REG - 3i Group PLC - 3i Group Half-year results to 30 September 2017 <Origin Href="QuoteRef">III.L</Origin> - Part 3
16/11/2017 07:06
- Part 3: For the preceding part double click ID:nRSP6442Wb
411 994
Total assets 7,186 6,713
Liabilities
Non-current liabilities
Trade and other payables (25) (24)
Carried interest and performance fees payable (144) (124)
Loans and borrowings (575) (575)
Retirement benefit deficit (22) (22)
Provisions (1) (2)
Total non-current liabilities (767) (747)
Current liabilities
Trade and other payables (88) (103)
Carried interest and performance fees payable (8) (23)
Provisions (3) (4)
Total current liabilities (99) (130)
Total liabilities (866) (877)
Net assets 6,320 5,836
Equity
Issued capital 719 719
Share premium 786 785
Capital redemption reserve 43 43
Share-based payment reserve 25 30
Translation reserve 219 218
Capital reserve 3,826 3,390
Revenue reserve 728 689
Own shares (26) (38)
Total equity 6,320 5,836
Condensed consolidated statement of changes in equity
For the six months to Share-
30 September 2017
(unaudited)
Capital based
Share Share redemption payment Translation Capital Revenue Own Total
capital premium reserve reserve Reserve reserve reserve shares Equity
£m £m £m £m £m £m £m £m £m
Total equity at the start of 719 785 43 30 218 3,390 689 (38) 5,836
the period
Profit for the period - - - - - 576 81 - 657
Exchange differences on translation of foreign operations - - - - 1 - - - 1
Re-measurements of defined benefit plans - - - - - (3) - - (3)
Total comprehensive incomefor the period - - - - 1 573 81 - 655
Share-based payments - - - 6 - - - - 6
Release on exercise/forfeiture of share awards - - - (11) - - 11 - -
Loss on sale of own shares - - - - - (12) - 12 -
Ordinary dividends - - - - - (24) (53) - (77)
Additional dividends - - - - - (101) - - (101)
Issue of ordinary shares - 1 - - - - - - 1
Total equity at the end of 719 786 43 25 219 3,826 728 (26) 6,320
the period
For the six months to Share-
30 September 2016
(unaudited)
Capital based
Share Share redemption payment Translation Capital Revenue Own Total
capital premium reserve reserve Reserve1 reserve reserve shares Equity
£m £m £m £m £m £m £m £m £m
Total equity at the start of 719 784 43 32 229 2,080 622 (54) 4,455
the period
Profit for the period - - - - - 937 86 - 1,023
Exchange differences on translation of foreign operations from continuing operations - - - - (3) - - - (3)
Re-measurements of defined benefit plans from continuing operations - - - - - (19) - - (19)
Other comprehensive income from discontinued operations - - - - 5 - - - 5
Total comprehensive income for the period - - - - 2 918 86 - 1,006
Share-based payments - - - 12 - - - - 12
Release on exercise/forfeiture of share awards - - - (18) - - 18 - -
Loss on sale of own shares - - - - - (15) - 15 -
Ordinary dividends - - - - - - (52) - (52)
Additional dividends - - - - - (102) - - (102)
Issue of ordinary shares - 1 - - - - - - 1
Total equity at the end of 719 785 43 26 231 2,881 674 (39) 5,320
the period
1 Translation reserve balance at 30 September 2016 included £12 million in relation to discontinued operations (31 March 2016: £7 million).
Condensed consolidated cash flow statement
Six months to Six months to
30 September 30 September
2017 2016
(unaudited) (unaudited)
£m £m
Cash flow from operating activities
Purchase of investments (267) (286)
Proceeds from investments 175 208
Net cash flow (to)/from investment entity subsidiaries (240) 151
Net cash outflow from derivatives (13) -
Portfolio interest received - 4
Portfolio dividends received 16 34
Portfolio fees received 8 2
Fees received from external funds 24 46
Carried interest and performance fees received 5 29
Carried interest and performance fees paid (17) (12)
Acquisition related earn-out charges - (1)
Operating expenses paid (71) (70)
Co-investment loans received 1 -
Income taxes paid (1) (1)
Net cash flow from operating activities (380) 104
Cash flow from financing activities
Issue of shares 1 1
Repurchase of short-term borrowings - (15)
Dividend paid (178) (154)
Interest received 1 1
Interest paid (11) (11)
Net cash flow from financing activities (187) (178)
Cash flow from investing activities
Purchase of property, plant and equipment (1) -
Purchase of intangibles (13) -
Net cash flow from investing activities (14) -
Change in cash and cash equivalents (581) (74)
Cash and cash equivalents at the start of the period 931 957
Effect of exchange rate fluctuations (8) 51
Cash held within assets held for sale - (14)
Cash and cash equivalents at the end of the period 342 920
Notes to the financial statements
Basis of preparation and accounting policies
Compliance with International Financial Reporting Standards ("IFRS")
The Half-year condensed consolidated financial statements of 3i Group plc have been prepared in accordance with the
Disclosure Rules and Transparency Rules of the Financial Conduct Authority and IAS 34 'Interim Financial Reporting' as
issued by the International Accounting Standards Board ('IASB') and as endorsed by the European Union. The Half-year
condensed consolidated financial statements should be read in conjunction with the Annual report and accounts 2017. The
accounting policies applied by 3i Group plc for the Half-year condensed consolidated financial statements are consistent
with those described on pages 108 to 148 of the Annual report and accounts 2017, as are the methods of computation. There
was no change in the current period to the critical accounting estimates and judgements applied in 2017, which are stated
on pages 109 to 110 of the Annual report and accounts 2017.
The impact of future standards and amendments on the financial statements is being assessed by the Group and the Company.
The Group does not anticipate that IFRS 9 (Financial instruments) and IFRS 16 (Leases) will have a material impact on its
results. The detailed assessment of the extent to which IFRS 15 (Revenue from contracts with customers) may affect the
carried interest receivable recognition in the Group's financial statements is ongoing.
The financial information for the year ended 31 March 2017 contained within this Half-year report does not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. The statutory accounts for the year to 31 March
2017, prepared under IFRS as endorsed by the EU, have been reported on by Ernst & Young LLP and delivered to the Registrar
of Companies. The report of the Auditor on these statutory accounts was unqualified and did not contain a statement under
section 498(2) or section 498(3) of the Companies Act 2006.
3i announced the sale of its Debt Management business to Investcorp on 25 October 2016 and the transaction completed on 3
March 2017. At 30 September 2016, the Debt Management business was classified as discontinued operations and all of its
associated assets and liabilities as held for sale. As disclosed in the Annual report and accounts 2017, we retained the
Debt Management investments not sold to Investcorp and classified them as 'Other' in our segmental analysis. Therefore, the
comparatives for the six months ended 30 September 2016 have been re-presented to include the results from these retained
Debt Management assets as continuing operations.
The Half-year condensed consolidated financial statements are prepared on a going concern basis.
1 Segmental analysis
The tables below are presented on the Investment basis which is the basis used by the chief operating decision maker, the
Chief Executive, to monitor the performance of the Group. A description of the Investment basis and a reconciliation of the
Investment basis to the IFRS financial statements is provided in the "Reconciliation of the Investment basis to IFRS"
section. Further detail on the Group's segmental analysis can be found on pages 112 to 114 of the Annual report and
accounts 2017. The remaining Notes are prepared on an IFRS basis.
Investment basis
Private
Equity Infrastructure Other Total
Six months to 30 September 2017 £m £m £m £m
Realised profits over value on the disposal 53 - - 53
of investments
Unrealised profits on the revaluation of investments 517 22 - 539
Portfolio income
Dividends 2 13 7 22
Interest income from investment portfolio 49 - - 49
Fees receivable 10 - - 10
Foreign exchange on investments 84 (3) (8) 73
Gross investment return 715 32 (1) 746
Fees receivable from external funds 3 21 - 24
Operating expenses (38) (20) - (58)
Interest received 1
Interest paid (18)
Exchange movements (21)
Other income 1
Operating profit before carried interest 675
Carried interest
Carried interest and performance fees receivable 64 - - 64
Carried interest and performance fees payable (81) - - (81)
Operating profit 658
Income taxes -
Other comprehensive income
Re-measurements of defined benefit plans (3)
Total return 655
Net (investment)/divestment
Realisations1 350 - 24 374
Cash investment (506) (43) (23) (572)
(156) (43) 1 (198)
Balance sheet
Opening portfolio value at 1 April 2017 4,831 706 138 5,675
Investment2 555 43 23 621
Value disposed (297) - (24) (321)
Unrealised value movement 517 22 - 539
Other movement (including foreign exchange) 86 (6) (10) 70
Closing portfolio value at 30 September 2017 5,692 765 127 6,584
1 Investment basis Cash flow statement differs due to timing realisation cash flows in Private Equity.
2 Includes capitalised interest and other non-cash investment.
Investment basis Total
Private Continuing Discontinued
Equity Infrastructure Other1 Operations Operations1,2 Total
Six months to 30 September 20161 £m £m £m £m £m £m
Realised profits/(losses) over value on the disposal of investments 52 (1) - 51 2 53
Unrealised profits on the revaluation of investments 643 76 12 731 1 732
Portfolio income
Dividends 6 10 8 24 16 40
Interest income from investment portfolio 19 - - 19 3 22
Fees receivable 1 - - 1 - 1
Foreign exchange on investments 268 5 10 283 17 300
Gross investment return 989 90 30 1,109 39 1,148
Fees receivable from external funds 5 18 - 23 24 47
Operating expenses (35) (19) - (54) (12) (66)
Interest received 1 - 1
Interest paid (25) - (25)
Exchange movements 9 4 13
Other income/(expense) 8 (1) 7
Operating profit before carried interest 1,071 54 1,125
Carried interest and performance fees
Receivable 203 - - 203 1 204
Payable (302) - - (302) - (302)
Operating profit 972 55 1,027
Income taxes (2) - (2)
Other comprehensive income
Re-measurements of defined (19) - (19)
benefit plans
Total return 951 55 1,006
Net divestment/(investment)
Realisations3 654 12 - 666 3 669
Cash investment3 (291) (131) (8) (430) (42) (472)
363 (119) (8) 236 (39) 197
Year to 31 March 2017
Balance sheet
Opening portfolio value at 1 April 2016 3,741 527 92 4,360 137 4,497
Investment4 548 131 29 708 51 759
Value disposed (944) (13) (10) (967) (191) (1,158)
Unrealised value movement 1,274 59 9 1,342 3 1,345
Other movement 212 2 18 232 - 232
(including foreign exchange)
Closing portfolio value at 31 March 2017 4,831 706 138 5,675 - 5,675
1 Comparatives for the six months ended 30 September 2016 have been re-presented to show the results of the retained Debt Management assets, previously shown as discontinued operations, within Other.
2 Discontinued operations relate to the Debt Management business sold to Investcorp.
3 Investment basis Cash flow statement differs due to timing of investment and realisation cash flows in Private Equity and Debt Management.
4 Includes capitalised interest and other non-cash investment.
2 Realised profits/(losses) over value on the disposal of investments
Six months to 30 September 2017 Unquoted Quoted
investments investments Total
£m £m £m
Realisations 175 - 175
Valuation of disposed investments (162) - (162)
13 - 13
Of which:
- - profit recognised on realisations 14 - 14
- losses recognised on realisations (1) - (1)
13 - 13
Six months to 30 September 2016 Unquoted Quoted
investments investments Total
£m £m £m
Realisations 186 20 206
Valuation of disposed investments (180) (19) (199)
6 1 7
Of which:
- - profit recognised on realisations 7 1 8
- losses recognised on realisations (1) - (1)
6 1 7
3 Unrealised profits/(losses) on the revaluation of investments
Six months to 30 September 2017 Unquoted Quoted
investments investments Total
£m £m £m
Movement in the fair value of investments 165 11 176
Of which:
- unrealised gains 177 11 188
- unrealised losses (12) - (12)
165 11 176
Six months to 30 September 20161 Unquoted Quoted
investments investments Total
£m £m £m
Movement in the fair value of investments 44 48 92
Of which:
- unrealised gains 93 48 141
- unrealised losses (49) - (49)
44 48 92
1 Comparatives for the six months ended 30 September 2016 have been re-presented to show the unrealised profits/(losses) on the retained Debt Management assets, previously shown as discontinued operations, as continuing operations. See Note 11.
4 Per share information
The calculation of basic earnings per share is based on the profit attributable to shareholders and the average number of
basic shares. When calculating the diluted earnings per share, the weighted average number of shares in issue is adjusted
for the effect of all dilutive share options and awards.
6 months 6 months
to 30 September to 30 September
2017 20161
Earnings per share (pence)
Basic earnings per share 68.2 106.7
- of which from continuing operations 68.2 101.5
- of which from discontinued operations - 5.2
Diluted earnings per share 67.9 106.2
- of which from continuing operations 67.9 101.0
- of which from discontinued operations - 5.2
Earnings (£m)
Profit for the period attributable to equity holders of the Company 657 1,023
- of which from continuing operations 657 973
- of which from discontinued operations - 50
1 Comparatives for the six months ended 30 September 2016 have been re-presented to show the results from the retained Debt Management assets, previously shown as discontinued operations, as continuing operations. See Note 11.
6 months 6 months
to 30 September to 30 September
2017 2016
Number Number
Weighted average number of shares in issue
Ordinary shares 972,828,742 972,696,599
Own shares (9,611,495) (13,810,391)
Basic shares 963,217,247 958,886,208
Effect of dilutive potential ordinary shares
Share options and awards 4,520,532 4,403,571
Diluted shares 967,737,779 963,289,779
30 September 31 March
2017 2017
Net assets per share (pence)
Basic 655 607
Diluted 652 604
Net assets (£m)
Net assets attributable to equity holders of the Company 6,320 5,836
Basic NAV per share is calculated on 964,884,704 shares in issue at 30 September 2017 (31 March 2017: 961,458,801). Diluted
NAV per share is calculated on diluted shares of 969,721,096 at 30 September 2017 (31 March 2017: 966,553,549).
5 Dividends
6 months to 6 months to 6 months to 6 months to
30 September 30 September 30 September 30 September
2017 2017 2016 2016
pence pence
per share £m per share £m
Declared and paid during the period
Final dividend 18.5 178 16.0 154
18.5 178 16.0 154
Proposed interim dividend 8.0 77 8.0 77
6 Investment portfolio
This section should be read in conjunction with Note 10 on pages 120 to 121 of the Annual report and accounts 2017, which
provides more detail about initial recognition and subsequent measurement of investments at fair value.
6 months to Year to
30 September 2017 31 March 2017
Non-current £m £m
Opening fair value 1,706 1,540
Additions from continuing operations 277 291
- of which loan notes with nil value (1) (10)
Additions from discontinued operations - 70
Disposals and repayments from continuing operations (162) (311)
Disposals and repayments from discontinued operations - (191)
Fair value movement from continuing operations 176 262
Fair value movement from discontinued operations - 3
Other movements and net cash movements from continuing operations 6 71
Other movements and net cash movements from discontinued operations - (19)
Closing fair value 2,002 1,706
Quoted investments 397 390
Unquoted investments 1,605 1,316
Closing fair value 2,002 1,706
The holding period of 3i's investment portfolio is on average greater than one year. For this reason the portfolio is
classified as non-current. It is not possible to identify with certainty investments that will be sold within one year.
Additions include £10 million (31 March 2017: £11 million) in capitalised interest received by way of loan notes, of which
£1 million (31 March 2017: £10 million) was written down in the period to nil. Included within the Consolidated statement
of comprehensive income is £10 million (31 March 2017: £10 million) of interest income, which reflects the net additions
after write downs noted above, cash income is nil (31 March 2017: £4 million). The capitalisation of prior year accrued
income and non-capitalised accrued income is £1 million (31 March 2017: £5 million). The prior year to 31 March 2017
included £3 million of interest income from discontinued operations.
Other movements and net cash movements include the impact of changes in foreign exchange rates. The prior year to 31 March
2017 included cash returned of £19 million from warehouses used by our Debt Management business.
Quoted investments are classified as Level 1 in the fair value hierarchy and unquoted investments are classified as Level 3
in the fair value hierarchy; see Note 8 for details.
7 Investments in investment entity subsidiaries
Investments in investment entity subsidiaries are accounted for as financial instruments at fair value through profit and
loss. We determine that in the ordinary course of business, the net asset values of an investment entity subsidiary are
considered to be the most appropriate to determine fair value. At each reporting period, we consider whether any additional
fair value adjustments need to be made to the net asset values of the investment entity subsidiaries. These adjustments may
be required to reflect market participants' considerations about fair value that may include, but are not limited to,
liquidity and the portfolio effect of holding multiple investments within the investment entity subsidiary. There was no
particular circumstance to indicate that any fair value adjustment was required and after due consideration we concluded
that the net asset values were the most appropriate reflection of fair value at 30 September 2017.
Level 3 fair value reconciliation - investments in investment entity subsidiaries
6 months to Year to
30 September 2017 31 March 2017
Non-current £m £m
Opening fair value 3,483 2,680
Net cash flow to/(from) investment entities 240 (246)
Fair value movement on investment entity subsidiaries 396 1,041
Transfer of assets to investment entity subsidiaries 37 8
Closing fair value 4,156 3,483
All investment entity subsidiaries are classified as Level 3 in the fair value hierarchy, see Note 8 for details.
A 5% movement in the closing fair value of investments in investment entity subsidiaries would have an impact of £208
million (31 March 2017: £174 million).
Restrictions
3i Group plc, the ultimate parent company, receives dividend income from its subsidiaries. There are no restrictions on the
ability to transfer funds from these subsidiaries to the Group except for cash balances of £58 million (31 March 2017: £56
million) held in escrow in investment entity subsidiaries for carried interest payable.
Support
3i Group plc provides, where necessary, ongoing support to its investment entity subsidiaries for the purchase of portfolio
investments. During the period, there were net cash flows from the Group as noted in the table above.
8 Fair values of assets and liabilities
This section should be read in conjunction with Note 12 on pages 122 to 124 of the Annual report and accounts 2017 which
provides more detail about accounting policies adopted, the definitions of the three levels of fair value hierarchy,
valuation methods used in calculating fair value, and the valuation framework which governs oversight of valuations. There
have been no changes in the accounting policies adopted or the valuation methodologies used.
Valuation
The Group classifies financial instruments measured at fair value in the investment portfolio according to the following
hierarchy:
Level Fair value input description Financial instruments
Level 1 Quoted prices (unadjusted) from active markets Quoted equity instruments
Level 2 Inputs other than quoted prices included in Level 1 that are observable either directly (ie as prices) or indirectly (ie derived from prices) Derivative financial instruments
Level 3 Inputs that are not based on observable market data Unquoted equity instruments and loan instruments
The table below shows the classification of financial instruments held at fair value into the valuation hierarchy at 30
September 2017:
As at 30 September 2017 As at 31 March 2017
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£m £m £m £m £m £m £m £m
Quoted investments 397 - - 397 390 - - 390
Unquoted investments - - 1,605 1,605 - - 1,316 1,316
Investments in investment entity - - 4,156 4,156 - - 3,483 3,483
subsidiaries
Derivative financial instruments - 3 - 3 - - - -
Total 397 3 5,761 6,161 390 - 4,799 5,189
We determine that in the ordinary course of business, the net asset values of an investment entity subsidiary are
considered to be the most appropriate to determine fair value. The underlying portfolio is valued under the same
methodology as directly held investments, with any other assets or liabilities within investment entity subsidiaries valued
in accordance with the Group's accounting policies. Note 7 details the Directors' considerations about the fair value of
the underlying investment entity subsidiaries.
The fair values of the Group's other financial assets and liabilities are not materially different from their carrying
values with the exception of loans and borrowings. The fair value of loans and borrowings is £722 million (31 March 2017:
£741 million), determined with reference to their published market prices. The carrying value of the loans and borrowings
is £575 million (31 March 2017: £575 million).
Level 3 fair value reconciliation - unquoted investments
Six months to Year to
30 September 31 March
2017 2017
£m £m
Opening fair value 1,316 1,243
Additions from continuing operations 277 213
- of which loan notes with nil value (1) (10)
Additions from discontinued operations - 70
Disposals and repayments from continuing operations (162) (292)
Disposals and repayments from discontinued operations - (191)
Fair value movement from continuing operations 165 224
Fair value movement from discontinued operations - 3
Other movements and net cash movements from continuing operations 10 75
Other movements and net cash movements from discontinued operations - (19)
Closing fair value 1,605 1,316
Unquoted investments valued using Level 3 inputs also had the following impact on the Consolidated statement of
comprehensive income: realised profits over value on disposal of investment of £13 million (September 2016: £6 million),
dividend income of £8 million (September 2016: £4 million) and foreign exchange gains of £7 million (September 2016: £55
million).
Level 3 inputs are sensitive to assumptions made when ascertaining fair value as described in the Portfolio valuation - an
explanation section on pages 158 to 159 in the Annual report and accounts 2017. On an IFRS basis, of the unquoted assets
held at 30 September 2017 classified as Level 3, 41% (31 March 2017: 33%) were valued using a multiple of earnings and the
remaining 59% (31 March 2017: 67%) were valued using alternative valuation methodologies.
Assets move between Level 1 and Level 3 primarily when an unquoted equity investment lists on a quoted market exchange.
There were no transfers in or out of Level 3 in the period.
Valuation multiple - The valuation multiple is the main assumption applied to a multiple of earnings based valuation. The
multiple is derived from comparable listed companies and relevant market transaction multiples. Companies in the same
industry and geography and, where possible, with a similar business model and profile are selected and their valuation
multiple is then adjusted for factors including liquidity risk, growth potential and relative performance. Multiples are
also adjusted to reflect our longer term view of performance through the cycle or our exit assumptions.
The value weighted average multiple used when valuing the portfolio at 30 September 2017 was 11.28x (31 March 2017:
10.23x).
If the multiple used to value each unquoted investment valued on an earnings multiple basis as at 30 September 2017
decreased by 5%, the investment portfolio value would decrease by £38 million (31 March 2017: £18 million) or 2% (31 March
2017: 1%). If the same sensitivity was applied to the underlying portfolio held by investment entity subsidiaries, this
would have a negative impact of £257 million (31 March 2017: £224 million) or 6% (31 March 2017: 6%). If the multiple
increased by 5% then the investment portfolio value would increase by £38 million (31 March 2017: £16 million) or 2% (31
March 2017: 1%). If the same sensitivity was applied to the underlying portfolio held by investment entity subsidiaries,
this would have a positive impact of £261 million (31 March 2017: £215 million) or 6% (31 March 2017: 5%).
Alternative valuation methodologies - There are a number of alternative investment valuation methodologies used by the
Group, for reasons specific to individual assets. The details of such valuation methodologies, and the inputs that are
used, are given in the Portfolio valuation - an explanation section on pages 158 to 159 in the Annual report and accounts
2017. Each methodology is used for a proportion of assets by value, and at 30 September 2017 the following techniques were
used under an IFRS basis: 51% other (which includes DCF) and 8% industry metric. If the value of all of the investments
under these methodologies moved by 5%, this would have an impact on the investment portfolio of £47 million (31 March 2017:
£44 million) or 3% (31 March 2017: 3%). If the same sensitivity was applied to the underlying portfolio held by investment
entity subsidiaries, this would have an impact of £5 million (31 March 2017: £7 million) or 0.1% (31 March 2017: 0.2%).
9 Contingent liabilities
The Company has provided a guarantee to the Trustees of the 3i Group Pension Plan in respect of liabilities of 3i plc to
the Plan. 3i plc is the sponsor of the 3i Group Pension Plan. On 4 April 2012 the Company transferred eligible assets (£150
million of ordinary shares in 3i Infrastructure plc) as defined by an agreement with a wholly owned subsidiary of the
Group. The Company will retain all income and capital rights in relation to the 3i Infrastructure plc shares, as eligible
assets, unless the Company becomes insolvent or fails to comply with material obligations in relation to the agreement with
the Trustees, all of which are under its control. The fair value of eligible assets held by this subsidiary at 30 September
2017 was £273 million (31 March 2017: £265 million). As part of the latest triennial valuation of the pension scheme, the
Company has agreed to pay up to £50 million to the scheme if the Group's gearing increases above 20%, gross debt above £1
billion or net assets fall below £2 billion. If gearing, gross debt or net asset limits noted are reached, the Group may be
required to increase the potential cover provided by the contingent asset arrangement until the gearing, gross debt or net
assets improve.
At 30 September 2017, there was no material litigation outstanding against the Company or any of its subsidiary
undertakings.
10 Related parties
All related party transactions that took place in the half year to 30 September 2017 are consistent in nature with the
disclosures in Note 29 on pages 140 to 143 of the Annual report and accounts 2017. Related party transactions which took
place in the period and materially affected performance or the financial position of the Group, together with any material
changes in related party transactions as described in the Annual report and accounts 2017 that could materially affect the
performance or the financial position of the Group are detailed below.
Limited partnerships
The Group manages a number of external funds which invest through limited partnerships. Group companies act as the general
partners of these limited partnerships and exert significant influence over them. The following amounts have been
recognised in respect of these limited partnerships:
Consolidated statement of comprehensive income Six months to Six months to
30 September 30 September
2017 2016
£m £m
Carried interest and performance fees receivable 64 205
Fees receivable from external funds 13 14
Consolidated statement of financial position 30 September 31 March
2017 2017
£m £m
Carried interest and performance fees receivable 430 356
Investments
The Group makes investments in the equity of unquoted and quoted investments where it does not have control but may be able
to participate in the financial and operating policies of that company. IFRS presumes that it is possible to exert
significant influence when the equity holding is greater than 20%. The Group has taken the investment entity exception as
permitted by IFRS 10 and has not equity accounted for these investments, in accordance with IAS 28, but they are related
parties. The total amounts included for investments where the Group has significant influence but not control are as
follows:
Consolidated statement of comprehensive income Six months to Six months to
30 September 30 September
2017 20161
£m £m
Realised profit over value on the disposal of investments 9 -
Unrealised profits on the revaluation of investments 25 29
Portfolio income 5 7
Profits for the period from discontinued operations - 30
Consolidated statement of financial position 30 September 31 March
2017 2017
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