Bridgepoint Group
plc
(the "Company")
Strong performance and well
placed for continued growth
Bridgepoint Group plc today
announces full year results ahead of expectations and key targets
set at the time of IPO with fundraising for BE VII completing soon
and on target.
Summary highlights:
Bridgepoint Standalone:
·
|
7% organic increase in AUM to €41
billion
|
·
|
10% increase in management fees to
£265 million
|
·
|
28% increase in underlying FRE to
£95 million and PRE of £55 million
|
·
|
12% increase in underlying pre-tax
profit to £134 million
|
·
|
Fundraising for BE VII soon to
close at €7 billion, with fundraising for BDC V and BDL IV under
way
|
Including ECP:
·
|
62% year on year increase in AUM
to €62 billion post combination with ECP
|
·
|
ECP transaction expected to close
in Q2 and fundraising for ECP V, which has a target of €4 billion,
is set to close in April
|
·
|
Bridgepoint remains well
positioned to deliver 2024 performance in line with current
expectations
|
Raoul Hughes, Chief Executive said:
"2023 has been a very strong year
for Bridgepoint with underlying profit growth of 12% year-on-year,
on the back of robust investment returns, strong progress on
fundraising and fund deployment, and good cost control. 2024 has
started equally strongly with fundraising shortly to close for BE
VII with commitments on target at €7 billion.
"Importantly, Bridgepoint's strong
transaction origination capability and disciplined investment
approach continues to deliver high quality returns with all funds
remaining on or above plan in both deployment and performance and
with a healthy exit pipeline at year end, despite M&A
transaction volumes being down globally in 2023.
"The addition of ECP to the Group,
expected to occur in Q2 2024 subject to receipt of the final
regulatory clearance, will represent a major step forward in
implementing the strategy set out at IPO, adding energy transition
infrastructure alongside our private equity and credit businesses.
ECP V, which has a target of €4 billion, is set to close in
April.
"Looking ahead, we will continue
to drive growth in the Group and are currently investigating
opportunities for further expansion amid industry consolidation. To
support this work, as previously announced we have recently taken
steps to further strengthen our balance sheet with a US$430 million
US private placement. With a diversified investment approach and a
strong pipeline of investment and exit activity, Bridgepoint is
well placed to navigate 2024 and beyond with
confidence."
Financials
·
|
Fee paying assets under management
("Fee paying AUM") of €26
billion, an 11% increase vs. FY 2022 FPAUM of €23
billion;
|
·
|
Management fees increased by 10%
to £265 million (2022: £242 million), including £6.7 million of
catch-up fees from BE VII;
|
·
|
PRE of £55 million for the full
year following a step up in activity in H2 (2022: £65
million);
|
·
|
Underlying costs were £171 million
(2022: £168 million), due to cost control and the deliberate
phasing of recruitment through the M&A cycle. When combined
with growth in management fees, this resulted in 28% growth in
underlying fee related earnings ("FRE") to £95 million (2022: £74
million);
|
·
|
Underlying EBITDA was 7% higher at
£149 million (2022: £139 million);
|
·
|
Underlying profit before tax
increased by 12% to £134 million (2022: £120 million), giving
underlying EPS of 14.9p (2022: 13.8p);
|
·
|
Profit after tax of £70.7 million
and EPS of £8.7p, which includes the impact of costs incurred in
the ECP transaction; and
|
·
|
Total assets under management
("AUM") of €41 billion, an
increase of 7% from FY 2022 and 52% since IPO (FY 2020).
|
Fundraising
·
|
Fundraising on track with BE VII
soon to close on target at €7 billion of capital
commitments;
|
·
|
Fundraises for BDL III and BCO IV
closed in 2023, positioning the credit business to take advantage
of the favourable interest rate environment;
|
·
|
BDC V and BDL IV fundraises
commenced early in 2024, with BDC V expected to start paying
management fees from Q1 2025; and
|
·
|
BCO V, BG II and CLO 6 have begun
or will begin fundraising later in the year.
|
Fund performance
·
|
Bridgepoint's middle market focus
and value driving investment approach continues to deliver high
quality returns, with all funds remaining on or above plan in both
deployment and performance;
|
·
|
After a strong year of deployment,
BE VII is now 31% deployed, BDC IV is at 79%, BDL III is at 79%,
BCO IV is at 85% and two new CLOs were launched in the
year;
|
·
|
The most recent fully invested
funds, BE VI and BDC III, remain top quartile for their vintages
with value driven by strong underlying company trading performance
derived from carefully focused sector driven investment;
and
|
·
|
In Bridgepoint Credit, BDL III and
BCO IV both remained on plan with net IRRs of 10.4% and 13.8%
respectively.
|
ECP
update
·
|
The combination with ECP will
create a leading global private asset growth investor focused on
the middle market;
|
·
|
The transaction is expected to
close in Q2 2024, subject to the final regulatory clearance, and
will accelerate the enlarged Bridgepoint group's growth ambitions
and significantly diversify the group's income streams;
|
·
|
ECP is closing ECP V shortly, and
ECP's Forestar strategy has begun fundraising; and
|
·
|
ECP had standalone AUM and Fee
paying AUM of €21 billion and €11 billion respectively at year
end.
|
Dividend and outlook
·
|
Final dividend proposed of 4.4p
per share, subject to approval at annual general
meeting;
|
·
|
Combined with capital return of
7.6p per share through the share buyback and the interim dividend
of 4.4p per share paid in September 2023, total capital return to
shareholders in 2023 of 16.4p more than double that in 2022 (8.0p);
and
|
·
|
Bridgepoint remains well
positioned to deliver 2024 performance in line with current market
expectations.
|
FINAL DIVIDEND PAYMENT TIMETABLE
The timetable for the payment of
the interim dividend of 4.4 pence per share announced today is as
follows:
Ex-dividend date:
|
18 April 2024
|
Record date:
|
19 April 2024
|
Payment date:
|
21 May 2024
|
ENQUIRIES
Bridgepoint
FGS Global (Public Relations
Adviser to Bridgepoint)
Charles O'Brien / +44 20 7251 3801
/ +44 7825 043 656
Anjali Unnikrishnan / +44 20 7251
3801 / +44 7826 534 233
bridgepoint@fgsglobal.com
Abbreviated income
statement
£ million
|
Year ended
31 December
2023
|
Year ended
31 December
2022
|
Change
(%)
|
Management and other
fees
|
265.3
|
241.5
|
9.9%
|
PRE
|
55.3
|
64.9
|
(14.8)%
|
Total operating income
|
321.6
|
307.4
|
4.6%
|
Total expenses*
|
(224.5)
|
(171.4)
|
31.0%
|
Total expenses (excluding
exceptional expenses and adjusted items)*
|
(171.3)
|
(168.2)
|
1.8%
|
EBITDA*
|
97.1
|
136.0
|
(28.6)%
|
Underlying EBITDA*
|
148.8
|
139.2
|
6.9%
|
Underlying FRE*
|
95.0
|
74.3
|
27.9%
|
Depreciation and
amortisation
|
(18.7)
|
(18.3)
|
2.2%
|
Net finance and other
income*
|
7.6
|
9.7
|
(21.6)%
|
Net
finance other income/(expenses) (excluding exceptional net other
income)*
|
0.7
|
(3.9)
|
(117.9)%
|
Underlying profit before
tax
|
133.8
|
120.0
|
11.5%
|
Reported profit before
tax
|
86.0
|
127.4
|
(32.5)%
|
Tax
|
(15.3)
|
(6.8)
|
125.0%
|
Reported profit after
tax
|
70.7
|
120.6
|
(41.4)%
|
*
|
2022 has been restated to move
non-operating foreign exchange gains from total expenses to net
other income. EBITDA and FRE subtotals have been restated as a
result.
|
|
|
|
| |
Consolidated balance
sheet
Summarised consolidated statement
of financial position (statutory basis)
£ million
|
As at
31 December
2023
|
As at
31 December 2022
|
Change
(%)
|
Assets
|
|
|
|
Non-current assets
|
582.2
|
540.0
|
7.8%
|
Current assets
|
1,795.5
|
1,247.8
|
43.9%
|
Total Assets
|
2,377.7
|
1,787.8
|
33.0%
|
Liabilities
|
|
|
|
Non-current liabilities
|
1,318.8
|
757.1
|
74.2%
|
Current liabilities
|
337.7
|
258.0
|
30.9%
|
Total Liabilities
|
1,656.5
|
1,015.1
|
63.2%
|
Net Assets
|
721.2
|
772.7
|
(6.7)%
|
Equity
|
|
|
|
Share capital and
premium
|
289.9
|
289.9
|
0.0%
|
Other reserves
|
12.6
|
9.1
|
38.5%
|
Retained earnings
|
418.7
|
473.7
|
(11.6%)
|
Total Equity
|
721.2
|
772.7
|
(6.7%)
|
Financial summary
|
Year ended
31 December
2023
|
Year ended
31 December
2022
|
Change
(%)
|
Total AUM (€bn)
|
40.5
|
38.0
|
6.6%
|
Fee Paying AUM (€bn)
|
26.0
|
23.4
|
11.1%
|
Management fee margin on Fee Paying
AUM (%)
|
1.12%
|
1.16%
|
(0.04)ppt
|
Management and other fees
(£m)
|
265.3
|
241.5
|
9.9%
|
PRE (£m)
|
55.3
|
64.9
|
(14.8)%
|
Total operating income
(£m)
|
321.6
|
307.4
|
4.6%
|
Total expenses (excluding
exceptional expenses and adjusted items) (£m)
|
(171.3)
|
(168.2)
|
1.8%
|
Underlying EBITDA (£m)
|
148.8
|
139.2
|
6.9%
|
Underlying EBITDA margin
(%)
|
46.3%
|
45.3%
|
1.0ppt
|
Underlying FRE (£m)
|
95.0
|
74.3
|
27.9%
|
Underlying FRE margin
(%)
|
35.7%
|
30.6%
|
5.1ppt
|
Underlying profit before tax
(£m)
|
133.8
|
120.0
|
11.5%
|
Reported profit before tax
(£m)
|
86.0
|
127.4
|
(32.5)%
|
Reported profit after tax
(£m)
|
70.7
|
120.6
|
(41.4)%
|
Reported basic and diluted EPS
(pence)
|
8.7
|
14.6
|
(40.3)%
|
Underlying basic and diluted EPS
(pence)
|
14.9
|
13.8
|
8.5%
|
Reconciliation between statutory
and underlying income statements
|
|
Year ended 31 December
2023
|
|
Year ended 31 December
2022
|
£ million
|
|
Underlying
|
Excluded
items
|
Reported
|
|
Underlying
|
Excluded items
|
Reported
|
Management and other
fees
|
|
265.3
|
-
|
265.3
|
|
241.5
|
-
|
241.5
|
PRE
|
|
55.3
|
-
|
55.3
|
|
64.9
|
-
|
64.9
|
Other operating income
|
|
1.0
|
-
|
1.0
|
|
1.0
|
-
|
1.0
|
Total operating income
|
|
321.6
|
-
|
321.6
|
|
307.4
|
-
|
307.4
|
Personnel expenses
|
|
(127.6)
|
(4.9)
|
(132.5)
|
|
(125.8)
|
(1.1)
|
(126.9)
|
Other operating expenses
|
|
(45.2)
|
(46.8)
|
(92.0)
|
|
(42.4)
|
(2.1)
|
(44.5)
|
Total expenses including investment
linked bonuses
|
|
(172.8)
|
(51.7)
|
(224.5)
|
|
(168.2)
|
(3.2)
|
(171.4)
|
EBITDA
|
|
148.8
|
(51.7)
|
97.1
|
|
139.2
|
(3.2)
|
136.0
|
EBITDA Margin
|
|
46%
|
|
30%
|
|
45%
|
|
44%
|
FRE
|
|
95.0
|
(51.7)
|
43.3
|
|
74.3
|
(3.2)
|
71.1
|
FRE Margin
|
|
36%
|
|
16%
|
|
31%
|
|
29%
|
Depreciation and
amortisation
|
|
(15.7)
|
(3.0)
|
(18.7)
|
|
(15.3)
|
(3.0)
|
(18.3)
|
Net other
income/(expense)
|
|
0.7
|
6.9
|
7.6
|
|
(3.9)
|
13.6
|
9.7
|
Profit Before Tax
|
|
133.8
|
(47.8)
|
86.0
|
|
120.0
|
7.4
|
127.4
|
Tax
|
|
(15.3)
|
-
|
(15.3)
|
|
(6.8)
|
-
|
(6.8)
|
Profit After Tax
|
|
118.5
|
(47.8)
|
70.7
|
|
113.2
|
7.4
|
120.6
|
Chief Executive's statement
Raoul Hughes
Raoul is the Chief Executive of
Bridgepoint Group plc and Chair of Bridgepoint's Group Management
and Operating Committees. He joined the firm in 1988.
Bridgepoint is a global leader in
value-add growth investing with €62 billion of AUM across private
equity, credit, and following the ECP transaction, infrastructure.
The Group's strong local presence in Europe, North America and
Asia, combines global reach with local insight, and sector
expertise, enabling strong returns to be delivered consistently
through cycles.
2023 was no exception, with the
Group's strong set of financial results exceeding expectations,
driven by solid fund performance across strategies and further
progress on fundraising.
Financial performance ahead of
expectations
In 2023, Bridgepoint grew AUM
organically by 7% to €41 billion, contributing to a 10% increase in
management fees year-on-year to £265 million, and a 28% increase in
underlying FRE to £95 million. As guided in our interim results
exits, particularly within the firm's SMID Cap strategy, were
concentrated towards the second half of the year. This, along with
the growth of Bridgepoint's portfolios overall, delivered PRE of
£55 million. Consequently, underlying EBITDA and underlying profit
before tax increased by 7% and 12% respectively to £149 million and
£134 million and underlying earnings per share grew to 14.9 pence
per share.
Fundraising approaching completion
for flagship fund
The strong story continued on
fundraising, with BE VII expected to close this quarter with €7
billion of capital commitments. In relation to ECP, ECP V, which
has a fund target of $4 billion, is set to close at the end of
April. Appetite for Bridgepoint's private credit funds remains
robust, supported by a strong performance in 2023, with a total of
€0.7 billion raised for the Bridgepoint Direct Lending and Credit
Opportunities strategies, alongside the pricing of two CLOs.
Fundraising for BDC V is underway, with an expected transition from
BDC IV to BDC V by Q1 2025.
To support future growth further
investment in Bridgepoint's global coverage team has been made,
with important senior coverage hires in North America, Asia and the
DACH region in Europe. This enables the firm to continue to raise
increasing amounts of capital from a broadening range of investors
and to expand the Group's product offering.
Delivering high-quality returns
through disciplined investment
Bridgepoint's investment strategies
aim to deliver absolute returns for fund investors through a
disciplined approach, characterised by measured diversification
across sectors, geographies and deployment timelines. This approach
proved instrumental in driving performance in 2023, with all funds
remaining on or ahead of plan.
Private equity
In 2023, 13 platform investments
were made through Bridgepoint's private equity strategies,
deploying €2.7 billion. BE VII committed €1.7 billion in capital to
5 acquisitions, and has now committed 31% of its primary capital.
BE VII deployment remains on track, with a four-year investment
period expected before transitioning to BE VIII. BDC IV also had a
strong year with eight acquisitions, taking total commitments to
79% of primary capital. BDC III made notable progress, with the
Multiple on Invested Capital rising from 3.0x at the end of 2022 to
3.8x at the end of 2023. During the year, €1.1 billion was also
returned to private equity fund investors.
Infrastructure
The addition of ECP marks a major
step forward in Bridgepoint's strategy as set out at IPO, adding an
energy transition infrastructure business to the firm's private
equity and credit businesses. ECP's leading position in the energy
transition market positions the Company well in the global drive
for decarbonisation and enhanced energy security, as reflected in
its fund performance in 2023. With the transaction on track to
complete in the first half of 2024, we look forward to driving
growth in the enlarged group.
With Bridgepoint and ECP being
people-centred companies, the importance of cultural compatibility
cannot be overstated. After a year of extensive collaboration, it's
clear that both firms share a common ethos, with a focus on
long-term talent retention, team collaboration and prioritising
investors. Personally, I'm hugely excited about leading the firm in
the next chapter of this combined story.
Private credit
The credit market in 2023 offered
favourable conditions, with Bridgepoint Credit funds benefiting
from higher interest rates. This, coupled with disciplined credit
decision-making, is driving enhanced fund performance. Over the
year, Bridgepoint's Direct Lending and Credit Opportunities
strategies deployed approximately €1.3 billion of capital,
demonstrating a compelling track record of delivering consistently
strong risk-adjusted returns. For example, in aggregate as of Q4
2023, the BDL funds delivered impressive gross and net IRRs of 9%
and 8% respectively and a gross cash yield of 10%, with no realised
losses in their portfolios.
This success is attributed to BDL's
rigorous asset selection, targeting businesses in resilient sectors
with strong credit fundamentals, and a thorough due diligence
approach that leverages the Bridgepoint Group's extensive knowledge
and experience. In terms of fundraising, BDL III and BCO IV were
successfully closed in 2023, along with two CLOs. Fundraising for
BDL IV and BCO V has been launched, while CLO 6 is in its
warehousing phase, with pricing anticipated in the
summer.
Deepening the platform's
leadership as it scales
In line with Bridgepoint's
broadened platform, a new management structure has been put in
place to support the firm's medium-term priorities and help enable
the growth and diversification of the platform. Boards have been
established for the firm's private equity and credit businesses,
and comparable board will be established for ECP when it joins the
Group. Each board is led by a senior team responsible for growing
their respective product areas while continuing to focus on their
core investment activities.
At the Group level, a Group
Management Committee has been established, which is responsible for
the delivery of the Group's strategy. It will include members from
both Bridgepoint and, following the ECP transaction, the ECP
investment businesses. A Group Operating Committee has also been
established, responsible for the day-to-day operations of the
Group, ensuring that central functions efficiently support each
business unit and the Group's expansion.
These committees bring together a
dedicated and highly experienced management team to drive growth
and enhance shareholder value. I look forward to seeing the results
of their combined efforts.
Looking to the future with
confidence
Bridgepoint's diversified
investment strategies and healthy pipeline of potential investments
and exits position the firm well to navigate the year ahead with
confidence.
Amid ongoing industry
consolidation, opportunities for inorganic growth and expansion
into new asset classes are being actively explored, alongside
continued scaling of Bridgepoint's current strategies and
broadening product offerings.
We are ambitious and confident in
the Group's ability to deliver continued growth and value
creation.
I'd like to thank all colleagues
working at Bridgepoint for their dedication and hard work. It is
thanks to them that the business is in such a strong position
today.
Raoul Hughes
Chief Executive
CFO statement
The Group's financial performance
in 2023 delivers profits which are ahead of expectations due to
careful cost management, fees which are in line with expectations
and investment income modestly outperforming expectations despite
the more challenging, but improving, market conditions. Fundraising
for BE VII is completing soon (and on target), with
the completion of the ECP transaction expected in the second
quarter, which together means the Group is positively positioned at
the start of 2024.
Group financial performance in 2023
was driven by 6.6% growth in Total AUM to reach €40.5 billion and
an 11.1% increase in Fee Paying AUM to €26.0 billion at year
end. This increase drove a £23.8 million or 9.9% increase in
management and other fees (including the recognition of £6.7
million of late fees relating to BE VII). When combined with
careful cost management, personnel investment phased to fundraising
progress, and a lower bonus pool reflecting the reduced numbers of
exits compared to prior periods, this helped deliver a 27.9%
increase in underlying FRE, and a 5.1 percentage point increase in
underlying FRE margin to 35.7%.
Investment performance delivered
£55.3 million of PRE despite volatile and uncertain markets
delaying exits. Whilst PRE is not linear and was materially
weighted to the second half as advised at our 2023 interim results,
our second half performance does reflect improving economic
conditions compared with the first half of the year.
PRE, in combination with Underlying
FRE, delivered Underlying EBITDA of £148.8 million, an increase of
£9.6 million or 6.9%.
Underlying profit before tax of
£133.8 million was £13.8 million or 11.5% higher than the previous
year, primarily driven by the full year impact of BE VII and growth
of Fee Paying AUM in our credit business, with good momentum on
deployment and the de-risking of carried interest through fund
performance, partially offset by modest cost growth and slightly
lower investment returns.
Reported profit after tax of £70.7
million includes the impact of costs incurred in the ECP
transaction.
The pending ECP transaction,
expected to complete in Q2, is a major step in delivering on the
strategy set out at the time of the IPO, adding Infrastructure as a
significant third pillar alongside our private equity and credit
businesses. The transaction positions the Group well for future
growth and diversification and will be immediately accretive to FRE
and earnings per share.
During 2023, we completed an
initial share buyback programme of £50.0 million and in October
2023 announced a second programme committing up to a further £50.0
million, reflecting the confidence we have in the resilience of our
business and the attractive fundamental value and prospects of the
Company. At 31 December 2023, £10.2 million of the second £50.0
million had been used to repurchase shares.
The Group was well-capitalised at
year end with a net cash position of £238.8 million (excluding cash
belonging to consolidated CLOs) alongside undrawn revolving credit
banking facility of £250.0 million.
We also recently priced $430.0
million of US private placement notes. This new financing further
strengthens the balance sheet and provides the Group with further
resources to continue our strategic growth plans, as well as an
amount which will be used to refinance part of the debt which will
transfer with ECP.
Adam Jones
Group Chief Financial Officer
and Chief Operating Officer
Guidance
·
|
Fundraising
|
|
·
|
BE VII on track to close in line
with expectations, with an average fee rate of 1.4%
|
|
·
|
expect to raise more than €20
billion across the wider platform during the next range of fund
cycles
|
·
|
Credit deployment: average
increase in Fee Paying AUM of €1 billion a year from 2024 to
2026
|
·
|
PRE:
|
|
·
|
expect H2 weighting in 2024 (c.
2/3) reflecting exit pipeline (in line with 2023)
|
|
·
|
expected to be at the upper end of
our normal range of between 20% and 25% of total income
|
·
|
Cost: excluding the impact of
ECP, total costs in 2024 likely to represent mid to high single
digit compound growth from 2022
|
·
|
Underlying FRE margin:
|
|
·
|
expected to be around 30% to 35% in
2024 (including ECP)
|
|
·
|
medium term guidance of around 35%
until BE VIII starts to generate fees
|
·
|
Group financing: additional
$430 million financing will pay fixed coupon of 6.17%
|
·
|
Tax: blended Group underlying
tax rate expected to be around 15% following ECP
transaction
|
Summary
Financial summary
|
Year ended 31 December
2023
|
Year ended 31 December
2022
|
Change (%)
|
Total AUM (€bn)
|
40.5
|
38.0
|
6.6%
|
Fee Paying AUM (€bn)
|
26.0
|
23.4
|
11.1%
|
Management fee margin on Fee Paying
AUM (%)
|
1.12%
|
1.16%
|
(0.04)ppt
|
Management and other fees
(£m)
|
265.3
|
241.5
|
9.9%
|
PRE (£m)
|
55.3
|
64.9
|
(14.8)%
|
Total operating income
(£m)
|
321.6
|
307.4
|
4.6%
|
Total expenses (excluding
exceptional expenses and adjusted items) (£m)*
|
(171.3)
|
(168.2)
|
1.8%
|
Underlying EBITDA (£m)*
|
148.8
|
139.2
|
6.9%
|
Underlying EBITDA margin
(%)*
|
46.3%
|
45.3%
|
1.0ppt
|
Underlying FRE (£m)*
|
95.0
|
74.3
|
27.9%
|
Underlying FRE margin
(%)*
|
35.7%
|
30.6%
|
5.1ppt
|
Underlying profit before tax
(£m)
|
133.8
|
120.0
|
11.5%
|
Reported profit before tax
(£m)
|
86.0
|
127.4
|
(32.5)%
|
Reported profit after tax
(£m)
|
70.7
|
120.6
|
(41.4)%
|
Reported basic and diluted EPS
(pence)
|
8.7
|
14.6
|
(40.3)%
|
Underlying basic and diluted EPS
(pence)
|
14.9
|
13.8
|
8.5%
|
*
|
2022 comparative information has
been restated to exclude non-operating foreign exchange gains and
losses.
|
|
|
|
| |
Fundraising
Private Equity AUM at 31 December
2023 amounted to €28.1 billion.
The BE VII strategy is expected to
hold its final close in March, with €7 billion of
commitments.
Bridgepoint Direct Lending ("BDL") III concluded fundraising in May
2023. In total, including separately managed accounts, the strategy
raised over €3.4 billion of investable capital. The second
half of 2023 saw Bridgepoint Credit Opportunities ("BCO") IV holding its final closing, the
launch of CLO 5 and CLO 6 entering warehousing. As a result
of these fundraisings, Credit AUM ended the year at €12.4
billion.
Fundraising for Bridgepoint
Development Capital ("BDC")
V and BDL IV are now well underway,
alongside other funds entering the market in 2024.
ECP AUM at 31 December 2023
amounted to $23.3 billion. Fundraising for ECP V is almost complete
with commitments expected in excess of the $4 billion target we
shared in September. Fundraising for ECP Forestar Credit Fund and
related separately managed accounts remains in progress with a
target of over $2 billion.
Overall, we expect to raise c. €20
billion across the Group, including ECP, weighted towards the ECP
VI and BE VIII raises in the next fundraising cycle.
Total AUM development during the
year
€ billion
|
Private equity
|
Credit
|
Total
|
31 December 2022
|
26.8
|
11.2
|
38.0
|
Fundraising
|
1.1
|
1.6
|
2.7
|
Divestments
|
(1.1)
|
(0.8)
|
(1.9)
|
Revaluations
|
1.3
|
0.4
|
1.7
|
31 December 2023
|
28.1
|
12.4
|
40.5
|
Total AUM at 31 December 2023 was
€40.5 billion compared to €38.0 billion at the end of 2022. The
6.6% increase is primarily due to additional commitments raised for
BE VII, BDL III, BCO IV and the impact of valuation growth of fund
investments.
ECP AUM at 31 December 2023 was
€21.1 billion.
Fee Paying AUM development during
the year
€ billion
|
Private equity
|
Credit
|
Total
|
31 December 2022
|
16.4
|
7.0
|
23.4
|
Fundraising: fees on committed
capital
|
1.4
|
-
|
1.4
|
Deployment of funds: fees on
invested capital
|
0.2
|
1.8
|
2.0
|
Realisations
|
(0.2)
|
(0.6)
|
(0.8)
|
31 December 2023
|
17.8
|
8.2
|
26.0
|
Fee Paying AUM at 31 December 2023
was €26.0 billion compared to €23.4 billion at the end of 2022,
with the 11.1% increase in 2023 primarily due to additional BE VII
commitments and an increase in invested capital in our Credit
strategies. In aggregate our Credit business added €1.2 billion of
Fee Paying AUM during 2023, including the launch of new
CLOs.
ECP Fee Paying AUM at 31 December
2023 was €10.7 billion.
Abbreviated income
statement
£ million
|
Year ended 31 December
2023
|
Year ended 31 December
2022
|
Change
(%)
|
Management and other
fees
|
265.3
|
241.5
|
9.9%
|
PRE
|
55.3
|
64.9
|
(14.8)%
|
Total operating income
|
321.6
|
307.4
|
4.6%
|
Total expenses*
|
(224.5)
|
(171.4)
|
31.0%
|
Total expenses (excluding
exceptional expenses and adjusted items)*
|
(171.3)
|
(168.2)
|
1.8%
|
EBITDA*
|
97.1
|
136.0
|
(28.6)%
|
Underlying EBITDA*
|
148.8
|
139.2
|
6.9%
|
Underlying FRE*
|
95.0
|
74.3
|
27.9%
|
Depreciation and
amortisation
|
(18.7)
|
(18.3)
|
2.2%
|
Net finance and other
income**
|
7.6
|
9.7
|
(21.6)%
|
Net finance and other
income/(expenses) (excluding exceptional net other
income)**
|
0.7
|
(3.9)
|
(117.9)%
|
Underlying profit before
tax
|
133.8
|
120.0
|
11.5%
|
Reported profit before
tax
|
86.0
|
127.4
|
(32.5)%
|
Tax
|
(15.3)
|
(6.8)
|
125.0%
|
Reported profit after
tax
|
70.7
|
120.6
|
(41.4)%
|
*
|
2022 comparative information has
been restated to exclude non-operating foreign exchange gains and
losses.
|
**
|
2022 net other income and net
other expenses (excluding exceptional net other income) have been
restated to include non-operating foreign exchange gains and
losses.
|
|
|
|
| |
The Group's consolidated income
statement has two key components: the first is the income generated
from management and other fees, which are from long-term fund
management contracts. The second component is the variable income
from investments in funds and carried interest, or PRE. Underlying
FRE is management and other fees plus other operating income less
costs excluding exceptional expenses, bonuses linked to investment
returns and the costs associated with certain employee share
schemes. PRE together with FRE forms the EBITDA of the
business.
Exceptional items are items of
income or expense that are material by size and/or nature and are
not considered to be incurred in the normal course of business.
Exceptional items are classified as "exceptional" within the Group
Consolidated Statement of Profit or Loss are disclosed separately
to give a clearer presentation of the Group's results. In the year
ended 31 December 2023, exceptional expenses within EBITDA were
predominantly relating to transaction costs incurred in the
acquisition of ECP. Exceptional other income outside of EBITDA
relates to the remeasurement and revaluation of a deferred
consideration payable to EQT. In the year ended 31 December 2022,
exceptional expenses included costs related to the acquisition of
the EQT Credit business and other potential acquisitions. Further
explanation of these items is included within note 8 of the
financial statements.
Underlying profit before tax
excludes the aforementioned exceptional items, costs relating to
certain employee share schemes and the amortisation of intangible
assets arising from the acquisition of EQT Credit. Further
explanation of these items is included within note 8 of the
financial statements.
Total operating income
£ million
|
Year ended 31 December
2023
|
Year ended 31 December
2022
|
Change
(%)
|
Management and other
fees
|
265.3
|
241.5
|
9.9%
|
PRE
|
55.3
|
64.9
|
(14.8)%
|
Other operating income
|
1.0
|
1.0
|
0.0%
|
Total operating income
|
321.6
|
307.4
|
4.6%
|
Total operating income increased
by 4.6% from £307.4 million in 2022 to £321.6 million in 2023
reflecting higher management fees offset by reduction in fair value
remeasurement of investments.
Management and other fees increased
by £23.8 million, or 9.9%, from £241.5 million for the year ended
31 December 2022 to £265.3 million for the year ended 31 December
2023, and was attributable to the below reporting segments in the
year.
£ million
|
Year ended 31 December
2023
|
Year ended 31 December
2022
|
Change
(%)
|
Private equity
|
205.0
|
187.8
|
9.2%
|
Credit
|
56.5
|
50.8
|
11.2%
|
Central
|
3.8
|
2.9
|
31.0%
|
Management and other
fees
|
265.3
|
241.5
|
9.9%
|
The increase in fees was primarily
due to a full year of BE VII fee paying commitments recognised by
the private equity business in 2023, plus fees on increased levels
of invested capital in BDL III and BCO IV and the launch of new
CLOs in the credit business. These increases were partially offset
by declining fees on older funds which are in their divestment
phase, where fees are based upon the remaining invested capital and
reduce when investments are sold.
Income from the Group's share of
carried interest reflects the continued growth in the value of the
fund portfolios in 2023, along with the de-risking of carry
receipts from exit activity and improved economic conditions. The
income of £30.0 million is earned primarily from the BDC III
portfolio and the initial recognition of carried interest from the
BG I fund during the year.
Income recognised as a result of
increases in the value of co-investments was £25.3 million. This
reflected smaller valuation increases across the private equity
fund range, in part due to lower levels of exits.
Operating expenses
£ million
|
Year ended 31 December
2023
|
Year ended 31 December
2022*
|
Change
(%)
|
Personnel expenses (excluding
exceptional expenses and adjusted items)
|
(126.1)
|
(125.8)
|
0.2%
|
Other operating expenses (excluding
exceptional expenses)
|
(45.2)
|
(42.4)
|
6.6%
|
Total expenses (excluding
exceptional expenses and adjusted items)*
|
(171.3)
|
(168.2)
|
1.8%
|
Certain share-based
payments
|
(4.0)
|
-
|
n/a
|
Investment linked
bonuses
|
(1.5)
|
-
|
n/a
|
Exceptional expenses
|
(47.7)
|
(3.2)
|
1,390.6%
|
Total expenses*
|
(224.5)
|
(171.4)
|
31.0%
|
*
|
2022 comparative information has
been restated to exclude non-operating foreign exchange gains and
losses.
|
|
|
|
| |
Personnel expenses (excluding
exceptional expenses and adjusted items) increased by 0.2%, from
£125.8 million in 2022 to £126.1 million in 2023, reflecting
deliberate phasing of investment team hires to match fundraising
progress and timing of replacement hires for natural attrition.
2023 costs also reflect a lower bonus expense associated with a
lower number of investment exits during the year.
In the year ended 31 December 2023,
reported personnel costs included £1.5 million of investment linked
bonuses (2022: £nil) and £4.0 million of share-based
payments (2022: £nil) excluded from underlying metrics for the
reasons explained in the APM definitions.
Personnel expenses (excluding
exceptional expenses and adjusted items) as a percentage of total
operating income was 39.2% for the year ended 31 December 2023,
compared to 40.9% for the year ended 31 December 2022. The
improvement in the ratio in 2023 was primarily due to an increase
in total operating income.
Other operating expenses (excluding
exceptional expenses) as a percentage of total operating income
remained broadly consistent at 14.1% for the year ended 31 December
2023, compared to 13.8% for the year ended 31 December 2022. Other
operating expenses (excluding exceptional expenses) increased by
6.6% from £42.4 million in 2022 to £45.2 million in 2023 driven by
higher fundraising costs and higher levels of travel
activity.
EBITDA
£ million
|
Year ended 31 December
2023
|
Year ended 31 December
2022*
|
Change
(%)
|
Underlying EBITDA*
|
148.8
|
139.2
|
6.9%
|
Exceptional expenses within
EBITDA
|
(47.7)
|
(3.2)
|
1,390.6%
|
Certain share-based
payments
|
(4.0)
|
-
|
n/a
|
EBITDA*
|
97.1
|
136.0
|
(28.6)%
|
*
|
2022 comparative information has
been restated to exclude non-operating foreign exchange gains and
losses.
|
|
|
|
| |
Underlying EBITDA increased to
£148.8 million in 2023 from £139.2 million in 2022, excluding
exceptional expenses and adjusted items. Whilst investment
returns were lower than 2022 due to delayed exits across the
private equity market, this was offset by higher management and
other fees and prudent cost control.
Exceptional expenses within EBITDA
of £47.7 million in 2023 primarily related to £43.5 million of
transaction costs relating to the acquisition of ECP.
EBITDA, inclusive of exceptional
expenses, adjusted items and other M&A due diligence costs,
decreased by 28.6% primarily due to the increase in exceptional
expenses due to the ECP transaction.
Depreciation and amortisation
expense
£ million
|
Year ended 31 December
2023
|
Year ended 31 December
2022
|
Change
(%)
|
Depreciation
|
(14.9)
|
(15.3)
|
(2.6)%
|
Amortisation of
intangibles
|
(3.8)
|
(3.0)
|
26.7%
|
Total depreciation and amortisation
expense
|
(18.7)
|
(18.3)
|
2.2%
|
Depreciation and amortisation
expense increased by 2.2% from £18.3 million in 2022 to £18.7
million in 2023. This increase was primarily due to the cessation
of legacy leases in London following the move to 5 Marble Arch,
offset by higher lease costs associated with new offices in
Frankfurt and Amsterdam during 2023. The amortisation of
intangibles acquired with the EQT Credit business (fund customer
relationships) of £3.0 million in both 2022 and 2023 respectively
have been excluded from the underlying
profitability measures in
order to enable a clearer analysis of the business's
performance.
Finance and other income or
expenses
£ million
|
Year ended 31 December
2023
|
Year ended 31 December
2022*
|
Change
(%)
|
Net finance and other
income/(expense), excluding exceptional items
|
0.7
|
(3.9)
|
(117.9)%
|
Exceptional other income
|
6.9
|
13.6
|
(49.3)%
|
Net finance and other income,
including exceptional items
|
7.6
|
9.7
|
(21.6)%
|
|
2022 comparative information has
been restated to exclude non-operating foreign exchange gains and
losses.
|
|
|
|
| |
Finance and other income or
expenses includes interest income from cash deposits and interest
cost on bank facilities, lease liabilities and finance expense on
amounts payable to related party investors, along with
non-operating foreign exchange gains and losses.
Net finance and other income,
excluding exceptional items, increased by £4.6 million to income of
£0.7 million, compared to a net expense of £3.9 million for the
year ended 31 December 2022. These movements are principally due to
increased interest income from cash on deposit. Net finance and
other expenses will increase in 2024 as a result of the US private
placement financing undertaken by the Group, along with the
borrowings transferring with ECP.
Exceptional other income of £6.9
million (2022: £13.6 million) relates to remeasurement and
revaluation of the deferred contingent consideration payable to EQT
AB in relation to the acquisition of EQT Credit in 2020, and the
associated unwind of discounting. The deferred consideration was
settled during the year for a final amount of £9.4
million.
Profit before tax
£ million
|
Year ended 31 December
2023
|
Year ended 31 December
2022
|
Change
(%)
|
Underlying profit before
tax
|
133.8
|
120.0
|
11.5%
|
Exceptional expenses
|
(47.7)
|
(3.2)
|
1,390.6%
|
Exceptional other income
|
6.9
|
13.6
|
(49.3)%
|
Certain share-based
payments
|
(4.0)
|
-
|
n/a
|
Amortisation of acquisition related
intangible assets
|
(3.0)
|
(3.0)
|
0.0%
|
Reported profit before
tax
|
86.0
|
127.4
|
(32.5)%
|
Underlying profit before tax
margin
|
41.6%
|
39.0%
|
2.6ppt
|
Underlying profit before tax
increased by 11.5% from £120.0 million in 2022 to £133.8 million in
2023. The underlying profit before tax margin increased from 39.0%
for the year ended 31 December 2022 to 41.6% for the year ended 31
December 2023.
Reported profit before tax
decreased by 32.5% from £127.4 million in 2022 to £86.0 million in
2023, reflecting the transaction costs associated with the ECP
acquisition.
Tax
£ million
|
Year ended 31 December
2023
|
Year ended
31 December 2022
|
Change
(%)
|
Tax
|
(15.3)
|
(6.8)
|
125.0%
|
The tax charge increased from £6.8
million in 2022 to £15.3 million in 2023. The effective tax rate
for the year ended 31 December 2023 was 17.8% compared to 5.4% for
the year ended 31 December 2022. This was primarily due to an
increase in deferred tax liabilities which reflect the lower level
of fund exits, and the exceptional transaction costs relating to
the ECP transaction. Adjusting for these transaction costs, the
underlying effective tax rate is 11.4%.
As detailed in note 11 to the
financial statements, the Group has a lower effective tax rate than
the UK statutory rate. This is largely driven by timing differences
on the taxation of management fee income and significant tax loss
carry-forwards in the UK due to certain forms of income that are
not subject to UK corporation tax.
Profit after tax
£ million
|
Year ended 31 December
2023
|
Year ended 31 December
2022
|
Change
(%)
|
Profit after tax
|
70.7
|
120.6
|
(41.4)%
|
Profit after tax decreased by
41.4% from £120.6 million in 2022 to £70.7 million in 2023,
reflecting the transaction costs associated with the ECP
acquisition and the higher tax charge for the year.
Earnings per share and dividend
per share
£ pence
|
Year ended 31 December
2023
|
Year ended
31 December 2022
|
Change
(pence)
|
Reported basic and diluted earnings
per share
|
8.7
|
14.6
|
(5.9)
|
Underlying basic and diluted
earnings per share
|
14.9
|
13.8
|
1.1
|
Interim dividend per
share
|
4.4
|
4.0
|
0.4
|
Final dividend per share
|
4.4
|
4.0
|
0.4
|
Underlying earnings per share grew
by 1.1 pence per share, reflecting the increase in underlying
profit after tax. An interim dividend of £35.3 million, or 4.4
pence per share, was paid on 25 September 2023.
The Directors are proposing a final
dividend of 4.4 pence per share in respect of the second half of
2023.
Consolidated balance
sheet
Summarised consolidated statement
of financial position (statutory basis)
£ million
|
As at 31 December 2023
|
As at 31 December 2022
|
Change
(%)
|
Assets
|
|
|
|
Non-current assets
|
582.2
|
540.0
|
7.8%
|
Current assets
|
1,795.5
|
1,247.8
|
43.9%
|
Total Assets
|
2,377.7
|
1,787.8
|
33.0%
|
Liabilities
|
|
|
|
Non-current liabilities
|
1,318.8
|
757.1
|
74.2%
|
Current liabilities
|
337.7
|
258.0
|
30.9%
|
Total Liabilities
|
1,656.5
|
1,015.1
|
63.2%
|
Net Assets
|
721.2
|
772.7
|
(6.7)%
|
Equity
|
|
|
|
Share capital and
premium
|
289.9
|
289.9
|
0.0%
|
Other reserves
|
12.6
|
9.1
|
38.5%
|
Retained earnings
|
418.7
|
473.7
|
(11.6)%
|
Total Equity
|
721.2
|
772.7
|
(6.7)%
|
Net assets principally comprise
cash and money market funds, the fair value of investments and
carried interest receivable from private equity and credit funds,
and goodwill arising from the acquisition of the EQT Credit
business.
Non-current assets increased by
7.8% from £540.0 million at 31 December 2022 to £582.2 million at
31 December 2023 and current assets increased by 43.9% from
£1,247.8 million at 31 December 2022 to £1,795.5 million at 31
December 2023, primarily due to the impact of the build-up of the
CLO 5 portfolio following its launch and the warehousing of assets
in CLO 6. The balance sheet now includes the full consolidation of
the assets and liabilities of CLOs 1, 3, 4, 5 and 6, which are
required under IFRS to be presented gross on the balance
sheet.
At 31 December 2023, the Group had
cash of £238.8 million (including amounts in money market funds,
but excluding cash belonging to the consolidated CLOs).
Total liabilities increased by
63.2% from £1,015.1 million at 31 December 2022 to £1,656.5 million
at 31 December 2023. Non-current liabilities increased from £757.1
million at 31 December 2022 to £1,318.8 million at 31 December
2023, primarily due to an increased level of liabilities owed by
consolidated CLOs. Current liabilities increased by 30.9% from
£258.0 million at 31 December 2022 to £337.7 million at 31 December
2023. Excluding the impact of consolidated CLOs, non-current
liabilities remained relatively stable, increasing by
4.5%.
Total equity reflects the 2023
profit, offset by dividends paid, the cost of the share buyback
programme and a decrease in other reserves due to movements in fair
value of hedging instruments, which is partially offset by foreign
exchange movements. These resulted in total equity of £721.2
million at 31 December 2023, down from £772.7 million at 31
December 2022.
The consolidation of certain CLOs
could distort how a reader of the financial statements interprets
the balance sheet of the Group. The Group's maximum exposure to
loss associated with its interest in the CLOs is limited to its
investment in the relevant CLOs which at 31 December 2023 was £96.3
million (2022: £60.3 million).
In addition, a summarised
consolidated balance sheet on a non-statutory basis, excluding
third-party CLO assets and liabilities, is included
below.
Summarised consolidated statement
of financial position (excluding third party CLO assets and
liabilities, non-statutory)1
£ million
|
As at 31 December 2023
|
As at 31 December 2022
|
Change
(%)
|
Assets
|
|
|
|
Non-current assets
|
663.3
|
585.2
|
13.3%
|
Current assets
|
370.7
|
481.9
|
(23.1)%
|
Total Assets (excluding third-party
CLO assets)
|
1,034.0
|
1,067.1
|
(3.1)%
|
Liabilities
|
|
|
|
Non-current liabilities
|
166.8
|
159.6
|
4.5%
|
Current liabilities
|
146.0
|
134.8
|
8.3%
|
Total Liabilities (excluding
third-party CLO liabilities)
|
312.8
|
294.4
|
6.3%
|
Net Assets (excluding third-party
CLO assets and liabilities)
|
721.2
|
772.7
|
(6.7)%
|
1
|
A full non-statutory consolidated
statement of financial position excluding third-party CLO assets
and liabilities (unaudited) is included in this
announcement.
|
|
|
|
| |
Liquidity
The Group's liquidity requirements
arise primarily in relation to the funding of operations and the
Group's plans in connection with its expansion and diversification
strategy. The Group funds its business using cash from its
operations (retained profits), capital from shareholders and, from
time-to-time, third-party debt.
Total financial debt and net cash
position
£ million
|
As at 31 December 2023
|
As at 31 December 2022
|
Change
(%)
|
Bank borrowings
|
-
|
-
|
-%
|
Cash and cash equivalents
(excluding CLO cash)
|
238.8
|
196.0
|
21.8%
|
Term deposits with original
maturities of more than three months
|
-
|
100.0
|
(100.0)%
|
Net cash (excluding consolidated
CLO cash)
|
238.8
|
296.0
|
(19.3)%
|
At 31 December 2023, the Group had
net cash of £238.8 million compared with net cash of £296.0 million
at 31 December 2022.
Prior to the ECP transaction, the
Group has no debt and had in place the undrawn £250 million
revolving credit facility and the undrawn £75 million acquisition
bridge facility (up-sized to £125 million subsequently to the
year-end).
As announced recently, the Group
recently priced $430.0 million of US private placement notes. The
proceeds will be used to provide additional resources to deliver
the Group's strategic growth plans and be used to refinance any
amount of ECP debt which requires refinancing on the completion of
the ECP change of control process. The new notes will be structured
in four tranches with maturities of 3, 5, 7 and 10 years and an
average coupon of 6.17 per cent. The closing of the new notes is
expected during Q2 2024, subject to the completion of the ECP
transaction and customary conditions.
As at 31 December 2023, in addition
to the liabilities shown on the balance sheet, the Group had
approximately £257.0 million and £30.3 million of remaining undrawn
capital commitments to the Bridgepoint funds in each of the private
equity and private credit segments, respectively.
Consolidated cash flows
Summarised consolidated cash flow
statement (statutory basis)
£ million
|
Year ended 31 December
2023
|
(Restated)
Year ended
31 December 2022
|
Change
(%)
|
Net cash flows from operating
activities
|
147.8
|
33.9
|
336.0%
|
Net cash flows from investing
activities
|
(372.8)
|
(57.3)
|
550.6%
|
Net cash flows from financing
activities
|
325.6
|
(86.6)
|
(476.0)%
|
Net increase/(decrease) in cash and
cash equivalents
|
100.6
|
(110.0)
|
(191.5)%
|
Total cash and cash equivalents at
beginning of the year
|
220.6
|
327.3
|
(32.6)%
|
Effect of exchange rate
changes
|
(6.4)
|
3.3
|
(293.9)%
|
Total cash and cash equivalents at
the end of the year
|
314.8
|
220.6
|
42.7%
|
of which: cash and cash equivalents
at the end of the year (for use within the Group)
|
238.8
|
196.0
|
21.8%
|
of which: CLO cash (restricted for
use within relevant CLO)
|
76.0
|
24.6
|
208.9%
|
Total cash and cash equivalents at
the end of the year
|
314.8
|
220.6
|
42.7%
|
Net cash flows from operating
activities for the year ended 31 December 2023 were £147.8 million.
The increase of £113.9 million in the net cash flows from operating
activities compared to the year ended 31 December 2022 was due to
the receipt of deferred proceeds from the sale of the Group's
investment in Bridgepoint Credit II and favourable movements in the
Group's working capital. Operating cash flows, excluding the impact
of the receipt of the deferred proceeds from BC II and the payment
of exceptional costs relating to the ECP transaction, represented
124.2% of FRE demonstrating the strong cash generation of the
business (2022: 48.0% due to the delayed receipt in the collection
of certain management fees, accumulation of fundraising costs
recoverable from funds and timing differences on fund related
payments).
Net cash flows from investing
activities include proceeds from carried interest and investment
income, which is driven by the timing of investments into, and
receipts from divestments from, the underlying Bridgepoint funds.
Net cash flows from investing activities for the year ended 31
December 2023 were £372.8 million; this was made up of investments
of £449.9 million relating to consolidated CLOs, which includes the
impact of the launch of CLO 5 and the warehousing of CLO 6 (which
are both consolidated), and the receipt of £100.0 million
redeemed from cash held in term deposits with an original maturity
of more than three months which was classified separately from cash
and cash equivalents at 31 December 2022 under accounting
rules.
Net cash flows from financing
activities include cash drawn from and repaid to consolidated CLO
investors, dividend payments to shareholders and other transactions
with shareholders. For the year ended 31 December 2023 net cash
flows from financing activities totalled £325.6 million, which
primarily related to net inflow of CLO cash from investors in CLO 4
and 5 (which are consolidated) of £576.2 million, offset by
dividends paid to shareholders of £68.0 million and payments to
acquire shares as part of the share buyback programme, which
totalled £60.2 million by the end of the year.
In addition to £238.8 million of
its own cash at 31 December 2023, the Group had £76.0 million
recorded on the balance sheet as consolidated CLO cash which was
held by the consolidated CLO vehicles, legally ringfenced and not
available for use by the Group.
The consolidated cash flow
statement includes the gross cash inflows and outflows for the
period in respect of the consolidated CLOs, and cash held at 31
December 2023 for those CLOs which are required to be consolidated.
This could distort how a reader of the financial statements
interprets the cash flows of the Group, therefore a cash flow
statement without the consolidated CLO vehicles is presented
below.
Summarised consolidated cash flow
statement (excluding cash flows relating to consolidated CLOs,
non-statutory)1
£ million
|
Year ended 31 December
2023
|
(Restated)
Year ended 31 December
2022
|
Change
(%)
|
Net cash flows from operating
activities (excluding consolidated CLOs)
|
147.8
|
33.9
|
336.0%
|
Net cash flows from investing
activities (excluding consolidated CLOs)
|
41.5
|
(93.7)
|
(144.3)%
|
Net cash flows from financing
activities (excluding consolidated CLOs)
|
(140.8)
|
(69.6)
|
102.3%
|
Net increase in cash and cash
equivalents (excluding consolidated CLOs)
|
48.5
|
(129.4)
|
(137.5)%
|
Cash and cash equivalents at
beginning of the year (excluding consolidated CLOs)
|
196.0
|
323.1
|
(39.3)%
|
Effect of exchange rate changes on
cash and cash equivalents (excluding consolidated CLOs)
|
(5.7)
|
2.3
|
(347.8)%
|
Cash and cash equivalents at the
end of the year (excluding consolidated CLOs)
|
238.8
|
196.0
|
21.8%
|
Add back: investment in term
deposits with original maturities of more than three
months
|
-
|
100.0
|
(100.0)%
|
Net cash at the end of the year
(excluding consolidated CLOs)
|
238.8
|
296.0
|
(19.3)%
|
1
|
A full non-statutory consolidated
cash flow statement excluding third-party CLO assets and
liabilities (unaudited) is included in this
announcement.
|
|
|
|
| |
Alternative performance measures
These full-year results include several measures which are not
defined or recognised under International Financial Reporting
Standards ("IFRS"),
including financial and operating measures relating to the Group
such as EBITDA, Underlying EBITDA, Underlying EBITDA margin,
Underlying profit before tax, Underlying FRE, Underlying FRE
margin, PRE, Fee Paying AUM and Total AUM, all of which the Group
considers to be alternative performance measures ("APMs"). These are reconciled to
the statutory results in the table below.
These APMs and KPIs are used by the
Board and management to analyse the Group's business and financial
performance, track the Group's progress and help develop long-term
strategic plans. These APMs are presented to provide additional
information to investors and enhance their understanding of the
Group's results and operations. Furthermore, the Board believes
that these APMs are widely used by certain investors, securities
analysts and other interested parties as supplemental measures of
performance and liquidity. However, as these measures are not
determined in accordance with IFRS or any generally accepted
accounting standards, and are thus susceptible to varying
calculations, they may not be comparable to other similarly titled
measures used by other companies and have limitations as analytical
tools. In particular, there are no generally accepted principles
governing the calculation of these measures and the criteria on
which these measures are based can vary from company to company,
which means that other companies may define and calculate such
measures differently from the Group.
In addition, as the Group is
required by IFRS to consolidate certain Collateralised Loan
Obligations ("CLOs") which
are managed by the Group and in which the Group has an investment,
and so the consolidated statement of financial position includes the assets and liabilities and
the consolidated statement of cash flows includes the gross cash
inflows and outflows for the period for those consolidated
CLOs.
The consolidation of these CLOs
could distort how a reader of the financial statements interprets
the balance sheet and cash flows of the Group, therefore the CFO
statement includes a summarised non-statutory balance sheet and
cash flow statement which exclude the third-party CLO assets and
liabilities. Such measures are also APMs. Full versions of these
statements can be found in this announcement.
APMs should not be considered in
isolation and investors should not consider such information as
alternatives to total operating income, profit before tax or cash
flows from operating activities calculated in accordance with IFRS,
as indications of operating performance or as measures of the
Group's profitability or liquidity. Such financial information must
be considered only in addition to, and not as a substitute
for or superior to, financial information prepared in
accordance with IFRS included elsewhere in this
announcement.
EBITDA
|
|
Earnings before interest, taxes,
depreciation and amortisation. It is calculated by reference to
total operating income and deducting from it, or adding to it, as
applicable, personnel expenses and other operating
expenses.
|
|
Underlying EBITDA
|
|
Calculated by excluding exceptional
items and certain share-based payments from EBITDA. Exceptional
items are items of income or expense that are material by size
and/or nature and are not considered to be incurred in the normal
course of business.
The excluded share-based payments
relate to awards that were granted following the IPO to a targeted
group of employees with the aim of increasing employee ownership in
the Group. The awards are not considered to be an alternative to
cash-based compensation, are not included in the cost-base when
considering operating segment performance and will cease to be a
reconciling item once the awards issued as part of the strategy are
fully vested. The share-based payment expenses related to the
executive director Restricted Share Plan, and any share-based
payment charges on awards made prior to the IPO are included in
underlying costs.
A breakdown of exceptional items
within EBITDA is included within note 8 of the financial
statements.
|
|
|
|
Underlying EBITDA
|
2023
£m
|
2022
£m*
|
|
|
|
EBITDA
|
97.1
|
136.0
|
|
|
|
Add back: exceptional items within
EBITDA
|
47.7
|
3.2
|
|
|
|
Add back: certain share-based
payments
|
4.0
|
-
|
|
|
|
Underlying EBITDA
|
148.8
|
139.2
|
|
|
|
Underlying EBITDA margin
|
|
Underlying EBITDA as a percentage
of total operating income.
|
|
Underlying FRE
|
|
Underlying EBITDA less carried
interest and income from the fair value remeasurement of
investments and adding back the cost of bonuses linked to
investment profits.
|
|
|
|
Underlying FRE
|
2023
£m
|
2022
£m*
|
|
|
|
Underlying EBITDA
|
148.8
|
139.2
|
|
|
|
Less: carried interest
|
(30.0)
|
(24.2)
|
|
|
|
Less: fair value remeasurement of
investments
|
(25.3)
|
(40.7)
|
|
|
|
Add back: investment linked
bonuses
|
1.5
|
-
|
|
|
|
Underlying FRE
|
95.0
|
74.3
|
|
|
|
|
|
Underlying FRE margin
|
|
Underlying FRE as a percentage of
total operating income excluding carried interest and income from
the fair value remeasurement of investments.
|
|
|
|
Underlying FRE margin
|
2023
£m
|
2022
£m*
|
|
|
|
Underlying FRE
|
95.0
|
74.3
|
|
|
|
Total operating income
|
321.6
|
307.4
|
|
|
|
Less: carried interest
|
(30.0)
|
(24.2)
|
|
|
|
Less: fair value remeasurement of
investments
|
(25.3)
|
(40.7)
|
|
|
|
Adjusted total operating
income
|
266.3
|
242.5
|
|
|
|
Underlying FRE margin
|
35.7%
|
30.6%
|
|
|
|
|
|
PRE
|
|
Performance Related Earnings is
calculated by adding the fair value remeasurement of investments to
carried interest income.
|
|
|
|
PRE
|
2023
£m
|
2022
£m
|
|
|
|
Carried interest
|
30.0
|
24.2
|
|
|
|
Fair value remeasurement of
investments
|
25.3
|
40.7
|
|
|
|
PRE
|
55.3
|
64.9
|
|
|
|
|
|
*
|
2022 comparative information has
been restated to exclude non-operating foreign exchange gains and
losses.
|
|
|
|
|
|
| |
Underlying profit
before tax
|
|
Calculated by excluding exceptional
items, certain share-based payments and the amortisation
of acquisition related intangible assets from within profit
before income tax.
|
|
|
Underlying profit before
tax
|
2023
£m
|
2022
£m
|
|
|
Profit before tax
|
86.0
|
127.4
|
|
|
Add back: exceptional items within
EBITDA
|
47.7
|
3.2
|
|
|
Add back: amortisation of
acquisition related intangible assets
|
3.0
|
3.0
|
|
|
Add back: certain share-based
payments
|
4.0
|
-
|
|
|
Less: exceptional other
income
|
(6.9)
|
(13.6)
|
|
|
Total underlying profit before
tax
|
133.8
|
120.0
|
|
|
|
|
|
Underlying profit before
tax margin
|
|
Underlying operating profit before
tax as a percentage of total operating income.
|
Underlying profit
after tax margin
|
|
Underlying profit after tax as a
percentage of total operating income.
|
Underlying basic and diluted
earnings per share
|
|
Calculated by dividing underlying
profit after tax gross of non-controlling interests by the number
of shares in issue at the period end.
|
|
|
Underlying basic and diluted
EPS
|
|
2023
£m
|
2022
£m
|
|
|
Profit after tax
|
70.7
|
120.6
|
|
|
Add back: exceptional items within
EBITDA
|
47.7
|
3.2
|
|
|
Add back: amortisation of
acquisition related intangible assets
|
3.0
|
3.0
|
|
|
Add back: certain share-based
payments
|
4.0
|
-
|
|
|
Less: exceptional other
income
|
(6.9)
|
(13.6)
|
|
|
Total underlying profit after
tax
|
118.5
|
113.2
|
|
|
Number of shares at year end
(m)
|
794.6
|
823.3
|
|
|
Underlying basic and diluted EPS
(£)
|
0.15
|
0.14
|
|
|
|
Cash conversion ratio
|
|
Calculated by dividing cash
generated from operations (excluding exceptional and adjusted
items) by underlying FRE.
|
|
|
Cash conversion ratio
|
|
2023
£m
|
2022
£m*
|
|
|
Cash generated from
operations
|
152.5
|
35.6
|
|
|
Exceptional and adjusted items
within cash flows from operations
|
(34.5)
|
0.1
|
|
|
Adjusted cash generated from
operations
|
118.0
|
35.7
|
|
|
Underlying FRE
|
95.0
|
74.3
|
|
|
Cash conversion ratio
|
124.2%
|
48.0%
|
|
|
|
Non-current assets (excluding
third-party
CLO assets)
|
|
Calculated by excluding
consolidated third-party CLO non-current assets from total
non-current assets as defined by IFRS, and adding back the
investment into CLOs on a non-consolidated basis.
|
|
|
Non-current assets (excluding
third-party CLO assets)
|
|
2023
£m
|
2022
£m
|
|
|
Total non-current assets
|
|
582.2
|
540.0
|
|
|
Add: investment in CLOs on a
non-consolidated basis
|
81.1
|
45.2
|
|
|
Non-current assets (excluding
third-party CLO assets)
|
663.3
|
585.2
|
|
|
|
*
|
2022 comparative information has
been restated to exclude non-operating foreign exchange gains and
losses.
|
|
|
|
|
|
| |
Current assets (excluding
third-party CLO assets)
|
|
Calculated by excluding
consolidated third-party CLO current assets from total current
assets as defined by IFRS.
|
|
|
Current assets (excluding
third-party CLO assets)
|
|
2023
£m
|
2022
£m
|
|
|
Total current assets
|
|
1,795.5
|
1,247.8
|
|
|
Less: consolidated CLO
assets
|
|
(1,348.8)
|
(741.3)
|
|
|
Less: consolidated CLO
cash
|
|
(76.0)
|
(24.6)
|
|
|
Current assets (excluding
third-party CLO assets)
|
370.7
|
481.9
|
|
|
|
Non-current liabilities (excluding
third-party
CLO liabilities)
|
|
Calculated by excluding
consolidated third-party CLO non-current liabilities from total
non-current liabilities as defined by IFRS.
|
|
|
Non-current liabilities (excluding
third-party CLO liabilities)
|
|
2023
£m
|
2022
£m
|
|
|
Total non-current
liabilities
|
|
1,318.8
|
757.1
|
|
|
Less: fair value of consolidated
CLO liabilities
|
|
(1,152.0)
|
(597.5)
|
|
|
Non-current liabilities (excluding
third-party CLO liabilities)
|
166.8
|
159.6
|
|
|
|
Current liabilities (excluding
third-party CLO liabilities)
|
|
Calculated by excluding
consolidated third-party CLO current liabilities from total current
liabilities as defined by IFRS.
|
|
|
Current liabilities (excluding
third-party CLO liabilities)
|
|
2023
£m
|
2022
£m
|
|
|
Total current
liabilities
|
337.7
|
258.0
|
|
|
Less: consolidated CLO
liabilities
|
(14.9)
|
(2.6)
|
|
|
Less: consolidated CLO purchases
awaiting settlement
|
(176.8)
|
(120.6)
|
|
|
Current liabilities (excluding
third-party CLO liabilities)
|
146.0
|
134.8
|
|
|
|
|
|
|
Fee Paying AUM
|
|
Assets under management upon which
management fees are charged by the Group, including CLOs. For all
funds with private equity strategies and the Bridgepoint Credit
Opportunities funds I to III, Fee Paying AUM is either based
on total commitments (during the commitment period) or on net
invested capital (normally during the post-commitment
period).
For the Bridgepoint Direct Lending
funds and Bridgepoint Syndicated Debt funds as well as expected
future Bridgepoint Credit Opportunities funds, Fee Paying AUM is
based on net invested capital throughout the life of the
fund.
Fee Paying AUM in 2023 is €26.0
billion, or €36.7 billion pro forma for the ECP
transaction.
|
Total AUM
|
|
The total value of unrealised
assets as of the relevant date (as determined pursuant to the
latest quarterly or semi-annual valuation for each Bridgepoint fund
conducted by the Group) plus undrawn commitments managed by the
Group. The valuations for Total AUM come from the Group's
valuations of the investments of the Bridgepoint funds.
The Group values all investments of
the Bridgepoint funds at least twice a year, but in most cases four
times a year. Each investment undergoes the same detailed valuation
process, in accordance with the Group's valuation policies and in
line with fund requirements. Completed valuations are presented and
discussed at the relevant Bridgepoint valuation committee and are
audited at year end by the relevant fund auditor.
Total AUM in 2023 is €40.5 billion,
or €61.6 billion pro forma for the ECP transaction.
|
Management fee margin on Fee Paying
AUM
|
|
The underlying management fee rate
in the Bridgepoint funds, calculated as the weighted average
management fee rate for all Bridgepoint funds contributing to
Fee Paying AUM as at the end of the accounting
period.
|
Key risks
The Group's risk management
framework is designed to identify a broad range of risks and
uncertainties which it believes could adversely impact the
stability and financial prospects of the Group. A similar
process is undertaken with respect to risks specifically facing the
funds managed by the Group and as required by applicable regulatory
regimes. As part of each of these frameworks and processes,
ESG-related risks are actively considered.
The following sections set
out the Group's key risks identified and the primary mitigating
actions, controls or monitors implemented for each risk as well as
the change in that risk during the course of 2023 compared to
2022.
The key risks are described based
on the Group's combined assessment of the likelihood and impact of
each risk eventuating after the Group's controls and mitigants, as
well as the speed to impact of that risk.
Additional risks and uncertainties
that the Group may face, including those that are not currently
known or that the Group currently deems immaterial, may
individually or cumulatively also have a material effect on the
Group's business, results of operations and/or financial
condition.
Fundraising challenges
|
|
|
|
|
Description
The current Bridgepoint funds have
a finite life and a finite amount of commitments from
fund investors. Once a fund nears the end of its investment period,
the Group raises additional or successor funds in order to keep
making investments and, over the long-term, earn management fees
(although funds and investment vehicles continue to earn management
fees after the expiration of their investment periods, they
generally do so at a reduced rate).
The alternative investment
management sector is intensely competitive, with the Group
competing with a number of other persons for investor capital,
including sponsors of public and private investment funds.
Fundraising markets remained congested in 2023. If market
conditions for competing investment products result in a greater
number of competing products promoting similar or higher rates of
return than those achieved by the Bridgepoint funds, the
attractiveness of Bridgepoint funds to investors could decrease and
Bridgepoint could experience reduced investor
commitments.
The inability to raise additional
or successor funds (or raise successor funds of a comparable size
to predecessor funds), or a change in the terms on which investors
are willing to invest, could have a material adverse impact on the
Group's business, revenue, net income, cash flows or the ability to
retain employees.
|
|
Mitigation
The Group's capital raising efforts
are supported by an in-house global investor services team, which
utilises the Group's data and technology capabilities.
The Group has made efforts to
broaden its investor base, both in terms of the number of investors
across the platform and the geographic spread of such investors,
helping to alleviate competitive pressures. In particular, the
introduction of new products and strategies to Bridgepoint (through
growth or acquisition) helps to broaden the investor base by
investor type, geography and investment strategy.
As a leading middle market
investor, the Group offers investors a differentiated approach
arising from its global reach and ability to deploy capital across
middle market strategies. This differentiation insulates the Group,
to some extent, against the competitive pressures arising in
respect of attracting fund investors.
|
Law and regulation
|
|
|
|
|
Description
The international nature of the
Group's business, with corporate and fund entities located in
multiple jurisdictions and a diverse investor base, makes it
subject to a wide range of laws and regulations. It is supervised
by a number of regulators, including the Financial Conduct
Authority in the UK, the Securities and Exchange Commission in the
United States, the Autorité des Marchés Financiers in France and
the Commission de Surveillance du Secteur Financier in Luxembourg.
Failure to comply with these laws and regulations may put the Group
at risk of fines, lawsuits or reputational damage. The failure of
the Group to comply with the rules of professional conduct and
relevant laws and regulations could expose the Group to regulatory
scrutiny, including penalties or enforcement actions.
Increased law and regulation may
impact the Group's operating entities, funds, and the markets and
sectors in which the Group's investment strategies invest or from
which capital is raised.
|
|
Mitigation
The Group is supported by dedicated
Legal and Compliance functions that provide guidance to the
business on its regulatory and legal obligations. These functions
work with colleagues in other central functions and in local
offices to monitor regulatory and legislative changes in the
jurisdictions in which the Group operates and interact with
regulators and industry bodies to stay informed of regulatory changes. They also proactively take
actions across the business to comply with any changes in law or
regulation.
Employees of the Group are provided
with periodic training on the laws and regulations relevant to the
Group.
|
Changes in macroeconomic
environment
|
|
|
|
|
Description
Macroeconomic events may contribute
to volatility in financial markets which can adversely impact the
Group's business by reducing the value or performance of the
investments made by Bridgepoint's funds. These pressures may result
in challenges in finding investment opportunities for funds as well
as challenges in exiting existing investments to realise value for
investors. This could in turn affect the Group's ability to raise
new funds and materially reduce its profitability.
For example, rising interest rates
may adversely impact multiples and discount rates used for
investment valuations. Higher interest rates may also reduce our
ability to secure favourable financing for fund transactions,
impacting fund returns. Higher interest rates may also impact the
cost of financing under Group facilities, or the availability of
such financing. Furthermore, unhedged foreign exchange rate
movements impact total returns and fund net asset
values.
|
|
Mitigation
The Group's business model is
predominantly based on illiquid, closed-end funds which allow
investment teams to remain disciplined throughout economic cycles.
A range of approaches are used to inform strategic planning and
risk mitigation across such cycles, including active management of
the Group's fund portfolios, profitability and balance sheet
scenario planning, treasury management, and stress testing to
ensure resilience across a range of macroeconomic
outcomes.
Operating products in different
asset classes can also help to mitigate the impact of macroeconomic
change, for example higher interest rates may benefit the Group's
private credit strategy.
Senior management of the Group
regularly updates the business on economic trends and outlooks to
aid investment teams and corporate functions to anticipate and
proactively address macroeconomic risks.
|
Fund underperformance
|
|
|
|
|
Description
In the event that certain of the
Bridgepoint funds were to perform unsatisfactorily, in particular
if this were the case for a larger Bridgepoint fund (for example,
the current private equity flagship fund, Bridgepoint Europe VII or
its successors), this may adversely affect the Group's business,
brand and reputation and lead to difficulties for the Group in
attracting fund investors and raising capital for new funds in the
future.
|
|
Mitigation
The Group has in place a robust and
disciplined investment process where investments are analysed and
selected by the Group's Operating Committees and Investment
Advisory Committees. Portfolio Management and Portfolio Review
Committees regularly monitor investment performance and delivery of
investment objectives. Any 'at risk' investments are subject to a
detailed review by a Portfolio Working Group or receive other
specialist attention.
Investment processes not only
evaluate and mitigate the risks inherent in particular investments
or divestments, but also ensure that all investment decisions are
taken in accordance with the relevant fund's investment
strategy.
The Group limits fund exposure to
individual investments, and diversifies investments in terms of
sector, vintage and geography.
The deal flow of Bridgepoint funds
is driven by the Group's sector strategy which is continually
refined to exploit market conditions, including changes in
competitive pressures. The Group's investment approach has evolved
through different economic cycles, helping it to resist temporary
pressures.
The introduction of new products
and strategies to Bridgepoint (through growth or acquisition) also
helps to reduce dependence on performance of any individual
fund.
|
Decreased pace or size of
investments
made by Bridgepoint funds
|
|
|
|
|
Description
The Group's revenue is driven in
part by the pace at which the Bridgepoint funds make investments
and the size of those investments, and a decline in the pace or the
size of such investments may reduce the Group's revenue.
Many factors could cause a decline
in the pace of investment, including the inability of the Group's
investment professionals to identify attractive investment
opportunities, decreased availability of capital on attractive
terms and the failure to consummate identified investment
opportunities because of business, regulatory or legal
complexities, new regulations, guidance provided or other actions
taken by regulatory authorities, or uncertainty and adverse
developments in the global economy or financial markets.
The Group competes for investment
opportunities for the Bridgepoint funds, and such competition is
based primarily on the pricing, terms and structure of a proposed
investment and certainty of execution. The market for private
equity transactions has at times been characterised by relatively
high prices, which can make the deployment of capital more
difficult.
A failure to deploy committed
capital in a timely manner may have a negative impact on investment
performance and the ability to raise new funds.
|
|
Mitigation
The rate of investment is kept
under review by senior management to ensure that it is maintained
at an acceptable level.
The Group has ongoing dialogue with
its investors and is sensitive to their concerns regarding
investment and realisation pace. These concerns are taken into
consideration when setting the short and long-term strategy of a
fund, and where necessary consent is sought to modify investment
periods to align with the pace of investment that is reasonably and
responsibly achievable.
|
Personnel and key
people
|
|
|
|
|
Description
The Group's personnel, including
its investment professionals and specialist teams, are highly
important to the Group's business and its strategy implementation,
and the market for such persons is highly competitive. The Group's
continued success is therefore dependent upon its ability to retain
and motivate its personnel and to strategically recruit new
talented professionals.
In particular, the Group depends on
the efforts, skill, reputations and business contacts of its
executive management and other key senior team members and the
information and deal flow they generate.
|
|
Mitigation
The Group has competitive reward
schemes in place for all employees, with rewards weighted towards
performance and long-term alignment with fund investors, driving
value for the Group. For senior management, these include a blend
of short and long-term incentives.
The Group performs ongoing
succession planning and invests in leadership
development.
|
Information technology
and cyber security
|
|
|
|
|
Description
The Group relies on the secure
processing, storage and transmission of confidential and other
information in Bridgepoint computer systems and networks.
Cyber-security incidents and cyber-attacks have been occurring
globally at a more frequent and severe level and will likely
continue to increase in frequency in the future. As an increasingly
global business, the Group faces various cyber-security threats on
a regular basis, including ongoing cyber-security threats to, and
attacks on, information technology infrastructure that are intended
to gain access to proprietary information, destroy data or disable
or degrade or sabotage systems.
Cyber-security failures, technology
failures or data security breaches could result in the
confidentiality, integrity or availability of data being negatively
affected, causing disruption or damage to the Group's
business.
|
|
Mitigation
The Group has in place an internal
vulnerability management programme, as well as critical asset
processes to patch critical vulnerabilities. Phishing testing is
performed at least quarterly, and penetration testing is undertaken
annually.
The Group has a disaster recovery
plan in place, and all key systems are hosted in the cloud,
providing an inherent level of resilience.
|
Third-party service
providers
|
|
|
|
|
Description
Certain of the Group's funds and
Group activities depend on the services of third-party service
providers, including those providing banking and foreign exchange,
professional advisory services, information technology, insurance
broking, depository and alternative investment management services.
The Group is subject to the risk of errors, failure, or regulatory
non-compliance by such persons, which may be attributed to the
Group and subject it or the Bridgepoint funds to reputational
damage, business disruption, penalties or losses.
|
|
Mitigation
The Group ensures appropriate due
diligence is undertaken in respect of third-party service providers
prior to appointment, and appropriate monitoring and oversight of
appointed third-party service providers is undertaken on a periodic
basis.
|
Financial information
Consolidated Statement
of Profit or Loss
for the year ended 31
December
|
Note
|
2023
£ m
|
(Restated)
2022**
£ m
|
Management and other
fees
|
5
|
265.3
|
241.5
|
Carried interest
|
5
|
30.0
|
24.2
|
Fair value remeasurement of
investments
|
5
|
25.3
|
40.7
|
Other operating income
|
|
1.0
|
1.0
|
Total operating income
|
|
321.6
|
307.4
|
Personnel expenses
|
6
|
(132.5)
|
(126.9)
|
Other operating expenses
|
7
|
(92.0)
|
(44.5)
|
EBITDA*
|
|
97.1
|
136.0
|
Depreciation and amortisation
expense
|
9
|
(18.7)
|
(18.3)
|
Finance and other income
|
10
|
16.7
|
17.6
|
Finance and other
expenses
|
10
|
(9.1)
|
(7.9)
|
Profit before tax*
|
|
86.0
|
127.4
|
Tax
|
11
|
(15.3)
|
(6.8)
|
Profit after tax
|
|
70.7
|
120.6
|
|
|
|
|
Attributable to:
|
|
|
|
Equity holders of the
parent
|
|
70.7
|
120.6
|
|
|
|
|
|
|
£
|
£
|
Basic and diluted earnings per
share
|
12
|
0.09
|
0.15
|
*
|
Exceptional expenses of £47.7m
(2022: £3.2m) are included in EBITDA. Profit before tax includes
exceptional expenses of £47.7m (2022: £3.2m) and exceptional income
of £6.9m (2022: £13.6m). Details of exceptional items are included
in note 8.
|
**
|
The Group has changed the
presentation of the Consolidated Statement of Profit or Loss for
the year ended 31 December 2022 to reclassify foreign exchange
gains and losses from EBITDA to finance and other income and
expenses with nil impact in profit before tax or profit after tax.
Further details are provided in note 1.
|
|
|
|
| |
The notes to the accounts form an
integral part of these financial statements.
Consolidated Statement of Comprehensive
Income
for the year ended 31
December
|
Note
|
2023
£ m
|
2022
£ m
|
Profit after tax
|
|
70.7
|
120.6
|
Items that may be reclassified to
the statement of profit or loss in subsequent years:
|
|
|
|
Exchange differences on translation
of foreign operations
|
|
(5.8)
|
11.3
|
Change in the fair value of hedging
instruments
|
20 (b)
|
8.6
|
(10.5)
|
Change in the time value of foreign
exchange options
|
20 (b)
|
0.1
|
-
|
Reclassifications to the
Consolidated Statement of Profit or Loss
|
20 (b)
|
1.3
|
(5.9)
|
Total tax on components of other
comprehensive income
|
11 (c)
|
(2.2)
|
3.3
|
Other comprehensive income/(loss)
net of tax
|
|
2.0
|
(1.8)
|
Total comprehensive income net of
tax
|
|
72.7
|
118.8
|
|
|
|
|
Total comprehensive income
attributable to:
|
|
|
|
Equity holders of the
parent
|
|
72.7
|
118.8
|
The notes to the accounts form an
integral part of these financial statements.
Consolidated Statement of Financial
Position
as at 31 December
|
Note
|
2023
£ m
|
2022
£ m
|
Assets
|
|
|
|
Non-current assets
|
|
|
|
Property, plant and
equipment
|
13
|
73.7
|
85.5
|
Goodwill and intangible
assets
|
14
|
116.6
|
119.6
|
Carried interest
receivable
|
15
|
67.3
|
42.0
|
Fair value of fund
investments
|
16 (a), (b)
|
301.4
|
273.0
|
Trade and other
receivables
|
16 (a), (f)
|
23.2
|
19.9
|
Total non-current assets
|
|
582.2
|
540.0
|
Current assets
|
|
|
|
Consolidated CLO assets*
|
16 (a), (d)
|
1,348.8
|
741.3
|
Trade and other
receivables
|
16 (a), (f)
|
118.2
|
184.9
|
Derivative financial
assets
|
16 (a), (e)
|
6.2
|
1.0
|
Other investments
|
16 (a), (c)
|
7.5
|
-
|
Cash and cash
equivalents
|
16 (a), (g)
|
238.8
|
196.0
|
Term deposits with original
maturities of more than three months
|
16 (g)
|
-
|
100.0
|
Consolidated CLO cash*
|
16 (a), (g)
|
76.0
|
24.6
|
Total current assets
|
|
1,795.5
|
1,247.8
|
Total assets
|
|
2,377.7
|
1,787.8
|
Liabilities
|
|
|
|
Non-current liabilities
|
|
|
|
Trade and other payables
|
17 (a), (b)
|
13.1
|
13.6
|
Other financial
liabilities
|
17 (a), (d)
|
50.1
|
49.5
|
Fair value of consolidated CLO
liabilities*
|
17 (a), (e)
|
1,152.0
|
597.5
|
Lease liabilities
|
17 (a),18
|
69.7
|
77.1
|
Deferred tax liabilities
|
22
|
33.9
|
19.4
|
Total non-current
liabilities
|
|
1,318.8
|
757.1
|
Current liabilities
|
|
|
|
Trade and other payables
|
17 (a), (b)
|
132.5
|
115.5
|
Lease liabilities
|
17 (a),18
|
11.9
|
6.1
|
Derivative financial
liabilities
|
17 (a), (g)
|
1.6
|
13.2
|
Consolidated CLO
liabilities*
|
17 (a), (e)
|
14.9
|
2.6
|
Consolidated CLO purchases awaiting
settlement*
|
17 (a), (f)
|
176.8
|
120.6
|
Total current
liabilities
|
|
337.7
|
258.0
|
Total liabilities
|
|
1,656.5
|
1,015.1
|
Net assets
|
|
721.2
|
772.7
|
Equity
|
|
|
|
Share capital
|
21, 23 (a)
|
0.1
|
0.1
|
Share premium
|
21, 23 (a)
|
289.8
|
289.8
|
Retained earnings
|
|
418.7
|
473.7
|
Other reserves**
|
21, 23 (c)
|
12.6
|
9.1
|
Total equity
|
|
721.2
|
772.7
|
*
|
Details of the Group's interest in
consolidated Collateralised Loan Obligations ("CLOs") are
included in note 16 (d). The equity holders' exposure in the
consolidated CLOs is £81.1m at 31 December 2023 (2022: £45.2m). The
Group's investment in CLOs which are not consolidated is £15.2m
(2022: £15.1m) and are included within fair value of fund
investments. A non-statutory Consolidated Statement of Financial
Position, excluding consolidated CLOs is presented in this
announcement.
|
**
|
The Group has changed the
presentation of equity to aggregate other reserves. A breakdown of
other reserves is included in note 23 (c).
|
|
|
|
| |
Consolidated Statement of Changes in
Equity
for the
year ended 31 December
|
Note
|
Share
capital
£ m
|
Share
premium
£ m
|
Other
reserves*
£ m
|
Retained earnings
£ m
|
Total
equity
£ m
|
At 1 January 2023
|
|
0.1
|
289.8
|
9.1
|
473.7
|
772.7
|
Profit for the year
|
|
-
|
-
|
-
|
70.7
|
70.7
|
Other comprehensive
income
|
|
-
|
-
|
4.2
|
(2.2)
|
2.0
|
Total comprehensive
income
|
|
-
|
-
|
4.2
|
68.5
|
72.7
|
Vested share-based
payments
|
23 (c)
|
-
|
-
|
(4.7)
|
4.7
|
-
|
Share-based payments
|
6 (a)
|
-
|
-
|
4.0
|
-
|
4.0
|
Share buyback
|
23 (c)
|
-
|
-
|
-
|
(60.2)
|
(60.2)
|
Dividends
|
24
|
-
|
-
|
-
|
(68.0)
|
(68.0)
|
At 31 December 2023
|
|
0.1
|
289.8
|
12.6
|
418.7
|
721.2
|
|
Note
|
Share
capital
£ m
|
Share
premium
£ m
|
Other
reserves*
£ m
|
Retained earnings
£ m
|
Total
equity
£ m
|
|
At 1 January 2022
|
|
0.1
|
289.8
|
13.8
|
412.6
|
716.3
|
|
Profit for the year
|
|
-
|
-
|
-
|
120.6
|
120.6
|
|
Other comprehensive loss
|
|
-
|
-
|
(5.1)
|
3.3
|
(1.8)
|
|
Total comprehensive
income
|
|
-
|
-
|
(5.1)
|
123.9
|
118.8
|
|
Share-based payments
|
6 (a)
|
-
|
-
|
0.4
|
-
|
0.4
|
|
Dividends
|
24
|
-
|
-
|
-
|
(62.8)
|
(62.8)
|
|
At 31 December 2022
|
|
0.1
|
289.8
|
9.1
|
473.7
|
772.7
|
|
*
|
The Group has changed the
presentation of equity to aggregate other reserves. A breakdown of
other reserves is included in note 23 (c).
|
|
|
|
|
|
|
|
| |
The notes to the accounts form an
integral part of these financial statements.
Consolidated Statement
of Cash Flows
for the year ended 31
December
|
Note
|
2023
£ m
|
2022
£ m
|
Cash flows from operating
activities
|
|
|
|
Cash generated from
operations
|
25 (a)
|
152.5
|
35.6
|
Tax paid
|
|
(4.7)
|
(1.7)
|
Net cash inflow from operating
activities
|
|
147.8
|
33.9
|
Cash flows from investing
activities
|
|
|
|
Investment in term deposits with
original maturities of more than three months
|
16 (g)
|
100.0
|
(100.0)
|
Receipts from investments
(non-CLO)
|
|
30.8
|
74.3
|
Purchase of investments
(non-CLO)
|
|
(46.9)
|
(41.2)
|
Purchase of other investments
(non-CLO)
|
15, 16 (b)
|
(7.5)
|
-
|
Interest received
(non-CLO)
|
|
8.5
|
3.3
|
Payment for foreign exchange option
premium
|
|
(3.8)
|
-
|
Investments in non-consolidated
CLOs
|
|
-
|
(8.7)
|
Cash acquired on consolidation of
intermediate fund holding entities
|
|
-
|
1.2
|
Receipts from investments
(consolidated CLOs)
|
|
302.0
|
156.9
|
Purchase of investments
(consolidated CLOs)
|
|
(751.9)
|
(166.1)
|
Cash movements from the
consolidated CLOs
|
|
-
|
45.6
|
Payments for property, plant and
equipment and intangible assets
|
13
|
(4.0)
|
(22.6)
|
Net cash (outflow) from investing
activities
|
|
(372.8)
|
(57.3)
|
Cash flows from financing
activities
|
|
|
|
IPO costs
|
|
-
|
(1.8)
|
Dividends paid to shareholders of
the Company
|
24
|
(68.0)
|
(62.8)
|
Share buyback
|
23 (c)
|
(60.2)
|
-
|
Drawings from related party
investors in intermediate fund holding entities
|
|
1.2
|
3.8
|
Principal elements of lease
payments
|
|
(6.6)
|
(4.1)
|
Drawn funding (consolidated
CLOs)
|
|
148.7
|
-
|
Repayment of CLO borrowings
(consolidated CLOs)
|
|
(258.5)
|
(15.3)
|
Cash from/(paid to) CLO investors
(consolidated CLOs)
|
|
576.2
|
(1.7)
|
Interest paid (non-CLO)
|
|
(7.2)
|
(4.7)
|
Net cash inflow/(outflow) from
financing activities
|
|
325.6
|
(86.6)
|
Net increase/(decrease) in cash and
cash equivalents
|
|
100.6
|
(110.0)
|
Total cash and cash equivalents at
the beginning of the year
|
|
220.6
|
327.3
|
Effect of exchange rate changes on
cash and cash equivalents
|
|
(6.4)
|
3.3
|
Total cash and cash equivalents at
the end of year
|
|
314.8
|
220.6
|
Cash and cash equivalents (for use
within the Group)
|
16 (g)
|
238.8
|
196.0
|
Consolidated CLO cash (restricted
for use within relevant CLO)
|
16 (g)
|
76.0
|
24.6
|
Total cash and cash equivalents at
the end of year
|
|
314.8
|
220.6
|
1.
|
The Consolidated Statement of Cash
Flows includes the cash flows of consolidated CLOs. A non-statutory
Consolidated Statement of Cash Flows excluding the impact of
consolidating CLOs, which has not been audited, is included in this
announcement.
|
|
|
|
| |
The notes to the accounts form an
integral part of these financial statements.
Company Statement
of Financial Position
as at 31 December
|
Note
|
2023
£ m
|
2022
£ m
|
Assets
|
|
|
|
Non-current assets
|
|
|
|
Investments in subsidiaries and
other Group affiliates
|
28
|
1,026.9
|
1,023.0
|
Deferred tax assets
|
22
|
-
|
0.4
|
Total non-current assets
|
|
1,026.9
|
1,023.4
|
Current assets
|
|
|
|
Trade and other
receivables
|
16 (a), (f)
|
8.4
|
20.3
|
Cash and cash
equivalents
|
16 (a), (g)
|
139.7
|
114.0
|
Derivative financial
assets
|
16 (a), (e)
|
3.9
|
-
|
Term deposits with original
maturities of more than three months
|
16 (a), (g)
|
-
|
50.0
|
Total current assets
|
|
152.0
|
184.3
|
Total assets
|
|
1,178.9
|
1,207.7
|
Liabilities
|
|
|
|
Current liabilities
|
|
|
|
Trade and other payables
|
17 (a), (b)
|
131.7
|
1.1
|
Total liabilities
|
|
131.7
|
1.1
|
Net assets
|
|
1,047.2
|
1,206.6
|
Equity
|
|
|
|
Share capital
|
23 (a)
|
0.1
|
0.1
|
Share premium
|
23 (a)
|
289.8
|
289.8
|
Retained earnings
|
|
182.9
|
341.7
|
Other reserves*
|
23 (c)
|
574.4
|
575.0
|
Total equity
|
|
1,047.2
|
1,206.6
|
*
|
The Company has changed the
presentation of equity to aggregate other reserves. A breakdown of
other reserves is included in note 23 (c).
|
|
|
|
| |
The Company's total loss for the
year was £35.3m (2022: profit of £2.9m), reflecting the exceptional
transaction costs associated with the ECP acquisition. Details of
exceptional items are included in note 8 in this
announcement.
The notes to the accounts form an
integral part of these financial statements.
Company Statement
of Changes in Equity
for the year ended 31
December
|
Note
|
Share
capital
£ m
|
Share
premium
£ m
|
Other
reserves*
£ m
|
Retained
earnings
£ m
|
Total
equity
£ m
|
At 1 January 2023
|
|
0.1
|
289.8
|
575.0
|
341.7
|
1,206.6
|
Loss for the year
|
|
-
|
-
|
-
|
(35.3)
|
(35.3)
|
Other comprehensive
income
|
20 (b)
|
-
|
-
|
0.1
|
-
|
0.1
|
Total comprehensive loss
|
|
-
|
-
|
0.1
|
(35.3)
|
(35.2)
|
Share-based payments
|
6 (a)
|
-
|
-
|
4.0
|
-
|
4.0
|
Vested share-based
payments
|
23 (c)
|
-
|
-
|
(4.7)
|
4.7
|
-
|
Share buyback
|
23 (c)
|
-
|
-
|
-
|
(60.2)
|
(60.2)
|
Dividends
|
24
|
-
|
-
|
-
|
(68.0)
|
(68.0)
|
At 31 December 2023
|
|
0.1
|
289.8
|
574.4
|
182.9
|
1,047.2
|
|
Note
|
Share
capital
£ m
|
Share
premium
£ m
|
Other
reserves*
£ m
|
Retained
earnings
£ m
|
Total
equity
£ m
|
At 1 January 2022
|
|
0.1
|
289.8
|
574.6
|
401.6
|
1,266.1
|
Profit for the year
|
|
-
|
-
|
-
|
2.9
|
2.9
|
Other comprehensive
income
|
|
-
|
-
|
-
|
-
|
-
|
Total comprehensive
income
|
|
-
|
-
|
-
|
2.9
|
2.9
|
Share-based payments
|
6 (a)
|
-
|
-
|
0.4
|
-
|
0.4
|
Dividends
|
24
|
-
|
-
|
-
|
(62.8)
|
(62.8)
|
At 31 December 2022
|
|
0.1
|
289.8
|
575.0
|
341.7
|
1,206.6
|
*
|
The Company has changed the
presentation of equity to aggregate other reserves. A breakdown of
other reserves is included in note 23 (c).
|
|
|
|
|
|
|
| |
The notes to the accounts form an
integral part of these financial statements.
Company Statement of Cash Flows
for the year ended 31
December
|
Note
|
2023
£ m
|
2022
£ m
|
Cash flows from operating
activities
|
|
|
|
Cash generated from
operations
|
25
|
107.2
|
66.3
|
Net cash inflow from operating
activities
|
|
107.2
|
66.3
|
Cash flows from investing
activities
|
|
|
|
Investment in term deposits with
original maturities of more than three months
|
16 (g)
|
50.0
|
(50.0)
|
Interest received
(non-CLO)
|
|
4.7
|
1.5
|
Payment for foreign exchange option
premium
|
|
(3.8)
|
-
|
Net cash inflow/(outflow) from
investing activities
|
|
50.9
|
(48.5)
|
Cash flows from financing
activities
|
|
|
|
Dividends paid to shareholders of
the Company
Share buy-back
Interest paid
|
24
23 (c)
|
(68.0)
(60.2)
(1.0)
|
(62.8)
-
-
|
Net cash (outflow) from financing
activities
|
|
(129.2)
|
(62.8)
|
Net increase/(decrease) in cash and
cash equivalents
|
|
28.9
|
(45.0)
|
Cash and cash equivalents at the
beginning of the year
|
|
114.0
|
159.0
|
Effect of exchange rate changes on
cash and cash equivalents
|
|
(3.2)
|
-
|
Cash and cash equivalents at the
end of year
|
16 (g)
|
139.7
|
114.0
|
The notes to the accounts form an
integral part of these financial statements.
Notes to the consolidated and Company
financial statements
1 General information and basis of
preparation
General information
Bridgepoint Group plc (the
"Company") is a public
company limited by shares, incorporated, domiciled and registered
in England and Wales. The Company's registration number is 11443992
and the address of its registered office is 5 Marble Arch, London,
W1H 7EJ.
The financial information set out
in this preliminary announcement does not constitute the Company's
statutory accounts for the years ended 31 December 2023 or 31
December 2022. The financial information for 2022 is derived from
the statutory accounts for that year which have been delivered to
the Register of Companies. The auditors reported on those accounts:
their report was unqualified, did not draw attention to any matters
by way of emphasis and did not contain a statement under s498(2) or
(3) of the Companies Act 2006. The audit of the statutory accounts
for the year ended 31 December 2023 is substantially complete.
These accounts will be finalised on the basis of the financial
information presented by the directors in this results announcement
and will be delivered to the Registrar of Companies following the
Company's annual general meeting.
The principal activity of the
Company and entities controlled by the Company (collectively, the
"Group") is to act as a
private equity and credit fund manager.
Basis of preparation
The consolidated financial
statements for the year ended 31 December 2023 comprise the
financial statements of the Group and the Company.
The consolidated financial
statements of the Group and the Company's financial statements have
been prepared in accordance with UK-adopted international
accounting standards and in conformity with the requirements of the
Companies Act 2006, as applicable to companies reporting under
those standards. The financial statements have been prepared on a
historical cost basis, except for financial instruments measured at
fair value through profit and loss.
The principal accounting policies
applied in the preparation of the financial statements are set out
within note 2. These policies have been consistently applied to all
the periods presented, unless otherwise stated.
The preparation of the financial
statements in conformity with international accounting standards
requires the use of certain critical accounting estimates. It also
requires management to exercise judgement in the process of
applying the Group's accounting policies. Details of the critical
judgements and key sources of estimation uncertainty are set out in
note 3. Actual results may differ from these estimates.
The financial statements are
presented in pound sterling and all values are rounded to the
nearest £0.1m except where otherwise indicated.
Adoption of new and amended
standards and interpretations
Standards, interpretations and
amendments to published standards effective for the year ended 31
December 2023
The following new and amended
standards do not have a material impact on the Group or Company's
financial statements:
International accounting standards
and interpretations
|
Effective date
|
Amendments to IAS 1 "Presentation
of Financial Statements" and IFRS Practice Statement 2 "Disclosure
of Accounting Policies"
|
1 January 2023
|
Amendments to IAS 8 "Definition of
Accounting Estimates"
|
1 January 2023
|
IFRS 17 "Insurance
Contracts"
|
1 January 2023
|
Amendments to IAS 12 "Deferred Tax
Related to Assets and Liabilities Arising from a Single
Transaction"
|
1 January 2023
|
International Tax Reform - Pillar
Two Model Rules - Amendments to IAS 12
|
23 May 2023
|
Standards, interpretations and
amendments to published standards which are not yet
effective
New and amended standards that have
been issued, but are not yet effective, up to the date of the
Group's financial statements are disclosed below. The Group plans
to adopt these, if applicable, when they become effective. The
following do not have a material impact on the Group or Company's
financial statements:
International accounting standards
and interpretations
|
Effective date
|
Amendments to IFRS 16 "Leases":
lease liability in a sale and leaseback
|
1 January 2024
|
Amendments to IAS 1 non-current
liabilities with covenants and classification of liabilities as
current or non-current
|
1 January 2024
|
Changes to comparative period
financial information
The presentation of foreign
exchange gains and losses has been changed in the Consolidated
Statement of Profit or Loss as it primarily relates to
non-operating activities. As a result, the comparative information
for the affected line items for the year ended 31 December 2022 has
been restated to reclassify foreign exchange gains of £1.1m into
finance and other income. The restatement also impacts the
comparative period EBITDA and FRE metrics throughout this
announcement. There is no impact on net profit in either
year.
Going concern
The consolidated financial
statements have been prepared on a going concern basis. The
Directors have a reasonable expectation that the Group and
Company have adequate resources to continue in operational
existence for a period of at least 12 months from the date
of issue of these financial statements. In forming this
conclusion the Directors have assessed the business risks,
financial position and resources of both the Group and
Company.
Company financial
statements
As permitted by section 408 of the
Companies Act 2006, the Company Statement of Profit or Loss and the
Statement of Comprehensive Income are not presented as part of
these financial statements. The Company's loss for the year
amounted to £35.3m (2022: profit of £2.9m).
2 Accounting policies
(a) Consolidation
The consolidated financial
statements include the comprehensive gains or losses, the financial
position and the cash flows of the Company, its subsidiaries and
the entities that the Group is deemed to control, drawn up to the
end of the relevant period, which includes elimination of all
intra-group transactions. Uniform accounting policies have been
adopted across the Group.
Assessment of control
The Group controls an investee
(entity) if, and only if, the Group has all of the
following:
·
|
power over the investee (i.e.
existing rights that give it the current ability to direct the
relevant activities of the investee);
|
·
|
exposure, or rights, to variable
returns from its involvement with the investee; and
|
·
|
ability to use its power over the
investee to affect its returns.
|
The Group reassesses whether or not
it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of
control listed above.
When the Group holds less than a
majority of the voting rights of an investee, it has power over the
investee when the voting rights are sufficient to give it the
practical ability to direct the relevant activities of the investee
unilaterally. The Group considers all relevant facts and
circumstances in assessing whether or not the Group's voting rights
in an investee are sufficient to give it power,
including:
·
|
the size of the Group's holding of
voting rights relative to the size and dispersion of holdings of
the other vote holders;
|
·
|
potential voting rights held by the
Group, other vote holders or other parties;
|
·
|
rights arising from other
contractual arrangements; and
|
·
|
any additional facts and
circumstances that indicate that the Group has, or does not have,
the current ability to direct the relevant activities at the time
when decisions need to be made, including voting patterns at
previous shareholders' meetings.
|
The assessment of control is based
on all relevant facts and circumstances and the Group reassesses
its conclusion if there is an indication that there are changes in
facts and circumstances.
Consolidation of a subsidiary
begins when the Group obtains control over the subsidiary and
ceases when the Group loses control over the subsidiary.
Specifically, income and expenses of a subsidiary acquired or
disposed of during the year are included in the Consolidated
Statement of Comprehensive Income from the date the Group
gains control until the date when the Group ceases to control the
subsidiary. All intra-group balances and transactions with
subsidiaries are eliminated upon consolidation.
When the Group consolidates an
entity which has an interest held by a third party, it assesses
whether the third party's interest represents equity or a financial
liability. To determine this classification, the substance of the
contractual terms of the financial instrument is taken as an
indicator of whether the third party's interest is debt or equity.
If a pre-agreed profit share percentage that is contractually
defined within relevant limited partnership agreements is present,
the Group recognises a contractual obligation to settle in cash
and, therefore, the interest is classified as debt and fair valued
through profit and loss. In the case where the contract results in
a residual interest in the assets of the investee after deducting
all of the investee's liabilities, a non-controlling interest is
recognised within equity.
(b) Foreign currencies
Presentation currency
The financial statements are
presented in pound sterling, which is the Company's functional
currency and also the presentational currency for the Company and
Group.
Foreign currency
transactions
Foreign currency transactions are
translated into the functional currency using the opening spot
exchange rate for the month in which the transaction occurs as an
approximate for the actual rate at the date of the
transaction.
Foreign exchange gains and losses
resulting from the settlement of such transactions, and from the
translation of monetary assets and liabilities denominated in
foreign currencies at year end exchange rates, are generally
recognised in profit or loss.
Non-monetary assets and liabilities
denominated in foreign currencies that are measured at fair value
are translated to the functional currency at the applicable foreign
currency exchange rate on the date the fair value was determined.
Non-monetary items in a foreign currency that are measured in terms
of historical cost are translated using the exchange rate on the
date of the transaction.
Foreign operations
The results and financial position
of foreign operations that have a functional currency different
from the presentational currency are translated into the
presentational currency of the Group as follows:
·
|
assets and liabilities for each
statement of financial position presented are translated at the
closing rate at the date of that statement of financial
position;
|
·
|
income and expenses for each
statement of profit or loss presented are translated at opening
spot rate for the month; and
|
·
|
all resulting exchange differences
are recognised in other comprehensive income.
|
(c) Operating income
Operating income primarily
comprises management and other fees, carried interest income and
investment income from the management of investment in private
equity and credit fund partnerships. The parties to agreements for
fund management services comprise the Group and the investors of
each fund as a body. Accordingly, the group of investors of each
fund are identified as a customer for accounting
purposes.
Income is measured based on the
consideration specified in the contracts and exclude amounts
collected on behalf of third parties, discounts and value added
taxes.
Management and other
fees
The Group earns management fees
from its provision of various investment management services to
funds, which are treated as a single performance
obligation.
Management fees are recognised over
the life of each fund, generally 10 to 12 years, occasionally
subject to an extension, if agreed with the investors of that
fund.
Management fees are based on an
agreed percentage of either committed or invested capital,
depending on the fund and its life stage. Fees are billed in
accordance with the relevant limited partnership agreement and are
either billed semi-annually or quarterly in advance or
arrears.
Other fees may also comprise fees
and commissions relating to provision of services to third
parties.
Carried interest
The Group receives a share of fund
profits through its holdings in founder partnerships as variable
consideration dependent on the level of fund returns. The
entitlement to carried interest and the amount is determined by the
level of accumulated profits exceeding an agreed threshold (the
"hurdle") over the life-time of each fund. The carried interest
income is only recognised to the extent it is highly probable that
there would not be a significant reversal of any accumulated
revenue recognised on the completion of a fund. The reversal risk
due to uncertainty of future fund performance is managed through
the application of discounts. This is explained further within note
3.
The carried interest receivable
represents a contract asset under IFRS 15 "Revenue from Contracts
with Customers". Amounts are typically presented as non-current
assets unless they are expected to be received within the next 12
months.
Investment income
Investment income consists
primarily of fair value remeasurement of the Group's investments in
private equity and credit funds. Details of the valuation of such
investments is explained further within note 3.
Other operating income
Other operating income includes
fees and commissions receivable by the Group's procurement
consulting business, PEPCo Services LLP.
It also includes income earned from
other investments including, but not limited to, loans made to fund
portfolio companies. Interest income is accrued on the principal
amount of the loans based on the contractual interest
rate.
Amounts are recognised in the
Consolidated Statement of Profit or Loss on an accruals
basis.
(d) Deferred acquisition
costs
Professional costs, particularly
legal and other adviser costs, are incurred when raising a new
fund. The limited partnership agreement of each fund dictates
the aggregate expense that can be recharged to the fund investors
on the close of a new fund. Costs in excess of the cap and any
fees paid to placement agents are capitalised as a current or
non-current asset.
The benefit of the incurred costs
for private equity funds is primarily considered to be attributable
to the period when the primary fund investment activity is carried
out. Therefore, the useful life of the asset is aligned to the
investment period of the fund which is between three and five years
for private equity funds.
For credit funds, the period of
portfolio construction is typically longer, therefore a five-year
useful life is used, which correlates with the period over which
the management fees build up to a maximum level.
Details are provided within note 16
(f).
(e) Personnel benefits
Short-term employee
benefits
Short-term employee benefits, which
include employee salaries and bonuses, are expensed as the related
service is provided. A liability is recognised for the amount
expected to be paid if the Group has a present or constructive
obligation to pay this amount as a result of past service provided
by the employee and the obligation can be estimated
reliably.
Accumulated holiday balances are
accrued at each period end, if an employee's entitlement is not
used in full.
Long-term employee
benefits
Long-term employee benefits, which
are those that are not expected to be settled wholly before 12
months after the period end in which the employee renders the
service that gives rise to the benefit, include certain long-term
bonuses. An expense is recognised over the period in which the
related service is provided. A liability is recognised for the
amount expected to be paid if the Group has a present or
constructive obligation to pay this amount as a result of past
service provided by the employee and the obligation can be
estimated reliably.
Defined contribution
pensions
Amounts payable in respect of
employers' contributions to the Group's defined contribution
pension scheme are recognised as employee expenses as incurred.
The assets of the scheme are held separately from those of the
Group in an independently administered fund.
Share-based payments
The Group enters into both
equity-settled and cash-settled share-based payment arrangements
with certain employees as compensation for the provision of their
services.
1) Equity-settled share-based
payments
The cost of equity-settled
share-based payments with employees is measured by reference to the
fair value at the date at which the awards are granted and is
recognised as an expense on a straight-line basis over the vesting
period, based on an estimate of the number of equity instruments
that will eventually vest. A corresponding credit is made to the
share-based payment reserve within equity.
In valuing equity-settled
transactions, no account is taken of any non-market based vesting
conditions and no expense or investment is recognised for
awards that do not ultimately vest as a result of a failure to
satisfy a non-market based vesting condition.
At each reporting date, the Group
revises its estimate of the number of equity instruments expected
to vest. The impact of the revision of the original estimates, if
any, is recognised in the Consolidated Statement of Profit or Loss
such that the cumulative expense reflects the revised estimate,
with a corresponding adjustment to equity.
Upon vesting of an equity
instrument, the cumulative cost in the share-based payments reserve
is reclassified to retained earnings in equity.
2) Cash-settled share-based
payments
The cost of cash-settled
transactions is measured at fair value. Fair value is estimated
initially at the grant date and at each balance sheet date
thereafter until the awards are settled. Market based performance
conditions are taken into account when determining fair value. At
each balance sheet date, the liability recognised is based on the
fair value of outstanding awards (ignoring non-market based vesting
conditions), along with any employment tax to be incurred by the
Group, at the balance sheet date, the period that fell prior to the
balance sheet date and management's estimate of the likelihood and
extent of non-market based vesting conditions being
achieved.
Changes in the carrying amount of
the liability are recognised in the Consolidated Statement of
Profit or Loss for the period.
(f) EBITDA
EBITDA means earnings before
interest, taxes, depreciation and amortisation. It is used to
provide an overview of the profitability of the Group's business
and segments. Underlying EBITDA is calculated by deducting from
within EBITDA exceptional items and employee share-based payments
granted to a targeted group of employees to increase employee
ownership in the Group post-IPO.
EBITDA and Underlying EBITDA are
alternative performance measures and non-IFRS measures.
The Group uses Underlying EBITDA as
exceptional income or expenditure could distort an understanding of
the performance of the Group. Details of exceptional expenses are
set out in note 8.
(g) Leases
Group as lessee
The Group has applied IFRS 16
"Leases" where the Group has right-of-use of an asset under a lease
contract for a period of more than 12 months. Such contracts
represent leases of office premises where the Group is a
tenant.
The lease liability is initially
measured at the net present value of future lease payments that are
not paid at the commencement date discounted using the Group's
incremental borrowing rate ("IBR") as the discount rate as the
implicit rate is not readily determinable for the rented office
premises. The IBR reflects the rate that the Group would have to
pay to borrow the funds necessary to obtain an asset of similar
value to the right-of-use asset in a similar economic environment
within similar terms, security and conditions.
The lease liability is subsequently
measured at amortised cost using the effective interest method.
Lease payments due within the next 12 months are recognised within
current liabilities. Payments due after 12 months are recognised
within non-current liabilities.
Right-of-use assets are recorded
initially at cost and depreciated on a straight-line basis over the
length of the contractual lease term.
Cost is defined as the lease liabilities recognised plus any
initial costs and dilapidation provisions less any incentives
received. Right-of-use assets are included within property, plant
and equipment in the Consolidated Statement of Financial
Position.
Group as lessor
Where the Group acts as an
intermediate lessor by entering into a subletting agreement and has
transferred substantially all the risks and rewards incidental to
ownership of the underlying asset, the Group accounts for these
subleases as finance leases under IFRS 16 "Leases". Such contracts
represent subleases of office premises.
At commencement of the lease term,
the Group derecognises the right-of-use asset relating to the head
lease and recognises the net investments in the sublease as a
receivable. The difference between the right-of-use asset and the
net investment in the sublease is recognised in profit and loss.
The Group uses the IBR used for the head lease to measure the net
investment in the lease (adjusted for any initial direct costs
associated with the sublease). During the term of the sublease, the
Group recognises both finance income on the sublease and finance
expense on the head lease.
Short-term leases and leases of
low-value assets
The Group has elected not to
recognise right-of-use assets and lease liabilities for short-term
leases that have a lease term of 12 months or less and leases
of low-value assets. The Group recognises the lease payments
associated with these leases as an expense on a straight-line basis
over the lease term within operating expenses.
(h) Finance and other income and
expense
Finance and other income comprises
interest earned on cash and term deposits, finance income on
sublease agreements and amounts receivable from related party
investors, foreign exchange gains and the impact of the
remeasurement of the deferred contingent consideration.
Finance and other expenses comprise
interest on interest-bearing liabilities, finance expenses on lease
liabilities, foreign exchange losses and amounts due to related
party investors.
Interest income and expense is
recognised using the effective interest rate method. Recurring fees
and charges levied on committed bank facilities are charged to the
Consolidated Statement of Profit or Loss as accrued. Credit
facility arrangement fees are capitalised and amortised to the
Consolidated Statement of Profit or Loss using the effective
interest method over the term of the facility.
(i) Exceptional items
Items of income and expense that
are material by size and/or nature and are not considered to be
incurred in the normal course of business are classified as
'exceptional' within the Consolidated and Company Statement of
Profit or Loss and disclosed separately to give a clearer
presentation of the Group's underlying financial performance. In
considering the nature of an exceptional item, management's
assessment includes, both individually and collectively, each of
the following:
·
|
whether the item is outside of the
principal activities of the business;
|
·
|
the specific circumstances which
have led to the item arising;
|
·
|
the likelihood of recurrence;
and
|
·
|
if the item is likely to recur,
whether the item is unusual by virtue of its size.
|
(j)
Taxation
Taxation expense for the period
comprises current and deferred tax recognised in the reporting
period.
Current tax
Current tax is the amount of
corporation tax payable in respect of the taxable profit for the
current or prior reporting periods. Tax is calculated on the basis
of tax rates and laws that have been enacted or substantively
enacted by the period end. Current tax is recognised in the
Consolidated Statement of Profit or Loss, except to the extent that
it relates to items recognised in other comprehensive income, or
directly in equity. In this case, current tax is also recognised in
other comprehensive income or directly in equity
accordingly.
Deferred tax
Deferred tax arises from temporary
differences at the reporting date between the carrying amounts of
assets and liabilities and the amounts used for taxation
purposes.
Deferred tax is not recognised if
the temporary difference arises from the initial recognition of
goodwill or from the initial recognition of other assets and
liabilities in a transaction, other than a business combination,
that affects neither the tax nor the accounting profit.
Deferred tax liabilities are
recognised for all taxable temporary differences.
Unrelieved tax losses and other
deferred tax assets are only recognised when it is probable that
they will be recovered against the reversal of deferred tax
liabilities or other future taxable profits will be available
against which the deferred tax assets can be utilised.
Deferred tax assets and liabilities
are calculated at the tax rates that are expected to be applied to
their respective period of realisation, provided they are enacted
or substantively enacted at the reporting date. Deferred tax assets
and liabilities are offset when there is a legally enforceable
right of set off, when they relate to income taxes levied by the
same tax authority and the Group intends to settle on a net basis.
Changes in deferred tax assets or liabilities are recognised as a
component of tax expense in the Consolidated Statement of Profit or
Loss, except where they relate to items that are charged or
credited in other comprehensive income or directly to equity, in
which case the related deferred tax is also charged or credited
directly to equity, or to other comprehensive income.
Current or deferred taxation assets
and liabilities are not discounted.
(k) Property, plant and
equipment
Property, plant and equipment are
stated at cost less accumulated depreciation and any provision for
impairment. The cost includes the purchase price as well as
expenditure directly attributable to put the asset in place and
order to be used in accordance with the purpose of the acquisition.
Assets are depreciated to a residual value on a straight-line
basis, over their estimated useful lives as follows:
Asset class
|
Useful life
|
Computers, furniture and
other
|
3 to 6 years
|
Leasehold improvements
|
Over the shorter of their useful
economic life or the lease term
|
Property right-of-use
assets
|
Over the contractual lease
term
|
The loss to reduce the carrying
amount of any assets that are impaired is recognised within the
Consolidated Statement of Profit or Loss and reversed if there are
indications that the need for impairment is no longer present. The
carrying amount of an item of property, plant and equipment is
derecognised from the Consolidated Statement of Financial Position
at disposal or when no future economic benefits are expected from
the use or disposal of the asset.
The estimated useful lives,
residual values and depreciation method are reviewed at the end of
each reporting period, with the effect of any changes in estimate
accounted for on a prospective basis.
(l) Intangible assets
Customer relationship intangible
assets
Customer relationship intangible
assets acquired from a business combination are initially
recognised at cost. The cost of intangible assets acquired in a
business combination is their fair value at the date of
acquisition. Following the initial recognition, intangible assets
are carried at cost less accumulated amortisation and accumulated
impairment losses.
Intangible assets are annually
assessed for impairment when there are indicators of
impairment.
Amortisation is calculated using
the straight-line method, to allocate the depreciable amount of the
assets to their residual values over their estimated useful lives
up to 7 years. The amortisation is included within "Depreciation
and amortisation expense" in the Consolidated Statement of Profit
or Loss.
Computer software
Acquired computer software licenses
are capitalised on the basis of the costs incurred to acquire and
bring to use the specific software. Software recognised as an asset
is carried at cost less accumulated amortisation and impairment
losses.
Software-as-a-Service
("SaaS") contracts are only
classified as intangible assets when the recognition criteria are
fulfilled; otherwise they are classified as service contracts, for
which costs are expensed as incurred.
Capitalised computer software is
amortised over its estimated useful economic lives up to 5
years.
(m) Business combinations and
goodwill
Business combinations are accounted
for by applying the acquisition method. The cost of a business
combination is the fair value of the consideration given,
liabilities incurred or assumed and of equity instruments issued.
Costs attributable to the business combination are expensed in the
Consolidated Statement of Profit or Loss.
On acquisition of a business, fair
values are attributed to the identifiable assets, liabilities, and
contingent liabilities. Intangible assets are only recognised
separately from goodwill where they are separable and arise from
contractual or other legal rights. Where the fair value of
contingent liabilities cannot be reliably measured, they are
disclosed on the same basis as other contingent
liabilities.
Contingent consideration is
recognised at the acquisition date. It is classified as a financial
liability and subsequently remeasured to fair value, with changes
in fair value recognised in the Consolidated Statement of Profit or
Loss.
Goodwill recognised represents the
excess of the fair value of the purchase consideration over the
fair values to the Group's interest in the identifiable assets,
liabilities and contingent liabilities acquired.
Goodwill is assessed for impairment
annually or more frequently if events or changes in circumstances
indicate potential impairment loss. Any identified impairment is
charged to the Consolidated Statement of Profit or Loss. No
reversals of impairment are recognised. Impairment triggers could
include the loss of a fund management contract or a failure to
raise a new fund.
Third party interest arises when
the Group's interest only constitutes a portion of the total with
the remaining portion being profit share that the Group owes the
other related parties. The profit share is calculated based on a
contractually defined and pre‐agreed percentage which is set out
within relevant limited partnership agreements. The Group has
considered factors such as the substance of the legal contractual
agreement and the lack of discretion the Group has regarding the
residual payments to third parties. Therefore, third party interest
is classified as a financial liability and measured at fair value
through profit and loss with the corresponding assets being
measured at fair value.
(n) Financial
instruments
Financial assets
The Group's financial assets
consist of fund investments, investments made by Collateralised
Loan Obligations ("CLOs")
consolidated by the Group, derivative financial instruments, other
investments, accounts receivable and other receivables, and cash
and cash equivalents.
The Company's financial assets
consist of accounts receivable and other receivables, derivative
financial instruments, cash and cash equivalents.
1) Recognition and
measurement
A financial asset is recognised
when the Group or Company becomes party to the contractual
provisions of the instrument, which is generally on trade
date.
The Group's financial assets are
initially classified into one of three measurement categories. The
classification depends on how the asset is managed (business model)
and the characteristics of the asset's contractual cash flows. The
measurement categories for financial assets are as
follows:
·
|
fair value through profit or
loss;
|
·
|
fair value through other
comprehensive income; and
|
·
|
amortised cost.
|
2) Fair value through profit or
loss
The Group's fund investments and
the majority of the consolidated CLO assets are measured at fair
value through profit or loss as such assets are held for investment
returns. Gains or losses arising from changes in fair value are
recognised through fair value remeasurement of investments within
the Consolidated Statement of Profit or Loss along with interest
received on the consolidated CLO assets. Financial assets at fair
value through profit or loss are recognised when the Group enters
into contracts with counterparties.
Derivative financial instruments
are initially measured at fair value determined using independent
third-party valuations or quoted market prices on the date on which
the derivative contract is entered into and are subsequently
measured at fair value at each reporting date. The accounting
policy for derivative financial instruments is further discussed in
the derivative instruments and hedge accounting section
below. Prior to their settlement, derivatives are carried as
a financial asset when the fair value is positive and as a
financial liability when fair value is negative.
3) Amortised cost
Financial assets are measured at
amortised cost only if both of the following criteria are
met:
·
|
the asset is held within a business
model whose objective is to collect the contractual cash flows;
and
|
·
|
the contractual terms give rise to
cash flows that are solely payments of principal and interest on
the principal amount outstanding.
|
The Group's trade and other
receivables are short-term receivables relating to non-financing
transactions and are therefore subsequently measured at amortised
cost using the effective interest rate method. Receivables
due in more than one year are initially discounted to their present
value using an equivalent rate of interest that would be due on
borrowings. The discount is released over time to the Consolidated
Statement of Profit or Loss.
Amounts receivable for sales of
consolidated CLO assets awaiting settlement are measured at
amortised cost and recognised at the point at which the CLO has a
contractual right to exchange cash.
The Group accounts for regular way
amortised cost financial instruments using trade date
accounting.
Cash and cash equivalents and term
deposits with original maturities of more than three months are
measured at amortised cost.
4) Impairment
Expected credit losses are
calculated on financial assets measured at amortised cost and are
recognised within the Consolidated Statement of Profit or Loss. For
trade and other receivables (including lease receivables) the Group
and Company apply the simplified approach and the practical
expedient permitted by IFRS 9 "Financial Instruments". The
allowance is based on historic experience of collection rates over
the expected life of trade receivables, adjusted for forward
looking factors specific to each counterparty and the economic
environment at large, to create an expected loss matrix.
5) Derecognition
A financial asset is derecognised
when the contractual rights to the cash flows from the asset
expire, or when the Group or Company transfers the rights to
receive the contractual cash flows in a transaction in which
substantially all the risks and rewards of ownership of the
financial asset are transferred. On derecognition of a financial
asset in its entirety, the difference between the asset's carrying
value amount and the sum of the consideration received and
receivable is recognised in the Consolidated Statement of Profit or
Loss.
Financial liabilities
1) Fair value through profit or
loss
Derivative financial liabilities
are initially recognised and subsequently measured at fair value at
each reporting date.
The majority of liabilities of CLOs
consolidated by the Group are designated as financial liabilities
measured at fair value through profit or loss. Financial
liabilities at fair value through profit or loss related to CLOs
are initially recognised and subsequently measured at fair value on
a recurring basis with gains or losses arising from changes in fair
value recognised through the fair value remeasurement of
investments line within the Consolidated Statement of Profit or
Loss along with interest paid on the CLO financial liabilities. The
effect of the Group's own credit risk on liabilities of the
consolidated CLOs is not recognised in other comprehensive income
as the effect would create an accounting mismatch in profit or
loss.
Deferred contingent consideration
payable relating to business combinations is measured at fair value
through profit or loss with gains or losses from fair value
remeasurement recognised in finance and other income.
CLO repurchase agreements and other
amounts payable to related party investors which represent the
residual profits due to third party investors are held at fair
value through profit and loss with the corresponding assets being
measured at fair value.
2) Amortised cost
Borrowings are initially recognised
as the amount of cash received from the lender, less separately
incurred transaction costs. They are subsequently measured at
amortised cost using the effective interest rate method.
Amounts payable for purchases of
consolidated CLO assets awaiting settlement are measured at
amortised cost and recognised at the point at which the CLO has a
contractual obligation to exchange cash.
3) Derecognition
The Group and Company derecognise
financial liabilities when, and only when, the Group's or Company's
obligations are discharged, cancelled or expire.
Derivative instruments and hedge
accounting
For derivatives designated as a
hedging instrument in cash flow hedges, during the hedging
relationship the effective portion of the fair value movements on
the hedging instrument is recognised in other comprehensive income
and within other reserves within equity. Any ineffective portion is
recognised immediately in profit or loss as a gain or loss within
finance and other income or expenses. If the hedged item does not
lead to the recognition of a non-financial asset or liability,
accumulated amounts recognised in equity are reclassified to profit
or loss when the hedged future cash flows affect profit or loss. If
the hedged item subsequently results in the recognition of a
non-financial asset or liability, the accumulated amounts in equity
are removed from equity and incorporated directly as a basis
adjustment to the carrying amount.
For derivatives that are not
designated as cash flow hedges, all fair value movements are
recognised in the Consolidated Statement of Profit or Loss. Where a
derivative relates to a hedge of investments in foreign currencies,
the profit or loss on the revaluation of the hedging instrument is
recognised together with the investment returns in the Consolidated
Statement of Profit or Loss.
(o) Investment in
subsidiaries
Investments in subsidiaries in the
Company Statement of Financial Position are recorded at cost less
provision for impairments. All transactions between the Company and
its subsidiary undertakings are classified as related party
transactions for the Company accounts and are eliminated on
consolidation for the Group.
(p) Investments in
associates
Associates are entities such as
funds or carried interest partnerships in which the Group has an
investment and over which it has significant influence, but not
control, through participation in the financial and operating
policy decisions.
The investments in associates are
designated at fair value through profit or loss. The investments
are recorded at fair value of fund investment or carried interest
receivable within the Group Consolidated Statement of Financial
Position. Any gains or losses are recognised within fair value
remeasurement of investments in the Consolidated Statement of
Profit or Loss.
(q) Cash and cash
equivalents
Cash and cash equivalents comprise
cash in hand and call deposits, and other short-term highly liquid
investments including term deposits with original maturities of
three months or less and money market funds which are readily
convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
CLO cash is cash held by CLO
vehicles consolidated by the Group and is not available for the
Group's other operating activities. Term deposits with original
maturities of three months are not included in cash equivalents and
are presented separately on the Consolidated and Company Statement
of Financial Position.
(r) Dividends
Dividends and other distributions
to the Company's shareholders are recognised in the period in which
the dividends and other distributions are declared and, if
relevant, approved by the shareholders. These amounts are
recognised in the Statement of Changes in Equity.
(s) Own shares
Own shares are recorded by the
Group when ordinary shares are purchased through special purpose
vehicles which have the purpose of purchasing and holding shares of
the Company from employees who have left the employment of the
Group or for other reasons. The special purpose vehicles include
Atlantic SAV Limited, Atlantic SAV 2 Limited and the Bridgepoint
Group plc Employee Benefit Trust. These entities are aggregated
together within the financial statements of the Company and are
consolidated within the Group financial statements.
Own shares are held at cost and
their purchase reduces the Group's net assets by the amount spent.
They are recognised as a deduction from retained
earnings.
When shares vest or are cancelled,
they are transferred from own shares to the retained earnings
reserve at their weighted average cost.
No gain or loss is recognised on
the purchase, sale, issue or cancellation of the Company's own
shares.
3 Critical judgements in the
application of accounting policies and key sources of estimation
uncertainty
The judgements and other key
sources of estimation uncertainty at the reporting date, which may
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year, are summarised below. The Group's estimates and
assumptions are based on historical experience and expectation of
future events and are reviewed periodically. The actual outcome may
be materially different from that anticipated.
(a) Judgements
Consolidation of fund
investments
The Directors have considered
whether the Group should consolidate investments in funds into the
results of the Group. Control is determined by the extent of
decision-making authority, rights held by other parties,
remuneration and exposure to returns.
The Directors have assessed the
legal nature of the relationships between the Group, the relevant
fund and fund investors and have determined that as the manager,
the Group has the power to influence the returns generated by the
fund, but that the Group's interests typically represent only a
small proportion of the total capital within each fund (c. 2% of
commitments). The Directors have therefore concluded that the Group
acts as an agent which is primarily engaged to act on behalf, and
for the benefit, of the fund investors rather than act for its own
benefit.
Bridgepoint funds are not
consolidated into the results of the Group.
Consolidation of CLOs
The Group holds investments in the
senior and subordinated notes of CLOs that it manages,
predominantly driven by risk-retention regulations. As the Group
has power as the asset manager to impact the returns of the
vehicles, the level of exposure to variable returns from its
involvement as an investor in the notes requires assessment to
whether this indicates that the Group has a principal or agent
relationship and therefore whether the CLO should be consolidated
under IFRS 10 "Consolidated Financial Statements". The subordinated
notes of CLOs are the tranche that is most exposed to the risk of
portfolio assets failing to pay as they are the first to absorb any
losses. As a result, the Group's consideration of exposure to
variable returns focuses on its interest in the equity
tranches.
The assets and liabilities of the
CLO are held within separate legal entities and, as a result, the
liabilities of the CLO are non-recourse to the Group. The
consolidation of the CLO results in a significant gross-up on the
Group's assets and liabilities, which is shown gross on the face of
the Consolidated Statement of Financial Position and Consolidated
Statement of Cash Flows as separate lines but has no net effect on
the profit or loss or net assets. Details of the assets and
liabilities are included in notes 16 and 17 and a non-statutory and
unaudited Consolidated Statement of Financial Position and
Consolidated Statement of Cash Flows excluding the consolidation of
CLOs is included in this announcement.
Name of CLOs
|
Bridgepoint interest in
the subordinated notes
|
Bridgepoint share of
CLO
|
Consolidation treatment at
YE23
|
Nature of the entity
|
Bridgepoint CLO 1 DAC
|
55.2%
|
5.0%
|
Consolidated
|
Subordinated notes in the residual
class
|
Bridgepoint CLO 2 DAC
|
5.0%
|
5.0%
|
Not consolidated
|
Subordinated notes in the residual
class
|
Bridgepoint CLO 3 DAC
|
51.0%
|
8.9%
|
Consolidated
|
Subordinated notes in the residual
class
|
Bridgepoint CLO IV DAC
|
61.0%
|
7.0%
|
Consolidated
|
Subordinated notes in the residual
class
|
Bridgepoint CLO V DAC
|
51.8%
|
5.1%
|
Consolidated
|
Subordinated notes in the residual
class
|
Bridgepoint CLO VI DAC
|
50.0%
|
50.0%
|
Consolidated
|
Warehouse entity
|
|
|
|
|
| |
The Group consolidates Bridgepoint
CLO 1 DAC ("CLO 1"),
Bridgepoint CLO 3 DAC ("CLO
3"), Bridgepoint CLO IV DAC ("CLO 4") and Bridgepoint CLO V DAC
("CLO 5") as the Group has
exposure to variable returns as an investor in the subordinated
notes. The Group holds the majority of the subordinated notes in
CLO 1, CLO 3, CLO 4 and CLO 5 and the Directors have therefore
concluded that the Group acts as principal and should consolidate.
The construction of Bridgepoint CLO VI DAC ("CLO 6") commenced during the year and
remained in warehousing as at 31 December 2023. As the Group held a
majority interest in the warehouse equity, the Group also fully
consolidates CLO 6.
Bridgepoint CLO 2 DAC
("CLO
2") is not consolidated in the
financial statements of the Group at 31 December 2023 as the
Group's exposure to variable returns is only 5% of the subordinated
notes.
The Group designates the amounts
attributable to the third-party investors as financial liabilities
at fair value through profit and loss.
Consolidation of Carried Interest
Partnerships
As a fund manager to its private
equity and credit funds, the Group participates in Carried Interest
Partnerships ("CIP"), the participants of
which are the Group, certain Group employees and others connected
to the underlying fund. These vehicles have two purposes: to
facilitate payments of carried interest from the fund to carried
interest participants, and to facilitate individual co-investment
into the funds.
The Directors have undertaken a
control assessment of each CIP in accordance with IFRS 10
"Consolidated Financial Statements" to consider whether they should
consolidate the CIP.
The Directors have considered the
contractual nature of the relationships between the relevant fund,
the CIP and the CIP participants. The purpose and design of the CIP
and the carry rights in the fund are generally determined at the
outset by the fund's limited partnership agreement
("LPA") which requires investor
agreement and incentivises individuals to enhance performance of
the underlying fund in line with investor expectations.
The Group has limited power over
the Adjudication Committees of the CIP, which makes decisions about
allocation of the carried interest, but these powers do not give
the Group control.
In addition, the Directors have
also considered the variability of returns of the CIP. The variable
returns are shared between the carried interest participants and
the Group is exposed to limited variable returns of below
50%.
The Directors concluded that the
Group does not control the CIP because of the predetermined
contractual nature of the CIP, the Group's limited powers over the
Adjudication Committees and limited exposure to the variable
returns of the CIP. However, when the Group has a share of 20% or
more of the rights to the carried interest, the Group is considered
to have significant influence and in this case the CIP is accounted
for as an associate. Details of the associates are set out within
note 28 (d).
Consolidation of employee share
partnership
On listing, the founder employee
shareholders created a separate ring-fenced vehicle, Burgundy
Investments Holdings LP (the "Burgundy Partnership"). The Burgundy
Partnership is a pool of assets, comprising the Company's shares.
The shares were contributed by founder employee shareholders
electing to donate a portion of their shares to the partnership.
This pool is ring-fenced for allocation to current and future
partners in the business, as a means of allowing them to build a
meaningful long-term shareholding in Bridgepoint and reflect the
opportunities that previous partners were offered. The existing
employee shareholders prior to listing, and certain employee
partners, will wholly own the interest in the Burgundy
Partnership.
The Group does not have any direct
economic interest in the Burgundy Partnership, and awards of new
points to existing and future employees will be made by the
Advisory Committee of the Burgundy Partnership, which is made up of
some of the largest founder employee shareholders. As such, the
Group does not have power over the allocation of the points and to
affect those returns through its power.
The Directors have considered the
requirements of IFRS 10 "Consolidated Financial Statements" to
determine whether they should consolidate the Burgundy Partnership.
As the Group does not have power over the Burgundy Partnership and
no exposure to variable returns from its involvement with the
Burgundy partnership, the Directors have concluded that the
Burgundy Partnership should not be consolidated.
(b) Estimates
Recognition and measurement of
carried interest revenue
Carried interest revenue is only
recognised to the extent it is highly probable that there would not
be a significant reversal of any accumulated revenue recognised on
the completion of a fund.
In determining the amount of
revenue to be recognised the Group is required to make assumptions
and estimates when determining 1) whether or not revenue should be
recognised and 2) the timing and measurement of such
amounts.
The Group bases its assessment on
the best available information pertaining to the funds and the
activity of the underlying assets within that fund. This includes
the current fund valuation and internal forecasts on the expected
timing and disposal of fund assets.
For private equity funds, the
constraints on estimating the revenue are incorporated through the
application of discounts of 15% to 40% (2022: 30% to 50%) to the
unrealised fair values of investments where the cumulative value of
the distributions to investors and unrealised fair value of
investments of a fund exceeds the relevant carried interest hurdle
(being the contractual minimum return for fund
investors).
For credit funds, which are more
sensitive to the performance of individual investments within the
portfolio, only funds that have either reached their hurdle or are
expected to do so imminently are modelled on the same
basis.
The discount applied for each fund
depends on the stage and maturity profile of each fund, and
therefore recognises the de-risking of the income over time, taking
into account diversity of assets, whether there has been a recent
market correction (and whether this has been already factored into
the valuation of the fund) and the expected average remaining
holding period. Reasons for a higher discount may include where the
fund has not yet completed its construction, has not yet returned
its original capital commitments and there is the potential for the
hurdle to grow further, or there is a higher level of perceived
risk (fund specific or macro-economic). Reasons for a lower
discount include where a fund has returned its capital commitments
and the hurdle has stopped or where the fund has already started to
pay carry. The levels of discounts applied are reassessed
annually.
The weighted average discount at 31
December 2023 to the notional carried interest due to the Group
based on unrealised fair value of investments in relevant funds is
51% (2022: 62%) resulting in a carried interest receivable of
£67.3m (2022: £42.0m). If the same weighted average discount of 62%
from 2022 had been applied to the notional carried interest
receivable at 31 December 2023, the carried interest receivable
asset would be £53.0m.
If the average discount was to
increase by 10% this would reduce carried interest income by
£13.2m. If the average discount was to decrease by 10% this would
increase carried interest income by £13.2m.
Valuation of fund investments at
fair value
Fund investments at fair value
consist of investments in private equity and credit funds. The
investments are fair valued using the net asset value of each fund,
determined by the fund manager. These funds are invested into
direct and indirect equity and debt investments.
Portfolio assets within each fund
are stated at fair value as determined in good faith by the fund
manager in accordance with the terms of the LPA of each fund and
the International Private Equity and Venture Capital Valuation
Guidelines ("IPEV") and are reviewed and
approved by the relevant Bridgepoint Valuation Committee. The
valuations provided by the fund manager typically reflect the fair
value of the Group's proportionate share of the capital account
balance of each investment as at the reporting date or the latest
available date.
The market approach is typically
used for the valuation of the assets held by the funds. This
comprises valuation techniques such as market comparable companies
and multiples. A market comparable approach uses quoted market
prices or third-party quotes for similar instruments to determine
the fair value of a financial asset. A multiples approach can be
used in the valuation of less liquid securities, which typically
form the majority of assets within a private equity or credit
fund.
Comparable companies and multiples
techniques assume that the valuation of unquoted direct investments
can be assessed by comparing performance measure multiples of
similar quoted assets for which observable market prices are
readily available. Comparable public companies are selected based
on factors such as industry, size, stage of development and
strategy. The most appropriate performance measure for determining
the valuation of the relevant investment is selected (which may
include EBITDA, price/earnings ratios for earnings or price/book
ratios for book values). Trading multiples for each comparable
company identified are calculated by dividing the value of the
comparable company by the defined performance measure. The relevant
trading multiples might be subject to adjustment for general
qualitative differences such as liquidity, growth rate or quality
of customer base between the valued direct investment and the group
of comparable companies. The fair value of the direct investment is
determined by applying the relevant adjusted trading multiple to
the identified performance measure of the valued company. Where
available, valuation techniques use market-observable assumptions
and inputs. If such information is not available, inputs may be
derived by reference to similar assets and active markets, from
recent prices for comparable transactions or from other observable
market data. When measuring fair value, the fund manager selects
the non-market-observable inputs to be used in its valuation
techniques based on a combination of historical experience,
deviation of input levels based upon similar investments with
observable price levels and knowledge of current market conditions
and valuation approaches.
Within its valuation techniques the
fund manager typically uses different unobservable input factors.
Significant unobservable inputs include EBITDA multiples (based on
budget/forward-looking EBITDA or historical EBITDA of the issuer
and EBITDA multiples of comparable listed companies for an
equivalent period), discount rates, price/earnings ratios and
enterprise value/sales multiples. The fund manager also considers
the original transaction prices, recent transactions in the same or
similar instruments and completed third party transactions in
comparable instruments and adjusts the model as deemed
necessary.
The fund manager takes into account
ESG related factors such as climate change into the valuation of
investments and, to the extent necessary, makes adjustments to
earnings and multiples where demand or costs for a portfolio
company could be impacted.
Debt instruments may be valued
using the market approach, independent loan pricing sources or at
amortised cost, which requires the determination of the effective
interest rate from a number of inputs, including an estimation of
the expected maturity of each loan.
Due to the level of unobservable
inputs within the determination of the valuation of individual
assets within each fund, and no observable price for each
investment in a fund, fund investments at fair value are classified
as level 3 financial assets under IFRS 13 "Fair Value
Measurement".
Further detail on the valuation
methodologies, inputs and the number of fund investments valued
using each technique, along with a sensitivity analysis of the
impact of a change in the fair value of fund investments is
included within note 19 (d) and (e).
Valuation of CLO assets and
liabilities
The consolidated CLO assets
consisting of loans are valued using independent loan pricing
sources. To the extent that the significant inputs are observable,
the Group categorises these investments as level 2. The valuation
methodology for the Group's investment in the various notes of CLOs
is based upon discounted cash flow models with unobservable market
data inputs, such as asset coupons, constant annual default rates,
prepayment rates, reinvestment rates, recovery rates and discount
rates and they are therefore considered level 3 financial
assets.
The consolidated CLO liabilities
consisting of the notes issued to third-party investors are valued
in line with the fair value of the CLOs' loan asset portfolios. The
CLO designated activity vehicles which are consolidated are set up
to distribute all proceeds generated from the assets of the CLO to
the note holders of the CLO and thus the entity itself does not
generate any residual profit. The valuations of the consolidated
liabilities are therefore measured at par and are adjusted in order
to match the value of the asset portfolio, with any adjustment
applied to the note liabilities in order of ascending
seniority.
The Group's investments in CLO
notes of consolidated CLO vehicles are eliminated based on the
valuation of the investments as determined by the discounted cash
flow models as described above. A sensitivity analysis has been
included within note 19 (e).
Measurement of intangible assets,
useful lives and impairment
A customer relationship asset was
recognised following the Group's acquisition of EQT Credit in
October 2020, to reflect the value of current investor
relationships to the Group in the future.
At the time of the acquisition, the
cost of the acquired customer relationship was measured at fair
value by discounting estimated contractual future cash flows over a
period in which the customer was expected to remain invested within
the Group's funds. Key assumptions in the model included forecast
earnings for 2021 to 2025, a growth rate applied from 2025 onwards
which was based upon the long-term operating plan for the business,
an investor reinvestment rate from one fund to another, and a
pre-tax discount rate of 10.5% which was calculated by using
comparable company information.
The useful life of the intangible
assets arising from this transaction has been determined as seven
years, which represents the period over which the net present value
of cash flows from the acquired customer relationships reduce to
nil.
The customer relationship asset is
assessed for impairment when there are indicators of impairment.
Such indicators would include fundraising being lower than targets.
No impairment has been identified.
Goodwill is assessed for impairment
annually or more frequently if events or changes in circumstances
indicate potential impairment loss. Goodwill arose from the
acquisition of EQT Credit. It is the Group's judgement that the
lowest level of cash generating unit ("CGU") used to determine
impairment is the credit business segment for the purposes of
monitoring and assessing goodwill for impairment. In performing the
impairment test, management prepares a calculation of the
recoverable amount of the goodwill, using the value-in-use approach
and compares this to the carrying value. In order to validate this,
a value-in-use forecast based on approved budgets has been prepared
by management to compare the forecast of the Credit business
segment to the carrying amount of the goodwill. Key assumptions in
the forecast include forecast earnings for 2024 to 2028 (2022: 2023
to 2027), including new fundraising, and a pre-tax discount rate of
16.1% (2022: 15.0%), which was calculated by using comparable
company information.
A sensitivity analysis of goodwill
and the intangible asset has been included within note
14.
4 Operating segments
Operating segments are the
components of the Group whose results are regularly reviewed by the
Group's chief operating decision maker to make decisions about
resources to be allocated to the segment and assess its
performance.
The Executive Directors are
considered to be the chief operating decision maker of the Group,
which is divided into operating segments based on how key
management reviews and evaluates the operation and performance of
the business.
The Group's operations are divided
into two groups, the Core business, consisting of the Private
Equity and Private Credit fund management and associated Central
support, and Other. Other includes the Group's procurement
consulting business, PEPCO Services LLP, and costs relating to
strategic projects.
The Group's core operations are
divided into two business segments: Private Equity and Private
Credit. The operations of both business segments consist of
providing investment management services to the relevant funds and
their investors. The investment management services comprise
identification and structuring of new investments, the monitoring
of investments and the sale and exit from investments. The two
business segments are supported by the Central support functions
which include investor relations, head office, finance, human
resources, IT and marketing.
Segmental income and profit before
tax analysis
The Executive Directors assess the
operating segments based on the line items below, primarily on
operating income and underlying EBITDA. The EBITDA for each
segment, together with depreciation and amortisation and net
finance and other income or expenses, forms profit before tax.
Depreciation, finance and other income, finance and other expenses,
exceptional items and the share-based payment expenses excluded
from underlying EBITDA are not allocated to operating segments and
are included in the Group total.
Group
Year ended 31 December
2023
|
Private Equity
£ m
|
Private Credit
£ m
|
Central
£ m
|
Total Core
£ m
|
Total Other
£ m
|
Total Group
£ m
|
Management and other
fees
|
205.0
|
56.5
|
3.8
|
265.3
|
-
|
265.3
|
Carried interest
|
30.0
|
-
|
-
|
30.0
|
-
|
30.0
|
Fair value remeasurement of
investments
|
17.3
|
8.0
|
-
|
25.3
|
-
|
25.3
|
Other operating income
|
0.2
|
-
|
-
|
0.2
|
0.8
|
1.0
|
Total operating income
|
252.5
|
64.5
|
3.8
|
320.8
|
0.8
|
321.6
|
Personnel expenses
|
(69.3)
|
(21.3)
|
(36.0)
|
(126.6)
|
(1.0)
|
(127.6)
|
Other operating expenses
|
(18.3)
|
(8.8)
|
(18.0)
|
(45.1)
|
(0.1)
|
(45.2)
|
Underlying EBITDA (excluding
exceptional expenses and certain share-based payment
expenses)
|
164.9
|
34.4
|
(50.2)
|
149.1
|
(0.3)
|
148.8
|
Exceptional expenses
|
|
|
|
|
|
(47.7)
|
Certain excluded share-based
payment expenses
|
|
|
|
|
|
(4.0)
|
EBITDA
|
|
|
|
|
|
97.1
|
Depreciation and
amortisation
|
|
|
|
|
|
(18.7)
|
Finance and other income and
expenses
|
|
|
|
|
|
7.6
|
Profit before tax
|
|
|
|
|
|
86.0
|
Group
Year ended 31 December
2022
|
Private Equity
£ m
|
(Restated)
Private Credit
£ m
|
(Restated)
Central
£ m
|
(Restated)
Total Core
£ m
|
Total Other
£ m
|
Total Group
£ m
|
Management and other
fees
|
187.8
|
50.8
|
2.9
|
241.5
|
-
|
241.5
|
Carried interest
|
24.2
|
-
|
-
|
24.2
|
-
|
24.2
|
Fair value remeasurement of
investments
|
32.1
|
8.6
|
-
|
40.7
|
-
|
40.7
|
Other operating income
|
0.2
|
-
|
-
|
0.2
|
0.8
|
1.0
|
Total operating income
|
244.3
|
59.4
|
2.9
|
306.6
|
0.8
|
307.4
|
Personnel expenses
|
(67.6)
|
(21.2)
|
(35.9)
|
(124.7)
|
(1.1)
|
(125.8)
|
Other operating expenses
|
(16.2)
|
(8.4)
|
(17.6)
|
(42.2)
|
(0.2)
|
(42.4)
|
Underlying EBITDA* (excluding
exceptional expenses)
|
160.5
|
29.8
|
(50.6)
|
139.7
|
(0.5)
|
139.2
|
Exceptional expenses
|
|
|
|
|
|
(3.2)
|
EBITDA*
|
|
|
|
|
|
136.0
|
Depreciation and
amortisation
|
|
|
|
|
|
(18.3)
|
Finance and other income and
expenses*
|
|
|
|
|
|
9.7
|
Profit before tax
|
|
|
|
|
|
127.4
|
*
|
2022 finance and other income and
expenses, EBITDA and Underlying EBITDA have been restated to
include or exclude non-operating foreign exchange gains and
losses.
|
|
|
|
|
|
|
| |
Geographical analysis and customer
concentrations
The Group's income from funds is
earned from funds entirely domiciled within Europe. The Group's
operating expenses are incurred in the locations where the Group
has offices in identifying and supporting portfolio companies which
are unconnected to the domicile of the fund or the location of the
fund investors. Therefore, the Group's operating results cannot be
analysed in a meaningful way by geography.
No single fund investor constitutes
more than 10% of assets under management.
Assets and liabilities
analysis
The Group's Consolidated Statement
of Financial Position is managed as a single unit rather than by
segment. The only distinction for the business segments relates to
the Group's investments in funds, carried interest receivable and
other investments, which can be split between Private Equity and
Private Credit (further split between investments attributable to
the Group and to third party investors).
|
Group
|
|
2023
£ m
|
2022
£ m
|
Investments:
|
|
|
Private Equity
|
260.9
|
241.3
|
Private Equity - other
investments
|
7.5
|
-
|
Private Credit (assets attributable
to the Group)
|
121.6
|
76.9
|
Private Credit (CLO assets
attributable to third-party investors)
|
1,267.7
|
696.1
|
Total investments
|
1,657.7
|
1,014.3
|
Carried interest
receivable:
|
|
|
Private Equity
|
64.7
|
39.4
|
Private Credit
|
2.6
|
2.6
|
Total carried interest
receivable
|
67.3
|
42.0
|
5 Operating income
Operating income primarily
comprises management and other fees, carried interest income and
investment income from the management of, and investment in,
private equity and credit fund partnerships.
Management and other
fees
Management and other fees are
presented net of the profit or loss impact of the settlement of
foreign exchange hedging used to limit the volatility of foreign
exchange on fees earned in euros.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Management and other fees before
settlement of foreign exchange hedges
|
264.2
|
239.1
|
Settlement of foreign exchange
hedges
|
1.1
|
2.4
|
Total management and other
fees
|
265.3
|
241.5
|
Carried interest
The amount of carried interest
recognised in operating income and the carrying value of the
related asset is sensitive to the fair value of unrealised
investments within each fund. The reversal risk in carried interest
income, which is accounted for under IFRS 15 "Revenue from
Contracts with Customers", is managed through the application of
discounts of 15% to 50% to the fair value of the fund investments
and the later recognition of carried interest relating to credit
funds.
A sensitivity analysis of the
average discount rate on the carried interest income is included in
note 3 (b).
Note 19 (e) includes a sensitivity
analysis for co-investment valuations and the impact on profit or
loss.
Fair value remeasurement of
investments
Fair value remeasurement of
investments consists of net changes in the fair value of the
Group's investments in private equity and credit funds.
Fair value remeasurement of
investments is presented net of the profit or loss impact of the
remeasurement of foreign exchange hedging used to limit the
volatility of foreign exchange on investment income earned in
euros.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Fair value remeasurement of
investments before remeasurement of foreign exchange
hedges
|
23.8
|
47.0
|
Remeasurement of foreign exchange
hedges
|
1.5
|
(6.3)
|
Fair value remeasurement of
investments
|
25.3
|
40.7
|
Fair value remeasurement of
investments includes the remeasurement of the fair value of
investments in CLOs which are fully consolidated by the Group. The
CLO investment expense is the amount of investment income due to
third-party note holders who have invested in the CLOs which are
fully consolidated by the Group.
|
Group
|
|
2023
£ m
|
2022
£ m
|
CLO investment income
|
66.7
|
14.9
|
CLO investment expense
|
(58.5)
|
(13.0)
|
CLO investment income,
net
|
8.2
|
1.9
|
The table above excludes the fair
value remeasurement of sale and repurchase arrangements of the
Group's interests in CLOs 2 and 3. Further details are set out in
note 17 (d).
6 Personnel expenses
Aggregate personnel expenses
(including Directors' remuneration) in each year were as
follows:
|
Group
|
|
2023
£ m
|
2022
£ m
|
Wages and bonuses
|
95.7
|
97.6
|
Social security
|
19.2
|
16.1
|
Pensions
|
1.9
|
2.0
|
Share-based payments
|
4.5
|
0.4
|
Other employee expenses
|
11.2
|
10.8
|
Total personnel expenses
|
132.5
|
126.9
|
Total personnel expenses include
£0.9m (2022: £1.1m) of exceptional expenses, and accordingly are
excluded from the calculation of underlying profitability measures.
See note 8 for further details.
a) Share-based payments
The total charge to the
Consolidated Statement of Profit or Loss for the year was £4.5m
(2022: £0.4m) and this was credited to the share-based payments
reserve in equity for an equity-settled award or recognised as a
liability for a cash-settled award. £4.0m of the total share-based
payment expenses are excluded from underlying metrics for the
reasons explained in the APMs definitions.
A3 share award
In June 2021, the Company issued A3
ordinary shares of £0.01 nominal value to certain employees for
consideration of £1.50 per share. The A3 shares would vest on the
fifth anniversary of their issue provided that the shareholder
remained an employee throughout this period. As part of the
Company's share reorganisation, the A3 shares were converted into
ordinary shares. The fair value of the share issued was calculated
as £3.96 per share as was determined by a third-party valuation.
The expenses relating to the A3 shares are included in underlying
profitability measures.
|
A3 Share Award
|
A3 Share Award (£ per
share)
|
Group and Company
|
2023
|
2022
|
2023
|
2022
|
Opening
|
528,975
|
602,000
|
3.96
|
3.96
|
Vested
|
(56,550)
|
(60,200)
|
3.96
|
3.96
|
Forfeited
|
(32,025)
|
(12,825)
|
3.96
|
3.96
|
Outstanding at year end
|
440,400
|
528,975
|
3.96
|
3.96
|
Long-term incentive
plans
Awards under new long-term
incentive plan ("LTIP") were granted to
qualifying employees on 31 March 2023. The total fair value of the
awards on the grant date was estimated at £5.6m. The Group will
settle the awards, vesting over the period 30 June 2023 to 31 March
2025, either in the Company's shares or with an equivalent cash
payment where local laws restrict the grant of shares in foreign
corporations, with no consideration paid by the participants. As
the LTIP awards vest subject to the achievement of certain service
conditions, namely continued employment in the Group, they are
accounted for as either equity-settled or cash-settled share-based
payment transactions under the Group's accounting policy in line
with IFRS 2 "Share-based Payment". The scheme was implemented to
increase employee ownership in the Group for a targeted group of
employees post-IPO. The awards are not considered an alternative to
cash-based compensation, are not included in the cost-base when
considering operating segment performance and will cease to be a
reconciling item once the awards issued as part of the strategy are
fully vested.
Group and Company
|
Number of shares
|
Weighted average fair value
per share granted (£)
|
2023
|
2022
|
2023
|
2022
|
Rights outstanding at beginning of
the period
|
-
|
-
|
N/A
|
N/A
|
Granted
|
2,619,773
|
-
|
2.15
|
-
|
Granted - dividend
equivalents
|
75,571
|
-
|
2.17
|
-
|
Forfeited
|
(91,298)
|
-
|
2.17
|
-
|
Forfeited - dividend
equivalents
|
(1,225)
|
-
|
2.17
|
-
|
Vested
|
(730,302)
|
-
|
2.17
|
-
|
Vested - dividend
equivalents
|
(13,171)
|
-
|
2.17
|
-
|
Rights outstanding (unvested) at
the end of the period
|
1,859,348
|
-
|
2.14
|
-
|
Restricted Share Plan
On 31 March 2023, a Director of the
Company was granted a conditional share award of 114,953 shares at
a value of £2.17 per share, with total value £250,000, vesting on
31 March 2026. This was in addition to an award of the same value
made on 31 March 2022. The restricted share plan is a constituent
part of the total compensation for directors of the Company and so
is considered an alternative to cash-based compensation. As such,
the cost for the year of £0.2m is included in underlying
profitability measures.
b) Other employee
expenses
Other employee expenses include
insurance, healthcare, training and recruitment costs.
Staff numbers
The monthly average number of
persons, including Directors, employed by the Group during the year
split by geography was as follows:
|
Group
|
|
2023
No.
|
2022
No.
|
UK
|
226
|
221
|
Other
|
152
|
145
|
Total
|
378
|
366
|
The Company has five employees
(2022: four).
7 Other operating
expenses
Other operating expenses include
expenditure on IT, travel and legal and professional fees. Other
operating expenses also include fees paid to the auditors for the
audit of the Group and relevant subsidiary financial statements and
other fees for other services.
In 2023, exceptional expenses of
£46.8m are included in the Group's other operating expenses.
Further details provided in note 8 (b).
Expenditure relating to low-value
asset leases is required to be disclosed separately and is set out
below.
a) Auditor's
remuneration
During the year, the Company and
the Group received the following services from its external
auditor, Mazars LLP. The table below sets out fees earned by Mazars
LLP in relation to the year ended 31 December 2023.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Audit fees
|
|
|
Fees payable to the external
auditor for the audit of the Company and the consolidated financial
statements
|
0.5
|
0.5
|
Fees payable to the external
auditor for the audit of the accounts of the Company's consolidated
subsidiaries
|
0.9
|
0.9
|
Total audit fees
|
1.4
|
1.4
|
Non-audit fees
|
|
|
Audit-related assurance
services
|
0.2
|
0.2
|
Other non-audit services
|
0.3
|
-
|
Total non-audit fees
|
0.5
|
0.2
|
Total auditor's
remuneration
|
1.9
|
1.6
|
b) Low-value asset
leases
|
Group
|
|
2023
£ m
|
2022
£ m
|
Expense relating to low-value asset
leases
|
|
|
Low-value asset leases
|
0.4
|
0.3
|
8 Exceptional items
Exceptional items in the year ended
31 December 2023 principally relate to costs associated with the
Group's acquisition of EQT Credit and costs incurred in relation to
the acquisition of Energy Capital Partners Holdings LP and
affiliated entities ("ECP"). Exceptional other income relates
to the remeasurement and revaluation of the EQT deferred
consideration payable.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Personnel expenses
|
(0.9)
|
(1.1)
|
Other operating expenses
|
(46.8)
|
(2.1)
|
Total exceptional expenses within
EBITDA
|
(47.7)
|
(3.2)
|
Finance and other
expenses
|
-
|
-
|
Total exceptional
expenses
|
(47.7)
|
(3.2)
|
|
Group
|
|
2023
£ m
|
2022
£ m
|
Finance and other income
|
6.9
|
13.6
|
Total exceptional income
|
6.9
|
13.6
|
a) Exceptional personnel
expenses
In 2023 and 2022, exceptional
personnel expenses include deferred transaction related bonuses and
associated social security costs from the acquisition of EQT Credit
in 2020. Specific bonus payments payable to employees in relation
to the EQT acquisition are exceptional as such awards were only
granted once. The awards incentivise employees to align their goals
with those of the business through being awarded over multiple
periods, hence such expenses will continue to be recognised until
2025.
b) Exceptional other operating
expenses
In 2023, exceptional other
operating expenses include costs incurred in relation to the
acquisition of ECP. Costs include completion fees for the
sponsoring banks on the transaction, structuring and other
accounting and tax advisory costs, documentation costs and costs
associated with the preparation of the shareholder circular in
respect of the ECP transaction and audit of the associated
workstreams. Such costs would have not been incurred if no
transaction had taken place and therefore have been classified as
exceptional. See note 30 (a) for further details of the ECP
transaction.
2022 exceptional other operating
expenses relate to costs incurred in relation to other potential
acquisitions.
c) Exceptional other
income
Exceptional other income of £6.9m
(2022: £13.6m) relates to the remeasurement and revaluation of the
deferred contingent consideration payable and unwind of discount of
the associated liability to EQT AB in relation to the acquisition
of EQT Credit in 2020. The deferred consideration was settled on 13
September 2023 for an amount of £9.4m or €11.0m and was based on
the outcome of certain fundraisings.
The deferred consideration payable
was recognised upon acquisition and is considered exceptional as
there are no similar contractual liabilities to EQT AB. Due to the
contractual arrangement underlying the deferred consideration,
there have been exceptional items related to the valuation in
multiple periods.
9 Depreciation and
amortisation
The following table summarises the
depreciation and amortisation charge during the year.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Depreciation on property, plant and
equipment
|
14.9
|
15.3
|
Amortisation of intangible
assets
|
3.8
|
3.0
|
Total depreciation and amortisation
expense
|
18.7
|
18.3
|
The charge of £3.8m includes £3.0m
amortisation of customer relationship intangible assets acquired
from the acquisition of EQT Credit and £0.8m amortisation of
computer software (2022: £3.0m only includes amortisation of
customer relationship).
The amortisation of customer
relationship intangible assets is excluded from the calculation of
underlying profitability measures in order to distinguish from
underlying performance.
10 Net finance and other income or
expenses
|
Group
|
|
2023
£ m
|
(Restated)
2022
£ m
|
Interest income on term
deposits
|
9.0
|
2.3
|
Finance income on
subleases
|
0.7
|
0.6
|
Net foreign exchange
gains
Finance income on amounts
receivable from related party investors
|
-
0.1
|
1.1
-
|
Other income
|
6.9
|
13.6
|
Total finance and other
income
|
16.7
|
17.6
|
Interest expense on bank overdrafts
and borrowings
|
(1.8)
|
(1.3)
|
Interest expense on lease
liabilities
|
(3.5)
|
(3.4)
|
Net foreign exchange
losses
|
(2.4)
|
-
|
Finance expense on amounts payable
to related party investors
|
(0.4)
|
(2.3)
|
Other expenses
|
(1.0)
|
(0.9)
|
Total finance and other
expenses
|
(9.1)
|
(7.9)
|
Net finance and other income,
including exceptional items
|
7.6
|
9.7
|
a) Other income
Other income in 2023 primarily
relates to the remeasurement and revaluation of the deferred
contingent consideration payable and associated unwind of discount
to EQT AB of £6.9m (2022: £13.6m). Further detail is included in
note 8 (c).
This income is considered
exceptional income, and accordingly is excluded from the
calculation of underlying profitability measures.
b) Other expenses
In 2023, other expenses of £1.0m
include borrowing facility fees for a new revolving credit facility
which are being amortised over the three-year term and fees for an
additional borrowing facility in connection with the ECP
transaction which are being amortised for a year. It also includes
the accelerated amortisation of a previously capitalised borrowing
facility fee, which related to a pre-existing facility, and was
terminated on the commencement of the new facility. Further detail
is included in note 17 (c).
Other expenses of £0.9m in 2022
relate to the amortisation of a previously capitalised borrowing
facility fee.
c) Finance income and expenses on
amounts payable to related party investors
Finance income and expenses
represent amounts due to or from related party investors in Opal
Investments LP, BE VI (French) Co-Invest LP, Maple Tree VII LP and
BDC IV (French) Co-Investment LP (2022: Opal Investments LP and BE
VI (French) Co-Invest LP) under the relevant limited partnership
agreement.
11 Tax expense
(a) Tax expense
Tax charged in the Consolidated
Statement of Profit or Loss:
|
Group
|
|
2023
£ m
|
2022
£ m
|
Current taxation
|
|
|
Current tax - current
year
|
3.2
|
3.4
|
Current tax - prior year
|
(0.2)
|
0.4
|
Total current tax
expense
|
3.0
|
3.8
|
Deferred tax
|
|
|
Deferred tax - current
year
|
14.9
|
4.7
|
Deferred tax - prior
year
|
(2.6)
|
(1.7)
|
Total deferred tax
expense
|
12.3
|
3.0
|
Total tax expense for the
year
|
15.3
|
6.8
|
(b) Reconciliation of tax
expense
The effective tax rate for the year
ended 31 December 2023 is 17.8% (2022: 5.4%). The tax on profit
before tax is different to the standard rate of corporation tax in
the UK of 23.5% (2022: 19.0%) primarily due to timing differences
on taxation of management fee income and tax losses carried forward
in the UK due to certain forms of income that are not subject
to UK corporation tax.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Profit before tax
|
86.0
|
127.4
|
Tax on profit before taxation at
the standard rate of corporation tax in the UK of 23.5% (2022:
19.0%)
|
20.2
|
24.2
|
Non-taxable and non-deductible
items
|
11.4
|
(23.7)
|
Deferred tax adjustments regarding
management fee income and investments
|
(16.2)
|
2.5
|
Effect of foreign tax
rates
|
(1.1)
|
0.2
|
Deferred tax not
recognised
|
3.8
|
5.0
|
Prior year adjustment
|
(2.8)
|
(1.4)
|
Total tax expense for the
year
|
15.3
|
6.8
|
(c) Tax on amounts recognised
directly in other comprehensive income
Tax on amounts recognised in other
comprehensive income relate to deferred tax timing differences on
foreign exchange forward contracts used for hedging
purposes.
|
Group
|
2023
£m
|
2022
£m
|
Tax on amounts recognised in other
comprehensive income
|
(2.2)
|
3.3
|
(d) Tax losses not
recognised
The Group has carried forward
losses of £487.5m (2022: £498.8m) as at 31 December 2023 which have
not been recognised due to the uncertainty of future taxable
profits against which the asset can be utilised.
The Group has an asset of £50.0m
(2022: £33.4m) and the Company an asset of £nil (2022: £0.4m) that
have been recognised where there is an expectation that the tax
losses can be utilised against future profits. See note 22 for
further detail on deferred tax assets recognised.
12 Earnings per share
|
Group
|
2023
|
2022
|
Profit attributable to equity
holders of the Company (£ m)
|
70.7
|
120.6
|
Weighted average number of ordinary
shares for purposes of basic and diluted EPS (m)
|
808.5
|
823.3
|
Basic and diluted earnings per
share (£)
|
0.09
|
0.15
|
The adjusted earnings per share on
underlying profit after tax of £118.5m (2022: £113.2m) based on the
number of shares in issue at 31 December 2023 is £0.15 (2022: £0.14
on underlying profit after tax of £113.2m based on the number of
shares in issue at 31 December 2022).
The underlying profit after tax is
calculated by excluding exceptional items and the amortisation of
intangible assets from within profit after tax. The number of
ordinary shares included in the calculation of earnings per share
excludes shares held by the Group itself and those subject to the
ongoing share buyback programme. Further detail is included in note
23.
13 Property, plant and
equipment
|
Group
|
Right-of-use assets
£ m
|
Leasehold improvements
£ m
|
Computers, furniture and other
£ m
|
Total
£ m
|
Cost
|
|
|
|
|
Balance at 1 January
2023
|
73.1
|
29.8
|
10.5
|
113.4
|
Foreign exchange
|
-
|
(0.2)
|
(0.1)
|
(0.3)
|
Additions
|
5.0
|
0.9
|
2.3
|
8.2
|
Disposals
|
(6.2)
|
(0.3)
|
(0.7)
|
(7.2)
|
Balance at 31 December
2023
|
71.9
|
30.2
|
12.0
|
114.1
|
Accumulated depreciation
|
|
|
|
|
Balance at 1 January
2023
|
(17.6)
|
(4.2)
|
(6.1)
|
(27.9)
|
Foreign exchange
|
-
|
0.1
|
0.1
|
0.2
|
Depreciation
|
(9.6)
|
(3.4)
|
(1.9)
|
(14.9)
|
Disposals
|
1.2
|
0.3
|
0.7
|
2.2
|
Balance at 31 December
2023
|
(26.0)
|
(7.2)
|
(7.2)
|
(40.4)
|
Carrying value at 31 December
2023
|
45.9
|
23.0
|
4.8
|
73.7
|
|
Group
|
Right-of-use assets
£ m
|
Leasehold improvements
£ m
|
Computers, furniture and other
£ m
|
Total
£ m
|
Cost
|
|
|
|
|
Balance at 1 January
2022
|
77.4
|
15.2
|
10.8
|
103.4
|
Foreign exchange
|
-
|
0.4
|
0.1
|
0.5
|
Additions
|
3.4
|
18.9
|
3.4
|
25.7
|
Disposals
|
(7.7)
|
(4.7)
|
(3.8)
|
(16.2)
|
Balance at 31 December
2022
|
73.1
|
29.8
|
10.5
|
113.4
|
Accumulated depreciation
|
|
|
|
|
Balance at 1 January
2022
|
(14.2)
|
(5.6)
|
(7.8)
|
(27.6)
|
Foreign exchange
|
-
|
(0.1)
|
(0.1)
|
(0.2)
|
Depreciation
|
(10.6)
|
(2.7)
|
(2.0)
|
(15.3)
|
Disposals
|
7.2
|
4.2
|
3.8
|
15.2
|
Balance at 31 December
2022
|
(17.6)
|
(4.2)
|
(6.1)
|
(27.9)
|
Carrying value at 31 December
2022
|
55.5
|
25.6
|
4.4
|
85.5
|
The Company has no plant, property
or equipment at 31 December 2023 (2022: nil).
14 Goodwill and intangible
assets
|
Group
|
Goodwill
£ m
|
Customer relationship asset
£ m
|
Total
£ m
|
Cost
|
|
|
|
Balance at 1 January
2023
|
105.1
|
21.2
|
126.3
|
|
|
|
|
Balance at 31 December
2023
|
105.1
|
21.2
|
126.3
|
Accumulated amortisation and
impairment
|
|
|
|
Balance at 1 January
2023
|
-
|
(6.7)
|
(6.7)
|
Amortisation
|
-
|
(3.0)
|
(3.0)
|
Balance at 31 December
2023
|
-
|
(9.7)
|
(9.7)
|
Carrying value
|
|
|
|
Balance at 1 January
2023
|
105.1
|
14.5
|
119.6
|
Balance at 31 December
2023
|
105.1
|
11.5
|
116.6
|
|
Group
|
Goodwill
£ m
|
Customer
relationship asset
£ m
|
Total
£ m
|
Cost
|
|
|
|
Balance at 1 January
2022
|
105.1
|
21.2
|
126.3
|
Balance at 31 December
2022
|
105.1
|
21.2
|
126.3
|
Accumulated amortisation and
impairment
|
|
|
|
Balance at 1 January
2022
|
-
|
(3.7)
|
(3.7)
|
Amortisation
|
-
|
(3.0)
|
(3.0)
|
Balance at 31 December
2022
|
-
|
(6.7)
|
(6.7)
|
Carrying value
|
|
|
|
Balance at 1 January
2022
|
105.1
|
17.5
|
122.6
|
Balance at 31 December
2022
|
105.1
|
14.5
|
119.6
|
(a) Impairment of
goodwill
The goodwill arose following the
acquisition of EQT Credit in 2020. All goodwill is attributable to
the Credit operating segment.
Goodwill is required to be assessed
for impairment annually or more frequently if events or changes in
circumstances indicate potential impairment loss. In performing the
impairment test, management prepares a calculation of the
recoverable amount of goodwill using the value-in-use approach and
compares this to the carrying value. The value-in-use is determined
by discounting the expected future cash flows generated from the
continuing use of the Credit operating segment and is based on the
following key assumptions:
·
|
The cash flows are projected based
on the actual operating results and a five-year estimate from 2024
to 2028. Cash flows for the time thereafter are taken into account
by calculating a terminal value based on the discount factor
applied by the Group.
|
·
|
Operating profits are based on
management approved income, future fundraising, deployment of
capital and costs of the business, taking into account growth plans
for the Credit business as well as past experience.
|
·
|
A pre-tax discount rate of 16.1%
(2022: 15.0%), which is based on the Group's weighted average cost
of capital, is applied in determining the recoverable
amount.
|
·
|
A long-term growth rate of 1.4%
(2022: 4.1%), which is based on an assessment of the private debt
industry rates of growth, and management's experience, is applied
to the terminal value.
|
As at 31 December 2023 significant
headroom is noted, and therefore no impairment is identified (2022:
nil). The Credit business would need to fall short of its projected
profit margins by over 23.5% (2022: 58.5%) over the period 2024 to
2028 (2022: 2023 to 2027) for the goodwill to be
impaired.
(b) Impairment of intangible
assets
Intangible assets that have a
finite useful life are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not
be recovered. Intangible assets are also reviewed annually for
indicators of impairment at each balance sheet date.
The customer relationship that is
included as an intangible asset arose as part of the acquisition of
EQT Credit. In assessing indication of impairment, management uses
indicators such as Credit business profit margins, size of funds,
level of reinvestment and attrition in new funds and the discount
rate applied to the projections.
No indicators of impairment were
identified in 2023.
The Company has no goodwill or
intangibles assets.
15 Carried interest
receivable
The carried interest receivable
relates to revenue which has been recognised by the Group relating
to its share of fund profits through its holdings in
CIPs.
Revenue is only recognised to the
extent it is highly probable that the revenue recognised would not
result in significant revenue reversal of any accumulated revenue
recognised on the completion of a fund. The reversal risk is
mitigated through the application of discounts. If adjustments to
the carried interest receivable recognised in previous periods are
required, they are adjusted through revenue.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Opening balance
|
42.0
|
38.9
|
Income recognised in the
year
|
29.8
|
23.1
|
Foreign exchange movements
recognised as profit or loss
|
(0.4)
|
1.1
|
Foreign exchange movements
recognised as other comprehensive income
|
(0.1)
|
0.1
|
Receipts of carried
interest
|
(4.0)
|
(21.2)
|
Closing balance
|
67.3
|
42.0
|
The Company has no carried
interest receivable.
16 Financial assets
(a) Classification of financial
assets
The following tables analyse the
Group and Company's assets in accordance with the categories of
financial instruments as defined in IFRS 9 "Financial Instruments".
Assets which are not considered as financial assets, for example
prepayments and lease receivables, are also shown in the table in a
separate column in order to reconcile to the face of the
Consolidated Statement of Financial Position.
As at 31 December 2023
|
Group
|
Fair value through profit or
loss
£ m
|
Hedging derivatives
£ m
|
Financial assets at amortised
cost
£ m
|
Assets which are not financial
assets
£ m
|
Total
£ m
|
Fair value of fund
investments
|
301.4
|
-
|
-
|
-
|
301.4
|
Consolidated CLO assets
|
1,313.0
|
-
|
35.8
|
-
|
1,348.8
|
Trade and other
receivables
|
-
|
-
|
124.4
|
17.0
|
141.4
|
Derivative financial
instruments
|
-
|
6.2
|
-
|
-
|
6.2
|
Other investment
|
-
|
-
|
7.5
|
-
|
7.5
|
Cash and cash
equivalents
|
-
|
-
|
238.8
|
-
|
238.8
|
Consolidated CLO cash
|
-
|
-
|
76.0
|
-
|
76.0
|
Total
|
1,614.4
|
6.2
|
482.5
|
17.0
|
2,120.1
|
As at 31 December 2022
|
Group
|
Fair value through profit or
loss
£ m
|
Hedging derivatives
£ m
|
Financial assets at amortised
cost
£ m
|
Assets which are not financial
assets
£ m
|
Total
£ m
|
Fair value of fund
investments
|
273.0
|
-
|
-
|
-
|
273.0
|
Consolidated CLO assets
|
726.3
|
-
|
15.0
|
-
|
741.3
|
Trade and other
receivables
|
-
|
-
|
181.6
|
23.2
|
204.8
|
Derivative financial
instruments
|
-
|
1.0
|
-
|
-
|
1.0
|
Cash and cash
equivalents
|
-
|
-
|
196.0
|
-
|
196.0
|
Term deposits with original
maturities of more than three months
|
-
|
-
|
100.0
|
-
|
100.0
|
Consolidated CLO cash
|
-
|
-
|
24.6
|
-
|
24.6
|
Total
|
999.3
|
1.0
|
517.2
|
23.2
|
1,540.7
|
As at 31 December 2023
|
Company
|
Fair value through profit or
loss
£ m
|
Hedging derivatives
£ m
|
Financial assets at amortised
cost
£ m
|
Assets which are not financial
assets
£ m
|
Total
£ m
|
Trade and other
receivables
|
-
|
-
|
8.0
|
0.4
|
8.4
|
Cash and cash
equivalents
|
-
|
-
|
139.7
|
-
|
139.7
|
Derivative financial
instruments
|
-
|
3.9
|
-
|
-
|
3.9
|
Total
|
-
|
3.9
|
147.7
|
0.4
|
152.0
|
As at 31 December 2022
|
Company
|
Fair value through profit or
loss
£ m
|
Hedging derivatives
£ m
|
Financial assets at amortised
cost
£ m
|
Assets which are not financial
assets
£ m
|
Total
£ m
|
Trade and other
receivables
|
-
|
-
|
20.3
|
-
|
20.3
|
Cash and cash
equivalents
|
-
|
-
|
114.0
|
-
|
114.0
|
Term deposits with original
maturities of more than three months
|
-
|
-
|
50.0
|
-
|
50.0
|
Total
|
-
|
-
|
184.3
|
-
|
184.3
|
(b) Fair value of fund
investments
The investments primarily consist
of loans or commitments made in relation to Bridgepoint Europe VII,
VI and V, Bridgepoint Europe Portfolio IV, Bridgepoint Development
Capital IV and III, and the Bridgepoint Credit Opportunities IV
fund.
The fund investments are measured
at fair value through profit or loss as the business model of each
vehicle is to manage the assets and to evaluate their performance
on a fair value basis.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Opening balance
|
273.0
|
313.7
|
Additions
|
36.3
|
38.5
|
Change in fair value
|
18.5
|
32.9
|
Foreign exchange movements
recognised in profit or loss
|
(1.3)
|
5.8
|
Foreign exchange movements
recognised in other comprehensive income
|
(5.1)
|
8.2
|
Disposals
|
(20.0)
|
(126.1)
|
Closing balance
|
301.4
|
273.0
|
The Company has no investment in
funds at 31 December 2023 (2022: nil).
(c) Other investments
Other investments include, but are
not limited to, loans made to fund portfolio companies. Other
investments (with the exception of certain other investments
designated as fair value through profit or loss) that are held to
collect contractual cash flows and which contain contractual terms
that give rise on specified dates to cash flows that are solely
payments of principal and interest are measured at amortised
cost.
The Company has no other
investments at 31 December 2023 (2022: nil).
(d) CLO assets
The balance shown includes the
gross value of the assets held by CLO 1, CLO 3, CLO 4, CLO 5 and
CLO 6 (2022: CLO 1, CLO 3 and CLO 4), which are consolidated by the
Group, but of which the Group only holds the right and liabilities
in relation to a small portion. The CLO assets are primarily
measured at fair value through profit or loss as the business model
of each vehicle is to manage the assets and to evaluate their
performance on a fair value basis.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Consolidated CLO assets held by the
Group
|
1,424.8
|
765.9
|
Consolidated CLO assets
attributable to third-party investors
|
(1,343.7)
|
(720.7)
|
Group's exposure to consolidated
CLO assets
|
81.1
|
45.2
|
The Company has no investments in
CLO assets at 31 December 2023 (2022: nil).
(e) Derivative financial
assets
|
Group
|
|
2023
£ m
|
2022
£ m
|
Derivative financial
assets
|
|
|
Forward contracts
|
2.3
|
1.0
|
Foreign currency options
|
3.9
|
-
|
Total derivative financial
assets
|
6.2
|
1.0
|
The derivative financial
instruments relate to forward contracts and foreign exchange
options that are used to hedge foreign exchange risk. Further
detail on the hedging programme is set out in note 20
(b).
The Company has foreign exchange
options of £3.9m at 31 December 2023 (2022: nil).
(f) Trade and other
receivables
|
Group
|
Company
|
|
2023
£ m
|
2022
£ m
|
2023
£ m
|
2022
£ m
|
Non-current
|
|
|
|
|
Prepayments
|
1.7
|
1.6
|
-
|
-
|
Trade and other
receivables
|
21.5
|
18.3
|
-
|
-
|
|
23.2
|
19.9
|
-
|
-
|
Current
|
|
|
|
|
Trade receivables
|
17.5
|
12.2
|
4.7
|
-
|
Accrued income
|
20.6
|
19.0
|
-
|
-
|
Prepayments
|
11.4
|
6.2
|
-
|
-
|
Deferred investment
receipts
|
-
|
52.8
|
-
|
-
|
Other receivables
|
68.7
|
94.7
|
3.7
|
20.3
|
|
118.2
|
184.9
|
8.4
|
20.3
|
Total trade and other
receivables
|
141.4
|
204.8
|
8.4
|
20.3
|
There are no material differences
between the above amounts for trade and other receivables and their
fair value as these do not contain any significant financing
components.
i) Other receivables
Other receivables primarily relate
to amounts to be invoiced to funds managed by the Group and their
portfolio companies in relation to costs incurred on their behalf.
Such costs include deal and fundraising expenditure. Amounts
receivable from the funds at year end were £41.2m (2022: £49.7m).
Amounts receivable from portfolio companies of the funds at the end
of the year were £3.8m (2022: £2.7m).
ii) Cost of acquisition
Trade and other receivables also
include the deferred cost of acquisition and consist of expenditure
in excess of the cap within the LPA and fees paid to placement
agents. Such costs are capitalised as a non-current asset and
amortised between three and five years. The movement in the
capitalised costs of acquisition is set out in the following
table.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Opening balance
|
2.8
|
0.1
|
Additions
|
4.0
|
3.6
|
Amortisation
|
(1.9)
|
(0.9)
|
Closing balance
|
4.9
|
2.8
|
iii) Lease receivables
Non-current and current trade and
other receivables include lease receivables on sublet office
premises. Two of the subleases run until the end of the related
head lease and expire on 31 December 2027. The third sublease runs
for 10 years and expires on 16 August 2031. The undiscounted cash
flows for these lease receivables during the year ended 31 December
2023 were £2.5m (2022: £1.4m). The finance income earned on the
subleases during the year ended 31 December 2023 was £0.7m (2022:
£0.6m).
The following table sets out the
maturity analysis of lease receivables, showing undiscounted lease
payments to be received after the reporting date.
|
Group
|
Lease receivables
|
2023
£ m
|
2022
£ m
|
Due within 1 year
|
3.1
|
2.5
|
Due between 1 and 2
years
|
3.6
|
2.5
|
Due between 2 and 3
years
|
3.6
|
2.5
|
Due between 3 and 4
years
|
3.6
|
2.5
|
Due between 4 and 5
years
|
2.0
|
2.5
|
Due after more than 5
years
|
6.0
|
5.2
|
Total undiscounted lease payments
receivables
|
21.9
|
17.7
|
Unearned finance income
|
(3.4)
|
(2.3)
|
Net investment in leases
|
18.5
|
15.4
|
Current
|
2.2
|
2.0
|
Non-current
|
16.3
|
13.4
|
|
18.5
|
15.4
|
The Company has no lease
receivables at 31 December 2023 (2022: nil).
(g) Cash and term
deposits
|
Group
|
Company
|
|
2023
£ m
|
2022
£ m
|
2023
£ m
|
2022
£ m
|
Cash at bank and in hand
|
67.0
|
78.3
|
4.7
|
1.4
|
Money market funds
|
170.9
|
17.7
|
135.0
|
12.6
|
Term deposits with original
maturities of less than three months
|
0.9
|
100.0
|
-
|
100.0
|
Total cash and cash
equivalents
|
238.8
|
196.0
|
139.7
|
114.0
|
Term deposits with original
maturities of more than three months
|
-
|
100.0
|
-
|
50.0
|
Consolidated CLO cash
|
76.0
|
24.6
|
-
|
-
|
Total cash and term
deposits
|
314.8
|
320.6
|
139.7
|
164.0
|
Consolidated CLO cash is cash held
by CLO vehicles consolidated by the Group and is not available for
the Group's operating activities.
There are no material differences
between the carrying amounts and fair values of cash and cash
equivalents, term deposits with original maturities of more than
three months and consolidated CLO cash.
17 Financial
liabilities
(a) Classification of financial
liabilities
The following tables analyse the
Group and Company's financial liabilities in accordance with the
categories of financial instruments defined in IFRS 9 "Financial
Instruments". Liabilities such as deferred income, long-term
employee benefits, social security and other taxes are excluded as
they do not constitute a financial liability and are shown in the
table in a separate column in order to reconcile to the face of the
Consolidated Statement of Financial Position.
As at 31 December 2023
|
Group
|
Fair value through profit or
loss
£ m
|
Hedging derivatives
£ m
|
Financial liabilities at amortised
cost
£ m
|
Liabilities which are not financial
liabilities
£ m
|
Total
£ m
|
Trade and other payables
|
-
|
-
|
47.6
|
98.0
|
145.6
|
Other financial
liabilities
|
50.1
|
-
|
-
|
-
|
50.1
|
Lease liabilities
|
-
|
-
|
81.6
|
-
|
81.6
|
Derivative financial
instruments
|
-
|
1.6
|
-
|
-
|
1.6
|
Consolidated CLO
liabilities
|
1,152.0
|
-
|
14.9
|
-
|
1,166.9
|
Consolidated CLO purchases awaiting
settlement
|
-
|
-
|
176.8
|
-
|
176.8
|
Total
|
1,202.1
|
1.6
|
320.9
|
98.0
|
1,622.6
|
As at 31 December 2022
|
Group
|
Fair value through profit or
loss
£ m
|
Hedging derivatives
£ m
|
Financial liabilities at amortised
cost
£ m
|
Liabilities which are not financial
liabilities
£ m
|
Total
£ m
|
Trade and other payables
|
16.7
|
-
|
51.8
|
60.6
|
129.1
|
Other financial
liabilities
|
49.5
|
-
|
-
|
-
|
49.5
|
Lease liabilities
|
-
|
-
|
83.2
|
-
|
83.2
|
Derivative financial
instruments
|
-
|
13.2
|
-
|
-
|
13.2
|
Consolidated CLO
liabilities
|
597.5
|
-
|
2.6
|
-
|
600.1
|
Consolidated CLO purchases awaiting
settlement
|
-
|
-
|
120.6
|
-
|
120.6
|
Total
|
663.7
|
13.2
|
258.2
|
60.6
|
995.7
|
|
Company
|
As at 31 December 2023
|
Fair value through profit or
loss
£ m
|
Hedging derivatives
£ m
|
Financial liabilities at amortised
cost
£ m
|
Liabilities which are not
financial liabilities
£ m
|
Total
£ m
|
Trade and other payables
|
-
|
-
|
112.2
|
19.5
|
131.7
|
Total financial
liabilities
|
-
|
-
|
112.2
|
19.5
|
131.7
|
|
Company
|
As at 31 December 2022
|
Fair value through profit or
loss
£ m
|
Hedging derivatives
£ m
|
Financial liabilities at amortised
cost
£ m
|
Liabilities which are not
financial liabilities
£ m
|
Total
£ m
|
Trade and other payables
|
-
|
-
|
1.1
|
-
|
1.1
|
Total financial
liabilities
|
-
|
-
|
1.1
|
-
|
1.1
|
(b) Trade and other
payables
|
Group
|
Company
|
|
2023
£ m
|
2022
£ m
|
2023
£ m
|
2022
£ m
|
Amounts due in more than one
year:
|
|
|
|
|
Management incentive
scheme
|
12.6
|
12.9
|
-
|
-
|
Accrued expenses
|
0.5
|
0.7
|
-
|
-
|
|
13.1
|
13.6
|
-
|
-
|
Amounts due within one
year:
|
|
|
|
|
Trade payables
|
9.1
|
1.3
|
-
|
-
|
Deferred contingent consideration
payable
|
-
|
16.7
|
-
|
-
|
Accrued expenses
|
110.9
|
77.7
|
25.5
|
1.1
|
Amounts due to related
parties
|
-
|
1.3
|
106.0
|
-
|
Social security and other
taxes
|
2.9
|
2.8
|
-
|
-
|
Other payables
|
9.6
|
15.7
|
0.2
|
-
|
|
132.5
|
115.5
|
131.7
|
1.1
|
Total trade and other
payables
|
145.6
|
129.1
|
131.7
|
1.1
|
There are no material differences
between the above amounts for trade and other payables and their
fair value as these do not contain any significant financing
components.
i) Deferred contingent
consideration
The deferred contingent
consideration was payable to EQT AB and relates to the outcome of
certain fundraisings that were completed during 2023. On 13
September 2023, the Group remeasured the final liability at that
point, which equated to a release of £6.9m, through the
Consolidated Statement of Profit or Loss and made a final payment
of £9.4m to EQT AB. Further details of the corresponding income
relating to the re-measurement are included in note 8
(c).
ii) Management incentive
scheme
In April 2021, a subsidiary
company, Bridgepoint Credit Holdings Limited, issued shares to
certain employees of the Group as part of a management incentive
scheme. The shares are subject to a put and call option, whereby
the participating employees have the option to sell and the Group
has the option to buy back the shares in the future based upon a
pre-determined formula which considers the amount of funds raised
and the resulting management fees over a five-year period. The
scheme has been accounted for as an other long-term employment
benefit under IAS 19 "Employment Benefits" as it is not linked to
the value of the equity of Bridgepoint Credit Holdings Limited or
equity instruments of other Group members, but is based on the
revenue generated by major funds managed by the Group.
As at 31 December 2023, the expense
and corresponding liability has been based upon funds raised and
expected management fees which exceed the targets at that
date.
iii) Accrued expenses and deferred
income
Accrued expenses and deferred
income include amounts that have been incurred, but not yet
invoiced, employee bonuses and amounts that have been received in
relation to fund management activity for services that have not
been provided, but are owed to the Bridgepoint funds.
The accrued expenses at 31 December
2023 mainly relate to the transaction costs related to the
acquisition of ECP.
iv) Other payables
Other payables include tax and
other provisions.
(c) Borrowings
On 1 June 2023, the Company entered
into a new borrowing facility agreement for £200m for a period of
three years. On 29 December 2023, the Company exercised an option
to increase the facility by a further £50m to a total of £250m. At
31 December 2023, there were no drawn amounts on this facility
(2022: nil).
On 22 September 2023, in connection
with the ECP transaction, the Company entered into an additional
borrowing facility agreement for £75m for one year, with the
opportunity to extend by two further six-month periods. On 21
February 2024, the facility was expanded by a further £50m to a
total of £125m. At 31 December 2023, there were no drawn amounts on
the facility (2022: nil).
The Company has no drawn borrowings
at 31 December 2023 (2022: nil).
(d) Other financial
liabilities
|
Group
|
|
2023
£ m
|
2022
£ m
|
Liabilities held at fair value
through profit and loss:
|
|
|
CLO repurchase
agreements
|
28.5
|
28.1
|
Amount payable to related party
investors in Opal Investments LP
|
8.4
|
10.0
|
Amount payable to related party
investors in intermediate fund holding entities
|
13.2
|
11.4
|
Total
|
50.1
|
49.5
|
i) CLO repurchase
agreements
The Group has entered into an
arrangement to sell and repurchase interests in CLOs 2 and 3. For
CLO 2, the repurchase liability is £12.6m (€14.6m) and will be
repaid at face value as at the scheduled repurchase date of 15
April 2035, unless an earlier date is agreed as per the agreement.
For CLO 3, the repurchase liability is £15.9m (€18.3m) and will be
repaid at face value as at the scheduled repurchase date of 15
January 2036, unless an earlier date is agreed as per the
agreement. The interest payable over the life of the repurchase is
equal to any distributions received by the relevant notes to which
the repurchase agreement relates.
ii) Amounts payable to related
party investors in Opal Investments LP
The Group has an investment in Opal
Investments LP, which is an investor in the Bridgepoint Europe V
fund partnerships. Under the relevant limited partnership
agreement, related party investors have the right to receive 15% of
the residual profits, which are classified as a financial liability
payable to related party investors. Due to the nature of this
agreement, being a contractually agreed profit share to related
party investors, the Group recognises their interest as a financial
liability which is fair valued through profit and loss at each
reporting date.
iii) Amount payable to related
party investors in intermediate fund holding entities
The Group consolidates a number of
limited partnerships through which some of the Group's investment
in funds is held. The Group's interest only constitutes a portion
of the total and therefore other financial liabilities include the
fair value of the amounts due to external parties, who are related
party investors, under the limited partnership agreement. Due to
the nature of this agreement, being a contractually agreed profit
share to related party investors, the Group recognises their
interest as a financial liability which is fair valued through
profit and loss at each reporting date.
The Company has no other financial
liabilities at 31 December 2023 (2022: nil).
(e) Consolidated CLO
liabilities
|
Group
|
|
2023
£ m
|
2022
£ m
|
Liabilities of CLOs consolidated by
the Group (non-current)
|
1,152.0
|
597.5
|
Liabilities of CLOs consolidated by
the Group (current)
|
14.9
|
2.6
|
Total
|
1,166.9
|
600.1
|
Non-current CLO liabilities are
designated as financial liabilities at fair value through profit
and loss.
Consolidated CLO liabilities
represent notes issued by CLOs which are consolidated by and have
been originated by the Group.
(f) Consolidated CLO purchases
awaiting settlement
|
Group
|
|
2023
£ m
|
2022
£ m
|
Consolidated CLO purchases awaiting
settlement
|
176.8
|
120.6
|
Amounts payable for purchases of
CLO assets awaiting settlement are recognised at the point at which
the CLO has a contractual obligation to exchange cash.
(g) Derivative financial
liabilities
|
Group
|
|
2023
£ m
|
2022
£ m
|
Derivative financial
liabilities:
|
|
|
Forward contracts
|
1.6
|
13.2
|
The derivative financial
instruments relate to forward contracts that are used to hedge
foreign exchange risk. Further detail on the Group's hedging
programme is set out in note 20 (b).
(h) Commitments
The Group's undrawn capital
commitments to the Bridgepoint funds at period end are shown in the
table below. Capital commitments are called over time, typically
between one to five years following the entry into the commitment.
Capital commitments are not a financial liability, and the Group
does not have an obligation to pay cash until the capital is
called. Commitments may increase where distributions made by the
fund are recallable.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Private equity funds
|
257.0
|
255.3
|
Credit funds
|
30.3
|
34.4
|
Total commitments
|
287.3
|
289.7
|
18 Lease liabilities
|
Group
|
|
2023
£ m
|
2022
£ m
|
Lease liabilities
|
|
|
Current
|
11.9
|
6.1
|
Non-current
|
69.7
|
77.1
|
Total
|
81.6
|
83.2
|
The lease liabilities relate to
rental payments in respect of the Group's rented offices. The lease
contracts range from 5 to 10 years.
The lease contracts include either
inflationary increases to the rent payable or periodic review of
the rent payable. The liability has been determined at each period
end, based upon expected changes in the contractual rent payable,
as well as any planned exercise of any break or early
exit.
The lease liability is sensitive to
assumptions relating to the selection and application of the IBR
and those relating to the exercise or non-exercise of lease break
clauses.
The determination of the lease term
for each lease involves the Group assessing any extension and
termination options, the enforceability of such options, and
judging whether it is reasonably certain that they will be
exercised. A number of leases contain such clauses. The Group
periodically reassesses the lease term and this assessment is based
on all relevant facts and circumstances. Should a change occur, the
Group modifies the lease liability and associated right of use
asset to reflect the remaining expected cash flows.
For each lease, a conclusion was
reached on the overall likelihood of the option being exercised.
The potential future cash outflows relating to extension options
not included in the measurement of lease liabilities are
approximately £3.3m (2022: £1.6m).
The IBR has been determined by
combining the relevant reference risk free rate for each currency,
consideration of adjustments for country specific risks and
applying a financing spread observable to comparable companies. In
order to validate the reasonableness of the IBR, it has been
compared to the margin payable on the Group's revolving credit
facility, and was found to be comparable. If the IBR had been 1%
higher or lower, the impact on the lease liability would
be:
|
Group
|
|
2023
£ m
|
2022
£ m
|
Increase of 1%
|
(2.5)
|
(3.0)
|
Decrease of 1%
|
2.6
|
3.2
|
The lease payments are allocated
between principal and finance expense. The finance expense is
charged to the profit or loss over the lease period so as to
produce a constant periodic rate of interest on the remaining
balance of the liability.
The Consolidated Statement of
Profit or Loss includes the following amounts relating to the lease
liabilities:
|
Group
|
|
2023
£ m
|
2022
£ m
|
Interest on lease
liability
|
3.5
|
3.4
|
The Company has no lease
liabilities (2022: nil).
19 Fair value
measurement
(a) Fair value
hierarchy
Fair value is the price that would
be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement
date in the principal, or in its absence, the most advantageous
market to which the Group has access to at that date. The fair
value of a liability reflects its non-performance risk.
The Group discloses fair values
using the following fair value hierarchy that reflects the
significance of the inputs used in making the
measurements:
·
|
Level 1: Quoted prices (unadjusted)
in active markets for identical assets or liabilities;
|
·
|
Level 2: Inputs other than quoted
prices included within level 1 that are observable for assets or
liabilities, either directly (i.e. as prices) or indirectly (i.e.
derived from prices); and
|
·
|
Level 3: Inputs for assets or
liabilities that are not based on observable market data (i.e.
unobservable inputs).
|
The following table summarises the
valuation of the Group's financial assets and liabilities by fair
value hierarchy:
|
2023
|
2022
|
Group
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Financial assets
|
|
|
|
|
|
|
|
|
Fair value of fund
investments
|
-
|
-
|
301.4
|
301.4
|
-
|
-
|
273.0
|
273.0
|
Consolidated CLO assets
|
-
|
1,313.0
|
-
|
1,313.0
|
-
|
726.3
|
-
|
726.3
|
Derivative financial
assets
|
-
|
6.2
|
-
|
6.2
|
-
|
1.0
|
-
|
1.0
|
Total
|
-
|
1,319.2
|
301.4
|
1,620.6
|
-
|
727.3
|
273.0
|
1,000.3
|
|
|
|
|
|
|
|
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
Deferred contingent consideration
payable
|
-
|
-
|
-
|
-
|
-
|
-
|
16.7
|
16.7
|
Other financial
liabilities
|
-
|
-
|
50.1
|
50.1
|
-
|
-
|
49.5
|
49.5
|
Consolidated CLO
liabilities
|
-
|
-
|
1,152.0
|
1,152.0
|
-
|
-
|
597.5
|
597.5
|
Derivative financial
liabilities
|
-
|
1.6
|
-
|
1.6
|
-
|
13.2
|
-
|
13.2
|
Total
|
-
|
1.6
|
1,202.1
|
1,203.7
|
-
|
13.2
|
663.7
|
676.9
|
There have not been any transfers
between levels in the fair value hierarchy during the
year.
The following table summarises the
valuation of the Company's financial assets and liabilities by fair
value hierarchy:
|
2023
|
2022
|
Company
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Financial assets
|
|
|
|
|
|
|
|
|
Derivative financial
assets
|
-
|
3.9
|
-
|
3.9
|
-
|
-
|
-
|
-
|
Total
|
-
|
3.9
|
-
|
3.9
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
Derivative financial
liabilities
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(b) Reconciliation of level 3 fair
value measurements of financial assets
A reconciliation of level 3 fair
values for financial assets which represent the Group's interest in
private equity and credit funds, including the Group's investment
in CLOs which are not consolidated, is set out in the table
below:
|
Group
|
Group
|
2023
£m
|
2022
£m
|
Level 3 financial assets at fair
value through profit or loss:
|
|
|
Opening balance
|
273.0
|
313.7
|
Additions
|
36.3
|
38.5
|
Change in fair value
|
18.5
|
32.9
|
Foreign exchange movements
recognised as profit or loss
|
(1.3)
|
5.8
|
Foreign exchange movements
recognised as other comprehensive income
|
(5.1)
|
8.2
|
Disposals
|
(20.0)
|
(126.1)
|
Transfer (to)/from level 1 or
2
|
-
|
-
|
Closing balance
|
301.4
|
273.0
|
The underlying assets in each fund
consist of portfolios of controlling or minority stakes, typically
in private companies, and investments in their debt. Due to the
level of unobservable inputs within the determination of the
valuation of individual assets within each fund, and no observable
price for each investment, such investments are classified as level
3 financial assets under IFRS 13 "Fair Value
Measurement".
A sensitivity analysis of a change
in the value of investments at fair value through profit or loss is
set out in note 19 (e).
(c) Reconciliation of level 3 fair
value measurements of financial liabilities
The valuation methodology for
valuing the consolidated CLO liabilities is based upon internal
discounted cash flow models with unobservable market data inputs,
such as asset coupons, constant annual default rates, prepayment
rates, reinvestment rates, recovery rates and discount rates and
are therefore considered level 3 financial liabilities.
Financial liabilities classified as
level 3 under the fair value hierarchy consist of the deferred
contingent consideration, consolidated CLO liabilities and other
financial liabilities. The valuation of these liabilities is based
on unobservable market data and therefore classified as level
3.
A reconciliation of level 3 fair
values for CLO liabilities at fair value through profit or loss is
set out in the table below.
|
Group
|
2023
£ m
|
2022
£ m
|
Movement in CLO liabilities at fair
value through profit or loss which are level 3:
|
|
|
Opening balance
|
597.5
|
29.7
|
On acquisition
|
-
|
287.9
|
Repayment
|
(52.6)
|
-
|
Drawn
|
582.5
|
52.8
|
Foreign exchange
movements
|
(14.0)
|
24.2
|
Change in fair value
|
38.6
|
(9.0)
|
Transfers (to)/from level 1 or
2
|
-
|
211.9
|
Closing balance
|
1,152.0
|
597.5
|
The Company does not hold any
liabilities at fair value at 31 December 2023 (2022:
nil).
|
2023
|
2022
|
Movement in other financial
liabilities at fair value through profit or loss which are level
3
|
|
|
Opening balance
|
21.4
|
9.1
|
Additions
|
1.3
|
11.1
|
Change in fair value
|
0.5
|
0.3
|
Foreign exchange
movements
|
(0.7)
|
0.9
|
Disposals
|
(0.9)
|
-
|
Transfers (to)/from level 1 or
2
|
-
|
-
|
Closing
|
21.6
|
21.4
|
A reconciliation is not provided
for CLO repurchase agreements on the basis that the movements
between 31 December 2022 and 31 December 2023 relate to
remeasurement and revaluation.
A sensitivity analysis of a change
in the value of CLO liabilities at fair value through profit or
loss is set out in note 19 (e).
(d) Valuations
(i) Private equity fund
investments:
Different valuation methodologies
are used when valuing private equity fund investments:
Valuation Approach
|
|
Earnings
|
The Group primarily uses an
earnings approach where a set of relevant listed companies and
precedent transactions are available.
Earnings multiples are applied to
the earnings of each portfolio company to determine the enterprise
value. The most common measure of earnings is EBITDA. Earnings are
adjusted for non-recurring items and run-rate adjustments to arrive
at maintainable earnings. Earnings are usually obtained from
portfolio company management accounts or forecast/budgeted
earnings, as considered appropriate. When selecting earning
multiples consideration is given to:
·
|
the original transaction
price/entry multiple;
|
·
|
recent transactions in the same or
similar instruments;
|
·
|
relevant comparable listed company
multiples; and
|
·
|
exit expectations and other company
specific factors.
|
The resulting enterprise value is
then adjusted to take into account the capital structure of the
portfolio company, including any assets or liabilities such as cash
or debt that should be included. The fund's share of the value is
calculated by calculating its holding.
|
(ii) Private credit fund
investments:
Different valuation methodologies
are used when valuing private credit fund investments.
Valuation Approach
|
|
Amortising to par method
|
Where a performing loan has been
originated is valued based upon its amortised cost. Provided that
there are no circumstances which indicate material underperformance
or inability of the borrower to pay interest or repay the
principal, the valuation of loans that have been originated is
determined by apportioning any arrangement fees, similar fees or
discount on a linear basis over the anticipated holding period
(which is typically three years).
|
Market price
|
Where a loan is traded in the
market, market prices can be obtained for use in pricing. Market
prices can be obtained from third-party market price aggregation
services or broker quotes where there is an active market. The
extent to which a market is active will depend on the 'depth' of
the pricing (being the number of distinct price quotations
available from different sources). Before the use
of market pricing, consideration is given to anomalies or other
inaccuracies in market pricing and whether there are other
factors that should be considered (for example, recent
transactions).
|
Earnings
|
Where a loan may be impaired an
earnings basis is typically used to determine the enterprise value
of the borrower, following which a waterfall approach is used to
determine the value of the loan. Where there are circumstances
which indicate there is risk of non-performance of the borrower,
the enterprise value of the borrower will typically be determined
in accordance with an earnings methodology (as described above),
following which a waterfall approach is used to determine the value
of the loan.
|
Discounted cash flows
|
Where the Group holds an interest
in the note of a CLO, a discounted cash flow analysis is used to
determine the valuation. Inputs used in the discounted cash flow
analysis include discount rates and those used to project the
expected cash flows relating to the CLO's underlying asset
portfolio including annual loan default rates and associated
recovery rates, prepayment rates, reinvestment rates and
spreads.
|
Other approaches
|
Considering the broad array of debt
instruments that may be held by the funds, it may be deemed
appropriate for other valuation techniques to be utilised in
certain cases.
|
(iii) Consolidated CLO
assets
The consolidated CLO assets are
priced using market price where a loan is traded in the market and
market prices can be obtained for use in pricing. The inputs
include market price aggregation services or broker quotes where
there is an active market. The extent to which a market is active
depends upon the 'depth' of the pricing (being the number of
distinct price quotations available from different sources). Before
the use of market pricing, consideration is given to identify
anomalies or other inaccuracies in market pricing and whether there
are other factors that should be considered (for example, recent
transactions). As at 31 December 2023, 100% (2022: 100%) of the CLO
fund assets were priced using market prices and classified as Level
2.
(iv) Consolidated CLO
liabilities
Where the Group is required to
consolidate the liabilities of a CLO, a net asset approach is used
where the value of the liabilities is driven by the value of the
consolidated loan asset portfolio and any residual cash, accrued
interest and expenses contained within the vehicle. The Group
deemed this financial liability to be Level 3.
(v) Deferred contingent
considerations
The Group uses discounted cash
flows to determine fair value of the deferred contingent
consideration which was paid to EQT AB in relation to the
acquisition of EQT Credit business. Inputs used in the calculation
of the deferred consideration include estimated outcomes of certain
fundraisings, minimum and maximum thresholds and payout ratio set
out in the relevant sale and purchase agreement and discount rate.
The Group deemed this financial liability to be Level 3.
(vi) CLO repurchase
agreements
The Group is party to a sale and
repurchase agreement relating to CLOs; a discounted cash flow
analysis is used to determine the valuation. Unobservable inputs
used in the discounted cash flow approach include discount rates
and forecast cash flows relating to the CLO's underlying asset
portfolio, including assumptions for annual loan default rates and
associated recovery rates, prepayment rates, reinvestment rates and
spreads. The Group deemed this financial liability to be Level
3.
(vii) Other financial
liabilities
The Group enters a limited
partnership agreement with related party investors to contractually
share profits from those partnerships. The liabilities are
calculated using a percentage outlined within the agreement
multiplied by the profit from the partnerships. The valuation
is derived from underlying value of the partnerships, which is
based on the unobservable market data and therefore they are
therefore classified as Level 3.
Derivatives used for hedging, which
are fair valued, are classified as Level 2 fair values as the
inputs are observable.
Further details on estimation
uncertainty in the valuation of investments is set out in note 3
(b).
(e) Valuation inputs and
sensitivity analysis
The number of unique investments
represents the investments that the Group indirectly invests into
through its investments in private equity and credit funds. The
table below sets out information about significant unobservable
inputs used at 31 December 2023 in measuring financial instruments
categorised as level 3 in the fair value hierarchy.
Description
|
Fair value at 31 December 2023
(£m)
|
Fair value at 31 December 2022
(£m)
|
Number
of unique investments
|
|
Valuation technique
|
Significant unobservable
inputs
|
Range
|
|
Sensitivity
|
Effective on fair value at 31
December 2023 (£m)
|
Private
equity fund investments
|
260.9
|
241.3
|
69
|
|
Market Approach
|
Earnings multiple
|
3.7x -19.5x
|
|
+10% Earnings multiple
|
32.1
|
Revenue multiple
|
3.1x - 8.8x
|
|
-10% Earnings multiple
|
(32.7)
|
Other private credit fund
investments
|
25.3
|
16.6
|
20
|
|
Market Approach
|
Earnings multiple
|
6.0x - 26.4x
|
|
+10% Earnings multiple
|
0.2
|
Revenue multiple
|
4.0x - 12.6x
|
|
-10% Earnings multiple
|
(0.2)
|
|
|
|
410
|
|
Other
|
n/a
|
n/a
|
|
n/a
|
n/a
|
Group's investments
in CLOs
that are not consolidated*
|
15.2
|
15.1
|
7
|
|
Discounted Cash Flow
|
Discount rate
|
1.8% -18.0%
|
|
Upside case**
|
0.9
|
Default rate
|
2.0%
|
Recovery rate
|
35.0% - 65.0%
|
Prepayment rate
|
10.0% - 20.0%
|
|
Downside case**
|
(0.7)
|
Reinvestment price
|
99.0%
|
Spread
|
4.5%
|
Total assets
|
301.4
|
273.0
|
|
|
|
|
|
|
|
|
Consolidated CLO
liabilities*
|
1,152.0
|
597.5
|
30
|
|
Discounted Cash Flow
|
Discount rate
|
1.8% -18.0%
|
|
Upside case**
|
23.0
|
Default rate
|
2.0%
|
Recovery rate
|
35.0% - 65.0%
|
|
Prepayment rate
|
10.0% - 20.0%
|
|
Downside case**
|
(18.5)
|
Reinvestment price
|
99.0%
|
Spread
|
4.5%
|
Deferred contingent
consideration
|
-
|
16.7
|
n/a
|
|
Discounted Cash Flow
|
Payout ratio
|
n/a
|
|
n/a
|
n/a
|
Discount rate
|
n/a
|
|
CLO repurchase agreements
|
28.5
|
28.1
|
10
|
|
Discounted Cash Flow
|
Discount rate
|
1.75% - 11.0%
|
|
+10% discount rate
|
0.3
|
|
-10% discount rate
|
(0.2)
|
Other financial
liabilities
|
21.6
|
21.4
|
n/a
|
|
Other
|
Net asset value (NAV)
|
n/a
|
|
+10% of NAV
|
2.5
|
|
-10% of NAV
|
(2.5)
|
Total liabilities
|
1,202.1
|
663.7
|
|
|
|
|
|
|
|
|
*
|
The sensitivity analysis is
performed on the portfolio of notes of CLO vehicles that that the
Group has invested in, including £15.2m of investments in CLOs that
are not consolidated (2022: £15.1m) and £81.1m of investments in
CLOs that are consolidated (2022: £45.3m). The sensitivity analysis
for the investments in the notes of CLOs that are consolidated
impacts the value of the consolidated CLO liabilities (as these are
eliminated from the overall balance) and are accordingly disclosed
in this section of the table.
|
|
**
|
The upside case is based on the
key inputs used in the valuation model disclosed above, being
favourably adjusted from their base value by a factor of 10%. The
downside case adjusts these key inputs by a factor of 10% in the
opposite direction
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
20 Financial risk
management
In its activities, the Group is
exposed to various financial risks: price/valuation risk, market
risk (including exposure to interest rates and foreign currencies),
liquidity risk and credit risk arising from financial
instruments. The Group's senior management is responsible for the
creation and management of an overall risk management policy in the
Group.
The Group Consolidated Statement of
Financial Position is made up predominately of investments into
private equity and credit funds, consolidated CLO assets and
liabilities, cash and cash equivalents, lease liabilities, CLO
purchases awaiting settlement and other financial
liabilities.
The assets of a private equity fund
are controlling or minority stakes, typically in private companies,
and debt in such companies. The assets of credit funds and the
consolidated CLO vehicles are loans to private companies. The
financial risks relating to such investments inherently vary, based
on the nature of the investments (equity or debt), and recovery and
returns from capital invested will depend upon the financial health
and prospects of each underlying investee entity. As part of
their construction, each fund is constructed as a diversified
portfolio of assets, diversified by number of assets, industries
and geographies.
Risk management policies are
established to identify and analyse the risks faced by the Group
and to set appropriate risk limits and controls. Policies are
reviewed on a regular basis to reflect changes in the market
conditions and the Group's activities. The Group, through its
training and management standards and procedures, aims to develop a
disciplined and constructive control environment in which all
employees understand their roles and obligations.
The Company Statement of Financial
Position is made up predominantly of investments in subsidiaries,
cash and cash equivalents, and derivative financial
instruments.
(a) Price and valuation
risk
Price and valuation risk is the
uncertainty about the difference between the reported value and the
price that could be obtained on exit or maturity of an asset or
liability. This principally relates to investments in funds, which
hold portfolios of private equity and debt investments, investments
held by consolidated CLOs, and notes issued by consolidated
CLOs.
This uncertainty arises due to the
use of unobservable inputs in the calculation of fair value, the
performance and financial health of portfolio companies and,
ultimately - in relation to investments in private equity - what a
third party may be willing to pay for the relevant business. There
is less uncertainty for investments in debt as the upside is capped
to the maximum of the principal and interest receipts, whereas
private equity investments have greater potential for larger
changes in their valuation as the upside is not capped.
The Group monitors the performance
of each investment closely. Portfolio monitoring is embedded and
maintains focus throughout the investment life of each company. All
investments are formally reviewed through dedicated Portfolio
Monitoring Committees. The review process involves a rigorous
assessment of the company's financial performance, financial health
(including covenant coverage) and exit prospects. The Group values
all investments in line with the IPEV Guidelines at least twice a
year, and in most cases quarterly. Each investment undergoes the
same detailed valuation process, in accordance with the Group's
valuation policies. Completed valuations are presented and
discussed at the relevant Bridgepoint Valuation Committee for
approval. Valuation methodologies together with the significant
unobservable inputs applied for the Group's financial assets and
liabilities are included in note 19.
The Company has no significant
exposure to price/valuation risk.
(b) Foreign exchange
risk
Foreign exchange risk is the risk
of losses or other adverse effects resulting from a change in a
foreign exchange rate, or from other unfavourable changes in
relation to a foreign currency. The Group is primarily exposed to
two types of foreign exchange risk:
·
|
Transaction risk: the adverse
effect that foreign exchange rate fluctuations can have on a
completed transaction prior to settlement. It is the exchange rate,
or currency, risk associated specifically with the time delay
between entering into a trade or contract and then settling it. As
the majority of the Group's income is denominated in euro, this
means that its income when recognised in pound sterling is subject
to exposure to foreign exchange rate movements over
time.
|
·
|
Translation risk: the risk of
adverse changes in the rates at which assets, liabilities, income
or costs in foreign currencies are translated into the reporting
currency. The Group holds financial assets and liabilities
denominated in currencies other than pound sterling, the
presentational currency of the Group. Consequently, the Group is
exposed to currency risk since the value of financial assets and
liabilities denominated in other currencies will fluctuate due to
change in exchange rate.
|
Hedging of euro management
fees
In order to hedge euro denominated
management fee income, the Group has entered into a series of
forward trades and swap agreements to sell euro and buy pounds
sterling at various dates in the future to reduce the currency
exposure of euro denominated income to future spot rate volatility.
The level of hedging is determined with reference to the amount of
pound sterling denominated costs and dividends. The level of
hedging provides for almost full coverage in 2024, and reducing in
2025 and 2026, which will be increased and extended as part of the
ongoing hedging strategy over time.
The nominal value of open trades at
the year end date to match certain expected future cash flows is
shown in the table below, along with the aggregate mark-to-market
of the year end date.
|
Group
|
2023
£ m
|
2022
£ m
|
Nominal value of forward trades and
swap agreements in pound sterling
|
362.7
|
294.2
|
Mark-to-market value at year
end
|
0.2
|
(9.6)
|
These hedges are in place to match
known future cash flows, and the Group has decided to use cash flow
hedge accounting as allowed and determined under IFRS 9 "Financial
Instruments".
The change in value that has been
recognised as ineffective in the Consolidated Statement of Profit
or Loss, the amount of the effective portion recognised within the
cash flow hedge reserve and amounts released to the Consolidated
Statement of Profit or Loss during the year are shown in the table
below. There was no hedge ineffectiveness.
|
Group
|
2023
£ m
|
2022
£ m
|
Ineffective portion recognised as
profit or loss
|
-
|
-
|
Effective portion recognised as
other comprehensive income
|
8.6
|
(10.5)
|
Reclassified to profit or loss upon
settlement of hedges
|
1.3
|
(5.9)
|
Hedge ineffectiveness could occur
if the amount of hedging is more than the amount of the EUR
denominated income and timing differences between receipt
of the income and settlement of the hedge.
Hedging of euro
investments
The Group's primary exposure to
assets and liabilities in foreign currencies is to investments in
funds and carried interest receivable, which are predominantly held
in euro . In order to remove the risk of volatility in the Group's
earnings on the translation of assets at each year end, the Group
has entered into a series of forward trades and swap agreements to
sell euro and buy pound sterling at various dates in the future
that match the expected date of receipts from the underlying
funds.
These hedges are in place to match
expected future cash flows, and the Group has decided to use hedge
accounting as allowed and determined under IFRS 9 "Financial
Instruments". The hedge ratio is tracked by comparing the nominal
value of outstanding trades to the Group's total exposure to fund
investments and loans denominated in a foreign currency.
The Group's exposure to euro
investments and borrowings at each year end is summarised below,
along with a sensitivity of the impact of a 5% change in the
foreign exchange rate. This analysis excludes the consolidated CLO
assets, which are attributable to third-party investors.
|
Group
|
2023
|
2022
|
Euro denominated investments
(€m)
|
400.7
|
330.7
|
Borrowings (€m)
|
-
|
-
|
Investment hedges (€m)
|
(83.3)
|
(176.7)
|
EUR denominated investments, net
(€m)
|
317.4
|
154.0
|
+/- 5% sensitivity (£m) impact on
profit and net assets
|
13.7
|
6.8
|
The nominal value of open trades at
the year end date is shown in the table below, along with the
aggregate mark-to-market.
|
Group
|
2023
£ m
|
2022
£ m
|
Nominal value of forward trades and
swap agreements in pound sterling
|
74.7
|
156.7
|
Mark-to-market value at year
end
|
0.6
|
(2.6)
|
The profit or loss on the
revaluation of the hedging instrument is recognised together with
the investment returns in the Consolidated Statement of Profit or
Loss.
A change to foreign exchange rates
will impact the fair value of derivative contracts, however an
opposing movement will be seen in the hedged item.
Hedging of dollar cash
consideration
On 6 September 2023, the Group
announced a transaction to add ECP to the Group. As part of the
transaction terms, the Group will deliver a $293m up-front cash
payment to the sellers. The cash consideration is funded partly by
the Group's cash resources in pound sterling and therefore the
Company is exposed to foreign exchange risk until completion. In
mitigation the Company is holding a certain amount of cash in
dollars and has purchased foreign exchange options for the residual
exposure, which give the Company, the right, but not the
obligation, to sell pound sterling and purchase dollars at an
agreed exchange rate on the expiry date.
The foreign exchange options have
been designated as hedging instruments under IFRS 9 "Financial
Instruments" and accordingly the Group uses cash flow hedge
accounting.
The nominal value of the open
trades at the year end date to match certain expected future cash
flows is shown in the table below, along with the aggregate
mark-to-market of the year end date.
|
Group and the Company
|
2023
£ m
|
2022
£ m
|
Nominal value of foreign exchange
options in pound sterling
|
103.3
|
-
|
Mark-to-market value at year
end
|
3.9
|
-
|
These foreign exchange options are
in place to hedge foreign exchange risk to maintain the upside
potential while protecting against adverse changes, and the Group
uses cash flow hedge accounting as allowed and determined under
IFRS 9 "Financial Instruments". The Group designates only changes
in the cash flows or fair value of the cash consideration below a
specified rate (a 'one-sided risk'). Only the intrinsic value of
the foreign exchange options is designated in the hedging
relationship and the time value of the foreign exchange options is excluded from the
hedging relationship.
The change in intrinsic value of
the foreign exchange options, to the extent that is effective, is
recognised in other comprehensive income ("OCI"). As the time value is considered
"aligned" time value, changes in time value of the foreign exchange
options is also recognised in OCI time value. Subsequently the
accumulated OCI time value and the amount deferred in the cash flow
hedge reserve are moved directly as a basis adjustment in the
purchase price allocation of ECP.
The change in value that has been
recognised as ineffective in the Consolidated Statement of Profit
or Loss, the amount of the effective portion recognised within the
cash flow hedge reserve and OCI time value, and amounts moved to
the initial cost as a basis adjustment during the year are shown in
the table below.
There was no material hedge
ineffectiveness noted during the year.
|
Group
|
2023
£ m
|
2022
£ m
|
Ineffective portion recognised as
profit or loss
|
-
|
-
|
Effective portion recognised as
cash flow hedge reserve in other comprehensive income
|
-
|
-
|
Effective portion recognised as
time value in other comprehensive income
|
0.1
|
-
|
Reclassified as a basis
adjustment
|
-
|
-
|
Hedge ineffectiveness could occur
if there are changes in timing of payment of the hedged item, a
reduction in the total amount or prices of the hedged item or a
change in the credit risk of the Company or the bank counterparties
to the purchased options.
The Company has no other
significant exposure to foreign currency risk.
(c) Interest rate risk
The Group's income and operating
cash flows are substantially independent of changes in market
interest rates. The amounts drawn under the Group's revolving
credit agreements, however, bear interest at a floating rate that
could rise and increase the Group's interest cost and debt,
although at 31 December 2023 the Group had no outstanding
borrowings (2022: nil).
If interest rates were to change by
1%, the Group's finance expense applied on the borrowings at year
end would have increased or (decreased) by the amounts set out in
the table below.
|
Group
|
2023
£ m
(+/-)
|
2022
£ m
(+/-)
|
Increase or decrease of
1%
|
-
|
-
|
(d) Credit risk
Credit risk is the risk that a
counterparty is unable to meet their contractual obligations in
full when due. Potential areas of credit risk consist of cash and
cash equivalents, term deposits, including deposits with banks and
financial institutions, short-term receivables, lease receivables,
investments in the CLOs and derivative financial instruments. The
Company and the Group have not experienced any significant defaults
in prior periods.
Group exposure
The Group's exposure to credit risk
is influenced mainly by the individual characteristics of each
counterparty. Expected credit losses are calculated on all of the
Group's financial assets that are measured at amortised cost.
Factors considered in determining whether a default has taken place
include how many days past the due date a payment is,
deterioration in the credit quality of a counterparty, and
knowledge of specific events that could influence a counterparty's
ability to pay.
Expected credit losses are not
expected to be material and there are no financial assets that are
materially impaired.
Cash and cash
equivalents
The Group limits its exposure in
relation to cash and cash equivalents by only dealing with
well-established financial institutions of high-quality credit
standing. At each period end, the Group's cash and cash equivalents
were held with banks that were investment grade credit quality (BBB
or higher).
Investments in CLOs
The Group is required to hold a 5%
interest in such vehicles after they are launched under risk
retention rules. Each CLO portfolio typically invests in 70-100
individual loans issued by private equity borrowers. The portfolios
are highly diversified by geography, industry and sponsor. The
Group's maximum exposure to loss associated with its interest in
the CLOs is limited to the carrying amounts of the notes held by
the Group, which at 31 December 2023 was £96.3m (2022:
£60.3m).
At 31 December 2023, the Group
fully consolidated CLOs 1, 3, 4, 5 and 6 (2022: CLO 1, 3 and 4).
The Group's interests in CLOs 1, 3, 4 and 5 comprise interests in
subordinated notes which incur the first loss if there is any
default within the portfolio of assets by an individual
borrower.
Whilst the Group has entered into
sale and repurchase agreements for CLO 2 and CLO 3, it remains
contractually exposed to the performance of the CLO, however as the
interest is held vertically across all notes of the CLO, the
holdings are more diversified than the Group's interest in CLOs 1,
4 and 5. Under the sale and repurchase agreements, the Group is
subject to credit risk with the counterparty of £29.0m (2022:
£29.7m), however it is holding cash collateral of £29.0m (2022:
£29.7m), reducing the risk.
Investments in private equity and
credit funds, including other investments
The Group's investments in private
equity and credit funds indirectly expose it to credit risk via
loans to investee entities. The maximum exposure to loss associated
with funds is limited to the carrying value at 31 December 2023
which was £286.4m (2022: £257.9m).
Trade and other receivables
(including lease receivables)
Trade and other receivables are
primarily amounts due from funds or amounts due from portfolio
companies. The funds are managed by the Group on behalf of
investors, who have made commitments to the funds. Therefore, trade
and other receivables from the funds are collateralised against
unfunded investor commitments. These commitments can be drawn at
any time. The Group therefore considers the probability of default
to be remote. As such, the Directors consider the Group's credit
exposure to trade and other receivables to be low.
As a lessor the Group has exposure
to payments by lessees. The Group considers there to be a low risk
of default due to the credit quality of the
counterparties.
Carried interest
receivable
The Group's carried interest
receivable represents income expected from CIPs. The Group
considers there to be a remote risk of default on these receivables
on the basis that these amounts are due from the funds for reasons
set out above (e.g. investor commitments).
Company exposure
Potential areas of credit risk for
the Company consist of cash and cash equivalents, including
deposits with banks and financial institutions, derivative
instruments, term deposits and short-term receivables. The maximum
exposure to credit risk at the year end of these financial assets
is their carrying value. The Company seeks to reduce the credit
risk relating to cash balances by only dealing with
well-established financial institutions of high quality
standing.
(e) Liquidity risk
Liquidity risk is the risk
that the Group or Company will encounter difficulty in meeting the
obligations associated with its financial liabilities that are
settled by delivering cash or another financial asset. The Group's
approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the
Group's reputation.
The liquidity outlook is monitored
at least monthly by management and regularly reviewed by the
Board.
The timing of the Group's
management fee receipts and operating expenditure are predictable.
The timing, amount and profits from the Group's investments, into
and divestments from, the funds are inherently less predictable,
however a reasonable period of notice is given to all investors,
including the Group, ahead of drawing of funds.
The Group's policy is to maintain
sufficient amounts of cash and cash equivalents to meet its
commitments at a given date, including for acquisitions and for
refinancing maturing debt.
At 31 December 2023, the Group has
the use of £250.0m of undrawn revolving credit facility which it
uses to manage liquidity. Subsequent to the year-end, the Group
priced $430.0m of US private placement notes, subject to the
closing of the ECP transaction and customary conditions. The
proceeds will be used to provide additional resources to deliver
the Group's strategic growth plans and in part will be used to
refinance certain ECP debt following the ECP transaction, which is
subject to a change of control process. Further detail is included
in note 30 (c).
In addition, at 31 December 2023,
the Group had the use of £75.0m of undrawn bridge facility which
was put in place in connection with the acquisition of ECP, which
was increased to £125.0m subsequent to the year-end, which is
available until the closing of the new US private placement
notes.
Due to the long-term nature of the
Group's assets, the Group seeks to ensure that the maturity of its
debt instruments is matched to free cash generated from the
business.
The Group's financing arrangements
are subject to financial covenants. Further detail is included in
note 21.
The Company has sufficient cash
reserves to assist in managing liquidity. The risk is not
considered to be material as the majority of the balances are held
with Group companies.
The tables below summarise the
Group and Company's financial liabilities by the time frame they
are contractually due to be settled, undiscounted and including
interest payable. This also excludes liabilities which are not
financial liabilities (for example, deferred income).
As at 31 December 2023
|
Group
|
Due within
1 year
£ m
|
Due between
1 and 2 years
£ m
|
Due within
2 and 5 years
£ m
|
Due more than
5 years
£ m
|
Total
£ m
|
Other financial
liabilities
|
-
|
21.6
|
-
|
29.0
|
50.6
|
Derivative financial
liabilities
|
1.2
|
0.4
|
-
|
-
|
1.6
|
Trade and other payables
|
47.6
|
-
|
-
|
-
|
47.6
|
Lease liabilities
|
15.0
|
14.1
|
38.7
|
25.7
|
93.5
|
Consolidated CLO
liabilities
|
96.4
|
63.6
|
1,271.5
|
-
|
1,431.5
|
Consolidated CLO purchases awaiting
settlement
|
176.8
|
-
|
-
|
-
|
176.8
|
|
337.0
|
99.7
|
1,310.2
|
54.7
|
1,801.6
|
As at 31 December 2022
|
Group
|
Due within
1 year
£ m
|
Due between
1 and 2 years
£ m
|
Due within
2 and 5 years
£ m
|
Due more than
5 years
£ m
|
Total
£ m
|
Other financial
liabilities
|
-
|
21.4
|
-
|
29.7
|
51.1
|
Derivative financial
liabilities
|
5.2
|
4.8
|
3.2
|
-
|
13.2
|
Trade and other payables
|
51.8
|
-
|
-
|
-
|
51.8
|
Deferred contingent
consideration
|
16.7
|
-
|
-
|
-
|
16.7
|
Lease liabilities
|
9.4
|
13.6
|
39.7
|
34.9
|
97.6
|
Consolidated CLO
liabilities
|
84.5
|
48.3
|
397.2
|
249.5
|
779.5
|
Consolidated CLO purchases awaiting
settlement
|
120.6
|
-
|
-
|
-
|
120.6
|
|
288.2
|
88.1
|
440.1
|
314.1
|
1,130.5
|
As at 31 December 2023
|
Company
|
Due within
1 year
£ m
|
Due between
1 and 2 years
£ m
|
Due within
2 and 5 years
£ m
|
Due more than
5 years
£ m
|
Total
£ m
|
Trade and other payables
|
131.7
|
-
|
-
|
-
|
131.7
|
As at 31 December 2022
|
Company
|
Due within
1 year
£ m
|
Due between
1 and 2 years
£ m
|
Due within
2 and 5 years
£ m
|
Due more than
5 years
£ m
|
Total
£ m
|
Trade and other payables
|
1.1
|
-
|
-
|
-
|
1.1
|
|
1.1
|
-
|
-
|
-
|
1.1
|
21 Capital management
The primary objective of the
Group's capital management is to ensure that the Company and its
subsidiaries have sufficient capital both now and in the future,
having considered risks in the business and mitigants to those
risks, while managing returns to the Group's shareholders. The
Group also manages its capital position to ensure compliance with
capital requirements imposed by the Financial Conduct Authority
("FCA") and other
regulatory authorities on individual regulated entities.
The Investment Firms Prudential
Regime ("IFPR") applies to
Markets in Financial Instruments Directive ("MiFID") investment firms, collective portfolio management investment
firms and regulated and unregulated holding companies of groups
that contain one or more of the aforementioned firms. The Group and
certain regulated subsidiaries report to the FCA on own funds, the
own funds requirement and a basic liquid asset
requirement.
The capital structure comprises
cash and cash equivalents, borrowings and the capital and reserves
of the Company. Capital and reserves comprise share capital, share
premium, capital contributions, other reserves and retained
earnings. These as set out below.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Cash and cash equivalents (for use
within the Group)
|
238.8
|
196.0
|
Term deposits with original
maturities of more than three months
|
-
|
100.0
|
Net cash
|
238.8
|
296.0
|
Share capital
|
0.1
|
0.1
|
Share premium
|
289.8
|
289.8
|
Capital redemption
reserve
|
0.0
|
-
|
Share-based payment
reserve
|
3.0
|
3.6
|
Cash flow hedge reserve
|
0.9
|
(8.9)
|
Foreign exchange option time value
reserve
|
0.1
|
-
|
Net exchange differences
reserve
|
8.6
|
14.4
|
Retained earnings
|
418.7
|
473.7
|
Equity attributable to equity
holders
|
721.2
|
772.7
|
The Group's financing facilities
are subject to financial covenants. The Group and the Company's
borrowing facility agreements are subject to a ratio of adjusted
EBITDA to net finance charges and ratio of total net debt to
adjusted EBITDA on a rolling annual period.
During the year the Group and the
Company were fully compliant with regulatory capital requirements
and banking covenants.
22 Deferred tax
|
Group
|
|
2023
£ m
|
2022
£ m
|
Deferred tax assets
|
74.6
|
57.9
|
Deferred tax liabilities
|
(108.5)
|
(77.3)
|
Net deferred tax
liability
|
(33.9)
|
(19.4)
|
Deferred tax assets
|
Other timing differences
|
Management fee hedges
|
Losses carried forward
|
Total
|
As at 1 January 2022
|
22.8
|
-
|
25.0
|
47.8
|
Credit to other comprehensive
income
|
-
|
2.0
|
-
|
2.0
|
(Charge)/credit to the Consolidated
Statement of Profit or Loss
|
(0.3)
|
-
|
8.4
|
8.1
|
As at 31 December 2022
|
22.5
|
2.0
|
33.4
|
57.9
|
(Charge) to other comprehensive
income
|
-
|
(2.0)
|
-
|
(2.0)
|
Credit to the Consolidated
Statement of Profit or Loss
|
2.1
|
-
|
16.6
|
18.7
|
As at 31 December 2023
|
24.6
|
-
|
50.0
|
74.6
|
|
|
|
|
| |
Deferred tax liabilities
|
Other timing differences
|
Management fee hedges
|
Management fee income and
investments
|
Capital allowance
|
Total
|
As at 1 January 2022
|
(20.9)
|
(1.3)
|
(42.8)
|
(2.5)
|
(67.5)
|
Credit to other comprehensive
income
|
-
|
1.3
|
-
|
-
|
1.3
|
(Credit)/charge to the Consolidated
Statement of Profit or Loss
|
1.9
|
-
|
(10.8)
|
(2.2)
|
(11.1)
|
As at 31 December 2022
|
(19.0)
|
-
|
(53.6)
|
(4.7)
|
(77.3)
|
(Charge) to other comprehensive
income
|
-
|
(0.2)
|
-
|
-
|
(0.2)
|
Credit/(charge) to the Consolidated
Statement of Profit or Loss
|
4.7
|
-
|
(37.4)
|
1.7
|
(31.0)
|
As at 31 December 2023
|
(14.3)
|
(0.2)
|
(91.0)
|
(3.0)
|
(108.5)
|
Deferred tax liabilities primarily
represent a future tax on the Group's management fees income and a
timing difference arising on the remeasurement of the fair value of
investments. They unwind as management fees become taxable and
investments are realised.
Deferred tax assets primarily
relate to tax losses carried forward, to the extent that they can
be utilised under relevant tax legislation.
Other timing differences primarily
relate to a deferred tax asset on lease liabilities of £20.4m
(2022: £20.8m) and a deferred tax liability on right-of-use assets
amounting to £11.5m (2022: £13.9m). These will unwind over the
period of the lease.
The Company has no deferred tax
assets or liabilities (2022: deferred tax assets of
£0.4m).
The deferred tax has been measured
using the applicable tax rate expected at the point at which the
income or cost will become taxable.
23 Equity
(a) Share capital and
premium
Allotted, called up and fully paid
shares
|
Company
|
|
2023
|
2022
|
|
No.
|
£
|
No.
|
£
|
Ordinary of £0.00005
each
|
794,637,730
|
39,732
|
823,268,774
|
41,163
|
Deferred of £81 each
|
500
|
40,500
|
500
|
40,500
|
Deferred of £1 each
|
1
|
1
|
1
|
1
|
Deferred of £0.01 each
|
1
|
1
|
1
|
0.01
|
Total
|
794,638,232
|
80,234
|
823,269,276
|
81,664
|
Share capital represents the
number of ordinary shares issued in the capital of the Company
multiplied by their nominal value of £0.00005 each. Share premium
substantially represents the aggregate of all amounts that have
ever been paid above nominal value to the Company when it has
issued ordinary shares.
The holders of the ordinary shares
have the right to receive notice of and to attend and vote at any
general meeting of the Company. The shares have one vote per share
on a resolution.
Each ordinary share is eligible for
ordinary course dividends and distributions on a liquidation, and
is generally entitled to participate in a return of capital, in
each case subject to the provisions set out in the Articles of the
Company.
Deferred shares have no rights
other than the right to receive their nominal value in a
liquidation after all other shares have received £1.0m per
share.
(b) Own shares
Own shares are recorded by the
Group when ordinary shares are acquired by the Company and they are
deducted from shareholders' equity. The Company held 171,096
ordinary shares and 501 deferred shares (2022: 886,484 ordinary
shares; 501 deferred shares) within retained earnings as at 31
December 2023 at a cost of nil (2022: nil).
(c) Other reserves
The following table provides a
breakdown of the reserves that are included in the Group and the
Company's other reserves.
|
Group
|
Company
|
|
2023
£ m
|
2022
£ m
|
2023
£ m
|
2022
£ m
|
Cash flow hedge reserve
|
0.9
|
(8.9)
|
-
|
-
|
Foreign exchange option time value
reserve
|
0.1
|
-
|
0.1
|
-
|
Net exchange differences
reserve
|
8.6
|
14.4
|
-
|
-
|
Share-based payment
reserve
|
3.0
|
3.6
|
2.9
|
3.6
|
Merger reserve
|
-
|
-
|
571.4
|
571.4
|
Capital redemption
reserve
|
0.0
|
-
|
-
|
-
|
Total
|
12.6
|
9.1
|
574.4
|
575.0
|
(i) Cash flow hedge
reserve
Hedge reserves consist of the cash
flow hedge reserve and the costs of hedging reserve, such as the
change in fair value related to forward points basis adjustment.
The cash flow hedge reserve is used to recognise the effective
portion of gains or losses on foreign exchange forward contracts
that are designated and qualify as cash flow hedges, as described
in note 20 (b).
(ii) Foreign exchange option time
value reserve
Foreign exchange option time value
reserve represents the time value of the foreign exchange options
as only the intrinsic value of the foreign exchange options is
designated as the hedging instrument. Further detail is included in
note 20 (b).
(iii) Net exchange differences
reserve
Other comprehensive income reported
in the net exchange differences reserve comprises the net foreign
exchange gains and losses on the translation of foreign
operations.
(iv) Share-based payment
reserve
The share-based payment reserve
relates to the accumulated expense from the recognition of
equity-settled share-based payments to employees.
During the year, a £4.7m transfer
was made between share-based payment reserve and retained earnings
which related to the full vesting of the IPO share award, A3 shares
and LTIP awards.
(v) Merger reserve
The merger reserve relates to the
fair value of shares issued by the Company as part of the
restructuring ahead of the Company's IPO in 2021 at fair
value.
(vi) Capital redemption
reserve
On 24 January 2023, the Company
announced an on-market share buyback programme of up to £50.0m. The
sole purpose of the share buyback programme is to reduce the
Company's share capital. The share buyback programme commenced on
24 January 2023 and completed on 11 October 2023 with £50.0m, or
23.6m ordinary shares bought back and cancelled.
On 2 October 2023, the Company
announced a further buyback programme of up to £50.0m that
commenced on 12 October 2023. As at 31 December 2023, in aggregate
5.0m ordinary shares within the second buyback programme have been
bought back and cancelled for £10.2m pursuant to the second share
buyback programme.
24 Dividends
The Company paid a final dividend
of 4.0 pence per share, which equates to £32.7m, in May 2023 in
respect of the second half of 2022.
An interim dividend of 4.4 pence
per share, which equates to £35.3m was paid to shareholders in
September 2023.
The directors have proposed a final
dividend of 4.4 pence per share, to be paid in May 2024 to
shareholders on the register as at 18 April 2024. This equates to
£34.9 million, subject to the share buyback programme.
|
Company
|
|
2023
|
2022
|
Ordinary dividends
|
£ m
|
Pence per share
|
£ m
|
Pence per share
|
Prior interim dividends
paid
|
35.3
|
4.4
|
32.8
|
4.0
|
Proposed final dividends
|
34.9
|
4.4
|
33.0
|
4.0
|
25 Cash flow
information
(a) Cash generated from
operations
|
Group
|
Company
|
|
2023
£ m
|
2022
£ m
|
2023
£ m
|
2022
£ m
|
Profit/(loss) before tax
|
86.0
|
127.4
|
(34.6)
|
2.9
|
Adjustments for:
|
|
|
|
|
Exceptional expenses
|
3.3
|
3.2
|
-
|
0.1
|
Share-based payments
|
4.2
|
0.4
|
-
|
-
|
Loss on disposal of right-of-use
asset
|
1.2
|
0.4
|
-
|
-
|
Depreciation and amortisation
expense
|
17.5
|
18.3
|
-
|
-
|
Net other (income)
|
(10.0)
|
(8.6)
|
(2.7)
|
(1.7)
|
Carried interest
|
(30.0)
|
(24.2)
|
-
|
-
|
Fair value remeasurement of
investments
|
(25.3)
|
(40.7)
|
-
|
-
|
Net exchange
losses/(gains)
|
2.4
|
(1.1)
|
3.4
|
0.1
|
Decrease/(increase) in trade and
other receivables
|
47.2
|
(46.4)
|
117.3
|
86.9
|
Increase/(decrease) in trade and
other payables
|
56.0
|
6.9
|
23.8
|
(22.0)
|
Cash generated from
operations
|
152.5
|
35.6
|
107.2
|
66.3
|
(b) Cash outflows from
leases
|
Group
|
|
2023
£ m
|
2022
£ m
|
Financing
|
10.1
|
7.6
|
Operating
|
0.3
|
0.3
|
Cash outflows from
leases
|
10.4
|
7.9
|
The Company has no leases (2022:
nil).
(c) Reconciliation of liabilities
arising from financing activities
|
|
|
Group
|
|
|
|
1 January 2023
£ m
|
Cash flows
£ m
|
Net additions /
(disposals)
£ m
|
Fair value movements
£ m
|
Foreign exchange movements
£ m
|
31 December 2023
£ m
|
Borrowings
|
-
|
-
|
-
|
-
|
-
|
-
|
Fair value of consolidated CLO
liabilities
|
597.5
|
466.4
|
-
|
88.1
|
-
|
1,152.0
|
Lease liabilities
|
83.2
|
(10.2)
|
8.6
|
-
|
-
|
81.6
|
Total
|
680.7
|
456.2
|
8.6
|
88.1
|
-
|
1,233.6
|
|
|
|
Group
|
|
|
|
1 January 2022
£ m
|
Cash flows
£ m
|
Net additions /
(disposals)
£ m
|
Fair value movements
£ m
|
Foreign exchange movements
£ m
|
31 December 2022
£ m
|
Borrowings
|
-
|
-
|
-
|
-
|
-
|
-
|
Fair value of consolidated CLO
liabilities
|
241.4
|
-
|
340.7
|
(9.0)
|
24.2
|
597.5
|
Lease liabilities
|
84.8
|
(7.6)
|
6.0
|
-
|
-
|
83.2
|
Total
|
326.2
|
(7.6)
|
346.7
|
(9.0)
|
24.2
|
680.7
|
The Company has no borrowings or
lease liabilities (2022: nil).
26 Related party
transactions
(a) Key management
compensation
The Executive Directors are
considered to represent the key management of the Group. The
compensation paid or payable to the key management is set out in
the table below.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Salary, bonus and other
benefits
|
1.9
|
1.6
|
Total
|
1.9
|
1.6
|
(b) Directors'
emoluments
The directors of the Company since
their appointment or the point of their resignation were
remunerated by the Group as set out below. The aggregate value of
remuneration expenses in relation to pensions and share based
payments are less than £0.2m.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Salary, bonus and other
benefits
|
2.4
|
2.1
|
Total
|
2.4
|
2.1
|
(c) Transactions with
Directors
On 31 March 2023, Adam Jones was
granted a conditional share award of 114,953 shares at a value of
£2.17 per share, with total value £250,000, vesting on 31 March
2026.
(d) Carried interest
Fund investors expect certain
members of the Group's senior executive management to invest in
carried interest and co-investment in the Group's third-party funds
to demonstrate alignment of interest, and as such the directors of
the Company have made significant personal commitments from their
own resources to some of these third-party funds. The funds and
CIPs (which are entitled to the carry) are not consolidated by the
Group but are related parties. The returns (in the form of
investment income and capital appreciation) are fully dependent on
the performance of the relevant fund and its underlying
investments.
The Directors of the Company at 31
December 2023 have committed amounts from their personal resources
across multiple funds totalling £21.4m (the Directors at 31
December 2022: £15.6m).
(e) Transactions with
funds
The Bridgepoint funds are related
parties of the Group. Amounts received as fees from and
reimbursement of expenses paid on behalf of the funds during the
year are shown in the table below, along with the amounts
receivable at year end.
|
Group
|
|
2023
£ m
|
2022
£ m
|
Amounts received from
funds
|
298.2
|
264.3
|
Amounts paid on behalf of the
funds
|
28.4
|
19.0
|
Amounts receivable from
funds
|
41.2
|
49.7
|
27 Parent and ultimate controlling
party
The Company is owned by a number of
natural persons and corporates, none of whom own more than 20% of
the issued share capital of the Company. Accordingly, there is no
parent entity nor ultimate controlling party.
28 Subsidiaries and interests in
other entities
The Group consists of the Company
and entities controlled by the Company. This note sets out those
subsidiary entities owned by the Company and that are consolidated,
those which are not, and those structured entities which are
consolidated in the financial statements.
|
Company
|
|
2023
£ m
|
2022
£ m
|
Balance as at 1 January
|
1,023.0
|
1,022.6
|
Increase in investment in
subsidiary and other Group affiliates
|
3.9
|
0.4
|
At 31 December
|
1,026.9
|
1,023.0
|
The Group holds a direct interest
in Bridgepoint Group Holdings Limited as at 31 December 2023
representing 100% (2022: 100%).
Its registered office is referenced
in the table below the list of subsidiaries.
(a) List of
subsidiaries
Name of subsidiary
|
Ref
|
Country of
incorporation
|
Principal
activity
|
Share
class
|
Company's
proportion of ownership interest
|
Bridgepoint Group Holdings
Limited
|
1
|
UK
|
Holding
company
|
Ordinary
shares
|
100%
|
The table below shows details of
subsidiaries owned directly or indirectly by Bridgepoint Group
Holdings Limited as at 31 December 2023 and its ownership interest
in each entity. The registered office of each subsidiary is
referenced to a table below the list of subsidiaries. All
subsidiaries operate in the countries where they are registered or
incorporated and are stated at cost less, where appropriate,
provision for impairment.
Name of subsidiary
|
Ref
|
Country of
incorporation
|
Principal
activity
|
Share
class
|
Company's
proportion of ownership interest
|
101 Investments (GP)
Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
Atlantic GP 1 Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
Atlantic GP 2 Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
Atlantic GP LLP
|
1
|
UK
|
General Partner
|
N/A
|
-
|
BBTPS GP Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BBTPS FP GP Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BBTPS Nominees Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
BC II FP Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
BC II FP SGP Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BC GP 1 Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BC GP 2 Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BC II GP LLP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BC II GP LP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BC II MLP Limited
|
1
|
UK
|
Managing Limited
Partner
|
Ordinary shares
|
100%
|
BC MLP UK Limited
|
1
|
UK
|
Managing Limited
Partner
|
Ordinary shares
|
100%
|
BC SMA Carry GP S.à
r.l.
|
3
|
Luxembourg
|
General Partner
|
Ordinary shares
|
100%
|
BC SMA II Carry GP LLP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BC SMA II FP Limited
|
1
|
UK
|
Limited Partner
|
Ordinary shares
|
100%
|
BCLO Credit Investments I S.à
r.l.
|
3
|
Luxembourg
|
CLO management company
|
Ordinary shares
|
100%
|
BCO II Carry GP LLP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BCO III Carry GP LLP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BCO IV Carry GP LLP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BCO IV FP Limited
|
1
|
UK
|
Limited Partner
|
Ordinary shares
|
100%
|
BCO IV LORAC Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
BDC GP LP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BDC II (SGP) Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BDC II FP GP Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BDC II GP LP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BDC II Limited
|
1
|
UK
|
Limited Partner
|
Ordinary shares
|
100%
|
BDC II Nominees Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
BDC III GP 1 Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BDC III GP 2 Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BDC III GP LLP
|
1
|
UK
|
General Partner
|
N/A
|
-
|
BDC III Limited
|
1
|
UK
|
Limited Partner
|
Ordinary shares
|
100%
|
BDC III Nominees
Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
BDC III SFP GP Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BDC IV Nominees Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
BDC IV Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
BDC GP 1 Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BDC IV GP 2 Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BDC IV MLP Limited
|
1
|
UK
|
Managing Limited
Partner
|
Ordinary shares
|
100%
|
BDC IV GP LLP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BDC IV GP LP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BDC IV SFP GP Limited
BDC V GP LLP
BDC V MLP Limited
BDC V GP SCSp
|
2
1
1
3
|
UK
UK
UK
Luxembourg
|
General Partner
General Partner
Managing Limited
Partner
General Partner
|
Ordinary shares
N/A
Ordinary shares
N/A
|
100%
-
100%
-
|
BDC V GP 2 Limited
BDC Special 1 Limited
|
1
2
|
UK
UK
|
General Partner
General Partner
|
Ordinary shares
Ordinary shares
|
100%
100%
|
BDC Special 2 Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BDC Special GP LLP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BDCP II (Nominees)
Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
BDCP II GP 1 Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BDCP II GP 2 Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BDCP II GP LLP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BDCP II GP LP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BDCP II Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
BDCP II MLP Limited
|
1
|
UK
|
Managing Limited
Partner
|
Ordinary shares
|
100%
|
BDCP II SFP GP Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BDL I Carry GP LLP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BDL II Carry GP S.à
r.l.
|
3
|
Luxembourg
|
General Partner
|
Ordinary shares
|
100%
|
BDL III Carry GP LLP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BDL III FP Limited
|
1
|
UK
|
Limited Partner
|
Ordinary shares
|
100%
|
BDL III LORAC Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
BEP IV (Nominees)
Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
BEP IV FP Limited
|
1
|
UK
|
Limited Partner
|
Ordinary shares
|
100%
|
BEP IV FP SGP Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BEP IV GP 2 Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BEP IV GP LLP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BEP IV GP LP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BEP IV MLP Limited
|
1
|
UK
|
Managing Limited
Partner
|
Ordinary shares
|
100%
|
BEV Germany GP Co
Limited
|
4
|
Guernsey
|
General Partner
|
Ordinary shares
|
100%
|
BEV FP Limited
|
1
|
UK
|
Limited Partner
|
Ordinary shares
|
100%
|
BEV GP LLP
|
1
|
UK
|
General Partner
|
N/A
|
-
|
BEV FP SGP Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BEV GP 2 Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BEV GPC Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BEV MLP Limited
|
1
|
UK
|
Managing Limited
Partner
|
Ordinary shares
|
100%
|
BEV Nominees Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
BEV Nominees II Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
BE VI FP Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
BE VI FP SGP Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BE VI GP 2 Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
BE VI GP LLP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BE VI GP LP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
BE VI MLP Limited
|
1
|
UK
|
Managing Limited
Partner
|
Ordinary shares
|
100%
|
BE VI Nominees Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
BE VI Nominees II
Limited
BE VII GP SCSp
|
1
3
|
UK
Luxembourg
|
Nominee company
General Partner
|
Ordinary Shares
N/A
|
100%
-
|
BG II GP LLP
|
1
|
UK
|
General Partner
|
N/A
|
-
|
BG II Nominees Limited
Bridgepoint Advisers Singapore
Pte. Ltd
|
1
16
|
UK
Singapore
|
Nominee company
Private equity advisory
company
|
Ordinary shares
Ordinary shares
|
100%
100%
|
Bridgepoint AB
|
5
|
Sweden
|
Private equity advisory
company
|
Ordinary shares
|
100%
|
Bridgepoint Advantage
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Advantage MLP
Limited
|
1
|
UK
|
Managing Limited
Partner
|
Ordinary shares
|
100%
|
Bridgepoint Advantage FP
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Advantage FP SGP
Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Advantage GP 2
Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Advantage GP
LLP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
Bridgepoint Advantage GP
LP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
Bridgepoint Advantage Nominees
Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
Bridgepoint Advisers Europe
Limited
|
1
|
UK
|
Private equity advisory
company
|
Ordinary shares
|
100%
|
Bridgepoint Advisers Group
Limited
|
1
|
UK
|
Investment holding
company
|
Ordinary shares
|
100%
|
Bridgepoint Advisers
Holdings
|
1
|
UK
|
Investment holding
company
|
Ordinary shares
|
100%
|
Bridgepoint Advisers II
Limited
|
1
|
UK
|
Private equity management
company
|
Ordinary shares
|
100%
|
Bridgepoint Advisers
Limited
|
1
|
UK
|
Private equity management
company
|
Ordinary shares
|
100%
|
Bridgepoint Advisers UK
Limited
|
1
|
UK
|
Private equity management
company
|
Ordinary shares
|
100%
|
Bridgepoint Capital (Doolittle)
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Capital (Nominees)
Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
Bridgepoint Capital Directorships
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Capital General
Partner LP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
Bridgepoint Capital Group Limited
Employee Benefit Trust
|
1
|
UK
|
Employee Benefit Trust
|
N/A
|
-
|
Bridgepoint Capital Scottish GP
Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Capital Partners
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Capital Verwaltungs
GmbH
|
6
|
Germany
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Credit AD GP S.à
r.l.
|
3
|
Luxembourg
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Credit Advisers UK
Limited
|
1
|
UK
|
Credit fund advisory
company
|
Ordinary shares
|
100%
|
Bridgepoint Credit BOCPIF GP S.à
r.l.
|
3
|
Luxembourg
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Credit Carry
LP
|
2
|
UK
|
Investment holding
company
|
N/A
|
-
|
Bridgepoint Credit Carry GP
LLP
Bridgepoint Credit CLO GP S.à
r.l.
|
2
3
|
UK
Luxembourg
|
General Partner
General Partner
|
N/A
Ordinary shares
|
-
100%
|
Bridgepoint Credit Co-Invest GP
S.à r.l.
|
3
|
Luxembourg
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Credit Empire GP S.à
r.l.
|
3
|
Luxembourg
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Credit France
SAS
|
12
|
France
|
Credit fund management
company
|
Ordinary shares
|
100%
|
Bridgepoint Credit GP Verwaltungs
GmbH
|
13
|
Germany
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Credit Holdings
Limited
|
1
|
UK
|
Investment holding
company
|
Ordinary shares
|
100%
|
Bridgepoint Credit
Limited
|
1
|
UK
|
Credit fund management
company
|
Ordinary shares
|
100%
|
Bridgepoint Credit Management
Limited
|
1
|
UK
|
Credit fund management
company
|
Ordinary shares
|
100%
|
Bridgepoint Credit MSPD GP S.à
r.l.
|
3
|
Luxembourg
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Credit MPD GP S.à
r.l.
|
3
|
Luxembourg
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Credit Nominees
Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
Bridgepoint Credit Opportunities
II GP Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Credit Opportunities
II GP LP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
Bridgepoint Credit Opportunities II
GP GmbH & Co. KG
|
13
|
Germany
|
General Partner
|
N/A
|
-
|
Bridgepoint Credit Opportunities
III GP LP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
Bridgepoint Credit Opportunities
III GP Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Credit Opportunities
IV GP S.à r.l.
|
3
|
Luxembourg
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Credit Opportunities
SICAV GP S.à r.l.
|
3
|
Luxembourg
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Credit Partners
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Credit PPF GP S.à
r.l.
Bridgepoint Credit PS GP S.à
r.l.
|
3
3
|
Luxembourg
Luxembourg
|
General Partner
General Partner
|
Ordinary shares
Ordinary shares
|
100%
100%
|
Bridgepoint Credit Services S.à
r.l.
|
3
|
Luxembourg
|
Credit fund advisory
company
|
Ordinary shares
|
100%
|
Bridgepoint Credit UK
Limited
|
1
|
UK
|
Credit fund advisory
company
|
Ordinary shares
|
100%
|
Bridgepoint Debt Funding
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Debt Management
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Debt Managers
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Development Capital
Limited
Bridgepoint Development Capital V
GP S.a r.l.
|
1
3
|
UK
Luxembourg
|
Dormant entity
General Partner
|
Ordinary shares
Ordinary shares
|
100%
100%
|
Bridgepoint Direct Lending II GP
S.à r.l.
|
3
|
Luxembourg
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Direct Lending III GP
S.à r.l.
Bridgepoint Direct Lending IV GP
S.à r.l.
|
3
3
|
Luxembourg
Luxembourg
|
General Partner
General Partner
|
Ordinary shares
Ordinary shares
|
100%
100%
|
Bridgepoint Europe (SGP)
Ltd
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Europe III FP (GP)
Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Europe III (GP)
Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Europe III GP
LP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
Bridgepoint Europe IV (Nominees) 1
Limited
|
1
|
UK
|
Nominee entity
|
Ordinary shares
|
100%
|
Bridgepoint Europe IV (Nominees)
Limited
|
1
|
UK
|
Nominee entity
|
Ordinary shares
|
100%
|
Bridgepoint Europe IV FP (GP)
Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Europe IV General
Partner L.P.
|
2
|
UK
|
General Partner
|
N/A
|
-
|
Bridgepoint Europe IV General
Partner 'F' L.P.
|
2
|
UK
|
General Partner
|
N/A
|
-
|
Bridgepoint Europe
Limited
|
1
|
UK
|
Limited Partner
|
Ordinary shares
|
100%
|
Bridgepoint Europe Managerial
LLP
|
1
|
UK
|
Limited Partner
|
N/A
|
-
|
Bridgepoint Europe V Finance 1
Limited
Bridgepoint Europe V Finance GP
LLP
|
1
1
|
UK
UK
|
Dormant entity
General Partner
|
Ordinary Shares
N/A
|
100%
100%
|
Bridgepoint Europe VII (GP) S.à
r.l.
|
3
|
Luxembourg
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Europe VII FP
Limited
|
1
|
UK
|
Limited Partner
|
Ordinary shares
|
100%
|
Bridgepoint Europe VII FP SGP
Limited
|
2
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Europe VII GP 2
Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Europe VII GP
LLP
|
1
|
UK
|
General Partner
|
N/A
|
-
|
Bridgepoint Europe VII Nominees
Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
Bridgepoint Europe VII MLP
Limited
|
1
|
UK
|
Managing Limited
Partner
|
Ordinary shares
|
100%
|
Bridgepoint Finance
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Fund Management S.à
r.l.
|
3
|
Luxembourg
|
Private equity management
company
|
Ordinary Shares
|
100%
|
Bridgepoint GmbH
|
6
|
Germany
|
Private equity advisory
company
|
Ordinary shares
|
100%
|
Bridgepoint GP2 LLP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
Bridgepoint Growth I GP
LLP
BDC V Nominees Limited
|
1
1
|
UK
UK
|
General Partner
Nominee entity
|
N/A
Ordinary shares
|
-
100%
|
Bridgepoint Growth
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Growth Nominees
Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
Bridgepoint Holdco 1
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Holdings Group
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Holdings
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Infrastructure
Advisers Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Infrastructure
Development Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Infrastructure
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint International
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Investment Consultants
(Shanghai) Co Ltd
Bridgepoint Loan Fund GP GmbH
& Co. KG
|
8
13
|
China
Germany
|
Private equity advisory
company
General Partner
|
Ordinary shares
N/A
|
100%
-
|
Bridgepoint Loan Fund GP
S.à.r.l.
|
3
|
Luxembourg
|
General Partner
|
Ordinary shares
|
100%
|
Bridgepoint Netherlands
B.V.
Bridgepoint OP GP
Limited
Bridgepoint OP LP
|
9
1
1
|
Netherlands
UK
UK
|
Private equity advisory
company
General Partner
Investment holding
partnership
|
Ordinary shares
Ordinary shares
N/A
|
100%
100%
-
|
Bridgepoint Partners
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint SAS
Bridgepoint Services France
SAS
|
7
12
|
France
France
|
Private equity advisory
company
Private equity advisory
company
|
Ordinary shares
Ordinary shares
|
100%
100%
|
Bridgepoint Private Equity Group
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Private Equity Growth
Fund Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Private Equity
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Property Advisers
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Property Development
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Real Estate Advisers
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Real Estate
Development Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Real Estate
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint Real
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint SA
|
10
|
Spain
|
Private equity advisory
company
|
Ordinary shares
|
100%
|
Bridgepoint Services
Sàrl
|
3
|
Luxembourg
|
Private equity advisory
company
|
Ordinary shares
|
100%
|
Bridgepoint Sp Zoo (in
liquidation)
|
11
|
Poland
|
Private equity advisory
company
|
Ordinary shares
|
100%
|
Bridgepoint Sp Zoo sp.k (in
liquidation)
|
11
|
Poland
|
General Partner
|
N/A
|
-
|
Bridgepoint Structured Credit
Limited
Bridgepoint UK Holdco
Limited
Bridgepoint UK Midco
Limited
|
1
1
1
|
UK
UK
UK
|
Dormant entity
Dormant entity
Dormant entity
|
Ordinary shares
Ordinary shares
Ordinary shares
|
100%
100%
100%
|
Bridgepoint US Holdings
Limited
Bridgepoint US Holdco
Limited
Bridgepoint US Holdco 2
Limited
|
1
14
14
|
UK
United States
United States
|
Dormant entity
Investment holding
company
Investment holding
company
|
Ordinary shares
Ordinary shares
Ordinary shares
|
100%
100%
100%
|
Bridgepoint Ventures
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Bridgepoint, LLC
|
14
|
United States
|
Private equity advisory
company
|
Ordinary shares
|
100%
|
Burgundy GP LLP
|
1
|
UK
|
General Partner
|
N/A
|
-
|
Burgundy GP 2 Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
GeorgeTown (Nominees)
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Horninghaven Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Horningway Limited
|
1
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
HPE II GP LP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
HPE SGP Limited
|
2
|
UK
|
General Partner
|
Ordinary shares
|
100%
|
LORAC 5 Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
LORAC 6 Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
LORAC BC Co-Investment
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
LORAC BC II Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
LORAC BDC III Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
LORAC BDC IV Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
LORAC BDC Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
LORAC BDCP II Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
LORAC BEP IV Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
LORAC BE VI Co-investment
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
LORAC BG I Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
LORAC Carry BC SMA II
Limited
|
1
|
UK
|
Investment holding
company
|
Ordinary Shares
|
100%
|
LORAC Carry BCO IV
Limited
|
1
|
UK
|
Investment holding
company
|
Ordinary Shares
|
100%
|
LORAC Carry BDL III
Limited
|
1
|
UK
|
Investment holding
company
|
Ordinary Shares
|
100%
|
LORAC Eagle Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
LORAC KITE Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
New HPE II GP LP
|
2
|
UK
|
General Partner
|
N/A
|
-
|
Opal Investments LP
|
2
|
UK
|
Investment holding
partnership
|
N/A
|
-
|
PEPCO Services LLP
|
1
|
UK
|
Collective purchasing
negotiator
|
N/A
|
-
|
Ruby Investments (UK)
Limited
|
1
|
UK
|
Dormant entity
|
Ordinary shares
|
100%
|
Sapphire Investments (Guernsey)
Limited
|
4
|
Guernsey
|
Investment holding
company
|
Ordinary shares
|
100%
|
Throttle Nominees
Limited
|
1
|
UK
|
Nominee company
|
Ordinary shares
|
100%
|
Vigny Advisory
|
15
|
France
|
Dormant entity
|
Ordinary shares
|
100%
|
Vigny Participation
|
15
|
France
|
Dormant entity
|
Ordinary shares
|
100%
|
Vigny Holding
|
15
|
France
|
Dormant entity
|
Ordinary shares
|
100%
|
|
|
|
|
|
| |
Ref
|
Registered office
|
1
|
5 Marble Arch, London, W1H 7EJ,
United Kingdom
|
2
|
50 Lothian Road, Festival Square,
Edinburgh, EH3 9WJ, Scotland, United Kingdom
|
3
|
6B Rue du Fort Niedergrünewald,
Luxembourg, L-2226, Luxembourg
|
4
|
1 Royal Plaza, Royal Avenue, St
Peter Port, Guernsey, GY1 2HL, Guernsey
|
5
|
Mäster Samuelsgatan 1, S-111 44
Stockholm , Sweden
|
6
|
Nextower, Thurn-und-Taxis-Platz 6,
60313 Frankfurt, Germany
|
7
|
21 Avenue Kleber, 75116, Paris,
France
|
8
|
Unit 2103-05, ONE ICC, No 999
Middle Huaihai Road, Shanghai, Xuhui District, China
|
9
|
Paulus Potterstraat 22A, 1071 DA,
Amsterdam, Netherlands
|
10
|
Calle Rafael Calvo, 39A-4° - 28010
Madrid , Spain
|
11
|
ul. Rondo ONZ 1, 00-124, Warsaw,
Poland
|
12
|
21 rue La Pérouse, 75116, Paris,
France
|
13
|
C/O Steigmaier
Steuerberatungsgesellschaft mbH, Schleissheimer Str. 12, 85221,
Dachau, Germany
|
14
|
251 Little Falls Drive, City of
Wilmington 19808, Country of New Castle
|
15
|
21 rue La Pérouse, 75017, Paris,
France
|
16
|
10 Anson Road, #22-02,
International Plaza, Singapore (079903)
|
(b) Entities not
consolidated
The table below shows entities that
are indirect subsidiaries of the Company, but the Group does not
have the power to direct activities or rights to variable returns
from the entity and they are therefore not consolidated in the
financial information.
Name of subsidiary:
|
Ref
|
Country of incorporation
|
Principal activity
|
Share class
|
Proportion of ownership
interest
|
Bridgepoint PE CI
Limited
|
1
|
UK
|
Investment holding
company
|
Ordinary shares
|
49.1%
|
Sapphire Sub II A
Limited*
|
4
|
Guernsey
|
Investment holding
company
|
Ordinary shares
|
100%
|
Sapphire Sub II B
Limited*
|
4
|
Guernsey
|
Investment holding
company
|
Ordinary shares
|
100%
|
Sapphire Sub III A
Limited*
|
4
|
Guernsey
|
Investment holding
company
|
Ordinary shares
|
100%
|
Sapphire Sub III B
Limited*
|
4
|
Guernsey
|
Investment holding
company
|
Ordinary shares
|
100%
|
Sapphire Sub III C
Limited*
|
4
|
Guernsey
|
Investment holding
company
|
Ordinary shares
|
100%
|
Sapphire Sub South
Limited*
|
4
|
Guernsey
|
Investment holding
company
|
Ordinary shares
|
25%
|
* Entities are in
liquidation
The profit or loss for the above
entities for the years ended 31 December 2023 and 2022 are not
material.
(c) Consolidated structured
entities
The table below shows details of
structured entities that the Group is deemed to control and are
consolidated within the financial statements for the periods
referenced.
|
Country of incorporation
|
Group's proportion of ownership
interest
|
Nature of interest
|
Periods consolidated
|
Name of structured
entities:
|
|
|
|
|
BE VI (French) Co-Invest
LP
|
United
Kingdom
|
86.2%
|
Limited
partner
|
All
periods
|
BDC IV (French) Co-Investment
LP
|
United
Kingdom
|
51.9%
|
Limited
partner
|
All
periods
|
Bridgepoint CLO 1 DAC
|
Ireland
|
55.2%
|
Subordinated note in the residual class
|
All
periods
|
Bridgepoint CLO 3 DAC
|
Ireland
|
51.0%
|
Subordinated note in the residual class
|
All
periods
|
Bridgepoint CLO IV DAC
|
Ireland
|
61.0%
|
Subordinated note in the residual class
|
All
periods
|
Bridgepoint CLO V DAC
|
Ireland
|
51.8%
|
Subordinated note in the residual class
|
Year
ended 31 December 2023
|
Bridgepoint CLO VI DAC
|
Ireland
|
50.0%
|
Warehouse entity
|
Year
ended 31 December 2023
|
Opal Investments LP
|
United
Kingdom
|
85.0%
|
Limited
partner
|
All
periods
|
Maple Tree VII LP
|
United
Kingdom
|
21.7%*
|
Limited
partner
|
All
periods
|
* A control assessment of Maple
Tree VII LP has been performed in accordance with the Group's
accounting policies and concluded that the Group has power and
exposure to variable returns in profit sharing. As a result, the
Group consolidates the vehicle. Under the limited partnership
agreement, third-party investors have the right to receive a
minimum return on drawn commitments, along with a share of residual
profits from the partnership. As at 31 December 2023, no commitment
had been drawn from the third-party investors.
(d) Associates
Where the Group holds investments
in funds or CIPs that give the Group significant influence, but not
control, through participation in financial and operating policy
decisions, the Group measures investments in associates at fair
value through profit or loss. Information about the Group's
associates measured at fair value is shown below. Where the Group
holds an interest that is greater than 20% the Group is considered
to have significant influence, but not control. These investments
are recorded as financial assets or carried interest receivable
within the Group Consolidated Statement of Financial
Position.
Bridgepoint Growth I SFP
LP
The Group has an interest in a CIP
which has a share of 35.0% of the rights to the carried interest
from the Bridgepoint Growth I fund partnership and is therefore
considered to have significant influence.
|
31 December
|
|
2023
£ m
|
2022
£ m
|
Carried interest
receivable
|
13.6
|
-
|
Carried interest payable
|
(13.5)
|
-
|
Net assets
|
0.1
|
-
|
Result for the year
|
-
|
-
|
Group's interest in the
associate
|
35.0%
|
35.0%
|
The partnership's registered
address is 50 Lothian Road, Edinburgh, EH3 9WJ, UK.
BDC III SFP LP
The Group has an interest in a CIP
which has a share of 25.9% of the rights to the carried interest
from the BDC III fund partnerships and is therefore considered to
have significant influence. Accordingly, the BDC III carry scheme
is considered an associate of the Group. Key financial information
is set out in the table below.
|
31 December
|
|
2023
£ m
|
2022
£ m
|
Carried interest
receivable
|
228.1
|
136.4
|
Carried interest payable
|
(228.0)
|
(136.2)
|
Net assets
|
0.1
|
0.2
|
Result for the year
|
-
|
-
|
Group's interest in the
associate
|
25.9%
|
25.9%
|
The partnership's registered
address is 50 Lothian Road, Edinburgh, EH3 9WJ, UK.
BEP IV SFP LP
Within investments in funds, the
Group has an investment that has an entitlement of 49.7% of the
limited partner commitments of BEP IV SFP LP, a partnership that is
a co-investor into the BEP IV fund partnerships. The Group also
holds 31.8% of the entitlement to the founder partner commitments
of the entity, which currently has no value. Accordingly, BEP IV
SFP LP is considered to be an associate of the Group. Key financial
information about the fund is set out in the table
below.
|
31 December
|
|
2023
£ m
|
2022
£ m
|
Investments at fair
value
|
35.7
|
39.5
|
Other assets
|
2.5
|
3.2
|
Total liabilities
|
(2.5)
|
(2.1)
|
Net assets
|
35.7
|
40.6
|
Profit for the year
|
1.9
|
0.7
|
Group's interest in the
associate
|
49.7%
|
49.7%
|
The partnership's registered
address is 50 Lothian Road, Edinburgh, EH3 9WJ, UK.
BE VI Co-Investment (Feeder)
Partnership LP
The Group has an investment that
has an entitlement of 45.2% of the limited partner commitments of
BE VI Co-Investment (Feeder) Partnership LP. Accordingly, BE VI
Co-Investment (Feeder) Partnership LP is considered to be an
associate of the Group. Key financial information about the fund is
set out in the table below.
|
31 December
|
|
2023
£ m
|
2022
£ m
|
Investments at fair
value
|
14.5
|
12.4
|
Other assets
|
0.1
|
1.5
|
Total liabilities
|
(0.2)
|
(0.1)
|
Net assets
|
14.4
|
13.8
|
Profit for the year
|
0.9
|
2.8
|
Group's interest in the
associate
|
45.2%
|
45.6%
|
The partnership's registered
address is 50 Lothian Road, Edinburgh, EH3 9WJ, UK.
Other associates
In addition to the associates
listed above, there are four other entities where the Group
considers itself to have significant influence with ownership above
20%. These are immaterial individually and in aggregate and have no
balances or transactions associated with them for the years
presented.
(e) Subsidiaries not
audited
For the year ended 31 December 2023
the following UK subsidiaries were expected to be entitled to
exemption from audit under section 479A of the Companies Act 2006
relating to subsidiary companies:
|
|
|
|
101 Investments (GP)
Limited
|
BDC III GP 2 Limited
|
BDCP II MLP Limited
|
Bridgepoint Europe III FP (GP)
Limited
|
Atlantic GP 1 Limited
|
BDC III Limited
|
BDCP II SFP GP Limited
|
Bridgepoint Europe IV FP (GP)
Limited
|
Atlantic GP LLP
|
BDC III SFP GP Limited
|
BE VI FP SGP Limited
|
Bridgepoint Europe Managerial
LLP
|
BBTPS FP GP Limited
|
BDC IV MLP Limited
|
BE VI GP 2 Limited
|
Bridgepoint Europe VII FP
Limited
|
BC GP 2 Limited
|
BDC IV SFP GP Limited
|
BE VI MLP Limited
|
Bridgepoint Europe VII FP SGP
Limited
|
BC II FP SGP Limited
|
BDC Special 1 Limited
|
BEP IV FP SGP Limited
|
Bridgepoint Europe VII GP 2
Limited
|
BC II MLP Limited
|
BDC Special 2 Limited
|
BEP IV GP 2 Limited
|
Bridgepoint Europe VII MLP
Limited
|
BDC II FP GP Limited
|
BDC Special GP LLP
|
BEP IV MLP Limited
|
Burgundy GP LLP
|
BDC II Limited
|
BDCP II GP 2 Limited
|
BEV FP SGP Limited
|
|
29 Unconsolidated structured
entities
A structured entity is an entity
that has been designed so that voting or similar rights are not the
dominant factor in deciding who controls the entity, such as when
any voting rights relate to administrative tasks only and the
relevant activities are directed by means of contractual
arrangements.
The Group has determined that where
the Group holds an investment, loan, fee receivable, commitment
with an investment fund or CIP with a right to carried interest,
this represents an interest in a structured entity. Where the Group
does not hold an investment in the structured entity, the Group has
determined that the characteristics of control are not met. As set
out in note 3 (a), CIPs that currently have value are those where
the Group is exposed to variable returns of below 50% with the main
beneficiaries of the CIP being the other participants.
The disclosure below includes CLO 2
for the years ended 31 December 2022 and 31 December 2023, which is
not consolidated in either year, as explained in note 3
(a).
The Group acts in accordance with
pre-determined parameters set out in various agreements and the
decision-making authority is well defined, including third-party
rights in respect of the investment manager. The agreements include
management fees that are commensurate with the services provided
and performance fee arrangements that are industry standard. As
such the Group is acting as agent on behalf of these investors and
therefore these entities are not consolidated into the Group's
financial statements.
The Group's interest in, and
exposure to, unconsolidated structured entities, including
outstanding management fees, is detailed in the table below and
recognised within trade and other receivables in the Consolidated
Statement of Financial Position. The carried interest receivable is
included within the Consolidated Statement of Financial
Position.
at 31 December
|
Value of the Group's co-investments
at year end
£ m
|
Typical Group commitment
to the fund as %
|
Total investor commitments
£ bn
|
Net asset value of the funds
at year end
£ bn
|
Management fees received by the
Group
£ m
|
Typical management
fee range
%
|
Carried interest rate
%
(where applicable)
|
Typical Group share of carried
interest
%
|
Group accrued carried interest
receivable at year end
£ m
|
Group
maximum exposure to loss at
year end
£ m
|
2023
|
|
|
|
|
|
|
|
|
|
|
Private equity funds
|
260.9
|
<2%
|
28.9
|
16.7
|
205.0
|
0.75 to
2.00%
|
Generally up to 20% of profits over
threshold
|
Up to 35%
|
64.7
|
325.6
|
Credit funds
|
121.6
|
<9%
|
6.9
|
4.4
|
56.5
|
0.50 to
1.75%
|
Generally up to 20% of profits over
threshold
|
Up to 35%
|
2.6
|
124.2
|
|
382.5
|
|
35.8
|
21.1
|
261.5
|
|
|
|
67.3
|
449.8
|
at 31 December
|
Value of the Group's co-investments
at year end
£ m
|
Typical Group commitment to the fund
as %
|
Total investor commitments
£ bn
|
Net asset value of the funds
at year end
£ bn
|
Management fees received by the
Group
£ m
|
Typical management
fee range
%
|
Carried interest rate
%
(where applicable)
|
Typical Group share of carried
interest
%
|
Group accrued carried interest
receivable at year end
£ m
|
Group
maximum exposure to loss at
year end
£ m
|
2022
|
|
|
|
|
|
|
|
|
|
|
Private equity funds
|
241.3
|
<2%
|
28.2
|
15.5
|
179.5
|
0.75 to 2.00%
|
Generally up to 20% of profits over
threshold
|
Up to 35%
|
39.4
|
280.7
|
Credit funds
|
76.9
|
<9%
|
6.0
|
2.8
|
50.8
|
0.50 to 1.75%
|
Generally up to 20% of profits over
threshold
|
Up to 35%
|
2.6
|
79.5
|
|
318.2
|
|
34.2
|
18.3
|
230.3
|
|
|
|
42.0
|
360.2
|
30 Events after the reporting
period
(a) ECP transaction
On 6 September 2023, the Group
announced a transaction to add ECP to the Group to accelerate
Bridgepoint's strategic diversification. The transaction
establishes a third and complementary growth pillar for the Group.
ECP is a leading North American infrastructure investor with a
market-leading position in the highly sought-after energy
transition and sustainability focussed investing ecosystem.
Further details of the transaction were set out in the shareholder
circular dated 2 October 2023, which can be found at our website:
www.bridgepoint.eu/shareholders.
The transaction was approved by the
Company's shareholders on 19 October 2023 and it was announced on
20 October 2023 that required investor consents to the transaction
had been received in respect of ECP Fund III, IV and V. As
announced on 4 March 2024, the sole outstanding regulatory
clearance in respect of the transaction is a clearance applied for
by ECP ControlCo, LLC from the Federal Energy Regulatory
Commission, and closing of the transaction is expected to occur in
Q2 2024.
As the transaction was not
completed before 31 December 2023, the Group's Consolidated
Statement of Profit or Loss for the year ended 31 December 2023
does not include any revenue, profit or loss relating to the ECP
business, other than transaction costs of £43.5m incurred by the
Group during the year, which have been incurred as other operating
expenses and personnel expenses. Such transaction costs are
classified as exceptional and so are excluded from underlying
performance metrics. Further details exceptionals are included in
note 8.
The Group will apply the
acquisition method to account for the transaction in accordance
with IFRS 3 "Business Combinations". The Group is required to
determine what is part of the business combination transaction, to
recognise and measure the identified net assets acquired, and to
determine the consideration transferred. As the transaction had not
yet completed when the Annual Report was authorised for issue, the
Group is unable to reasonably estimate the fair value of net assets
acquired, the fair value of consideration transferred and the
resulting goodwill and intangible assets.
(b) Share buyback
programme
On 2 October 2023, the Company
announced a second share buyback programme of up to £50.0m. The
share buyback programme commenced on 12 October 2023 following
completion of the previous programme, and is expected to complete
on or before 31 July 2024. Between 31 December 2023 and 12 March
2024, being the latest practicable date before the publication of
these financial statements, a further 834,518 ordinary shares have
been bought back in aggregate for £2.3m pursuant to the share
buyback programme. Of these shares, in aggregate 834,518 have been
cancelled as at 12 March 2024.
(c) US private placement
notes
On 7 March 2024, the Group priced
$430.0m of new US private placement notes. The proceeds from the
new notes will be used to provide additional resources to deliver
the Group's strategic growth plans. The proceeds will also be used
to refinance any portion of the $225.0m private placement notes
that will transfer to the Group as part of the ECP transaction
perimeter. Under a change of control process in these
existing notes, note holders can opt for repayment from completion
of the ECP transaction. The new notes will be structured in four
tranches with maturities of 3, 5, 7 and 10 years and an average
coupon of 6.17 per cent. The receipt of funding for the new notes
is expected during Q2 2024, subject to the completion of the ECP
transaction and customary conditions.
There have been no other material
subsequent events since 31 December 2023.
Non-statutory Consolidated Statement
of Financial Position, excluding CLOs
as at 31 December
|
|
(Unaudited)
2023
£ m
|
(Unaudited)
2022
£ m
|
Assets
|
|
|
|
Non-current assets
|
|
|
|
Property, plant and
equipment
|
|
73.7
|
85.5
|
Goodwill and intangible
assets
|
|
116.6
|
119.6
|
Carried interest
receivable
|
|
67.3
|
42.0
|
Fair value of fund
investments*
|
|
382.5
|
318.2
|
Trade and other
receivables
|
|
23.2
|
19.9
|
Total non-current assets
|
|
663.3
|
585.2
|
Current assets
|
|
|
|
Trade and other
receivables
|
|
118.2
|
184.9
|
Derivative financial
assets
|
|
6.2
|
1.0
|
Other investments, at fair
value
|
|
7.5
|
-
|
Cash and cash
equivalents
|
|
238.8
|
196.0
|
Term deposits with original
maturities of more than three months
|
|
-
|
100.0
|
Total current assets
|
|
370.7
|
481.9
|
Total assets
|
|
1,034.0
|
1,067.1
|
Liabilities
|
|
|
|
Non-current liabilities
|
|
|
|
Trade and other payables
|
|
13.1
|
13.6
|
Other financial
liabilities
|
|
50.1
|
49.5
|
Lease liabilities
|
|
69.7
|
77.1
|
Deferred tax liabilities
|
|
33.9
|
19.4
|
Total non-current
liabilities
|
|
166.8
|
159.6
|
Current liabilities
|
|
|
|
Trade and other payables
|
|
132.5
|
115.5
|
Lease liabilities
|
|
11.9
|
6.1
|
Derivative financial
liabilities
|
|
1.6
|
13.2
|
Total current
liabilities
|
|
146.0
|
134.8
|
Total liabilities
|
|
312.8
|
294.4
|
Net assets
|
|
721.2
|
772.7
|
Equity
|
|
|
|
Share capital
|
|
0.1
|
0.1
|
Share premium
|
|
289.8
|
289.8
|
Retained earnings
|
|
418.7
|
473.7
|
Other reserves**
|
|
12.6
|
9.1
|
Total equity
|
|
721.2
|
772.7
|
*
|
The fair value of fund investments
includes the Group's own exposures in consolidated CLOs 1, 3, 4, 5
and 6 of £81.1m (2022: CLOs 1, 3 and 4 of £45.2m) as at 31 December
2023.
|
**
|
The Group has changed the
presentation of equity to aggregate other reserves. A breakdown of
other reserves is included in note 23 (c).
|
|
|
|
| |
This unaudited non-statutory
consolidated statement of financial position applies all of the
measurement and recognition requirements of IFRS and the accounting
policies of the Group, except for the requirement to consolidate
CLOs. CLOs are presented as an investment held at fair value in
line with how they are managed by the Group, rather than being
consolidated in accordance with IFRS 10 "Consolidated Financial
Statements".
Non-statutory Consolidated Statement
of Cash Flows, excluding CLOs
for the year ended 31
December
|
|
Unaudited
2023
£ m
|
Unaudited
2022
£ m
|
Cash flows from operating
activities
|
|
|
|
Cash generated from
operations
|
|
152.5
|
35.6
|
Tax paid
|
|
(4.7)
|
(1.7)
|
Net cash inflow from operating
activities
|
|
147.8
|
33.9
|
Cash flows from investing
activities
|
|
|
|
Investment in term deposits with
original maturities of more than three months
|
|
100.0
|
(100.0)
|
Receipts from
investments
|
|
30.8
|
74.3
|
Purchase of investments
|
|
(46.9)
|
(41.2)
|
Purchase of other
investments
|
|
(7.5)
|
-
|
Interest received
|
|
8.5
|
3.3
|
Payment for foreign exchange option
premium
|
|
(3.8)
|
-
|
Investments in CLOs
|
|
(35.6)
|
(8.7)
|
Cash acquired on consolidation of
intermediate fund holding entities
|
|
-
|
1.2
|
Payments for property, plant and
equipment and intangible assets
|
|
(4.0)
|
(22.6)
|
Net cash flows from investing
activities
|
|
41.5
|
(93.7)
|
Cash flows from financing
activities
|
|
|
|
IPO costs
|
|
-
|
(1.8)
|
Dividends paid to shareholders of
the Company
|
|
(68.0)
|
(62.8)
|
Share buyback
|
|
(60.2)
|
-
|
Drawings from related party
investors in intermediate fund holding entities
|
|
1.2
|
3.8
|
Principal elements of lease
payments
|
|
(6.6)
|
(4.1)
|
Interest paid
|
|
(7.2)
|
(4.7)
|
Net cash flows from financing
activities
|
|
(140.8)
|
(69.6)
|
Net increase/(decrease) in cash and
cash equivalents
|
|
48.5
|
(129.4)
|
Cash and cash equivalents at the
beginning of the year
|
|
196.0
|
323.1
|
Effect of exchange rate changes on
cash and cash equivalents
|
|
(5.7)
|
2.3
|
Cash and cash equivalents at the
end of the year
|
|
238.8
|
196.0
|
This unaudited non-statutory
consolidated statement of cash flows applies all of the measurement
and recognition requirements of IFRS and the accounting policies of
the Group, except for the requirement to consolidate CLOs.
Consolidated CLO cash is not presented in the opening or closing
cash positions in this statement and all cash flows relate to the
non-CLO activities of the Group.
Directors
The directors of Bridgepoint Group
plc at 14 March 2023 are:
William Jackson
Raoul Hughes
Archie Norman
Adam Jones
Angeles
Garcia-Poveda
Carolyn McCall
Tim Score
Cyrus
Taraporevala
Forward Looking Statements
This announcement may include
forward-looking statements. Forward-looking statements are
statements that are not historical facts and may be identified by
words such as "plans", "targets", "aims", "believes", "expects",
"anticipates", "intends", "estimates", "will", "may", "continues",
"should" and similar expressions. These forward-looking statements
reflect, at the time made, the beliefs, intentions and current
targets/aims of Bridgepoint Group plc (the "Company"). Forward-looking statements
involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future.
The forward-looking statements in this announcement are based upon
various assumptions. Although the Company believes that these
assumptions were reasonable when made, these assumptions are
inherently subject to significant known and unknown risks,
uncertainties, contingencies and other important factors which are
difficult or impossible to predict and are beyond its control.
Forward-looking statements are not guarantees of future performance
and such risks, uncertainties, contingencies and other important
factors could cause the actual outcomes and the results of
operations, financial condition and liquidity of the Company, its
subsidiary undertakings or the industry to differ materially from
those results expressed or implied in this announcement by such
forward-looking statements. No representation or warranty, express
or implied, is made that any of these forward-looking statements or
forecasts will come to pass or that any forecast result will be
achieved. Undue influence should not be given to, and no reliance
should be placed on, any forward-looking statement. No statement in
this announcement is intended to be nor may be construed as a
profit forecast. Neither the Company, nor any of its subsidiaries
nor any of their affiliates, nor any of its or their officers,
employees, agents or advisers, undertake to publicly update or
revise any such forward-looking statement, except to the extent
required by applicable law.
Issued by Bridgepoint Group
plc
LEI:
213800KFNMVI8PDZX472
Registered in England and Wales
no. 11443992.
Registered office: 5 Marble Arch,
London, W1H 7EJ