit scope
• The Company is an Investment Trust Company and engages Polar Capital LLP (the“Manager”) to manage its assets. The
Company also engages the Manager to manage its day to day operations.
• We conducted our audit of the financial statements using information from HSBC Securities Services (the “Administrator” )
to whom the Manager has, with the consent of the Directors, delegated the provision of certain administrative functions.
• We tailored the scope of our audit taking into account the types of investments within the Company, the involvement of the
third parties referred to above, the accounting processes and controls, and the industry in which the Company operates.
• We obtained an understanding of the control environment in place at both the Manager and the Administrator and adopted
a fully substantive testing approach using reports obtained from the Administrator.
Key audit matters
• Valuation and existence of investments
• Income from investments
Materiality
• Overall materiality: £6,296,000 (2023: £4,881,000) based on approximately 1% of net assets.
• Performance materiality: £4,772,000 (2023: £3,660,000).
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.
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 and existence of investments
Refer to Note 2 Accounting Policies (g) Investments Held at
Fair Value Through Profit or Loss and Note 13 Investments
Held at Fair Value Through Profit or Loss.
The investment portfolio (£660m) at the year-end comprised
of primarily listed investments (£653m) with two unlisted
investments (£7m).
We focused on the valuation and existence of investments
because investments represent the principal element of the
net asset value as disclosed in the Balance Sheet.
We tested the valuation of the listed equity investments by
agreeing the prices used in the valuation to independent
third-party sources.
We tested the valuation of the listed equity investments by
agreeing the prices used in the valuation to independent
third-party sources.
For unlisted investments, we assessed the appropriateness
of the valuation methodology applied by reference to the
International Private Equity and Venture Capital Valuation
guidelines (IPEV), and tested the techniques used in
determining the fair value of unlisted investments.
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 74
Key audit matter How our audit addressed the key audit matter
We also focussed on the accounting policy for the valuation
of investments held at fair value through profit or loss as
incorrect application could indicate a misstatement in the
valuation of investments.
For each unlisted investment we performed procedures to
assess whether significant estimates and judgements made
were supportable. Where applicable per investment we:
• Reviewed the most recent valuation committee meeting
minutes where the valuations of the unlisted investments
were discussed;
• Confirmed the value of the investments to the price
of recent investments or offer prices, taking into
consideration the relevant facts and circumstances around
these transactions;
• Sought publicly available third-party information that
would support or challenge management’s valuation; and
• Checked the mathematical accuracy of the valuation
calculation.
We tested the existence of the entire investment portfolio,
including unlisted investments, by agreeing investment
holdings to an independent confirmation obtained from the
custodian, HSBC Bank plc.
We assessed the accounting policy for investments held at fair
value through profit or loss for compliance with accounting
standards and performed testing to check that investments
are accounted for in accordance with the stated accounting
policy.
We did not identify any material matters to report.
Income from investments
Refer to the Note 2 Accounting Policies (c) Income, (g)
Investments Held at Fair Value Through Profit or Loss, Note 3
Investment Income and Note 5 Gains/(losses) on Investments
Held at Fair Value.
We focused on the accuracy, occurrence and completeness
both of net capital gains on investments and of dividend
income recognition.
ISAs (UK) presume there is a risk of fraud in income
recognition because of the pressure management may feel
to achieve a certain objective. In this instance, we consider
that ‘income’ refers to all the Company’s income streams,
both revenue and capital (including gains and losses on
investments).
We assessed the accounting policy for income recognition
for compliance with accounting standards and the AIC SORP,
and that income from investments has been accounted for in
accordance with the stated accounting policy.
We tested the accuracy of 100% of the dividend receipts by
agreeing the dividend rates from investments to independent
third-party data.
We tested occurrence by testing 100% of dividends recorded
in the year had been declared in the market by investment
holdings, and we traced a sample of dividends received to
bank statements.
To test for completeness, we tested that the appropriate
dividends had been received in the year by reference to
independent data of dividends declared for dividends during
the year.
We also tested the allocation and presentation of dividend
income between the revenue and capital return columns of
the Statement of Comprehensive Income in line with the
requirements set out in the AIC SORP by determining reasons
behind dividend distributions.
Independent Auditors’ Report continued
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 75
Key audit matter How our audit addressed the key audit matter
We also focused on the accounting policy for investment
income recognition and its presentation in the Statement
of Comprehensive Income as set out in the requirements
of The Association of Investment Companies Statement
of Recommended Practice (the “AIC SORP”) as incorrect
application could indicate a misstatement in income
recognition.
The gains and losses on investments held at fair value
comprise realised and unrealised gains and losses.
For unrealised gains and losses, we tested the valuation
of the portfolio at the year-end, together with testing the
reconciliation of opening and closing investments.
For realised gains and losses, we tested a sample of disposals
by agreeing the proceeds to bank statements and we
reperformed the calculation of a sample of realised gains and
losses.
We did not identify any material misstatements as a result of
our testing.
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 Company, the accounting processes and controls, and the
industry in which it operates.
The Company’s accounting is delegated to the Administrator who maintains the Company’s accounting records and who has
implemented controls over those accounting records. We obtained our audit evidence from substantive tests. However, as per
our risk assessment, we understood and assessed the internal controls in place at both the Manager and the Administrator
to the extent relevant to our audit. This assessment of the operating and accounting structure in place at both organisations
involved obtaining and analysing the relevant control-reports issued by the Manager and the Administrator and the work
conducted by the independent service auditor in accordance with generally accepted assurance standards for such work.
Following this assessment, we applied professional judgement to determine the extent of testing required over each balance in
the financial statements.
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 company’s financial statements, and we remained alert when performing our audit procedures for any indicators of the
impact of climate risk. Our procedures did not identify any material impact as a result of climate risk on the company’s financial
statements.
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:
Overall Company materiality £6,296,000 (2023: £4,881,000).
How we determined it approximately 1% of net assets
Rationale for benchmark applied We believe that net assets is the primary measure used by the Shareholders in
assessing the performance of the Company, and is a generally accepted auditing
benchmark for investment trust audits.
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 £4,772,000
(2023: £3,660,000) for the Company financial statements.
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 76
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.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £314,800
(2023: £244,000) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting
included:
• evaluating the Directors’ updated risk assessment and considering whether it addressed relevant threats;
• evaluating the Directors’ assessment of potential operational impacts, considering their consistency with other available
information and our understanding of the business and assessed the potential impact on the financial statements;
• reviewing the Directors’ assessment of the Company’s financial position in the context of its ability to meet future expected
operating expenses, their assessment of liquidity as well as their review of the operational resilience of the Company and
oversight of key third-party service providers;
• assessing the premium/discount at which the Company’s share price trades compared to the net asset value per share;
• assessing the implication of significant reductions in net assets as a result of market performance on the ongoing ability of
the Company to operate;
• regarding the scheduled tender offer: we considered the stability and composition of the share register, results of the
take up by Shareholders at the previous tender offer, the performance of the Company since the last tender offer, held
discussions with the Company Secretary and the Corporate Broker and Sales teams and reviewed the appropriateness of
annual report disclosures by the Directors; and
• considering the revolving credit facility repayment falling within the going concern period and the feasbility of the
Company’s refinancing plans or its ability to repay the facility.
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 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 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
Independent Auditors’ Report continued
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 77
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 30 November 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 Company and its 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.
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 is 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 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 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 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 Company and its
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:
Governance
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 78
• 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 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 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.
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities, 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 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 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 Company and industry, we identified that the principal risks of non-compliance with laws
and regulations related to breaches of Section 1158 of the Corporation Tax Act 2010, 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 requirements of the Companies Act 2006. 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 to increase
revenue (investment income and capital gains) or to increase net asset value, and management bias in accounting estimates.
Audit procedures performed by the engagement team included:
• discussions with the Manager and Audit Committee, including consideration of known or suspected instances of
non-compliance with laws and regulation and fraud where applicable;
• reviewing relevant committee meeting minutes, including those of the Board and Audit Committee;
• assessment of the Company’s compliance with the requirements of section 1158 of the Corporation Tax Act 2010, including
recalculation of numerical aspects of the eligibility conditions;
• identifying and testing manual journal entries posted by the Administrator during the preparation of the financial
statements;
Independent Auditors’ Report continued
Governance
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 79
• challenging assumptions in the significant accounting estimates, in relation to the valuation of unlisted investments (see
related key audit matter above); and
• incorporating unpredictability around the nature, timing or extent of our testing.
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.
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 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
Following the recommendation of the Audit Committee, we were appointed by the members on 17 May 2013 to audit the
financial statements for the year ended 30 November 2013 and subsequent financial periods. The period of total uninterrupted
engagement is 12 years, covering the years ended 30 November 2013 to 30 November 2024.
Kevin Rollo (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
19 February 2025
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 80
Financial
Statements
and Notes
80
Financial Statements and Notes
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 81
Statement of Comprehensive Income
For the year ended 30 November 2024
Year ended 30 November 2024 Year ended 30 November 2023
Notes
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Investment income 3 19,067 – 19,067 19,143 – 19,143
Other operating income 4 1,505 – 1,505 916 – 916
Gains/(losses) on investments held at fair value 5 – 156,916 156,916 – (25,777) (25,777)
Losses on derivatives – (251) (251) – (442) (442)
Other currency losses 6 – (2,312) (2,312) – (152) (152)
Total income/(expense) 20,572 154,353 174,925 20,059 (26,371) (6,312)
Expenses
Investment management fee 7 (772) (3,088) (3,860) (704) (2,815) (3,519)
Other administrative expenses 8 (798) (46) (844) (774) (20) (794)
Total expenses (1,570) (3,134) (4,704) (1,478) (2,835) (4,313)
Profit/(loss) before finance costs and tax 19,002 151,219 170,221 18,581 (29,206) (10,625)
Finance costs 9 (799) (3,196) (3,995) (722) (2,887) (3,609)
Profit/(loss) before tax 18,203 148,023 166,226 17,859 (32,093) (14,234)
Tax 10 (1,988) 337 (1,651) (1,986) 695 (1,291)
Net profit/(loss) for the year and total
comprehensive income/(expense) 16,215 148,360 164,575 15,873 (31,398) (15,525)
Earnings/(losses) per ordinary share (pence) 11 5.31 48.62 53.93 4.97 (9.84) (4.87)
The total column of this statement represents the Company’s Statement of Comprehensive Income, prepared in accordance
with UK-adopted International Accounting Standards.
The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the
Association of Investment Companies.
The amounts dealt with in the Statement of Comprehensive Income are all derived from continuing activities.
The notes on pages 85 to 110 form part of these Financial Statements.
Financial Statements and Notes
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 82
Statement of Changes in Equity
For the year ended 30 November 2024
Year ended 30 November 2024
Notes
Called up
share
capital
£’000
Capital
redemption
reserve
£’000
Share
premium
reserve
£’000
Special
distributable
reserve
£’000
Capital
reserves
£’000
Revenue
reserve
£’000
Total
Equity
£’000
Total equity at
1 December 2023 16,588 251 311,369 105,117 43,507 11,366 488,198
Total comprehensive
income:
Profit for the year ended
30 November 2024 – – – – 148,360 16,215 164,575
Transactions with owners,
recorded directly to equity:
Shares bought back and held in
treasury 22 – – – (9,038) – – (9,038)
Equity dividends paid 12
– – – – – (14,057) (14,057)
Total equity at
30 November 2024 16,588 251 311,369 96,079 191,867 13,524 629,678
Year ended 30 November 2023
Notes
Called up
share
capital
£’000
Capital
redemption
reserve
£’000
Share
premium
reserve
£’000
Special
distributable
reserve
£’000
Capital
reserves
£’000
Revenue
reserve
£’000
Total
Equity
£’000
Total equity at
1 December 2022 16,588 251 311,380 128,256 74,905 9,892 541,272
Total comprehensive
(expense)/income:
(Loss)/profit for the year ended
30 November 2023 – – – – (31,398) 15,873 (15,525)
Transactions with owners,
recorded directly to equity:
Issue costs relating to prior year
share placings 21 – – (11) – – – (11)
Shares bought back and held in
treasury 22 – – – (23,139) – – (23,139)
Equity dividends paid 12 – – – – – (14,399) (14,399)
Total equity at
30 November 2023 16,588 251 311,369 105,117 43,507 11,366 488,198
The notes on pages 85 to 110 form part of these Financial Statements.
Financial Statements and Notes
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 83
Notes
30 November 2024
£’000
30 November 2023
£’000
Non-current assets
Investments held at fair value through profit or loss
13
659,943 518,124
Current assets
Cash and cash equivalents
15
28,178 37,262
Fair value of open derivative contracts
13
728 506
Receivables
14
22,873 8,419
51,779 46,187
Total assets 711,722 564,311
Current liabilities
Bank overdraft
15
– (1)
Fair value of open derivative contracts
13
(378) (316)
Payables
16
(2,335) (6,502)
Bank loan
17
(78,935) –
(81,648) (6,819)
Non-current liabilities
Bank loan
17
– (69,031)
Indian capital gains tax provision
18
(396) (263)
(396) (69,294)
Net assets 629,678 488,198
Equity attributable to equity Shareholders
Called up share capital
19
16,588 16,588
Capital redemption reserve
20
251 251
Share premium reserve
21
311,369 311,369
Special distributable reserve
22
96,079 105,117
Capital reserves
23
191,867 43,507
Revenue reserve
24
13,524 11,366
Total equity 629,678 488,198
Net asset value per ordinary share (pence)
25
207.66 158.06
The Financial Statements on pages 81 to 110, including the associated notes, were approved and authorised for issue by the
Board of Directors on 19 February 2025 and signed on its behalf by:
Simon Cordery
Chair
The notes on pages 85 to 110 form part of these Financial Statements.
Registered number: 8534332
Balance Sheet
As at 30 November 2024
Financial Statements and Notes
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 84
Notes
Year ended
30 November 2024
£’000
Year ended
30 November 2023
£’000
Cash flows from operating activities
Profit/(loss) before tax 166,226 (14,234)
Adjustment for non-cash items:
(Profit)/losses on investments held at fair value through profit or loss (156,916) 25,777
Losses on derivative investments 251 442
Amortisation on fixed interest securities (141) (186)
Adjusted profit before tax 9,420 11,799
Adjustments for:
Purchases of investments, including transaction costs (670,314) (284,542)
Sales of investments, including transaction costs 667,632 311,263
Purchases of derivative financial instruments (3,621) (1,794)
Proceeds on disposal of derivative financial instruments 3,210 1,168
Increase in receivables (548) (549)
Increase in payables 167 479
(Decrease)/increase in Indian capital gain tax (199) 114
Overseas tax deducted at source (1,450) (1,596)
Net cash generated from operating activities 4,297 36,342
Cash flows from financing activities
Shares repurchased into treasury (9,227) (22,988)
Issue cost paid – (11)
Loan drawn
17
10,000 9,891
Exchange gains on the loan facility (96) (1,367)
Equity dividends paid
12
(14,057) (14,399)
Net cash used in financing activities (13,380) (28,874)
Net (decrease)/increase in cash and cash equivalents (9,083) 7,468
Cash and cash equivalents at the beginning of the year 37,261 29,793
Cash and cash equivalents at the end of the year
15
28,178 37,261
The notes on pages 85 to 110 form part of these Financial Statements.
Cash Flow Statement
For the year ended 30 November 2024
Financial Statements and Notes
Notes to the Financial Statements
For the year ended 30 November 2024
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 85
1. General Information
Polar Capital Global Financials Trust plc is a public limited company registered in England and Wales whose shares are traded on
the London Stock Exchange.
The principal activity of the Company is that of an investment trust company within the meaning of Section 1158/1159 of the
Corporation Tax Act 2010 and its investment approach is detailed in the Strategic Report.
The Board has determined that Sterling is the Company’s functional currency and the presentational currency of the Financial
Statements because it is the currency which is most relevant to the majority of the Company’s Shareholders and creditors and
is the currency in which the majority of the Company’s operating expenses are paid. All figures are rounded to the nearest
thousand pounds (£’000) except as otherwise stated.
2. Accounting Policies
The material principal accounting policies, which have been applied consistently for all years presented, are set out below:
(a) Basis of Preparation
The Company’s Financial Statements have been prepared and approved by the Directors in accordance with UK-adopted international
accounting standards (“UK-adopted IAS”) and with the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards.
The Financial Statements have been prepared on a going concern basis under the historical cost convention, as modified by the
revaluation of investments and derivative financial instruments at fair value through profit or loss.
Where presentational guidance set out in the Statement of Recommended Practice (SORP) for investment trusts issued by the
Association of Investment Companies (AIC) in July 2022 is consistent with the requirements of UK-adopted IAS, the Directors have
sought to prepare the Financial Statements on a basis compliant with the recommendations of the SORP.
The financial position of the Company as at 30 November 2024 is shown in the balance sheet on page 83. As at 30 November 2024
the Company’s total assets exceeded its total liabilities by a multiple of over 8.7. The assets of the Company consist mainly of securities
that are held in accordance with the Company’s Investment Policy, as set out on page 36 and these securities are readily realisable.
The Directors have considered a detailed assessment of the Company’s ability to meet its liabilities as they fall due. The assessment
took account of the Company’s current financial position, its cash flows and its liquidity position. In addition to the assessment, the
Company also considered its loan repayment obligations in July 2025 and carried out stress testing which used a variety of falling
parameters to demonstrate the effects on the Company’s share price and net asset value. Should the loan facilities not be renewed
in July 2025, the Board is satisfied that the Company could fund the repayment and ongoing cash flow requirements through the
sale of a portion of the portfolio of listed securities in all severe but plausible downside scenarios considered. In light of the results
of these tests, the Company’s cash balances, and the liquidity position, the Directors consider that the Company has adequate
financial resources to enable it to continue in operational existence for at least 12 months from the date of issuance of these Financial
Statements. As part of this assessment, the Board also considered the tender offer taking place on or before 30 June 2025. If the
resultant size of the Company following the 2025 tender offer does not meet a size at which its business model remains viable, the
Board may consider putting forward liquidation proposals. However, based on extensive discussions with its advisors and the long
term relative and absolute performance of the Company, the Board believes that there is sufficient support to indicate that the 2025
Tender Offer will not result in the Company failing to reach an adequate minimum size. Accordingly, the Directors believe that it is
appropriate to continue to adopt the going concern basis in preparing the Company’s Financial Statements.
(b) Presentation of the Statement of Comprehensive Income
In order to better reflect the activities of an investment trust company and in accordance with the guidance set out by the AIC,
supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and capital
nature has been presented alongside the Statement of Comprehensive Income. The result presented in the revenue return
column is the measure the Directors believe appropriate in assessing the Company’s compliance with certain requirements set
out in Section 1158 of the Corporation Tax Act 2010.
(c) Income
Dividends receivable from equity shares are taken to the revenue return column of the Statement of Comprehensive Income on
an ex-dividend basis.
Special dividends are recognised on an ex-dividend basis and may be considered to be either revenue or capital items. The facts
and circumstances are considered on a case-by-case basis before a conclusion on appropriate allocation is reached.
Financial Statements and Notes
Notes to the Financial Statements continued
For the year ended 30 November 2024
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 86
2. Accounting Policies continued
(c) Income continued
Where the Company has received dividends in the form of additional shares rather than in cash, the amount of the cash
dividend foregone is recognised in the revenue return column of the Statement of Comprehensive Income. Any excess in value
of shares received over the amount of cash dividend foregone is recognised in the capital return column of the Statement of
Comprehensive Income.
The fixed returns on debt securities and non-equity shares are recognised under the effective interest rate method.
Bank interest is accounted for on an accrual basis. Interest outstanding at the year end is calculated on a time apportionment
basis using market rates of interest.
(d) Written Options
The Company may write exchange-traded options with a view to generating income. This involves writing short-dated covered
call options and put options. The use of financial derivatives is governed by the Company’s policies, as approved by the Board.
These options are recorded initially at fair value, based on the premium income received, and are then measured at subsequent
reporting dates at fair value. Changes in the fair value of the options are recognised in the capital return for the year.
The option premiums are recognised evenly over the life of the option and shown in the revenue return, with an appropriate
amount shown in the capital return to ensure the total return reflects the overall change in the fair value of the options.
Where an option is exercised, any balance of the premium is recognised immediately in the revenue return with a corresponding
adjustment in the capital return based on the amount of the loss arising on exercise of the option.
(e) Expenses and Finance Costs
All expenses, including the management fee, are accounted for on an accrual basis.
Expenses are allocated wholly to the revenue column of the Statement of Comprehensive Income except as follows:
Expenses are charged to the capital column of the Statement of Comprehensive Income where a connection with the
maintenance or enhancement of the value of investments can be demonstrated. In this respect the investment management
fees have been charged to the Statement of Comprehensive Income in line with the Board’s expected long-term split of returns,
in the form of capital gains and income from the Company’s portfolio. As a result, 20% of the investment management fees are
charged to the revenue account and 80% charged to the capital account of the Statement of Comprehensive Income.
Finance costs are calculated using the effective interest rate method and are accounted for on an accruals basis and, in line with
the management fee expense, are charged 20% to the revenue account and 80% to the capital account of the Statement of
Comprehensive Income.
Any performance fee accrued is charged entirely to capital as the fee is based on the outperformance of the Benchmark and is
expected to be attributable largely, if not wholly, to capital performance. A provision will be recognised when outperformance
has been achieved in accordance with the calculations detailed on page 38.
The research costs relate solely to specialist financial research and are accounted for on an accruals basis. They are allocated
20% to revenue and 80% to capital in line with the expected long-term split of revenue and capital return from the Company’s
investment portfolio.
(f) Tax
The tax expense represents the sum of the overseas withholding tax deducted from investment income, tax currently payable
and deferred tax.
The tax currently payable is based on the taxable profits for the year ended 30 November 2024. Taxable profit differs from net
profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable
or deductible in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current
tax is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date.
Financial Statements and Notes
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 87
In line with the recommendations of the SORP, the allocation method used to calculate tax relief on expenses presented against
capital returns in the supplementary information in the Statement of Comprehensive Income is the “marginal basis”. Under this
basis, if taxable income is capable of being offset entirely by expenses presented in the revenue return column of the Statement
of Comprehensive Income, then no tax relief is transferred to the capital return column.
Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit,
and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised.
Investment trusts which have approval as such under Section 1158 of the Corporation Tax Act 2010 are not liable for taxation
on UK capital gains.
The Company is liable to Indian capital gains tax under Section 115 AD of the Indian Income Tax Act 1961. The Indian capital
gains tax provision represents an estimate of the amount of tax payable by the Company. Tax amounts payable may differ from
this provision depending on when the Company disposes of its investments. The current provision for Indian capital gains tax is
calculated based on the long term (securities held more than one year) or short term (securities held less than one year) nature
of the investments and the applicable tax rate at the year end. With effect from 23 July 2024, the short-term tax rate is 20%
(previously 15%) and the long-term tax rate is 12.5% (previously 10%). The estimated tax charge is subject to regular review
including a consideration of the likely period of ownership, tax rates and market valuation movements. The provision at the
year end is recognised in the Balance Sheet and the year-on-year movement in the provision is recognised in the Statement of
Comprehensive Income.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or when the asset
is realised based on tax rates that have been enacted or substantively enacted at the balance sheet date.
Deferred tax is charged or credited in the Statement of Comprehensive Income, except when it relates to items charged or
credited directly to equity, in which case the deferred tax is also dealt with in equity.
(g) Investments Held at Fair Value Through Profit or Loss
When a purchase or sale is made under contract, the terms of which require delivery within the timeframe of the relevant
market, the investments concerned are recognised or derecognised on the trade date and are initially measured at fair value.
On initial recognition the Company has designated all of its investments as held at fair value through profit or loss as defined by
UK-adopted IAS. All investments are measured at subsequent reporting dates at fair value, which is either the bid price or the
last traded price, depending on the convention of the exchange on which the investment is quoted.
Written and purchased options are valued at fair value using quoted bid prices.
Index futures are valued at the difference between exchange settlement prices and inception prices.
All investments, classified as fair value through profit or loss, are further categorised into the fair value hierarchy detailed on
page 97.
Changes in fair value of all investments and derivatives held at fair value are recognised in the capital return column of the
Statement of Comprehensive Income. Gains or losses on derivative financial instruments are treated as capital or revenue
depending on the motive and circumstances of the transaction. Where positions are undertaken to protect or enhance capital,
the returns are capital and where they are generating or protecting revenue, the returns are revenue.
In respect of unquoted investments, or where the market for a financial instrument is not active, fair value is established by
using various valuation techniques, in accordance with the International Private Equity and Venture Capital (“IPEVC”) Valuation
Guidelines – Edition December 2022. These may include using reference to recent arm’s length market transactions between
knowledgeable, willing parties, if available, reference to recent rounds of re-financing undertaken by investee companies
involving knowledgeable parties, reference to the current fair value of another instrument that is substantially the same or a
relevant comparable.
Financial Statements and Notes
Notes to the Financial Statements continued
For the year ended 30 November 2024
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 88
2. Accounting Policies continued
(h) Receivables
Receivables are initially recognised at fair value and subsequently measured at amortised cost. Receivables do not carry
any interest and are short-term in nature and are accordingly stated at their nominal value (amortised cost) as reduced by
appropriate allowances for estimated irrecoverable amounts.
(i) Cash and Cash Equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, maturity of three months or less, highly
liquid investments that are readily convertible to known amounts of cash.
(j) Dividends Payable
Interim dividends payable to Shareholders are recognised in the Financial Statements in the period in which they are paid.
(k) Payables
Payables are not interest-bearing and are initially valued at fair value and subsequently stated at their nominal value (amortised cost).
(l) Bank Loans
Interest-bearing bank loans are initially recognised at cost, being the proceeds received net of direct issue costs, and
subsequently at amortised cost. The amounts falling due for repayment within one year are included under current liabilities and
more than one year under non-current liabilities in the Balance Sheet.
(m) Foreign Currency Translation
Transactions in foreign currencies are translated into Sterling at the rate of exchange ruling on the date of each transaction.
Monetary assets, monetary liabilities and equity investments in foreign currencies at the balance sheet date are translated into
Sterling at the rates of exchange ruling on that date.
Realised profits or losses on exchange, together with differences arising on the translation of foreign currency assets or liabilities,
are taken to the capital return column of the Statement of Comprehensive Income.
Foreign exchange gains and losses arising on investments held at fair value are included within changes in fair value.
(n) Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are
shown in equity, as a deduction, net of tax, from the proceeds.
(o) Capital Reserves
Capital reserve arising on investments sold includes:
– gains/losses on disposal of investments;
– exchange differences on currency balances; and
– other capital charges and credits charged to this account in accordance with the accounting policies above.
Capital reserve arising on investments held includes:
– increases and decreases in the valuation of investments held at the balance sheet date.
All of the above are accounted for in the Statement of Comprehensive Income.
When making a distribution to Shareholders, the Directors determine the profits available for distribution by reference to the
‘Guidance on realised and distributable profits under the Companies Act 2006’ issued by the Institute of Chartered Accountants
in England and Wales and the Institute of Chartered Accountants of Scotland in April 2017. The availability of distributable
reserves in the Company is dependent on those dividends meeting the definition of qualifying consideration within the guidance
and on the available cash resources of the Company and other accessible sources of funds. The distributable reserves are
therefore subject to any future restrictions or limitations at the time such distribution is made.
Financial Statements and Notes
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 89
(p) Repurchase of Ordinary Shares (including those held in treasury)
Where applicable, the costs of repurchasing Ordinary Shares including related stamp duty and transaction costs are taken
directly to equity and reported through the Statement of Changes in Equity as a charge on the special distributable reserve.
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 called up share capital and into the
capital redemption reserve.
Where shares are repurchased and held in treasury, the transfer to capital redemption reserve is made if and when such shares
are subsequently cancelled.
Where the shares held in treasury are reissued, the amount of the sales proceed up to the repurchased cost of those shares is
transferred back into special distributable reserve, the excess of the sales proceeds over the repurchased cost is transferred to
share premium.
(q) Share Issue Costs
Where applicable, costs incurred directly in relation to the issue of new shares together with additional share listing costs have
been deducted from the share premium reserve.
(r) Segmental Reporting
Under IFRS 8 Operating Segments, operating segments are considered to be the components of an entity about which separate
financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate
resources and in assessing performance. The chief operating decision maker has been identified as the Investment Manager
(with oversight from the Board).
The Directors are of the opinion that the Company has only one operating segment and as such no distinct segmental reporting
is required.
(s) Key Estimates and Judgements
The preparation of Financial Statements in conformity with UK-adopted IAS requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and
expenses. Estimates and assumptions used in preparing the Financial Statements are reviewed on an ongoing basis and are
based on historical experience and various other factors that are believed to be reasonable under the circumstances. The results
of these estimates and assumptions form the basis of making judgements about carrying values of assets and liabilities that are
not readily apparent from other sources.
The key judgements and sources of estimation uncertainty that have a significant risk of causing material adjustment to the
carrying amounts of assets and liabilities and expenses in future periods are as follows:
Valuation of Level 3 Investments
Investments valued using valuation techniques include unlisted financial investments, which by their nature, do not have an
externally quoted price based on regular trades.
The valuation techniques used may include the techniques described in note 2(g). When determining the inputs into the
valuation techniques used, priority is given to publicly available prices from independent sources when available, but overall the
source of pricing is chosen with the objective of arriving at a fair value measurement that reflects the price at which an orderly
transaction would take place between market participants at the balance sheet date.
Financial Statements and Notes
Notes to the Financial Statements continued
For the year ended 30 November 2024
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 90
2. Accounting Policies continued
(t) New and Revised Accounting Standards
There were no new UK-adopted IAS or amendments to UK-adopted IAS applicable to the current year which had any significant
impact on the Company’s Financial Statements.
i) The following new or amended standards became effective for the current annual reporting period and the adoption of the
standards and interpretations have not had a material impact on the Financial Statements of the Company.
Standards &
Interpretations
Effective for periods
commencing on or after
Disclosure of
Accounting Policies
(Amendments to
IAS 1 and IFRS Practice
Statement 2)
Requirement amended to disclose material accounting policies instead
of significant accounting policies and provided guidance in making
materiality judgements to accounting policy disclosure.
1 January 2023
Definition of Accounting
Estimates (amendments
to IAS 8)
Introduced the definition of accounting estimates and included
other amendments to IAS 8 to help entities distinguish changes in
accounting estimates from changes in accounting policy.
1 January 2023
International Tax
Reform - Pillar
Two Model Rules
(Amendments to IAS 12)
A mandatory temporary exception to the accounting for deferred taxes
arising from the jurisdictional implementation of the Pillar Two model
rules; and disclosure requirements for affected entities to help users of
the Financial Statements to better understand an entity’s exposure to
Pillar Two income taxes arising from that legislation, particularly before
its effective date.
1 January 2023
ii) At the date of authorisation of the Company’s Financial Statements, the following relevant standards that potentially impact
the Company are in issue but are not yet effective and have not been applied in the Financial Statements:
Standards &
Interpretations
Effective for periods
commencing on or after
Amendments to IAS 1
Presentation of Financial
Statements
– Non-current liabilities
with Covenants
– Deferral of Effective
Date Amendment
(published 15 July
2020)
Classification of
Liabilities as Current
or Non-Current
(Amendments to IAS 1)
(publicised 23 January
2020)
The amendments clarify that only covenants with which an entity
must comply on or before the reporting date will affect a liability’s
classification as current or non-current and the disclosure requirement
in the Financial Statements for the risk that non-current liabilities with
covenant could become repayable within twelve months.
1 January 2024
Supplier Finance
Arrangements
(Amendments to IAS 7
and IFRS 7)
The amendments address the disclosure requirements to enhance the
transparency of supplier finance arrangements and their effects on a
company’s liabilities, cash flows and exposure to liquidity risk.
1 January 2024
The Directors expect that the adoption of the standards listed above will have either no impact or that any impact will not be
material on the Financial Statements of the Company in future periods.
Financial Statements and Notes
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 91
3. Investment Income
Year ended
30 November 2024
£’000
Year ended
30 November 2023
£’000
Revenue:
UK dividends 2,933 2,391
Overseas dividends 13,182 13,313
Interest on debt securities 2,952 3,439
Total Investment Income 19,067 19,143
Included within income from investments is £1,460,000 (2023: £623,000) of special dividends classified as revenue in nature in
accordance with note 2 (c). No special dividends have been recognised in capital (2023: nil).
4. Other Operating Income
Year ended
30 November 2024
£’000
Year ended
30 November 2023
£’000
Bank interest 1,505 916
Total other operating income 1,505 916
5. Gains/(losses) on Investments Held at Fair Value
Year ended
30 November 2024
£’000
Year ended
30 November 2023
£’000
Net gains/(losses) on disposal of investments at historic cost 68,405 (1,274)
Less fair value adjustments in earlier years (21,042) (26,371)
Gains/(losses) based on carrying value at previous balance sheet date 47,363 (27,645)
Valuation gains on investments held during the year 109,553 1,868
156,916 (25,777)
6. Other Currency Losses
Year ended
30 November 2024
£’000
Year ended
30 November 2023
£’000
Exchange losses on currency balances (2,408) (1,519)
Exchange gains on the loan facility 96 1,367
(2,312) (152)
Financial Statements and Notes
Notes to the Financial Statements continued
For the year ended 30 November 2024
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 92
7. Investment Management Fee
Year ended
30 November 2024
£’000
Year ended
30 November 2023
£’000
Management fee
– charged to revenue 772 704
– charged to capital 3,088 2,815
Investment management fee payable to Polar Capital LLP 3,860 3,519
Management fees are allocated 20% to revenue and 80% to capital. Details of the investment management fees are set out in
the Strategic Report on page 37.
8. Other Administrative Expenses (including VAT where appropriate)
Year ended
30 November 2024
£’000
Year ended
30 November 2023
£’000
Directors' fees
1
142 145
Directors' NIC 15 15
Auditors' remuneration - for audit of the Financial Statements
2
54 50
Depositary fee
3
37 34
HSBC administration fee
3
206 205
Registrar fee 38 39
Custody and other bank charges
4
77 87
UKLA and LSE listing fees 57 49
Legal & professional fees 3 (3)
AIC fees 21 21
Directors’ and officers’ liability insurance 19 19
Corporate broker's fee
5
16 16
Marketing expenses
6
72 72
Research costs - allocated to revenue
7
11 5
Shareholder communications 22 17
Other expenses 8 3
Total other administrative expenses allocated to revenue 798 774
Research costs - allocated to capital
7
46 20
Total other administrative expenses 844 794
1 Full disclosure is given in the Directors’ Remuneration Report on page 66.
2 The base audit fee for the statutory audit in the current year was £53,500 (2023: £49,480).
3 Fees are determined on the pre-approved rate card with HSBC.
4 Fee is based on the value of the assets and geographical activity and determined on the pre-approved rate card with HSBC.
5 Corporate Broker fee is reduced by the commission received on the share buybacks during the year.
6 Includes bespoke marketing budget of £50,000 (2023: £50,000).
7 Research costs (which applied from 3 January 2018) payable by the Company relate solely to specialist financial research. The budget for the year is $75,000 (2023: $40,000).
Ongoing charges represents the total expenses of the Company, excluding finance costs and tax, expressed as a percentage of
the average daily net asset value, in accordance with AIC guidance issued in July 2022.
The ongoing charges ratio for the year ended 30 November 2024 was 0.85% (2023: 0.86%). See Alternative Performance
Measures on pages 112 to 114.
Financial Statements and Notes
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 93
9. Finance Costs
Year ended 30 November 2024 Year ended 30 November 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Interest on loans and overdrafts 781 3,123 3,904 699 2,795 3,494
Loan arrangement fees 18 73 91 23 92 115
799 3,196 3,995 722 2,887 3,609
Finance costs are allocated 20% to revenue and 80% to capital.
10. Tax
a) Analysis of tax charge/(credit) for the year:
Year ended 30 November 2024 Year ended 30 November 2023
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Overseas tax 1,319 – 1,319 1,438 – 1,438
Tax relief in capital 669 (669) – 693 (693) –
Withholding tax recovered – – – (145) – (145)
Indian capital gains tax – 332 332 – (2) (2)
Total tax charge/(credit) for the year (see note 10b) 1,988 (337) 1,651 1,986 (695) 1,291
b) Factors affecting tax charge/(credit) for the year:
The charge/(credit) for the year can be reconciled to the profit/(loss) before tax per the Statement of Comprehensive Income as
follows:
Year ended 30 November 2024 Year ended 30 November 2023
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Profit/(loss) before tax 18,203 148,023 166,226 17,859 (32,093) (14,234)
Tax at the UK corporation tax rate of 25% (2023: effective
tax rate of 23%) 4,551 37,006 41,557 4,108 (7,381) (3,273)
Tax effect of non–taxable dividends (3,871) – (3,871) (3,382) – (3,382)
Capital (gains)/losses that are not taxable – (38,589) (38,589) – 6,065 6,065
Overseas tax suffered 1,319 – 1,319 1,438 – 1,438
Indian capital gains tax – 332 332 – (2) (2)
Unrelieved current period expenses and deficits – 914 914 – 623 623
Withholding tax recovered – – – (145) – (145)
Tax relief on overseas tax suffered (11) – (11) (33) – (33)
Total tax charge/(credit) for the year (see note 10a) 1,988 (337) 1,651 1,986 (695) 1,291
Financial Statements and Notes
Notes to the Financial Statements continued
For the year ended 30 November 2024
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 94
10. Tax continued
c) Factors that may affect future tax charges:
The Company has an unrecognised deferred tax asset of £3,524,000 (2023: £2,618,000). The deferred tax asset is based on the
current corporation tax rate of 25% (2023: 25%).
It is unlikely that the Company will generate sufficient taxable profits in the future to utilise these expenses and deficits and
therefore no deferred tax asset has been recognised.
Due to the Company’s tax status as an investment trust and the intention to continue meeting the conditions required to obtain
approval of such status in the foreseeable future, the Company has not provided UK tax on any capital gains arising on the
revaluation or disposal of investments held by the Company.
The Company is liable to Indian capital gains tax under Section 115 AD of the Indian Income Tax Act 1961. A tax provision on
Indian capital gains is calculated based on the long term (securities held more than one year) or short term (securities held less
than one year) nature of the investments and the applicable tax rate at the year end. The current rates from 23 July 2024 of
short-term tax rates are 20% (previously 15%) and the long term tax rates are 12.5% (previously 10%) respectively. At the year
ended 30 November 2024, the Company has a deferred tax liability of £396,000 (2023: £263,000) on capital gains which may
arise if Indian investments are sold.
11. Earnings/(Losses) Per Ordinary Share
Year ended 30 November 2024 Year ended 30 November 2023
Revenue
return
Capital
return
Total
return
Revenue
return
Capital
return
Total
return
The calculation of basic earnings/(losses) per share is
based on the following data:
Net profit/(loss) for the year (£'000) 16,215 148,360 164,575 15,873 (31,398) (15,525)
Weighted average ordinary shares
in issue during the year 305,146,436 305,146,436 305,146,436 319,065,538 319,065,538 319,065,538
Basic - ordinary shares (pence) 5.31 48.62 53.93 4.97 (9.84) (4.87)
As at 30 November 2024 there were no potentially dilutive shares in issue (2023: nil).
12. Amounts Recognised as Distributions to Ordinary Shareholders in the Year
Dividends paid in the year ended 30 November 2024
Payment date
No. of shares Amount per share
Year ended
30 November 2024
£’000
29 February 2024
307,160,405 2.10p 6,450
30 August 2024
304,272,705 2.50p 7,607
14,057
The revenue available for distribution by way of dividend for the year is £16,215,000 (2023: £15,873,000).
Financial Statements and Notes
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 95
The total dividends payable in respect of the financial year ended 30 November 2024, which is the basis on which the
requirements of section 1158 Corporation Tax Act 2010 are considered, are set out below:
Payment date
No. of shares Amount per share
Year ended
30 November 2024
£’000
30 August 2024
304,272,705 2.50p 7,607
28 February 2025
303,219,365
2.20p 6,671
14,278
The total dividends payable in respect of the financial year ended 30 November 2023, which is the basis on which the
requirements of section 1158 Corporation Tax Act 2010 are considered, are set out below:
Payment date
No. of shares Amount per share
Year ended
30 November 2023
£’000
31 August 2023
315,955,329 2.45p 7,741
29 February 2024
307,160,405 2.10p 6,450
14,191
All dividends are paid as interim dividends, and all have been charged to revenue, where necessary utilising the revenue reserve
and in exceptional circumstances utilising the special distributable reserve.
13. Investments Held at Fair Value Through Profit or Loss
(a) Investments held at fair value through profit or loss
30 November 2024
£’000
30 November 2023
£’000
Opening book cost 476,645 506,766
Opening investment holding gains 41,479 65,982
Opening fair value 518,124 572,748
Analysis of transactions made during the year
Purchases at cost 666,169 286,636
Sales proceeds received (681,407) (315,669)
Gains/(losses) on investments held at fair value 156,916 (25,777)
Amortisation on fixed interest securities 141 186
Closing fair value 659,943 518,124
Closing book cost 529,953 476,645
Closing investment holding gains 129,990 41,479
Closing fair value 659,943 518,124
The Company received £681,407,000 (2023: £315,669,000) from disposal of investments in the year. The book cost of these
investments when they were purchased were £613,002,000 (2023: £316,943,000). These investments have been revalued over
time and until they were sold any unrealised gains/losses were included in the fair value of the investments.
Financial Statements and Notes
Notes to the Financial Statements continued
For the year ended 30 November 2024
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 96
13. Investments Held at Fair Value Through Profit or Loss continued
(a) Investments held at fair value through profit or loss continued
The following transactions costs, including stamp duty and broker commissions were incurred during the year:
30 November 2024
£’000
30 November 2023
£’000
On acquisitions 924 473
On disposals 561 246
1,485 719
(b) Changes in Derivative Financial Instruments
(i) Futures
30 November 2024
£’000
30 November 2023
£’000
Valuation at 1 December (288) 6
Additions at cost 1,816 683
Proceeds of disposal (984) (386)
Losses on disposal (832) (297)
Valuation gains/(losses) 638 (294)
Valuation at 30 November 350 (288)
The Company invested in currency and index futures during the year for the purposes of efficient portfolio management. As at
30 November 2024, the Company held a short position of 80 CME British pound/ Japanese Yen December 2024 contracts and
a short position of 250 CME Euro December 2024 contracts with a market value gain of £350,000. (2023: Long position of
80 CME Japanese Yen December 2023 contracts, a short position of 250 CME British Pound December 2023 contracts and a
short position of 20 CME British Pound/Japanese Yen December 2023 contracts with a market value loss of £288,000).
(ii) Options
30 November 2024
£’000
30 November 2023
£’000
Valuation at 1 December 478 –
Additions at cost 1,805 1,111
Proceeds of disposal (2,226) (782)
(Losses)/gains on disposal (201) 293
Valuation gains/(losses) 144 (144)
Valuation at 30 November – 478
The Company invested in purchased call and put options during the year for the purposes of efficient portfolio management.
As at 30 November 2024, the company had sold out of all options. (2023: £478,000 - SPDR S&P Regional Banking ETF call option).
(c) Fair Value of Open Derivative Contracts
30 November 2024
£’000
30 November 2023
£’000
CME Japanese Yen December 2023 Futures – 28
SPDR S&P Regional Banking ETF Call Options – 478
CME Euro December 2024 Futures 728 –
728 506
CME British Pound December 2023 Futures – (231)
CME British Pound/Japanese Yen December 2024 Futures (378) (85)
(378) (316)
Total 350 190
Financial Statements and Notes
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 97
(d) Fair value hierarchy
The Company’s financial instruments within the scope of IFRS 7 that are held at fair value comprise its investment portfolio and
derivative financial instruments.
They are categorised into a hierarchy consisting of the following three levels:
Level 1 – valued using quoted prices in active markets for identical assets or liabilities.
Level 2 – valued by reference to valuation techniques using observable inputs other than quoted market prices included within Level 1.
Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market data.
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to ‘the fair
value measurement of the relevant asset’.
Details of the valuation techniques used by the Company are given in note 2(g) on page 87.
The following tables set out the fair value measurements using the IFRS 7 hierarchy at 30 November 2024 and 2023:
As at 30 November 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity Investments and derivative financial
instruments 612,625 – 6,699 619,324
Interest bearing securities 40,969 – – 40,969
Total 653,594 – 6,699 660,293
The Level 3 investment relates to the shares in Atom Bank and Moneybox.
As at 30 November 2023
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity Investments and derivative financial
instruments 464,999 478 5,054 470,531
Interest bearing securities 47,783 – – 47,783
Total 512,782 478 5,054 518,314
The Level 2 investment relates to the SPDR S&P Regional Banking ETF Call Options.
The Level 3 investment relates to the shares in Atom Bank and Moneybox.
There have been no transfers during the year between Levels 1 and 2. A reconciliation of fair value measurements in Level 3 is
set out below.
Level 3 investments at fair value through profit or loss
30 November 2024
£’000
30 November 2023
£’000
Opening balance 5,054 4,551
Total gains included in the Statement of Comprehensive Income - on assets
held at the year end 1,645 503
Closing balance 6,699 5,054
Level 3 Investments are recognised at fair value through profit or loss on a recurring basis.
Level 3 investments are valued in accordance with the accounting policy in Note 2(g) on page 87.
A +/- 10% change in the price used to value the investment in the level 3 investments at the year end would result in a +/- £670,000
(2023: £505,000) impact on the gains or losses on investments held at fair value in the Statement of Comprehensive Income.
Financial Statements and Notes
Notes to the Financial Statements continued
For the year ended 30 November 2024
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 98
13. Investments Held at Fair Value Through Profit or Loss continued
(e) Unquoted Investments
The value of the unquoted investments as at 30 November 2024 was £6,699,000 (2023: £5,054,000) and the portfolio
comprised the following holdings:
30 November 2024
£’000
30 November 2023
£’000
Atom Bank 1,281 1,281
Moneybox 5,418 3,773
6,699 5,054
Atom Bank is a UK digital bank founded in 2014 and based in Durham. It currently offers fixed rate and instant access savings
products, business banking loans and retail mortgages.
At 31 March 2024 (Atom Bank’s financial year end), Atom Bank announced that it had made a pre-tax profit of £6,700,000
(2023: losses £10,097,000) and had net assets attributable to Shareholders of £402,400,000 (2023: £283,134,000).
The valuation of Atom Bank was reviewed by the Investment Manager and the Board during both the half year and full year
financial results process. The valuation of Atom Bank at the year end is supported by the secondary transaction announced by
the company in November 2024. To factor in any uncertainty surrounding the current price, if the fair value of the investment
at the reporting date has been stressed by +/- 10% (2023: +/- 10%) the fair value would increase/decrease by £128,000 (2023:
£128,000).
Moneybox is an on-line UK savings and wealth platform and provides mobile applications which enable customers to make
regular savings into tax efficient products, such as ISAs, or a personal pension, as well as various savings accounts.
At 31 May 2024 (Moneybox’s financial year end), Moneybox announced that it had made pre-tax profit of £26,542,000 (2023:
losses £4,141,000) and had net assets attributable to Shareholders of £87,173,000 (2023: £62,569,000).
The valuation of Moneybox was reviewed by the Investment Manager and the Board during both the half year and full year
financial results process. During the year, the valuation of Moneybox was increased following the announcement of the company’s
completion of a secondary share sale bringing in new investors. The valuation for the current year has been calculated using the
price of this recent arms length transaction. To factor in any uncertainty surrounding the current price, if the fair value of the
investment at the reporting date has been stressed by +/- 10% the fair value would increase/decrease by £542,000.
In the prior year the valuation of Moneybox was calculated by calculating the average enterprise value to sales ratio of a peer
group of listed companies and then applying a discount to reflect the smaller size and narrower focus of Moneybox. This was cross
checked using a discounted cash flow analysis. An increase/decrease in the discount used of 5% would decrease/increase the fair
value by £290,000 and an increase/decrease of the multiple of sales of the peer group used of 0.5x would increase/decrease the
fair value by £295,000.
See Note 13(d) on page 97 for further details
14. Receivables
30 November 2024
£’000
30 November 2023
£’000
Securities sold awaiting settlement 18,708 4,933
Dividends and interest receivable 2,480 1,930
VAT recoverable 32 36
Overseas tax recoverable 1,618 1,487
Prepayments 35 33
22,873 8,419
Financial Statements and Notes
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 99
15. Cash and Cash Equivalents
30 November 2024
£’000
30 November 2023
£’000
Cash at bank 26,436 36,406
Cash held at derivative clearing houses 1,742 856
Cash and Cash Equivalents 28,178 37,262
Bank overdraft – (1)
28,178 37,261
16. Payables
30 November 2024
£’000
30 November 2023
£’000
Securities purchased awaiting settlement 376 4,521
Repurchase of treasury shares awaiting settlement – 189
Accruals 1,959 1,792
2,335 6,502
17. Bank Loans
i) Bank loans
30 November 2024
£’000
30 November 2023
£’000
The Company has the following unsecured term loans:
£15m at 3.921% repayable 8 July 2025 15,000 15,000
US$18.4m at 4.208% repayable 8 July 2025 14,493 14,551
29,493 29,551
The Company made the following drawdowns from the RBS revolving credit facility of £50m
as at year ended 30 November 2024 (2023: RBS revolving credit facility of £50m):
£20m repayable 8 July 2025 20,000 20,000
£5m repayable 8 July 2025 5,000 5,000
US$6m repayable 8 July 2025 4,721 4,740
US$6m repayable 8 July 2025 4,721 4,740
£5m repayable 8 July 2025 5,000 5,000
£10m repayable 8 July 2025 10,000 –
78,935 69,031
During the year, the Company had a further draw down of £10m from the three-year £50m revolving credit facility, all expiring
on 8 July 2025. As at 30 November 2024, the Company had drawn down £40m and US$12m (£9.4m) respectively from the
revolving credit facility, effectively fully drawn.
The term loans of £15m and USD$18.4m (£14.5m) held at the year end is due for settlement within 1 year and is stated at its
fair value, which equates to amortised cost.
Both the term loan and credit facility are unsecured but subject to certain covenants and restrictions, all of which have been
complied with during the year. The main covenants relating to the term loan and credit facility are:
(i) Consolidated Gross Borrowing not to exceed 30% of the Adjusted Portfolio Value at any time.
(ii) The number of Eligible Investments shall not be less than 50 at any time.
(iii) The Adjusted Portfolio Value shall at all times be equal to or more than £240,000,000.
Financial Statements and Notes
Notes to the Financial Statements continued
For the year ended 30 November 2024
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 100
17. Bank Loans continued
ii) Reconciliation of bank loans
30 November 2024
£’000
30 November 2023
£’000
Bank loans held as at 1 December 2023 69,031 60,507
RCF drawn under RBS facility due to expire in July 2025 10,000 9,891
Effect of changes in foreign exchange rates on Term loan and RCF (96) (1,367)
Bank loans held as at 30 November 2024 78,935 69,031
The movement in the liability arising from the bank loans due to changes in foreign exchange rates is a non-cash movement and
is included in the Statement of Comprehensive Income within ‘Other currency losses’.
18. Non–current Liabilities
30 November 2024
£’000
30 November 2023
£’000
Indian capital gains tax provision 396 263
Bank loan – 69,031
396 69,294
19. Called Up Share Capital
30 November 2024
£’000
30 November 2023
£’000
Allotted, Called up and Fully paid:
Ordinary shares of 5p each:
Opening balance of 308,861,687* (2023: 325,394,000) 15,443 16,270
Repurchase of 5,642,322 (2023: 16,532,313) ordinary shares into treasury (282) (827)
Allotted, Called up and Fully paid: 303,219,365* (2023: 308,861,687) ordinary shares
of 5p 15,161 15,443
28,530,635 (2023: 22,888,313) ordinary shares held in treasury 1,427 1,145
At 30 November 2024 16,588 16,588
* Excluding shares held in Treasury.
During the year, there were 5,642,322 ordinary shares repurchased into treasury (2023: 16,532,313) for a total consideration
£9,038,000 (2023: £23,139,000). No ordinary shares were issued during the year (2023: nil).
The ordinary shares held in treasury have no voting rights and are not entitled to dividends.
20. Capital Redemption Reserve
30 November 2024
£’000
30 November 2023
£’000
At 1 December 2023 251 251
At 30 November 2024 251 251
The capital redemption reserve represents the nominal value of shares repurchased and cancelled.
This reserve is not distributable.
Financial Statements and Notes
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 101
21. Share Premium Reserve
30 November 2024
£’000
30 November 2023
£’000
At 1 December 2023 311,369 311,380
Issue cost – (11)
At 30 November 2024 311,369 311,369
The prior year cost of £11,000 relates to a VAT adjustment in respect to share issue costs following the submission of the
Company’s VAT return.
The share premium arises from excess of consideration received on the issue of the shares over the nominal value.
This reserve is not distributable.
22. Special Distributable Reserve
30 November 2024
£’000
30 November 2023
£’000
At 1 December 2023 105,117 128,256
Repurchase of 5,642,322 (2023: 16,532,313) ordinary shares into treasury (9,038) (23,139)
At 30 November 2024 96,079 105,117
The special distributable reserve was created following approval from the Court, received on 4 September 2013, to cancel the
share premium account from initial share offering.
Surpluses to the credit of the special distributable reserve can be used to purchase the Company’s own shares. In addition,
the Company may use this reserve for the payment of dividends.
23. Capital Reserves
30 November 2024
£’000
30 November 2023
£’000
At 1 December 2023 43,507 74,905
Net gains/(losses) on disposal of investments 47,363 (27,645)
Valuation gains on investments held during the year 109,553 1,868
Net losses on derivative contracts (251) (442)
Exchange losses on currency balances (2,408) (1,519)
Exchange gains on the loan facility 96 1,367
Investment management fee charged to capital (3,088) (2,815)
Research costs charged to capital (46) (20)
Finance costs charged to capital (3,196) (2,887)
Indian capital gains tax (332) 2
Tax relief due from revenue 669 693
At 30 November 2024 191,867 43,507
Financial Statements and Notes
Notes to the Financial Statements continued
For the year ended 30 November 2024
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 102
23. Capital Reserves continued
The balance on the capital reserve represents a profit of £131,070,000 (2023: profit of £42,095,000) on investments held and a
gain of £60,797,000 (2023: gain of £1,412,000 ) on investments sold.
The balance on investments held comprises holding gains on investments (which may become realised) and other amounts,
which are unrealised. An analysis has not been made between the amounts that are realised (and may be distributed or used to
repurchase the Company’s shares) and those that are unrealised.
The balance on investments sold are realised distributable capital reserves which may be used to repurchase the Company’s
shares or be distributed as dividends subject to meeting the definition of qualifying consideration as noted in Note 2(o).
24. Revenue Reserve
30 November 2024
£’000
30 November 2023
£’000
At 1 December 2023 11,366 9,892
Revenue profit 16,215 15,873
Interim dividends paid (14,057) (14,399)
At 30 November 2024 13,524 11,366
The revenue reserve may be distributed or used to repurchase the Company’s shares (subject to being a positive balance).
25. Net Asset Value Per Ordinary Share
30 November 2024 30 November 2023
Net assets attributable to ordinary Shareholders (£'000) 629,678 488,198
Ordinary shares in issue at end of year (excluding shares held in treasury) 303,219,365 308,861,687
Net asset value per ordinary share (pence) 207.66 158.06
As at 30 November 2024, there were no potentially dilutive shares in issue (2023: nil).
26. Transactions with the Investment Manager and Related Party Transactions
(a) Transactions with the manager
Under the terms of an agreement dated 11 June 2013 the Company has appointed Polar Capital LLP (“Polar Capital”) to provide
investment management, accounting, secretarial and administrative services. Details of the fee arrangement for these services are
given in the Strategic Report. The total fees, paid under this agreement to Polar Capital in respect of the year ended 30 November
2024 were £3,860,000 (2023: £3,519,000) of which £350,000 (2023: £278,000) was outstanding at the year end.
A performance fee based on cumulative relative performance since 23 April 2020, amounting to £nil (2023: £nil) has been
accrued at the year end. Any accrued performance fee is payable at the end of each five-year tender period, the next being in
2025. See Strategic Report on page 38 for more details.
In addition, the total research costs in respect of the year from 1 December 2023 to the year ended 30 November 2024 were
£57,000 (2023: £25,000) of which £19,000 (2023: £8,000) was outstanding.
(b) Related party transactions
The Company has no employees and therefore no key management personnel other than the Directors. The Company
paid £142,000 (2023: £145,000) to the Directors of which £35,000 (2023: £23,000) was outstanding at the year end. The
Remuneration Report is set out on pages 64 to 68. When dividends are paid by the Company these are received by the Directors
who own shares at the same rates and terms as by all other Shareholders.
Financial Statements and Notes
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 103
27. Derivatives and Other Financial Instruments
Risk management policies and procedures for the Company
The Company invests in equities, debt securities and other financial instruments for the long-term to further the investment
objective set out on page 36.
This exposes the Company to a range of financial risks that could impact on the assets or performance of the Company.
The main risks arising from the Company’s pursuit of its investment objective are market risk, liquidity risk and credit risk and
the Directors’ approach to the management of them is set out below.
The Company’s exposure to financial instruments can comprise:
– Equity and non-equity shares and fixed interest securities which may be held in the investment portfolio in accordance with
the investment objective.
– Borrowings, the main purpose of which is to enhance returns.
– Cash, liquid resources and short-term debtors and creditors that arise directly from the Company’s operations.
– Derivative transactions which the Company enters into may include equity or index options, contracts for difference, index
futures contracts and forward foreign exchange contracts. The purpose of these is to manage the market price risks and
foreign exchange risks arising from the Company’s investment activities.
The overall management of the risks is determined by the Board and its approach to each risk identified is set out below. The
Board and the Manager co-ordinate the risk management and the Manager assesses the exposure to market risk when making
each investment decision.
(a) Market Risk
Market risk comprises three types of risk: market price risk (see note 27(a)(i)), currency risk (see note 27(a)(ii)), and interest rate
risk (see note 27(a)(iii)). Further details are included in the Strategic Report on page 42.
(i) Market Price Risk
The Company is an investment company and as such its performance is dependent on its valuation of its investments.
Consequently, market price risk is the most significant risk that the Company faces.
Market price risk arises mainly from uncertainty about future prices of financial instruments used in the Company’s operations.
It represents the potential loss the Company might suffer through holding market positions in the face of price movements.
A detailed breakdown of the investment portfolio is given on pages 24 to 26. Investments are valued in accordance with the
accounting policies as stated in note 2(g).
At the year end, the Company’s portfolio included index futures contracts to the value of £350,000 (2023: loss of £288,000)
and purchased call options to the value of £nil (2023: £478,000).
Financial Statements and Notes
Notes to the Financial Statements continued
For the year ended 30 November 2024
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 104
27. Derivatives and Other Financial Instruments continued
(a) Market Risk continued
(i) Market Price Risk continued
Management of the risk
In order to manage this risk it is the Board’s policy to hold an appropriate spread of investments in the portfolio in order to
reduce both the statistical risk and the risk arising from factors specific to a particular financial sub-sector. The allocation of
assets to international markets, together with stock selection covering small, medium and large companies, and the use of
options, are additional factors which act to reduce price risk. The Investment Manager actively monitors market prices and
reports to the Board, which meets regularly in order to consider investment strategy.
Market price risks exposure
The Company’s exposure to changes in market prices at 30 November on its investments was as follows:
30 November 2024
£’000
30 November 2023
£’000
Investments held at fair value through profit or loss 659,943 518,124
Derivative financial instruments held at fair value through profit or loss 350 190
660,293 518,314
Market price risk sensitivity
The following table illustrates the sensitivity of the return after taxation for the year and the value of Shareholders’ funds to an
increase or decrease of 15% (2023: 15%) in the fair values of the Company’s investments. This level of change is considered to
be reasonably possible based on observation of current market conditions and historic trends. The sensitivity analysis is based on
the Company’s investments at each balance sheet date, adjusting for a change in management fee, with all other variables held
constant.
30 November 2024 30 November 2023
Increase in fair value
£’000
Decrease in fair value
£’000
Increase in fair value
£’000
Decrease in fair value
£’000
Statement of Comprehensive
Income - profit after tax
Revenue return (139) 139 (109) 109
Capital return 98,489 (98,489) 77,312 (77,312)
Change to the profit after
tax for the year 98,350 (98,350) 77,203 (77,203)
Change to equity attributable to
Shareholders 98,350 (98,350) 77,203 (77,203)
(ii) Currency Risk
The Company’s total return and net assets can be significantly affected by currency translation movements as the majority of the
Company’s assets and revenue are denominated in currencies other than Sterling.
Management of the risk
The Manager mitigates risks through an international spread of investments.
Derivative contracts may be used to hedge against the exposure to currency risk at the Manager’s discretion.
Financial Statements and Notes
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 105
Foreign currency exposure
The table below (as continued) with non-monetary items on page 106, shows, by currency, the split of the Company’s monetary
assets, liabilities and investments that are priced in currencies other than Sterling.
30 November 2024
£’000
30 November 2023
£’000
Monetary Assets:
Cash and short term receivables
US dollars 30,218 15,217
Korean won 8,357 –
Australian dollars 7,431 7,471
Japanese yen 6,975 4,551
Canadian dollars 6,549 6,622
Euros 4,388 2,412
Vietnam dong 483 507
Indian rupee 150 152
Swiss francs 124 93
Taiwan dollars 100 104
Norwegian krona 27 28
Indonesian rupiah 23 –
Danish krone 13 –
Monetary Liabilities:
Other payables
US dollar (15,279) (20,671)
Korean won (8,357) –
Japanese yen (8,239) (4,875)
Indian rupee (396) (3,122)
Euros (749) (705)
Hong Kong dollars – (1)
Foreign currency exposure on net monetary items 31,818 7,783
Financial Statements and Notes
Notes to the Financial Statements continued
For the year ended 30 November 2024
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 106
27. Derivatives and Other Financial Instruments continued
(a) Market Risk continued
(ii) Currency Risk continued
30 November 2024
£’000
30 November 2023
£’000
Non-Monetary Items:
Investments held at fair value through profit or loss that are equities
US dollars 388,204 269,074
Euros 86,505 54,991
Japanese yen 20,602 8,021
Indian rupee 12,617 25,900
Australian dollars 12,611 4,125
Canadian dollars 10,910 17,271
Danish krone 8,790 –
Korean won 6,197 –
Malaysian ringgit 5,539 –
Philippine pesos 5,467 –
Indonesian rupiah 5,370 13,376
Swedish krona 2,372 9,660
Hong Kong dollars – 8,177
Mexican peso – 7,100
Thai baht – 5,174
Singapore dollars – 4,254
Total net foreign currency exposure
597,002 434,906
Foreign currency sensitivity
The following tables illustrate the sensitivity of net profit for the year and net assets with regard to the Company’s monetary
financial assets and liabilities and exchange rates. The sensitivity analysis is based on the Company’s monetary currency financial
instruments held at the balance sheet date and assumes a 20% (2023: 20%) appreciation or depreciation in Sterling against
the currencies to which the Company is exposed, which is considered to be a reasonable illustration based on the volatility of
exchange rates during the year.
If Sterling had weakened by 20% (2023: 20%) this would have had the following effect:
30 November 2024
£’000
30 November 2023
£’000
Statement of Comprehensive Income - profit after tax
Revenue return 2,668 3,015
Capital return 4,269 (470)
Change to the profit after tax for the year 6,937 2,545
Change to equity attributable to Shareholders 6,937 2,545
Financial Statements and Notes
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 107
Conversely if Sterling had strengthened by 20% (2023: 20%) this would have had the following effect:
30 November 2024
£’000
30 November 2023
£’000
Statement of Comprehensive Income - profit after tax
Revenue return (2,668) (3,015)
Capital return (4,269) 470
Change to the profit after tax for the year (6,937) (2,545)
Change to equity attributable to Shareholders (6,937) (2,545)
In the opinion of the Directors, while these are regarded as reasonable estimates, neither of the above sensitivity analysis are
representative of the year as a whole since the level of exposure changes frequently as part of the currency risk management
process used to meet the Company’s objectives.
(iii) Interest Rate Risk
The Company will be affected by interest rate changes as it holds interest-bearing financial assets. Interest rate changes will also
have an impact on the valuation of investments, although this forms part of price risk, which is considered separately above.
Management of the risk
The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account
when making investment decisions.
Derivative contracts may be used to hedge against the exposure to currency risk at the Manager’s discretion.
Interest rate exposure
The exposure, at 30 November 2024, of financial assets and liabilities to interest rate risk is shown by reference to:
– Floating interest rates (i.e. giving cash flow interest rate risk) - when the rate is due to be re-set; and
– Fixed interest rates (i.e. giving fair value interest rate risk) - when the financial instrument is due for repayment.
30 November 2024
Within one year
£’000
More than one year
£’000
Total
£’000
Exposure to floating interest rates:
Cash and cash equivalents 28,178 – 28,178
Bank loans (49,442) – (49,442)
Non-current asset investments held at fair value through profit or
loss – 33,046 33,046
Exposure to fixed interest rates:
Non-current asset investments held at fair value through
profit or loss – 7,923 7,923
Bank loans (29,493) – (29,493)
Total exposure to interest rates (50,757) 40,969 (9,788)
Financial Statements and Notes
Notes to the Financial Statements continued
For the year ended 30 November 2024
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 108
27. Derivatives and Other Financial Instruments continued
(a) Market Risk continued
(iii) Interest Rate Risk continued
30 November 2023
Within one year
£’000
More than one year
£’000
Total
£’000
Exposure to floating interest rates:
Cash and cash equivalents 37,262 – 37,262
Bank overdraft (1) – (1)
Bank loans – (39,480) (39,480)
Non-current asset investments held at fair value through profit or
loss – 40,788 40,788
Exposure to fixed interest rates:
Non-current asset investments held at fair value through profit or
loss – 6,995 6,995
Bank loans – (29,551) (29,551)
Total exposure to interest rates 37,261 (21,248) 16,013
The weighted average interest rate for the fixed rate financial assets was 6.1% (2023: 10.4%) and the effective period for
which the rate was fixed was 5.5 years (2023: 4.5years).
During the year, the Company maintained its £15m and USD$18.4m (£14.5m) term loan with The Royal Bank of Scotland
International Ltd, on which interest is payable at fixed rates of 3.921% and 4.208% respectively. The loan will expire on 8 July
2025. Details of the amounts drawn on the loan are given in Note 17.
The Company also maintained its three-year revolving credit facility for the amount of £50 million with The Royal Bank of
Scotland International Ltd. Interest is payable at the Compounded Reference Rate based on the secured overnight financing rate
(SOFR) as quoted in the market for the relevant currency and period, plus a margin of 1.30%, plus mandatory costs, which are
the lender’s costs of complying with certain regulatory requirements of the Bank of England. At the year end, the Company had
drawn down £40m and US$12m (£9.4m) respectively from the revolving credit facility.
The above amounts are not necessarily representative of the exposure to interest rates in the year ahead, as the level of cash
and investment in fixed interest securities varies during the year according to the performance of the stock market, events
within the wider economy and the Manager’s decisions on the best use of cash or borrowings over the year.
Interest rate sensitivity
The following table illustrates the sensitivity of the return after taxation for the year and net assets to an increase or decrease of
150 basis points (2023: 150 basis points) in interest rates regarding the Company’s monetary financial assets, which are subject to
interest rate risk. This level of change is considered to be reasonably possible based on observation of current market conditions.
The sensitivity analysis is based on the Company’s monetary financial instruments held at each balance sheet date, with all other
variables held constant.
30 November 2024 30 November 2023
Increase
in rate
£’000
Decrease
in rate
£’000
Increase
in rate
£’000
Decrease
in rate
£’000
Effect on revenue return 274 (274) 440 (440)
Effect on capital return (593) 593 (474) 474
Effect on net profit and on equity
attributable to Shareholders (319) 319 (34) 34
In the opinion of the Directors, the above sensitivity analysis may not be representative of the year as a whole, since the level of
exposure may change.
Financial Statements and Notes
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 109
(b) Liquidity Risk
Liquidity risk is the possibility of failure of the Company to realise sufficient assets to meet its financial liabilities.
Management of the risk
The Company’s assets mainly comprise readily realisable securities which may be sold to meet funding requirements as necessary.
Liquidity risk exposure
At 30 November the financial liabilities comprised of:
30 November 2024
£’000
30 November 2023
£’000
3 months or less:
Balances due to brokers 376 4,710
Accruals 1,959 1,792
Bank overdraft – 1
Fair value of open derivative contracts 378 316
3 to 12 months:
Bank loan 78,935 –
More than 12 months:
Indian capital gains tax provision 396 263
Bank loan – 69,031
82,044 76,113
(c) Credit Risk
Credit risk is the exposure to loss from failure of a counterparty to deliver securities or cash for acquisitions or disposal of
investments or to repay deposits.
Management of the risk
The Company manages credit risk by using brokers from a database of approved brokers and by dealing through Polar Capital.
All cash balances are held with approved counterparties.
HSBC Bank plc is the custodian of the Company’s assets. The Company’s assets are segregated from HSBC’s own trading assets
and are therefore protected in the event that HSBC were to cease trading.
These arrangements were in place throughout the current and prior year.
Credit risk exposure
The maximum exposure to credit risk at 30 November 2024 was £50,094,000 (2023: £44,631,000) comprising:
30 November 2024
£’000
30 November 2023
£’000
Balances due from brokers 18,708 4,933
Fair value of open derivative contracts 728 506
Accrued Income 2,480 1,930
Cash and cash equivalents 28,178 37,262
50,094 44,631
All of the above financial assets are current, their fair values are considered to be the same as the values shown and the
likelihood of a material credit default is considered low. All deposits were placed with banks that had ratings of A or higher.
Financial Statements and Notes
Notes to the Financial Statements continued
For the year ended 30 November 2024
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 110
27. Derivatives and Other Financial Instruments continued
(d) Gearing Risk
The Company’s policy is to increase its exposure to markets through the judicious use of borrowings. When borrowings are invested,
the impact is to magnify the impact on Shareholder’s funds of changes, both positive and negative, in the value of the portfolio.
Management of the risk
The Company uses short-term loans to manage gearing risk, details of which can be found in note 17.
Gearing risk exposure
The loans are valued at amortised cost, using the effective interest rate method in the Financial Statements.
(e) Capital Management Policies and Procedures
The Company’s capital, or equity, is represented by its net assets which amounted to £629,678,000 as at 30 November 2024
(2023: £488,198,000), which are managed to achieve the Company’s investment objective set out on page 36.
The Board monitors and reviews the broad structure of the Company’s capital on an ongoing basis.
This review includes:
(i) the need to issue or buy back equity shares for cancellation, which takes account of the difference between the net asset
value per share and the share price (i.e. the level of share price discount or premium);
(ii) the determination of dividend payments; and
(iii) the planned level of gearing through the Company’s fixed and variable rate revolving credit facility.
The Company is subject to externally imposed capital requirements through the Companies Act with respect to its status as a
public company. In addition, in order to pay dividends out of profits available for distribution by way of dividend, the Company
has to be able to meet one of the two capital restriction tests imposed on investment companies by company law.
28. Capital Commitments, Contingent Assets and Liabilities
Capital Commitments
The Company has no commitments to further investment in any investee companies (2023: £nil).
29. Post Balance Sheet Events
There are no significant events that have occurred after the end of the reporting period to the date of this report which require
disclosure.
Shareholder Information
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 111
Shareholder
Information
111
Shareholder Information
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 112
Alternative Performance Measures
(APMs)
In assessing the performance of the Company, the Investment Manager and the Directors use the following APMs which are not
defined in accounting standards or law but are considered to be known industry metrics:
NAV Total Return
The NAV total return shows how the net asset value per share has performed over a period of time taking into account both
capital returns and dividends paid to Shareholders. The NAV total return performance for the period is calculated by reinvesting
the dividends in the assets of the Company from the relevant ex-dividend date.
Year ended
30 November 2024
Year ended
30 November 2023
Opening NAV per share
a
158.1p 166.3p
Closing NAV per share
b
207.7p 158.1p
Dividend reinvestment factor
c
1.025875 1.022930
Adjusted closing NAV per share
d = b*c
213.1p 161.7p
NAV total return for the year
(d / a)-1
34.8% -2.8%
NAV Total Return Since Inception
NAV total return since inception is calculated as the change in NAV from the initial NAV of 98p, assuming that dividends paid to
Shareholders are reinvested on the ex-dividend date in ordinary shares at their net asset value.
Year ended
30 November 2024
Year ended
30 November 2023
NAV per share at inception
a
98.0p 98.0p
Closing NAV per share
b
207.7p 158.1p
Dividend reinvestment factor
c
1.411532 1.361991
Adjusted closing NAV per share
d = b*c
293.2p 215.3p
NAV total return since inception
(d / a)-1
199.2% 119.7%
NAV Total Return Since Reconstruction
NAV total return since reconstruction is calculated as the change in NAV from the NAV of 102.8p, which was the closing
NAV the day before the tender offer on 22 April 2020, assuming that dividends paid to Shareholders are reinvested on the
ex-dividend date in ordinary shares at their net asset value.
Year ended
30 November 2024
Year ended
30 November 2023
Rebased NAV per share at reconstruction
a
102.8p 102.8p
Closing NAV per share
b
207.7p 158.1p
Dividend reinvestment factor
c
1.137893 1.097861
Adjusted closing NAV per share
d = b*c
236.3p 173.6p
NAV total return since reconstruction
(d / a)-1
129.9% 68.8%
Shareholder Information
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 113
Share Price Total Return
Share price total return shows how the share price has performed over a period of time. It assumes that dividends paid to
Shareholders are reinvested in the shares at the time the shares are quoted ex-dividend.
Year ended
30 November 2024
Year ended
30 November 2023
Opening share price
a
138.8p 154.6p
Closing share price
b
196.2p 138.8p
Dividend reinvestment factor
c
1.028511 1.030408
Adjusted closing share price
d = b*c
201.8p 143.0p
Share price total return for the year
(d / a)-1
45.4% -7.5%
Share Price Total Return Since Inception
Share price total return since inception is calculated as the change in share price from the launch price of 100p, assuming that
dividends paid to Shareholders are reinvested on the ex-dividend date.
Year ended
30 November 2024
Year ended
30 November 2023
Share price at inception
a
100.0p 100.0p
Closing share price
b
196.2p 138.8p
Dividend reinvestment factor
c
1.391998 1.353458
Adjusted closing share price
d = b*c
273.1p 187.9p
Share price total return since inception
(d / a)-1
173.1% 87.9%
Share Price Total Return Including Subscription Share Value
The share price total return including subscription share value performance since inception includes the value of the subscription
shares issued free of payment at launch on the basis of one-for-five ordinary shares and assumes such were held throughout the
period from launch to the conversion date of 31 July 2017. Performance is calculated by reinvesting the dividends in the shares
of the Company from the relevant ex-dividend date and uses the launch price of 100p per ordinary share.
Year ended
30 November 2024
Year ended
30 November 2023
Share price at inception
a
100.0p 100.0p
Closing share price
b
196.2p 138.8p
Dividend reinvestment factor
c
1.401121 1.381556
Adjusted closing share price
d = b*c
274.9p 191.8p
Share price total return including subscription
share value since inception
(d / a)-1
174.9% 91.8%
Shareholder Information
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 114
(Discount)/Premium
A description of the difference between the share price and the net asset value per share usually expressed as a percentage (%)
of the net asset value per share. If the share price is higher than the NAV per share the result is a premium. If the share price is
lower than the NAV per share, the shares are trading at a discount.
30 November 2024 30 November 2023
Closing share price
a
196.2p 138.8p
Closing NAV per share
b
207.7p 158.1p
Discount per ordinary share
(a / b)-1
-5.5% -12.2%
Ongoing Charges
Ongoing charges are calculated in accordance with AIC guidance by taking the Company’s annual ongoing charges, excluding
performance fees and exceptional items, if any, and expressing them as a percentage of the average daily net asset value of the
Company over the year.
Ongoing charges include all regular operating expenses of the Company. Transaction costs, interest payments, tax and
non-recurring expenses are excluded from the calculation as are the costs incurred in relation to share issues and share buybacks.
Where a performance fee is paid or is payable, a second ongoing charge is provided, calculated on the same basis as the above
but incorporating the movement in the performance fee provision.
Year ended
30 November 2024
Year ended
30 November 2023
Investment Management Fee (Note 7 on page 92) £3,860,000 £3,519,000
Other Administrative Expenses (Note 8 on page 92) £844,000 £794,000
a
£4,704,000 £4,313,000
Average daily net assets value
b
£552,193,000 £502,339,000
Ongoing Charges excluding performance fee
a / b
0.85% 0.86%
Performance fee (Note 7 on page 92)
c
- -
d = a+c
£4,704,000 £4,313,000
Ongoing charges including performance fee
d / b
0.85% 0.86%
Net Gearing
Gearing is calculated in line with AIC guidelines and represents net gearing. This is defined as total assets less cash and cash
equivalents divided by net assets. The total assets are calculated by adding back the bank loan. Cash and cash equivalents are
cash and purchases and sales for future settlement outstanding at the year end.
30 November 2024 30 November 2023
Net assets
a
£629,678,000 £488,198,000
Bank loan
b
£78,935,000 £69,031,000
Total assets
c = (a+b)
£708,613,000 £557,229,000
Cash and cash equivalents (including amounts awaiting settlement)
d
£46,510,000 £37,484,000
Net gearing
(c-d)/a-1
5.1% 6.5%
Alternative Performance Measures (APMs) continued
Shareholder Information
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 115
Glossary of Terms
AAF Report A report prepared in accordance with Audit and Assurance Faculty guidance issued by the Institute of
Chartered Accountants in England and Wales. Utilised within the review of internal controls.
Administrator The Company’s Administrator is HSBC Securities Services (HSS) who is contracted through Polar Capital
LLP to provide accounting and administrative services under the terms of the Investment Management
Agreement (“IMA”).
AGM Annual General Meeting – a meeting required to be held in accordance with the Companies Act 2006,
within six months of the Company’s financial year end. The Annual General Meeting will be held at
2:00pm on Thursday 10 April 2025 at the office of the manager, Polar Capital, 16 Palace Street,
London, SW1E 5JD.
AIC Association of Investment Companies, the industry body for closed ended investment companies.
AIF Alternative Investment Fund – the Company is an investment trust which is a collective investment
undertaking which raises capital from a number of investors (in the case of the Company, by selling
shares in the open market on the London Stock Exchange) with a view to investing the capital in
accordance with the investment policy (see page 36).
AIFM Alternative Investment Fund Manager, a body appointed in accordance with the AIFMD (see below).
Polar Capital LLP is the appointed AIFM to the Company.
AIFMD Alternative Investment Fund Managers Directive. Issued by the European Parliament in 2012 and 2013.
The Directive requires that, while the Board of Directors of an Investment Trust remains fully responsible
for all aspects of the Company’s strategy, operations and compliance with regulations, all alternative
investment funds (‘AIFs’) in the UK and European Union, must appoint a Depositary and an Alternative
Investment Fund Manager (‘AIFM’).
Benchmark The Benchmark is the MSCI ACWI Financials Net Total Return Index (in Sterling with dividends
reinvested).
Board of Directors All companies must have a board of directors. The directors are the decision-makers working on
behalf of the Shareholders who are the owners of the company. They are responsible for representing
the interests of Shareholders and ensuring that the Company operates in a manner that aligns with its
mission, objectives and values.
Closed-ended
Investment
Company
An Investment Company whose shares are traded in the open market, e.g., on the London Stock
Exchange.
Custodian HSBC Bank plc is the Custodian of the Company’s assets. The Custodian is a financial institution
responsible for safeguarding, worldwide, the listed securities and certain cash assets of the Company,
as well as the income arising therefrom, through provision of custodial, settlement and associated
services.
Depositary The Company’s Depositary is HSBC Bank plc. Under AIFMD (see above) rules the Company must appoint
a Depositary whose duties in respect of investments, cash and similar assets include: safekeeping;
verification of ownership and valuation; and cash monitoring. Under the AIFMD rules, the Depositary has
strict liability for the loss of the Company’s financial assets in respect of which it has safe-keeping duties.
The Depositary’s oversight duties will include but are not limited to share buybacks, dividend payments
and adherence to investment limits.
Shareholder Information
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 116
Glossary of Terms continued
Derivative A contract between two or more parties, the value of which fluctuates in accordance with the value of
an underlying security. Examples of derivatives are Put and Call Options, Swap contracts, Futures and
Contracts for Difference. A derivative can be an asset or a liability and is a form of gearing because it can
increase the economic exposure for Shareholders.
Discount/premium See Alternative Performance Measure (APM) on page 114.
Earnings per Share
(“EPS”)
A company’s profitability expressed on a per share basis and calculated by dividing the company’s annual
earnings after tax by the weighted average number of shares in issue.
ESEF European Single Electronic Format (ESEF) is the requirement whereby reports are prepared and filed in
XHTML format. The requirement applied with effect from 1 January 2021 to all issuers in UK (or EU)
regulated markets. In addition, for issuers preparing consolidated annual accounts in accordance with
IFRS, the XHTML file requires tagging under the IFRS taxonomy.
ESG Stands for Environmental, Social and Governance Principles. It’s a way for investors to evaluate
companies based on how they impact the environment and society.
FCA The Financial Conduct Authority regulates the financial services industry in the UK. Its role includes
protecting consumers, keeping the industry stable, and promoting healthy competition between
financial service providers.
IFRS International Financial Reporting Standards (IFRS) are accounting standards which are developed by the
International Accounting Standards Board (IASB) and the International Sustainability Standards Board (ISSB).
The IASB sets IFRS Accounting Standards and the ISSB sets IFRS Sustainability Disclosure Standards.
Investment
Company
Section 833 of the Companies Act 2006. An Investment Company is defined as a company which invests
its funds in shares, land or other assets with the aim of spreading investment risk.
Investment
Manager/Manager
Polar Capital LLP is the Investment Manager which has delegated responsibility for the creation of the
portfolio of investments subject to various parameters set by the Board of Directors. The responsibilities
of the Investment Manager and the fees payable are set out in the Directors’ Report.
Investment Trust
taxation status
Section 1158 of the Corporation Tax Act 2010. UK Corporation Tax law allows an Investment Company
(referred to in Tax law as an Investment Trust) to be exempted from tax on its profits realised on
investment transactions, provided it complies with certain rules. These are similar to Section 833
above but further require that the Company must be listed on a regulated stock exchange and that it
cannot retain more than 15% of income received. The Directors’ Report contains confirmation of the
Company’s compliance with this law and its consequent exemption from taxation on capital gains.
MiFID II Markets in Financial Instruments Directive, applicable from 3 January 2018.
Market
capitalisation
Also sometimes referred to as ‘market cap’, this is a measure which describes the size of a Company
or an Investment Trust. It is calculated by multiplying the number of shares in issue by the price of the
shares.
Shareholder Information
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 117
Net Asset Value
(NAV)
The NAV is the value attributed to the underlying assets of the Company less the liabilities, presented
either on a per share or total basis. The value of the Company’s assets, principally investments made in
other companies and cash being held, minus any liabilities. The NAV is also described as ‘Shareholders
funds’. The NAV is often expressed in pence per share after being divided by the number of shares which
have been issued. The NAV per share is unlikely to be the same as the share price which is the price
at which the Company’s shares can be bought or sold by an investor. The NAV per ordinary share is
published daily.
Non-executive
Director
The Company is managed by a Board whose members are all independent non-executive Directors. The
Company does not have any executive Directors. Remuneration of the Non-executive Directors is set out
in the Directors’ Remuneration Report while the duties of the Board and the various Committees are set
out in the Corporate Governance Statement.
Ongoing Charges
Ratio
Ongoing Charges are the total operating expenses of the Company excluding any performance fee and
the Ongoing Charges Ratio is an expression of those expenses as a percentage of the average daily net
asset value of the Company during the year. See Alternative Performance Measure (APM) on page 114.
PRIIPS The Packaged Retail and Insurance-based Investment Products regulations which came into force on
1 January 2018 in the UK and EU. The regulations require generic pre-sale disclosure of investment
‘product’ costs, risks and certain other matters.
PwC The Company’s Auditors are PricewaterhouseCoopers LLP, represented by Kevin Rollo, Partner.
Shareholder A Shareholder is a person, group, or legal entity that owns at least one share in the Company. Owning
shares provides each Shareholder with rights and obligations regarding the direction of the company.
SORP The Statement of Recommended Practice (SORP) for investment trusts is issued by the AIC and it
provides recommendations on financial reporting that supplement official accounting standards.
(See Note 2(a) on page 85).
Treasury shares Treasury shares are the Company’s own shares that have been bought back from Shareholders and
not cancelled but held in Treasury. Such shares may be reissued into the market at a premium to NAV.
Treasury shares do not attract the right to receive dividends or have any other voting rights.
UK-adopted IAS The international accounting standards adopted by the UK Endorsement Board after delegation
of adoption powers. These include International Accounting Standards (IAS), IFRS and related
interpretations, subsequent amendments to those standards and related interpretations, issued or
adopted by the IASB.
Shareholder Information
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 118
Corporate Information – AGM
2025 Annual General Meeting (“AGM”)
The Company’s AGM will be held at 2:00pm on Thursday 10 April 2025 at 16 Palace Street, London, SW1E 5JD.
We will once again provide a recording of the Investment Managers’ presentation on the Company’s website ahead of the
AGM as we are aware that many Shareholders are particularly interested in the Company’s portfolio and its performance. We
estimate that the Managers’ presentation will be uploaded to the website on or before 28 March 2025 to give Shareholders
time to consider the content ahead of the deadline to submit their proxy votes on the formal business. Given that the AGM will
only cover formal business, please note that there will be no live presentation from the Manager.
Shareholders will have the option to ask questions at the meeting but are also encouraged to send any questions ahead of the
AGM to the Board via the Company Secretary at cosec@polarcapital.co.uk stating the subject matter as PCFT-AGM. We will
endeavour to answer relevant questions at the meeting or on the Company’s website as appropriate. For ease of reference and
understanding a brief explanation of the resolutions is set out below.
Further information including the full text of the resolutions to be proposed at the AGM and an explanation of each resolution is
contained in the Notice of AGM which has been posted to Shareholders and is available on the Company’s website.
Resolution 1 relates to the statutory requirement of every company to lay before Shareholders the Annual Report and Financial
Statements, i.e. this document. The Annual Report has been prepared and approved by the Board of Directors and audited by
the externally appointed auditors. The document will be filed at Companies House once published to Shareholders. The Annual
Report sets out the Company’s business strategy, governance structure and procedures as well as the financial statements for
the financial year under review.
Resolutions 2, in compliance with the Large and Medium-Sized Companies and Groups (Accounts and Reports) (Amendment)
Regulation 2013 (the ‘Regulations’), The Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report)
Regulations 2019 and the Listing Rules of the Financial Conduct Authority, the Company is required on a three-yearly basis to
provide Shareholders with the opportunity to vote on the Company’s Directors’ Remuneration Policy.
In addition to this, on an annual basis, Shareholders are presented with the Directors’ Remuneration Implementation Report
which looks back at the year under review and advises how the Remuneration Policy was applied. Shareholders last voted on the
Remuneration Policy at the AGM in 2023 and the policy came into effect from 1 December 2023, the current policy will remain
in force until 30 November 2026 (unless amended earlier). Resolution 2 therefore, is the annual advisory vote of Shareholders
on the Remuneration Implementation Report. The Directors’ Remuneration Report is presented on pages 64 to 68.
Resolutions 3 to 6 relate to the annual re-election of directors. In line with good corporate governance the tenure policy of
directors is nine years, with the exception of the Board’s Chair tenure policy which allows the Chair to remain in role for up to
twelve years in certain circumstances. It is recommended that directors stand for re-election on an annual basis in order to give
Shareholders the opportunity to vote on each Director. Having undergone a Board Evaluation process, as described on page 56,
the Directors have provided a rationale for their support for the reappointment of each director on pages 10 and 11 and within
the Notice of AGM.
Resolutions 7 and 8 relate to the statutory appointment or reappointment of the Company’s external auditors and the
Directors’ authority to determine their remuneration. Further information is provided in the Audit Committee Report on
pages 60 and 61.
Resolution 9 relates to the proposed adoption of an “enhanced dividend” policy under which the Company will aim to pay, in
the absence of unforeseen circumstances, a regular dividend equivalent to approximately 4% of the Company’s NAV in a given
year. It is proposed that dividends are paid quarterly at a level of 1% of the Company’s NAV per quarter calculated on the last
business day of each prior financial quarter. Please refer to the Chair’s Statement on page 6 for further details.
Resolutions 10 to 12 relate to potential changes in the share capital. Resolution 10 authorises the Directors to allot (i.e. sell)
ordinary shares, whether these be newly created shares or shares held in the Company’s treasury account which have been
previously bought back in the market. Once allotted the shares are listed on the London Stock Exchange and have the same
rights as any other ordinary shares of the Company. Resolution 11 is proposed in connection with 10 and allows the Directors
to allot the shares without pre-emption rights. Under the Companies Act, all Shareholders have the right of pre-emption
which means that the Company must offer existing Shareholders an opportunity to buy the company’s shares before they are
offered to third parties; being a listed company with many Shareholders, the Directors ask to disapply the pre-emption rights
Shareholder Information
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 119
which means they are able to offer and allot the shares to specific Shareholders or in specific ways to the market, noting that
such allotments would be at a premium to the net asset value (NAV) per share and therefore accretive (i.e. positive) to overall
Shareholder value. While all Shareholders can trade the ordinary shares of the Company on the open market there are times
when a Shareholder would like to acquire greater amounts of shares than are available in the market and might approach
the Company through the corporate broker to obtain shares. In a similar but opposite scenario, resolution 12 provides the
Directors’ the ability to buy back (i.e. purchase) shares of the Company in the market. Depending on the market environment,
and various other factors, the shares of the Company may trade at a discount to NAV. When this is the case the Company may
step in and buy back shares in an effort to reduce the discount. Each of these authorities require Shareholder approval and are
regular resolutions proposed to each AGM. Each authority remains in place for 12 months or until the limits have been reached.
Resolution 13 relates to the reduction of the Company’s share premium account. In order to provide the Board with additional
flexibility to pay dividends or for any other general corporate purposes, the Company is seeking to cancel the share premium
account. The Company has built up a substantial share premium account of approximately £311,369,000 as a result of issuing
shares at a premium to their nominal value. The net proceeds are apportioned to the Company’s Share Premium Account which
is a non-distributable reserve that Company is unable to utilise for the purpose of making distributions to Shareholders unless
approved by Shareholders and the Court.
The Board proposes, subject to Shareholder and Court approval, to cancel the amount standing to credit of the Company’s
share premium account. The resulting credit arising in the Company’s books of account will then be credited to a new
distributable reserve, subject to any terms and conditions required by the Court in granting the order confirming the Share
Premium Reduction.
The Company intends that an application will be made to the Court to approve the Share Premium Reduction as soon as is
reasonably practicable after AGM, provided that Resolution 13 is approved by Shareholders.
Resolution 14 seeks Shareholder approval for the Company to hold General Meetings (other than the AGM) on at least
14 clear days’ notice. Changes made to the Companies Act 2006 (“the Act”) by the Shareholders’ Rights Regulations increase
the notice period required for general meetings of the Company to 21 clear days’ unless Shareholders approve a shorter
notice period, which cannot however be less than 14 clear days. (AGM’s will continue to be held on 21 clear days’ notice).
The Company will only use this shorter notice period where it is merited by the purpose of the meeting. This authority shall
expire on the conclusion of the next Annual General Meeting of the Company to be held in 2026, or, if earlier, on the expiry 15
months from the date of the passing of this resolution.
Shareholder Information
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 120
History and Structure
The Company was incorporated on 17 May 2013 with a fixed seven-year life. On 1 July 2013, it issued 153,000,000 ordinary
shares plus one subscription share for every five ordinary shares which were admitted to trading on the Main Market of the
London Stock Exchange. In accordance with the Company’s original prospectus, on 31 July 2017, the subscription Shareholders
had the opportunity to exercise their rights to subscribe for one ordinary share per subscription share at a price of 115p per
ordinary share, following which all subscription rights lapsed and the subscription shares were cancelled. As a result of the
subscription exercise the Company issued 30,600,000 new ordinary shares.
In substitution of the fixed seven-year life, Shareholders approved changes to the Company’s Articles of Association to extend
the Company’s life indefinitely, subject to further regular tender offers at the Company’s Annual General Meeting held on
7 April 2020. The Articles of Association require the Board to make tender offers at five-yearly intervals, with the first to
commence on or before 30 June 2025. The Company continues to operate as an investment trust with an independent Board
and third party investment manager.
Share Capital, Voting Rights and Transferability
The Company’s share capital is divided into ordinary shares of 5p each. At the year end, there were 331,750,000 ordinary
shares in issue (2023: 331,750,000 ordinary shares), of which 28,530,635 (2023: 22,888,313) were non-voting shares held
in treasury by the Company. In the year under review the Company bought back of a total of 5,642,322 shares were issued
(2023: 16,532,313). No ordinary shares were bought back or issued following the year end.
Ordinary shares carry voting rights which are exercised on a show of hands at a meeting, where each Shareholder has one
vote, or on a poll, where each share has one vote. Ordinary shares held in treasury carry no voting rights. Arrangements for the
casting of proxy votes are provided when a Notice of Meeting is issued.
Any shares in the Company may be held in uncertificated form and, subject to the Articles, title to uncertificated shares may
be transferred by means of a relevant system. Further information can be found in the Articles of Association available on the
Company’s website www.polarcapitalglobalfinancialstrust.com
The Company is not aware of arrangements to restrict the votes or transferability of its shares.
The Company is registered under the United States’ FATCA legislation and its Global Intermediary Identification Number (GIIN) is
8KP5BT.99999.SL.826. The Company’s Legal Entity Identifier (LEI) code is 549300G5SWN8EP2P4U41.
Subscription Shares Tax Implications
The base ‘cost’ for UK tax purposes of the subscription shares is a proportion of the issue price paid for the ordinary shares to
which the subscription shares were attached. The apportionment is made by reference to the respective market values of the
ordinary shares and subscription shares at the close of business on 1 July 2013, the day the ordinary and subscription shares
were admitted to trading. The market value for UK tax purposes of the Company’s ordinary shares and subscription shares on
such date were as follows:
Ordinary Shares 103.625p Subscription Shares 11.75p
If you have exercised the subscription rights attaching to your subscription shares, the resulting ordinary shares are treated for
UK tax purposes as the ‘same’ asset as the subscription shares in respect of which the subscription rights are exercised. The base
‘cost’ for UK tax purposes of the resulting ordinary shares will be the base cost attributed to the exercised subscription shares,
increased by the amount of subscription monies paid.
Capital Gains Tax
Information on Capital Gains Tax (‘CGT’) is available on the HM Revenue & Customs website www.gov.uk/capital-gains-tax.
When shares are disposed of a capital gain may result if the disposal proceeds exceed the sum of the base cost of the shares
sold and any other allowable deductions such as share dealing costs. The exercise of subscription shares into ordinary shares
should not have given rise to a capital gain, however a capital gain may arise on the eventual disposal of those shares.
The calculations required to compute capital gains may be complex and depend on personal circumstances. Shareholders are
Corporate Information – Other
Shareholder Information
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 121
advised to consult their personal financial advisor for further information regarding a possible tax liability in respect of their
shareholdings.
The Company was launched on 1 July 2013 with the issue of ordinary shares at 100 pence per share with subscription shares
attached (on a one-for-five basis).
Company Website
www.polarcapitalglobalfinancialstrust.com
The Investment Manager maintains a website on behalf of the Company which provides a wide range of information on the
Company, monthly factsheets issued by the Investment Manager and copies of announcements, including the annual and half year
reports when issued.
Information on the Company can also be obtained from various different sources including:
• www.theaic.co.uk
• www.ft.com/markets
• www.londonstockexchange.com
Statement by the Depositary
The statement of the Depositary’s responsibilities in respect of the Company and its report to Shareholders for the year ended
30 November 2024 are available on the Company’s website. The Depositary, having carried out such procedures as it considered
necessary, was satisfied that in all material respects the Company was managed in accordance with the applicable FCA rules and
AIFMD.
Statement by the AIFM
The statement by the AIFM in respect of matters to be disclosed to investors for the year ended 30 November 2024 is available on
the Company’s website.
Share Prices and Net Asset Value
The Company’s Net Asset Value (NAV) is normally released daily, on the next working day, following the calculation date, to the
London Stock Exchange. The mid-market price of the ordinary shares is published daily in the Financial Times in the Companies
and Markets section under the heading ‘Investment Companies’. Share price information is also available from The London Stock
Exchange website: www.londonstockexchange.com
Electronic Communications
If you hold your shares in your own name you can choose to receive communications from the Company in electronic format. This
method reduces cost, is environmentally friendly and, for many, is convenient.
If you would like to take advantage of Electronic Communications, please visit our registrar’s website at www.shareview.co.uk.
You will need your Shareholder Reference Number. If you agree to the terms and conditions, in future, on the day that documents
are sent to Shareholders by post you will receive an e-mail providing the website address where the documents can be viewed and
downloaded. Paper copies will still be available on request.
Nominee Shareholders
Where notification has been provided in advance the Company will arrange for copies of Shareholder communications to be
provided to the operators of nominee accounts. Nominee service providers are encouraged to advise investors that they may attend
general meetings when invited by the Chair.
Shareholder Information
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 122
Corporate Information – Other continued
Disability Act
Copies of this Annual Report and Financial Statements or other documents issued by the Company are available from the
Company Secretary. If needed, copies can be made available in a variety of formats, either Braille or on audio tape or larger type
as appropriate.
Investing
The ordinary shares of the Company are listed and traded on the London Stock Exchange. Investors may purchase shares through
their stockbroker, bank or other financial intermediary.
Polar Capital Global Financials Trust plc is an investment trust and as such its ordinary shares are excluded from the FCA’s
restrictions which apply to non-mainstream investment products. The Company conducts its affairs and intends to continue to do
so for the foreseeable future so that the exclusion continues to apply.
There are a variety of ways to invest in the Company. However, this will largely depend upon whether you would like financial
advice or are happy to make your own investment decisions.
Investing Risks
Investors should be aware of the following risks when considering investing in the shares of Polar Capital Global Financials Trust plc:
Past performance is not a guide to future performance.
Please remember that any investment in the shares of Polar Capital Global Financials Trust plc either directly or through a savings
scheme or ISA carries the risk that the value of your investment and any income from them may go down as well as up due to
the fluctuations of the share price, the market and interest rates. This risk may result in an investor not getting back their original
amount invested.
As the shares in an investment trust are traded on a stock market, the share price will fluctuate in accordance with supply and
demand and may not reflect the underlying net asset value of the shares. Where the share price is less than the underlying value of
the assets, the difference is known as the ‘discount’. For these reasons, investors may not get back the original amount invested.
Although the Company’s Financial Statements are denominated in sterling, it may invest in stocks and shares that are denominated
in currencies other than sterling. To the extent that it does so, asset values may be affected by movements in exchange rates. As a
result, the value of your investment may rise or fall with movements in exchange rates.
Polar Capital Global Financials Trust plc is allowed to borrow against its assets and this may increase losses triggered by a falling
market. The Company may increase or decrease its borrowing levels to suit market conditions. If you are in any doubt as to the
suitability of a plan or any investment available within a plan, please take professional advice.
If you are investing through a savings plan, ISA or other investment arrangement it is important that you read the key features
documents and understand the risks associated with investing in the shares of the Company. If you are in any doubt as to the
suitability of a plan or any investment available within a plan, please take professional advice.
Tax rates and reliefs change from time to time and may affect the value of your investment.
For those investors who would like advice:
Private Client Stockbrokers – generally for investors with a large lump sum to invest, a private client stockbroker will manage a
portfolio of shares on behalf of a private investor and will offer a personalised service to meet an individual’s particular needs. A list
of private client stockbrokers is available from The Personal Investment Management & Financial Advice Association (PIMFA) at
www.pimfa.co.uk
Financial Advisers – carry out the share transactions for their clients, they can do this directly but also via a growing number of
platforms that offer investment trusts including AJ Bell, Interactive Investor, Nucleus, Raymond James, Seven IM and Transact. For
investors looking to find a financial adviser, please visit www.unbiased.co.uk
Shareholder Information
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 123
For those investors who are happy to make their own investment decisions:
Online Stockbroking Services – There are a number of real time execution only stockbroker services or platforms which allow
private investors to trade online for themselves, manage a portfolio and buy UK listed shares. Online stockbroking services include
AJ Bell, Interactive Investor, Barclays Stockbrokers, Halifax Share Dealing and Hargreaves Lansdown.
As an investment company Shareholder, you have the right to vote at the Company’s AGM and on other important decisions
facing the Company. If you hold your investment company shares on a platform, we encourage you to exercise your vote through
your respective platform and where possible attend the AGM proceedings.
For example, Interactive Investor allow you to vote your shares at no extra cost through your account and new customers are
automatically signed up to the voting and information service, which enables you to receive Shareholder materials and vote on
decisions directly affecting your UK registered shareholdings.
Please visit the AIC’s pages below for further information:
https://www.theaic.co.uk/how-to-attend-an-AGM
https://www.theaic.co.uk/how-to-vote-your-shares
Share Dealing Services
The Company has also made arrangements with its share registrars, Equiniti Limited, for investors to buy and sell shares through
the Shareview.co.uk service.
For telephone sales call 0345 603 7037 between 8.00am and 5.30pm for dealing and up to 6.00pm for enquiries, Monday to
Friday. For Internet sales log on to www.shareview.co.uk/ dealing
Forward-Looking Statements
Certain statements included in this Annual Report and Financial Statements contain forward-looking information concerning
the Company’s strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the
countries, sectors or markets in which the Company operates.
By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to
events, not all of which are within the Company’s control or can be predicted by the Company.
Although the Company believes that the expectations reflected in such forward-looking statements are reasonable,
no assurance can be given that such expectations will prove to have been correct.
Actual results could differ materially from those set out in the forward-looking statements. For a detailed analysis of the factors
that may affect our business, financial performance or results of operations, we urge you to look at the principal risks and
uncertainties included in the Strategic Report within this Annual Report.
No part of this Annual Report constitutes, or shall be taken to constitute, an invitation or inducement to invest in Polar Capital
Global Financials Trust plc or any other entity and must not be relied upon in any way in connection with any investment
decision. The Company undertakes no obligation to update any forward-looking statements.
The Company undertakes no obligation to update any forward-looking statements.
Shareholder Information
Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2024 124
Boiler Room Scams
Shareholders of Polar Capital Global Financials Trust plc may receive unsolicited phone calls or correspondence concerning
investment matters. These are typically from overseas based ‘brokers’ who target UK Shareholders, offering to sell them what
often turn out to be worthless or high risk shares in U.S. or UK investments or offering to act on the Shareholder’s behalf on the
payment of a retainer or similar in a spurious corporate event. These operations are commonly known as ‘boiler rooms’. These
‘brokers’ can be very persistent and extremely persuasive.
It is not just the novice investor that has been duped in this way; many of the victims had been successfully investing for several
years. Shareholders are advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers of free
company reports.
If you have been contacted by an unauthorised firm regarding your shares the FCA would like to hear from you. You can
report an unauthorised firm using the FCA helpline on 0800 111 6768 or by visiting their website, which also has other useful
information, at www.fca.org.uk
If you receive any unsolicited investment advice:
• Make sure you get the correct name of the person and organisation
• If the calls persist, hang up
If you deal with an unauthorised firm, you will not be eligible to receive payment under the Financial Services Compensation
Scheme. More detailed information on this or similar activity can be found on the FCA website.
How to avoid investment and pension scams
If you’re suspicious, report it
You can report the �rm or scam to us by
contacting our Consumer Helpline on
0800 111 6768 or using our reporting form
using the link below.
If you’ve lost money in a scam, contact
Action Fraud on 0300 123 2040 or
www.actionfraud.police.uk
Reject unexpected o�ers
Scammers usually cold call, but contact
can also come by email, post, word of mouth
or at a seminar. If you’ve been o�ered an
investment out of the blue, chances are it’s
a high risk investment or a scam.
Check the FCA Warning List
Use the FCA Warning List to check the risks
of a potential investment – you can also search
to see if the �rm is known to be operating without
our authorisation.
Get impartial advice
Get impartial advice before investing – don’t use
an adviser from the �rm that contacted you.
Be ScamSmart and visit
www.fca.org.uk/scamsmart
1
2
3
Corporate Information – Other continued
Shareholder Information
Annual Report and Financial Statements 2024 • Polar Capital Global Financials Trust plc 125
Contact Information
Company Registration Number
8534332 (Registered in England)
The Company is an investment company as defined under
Section 833 of the Companies Act 2006.
Directors
Simon Cordery, Chair
Cecilia McAnulty
Susie Arnott
Angela Henderson
Registered Office and Contact Address for
Directors
16 Palace Street
London
SW1E 5JD
Investment Manager and AIFM
Polar Capital LLP
16 Palace Street
London
SW1E 5JD
Authorised and regulated by the Financial Conduct Authority.
Telephone: 020 7227 2700
Website: www.polarcapital.co.uk
Co-Fund Managers
Mr Nick Brind
Mr George Barrow
Mr Tom Dorner
Company Secretary
Polar Capital Secretarial Services Limited
Represented by Jumoke Kupoluyi, ACG
Administrators, Bankers, Depositary
and Custodian
HSBC Bank Plc
8 Canada Square
London
E14 5HQ
Independent Auditors
PricewaterhouseCoopers LLP
7 More London Riverside
London
SE1 2RT
Solicitors
Herbert Smith Freehills LLP
Exchange House
Primrose Street
London
EC2A 2HS
Stockbrokers
Stifel Nicolaus Europe Limited
150 Cheapside
London
EC2V 6ET
Identification Codes
Ordinary shares
SEDOL: B9XQT11
ISIN: GB00B9XQT119
TICKER: PCFT
GIIN: 8KP5BT.99999.SL.826
LEI: 549300G5SWN8EP2P4U41
Registrar
Shareholders who have their shares registered in their own
name, not through a share savings scheme or ISA, can contact
the registrars with any queries on their holding. Post, telephone
and Internet contact details are given below.
In correspondence you should refer to Polar Capital Global
Financials Trust plc, stating clearly the registered name and
address and, if available, the full account number.
Equiniti Limited
Highdown House
Yeoman Way
Worthing
West Sussex
BN99 3HH
Shareholder helpline: +44 (0)800 313 4922
Shareholder website:
www.shareview.co.uk
CBP029396
This document is printed on Galerie Satin,
a paper sourced from well managed,
responsible, FSC® certified forests and
other controlled sources. The pulp used
in this product is bleached using an
elemental chlorine free (ECF) process.
See more at:
polarcapitalglobalfinancialstrust.com
2024 Annual Report and Financial Statements for the year ended 30 November 2024