REG - Pantheon Intl PLC - Annual Financial Report
Thu 07:02
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RNS Number : 2882T Pantheon International PLC 31 July 2025
For immediate release
The information contained in this announcement is restricted and is not for
publication, release or distribution in the United States of America, Canada,
Australia (other than to persons who are both wholesale clients and
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distribution is or may be unlawful.
PANTHEON INTERNATIONAL PLC
ANNUAL REPORT FOR THE TWELVE MONTHS ENDED 31 MAY 2025
The full Annual Report and Accounts can be accessed via the Company's website
at www.piplc.com (http://www.piplc.com) or by contacting the Company Secretary
by telephone on +44 (0)333 300 1932.
Pantheon International Plc
(the "Company" or "PIN")
Pantheon International Plc, a FTSE 250 investment trust that provides access
to an actively-managed global and diversified portfolio of private
equity-backed companies, today publishes its Annual Report and Accounts for
the twelve months ended 31 May 2025.
It has been a busy period implementing Step Three of our corporate strategy
programme. This step, which aims to increase demand for PIN's shares and
narrow the discount at which they trade, is still in progress but has already
led to some observations and actions:
· Enhancing our investment strategy and performance through active
portfolio management
· Our strategy is to invest in, and alongside, the leading private
equity managers globally, which we are able to do through the longstanding
relationships that Pantheon has with them.
o We believe that investing directly into single companies - which accounted
for 54% of the portfolio as at 31 May 2025 - complemented by fund investments
in leading private equity managers, is the right approach to take advantage of
their respective strengths: portfolio company diversification in the case of
fund investments, and closer involvement in asset selection and lower fees in
the case of direct investments.
o This year's analysis has shown that 72% of PIN's underlying private equity
managers are first or second quartile in terms of performance or are still
early in their investment period, therefore we will concentrate investment in
the funds and associated direct investments in top-performing private equity
managers.
· We are refining our approach to portfolio management by
periodically rebalancing the portfolio, regularly reviewing it to see whether
there are parts which could be sold, with the proceeds reinvested to enhance
shareholder returns.
· We are examining a number of methodologies to smooth out the
effects of investment pacing to ensure greater consistency of vintage
diversification - a further update will be provided later in the year.
· Management of capital
· In order to capture value for shareholders, PIN invested
£53.5m(1) in share buybacks which added 1.5% to the NAV.
· In recognition of the continued wide discount on the shares, the
Board allocated a further £30m to share buybacks for the period of 1 June
2025 to mid-September when the August NAV is expected to be released.
· We will implement a more dynamic approach to capital management,
considering all the sources and uses of capital available to PIN to optimise
long-term shareholder returns.
· Proactive broadening of our reach and building the brand
· A busy period of laying the groundwork of our marketing strategy
in partnership with our recently-appointed marketing agency and other partners
such as our PR and website agencies.
· This has involved, and will continue to involve, substantial
testing and learning in areas such as our addressable investor audience and
effective communication to them.
· Corporate Governance and continuing proactivity
· Three deeply experienced new Non-Executive Directors from the
private equity sector - Tim Farazmand, Candida Morley and Tony Morgan - joined
the already highly skilled Board during the period.
· Zoe Clements formally took over as Audit Chair during the period.
· After nine years on the Board, John Singer CBE will retire from
the Board at the end of December 2025 and John Burgess will retire from the
Board upon conclusion of the Company's Annual General Meeting in October 2025.
· Tony Morgan will become Chair of PIN from the start of 2026. Tony
has been fully involved in Step Three of our corporate strategy and, having
spent almost three decades in senior investment roles at a range of financial
institutions and private equity firms, has the experience to lead its
implementation.
Performance update
· Before currency effects, during the year ended 31 May 2025 PIN's
assets grew by 5.9% and investment income added 0.9% to the NAV. Share
buybacks added 1.5% to the NAV.
· Approximately 76% of PIN's portfolio is denominated in US dollars
which weakened against sterling during the period. As a result, unfavourable
currency movements reduced PIN's sterling-quoted NAV by 4.8%.
· After the impact of currency and expenses and taxes, PIN's NAV
increased by 1.2% during the period, compared to the previous year.
· In line with the listed private equity sector, the discount on
the shares has continued to be wide and disappointingly, the share price
declined by 9.2% during the period. The discount on the shares was 40% at the
end of May 2025 although this had narrowed to 32% at the time of writing.
(( 1 )) Includes £3.5m of share repurchases that relate to the unused portion
of the £200m FY2024 share buyback programme that was carried over to the
current financial year.
Annualised performance as at 31 May 2025
1 yr 3 yrs 5 yrs 10 yrs Since inception*
NAV per share (stated net of fees) 1.2% 3.2% 11.5% 12.2% 11.6%
Ordinary share price -9.2% 0.1% 7.5% 8.7% 10.3%
FTSE All-Share, Total Return 9.4% 8.2% 11.1% 6.1% 7.6%
MSCI World, Total Return (Sterling) 7.8% 11.2% 12.7% 11.9% 8.6%
(*) Inception in September 1987.
NAV per share vs. market performance
1 yr 3 yrs 5 yrs 10 yrs Since inception
Versus FTSE All-Share, Total Return -8.2% -5.0% +0.4% +6.1% +4.0%
Versus MSCI World, Total Return (Sterling) -6.6% -8.0% -1.2% +0.3% +3.0%
Share price vs. market performance
1 yr 3 yrs 5 yrs 10 yrs Since inception
Versus FTSE All-Share, Total Return -18.6% -8.1% -3.6% +2.6% +2.7%
Versus MSCI World, Total Return (Sterling) -17.0% -11.1% -5.2% -3.2% +1.7%
Portfolio update
· PIN's portfolio is tilted towards non-cyclical companies that are
in more resilient sectors such as Information Technology and Healthcare. These
companies are benefitting from long-term trends that we believe are here to
stay.
· PIN's distribution rate was 12% for the year ended 31 May 2025.
While this was below the Company's long-term average, it was still 50% higher
than the distribution rate in the last financial year (during the year to 31
May 2024: 8%).
· The call rate was 20% during the financial year, which was also
low compared with historical levels and reflects the lower overall levels of
deal activity in private equity.
· As a result, PIN's portfolio has remained cash-generative during
the period with net cash inflow from the portfolio of £130.8m. This is more
than a three-fold increase over 2024.
· PIN has generated a total of £1.5bn of net cash over the last 10
years.
Financial position update
· During the period, PIN's credit facility was right-sized to a
£400m equivalent with the flexibility for this to be increased to £700m
under the existing structure.
· As at 31 May 2025, PIN had net available cash of £21m while
£103m was drawn down under the credit facility and £111m of sterling
equivalent loan notes were outstanding.
· Therefore as at 31 May 2025, PIN's net debt to NAV, excluding the
Asset Linked Note, was prudent at 8.7%.
· As at 31 May 2025, PIN's financing cover was 4.2x and its undrawn
coverage ratio was comfortable at 85%, relative to the 25% minimum required
under existing loan covenants.
Commenting on the full year, John Singer CBE, Chair of PIN, said: "We have had
a very busy year during which we have continued to implement Step Three of our
three-step programme aimed at narrowing the discount through increased demand
for PIN's shares. While we expect to update investors fully on the conclusions
of our work later in the year, a number of decisions have already been made
which aim to improve PIN's long-term NAV performance and stimulate demand for
PIN's shares. These include making enhancements to the active management of
PIN's portfolio and capital management as well as broadening the reach of
PIN's brand and appeal to a range of investors. PIN is overseen by a very
talented Board of Directors and, as I step down at the end of the year, we
have a truly experienced and perfect successor as Chair in Tony Morgan. The
path ahead is exciting. Our strategy is clearer, our structure is stronger,
and our commitment - to putting shareholders first - remains at the heart of
everything we do."
Commenting, Charlotte Morris, Partner at Pantheon and Co-Lead Manager of PIN,
said: "Like many industries, the persistent macroeconomic uncertainty around
the world and a higher interest rate environment have had an impact on private
equity over the past few years. Generating NAV outperformance has been more
challenged in the past three years especially but we believe that the
portfolio is well-positioned for when an improvement in market conditions and
increase in deal activity comes through. It is difficult to predict the timing
of when exit realisations may revert towards the levels seen historically;
however, we are aware of several of our underlying managers finalising the
sales of portfolio companies. We believe that PIN's focus on small to
mid-market buyouts - which are well-established businesses that are typically
sold to corporate buyers or larger private equity managers - means that it
should benefit when this happens."
Commenting, Helen Steers MBE, Partner at Pantheon and Co-Lead Manager of PIN,
said: "Over the more than 30 years that I have worked in private markets, I
have seen many significant changes. One of the most striking has been how the
best private equity firms, including many of those in PIN's portfolio, have
been able to adapt to different market conditions over successive
macroeconomic cycles. It has also been pleasing to see how private equity can
be a driver of growth, and how it has become a creator of jobs in many local
communities. With public markets becoming increasingly concentrated and
inaccessible or unattractive to smaller, fast-growing businesses, having
exposure to the private company opportunity set could become increasingly
important for all investors. Since its inception in 1987, PIN has been, and we
believe continues to be, one of the most accessible ways for investors of all
types and sizes to do this."
Videos of the Chair discussing a busy period for the Company and of the
Pantheon team discussing PIN's full-year results are available on PIN's
website at www.piplc.com (http://www.piplc.com) .
Capital Markets Afternoon
PIN will host a Capital Markets Afternoon on 17 September 2025 during which
there will be presentations from Pantheon and one of PIN's underlying private
equity managers. Institutional investors and analysts wishing to attend should
contact the Pantheon team at pip.ir@pantheon.com (mailto:pip.ir@pantheon.com)
for further details.
LEI: 2138001B3CE5S5PEE928
For more information please contact:
Pantheon
Helen Steers MBE / Charlotte Morris / Vicki Bradley +44 (0)20 3356 1800
pip.ir@pantheon.com (mailto:pip.ir@pantheon.com)
Investec Bank plc +44 (0)20 7597 4000
Joint Corporate Broker
Tom Skinner (Corporate Broking)
Lucy Lewis (Corporate Finance)
J.P. Morgan Cazenove +44 (0)203 493 8000
Joint Corporate Broker
William Simmonds (Corporate Finance)
Montfort Communications +44 (0)7539 993 601
Gay Collins / Charlotte Merlin-Jones / PIN@montfort.london (mailto:PIN@montfort.london)
Michael Schutzer-Weissmann
Follow PIN on LinkedIn:
https://www.linkedin.com/company/pantheon-international-plc
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Important Information
A copy of this announcement will be available on the Company's website at
www.piplc.com (http://www.piplc.com/) Neither the content of the Company's
website, nor the content on any website accessible from hyperlinks on its
website for any other website, is incorporated into, or forms part of, this
announcement nor, unless previously published by means of a recognised
information service, should any such content be relied upon in reaching a
decision as to whether or not to acquire, continue to hold, or dispose of,
securities in the Company.
STRATEGIC REPORT
AT A GLANCE
Putting shareholders first
A share in Pantheon International Plc ("PIN" or the "Company") provides access
to a high-quality diversified portfolio of private-equity backed companies
around the world that would otherwise be inaccessible to most investors.
Shares in PIN can be bought and sold as they would in any other publicly
listed company.
PIN is a FTSE 250 investment trust, which invests in private equity assets,
and it is actively managed by Pantheon, one of the leading private markets
investment managers globally.
PIN is overseen by an independent Board of Directors who have a diverse range
of skills, expertise and backgrounds, including significant private equity
experience.
As at 31 May 2025
Net asset value ("NAV") £2.2bn
Annualised NAV per share return since 1987 (net of fees) +11.6%
NAV per share growth in the period +1.2%
Valuation gains in the year, excluding foreign exchange effects +5.9%
Net asset value per share 496.5p
Market capitalisation £1.3bn
Annualised share price return since 1987 +10.3%
Share price change in the period -9.2%
Association of Investment Companies ("AIC") ongoing charges 1.35%(1)
(1)Ongoing charges are calculated based on the AIC definition. Including
financing costs, PIN's total ongoing charges would be 2.22%. See the
Alternative Performance Measures section in the full Annual Report for
calculations and disclosures.
CHAIR'S STATEMENT AND OVERVIEW
For most of us, this year has been one of volatility and unpredictability,
with the need for constant change to meet the new requirements of
stakeholders.
We have made good progress on many of our initiatives, though the share price
and performance during the year have been subdued. We have several reflections
from this year which we have factored into developing our strategy and
plans.
Our underlying mission at PIN is clear and enduring: to offer an ever-widening
set of investors access to a global, diversified portfolio of private
companies capable of delivering long-term growth and market-beating returns.
We take advantage of our Manager's long-standing and deep relationships with
leading fund managers (General Partners, known as GPs) in pursuit of this
mission. We believe that the investment trust structure is a strong enabler in
democratizing private equity, making this sector available for all.
When I took over as Chair three years ago, I was keen to understand our
investors better and through many meetings and engagements have received
valuable feedback. Many investors felt that the sector was not putting them
first and was not extolling in clear language the benefits of investing in
private equity through investment trusts. The issue of discounts to net asset
values (NAVs) was foremost in their minds.
It was against this backdrop that we crafted our Three Step Plan.
Steps One and Two have been based on our strong belief that investment trust
boards must evolve beyond pure stewardship (governance, administration and
monitoring) to take on strong, proactive, supervisory roles, developing
corporate, investment and leverage strategies for execution by the Manager. We
also embarked on a journey to broaden our reach and build our brand while
continuing to strengthen the board through timely succession and recruitment,
especially in the area of private equity skills and experience.
This year, I would like to report on progress on Step Three, targeted at the
discount problem, with a view to confirming our refined strategy.
As a reminder, in Steps One and Two we reshaped PIN's capital structure and we
carried out a buyback programme, including a £200m reverse tender offer. We
also reshaped PIN's debt financing, resulting in a strengthened balance sheet
and a better spread of lenders. Finally, as an element of Step Two, we added
to our highly skilled board three very experienced professionals with deep and
relevant knowledge of private equity; Tony Morgan, Candida Morley and Tim
Farazmand, all of whom joined in January 2025. Their extensive private equity
backgrounds with their CVs are set out in the full Annual Report.
As planned in 2022, these steps were necessary before tackling the Step Three
objective of reducing the discount through increasing demand for PIN shares.
I would like to share below the direction of travel and some of the decisions
that are being implemented. I will also refer to the results for PIN for the
year ending 31st May 2025 and focus on how changes in the world around us have
demanded even more activity from the board. The Manager has set out the
detailed results in their report below.
1. Enhancing our investment strategy and performance
Focus of our Investments
We fundamentally believe that private equity remains an attractive asset
class. With the exception of a couple of recent years, over the last few
decades global returns from private equity demonstrate higher annualised net
returns than public-equity indices. It is the GPs in the first two quartiles
who significantly outperform those public indices over the long run. Within
these, one needs to invest in leading managers that know how to add value to
portfolio companies through actively improving their operations, rather than
just relying on passive multiple arbitrage and high borrowing.
Therefore private equity performs best when you invest in and alongside those
consistent market-beating performers. This year's analysis has shown that 72%
of PIN's GPs are first or second quartile or are still early in their
investment period. We will work towards increasing that proportion further. We
will continue to apply our Board's strong private equity ("PE") experience to
focus even more tightly on our competitive advantage of Pantheon's close
relationships with top performing GPs, investing in their funds and alongside
them in selected direct investments.
PIN's portfolio mix, with 46% of fund investments and 54% of direct
investments, is similar to last year. This ratio will be constantly monitored,
reviewed and changed as needed - not just based on returns, which are similar
for primaries and co-investments, but to take advantage of their respective
strengths: portfolio company diversification, in the case of fund investments,
and closer involvement in asset selection and lower fees in the case of direct
investments.
Active Portfolio Management
While focusing on our core strength for new investments, we have also examined
our portfolio management approach to enhance overall performance. We will be
periodically rebalancing the portfolio, regularly reviewing it to see whether
there are parts which could be sold, with the proceeds reinvested to enhance
shareholder returns.
Investing Through Investment Cycles
A concern for many of our investors - and indeed for ourselves - is the danger
that market cyclicality can create. At the top of the cycle, when distribution
rates are high, it is tempting to invest when prices are often at their
highest. We have therefore been examining methodologies to smooth out
investment pacing to ensure greater consistency of vintage diversification
without becoming totally formulaic. We will be able to share the findings from
our analysis and discussions later this year.
2. Management of capital
Dynamic Capital Management
Capital allocation policy has been discussed in many of my meetings with
shareholders and others in the sector. While views vary dramatically, we are
working towards finalising a policy which meets the objectives of as many
investors and potential investors as possible. Our endeavour is to make this
policy consistent with our overall objectives for PIN. We will implement a
more dynamic approach to capital management, considering all the sources and
uses of capital available to PIN rather than purely a choice between buybacks
versus new investments, which is often used to define "capital allocation".
Buyback Policy
We reconsidered the possibility of dividends, and at this stage, we do not
feel that we should be changing our policy on this. This is also based on the
preference of most of our investors. However, share buybacks remain a
priority, especially when our discount is wide, and will be part of the
integrated and comprehensive approach to capital management. It is for that
reason that we decided to override the Step Two formula for buyback
allocations, and increase buybacks with a £50m programme. In view of the
continued discount, we have recently announced a further £30m for buybacks
for the period from 31st May to mid-September 2025.
3. Proactive broadening of our reach and building the brand
Explaining the Benefits of Our Investment Trust Structure
We have carried out considerable research into the various avenues available
in private equity, including alternative vehicles, their investor
qualification requirements and other characteristics. Our conclusion is that
the new alternative vehicles will not suit everybody, and most have been
established in recent years. Listed investment trust vehicles have been in
existence in one form or another for more than 150 years, have distinct
features, and have demonstrated resilience and adaptability through numerous
cycles. This is one reason why the listed investment trust remains a
compelling vehicle for broadening the reach of PIN to new investors.
Most importantly, the investment trust is the only structure that is truly
available to all, with the price of a share being the very low minimum
investment. There are no qualification criteria, and investors can easily buy
shares through low-cost online trading platforms. Also, an investment trust
offers the huge benefit of an independent Board, able to make independent
decisions and challenge the Manager. Finally, the investment trust model also
offers daily liquidity to the buyer and the seller, avoiding investors'
savings being trapped.
PIN provides a proven structure that has performed through numerous market
cycles and therefore our focus is on explaining these benefits for the
long-term investor who is looking for outstanding capital gains returns over
time.
Inclusion and Simplicity
In our experience, the complexity of private equity has often led to a
distrust of the sector and company valuations, along with a view that it
provides a lack of openness and transparency. Given our culture and values
at PIN, we need to do more to overcome this distrust to increase demand for
our shares. Simplification of our message is a core goal for PIN. We hope that
you see this simplification start to happen through our communications,
including this annual report, with the new length, format and content. This is
representative of how we will approach investor communications.
Laying the Groundwork of our Marketing Strategy
We believe that marketing is key to extending our reach to a wider set of
investors as part of our democratisation drive to increase demand for PIN
shares. We have been working with our marketing agency to ensure we have the
tools and materials in place to allow us to execute more effective marketing
and communication as soon as the overall plan falls into place over the rest
of this year. This will continue to involve substantial testing and learning
in areas such as our addressable investor audience and effective communication
to them, as well as the ability to execute in agile ways. We will be launching
an improved website in time for our AGM in October.
4. Governance and continuing proactivity
Costs are another area where active engagement by the board is essential. Cost
disclosure, to the detriment of the UK's important investment trust sector,
remains an unresolved issue and presents barriers to wider shareholder
participation. We believe the importance and urgency of this issue needs to be
focused on by external decision makers and we are engaging in this industry
debate. We continue to focus on our own costs, and importantly on the
service quality to cost ratios. Clearly, Manager fees are a key component of
overall costs, and therefore form an important part of our review work which
we will be completing during this calendar year. Pantheon fully understands
this issue, and the importance of both the absolute fee level as well as the
alignment of its incentives with creating shareholder value.
One of the benefits of the investment trust structure is the oversight
provided by the independent Board. This is why we have put such an emphasis in
the last three years on our highly supervisory function over so many areas and
activities of PIN - without forgetting that it is the Manager who executes the
strategies which the Board approves. Over the last two years, our board's
stewardship and contribution were recognized with two Best Board of the Year
Awards for investment trusts. We further improved the quality and relevance of
the Board this year by adding the three new non-executive directors referred
to earlier.
Later this year, we will sadly be losing John Burgess as a board member, as he
reaches the recommended maximum length of Board service. John has been a
passionate believer in our aims and has been a very useful "out of the box"
strategic thinker. My personal thanks and those of the whole board to him.
The other departure and recipient of huge gratitude from all of us on the
Board is that of Helen Steers at the end of this year as co-Head of our PIN
executive team. I have known and admired Helen for decades at Pantheon and in
her previous positions. And I know those feelings are shared not only by my
Board members, but by fund managers and investors alike who all admire her
experience, expertise, openness, patience and genuine caring. Helen has also
handled the transition to her co-Manager Charlotte Morris very successfully
indeed so that she can take up where Helen leaves off. Charlotte has in turn
already demonstrated the strength of her capabilities to lead our Manager team
in defining and achieving PIN's aims. Thank you so much, Helen, from all of us
at PIN.
Talking of succession, I am also reaching the recommended tenure limit of nine
years on the Board, even if only three of them have been as Chair. No goodbyes
yet, as I will be continuing until the end of the calendar year to ensure an
orderly transition to my successor, if approved by shareholders. The board has
elected a truly experienced and perfect successor as Chair in the form of Tony
Morgan to take over from me when I step down. I will be introducing Tony to a
number of our investors, and can reassure you all that he is a great believer
in what we are doing, and definitely the right person to lead the PIN board.
5. Results for PIN Year ending 31(st) May 2025
As usual, I am leaving it to the Manager to cover these in detail in their
report below. However, I would like to make some observations to help explain
PIN's direction and actions described above. One can see very clearly the
importance of being able to manage - and even take advantage of - cycles in
explaining various aspects of private equity (as well as other investment
markets), and their impact on performance. Looking back over the past five
years, it is clear now that private equity hit a frothy peak at the beginning
of the 2020s, followed by a very powerful combination of macro and micro
downward cycles, persistent inflation, high interest rates and tighter credit
conditions. This seismic shift in market conditions sorts out the proactive
from the passive, not just for investment trust boards, but especially for GPs
who are now having to hold their companies and maintain their growth for much
longer periods - an average of over six years last year in the US and Europe.
This is a further reason for us to invest in profit- and growth-focused,
market-leading GPs.
Therefore our results for last year are muted, but with some interesting
positive trends in the business. The net asset value (NAV) of PIN's portfolio,
being the result of portfolio valuation gains plus investment income plus the
impact of share buybacks, grew by 8.3% over the year, but was then halved by a
foreign exchange loss of 4.8%. Admittedly this was disappointing compared to
the historic returns we have generated, and indicates the need for some of the
smoothing techniques that have been described above.
That is why it is crucial to improve sustainable long-term investment
performance proactively, together with enhancing marketing and
communications. One can take some encouragement from the fact that the total
portfolio investment returns as defined in the full Annual Report have been
recovering over the last three years, at 3.5%, 4.9% and 6.2% respectively.
Given the impact of past lower M&A activity on distributions, it is very
encouraging that funds generated by portfolio cashflows of £131m were more
than three times that of the previous year.
Continuing our focus on leading GPs and investing alongside them, the
selection of these depends heavily on the GPs' ability to maintain growth
through cycles. This enables them to capture capital gains and an uplift at
the exit on prior valuations. In our Step Three work to get closer to the
data, and as part of our performance review and monitoring processes, we have
been building a picture of portfolio data using the companies we are closest
to ourselves - the direct investments, which make up 54% of our portfolio. It
is encouraging that we have seen good growth - 16%(1) in underlying profits
this year - in our portfolio of co-investments and manager-led secondaries.
The uplift experience of last year, as set out in the Manager's Review, also
builds our confidence in the selection of our GPs, who have the experience,
expertise and resources to maintain growth in their companies even during
today's long holding periods.
On the cash management side, we continue to take a prudent approach to our
borrowing. This reflects the expectations of our investors, who will be
pleased to see that we have managed to continue our programme of new
investments and buybacks while keeping net debt as a percentage of PIN's NAV
on 31st May 2025 at 8.7% - only a slight increase on the 2024 year-end figure
of 8.1%. At year end, we were using £103m of the £400m revolving credit
facility, and we still had £111m of private placement loan notes outstanding.
Our net debt to NAV ratio is lower than the relevant peer group average of
12.2%(2).
The discount on the publication date of this annual report represents a slight
narrowing to 33%(3) compared with 34% as at 31st May 2024. While this is an
improvement on the mid-40s range when I took over as Chair at the end of 2022,
it still doesn't reflect the fundamental value of the shares. This is
precisely why the Board is focused on delivering a set of actions in Step
Three of our programme, and hopefully we will see the results start to come
through significantly over the next year or two.
6. Conclusion
Markets continue to be challenged. However, PIN is a seasoned investment trust
and I believe investors should benefit from a strong portfolio of diverse
international private companies capable of delivering long-term growth and
market-beating returns.
Overall, it has been a productive year of extensive review, resulting in
changes in policies and tactics, some of which have already been adopted, with
further announcements due around the capital markets day in September, and the
end of the calendar year.
While the strategic plan is clearly work in progress, I am summarizing seven
action areas, focused on realising market-beating returns:
1. Maintain our focus on offering an ever-widening set of investors access
to a portfolio of diversified international private companies capable of
delivering long-term growth and market-beating returns.
2. Concentrate investment in the funds and associated direct investments
of top-performing GPs, benefiting from the strong competitive advantage PIN
has from Pantheon relationships.
3. Implement enhanced performance strategies, such as smoothing out
investing cycles through consistent vintage investing.
4. Implement an all-encompassing dynamic approach to capital management,
by considering all sources and uses of capital through the cycle to improve
shareholder returns.
5. Simplify our communications, including explaining PE complexities and
investment trust benefits to expand demand for PIN shares.
6. Complete the development of PIN's marketing tools and implement "test
and learn" marketing programmes in preparation for a much bigger campaign
later in the year.
7. Use the strong PE-experienced Board to continue proactive supervision
of the Manager, especially in corporate strategies, broadening our reach,
governance and cost management.
It has been a great honour and pleasure for me to work over the years with
such a committed Board, and with our Manager. In closing, let me reserve the
biggest heartfelt thank you to all of our shareholders. Thank you for your
continued support, for your candid and helpful feedback, and for being part of
what we are building together. The path ahead is exciting. Our strategy is
clearer, our structure is stronger, and our commitment - to putting
shareholders first - remains at the heart of everything we do.
JOHN SINGER CBE
Chair
30 July 2025
(1) Refer to Alternative Performance Measures in the full Annual Report for
further information on the methodology used to calculate Direct portfolio
revenue and EBITDA growth numbers. The data represents a subset of direct
investments and may not be representative of PIN's overall portfolio.
(2) Relevant peer group comprised: CT Private Equity Trust, HarbourVest Global
Private Equity, ICG Enterprise Trust and Patria Private Equity Trust. Data as
at 31 May 2025. The HVPE net debt used in this calculation is based on a full
look-through basis and therefore includes, publicly disclosed, debt at its
intermediate fund-level.
(3) As at 29 July 2025.
OUR STRATEGY
A cohesive and holistic strategy to address shareholders' needs
1. Corporate Strategy
We aim to generate market-beating returns by investing in a global,
diversified portfolio of private companies alongside leading private equity
managers.
As set out in the Chair's Statement, the Board and the Manager have conducted
extensive research and analysis as part of a thorough review of strategy to
underpin Step Three of the Company's three-step programme.
In this Annual Report, there is information on the refinements to strategy
that aim over the medium term to improve NAV performance and address the
discount at which PIN's shares currently trade in order to improve overall
shareholder experience.
On an ongoing basis, the Board and PIN's Manager, Pantheon, are in constant
dialogue regarding PIN's overall strategy and the Company's progress towards
achieving its strategic goals. This dialogue is informed by the Manager's
assessment of any changes in market conditions, for example in the mergers and
acquisitions ("M&A") environment, and through stakeholder engagement,
including with shareholders and peers in the market.
Over the past few years, the macroeconomic environment has been challenging,
resulting in subdued performance across the private equity market. The
backdrop for private equity is evolving and, as a result, the Board and the
Manager have assessed whether adjustments to corporate, investment and
financing strategy are appropriate to align strategy with the market
conditions expected over the medium term.
PIN's overall strategy aims to generate market-beating returns over the long
term by investing in a portfolio of private companies alongside leading
private equity managers. Since the timing of market cycles is inherently
unknown, PIN will execute a more deliberate capital management approach going
forward, to mitigate the procyclicality that can occur with closed-end
investment trusts.
The key elements of the capital management approach are:
1. More consistent deployment into new investments on an annual basis;
2. Enhanced discipline around the uses of cash generated by the portfolio;
3. Review of the capital allocation policy to ensure sufficient capital is
dedicated to buybacks when the discount is wide and that reinvesting in the
portfolio is both compelling and accretive to NAV per share;
4. Periodic rebalancing of the portfolio through sales of investments into the
secondary market, according to where we think future returns can be optimised;
and
5. Evolved use of the capital structure to minimise cash drag while
facilitating buybacks and consistent deployment over time.
The below sets out in more detail the investment and financing strategies.
The Manager also reports regularly to the Board on PIN's marketing and
investor relations activities, considering new initiatives that could help to
increase PIN's profile. As set out in the Chair's Statement, an important part
of Step Three's objective of increasing demand for PIN's shares involves
targeted outreach to potential new investors. The Board and the Manager have
been developing marketing activities over the past year and will continue to
engage in initiatives that aim to increase demand for PIN's shares.
2. Investment Strategy
We aim to back the leading private equity managers globally.
The Company's investment strategy is recommended to the Board by the Manager,
discussed at length and then amended as necessary.
The investment policy can be found in the full Annual Report. While the
Company's agreed investment strategy, which is described in detail below, sets
the overall parameters of the investment programme - for example the tilt
towards selected managers, small/mid buyouts and certain sectors - the Board
will review individual investments that exceed exposure limits, which are set
at appropriate levels to reflect a diversified approach. At times, the Manager
may make recommendations to the Board and seek approval for certain
investments that fall outside of any limits expressed in the agreed strategic
approach, but which Pantheon believes to be a good investment opportunity for
PIN. The Board maintains its independence at all times and robustly challenges
such recommendations to ensure that they are in the best interests of
shareholders.
The Board believes that there are several benefits to this investment
approach, risk is effectively managed through diversification while the
improved transparency of PIN's underlying portfolio should create a clearer
link between the strongest performing companies in the portfolio and the
potential to boost NAV growth in the future. Also, Pantheon can remain highly
selective and disciplined when assessing deal flow, while at the same time
reducing the risk of PIN being excluded from exciting opportunities due to
investment constraints.
The Board believes that its oversight of the Manager's activities, while at
the same time allowing Pantheon the flexibility that it needs to make the
appropriate investment decisions on the Company's behalf, ensures that PIN is
able to deliver on its strategic objectives for shareholders over the long
term.
Investment type
PIN's investment strategy is anchored in backing the leading private equity
managers globally. Through Pantheon's relationships, PIN is able to invest in
primary, secondary and co-investment opportunities, building a portfolio of
private companies that are actively managed by leading private equity
managers. PIN invests directly in the investment opportunities offered to it
by Pantheon.
Primaries, secondaries and co-investments all have attractive characteristics,
as highlighted in the Investment Model section in the full Annual Report.
PIN's transparent and direct investment approach gives it the flexibility to
take advantage of prevailing market conditions and to maximise control over
the Company's financing risk, including its ability to generate positive cash
flows.
Each investment type has a different cash flow and maturity profile - the
Board and the Manager believe that a mix of investment types is optimal to
benefit from the cash generated by the more mature assets in PIN's portfolio
while rejuvenating the portfolio with the younger vintages offered by
primaries and co-investments.
With an increased weighting towards direct company investments, we have seen
the number of underlying managers and portfolio companies to which the Company
is exposed reduce over time. As we focus on the group of leading private
equity managers that PIN works with actively, we expect this to reduce
further. As a result, the potential for the Company's overall NAV to be driven
by the performance of individual assets should be increased while maintaining
the benefits of a portfolio that is well diversified by vintage, type, stage,
geography and sector.
Investment Stage
Focus on mid-market buyout and growth.
PIN's portfolio is diversified by stage. While the Company's strategy is to
maintain a healthy mix of all stages, Pantheon and PIN favour the buyout
segments, with a particular focus on the small and mid-market companies.
The small/mid-market buyout segment offers distinct characteristics, when
compared with large deals, such as:
· More attractively priced assets that tend to have lower levels of
leverage than the broader market average;
· Greater visibility of the value drivers and the levers to improve
operational efficiency to better drive growth, both organically and through
buy-and-build strategies; and
· More routes to exit, including strategic acquisitions, sales to
other private equity managers or an initial public offering ("IPO"). In PIN's
case, it should be noted that the majority of exits have consistently been to
strategic buyers and other private equity managers, with IPOs accounting for
7.2% of exit proceeds on average over the last five years.
Venture accounts for a very small proportion of PIN's portfolio (5%) and any
investment activity by PIN in early-stage venture is focused on investing with
top-tier venture managers, mainly through primary fund investments, who are
able to identify innovative opportunities with the potential to generate
significant outperformance.
Sector and Geographic Exposure
Global with a focus on high-growth and niche areas.
The Board is committed to offering investors a global portfolio with
investments in North America, Europe and Asia.
The weightings of those geographies may change in response to market
conditions but the Board supports the majority of the Company's capital being
invested in the North America and Western Europe, where the private equity
markets are well established. The Board relies on Pantheon's investment teams
located around the world that can take advantage of proprietary information
flows and access to opportunities through their extensive networks of
relationships.
It is Pantheon's objective to identify and access leading managers globally
that are able to take a thematic approach and focus on high-growth sectors,
many of which may not be fully represented by the public markets. In addition,
Pantheon has a deliberate strategy of targeting sectors experiencing
dislocation, as well as niches where underlying growth is less correlated to
GDP growth and where they are benefiting from long-term trends. As a result,
the largest two sectors in PIN's portfolio are information technology and
healthcare.
3. Financing Strategy
We aim to build a sustainable, diverse and flexible capital structure that can
support PIN's corporate and investment strategies.
Diversified sources of financing
PIN has access to traditional lenders in the form of a £400m revolving credit
facility ("credit facility") as well as institutional investors via US$150m of
private placement loan notes ("loan notes").
As a result of its proactive approach, PIN has successfully diversified its
financing counterparties, expanded its sources of liquidity and reduced
refinancing risk.
Prudent gearing level
The measured use of leverage to reduce cash drag and enhance NAV growth is
central to PIN's strategy. New investments, calls on undrawn commitments and
share buybacks will be funded primarily by distributions and, where
appropriate, short-term drawdowns from the credit facility.
As at 31 May 2025, PIN had £103m drawn down under the credit facility and
£111m of sterling-equivalent loan notes outstanding. Taken in conjunction
with PIN's net available cash of £21m, this results in a conservative net
debt(1) to NAV ratio of 8.7% (31 May 2024: 8.1%).
Managing our financing cover
We manage PIN to ensure that it has sufficient liquidity to finance its
undrawn commitments, which represent capital committed to funds but yet to be
drawn by the private equity managers, as well as to take advantage of new
investment opportunities. A critical part of this exercise is ensuring that
the undrawn commitments do not become excessive relative to PIN's available
financing. We achieve this by managing PIN's investment pacing as well as
constructing its portfolio to ensure the right balance of exposure to
primaries, secondaries and co-investments.
In October 2024, the credit facility was right sized to a £400m equivalent
commitment (from £500m), with the flexibility to increase the facility size
to £700m under the existing structure if so required. This ensures continued
liquidity coverage whilst appropriately managing costs associated with the
credit facility.
As at 31 May 2025, PIN had net available cash(2) balances of £21m (31 May
2024: £16m). In addition, PIN has access to a £400m equivalent facility.
Using exchange rates as at 31 May 2025, the credit facility amounted to a
sterling equivalent of £393m, of which £289m remained undrawn as at the year
end.
With £21m of net available cash and an undrawn credit facility of £289m, PIN
had £310m of available financing(2) as at 31 May 2025 (31 May 2024: £414m)
which, along with 10% of the value of the private equity portfolio, provides
comfortable cover of 85% (31 May 2024: 89%) relative to undrawn commitments
for funds within their investment periods.
(1) Net debt calculated as borrowings (excluding the outstanding balance of
the ALN) less net available cash. The ALN is not considered in the calculation
of gross borrowings or the loan-to-value ratio, as defined in PIN's credit
facility and loan notes agreements. If the ALN is included, net debt to NAV
was 9.6% as at 31 May 2025.
(2) The net available cash and loan figure excludes the current portion
payable under the ALN, which amounted to £1.6m as at 31 May 2025.
OUR INVESTMENT MODEL
We have full control over portfolio construction.
PIN has the opportunity to participate in all of the private equity
investments sourced for it by Pantheon.
This means that:
· We have control of investment strategy, overseen by the fully
independent Board.
· We have the flexibility to tilt the portfolio towards where we
see the best fit for our long-term objectives.
· We can accept or decline deals without being "tied in" to other
Pantheon fund strategies.
· We can control PIN's investment pacing according to its financial
resources at the time.
· We have the flexibility to vary the size of PIN's commitments as
appropriate and in line with any adjustments to its investment strategy.
· We avoid the additional costs that can occur when investing via
intermediate vehicles.
Direct company investments(1)
54% of PIN's portfolio
Co-investments
We invest in a company directly, alongside a private equity manager.
· Direct investment in individual companies that have attractive
growth characteristics and have effectively passed through two layers of
scrutiny alongside PIN's leading private equity managers.
· This boosts the performance potential because as an individual
company investment has been selected by Pantheon, rather than it being part of
a fund, and there are typically very low or no fees, making it a
cost-effective way of capitalising on the high value added by PIN's selected
managers.
· Co-investments are through invitation only and are therefore not
accessible to most investors.
Manager-led secondaries
We invest in a company directly, alongside a private equity manager, that the
manager has already owned for a period of time and therefore knows well.
· We partner with high-quality private equity managers to acquire,
as single transactions, their most attractive portfolio companies via a
continuation fund. Typically fees are lower than those on primaries.
· This provides an opportunity to invest in an asset that the
private equity manager believes has potential for further growth, when the
fund in which it is held has limited time or capital remaining to the end of
its life.
Fund investments
46% of PIN's portfolio
Primaries
We invest in a new private equity fund when it is established.
· We capture exposure to leading managers as well as to smaller
niche funds that are generally hard to access.
· We target leading managers predominantly in the USA and Europe
· Primaries invest capital into companies over an investment period
of typically five years, providing steady deployment over time and
diversification across a portfolio of companies.
Fund secondaries
Fund secondaries involve the purchase of existing investor interests in
private equity funds. Rather than investing in companies directly, secondary
fund investors acquire stakes in funds that are already partway through their
lifecycle, often with partially or fully deployed capital.
· Our fund secondaries are interests in high-quality private equity
funds, providing liquidity to existing investors who seek an early exit.
· These transactions offer enhanced visibility into the underlying
portfolio, as many of the assets are already acquired or realised.
HISTORICAL NAV PERFORMANCE
PIN's objective is to maximise capital growth over the long term.
PIN's NAV grew by 6% in the 12 months to 31 May 2025, excluding the impact of
foreign exchange movements. Ongoing macroeconomic uncertainty and the
resulting currency fluctuations have tempered growth, resulting in overall NAV
performance that was muted during the period.
In comparison, the performance of the MSCI World index was skewed by a small
number of companies ("Magnificent 7")(2) in recent years.
Annualised performance as at 31 May 2025
1 yr 3 yrs 5 yrs 10 yrs Since inception(1)
NAV per share 1.2% 3.2% 11.5% 12.2% 11.6%
Ordinary share price -9.2% 0.1% 7.5% 8.7% 10.3%
FTSE All-Share Total Return 9.4% 8.2% 11.1% 6.1% 7.6%
MSCI World Total Return (sterling) 7.8% 11.2% 12.7% 11.9% 8.6%
NAV per share relative performance 1 yr 3 yrs 5 yrs 10 yrs Since inception(1)
Versus FTSE All-Share Total Return -8.2% -5.0% +0.4% +6.1% +4.0%
Versus MSCI World Total Return (sterling) -6.6% -8.0% -1.2% +0.3% +3.0%
Share price relative performance 1 yr 3 yrs 5 yrs 10 yrs Since inception(1)
Versus FTSE All-Share Total Return -18.6% -8.1% -3.6% +2.6% +2.7%
Versus MSCI World Total Return (sterling) -17.0% -11.1% -5.2% -3.2% +1.7%
(1) Inception in September 1987.
(2) "Magnificent 7" stocks: Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta
Platforms and Tesla.
KEY PERFORMANCE INDICATORS
During the year, the Company's net asset value (NAV) per share increased by
+5.9% before foreign exchange ("FX") effects, driven by valuation gains across
the portfolio. However, significant currency movements moderated this growth,
resulting in a more modest overall NAV per share increase of +1.2%.
Despite external pressures, the five-year total shareholder return was broadly
maintained. Portfolio return was muted but positive, reflecting the resilience
of the portfolio and disciplined capital management. Notably, net portfolio
cash flow was nearly 3.5 times greater than in the previous year, highlighting
a significant improvement in distributions.
What this is How PIN has performed Link to our strategic objectives Examples of related factors that we monitor
NAV per share growth(1) NAV per share reflects the attributable value of a shareholder's holding in · NAV per share increased by 6.0p during the year to 496.5p (31 May · Investing in high performing private companies alongside and · Valuations provided by the underlying private equity managers.
PIN. The provision of consistent long-term NAV per share growth is central to 2024: 490.5p). This was an increase of +1.2% compared with the prior financial through top-tier private equity managers globally, to maximise long-term
1.2% our strategy. year end. capital growth. · Fluctuations in currency exchange rates.
(31 May 2023: 2.4% · Valuation gains, investment income and share buybacks of +8.3% · Containing costs and risks by constructing a well-diversified · Tax efficiency of investments.
were largely offset by foreign exchange movements of-4.8%(2) and fees and portfolio in a cost-efficient manner.
31 May 2024: 6.1%) NAV per share growth in any period is shown net of foreign exchange movements expenses of -2.3%.
and all costs associated with running the Company.
· While we remain cautious, the gradual recovery in valuations that
is shown by the profile of upwards and downwards valuation movements shown in
the chart in the full Annual Report indicates a modest improvement.
The NAV reflects the robust application of Pantheon's Valuation Policy and is
audited by the Company's auditors as at 31 May 2025.
Five-Year cumulative total shareholder return 43.3% Total shareholder return constitutes the return to investors, after taking · PIN's ordinary shares had a closing price of 296.0p at the year · Maximise shareholder returns through long-term capital growth. · Rate of NAV growth relative to listed markets.
(31 May 2023: 31.0%, 31 May 2024: 46.5%) into account share price movements (capital growth) and any share buybacks end (31 May 2024: 326.0p). The 9.2% decline in share price during the year
paid during the period. reflects ongoing macroeconomic and sector headwinds. · Promote better market liquidity and narrow the discount by · Trading volumes for the Company's shares.
building demand for the Company's shares.
· Share price discounts to NAV have remained wide in the listed · Share price discount to NAV.
private equity sector. The discount on PIN's shares was 40% at the year end
The Board's strategy is to deliver returns for shareholders through the growth (31 May 2024: 34%). The median discount for listed private equity peers(3) at
in NAV and not through the payment of dividends. the same date was 33% (31 May 2024: 34%). At the time of publishing the
discount to NAV had narrowed to 32%.
Portfolio investment return(1) Portfolio investment return measures the total movement in the valuation of · Modest increase in underlying portfolio valuation against a · Maximise shareholder returns through long-term capital growth. · Performance relative to listed markets and listed private equity
the underlying companies and funds comprising PIN's portfolio, expressed as a backdrop of market volatility.
peer group.
6.2 percentage of the opening portfolio value, before taking foreign exchange
effects and other expenses into account. · PIN's portfolio is actively managed and focuses on resilient, · Valuations provided by the underlying private equity managers.
(31 May 2023: 3.5%, 31 May 2024: 4.9%) high-growth sectors.
· PIN's portfolio return for the year was mainly driven by the
buyout segment, which accounts for 72% of the portfolio.
· The Portfolio investment return of £152m is classified as an
Alternative Performance Measure, which is detailed further in the full Annual
Report. This comprises the loss after taxation of £7m, adjusted for non
portfolio income, expenses and foreign exchange.
Net portfolio cash flow(1) Net portfolio cash flow is equal to distributions less capital calls to · PIN's portfolio generated £291m in distributions for the year · Maximise long-term capital growth through ongoing portfolio · Relationship between outstanding commitments and NAV.
finance investments, and reflects the Company's capacity to finance calls from ended 31 May 2025 (an increase from £193m in the prior year), against £160m renewal while controlling financing risk.
£130.8m existing investment commitments. of calls (31 May 2024: £156m), resulting in a net cash flow of £131m which
· Portfolio maturity and distribution rates by vintage.
is 3.5 times the cash flow generated in the previous year.
(31 May 2023: £67.8m, 31 May 2024: £36.9m)
· Commitment rate to new investment opportunities.
· In addition, the Company made new commitments of £143m during
PIN manages its maturity profile through a mix of primaries, secondaries and the year (year to 31 May 2024: £153m), £43m of which was drawn at the time
co-investments to ensure that its portfolio remains cash-generative at the of commitment (31 May 2024: £50m).
same time as maximising the potential for growth.
(· ) As at 31 May 2025, PIN's portfolio had a weighted
average age of 5.6 years(4) (31 May 2024: 5.2 years).
Gearing Gearing relates to how much debt is utilised in PIN's capital structure and is · PIN's net debt as a percentage of the Company's NAV as at 31 May · Adopting a more efficient use of balance sheet capital to reduce · Utilisation level of the revolving credit facility.
expressed as net debt (borrowings excluding the ALN less cash) as a percentage 2025 was 8.7% (31 May 2024: net debt to NAV ratio was 8.1%). cash drag and enhance NAV growth.
(8.7%) of NAV.
· Anticipated distribution levels and impact on liquidity position.
· As at 31 May 2025, PIN has utilised £103m of its £400m
(31 May 2023: 2.6%, 31 May 2024: (8.1%)) revolving credit facility, and has £111m of private placement loan notes · Gearing relative to listed private equity peer group.
outstanding.
The Board appreciates gearing is a differentiator of the investment trust
structures, and that a measured use of debt can eliminate cash drag and · PIN's net debt to NAV ratio is lower than the relevant peer group
enhance investment returns. PIN's approach to gearing remains prudent. average of 12.2%(3.)
Underdrawn coverage ratio(5) The undrawn coverage ratio measures the ability to cover undrawn commitments · The current undrawn coverage ratio reflects modest use of · Flexibility in portfolio construction, allowing the Manager to · Relative weighting of primary, secondary and co-investments in
using available financing and 10% of private equity assets. The undrawn leverage and the right-sizing of the credit facility from £500m to £400m. select a mix of secondaries, co-investments and primaries, and vary investment the portfolio.
85% coverage ratio is an indicator of the Company's ability to meet outstanding
pace, to achieve long-term capital growth.
commitments, even in the event of a market downturn. · The optimisation of PIN's balance sheet will enable the Company
· Level of undrawn commitments relative to gross assets.
(31 May 2023: 98%, 31 May 2024: 89%)
to further enhance its performance, by allowing PIN to lean into attractive · The vintage diversification of unfunded commitments helps PIN
opportunities across market cycles and by reducing cash drag. manage future capital calls. · Trend in distribution rates.
· PIN's undrawn coverage ratio is prudent as we expect outstanding · Ability to access debt markets on favourable terms.
commitments to be drawn over a number of years as evidenced by PIN's 10-year
average call rate (23% of opening undrawn commitments).
· An 85% undrawn coverage ratio is comfortable relative to the 25%
minimum required under existing loan covenants.
(1) Excludes valuation gains and/or cash flows associated with the Asset
Linked Note ("ALN").
(2) These figures are gross of fees and expenses, which had a negative impact
of -2.3%.
(3 )Relevant peer group comprised: CT Private Equity Trust, HarbourVest
Global Private Equity, ICG Enterprise Trust PLC and Patria Private Equity
Trust. Data as at 31 May 2025. The HVPE net debt used in this calculation is
based on a full look-through basis and therefore includes, publicly disclosed,
debt at its intermediate fund-level.
(4) Excludes the portion of the reference portfolio attributable to the ALN.
(5) Outstanding commitments relating to funds outside their investment period
(>13 years old), amounting to £43m as at 31 May 2025 (31 May 2024: £42m),
were excluded from the calculation as there is a low likelihood of these being
drawn.
RISK MANAGEMENT AND FRAMEWORK
Identify, evaluate and mitigate
Risk approach and governance
PIN is exposed to a variety of risks and uncertainties and the Board is
ultimately responsible for the risk management of the Company. It seeks to
achieve an appropriate balance between mitigating risk and generating
long-term sustainable risk-adjusted returns for shareholders. Integrity,
objectivity and accountability are embedded in the Company's approach to risk
management. The risk governance framework is designed to identify, evaluate
and mitigate the risks deemed by the Board as being of significant relevance
to the Company's business model and to reflect its risk profile and risk
appetite. The Board exercises oversight of the risk framework, through its
Audit Committee, and has undertaken a robust assessment and review of the
principal risks facing the Company, including those that would threaten its
business model, future performance, solvency or liquidity.
Risk review process
The Company is reliant on the risk management frameworks of the Manager and
other key service providers. To evaluate the principal risks and uncertainties
facing the Company, the Board through delegation to the Audit Committee,
reviews the risk management matrix prepared by the Manager. Within the risk
management matrix, the Board believes the principal risks and uncertainties
are those which could have a material impact on the Company's financial
condition or carry a significant operational or reputational impact to the
Company.
The risk matrix is divided into several key risk categories and emerging areas
of risks are also identified. Underlying these risk categories are specific,
identifiable risks. Each identifiable risk includes information an assessment
of the degree of risk, the controls exercised by the Board and those exercised
by the Manager and service providers, and a review of any changes in the risk
assessment or status in the period.
Risk categorisation
The Audit Committee uses the following categorisation to describe risks that
are identified during the risk review process.
Emerging Risks Key Risks Principal Risks
An emerging risk is one that may in future be likely to have a material impact A key risk is considered currently to pose the risk of a material impact on The Company's principal risks are individual risks, or a combination of risks,
on the performance of the Company and the achievement of our long-term the Company. Risks may be identified as emerging risks and subsequently become that could threaten the Company's business model, future performance, solvency
objectives, but that is not yet considered to be a key risk and is subject to key risks. Identified key risks may cease to be considered key risks over or liquidity. These are detailed further below.
uncertainty as to nature, impact and timing. time.
Risk appetite
The Board acknowledges and recognises that in the normal course of business,
the Company is exposed to risk and it is willing to accept a certain level of
risk in managing the business to achieve its investment and strategic
objectives. The Board's risk appetite framework provides a basis for the
ongoing monitoring of risks and enables dialogue with respect to the Company's
current and evolving risk profile, allowing strategic and financial decisions
to be made on an informed basis. The Board considers several factors to
determine its acceptance for each principal risk and categorises acceptance
for each risk as low, moderate and high. Where a risk is approaching or is
outside the tolerance set, the Board will consider the appropriateness of
actions being taken to manage the risk. The Board has a lower tolerance for
financing risk, with the aim to ensure that even under a stress scenario, the
Company is likely to meet its funding requirements and financial obligations.
Similarly, the Board has a low risk tolerance concerning operational risks
including legal, tax and regulatory compliance and business process and
continuity risk.
Emerging risks
The Board has considered and kept under review emerging risks.
Sustainability and climate change
Whilst there is risk that the Company or the Manager fails to respond
appropriately to the increasing global focus on sustainability issues, which
could damage the reputation and standing of the Company and ultimately affect
its investment performance, the transition to a low-carbon economy across the
globe may also provide attractive investment opportunities. Pantheon has a
responsible approach when making investments on behalf of PIN, and adherence
to sustainability principles has been an integral part of Pantheon's
investment processes for several years.
Artificial Intelligence ("AI")
There is a risk that failure to successfully implement market leading AI tools
within Pantheon's investment process could impact investment rates and
long-term performance, and portfolio companies market position could be
challenged by competition from companies using AI more effectively. Pantheon
continues to evaluate opportunities to use AI within its business model, and
assesses the potential risks and opportunities of AI as part of its investment
due diligence process.
Risk Management and Principal Risks
PIN is exposed to a variety of risks and uncertainties. The Board, through
delegation to the Audit Committee, has undertaken an exercise to identify,
assess and manage the risk within the Company.
The principal risks identified have been assessed based on residual likelihood
and consequence. The disclosures in the risk report do not encompass an
exhaustive list of risks and uncertainties faced by the Company. Instead, they
serve as a concise summary of significant key risks actively reviewed by the
Board, their mitigating controls and developments in the year.
A summary of the risk management and internal control processes can be found
in the Statement on Corporate Governance in the full Annual Report. An
assessment of principal risks is below.
Type and Description of Risk Potential Impact Risk Mitigation Outcome for the Year
Investment availability and performance · NAV Performance that fails to keep pace with benchmark or industry · Pantheon has a long track record of investing alongside private Rising during the year
averages could result in a decline in the Company's share price and may equity managers who have experience of navigating economic cycles.
The Manager is responsible for selecting the investments in the Company's contribute to a widening of the discount to NAV. This risk may be heightened Diversification by geography, stage, vintage and sector, helps to mitigate the · The macroeconomic and exit environment has been challenging in the
portfolio, and the performance of the Company is closely linked to the by changes in the Company's risk profile arising from exposures to managers, effect of public market movements on the Company's performance. year, resulting in subdued performance across the private equity market. PIN's
origination, selection, and portfolio management capabilities of both the funds, or companies that are materially different from its intended investment
performance has been resilient in the year with NAV per share increasing by
Manager and the underlying third-party managers. A lack of suitable investment strategy. · Pantheon has put in place a dedicated investment management process 1.2%, which includes 1.5% attributable to £53.5m(1) invested in share
opportunities that align with the Company's strategic objectives could designed to achieve the intended investment strategy agreed with the Board. buybacks in the year. £143.3m was invested in new investments during the
adversely impact performance.
year.
· The Board regularly reviews investment and financial reports produced
by the Manager to monitor the Manager's investment processes and resultant · PIN continues to adopt a diversified approach to portfolio
performance. construction by vintage year, geography and stage, as well as investing within
concentration limits for individual managers, funds and companies.
· In historical periods of significant public market volatility,
private equity market valuations have typically been less affected than public
equity market valuations.
Macroeconomic and geopolitical risk · General economic conditions can significantly influence underlying · As part of its investment due diligence process, Pantheon assesses Rising during the year
fund and company valuations, exit opportunities, and the availability of the approach of its underlying managers to company illiquidity and
credit. macroeconomic factors as well as projected exit outcomes, taking currency · Increase in geopolitical risks and tariffs introduced by the new US
denominations into account. The assessment of geopolitical risk is also administration have increased risks significantly. High levels of interest
Macroeconomic factors such as inflation, interest rates and equity market · Worsening economic environment can result in higher risk of market embedded in the investment process. rates and inflation throughout the world had started to ease but tariffs have
performance can affect portfolio investment returns. In addition, geopolitical volatility, price shocks or a substantial market correction.
resulted in increased market volatility and increased risk of inflation.
factors - including the ongoing conflicts in Ukraine and the Middle East -
· The Board and Pantheon continuously monitor geopolitical
continue to contribute to global economic uncertainty, which may impact the · Additionally, evolving geopolitical risks - including ongoing or
· Resilient performance of the portfolio despite a challenging
Company's investments. escalating conflicts, supply chain disruptions, sanctions, legislative changes developments and societal issues relevant to its business. macroeconomic environment. Underlying portfolio revenue growth for PIN's
and investment restrictions - have the potential to affect global economies
Direct portfolio was +11% and EBITDA growth was +16% in the reporting period.
over the medium to long term. These developments may influence energy prices, · The portfolio is diversified across multiple countries and sectors For further information on methodology on these calculations refer to the
interest rates, and the performance of specific companies within the Company's
Alternative Performance Measures ("APMs") in the full Annual Report.
portfolio, and may also disrupt long-term investment planning and capital to reduce the impact of market and macroeconomic factors.
allocation. · PlN's exposure to high-risk(2) countries is minimal.
FX Asset risk · Exposure to market and currency fluctuations, particularly unhedged · Pantheon monitors underlying foreign currency exposure and, together Stable during the year
foreign exchange movements, may impact investment returns. with the Board, reviews hedging strategies available to the Company. The
The portfolio is geographically diversified and as a result, a significant multi-currency credit facility provides a natural hedge for currency · While there was no material change in the Company's exposure to
majority of PIN's investments are now denominated in US dollars, euros, and fluctuations. The Company does not currently hedge against foreign currency foreign exchange currency risk in the year, foreign exchange had a negative
other non-sterling currencies. fluctuations due to the difficulty of predicting the timing and quantum of impact on NAV performance during the year.
non-GBP cash flows.
Market discount for listed private equity trusts · Market sentiment on the listed private equity sector can affect the · Regular review of the level of discount or premium relative to the Rising during the year
Company's share price and widen the discount relative to NAV, causing sector.
Listed private equity trusts shares often trade at discounts to their shareholder dissatisfaction.
· Private equity continues to outperform public markets over the long
underlying NAVs. Discounts can fluctuate leading to volatile returns for
· Consideration of ways in which share price performance may be term and has proved to be an attractive asset class through various cycles.
investors. enhanced including the effectiveness of marketing and use of share buybacks.
· The Company invested £53.5m(1) in share buybacks during the
· The Board regularly discusses the shareholder register with the financial year to 31 May 2025.
Manager to monitor buying/selling activity and to identify potential new
investors. · Discount rose to over 45% during the year due to recent market
volatility. Overall industry discount is high compared to historic averages.
· Pantheon and the Company's brokers are in regular contact with
existing shareholders and prospective new investors.
Vehicle financing and liquidity management · The Company has outstanding commitments that may be drawn down at any · PIN's approach to liquidity and balance sheet management is Stable during the year
time in excess of total liquidity to private equity funds. The ability to fund underpinned by a robust framework of oversight and discipline. The Company's
this difference is dependent on receiving cash proceeds from investments (the Articles of Association and Investment Policy impose clear limits on the · Cash flow forecasts under normal and stress conditions were reviewed
timing of which are unpredictable) and the availability of financing amount of gearing permitted, and the principal covenants of the loan facility with the Board. Downside scenario modelling indicates that the Company has the
Availability, level and cost of credit for the Company. Insufficient liquid facilities. A lack of vehicle financing could potentially impact performance - including loan-to-value and liquidity ratios - are reviewed periodically to available financing in place to meet investment commitments, even in an
resources to meet outstanding commitments to private equity funds. and liquidity, especially in the event of a market downturn. ensure ongoing compliance. environment characterised by large NAV declines and a material reduction in
distribution activity.
· The Board conducts regular reviews of the balance sheet and long-term
cash flow projections, including stress testing against downside scenarios · The Board currently does not expect net leverage to exceed 10% of NAV
such as significant declines in NAV, adverse shifts in call and distribution under normal market conditions. The Company-level leverage was 8.7% as at the
rates, and reduced market liquidity. end of the financial year.
· PIN benefits from a mature, cash-generative portfolio and, if cash · The Company has access to US$150m of private placement loan notes and
balances or distributions prove insufficient to meet capital calls, the a £400m equivalent credit facility.
Company has access to a credit facility to provide additional flexibility.
Pantheon actively manages the portfolio to ensure that undrawn commitments · Together with PlN's net available cash balances of £21m, total
remain at prudent levels relative to portfolio assets and available financing, available financing as at 31 May 2025 stood at £310m. The ratio of total
and the Board monitors cash flow forecasts under a range of conditions to available financing plus the private equity portfolio to outstanding
safeguard the Company's ability to meet its obligations. commitments stood at 4.2x (refer to APMs in full Annual Report for
calculation).
Investment Level Financing (look through)(3) · Rising interest rates can impact the profitability, cashflows and · As part of its investment process, the Manager undertakes a detailed Stable during the year
valuation of underlying portfolio companies. assessment of the impact of debt at the underlying fund level and underlying
Availability, level and cost of debt for underlying funds and portfolio
company level on the risk-return profile of a specific investment. · Debt multiples in PlN's direct portfolio have remained stable and in
companies. · A deterioration in credit availability can potentially reduce line with the broader Leveraged Buyout market.
investment activity.
Valuation risk · Potential for inconsistency in the valuation methods adopted by · The valuation of investments is based on periodically audited Stable during the year
third-party managers and for valuations to be misstated. valuations that are provided by the underlying private equity managers. Where
In valuing its investments in private equity funds and unquoted companies and
appropriate Pantheon appoints an independent third party to provide a · No material misstatements concerning the valuations provided by
publishing its NAV, the Company relies to a significant extent on the accuracy valuation to support these, for example where the investments are not audited. underlying private equity managers and the existing investments during the
of financial and other information provided by third-party managers.
year.
· Pantheon carries out a formal valuation process involving monthly
reviews of valuations, the verification of audit reports and a review of any · No changes in valuation policy in the year or changes to applicable
potential adjustments required to ensure reasonable valuations in accordance valuation standards.
with fair market value principles under Generally Accepted Accounting
Principles ("GAAP").
· Pantheon's Global valuation Committee, which is independent of the
investment and investor relations teams, and comprised of senior team members,
has ultimate responsibility for approving valuations, ensuring that there are
robust governance, oversight and process frameworks in place, guaranteeing
compliance with standards and consistent application of policy. This Committee
reports to the Board on a semi-annual basis or when there are any material
matters arising.
· A member of the Audit Committee and EY observes Pantheon's Sub
Valuation Committee on a semi-annual basis.
Reliance on service providers and cyber security risk · Business disruption should the services of Pantheon and other · The Management Agreement is subject to a notice period of two years, Stable during the year
third-party suppliers cease to be available to the Company. giving the Board adequate time to make alternative arrangements in the event
The Company is dependent on third parties for the provision of services and
that the services of Pantheon cease to be available. · Pantheon's systems, processes and technologies have been thoroughly
systems, especially those of the Manager, the Administrator and the · A failure of the Manager to retain or recruit appropriately qualified
tested and are fully operational.
Depositary. personnel may have a material adverse effect on the Company's overall · The Manager regularly updates the Board on team developments and
performance. succession planning. · Pantheon has appointed a specialist who can provide the service of
identifying new fraudulent sites and facilitate the subsequent take-down once
· Significant disruption to information technology systems, including · Pantheon has a comprehensive set of policies, standards and discovered.
There is high dependency on effective information technology systems to from a potential cyber-attack, may result in financial losses, the inability
support key business functions and the safeguarding of sensitive information. to perform business-critical functions, loss or theft of confidential data, procedures related to information technology and cybersecurity. · The Board has approved the continuing appointment of the Manager and
regulatory censure, legal liability and reputational damage.
other service providers following an assessment of their respective
· Pantheon reviews all the service providers to ensure they have performance during the year.
appropriate procedures in place. Service providers provide copies of
cybersecurity policies, systems, procedures, certificates and relevant
insurance documentation.
· The Board performs an ongoing review of the Manager's and other
service providers' performance in addition to a formal annual review.
(1) Includes £3.5m that was carried over from the previous financial year
share buyback programme, excludes costs and stamp duty.
(2) High risk countries include risky and very risky countries according to
the Bloomberg county risk score and include Argentina, Brazil, Colombia,
Kazakhstan, Mexico, Nigeria, Panama, the Philippines, South Africa, Turkey,
and Vietnam.
(3) Lookthrough relates to the underlying companies within the portfolio which
are managed by third party private equity managers.
VIABILITY STATEMENT
Pursuant to provision 31 of the UK Corporate Governance Code 2018, and the AIC
Code of Corporate Governance, the Board has assessed the viability of the
Company over a three-year period from 31 May 2025. It has chosen this period
as it falls within the Board's strategic planning horizon.
PIN invests in a portfolio of private equity assets that is diversified by
geography, sector, stage, manager and vintage; it does so via both fund
investments and by co-investing directly into companies alongside selected
private equity managers. The Company ensures that it invests in a portfolio
that is diversified by vintage to maintain a portfolio maturity that is
naturally cash-generative in any particular year.
The Company seeks to maximise long-term capital growth by investing in
selected private equity managers. As an investment trust, the Company's
permanent capital structure is well suited to investing in private equity, a
long-term asset class. The Company's Manager has a long-standing culture that
emphasises collaboration and accountability, facilitating open dialogue with
underlying private equity managers that help the Company to anticipate market
conditions and maintain a prudent approach to balance sheet management. The
resilience of the Company, positioning of the portfolio, and durability of the
private equity market are detailed in the full Annual Report.
In making this statement, the Directors have reviewed the reports of the
Manager in relation to the resilience of the Company, taking account of its
current position, the principal risks facing it in a downside case scenario
that considers the potential further impact of the ongoing international
conflicts which have brought about increased geopolitical uncertainties,
including the disruption to the global supply chain and increases in the cost
of living as result, inflation, interest rate rises and the impact of climate
change on PIN's portfolio, the effectiveness of any mitigating actions and the
Company's risk appetite. The assessment also considers the impact of the
Company's capital allocation policy in regard to share buybacks.
As part of the assessment, this also included a combined reverse stress test
that analyses the factors that would have to simultaneously occur for the
Company to be forced into a wind-down scenario where the Company's business
model would no longer remain viable. These circumstances include a significant
peak in the outstanding commitments called within a 12-month period, combined
with a significant decline in the portfolio valuations and distributions.
Overall, the reverse stress tests are sufficiently improbable as to provide a
low likely risk of impact to the Company's viability and medium-term
resilience.
Commitments to new funds are controlled relative to the Company's assets, and
the Company's available liquid financial resources are managed to maintain a
reasonable expectation of being able to finance the calls that arise from such
commitments out of internally generated cash flow. The Company has put in
place a revolving credit facility to ensure that it is able to finance such
calls in the event that distributions received from investments in the period
are insufficient to finance calls. In addition, the Company agreed a private
placement of $150m long-dated loan notes, giving it access to an even more
diverse supply of liquidity. The Board reviews the Company's financing
arrangements at least quarterly to ensure that the Company is in a strong
position to finance all outstanding commitments on existing investments as
well as being able to finance new investments.
In reviewing the Company's viability, the Board has considered the Company's
position with reference to its investment trust structure, its business model,
its business objectives, the principal risks and uncertainties, as detailed
above, and its present and expected financial position. In addition, the Board
has also considered the Company's prudent approach to Balance Sheet
management, which allows it to take advantage of significant investment
opportunities, and the appropriateness of the Company's current investment
objectives in the prevailing investment market and environment.
The Board regularly reviews the prospects for the Company's portfolio and the
opportunities for new investment under a range of potential scenarios to
ensure it can expect to be able to continue to finance its activities for the
medium-term future. Based on its review, the Board has a reasonable
expectation that the Company will be able to continue in operation and meet
its liabilities as they fall due over a three-year period ending on 31 May
2028.
On behalf of the Board
John Singer CBE
30 July 2025
MANAGER'S REVIEW
Well-positioned for growth
Charlotte Morris and Helen Steers MBE, Pantheon Partners and Co-Lead Managers
of PIN, discuss the private equity market and how PIN's portfolio has
performed against that backdrop.
The private equity industry has grown significantly over the past two decades
and the asset class continues to attract a broadening range of investors.
However the last few years have been characterised by a prolonged period of
lower deal activity and a meaningful decline in distributions. Private equity
managers typically wait until the timing and market conditions are right
before selling their portfolio companies. There is now an estimated US$3.6tn
across 29,000 companies globally that are yet to be exited and on average
companies are being held for longer by their respective private equity firms -
currently around six years - than was previously the case(1). This record
backlog of unsold assets, a higher interest rate environment and the
persistent macroeconomic uncertainty have reshaped the landscape of the
private equity industry.
The gradual recovery in M&A activity that was anticipated at the beginning
of 2025 stalled as investors sought to understand the potential impact of the
tariffs announced by the Trump administration in April. Nevertheless, even in
times of uncertainty, both private equity managers and strategic buyers, the
two main sources of exit for portfolio companies, continue to make
acquisitions resulting in exits and distributions for PIN. At 12% for the year
ended 31 May 2025, PIN's distribution rate was below the Company's long-term
average but 50% higher than the distribution rate in the last financial year
(it was 8% for the year ended 31 May 2024). It should be noted that the call
rate, which was 20% during the financial year, was also low relative to
historical levels, reflecting the lower overall levels of deal activity. See
the historical distribution and call rate levels in the Supporting Analysis
section in the full Annual Report.
Distributions exceeded calls during the period, meaning that PIN has remained
net cash flow positive, generating £130.8m of cash, more than a three-fold
increase over the year to 31 May 2024. In its history, PIN's portfolio has
been consistently cash generative and over the last 10 years has produced a
total of £1.5bn of net cash. As at 31 May 2025, the weighted average age of
PIN's portfolio was 5.6(2) years, meaning that it is ideally positioned to
benefit both from the value creation of the younger assets in the portfolio
and the cash proceeds from the more mature companies when they are sold.
Significant increase in net cash flow
Annual net portfolio cash flows
31 May 2025 £130.8m
31 May 2024 £36.9m
31 May 2023 £67.8m
It is difficult to predict the timing of when exit realisations may revert
towards the levels seen historically, however we have observed an uptick in
distributions through the year and are aware of several of our underlying
managers finalising the sales of portfolio companies. That, coupled with
reports that some potentially large initial public offerings may come to
fruition, could help to improve overall market sentiment and provide the
catalyst for deal activity to start to pick up. We believe that PIN's focus on
small to mid-market buyouts positions it well for when this happens. Dry
powder, which is capital that has been raised and is available to invest but
has not yet been deployed, has built up considerably to US$2.1tn(3).
Interestingly, this is concentrated among the larger buyout private equity
managers, which means that this capital is available to purchase assets from
small/mid-market managers such as those in PIN's portfolio.
We remain convinced that private equity is an attractive asset class
Despite the challenges being faced in the near term by the industry, we
continue to believe that private equity offers attractive credentials for
investors seeking to build a balanced portfolio that includes exposure to
fast-growing private companies that are not available via the public markets.
The chart in the full Annual Report demonstrates that private equity has
delivered strong returns and outperformed the public markets over the long
term. It also highlights the wide dispersion of returns in private equity,
which have always been a feature of the industry, and therefore the importance
of selecting experienced managers who can manage their assets well through
economic cycles. In uncertain times, the ability to create real value becomes
even more critical as not all styles of value creation work all of the time.
The key factor in assessing PIN's primary investments is always the strength
of the manager and their ability to outperform the public markets. This also
applies to single company investments, where over the medium to long term, on
behalf of PIN, we have taken more concentrated positions in companies that are
under strong stewardship and have resilient profiles.
Valuations
Valuations have long been a topic of much discussion and debate, especially in
recent years. Across the USA and Europe, Enterprise Value ("EV") and EBITDA
valuation multiples across private equity buyouts saw a peak in 2021 and have
moderated since then, from 13.3x in 2021 to 10.5x in 2023, rising again last
year to 12.2x. Although deal activity has been at lower levels during 2023 and
2024, the indications are that these could be attractive vintages for private
equity and underpin the case for a recovery in private equity returns from the
subdued levels seen since 2021.
US & Europe private equity EV/EBITDA multiples(4)
2024 12.2x
2023 10.5x
2022 12.2x
2021 13.3x
Valuation movement by type in the year to May 2025 Portfolio by type(5)
Primary 6.6% Primary 37%
Co-investment 5.5% Co-investments 33%
Fund secondary 5.3% Manager-led secondaries 21%
Manager-led secondary 4.0% Fund secondaries 9%
Valuation movement by region in the year to May 2025 Portfolio by region(5)
Europe 7.5% USA 52%
Global 5.5% Europe 33%
USA 4.9% Global(6) 8%
Asia 2.4% Asian and Emerging Markets 7%
PIN's NAV performance during the financial year
PIN's private equity portfolio demonstrated resilience and continued strategic
progress over the 12-month period to 31 May 2025. Before currency effects,
PIN's assets grew by 5.9% during the year ended 31 May 2025. Investment income
added 0.9% to the NAV while share buybacks added 1.5%. Approximately 76% of
PIN's portfolio is denominated in US dollars, which weakened against sterling
during the period. As a result, unfavourable currency movements reduced PIN's
sterling-quoted NAV by 4.8%. We do not hedge currency due to the difficulty
with predicting the timing and size of cash flows in private equity.
In our experience, currency movements tend to balance out over time however we
keep the option of hedging under review. After the impact of currency and
expenses and taxes (-2.3%), PIN's NAV increased by 1.2% during the period
compared to the previous year. Overall, the portfolio maintained its strength
and strategic direction, with growth in the underlying portfolio companies and
ongoing investment activity positioning it well for future value creation. The
stronger performance in the MSCI World index over the same period was skewed
by the so called "Magnificent 7" stocks. Indeed the concentration of companies
in public markets represents a meaningful difference in the profile of public
market benchmarks and their potential volatility versus a diversified private
company portfolio.
For example, at the end of 2024, those seven companies making up the so-called
Magnificent 7 represented ~24% of the MSCI World index's market capitalisation
or ~30% of the S&P 500 index. In contrast, PIN's portfolio is more
balanced, with the top 36 companies representing 24% of portfolio NAV. Private
equity is a long-term asset class and over 10 years and since inception, PIN
has continued to outperform its public market benchmarks.
Valuation movement by stage in the year to May 2025 Portfolio by Stage(5)
Venture 17.6% Small/mid buyout 46%
Large/mega buyout 7.1% Large/mega buyout 26%
Small/mid buyout 4.5% Growth 19%
Growth 4.0% Venture 5%
Special Situations 3.0% Special Situations 4%
There was positive performance across all regions and investment types in
PIN's global portfolio.
There were also positive returns across all stages with venture being the
strongest performer. While this is pleasing, venture tends to be the most
volatile part of the private equity universe and the dispersion of returns is
even greater than in the buyout segment of the market. For this reason,
venture will continue to be a small part of PIN's portfolio and we will only
access this part of the market through primary investments. Buyouts, which are
well-established businesses and account for the majority of PIN's portfolio,
have consistently performed well over previous reporting periods and this was
the case again in this financial year. We believe that this is due to PIN's
emphasis on companies that are operating in defensive sub-sectors within
information technology, healthcare and consumer staples and services. These
companies are benefitting from long-term trends that we believe are here to
stay. For example, in information technology PIN invests in companies offering
software-as-a-service and cybersecurity solutions while in healthcare, PIN is
backing companies that provide services and products that are responding to
the demands of ageing populations across the world and the need for higher
quality healthcare provision.
Portfolio by sector(7)
Information Technology 33%
· Software & Services 30%
· Technology Hardware & Equipment 3%
Healthcare 20%
· Health Care Equipment & Services 15%
· Pharmaceutical, Biotechnology & Life Sciences 5%
Financials 12%
· Diversified Financials 7%
· Insurance 4%
· Banks 1%
Industries 11%
· Commercial & Professional Services 6%
· Capital Goods 4%
· Transportation 1%
Consumer discretionary 9%
· Consumer Services 5%
· Retailing 3%
· Consumer Durables & Apparel 1%
Communication services 7%
· Media & Entertainment 6%
· Telecommunication Services 1%
Consumer staples 4%
· Food, Beverage & Tobacco* 3%
· Food & Staples Retailing 1%
Energy 2%
Materials 2%
* PIN seeks to avoid investment in tobacco products and distribution.
As part of the deep analysis of portfolio performance undertaken as part of
Step Three, we assessed the returns generated by sector focusing on
co-investments, where we have a larger set of data having been investing in
this investment type for significantly longer than manager-led secondaries.
Healthcare and technology co-investment deals generated strong returns of
20.1% and 19.1% respectively(9). These are both specialist areas, where it is
critical to partner with managers that have proven experience and knowledge of
the complexities of the sub-sectors and niches within the wider industry. Our
deep relationships with specialist sector experts give us access to attractive
opportunities within these key sectors.
As part of our due diligence process, we look closely at our managers' use of
debt in their portfolio companies. The debt multiples within PIN's directs
portfolio of 5.4x(10) are broadly in line with what we have observed in the
broader private equity market. See the Alternative Performance Measures
section in the full Annual Report for more information.
While there have been fewer company exits in recent years, as described
already, when the private equity managers in PIN's portfolio sell their
portfolio companies, they often do so for a higher amount than the holding
value of the company prior to the sale. During the year to 31 May 2025, the
weighted average uplift on PIN's portfolio was 25%(11), while only 0.4% of
opening NAV was written off. Over time, we have consistently observed uplifts
on exit being achieved, which we believe validates the valuations at which the
managers hold their companies. While private equity managers apply fair value
when valuing their portfolio companies, in many cases, they are able to
achieve a sale price above that valuation by identifying the right buyer for
that company. An example of that ideal buyer could be a larger corporation
operating in the same industry that can generate synergies and therefore may
be willing to pay a higher price or it could be that the manager is selling a
scarce asset that attracts interest from buyers willing to pay more to secure
that specific company. During the year, the proceeds from exits resulted in an
average cost multiple of 2.9x. We believe that the cost multiples on exit
realisations demonstrate the value creation achieved by our managers through
their hands-on approach in managing their portfolio companies and the
implementation of operational improvements. The case studies in this report
and on PIN's website provide a snapshot of how our managers identify and work
with portfolio companies.
PIN's direct company investments have demonstrated sustained positive
operating performance during the year ended 31 December 2024, which is the
most recently available data, through revenue growth of 11% and improving
margins that enhanced that growth to 16%(10) on EBITDA. We believe that this
demonstrates that we are backing managers who create value by helping their
portfolio companies to become profitable, and how a manager does this forms a
core part of our due diligence when assessing an investment opportunity. Since
the overall valuation gain on direct company investments was 5.4% for the
period to 31 May 2025, this could represent embedded value that helps support
a strong uplift at exit when the companies are eventually sold. As the Chair
set out, we are working on analysis to be able to present value creation
statistics for the portfolio of direct company investments.
When we analyse the valuation movements across recent years, we have observed
that the spread of movements has narrowed, mirroring the single figure
valuation increases we have seen this year and last. While we remain cautious,
the gradual recovery in valuations that is shown by the profile of upwards and
downwards valuation movements in the table below, indicates a modest
improvement.
Modest recovery in valuation movements
Upwards valuation movements Downwards valuation movements
2025 10.5% (4.5%)
2024 9.8% (4.9%)
2023 10.1% (8.6%)
2022 31.0% (5.2%)
Portfolio insights
In line with the investment strategy that has been agreed with the Board, we
have tilted PIN's portfolio towards investing directly in private companies
and as at 31 May 2025, they accounted for 54% of the portfolio. We make these
investments alongside our favoured private equity managers where, on behalf of
PIN, we apply two layers of scrutiny as both the private equity manager and
the company itself must pass our stringent due diligence processes. These
individual private company investments are complemented by primary fund
investments that offer access to opportunities and managers that might not
otherwise be available through direct company investments alone.
As an illustration of the returns that can be generated on these direct
investments, all realised co-investment deals have returned 2.3x net MOIC and
22% net IRR. The entire track record of overall returns (including realised
and unrealised) on co-investments is 1.76x net MOIC and 16.6% net IRR.
Across our portfolio, each of the investment types has contributed to returns
over time. The table below is taken from the detailed analysis and shows how
each investment type has performed over five-year and 10-year periods compared
to the MSCI World and MSCI ACWI indices.
Five and 10-year annualised time-weighted returns: PIN strategies vs public
markets (for periods ending 31 December 2024)
Last 5 years Last 10 years
Primaries 14.9% 15.2%
Fund secondaries 8.1% 11.0%
Manager-led secondaries 9.0% 20.3%
Co-investment 10.8% 16.0%
MSCI ACWI (net) GBP 11.3% 11.7%
MSCI World (net) GBP 12.5% 12.4%
Primaries are demonstrating consistent returns over longer periods as the
managers typically invest their capital over five years and the portfolios are
also diversified by number of companies. A similar profile is seen in fund
secondaries where the portfolios tend to be very diversified. Manager-led
secondaries and co-investments are concentrated deals, generally consisting of
just one company. As more capital has been deployed in recent years, these
deals are weighted towards the recent subdued performance experienced within
PIN's portfolio but also across the private equity market.
Outperformance has been more challenged in the past three years especially,
but we believe that the portfolio is well-positioned for when an improvement
in market conditions and increase in deal activity comes through. The
evolution of strategy emerging from Step Three should also result in improved
NAV performance that, coupled with an increase in demand to narrow the
discount, could translate also into improved share price performance.
Although private equity fundraising was down overall in 2024, compared to the
previous year, the best private equity managers have still been able to raise
capital, and during the year to 31 May 2025, PIN made 18 new investments,
amounting to £143.3m in new commitments. This included commitments to ten
primary funds (£88.5m), five co-investments (£38.6m) and three manager-led
secondaries (£16.2m). In terms of cash outlay, we used £43m of cash to
invest in new investments during the period.
The challenging exit environment has led to record deal flow in the
secondaries market over the last four years and volumes reached US$160bn in
2024(12). Manager-led secondaries, now an established part of the market, have
increasingly become a tool for private equity managers to offer liquidity
solutions to their investors and accounted for 44%(13) of the secondary market
deal flow in 2024 and 14%(13) of buyout exits. We find these situations to be
attractive as they allow us to invest in companies that our managers already
know well and believe have further potential for growth.
However, the increased dealflow in this newer segment of the secondaries
market and the growing interest from new entrants call for careful screening
of opportunities. While Pantheon focuses on single company transactions where
there is a clear rationale for the private equity manager to want to remain
invested for another phase of growth, there are a variety of transactions in
the market and the dealflow continues to evolve.
We continue to manage PIN's financial position prudently, regularly stress
testing its Balance Sheet to ensure that it can withstand a variety of
scenarios and market conditions as well as being well positioned to take
advantage of share buyback and new deal opportunities. As at 31 May 2025, PIN
had a net debt position of 8.7% of NAV, which we consider to be a prudent
level of leverage for PIN's structure.
Revised approach to overall capital management
PIN is an evergreen structure, meaning that we are constantly managing and
reinvesting cash over time. The gearing position is one element but it is a
much broader concept. As mentioned in the Chair's Statement, the Board and the
Manager undertook an extensive research and analysis project during this year,
touching on many aspects of strategy and performance. A key attraction of an
investment trust like PIN is that it is managed by an experienced team
handling not only the investment strategy but also the overall management of
PIN's capital. In both areas, it is important to apply a proactive approach.
In these changing times and amid challenging market conditions for private
equity, capital management and, within that, portfolio management become even
more important. Therefore, going forward, we will execute PIN's corporate,
investment and leverage strategies with a refined and more deliberate focus on
capital and portfolio management. This has the ability to boost NAV
performance and could also be a factor in stimulating demand from investors
that value a company that is focused on actively managing their capital on
behalf of shareholders.
There are two parts to this revised approach: portfolio management and overall
capital management.
Active portfolio management
Investment strategy is recommended by Pantheon to the Board and then an
execution plan is devised to deliver on that strategy over time. The process
involves the origination, selection, due diligence, execution and monitoring
of new investments and the opportunity to invest capital in line with the
Company's investment strategy. Similarly, it involves selection, due diligence
and execution of sales of investments from the portfolio. Between these two
bookends, we are monitoring the portfolio, the wider private equity market and
macroeconomic conditions to assess whether we should refine either the
portfolio or the strategy or both. Regular review of performance of the
portfolio underpins the assessment of relative value between the outlook and
expected return from a set of investments today, set against the potential
return that could be derived from selling and reinvesting that cash in new
investment opportunities.
A refinement to our existing portfolio management approach will be an
increased focus on periodically rebalancing the portfolio, including through
sales of investments into the secondary market, taking account of pricing and
supply-demand dynamics within that market. More active portfolio management
allows a holistic view of our whole portfolio whereby we are not only adding
to the portfolio but also making periodic changes within it, according to
where we think future returns can be optimised to generate alpha and
market-beating returns for our investors.
Active capital management
Investment strategy, and the execution of it through active portfolio
management, is a key pillar within active capital management, which takes the
same concepts and applies them to PIN's capital structure and overall
investment philosophy. There are various sources of cash available to PIN and
uses of cash to choose between. An active capital management approach is
centred in assessing the best sources and uses of cash over time, going beyond
simply reinvesting the cash distributed from the portfolio into new deals.
Distributions from the portfolio that arise when a portfolio company is sold
are certainly the consistent backbone of sources of cash, augmented by cash
proceeds from the sale of investments in the secondary market, and drawing
down on the leverage facilities that PIN has in place. Uses of cash could
include: new investments, share buybacks during periods where the discount is
wide, special dividends (although PIN does not have a dividend policy) and
making repayments on the leverage facilities to reduce their balances.
As part of this evolution, PIN's active capital management philosophy will
become more dynamic. PIN today already targets the most attractive investment
opportunities it sees, including repurchasing its own shares. We intend to
build on this, enhancing PIN's flexibility in capital allocation, enabling us
to manage investment pacing prudently through cycles, while continuing to back
top-quality managers and resilient, growing direct company investments.
Marketing and communications
Over several years, we have engaged in activities aimed at raising the profile
of PIN, participating in discussions around the investment trust sector and
providing educational content to assist market participants in assessing
private equity and PIN specifically. These activities have taken many forms:
webinars explaining private equity and investment trusts; interviews and
podcasts discussing PIN's differentiated strategy; joining industry round
tables, conferences and other events as panellists discussing topics such as
listed private equity; leveraging our dedicated LinkedIn page to distribute
content and raise awareness of PIN and its media activities; and thought
leadership through contributions to papers and articles in the financial
media. During this financial year, we have continued to push for transparency,
awareness and education around private equity, augmenting our significant
existing outreach programme with research and planning alongside our marketing
agency.
As the Chair explained in our Interim Report earlier this year, the focus was
on a discovery phase that included detailed research and many interviews with
a wide range of investors which enabled us to segment the market and identify
three specific target audiences likely to have heightened interest in adding
private equity exposure to their investment portfolios, providing they could
do so through an accessible structure. With investors who are new to the asset
class, it is important to reach and educate them on the benefits of private
equity as well as how they might access it.
For example, we and many of our peers in our sector are focusing on retail
investors as an area of keen interest and the research indicates that
simplicity of message is paramount for this group. Clear and direct messaging
has appeal not just for retail audiences but also for institutional and
private wealth investors so we believe that this shift will benefit all
investors.
Over the past six months, we have moved from discovery and research into
planning and execution. Using the research to guide us, we have been
developing clearer and differentiated branding as well as revising our
messaging to increase the accessibility and inclusion among a widened target
audience. This will be apparent in a redesigned website launching later this
year that will continue to be a key source of information for new and existing
investors.
We are applying a test and learn approach, which is iterative, learning from
what resonates with target audiences through activities such as LinkedIn
campaigns and search engine optimisation ("SEO") initiatives and applying that
to adapt our future campaigns and activities. This important data is informing
next steps and we have a detailed plan of activities around media, public
relations ("PR") and investor outreach. We look forward to sharing more of the
results of these efforts to increase demand in due course.
Outlook
After decades of growth, the private equity industry now finds itself at a
crossroads where it is faced with both challenges and opportunities. However
history has shown that the highest quality managers are nimble and have a
track record of being able to navigate successfully and adapt to market
dislocations. In addition, there are structural trends that continue to be
supportive for private equity's prospects. For example, the number of publicly
quoted companies globally continues to decrease while more than 80% of US and
more than 90% of EU and UK companies with less than $100m revenue remain
private(14). The more favourable valuation environment, compared to the peak
that we saw in 2021, should also present some interesting opportunities for
investment.
We believe that maintaining an allocation to private equity remains a key
component of any well-diversified portfolio and, since its inception in 1987,
PIN has been one of the most accessible ways for investors of all types and
sizes to do this, and our access to many of the leading private equity
managers underpins our ability to deliver market-beating returns for PIN over
the long term.
Charlotte Morris and Helen Steers MBE
Pantheon Partners and Co-Lead Managers of PIN
(1) Source: Bain, March 2025 "Global Private Equity Report 2025". Bain uses
data from PitchBook (PE-Backed Companies and Holding Period as 30 June 2024)
and Preqin (Unrealised Value as at 30 September 2024).
(2) Excludes the portion of the reference portfolio attributable to the ALN.
(3) Source: Preqin, as at September 2024.
(4) Pitchbook data as at 31 December 2024.
(5) Investment type, region and stage charts are based upon underlying fund
and company valuations. The charts exclude the portion of the reference
portfolio attributable to the Asset Linked Note ("ALN").
(6) Global category contains funds with no target allocation to any particular
region equal to or exceeding 60%.
(7) The company sector table is based upon underlying company valuations as at
31 March 2025, adjusted for calls and distributions to 31 May 2025. These
account for 100% of PIN's overall portfolio value.
(9) As at 31 December 2024, all co-investments completed from 2010 to 2024.
(10)This data is on a sub-set of the portfolio and may not be representative
of the entire portfolio. Refer to Alternative Performance Measures in the full
Annual Report for further information on the methodology used to calculate
Direct portfolio revenue and EBITDA growth numbers.
(11) Please refer to the APMs in the full Annual Report.
(12) Source: Secondary market volume from Evercore FY 2024 Secondary Market
Review - Highlights, January 2025.
(13) Source: Continuation Fund Volume as % of Total Private Equity Exit Value
from Morgan Stanley Continuation Fund Market Review: Full Year 2024, February
2025.
(14) Source: BlackRock's Larry Fink's 2025 Annual Chairman's Letter to
Investors.
THE DIRECTORS
The Directors in office at the date of this report are:
John Singer CBE* (Chair)
Mary Ann Sieghart* (Senior Independent Director)
Zoe Clements* (Audit Committee Chair)
John Burgess*
Tim Farazmand*
Anthony (Tony) Morgan*
Candida Morley*
Dame Susan Owen DCB*
Rahul Welde*
* Independent of the Manager
EXTRACTS FROM THE DIRECTORS' REPORT
Share capital
The rights attaching to the Company's shares are set out in the Company's
Articles of Association. Each holder of ordinary shares is entitled, on a show
of hands, to one vote and, on a poll, to one vote for each ordinary share
held.
Authorities given to the Directors at the AGM on 16 October 2024 to allot
shares, disapply statutory pre-emption rights and buy back shares will expire
at the forthcoming AGM. In order to take advantage of the investment
opportunity offered by the discount to net asset value ("NAV") on the shares,
during the year to 31 May 2025, 17,828,887 shares, representing 3.8% of the
called-up share capital and a nominal value of £1,194,535.43, were bought
back for an aggregate amount of £53,513,767 (excluding costs and stamp duty)
subsequently cancelled. As at 31 May 2025, authority to buy back a further
54,471,680 shares remained.
The Company's ordinary shares are freely transferable. However, the Directors
may refuse to register a transfer of shares held in certificated form which
are not fully paid unless the instrument of transfer is (i) lodged, duly
stamped at the Company's registered office, accompanied by the relevant share
certificate(s) and such other evidence (if any) as the Directors may
reasonably require to show the right of the transferor to make the transfer
and (ii) not in favour of more than four persons jointly. The Directors may
decline to register a transfer of an uncertificated share in the circumstances
set out in the Uncertified Securities Regulations 2001 and where, in the case
of a transfer to joint holders, the number of joint holders to whom the
uncertificated share is to be transferred exceeds four. If the Directors
decline to register a transfer, they are required to send notice of the
refusal to the transferee within two months, giving reasons for their
decision.
Unless the Directors determine otherwise, a holder of ordinary shares will
cease to be entitled to attend or vote at general meetings of the Company or
on any poll if he/she fails to comply with a request by the Company to provide
details of any interest held by any person in his/her ordinary shares within
14 days of the request being made. Additionally, if the shares represent at
least 0.25%, any dividends payable in respect of the shares will be withheld
by the Company and no transfers of any of the shares held in certified form
will be registered unless the shareholder is not him/herself in default as
regards supplying the information required (and the Directors are satisfied
that no person in default as regards supplying such information is interested
in any of the shares that are subject of the transfer) or unless the transfer
arises as a result of the acceptance of a takeover offer or a sale made
through a recognised investment exchange (or any other stock exchange outside
the UK on which the Company's shares are normally traded) or is a transfer
which the Directors are satisfied is made in consequence of a sale of the
entire beneficial interest in the shares to a person who is unconnected with
the shareholder and with any other person appearing interested in the shares.
The Company's Articles of Association contain additional provisions enabling
the Directors to take certain steps where ordinary shares are or may be owned,
or rights attaching to such shares may be exercised, by persons in
circumstances which the Directors determine would give rise to a regulatory
burden under certain US securities, investment and pension laws and
regulations.
Save as described above, there are no restrictions concerning the transfer of
securities in the Company or on voting rights; no special rights with regard
to control attached to securities; no agreements between holders of securities
regarding their transfer known to the Company; and no agreements which the
Company is party to that might affect its control following a successful
takeover bid.
The giving of authority to issue or buy back the Company's shares requires an
appropriate resolution to be passed by shareholders. Proposals for the renewal
of the Board's current authorities to issue and buy back shares will be set
out in the separate 2025 Notice of AGM.
As at 31 May 2025, the Company had shares in issue as shown in the table
below, all of which were listed on the official list maintained by the
Financial Conduct Authority ("FCA") and admitted to trading on the London
Stock Exchange. No shares were held in Treasury at the year end or as at the
date of this Report. The number of shares in issue and the voting rights as at
the date of this report are 443,553,870.
Share capital and voting rights
As at the date of this Report As at 31 May 2024 As at 31 May 2024
Number of ordinary shares of 6.7p each in issue 443,553,870 447,784,724 465,613,611
Voting rights attached to each share 1 1 1
Number of shares held in Treasury - - -
Total voting rights 443,553,870 447,784,724 465,613,611
Dividends
No final dividend is being recommended.
Going Concern
The Company's business activities, together with the factors likely to affect
its future development, performance and financial position, are set out in the
Strategic Report and Manager's Review.
The Directors have made an assessment of going concern, taking into account
the Company's current performance and financial position as at 31 May 2025. In
addition, the Directors have assessed the outlook, which considers the
potential further impact of ongoing international conflicts which have brought
about increased geopolitical uncertainties including the disruption to the
global supply chain and increases in the cost of living as a result,
inflation, interest rates and the impact of climate change on PIN's portfolio,
using the information available as at the date of issue of these Financial
Statements.
The Directors have also considered the Company's position with reference to
its Investment Trust structure, its business model, its business objectives,
the principal risks and uncertainties as detailed in the full Annual Report
and its present and projected financial position. The Directors have
considered the impact of the Company's Capital Allocation Policy in regards to
share buybacks. As part of the overall assessment, the Directors have taken
into account the Manager's culture, which emphasises collaboration and
accountability, the Manager's conservative approach to balance sheet
management, and its emphasis on investing with underlying private equity
managers that are focused on market outperformance.
At each Finance Sub-Committee meeting, the Directors review the Company's
latest management accounts and other financial information. The Company's
commitments to private equity investments are reviewed, together with its
financial resources, including cash held and its borrowing capability.
One-year cash flow scenarios are also presented and discussed at each meeting.
PIN's Balance Sheet is managed to ensure that the Company can finance its
undrawn commitments, which are carefully controlled relative to its assets and
available liquidity. This disciplined approach enables the Company to
withstand periods of volatility such as those experienced as a result of the
ongoing international conflicts and periods of historically low exit and
distribution levels.
The Directors have considered downside liquidity modelling scenarios with
varying degrees of decline in investment valuations, decreased investment
distributions, and increased call rates, with the worst being an extreme
downside scenario representing an impact to the portfolio that is worse than
that experienced during the 2008-2009 global financial crisis.
In the event of a downside scenario, PIN can take steps to limit or mitigate
the impact on the Balance Sheet, namely drawing on the credit facility and
pausing new commitments. In addition, subject to the prevailing market
environment, it could raise additional credit or capital, and sell assets to
increase liquidity and reduce outstanding commitments.
After due consideration of the Balance Sheet, activities of the Company, its
assets, liabilities, commitments and financial resources, the Directors have
concluded that the Company has adequate resources to continue in operation for
at least 12 months from the approval of the Financial Statements for the year
ended 31 May 2025. For this reason, they consider it appropriate to continue
to adopt the going concern basis in preparing the Financial Statements.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors are responsible for preparing the Annual Report and the
Financial Statements in accordance with applicable laws and regulations in
accordance with FRS102. Company law requires the Directors to prepare
Financial Statements for each financial year. Under that law they have elected
to prepare the Financial Statements in accordance with applicable law and UK
Accounting Standards (UK Generally Accepted Accounting Practice). Under
company law the Directors must not approve the Financial Statements unless
they are satisfied that they give a true and fair view of the state of affairs
of the Company as at the end of each financial year and of the profit or loss
of the Company for that period.
In preparing these financial statements, the Directors are required to:
· Present a true and fair view of the financial position, financial
performance and cash flows of the Company;
· Select suitable accounting policies in accordance with United
Kingdom accounting standards and then apply them consistently;
· Present information, including accounting policies, in a manner
that provides relevant, reliable, comparable and understandable information;
· Make judgements and estimates that are reasonable and prudent;
· State whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and explained in the
Financial Statements; and
· Prepare the financial statements on a going concern basis unless
it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the Financial Statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are also responsible for preparing the Strategic Report, the
Directors' Report, the Directors' Remuneration Report, the Corporate
Governance Statement and the Report of the Audit Committee in accordance with
the Companies Act 2006 and applicable regulations, including the requirements
of the Listing Rules and the Disclosure Guidance and Transparency Rules.
The Directors have delegated responsibility to the Manager for the maintenance
and integrity of the Company's corporate and financial information included on
the Company's website (www.piplc.com (http://www.piplc.com) ). Legislation in
the UK governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
Each of the Directors, whose names are listed above, confirms that to the best
of their knowledge:
· The Financial Statements, prepared in accordance with applicable
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit of the Company; and
· The management report, which is incorporated in the Directors'
Report and Strategic Report, includes a fair review of the development and
performance of the business and the position of the Company, together with a
description of the principal risks and uncertainties that it faces.
The UK Corporate Governance Code requires Directors to ensure that the Annual
Report and Financial Statements are fair, balanced and understandable. In
order to reach a conclusion on this matter, the Board has requested that the
Audit Committee advises on whether it considers that the Annual Report and
Financial Statements fulfil these requirements. The process by which the Audit
Committee has reached these conclusions is set out in its report in the full
Annual Report.
As a result, the Board has concluded that the Annual Report and Financial
Statements for the year ended 31 May 2025, taken as a whole, is fair, balanced
and understandable and provides the information necessary for shareholders to
assess the Company's position and performance, business model and strategy.
Signed on behalf of the Board by
John Singer CBE
Chair
30 July 2025
NON-STATUTORY ACCOUNTS
The financial information set out below does not constitute the Company's
statutory accounts for the year ended 31 May 2025 and period ended 31 May 2024
but is derived from those accounts. Statutory accounts for 2024 have been
delivered to the Registrar of Companies, and those for 2025 will be delivered
in due course. The Auditors have reported on those accounts; their report was
(i) unqualified, (ii) did not include a reference to any matters to which the
Auditors drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under Section 498 (2) or (3) of the
Companies Act 2006. The text of the Auditors' report can be found in the
Company's full Annual Report and financial statements at www.piplc.com
(http://www.piplc.com) .
INCOME STATEMENT
Year ended 31 May 2025
Year ended 31 May 2025 Year ended 31 May 2024
Note Revenue Capital Total(1) Revenue Capital Total(1)
£'000 £'000 £'000 £'000 £'000 £'000
Gains on investments at fair value through profit or loss 9b - 11,344 11,344 - 60,324 60,324
(Losses)/gains on financial instruments at fair value through profit or loss - (812) 6,073 5,261 (675) (2,745) (3,420)
ALN
Currency gains on cash and borrowings 18 - 8,975 8,975 - 5,491 5,491
Investment income 2 19,829 - 19,829 16,534 - 16,534
Investment management fees 3 (26,769) - (26,769) (25,674) - (25,674)
Other expenses 4 (2,579) (702) (3,281) (2,148) (3,374) (5,522)
(Loss)/return before financing and taxation (10,331) 25,690 15,359 (11,963) 59,696 47,733
Interest payable and similar expenses 6 (19,787) - (19,787) (13,051) - (13,051)
(Loss)/return before taxation (30,118) 25,690 (4,428) (25,014) 59,696 34,682
Taxation paid 7 (2,284) - (2,284) (3,033) - (3,033)
(Loss)/return for the year, being total comprehensive income for the year (32,402) 25,690 (6,712) (28,047) 59,696 31,649
(Loss)/return per ordinary share 8 (7.02)p 5.57p (1.45)p (5.68)p 12.08p 6.40p
(1) The Company does not have any income or expenses that are not included in
the return for the year, therefore the return for the year is also the total
comprehensive income for the year. The supplementary revenue and capital
columns are prepared in accordance with Financial Reporting Standards (FRS"),
and under guidance published in the Statement of Recommended Practice ("SORP")
issued by the Association of Investment Companies ("AIC").
All revenue and capital items in the above statement relate to continuing
operations. No operations were acquired or discounted during the period.
The Notes below form part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
Year ended 31 May 2025
Note Share Share Capital Other Capital Revenue Total
capital premium redemption capital reserve on reserve £'000
£'000 £'000 reserve reserve investments £'000
£'000 £'000 held
£'000
Movement for the year ended 31 May 2025
Opening equity shareholders' funds 31,196 269,535 8,369 1,492,834 643,009 (161,302) 2,283,641
(Loss)/return for the year - - - 123,735 (98,045) (32,402) (6,712)
Ordinary shares bought back for cancellation in the market(1) 17 (1,194) - 1,194 (53,889) - - (53,889)
Closing equity shareholders' funds 17, 18 30,002 269,535 9,563 1,562,680 544,964 (193,704) 2,223,040
Movement for the year ended 31 May 2024
Opening equity shareholders' funds 35,503 269,535 4,062 1,620,532 653,695 (133,255) 2,450,072
(Loss)/return for the year - - - 70,382 (10,686) (28,047) 31,649
Ordinary shares bought back for cancellation in the market(1) 17 (1,012) - 1,012 (47,030) - - (47,030)
Ordinary shares bought back for cancellation via Tender Offer(1) 17 (3,295) - 3,295 (151,050) - - (151,050)
Closing equity shareholders' funds 17, 18 31,196 269,535 8,369 1,492,834 643,009 (161,302) 2,283,641
(1) The value of ordinary shares bought back include any associated fees and
stamp duty.
The Notes below form part of these financial statements.
BALANCE SHEET
As at 31 May 2025
Note 31 May 31 May 2024
2025 £'000
£'000
Fixed assets
Investments at fair value 9a/b 2,437,294 2,498,505
Current assets
Debtors 11 3,081 2,487
Cash and cash equivalents 12 25,417 21,863
28,498 24,350
Creditors: Amounts falling due within one year
Bank loan facility 14 - (83,261)
Other creditors 13 (7,670) (7,752)
(7,670) (91,013)
Net current assets/(liabilities) 20,828 (66,663)
Total assets less current liabilities 2,458,122 2,431,842
Creditors: Amounts falling due after one year
Bank loan facility 14 (103,093) -
Asset Linked Loan 15 (20,738) (30,378)
Private Placement debt notes 16 (111,251) (117,823)
(235,082) (148,201)
Net assets 2,223,040 2,283,641
Capital and reserves
Called-up share capital 17 30,002 31,196
Share premium 18 269,535 269,535
Capital redemption reserve 18 9,563 8,369
Other capital reserve 18 1,562,680 1,492,834
Capital reserve on investments held 18 544,964 643,009
Revenue reserve 18 (193,704) (161,302)
Total equity shareholders' funds 2,223,040 2,283,641
Net asset value per ordinary share 19 496.45p 490.46p
The financial statements were approved by the Board of Pantheon International
Plc on 30 July 2025 and were authorised for issue by
John Singer CBE
Chair
Company No. 214798
CASH FLOW STATEMENT
Year ended 31 May 2025
Year ended Year ended
31 May 2025 31 May 2024
Note £'000 £'000
Cash flow from operating activities
Investment income received - comprising:
- Dividend income 17,757 12,975
- Interest income 1,669 2,815
- Other investment income 384 86
Deposit and other interest received 13 669
Investment management fees paid (26,862) (25,639)
Secretarial fees paid (541) (464)
Depositary fees paid (262) (236)
Directors' fees paid (388) (343)
PR/Marketing fees paid (394) (302)
Legal & Professional fees paid (849) (1,208)
Capitalised project related legal costs - (2,497)
Other cash payments (1,337) (777)
Taxation paid (2,312) (2,933)
Net cash outflow from operating activities 21 (13,122) (17,854)
Cash flows from investing activities
Purchases of investments(1) (133,456) (152,960)
Disposals of investments(1) 206,717 131,544
Net cash inflow/(outflow) from investing activities 73,261 (21,416)
Cash flows from financing activities
ALN repayments (2,700) (4,650)
Ordinary shares bought back for cancellation(2) (54,779) (46,140)
Ordinary shares bought back for cancellation via Tender Offer(2) - (151,050)
Drawdown from loan facility 169,973 200,375
Repayment of drawn loan (148,370) (111,903)
Loan commitment and arrangement fees paid (6,767) (5,642)
Loan interest paid (6,371) (4,018)
Private placement debt note funding - 118,274
Private placement debt note coupon interest (8,193) -
Net cash outflow from financing activities (57,207) (4,754)
Increase/(decrease) in cash in the year 2,932 (44,024)
Cash and cash equivalents at the beginning of the year 21,863 66,043
Foreign exchange gains/(losses) on cash accounts 622 (156)
Cash and cash equivalents at the end of the year 25,417 21,863
(1) Purchases and disposals do not include investments actioned by Pantheon
International Holdings LP.
(2) The value of ordinary shares bought back include any associated fees and
stamp duty amounting to £375,000 (2024: £1,377,000).
The Notes below form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting Policies
Pantheon International Plc is a listed public limited company incorporated in
England and Wales. The registered office is detailed at the start of this
announcement. A summary of the principal accounting policies and measurement
bases, all of which have been applied consistently throughout the year, is set
out below.
A. Basis of Preparation
The Company's financial statements have been prepared in compliance with FRS
102 as it applies to the financial statements of the Company for the year
ended 31 May 2025. They have also been prepared on the assumption that
approval as an investment trust will continue to be granted. The Company's
Financial Statements are presented in sterling and all values are rounded to
the nearest thousand pounds (£'000) except when indicated otherwise. The
investments in the subsidiaries are financial assets, and held at fair value
through profit or loss.
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, other than where restrictions are imposed on the
Company which prohibit specific disclosures.
B. Going Concern
The financial statements have been prepared on a going concern basis and under
the historical cost basis of accounting, modified to include the revaluation
of certain assets 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 31 May 2025. In
addition, the Directors have assessed the outlook, which considers the
potential further impact of the ongoing international which have brought about
increased geopolitical uncertainties including the disruption to the global
supply chain and increases in the cost of living as a result, persistent
inflation, high interest rates and the impact of climate change on PIN's
portfolio using the information available as at the date of issue of these
Financial Statements. As part of this assessment the Directors considered:
· Various downside liquidity modelling scenarios with varying
degrees of decline in investment valuations, investment distributions, and
increased call rates, with the worst being a low case downside scenario
representing an impact to the portfolio that is worse than experienced during
the Global Financial Crisis.
· The Company manages and monitors liquidity regularly, ensuring it
is adequate and sufficient and is underpinned by its monitoring of
investments, distributions, capital calls and outstanding commitments. Total
available financing as at 31 May 2025 stood at £310m (31 May 2024: £414m),
comprising £21m (31 May 2024: £16m) in available cash balances and £289m
(31 May 2024: £398m) in undrawn, sterling equivalent, bank facilities.
· The Company's 31 May 2025 valuation is primarily based on
reported GP valuations with a reference date of 31 March 2025, updated for
capital movements and foreign exchange impacts.
· Unfunded commitments - PIN's unfunded commitments at 31 May 2025
were £693m (31 May 2024: £789m). The Directors have considered the maximum
level of unfunded commitments which could theoretically be drawn in a 12-month
period, the ageing of commitments and available financing available to fund
these commitments. In these scenarios PIN can take steps to limit or mitigate
the impact on the Balance Sheet, namely drawing on the credit facility,
pausing on new commitments, selling assets to increase liquidity and reducing
outstanding commitments if necessary. In addition, subject to market
conditions, the Company could also seek to raise additional credit or capital.
· The impact of share buybacks and the Company's Capital Allocation
Policy on available liquidity.
Having performed the assessment on going concern, 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 12 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 an investment business. Consequently no business
segmental analysis is provided.
D. Valuation of Investments
Investments in private equity funds comprise "primaries", "secondaries",
"co-investments", "Manager-led secondaries" and "directs", (refer to Glossary
of Terms) and are held by the Company, together with the fair value of the
Company's investments in Pantheon International Holdings LP ("PIH LP"), which
itself holds a basket of investments held at fair value. The fair value of PIH
LP is based on its latest net asset value. The Company has fully adopted
sections 11 and 12 of FRS 102. All investments are classified upon initial
recognition as held at fair value through profit or loss (described in these
financial statements as investments held at fair value) and are measured at
subsequent reporting dates at fair value. The Company's business is investing
in financial assets with a view to profiting from their total return in the
form of interest, dividends or increases in fair value.
i. Unquoted fixed asset investments are stated at the estimated fair value
Given the nature of the Company's investments which comprise predominantly
unlisted fund investments, while the Company operates a robust and consistent
valuation process, there is significant estimation uncertainty in the
underlying fund valuations which are estimated at a point in time.
The valuations of the Company's investments are primarily based upon the
valuation information provided by underlying third-party private equity
managers ("general partners" or "GPs"). The GPs perform periodic valuations of
the underlying investments in their funds, typically using earnings multiple
or discounted cash flow methodologies to determine enterprise value in line
with IPEV Guidelines. In the absence of contrary information, these net asset
valuations received from GPs are deemed to be appropriate by Pantheon, for the
purposes of the determination of the fair values of the unquoted investments.
Pantheon considers the GPs to be the "Management Experts", as:
· GPs have an intimate knowledge of the company's business and the
fundamental business environment it operates in;
· GPs have a more comprehensive understanding of the company's
financials;
· GPs are more knowledgeable of the market environment in which
transactions of comparable companies take place, and
· GPs are mandated to exit concurrent with co-investors and so
Pantheon's economic interest in an investment as a co-investor is aligned with
that of the GP.
A robust assessment is performed by Pantheon to determine the capability and
track record of the GPs. All GPs are scrutinised by the Investment Committee
and an approval process is performed before any GP manager is approved and an
investment made. As part of this process Pantheon ensures that:
· Underlying fund vehicles report under recognised accounting
standards, are compliant with those standards, fair value principles are
followed and are audited annually; and
· Where accounting standards followed do not require fair value
reporting, a detailed review of financial information provided is conducted.
Adjustments are made by Pantheon, where necessary, to bring these valuations
in line with fair value.
· Pantheon may adjust GP's valuations on occasions or under certain
circumstances, providing fair value can be reliably estimated and can be
supported by material evidence and sufficient supporting documentation. The
most common reason for adjustments to the value provided by a GP is to take
account of events occurring between the date of the GP's valuation and the
reporting date, for example, subsequent cash flows or notification of an
agreed sale. On more rare occasions Pantheon may apply valuation adjustments
under the following circumstances, including, but not limited to:
· GP's valuations are not prepared in accordance with the valuation
standards;
· Pantheon's view on provisions to account for potential claims or
investment performance is not accounted for in the third-party private equity
managers reported values;
· Significant post-balance sheet events that meet the criteria for
adjustment under IAS 10 are not accounted for in the reported values; and
· At year-end, if a significant time has elapsed since the last
reported NAV date, Pantheon may apply adjustments to reflect market movements
on a risk-based and materiality-based approach.
In a small number of instances, a GP valuation may not be available. In such
cases Pantheon engages a qualified and independent valuation expert. The scope
of the engagement is determined on a case-by-case basis and, dependent on the
investment, could include an independent valuation report from a valuation
provider engaged by the Investment Manager. Pantheon then analyses the
independent valuation report to determine the reasonableness of the valuation
and that it is appropriate to the investment and performance thereof before
presenting to the Pantheon's Valuation Committee for approval.
ii. Quoted investments are valued at the bid price on the relevant stock
exchange
Private equity funds may contain a proportion of quoted shares from time to
time; for example, where the underlying company investments have been taken
public but the holdings have not yet been sold. The quoted market holdings at
the date of the latest fund accounts are reviewed and adjusted to the
published prices of those holdings at the period end.
E. Asset Linked Note
As part of the share consolidation effected on 31 October 2017, the Company
issued an ALN with an initial principal amount of £200m to the Investor.
Payments under the ALN are made quarterly in arrears and are linked to the ALN
share (c.75%) of the net cash flows from a reference portfolio which consists
of interests held by the Company in over 300 of its oldest private equity
funds, substantially 2006 and earlier vintages. The Company retains the net
cash flows relating to the remaining c.25% of the reference portfolio.
The ALN is held at fair value through profit or loss and therefore movements
in fair value are reflected in the Income Statement. Fair value is calculated
as the sum of the ALN share of fair value of the reference portfolio plus the
ALN share of undistributed net cash flow. The fair value movement is allocated
between revenue and capital pro rata to the fair value gains and
income-generated movements in the reference portfolio.
A pro rata share of the Company's total ongoing charges is allocated to the
ALN, reducing each quarterly payment ("the Expense Charge") and deducted from
Other Expenses through the revenue account in the Income Statement.
The ALN's share of net cash flow is calculated after withholding taxation
suffered. These amounts are deducted from taxation through the revenue account
in the Income Statement.
See Note 15 for further information.
F. Income
Dividends receivable on quoted equity shares are brought into account on the
ex-dividend date.
Dividends receivable on equity shares where no ex-dividend date is quoted are
brought into account when the Company's right to receive payment is
established. The fixed return on a debt security is recognised on a time
apportionment basis.
Income distributions from funds are recognised when the right to distributions
is established.
G. Taxation
Corporation tax payable is based on the taxable profit for the period. The
charge for taxation takes into account taxation deferred or accelerated
because of timing differences between the treatment of certain items for
accounting and taxation purposes. Full provision for deferred taxation is made
under the liability method, without discounting, on all timing differences
that have arisen but not reversed by the Balance Sheet date.
The tax effect of different items of income/gain and expenditure/loss is
allocated between capital and revenue on the same basis as the particular item
to which it relates, using the marginal method.
Dividends receivable are recognised at an amount that may include withholding
tax (but excludes other taxes, such as attributable tax credits). Any
withholding tax suffered is shown as part of the revenue account tax charge.
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 continue for the foreseeable future to meet) the conditions for approval as
an investment trust company, pursuant to sections 1158 and 1159 of the
Corporation Tax Act ("CTA").
Deferred tax assets are only recognised if it is considered more likely than
not that there will be suitable profits from which the future reversal of
timing differences can be deducted.
H. Expenses
All expenses are accounted for on an accruals basis. Expenses, including
investment management fees, are charged through the revenue account except as
follows:
· Expenses which are incidental to the acquisition or disposal of
an investment are treated as capital costs and separately identified and
disclosed in Note 4;
· Expenses of a capital nature are accounted for through the
capital account; and
· Investment performance fees.
I. Foreign Currency
The functional and presentational currency of the Company is pounds sterling
("sterling") because it is the primary currency in the economic environment in
which the Company operates. Transactions denominated in foreign currencies are
recorded in the local currency at actual exchange rates as at the date of
transaction. Monetary assets and liabilities denominated in foreign currencies
at the period end are reported at the rates of exchange prevailing at the
period end. Any gain or loss arising from a change in exchange rates
subsequent to the date of the transaction is included as an exchange gain or
loss in the revenue or capital column of the Income Statement depending on
whether the gain or loss is of a capital or revenue nature. For non-monetary
assets, these are covered by fair value adjustments. For details of
transactions included in the capital column of the Income Statement please see
(J) and (K) below.
J. Other Capital Reserve
The following are accounted for in this reserve:
· Investment performance fees;
· Gains and losses on the realisation of investments;
· Realised exchange difference of a capital nature;
· Expenses of a capital nature; and
· Costs of share buybacks.
Capital distributions received from investments are accounted for by firstly
reducing any cost of that investment, with any gains being recognised as
realised only when the cost has been reduced to nil.
K. Capital Reserve on Investments Held
The following are accounted for in this reserve:
· Increases and decreases in the value of investments held at the
year end and the ALN.
L. Investment Performance Fee
The Manager is entitled to a performance fee from the Company in respect of
each 12 calendar month period ending on 31 May in each year. The performance
fee payable in respect of each such calculation period is 5% of the amount by
which the net asset value at the end of such period exceeds 110% of the
applicable "high-water mark", i.e. the net asset value at the end of the
previous calculation period in respect of which a performance fee was payable,
compounded annually at 10% for each subsequent completed calculation period up
to the start of the calculation period for which the fee is being calculated.
For the calculation period ended 31 May 2025, the notional performance fee
hurdle is a net asset value per share of 668.0p.
The performance fee is calculated using the adjusted net asset value. The net
asset value per share at 31 May 2025 is 496.5p.
The performance fee is calculated so as to ignore the effect on performance of
any performance fee payable in respect of the period for which the fee is
being calculated or of any increase or decrease in the net assets of the
Company resulting from any issue, redemption or purchase of any shares or
other securities, the sale of any treasury shares or the issue or cancellation
of any subscription or conversion rights for any shares or other securities
and any other reduction in the Company's share capital or any distribution to
shareholders.
M. Significant Judgements and Estimates
The preparation of financial statements requires the 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. Actual results may differ
from these estimates. Details of how the fair values of unlisted investments
are estimated and any associated judgements applied are provided in Section
(D) of this Note and also within the Market price risk section in Note 24.
N. Derecognition/Recognition of assets and liabilities
Financial assets and financial liabilities are recognised on the Company's
Balance Sheet when the Company becomes a party to the contractual provisions
of the instrument. In accordance with FRS102, financial assets are
derecognised when the contractual rights to the cash flows from the instrument
expire or the asset is transferred and the transfer qualifies for
derecognition. Financial liabilities are derecognised when the obligation is
discharged, extinguished or expired.
O. Cash and cash equivalents
Cash and cash equivalents include cash deposits held with banks and money
market funds, together with other short-term highly liquid investments with
original maturities of three months or less at the date of placement, free of
any encumbrances, which are readily convertible into known amounts of cash and
subject to insignificant risk of changes in value. The Manager uses money
market funds for cash management purposes.
P. Loans and borrowings
All loan borrowing costs are recognised within interest payable and similar
expenses in the Income Statement, in the period in which they are incurred.
These costs include interest, commitment fees and arrangement fees. The
arrangement fees have been expensed over the life of the facility.
2. Income
31 May 2025 31 May 2024
£'000 £'000
Income from investments
Investment income (comprising dividend income, interest income and other 19,816 15,882
investment income)
19,816 15,882
Other income
Interest 19 643
Income on money market account - 11
Exchange difference on income (6) (2)
13 652
Total income 19,829 16,534
Total income comprises
Dividend income 17,763 12,981
Interest income 1,669 2,815
Other investment income 384 86
Bank interest 19 172
Money market fund interest - 471
Money market fund expense rebate - 11
Exchange difference on income (6) (2)
19,829 16,534
Analysis of income from investments
Unlisted 19,816 15,882
19,816 15,882
Geographical analysis
UK 1,360 359
US 14,432 12,035
Other overseas 4,024 3,488
19,816 15,882
3. Investment Management Fees
31 May 2025 31 May 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment management fees 26,769 - 26,769 25,674 - 25,674
26,769 - 26,769 25,674 - 25,674
The investment management fee is payable monthly in arrears at the rate set
out in the Directors' Report within the full Annual Report.
During the year, the investment services with a total value of £28,117,000
(period to 31 May 2024: £28,501,000), being £26,769,000 (period to 31 May
2024: £25,674,000) directly from Pantheon Ventures (UK) LLP and £1,348,000
(period to 31 May 2024: £2,827,000) via Pantheon-managed fund investments
were purchased by the Company.
The value of investments in, and outstanding commitments to, investment funds
managed or advised by the Pantheon Group ("Pantheon Funds") are excluded in
calculating the monthly management fee and the commitment fee. The value of
holdings in investments managed by the Pantheon Group totalled £1,352,685,000
as at 31 May 2025 (31 May 2024: £1,235,005,000), including £1,184,661,000
from the Pantheon-managed Pantheon International Holdings subsidiaries (31 May
2024: £1,082,057,000 Please see Note 20 for further details.
In addition, the Manager has agreed that the total fees (including performance
fees) payable by Pantheon Funds to members of the Pantheon Group and
attributable to the Company's investments in Pantheon Funds shall be less than
the total fees (excluding the performance fee) that the Company would have
been charged under the Management Agreement had it invested directly in all of
the underlying investments of the relevant Pantheon Funds instead of the
relevant Pantheon Funds instead of through the relevant Pantheon Funds.
At 31 May 2025, £2,187,000 (31 May 2024: £2,280,000) was owed for investment
management fees. No performance fee is payable in respect of the year to 31
May 2025 (31 May 2024: £nil). The basis upon which the performance fee is
calculated is explained in Note 1 (L) and in the Directors' Report in the full
Annual Report.
4. Other Expenses
31 May 2025 31 May 2024
Revenue Capital Total Revenue Capital Total
£'000
£'000
£'000
£'000
£'000
£'000
Secretarial and accountancy services 500 - 500 474 - 474
Depositary fees 262 - 262 258 - 258
Custodian fees 12 - 12 20 - 20
Registrar fees 120 - 120 108 - 108
Public relations and web-related fees 384 - 384 301 - 301
Fees payable to the Company's Auditor for the - audit of the annual financial 153 - 153 149 - 149
statements
Fees payable to the Company's Auditor for - audit-related assurance services 47 - 47 46 - 46
- Half-Yearly Report
Directors' remuneration (see Note 5) 404 - 404 360 - 360
Employer's National Insurance 44 - 44 27 - 27
Irrecoverable VAT 21 - 21 - - -
Legal and professional fees(1) 653 702 1,355 404 877 1,281
Project-related costs(1) - - - - 2,497 2,497
Other(2) 484 - 484 463 - 463
ALN Expense Charge (see Note 1 (E))(3) (505) - (505) (462) - (462)
2,579 702 3,281 2,148 3,374 5,522
(1) Legal fees incidental to the acquisition of investments and project
related costs are charged to the Capital column of the Income Statement since
they are capital in nature.
(2) Other expenses predominantly comprise fees and expenses relating to
printing, public relations, Stock Exchange listing, FCA fees, AIC Levy and
share price publications.
(3) A pro rata share of the Company's total ongoing charges is allocated to
the ALN, reducing each quarterly payment.
The Directors do not consider that the provision of non-audit work to the
Company affects the independence of the Auditors due to the half year review
being an assurance service.
5. Directors' Remuneration
Directors' emoluments comprise Directors' fees. A breakdown is provided in the
Directors' Remuneration Report in the full Annual Report.
6. Interest Payable and Similar Expenses
31 May 2025 31 May 2024
£'000 £'000
Loan commitment and arrangement fees 5,022 6,346
Loan Interest 7,317 4,154
Private Placement debt note coupon interest 7,448 2,551
19,787 13,051
On 12 January 2024, the Company agreed a private placement of US$150m in loan
notes with proceeds being received on 1 February 2024. The loan notes have
been structured over different maturities of five, seven and 10 years with
varying coupon rates, further details are disclosed in Note 16.
7. Taxation
31 May 2025 31 May 2024
Revenue Capital Total Revenue Capital Total
£'000
£'000
£'000
£'000
£'000
£'000
Taxation paid to foreign tax authorities 282 - 282 - - -
Witholding tax deducted from distributions 2,002 - 2,002 3,033 - 3,033
2,284 - 2,284 3,033 - 3,033
Tax charge
The standard rate of corporation tax in the UK is 25%.
The differences are explained below:
Net return before tax (30,118) 25,690 (4,428) (25,014) 59,696 34,682
Theoretical tax at UK corporation tax rate of 25% (31 May 2024: 25%) (7,530) 6,423 (1,107) (6,254) 14,924 8,670
Non-taxable investment, derivative and currency gains - (6,599) (6,599) - (15,143) (15,143)
Effect of expenses in excess of taxable income - 176 176 - 219 219
Carry forward management expenses 7,530 - 7,530 6,254 - 6,254
Taxation paid 282 - 282 - - -
Withholding tax deducted from distributions 2,002 - 2,002 3,033 - 3,033
2,284 - 2,284 3,033 - 3,033
The tax charge for the year ended 31 May 2025 is £2.3m (31 May 2024: £3.0m).
The taxation paid to foreign tax authorities includes corporate income tax
liabilities payable to various US state tax authorities, due to receipt of US
state sourced investment income. The Company's US federal corporate income
taxes are typically satisfied through withholding at source. These amounts are
accounted for as withholding tax deducted from distributions.
Investment gains are exempt from capital gains tax owing to the Company's
status as an investment trust.
Factors That May Affect Future Tax Charges
The Company is an investment trust and therefore is 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 excess management
expenses and expenses in excess of taxable income as they will only be
recoverable to the extent that there is sufficient future taxable revenue. As
at 31 May 2025, excess management expenses are estimated to be in excess of
£410m (31 May 2024: £359m).
At 31 May 2025, the Company had no unprovided deferred tax liabilities (31 May
2024: £nil).
8. Return per Ordinary Share
31 May 2025 31 May 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
(Loss)/return for the financial year in £'000 (32,402) 25,690 (6,712) (28,047) 59,696 31,649
Weighted average ordinary shares 461,269,972 494,296,359
(Loss)/return per share (7.02)p 5.57p (1.45)p (5.68)p 12.08p 6.40p
There are no dilutive or potentially dilutive shares in issue.
9a. Movements on Investments
31 May 2025 31 May 2024
£'000 £'000
Book cost brought forward 1,823,676 1,734,850
Opening unrealised appreciation on investments held:
- Unquoted investments 673,924 682,437
- Quoted investments 905 333
Valuation of investments brought forward 2,498,505 2,417,620
Movements in year:
Acquisitions at cost 133,456 152,960
Sale proceeds and capital distributions at fair value (206,014) (132,396)
Realised gains on sales 115,465 68,262
Decrease in unrealised appreciation on investments held (104,118) (7,941)
Valuation of investments at year end 2,437,294 2,498,505
Book cost at year end 1,866,583 1,823,676
Closing unrealised appreciation on investments held:
- Unquoted investments 569,567 673,924
- Quoted investments 1,144 905
Valuation of investments at year end 2,437,294 2,498,505
Fair value of investments:
Unlisted investments 2,435,159 2,495,920
Listed investments 2,135 2,585
Valuation of investments at year end 2,437,294 2,498,505
Further details in relation to the structuring arrangements are included in
Note 20.
9b. Analysis of Investments
Further analysis of the investment portfolio is provided in the Manager's
Review in the full Annual Report.
The Company received £206,014,000 (2024: £132,396,000) from investments sold
at fair value during the year. The book cost of these investments when they
were purchased was £90,549,000 (2024: £64,134,000). These investments have
been revalued over time until such time they were sold and up until that
point, any unrealised gains or losses were included in the fair value of the
investments. Transaction costs (incurred at the point of the transaction)
incidental to the acquisition of investments totalled £nil (31 May 2024:
£nil) and to the disposals of investments totalled £3,000 (31 May 2024:
£5,000) for the period. In addition, legal fees incidental to the acquisition
of investments totalled £702,000 (31 May 2024: £877,000), as disclosed in
Note 4, have been taken to the Capital column in the Income Statement since
they are capital in nature.
Also included in investment are investments that the Company holds in its
subsidiaries. Please see Note 20 below for further details.
Gains on investment per income statement 31 May 2025 31 May 2024
£'000 £'000
Realised gains on sales 115,465 68,262
Decrease in unrealised appreciation of investments held (104,118) (7,941)
Revaluation of amounts owed in respect of transactions (3) 3
Gains on investments 11,344 60,324
Currency analysis of investment valuation 31 May 2025 31 May 2024
£'000 £'000
Sterling
Unlisted investments 1,231,060 1,126,722
1,231,060 1,126,722
US dollar
Unlisted investments 961,385 1,102,043
Listed investments 2,135 2,246
963,520 1,104,289
Euro
Unlisted investments 226,325 244,243
226,325 244,243
Other
Unlisted investments 16,389 22,912
Listed investments - 339
16,389 23,251
Total valuation of investments 2,437,294 2,498,505
9c. Material Investment
At the year end, the Company held no material holdings in any underlying
company which exceeded 3% of the investee funds which exceed 15% of any class
of capital.
10. Fair Value Hierarchy
The fair value hierarchy consists of the following three levels:
Level 1 - The unadjusted quoted price in an active market for identical assets
or liabilities that the entity can access at the measurement date. The Level 1
holdings include publicly listed holdings held directly by the Company from in
specie distributions received from underlying investments, but does not
include listed holdings held indirectly through the Company's underlying
private equity managers which are classified under Level 3 holdings;
Level 2 - Inputs other than quoted prices included within Level 1 that are
observable (i.e. developed using market data) for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3 - Inputs are unobservable (i.e. for which market data is unavailable)
for the asset or liability.
Financial assets at fair value through profit or loss at 31 May 2025
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Unlisted holdings - - 2,435,159 2,435,159
Listed holdings 2,135 - - 2,135
2,135 - 2,435,159 2,437,294
Financial assets at fair value through profit or loss at 31 May 2024
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Unlisted holdings - - 2,495,920 2,495,920
Listed holdings 2,585 - - 2,585
2,585 - 2,495,920 2,498,505
Financial Liabilities at Fair Value Through Profit or Loss at 31 May 2025
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Bank loan 103,093 - - 103,093
Asset Linked Note - - 22,366 22,366
103,093 - 22,366 125,459
Financial Liabilities at Fair Value Through Profit or Loss at 31 May 2024
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Bank loan 83,261 - - 83,261
Asset Linked Note - - 30,815 30,815
83,261 - 30,815 114,076
Investments in level 3 assets are in respect of private equity fund
investments comprising primaries, secondaries, co-investments and manager-led
secondaries. These are held at fair value and are calculated using valuations
provided by the underlying manager of the investment, with adjustments made to
the statements to take account of cash flow events occurring after the date of
the manager's valuation, such as realisations or liquidity adjustments.
Underlying managers will use a number of valuation methodologies to determine
the fair value and exercise their judgement in applying the most appropriate
technique which may include comparable private company transactions, earnings
multiples, industry valuation benchmarks, discounting cash flows and net
assets. On certain occasions Pantheon will directly engage a third-party
valuation agent to perform valuations. The fair value of these investments at
31 May 2025 was £79.8m (31 May 2024: £9.7m).
11. Debtors
31 May 2025 31 May 2024
£'000 £'000
Amounts owed by investment funds 435 1,131
Prepayments 2,646 1,356
3,081 2,487
12. Cash and Cash Equivalents
31 May 2025 31 May 2024
£'000 £'000
Cash at bank 25,417 21,863
25,417 21,863
13. Creditors Amounts Falling Due Within One Year
31 May 2025 31 May 2024
£'000 £'000
Investment management fees 2,187 2,280
Amounts owed in respect of share buybacks and trades 9 1,003
ALN repayment to the Investor 1,628 437
Loan interest and loan commitment fees payable 1,083 627
Private placement loan note coupon interest 1,806 2,551
Other creditors and accruals 957 854
7,670 7,752
14. Bank Loan
31 May 2025 31 May 2024
£'000 £'000
Short term - 83,261
Facility B (USD) USD122.0m (£100m) Expired Oct 2024
Long term
Facility A1 (USD) USD393.0m (£300.0) Expiry Oct 2028 103,093 -
Facility A2 (EUR) EUR120.0m (£100.0) Expiry Oct 2028 - -
103,093 83,261
On 20 October 2023, the Company entered into a £500m equivalent
multi-tranche, multi-currency revolving credit facility agreement (the "Loan
Facility"). The facility structure was Facility A: £400m expiring in October
2026 and Facility B: £100m expiring in October 2024. There are five lenders
of the facility being Lloyds Bank plc, Mizuho, RBC Europe, Royal Bank of
Scotland and State Street.
On 28 October 2024, the Company announced that it had agreed an extension to
the Loan Facility, which was due to expire in October 2026, by a further two
years. Following the extension, the Loan Facility will have a four-year tenor
and a new maturity date of October 2028 and is now a £400m equivalent
commitment, with the flexibility to be increased to £700m under the existing
structure. This ensures extended liquidity coverage whilst appropriately
managing costs associated with the Loan Facility. The Loan Facility
commitments have been re-denominated as to US$393.0m and EUR120.0m at signing
to account for a strengthening in GBP and to match more closely the principal
currencies in which PIN's undrawn commitments are denominated.
The £100m 'Facility B' expired in October 2024.
The Loan Facility, which is secured by certain assets of the Company and is
split as follows
· Facility A1: £300m, expiring in October 2028; and
· Facility A2: £100m, expiring in October 2028
Both A1 and A2 have an ongoing option to extend, by agreement, the maturity
date by 364 days at a time. Depending on the utilisation of the Loan Facility,
PIN will pay a commitment fee of between 0.70% and 1.15% per annum on the
undrawn portion of the Loan Facility. The rate of interest payable on the
drawn portion is the aggregate of the relevant benchmark rate plus 2.95%. The
Loan Facility is subject to market standard loan-to-value and liquidity
covenants. See Note 24 for details regarding loan covenants.
As at 31 May 2025, the Loan Facility had a sterling equivalent value of
£103.1m all drawn from Facility A1 (31 May 2024: £83.3m from Facility B).
15. Creditors Amounts Falling Due After One Year - Asset Linked Note
31 May 2025 31 May 2024
£'000 £'000
Opening value of ALN 30,815 32,520
Repayment of net cashflows received (2,700) (4,650)
Fair value movement through profit or loss (5,261) 3,420
Expense charge and ALN share of withholding taxes (488) (475)
Closing value of ALN (see Note 1(E)) 22,366 30,815
Transfer to creditors due within one year (1,628) (437)
20,738 30,378
16. Private Placement Loan Notes
The Company has private placement debt, in the form of loan notes totalling
US$150m, which were placed on 1 February 2024, with interest payable to the
loan note holders on a six-monthly basis. The loan notes have been structured
over different maturities of five, seven and ten years with varying coupon
rates, revalued as follows:
31 May 2025 31 May 2024
£'000 £'000
Tranche A (USD) 6.36%.1 February 2029 38,938 41,238
Tranche B (USD) 6.53%. 1 February 2031 50,063 53,020
Tranche C (USD) 6.65%. 1 February 2034 22,250 23,565
111,251 117,823
The loan covenants applied to these notes are the same covenant held on the
bank loan facility, as stated in Note 24 under Liquidity risk.
17. Called-up Share Capital
31 May 2025 31 May 2024
Shares £'000 Shares £'000
Allotted, called up and fully paid:
Ordinary Shares of 6.7p each
Opening position 465,613,611 31,196 529,893,457 35,503
Ordinary shares bought back for cancellation in the market (17,828,887) (1,194) (15,099,519) (1,012)
Ordinary shares bought back for cancellation via Tender Offer - - (49,180,327) (3,295)
Closing position 447,784,724 30,002 465,613,611 31,196
Total shares in issue 447,784,724 30,002 465,613,611 31,196
In May 2024, the Company announced its capital allocation policy, which set
out the intention to continue share buybacks during the periods where the
discount remains wide.
During the year ended 31 May 2025, 17,828,887 Ordinary shares were bought back
in the market, for cancellation at a total cost, including stamp duty, of
£53.9m.
During the year ended 31 May 2024, 15,099,519 Ordinary shares were bought back
in the market, for cancellation at a total cost, including stamp duty, of
£47.0m, together with 49,180,327 via a Tender Offer at a total cost,
including stamp duty, of £151.0m.
As a result, there were 447,784,724 Ordinary shares in issue as at 31 May 2025
(of which none are held in Treasury; year to 31 May 2024: 465,613,611 ordinary
shares and no treasury shares).
Each holder of ordinary shares is entitled, on a show of hands, to one vote
and, on a poll, to one vote for each ordinary share held.
18. Reserves
Movement for the year ended 31 May 2025 Share Capital Other Capital Revenue
premium redemption capital reserve on Reserve(1)
£'000 reserve reserve investments £'000
£'000 £'000 held
£'000
Beginning of year 269,535 8,369 1,492,834 643,009 (161,302)
Net gain on realisation of investments - - 115,465 - -
Decrease in unrealised appreciation - - - (98,045) -
Revaluation of amounts owed in respect of transactions - - (3) - -
Exchange differences on currency - - 2,393 - -
Exchange differences on other capital items - - 6,582 - -
Legal and professional expenses charged to capital - - (702) - -
Share buybacks(2) - 1,194 (53,889) - -
Revenue return for the year - - - - (32,402)
End of year 269,535 9,563 1,562,680 544,964 (193,704)
Movement for the year ended 31 May 2024
Beginning of year 269,535 4,602 1,620,532 653,695 (133,255)
Net gain on realisation of investments - - 68,262 - -
Decrease in unrealised appreciation - - - (10,686) -
Revaluation of amounts owed in respect of transactions - - 3 - -
Exchange differences on currency - - 5,505 - -
Exchange differences on other capital items - - 436 - -
Legal and professional expenses charged to capital - - (1,851) - -
Other expenses charged to capital - - (1,523) - -
Share buybacks(2) - 4,307 (198,080) - -
Revenue return for the year - - - - (28,047)
End of year 269,535 8,369 1,492,834 643,009 (161,302)
(1)Reserves that are distributable by way of dividends. In addition, the other
capital reserve can be used for share buybacks.
(2)The value of ordinary shares bought back include any associated fees and
stamp duty.
19. Net Asset Value per Share
31 May 2025 31 May 2024
Net assets attributable in £'000 2,223,040 2,283,641
Ordinary shares 447,784,724 465,613,611
Net asset value per ordinary share 496.45p 490.46p
20. Subsidiaries
The Company has formed three wholly-owned subsidiaries, to provide security
for future financial lending arrangements.
Pantheon International Holdings LP ("PIH LP") was incorporated on 29 March
2021 with a registered address in the State of Delaware (National Registered
Agents, Inc., 209 Orange Street, Wilmington, Delaware, 19801), and is
wholly-owned by the Company.
The Company holds an investment in PIH LP, which itself holds a basket of
investments, rather than to carry out business on the Company's behalf.
Investments held within PIH LP are based on the fair value of the investments
held in those entities.
On 31 December 2021, the Company transferred several investments, at a fair
value of £627.1m, to its PIH LP in order to provide security for the
multi-currency facility. On 1 October 2022, the Company transferred one
further investment, at a fair value of £3.1m.
The aggregate amount of its capital and reserves as at 31 May 2025 is
£1,184,680,000 (2024: £1,082,132,000) and the profit or loss for the period
ended 31 May 2025 is £1,427,000 (2024: £3,168,000).
The General Partner for PIH LP is Pantheon International Holdings GP ("PIH
GP") Limited. Incorporated on 17 March 2021 with a registered address c/o
Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman,
KY1-1104, Cayman Islands, and is wholly owned by the Company.
The aggregate amount of its capital and reserves as at 31 May 2025 is £1
(2024: £1) and the profit or loss for the period ended 31 May 2025 is £nil
(2024: £nil).
The General Partner and the Limited Partner, formed an exempted limited
partnership, named Pantheon International Holdings GP LP, incorporated on 17
March 2021 with a registered address c/o Maples Corporate Services Limited, PO
Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The Company
holds an investment in PIH GP LP.
Any investments made by the Company into PIH LP, generally invest at 99%
directly into PIH LP, with the remaining 1% investing into PIH GP LP. PIH GP
LP will then, in turn, wholly invest those funds into PIH LP, so no funds
remain in PIH GP LP.
In accordance with FRS 102, the Company is exempted from the requirement to
prepare consolidated Financial Statements on the grounds that its subsidiary
PIH LP is held exclusively with a view to a subsequent resale as it is
considered part of an investment portfolio and PIH GP LP and PIH GP are not
material. Therefore, the Company has no requirement to prepare consolidated
accounts, and therefore the subsidiaries noted above are held as investments
recognised at fair value through profit or loss.
21. Reconciliation of Return Before Financing Costs and Taxation to Net Cash
Flow from Operating Activities
31 May 2025 31 May 2024
£'000 £'000
Return before finance costs and taxation 15,359 47,733
Withholding tax deducted and taxation paid (2,284) (3,033)
Gains on investments (11,344) (60,324)
Currency gains on cash and borrowings (8,975) (5,491)
(Decrease)/increase in creditors (94) 205
(Increase)/decrease in other debtors (35) 111
(Gains on )/reduction of financial liabilities at fair value through profit or (5,261) 3,420
loss (ALN)
Expenses and taxation associated with the ALN (488) (475)
Net cash outflow from operating activities (13,122) (17,854)
22. Reconciliation of net cash flow to movement in net debt
31 May 2025 31 May 2024
Reconciliation of net cash flow to movement in net debt £'000 £'000
Increase/(decrease) in cash 2,932 (44,024)
Net cash inflow from loans (21,603) (88,471)
Cash inflow from private placement loan notes - (118,274)
Change in net debt resulting from cash flows (18,671) (250,769)
Foreign exchange movements 8,965 5,505
Movement in net debt (9,706) (245,264)
Net (debt)/cash at start of year (179,221) 66,043
Net debt at end of year (188,927) (179,221)
Analysis in changes in net cash/(debt)
1 June 2024 Cash flows Foreign exchange movements £'000 31 May 2025
£'000 £'000 £'000
Cash and cash equivalents 21,863 2,932 622 25,417
Debt due within one year
- Bank loan (83,261) 80,979 2,282 -
Debt due after more than one year
- Bank loan - (102,582) (511) (103,093)
- Private placement loan notes (117,823) - 6,572 (111,251)
Net debt (179,221) (18,671) 8,965 (188,927)
1 June 2023 Cash flows Foreign exchange movements £'000 31 May 2024
£'000 £'000 £'000
Cash and cash equivalents 66,043 (44,024) (156) 21,863
Debt due within one year
- Bank loan - (88,471) 5,210 (83,261)
Debt due after more than one year
- Private placement loan notes - (118,274) 451 (117,823)
Net cash/(debt) 66,043 (250,769) 5,505 (179,221)
23. Contingencies, Guarantees and Financial Commitments
At 31 May 2025, there were financial commitments outstanding of £693m (31 May
2024: £789m) in respect of investments in partly paid shares and interests in
private equity funds.
We expect 20% of the financial commitments outstanding to be called within the
next 12 months.
Further detail of the available finance cover is provided in Note 24.
24. Analysis of Financial Assets and Liabilities
The primary investment objective of the Company is to seek to maximise
long-term capital growth for its shareholders by investing in funds
specialising in unquoted investments, acquiring unquoted portfolios and
participating directly in private placements. Investments are not restricted
to a single market but are made when the opportunity arises and on an
international basis.
The Company's financial instruments comprise securities and other investments,
cash balances and debtors and creditors that arise from its operations, for
example sales and purchases awaiting settlement and debtors for accrued
income.
The principal risks the Company faces in its portfolio management activities
are:
· Liquidity/marketability risk;
· Interest rate risk;
· Market price risk; and
· Foreign currency risk.
The Manager only holds cash at banks with high credit ratings, therefore the
Company has little exposure to credit risk. The Manager monitors the financial
risks affecting the Company on a daily basis and the Directors regularly
receive financial information, which is used to identify and monitor risk.
In accordance with FRS 102 an analysis of financial assets and liabilities,
which identifies the risk to the Company of holding such items, is given
below.
Liquidity Risk
Due to the nature of the Company's investment policy, the largest proportion
of the portfolio is invested in unquoted securities, many of which are less
readily marketable than, for example, "blue-chip" UK equities. The Directors
believe that the Company, as a closed-end fund with no fixed wind-up date, is
ideally suited to making long-term investments in instruments with limited
marketability. The investments in unquoted securities are monitored by the
Board on a regular basis.
There are times when opportunities for the Company to acquire secondary
unquoted portfolios of interests or co-investments may be limited due to the
cyclical nature of their occurrence. As a result, at times of low investment
opportunity, some funds may be held on deposit or invested in gilts and other
fixed interest government bonds. It is the nature of investment in private
equity that a commitment (see Note 23 for outstanding commitments as at 31 May
2025) to invest will be made and that calls for payments will then be received
from the unlisted investee entity. These payments are usually on an ad-hoc
basis and may be called at any instance over a number of years. The Company's
ability to meet these commitments is dependent upon it receiving cash
distributions from its private equity investments and, to the extent these are
insufficient, on the availability of financing facilities.
The Loan Facility, which was extended in October 2024 by a further two years
to expire in 2028 (as detailed in Note 14), is secured by certain assets of
the Company.
The Facility is split as follows:
· Facility A1: £300m, expiring in October 2028; and
· Facility A2: £100m, expiring in October 2028.
The Company has sought to build a long-term, sustainable, more flexible and
diverse capital structure as part of this process, further strengthening the
Company's balance sheet. The structure permits Facility A to be increased from
£400m to £700m via an uncommitted accordion option, subject to the consent
of the participating Lenders, with a covenant package that better supports
utilisation under the Loan Facility.
For details of commitment fees and rates of interest, refer to Note 14. The
Loan Facility is subject to market standard loan to value and liquidity
covenants.
The principal covenants that apply to the loan facility require:
(i) that gross borrowings do not exceed 35% of the adjusted borrowing base(1);
(ii) the liquidity ratio(2) does not exceed 4.1x undrawn commitment;
(iii) the ratio of expected capital calls for the next 12 months to liquid
financial resources does not exceed 1:1; and
(iv) the total number of eligible investments does not fall below 200.
(1) The adjusted borrowing base is the total collaterised proportion of assets
adjusted for loan agreement specific restrictions.
(2) Liquidity ratio - see Alternative Performance Measures in the full Annual
Report.
Total available financing as at 31 May 2025 stood at £310m (31 May 2024:
£414m), comprising £21m (31 May 2024: £16m) in cash balances and £289m (31
May 2024: £398m) (sterling equivalent) in undrawn bank facilities. The
available financing along with the private equity portfolio exceeded the
outstanding commitments by 4.2 times (31 May 2024: 3.9 times) (which excludes
any outstanding commitments relating to funds outside their investment period
(>13 years old) as there is a low likelihood of these being drawn).
The below table shows the maturity date profile of the Company's undiscounted
financial liabilities as at 31 May 2025:
31 May 2025 Total No maturity Matures Matures Matures
£'000 date within within within
£'000 1 year 1-5 years 6-10 years
£'000 £'000 £'000
Fair value of financial liabilities subject to liquidity risk
Bank loan 103,093 - - 103,093 -
ALN(1) 22,366 - 1,628 20,738 -
Private Placement 111,251 - - 38,938 72,313
236,710 - 1,628 162,769 72,313
(1) Short term element per creditors. Longer term element expiry August 2027.
The below table shows the maturity date profile of the Company's undiscounted
financial liabilities as at 31 May 2024:
31 May 2024 Matures Matures Matures within
No maturity within within 6-10 years
Total date 1 year 1-5 years £'000
£'000 £'000 £'000 £'000
Fair value of financial liabilities subject to liquidity risk
Bank loan 83,261 - 83,261 - -
ALN(1) 30,815 - 437 30,378 -
Private Placement 117,823 - - 41,238 76,585
231,899 - 83,698 71,616 76,585
1 Short term element per creditors. Longer-term element expiry August 2027.
Interest Rate Risk
The Company may use gearing to achieve its investment objectives and manage
cash flows and uses a multi-currency revolving credit facility for this
purpose.
Interest on the revolving credit facility is payable at variable rates
determined subject to drawdown. Variable rates are defined as relevant
benchmark rates plus 2.350% to 2.575%, dependent on the currency drawn. The
interest rate is then fixed for the duration that the loan is drawn down. At
31 May 2025, there was a sterling equivalent of £103.1m funds drawn down on
the loan facilities (31 May 2024: £83.3m). A blended commitment fee of 0.95%
per annum is payable in respect of the amounts available for drawdown in each
facility.
Interest rate movements may affect:
- the level of interest receivable on cash deposits; and
- the interest payable on loan borrowings.
A 1% increase in market interest rates would be expected to decrease net
assets, by approximately £1.0m (31 May 2024: £0.8m), with all other factors
being equal. A 1% decrease would increase net assets by the same amount. The
Private Placement debt notes issued by the Company pay a fixed rate of
interest and therefore movements in interest rates will not affect net assets.
Non-interest Rate Exposure
The remainder of the Company's portfolio and current assets are not subject to
interest rate risks.
Financial assets for 2025 and 2024 consisted of investments, cash and debtors
(excluding prepayments). As at 31 May 2025, the interest rate risk and
maturity profile of the Company's financial assets was as follows:
31 May 2025 Total No maturity
£'000 date
£'000
Fair value no interest rate risk financial assets
Sterling 1,236,375 1,236,375
US dollar 983,903 983,903
Euro 227,807 227,807
Other 16,441 16,441
2,464,526 2,464,526
The interest rate and maturity profile of the Company's financial assets as at
31 May 2024 was as follows:
31 May 2024 Total No Matures Matures Fixed interest
£'000 Maturity within after average interest
Date 1 year 1 year rate
£'000 £'000 £'000 %
Fair value no interest rate risk financial assets
Sterling 1,128,658 1,128,658 - - -
US dollar 1,123,644 1,123,644 - - -
Euro 246,409 246,409 - - -
Other 23,907 23,907 - - -
2,522,618 2,522,618 - - -
Financial Liabilities
At 31 May 2025, the Company had drawn the sterling equivalent of £103.1m (31
May 2024: £83.3m) of its multi-currency credit facility, expiring July 2028.
Interest is incurred at a variable rate as agreed at the time of drawdown and
is payable at the maturity date of each advance. At the year end, interest of
£1.1m (31 May 2024: £0.1m) was accrued.
The Company utilises US$150m through private placement loan notes, that have
been structured in three tranches over different maturities of five, seven and
ten years, maturing in 2029, 2031 and 2034 with a blended coupon rate of
6.49%.
At 31 May 2025 the sterling equivalent was £111.3m (31 May 2024: £117.8m)
and at the year end, coupon interest of £1.8m (31 May 2024: £2.6m) was
accrued.
At 31 May 2025, other than the ALN and the private placement debt and drawn
loan facilities, all financial liabilities were due within one year. As at 31
May 2024, other than the ALN and the private placement debt, all financial
liabilities were due within one year including the drawn loan facilities.
The ALN is repayable by no later than 31 August 2027.
Market price risk
The method of valuation of the fixed asset investments is described in Note
1(D) above. The nature of the Company's fixed asset investments, with a high
proportion of the portfolio invested in unquoted securities, means that the
investments are valued by Pantheon after due consideration of the most recent
available information from the underlying investments.
PIN's portfolio is well diversified by the sectors in which the underlying
companies operate. This sectoral diversification helps to minimise the effects
of cyclical trends within particular industry segments.
If the investment portfolio fell by 20% from the 31 May 2025 valuation, with
all other variables held constant, there would have been a reduction of
£487,459,000 (31 May 2024: £499,701,000) in the return before taxation. An
increase of 20% would have increased the return before taxation by an equal
and opposite amount.
Foreign Currency Risk
Since it is the Company's policy to invest in a diverse portfolio of
investments based in a number of countries, the Company is exposed to the risk
of movement in a number of foreign exchange rates. A geographical analysis of
the portfolio and hence its exposure to currency risk is given above and in
Note 9b. Although it is permitted to do so, the Company did not hedge the
portfolio against the movement in exchange rates during the financial period.
The investment approach and the Manager's consideration of the associated risk
are discussed in further detail in the Strategic Report and the Manager's
Review above.
The Company settles its transactions from its bank accounts at an agreed rate
of exchange at the date on which the bargain was made. As at 31 May 2025,
realised exchange gains of £10,000 (31 May 2024: losses of £14,000) have
been taken to Capital Reserve within (losses)/gain on investments. Also taken
to Capital Reserve, are realised gains relating to currency and loan
revaluations of £2,393,000 (31 May 2024: £5,055,000).
The Company's exposure to foreign currency excluding private equity
investments is shown below. In relation to this exposure, if the
sterling/dollar and sterling/euro exchange rate had reduced by 10% from that
obtained at 31 May 2025, it would have the effect, with all other variables
held constant, of increasing equity shareholders' funds by £21,733,000 (31
May 2024: £20,343,000). If there had been an increase in the sterling/dollar
and sterling/euro exchange rate of 10% it would have the effect of decreasing
equity shareholders' funds by £ 17,782,000 (31 May 2024: £16,645,000). The
calculations are based on the financial assets and liabilities and the
exchange rate as at 31 May 2025 of 1.3483 (31 May 2024: 1.2731)
sterling/dollar and 1.18775 (31 May 2024: 1.1727) sterling/euro. The Company's
investment currency exposure is disclosed in Note 9b.
An analysis of the Company's exposure to foreign currency (excluding
Investments) is given below:
31 May 2025 31 May 2025 31 May 2024 31 May 2024
Assets Liabilities Assets Liabilities
£'000 £'000 £'000 £'000
US dollar 20,382 217,527 19,355 204,488
Canadian dollar 12 - 276 -
Euro 1,482 - 2,166 123
Swedish krone - - 226 -
Norwegian krone - - 22 -
Australian dollar 41 - 132 -
21,917 217,527 22,177 204,611
Fair value of financial assets and financial liabilities
Investments of the Company are held at fair value. All other financial assets
are held at cost, which is an approximation of fair value. Other than the ALN,
the financial liabilities are held at amortised cost, which is not materially
different from fair value.
Managing Capital
The Company's equity comprises ordinary shares as described in Note 17.
Capital is managed so as to maximise the return to shareholders while
maintaining a capital base that allows the Company to operate effectively in
the marketplace and sustain future development of the business.
As at 31 May 2025 and 31 May 2024, the Company had bank debt facilities to
increase the Company's liquidity. Details of actual and available borrowings
at the period end can be found earlier in this Note and in Note 14.
The Company's assets and borrowing levels are reviewed regularly by the Board
of Directors with reference to the loan covenants.
The Company's capital requirement is reviewed regularly by the Board of
Directors.
25. Transactions with the Manager and Related Parties
The amounts paid to the Manager, together with the details of the Investment
Management Agreement, are disclosed in Note 3.
The fees paid to the Company's Board are disclosed in the Directors'
Remuneration Report in the full Annual Report. The Company's National
Insurance contribution in relation to Directors' remuneration is disclosed in
Note 4.
Amounts outstanding for Directors' Fees as at 31 May 2025 amount to £78,000
(2024: £62,000).
The Company also has three wholly-owned subsidiaries. Please see Note 20 for
further details.
There are no other identifiable related parties at the year end.
26. Post Balance Sheet Events
There are no post balance sheet events to report.
ENDS
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