REG - Pantheon Infrastrct. - Interim Report
27/09/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230927:nRSa7527Na&default-theme=true
RNS Number : 7527N Pantheon Infrastructure PLC 27 September 2023
27 September 2023
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR TO
THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND, THE REPUBLIC OF SOUTH
AFRICA, JAPAN OR ANY MEMBER STATE OF THE EEA OR ANY OTHER JURISDICTION IN
WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE OF THIS ANNOUNCEMENT WOULD BE
UNLAWFUL.
PANTHEON INFRASTRUCTURE PLC
Results for the period ended 30 June 2023
The Directors of the Company are pleased to announce the Company's half year
results for the period ended 30 June 2023. The full unaudited annual report
and unaudited condensed financial statements can be accessed via the Company's
website at www.pantheoninfrastructure.com
(http://www.pantheoninfrastructure.com/) or by contacting the Company
Secretary by telephone on +44 (0)1392 477 500.
HIGHLIGHTS:
· Net Asset Value (NAV) of £484 million, 101.0p per share as at 30
June 2023 (98.9p as at 31 December 2022), representing a NAV total return of
3.1% since 31 December 2022, accounting for the dividend of 1 pence per share
paid in the period to 30 June 2023.
· By the end of the period to 30 June 2023, the Company had
invested or committed £423 million across 12 investments, in line with
deployment timetable outlined at IPO
· Two investments were made during the period: £42 million was
committed to the European telecoms towers operator GD Towers, and £20 million
was committed to pan-Nordic fibre operator GlobalConnect
· After the period end a further £35 million was committed to
Zenobe, a UK-based battery storage and electric vehicle fleet specialist,
adding to PINT's renewables & energy efficiency allocation
· Interim dividend of 2 pence per share declared in respect of the
period covering H1 of 2023, in line with guidance. The dividend will be paid
on 27 October 2023
· Target of 4 pence per share in respect of the financial year
ending 2023 with a progressive dividend policy thereafter
· On 31 March 2023, the Board announced the commencement of a
programme to buy back shares up to a total consideration of £10 million. As
at 30 June 2023, the Company had repurchased 1,185,000 shares for a total
consideration of £979,000
· The Company's revolving credit facility was extended by a further
£52.5 million, through the addition of Royal Bank of Scotland International
Limited, to provide additional working capital liquidity and support further
investment
· PINT's portfolio of high-quality infrastructure assets has been
further diversified through its low-cost, co-investment model, which provides
access to opportunities not normally available to public market investors
· The Company continues to review a robust pipeline of
opportunities
· PINT published its inaugural Sustainability Report, covering the
period up to 31 December 2022, in September 2023
The portfolio comprises assets in the following sectors: Digital; including
data centres, fibre networks and telecom towers; Power & Utilities,
including electricity generation, gas transmission and district heating;
Renewables & Energy Efficiency, including critical electricity
infrastructure and metering alongside battery storage and e-mobility; and
Transport & Logistics, specifically in the cold storage logistics sector.
Vagn Sørensen, Chair, Pantheon Infrastructure Plc, said: "
I am pleased to present the interim report for Pantheon Infrastructure Plc for
the six-month period to 30 June 2023. This is the second
interim report since the Company's launch, and it is pleasing to see the
progress of the Company in deploying its funds into a diversified
portfolio of high-quality infrastructure assets, generating dividends in line
with its pre-IPO target and positive NAV total returns. I would like to thank
shareholders for their continued support."
Richard Sem, Partner at Pantheon Ventures, PINT's investment manager, said:
"PINT continues to build out its strong, diversified portfolio and we remain
optimistic about the future growth potential of our assets. The portfolio's
focus on sub-sectors which benefit from long-term tailwinds - such as the path
to net zero and the increased global requirement for digital infrastructure -
provides a solid backdrop for PINT's investments going forward. As an asset
class, infrastructure continues to benefit from downside protection and
inflation-linkage, which is especially important in uncertain times. The team
remains excited about PINT's investment prospects and believe we are well
positioned to help deliver the for our investors."
Ends
For further information, contact:
Pantheon Ventures (UK) LLP +44 (0) 20 3356 1800
Investment Manager pint@pantheon.com (mailto:pint@pantheon.com)
Richard Sem, Partner
Ben Perkins, Principal
Harriet Alexander, Vice President
Investec Bank plc +44 (0) 20 7597 4000
Corporate Broker
Tom Skinner (Corporate Broking)
Lucy Lewis, Denis Flanagan (Corporate Finance)
TB Cardew +44 (0) 20 7930 0777
Public relations advisor pint@tbcardew.com (mailto:pint@tbcardew.com)
Ed Orlebar +44 (0)7738 724 630
Tania Wild +44 (0)7425 536 903
Henry Crane +44 (0)7918 207157
Notes to editors
Pantheon Infrastructure PLC (PINT)
Pantheon Infrastructure PLC is a closed-ended investment company and an
approved UK Investment Trust, listed on the Premium Segment of the London
Stock Exchange's Main Market. Its Ordinary Shares trade under the ticker
'PINT'. The independent Board of Directors of PINT have appointed Pantheon,
one of the leading private markets investment managers globally, as investment
manager. PINT aims to provide exposure to a global, diversified portfolio of
high-quality infrastructure assets through building a portfolio of direct
co-investments in infrastructure assets with strong defensive characteristics,
typically benefitting from contracted cash flows, inflation protection and
conservative leverage profiles.
Further details can be found at www.pantheoninfrastructure.com
LEI 213800CKJXQX64XMRK69
Pantheon
Pantheon is a leading global private markets specialist with dedicated
strategies across private equity, real assets and private credit, with 40
years' experience sourcing and executing investment opportunities on behalf of
clients. Pantheon manages or advises on US$93.4 billion of assets (as at 31
March 2023) and employs more than 460 staff, including around 140 investment
professionals, across offices in London, San Francisco, New York, Chicago,
Hong Kong, Seoul, Bogotá, Tokyo, Dublin, Berlin and a presence in Tel Aviv.
Further details can be found at www.pantheon.com (http://www.pantheon.com) .
PANTHEON INFRASTRUCTURE PLC
Access to high-quality global infrastructure assets
Interim report
30 June 2023
Purpose
Our purpose is to provide investors of all types with easy and immediate
access to a diversified portfolio of high-quality infrastructure assets via a
single vehicle, offering both a regular dividend payment and targeting capital
growth.
This portfolio, which is diversified by sector and geography, is designed to
generate sustainable attractive returns over the long term. We achieve this by
targeting assets which have strong environmental, social and governance (ESG)
credentials, and underpin the transition to a low‑carbon economy. We invest
in private assets which we believe will benefit from strong downside
protection through inflation linkage and other defensive characteristics.
About us
Pantheon Infrastructure Plc (the 'Company' or 'PINT') is a closed-ended
investment company and an approved UK investment trust, listed on the Premium
Segment of the London Stock Exchange's Main Market.
PINT provides exposure to an international, diversified portfolio (the
'Portfolio') through direct co‑investments in high‑quality infrastructure
assets with strong defensive characteristics, typically benefiting from
contracted cash flows, inflation protection and conservative leverage
profiles. PINT targets assets which have strong ESG credentials, which
includes projects that support the transition to a low‑carbon economy. The
Portfolio focuses on assets benefiting from long‑term secular tailwinds.
The Company is overseen by an independent Board of non‑executive Directors
and managed by Pantheon Ventures (UK) LLP ('Pantheon'), a leading
multi-strategy Investment Manager in infrastructure and real assets, private
equity, private debt and real estate.
Highlights
At a glance as at 30 June 2023
Invested capital:
£458m(1)
Net asset value (NAV):
£484m
Interim dividend per share:
2p
Market cap:
£383m
NAV per share:
101.0p
1. This refers to the capital committed to assets which, at 30 June
2023, were invested, committed or in legal closing. Invested assets represent
the fair value of those that had reached financial close and had been, or were
in the process of being, funded, and includes small amounts reserved for
follow‑on investments; committed assets represent those which were announced
but remained subject to final financial close; and in legal closing assets
represent those which were not yet announced but were in the final stages of
legal closing. There is no guarantee that commitments subject to legal closing
will be closed. As at 30 June 2023, £423 million of capital was committed
to assets, with a further £35 million in legal closing.
Why invest in PINT
The Company is building an international portfolio of investments with blended
risk/return profiles, in line with targets across deal types, sectors and
geographies for diversification.
1. Unique access to private infrastructure co‑investment assets
Pantheon, PINT's Investment Manager, has a large and global infrastructure
network
The Company is building an international portfolio of investments in line with
targets across deal types, sectors and geographies to achieve diversification.
PINT invests in infrastructure assets via co‑investments alongside highly
experienced general partners ('Sponsors'), typically on a management fee and
carried interest free basis.
This is attractive for several reasons, including:
Unique opportunities
PINT provides investors with the opportunity to access Pantheon's substantial
deal flow from its extensive network of blue‑chip infrastructure investors.
These opportunities arise because Pantheon's wider Infrastructure platform
invests directly into Sponsors' funds and secondary transactions. As a trusted
investor of scale, Pantheon then gains access to Sponsors' co-investment deal
flow.
Liquid access to illiquid markets
There are fewer public market infrastructure opportunities to access private
infrastructure assets, as infrastructure companies often remain private for
long periods of time and are structured in longer-tenured vehicles which are
aimed at institutional investors only. Investing in PINT provides immediate
access to high‑quality co‑investment infrastructure assets not normally
accessible to public market investors more broadly, both institutional and
retail.
Portfolio construction
Pantheon uses co‑investments to select individual assets to gain exposure
to, and tilt the Portfolio towards, sectors based on the Investment Manager's
view on relative value. This leads to the creation of a global and diversified
portfolio, with the ability to focus on major investment and economic
tailwinds.
Cost-effective access
The use of co‑investments can reduce the overall expense ratio and
gross‑to‑net performance spread of a portfolio, as most deals are offered
with no ongoing management fee or carried interest charged by the Sponsor.
Sponsor specialisation
Pantheon, on behalf of PINT, is able to choose deals alongside a Sponsor with
a distinct edge who may be best placed to create value in that particular
sub‑strategy.
ESG
Through the Manager, PINT looks to partner with Sponsors that have
demonstrated strong capabilities in managing ESG risks and will actively
engage with the Manager where it identifies areas of concern. Pantheon has
developed a bespoke ESG due diligence process, which utilises an in-house tool
(an ESG scorecard) in addition to consultation with an external ESG
specialist, which utilises a range of different data ESG sources. For more
information, please refer to the ESG section on p 38 to 42 of the Interim
Report to 30 June 2023.
2. Favourable defensive long‑term characteristics
Infrastructure assets can offer reliable income streams with inflation
protection
Infrastructure assets combine a range of attractive characteristics for
long‑term investors. Distinctively, infrastructure may mitigate the adverse
effects of rising inflation and may provide an income‑generating investment
outside traditional fixed income. Infrastructure assets may also provide
embedded value and downside protection across market cycles given the
regulated and contracted nature of many of the underlying cash flows.
Infrastructure assets may provide a range of attractive investment attributes,
including the following:
Stable cash flow profile
Infrastructure may provide a compelling, stable distribution profile similar
to traditional fixed income, but backed by tangible assets. These
infrastructure assets often offer reliable income streams governed by
regulation, hedges or long‑term contracts with reputable counterparties.
Inflation hedge
Infrastructure investments can provide a natural hedge to rising inflation, as
many sub‑sectors have contracts with explicit inflation‑linkage or
implicit protection through regulation or market position. The majority of
PINT's assets have explicit inflation-linkage or implicit protection through
regulation or market position.
Embedded downside protection
The vital role that many infrastructure sub‑sectors play in our daily lives
can make them an innately defensive investment. The tangible nature of
infrastructure investments can provide a basis for liquidation and recovery
value in downside cases. Furthermore, infrastructure investing is generally
focused on gaining exposure to assets in a monopolistic or duopolistic market
which, with high upfront costs, can be a barrier to entry for new
participants. Investments typically have long-term contracts with price
escalators or inflation-linkage with high‑quality counterparties, which
offers further downside protection. Finally, high friction costs tend to
discourage customers from switching providers, which can provide a stable and
long-term customer base.
Diversification
Infrastructure can be a valuable portfolio diversifier alongside traditional
and alternative investments. Historically, listed infrastructure returns have
been only moderately correlated to traditional asset classes. The
sub‑sectors within the infrastructure universe and the drivers of such
sub‑sector returns tend not to be correlated with one another.
3. Access to secular trends
PINT continues to develop its diversified Portfolio across sectors that
benefit from secular trends
Pantheon has taken and continues to take a disciplined approach to PINT's
strategy to construct an internationally diversified portfolio with exposure
across sub‑sectors and geographies, while maintaining the flexibility to
tilt exposures based on opportunities which may present compelling relative
value. The Company has built an international portfolio of investments with
blended risk/return profiles, in line with targets across deal types, sectors
and geographies for diversification. Please refer to page 30 of the Interim
Report to 30 June 2023 for more detail
Digital Infrastructure
44%(1)
Data centres, fibre networks and towers
Power & Utilities
25%(1)
Energy utilities, water and conventional power
Renewables & Energy Efficiency
16%(1)
Wind, solar, sustainable waste and smart infrastructure
Transport & Logistics
9%(1)
Ports, rail and road, airports and e-mobility
1. Proportion of gross assets of £485.6 million at 30 June 2023.
Includes assets which, at 30 June 2023, were invested, committed or in legal
closing. Figures do not total to 100% because of uncommitted cash totalling 6%
of gross assets.
4. PINT seeks to generate attractive risk‑adjusted returns
Targeting capital growth and dividend returns
The Company seeks to generate attractive risk‑adjusted total returns for
shareholders over the longer term. This comprises capital growth with a
progressive dividend, through the acquisition of equity or equity‑related
investments in a diversified portfolio of infrastructure assets with a primary
focus on developed OECD markets.
The Company is targeting a NAV Total Return per share of 8‑10% per annum.
8‑10% p.a.(1)
Target NAV Total Return per share
2p per share(2)
Interim 2023 dividend
4p per share(3)
Target 2023 dividend, progressive thereafter
1. NAV Total Return per share is defined as the growth in NAV per share,
together with all distributions (of an income or capital nature) paid in
respect of such share.
2. Interim dividend of 2 pence per share declared in relation to H1
2023.
3. The Company is targeting a dividend of 4 pence per share for the year
ending 31 December 2023 and, thereafter, a progressive dividend.
PINT at a glance
Thirteen infrastructure co‑investment assets(1)
Geographic diversification(1)
Europe | 41%
North America | 37%
UK | 16%
Uncommitted | 6%
Sector diversification(1)
Digital Infrastructure | 44%
Power & Utilities | 25%
Renewables & Energy Efficiency | 16%
Transport & Logistics | 9%
Uncommitted | 6%
1. Based on assets invested, committed and in legal closing at 30 June
2023.
North America
CyrusOne
Cartier Energy
Calpine
Vantage Data Centers
Vertical Bridge
United Kingdom
National Gas
Zenobe(2)
Nordic
GlobalConnect(1)
Netherlands
Delta Fiber
Fudura
Ireland
National Broadband Ireland
Spain
Primafrio
Germany/Austria
GD Towers
1. Committed but not funded at 30 June 2023
2. In legal closing at 30 June 2023
Chair's statement
Introduction
I am pleased to present the interim report for Pantheon Infrastructure Plc for
the six-month period to 30 June 2023. This is the second interim report since
the Company's launch, and it is pleasing to see the progress of the Company in
deploying its funds into a diversified portfolio of high-quality
infrastructure assets, generating dividends in line with its pre-IPO target
and positive NAV total returns.
During the first half of the year, the Company's NAV per share grew 2.1p to
101.0p. Accounting for dividends of 2p per share paid in the period to
30 June 2023, this represents a NAV total return of 3.1% since 31 December
2022. I am also pleased to declare an interim dividend payment of 2p per share
for the half year ended 30 June 2023, payable on 27 October 2023.
Economic environment
The reporting period and subsequent months have been characterised by further
economic uncertainty. Most of the developed economies in which we invest have
so far avoided recessions that were widely expected in the first half of this
year. Market sentiment appears to foresee a soft rather than hard landing.
However, inflation has proved stickier than many central banks, perhaps most
notably the Bank of England, had anticipated, with ensuing interest rate rises
bringing additional challenges to the market.
The relative resilience of the global economy can be attributed to several
supply and demand-side drivers to growth (such as excess savings from the
pandemic and low unemployment), and because the full effect of monetary
tightening to combat inflation is taking its time to feed through where either
mortgage rates are fixed or mortgage penetration is low. From a macroeconomic
perspective, there are still risks to the downside although the pace of
interest rate hikes, led by the US Federal Reserve, is slowing. We can now say
with relative confidence that the era of lower-for-longer interest rates and
easy money policy has come to an end.
Investor sentiment and discount management
Rising interest rates, bond and gilt yields have led to a reassessment and
rebalancing of investment portfolios by many investors. With an increased
risk-free rate and lacklustre performance by equity markets (beyond the
largest US tech‑focused names), some investors have sought to de-risk their
portfolios with a move to the perceived safety of fixed income. Retail flows
have been particularly affected by the increased cost of living resulting from
high inflation and significantly higher mortgage servicing costs. As a result,
individuals and families have felt the squeeze and witnessed a reduction in
surplus cash that was previously available for savings and investment.
In this environment, demand for the shares of listed investment trusts
including the infrastructure sector and PINT has been subdued. As at
30 June 2023, PINT's shares traded at a discount of 20.8% to NAV despite the
performance of the underlying assets being robust.
We believe that the current share price discount to NAV is unjustified, as an
investment in PINT offers a meaningful asset‑backed yield as well as capital
growth and inflation protection that cannot be achieved by an investment in
bonds or gilts. A full sensitivity analysis of the Portfolio to various
economic factors, including inflation, interest rates and valuation discount
rates, is set out in the Investment Manager's report on page 29 of the Interim
Report to 30 June 2023.
I would like to assure shareholders that the Board is not complacent about the
current level of discount and the impact on your reported returns. Having set
out our views relating to discounts prior to the launch of the Company, we
were quick to react as the discount widened. On 31 March 2023, the Board
announced the commencement of a programme to buy back shares up to a total
consideration of £10 million.
The Board continues to believe that share buybacks completed within the limits
of this programme represent an attractive use of shareholders' capital, whilst
also retaining sufficient resources to access the exciting pipeline of
investment opportunities available to the Company, and also ensuring its
ongoing ability to pay its target dividend and working capital costs.
As at 30 June 2023, the Company had repurchased 1,185,000 shares for a total
consideration of £979k, resulting in a NAV increase of 0.04p per share. Since
that date, the Company has repurchased a further 3,650,000 shares for a
consideration of £2.9 million, resulting in a NAV increase of 0.18p per
share. In total, the Company has now repurchased 4,835,000 shares for £3.8
million since the buyback programme was announced.
Portfolio deployment and diversification
As at 30 June 2023, the Company had invested in or committed to twelve assets
totalling £423 million, including £20 million committed to the pan-Nordic
data centre and fibre business GlobalConnect, announced on 22 June 2023. A
further commitment of £35m was announced after the end of the reporting
period on 7 September 2023 to invest in the grid scale battery storage and
electric vehicle (EV) fleet specialist Zenobe.
The addition of Zenobe further diversifies our Portfolio with its focus on
energy storage and EV mobility. The Portfolio continues to be focused on
diversification by geography, Sponsor and across its key sectors: Power &
Utilities; Digital infrastructure (Fibre, Towers and Data Centres); Renewables
& Energy Efficiency; and Transport & Logistics.
The Company is substantially fully invested, after allowing for required
working capital and cash retentions, and an investment into PINT gives an
immediate exposure to a high-quality, established and diversified Portfolio.
Further details of the Portfolio Companies and their diversification can be
found in the Investment Manager's report on page 30 of the Interim Report to
30 June 2023.
Revolving credit facility
In light of the progress deploying the Company's funds into its Portfolio, the
Board was pleased to announce on 7 June 2023 a £52.5 million increase to its
existing £62.5 million multi-currency revolving credit facility ("RCF"),
bringing the total to £115 million. The increase in the RCF provides the
Company with an efficient and flexible way to cover its risk buffers and
working capital needs. It also gives us additional liquidity to increase
diversification through further investment in high‑quality infrastructure
assets from PINT's near-term investment pipeline, where we continue to see
compelling opportunities. Such investment will only be considered where it is
materially accretive to shareholders in light of the current cost of such
borrowings and the Company is not expected to become highly levered or the
facility to be fully drawn.
Oversight of the investment process
Investment management is delegated to Pantheon by the Board. Pantheon is
responsible for reviewing, selecting and executing investment opportunities
for the Company. However, it is a vital part of the Board's responsibilities
to oversee these activities, to ensure the investment process is robust, and
that the investments made are consistent with the aims and objectives of the
Company.
To that end, the Board was delighted to join members of Pantheon's team on a
site visit to Primafrio's Head Office and major distribution centre in Murcia,
Spain during the period. Primafrio was the Company's first investment
commitment, announced a few months after our launch, and it was very pleasing
to see the progress that it continues to make in the development of existing
and new distribution centres and logistics infrastructure.
The Board, the Manager and our corporate brokers, Investec, met with senior
representatives from both Primafrio and Apollo, the Sponsor partner on the
transaction. The visit provided the Board with valuable insight into and
assurance regarding the Manager's robust investment and underwriting
processes, the strength of relationships with Sponsors, and an example of the
access to the management teams of the Company's underlying assets accorded to
the Manager.
Through our oversight, such as this visit and regular meetings with the
Manager, the Board maintains comfort in the investment process and the quality
of the Company's Portfolio. As evidenced by the continued NAV growth, these
businesses are in aggregate operating solidly and executing in line with the
business plans on which our investments were based.
Strategy
As it has done since launch, the Company seeks to generate attractive
risk-adjusted returns by constructing a diversified portfolio of high-quality
assets across the global infrastructure investment universe. The Company
focuses on assets that offer downside and inflation protection, which is
particularly relevant in the current market environment. Leveraging Pantheon's
extensive 14-year experience in infrastructure investing and its c.$21 billion
infrastructure platform, PINT targets specific transactions that Pantheon
deems to be most attractive, notably opportunities in businesses with strong
operations and growth potential, in sub-sectors benefiting from long-term
positive trends and managed by high-quality Sponsors.
Both the Board and Manager, however, remain alert to the challenges in the
current environment and there are several key themes that we continue to
believe are important in the current environment:
Inflation: Despite policy intervention, inflation remains elevated in many
jurisdictions, albeit with some modest easing recently. PINT's Portfolio is
positively correlated against inflation as many of its underlying cash flows
are contractually index-linked, or capture inflationary benefits through
regulation or market position. We believe that this inflation linkage makes
PINT attractive in comparison with asset classes such as gilts or bonds.
Interest rates: Rates have risen to levels not seen since before the Global
Financial Crisis of 2008, with bond yields driving up risk-free rates;
however, transactional evidence is showing only limited to modest increases in
the discount rates used to value privately held infrastructure assets.
Financing in place for the Portfolio Companies has generally been executed on
favourable terms, which mitigates this risk.
Global economic slowdown: Real GDP growth expectations have been cut sharply,
with global demand expected to weaken throughout 2023 as central bank
intervention continues. GDP correlation and leverage continue to be areas of
key diligence focus when making investments for PINT.
Governance and sustainability
The Board takes its responsibilities to its shareholders, in accordance with
good governance standards, very seriously, and we continually strive to
improve our oversight of the Company and its transparency. During the period,
we have had a particular focus on ESG matters and sustainability.
To ensure sufficient focus on these matters, we have formally created a new
ESG and Sustainability Committee, which is chaired by Andrea Finegan. Andrea
has been a non-executive Director of the Company since its launch and is an
experienced infrastructure asset management professional with over 30 years of
sector experience, performing a number of other board and advisory roles with
an emphasis on ESG outcomes.
PINT's ESG and Sustainability Committee has responsibility for: agreeing,
overseeing and monitoring the Company's ESG strategy; its ESG reporting and
disclosure; its ESG risk management (alongside the Audit and Risk Committee);
and ensuring effective stakeholder engagement.
Under the oversight of this committee, the Company published its inaugural
Sustainability Report on 19 September 2023, providing (among other things)
further insight into the sustainability characteristics of PINT's Portfolio
and relevant emissions data. The full report can be found on the Company's
website www.pantheoninfrastructure.com and a summary of the information can be
found on page 43 of the Interim Report to 30 June 2023.
Shareholder engagement
A major part of the Board's purpose is to represent the interests, needs and
wishes of the Company's shareholders. We are committed to maintaining open
channels of communication and to engaging with shareholders in a manner which
they find most meaningful, in order to gain an understanding of their views.
Shareholder meetings take place throughout the year with the Investment
Manager, but as Chair I believe it is vitally important for the Board and I to
hear views first hand. Earlier this year, the Chair of the Audit and Risk
Committee and I offered meetings to a significant number of shareholders
representing a majority of the share register by issued share capital. Several
of them accepted our offer and we met with investors representing more than
one-fifth of the register.
Feedback from these meetings was overall very positive, and the engagement
from the Board was well received. Naturally, shareholders were keen to see
continued improvement and we have endeavoured to respond to many of the issues
raised, such as: the increasing discount (we have announced a programme of
buybacks); providing confidence in valuations (we have continued to disclose
valuation sensitivities); and improved ESG and climate disclosures (we have
since published our Sustainability Report).
The Board always welcomes contact with shareholders, so if there are matters
you wish to raise with us or if you would like a meeting, please feel free to
contact us at the registered office or via the Company Secretary using the
details on page 65 of the Interim Report to 30 June 2023.
Outlook
Infrastructure remains a key driver of economic growth, and therefore the need
for investment into new infrastructure is arguably stronger than ever. Indeed,
in the current environment, private investment is especially needed, and we
believe will be ultimately rewarded, at a time where governments are facing
significant budget deficits and rising debt levels.
The last few months have seen an even greater international focus on
decarbonisation. According to the World Meteorological Organization, both June
and July of this year exceeded prior record average global temperatures for
the month by close to 0.2°C and 0.3°C, respectively. 2023 now looks set to
be the warmest year on record and the world, as a whole, has warmed by
approximately 1°C since 1970. The road to net zero globally will require
sustained and extraordinary investment in new infrastructure. Private
infrastructure has demonstrated a necessary role in filling that gap, and we
believe it will continue to play an important part in funding global
infrastructure investments.
The market for infrastructure investments remains competitive and fundraising
in private markets has been challenging so far in 2022/2023. PINT's strategy
continues to be to identify and target companies that are set to benefit from
key sectoral tailwinds whilst exhibiting defensive characteristics, delivering
growth in real terms across the economic cycle. Pantheon's wide capability to
source new investments through its vast network and established partnerships,
as demonstrated since PINT's launch, is all the more crucial in current market
conditions. The Board remains optimistic about PINT's future investment
opportunities and value creation potential.
With this in mind, and as already stated, we believe that the current level of
discount is unjustified, and represents a compelling value opportunity for
those seeking to invest into a fully deployed and diversified portfolio of
high-quality infrastructure assets. Currently, it appears that much of the
market is focusing purely on yield from gilts and bonds without considering
prospects for capital appreciation. We continue to believe that PINT's
strategy means it is well positioned for when investors again start to
recognise the importance of growth potential in a well-balanced investment
strategy. The Board is confident of the Manager's ability to continue to
source new assets and to manage the existing portfolio to deliver that growth.
We also believe that infrastructure assets will provide much-needed resilience
in the current uncertain world.
Vagn Sørensen
Chair
26 September 2023
PINT investments
Existing portfolio
Transport & Logistics
Primafrio
Specialised temperature‑controlled transportation and logistics company in
Europe primarily focused on the export of fresh fruit and vegetables from
Iberia to Northern Europe.
Sector: Transport & Logistics
Geography: Europe
Sponsor: Apollo
Website: www.primafrio.com
Date of commitment: 21.03.2022
PINT NAV 30 June 2023: £43m
Investment thesis and value creation strategy(1)
· Niche market leader providing an essential service to resilient end
markets. The company has demonstrated strong organic growth over a 15+ year
operating history, including during major economic dislocations (2008‑2009
global financial crisis and 2020‑2021 Covid-19). The defensive qualities of
Primafrio's market and its operations provide strong downside protection.
· Value creation opportunities include inorganic growth, strategic
M&A, and continued investment in Primafrio's cold storage logistics
infrastructure footprint.
Digital Infrastructure
CyrusOne
Operates more than 50 high‑performance data centres representing more than
four million sq ft of capacity across North America and Europe.
Sector: Digital: Data Centre
Geography: North America
Sponsor: KKR
Website: www.cyrusone.com
Date of commitment: 28.03.2022
PINT NAV 30 June 2023: £24m
Investment thesis and value creation strategy(1)
· Growth in data usage continues to drive data centre demand. In
particular, the hyperscale segment represents a strong growth opportunity due
to increasing cloud adoption and increasingly data‑heavy technologies (5G,
AI, gaming, video streaming).
· Benefits from defensive characteristics such as long‑term
contracts with a largely investment grade credit quality customer base, price
escalators, and limited historical customer churn.
Power & Utilities
National Gas
The owner and operator of the UK's sole gas transmission network, regulated by
Ofgem, and an independent, highly contracted metering business.
Sector: Power & Utilities: Gas utility and metering
Geography: UK
Sponsor: Macquarie
Website: www.nationalgas.com
Date of commitment: 28.03.2022
PINT NAV 30 June 2023: £41m
Investment thesis and value creation strategy(1)
· Highly stable inflation‑linked cash flows and high yielding
returns are positively correlated with higher inflation, supported by
tailwinds of the current macroeconomic environment.
· Strong downside protection; regulatory framework allows for the
recovery of costs and guarantees a minimum return on capital. The company also
holds a monopolistic position through sole ownership of the UK's backbone gas
transmission network.
· Significant growth opportunity. The transmission system should play
a leading role in making the network ready for the transition from natural gas
to hydrogen. It will support the expansion of hydrogen's role in the energy
mix while working closely with the government and Ofgem to maintain security
of supply.
1. There is no guarantee that the investment thesis will be achieved.
Pantheon opinion.
Past performance is not indicative of future results. Future results are not
guaranteed, and loss of principal may occur. Please refer to 'Disclosure 1 -
Investments' towards the back of this report.
Digital Infrastructure
Vertical Bridge
The largest private owner and operator of towers and other wireless
infrastructure in the US, with more than 7,000 owned towers across the
country.
Sector: Digital: Towers
Geography: North America
Sponsor: DigitalBridge
Website: www.verticalbridge.com
Date of commitment: 04.04.2022
PINT NAV 30 June 2023: £27m
Investment thesis and value creation strategy(1)
· Track record of organic and inorganic growth: since its founding in
2014, Vertical Bridge has been one of the most active acquirers and
'build‑to‑suit' developers amongst tower companies, and expects to further
accelerate these activities.
· 5G build-out supporting continued growth: US carrier annual capex
is forecast to increase over 30% by 2025, prioritising macro towers in the 5G
rollout.
· Top‑tier management team and Sponsor: key members of Vertical
Bridge and DigitalBridge (including both CEOs) have worked together since
2003, and have exceeded the original Vertical Bridge business plan.
Digital Infrastructure
Delta Fiber
Owner and operator of fixed telecom infrastructure in the Netherlands,
providing broadband, TV, telephone and mobile services to retail and wholesale
customers over a predominantly fibre network.
Sector: Digital: Fibre
Geography: Europe
Sponsor: Stonepeak
Website: www.deltafibernederland.nl
Date of commitment: 26.04.2022
PINT NAV 30 June 2023: £23m
Investment thesis and value creation strategy(1)
· Opportunity to invest in high-quality fibre network with high
barriers to entry as a regional leader in its core footprint of suburban and
rural areas with historically high penetration and low churn rates.
· Well positioned to capitalise on extensive rollout programme via
first mover advantage in its core markets, exhibited through its track record
of fast build rates and ramp up of construction capacity.
Power & Utilities
Cartier Energy
Platform of eight district energy systems located across the Northeast,
Mid‑Atlantic and Midwest of the US.
Sector: Power & Utilities: District Heating
Geography: North America
Sponsor: Vauban
Website: To be created
Date of commitment: 23.05.2022
PINT NAV 30 June 2023: £33m
Investment thesis and value creation strategy(1)
· Gross margin structure underpinned by availability‑based fixed
capacity payments and consumption charges, and pass‑through pricing
mechanism limits commodity price exposure providing robust downside
protection.
· 'Sticky' customer base with an average relationship tenure of
~15‑20 years and ~10‑12 year average remaining contractual life.
· Provides customers with a path to decarbonisation and increased
thermal efficiency.
1. There is no guarantee that the investment thesis will be achieved.
Pantheon opinion.
Past performance is not indicative of future results. Future results are not
guaranteed, and loss of principal may occur. Please refer to 'Disclosure 1 -
Investments' towards the back of this report.
Power & Utilities
Calpine
Independent power producer with a c.26GW fleet of principally gas-fired
generating capacity, including c.770MW of operational renewables.
Sector: Power & Utilities: Electricity Generation
Geography: North America
Sponsor: ECP
Website: www.calpine.com
Date of commitment: 27.06.2022
PINT NAV 30 June 2023: £48m
Investment thesis and value creation strategy(1)
· Vital supplier to the US electricity grid, providing reliable power
generation capacity and playing an important role in the energy transition as
the US targets net zero carbon by 2050. Calpine benefits from highly
predictable diversified cash flows underpinned by contracts supported by a
robust hedging programme.
· Strong renewables development pipeline of solar and battery
projects, financeable through the cash flows generated by existing assets,
which are projected to nearly triple its renewables power generation capacity
over the next five to six years.
Digital Infrastructure
Vantage Data Centers
Leading provider of wholesale data centre infrastructure to large enterprises
and hyperscale cloud providers.
Sector: Digital: Data Centre
Geography: North America
Sponsor: DigitalBridge
Website: www.vantage‑dc.com
Date of commitment: 01.07.2022
PINT NAV 30 June 2023: £27m
Investment thesis and value creation strategy(1)
· Secular data usage growth through increasing cloud adoption and
increasing data‑heavy technologies continues to drive data centre demand.
· Strong growth pipeline from favourable existing relationships with
hyperscale customers.
· Downside protection from strong position in supply‑constrained
core geographies, long‑term contracts with investment‑grade
counterparties, and low churn due to high switching costs and barriers to
entry.
Renewables & Energy Efficiency
Fudura
Dutch market-leading owner and provider of medium‑voltage electricity
infrastructure to business customers, with a focus on transformers, metering
devices and related data services.
Sector: Renewables & Energy Efficiency
Geography: Europe
Sponsor: DIF
Website: www.fudura.nl
Date of commitment: 25.07.2022
PINT NAV 30 June 2023: £43m
Investment thesis and value creation strategy(1)
· Highly stable inflation‑linked cash flows from large and
diversified locked‑in customer base with long-term contracts, low churn and
inflation protection.
· Strong downside protection with a quasi‑monopoly positioning in
its core regional markets characterised by high barriers to entry.
· Energy efficiency and decarbonisation tailwinds driving growth
opportunities to broaden service offering to customers including EV charging,
solar panels, heat pumps and battery storage.
1. There is no guarantee that the investment thesis will be achieved.
Pantheon opinion.
Past performance is not indicative of future results. Future results are not
guaranteed, and loss of principal may occur. Please refer to 'Disclosure 1 -
Investments' towards the back of this report.
Digital Infrastructure
National Broadband Ireland
Fibre-to-the-premises network developer and operator working with the Irish
government to support the rollout of the National Broadband Plan, targeting
connection to 560,000 rural homes.
Sector: Digital: Fibre
Geography: Ireland
Sponsor: Asterion
Website: www.nbi.ie
Date of commitment: 09.11.2022
PINT NAV 30 June 2023: £44m
Investment thesis and value creation strategy(1)
· Stable cash flows with inflation protection expected through the
terms of the project agreement and the prices NBI can charge to internet
service providers for access.
· Downside protection through a unique positioning in the
intervention area (the franchise area granted by the Irish government) and a
flexible government subsidy regime.
· Attractive macro trends including increased working from home,
demographics and growth in fibre broadband take‑up to date underpin the
long‑term commercial viability of the network.
1. There is no guarantee that the investment thesis will be achieved.
Pantheon opinion.
Past performance is not indicative of future results. Future results are not
guaranteed, and loss of principal may occur. Please refer to 'Disclosure 1 -
Investments' towards the back of this report.
New investments during the period
Digital Infrastructure
GD Towers
Largest tower and telecom infrastructure networks in Western Europe with
c.40,000 tower sites across Germany and Austria.
Sector: Digital: Towers
Geography: Europe
Sponsor: DigitalBridge
Website: To be created
Date of announcement: 31.01.2023
PINT NAV 30 June 2023: £38m
Transaction/company overview
· In July 2022, DigitalBridge, alongside Brookfield Asset Management,
agreed to buy 51% of GD Towers from Deutsche Telekom for a total enterprise
value of €17.5 billion.
· GD Towers has one of the largest tower and telecom infrastructure
networks in Western Europe with c.40,000 tower sites across Germany and
Austria, making it the market leader in Germany and second largest in Austria.
· GD Towers' high-quality portfolio is supported by an anchor tenancy
agreement with Deutsche Telekom, which has retained a 49% ownership stake in
GD Towers.
Investment thesis and value creation strategy(1)
· Majority of cash flows are contracted and index-linked, offering
strong downside protection in challenging macroeconomic conditions.
· Favourable market tailwinds from regulatory‑driven 5G coverage
requirements with significant growth opportunities.
· Organic and inorganic growth opportunities arising from other
market participants, and numerous consolidation opportunities in Europe.
ESG(2)
· Deutsche Telekom AG has a net zero carbon strategy that is aligned
with the Science Based Targets initiative and has been highly rated by the
Carbon Disclosure Project.
· The majority of power for the tower sites now comes from renewable
sources, with carbon offsetting arrangements in place for any fossil fuel
power consumption.
1. There is no guarantee that the investment thesis will be achieved.
Pantheon opinion.
2. Source: ERM. While DigitalBridge may consider ESG factors when making
an investment decision, DigitalBridge does not pursue an ESG-based investment
strategy or limit its investments to those that meet specific ESG criteria or
standards. Any reference herein to environmental or social considerations is
not intended to qualify DigitalBridge's duty to maximise risk-adjusted
returns.
Past performance is not indicative of future results. Future results are not
guaranteed, and loss of principal may occur. Please refer to 'Disclosure 1 -
Investments' towards the back of this report.
Digital Infrastructure
GlobalConnect
Sector: Digital: Fibre
Geography: Europe
Sponsor: EQT
Website: www.globalconnect.com
Date of commitment: 22.06.2023
PINT commitment 30 June 2023: £20m
Transaction/company overview
· In Q4 2022, EQT Infrastructure III announced the sale of a minority
stake (15%) of its shareholding in GlobalConnect ("GC") to Mubadala. PINT
invested alongside other co-investors following this transaction, while EQT
retained a majority (controlling) stake.
· GC is a pan-Nordic digital infrastructure platform with a 155,000
km fibre network and 17 (35,000 m²) data centres.
· GC is a leading challenger and is well positioned to increase its
market share across verticals and geographies given its blue-chip customer
base, one-stop-shop solution and high barriers to entry.
Investment thesis and value creation strategy(1)
· Majority of cash flows are contracted and index-linked, offering
downside protection in challenging macroeconomic conditions.
· Favourable market tailwinds from regulatory-driven 5G coverage
requirements with significant growth opportunities and long-term secured
revenues, protecting its market position.
· Organic and inorganic growth opportunities arising from rural fibre
rollout, growing demand for larger bandwidth and numerous consolidation
opportunities.
ESG
· In June 2023, GC was approved by the Science Based Targets
initiative (SBTi), committing to reducing its absolute carbon emissions by 42%
by 2030.
· In 2022, GC raised €1 billion in ESG-linked financing and
recently won an award for the sustainability-linked loan of the year in
Europe.
· Its sustainable data centres powered by 100% green energy are
achieving ~25% lower power usage than the European average.
1. There is no guarantee that the investment thesis will be achieved.
Pantheon opinion.
Past performance is not indicative of future results. Future results are not
guaranteed, and loss of principal may occur. Please refer to 'Disclosure 1 -
Investments' towards the back of this report.
Portfolio in numbers(1)
Exposure to operational infrastructure assets
26GW
of electric generation capacity, including 725MW of renewables, generating
111TWh annually
343,000 km
of fibre cable, passing 2.5 million homes
1,331,000
homes connected to high speed fibre
87
data centres providing 1,094MW of power capacity
7,630 km
of pressurised gas transmission pipes, 71 gas compressors, and 9 gas and LNG
terminals
8
district heating networks, with 96 km of piping serving 190 buildings
17,200
medium and high voltage transformers
65,900
smart meters reducing domestic energy bills
2,100
temperature controlled trucks and 40,000 m² of temperature controlled
warehouse capacity
51,000
telecom towers
1,000
electric buses saving 66,000 tonnes of CO(2) annually
1,017MW
of battery energy storage capacity, supporting the transition to net zero
1. Figures represent the total infrastructure assets across PINT's
Portfolio Companies.
Business model
Approach
The Company is building an international portfolio of investments with blended
risk and return profiles, in line with set targets across deal types,
sectors and geographies for diversification.
Our co-investment strategy differentiates us in the listed infrastructure
market.
What sets us apart
1. Deal selectivity:
Sponsor relationships drive strong deal flow, allowing for highly selective
investment process.
2. Diversification:
Access to investments across sourcing Sponsors, sectors and geographies.
3. Sponsor specialisation:
Ability for investors to choose deals alongside a Sponsor with a distinct edge
who may be best placed to create value.
4. Fee efficient:
Co-investments typically offered with no ongoing management fee/carried
interest.
Capturing secular growth
Digital Infrastructure
· Growth in mobile data traffic
· Growth in 5G connected devices
Renewables & Energy Efficiency
· Average cost reduction for solar/wind
· Increasing global installed wind/solar capacity
Power & Utilities
· US/Europe transitioning grid to renewables
· US coal power plant retirements
Transport & Logistics
· Increased global trade
· Higher e‑commerce penetration
How we create value
Investors
Shareholders
Investors in PINT can participate in an internationally diversified portfolio
of core infrastructure assets alongside other leading private asset managers
and institutional investors.
PINT's business model creates value by allowing Pantheon, the Investment
Manager, to allocate capital and invest on its behalf alongside Sponsors that
it believes have a distinct edge in a particular infrastructure sector.
Vehicle
PINT (public)
PINT has access to Pantheon's deal sourcing platform. Since PINT is publicly
listed, any retail or institutional investor is able to benefit from any value
it creates.
Other Pantheon funds (private)
Pantheon provides a broad sourcing network with leading private asset
investment managers and has strong relationships with Sponsors it can leverage
on behalf of PINT.
Refer to the Investment Manager's report for more details.
Portfolio
Infrastructure assets
High‑quality infrastructure assets typically benefit from long‑term
contractual cash flows, positive correlation to inflation and exposure to
secular changes in society.
Value creation
8-10% p.a.
target NAV Total Return per share
4p per share(1)
second year dividend, progressive thereafter
1. The Company is targeting a dividend of 4 pence per share for the year
ending 31 December 2023, and, thereafter, a progressive dividend.
Investment strategy
The Company seeks to generate attractive risk‑adjusted total returns for
shareholders over the long term, comprising both capital growth and a
progressive dividend. Through the acquisition of equity or equity‑related
investments, PINT offers a diversified portfolio of infrastructure assets
with a primary focus on developed OECD markets.
Diversification
International portfolio with exposure to regions, sectors and sourcing
partners and the ability to tilt the Portfolio over time to the best
risk/return opportunities.
Resilient cash flow assets
Emphasis on direct infrastructure assets with substantially contracted cash
flows and conservative leverage creates a portfolio with downside protection.
Inflation protection
Natural hedge against rising inflation with certain assets benefiting from
inflation protection.
Capturing long‑term growth
Exposure to growth dynamics within infrastructure sub‑sectors including the
transition to a net zero carbon economy and the digitalisation of social and
economic activity.
Value creation opportunities
Assets where added value can be created through operational optimisation, and
increased profitability, through incremental expansion of a platform or
industry consolidation, utilising the skill‑set and track record of
Sponsors.
Strong ESG characteristics
Robust asset and Sponsor ESG risk assessment through due diligence, ongoing
asset monitoring and exclusion of high‑risk ESG sectors from the strategy,
including coal, oil, gas (upstream), mining and nuclear.
Alternative Performance Measures (APMs)
PINT assesses its performance using a variety of measures that are not
specifically defined under FRS 102 and are therefore termed APMs. The APMs
used may not be directly comparable with those used by other companies.
These APMs provide additional information as to how the Company has performed
over the period and allow the Board, management and stakeholders to compare
its performance.
APM Details Calculation Reconciliation to FRS 102
NAV Total Return Total return comprises the investment return from the Portfolio and income It is calculated as the total return of £14.9 million for the six months The calculation uses FRS 102 measures.
from any cash balances, net of management and operating and finance costs. It ended 30 June 2023, as shown in the Income Statement, as a percentage of the
also includes foreign exchange movement and movement in the fair value of opening NAV for the period of £474.8 million as of 31 December 2022.
derivatives and taxes.
Net asset value per share A measure of the NAV per share in the Company. It is calculated as the NAV divided by the total number of shares in issue, The calculation uses FRS 102 measures and is set out in Note 16 to the
both at the balance sheet date. accounts.
Annual distribution This measure reflects the dividends distributed to shareholders in respect of The dividend is measured on a pence per share basis. The calculation uses FRS 102 measures.
each year.
Investment value and outstanding commitments A measure of the size of the investment portfolio including the value of It is calculated as the Portfolio asset value plus the amount of contracted The Portfolio asset value uses the FRS 102 measure Investments at fair value,
further contracted future investments committed by the Company. commitments. set out in Note 1 to the accounts. The value of future commitments is set out
in Note 21.
Investment Manager's report
Pantheon platform
134
Investment professionals
$93.4bn(1)
Funds under management
>1,000
Institutional investors globally
13
Global offices
Pantheon private infrastructure
$20.9bn(1)
AUM
194
Investments
31
Investment professionals
21 years
Average experience
Pantheon private infrastructure co‑investments
$4.3bn
Total commitments
52
Total investments
50+
Asset sourcing partners
14.1%
Notional net IRR(2)
Pantheon primary funds strategy
$9.8bn
AUM in primary companies since 2009(1)
· Pantheon develops long‑term relationships with top tier Sponsors
by investing in their underlying flagship funds.
· Sponsors consider Pantheon to be a strategic partner, rather than a
direct competitor.
Sponsors require co‑investment partner
$78bn
Co‑investment opportunities screened since 2015(3)
Sponsors may offer co‑investments for the following reasons: size of
transaction, manage concentration limits, raise follow‑on capital and
strengthen investor relationships.
Pantheon co‑investment strategy
$4.3bn
Committed across 52 co‑investment assets(4)
· Access to co‑investment assets, typically on a no-fee,
no‑carry basis.
· Proven track record as a valuable partner by providing experience
in complex deals; speed and certainty of deal execution within short
time frames.
· Co-investment track record has produced notional net IRR
of 14.1%(5).
1. As at 31 March 2023. This figure includes assets subject to
discretionary or non-discretionary management or advice. Infrastructure AUM
includes all infrastructure and real asset programmes which have an allocation
to natural resources.
2. Performance data as of 31 March 2023. Past performance is not
indicative of future results. Future performance is not guaranteed and a loss
of principal may occur. Performance data includes all infrastructure
co-investments approved by Pantheon's Global Infrastructure and Real Assets
Committee (GIRAC) since 2015, when Pantheon established its infrastructure
co-investment strategy. Notional net performance is based on an average
forecast annualised fee of 1.5% of NAV.
3. Pantheon internal data from 2015 to 30 June 2023. Screened deal flow
is based on total value of transactions ($).
4. Total infrastructure co-investment count and committed amount as of
31 March 2023, includes all Pantheon infrastructure co-investments closed or
in legal closing.
5. Performance data as of 31 March 2023. Performance data includes all
consummated infrastructure co-investments approved by GIRAC since 2015,
when Pantheon established its infrastructure co-investment strategy.
Investment activity
PINT continued to deploy selectively during the first half of the year. In
addition to c.£61.6 million of capital committed during the period to GD
Towers and GlobalConnect, after the period end the Company further announced a
£35 million commitment to Zenobe, a UK renewables and energy efficiency
transaction. Cash amounts invested across the Portfolio during the period were
£86.1 million with a total undrawn amount at the period end of £32.9 million
of which £19.8 million was invested shortly after the period end in
GlobalConnect.
Pantheon continues to see significant co-investment opportunities across all
sectors, and maintains a disciplined approach to assessing the suitability of
investments for PINT. Several further deals were screened, and ultimately
declined, in addition to those closed during the period. Additionally, in one
instance an investment, for a North American renewable energy platform, was
declined during legal closing - the period subsequent to GIRAC approval but
prior to legally binding commitment - due to the Sponsor declining to provide
PINT with the necessary information disclosure permissions. Whilst this was
naturally disappointing, it demonstrates Pantheon's commitment to ensure that
PINT can disclose fundamental investment characteristics to investors. Further
details around deal screening and selection are set out in the 'Co-investment
approach' later on in the report.
Performance
Portfolio movement (period to 30 June 2023)
During the period, PINT invested £39.2 million into one new asset, GD Towers
(GlobalConnect closed on 22 June 2023 but was not funded until after the
period end) and a further £46.9 million into existing Portfolio commitments
(principally into National Gas). Underlying fair value movements on the eleven
investments held during the period totalled £21.3 million and
the strengthening of GBP resulted in a Portfolio foreign exchange loss of
£15.3 million, before considering the impact of the hedging programme, which
is discussed on page 29 of the Interim Report to 30 June 2023. Distributions
of £3.0 million were received during the period, resulting in a closing
Portfolio value of £390.5 million at 30 June 2023.
Much of the Portfolio movement can be attributable to the impact of rolling
forward DCF valuations, and aside from updated future borrowing costs in line
with increasing base rates, no material amendments to the underlying Portfolio
Companies' business plans were reported by Sponsors. Only one completed
investment, GD Towers, which closed during the period, was valued at cost.
Portfolio update
From an operating perspective, the Portfolio continued to perform well during
the period with no material underperformance across any of the Portfolio
Companies. Operational developments of note included:
· Delta Fiber and TMobile Netherlands entered into a long-term
network sharing agreement, which broadens both parties' coverage and
represents a key milestone for the open access business model that targets a
greater degree of wholesale business.
· Calpine commenced construction on the 680MW Nova battery storage
project, which is expected to be the largest standalone battery storage
project in North America.
· Vertical Bridge entered into a joint venture agreement with Verizon
to build cell towers across the US to serve Verizon's expansion of 4G and 5G
Ultra Wideband services. The towers will be constructed on a 'build-to-suit'
basis which further supports Vertical Bridge's long-term growth expectations
in this business segment.
· National Broadband Ireland passed a further 23,400 homes, bringing
its total homes passed to 154,400 out of a total intervention area of over
560,000 homes. 9,100 additional homes were connected in the period, bringing
the total to 45,200.
· GlobalConnect became the first data centre provider in Europe to
offer submerged cooling - submerging servers in a special developed cooling
liquid - after introducing the technology in its Copenhagen data centre
following a research programme with technology provider GRC. The technology is
expected to be rolled out at other locations and has the potential to
dramatically reduce cooling space and power requirements.
Sector diversification(1) (as at 30 June 2023)
Digital Infrastructure | 44%
Invested | 37% Committed | 7%
Power & Utilities | 25%
Invested | 25% Committed | -
Renewables & Energy Efficiency | 16%
Invested | 9% Committed | 7%
Transport & Logistics | 9%
Invested | 9% Committed | -
Uncommitted(4) | 6%
Geographic diversification(1) (as at 30 June 2023)
Europe | 41%
Invested | 39% Committed | 2%
North America | 37%
Invested | 32% Committed | 5%
UK | 16%
Invested | 9% Committed | 7%
Uncommitted(4) | 6%
1. Based on gross assets of £485.6 million at 30 June 2023.
2. Invested amounts at 30 June 2023 totalled £390.5 million,
representing the fair value of the Company's funded investments in those
sectors or geographies.
3. Committed amounts at 30 June 2023 totalled £67.9 million,
representing cash held in respect of as yet undrawn commitments and/or deals
in legal closing in those sectors or geographies. Undrawn commitments are a
feature of the Company's investments and occur when completions are deferred
due to commercial or regulatory approval processes, or where capital calls are
intentionally staggered over time for follow-on purposes, for example for
capex or M&A requirements.
4. Remaining working capital at 30 June 2023, net of amounts reserved
for committed investments or investments in legal closing, totalled £27.2
million.
Discount rates
At the period end, the weighted average discount rate ("WADR") of the
Portfolio was 14%. This is significantly higher than observed elsewhere in the
listed infrastructure universe, which Pantheon believes provides significant
valuation headroom in a higher interest rate environment. This outlook is
supported by limited evidence of downward valuation movements in core plus and
value-add private market infrastructure assets over the last 12 months, as
private capital continues to specifically seek out high-quality assets with
significant growth potential from key societal tailwinds.
More generally, the higher entry IRRs and ongoing discount rates of the
Company's investments partly reflect the long-term objective of PINT to focus
on underlying investments that deliver capital growth. This growth is expected
to be achieved by Portfolio Companies' increasing their long-term earnings
through a mixture of organic growth, accretive capital investment, M&A
activity, and improved business efficiencies, and ultimately from divesting in
the future at a premium to the entry valuation. All of these factors feed into
a Sponsor's ongoing business plan, which introduces additional execution risk
and therefore higher required returns, when considered relative to assets
valued entirely on the basis of cash flows arising from existing operational
assets with finite asset lives. However, to the extent that individual
Portfolio Companies successfully execute on their growth initiatives and
de-risk business plans over time, Pantheon would expect discount rates to fall
commensurately with increased future earnings certainty.
RCF increase
During the period, the Company increased its RCF by £52.5 million through the
addition of Royal Bank of Scotland International as a lender. The total
available RCF is now £115 million, which remains fully undrawn, with a
remaining term of just over two years until December 2025.
Buybacks
Following the Company's announcement in March to allocate up to £10 million
of capital for share buybacks, c.£1 million of buybacks were made during the
period, contributing 0.04p per share in NAV uplifts. Further buybacks after
the period end, totalling £2.9 million, have contributed a further 0.18p per
share in NAV uplifts.
Capital allocation
Pantheon continues to see a significant pipeline of executable transactions
for PINT through the depth of its Sponsor relationships. It is, however,
mindful of the continuing macroeconomic environment and its associated impact
on sentiment towards listed infrastructure as an asset class, and the
resulting sustained discounts to NAV that have emerged. Accordingly, Pantheon
gives regular consideration to the appropriateness of making further
investments relative to the alternative options for allocating capital,
including share buybacks, or retaining increased liquidity, as well as the
associated cost of any capital that is allocated for these purposes.
Pantheon continues to see good reason for PINT making new investments
alongside its buyback programme. Aside from where the economics of a proposed
transaction are significantly attractive to the Company, further investment
also increases the benefit of diversification - by sector, geography and
vintage - that is not possible through further share buybacks.
As detailed below, following the recent completion of the Zenobe transaction,
PINT has now largely committed its available cash resources, which means any
further investment activity or increased buyback allocation will eventually
require some form of utilisation of the RCF. Pantheon considers this to be a
beneficial position for PINT to be in, as the Company can approach any such
activity mindful of the incremental cost of doing so, given the backdrop of
the increased interest rate environment.
Pantheon expects that further investment by PINT will be carefully considered
relative to potential investment returns, current cost of drawn debt and the
returns available through share buybacks. In any event, the Company's approach
to capital allocation will be continuously reviewed in the context of the
investment opportunities that Pantheon has access to.
Liquidity and leverage
At the period end, the Company benefited from significant available liquidity
of £205.8 million through its remaining cash and cash equivalents of £90.8
million and its undrawn RCF of £115 million.
The Company continues to maintain a policy to hold liquidity sufficient to
cover all investment commitments, amounts in legal closing and the remaining
allocation to its share buyback programme due in the next twelve months. At
the period end, this amount totalled £76.9 million, which includes the
GlobalConnect (£19.8 million) and Zenobe (£35 million) transactions.
The Company holds specific cash buffers in respect of potential further
liquidity requirements over the next twelve months. These buffers include
forecast operating costs, dividend payments, FX hedge settlements due (based
on mark‑to‑market valuations), an allowance for emergency co-investment
capital across the Portfolio, allowances for FX movements on undrawn non‑GBP
commitments, and amounts held against the Company's FX hedging positions
(calculated relative to notional amounts and contractual maturity). At the
period end, these amounts totalled £78.3 million.
Deducting all these considerations represents the surplus funds available to
the Company for further investment, which at the period end stood at £50.6
million. Any material changes to each investment's liquidity horizon, such as
underlying distributions or an accelerated exit relative to the underlying
Sponsor base case, will improve the Company's liquidity position and
accordingly increase this amount.
Sources £'m
Cash and cash equivalents 90.8
RCF 115.0
Total (A) 205.8
Commitments
Undrawn investment commitments 32.9
Investments in legal closing 35.0
Remaining allocation under share buyback programme 9.0
Total (B) 76.9
Buffers
Operating costs 8.5
FX mark-to-market 0.6
Dividends 14.4
Co-investment buffers 19.2
FX buffers on undrawn investment commitments 6.4
FX hedging buffers 24.2
Total (C) 78.3
Available funds (= A - B - C) 50.6
As noted above, Pantheon continuously assesses the optimal use of remaining
funds when presented with new investment opportunities, noting that utilising
this surplus in full for any purpose would involve a full utilisation of the
Company's existing cash balances and partial utilisation of its RCF, up to an
amount representing c.10% of NAV. Pantheon considers such a level of gearing
in current conditions to be appropriate relative to the established parameters
of investing either through additional share buybacks, at a material discount
to NAV, or carefully selected new investments with demonstrable returns in
excess of the drawn cost of the RCF=
NAV performance
NAV pence per share movement (period to 30 June 2023)
NAV per share over the period increased by 2.1p per share, or 3.1p per share
after adjusting for the interim dividend for H2 2022 of 1.0p per share, paid
in March 2023. This movement is broadly in line with Pantheon's expectations
given the timing of investment completions, remaining undrawn cash and the
holding at cost of GD Towers.
The movement in the period was principally driven by fair value gains of 4.7p
per share, offset by negative foreign exchange movement of (3.1p) per share
caused by the strengthening of the GBP in the period, which was partially
offset by a 2.0p per share movement from the foreign exchange hedging
programme. Interest from cash deposits contributed 0.4p per share, offset by
(0.9p) per share related to fund operating expenses, resulting in a closing
NAV of 101.0p per share. The impact of transactions undertaken in line with
the Company's share buyback programme contributed 0.04p per share during the
period.
Dividend
The Company remains committed to its IPO target to pay a dividend of 4p per
share for the year ending 31 December 2023 and then move to a progressive
dividend policy. Based on the effective NAV per share increase during the
period of 3.1p per share and the interim dividend of 2p per share, the
Company's dividend for H1 2023 is covered by earnings 1.6 times.
From a cash perspective, the Company does not expect its dividend to be
covered on a cash receipts basis in the short-term. The main reason for this
is that the co-investment model means the Company does not have direct control
of underlying distributions, and many of the Portfolio Companies consider the
re-deployment of free cash flow into growth capex or M&A activity to be a
more effective use of cash flow than making distributions in the current
interest rate environment, and the relative immaturity of the Portfolio means
that no investment exits are envisaged in the short-term.
Foreign exchange impact
PINT aims to deliver steady NAV growth and, as outlined in the IPO Prospectus,
the Company may enter into foreign exchange hedging transactions for the
purposes of efficient portfolio management.
In order to limit the potential impact on the NAV from material movements in
major foreign exchange rates, the Company has implemented a structured foreign
exchange hedging programme. This aims to reduce (rather than eliminate) the
impact of movements in major foreign exchange rates on the GBP net asset
value.
The appreciation of GBP resulted in a negative portfolio foreign exchange
movement of (£15.3) million in the period to 30 June 2023, which was
partially offset by a gain in the hedging programme of £9.7 million. The
resulting net downward impact of (£5.6) million, or (1.2p) per share, is
attributable to a combination of the Company's unhedged foreign currency
investments along with movements in the long-term forward rates used in
derivative mark-to-market valuations, arising from higher long-term interest
GBP rate expectations compared to EUR and USD. All other things being equal,
negative movements attributable to these long-term forward rates will unwind
in the Company's favour as it approaches contract maturities.
Sensitivity
In line with their information reporting obligations, Sponsors are required to
perform a number of valuation sensitivities on the Company's behalf against
key inputs including inflation, interest rates and discount rates. The
aggregated results of these sensitivities across the Portfolio are shown in
the chart below. Owing to the nature of the underlying revenues across the
Portfolio, the Company benefits from a net positive correlation with
inflation. Conversely, the Portfolio is negatively correlated to interest rate
movements, where rises would result in reduced free cash flows. The impact of
this across the Portfolio is mitigated by substantially hedged or fixed rate
debt at investment level.
1. Based on assets invested at 30 June 2023. Sensitivity results are
provided by Sponsors based on adjustments to the relevant underlying
assumptions in base case financial models across the expected life of each
investment.
Portfolio summary
Asset Status Commitment date Sector Region Sponsor Portfolio NAV Undrawn
30 June 2023 commitments
(£m) (£m)
Portfolio assets 30 June 2023
Primafrio Invested March 2022 Transport & Logistics Europe Apollo 43.0 0.5
CyrusOne Invested March 2022 Digital Infrastructure North America KKR 23.7 3.8
National Gas Invested March 2022 Power & Utilities UK Macquarie 41.2 0.0
Vertical Bridge Invested April 2022 Digital Infrastructure North America DigitalBridge 26.6 -
Delta Fiber Invested April 2022 Digital Infrastructure Europe Stonepeak 22.6 1.5
Cartier Energy Invested May 2022 Power & Utilities North America Vauban 33.2 -
Calpine Invested June 2022 Power & Utilities North America ECP 47.9 -
Vantage Data Centers Invested July 2022 Renewables & Energy Efficiency North America DigitalBridge 27.2 -
Fudura Invested July 2022 Renewables & Energy Efficiency Europe DIF 43.4 1.6
National Broadband Ireland Invested November 2022 Digital Infrastructure Europe Asterion 43.6 3.2
GD Towers Invested January 2023 Digital Infrastructure Europe DigitalBridge 37.9 2.5
390.5 13.1
Assets committed and in legal closing at 30 June 2023
GlobalConnect Committed June 2023 Digital Infrastructure Europe EQT - 19.8
Zenobe In-legal closing September 2023 Renewables & Energy Efficiency UK Infracapital - 35.0
- 54.8
TOTAL 390.5 67.9
Key:
Digital
Infrastructure
Renewables & Energy
Efficiency
Power & Utilities
Transport & Logistics
Investment policy
Digital Infrastructure
(including wireless towers, data centres and fibre-optic networks)
Power & Utilities
(including transmission and distribution networks, regulated utility companies
and efficient conventional power assets)
Renewables & Energy Efficiency
(including smart infrastructure, wind, solar and sustainable waste)
Transport & Logistics
(including ports, rail, roads, airports and logistics assets)
Social & Other Infrastructure
(including education, healthcare, government and community buildings)
The Company invests in a diversified portfolio of high-quality operational
infrastructure assets which provide essential physical structures, systems
and/or services to allow economies and communities to function effectively.
The Company invests in both yielding and growth infrastructure assets which
the Investment Manager believes will offer strong downside protection and
typically offer strong inflation protection.
The Company invests internationally, with a primary focus on developed OECD
markets, with the majority of its investments in Europe and North America.
The Company's Portfolio is diversified across infrastructure sectors, which
includes (but are not limited to) the sectors opposite, in each case where the
Investment Manager believes it can generate the most attractive risk-adjusted
returns.
The Company focuses on gaining exposure to infrastructure assets via
co-investments alongside leading third-party private direct infrastructure
asset investment managers who are acting as general partner or manager of a
fund in which Pantheon, or any investment scheme, pooled investment vehicle or
Portfolio Company managed by Pantheon, has invested or may invest. In doing
so, the Company may invest on its own or alongside other institutional clients
of the Investment Manager. The Company may also invest in other direct or
single asset investment opportunities originated by the Investment Manager or
by other third-party asset sourcing partners. The Company does not invest in
private funds targeting a diversified portfolio of infrastructure investments.
Co-investment approach
Features of co-investment
Whilst the precise structure varies from deal to deal, there are a number of
standard characteristics of PINT's co-investments, including:
Price
The entry price for a co-investment is set by the Sponsor, often as a result
of a bidding or auction process, and for single asset secondaries will usually
be linked to the Sponsor's current holding valuation, in some cases with a
modest entry discount. It is then for Pantheon to determine whether the
valuation represents an appropriate entry point, which is usually done through
a combination of benchmarking and sensitivity analysis. This includes the
preparation of a 'Pantheon Case' scenario which may have long-term assumptions
that diverge from those of a Sponsor, and may lead to a different forecast
return.
Due diligence
Pantheon is provided with all the due diligence materials available to the
Sponsor as part of any underwriting process, and in some cases, access is also
granted to certain advisers to address any concerns over discrete company
risks. A series of reference calls with other key external stakeholders in the
relevant sector is usually undertaken as the final stage of the due diligence
phase.
Control
A co-investor will not usually be able to exert any material control over a
co-investment, as operating autonomy around critical business decisions is
considered essential for Sponsors to grow Portfolio Companies. This means that
in practice key decisions around growth strategy, capital structure, treasury
management, distribution policy and exit economics/timing are not directly
determined by PINT. The critical protections around this lack of control are
to ensure sufficient contractual mechanisms are in place to provide alignment
with the lead Sponsor, as well as performing appropriately targeted due
diligence around key company risks.
Alignment
Co-investments are typically structured to include reciprocal drag and tag
rights, which exist to protect both the co-investor and Sponsor and form a key
component of aligning the economic outcomes amongst parties. A drag‑along
right enables a Sponsor to force co-investors to consent to a sale, and a
tag-along right offers reciprocal protection for co‑investors if a Sponsor
decides to sell its stake. Other areas of alignment may include lock-in
periods, minimum Sponsor carry commitments and minimum MOIC thresholds.
Valuations
Under IPEV guidance, PINT uses valuations that are prepared by the Sponsor or
their external valuation agent, using their methodology and inputs, including
business forecasts and discount rates. They are then reviewed by Pantheon's
valuation committee for appropriateness. Valuations are commonly performed on
a DCF basis but may sometimes be a combination of other methods including
benchmarking to market comparisons or transactional evidence. Owing to their
inherent complexity and the Sponsor's familiarity with companies, it is not
usually possible for co-investors to reconstruct valuations on a bottom-up
basis.
Reporting
Beyond the underwriting stage, enhanced information and reporting rights are
typically guided by a co-investor's specific requirements, but are usually
governed by strict disclosure and confidentiality provisions to prevent
publication of commercially sensitive information.
Pantheon approach
PINT's investment policy is to seek exposure to single companies through
co-investments or single asset secondary transactions alongside the leading
Sponsors that Pantheon works with. Its extensive network of Sponsors means
Pantheon is granted access to a significant deal flow of opportunities on
which PINT can transact and accordingly must be selective around those that
it pursues. Specific considerations on this selective approach to screening
target deals include:
Size
Specific appetite for an opportunity is considered relative to PINT's
long-term target sector and geography allocations.
Tailwinds
PINT targets companies operating in sectors that are suitably positioned to
benefit from the growth potential in future secular tailwinds.
Downside protection
Analysis of the relative weighting of a company's contracted revenues is the
starting point in screening a transaction, however uncontracted exposure will
be considered if there is sufficient conviction around a company's existing
competitive advantage or that there will remain barriers to entry in the
sector.
Fees
Deals are typically presented to Pantheon on a fee-free and carry-free basis,
however in some instances transactions with fees and carry may be considered
if the opportunity is considered attractive enough to justify the economic
leakage.
Gearing
Capital structures are considered relative to what is typical for a sector,
with a preference for longer-term fixed rate or hedged debt structures. A
company's access to incremental financing and the Sponsor's track record in
delivering such financing are also considered critical for ensuring future
business plans are sufficiently funded in capital-intensive sectors such as
data centres and fibre.
Inflation protection
Explicit inflation linkage of a company's revenues is preferred, typically
through contractual or regulation-based escalators, but implicit inflation
linkage is also acceptable when real returns are not significantly diluted
under downside scenarios and can be protected in instances of high
capex inflation.
Exit timing and assumptions
Exits are generally assumed to occur within a five to seven-year time frame,
normally in line with the Sponsors' underlying fund lives, but 'buy and hold'
base case scenarios are considered where there are sufficient contractual
mechanisms for PINT to seek a unilateral exit. Exit economics (e.g. secondary
buyer IRRs or EBITDA multiples) are typically determined relative to existing
current market comparable transactions, and material upside from sector
're-rating' is not considered as part of an investment base case
Our market
Infrastructure market indicators
Strong upward trends in deal activity, fundraising and investor sentiment
provide a positive backdrop for future growth.
The way in which societies and economies function over time is changing, which
creates new long-term tailwinds for the sectors that serve them. PINT
continues to construct a portfolio in these growing markets with favourable
tailwinds which should provide sustainable returns to shareholders.
Global changes
Urbanisation
Digitalisation
Smart cities
Telecommunications
Work from home
Decarbonisation
Population growth
Supply chain realignment
Key sector themes
Utilities
· The role of hydrogen is expected by some to be significant in
energy transition, which impacts utilities such as gas transmission and
distribution companies.
· Revenues tend to be inflation-linked, which is highly beneficial in
the current market environment.
· High demand for assets and lack of supply has driven asset prices
up.
Energy transition
· Governments and supranational organisations globally are
prioritising climate change issues and clean energy, leading to tangible and
publicly stated targets for many organisations.
· Infrastructure supporting the development of energy transition is
still under-developed in areas such as the electric grid/EVs; further
investment in this sector is in high demand.
· However, the process to build/transition relevant assets
is comparatively slow.
Transportation
· Increased demand for cleaner modes of transport in line with
aforementioned global trends.
· Travel volumes continue to recover after Covid-19, although air
travel now recovered to c.96% of 2019 levels.(1)
· After significant increases in 2021, freight prices fell during
2022 due to softening global demand.(2)
Digital
· Significant increase in demand due to global trends (working from
home gaming, AI, streaming, videos etc.) requiring major increase in
data/connectivity.
· Labour and supply chain shortages/issues are impacting certain
build-out and development projects.
Social & healthcare
· Increased demand for childcare facilities and population growth.
· Growth in life sciences, medical services and research, and an
ageing population are driving demand for infrastructure in this sector.
Pantheon opinion. There is no guarantee that these trends will persist.
1. Source: IATA, July 2023.
2. Source: Freightos, February 2023.
Sector spotlight
Battery Energy Storage Systems
Overview
Battery Energy Storage Systems (or "BESS") are devices connected to
electricity distribution or transmission networks that are capable of storing
energy and releasing it at a later time. Algorithms and software are used to
co-ordinate energy production and when to store and release that energy.
As the pursuit of decarbonisation continues to see an increase in renewable
energy generation, these systems provide a way to modulate fluctuations in
energy production at times when supply does not match energy demand. This,
paired with the decreasing cost of battery technology, has led to the rise of
BESS solutions as a key part of the energy transition.
BESS sites require capital-intensive infrastructure, including the battery
systems themselves, connections to distribution or transmission networks,
enclosures with thermal management, power conversion systems (inverters),
energy management systems (monitoring and controlling energy flow within the
system), and battery management systems (ensuring the safety of the system).
Grid infrastructure has not kept up with the pace of renewables deployment,
with demand for BESS determined by multiple factors, such as:
· The variability of electricity demand.
· The current and expected future split of power generation sources.
· The flexibility and variability of these power generation sources.
· Cost and effectiveness of the energy storage technology.
· Connection availability to the grid.
Technology
There are multiple types of battery technology available, with common types
including Lithium-ion batteries ("Li-ion"), lead-acid batteries, sodium
sulphur batteries, zinc bromine batteries, and flow batteries.
The dominant and most widely used technology today is the Li-ion battery - a
versatile technology developed in the 1970s, used in devices such as mobile
phones, laptops and electric cars. They offer an efficient and high-density
solution, with a long cycle and quick charge and discharge potential. The
batteries are charged during periods of low demand, by converting excess
electricity into chemical energy within the batteries.
There are other types of energy storage systems which are mostly in
developmental stages, but for now BESS form the majority of the required
pipeline for additional energy storage units - examples of other technologies
are compressed air energy storage, mechanical gravity energy storage, pumped
hydropower storage, and hydrogen energy storage and fuel cells.
Balancing the grid
The use of BESS provides a range of benefits to the electricity grid,
including frequency regulation, peak load shifting, power management, and the
integration of renewable energy sources.
Conventional renewable energy generation relies on unreliable inputs, making
the electricity output unreliable in turn - the wind does not always blow and
the sun does not always shine. When supply is higher than demand this results
in wasted energy and lost revenue, or power outages when demand is higher than
supply.
Stabilisation of the distribution network is a core requirement to accompany
the increase in renewable energy generation, to allow more flexibility to meet
electricity demands. Current system flexibility in the grid system tends to be
provided by an increase or decrease in the provision of coal, gas-fired or
nuclear power generation.
BESS provides a way to make the variable renewable resource consistent,
dependable and predictable so that the electricity network needs can be met.
It will also help reduce the dependency on non-renewable energy sources,
whilst optimising returns and maximising energy efficiency.
Market
More energy storage systems are required as a higher proportion of energy is
generated from renewable sources, with the need for BESS growing more quickly
at higher levels of renewables penetration given the increased variability in
the overall supply.
The cost of Li-ion batteries has been on a strong downward trend over the last
few decades, which has largely assisted in their becoming a viable solution
for energy storage, and a potentially profitable investment.
Applications of utility scale energy storage systems include:
· Energy arbitrage - wholesale market trading, purchasing and storing
of electricity during periods of low demand at low cost, and selling and
discharging it at a higher price during periods of high demand. Revenue is
generated from the volatility in energy prices.
· Frequency response (ancillary services) - providing fast responses
to unpredictable variations in electricity demand and generation. These are
usually short-term contracts that are awarded by energy grid operators with
pricing mechanisms based on availability and pricing.
· Capacity provision - long-term commercial contracts, usually with
creditworthy parties including energy system operators, such as National Grid
in the UK, that agree to pay a fixed price for a project's capacity. These
help to ensure a reliable energy provision to the grid, or alternatively
supply energy to specific customers (for example EVs).
Through provision of a combination of these services, BESS owners can maximise
their revenue through value stacking.
Business case
BESS projects are attractive to investors for a number of reasons, including
the sector growth anticipated as the energy transition continues, and the
potential for long-term contracts with predictable cash flows.
Energy transition - BESS projects are essential to help realise governmental
targets of net zero by 2050 as energy systems move towards a higher proportion
of renewable energy generation.
Long-term contracts - many of the BESS projects will have a capacity provision
contract in place that will secure a proportion of cash flows, with the
potential for these to be inflation linked. Further upside can be seen through
value stacking.
Regulation - given the growth seen in the sector over the past few years,
regulation has fallen behind. BESS are now an area of focus for governments
and regulators, which will help to lift barriers and may also see financial
incentives or subsidies for the projects.
Supplier warranty - the battery units will typically benefit from a supplier
warranty that guarantees minimum performance levels under specific operating
parameters, reducing technology risk.
PINT approach
PINT has exposure to a number of BESS projects through its investments in the
Power & Utilities and Renewables & Energy Efficiency sectors. These
include Calpine, which has in excess of 500MW of operational and development
phase projects, notably Santa Ana and Nova in California, and Fudura, through
its product offering of small to medium-sized behind-the-meter batteries to
commercial customers. Furthermore, battery storage projects form a key part of
the investment thesis of the recently announced Zenobe investment, which
boasts c.500MW of contracted operational battery storage projects in the UK as
well as a significant global development pipeline.
The development of BESS projects is expected to represent a key growth
opportunity for infrastructure developers that PINT aims to invest in.
Accordingly, the Company's exposure to this significant decarbonisation sector
is expected to grow over time.
ESG in infrastructure investing
Introduction
The Board of PINT believes that sound ESG practices and operating sustainably
are integral to building a resilient infrastructure business and creating
long-term value for our shareholders and other stakeholders. Investing
responsibly in infrastructure is central to PINT's business model.
PINT's Board is ultimately responsible for its sustainability, and established
its ESG and Sustainability Committee in July 2023 to oversee and review its
ESG and Sustainability policy, which can be found on PINT's website
(www.pantheoninfrastructure.com). The Committee is chaired by Andrea Finegan,
an independent non-executive Director, and consists of PINT's Board members
and Pantheon's Global Head of ESG.
The Board has appointed Pantheon as its Investment Manager who, amongst other
responsibilities, is tasked with delivering this ESG and Sustainability policy
day-to-day.
In turn, Pantheon (the "Investment Manager") maintains its own group-wide ESG
Policy, the objective of which is to ensure that, wherever possible, ESG
considerations are appropriately reflected in Pantheon's investment process.
Pantheon believes this is crucial to harnessing the potential for value
creation, as well as in protecting the interests and reputations of its firm
and clients. ESG due diligence findings are formally documented in investment
recommendations, with potential concerns flagged for consideration by Pantheon
investment committees. Following the closing of an investment, Pantheon
actively monitors ESG and climate change risk, and proactively engages with
its highly experienced general partners and Sponsors to advocate for
improvement in the event of any negative incidents.
Pantheon is rigorous in assessing and managing sustainability-related risks in
its managed portfolio and identifying opportunities. Equally, Pantheon
actively seeks opportunities arising from the development of solutions to
global sustainability challenges. These long-term trends are aligned with
PINT's strategy and investment mandate.
PINT is classified as Article 8 under the European Union's Sustainable Finance
Disclosure Regulation ("SFDR"), and as such PINT must make available annual
periodic reports, as detailed in the next paragraph. To support its promoted
environmental / social characteristic, PINT has adopted an investment policy
which restricts investments in specific excluded sectors. PINT will not invest
in infrastructure assets whose principal operations are in any of the
following sectors:
· coal (including coal-fired generation, transportation and mining);
· oil (including upstream, midstream and storage);
· upstream gas;
· nuclear energy; and
· mining.
H1 highlights
During 2023, the following was achieved:
PINT established an ESG & Sustainability Committee
Pantheon published its inaugural sustainability report for 2022
PINT adopted a Company ESG and sustainability policy, which complements and
builds on the Investment Manager's ESG policy
Looking ahead, the Company is aiming to improve data collection, resulting in
better disclosures and also improved ESG performance of investments. We
acknowledge that as an investment company without control of the underlying
investee companies, we are heavily reliant on Pantheon and the Sponsors for
the collection of data and delivery of any ESG objectives. The focus over the
next year will be very much on engagement with suppliers and Sponsors to
develop the communication, data collection and disclosure.
PINT and Pantheon's enhanced approach to ESG
Integrating ESG considerations into the selection and monitoring of its
infrastructure assets is central to PINT's business model.
PINT recognises that its level of control of investments is limited, however
where possible it will seek, through its Investment Manager and the management
teams of the investments, to work with investee companies to improve their ESG
performance.
The sustainability of a new potential investment into a Portfolio Company is
assessed during the due diligence phase of the investment process, prior to
any investment decision being made.
Pantheon's approach to assessing ESG opportunities and risk, on behalf of PINT
is multi-faceted and includes a robust assessment of both Sponsor-level and
asset-level factors. The investment team conducts extensive diligence at the
Sponsor level using several ESG key performance indicators ("KPIs").
Pantheon's ESG analysis of potential infrastructure co-investments also
involves assessment of ESG risk at the Portfolio Company level.
Pantheon's approach is based around four key aspects:
1. Transparency
Enhanced transparency through improved ESG practices
2. Integration
Integration of ESG screening, due diligence and monitoring
3. Engagement
Consistent Sponsor, industry and investor engagement leads to improved ESG
reporting
4. Solutions
Developing Sponsor capabilities to offer solutions that meet investors' ESG
and sustainability requirements
Sustainable Development Goals (SDGs)
As part of its integrated ESG analysis in investment due diligence, Pantheon
considers the alignment of each UN Sustainable Development Goal (SDG)
applicable to PINT's assets.
Overview
The UN defines SDGs as: 'as a universal call to action to end poverty, protect
the planet, and ensure that by 2030 all people enjoy peace and prosperity.
Pantheon believes that private sector investment is essential to achieving
SDGs. Annual investment requirements across all sectors have been estimated at
around $5-7 trillion to achieve the SDGs and therefore mobilising private
capital at scale is critical.
Against this backdrop, Pantheon engaged an external ESG consultancy firm to
support it, through enhancing its investment screening and due diligence.
Pantheon has also developed a bespoke and comprehensive ESG scorecards to
support manager and Portfolio Company ESG assessments. Pantheon's ESG
scorecard utilises various ESG data sources and leading ESG indicators - such
as climate change performance index, World Bank carbon pricing benchmark to
assess managers and Portfolio Companies.
These utilise various industry data sources and leading ESG indicators - such
as the Climate Change Performance Index and the World Bank Carbon Pricing
Benchmark.
These are completed by the investment team before taking a deal to Pantheon's
investment committee.
For further details on Pantheon's SDG mapping methodology, please refer to
PINT's sustainability report, available on PINT's website.
Pantheon's ESG scorecard for single-company investments includes a tool which
enables a high-level assessment of which SDGs the investment might contribute
to (and can be found on page 42 of the Interim Report to 30 June 2023).
Voluntary climate-related disclosures
In order to improve and increase reporting on climate-related financial
information, the Financial Stability Board (FSB) - an international body
formed by the G20 that monitors and makes recommendations about the global
financial system - established the Task Force on Climate-Related Financial
Disclosures ("TCFD"). This was driven by concerns that the risks associated
with the transition to a low-carbon economy were being mispriced by market
participants. For 2022, there is no mandatory requirement for PINT to make
disclosures under the Task Force on Climate-Related Financial Disclosures
TCFD; however, the Company is making progress towards reporting fully against
the TCFD categories of Governance, Strategy, Risk Management, and Metrics and
Targets.
This section of the report sets out how PINT incorporates climate-related
risks and opportunities into its governance, strategy, risk management,
metrics and targets and is guided by, but is not intended to comply with, the
recommendations of the TCFD.
Governance
PINT's Audit and Risk Committee ("ARC") monitors the integrity of the
financial statements of the Company, including its annual and interim reports,
including checking the sources of information relating to ESG and climate
disclosures included therein. PINT is committed to sustainability throughout
its supply chain. The appointment of third parties is overseen by the Manager
and reviewed annually at the Management Engagement Committee. PINT is
classified as Article 8 under the European Union's Sustainable Finance
Disclosure Regulation, and as such has enhanced reporting requirements and an
investment policy which restricts investments in specific exclusion sectors.
Strategy
As set out in the Company's launch prospectus and ESG and sustainability
policy, the Company intends to be diversified across sectors that support the
Company's promoted environmental characteristics including climate change
mitigation.
PINT will not invest in infrastructure assets whose principal operations are
in any of the excluded sectors mentioned on page 38 of the Interim Report 30
June 2023.
Risk management
As set out in its annual report and accounts for 2022, the Company has a
comprehensive risk and governance framework to ensure all risks, including ESG
and climate-related risks, are monitored and managed with due care and
diligence. The Board exercises oversight of this framework, through its Audit
and Risk Committee, and ESG risks and opportunities are additionally
considered by the ESG and Sustainability Committee.
The Company is ultimately reliant on the risk management frameworks of the
Investment Manager, investment Sponsors and other key service providers, as
well as on the risk management operations of each Portfolio Company.
Metrics and targets
As set out in its strategy, PINT restricts investments in certain sectors;
however, as it invests in a diversified portfolio, it does not have an
overarching portfolio emissions target.
PINT reports against the following climate-related ESG key performance
indicators:
· CO(2) emissions data (tCo(2)e);
· year of emissions;
· carbon intensity per asset (tCo(2)e/£m revenue); and
· carbon footprint (tCO(2)e/£m NAV).
CO(2): Scope 1 and 2 disclosures - PINT's portfolio
· Scope 1 (direct emissions): emissions generated from activities
directly controlled by Portfolio Companies (i.e. combustion of fuel and
operation of facilities).
· Scope 2 (indirect emissions): emissions generated from Portfolio
Companies' consumption of power (i.e. purchased electricity/heat).
The top three CO(2)-emitting Portfolio Companies (tCO(2)e) contribute 99% of
PINT's Scope 1 & 2 emissions.
Scope 1 Scope 2 Scope 1+2
GHG emissions (tCO(2)e) 439,519 6,406 445,926
Year of emissions 2022 2022 2022
Carbon intensity (tCO(2)e/£m revenues) 4,578 84 4,662
Carbon footprint (tCO(2)e/£m NAV) 1,457 21 1,478
Coverage (% of NAV reported) 100% 100% 100%
Notes: Coverage refers to the % of NAV for which the Sponsors provided the GHG
emissions value. All figures are actual data provided by Sponsors. None of the
figures were estimated by Pantheon. Carbon intensity shown as a weighted
average by NAV.
Revenue figures are latest available as at 31 December 2022. Emissions and NAV
figures are as at 31 December 2022.
PINT's Portfolio Companies: Policies and diversity
The data below provide a summary of the proportion of PINT's Portfolio
Companies with Health & Safety and Diversity & Inclusion policies in
place, and of the gender diversity of their boards and full-time employees.
Policies: Percentage of Portfolio Companies with Health & Safety and
Diversity & Inclusion policies in place
Going forward, PINT and Pantheon will endeavour to work with Sponsors to
ensure that Portfolio Companies which do not have the aforementioned policies
work towards putting them in place.
Pantheon is relying on Sponsor's confirmation of Health & Safety and
Diversity & Inclusion policies and has not received or reviewed the
policies. Number of women FTEs not provided for one Portfolio Company.
% of assets with an H&S / D&I policy in place:
H&S | 89%
D&I | 67%
% of women board members:
30-40% | 4
20-30% | 1
10-20% | 2
<10% | 2
% of women FTEs:
>50% | 1
40-50% | 1
30-40% | 1
20-30% | 4
<10% | 1
Note: Number of women FTEs not provided for one Portfolio Company.
Looking ahead
Going forward, PINT is aiming to develop data collection, resulting in better
disclosures and also improved ESG performance of investments.
As an investment company without control of underlying investee companies, the
Board is heavily reliant on Pantheon and Sponsors for the collection of data
and delivery of any ESG objectives. The focus over the next year will be very
much on engagement with suppliers to improve the communication, data
collection and disclosure.
Further details of Pantheon's approach to climate change analysis in
investing, investment examples, third-party relationships and Pantheon's own
diversity and inclusion metrics can be found in the full 2022 sustainability
report on PINT's website.
Board of Directors
Vagn Sørensen
Chair and Nomination Committee Chair
Appointed to the Board 4 October 2021
Mr Vagn Sørensen is an experienced non‑executive chair and director of
listed and private companies.
After attending Aarhus Business School and graduating with a MSc degree in
Economics and Business Administration, Mr Sørensen began his career at
Scandinavian Airlines Systems in Sweden, rising through numerous positions in
a 17‑year career before becoming Deputy CEO with special responsibility for
Denmark. Between 2001 and 2006, Mr Sørensen was President and Chief Executive
Officer for Austrian Airlines Group in Austria, a business with approximately
€2.5 billion of turnover, 8,000 employees and listed on the Vienna Stock
Exchange. Mr Sørensen also served as Chair of the Association of European
Airlines in 2004. Since 1999, Mr Sørensen has been a Tier 1 senior industrial
adviser to EQT, a private equity sponsor, and has been a non‑executive
director or Chair of a number of their Portfolio Companies. Since 2008, Mr
Sørensen has been a senior adviser to Morgan Stanley Investment Bank.
Mr Sørensen is currently Chair of Air Canada (since 2017) and a
non‑executive director of CNH Industrial and Royal Caribbean Cruises.
Notable previous non‑executive appointments have included Chair of SSP Group
(2006 to February 2020), Chair of Scandic Hotels AB (2007‑2018), Chair of
TDC A/S (2006‑2017) and Chair of FLSmidth & Co (2009‑2022).
Anne Baldock
Senior Independent Director and Chair of the Remuneration Committee
Appointed to the Board 4 October 2021
Ms Anne Baldock is an experienced board member and lawyer with over 30 years'
experience in the infrastructure sector.
Ms Baldock graduated in law from the London School of Economics and was a
qualified Solicitor in England and Wales from 1984 to 2012. Ms Baldock was a
Partner at Allen & Overy LLP between 1990 and 2012, during which time she
was Managing Partner, Projects Group London (1995‑2007), member of the
firm's Global/Main Strategic Board (2000‑2006) and Global Head of Projects,
Energy and Infrastructure (2007‑2012). Notable transactions included the
Second Severn Crossing, Eurostar, the securitisation of a major UK water
utility and several major PPP projects in the UK and abroad.
Ms Baldock's current roles include Senior Independent Director for the
Restoration and Renewal Delivery Authority Limited (the delivery body created
by parliament to deal with the restoration of the Houses of Parliament),
Senior Independent Director and Chair of Audit and Risk Committee for East
West Railway Company Limited (the Government‑owned company constructing the
new Oxford to Cambridge railway) and non‑executive director of Electricity
North West Limited. Amongst previous roles, Ms Baldock was non‑executive
director of Thames Tideway Tunnel, non‑executive director of Hydrogen Group
(AIM‑listed) and Trustee of Cancer Research UK.
Patrick O'Donnell Bourke
Audit and Risk Committee Chair
Appointed to the Board 4 October 2021
Mr Patrick O'Donnell Bourke is an experienced board member with more than 28
years of experience in energy and infrastructure.
After graduating from Cambridge University, Mr O'Donnell Bourke started his
career at Peat Marwick, Chartered Accountants (now KPMG) and qualified as a
Chartered Accountant. After that he held a variety of investment banking
positions at Hill Samuel and Barclays de Zoete Wedd. In 1995, he joined
Powergen Plc, where he was responsible for mergers and acquisitions before
becoming Group Treasurer. In 2000, Mr O'Donnell Bourke joined Viridian Group
Plc as Group Finance Director and later became Chief Executive, appointed by
the private equity shareholder following take‑over in 2006. In 2011, he
joined John Laing Group, a specialist international investor in, and manager
of, greenfield infrastructure assets where he served as CFO until his
retirement in 2019. While at John Laing, he was part of the team which
launched the John Laing Environmental Assets Fund on the London Stock Exchange
in 2014.
Mr O'Donnell Bourke currently serves as Chair of Ecofin US Renewables
Infrastructure Trust Plc and as Chair of the Audit Committee of Harworth Group
Plc (a leading UK regenerator of land and property for development and
investment). Mr O'Donnell Bourke was previously Chair of the Audit and Risk
Committee at Calisen Plc (an owner and operator of smart meters in the UK) and
Chair of the Audit Committee at Affinity Water.
Andrea Finegan
Management Engagement Committee Chair and ESG & Sustainability Committee
Chair
Appointed to the Board 4 October 2021
Ms Andrea Finegan is an experienced infrastructure asset management
professional with over 30 years of sector experience.
After graduating from Loughborough University, Ms Finegan held investment
banking roles at Deutsche Bank and Barclays Capital, before joining Hyder
Investments as Head of the Deal Closing Team. Between 1999 and 2007, Ms
Finegan worked at Innisfree Limited, the investment manager of an £8 billion
infrastructure asset portfolio, latterly as Board Director and Head of Asset
Management. Ms Finegan was subsequently Chief Operating Officer, ING
Infrastructure Funds and Fund Consultant to Climate Change Capital.
In 2012, Ms Finegan joined Greencoat Capital LLP for the set up and launch of
Greencoat UK Wind Plc, the renewable infrastructure investment trust, in 2013,
then became Chief Operating Officer until 2018, a position that included
structuring and launching another renewable energy infrastructure fund listed
on the London Stock Exchange and Euronext Dublin (Greencoat Renewables Plc)
and a number of private markets solar energy funds.
Ms Finegan is currently Chair of the Valuation Committee of Schroders
Greencoat LLP, a role she has held since 2015, and independent consultant to
the board of Sequoia Economic Infrastructure Income Fund Limited, working
closely with the ESG & Stakeholder Committee and the Risk Committee.
Interim management report and responsibility statement
of the Directors in respect of the interim report
Interim management report
The important events that have occurred during the period under review, the
key factors influencing the financial statements and the principal
uncertainties for the remaining six months of the financial year are set out
in the Chair's statement and the Investment Manager's report. The principal
risks facing the Company are substantially unchanged since the date of the
annual report for the financial period ended 31 December 2022 and continue to
be as set out in that report on pages 72 to 76. Risks faced by the Company
include, but are not limited to market conditions, political and regulatory
changes, falls in demand, returns target, investor sentiment, lack of suitable
investment opportunities, portfolio concentration risk, over-reliance on the
Investment Manager, tax status and legislation, third‑party providers, cyber
security, geopolitical turbulence and climate change risk.
Each Director confirms that, to the best of his or her knowledge:
· the condensed set of financial statements has been prepared in
accordance with FRS 104: Interim Financial Reporting and gives a true and fair
view of the assets, liabilities, financial position and return of the Company;
and
· the interim financial report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred for the six months to 30
June 2023 and their impact on the set of financial statements; and a
description of the principal risks and uncertainties for the remaining six
months of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the six months to
30 June 2023 and that have materially affected the financial position or
performance of the Company during that period.
This interim financial report was approved by the Board on 26 September 2023
and was signed on its behalf by:
Vagn Sørensen
Chair
26 September 2023
Independent review report
to Pantheon Infrastructure Plc
Conclusion
We have been engaged by Pantheon Infrastructure Plc ('the Company') to review
the condensed set of financial statements in the half-yearly financial report
for the six months ended 30 June 2023 which comprises the Income statement,
Statement of changes in equity, Balance sheet, Cash flow statement, and Notes
1 to 21. We have read the other information contained in the half yearly
financial report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed set of
financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2023 is not prepared, in all
material respects, in accordance with FRS 104 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" ('ISRE') issued by the Financial
Reporting Council. A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in Note 1, the annual financial statements of the Company are
prepared in accordance with United Kingdom Generally Accepted Accounting
Practice. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with the
Financial Reporting Standard FRS 104 'Interim Financial Reporting'.
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE, however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of the Directors
The Directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the Directors are responsible
for assessing the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to
liquidate the Company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibility for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, is based on procedures that are less extensive than
audit procedures, as described in the Basis for Conclusion paragraph of this
report.
Use of our report
This report is made solely to the Company in accordance with guidance
contained in International Standard on Review Engagements 2410 (UK) "Review of
Interim Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the Company, for our work, for this report, or for the conclusions we
have formed.
Ernst & Young LLP
London, United Kingdom
26 September 2023
Condensed income statement (unaudited)
For the six months to 30 June 2023
Six months ended Period 9 September 2021 to Period 9 September 2021 to 31 December 2022
30 June 2022 30 June 2023
Note Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gain on investments at fair value through profit or loss(1) 9 - 7,193 7,193 - 5,711 5,711 - 19,592 19,592
Gains/(losses) on financial instruments at fair value through profit or loss 12 - 9,724 9,724 - (4,994) (4,994) - (8,520) (8,520)
Foreign exchange gains on cash and non‑portfolio assets - 116 116 - 19 19 - 5 5
Investment management fees 2 (2,386) - (2,386) (790) - (790) (3,194) - (3,194)
Other expenses 3 (942) (9) (951) (786) (122) (908) (1,360) (555) (1,915)
(Loss)/profit before financing and taxation (3,328) 17,024 13,696 (1,576) 614 (962) (4,554) 10,522 5,968
Finance income 4 1,762 - 1,762 405 - 405 2,096 - 2,096
Interest payable and similar expenses 5 (560) - (560) (1) - (1) (36) - (36)
(Loss)/profit before taxation (2,126) 17,024 14,898 (1,172) 614 (558) (2,494) 10,522 8,028
Taxation recovered/(paid) 6 - - - - - - - - -
(Loss)/profit for the period, being total comprehensive income for the period (2,126) 17,024 14,898 (1,172) 614 (558) (2,494) 10,522 8,028
Earnings per share - Basic 7 (0.44)p 3.55p 3.11p (0.29)p 0.15p (0.14)p (0.58)p 2.45p 1.87p
Earnings per share - Diluted 7 (0.44)p 3.55p 3.11p (0.24)p 0.13p (0.11)p (0.58)p 2.45p 1.87p
1. Includes foreign exchange movements on investments.
The Company does not have any income or expense that is not included in the
return for the period, therefore the return for the period is also the total
comprehensive income for the period. The supplementary revenue and capital
columns are prepared under guidance published in the Statement of Recommended
Practice (SORP) issued by the Association of Investment Companies (AIC). The
total column of the statement represents the Company's statement of total
comprehensive income prepared in accordance with FRS 104.
All revenue and capital items in the above statement relate to continuing
operations.
No operations were acquired or discontinued during the period.
The Notes on pages 51 to 62 form part of the financial statements in the
Interim Report to 30 June 2023.
Condensed statement of changes in equity (unaudited)
For the six months to 30 June 2023
Note Share capital Share premium Capital Other capital Revenue reserve(1) Total
£'000 £'000 redemption reserve(1) £'000 £'000
reserve(1) £'000
£'000
Movement for the six months ended 30 June 2023
Opening equity shareholders' funds 4,800 79,449 382,484 10,522 (2,494) 474,761
Share issue costs - (187) - - - (187)
Ordinary Shares bought back - - (979) - - (979)
Dividends paid 8 - - (4,800) - -- (4,800)
Profit/(loss) for the period - - - 17,024 (2,126) 14,898
Closing equity shareholders' funds 4,800 79,262 376,705 27,546 (4,620) 483,693
Movement for the period 9 September 2021 to 30 June 2022
Balance at 9 September 2021 - - - - - -
Share issue costs - (7,916) - - - (7,916)
Ordinary Shares issued 4,800 395,200 - - - 400,000
Cancellation of share premium - (387,284) 387,284 - - -
Profit/(loss) for the period - - - 614 (1,172) (558)
Closing equity shareholders' funds 4,800 - 387,284 614 (1,172) 391,526
Movement for the period 9 September 2021 to 31 December 2022
Balance at 9 September 2021 - - - - - -
Share issue costs - (9,267) - - - (9,267)
Ordinary Shares issued 4,800 395,200 - - - 400,000
Subscription shares issued (subsequently converted to Ordinary Shares) - 80,800 - - - 80,800
Cancellation of share premium - (387,284) 387,284 - - --
Dividends paid 8 - - (4,800) - - (4,800)
Profit/(loss) for the period - - - 10,522 (2,494) 8,028
Closing equity shareholders' funds 4,800 79,449 382,484 10,522 (2,494) 474,761
1. The capital redemption reserve, capital reserve and revenue reserve
are all the Company's distributable reserves. The capital redemption reserve
has arisen from the cancellation of the Company's share premium account and is
a distributable reserve.
Condensed balance sheet (unaudited)
As at 30 June 2023
Note 30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Non-current assets
Investments at fair value 9 391,616 145,360 301,382
Debtors 10 815 - 740
Current assets
Derivative financial instruments 12 2,048 - -
Debtors 10 1,182 597 959
Cash and cash equivalents 11 90,816 251,674 182,937
94,046 252,271 183,896
Creditors: Amounts falling due within one year
Other creditors 13 (1,940) (1,111) (2,737)
(1,940) (1,111) (2,737)
Net current assets 92,106 251,160 181,159
Total assets less current liabilities 484,537 396,520 483,281
Creditors: Amounts falling due after one year
Derivative financial instruments 12 (844) (4,994) (8,520)
Net assets 483,693 391,526 474,761
Capital and reserves
Called-up share capital 15 4,800 4,800 4,800
Share premium 79,262 - 79,449
Capital redemption reserve 376,705 387,284 382,484
Capital reserve 27,546 614 10,522
Revenue reserve (4,620) (1,172) (2,494)
Total equity shareholders' funds 483,693 391,526 474,761
NAV per Ordinary Share 16 101.0p 97.9p 98.9p
The financial statements were approved by the Board of Pantheon Infrastructure
Plc on 26 September 2023 and were authorised for issue by:
Vagn Sørensen, Chair
Company Number: 13611678.
Condensed cash flow statement
For the six months to 30 June 2023
Six months ended Period Period
30 June 9 September 9 September
2023 2021 to 2021 to
£'000 30 June 31 December
2022 2022
£'000 £'000
Cash flow from operating activities
Investment management fees paid (2,368) (240) (1,994)
Operating fees paid (748) (605) (1,581)
Other cash payments (101) (346) (110)
Net cash outflow from operating activities (3,217) (1,191) (3,685)
Cash flow from investing activities
Purchase of investments (83,041) (139,649) (281,790)
Net cash outflow from investing activities (83,041) (139,649) (281,790)
Cash flow from financing activities
Share issue proceeds - 400,000 480,800
Share issue costs - (7,916) (9,267)
Share buyback costs (976) - -
Dividends paid (4,800) - (4,800)
Loan arrangement facility fee paid (1,816) - -
Finance costs paid (290) - (1)
Finance income 1,903 405 1,675
Net cash (outflow)/inflow from financing activities (5,979) 392,489 468,407
(Decrease)/increase in cash and cash equivalents in the period (92,237) 251,649 182,932
Cash and cash equivalents at the beginning of the period 182,937 - -
Foreign exchange gains 116 25 5
Cash and cash equivalents at the end of the period 90,816 251,674 182,937
.
Notes to the interim financial statements (unaudited)
1. Accounting policies
Pantheon Infrastructure Plc (the 'Company') is a listed closed-ended
investment company incorporated in England and Wales on 9 September 2021, with
registered 'company number' 13611678. The Company began trading on 15 November
2021 when the Company's shares were admitted to trading on the London Stock
Exchange. The registered office of the Company is Link Company Matters
Limited, 6th Floor, 65 Gresham Street, London EC2V 7NQ.
A. Basis of preparation
The Company applied FRS 102 and the SORP for the period 9 September 2021 to 31
December 2022 in its financial statements. The financial statements for the
six months to 30 June 2023 have therefore been prepared in accordance with FRS
104: Interim Financial Reporting. The condensed financial statements have been
prepared on the same basis as the statutory accounts for the period ended 31
December 2022. They have also been prepared on the assumption that approval as
an investment trust will continue to be granted. The Company's condensed
financial statements are presented in GBP and all values are rounded to the
nearest thousand pounds (£'000) except when indicated otherwise.
The financial statements have been prepared in accordance with the SORP for
the financial statements of investment trust companies and venture capital
trusts issued by the AIC in July 2022.
The financial information contained in this interim report, the comparative
figures for the financial period ended 30 June 2022 and the comparative
information for the period 9 September 2021 to 31 December 2022 do not
constitute statutory accounts within the meaning of section 434 of the
Companies Act 2006. The financial information for the six months ended 30 June
2023, and the period 9 September 2021 to 30 June 2022, have not been audited
but have been reviewed by the Company's Auditor and their report can be found
on page 46 of the Interim Report 30 June 2023. The annual report and financial
statements for the financial period ended 31 December 2022 have been delivered
to the Registrar of Companies. The report of the Auditor was: (i) unqualified;
(ii) did not include a reference to any matters which the Auditor drew
attention by way of emphasis without qualifying the report; and (iii) did not
contain statements under section 498 (2) and (3) of the Companies Act 2006.
The financial statements comprise the results of the Company only. The Company
has control over a number of subsidiaries. Where the Company owns a subsidiary
that is held as part of the investment portfolio and its value to the Company
is through the fair value rather than as the medium through which the group
carries out business, the Company excludes it from consolidation. The
subsidiaries have not been consolidated in the financial statements under FRS
102, but are included at fair value within investments in accordance with
9.9C(a) of FRS 102.
B. Going concern
The financial statements have been prepared on the going concern basis and
under the historical cost basis of accounting, modified to include the
revaluation of certain investments at fair value.
The Directors have made an assessment of going concern, taking into account
the Company's current performance and financial position as at 30 June 2023.
In addition, the Directors have assessed the outlook, which considers the
potential further impact of ongoing geopolitical uncertainties as a result of
the Russia-Ukraine conflict including the disruption to the global supply
chain, and increases in the cost of living as a result of this conflict,
persistent inflation, interest rate rises and the impact of climate change on
the Company's Portfolio, using the information available up to the date of
issue of the financial statements
In reaching this conclusion, the Board considered budgeted and projected
results of the business, including projected cash flows, various downside
modelling scenarios and the risks that could impact the Company's liquidity.
Having performed their assessment, the Directors considered it appropriate to
prepare the financial statements of the Company on a going concern basis. The
Company has sufficient financial resources and liquidity, is well placed to
manage business risks in the current economic environment, and can continue
operations for a period of at least twelve months from the date of issue of
these financial statements.
C. Segmental reporting
The Directors are of the opinion that the Company is engaged in a single
segment of business, being investment in infrastructure to generate investment
returns while preserving capital. The financial information used by the
Directors and Investment Manager to allocate resources and manage the Company
presents the business as a single segment comprising a homogeneous portfolio.
D. Significant judgements, estimates and assumptions
The preparation of financial statements requires the Company and Investment
Manager to make judgements, estimates and assumptions that affect the reported
amounts of investments at fair value at the financial reporting date and the
reported fair value movements during the reporting period. However,
uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of the investments
at fair value in future years.
The fair values for the Company's investments are established by the Directors
after discussion with the Investment Manager using valuation techniques in
accordance with the International Private Equity and Venture Capital (IPEV)
guidelines. Valuations are based on periodic valuations provided by the
Sponsors of the investments and recorded up to the measurement date. Such
valuations are necessarily dependent upon the reasonableness of the valuations
by the Sponsor of the underlying assets. In the absence of contrary
information, the valuations are assumed to be reliable. These valuations are
reviewed periodically for reasonableness and recorded up to the measurement
date. The Sponsor is usually the best placed party to determine the
appropriate valuation. The annual and quarterly reports received from the
Sponsors are reviewed by the Investment Manager to ensure consistency and
appropriateness of approach to reported valuations. The investments are
approved by Pantheon's Valuation Committee.
2. Investment management fees
Six months ended Period ended Period 9 September 2021 to 31 December 2022
30 June 2023 30 June 2022
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investment management fees 2,386 - 2,386 790 - 790 3,194 - 3,194
2,386 - 2,386 790 - 790 3,194 - 3,194
The Investment Manager is entitled to a quarterly management fee at an annual
rate of:
· 1.0% of the part of the Company's Net Asset Value up to and
including £750 million; and
· 0.9% of the part of such Net Asset Value in excess of £750
million.
As at 30 June 2023, £1,218,000 was owed for investment management fees (30
June 2022: £550,000, 31 December 2022: £1,200,000).
The Investment Manager does not charge a performance fee.
3. Other expenses
Six months ended Period ended Period 9 September 2021 to 31 December 2022
30 June 2023 30 June 2022
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Secretarial and accountancy services 110 - 110 111 - 111 201 - 201
Depositary services 41 - 41 44 - 44 74 - 74
Fees payable to the Company's Auditor for audit-related assurance services - - - 25 - 25 160 - 160
Fees payable to the Company's Auditor for non‑audit‑related assurance 35 - 35 35 - 35 35 - 35
services
Directors' remuneration 90 - 90 130 - 130 220 - 220
Employer's National Insurance 8 - 8 15 - 15 24 - 24
Legal and professional fees 13 9 22 90 122 212 186 534 720
Other fees(1) 645 -- 645 336 - 336 460 21 481
942 9 951 786 122 908 1,360 555 1,915
1. Other fees consist of items such as advertising and marketing fees,
irrecoverable VAT, broker, valuation and registrar fees and other operating
costs.
4. Finance income
Period
9 September
Six months ended Period ended 2021 to
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Interest income 1,762 405 2,096
1,762 405 2,096
5. Interest payable and similar expenses
Six months ended Period ended Period
30 June 30 June 9 September
2023 2022 2021 to
£'000 £'000 31 December
2022
£'000
Commitment fees payable on borrowings 340 - 22
Amortisation of loan arrangement fee 219 - 13
Bank interest expense 1 1 1
560 1 36
6. Taxation
Tax charge
The tax credit/(charge) for the period differs from the standard rate of
corporation tax in the UK of 19% to 31 March 2023 rising to 25% from 1 April
2023, giving a weighted average for the six months of 22%. The differences are
explained below:
Six months ended Period ended Period 9 September 2021 to 31 December 2022
30 June 2023 30 June 2022
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Net return before tax (2,126) 17,024 14,898 (1,172) 614 (558) (2,494) 10,522 8,028
Tax at UK corporation tax rate of 22% (30 June 2022: 19%, 31 December 2022: (468) 3,745 3,277 (223) 117 (106) (474) 1,999 1,525
19%)
Non-taxable investment, derivative and currency gains - (3,745) (3,745) - (117) (117) - (1,999) (1,999)
Carry forward management expenses 468 - 468 223 - 223 474 - 474
- - - - - - - - -
Factors that may affect future tax charges
The Company is an investment trust and is therefore not subject to tax on
capital gains. Deferred tax is not provided on capital gains and losses
arising on the revaluation or disposal of investments because the Company
meets (and intends to meet for the foreseeable future) the conditions for
approval as an investment trust company. No deferred tax asset has been
recognised in respect of management and other expenses in excess of taxable
income as they will only be recoverable to the extent that there is sufficient
future taxable revenue.
As at 30 June 2023, the Company had no unprovided deferred tax liabilities.
For the six months ended 30 June 2023, excess management expenses were £5.0
million.
7. Earnings per share
Earnings per share (EPS) are calculated by dividing profit for the period
attributable to ordinary equity holders of the Company by the weighted average
number of Ordinary Shares in issue during the period. As there were no
dilutive instruments outstanding for the six months ended 30 June 2023, there
is no difference between basic and diluted earnings per share as shown below:
Six months ended Period ended Period 9 September 2021 to
30 June 2023 30 June 2022 31 December 2022
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Earnings for the financial period (£'000) (2,126) 17,024 14,898 (1,172) 614 (558) (2,494) 10,522 8,028
Weighted average Ordinary Shares (number) 479,786,326 400,000,000 428,272,575
Basic earnings per share (0.44)p 3.55p 3.11p (0.29)p 0.15p (0.14)p (0.58)p 2.45p 1.87p
Earnings for the financial period (£'000) (2,126) 17,024 14,898 (1,172) 614 (558) (2,494) 10,522 8,028
Weighted average Ordinary Shares (number) 479,786,326 400,000,000 428,272,575
Dilutive shares in respect of Subscription Shares - 80,000,000 -
Diluted earnings per share (0.44)p 3.55p 3.11p (0.24)p 0.13p (0.11)p (0.58)p 2.45p 1.87p
There were no meaningful shareholders or corporate activity between
incorporation of the Company on 9 September 2021 and 16 November 2021, the IPO
date, and therefore this period has not been included for the purpose of
calculating the weighted average number of shares.
8. Dividends paid
Six months ended Period ended Period
30 June 30 June 9 September
2023 2022 2021 to
£'000 £'000 31 December
2022
£'000
Dividends paid during the period 4,800 - 4,800
4,800 - 4,800
9. Investments
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Cost brought forward 281,790 - -
Opening unrealised appreciation on investments held
- Unlisted investments 19,592 - -
- Listed investments - - -
Valuation of investments brought forward 301,382 - -
Movement in period:
Acquisitions at cost 83,041 139,649 281,790
Appreciation on investments held 7,193 5,711 19,592
Valuation of investments at period end 391,616 145,360 301,382
Cost at year end 364,831 139,649 281,790
Closing unrealised appreciation on investments held
- Unlisted investments 26,785 5,711 19,592
- Listed investments -- - -
Valuation of investments at period end 391,616 145,360 301,382
10. Debtors
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Other debtors - non-current(1) 815 - 740
Other debtors - current(1) 841 561 486
Prepayments and accrued income 341 36 473
1,997 597 1,699
1. Relates to the revolving credit facility (RCF) arrangement fees which
are to be released to the Income Statement until the loan maturity date of 18
December 2025.
11. Cash and cash equivalents
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Cash 27,508 251,674 26,670
Cash equivalents 63,308 - 156,267
90,816 251,674 182,937
Cash equivalents of £63,308,000 were held in a money market fund at 30 June
2023 (30 June 2022: £nil, 31 December 2022: £156,267,000).
12. Derivative financial instruments
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
At the beginning of the period (8,520) - -
Gains/(losses) on financial instruments at fair value through profit or loss 9,724 (4,994) (8,520)
At the end of the period 1,204 (4,994) (8,520)
The Company uses forward foreign exchange contracts to minimise the effect of
fluctuations in the value of the investment portfolio from movements in
exchange rates. As at 30 June 2023, there were five contracts due to expire in
the next twelve months with a valuation of £2,048,000. The remaining
contracts due to expire after the twelve months following period end were
valued as a liability of £844,000.
The fair value of these contracts is recorded in the Balance Sheet. No
contracts are designated as hedging instruments and consequently all changes
in fair value are taken through profit or loss.
As at 30 June 2023, the notional amount of the forward foreign exchange
contracts held by the Company was £325.1 million (30 June 2022: £120.2
million, 31 December 2022: £278.9 million).
13. Other creditors
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Investment management fees payable 1,218 550 1,200
Other creditors and accruals 722 561 1,537
1,940 1,111 2,737
14. Interest-bearing loans and borrowings
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Interest-bearing loans and borrowings - - --
Loan arrangement fee brought forward 1,087 - -
Loan arrangement fee incurred in the period 788 - 1,100
Amortised loan arrangement fee for the period (219) - (13)
Loan arrangement fee carried forward(1) 1,656 - 1,087
Total credit facility payable - - -
1. The loan arrangement fee carried forward are shown as other debtors
in Note 10.
The Company entered into a £62.5 million RCF with Lloyds Bank Corporate
Markets in December 2022. In June 2023, this was increased by £52.5 million,
bringing the RCF total to £115 million. As part of the increase, the Company
has sought to diversify the lender group through the introduction of The Royal
Bank of Scotland International Limited alongside, Lloyds Bank Corporate
Markets.
The RCF is denominated in GBP, with the option to be utilised in other major
currencies. The rate of interest is the relevant currency benchmark plus an
initial margin of 2.85% per annum, reducing to 2.65% once certain expansions
thresholds have been met. A commitment fee of 1.00% per annum is payable on
undrawn amounts, and the tenor of the RCF is three years from December 2022.
The facility is secured against the assets held in the Company's subsidiary,
Pantheon Infrastructure Holdings LP.
Borrowing costs associated with the RCF are shown as interest payable and
similar expenses in Note 5 to these financial statements.
The Loan arrangement fee of £1.7 million carried forward at 30 June 2023 is
included within Debtors, Note 10 to these financial statements.
15. Called-up share capital
30 June 2023 30 June 2022 31 December 2022
Allotted, called up and fully paid: Shares £'000 Shares £'000 Shares £'000
Ordinary Shares of £0.01
Opening balance 480,000,000 4,800 -- - - -
Ordinary Shares issued in the period - - 400,000,000 4,000 400,000,000 4,000
Conversion of subscription shares in the period - - - - 80,000,000 800
Closing balance 480,000,000 4,800 400,000,000 4,000 480,000,000 4,800
Subscription shares of £0.01
Opening balance - - - - - -
Subscription shares issued in the period - - 80,000,000 800 80,000,000 800
Conversion of subscription shares in the period - - - - (80,000,000) (800)
Closing balance - - 80,000,000 800 - -
Treasury shares
Opening balance - - - - - -
Share buybacks in the period 1,185,000 979 - - - -
Closing balance 1,185,000 979 - - - -
Total called-up share capital excluding treasury shares 478,815,000 3,821 480,000,000 4,800 480,000,000 4,800
During the six months to 30 June 2023, 1,185,000 Ordinary Shares were bought
back in the market, to be held in treasury (30 June 2022: nil, 31 December
2022: nil) at a total cost, including stamp duty, of £979,000.
16. Net asset value per share
NAV per share is calculated by dividing net assets in the Balance Sheet
attributable to ordinary equity holders of the Company by the number of
Ordinary Shares outstanding at the end of the period. As there were no
dilutive instruments outstanding at 30 June 2023 there is no difference
between basic and diluted NAV per share:
30 June 30 June 31 December
2023 2022 2022
Net assets attributable (£'000) 483,693 391,526 474,761
Ordinary Shares 478,815,000 400,000,000 480,000,000
NAV per Ordinary Share 101.0p 97.9p 98.9p
17. Reconciliation of gain/(loss) before financing costs and taxation to net
cash flows from operating activities
Six months ended Period ended Period
30 June 9 September 9 September
2023 2021 to 2021 to
30 June 31 December
2022 2022
Gain/(loss) before financing costs and taxation 13,696 (962) 5,968
Losses/(gains) on investments (7,193) (5,711) (19,592)
Foreign exchange losses/(gains) on cash and borrowings (116) (26) (5)
Increase in operating debtors (88) (597) (182)
(Decrease)/increase in operating creditors 208 1,111 1,606
(Gains)/losses on financial instruments at fair value through profit or loss (9,724) 4,994 8,520
Net cash flows from operating activities (3,217) (1,191) (3,685)
18. Subsidiaries
The Company has two wholly owned subsidiaries. The Company has ownership and
control over these two entities and as such they are deemed to be subsidiaries
by the Board.
i. PIH LP was incorporated on 5 November 2021 with a registered address in
the State of Delaware, National Registered Agents, Inc., 209 Orange Street,
Wilmington, Delaware, 19801, USA and is wholly owned by the Company.
The Company holds an investment in PIH LP. In accordance with FRS 102, the
Company has not consolidated the subsidiary on the grounds it does not carry
out business through the subsidiary and that it is held exclusively with a
view to subsequent resale. It is therefore considered part of an investment
portfolio.
Several of the investments in the Portfolio are held through PIH LP and are
valued based on the fair value of the investments held in those entities. The
Company holds a 99.9% investment in PIH LP, with the remaining holding is held
by Pantheon Infrastructure Holdings GP LLC (PIH GP).
ii. PIH GP was incorporated on 5 November 2021 with a registered address in
the State of Delaware, National Registered Agents, Inc., 209 Orange Street,
Wilmington, Delaware, 19801, USA and is wholly owned by the Company.
The Company has not consolidated PIH GP as it is immaterial. This treatment is
supported by the Companies Act 2006, section 405 (2), whereby a subsidiary
undertaking may be excluded from consolidation if its inclusion is not
material for the purpose of giving a true and fair view.
19. Fair value
Fair value hierarchy
Financial assets are carried in the Balance Sheet at their fair value or
approximation of fair value. The fair value is the amount at which the asset
could be sold in an orderly transaction between market participants, at the
measurement date, other than a forced liquidation sale.
The Company measures fair values using the following fair value hierarchy that
reflects the significance of the inputs used in making the measurements.
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant assets as follows:
Level 1: Quoted (unadjusted) market prices in active markets for identical
assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that is
significant to the fair value measurement is directly or indirectly
observable.
Level 3: Valuation techniques for which the lowest level input that is
significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on
a recurring basis, the Company determines whether transfers have occurred
between levels in the hierarchy by reassessing categorisation at the end of
each reporting period. There were no transfers between levels during the
period.
Financial assets at fair value through profit or loss at 30 June 2023
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Investments - - 391,616 391,616
Derivatives - financial instruments - 1,204 - 1,204
- 1,204 391,616 392,820
Financial assets at fair value through profit or loss at 30 June
2022
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Investments - - 145,360 145,360
Derivatives - financial instruments - (4,994) - (4,994)
- (4,994) 145,360 140,366
Financial assets at fair value through profit or loss at 31 December
2022
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Investments - - 301,382 301,382
Derivatives - financial instruments - (8,520) - (8,520)
- (8,520) 301,382 292,862
The fair value of these investments and derivatives - financial instruments is
recorded in the Balance Sheet as at the period end.
There have been no transfers between Level 1 and Level 2 during the period,
nor have there been any transfers between Level 2 and Level 3 during the
period.
The carrying amount of all assets and liabilities, detailed within the Balance
Sheet, is considered to be the same as their fair value.
The majority of the assets held within Level 3 are valued on a discounted cash
flow basis; hence, the valuations are sensitive to the discount rate assumed
in the valuation of each asset. Other significant unobservable inputs include
inflation and interest rate assumptions used to project future cash flows and
the forecast cash flows themselves.
The majority of assets held within Level 3 have revenues that are linked,
partially linked or in some way correlated to inflation.
The valuations are sensitive to changes in interest rates. These comprise a
wide range of interest rates from short-term deposit rates to longer-term
borrowing rates across a broad range of debt products.
20. Transactions with the Investment Manager and related parties
The amounts payable to the Investment Manager, together with the details of
the Investment Management Agreement, and outstanding amounts are disclosed in
Note 2.
The Company's related parties are its Directors and its subsidiaries as
disclosed in Note 18. The fees paid to the Company's Board for the six months
to 30 June 2023 totalled £98,000 (period ended 30 June 2022: £145,000,
period ended 31 December 2022: £244,000). There were no other identifiable
related parties at the period end.
21. Subsequent events
Commitments
At 30 June 2023 the Company had undrawn commitments of £32.9 million
outstanding in respect of infrastructure assets (period ended 30 June 2022:
£92.1 million).
On 7 September 2023 the Company made a commitment to invest in Zenobe, a
battery storage and electric vehicle fleet specialist, committing
approximately £35.0 million.
Disclosure 1 - Investments
This interim report provides information about certain investments made by
PINT. They should NOT be regarded as a recommendation. Pantheon makes no
representation or forecast about the performance, profitability or success of
such investments. You should not assume that future investments will be
profitable or will equal the performance of past recommendations.
The statements made reflect the views and opinions of Pantheon as of
the date of the investment analysis.
Contact Information:
Pantheon Infrastructure Plc
Telephone
+44 (0)20 3356 1800
Email
pint@pantheon.com
Website
www.pantheoninfrastructure.com
NATIONAL STORAGE MECHANISM
A copy of the Half-Yearly Financial Report will be submitted shortly to the
National Storage Mechanism ("NSM") and will be available for inspection at the
NSM at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
Ends
LEI: 213800CKJXQX64XMRK69
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FFFSIAIIRFIVRecent news on Pantheon Infrastructure
See all newsREG - Pantheon Infrastrct. - Annual Financial Report
AnnouncementREG - Pantheon Infrastrct. - Holding(s) in Company
AnnouncementREG - Pantheon Infrastrct. - Dividend Declaration
AnnouncementREG - Pantheon Infrastrct. - Notice Of Full Year Results and Analyst Meeting
AnnouncementREG - Pantheon Infrastrct. Schroders PLC - Holding(s) in Company
Announcement