REG - Pollen Street Group - Full Year 2025 Trading Update
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RNS Number : 1716Y Pollen Street Group Limited 26 March 2026
26 March 2026
Pollen Street Group Limited: Full Year 2025 Trading Update
Continued growth in 2025 with sustained and growing fundraising momentum
Pollen Street Group Limited ("Pollen Street", together with its subsidiaries,
the "Group") today issues its financial results for the year ended 31 December
2025. The Group is delivering sustained and growing fundraising momentum
across both Private Credit and Private Equity strategies, underpinning strong
financial performance and delivering against its key strategic priorities.
AUM (£bn) 2025 2024 YoY Growth (%)
Total AuM 7.1 5.4 30%
Fee Paying AuM 5.2 4.0 32%
INCOME STATEMENT (£m) 2025 2024 YoY Growth (%)
Fund Management Income 81.1 66.8 21%
Fund Management Administration Costs (49.4) (39.6) 25%
Fund Management EBITDA 31.7 27.2 17%
Income on Net Investment Assets 32.9 31.8 4%
EBITDA 64.6 59.0 10%
Profit After Tax 56.6 49.6 14%
EPS 93.7p 78.8p 19%
DPS 58.0p 53.6p 8%
FY25 Highlights
· Total Assets Under Management ("AUM") increased
by 30 per cent to £7.1 billion (FY 2024: £5.4 billion)
· Fee-paying AUM grew 32 per cent to £5.2 billion
(FY 2024: £4.0 billion)
· Flagship fundraises in both Private Equity and
Private Credit significantly outperforming target
· Group Profit After Tax up 14 per cent to £56.6
million (FY 2024: £49.6 million)
· Asset Management share of net revenues increased
to 71 per cent (FY2024: 68 per cent)
· Investment company income stable and consistent
over long term at £32.9 million
· £1.6 billion deployed across both strategies
· Second (and final) interim dividend of 31 pence
per share brings total dividend declared for the year to 58.0 pence per share,
3 pence per share ahead of guidance and 8 per cent up on FY24
· Growing visibility on reaching Total AUM of £10
billion, in line with our medium term target
Commenting on the performance, Lindsey McMurray, Chief Executive Officer,
said:
"2025 was a strong year for Pollen Street, marked by a step-change in
fundraising and growth across both our Private Equity and Private Credit
platforms. Our total AUM increased by 30 per cent to £7.1 billion, driven by
the successful close of Private Equity Fund V and clear momentum in Private
Credit Fund IV.
This fundraising strength, underpinned by the trust of our global investor
base, enabled us to generate strong management fee income and deliver Group
Operating Profit of £64.4 million, ahead of expectations.
Our investment strategies have continued to demonstrate resilience and
outperformance amidst difficult market conditions. Across both Private Equity
and Private Credit, the Group is focused on disciplined underwriting, downside
protection and supporting portfolio companies and borrowers through active
engagement.
We enter 2026 with exciting momentum and a robust pipeline for both deployment
and fundraising. Our strategic priorities remain clear: to continue deploying
capital across our flagship funds, prepare for the next generation of
investment strategies, and deliver sustainable value for our investors and
shareholders."
Financial Performance
· Management fees up 26 per cent to £69.9 million
· Fund Management EBITDA increased to £31.7
million, up 17 per cent
· Income on Net Investment Assets of £32.9 million
(2024: £31.8 million) giving a return of 9.9 per cent
· Underlying return on Net Investment Assets of
10.6 per cent before dilution from equalisation related to the strong
fundraising
· Earnings per share increased to 93.7 pence per
share, up 19 per cent from 78.8 pence per share in 2024, ahead of the growth
in Profit After Tax given the benefit of share buybacks
Fundraising
· Significant fundraising outperformance achieved
across both strategies
· Final close of Private Equity Fund V at €1.5
billion in July 2025
· Private Credit Fund IV now at £1.8 billion with
further capital commitments expected ahead of an imminent final close
· £0.8 billion dry powder in Private Credit as at
end December 2025, which will convert to fee-paying AUM once deployed
· Fundraising momentum and expanded investor base
underpin £10 billion medium term AUM target
Deployment and exits
· £1.6 billion invested across both platforms
· Mid-market target market resilient offering a
rich and deep opportunity set
· Existing funds seasoning well and current vintage
deploying at planned pace
· Robust pipeline of transaction opportunities
developed across both strategies for execution in 2026
· Three disposals completed during 2025 including
the IPO of Shawbrook on the London Stock Exchange
Outlook
· We are confident that our strategic focus and
significant momentum will enable the Group to capitalise on opportunities for
continued sustainable growth in 2026 and beyond.
· In order to recognise individual contributions to
the substantial outperformance of the Private Credit Fund IV fundraise, the
Board has determined to allocate a further 8 per cent of Carried Interest in
Private Credit Fund IV to certain individuals with the effect of reducing the
groups share to 17 per cent and to give more flexibility in how the Group's
share of Carried Interest is set for future funds. Given the significant
outperformance in fund size, there is no change in the Group's financial
guidance as a result of these changes.
· Despite our strong performance and favourable
fundamentals, the share price has not fully reflected the progress made and we
believe significantly undervalues the strength and resilience of the platform.
This conviction underpins the Groups continued commitment to returning capital
to shareholders through its share buyback programme.
Dividend
· The Board has declared a final dividend of 31.0
pence per share, bringing the total dividend for the year to 58.0 pence per
share or £34.7 million, pence per share ahead of guidance and an 8 per cent
increase on 2024
· The Group is committed to maintaining our
progressive dividend policy
AGM Notice
The Company will hold its Annual General Meeting on 30 April 2026 at 4pm at
the offices of Slaughter & May, One Bunhill Row, London EC1Y 8YY. Further
details are provided in the Notice of Annual General Meeting to be circulated
to shareholders in due course and shortly available on
www.pollenstreetgroup.com (http://www.pollenstreetgroup.com) .
About Pollen Street
Pollen Street is an alternative asset manager dedicated to investing within
the financial and business services sectors across both Private Equity and
Private Credit strategies. Founded in 2013, the Group has consistently
delivered top-tier returns alongside growing AuM.
Pollen Street operates through two complementary segments: the Asset Manager,
which manages third-party AuM, and the Investment Company, which invests on
balance sheet to generate attractive returns and accelerate AuM growth through
alignment with investors.
POLN is listed on the London Stock Exchange (ticker symbol: POLN) and is a
member of the FTSE 250 index. Further details are available at
www.pollenstreetgroup.com (http://www.pollenstreetgroup.com/) .
For investors:
A presentation and Q&A will be held for analysts at 1 PM on 26 March 2026.
The full presentation is available for on the website
www.pollenstreetgroup.com (http://www.pollenstreetgroup.com) .
Results webinar:
https://www.lsegissuerservices.com/spark-insights/POLLENSTREETGROUPLIMITED/events/1c2e7951-eecd-4e2b-a3ec-23d27ce4f37e
(https://www.lsegissuerservices.com/spark-insights/POLLENSTREETGROUPLIMITED/events/1c2e7951-eecd-4e2b-a3ec-23d27ce4f37e)
For further information about this announcement please contact:
Pollen Street - Corporate Development Director
Shweta Chugh
+44 (0)20 3965 5081
Barclays Bank plc - Joint Broker
Neal West / Stuart Muress
+44 (0)20 7623 2323
Investec Bank plc - Joint Broker
Ben Griffiths / Kamalini Hull
+44 (0)20 7597 4000
FGS Global
Chris Sibbald / Anna Tabor
PollenStreetCapital-LON@fgsglobal.com
(mailto:PollenStreetCapital-LON@fgsglobal.com)
MUFG Corporate Governance Limited - Company Secretary
POLNcosec@cm.mpms.mufg.com (mailto:POLNcosec@cm.mpms.mufg.com)
LEI: 894500LP94M98N8CY487
Annual Report and Accounts
The Annual Report and Accounts are available to view and download from the
Company's website
https://ir.pollenstreetgroup.com/investors/financial-information/
(https://ir.pollenstreetgroup.com/investors/financial-information/) . Neither
the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into or forms part of this announcement. The information set out
below does not constitute the Company's statutory accounts for the year ended
31 December 2025 but is derived from those accounts. Statutory accounts for
the year ended 31 December 2025 will be delivered to the Registrar of
Companies in due course. The group's 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
263 (2) or (3) of The Companies (Guernsey) Law, 2008. The following text are
selected extracts from the Annual Report and Accounts.
In accordance with UK Listing Rule 6.4.1, the following documents will be
submitted to the Financial Conduct Authority and will shortly be available for
inspection via the National Storage Mechanism which can be accessed at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) :
· Annual Report and Accounts for the year ended 31
December 2025;
· notice of 2026 annual general meeting; and
· proxy form for the 2026 annual general meeting.
In accordance with DTR 6.3.5(1A), the Annual Report and Accounts for the year
ended 31 December 2025 will be submitted in full unedited text to the
Financial Conduct Authority's National Storage Mechanism and will be available
for inspection as noted above.
Chair's Statement
Lynn Fordham
Chair
In my first report as Chair of Pollen Street Group Limited, I am pleased to
highlight another year of impressive progress for the business. Pollen Street
is successfully delivering against its strategy, growing assets under
management, deepening and maintaining investor relationships, and solidifying
its position as a leader in its selected strategies.
Momentum: Accelerating Our Growth
In 2025 Pollen Street has achieved the goals set at the start of the year,
executing well on our growth ambitions whilst also delivering strong cash
returns to shareholders. Our consistent investment performance and strong
relationships with our Limited Partner investors ("LPs") have driven
successful fundraises across both Private Equity and Private Credit.
In 2025, we grew AuM across both Private Equity and Private Credit to £7.1
billion - a 30 per cent increase on prior year. In Private Equity, we
delivered a successful final close of Private Equity Fund V, well ahead of its
initial target. In Private Credit, we have developed strong fundraising
momentum for Private Credit Fund IV which has already exceeded its target with
significant further commitments expected ahead of the final close. This
fundraising activity translated into sustained robust management fee growth in
the period with momentum for going forward.
The Investment Company continued to demonstrate strong and consistent
performance, with robust income generation and cash conversion supporting
£39.4 million of cash returns to shareholders during the year through
dividends and share buybacks.
In last year's report we set out our expectation of a favourable outlook as
the Group builds upon its strong foundations in differentiated strategies. Our
realised fundraising success reflects a robust and consistent investment track
record, strategic clarity and resilience, alongside the quality relationships
with existing and new LPs.
Looking ahead, we expect continued institutional allocation to private markets
in 2026, driven by the diversification and long-term return benefits these
strategies can offer especially with sustained demand for exposure to
mid-market opportunities where our sector-specialist focus remains a clear
differentiator. While macroeconomic, geopolitical and technology-related
uncertainties persist, Pollen Street's disciplined approach to investment
selection and active portfolio management position us well to navigate this
environment and capitalise on the structural opportunities it presents.
Group's Share of Carried Interest
Following the successful fundraises for Private Equity Fund V and Private
Credit Fund IV, the Board has reviewed how Carried Interest is allocated
between the Group and individual team members. At the time of the Combination
between Honeycomb Investment Trust and Pollen Street Capital Holding Limited
in 2022, it was agreed that 25 per cent of the Carried Interest entitlement in
all future funds would be allocated to the Group.
While we believe that it is important for the Group to benefit from the
performance of the funds it manages, in the case of Private Credit Fund IV,
and specifically to recognise contributions made to the success of this
fundraise and its resultant increased scale, the Board has determined to
reduce the Group's share of Carried Interest in this fund to 17 per cent and
to give more flexibility in how the Group's share of Carried Interest is set
for future funds. Going forward, the Group's allocation for each fund will be
set by the Board at or before the final close of the fund. The Group's
allocation will be set at no less than 15 per cent and up to 25 per cent of
the total entitlement for the next generation of flagship Private Equity and
Private Credit Funds.
The Board believe this change is strategically important for the Group to
support the long-term growth and development of our asset management platform.
There is no change in the Group's financial guidance as a result of these
changes.
Capital Allocation Framework & Buyback Programme
The Group continues to follow the enhanced capital allocation framework that
was put in place in November 2025 which gives confidence in maintaining cash
returns to shareholders whilst prioritising strategic growth opportunities,
including making capital commitments to our funds.
The Board has declared a final dividend of 31.0 pence per share, bringing the
total dividend for the year to 58.0 pence per share or £34.7 million.
Corporate Governance and Reporting on Responsible Investing
Pollen Street places excellent governance at the heart of everything that we
do. We adopt rigorous oversight, transparency and accountability as essential
foundations for delivering long-term value for our investors and shareholders.
We aim to model best-in-class governance through the strength and independence
of our Board. In this context, I am delighted to welcome Robert Ohrenstein,
who joins as an independent Non-Executive Director and will be appointed as
Chair of the Audit Committee following the AGM. Robert brings deep private
markets expertise and an unwavering commitment to robust audit and risk
oversight, further enhancing our governance framework.
Responsible Investing is a key part of Pollen Street's strategy and culture
helping us to build robust, resilient businesses with foundations to grow for
the future. We use proprietary metrics to drive clear, measurable progress
enabling fast, sustainable and safe growth - both for Pollen Street and for
our portfolio companies and borrowers.
The Group also remains focused on strengthening its reporting and climate risk
management, ensuring transparency and accountability as the regulatory
landscape further evolves.
Our Outlook: Sustained Progress and Long-Term Growth
Pollen Street enters 2026 with strong momentum and confidence in delivering
against our targets for the year ahead. While we are cognisant of the
uncertain macroeconomic environment, complex geopolitical backdrop and
ever-changing market dynamics, we believe that the outlook for the Group is
positive. Our platform has demonstrated performance across cycles, supported
by disciplined risk management and strong governance.
Pollen Street's shares delivered strong performance during 2025, significantly
outperforming the FTSE 250 index and reflecting investor confidence in our
successful fundraising, robust financial results, and quality earnings growth.
2026 has presented a more challenging backdrop for equity markets broadly and
listed alternative asset managers in particular. Initially this resulted from
a sharp sell-off in growth stocks amid heightened uncertainty over the impact
of AI, which was exacerbated by investor caution around private credit. More
recently this has been compounded with heightened risk aversion across global
markets following the escalation of the Iran conflict.
Notwithstanding this backdrop, the fundamental performance of our business
remains strong, with continued momentum in fundraising, deployment, and
portfolio performance.
I would like to thank the entire Pollen Street team for their outstanding work
in delivering such a successful year, as well as our LPs and shareholders for
their continued support. We look forward to building on this momentum in the
year ahead.
Lynn Fordham
Chair
25 March 2026
CEO Report
Lindsey McMurray
Chief Executive Officer
Strong Performance and Fundraising Momentum
2025 marked another strong year of progress for Pollen Street. We have
continued to execute well against our strategic objectives, delivering notable
fundraising successes and extending our consistently strong investment track
record.
We delivered substantial growth in AuM across both Private Equity and Private
Credit, reflecting the strength of our strategies and the depth of our
investor support. In July we completed the successful final close of Private
Equity Fund V, securing commitments of €1.5 billion. Including associated
co-investment vehicles, the Group has raised more than €2.0 billion for our
flagship strategy. Private Credit Fund IV has surpassed its target with £1.8
billion of commitments at the date of signing the financial statements and
significant further capital commitments expected ahead of a final close.
Importantly, the increase in commitments is from a broad range of global
investors and their consultant advisers, significantly adding to the
resilience of the platform and supporting cross sell across our strategies
over time. We are very grateful for the endurance of relationships that we
have with established partners and are thrilled to develop new partnerships as
we continue to expand our investor base.
This outperformance in fundraising enabled us to deliver strong financial
performance in the period, especially in relation to high-quality management
fee income and profits ahead of expectations.
Group Operating Profit grew to £64.4 million for 2025, up from £58.2 million
in 2024. The primary growth driver was our Asset Manager, with Operating
Profit increasing to £31.7 million (49 per cent of Group), from £27.2
million (47 per cent of Group) in 2024. This included an £8.4 million benefit
from catch up fees in Fund V ahead of it's final close during the year.
Resilience in a Changeable Macro Environment
As the macroeconomic and geopolitical backdrop remains uncertain, we are
intensely vigilant while our strategies remain resilient. Across both Private
Equity and Private Credit, we are focused on disciplined underwriting and
downside protection while actively engaging to support portfolio companies and
borrowers continue to build value.
We continually consider emerging threats from changing market conditions
including idiosyncratic events in adjacent markets and AI. In Private Credit,
high quality borrowers seek our expertise and long-term partnership and we
work together to create bespoke structures to withstand events and shocks. In
Private Equity, change also brings opportunities, both on an individual
investee company level and from a portfolio construction perspective and we
actively work with our companies to ensure that they have the expertise and
resources to take advantage of improved operational models to enhance their
customer proposition and their own operational efficiencies. Overall, we
believe our portfolio companies benefit from highly resilient business models
operating in regulated areas and benefiting from substantial proprietary data
and resilient end user markets.
ASSET MANAGER
Fundraising and Deployment
Total AuM grew to £7.1 billion as of 31 December 2025, up 30 per cent from
£5.4 billion at the end of 2024 with Fee-Paying AuM increasing 32 per cent
(£1.3 billion) to £5.2 billion.
Private Equity AuM increased to £4.2 billion and Private Credit AuM increased
to £2.9 billion.
2025 was a strong year for deployment across the platform. We invested £0.5
billion in Private Equity and £1.1 billion in Private Credit during the year.
We enter 2026 with a robust pipeline of opportunities across both strategies
and look forward to another active year of disciplined capital deployment.
Deepening our Diverse Client Base
Our fundraising momentum is driven by our strategies being positioned in the
most resilient and growing parts of private markets and by the strength of
positioning of our funds in their relevant markets, reflected in our
consistently strong investment track record. This has enabled us to
increasingly build out the strength and diversity of our investor base. We are
supported by a highly engaged and sophisticated group of Limited Partners,
built through long-standing relationships and reinforced by consistent
performance. We continue to attract new institutional capital, reflecting
increasing interest in specialist strategies, particularly within Financial
Services and asset-backed opportunities. The increasing breadth and depth of
relationships supported by the top global consultants, builds out the
resilience of our investor base and provides a greater opportunity for cross
sell across strategies over time.
INVESTMENT COMPANY
2025 marked another strong year of returns for the Investment Company,
extending its robust long-term track record.
Balance sheet investments performed in line with expectations generating
income of £32.9 million in addition to contributing to share buybacks of
£6.6 million and dividends paid of £32.8 million. Underlying returns of 10.6
per cent were in line with guidance, with reported returns of 9.9 per cent
after £2.4 million of equalisation charges related to the strong fundraising.
Our balance sheet is a strategic resource enabling the acceleration of
Third-Party AuM growth through demonstrating strong alignment with LPs
alongside delivering consistent returns. Making meaningful GP commitments, c.2
- 5 per cent in Private Equity Funds and 7 - 10 per cent in Private Credit
Funds, remains an important differentiator that supports us in attracting new
investors and strengthening existing ones.
At the end of 2025 GP commitments to Pollen Street managed funds were £188
million, with 72 per cent drawn (2024: 66 per cent). As at 31 December 2025,
the balance sheet allocation was £120 million Private Credit and £68 million
Private Equity.
OUTLOOK FOR 2026
Looking ahead with confidence to 2026, our strategic focus and significant
momentum will enable us to capitalise on opportunities for continued
sustainable growth, notwithstanding geopolitical and macroeconomic
uncertainties. We remain dedicated to delivering exceptional returns to our
investors and shareholders with our key priorities for 2026:
· Continue to deploy Private Equity Fund V
· Continue to deploy and build Private Credit AuM
· Prepare for marketing of Private Equity VI
· Maintain our progressive dividend policy while
strategically deploying capital for shareholder value
· Return surplus capital to shareholders through
share buybacks, subject to relative attractiveness compared to other
value-creation opportunities
And we are confident in our medium-term goal of reaching a Total AuM of £10
billion.
Our achievements in the past year were only possible with hard work,
commitment and teamwork shown across Pollen Street. I am incredibly proud of
the people that work in and with Pollen Street, and I am grateful to everyone
across the Group for the energy, care and professionalism they bring every
day. I would also like to thank our Board, Limited Partners, shareholders,
investors and wider partners for their continued trust and support. It means a
great deal to us.
Finally, I am delighted to welcome Lynn Fordham as Chair and Robert Ohrenstein
as an independent Non-Executive Director of our Board. They bring deep
experience, strong judgement and a shared commitment to high standards, and I
very much look forward to working with them as we continue to build Pollen
Street together. I would like to thank Jim Coyle who will be retiring from the
Board this year after 10 years of service. He has been a strong support in
implementing and maintaining our high governance standards and we wish him
well for the future.
Lindsey McMurray
Chief Executive Officer
25 March 2026
Private Equity Strategy
Michael England
Partner
Pollen Street Capital is a leading private markets investor focused on
mid-market European financial and business services. Our Private Equity
strategy targets majority stakes in founder-led businesses, where we support
outstanding teams to accelerate growth. Applying our deep sector knowledge and
a proven operational framework enables us to build businesses with the
potential to deliver transformational growth. The Group earns management fees
and carried interest from managing and advising funds investing in this
strategy.
We invest aligned with structural growth trends which form the basis of our
investment themes, from the wide-ranging impact of middle and back-office
automation, the consolidation of distribution that is driving change across
sectors and the embedding of financial services into other technologies such
as payments. We identify these key drivers of change and align our investment
strategy with businesses positioned to capitalise on these opportunities to
become market leaders.
Pollen Street's Private Equity strategy, developed and refined over 20 years,
has been proven through multiple market cycles. During this time, we have
consistently delivered top-tier returns through a disciplined, specialist
approach grounded in deep sector expertise and best practice.
How it Works: A Consistent Approach With Defined Areas Of Focus
Our long-standing investment strategy remains dedicated to buying and building
great businesses serving the financial ecosystem across six key sub-sectors:
· Payments;
· Wealth;
· Insurance;
· Financial software;
· Professional services; and
· Lending.
We combine this deep sector knowledge with deal origination that is built
around long-term themes, whilst continuing to assess the impact of market
changes. The approach we use to grow our portfolio companies is based around
three key pillars:
· Buy, build and consolidation;
· Global expansion; and
· Product development.
2025 - Continued Strength in Fundraising, Deployment, and Exits
During the year, we have delivered consistently strong performance across our
Private Equity funds, with disciplined deployment activity, strong revenue and
EBITDA growth as well as delivery on exits.
Pollen Street welcomed three new platform deals:
· Keylane: a software platform for European general
insurers and life and pension providers
· OrderYOYO: market-leading payments enabled
ecommerce solutions to restaurants
· Leonard Curtis: leading provider of corporate
restructuring and professional services to UK SMEs and Corporates
We also completed 24 bolt-on transactions enhancing the value of our portfolio
companies. Combined we acquired over €0.5 billion of Enterprise Value.
Alongside this, the pace of exits continues to build, with the disposal of:
· Punkta, a motor insurance broker in central
Europe, was sold to a local private equity sponsor
· Shawbrook, admitted to trading on the London
Stock Exchange, in one of the largest IPOs in a number of years
· Kingswood: sale of the UK and Ireland business to
a strategic acquirer
In July we announced the successful final close of Private Equity Fund V at
€1.5 billion exceeding our initial €1 billion target. Including associated
co-investment vehicles, the Group has raised more than €2 billion in total
equity capital for this flagship strategy. The fundraise welcomed new Limited
Partners from North America and Europe, together with returning investors,
reflecting confidence in our track record of top-tier returns and controlled
risk together with our ability to secure exits and to continue to deploy
capital into attractive deals.
Market Environment
Throughout the course of the year, markets have moved rapidly.
Most notable is the market reaction to the potential impact of GenAI on wider
society and especially the impact on the longevity of business models in
certain sectors. Our assessment across the portfolio sees more opportunity
than threat. Many of our portfolio companies stand to deliver impactful
automation initiatives to drive margin improvements and some are seeing
product enhancements driving increased sales. On the risk side, our approach
to subsector diversification means we have limited overall exposure to
software, and we are protected from correlation risks. Within our software
investments, we have been focused on product categories which are "systems of
record" which enables them to be closer to proprietary datasets such as
customer records, delivering mission-critical services and operating in
categories where accuracy and precision are critical success factors.
Overall, we continue to see attractive and well-priced businesses despite the
more recent market sell-off and continue to be optimistic that we can continue
to build our franchise throughout 2026.
Michael England
Partner
25 March 2026
Private Credit Strategy
Matthew Potter
Partner
Pollen Street's Private Credit strategy is focused on asset-based lending
("ABL") to mid-market companies across Europe. The Group earns management
fees, performance fees and carried interest from managing and advising funds
investing in this strategy.
ABL is a private credit strategy where investments are backed by diversified
tangible asset portfolios and is the funding behind the everyday activities
which power our economy and society. We provide funding to support everything
from building homes to funding SMEs, to vehicle financing. Our deals are
predominantly senior secured loans to companies that are serving these end
markets secured on diverse portfolios of financial or hard assets, such as
loans, leases and vehicles, alongside corporate guarantees.
As banks reduced their lending activity after the global financial crisis, a
significant and enduring funding gap emerged. Pollen Street recognised early
the opportunity to support this large and expanding market. Our ABL strategy
is designed to deliver resilient returns through the cycle, with low
correlation to other private credit strategies. Seniority, strong collateral,
comprehensive covenants and bespoke structuring provide robust downside
protection and close alignment with borrowers. Our specialist team offers
access to a market that is difficult to reach, enabling us to generate
consistently attractive returns compared with broader private and public
credit strategies.
Our ABL credit team, one of the largest in Europe, has deep expertise and a
network of long-term established relationships that allows us to identify
opportunities in the fragmented and underpenetrated mid-market. This is where
we believe the greatest opportunity and largest financing gap exists meaning
we can create the most favourable risk-reward profile. As a result, Pollen
Street has increasingly become a "go-to" funding partner for many borrowers.
How it Works: Structuring for Protection
Our strategy brings together the strengths of asset-backed and corporate
lending through a disciplined, repeatable approach that has produced strong
returns with low volatility. Significant credit protection is created through
both asset security and transaction structure: loans are secured against
large, diversified pools of assets that generate borrower cash flow,
complemented by full corporate guarantees and comprehensive covenants.
We follow a structured investment approach that focuses on:
· Diverse asset-backing: predominantly senior loans
secured on highly diverse tangible assets to maintain credit protection;
· Bespoke structuring: highly structured
investments that seek to create strong downside protection and align
incentives with our borrowers; and
· Conservative leverage on assets with tangible
value: substantial credit protection from borrower cash equity, asset pool
profits and corporate guarantees.
2025 - Accelerating Growth Alongside Strong Performance
2025 has been a successful period for both fundraising and deployment which is
helping to cement Pollen Street's reputation as a leader in the European Asset
Backed market. Private Credit Fund IV has attracted strong investor interest
with total commitments now surpassing the original target raise at £1.8
billion up to the date of signing the financial statements with further
commitments expected ahead of a final close. This result has been delivered
through 100 per cent retention rate of existing investors by final close
alongside securing a range of new global blue chip investors. These long term
relationships provide a strong platform for future fundraises and give
confidence in the long term growth of the platform.
Deployment across funds has also been strong with £1.1 billion of new deals
completed increasing Fee-Paying AuM to £2.1 billion (up from £1.4 billion in
2024), with strong visibility of future growth in 2026 from borrowers drawing
down existing commitments alongside deployment of the new raised Private
Credit Fund IV.
Fund returns have continued to outperform with inception to date IRRs ahead of
target alongside delivering high cash income distributions on a quarterly
basis. The strategy continues to deliver strong levels of liquidity with
Private Credit Fund III continuing to deliver realisations and high cash
income yields. Private Credit Fund IV is already a well-seeded portfolio with
£1.3 billion of facilities closed across 27 different names with
diversification across UK and European asset classes.
Market Environment
The Private Credit market continued its growth in 2025 albeit at a slower pace
than prior years as the industry matures in size and scale, with AUM growing
to ~$2.3 trillion and fundraisings increasing to $224 billion up 3 per cent on
the prior year. This maturing cycle has coincided with an increase in
competitive pressure from the volume of capital entering the sector alongside
banks and syndicated markets becoming increasingly active. This has resulted
in investors become increasingly nervous about the credit quality of loans
being written, borrower friendly structures and looser documentation. This
nervousness has been heightened by a few high-profile defaults and isolated
incidents of potentially fraudulent activity. US publicly traded Business
Development Companies ("BDCs") have also traded down throughout 2025 with the
majority trading at large discounts to NAV as investors have sought
redemptions in the face of this uncertainty.
This environment has accelerated investors desire to diversify their private
credit programmes with historic allocations typically heavily weighted towards
corporate credit. Asset based lending has benefited from this diversification
activity as it is viewed as being lowly correlated with other areas of private
debt and benefits from a less competitive investing environment (especially in
Europe) alongside strong downside protection from financial and hard assets as
opposed to relying solely on borrower cash-flow strength. Our positioning in
the mid market provides further protection, as transactions are predominately
bilateral, giving us control over due diligence and the counterparty
relationship, with no reliance on syndication agents.
This strategy is best delivered by a dedicated and experienced managers with
strategies specifically designed to provide capital into the sector with
bespoke underwriting and data and asset monitoring capabilities alongside
differentiated access to the market through a large investment team. We
believe Pollen Street is well positioned to take advantage of these dynamics.
Matthew Potter
Partner
25 March 2026
CFO Report
Crispin Goldsmith
Chief Financial Officer
Delivering Strong Performance with High-Quality Earnings
During the year ended 31 December 2025, the Group has delivered strong
financial performance against our strategic objectives, underpinned by
continued fundraising momentum, a growing contribution of high-quality,
recurring management fee income and resilient investment returns. Fee-Paying
AuM has increased by £1.3 billion, or 32 per cent, on the prior year which
has in turn generated higher management fees allowing the Group to deliver
robust growth and profits ahead of expectations.
The Investment Company delivered performance in line with expectations, with
Income on Net Investment Assets of £32.9 million (2024: £31.8 million)
notwithstanding the £2.4 million effect of equalisation on its investments in
Pollen Street managed funds, linked to the strong fundraising performance, and
alongside returning £39.4 million of cash to shareholders through dividends
and share buybacks, which had the effect of reducing invested assets. The
Investment Company delivered an underlying return on Net Investment Assets of
10.6 per cent, with a reported 9.9 per cent return after the effect of
equalisation is taken into account.
Fundraising accelerated across both strategies during the year, bringing total
AuM to £7.1 billion as at 31 December 2025 (31 December 2024: £5.4 billion),
an increase of 30 per cent, supported by a diverse and growing investor base.
Private Equity Fund V achieved its final close at €1.5 billion (together
with a further €0.5 billion of associated co-investment capital) in July
2025 significantly exceeding the target fund size of €1 billion.
We are also pleased with the sustained strong fundraising momentum for Private
Credit Fund IV which underpinned £1.0 billion (50 per cent) growth in total
Credit AuM to £2.9 billion during the year. Private Credit Fund IV has
exceeded its initial £1 billion target with total commitments of £1.8
billion up to the date of signing the financial statements and with the
expectation of significant further commitments ahead of the fund's final close
from a strong pipeline of investors in an advanced stage of due diligence. As
these commitments are deployed, they will convert into Fee-Paying AuM,
supporting future management fee growth.
The Operating Profit for the Group increased by 11 per cent to £64.4 million
(2024: £58.2 million). The main driver of this increase was the 17 per cent
increase in the Operating Profit of the Asset Manager segment to £31.7
million (2024: £27.2 million) as successful fundraising grew high quality,
recurring management fee income. This included the benefit of £8.4 million of
Private Equity catch-up fees during the year.
Growing Asset Manager Share of Earnings
Assets under management are tracked on a total and fee-paying basis. Total AuM
represents the total commitments that investors have made into funds managed
by the Asset Manager, whereas Fee-Paying AuM represents only that portion of
AuM on which the Group earns management fees. For Private Equity, the
Fee-Paying AuM is the committed capital in the flagship and Accelerator funds.
As funds mature, Fee-Paying AuM reduces, tracking the invested capital of the
fund. The difference between Total AuM and Fee-Paying AuM largely relates to
capital in co-investment vehicles which are typically non-fee paying.
Fee-Paying AuM for Private Credit is the net invested amount from each fund.
So non-Fee-Paying AuM for Private Credit represents capital available to be
deployed, which will become fee-paying as it is deployed.
Total AuM was £7.1 billion as at 31 December 2025 (2024: £5.4 billion). As a
result of Private Equity fundraising and Private Credit fundraising and
deployment, Fee-Paying AuM increased by 32 per cent during the year to £5.2
billion (31 December 2024: £4.0 billion).
Total AuM 2025 2024
(£ billion) (£ billion)
Private Equity 4.2 3.5
Credit 2.9 1.9
Total 7.1 5.4
Fee-Paying AuM 2025 2024
(£ billion) (£ billion)
Private Equity 3.1 2.6
Credit 2.1 1.4
Total 5.2 4.0
Of this, £3.1 billion related to Private Equity, up 21 per cent from £2.6
billion at December 2024, and £2.1 billion related to Private Credit, up 52
per cent from £1.4 billion at December 2024.
We expect the Private Credit strategy to be the main driver of Fee-Paying AuM
growth in 2026 as the strong fundraising pipeline converts into additional
committed capital and the £0.8 billion of dry powder at December 2025 is
deployed and becomes fee-paying.
Fund Management Income comprises management fees, performance fees and income
from carried interest. Total Income increased by 21 per cent to £81.1 million
(2024: £66.8 million), driven by increases in the Group's Fee-Paying AuM
flowing through into increased Management Fees, which are contracted over the
life of the fund and therefore recur over multiple years. We have also
benefitted from Private Equity catch-up fees, as outlined below.
Fund Management Administration Costs increased by 25 per cent to £49.4
million (2024: £39.6 million) as we made ongoing investments in our Business
Development and Investment teams to support the long-term growth of the
business. It is important to note that fundraising costs associated with
Private Credit funds, in relation to placement agents and Business Development
team incentivisation arrangements, are typically linked to fundraising rather
than deployment and are therefore incurred in advance of fee generation. As a
result, there is a natural timing difference between cost recognition and
revenue generation, with the benefits expected to flow through in future
periods.
The Group tracks the performance of this segment using Fund Management EBITDA,
which is the Operating Profit. Fund Management EBITDA has grown by 17 per cent
to £31.7 million (2024: £27.2 million), while Fund Management EBITDA Margin
has remained stable with a slight decrease from 41 per cent to 39 per cent
over the year for the reasons outlined above.
Asset Manager Profitability 2025 2024
(£ million) (£ million)
Total Income 81.1 66.8
Administration Costs (49.4) (39.6)
Fund Management EBITDA 31.7 27.2
Fund Management EBITDA Margin 39% 41%
Fund Management EBITDA now stands at 49 per cent of the Group EBITDA, up from
46 per cent in 2024.
Asset Manager Financial Ratios 2025 2024
Management Fee Rate 1.52% 1.50%
(% of Average Fee-Paying AuM)
Performance Fee Rate 14% 17%
(% of Fund Management Income)
Fund Management EBITDA Margin 39% 41%
(% of Fund Management Income)
Private Equity funds typically charge management fees on committed capital,
with investors admitted after the first close paying catch-up fees so that all
investors pay fees from the first closing date. Private Credit funds generally
charge fees on net invested capital, with capital recycled until the end of
the investment period. Management fee rates are fixed for the life of each
fund. We have guided to a long-term blended management fee rate across Private
Equity and Private Credit of 1.25-1.5 per cent. In 2025, we are at the upper
end of this guidance at 1.52 per cent (2024: 1.5 per cent), reflecting
catch-up fees on capital raised for Private Equity Fund V in the year.
Excluding £8.4 million of catch-up fees, the 2025 management fee rate would
have been 1.34 per cent.
In addition to management fees, the Group earns performance fees and carried
interest. These allow the Group to share in the profits of the funds under
management and are variable amounts dependent on the level of fund returns.
Carried Interest is earned once cumulative returns exceed an agreed threshold
(the "hurdle") over the lifetime of each fund. The Group was allocated 25 per
cent of carried interest in all Private Equity funds since Private Equity Fund
IV and Private Credit funds since Private Credit Fund III.
Carried interest is typically 20 per cent of Private Equity returns above an 8
per cent per annum hurdle, and 10 per cent of Private Credit returns above a 5
to 6 per cent per annum hurdle, in each case with full catch-up.
Performance fees and carried interest recognised in 2025 reflect the continued
growth in the value of the underlying fund portfolios and represents 14 per
cent of Fund Management Income for the year (2024: 17 per cent) and 8 per cent
of total income for the year (2024: 10 per cent). This is slightly below the
lower end of the long-term guidance of 15 per cent to 25 per cent of Fund
Management Income, reflecting outperformance in management fees together with
the relatively early stage of Private Equity Fund V and Accelerator II which
are expected to be the key generators of Carried Interest value over the
long-term. Excluding catch-up management fees, the performance fee rate was 15
per cent of Fund Management Income (2024: 19 per cent).
Following the Combination completed on 30 September 2022, the Group acquired
25 per cent of the carried interest rights in two Private Equity funds. These
were recognised on acquisition under IFRS 3 and are subsequently accounted for
under IFRS 9, and represent all of the recognised Private Equity Carried
Interest to date. The remaining Private Equity Carried Interest is accounted
for under IFRS 15 and will be recognised only where it is highly probable that
no significant reversal will occur. Discounts are therefore applied to reflect
fund maturity, asset diversification, market conditions and remaining holding
periods. Under IFRS 15, if no discount rate was applied to the carried
interest outstanding the carried interest receivable would increase by £18.4
million (2024: £13.1 million).
Following the outperformance in fundraising for Private Credit Fund IV, the
management team and Board have reviewed the allocation of Carried Interest
between the Group and the team. In order to recognise the contribution of
certain team members to the fundraising outperformance, and in order to
continue expanding both the Business Development and Investment teams to
sustain and enhance the growth momentum of the Group going forward, the Board
has elected to increase the team's share of the Carried Interest in Private
Credit Fund IV by reducing the Group's share to 17 per cent. Given the
outperformance in fundraising, the value of the Group's allocation is still
expected to be higher than it would have been at the initial £1 billion
target size for the fund. As such, there will be no impact on the Operating
Profit of the Asset Manager on implementing this change, nor will there be any
change in the Group's forward-looking guidance as a result of it.
The Board has further decided to adopt a similar approach for future funds to
be raised by the Group. The Group's share of Carried Interest will be up to 25
per cent for all future funds and shall be set at no less than 15 per cent for
the next generation of flagship Private Equity and Private Credit Funds. The
precise Group allocation for each fund will be determined by the Board, prior
to the final close of each fund.
Consistent Investment Company Returns
The Investment Company delivered returns in line with guidance with Return on
Net Investment Assets increasing to 9.9 per cent and Income on Net Investment
Assets of £32.9 million (2024: £31.8 million). This is in line with
expectations, notwithstanding £2.4 million of dilution from equalisation
effects in the year, related to the strong fundraising activity, and £6.6
million of share buybacks, which had the effect of reducing invested assets.
Strong growth in third party AuM across both Private Equity and Private Credit
had the effect of temporarily diluting the Investment Company's returns on its
investments in these funds through equalisation with new investors. The
equalisation process aims to treat all investors as having come into the fund
at the first close. To do so, gains initially allocated to earlier investors
in the fund are re-allocated to later investors pro rata to the increased fund
size. In return, newer investors pay interest to the older investors to
compensate them for their cost of capital on funds which have previously been
drawn. The underlying return on Net Investment Assets, before equalisation
effects, was 10.6 per cent.
We have maintained our disciplined investment approach resulting in robust
performance which is well diversified across deals and borrowers and the
performance of Pollen Street managed funds. The largest investment accounted
for 12 per cent of the portfolio, with the portfolio being 80 per cent
invested in Credit Assets and 20 per cent invested in Private Equity Assets
(either in direct deals or through Pollen Street managed funds). The portfolio
has seen high levels of cash generation in the year of £172 million (2024:
£239 million) driven by realisations, interest payments and amortisations on
continuing positions. This cash generation demonstrates the quality and
liquidity of the portfolio and facilitates the strategic rotation from direct
investments to investments in Pollen Street managed funds.
Investment Company Segment 2025 2024
Investment Assets (£'m) 536 504
Average Net Investment Assets (£'m) 332 330
Income on Net Investment Assets (£'m) 32.9 31.8
Reported Net Investment Return (%) 9.9% 9.6%
Add back: Equalisation Impact (£'m) 2.4 -
Underlying Income on Net Investment Assets (£'m) 35.3 31.8
Underlying Net Investment Return (%) 10.6% 9.6%
As at 31 December 2025, the investment portfolio was £536 million (2024:
£504 million).
The total drawn leverage for the Group was £199.7 million (2024: £188.3
million). In addition, the Group had £11.9 million (2024: £11.2 million) of
cash resulting in a strong liquidity position and a net debt-to-gross
investment assets ratio of 35 per cent (2024: 35 per cent).
Profit before Tax and Tax
Profit before Tax for the Group increased by 10 per cent to £61.6 million for
2025 (2024: £55.8 million). The main driver of this was the £4.5 million
increase in the Operating Profit from the Asset Manager.
The charge for depreciation and amortisation is £2.8 million (2024: £2.4
million). This relates to a charge of £0.6 million (2024: £0.3 million)
associated with the depreciation of the Group's fixed assets, a charge of
£1.5 million (2024: £1.5 million) associated with the depreciation of the
Group's leased assets and a charge of £0.6 million (2024: £0.6 million)
associated with the amortisation of intangible assets representing the value
of customer relationships acquired with the combination.
During the year a full review of the Group's tax position has been conducted
which has resulted in the release of certain previously accrued tax
liabilities and the identification of losses which had not previously been
applied. As a result, there was a minimal current tax charge for the period of
£37k (2024: £3.1 million). As at December 2025, the Group had a deferred tax
liability of £10.6 million (2024: £8.9 million) relating to fair value gains
in the Investment Company and carried interest in the Asset Manager, which is
expected to crystallise as these gains are realised in the medium term. The
deferred tax charge for the year was £5.0 million (2024: £3.1 million),
resulting in an effective tax rate of 8.2 per cent (2024: 11.1 per cent).
As detailed in Note 6 to the financial statements, the Group had a lower
effective tax rate than the UK statutory rate for the period. This was largely
driven by one-off adjustments made in the year, as referenced above, as well
as the tax treatment of certain other forms of income. We expect the effective
tax rate to increase towards previously guided levels going forward.
2025 2024
(£ million) (£ million)
Operating Profit of Asset Manager 31.7 27.2
Operating Profit of Investment Company 32.9 31.8
Operating Loss of Central segment (0.2) (0.8)
Operating Profit of Group 64.4 58.2
Depreciation and amortisation (2.8) (2.4)
Profit before Tax 61.6 55.8
Corporation tax (5.0) (6.2)
Profit after Tax 56.6 49.6
Earnings per Share & Dividends
Earnings per share (basic and diluted) increased by 19 per cent to 93.7 pence
per share (2024: 78.8 pence per share), ahead of the 14 per cent growth in
Profit After Tax given the benefit of share buybacks.
The Board is pleased to confirm a second (and final) interim dividend for the
period ended 31 December 2025 of 31.0 pence per share, amounting to a total
payment of £18.5 million. This dividend, combined with the first interim
dividend of 27.0 pence per share, brings the total dividends declared in
respect of 2025 to 58.0 pence per share, which is ahead of the guidance given
and represents a 4.4 pence per share (8 per cent) increase on 2024.
The second interim dividend will be paid on 1 May 2026 to shareholders on the
share register at the record date, being 7 April 2026. The ex-dividend date
will be 2 April 2026. Pollen Street operates a Dividend Re-Investment
Programme ("DRIP"), details of which are available from the Company's
Registrars, Computershare. The final date for DRIP elections will be 10 April
2026.
In November 2025, we announced a further share buyback programme of up to £30
million following the successful completion of the initial share buyback
programme launched in 2024. During 2025, £0.8 million was used to repurchase
8,338 shares.
Outlook
The Group enters 2026 with confidence, supported by a strong balance sheet, a
diversified and supportive investor base, and a growing base of Fee-Paying
AuM. While we are cognisant of the uncertain macroeconomic environment and
complex geopolitical backdrop, the Group benefits from strong fundraising
momentum across both strategies.
Fund Management income in 2026 is expected to be stable as further capital
raises and their subsequent deployment in Private Credit offset the
non-recurrence of Private Equity catch-up fees. As with prior periods, the
timing of deployment and consequent conversion of commitments into Fee-Paying
AuM will influence the pace at which this translates into revenue.
The balance sheet remains robust, with strong liquidity and disciplined
leverage, supporting ongoing investment activities and consistent returns.
The Group applies a disciplined approach to cost management, balancing
investments in the platform to support long-term growth with the achievements
and short-term profitability targets and maintaining operational resilience.
Execution discipline remains a priority as the business continues to scale.
The Group continues to trade in line with expectations and remains focused on
delivering sustainable long-term value for shareholders. In line with the
Capital Allocation Framework, the Board intends to maintain a progressive
dividend policy and will continue to assess opportunities to return surplus
capital to shareholders, including through share buybacks, while retaining
sufficient flexibility to support future growth and investment opportunities.
Crispin Goldsmith
Chief Financial Officer
25 March 2026
Risk Management
Effective risk management underpins the successful delivery of our strategy
and longer-term sustainability of the Group. It provides an integrated
approach to the evaluation, control and monitoring of the risks that the Group
faces. A robust governance structure ensures well defined, transparent, and
consistent lines of responsibility, supported by effective processes to
identify, manage, monitor, and report risks the Group is, or may become,
exposed to.
The Group's Risk landscape can be divided into six main categories:
The Group fosters a strong culture of risk awareness and proactive risk
management, demonstrated by the conduct of its personnel, established
governance arrangements that it has embedded, and the commitment of staff to
maintain appropriate management and control standards. A strong control
culture exists, with clear accountability, a tailored set of systems and
controls, and ongoing compliance monitoring. The monitoring and control of
risk form a fundamental part of the Group's management processes.
The Group's governance structure is by way of committees, designed to ensure
that the Board maintains appropriate oversight of the Group's activities. The
effectiveness of the governance framework is reviewed by senior management on
an ongoing basis. Should a material deficiency in the control environment or
risk management framework be identified, it shall be addressed without undue
delay.
The Board has established a Risk Committee responsible for overseeing the
Group's risk management systems and processes, including the management of the
key risks across the organisation. In addition, the Risk and Operations
Committee operates at management level, providing stewardship of the risk
framework, promoting a culture of risk awareness across all employees, and
reviewing the key risks together with the management approach to each risk.
Risk Management Framework
A comprehensive and independent risk management framework ensures that the
Group identifies, monitors, mitigates and manages risk with oversight from the
Risk Committees and the Board. Appropriate systems to identify, assess,
monitor and, where proportionate, reduce all material risks and harms have
been implemented and all areas of the business are engaged in risk management
supporting long-term performance and growth.
All staff are expected to actively manage risks, incorporate mitigants into
their processes, and escalate risk issues promptly and transparently actively
contributing to the Group's risk culture.
The risk management framework includes key components such as risk
identification, risk appetite, accountability, risk limits, controls and
reporting. Together, these elements enable effective oversight of risk across
the Group. Under this framework, a wide range of risk mitigants are targeted
at the risks to which the business is exposed.
Challenge and oversight are provided through the first, second and third lines
of defence; the Group has established committees that oversee specific areas
of the business, each of which will report to the relevant governing bodies.
Risk Environment 2025
The global economic and financial environment through 2025 continued to evolve
against a backdrop of persistent uncertainty and structural change. While
inflation continued to moderate and central banks began to ease monetary
policy, the pace of rate reductions was slower than markets had initially
anticipated, leaving the cost of capital elevated relative to previous years
and continuing to shape investor sentiment and asset valuations against a
backdrop of subdued economic growth.
Geopolitical tensions remained elevated, with continuing conflicts in Ukraine
and persistent instability across parts of the Middle East exerting pressure
on energy markets, trade, and global supply chains. These conditions left
markets sensitive to further geopolitical shocks, particularly in
energy‑producing regions. Longer-term transformative forces such as
decarbonisation, digitisation, deglobalisation, and demographic shifts
collectively reshaped the global investment landscape for many. The
acceleration of artificial intelligence and other technological innovations
continued to influence productivity expectations, business models, and
operating risks across many sectors.
Disciplined capital allocation and proactive portfolio management remained
central within our business. The fundraising environment continued to be
selective, reflecting a greater focus on manager differentiation, operational
value creation, and sustainable returns.
The regulatory environment continues to evolve, with heightened expectations
around transparency, Responsible Investment integration, and operational
resilience. The Group continues to embrace these developments closely and
adapt its governance, compliance and risk management frameworks accordingly.
Despite the complex environment, the Group's overall risk profile remains
stable. The strength of our governance arrangements and our disciplined
approach to investment provides resilience against market volatility. As we
move into 2026, the Group remains focused on prudent risk management, capital
preservation, and identifying opportunities that align with our long-term
investment philosophy.
Principal Risks & Uncertainties
The Group's assessment of risk has identified a broad range of internal and
external factors which it believes could adversely impact the Group. The
following summary of key risks has been identified as having the potential to
be material; it is not exhaustive of those faced by the Group. It includes
emerging risks and has been reviewed by the Risk and Operations Committee and
the Risk Committee on a regular basis and recorded on the Group's risk
register.
Responsible Investing and Climate-Related Risks are also considered, further
information on these are included in the Climate-Related Risk Management -
Task Force on Climate-Related Financial Disclosures section.
Key
Risk Description Risk Management 2025 Summary
Economic & Market Conditions
Economic and market factors may affect the Group's investments, track record Pollen Street operates closed ended funds without redemption rights for The portfolios remained resilient throughout 2025. Financial performance,
or ability to raise new capital, and may also adversely impact the timing and investors, therefore is not subject to redemption risk, allowing a greater together with progress towards the Group's medium-term targets was in line
terms of exits from existing investments. degree of freedom to pursue investment objectives throughout macroeconomic with expectations.
cycles, taking advantage of favourable market conditions, and weathering
In stressed or otherwise unfavourable conditions, market liquidity may also be downturns.
reduced, which could limit the Group's ability to transact or reallocate
capital as intended. Regular investment reviews are undertaken. The Investment Committee focuses on
investment strategy, exit processes, refinancing strategies, and assesses
the impact of geopolitical developments, supply chain and skills constraints,
and technology driven shifts in market sentiment, including those related to
AI, throughout the life of an investment.
An efficient capital call process exists enabling funds to be called from
Investors when needed in the unlikely event of potential liquidity shortfalls.
Fundraising
The inability to secure new capital, or the delay in raising capital, in a Pollen Street has extensive experience investing in both private equity and The Investor Relations team continued to benefit from additional resource and,
competitive market affecting the Group's revenue and cash flows. private credit strategies across a wide geographic landscape. The Group together with management, remained focused on fundraising activities across
continues to invest in its Investor Relations function to support capital the business throughout 2025.
The potential for downward pressure on fee levels and other terms that the raising across the business and has a supportive and growing investor base.
Group receives to manage new funds, which could adversely affect the Group's
During the year, the Group's reach was broadened with the opening of a new
ability to generate revenue. The Group maintains a focus on its brand and reputation through various media, office to support engagement across a wider geographic scope.
including thought leadership alongside consistent delivery of its investment
Fundraising activities involve a degree of fraud risk for the Group, for strategy and has established controls and oversight over fundraising Pollen Street's management fee revenue is long term and contractual in nature
example through external parties making fraudulent approaches to investors or activities. and its core strategies continue to provide a clear route to increasing AuM
misleading communications about fund offerings. despite the continued challenging macro environment.
Investment Underperformance and Financial Risks
The Group's Investment Assets are exposed to credit and market risks. They may The Group has a proven track record of making robust investment decisions and The Group has a diversified, granular portfolio of assets. Loans are subject
be impacted by adverse economic and market conditions, including higher has in place a strong team of investment professionals delivering investment to stringent underwriting and stress testing.
impairment charges or reduced valuations, leading to returns within the funds returns that are resilient to market conditions and idiosyncratic risks, and
falling below target levels. in line with published guidance. Investment performance remains robust. Further information over financial risk
management is set out in more detail in Note 18.
In addition, credit risk, market risk (such as interest rate risk, currency Investments are monitored closely as part of the Group's ongoing investment
risk & price risk), capital management risk, and liquidity risk exists. monitoring programmes, adhering to the funds' investment strategy. Pollen
Idiosyncratic risks in the underlying loan portfolios may affect the value and Street dedicates ample resources to product development, expansion, bolt-on
performance of the Group's investments. acquisitions and business development via the network of its portfolio
companies.
Conduct and Regulatory
Conduct and regulatory risk arises from the potential for the Group to fail to A comprehensive compliance framework is in place, supported by policies that Conduct and regulatory risk remained a key area of focus for the Group in
meet applicable laws, regulations, rules or recognised standards of market describe expected standards of behaviour, outline prohibited practices 2025, reflecting the evolving regulatory landscape and continued emphasis on
conduct in the jurisdictions in which it operates. This includes the risk of (including market abuse) and set out procedures for identifying, escalating, market integrity and the fair treatment of Investors and the markets.
market abuse or other illegal, improper or unethical practices that could reporting and preventing such issues.
disadvantage investors, distort or manipulate financial markets, or otherwise
undermine the fair treatment of clients and counterparties. Regular training is provided to staff on conduct expectations, regulatory
obligations and reporting procedures, with additional targeted training for
Such failures could result in regulatory investigations, supervisory higher‑risk roles. Personal account dealing controls oversee employees'
interventions, fines and sanctions, civil or criminal proceedings, personal trading activities, and the Group undertakes ongoing monitoring of
reputational damage, and requirements to remediate identified weaknesses. They relevant activities and communications to identify and address potential
may also give rise to financial losses, restrictions on business activities, conduct or regulatory concerns at an early stage.
increased operating costs and material reputational damage, which could
adversely affect investor confidence, fundraising, capital flows and the
Group's ability to execute its strategy.
Talent and Retention
Talent and retention remain a key people related risk for the Group given the Pollen Street seeks to create an environment that enables employees to deliver The business continued to strengthen its team throughout 2025, investing in
importance of attracting, developing and retaining skilled individuals to maximum potential and invests in both leadership development and ongoing the development of its people and making a number of senior key hires and
deliver its strategy and performance objectives. In addition, risk arises from development opportunities for all employees. progressing internal promotions to support the continued growth and
the potential inability to secure and retain the right skills at the right
development of the business.
time, provide competitive and appropriate remuneration and development The Group's remuneration and incentive arrangements are structured to promote
opportunities, maintain an engaging culture and sense of purpose, and ensure sound risk management and good conduct and are designed so that the variable Employee engagement is actively considered, and the firm seeks to enhance
effective succession planning for key roles. pay elements do not encourage excessive or irresponsible risk-taking, in line employee satisfaction through various programmes. The firm also invests in
with regulatory expectations. These incentive schemes align individual, team, training and development to further enhance employee skills and knowledge,
and organisational goals, driving value for the Group. supporting high standards of performance and professionalism.
Information Security & Resilience
Information Security and Resilience risk arises from the Group's dependence on The Group maintains strong technical and operational controls against cyber The Group invests annually in detailed external security reviews and
reliable and secure technology, systems and data to support its operations. and information security threats which comply with industry standards and penetration tests. All technology and security policies have been reviewed and
This includes risks associated with information security and data protection, regulatory requirements. updated during the year and the protections in place continue to operate well.
such as insufficient investment in, or ineffective implementation of,
appropriate technology; failures of IT systems leading to financial loss, data Staff awareness, being key to any modern defence plans, is enhanced through The technology team is appropriately sized to manage the various security
loss, business disruption or reputational damage; and weaknesses in data new joiner and ongoing training, and regular communications to staff about demands and utilises industry standard tooling to ensure monitoring and
protection and information security controls. relevant threats observed across the industry. Resilient systems are deployed response management is efficient and thorough.
to protect the Group's assets and are validated through regular testing and
This risk also encompasses loss of personal data or unauthorised access to simulations. The Group tested its Disaster Recovery Plan and Business Continuity Plans in
sensitive data that could compromise the integrity, confidentiality or
2025 with no material findings.
availability of information and result in data breaches or other cyber The Group holds a defined incident response plan as a set of guideline
security incidents. In addition, shortcomings in business continuity, disaster procedures to be followed in the event of an information security attack or
recovery and broader operational resilience arrangements could amplify the breach. The primary aim of any response is to protect the Group's assets,
impact of such events on the Group and its investors. remediate any issues and minimise the impact of the breach as quickly as
possible. The plan sets out communication, oversight and other considerations
to be undertaken.
Emerging Risk Identification
The Risk Management Function continually scans the horizon to identify and
communicate emerging risks that could materially affect the Group, which are
expected to have a significant impact within 1 to 10 years. Emerging risks may
be entirely new or developments of existing risks and are typically
characterised by a high degree of uncertainty in both likelihood and impact,
with the potential to influence the Group's strategy, business model and
operations.
The Group monitors these risks, supporting organisational readiness for
external volatility, drawing on both top down insight from the Board and Risk
Committee and bottom-up input from the business via the Risk and Operations
Committee. Key emerging risks for 2026 include:
· The growing integration of AI and machine
learning into financial markets and operating models, which presents both
opportunities and new forms of business, operational and conduct risks.
· The evolution of Cybersecurity risks, including
increasingly sophisticated AI-enabled attacks and ransomware, which may impact
the confidentiality, integrity and availability of systems and data.
· Heightened geopolitical tensions including the
potential escalation of existing conflicts, which may drive market volatility
and amplify operational, counterparty, cyber, and fraud risks.
· The increasing sophistication of fraud risk,
including AI-enabled financial fraud, identity fraud and misrepresentation in
investment and fundraising processes, which presents both direct financial
risk and reputational exposure, and requires continued vigilance across the
Group's underwriting, operational and compliance functions.
· A more volatile and uncertain environment for
private markets, including higher‑for‑longer interest rates, persistent
inflation and periods of reduced market liquidity. These conditions may affect
valuations, exit opportunities and financing availability for portfolio
companies, and could in turn influence fundraising conditions and deployment
pace for the Group.
The Risk Committee will continue to oversee and assess these and other
emerging risks, with a focus on strengthening operational resilience and
adapting governance, technology and risk management capabilities in response
to the evolving risk landscape.
Viability Statement
The Company has chosen to voluntarily comply with the requirements of Listing
Rules 6.6.6R(3) and present a Viability Statement. Therefore, the Directors
have carried out a comprehensive and vigorous assessment of the prospects of
the Group over the three-year period to Pollen Street Group Limited's AGM in
2029. The Board believes this period to be appropriate for assessing
viability, considering the Group's current trading position, the potential
impact of principal risks, and aligning with the recommendations of the
Financial Reporting Council's 2021 thematic review.
The Group's long-term prospects are primarily assessed through the strategic
and financial planning process, culminating in the Board-approved Group
Budget. As of the year-end, the Group was in a strong financial position, with
cash balances of £11.9 million and £371 million of tangible net assets,
coupled with good visibility of future management fees and a largely
predictable cost base, supports its ongoing viability.
To prepare the viability statement, the Board has considered the prospects of
the Group in light of its current position and has considered each of the
Group's principal risks, uncertainties and mitigating factors to develop a
comprehensive scenario analysis for viability.
These projections consider the Group's income, net asset value and the cash
flows over the three-year period under a range of scenarios. The scenarios are
not a business plan in itself, but rather a prudent view of how the Group may
evolve, based principally upon its growth to date, in order to demonstrate its
viability. Analysis to assess viability focused on the risks of delivery of
the growth of the business and a series of projections have been considered,
including changing new business volumes and the performance of the Investment
Assets.
Key assumptions within the scenario analysis include:
· the raising of new funds, which impacts the
amount of management fees;
· the timing and level of returns from funds, which
impacts co-investment and carried interest cash flows and profit recognition;
and
· changes in the cost base, primarily in relation
to people costs and inflation.
Progress against the current year's budget, which underpins the Group's
strategic plan, is monitored through the year.
The stressed scenarios applied were deliberately challenging, with the
combined scenario representing an extreme case. While the testing identified
potential pressures on liquidity in the most severe cases, the Board concluded
that the Group has sufficient mitigating actions available.
The ongoing geopolitical and macroeconomic disruption has also been considered
in these scenarios.
All the analysis indicates that due to the stability and cash-generating
nature of the Investment Asset portfolio, the long-term fund management
contracts of the Asset Manager, as well as the long-term debt facilities in
place, the Group would be able to withstand the impact of the risks
identified. Based on the robust assessment of the principal risks, prospects
and viability of the Group, the Board confirms that they have reasonable
expectation that the Group will be able to continue operating and meet its
liabilities as they fall due over the three-year period to Pollen Street Group
Limited's AGM in 2029. The Board also continuously monitors the financial
performance of the Group against key financial metrics and ratios, ensuring a
strict discipline in the financial management of the business.
Going Concern
The Group has chosen to voluntarily comply with the requirements of Listing
Rules 6.6.6R(3) and present a going concern statement. This statement includes
the Directors' assessment of the appropriateness of adopting the going concern
basis of accounting and their evaluation of the Group's prospects, in line
with Provisions 30 and 31 of the UK Corporate Governance Code.
The Directors have reviewed the financial projections of the Group, which show
that the Group will be able to generate sufficient cash flows in order to meet
its liabilities as they fall due for a period of at least twelve months from
when the financial statements are authorised for issue. The Group benefits
from income from long-term fund management contracts, with a significant
majority of forecast management fees in the assessment period from funds that
have already been raised. The firm benefits from a largely predictable cost
base, of which over three quarters is personnel related. Based on the above
there is good visibility of income, expenditure and future profitability
during and beyond the period covered by this assessment. These financial
projections have been performed for the Group under various new business
volumes and stressed scenarios, and in all cases the Group is able to meet its
liabilities as they fall due. The stressed scenarios included no new
fundraising and material impairments for a number of structured facilities.
The Directors consider these scenarios to be the most relevant risks to the
Group's operations. Finally, the Directors reviewed financial and
non-financial covenants in place for its debt facility with no breaches
anticipated, even in the stressed scenario.
The Directors are satisfied that the going concern basis remains appropriate
for the preparation of the financial statements. The Group also has detailed
policies and processes for managing the risk.
Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended For the year ended
31 December 2025 31 December 2024
Notes £'000 £'000
Management fee income 4 64,321 50,282
Carried interest and performance fee income 4, 13 7,551 7,786
Interest income on Credit Assets held at amortised cost 4 33,063 41,380
Gains on Investment Assets held at fair value 4, 9 29,584 18,998
Total income 134,519 118,446
Expected credit loss charge 4, 8 (472) (593)
Third-party servicing costs 4 (1,104) (1,177)
Net operating income 132,943 116,676
Administration costs 4 (52,074) (41,931)
Finance costs 4, 16 (16,468) (16,587)
Operating profit 64,401 58,158
Depreciation 4 (2,160) (1,730)
Amortisation 4, 12 (640) (640)
Profit before tax 61,601 55,788
Tax charge 6 (5,035) (6,190)
Profit after tax 56,566 49,598
Other comprehensive income 507 62
Foreign currency translation reserve
Total comprehensive income 57,073 49,660
Earnings per share 7 93.7 pence 78.8 pence
(basic and diluted)
The notes to the accounts form an integral part of the financial statements.
Company Statement of Profit or Loss and Other Comprehensive Income
For the year ended For the year ended
31 December 2025 31 December 2024
Notes £'000 £'000
Revenue 4 34,550 40,508
Administration costs 4 (1,771) (1,486)
Profit before tax 32,779 39,022
Tax charge 6 - -
Profit after tax 32,779 39,022
The notes to the accounts form an integral part of the financial statements.
There is no other comprehensive income in the current or preceding financial
years.
Consolidated Statement of Financial Position
As at As at
31 December 2025 31 December 2024
Notes £'000 £'000
Non-current assets
Credit Assets at amortised cost 8 300,098 309,423
Investment Assets held at fair value through profit or loss 9 236,054 194,176
Fixed assets 10 916 1,149
Lease assets 11 3,763 4,860
Goodwill and intangible assets 12 226,460 227,100
Carried interest 13 31,916 25,073
Deferred tax asset 6 - 3,256
Total non-current assets 799,207 765,037
Current assets
Trade and other receivables 14 32,475 35,542
Current tax receivable 7,275 561
Derivative financial assets 15 688 -
Cash and cash equivalents 11,899 11,195
Total current assets 52,337 47,298
Total assets 851,544 812,335
Current liabilities
Interest-bearing borrowings 16 121 498
Trade and other payables 17 40,399 29,249
Lease liabilities 11 1,512 1,376
Derivative financial liabilities 15 - 1,467
Total current liabilities 42,032 32,590
Total assets less current liabilities 809,512 779,745
Non-current liabilities
Interest-bearing borrowings 16 199,538 187,767
Lease liabilities 11 2,352 3,756
Deferred tax liability 6 10,608 8,866
Total non-current liabilities 212,498 200,389
Net assets 597,014 579,356
Shareholders' funds
Ordinary share capital 20 601 610
Share premium 20 543,129 549,757
Retained earnings 52,984 29,196
Other reserves 20 300 (207)
Total shareholders' funds 597,014 579,356
The notes to the accounts form an integral part of the financial statements.
The financial statements of Pollen Street Group Limited (company number
70165), which includes the notes, were approved and authorised by the Board of
Directors on 25 March 2026 and were signed on its behalf by:
Lynn Fordham
Chair
25 March 2026
Company Statement of Financial Position
As at As at
31 December 2025 31 December 2024
Notes £'000 £'000
Non-current assets
Investments in subsidiaries 27 571,269 571,269
Total non-current assets 571,269 571,269
Current assets
Trade and other receivables 14 24,271 23,986
Total current assets 24,271 23,986
Total assets 595,540 595,255
Current liabilities
Trade and other payables 17 36,088 29,167
Total current liabilities 36,088 29,167
Net assets 559,452 566,088
Shareholders' funds
Ordinary share capital 601 610
Share premium 536,344 542,972
Retained earnings 22,507 22,506
Total shareholders' funds 559,452 566,088
The notes to the accounts form an integral part of the financial statements.
The financial statements of Pollen Street Group Limited (company number
70165), which includes the notes, were approved and authorised by the Board of
Directors on 25 March 2026 and were signed on its behalf by:
Lynn Fordham
Chair
25 March 2026
Consolidated Statement of Changes in Shareholders' Funds
For the year ended 31 December 2025
Ordinary Share Capital Share Premium Retained Earnings Foreign Currency Translation Reserve Total Equity
£'000 £'000 £'000 £'000 £'000
Shareholders' funds as at 610 549,757 29,196 (207) 579,356
1 January 2025
Profit after taxation - - 56,566 - 56,566
Dividends paid - - (32,778) - (32,778)
Buybacks (9) (6,628) - - (6,637)
Foreign currency translation reserve - - - 507 507
Shareholders' funds as at 601 543,129 52,984 300 597,014
31 December 2025
For the year ended 31 December 2024
Ordinary Share Capital Share Premium Retained Earnings Special Distributable Reserve Merger Reserves Foreign Currency Translation Reserve Total Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Shareholders' funds as at 1 January 2024 642 - 4,978 351,625 225,270 (269) 582,246
Reallocation of reserves - 576,895 - (351,625) (225,270) - -
Profit after taxation - - 49,598 - - - 49,598
Reclassification of transaction costs - 517 (517) - - - -
Transaction costs in relation to the Reorganisation - (4,833) - - - - (4,833)
Dividends paid - - (24,863) - - - (24,863)
Buybacks (32) (22,822) - - - - (22,854)
Foreign currency translation reserve - - - - - 62 62
Shareholders' funds as at 31 December 2024 610 549,757 29,196 - - (207) 579,356
The notes to the accounts form an integral part of the financial statements.
Company Statement of Changes in Shareholders' Funds
For the year ended 31 December 2025
Ordinary Share Capital Share Premium Retained Earnings Total Equity
£'000 £'000 £'000 £'000
Shareholders' funds as at 610 542,972 22,506 566,088
1 January 2025
Profit after taxation - - 32,779 32,779
Dividends paid - - (32,778) (32,778)
Buybacks (9) (6,628) - (6,637)
Shareholders' funds as at 601 536,344 22,507 559,452
31 December 2025
For the year ended 31 December 2024
Ordinary Share Capital Share Premium Retained Earnings Total Equity
£'000 £'000 £'000 £'000
Shareholders' funds as at - - - -
1 January 2024
Issue of share capital 642 570,627 - 571,269
Transaction costs in relation to the Reorganisation - (4,833) - (4,833)
Profit after taxation - - 39,022 39,022
Dividends paid - - (16,516) (16,516)
Buybacks (32) (22,822) - (22,854)
Shareholders' funds as at 610 542,972 22,506 566,088
31 December 2024
The notes to the accounts form an integral part of the financial statements.
Consolidated Statement of Cash Flows
For the year ended For the year ended
31 December 2025 31 December 2024
Notes £'000 £'000
Cash flows from operating activities:
Cash generated from operations 22 56,754 35,077
Investments in Credit Assets at amortised cost (93,590) (35,064)
Distributions received on Credit Assets at amortised cost 104,870 176,726
Purchase of investments at fair value 9 (37,229) (94,984)
Proceeds from disposal of investments at fair value 9 23,000 6,483
Tax paid (6,580) (3,669)
Net cash inflow from operating activities 47,225 84,569
Cash flows from investing activities:
Purchase of fixed assets 10 (565) (156)
Net cash inflow from investing activities (565) (156)
Cash flows from financing activities:
Payment of lease liabilities 11 (1,654) (1,564)
Reorganisation transaction costs - (4,833)
Drawdown of interest-bearing borrowings 16 111,670 240,500
Repayments of interest-bearing borrowings 16 (100,900) (260,519)
Transaction costs for financing activities 16 - (2,880)
Interest paid on financing activities 16 (15,657) (15,951)
Share buybacks (6,637) (22,854)
Dividends paid in the year 21 (32,778) (24,863)
Net cash outflow from financing activities (45,956) (92,964)
Net change in cash and cash equivalents 704 (8,551)
Cash and cash equivalents at the beginning of the year 11,195 19,746
Cash and cash equivalents at the end of the year 11,899 11,195
Interest received for the Group for the year ended 31 December 2025 was £37.8
million (2024: £33.5 million).
The notes to the accounts form an integral part of the financial statements.
Company Statement of Cash Flows
For the year ended For the year ended
31 December 2025 31 December 2024
Notes £'000 £'000
Cash flows from operating activities:
Cash generated from operations 23 39,415 44,203
Net cash inflow from operating activities 39,415 44,203
Cash flows from financing activities:
Reorganisation transaction costs - (4,833)
Share buybacks (6,637) (22,854)
Dividends paid in the year (32,778) (16,516)
Net cash outflow from financing activities (39,415) (44,203)
Net change in cash and cash equivalents - -
Cash and cash equivalents at the beginning of the year - -
Cash and cash equivalents at the end of the year - -
The notes to the accounts form an integral part of the financial statements.
Notes to the Financial Statements
General information
Pollen Street Group Limited is a public company limited by shares,
incorporated and registered under the laws of Guernsey with registration
number 70165. Pollen Street Group Limited is referred to as the "Company" or
"Pollen Street", and together with its subsidiaries, the "Group". The
registered office of the Company is: Mont Crevelt House, Bulwer Avenue, St.
Sampson, Guernsey, GY2 4LH. The principal place of business of the Company is
11-12 Hanover Square, London, W1S 1JJ.
The principal activity of the Group is to act as an alternative asset manager
investing within the financial and business services sectors across both
Private Equity and Private Credit strategies, as well as holding on-balance
sheet investments consisting of both direct investments and investments in
funds managed by Pollen Street. The principal activity of the Company is to be
the holding company for two 100 per cent owned subsidiaries engaged in these
asset management and investment activities.
Material accounting policies
Basis of preparation
These financial statements have been prepared in accordance with UK-adopted
International Accounting Standards and with the requirements of The Companies
(Guernsey) Law 2008, and the Disclosure Guidance and Transparency Rules
sourcebook of the UK's Financial Conduct Authority ("FCA"). The accounting
policies comprise standards and interpretations approved by the International
Accounting Standards Board ("IASB") and International Financial Reporting
Committee as adopted in the UK, including interpretations issued by the IFRS
Interpretations Committee and interpretations issued by the International
Accounting Standard Committee ("IASC") that remain in effect.
The financial statements have been prepared on a historical cost basis, except
for financial assets and financial liabilities that are required to be
measured at fair value, including investments classified as at fair value
through profit or loss and derivative financial instruments. These instruments
are measured at fair value at each reporting date, with changes in fair value
recognised in profit or loss in accordance with the relevant accounting
standards.
Going concern
The Directors have reviewed the financial projections of the Group, which show
that the Group will be able to generate sufficient cash flows in order to meet
its liabilities as they fall due for a period of at least twelve months from
when the financial statements are authorised for issue. These financial
projections have been performed for the Group under stressed scenarios, and in
all cases the Group is able to meet its liabilities as they fall due. For the
Investment Company, the stressed scenarios included material impairments to a
significant number of structured facilities and individual exposures
experiencing ongoing performance at the worst monthly impact experienced
throughout 2024 and 2025. For the Asset Manager, the stressed scenarios
included no new funds being raised and no realisations in relation to accrued
carried interest.
The Directors consider these scenarios to be the most relevant risks to the
Group's operations. Finally, the Directors reviewed financial and
non-financial covenants in place for all debt facilities within the
subsidiaries of the Group with no breaches anticipated, even in the stressed
scenario. The Directors are satisfied that the going concern basis remains
appropriate for the preparation of the financial statements.
The material accounting policies adopted by the Company are set out below and
have been consistently applied across periods presented and all values are in
pounds, rounded to the nearest thousand.
Adoption of new and amended standards and interpretations
Standards, interpretations and amendments to published standards effective for
the year ended 31 December 2025
The following new and amended standards do not have a material impact on the
Group's financial statements:
International accounting standards and interpretations Effective date
Lack of Exchangeability - Amendments to IAS 21 'The Effects of Changes in 1 January 2025
Foreign Exchange Rates'
Standards, interpretations and amendments to published standards which are not
yet effective
New and amended standards that have been issued, but are not yet effective, up
to the date of the Group's financial statements are disclosed below. These
standards do not have a material impact on the Group's financial statements,
with the exception of IFRS 18: 'Presentation and Disclosure in Financial
Statements' which will impact the presentation and disclosure of financial
statements. The Group plans to adopt these, if applicable, when they become
effective.
International accounting standards and interpretations Effective date
Amendments to the Classification and Measurement of Financial Instruments - 1 January 2026
Amendments to IFRS 9 and IFRS 7
Annual Improvements to IFRS Accounting Standards - Volume 11 1 January 2026
IFRS 18 'Presentation and Disclosure in Financial Statements' 1 January 2027
Accounting policies
Consolidation
Subsidiaries are investees controlled by the Company. The Company controls an
investee if it is exposed to, or has the rights to, variable returns from its
involvement with the investee and has the ability to affect those returns
through its power over the investee. The Company reassesses whether it has
control if there are changes to one or more elements of control. The Company
does not consider itself to be an investment entity for the purposes of IFRS
10, as it does not hold substantially all of its investments at fair value.
Consequently, it consolidates its subsidiaries rather than holding at fair
value through profit or loss.
The Group also assessed the consolidation requirements for the carried
interest partnerships and certain underlying entities of Pollen Street managed
funds ("funds") which the Group holds as investments as explained in the
investments in associates section. Refer to Note 26 for further details.
In the consolidated financial statements, intra-group balances and
transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated. All entities within the Group have coterminous
reporting dates.
Capital reorganisation
Capital reorganisations are accounted for using the book-value method. This
methodology is used as these transactions do not represent a substantive
change in ownership. Instead, they are viewed as a reorganisation of entities
within the same group. The Directors consider this method to be the most
accurate reflection of the historical financial performance and position of
the combining entities following the Reorganisation.
This method applies retrospectively, meaning that the financial statements are
restated as if the Reorganisation had occurred at the beginning of the
earliest period presented. The assets and liabilities of the combining
entities are recognised at their carrying amounts in the financial statements.
No adjustments are made to reflect fair values or recognise any new assets or
liabilities, except where necessary to align accounting policies.
Any consideration transferred is recognised at its carrying amount. The
difference between the consideration transferred and the carrying amount of
the net assets acquired is recognised in equity.
Investments in subsidiaries
Investments in subsidiaries in the Statement of Financial Position of the
Company are recorded at cost less provision for impairments. All transactions
between the Company and its subsidiary undertakings are classified as related
party transactions for the Company accounts and are eliminated on
consolidation.
Investments in associates
Associates are entities over which the Group has significant influence, but
does not control, generally accompanied by a shareholding of between 20 per
cent and 50 per cent of the voting rights.
Before the acquisition of Pollen Street Limited by the Company, Pollen Street
Limited acquired carried interest rights in two Private Equity funds as part
of the Combination on 30 September 2022. The rights are in the form of
partnership participations in carried interest partnerships. The Group has 25
per cent of the total interests in these partnerships. The Group has in excess
of 20 per cent participation and therefore is considered to have significant
influence over the partnerships and the partnerships are considered to be an
associate.
The Directors also consider any influence that the Group has in the set up of
any new carried interest partnerships in order to assess the power to control
them. The Group has up to 25 per cent of the total interests in these
partnerships. It was determined that the carried interest partnerships were
set up on behalf of the fund investors, and that on balance, the Group does
not control the carried interest partnerships. Where the Group has in excess
of 20 per cent of LP interest in the carried interest partnership, the Group
is considered to have significant influence. It was therefore determined that
these carried interest partnerships are also accounted for as associates.
These carried interest partnerships (including associates and contract assets)
are presented in the 'Carried interest' line on the Consolidated Statement of
Financial Position; and income from the carried interest partnerships is
presented in the 'Carried interest and performance fee income' line on the
Consolidated Statement of Profit or Loss and Other Comprehensive Income.
The key judgemental areas for the accounting of carried interest partnerships
are set out in Note 3, Significant accounting estimates and judgements.
For the underlying entities or funds, the Directors consider the nature of the
relationships between the Group, the underlying entities or funds and the
investors. The Directors also consider any influence that the Group has in the
set up of the underlying entities or funds in order to assess the power to
control the underlying entities or funds. It was determined that the
underlying entities or funds were set up for the investors, and that on
balance, the Group does not control the underlying entities or funds.
The Group also holds more than 20 per cent of interest in certain underlying
entities or funds. The Group elects to hold these investments in associates at
Fair Value Through Profit or Loss ("FVTPL"). This treatment is permitted by
IAS 28 Investments in Associates and Joint Ventures, which permits investments
held by entities that are venture capital organisations, mutual funds or
similar entities to be excluded from its measurement methodology requirements
where those investments are designated, upon initial recognition, as at FVTPL
and accounted for in accordance with IFRS 9. These underlying entities or
funds are presented in the 'Investment Assets held at fair value through
profit or loss' line on the Consolidated Statement of Financial Position.
Changes in fair value of these entities or funds are presented in the 'Gains
on Investment Assets held at fair value' on the Consolidated Statement of
Profit or Loss and Other Comprehensive Income.
Business model assessment
The Group determines the business model for managing financial assets at a
portfolio level, as this best reflects how those assets are grouped and
managed in practice to achieve the Group's cash flow objectives. That is,
whether the Group's objective is solely to collect the contractual cash flows
from the assets or is to collect both the contractual cash flows and cash
flows arising from the sale of assets. If neither of these are applicable,
then the financial assets are classified and measured at FVTPL.
The assessment includes:
· the stated policies and objectives for the
portfolio and the operation of those policies in practice, including whether
the strategy focuses on earning contractual interest revenue, maintaining a
particular interest rate profile, matching duration of the financial assets to
the duration of the liabilities that are funding those assets or realising
cash flows through the sale of assets;
· past experience on how the cash flows for these
assets were collected;
· how the performance of the portfolio is evaluated
and reported;
· the risks that affect the performance of the
business model (and the financial assets held within that business model) and
how those risks are managed; and
· the frequency, volume and timing of deployment in
prior years, the reasons for such deployment and expectations about future
deployment activity. However, information about deployment activity is not
considered in isolation, but as part of an overall assessment of how the
stated objective for managing the financial assets is achieved and how
cashflows are realised.
Assessment of whether contractual cash flows are solely payments of principal
and interest
For the purposes of this assessment, "principal" is defined as the fair value
of the financial asset on initial recognition. "Interest" is defined as
consideration for the time value of money, for the credit risk associated with
the principal amount outstanding during a particular period of time and for
other basic lending risks and costs (e.g. liquidity risk and administrative
costs), as well as a reasonable profit margin.
In assessing whether the contractual cash flows are solely payments of
principal and interest, the contractual terms of the instrument are
considered. This includes assessing whether the financial asset contains a
contractual term that could change the timing or amount of contractual cash
flows such that it would not meet this condition. In making the assessment the
following features are considered:
· contingent events that would change the amount
and timing of cash flows;
· leverage features;
· prepayment and extension terms;
· terms that limit the Group's claim to cash flows
from specified assets, e.g. non-recourse asset arrangements; and
· features that modify consideration for the time
value of money, e.g. periodic reset of interest rates.
Classification and measurement
Financial assets and financial liabilities are recognised in the Consolidated
Statement of Financial Position when the Group becomes a party to the
contractual provisions of the instrument. The Group shall offset financial
assets and financial liabilities if it has a legally enforceable right to set
off the recognised amounts and interests and intends to settle on a net basis.
Financial assets and liabilities are derecognised when the Group settles its
obligations relating to the instrument.
Classification and measurement - Financial assets
IFRS 9 contains a classification and measurement approach for debt instruments
that reflects the business model in which assets are managed and their cash
flow characteristics. This is a principle-based approach and applies one
classification approach for all types of debt instruments. For debt
instruments, two criteria are used to determine how financial assets are
classified and measured:
· the entity's business model (i.e. how an entity
manages its debt Instruments in order to generate cash flows by collecting
contractual cash flows, selling financial assets or both); and
· the contractual cash flow characteristics of the
financial asset (i.e. whether the contractual cash flows are solely payments
of principal and interest).
A debt instrument is measured at amortised cost if it meets both of the
following conditions and is not designated as at FVTPL:
a) it is held within a business model whose objective is
to hold assets to collect contractual cash flows; and
b) its contractual terms give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal
amount outstanding.
IFRS 9 details the classification and measurement approach for assets measured
at fair value through other comprehensive income ("FVOCI") if it meets both of
the following conditions and is not designated as at FVTPL:
a) it is held within a business model whose objective is
achieved by both collecting contractual cash flows and selling financial
assets; and
b) its contractual terms give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal
amount outstanding.
Equity instruments and derivatives are measured at FVTPL, unless they are not
held for trading purposes, in which case an irrevocable election can be made
on initial recognition to measure them at FVOCI with no subsequent
reclassification to profit or loss. This election is made on an investment by
investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as
described above are measured at FVTPL.
All equity positions are measured at FVTPL. Financial assets measured at FVTPL
are recognised in the balance sheet at their fair value. Fair value gains and
losses together with interest coupons and dividend income are recognised in
the Consolidated Statement of Profit or Loss and Other Comprehensive Income
within Gains on Investment Assets held at fair value in the period in which
they occur. The fair values of assets and liabilities traded in active markets
are based on current bid and offer prices respectively. If the market is not
active the Group establishes a fair value by using valuation techniques. In
addition, on initial recognition the Group may irrevocably designate a
financial asset that otherwise meets the requirements to be measured at
amortised cost or at FVOCI as FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
The Group does not hold any FVOCI assets.
Classification and measurement - Financial liabilities
Financial liabilities are classified and subsequently measured at amortised
cost, except for:
· Financial liabilities at fair value through
profit or loss: this classification is applied to derivatives, financial
liabilities held for trading and other financial liabilities designated as
such at initial recognition. Gains or losses on financial liabilities
designated at fair value through profit or loss are presented partially in
other comprehensive income (the amount of change in the fair value of the
financial liability that is attributable to changes in the credit risk of that
liability, which is determined as the amount that is not attributable to
change in market conditions that give rise to market risk) and partially in
profit or loss (the remaining amount of change in the fair value of the
liability). This is unless such a presentation would create, or enlarge, an
accounting mismatch, in which case the gains and losses attributable to
changes in the credit risk of the liability are also presented in the
Consolidated Statement of Profit or Loss and Other Comprehensive Income.
· Financial liabilities arising from the transfer
of financial assets which did not qualify for derecognition, whereby a
financial liability is recognised for the consideration received for the
transfer. In subsequent years, the Group recognises any expense incurred on
the financial liability.
· Financial guarantee contracts and loan
commitments.
Credit Assets at amortised cost
Loans are initially recognised at a carrying value equivalent to the funds
advanced to the borrower plus the cost of acquisition fees and transaction
costs. After initial recognition loans are subsequently measured at amortised
cost using the effective interest rate method ("EIRM") less expected credit
losses (see Note 3).
Expected credit loss allowance for financial assets measured at amortised cost
The credit impairment charge or release in the Consolidated Statement of
Profit or Loss and Other Comprehensive Income represents the change in
expected credit losses which are recognised for loans and advances to
borrowers, other financial assets held at amortised cost.
IFRS 9 applies a single impairment model to all financial instruments subject
to impairment testing. Impairment losses are recognised on initial
recognition, and at each subsequent reporting period, even if the loss has not
yet been incurred. In addition to past events and current conditions,
reasonable and supportable forecasts affecting collectability are also
considered when determining the amount of impairment in accordance with IFRS
9.
At initial recognition, allowance is made for expected credit losses resulting
from default events that are possible within the next 12 months (12-month
expected credit losses). In the event of a significant increase in credit
risk, allowance (or provision) is made for expected credit losses resulting
from all possible default events over the expected life of the financial
instrument (lifetime expected credit losses). Financial assets where 12-month
expected credit losses are recognised are considered to be Stage 1; financial
assets which are considered to have experienced a significant increase in
credit risk are in Stage 2; and financial assets which have defaulted or are
otherwise considered to be credit-impaired are allocated to Stage 3. Stage 2
and Stage 3 are based on lifetime expected credit losses.
The measurement of expected credit loss ("ECL"), is primarily based on the
product of the instrument's probability of default ("PD"), loss given default
("LGD") and exposure at default ("EAD"), taking into account the value of any
collateral held or other mitigants of loss and including the impact of
discounting using the EIR.
· The PD represents the likelihood of a borrower
defaulting on its financial obligation, either over the next 12 months ("12M
PD"), or over the remaining lifetime ("Lifetime PD") of the obligation.
· EAD is based on the amounts the Group expects to
be owed at the time of default, over the next 12 months or over the remaining
lifetime. For example, for a revolving commitment, the Group includes the
current drawn balance plus any further amount that is expected to be drawn up
to the current contractual limit by the time of default, should it occur. The
EAD is discounted back to the reporting date using the EIR determined at
initial recognition.
· LGD represents the Group's expectation of the
extent of loss on a defaulted exposure. LGD varies by type of counterparty,
type and seniority of claim and availability of collateral or other credit
support. LGD is expressed as a percentage loss per unit of EAD. LGD is
calculated on a 12-month or lifetime basis, where 12-month LGD is the
percentage of loss expected to be made if the default occurs in the next 12
months and Lifetime LGD is the percentage of loss expected to be made if the
default occurs over the remaining expected lifetime of the loan ("Lifetime
LGD").
The ECL is determined by estimating the PD, LGD and EAD for each individual
exposure or collective segment. These three components are multiplied together
and adjusted for the likelihood of survival (i.e. the exposure has not prepaid
or defaulted in an earlier month). This effectively calculates an ECL, which
is then discounted back to the reporting date and summed. The discount rate
used in the ECL calculation is the original EIR or an approximation thereof.
The Lifetime PD is developed by applying a maturity profile to the current
12-month PD. The maturity profile looks at how defaults develop on a portfolio
from the point of initial recognition throughout the lifetime of the loans.
The maturity profile is based on historical observed data and is assumed to be
the same across all assets within a portfolio and credit grade band where
supported by historical analysis. The 12-month and lifetime EADs are
determined based on the expected payment profile, which varies by product
type:
· For amortising products and bullet repayment
loans, this is based on the contractual repayments owed by the borrower over a
12-month or lifetime basis. This is also adjusted for any expected
overpayments made by a borrower. Early repayment/refinance assumptions are
also incorporated into the calculation.
· For revolving products, the EAD is predicted by
taking current drawn balance and adding a "credit conversion factor" which
allows for the expected drawdown of the remaining limit by the time of
default. These assumptions vary by product type and current limit utilisation
band, based on analysis of the Group's recent default data.
The 12-month and lifetime LGDs are determined based on the factors which
impact the recoveries made post default. These vary by product type.
· For secured products, this is primarily based on
collateral type and projected collateral values, historical discounts to
market/book values due to forced sales, time to repossession and recovery
costs observed.
· For unsecured products, LGDs are typically set at
product level due to the limited differentiation in recoveries achieved across
different borrowers. These LGDs are influenced by collection strategies,
including contracted debt sales and price.
The main difference between Stage 1 and Stage 2 is the respective PD horizon.
Stage 1 estimates use a maximum of a 12-month PD, while Stage 2 estimates use
a lifetime PD. The main difference between Stage 2 and Stage 3 is that Stage 3
is effectively the point at which there has been a default event. For
financial assets in Stage 3, lifetime ECL continues to be recognised but now
recognises interest income on a net basis. This means that interest income is
calculated based on the gross carrying amount of the financial asset less ECL.
Stage 3 estimates continue to leverage existing processes for estimating
losses on impaired loans, however, these processes are updated to reflect the
requirements of IFRS 9, including the requirement to consider multiple
forward-looking scenarios using independent third-party economic information.
Movements between Stage 1 and Stage 2 are based on whether an instrument's
credit risk as at the reporting date has increased significantly relative to
the date it was initially recognised. Where the credit risk subsequently
improves such that it no longer represents a significant increase in credit
risk since origination, the asset is transferred back to Stage 1.
In assessing whether a borrower has had a significant increase in credit risk,
the following indicators are considered:
· Significant change in collateral value (secured
facilities only) which is expected to increase the risk of default;
· Actual or expected significant adverse change in
operating results of the borrower or performance of collateral;
· Significant adverse changes in business,
financial and/or economic conditions in the market in which the borrower
operates;
· Actual or expected forbearance or restructuring;
· Significant increase in credit spread, where this
information is available; and
· Early signs of cashflow/liquidity problems such
as delay in servicing of payables.
However, as a backstop, unless identified at an earlier stage, the credit risk
of financial assets is deemed to have increased significantly when repayments
are more than 30 days past due. Movements between Stage 2 and Stage 3 are
based on whether financial assets are credit impaired as at the reporting
date. IFRS 9 contains a rebuttable presumption that default occurs no later
than when a payment is 90 days past due. The Group uses this 90-day backstop
for all its assets except for UK second charge mortgages, where the Group has
assumed a backstop of 180 days past due as mortgage exposures more than 90
days past due, but less than 180 days, typically show high cure rates and this
aligns to the Group's risk management practices. Assets can move in both
directions through the stages of the impairment model.
In assessing whether a borrower is credit-impaired, the following qualitative
indicators are considered:
· Whether the borrower is in breach of financial
covenants, for example where concessions have been made by the lender relating
to the borrower's financial difficulty or there are significant adverse
changes in business, financial or economic conditions on which the borrower
operates;
· Where the credit risk has increased, the
remaining lifetime PD at the reporting date is assessed in comparison to the
residual lifetime PD expected at the reporting date when the exposure was
first recognised; and
· Any cases of forbearance.
The criteria above have been applied to all Credit Assets at amortised cost
held by the Group and are consistent with the definition of default used for
internal credit risk management purposes. The default definition has been
applied consistently to model the PD, EAD and LGD throughout the Group's
expected credit loss calculations.
Inputs into the assessment of whether a financial instrument is in default and
their significance may vary over time to reflect changes in circumstances.
Under IFRS 9, when determining whether the credit risk (i.e. the risk of
default) on a financial instrument has increased significantly since initial
recognition, the Group considers all reasonable and supportable information
that is relevant and available without undue cost or effort. This includes
both quantitative and qualitative information, together with analysis based on
historical experience, credit assessments and forward-looking information.
The measurement of expected credit losses for each stage and the assessment of
significant increases in credit risk considers information about past events
and current conditions as well as reasonable and supportable forward-looking
information. A "Base case" view of the future direction of relevant economic
variables and a representative range of other possible forecasts scenarios
have been developed. The process has involved developing two additional
economic scenarios and considering the relative probabilities of each outcome.
The base case represents a most likely outcome and is aligned with information
used for other purposes, such as strategic planning and budgeting. The number
of scenarios and their attributes are reassessed at each reporting date. All
of the portfolios of the Group use one positive, one optimistic and one
downside scenario. These scenario weightings are determined by a combination
of statistical analysis and expert judgement, taking account of the range of
possible outcomes each chosen scenario is representative of.
The estimation and application of forward-looking information requires
significant judgement. PD, LGD and EAD inputs used to estimate Stage 1 and
Stage 2 credit loss allowances, are modelled and adjusted based on the
macroeconomic variables (or changes in macroeconomic variables) that are most
closely correlated with credit losses in the relevant portfolio. The Group has
utilised macroeconomic scenarios prepared and provided by Oxford Economics
("Oxford"). Oxford combines two decades of forecast data with the quantitative
assessment of the current risks facing the global and domestic economy to
produce robust forward-looking distributions for the economy. Oxford construct
three alternative scenarios at specific percentile points in the distribution.
In any distribution, the probability of a given discrete scenario is close to
zero. Oxford produces a probability distribution of potential macroeconomic
outcomes. For IFRS 9 purposes, the Group selects a finite set of discrete
scenarios (e.g. Base, Upside and Downside) positioned at specified percentile
points within that distribution. As an individual percentile point has
negligible probability in a continuous distribution, each selected scenario is
treated as representative of a range of outcomes of similar severity around
that percentile. The probability weight applied to each scenario therefore
reflects the probability mass of that range (i.e. the "bucket" of outcomes the
scenario represents). Scenario weights are calibrated so that the probability
weights across all selected scenarios sum to 100 per cent. Where a greater
number of scenarios is used, the distribution is split into more (and
narrower) buckets, and each individual scenario will therefore carry a smaller
probability weight. This allows the probabilities to be calculated according
to whichever subset of scenarios have been chosen for use in the ECL
calculation. Oxford updates these scenarios on a quarterly basis to reflect
changes to the macroeconomic environment. The Group updates the scenarios
during the year if economic conditions change materially. Oxford selects the
scenarios to represent a broadly fixed probability within the distribution of
potential outcomes. As such the Group has maintained the probability of each
scenario at a broadly constant level despite the changing macroeconomic
environment. The Base case is given a 40 per cent weighting and the downside
and upside a 30 per cent weighting each, which is unchanged from the prior
year.
As with any economic forecasts, the projections and likelihoods of occurrence
are subject to a high degree of inherent uncertainty and therefore the actual
outcomes may be significantly different to those projected. The Group
considers these forecasts to represent its best estimate of the possible
outcomes and has analysed the non-linearities and asymmetries within the
Group's different portfolios to establish that the chosen scenarios are
appropriately representative of the range of possible scenarios.
Other forward-looking considerations not otherwise incorporated within the
above scenarios, such as the impact of any regulatory, legislative or
political changes, have also been considered, but no adjustment has been made
to the ECL for such factors. This is reviewed and monitored for
appropriateness at each reporting date.
Expected credit loss allowance for receivables
Receivables consist of trade and other debtor balances and prepayments and
accrued income. Trade receivables balances are represented by fees receivable
for investment fund management and advisory services provided during the year
to the Group's customers. The Group's customers are funds that the Group
manages or advises. As such, the Group has detailed and up-to-date information
on the financial position and outlook of its counterparties. Receivable
balances are generally collected on a monthly or quarterly basis and are
therefore short-term in nature. The Group applies a simplified approach in
calculating ECLs and recognises a loss allowance based on lifetime ECLs at
each reporting date. Given the historic rate of recoverability is 100 per cent
and the absence of reasons to believe the recoverability pattern will change,
management's assessment is that ECL calculated under IFRS 9 would be
immaterial at the end of the current and previous reporting period. Management
will continue to assess the recoverability at each reporting date for changes
in the circumstances surrounding the recoverability of the trade and other
receivables, and recognise an expected credit loss allowance when appropriate.
Write-off policy for financial assets measured at amortised cost
A loan or advance is normally written off, either partially or in full,
against the related allowance when the proceeds from realising any available
security have been received or there is no realistic prospect of recovery and
the amount of the loss has been determined. Subsequent recoveries of amounts
previously written off decrease the amount of impairment losses recorded in
the Consolidated Statement of Profit or Loss and Other Comprehensive Income .
Modification of loans
The Group sometimes renegotiates or otherwise modifies the contractual cash
flows of loans to customers. When this happens, the Group assesses whether or
not the new terms are substantially different to the original terms. The Group
does this by considering, among others, the following factors:
· if the borrower is in financial difficulty,
whether the modification merely reduces the contractual cash flows to amounts
the borrower is expected to be able to pay;
· whether any substantial new terms are introduced,
such as a profit share/equity-based return that substantially affects the risk
profile of the loan;
· significant extension of the loan term when the
borrower is not in financial difficulty;
· significant change in the interest rate;
· change in the currency the loan is denominated
in; and
· insertion of collateral, other security or credit
enhancements that significantly affect the credit risk associated with the
loan.
If the terms are substantially different, the Group derecognises the original
financial asset and recognises a new asset at fair value and recalculates a
new EIR for the asset. The date of renegotiation is consequently considered to
be the date of initial recognition for impairment calculation purposes,
including for the purpose of determining whether a significant increase in
credit risk has occurred. However, the Group also assesses whether the new
financial asset recognised is deemed to be credit-impaired at initial
recognition, especially in circumstances where the renegotiation was driven by
the debtor being unable to make the originally agreed payments. Differences in
the carrying amounts are also recognised in the Consolidated Statement of
Profit or Loss and Other Comprehensive Income as a gain or loss on
derecognition. If the terms are not substantially different, the renegotiation
or modification does not result in derecognition, and the Group recalculates
the gross carrying amount based on the revised cash flows of the financial
asset and recognises a modification gain or loss in the Consolidated Statement
of Profit or Loss and Other Comprehensive Income. The new gross carrying
amount is recalculated by discounting the modified cash flows at the original
EIR (or credit-adjusted EIR for purchased or originated credit-impaired
financial assets).
Modification of financial assets
The Group sometimes modifies the terms of loans provided to customers due to
commercial renegotiations, or for distressed loans, with a view to maximising
recovery.
Such restructuring activities include extended payment term arrangements,
payment holidays and payment forgiveness. Restructuring policies and practice
are based on indicators or criteria which, in the judgement of management,
indicate that payment will most likely continue. These policies are kept under
continuous review. Restructuring is most commonly applied to term loans.
The risk of default of such assets after modification is assessed at the
reporting date and compared with the risk under the original terms at initial
recognition, when the modification is not substantial and so does not result
in derecognition of the original assets. The Group monitors the subsequent
performance of modified assets. The Group may determine that the credit risk
has significantly improved after restructuring, so that the assets are moved
from Stage 2 or Stage 3.
Collateral and other credit enhancements
The Group employs a range of policies to mitigate credit risk. The most common
of these is accepting collateral for funds advanced. The Group has internal
policies of the acceptability of specific classes of collateral or credit risk
mitigation.
The Group prepares a valuation of the collateral obtained as part of the loan
origination process. This assessment is reviewed periodically. The principal
collateral types for loans and advances are:
· mortgages over residential properties;
· security over our borrowers receivables;
· margin agreement for derivatives, for which the
Group has also entered into master netting agreements;
· charges over business assets such as premises,
inventory and accounts receivable; and
· charges over financial instruments such as debt
securities and equities.
Longer-term finance and lending to corporate entities are generally secured;
revolving individual credit facilities are generally unsecured.
Collateral held as security for financial assets other than loans and advances
depends on the nature of the instrument. Derivatives are also generally
collateralised, such as collateralised debt obligations, in order to provide
collateral as a form of security for the obligations arising from the
derivative.
The Group closely monitors collateral held for financial assets considered to
be credit-impaired, as it becomes more likely that the Group will take
possession of collateral to mitigate potential credit losses.
Derecognition other than a modification
Financial assets, or a portion thereof, are derecognised when the contractual
rights to receive the cash flows from the assets have expired, or when they
have been transferred and either (i) the Group transfers substantially all the
risks and rewards of ownership, or (ii) the Group neither transfers nor
retains substantially all the risks and rewards of ownership and the Group has
not retained control.
The Group enters into transactions where it retains the contractual rights to
receive cash flows from assets but assumes a contractual obligation to pay
those cash flows to other entities and transfers substantially all of the
risks and rewards. These transactions are accounted for as "pass-through"
transfers that result in derecognition if the Group:
· has no obligation to make payments unless it
collects equivalent amounts from the assets;
· is prohibited from selling or pledging the
assets; and
· has an obligation to remit any cash it collects
from the assets without material delay.
Derecognition
Financial liabilities are derecognised when they are extinguished (i.e. when
the obligation specified in the contract is discharged, cancelled or expires).
Different terms, as well as substantial modifications of the terms of existing
financial liabilities, are accounted for as an extinguishment of the original
financial liability and the recognition of a new financial liability. The
terms are substantially different if the discounted present value of the cash
flows under the new terms, including any fees paid net of any fees received
and discounted using the original EIR, is at least 10 per cent different from
the discounted present value of the remaining cash flows of the original
financial liability. In addition, other qualitative factors, such as the
currency that the instrument is denominated in, changes in the type of
interest rate, new conversion features attached to the instrument and change
in covenants are also taken into consideration. If an exchange of debt
instruments or modification of terms is accounted for as an extinguishment,
any costs or fees incurred are recognised as part of the gain or loss on the
extinguishment. If the exchange or modification is not accounted for as an
extinguishment, any costs or fees incurred adjust the carrying amount of the
liability and are amortised over the remaining term of the modified liability.
Investments held at fair value through profit or loss
The investments held at FVTPL include Equity Assets and Credit Assets.
Equity Assets held at FVTPL are valued in accordance with the International
Private Equity and Venture Capital Valuation Guidelines ("IPEVCV") effective 1
January 2019 with the latest update in December 2025 as recommended by the
British Private Equity and Venture Capital Association.
Equity Assets are instruments that have equity-like returns; that is,
instruments that do not contain a contractual obligation to pay and that
evidence a residual interest in the issuer's net assets. Examples of equity
instruments include ordinary shares or investments in Private Equity funds
managed or advised by the Group. Investments into funds managed by the Group
are valued on the net asset value of each fund. The valuations reflect the
fair value of the Group's proportionate share of each investment as at the
reporting date.
Credit Assets at FVTPL consists of loans made to counterparties where the
contractual cash flows do not meet the requirements of the solely payments of
principal and interest test or are otherwise classified at fair value,
together with investments in Private Credit funds managed or advised by the
Group. See the section on Classification and measurement - Financial assets
earlier in this Note. Examples of credit instruments include credit
instruments where incremental cash flows are due contingent on certain events
occurring.
These Credit Assets at FVTPL are priced at their amortised cost value as a
proxy for the fair value, given that they are floating rate assets and
performing in line with expectations with limited credit risk.
Credit Assets at FVTPL also consists of investments in Private Credit Funds
managed by the Group and are valued based off the net asset value of each
fund. The valuations typically reflect the fair value of the Group's
proportionate share of each investment as at the reporting date.
Purchases and sales of unquoted investments are recognised when the contract
for acquisition or sale becomes unconditional.
IFRS 13 requires the Group to classify its financial instruments held at fair
value using a hierarchy that reflects the significance of the inputs used in
the valuation methodologies. These are as follows:
· Level 1 - quoted prices in active markets for
identical investments.
· Level 2 - other significant observable inputs
(including quoted prices for similar investments, interest rates, prepayments,
credit risk, etc.).
· Level 3 - significant unobservable inputs
(including the Group's own assumptions in determining the fair value of
investments).
An investment is always categorised as Level 1, 2 or 3 in its entirety. In
certain cases, the fair value measurement for an investment may use a number
of different inputs that fall into different levels of the fair value
hierarchy. The assessment of the significance of a particular input to the
fair value measurement requires judgement and is specific to the investment.
The gain on fair value is shown in the 'Gains on Investment Assets held at
fair value' line on the Consolidated Statement of Profit or Loss and Other
Comprehensive Income.
Fixed assets
Fixed assets are shown at cost less accumulated depreciation. Depreciation is
calculated by the Group on a straight-line basis by reference to the original
cost, estimated useful life and residual value. Cost includes the original
purchase price and the costs attributable to bringing the asset to its working
condition for its intended use. The period of estimated useful life for this
purpose is up to 10 years. Residual values are assumed to be nil.
Plant and equipment is stated at historical cost less accumulated depreciation
and impairment. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Depreciation is charged so as to allocate the cost of assets less their
residual value over their estimated useful lives, using the straight-line
method.
Depreciation is provided on the following basis:
Fixtures and fittings 3
years
Office equipment
3 years
Electric vehicles
5 years
Leasehold improvements 10 years
The assets' residual values, useful lives and depreciation methods are
reviewed, and adjusted prospectively if appropriate, or if there is an
indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount and are recognised in the Consolidated Statement of Profit
or Loss and Other Comprehensive Income.
Goodwill
Goodwill is initially measured at cost, which constitutes the excess of the
aggregate of the consideration transferred over the net identifiable assets
acquired and liabilities assumed. If the fair value of the net assets acquired
is in excess of the aggregate consideration transferred, the Group reassesses
whether it has correctly identified all of the assets acquired and all of the
liabilities assumed, and reviews the procedures used to measure the amounts to
be recognised at the acquisition date. If the reassessment still results in an
excess of the fair value of net assets acquired over the aggregate
consideration transferred, then the gain is recognised in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
After initial recognition, goodwill is measured at cost less any accumulated
impairment losses.
Goodwill is tested for impairment on an annual basis and whenever there is an
indication that the recoverable amount of a cash-generating unit ("CGU") is
less than its carrying amount. Any impairment loss recognised on the goodwill
is not reversed subsequently. For the purpose of impairment testing, goodwill
acquired in a business combination is, from the acquisition date, allocated to
each of the Group's CGUs or group of CGUs that are expected to benefit from
the combination, irrespective of whether other assets or liabilities of the
acquiree are assigned to those units. A CGU represents the lowest level at
which goodwill is monitored for internal management purposes.
Where goodwill has been allocated to a CGU and part of the operation within
that unit is disposed of, the goodwill associated with the disposed operation
is included in the carrying amount of the operation when determining the gain
or loss on disposal. Goodwill disposed in these circumstances is measured
based on the relative values of the disposed operation and the portion of the
CGU retained.
Intangibles
Intangible assets, which constitute acquired customer relationship assets
acquired from a business combination, are stated at cost less accumulated
amortisation and accumulated impairment losses. Intangible assets are assessed
at each reporting date when there are indicators of impairment.
Amortisation is calculated using the straight-line method to allocate the
amortised amount of the assets to their residual values over their estimated
useful lives.
Leases
The Group assesses at contract inception whether a contract is, or contains, a
lease. That is, if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all
leases, except for short-term leases and leases of low-value assets. The Group
recognises lease liabilities to make lease payments and lease assets
representing the right to use the underlying assets.
Lease assets
The Group recognises lease assets at the commencement date of the lease (i.e.,
the date the underlying asset is available for use). Lease assets are measured
at cost, less any accumulated depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The cost of lease assets includes
the amount of lease liabilities recognised, initial direct costs incurred, an
estimate of costs to be incurred in restoring the underlying asset to the
condition required by the terms and conditions of the lease and lease payments
made at or before the commencement date less any lease incentives received.
Lease assets are depreciated on a straight-line basis over the shorter of the
lease term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Group at the end of the
lease term or the cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated useful life of the asset.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease
term. The lease payments include fixed payments less any lease incentives
receivable and amounts expected to be paid under residual value guarantees.
The lease payments also include payments of penalties for terminating the
lease, if the lease term reflects the Group exercising the option to
terminate.
In calculating the present value of lease payments, the Group uses its
incremental borrowing rate at the lease commencement date because the interest
rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change
in the lease term, a change in the lease payments (e.g., changes to future
payments resulting from a change in an index or rate used to determine such
lease payments) or a change in the assessment of an option to purchase the
underlying asset.
Carried interest receivable
Carried interest represents unrealised and realised shares of fund profits
from holdings in carried interest partnerships where the Group receives
variable returns as an incentive for management of the underlying funds. The
realised amount is the amount actually received. For the unrealised
performance, the amount recognised is determined against an assessment of the
underlying investor returns exceeding an agreed threshold or hurdle, and is
either accounted for under IFRS 9 (for carried interest partnerships acquired
as part of the Combination) or under IFRS 15 (for non-acquired carried
interest partnerships).
Movements in fair value, and amounts accrued as revenue under IFRS 15, are
shown in the 'Carried interest and performance fee income' line on the
Consolidated Statement of Profit or Loss and Other Comprehensive Income, with
the outstanding balance shown in the 'Carried interest' line on the
Consolidated Statement of Financial Position and are typically presented as
non-current assets unless they are expected to be received within the next 12
months.
Cash and cash equivalents
Cash and cash equivalents, which are presented as a single class of asset on
the Consolidated Statement of Financial Position, comprise cash at bank,
including cash that is restricted and held in reserve.
Financial liabilities
Financial liabilities are classified according to the substance of the
contractual arrangements entered into.
Derivatives
The Group uses foreign exchange spot, forward and swap transactions to hedge
foreign exchange movements in non-GBP assets or liabilities in order to
minimise foreign exchange exposure.
Derivative financial instruments are initially measured at fair value on the
date on which the derivative contract is entered into and are subsequently
measured at fair value at each reporting date. The Group does not designate
derivatives as cash flow hedges and so fair value movements are recognised in
the 'Administration costs' line on the Consolidated Statement of Profit or
Loss and Other Comprehensive Income. The fair value of unsettled forward
currency contracts is calculated by reference to the market for forward
contracts with similar maturities.
Interest-bearing borrowings
Interest-bearing borrowings are initially recognised at a carrying value
equivalent to the proceeds received net of issue costs associated with the
borrowings. After initial recognition, interest-bearing borrowings are
subsequently measured at amortised cost using the effective interest rate
("EIR") method.
Finance costs
Finance costs are accrued on the EIR basis and are presented as a separate
line on the Consolidated Statement of Profit or Loss and Other Comprehensive
Income.
Dividends
Dividends to shareholders are recognised in the period in which they are paid.
Income
The Group has four primary sources of income: management fee income, carried
interest and performance fee income, interest income on Credit Assets held at
amortised cost, and gains on Investment Assets held at fair value.
Management fee income includes fees charged by the Group to the funds that it
manages for the provision of investment fund management and advisory services,
which are treated as a single performance obligation. The parties to
agreements for fund management services comprise the Group and the investors
of each fund. Accordingly, the group of investors of each fund are identified
as a customer for accounting purposes.
Management fees are earned over a period and are recognised on an accrual
basis in the same period in which the service is performed. Management fees
are based on an agreed percentage of either committed or invested capital,
depending on the fund and its life stage, in accordance with individual
management agreements or limited partnership agreements.
Income is measured based on the consideration specified in the contracts and
exclude amounts collected on behalf of third parties, discounts and value
added taxes.
For Private Equity managed funds, management fee income is charged from the
inception of the fund. Where an LP enters the fund as part of subsequent
closes "catch-up" management fee income is calculated and charged as if the LP
had entered the fund on first close. These management fees are earned over a
prior period where the provision of investment fund management and advisory
services has already been provided and the corresponding performance
obligation is satisfied. Therefore, these catch-up management fees are
recognised immediately in full. This is not applicable on Private Credit funds
given that management fee income is charged on invested capital, rather than
commitments.
Carried interest and performance fee income includes income recognised under
IFRS 15 from holdings in carried interest partnerships where the Group
receives variable returns as an incentive for the funds that it manages.
Carried interest represents a share of fund profits through the Group's
holdings in carried interest partnerships. The amount is determined by the
level of accumulated profits exceeding an agreed threshold or hurdle. The
carried interest income is recognised when the performance obligations are
expected to be met. Income is only recognised to the extent that it is highly
probable that there would not be a significant reversal of any accumulated
revenue recognised on the completion of a fund. The uncertainty of future fund
performance is reduced through the application of discounts in the calculation
of carried interest income. Performance fees are generally calculated as a
percentage of the appreciation in the net asset value of a fund above a
defined hurdle, and are recognised on an accrual basis when the fee amount can
be estimated reliably, and it is highly probable that it will not be subject
to significant reversal.
Management fees and performance fees are charged to the Investment Company by
the Asset Manager. These fees are shown in Note 4, operating segments.
However, they are eliminated on consolidation.
Interest income on Credit Assets held at amortised cost is generated from
loans originated by the Group. Interest from loans are recognised in the
Consolidated Statement of Profit or Loss and Other Comprehensive Income for
all instruments measured at amortised cost using the EIRM. The EIRM is a
method of calculating the amortised cost of a financial asset or financial
liability and of allocating the interest income or interest expense over the
relevant period. The EIR is the rate that exactly discounts estimated future
cash flows through the expected life of the financial instrument or, when
appropriate, a shorter period to the net carrying amount of the financial
asset or financial liability. When calculating the EIR, the Group takes into
account all contractual terms of the financial instrument, for example
prepayment options, but does not consider future credit losses. The
calculation includes all fees paid or received between parties to the contract
that are an integral part of the EIR, transaction costs and all other premiums
or discounts. Fees and commissions which are not considered integral to the
EIR model and deposit interest income are recognised on an accruals basis when
the service has been provided or received.
Gains on Investment Assets held at Fair Value include realised and unrealised
income on assets accounted for at fair value, including equity assets and
credit assets. Refer to the Investments held at fair value through profit or
loss section for further details.
Pensions
The Group makes contributions into employee personal pension schemes. Once the
contributions have been paid, the Group has no further payment obligations.
The contributions are recognised as an expense in the Consolidated Statement
of Profit or Loss and Other Comprehensive Income when they fall due. Amounts
not paid are shown in accruals as a liability in the Consolidated Statement of
Financial Position.
Share-based payments
The Group grants annual bonuses to its Executive Directors and other senior
employees some of which are deferred in accordance with the Group's
Remuneration Policy. Deferred awards may be used to acquire shares in Pollen
Street Group Limited (a Share-Based Award), or fund commitments into Pollen
Street managed funds (Co-Investment Opportunity) and are subject to malus and
clawback provisions.
The Share-Based Awards generally vest after three years, subject to the
opportunity for co-investment. The Co-Investment Opportunity permits the
employee to collect the deferred award early, either in shares or up front in
cash, provided they elect to apply the after-tax proceeds of the deferred
award into a fund managed by the Group that has a contractual duration of
longer than three years.
The Group accounts for Share-Based Awards as share-based payments. The awards
are considered to be compound financial instruments, because the employee has
the right to demand settlement in cash. The Group first measures the fair
value of the cash component, which is considered to be a cash-settled
share-based payment, and then measures the fair value of the equity component
taking into account that the counterparty must forfeit the right to receive
cash in order to receive the equity instrument, which is considered to be an
equity-settled share-based payment.
Segmental reporting
The Group has two segments: the Asset Manager segment and the Investment
Company segment. The primary revenue streams for the Asset Manager segment
consist of management fees and performance fees or carried interest arising
from managing Private Equity and Private Credit funds. The Investment Company
segment primarily consists of the Group Investment Assets and borrowings. The
primary revenue stream for the Investment Company segment is interest income
and fair value gains on Investments held at fair value.
The Asset Manager segment charges management and performance fees to the
Investment Company segment for managing the segment's assets. These fees are
shown in the segmental results. However, they are eliminated in the
consolidated financial statements. Refer to Note 4 for further details.
Taxation
Although the Company is incorporated and registered under the laws of
Guernsey, the Company elected to be UK resident for taxation purposes, and as
a result is non-tax resident in Guernsey.
Current income tax
Current income tax assets and liabilities are measured at the amount expected
to be recovered from or paid to the taxation authorities. The tax rates and
tax laws used to compute the amount are those that are enacted or
substantively enacted at the reporting date in the countries where the Group
operates and generates taxable income.
Current income tax relating to items recognised directly in equity is
recognised in equity and not in the Consolidated Statement of Profit or Loss
and Other Comprehensive Income. Management periodically evaluates positions
taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where
appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences,
except:
· when the deferred tax liability arises from the
initial recognition of goodwill or an asset or liability in a transaction that
is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; and
· in respect of taxable temporary differences
associated with investments in subsidiaries, associates and interests in joint
arrangements, when the timing of the reversal of the temporary differences can
be controlled and it is probable that the temporary differences will not
reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences,
the carry forward of unused tax credits and any unused tax losses. Deferred
tax assets are recognised to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences,
and the carry forward of unused tax credits and unused tax losses can be
utilised, except:
· when the deferred tax asset relating to the
deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at
the time of the transaction, affects neither the accounting profit nor taxable
profit or loss; and
· in respect of deductible temporary differences
associated with investments in subsidiaries, associates and interests in joint
arrangements, deferred tax assets are recognised only to the extent that it is
probable that the temporary differences will reverse in the foreseeable future
and taxable profit will be available against which the temporary differences
can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are reassessed at each
reporting date and are recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the period when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised
in Other Comprehensive Income ("OCI") or directly in equity.
Tax benefits acquired as part of a business combination, but not satisfying
the criteria for separate recognition at that date, are recognised
subsequently if new information about facts and circumstances change. The
adjustment is either treated as a reduction in goodwill (as long as it does
not exceed goodwill) if it was incurred during the measurement period or
recognised in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income.
The Group offsets deferred tax assets and deferred tax liabilities if and only
if it has a legally enforceable right to set off current tax assets and
current tax liabilities and the deferred tax assets and deferred tax
liabilities relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities which intend
either to settle current tax liabilities and assets on a net basis, or to
realise the assets and settle the liabilities simultaneously, in each future
period in which significant amounts of deferred tax liabilities or assets are
expected to be settled or recovered.
Sales tax
Expenses and assets are recognised net of the amount of sales tax, except:
· when the sales tax incurred on a purchase of
assets or services is not recoverable from the taxation authority, in which
case, the sales tax is recognised as part of the cost of acquisition of the
asset or as part of the expense item, as applicable; and
· when receivables and payables are stated with the
amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation
authority is included as part of receivables or payables in the Consolidated
Statement of Financial Position.
Expenses
All expenses are accounted for on an accruals basis.
Foreign currency
The financial statements have been prepared in Pounds Sterling because that is
the currency of the majority of the transactions during the year, so has been
selected as the presentational currency.
The liquidity of the Group is managed on a day-to-day basis in Pounds Sterling
as the Group's performance is evaluated in that currency. Therefore, the
Directors consider Pounds Sterling as the currency that most faithfully
represents the economic effects of the underlying transactions, events and
conditions and is therefore the functional currency.
Transactions involving foreign currencies are converted at the exchange rate
ruling at the date of the transaction. Foreign currency monetary assets and
liabilities are translated into Pounds Sterling at the exchange rate ruling on
the year-end date. Foreign exchange differences arising on translation would
be recognised in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income.
Receivables
Receivables do not carry any interest and are short term in nature. They are
initially stated at their nominal value and reduced by appropriate allowances
for expected credit losses (if any).
Payables
Payables represent amounts for goods and services provided to the consolidated
entity prior to the end of the financial year and which are unpaid. The
amounts are unsecured and are usually paid within 30 days of recognition.
Payables are non-interest-bearing and are initially stated at their nominal
value.
Shares
Ordinary and treasury shares are classified as equity. The costs of issuing or
acquiring equity are recognised in equity (net of any related income tax
benefit), as a reduction of equity on the condition that these are incremental
costs directly attributable to the equity transaction that otherwise would
have been avoided.
The costs of an equity transaction that is abandoned are recognised as an
expense. Those costs might include registration and other regulatory fees,
legal fees, accounting and other professional advisers, printing costs and
stamp duties.
Treasury shares have no entitlements to vote and are held directly by the
Company.
Significant accounting estimates and judgements
The UK-adopted International Accounting Standards requires the Group to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of income and
expenses during the reporting period. IFRS requires the Directors, in
preparing the Group's financial statements, to select suitable accounting
policies, apply them consistently and make judgements and estimates that are
reasonable. The Group's estimates and assumptions are based on historical
experience and expectations of future events and are reviewed on an ongoing
basis. Although these estimates are based on the Directors' best estimate of
the amount, actual results may differ materially from those estimates.
Estimates
The estimates of most significance to the financial statements are detailed
below. Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
Expected Credit loss allowance for financial assets measured at amortised cost
The calculation of the Group's ECL allowances and provisions against loan
commitments and guarantees under IFRS 9 is complex and involves the use of
significant judgement and estimation. Loan Impairment Provisions represent an
estimate of the losses incurred in the loan portfolios at the balance sheet
date. Individual impairment losses are determined as the difference between
the carrying value and the present value of estimated future cash flows,
discounted at the loans' original EIR. The calculation involves the
formulation and incorporation of multiple forward-looking economic conditions
into ECL to meet the measurement objective of IFRS 9, depending on a range of
factors such as changes in the economic environment in the UK. The most
significant factors are set out below.
Definition of default - The PD of an exposure, both over a 12-month period and
over its lifetime, is a key input to the measurement of the ECL allowance.
Default has occurred when there is evidence that the customer is experiencing
significant financial difficulty which is likely to affect the ability to
repay amounts due.
A number of the Group's loans are secured against underlying collateral. The
Directors do not consider the value of this collateral when assessing the
probability of default. However, the structure of certain lending arrangements
may improve the Group's ability to recover borrowings, even in cases of
heightened default risk.
The definition of default adopted by the Group is described in expected credit
loss allowance for financial assets measured at amortised cost above. The
Group has rebutted the presumption in IFRS 9 that default occurs no later than
when a payment is 90 days past due on some of its portfolio.
The lifetime of an exposure - To derive the PDs necessary to calculate the ECL
allowance it is necessary to estimate the expected life of each financial
instrument. A range of approaches has been adopted across different product
groupings including the full contractual life and taking into account
behavioural factors such as early repayments and refinancing. The Group has
defined the lifetime for each product by analysing the time taken for all
losses to be observed and for a material proportion of the assets to fully
resolve through either closure or write-off.
Significant increase in credit risk ("SICR") - Performing assets are
classified as either Stage 1 or Stage 2. An ECL allowance equivalent to 12
months' expected credit losses is established against assets in Stage 1;
assets classified as Stage 2 carry an ECL allowance equivalent to lifetime
expected credit losses. Assets are transferred from Stage 1 to Stage 2 when
there has been a SICR since initial recognition.
A number of the Group's loans are secured against underlying collateral. The
Directors do not consider the value of this collateral when assessing whether
there has been a significant increase in credit risk. However, the structure
of certain lending arrangements may improve the Group's ability to recover
borrowings, even in cases of heightened default risk, therefore influencing
whether there has been a SICR.
The Group uses a quantitative test together with qualitative indicators and a
backstop of 30 days past due for determining whether there has been a SICR.
The setting of precise trigger points combined with risk indicators requires
judgement. The use of different trigger points may have a material impact upon
the size of the ECL allowance.
Forward-looking information - IFRS 9 requires the incorporation of
forward-looking macroeconomic information that is reasonable and supportable,
but it provides limited guidance on how this should be performed. The
measurement of expected credit losses is required to reflect an unbiased
probability-weighted range of possible future outcomes.
In order to do this the Group uses a model to project a number of key
variables to generate future economic scenarios. These are ranked according to
severity of loss and three economic scenarios have been selected to represent
an unbiased and full loss distribution. They represent a "most likely outcome"
(the Base case scenario) and two, less likely, "outer" scenarios, referred to
as the "Upside" and "Downside" scenarios. These scenarios are used to produce
a weighted average PD for each product grouping which is used to calculate the
related ECL allowance. This weighting scheme is deemed appropriate for the
computation of unbiased ECL. Key scenario assumptions are set using external
economist forecasts, helping to ensure the IFRS 9 scenarios are unbiased and
maximise the use of independent information. Using externally available
forecast distributions helps ensure independence in scenario construction.
While key economic variables are set with reference to external distributional
forecasts, the overall narrative of the scenarios is aligned to the
macroeconomic risks faced by the Group at 31 December 2025.
The choice of alternative scenarios and probability weighting is a combination
of quantitative analysis and judgemental assessments, designed to ensure that
the full range of possible outcomes and material non-linearity are captured.
Paths for the two outer scenarios are benchmarked to the Base scenario and
reflect the economic risk assessment. Scenario probabilities reflect
management judgement and are informed by data analysis of past recessions,
transitions in and out of recession, and the current economic outlook. The key
assumptions made, and the accompanying paths, represent management's "best
estimate" of a scenario at a specified probability. Suitable narratives are
developed for the central scenario and the paths of the two outer scenarios.
It may be insufficient to use three scenarios in certain economic
environments. Additional analysis may be requested at management's discretion,
including the production of extra scenarios. We anticipate there will only be
limited instances when the standard approach will not apply. The Base case,
Upside and Downside scenarios are usually generated annually and those
described herein reflect the conditions in place at the balance sheet date and
are only updated during the period if economic conditions change
significantly.
The Group incorporates forward-looking information in its IFRS 9 ECL model
using macroeconomic scenarios prepared and provided by Oxford. In Oxford's
Base case scenario, the UK economy records growth of 1.0 per cent in 2026 and
1.4 per cent in 2027. The labour market recovers gradually, and the
unemployment rate falls to its recent decade-low of 4.0 per cent by 2032.
Supported by stronger sentiment, incomes and employment, residential house
prices pick-up faster in 2026. A sharp increase in consumption lifts financial
market sentiment from its current levels resulting in renewed gains in asset
prices.
The base case forecasts the unemployment rate to rise to around 5.0 per cent
in 2026, before gradually recovering towards 4.0 per cent by end-2032, with
the Bank of England base rate reducing to 2.5 per cent by 2029. In the mild
upside scenario, stronger global demand supports UK growth and a tighter
labour market, with unemployment falling to around 3.6 per cent by mid-2028;
inflationary pressures also re-emerge and the base rate rises to a new peak of
4.75 per cent in Q2 2026. In the downside scenario, unemployment increases
further, peaking at 6.9 per cent in mid-2028 and remaining elevated thereafter
(still around 5.5 per cent by end-2034); to counter the downturn, the base
rate falls more quickly to 1.8 per cent by December 2027.
The one-year forecast changes in key economic drivers are shown in the table
below.
See Note 8 for a breakdown of IFRS 9 provisioning.
As at 31 December 2025 Base Upside Downside
UK unemployment rate yearly change 0.60% 0.58% 0.59%
UK HPI yearly change 1.17% 1.32% 1.20%
UK Base Rate yearly change (0.50)% (0.63)% (0.63)%
As at 31 December 2024 Base Upside Downside
UK unemployment rate yearly change (0.03)% (0.67)% 1.07%
UK HPI yearly change 1.19% 3.20% (7.13)%
UK Base Rate yearly change (1.00)% 0.52% (1.85)%
Loss given default - referred to as LGD, represents the expectation of the
extent of loss on a defaulted exposure. LGD varies by type of counterparty,
type and seniority of claim and availability of collateral or other credit
support. LGD is expressed as a percentage loss per unit of exposure at the
time of default. LGD is calculated on a 12-month or lifetime basis, where
12-month LGD is the percentage of loss expected to be made if the default
occurs in the next 12 months and Lifetime LGD is the percentage of loss
expected to be made if the default occurs over the remaining expected lifetime
of the loan.
The 12-month and lifetime LGDs are determined based on the factors which
impact the recoveries made post default. These vary by product type:
· For secured products, this is primarily based on
collateral type and projected collateral values, historical discounts to
market/book values due to forced sales, time to repossession and recovery
costs observed.
· For unsecured products, LGDs are typically set at
product level due to the limited differentiation in recoveries achieved across
different borrowers. These LGDs are influenced by collection strategies,
including contracted debt sales and price.
Exposure at default - referred to as EAD, is based on the amounts expected to
be owed at the time of default, over the next 12 months or over the remaining
lifetime. IFRS 9 requires an assumed draw down profile for committed amounts.
Equity Asset valuation
The valuation of unquoted investments and investments for which there is an
inactive market is a key area of estimation and may cause material adjustment
to the carrying value of those assets and liabilities. The unquoted Equity
Assets are valued on a periodic basis using techniques including a market
multiple approach, costs approach and/or income approach. The valuation
process is collaborative, involving the finance and investment functions of
the Group with the final valuations being reviewed by the Valuation Committee,
which is a management-level Committee responsible for the oversight of the
valuation of investments. The techniques used include earnings multiples,
discounted cash flow analysis, the value of recent transactions and the net
asset value of the investment. The valuations often reflect a synthesis of a
number of different approaches in determining the final fair value estimate.
The individual approach for each investment will vary depending on relevant
factors that a market participant would take into account in pricing the
asset. These might include the specific industry dynamics, the Investee's
stage of development, profitability, growth prospects or risk as well as the
rights associated with the particular security.
Increases or decreases in any of the inputs in isolation may result in higher
or lower fair value measurements. Changes in fair value of all investments
held at fair value, which includes Equity Assets are recognised in the
Consolidated Statement of Profit or Loss and Other Comprehensive Income. On
disposal, realised gains and losses are also recognised in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income. Transaction costs
are included within gains or losses on investments held at fair value,
although any related interest income, dividend income and finance costs are
disclosed separately in the financial statements.
Sensitivity analysis has been performed on equity asset valuations in Note 9.
Impairment assessment for Goodwill
Goodwill is assessed for indicators of impairment at each reporting date and
whenever there is an indication that the recoverable amount of a
cash-generating unit ("CGU") is less than its carrying amount, and tested for
impairment annually. For the impairment test, goodwill is allocated to the CGU
or groups of CGUs which benefit from the synergies of the acquisition and
which represent the lowest level at which goodwill is monitored for internal
management purposes.
The recoverable amount of CGUs is determined based on the higher of
value-in-use and fair value less costs to sell. Key assumptions in the
discounted cash flow projections are prepared based on current economic
conditions and comprise an estimated long-term growth rate, the period over
which future cashflows have been forecast, the weighted average cost of
capital and estimated operating margins. Wherever possible, the inputs into
the discounted cash flow projections used for the impairment test of goodwill
are based on third party observable data.
Sensitivity analysis has been performed on the goodwill impairment assessment
in Note 12.
Carried interest
Carried interest represents unrealised and realised shares of fund profits
from holdings in carried interest partnerships where the Group receives
variable returns as an incentive for management of the underlying funds. The
realised amount is the amount actually received. For the unrealised
performance, the amount recognised is determined against an assessment of the
underlying investor returns exceeding an agreed threshold or hurdle, and is
either accounted for under IFRS 9 (for carried interest partnerships acquired
as part of the Combination) or under IFRS 15 (for non-acquired).
Movements in fair value, and amounts accrued as revenue under IFRS 15, are
shown in the 'Carried interest and performance fee income' line on the
Consolidated Statement of Profit or Loss and Other Comprehensive Income, with
the outstanding balance shown in the 'Carried interest' line on the
Consolidated Statement of Financial Position.
Carried interest at fair value is only recognised under IFRS 15 provided it
has been determined as being highly probable that there will not be a
significant reversal. The value of carried interest, under this method, has
been modelled by assessing the value of the assets in the fund as well as the
terms of the carried interest arrangements that the Group is a beneficiary of.
The value of the unrealised investments have been discounted to ensure that it
is highly probable that there will not be a significant reversal.
The discount applied for each fund depends on its stage and maturity profile,
and therefore recognises the de-risking of the income over time, taking into
account diversity of assets, whether there has been a recent market correction
and the expected average remaining holding period.
If the discount rates were unwound to give the notional carried interest due
to the Group based on unrealised fair value of investment in the relevant
funds this would result in additional carried interest income of £18.4
million (2024: £13.1 million) being recognised.
For carried interest accounted for under IFRS 9 and measured at fair value
through profit or loss, carried interest at fair value is modelled from the
value of the funds' investments and the amount that would be due to the Group
under the terms of the carried interest arrangements if the assets were
realised at these values. Carried interest includes an embedded option where
carried interest holders participate in gains but not losses of the fund
subject to certain hurdles. The value of this option has been modelled using a
variety of techniques, including the Black Scholes option valuation model and
scenario analysis.
Sensitivity analysis has been performed on carried interest valuations in Note
13.
Judgements
The critical judgements relate to the consolidation of Group companies, the
consolidation of fund investments and the accounting for carried interest
partnerships.
Consolidation of Group companies
Determining whether the Group has control of an entity is generally
straightforward when based on ownership of the majority of the voting capital.
However, in certain instances, this determination will involve significant
judgement, particularly in the case of structured entities where voting rights
are often not the determining factor in decisions over the relevant
activities. This judgement may involve assessing the purpose and design of the
entity. It will also often be necessary to consider whether the Group, or
another involved party with power over the relevant activities, is acting as a
principal in its own right or as an agent on behalf of others.
Consolidation of fund investments
It was assessed throughout the period whether the Group should consolidate
investments in funds managed or advised by the Group into the results of the
Group. Control is determined by the extent of which the Group has power over
the investee, exposure or rights to variable returns from its involvement with
the investee and the ability to use its power over the investee to affect the
amount of the investor's returns.
The Group has assessed the legal nature of the relationships between the
Group, the relevant fund, the General Partners and the Limited Partnerships.
This assessment included carrying out a control assessment of each Limited
Partnership in accordance with IFRS 10 to consider whether the Limited
Partnerships should be consolidated into the financial statements of the
Group. The Group has determined that control over the LPs ultimately resides
with the underlying fund majority investors and that the Group, through the
Asset Manager, acts as an agent to the underlying fund majority investors and
not as principal. The Group also determined that as the manager, the Group has
the power to influence the returns generated by the fund, but the Group's
interests typically represent only a small proportion of the total capital
within each fund. The Group has therefore concluded that the Group acts as an
agent, which is primarily engaged to act on behalf, and for the benefit, of
the Limited Partnerships rather than to act for its own benefit.
Accounting for carried interest partnerships
Carried interest represents unrealised and realised shares of fund profits
from holdings in carried interest partnerships where the Group receives
variable returns as an incentive for management of the underlying funds. The
amount is determined by the level of accumulated profits exceeding an agreed
threshold or hurdle. The rights are in the form of partnership interests in
carried interest partnerships. The Group has between 1 and 25 per cent of the
total interests in these partnerships.
The Group has undertaken a control assessment of each carried interest
partnership in accordance with IFRS 10 to consider whether they should be
consolidated into the Group's results. The Group has considered the nature of
the relationships between the Group, the fund, the fund investors, the carried
interest partnership and participants in the carried interest partnership. The
Group has determined that the power to control the carried interest
partnerships ultimately resides with the fund investors and that the Group is
therefore an agent and not a principal. This is because the purpose and design
of the carried interest partnerships and the carry rights in the fund are
determined at the outset by each fund's Limited Partnership Agreement ("LPA"),
which requires investor agreement and reflects investor expectations to
incentivise individuals to enhance performance of the underlying fund. While
the Group has some power over the carried interest partnerships, these powers
are limited and represent the best interests of all carried interest holders
collectively.
The Group has assessed the payments and the returns the carried interest
holders make and receive from their investment in carried interest and have
considered whether those carried interest holders, who are also employees of
the Group, were providing a service for the benefit of the Group or the
investors in the fund. The Group concluded that the carried interest
represents a separate relationship between the fund investors and the
individual employees and that the carried interest represents an investment
requiring the individuals to put their own capital at risk and that, after an
initial vesting period, continued rights to returns from the investment is not
dictated by continuation of employment. As a result of this, distributions
from these carried interest partnerships are not consolidated in the Group's
Consolidated Statement of Profit or Loss.
In addition, the Group has also considered the variability of returns for all
carried interest partnerships and in doing so have determined that the Group
is exposed to variable returns up to 25 per cent as at 31 December 2025, with
the main beneficiaries of the carried interest partnership variable returns
being the other participants. The Group concluded that the carried interest
partnership are not controlled by the Group and therefore should not be
consolidated.
The Group has also assessed whether the Group has significant influence over
the carried interest partnerships under IAS 28, Investments in Associates and
Joint Ventures. Where the Group has a share of 20 per cent or more of the
rights to the carried interest, the Group is considered to have significant
influence and therefore these carried interest partnerships are treated as an
associate.
Operating segments
The Group has two operating segments: the Asset Manager segment and the
Investment Company segment.
The Asset Manager segment incorporates the activities of the Group that
provide investment management and investment advisory services to a range of
funds under management within Private Equity and Private Credit strategies.
The primary revenue streams for the Asset Manager segment consist of
management fees, performance fees and carried interest. Fund management
services are also provided to the Investment Company segment, however fees
from these services are eliminated from the Group consolidated financial
statements. Fund Management EBITDA in the Strategic Report is the Operating
Profit of the Asset Manager segment.
The Investment Company segment holds the Investment Assets of the Group. The
primary revenue stream for this segment is interest income and fair value
gains on the Investment Asset portfolio. The Operating Profit of the
Investment Company segment is referred to as the Income on Net Investment
Assets in the Strategic Report.
The following tables show the consolidated operating segments profit and loss
movements for their respective years:
For the year ended 31 December 2025
Group Asset Manager Investment Company Central £'000 Total
£'000 £'000 £'000
Management fee income 61,551 - (5,605) 55,946
Catch-up management fee income 8,375 - - 8,375
Carried interest and performance fee income 11,153 - (3,602) 7,551
Interest income on Credit Assets held at amortised cost - 33,063 - 33,063
Gains on Investment Assets held at fair value - 29,584 - 29,584
Total income 81,079 62,647 (9,207) 134,519
Expected credit loss charge - (472) - (472)
Third-party servicing costs - (1,104) - (1,104)
Net operating income 81,079 61,071 (9,207) 132,943
Administration costs (49,171) (11,873) 8,970 (52,074)
Finance costs (187) (16,281) - (16,468)
Operating profit 31,721 32,917 (237) 64,401
Depreciation (2,160) - - (2,160)
Amortisation - - (640) (640)
Profit before tax 29,561 32,917 (877) 61,601
For the year ended 31 December 2024
Group Asset Manager Investment Company Central £'000 Total
£'000 £'000 £'000
Management fee income 49,600 - (5,193) 44,407
Catch-up management fee income 5,875 - - 5,875
Carried interest and performance fee income 11,320 - (3,534) 7,786
Interest income on Credit Assets held at amortised cost - 41,380 - 41,380
Gains on Investment Assets held at fair value - 18,998 - 18,998
Total income 66,795 60,378 (8,727) 118,446
Expected credit loss charge - (593) - (593)
Third-party servicing costs - (1,177) - (1,177)
Net operating income 66,795 58,608 (8,727) 116,676
Administration costs (39,386) (10,467) 7,922 (41,931)
Finance costs (235) (16,352) - (16,587)
Operating profit 27,174 31,789 (805) 58,158
Depreciation (1,730) - - (1,730)
Amortisation - - (640) (640)
Profit before tax 25,444 31,789 (1,445) 55,788
Asset Manager EBITDA For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Operating profit of the Asset Manager 31,721 27,174
Fund Management EBITDA 31,721 27,174
Fund Management EBITDA Margin 39% 41%
Group For the year ended For the year ended
31 December 2025 31 December 2024
Investment Assets (£'m) 536 504
Average Net Investment Assets (£'m) 332 330
Income on Net Investment Assets (£'m) 32.9 31.8
Reported Net Investment Return (%) 9.9% 9.6%
Add back: Equalisation Impact (£'m) 2.4 -
Underlying Income on Net Investment Assets (£'m) 35.3 31.8
Underlying Net Investment Return (%) 10.6% 9.6%
All of the Credit Assets at amortised cost were held within the Investment
Company segment and held by Pollen Street Limited and Pollen Street
Investments Limited at year end. The Investment Assets held at fair value
through profit or loss as at 31 December 2025 were £236.1 million (2024:
£194.2 million), of which £236.1 million (2024: £194.2 million) were held
within the Investment Company segment and held by Pollen Street Limited and
its subsidiary. The Gains on Investment Assets at fair value includes both
realised and unrealised income.
Income
Management fee income represents all income in the form of management fees
arising in the Asset Manager. Carried interest and performance fee income
includes income earned by the Asset Manager that is in the form of a
performance fee or the carried interest share from the funds under management.
Interest income relates to income earned by the Investment Company on loans
provided to third parties. Gains/(losses) on Investment Assets held at fair
value include revenue earned by the Group on its Investment Asset portfolio.
There was realised carried interest of £0.3 million (2024: nil). The
remaining carried interest income was unrealised.
For the Company, income is made up of dividend income of £32.8 million (2024:
£39.0 million) received from subsidiaries and from costs of £1.8 million
(2024: £1.5 million) that are charged to the Investment Company and the Asset
Manager.
Expenses
Estimated credit losses relate to any charges/(releases) on the assets held at
amortised cost within the Investment Company. Administrative costs include
employee expenses such as salaries, bonuses and any employee benefits costs
incurred by the Asset Manager.
The following table shows the fees payable to the Group's auditors
PricewaterhouseCoopers LLP ("PwC"):
Group For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Fees for the audit of the Company and Group financial statements 630 640
Fees for the statutory audits of the subsidiaries 189 275
Audit related assurance services 132 38
Total 951 953
The audit related assurance services for the current year relate to the review
of the interim financial information and client assets audit of a subsidiary.
Central
The Central column consists primarily of the elimination of inter-segment
fees, which are fees charged by the Asset Manager to the Investment Company,
exceptional costs and the amortisation of intangibles acquired as part of the
business combination.
Employees
The following tables show the average monthly number of employees and the
Directors during the year.
Group - Average number of staff and directors For the year ended For the year ended
31 December 2025 31 December 2024
Directors 7 7
Professional staff 95 86
Total 102 93
Company - Average number of directors For the year ended For the year ended
31 December 2025 31 December 2024
Directors 7 7
Total 7 7
There were no employees in the Company throughout the year (2024: nil) and the
Company had 7 Directors as at 31 December 2025 (2024: 6). The Group had a
total of 99 employees as at 31 December 2025 (2024: 88).
The following table shows the total staff costs incurred during the year. This
includes the Group's 7 Non-Executive Directors of Pollen Street Group Limited
(2024: 5). The total number of employees and Directors as at 31 December 2025
was 106 (2024: 94).
Group - Staff costs For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Wages and salaries 33,330 27,135
Social security costs 5,088 3,736
Defined contribution pension cost 191 173
Other staff costs 1,301 696
Total 39,910 31,740
Wages and salaries include the expense recognised in relation to bonuses
accrued for the year to 31 December 2025.
Employee Share Incentive Plan ("SIP")
During 2025 the Group introduced a UK Share Incentive Plan ("SIP") under which
eligible UK-resident employees may purchase ordinary shares in the Company
("Partnership Shares") through monthly deductions from their pre-tax salary.
For every Partnership Share purchased, the Company awards additional ordinary
shares free of charge ("Matching Shares"). The plan is administered through a
UK-resident trust with shares held by the trustee on behalf of participants;
participants are the beneficial owners and may instruct the trustee how to
vote at shareholder meetings.
Matching Shares are equity-settled share-based payment awards within the scope
of IFRS 2. The Matching Shares are required to be held in the SIP trust for a
minimum holding period of 3 to 5 years. In addition, the SIP rules provide
that shares cease to be subject to the SIP when a participant ceases relevant
employment. The fair value of Matching Shares is measured at grant date based
on the quoted market price of the ordinary shares on that date, adjusted for
any non-vesting conditions and restrictions as applicable. The total expense
recognised for Matching Shares during the year was £33,550 (2024: £nil),
recognised within Wages and salaries, with a corresponding credit to equity.
No directors or key management personnel participated in the SIP during the
year.
Corporation tax
a) Tax expense
The tax charge for the Group for the year was £5.0 million (2024: £6.2
million).
Group For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Current tax expenses
UK corporation tax charge for the year 1,455 3,078
Prior year adjustment (1,418) 38
Total current tax 37 3,116
Deferred tax expense
Origination and reversal of timing differences 5,680 2,676
Prior year adjustment (682) 398
Total deferred tax 4,998 3,074
Total tax charge 5,035 6,190
The Company incurred no tax expense during the year (2024: nil).
b) Factors affecting taxation charge for the year
The taxation charge for the year is based on the standard rate of UK
corporation tax of 25.0 per cent (2024: 25.0 per cent). A reconciliation of
the taxation charge for the year based on the standard rate of UK corporation
tax to the actual taxation charge is shown below.
The effective tax rate for the year ended 31 December 2025 is 8.2 per cent
(2024: 11.1 per cent). The tax on profit before tax is different to the
standard rate of corporation tax in the UK of 25.0 per cent (2024: 25.0 per
cent) primarily due to timing differences on taxation of management fee income
and the tax treatment of certain other forms of income.
Group For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Profit before taxation 61,601 55,788
Profit before taxation multiplied by the standard rate of UK Corporation tax 15,400 13,947
(25.0%) (2024: 25.0%)
Effects of:
Non-taxable and non-deductible items (7,340) (3,427)
Origination and reversal of timing differences (771) 1,871
Recognition of previously unrecognised losses - (6,568)
Other permanent differences (187) (89)
Fixed asset differences 33 21
Prior year adjustment (2,100) 435
Total tax charge 5,035 6,190
c) Deferred tax asset and liability
The following table shows the deferred tax asset and liability for the year:
For the year ended For the year ended
31 December 2025 31 December 2024
Group Deferred tax asset £'000 Deferred tax liability £'000 Total Deferred tax asset £'000 Deferred tax liability £'000 Total
£'000 £'000
Opening balance 3,256 (8,866) (5,610) - (3,093) (3,093)
Prior year adjustment - (682) (682) - (242) (242)
(Charge) / credit to profit or loss (3,256) (1,060) (4,316) 3,256 (5,531) (2,275)
Closing balance - (10,608) (10,608) 3,256 (8,866) (5,610)
The deferred tax liability in respect of the recognition of fair value gains
within the Investment Company and carried interest in the Asset Manager will
crystallise as the realised gain from these begins to flow to the Group in the
medium term.
Earnings per Share
The following table shows the Group's earnings per share for the year ended 31
December 2025:
Group For the year ended For the year ended
31 December 2025 31 December 2024
Profit after tax (£'000) 56,566 49,598
Average number of shares ('000) 60,344 62,977
Earnings per ordinary share 93.7 pence 78.8 pence
Credit Assets at amortised cost
a) Credit Assets at amortised cost
The allowance for ECL movement during the year was a charge of £0.5 million
(2024: charge £0.6 million).
The following table presents the gross carrying value of financial instruments
and the associated allowance for ECL provision under IFRS. See Notes 2 and 3
for more detail on the allowance for ECL.
As at As at
31 December 2025 31 December 2024
Group Gross Carrying Amount £'000 Allowance for ECL £'000 Net Carrying Amount £'000 Gross Carrying Amount £'000 Allowance for ECL £'000 Net Carrying Amount £'000
Credit Assets at amortised cost
Stage 1 262,056 (388) 261,668 283,226 (596) 282,630
Stage 2 7,182 (117) 7,065 15,785 (368) 15,417
Stage 3 37,523 (6,158) 31,365 19,316 (7,940) 11,376
Closing balance 306,761 (6,663) 300,098 318,327 (8,904) 309,423
The Company has no Credit Assets at amortised cost (2024: nil).
The reduction in Credit Assets at amortised cost is driven by the rotation of
the portfolio to focus on investing in Pollen Street managed funds from direct
investments.
The increase in the Stage 3 gross carrying amount during the year is
attributable to the classification of real estate-backed loans where the
underlying collateral provides strong loan-to-value support and recovery
expectations are consequently high; accordingly, the ECL provisions recognised
against these assets are minimal. The decrease in the Stage 3 allowance for
ECL relative to the prior year reflects the settlement of a position that in
2024 carried a provision that was large relative to its gross carrying value,
such that the composition of the Stage 3 portfolio has shifted materially
towards collateralised assets with limited credit loss exposure.
The following tables analyse the ECL by staging for the Group:
For the year ended 31 December 2025
Group Stage 1 £'000 Stage 2 £'000 Stage 3 £'000 Total
£'000
As at 1 January 2025 596 368 7,940 8,904
Movement from stage 1 to stage 2 - 35 - 35
Movement from stage 1 to stage 3 - - 99 99
Movement from stage 2 to stage 1 1 (67) - (66)
Movement from stage 2 to stage 3 - (134) 224 90
Movement from stage 3 to stage 1 - - (77) (77)
Movement from stage 3 to stage 2 - 15 (57) (42)
Movements within stage 156 (32) 1,723 1,847
Decreases due to repayments (263) (43) (624) (930)
Remeasurements due to modelling (102) (25) (357) (484)
Provision written off - - (2,713) (2,713)
Allowance for ECL as at 31 December 2025 388 117 6,158 6,663
For the year ended 31 December 2024
Group Stage 1 £'000 Stage 2 £'000 Stage 3 £'000 Total
£'000
As at 1 January 2024 693 576 7,042 8,311
Movement from stage 1 to stage 2 (2) 90 - 88
Movement from stage 1 to stage 3 (1) - 280 279
Movement from stage 2 to stage 1 - (75) - (75)
Movement from stage 2 to stage 3 - (101) 173 72
Movement from stage 3 to stage 1 - - (104) (104)
Movement from stage 3 to stage 2 - 15 (66) (51)
Movements within stage (12) (3) 752 737
Decreases due to repayments (241) (38) (234) (513)
Remeasurements due to modelling 159 (96) 97 160
Allowance for ECL as at 31 December 2024 596 368 7,940 8,904
b) Expected Credit Loss allowance for IFRS 9
Under the IFRS 9 expected credit loss model, impairment provisions are driven
by changes in credit risk of instruments, with a provision for lifetime
expected credit losses recognised where the risk of default of an instrument
has increased significantly since initial recognition.
The following table analyses ECL by staging for the Group:
Group For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
As at 1 January 8,904 8,311
Release for period - Stage 1 (208) (97)
Release for period - Stage 2 (251) (208)
Charge for period - Stage 3 931 898
Charge for period 472 593
Provision written off (2,713) -
Allowance for ECL 6,663 8,904
The ECL balance for the portfolio of Credit Assets at amortised cost has
decreased from £8.9 million as at 31 December 2024 to £6.7 million as at 31
December 2025 on gross Investment Assets of £307 million (2024: £318
million). This reduction includes a write off of £2.7 million of provisions
against accrued interest previously taken on one of the credit platforms. The
borrower has repaid all principal and the deal has a positive return.
Measurement uncertainty and sensitivity analysis of ECL
The recognition and measurement of ECL is highly complex and involves the use
of significant judgement and estimation. This includes the formulation and
incorporation of multiple forward-looking economic conditions into ECL to meet
the measurement objective of IFRS 9.
The Group has adopted the use of three economic scenarios, representative of
Oxford Economics view of forecast economic conditions, sufficient to calculate
an unbiased ECL. They represent a "most likely outcome", the Base scenario,
and two, less likely, outer scenarios, referred to as the "Upside" and
"Downside" scenarios.
The ECL recognised in these financial statements reflects the effect on
expected credit losses of a range of possible outcomes, calculated on a
probability-weighted basis, based on the economic scenarios described in Note
3, including management overlays where required. The probability-weighted
amount is typically a higher number than would result from using only the Base
(most likely) economic scenario. ECLs typically have a non-linear relationship
to the many factors which influence credit losses, such that more favourable
macroeconomic factors do not reduce defaults as much as less favourable
macroeconomic factors increase defaults. The ECL calculated for each of the
scenarios represents a range of possible outcomes that have been evaluated to
estimate ECL. As a result, the ECL calculated for the Upside and Downside
scenarios should not be taken to represent the upper and lower limits of
possible actual ECL outcomes. There is a high degree of estimation uncertainty
in numbers representing tail risk scenarios when assigned a 100 per cent
weight. A wider range of possible ECL outcomes reflects uncertainty about the
distribution of economic conditions and does not necessarily mean that credit
risk on the associated loans is higher than for loans where the distribution
of possible future economic conditions is narrower.
For Stage 3 impaired loans, LGD estimates consider independent recovery
valuations provided by external valuers where available, or internal forecasts
corresponding to anticipated economic conditions.
Analysis shows that the ECL would have been £0.4 million higher, as at 31
December 2025 (2024: £0.5 million higher), if the weighting of the scenarios
were changed to allocate a 100 per cent weight to the downside scenario. The
sensitivity of the ECL has been further analysed by assessing the impact of
£10.0 million (2024: £10.0 million) of portfolio Credit Assets at amortised
cost moving from Stage 1 to Stage 2 based on the ECL coverage of the loan book
at the reporting date. The analysis shows that the ECL would have been £0.1
million higher (2024: £0.2 million higher) under this sensitivity as the
provision coverage increases from Stage 1 to Stage 2.
c) Disposals of Credit Assets at amortised cost
The Group did not dispose of any assets for the year ended 31 December 2025
(2024: nil) and so no profit or loss on disposal was recorded during the year
(2024: nil).
d) Geographical analysis
The following table shows the Group geographical exposures of Credit Assets at
amortised cost in GBP equivalent:
Group As at As at
31 December 2025 31 December 2024
£'000 £'000
United Kingdom 252,854 281,702
Europe 47,244 27,721
Total 300,098 309,423
The majority of revenue was obtained in the UK. For the year ended 31 December
2025, the Group earned revenues from European and US Credit Assets of GBP
equivalent 3.3 million (2024: GBP equivalent 3.7 million).
Investment Assets at fair value through profit or loss
a) Investment Assets at fair value through profit or
loss
The following table shows the total Investment Assets at fair value through
profit or loss of the Group, which includes both Equity Assets and Credit
Assets for the year ended 31 December 2025.
For the year ended 31 December 2025
Group Equity Assets £'000 Credit Assets £'000 Total
£'000
Opening balance 83,384 110,792 194,176
Additions at cost 14,635 22,594 37,229
Realisations (4,136) (18,864) (23,000)
Unrealised gains through profit or loss 12,839 4,477 17,316
Realised gains through profit or loss 4,136 8,105 12,241
Foreign exchange revaluation (9) (1,899) (1,908)
Closing balance 110,849 125,205 236,054
Comprising:
Valued using net asset value 86,378 96,812 183,190
Valued using earnings multiple 9,086 - 9,086
Valued using tangible book value multiple 15,385 - 15,385
Valued using discounted cash flow - 28,393 28,393
Closing balance 110,849 125,205 236,054
For the Group as at 31 December 2024:
For the year ended 31 December 2024
Group Equity Assets £'000 Credit Assets £'000 Total
£'000
Opening balance 26,839 61,381 88,220
Additions at cost 45,172 49,812 94,984
Realisations (168) (8,021) (8,189)
Unrealised gains through profit or loss 11,541 1,330 12,871
Realised gains through profit or loss - 5,813 5,813
Foreign exchange revaluation - 477 477
Closing balance 83,384 110,792 194,176
Comprising:
Valued using net asset value 43,916 85,115 129,031
Valued using earnings multiple 15,385 - 15,385
Valued using discounted cash flow 1,360 25,677 27,037
Valued using liquidity discount 22,723 - 22,723
Closing balance 83,384 110,792 194,176
The Company has no Investment Assets at fair value through profit or loss
(2024: nil).
b) Fair value classification of total Investment Assets
The Group Investment Assets at fair value through profit or loss are
classified as level 3 assets with a value as at 31 December 2025 of £236.1
million (2024: £194.2 million). There were no movements for the Group (2024:
no movements) between the fair value hierarchies during the year.
c) Sensitivity analysis of assets at fair value
through profit or loss
The investments are in Equity Assets, Private Equity Funds and Private Credit
Funds, which are valued using different techniques, including net asset value
("NAV"), earnings multiple, tangible book value multiple, discounted cash
flows ("DCF"), recent transactions and a market approach. Sensitivity to the
quantitative information regarding the unobservable inputs for the Group's
Level 3 positions as at 31 December 2025 and 31 December 2024 is given below:
Valuation technique Sensitivity applied As at As at
31 December 2025 31 December 2024
£'000 £'000
Impact of sensitivity Impact of sensitivity
Net asset value NAV changed by 10% 18,319 12,903
Earnings multiple Earnings multiple changed by 1.0x 4,821 1,296
Tangible book value multiple TBV multiple changed by 0.1x 874 -
Discounted cash flow Cash flows changed by 10% 2,839 2,704
Liquidity discount Discount changed by 10% - 2,840
d) Financial assets and liabilities not carried at fair
value but for which fair value is disclosed
For the Group as at 31 December 2025:
Carrying Value Fair Value
Group £'000 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Assets
Credit Assets at amortised cost 300,098 - - 308,286 308,286
Carried interest receivable 6,095 - - 6,095 6,095
Trade and other receivables 32,475 - 32,475 - 32,475
Cash and cash equivalents 11,899 11,899 - - 11,899
Total assets 350,567 11,899 32,475 314,381 358,755
Liabilities
Trade and other payables (40,399) - (40,399) - (40,399)
Interest-bearing liabilities (199,659) - (199,659) - (199,659)
Total liabilities (240,058) - (240,058) - (240,058)
For the Group as at 31 December 2024:
Carrying Value Fair Value
Group £'000 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Assets
Credit Assets at amortised cost 309,423 - - 317,629 317,629
Carried interest receivable 3,983 - - 3,983 3,983
Trade and other receivables 35,542 - 35,542 - 35,542
Cash and cash equivalents 11,195 11,195 - - 11,195
Total assets 360,143 11,195 35,542 321,612 368,349
Liabilities
Trade and other payables (29,249) - (29,249) - (29,249)
Interest-bearing liabilities (188,265) - (188,265) - (188,265)
Total liabilities (217,514) - (217,514) - (217,514)
Note 8 provides further details of the loans at amortised cost held by the
Group.
The fair value of the receivable and payable balances approximates their
carrying amounts due to the short-term nature of the balances. The Group
considers that the carrying values of these receivables and payables
approximate their fair value.
e) Geographical analysis
The following table shows the Group geographical exposures of Investment
Assets held at fair value through profit or loss in GBP equivalent:
Group As at As at
31 December 2025 31 December 2024
£'000 £'000
UK 45,449 52,992
Europe 176,559 127,582
USA 14,046 13,602
Total 236,054 194,176
For the year ended 31 December 2025, the Group earned revenues from US and
European Investment Assets of GBP equivalent 21.9 million (2024: GBP
equivalent 14.6 million).
Fixed assets
The following table shows the movement in fixed assets for the Group during
the year.
Group For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Cost
Opening balance 1,763 1,607
Additions 565 156
Disposals (552) -
Closing balance 1,776 1,763
Accumulated depreciation
Opening balance (614) (330)
Depreciation expense (626) (284)
Disposals 380 -
Closing balance (860) (614)
Net book value 916 1,149
The Group's fixed assets comprise of fixtures and fittings, office equipment
and electric vehicles.
The Company has no fixed assets (2024: nil).
Leases
The Group leases include office premises where the Group is a tenant which
include fixed periodic rental payments over the fixed lease terms of no more
than five years remaining from the reporting date. The total cash outflow
during the year in relation to leases was £1.7 million (2024: £1.6 million).
The following table shows the carrying amounts of lease assets recognised and
the movements during the year:
Group - Lease assets For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Cost
Opening balance 7,367 4,873
Additions 437 -
Remeasurement due to lease modification - 2,494
Closing balance 7,804 7,367
Accumulated depreciation
Opening balance (2,507) (1,056)
Depreciation expense (1,534) (1,451)
Closing balance (4,041) (2,507)
Net book value 3,763 4,860
The following table shows the provision for restoration costs on lease
contracts which has been recognised as part of the lease assets acquired:
Group - Lease provision For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Opening balance 87 82
Unwinding of discount 4 5
Closing balance 91 87
The following table shows the carrying amounts of lease liabilities and the
movements during the year.
Group - Lease liabilities For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Opening balance 5,132 4,152
Additions 199 -
Remeasurement due to lease modification - 2,309
Accretion of interest 187 235
Payments (1,654) (1,564)
Closing balance 3,864 5,132
Remeasurement due to lease modification
During the year ended 31 December 2024, the Group's office lease underwent a
rent review, resulting in an increase in quarterly lease payments from
£325,000 to £390,953. This change necessitated a remeasurement of the lease
liability and right-of-use asset in accordance with IFRS 16. The remeasurement
resulted in an increase of £2.5 million to the lease asset and £2.3 million
to the lease liability. This adjustment reflects the present value of the
revised lease payments for the remaining lease term, discounted using the
original discount rate determined at the lease commencement date.
The following table shows the lease liabilities by maturity:
Group - Lease liabilities As at As at
31 December 2025 31 December 2024
£'000 £'000
Current 1,512 1,376
Non-current 2,352 3,756
Closing balance 3,864 5,132
The following table shows the amounts recognised in the Consolidated Statement
of Profit or Loss and Other Comprehensive Income:
Group - Amounts recognised in profit or loss For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Depreciation expense 1,534 1,451
Finance costs - Lease liability interest 187 235
Finance costs - Unwinding of discount 4 5
Closing balance 1,725 1,691
The incremental borrowing rate ("IBR") has been estimated based on what the
lessee would have to pay to borrow over a similar term as the leases at
origination of the lease. The rate of the IBR is in line with the interest
margin payable on the Group's debt facilities. If the IBR had been 1 per cent
higher or lower, the impact on the lease liabilities would be as follows:
Group As at As at
31 December 2025 31 December 2024
£'000 £'000
Lease assets
Increase IBR by 1% (82) (113)
Decrease IBR by 1% 86 183
Lease liabilities
Increase IBR by 1% (50) (90)
Decrease IBR by 1% 51 214
The Company has no lease assets or lease liabilities (2024: nil).
Goodwill and intangible assets
The following table shows the goodwill and intangible assets held by the Group
for their respective periods:
For the year ended For the year ended
31 December 2025 31 December 2024
Group Goodwill £'000 Intangibles £'000 Total Goodwill £'000 Intangibles £'000 Total
£'000 £'000
Cost
Opening balance 224,540 4,000 228,540 224,540 4,000 228,540
Closing balance 224,540 4,000 228,540 224,540 4,000 228,540
Amortisation
Opening balance - (1,440) (1,440) - (800) (800)
Amortisation - (640) (640) - (640) (640)
Closing balance - (2,080) (2,080) - (1,440) (1,440)
Net book value 224,540 1,920 226,460 224,540 2,560 227,100
Goodwill
a) Impairment testing
Goodwill is calculated as the consideration for an acquisition less the value
of the assets acquired. The goodwill relates to the acquisition of 100 per
cent of the share capital of Pollen Street Capital Holdings Limited ("PSCHL")
by Pollen Street Limited ("PSL") on 30 September 2022. The goodwill recognised
was made up of one cash-generating unit, which includes future management and
performance fees.
As per the requirements of IAS 36 "Impairment of assets", goodwill is tested
for impairment annually. The goodwill recognised as part of the acquisition
above is compared to a financial model used to estimate the value in use
("VIU") of PSCHL. The value in use involves identifying the cashflows
associated with the revenue streams of PSCHL and carrying out a forecast of
future cashflows that are discounted back to their net present value based on
discount rates obtained from relevant industry comparable information.
Goodwill was tested for impairment on 31 December 2025 and no impairment was
identified (2024: no impairment identified). The cashflows have been forecast
three years into the future (2024: four years), where the final year is
assigned a terminal value. The value in use of goodwill was £552 million
(2024: £328 million) which is £328 million (2024: £103 million) above the
goodwill value of £225 million (2024: £225 million) reported by the Group.
The value in use model has a number of assumptions; the most significant
assumptions are the future income projections that are based on PSCHL's
forecast profit after tax, the discount rate used of 11.5 per cent (2024: 12.7
per cent), and the assumed long-term growth rate of 3.9 per cent (2024: 3.9
per cent).
The future cashflow projections are based on management's best estimate using
historical performance and third-party data and applying assumptions for
future potential funds.
b) Sensitivities of key assumptions in calculating VIU
As at 31 December 2025, significant headroom is noted, and therefore no
impairment is identified (2024: nil). The future income projections would need
to fall short of its projected profit margins by over 56.4 per cent (2024:
31.5 per cent) over the period 2026 to 2028 (2024: 2025 to 2028) for the
goodwill to be impaired. Alternatively, the discount rate would have to
increase by 10.6 per cent (2024: 3.6 per cent) or the long-term growth rate
would have to decrease by 13.8 per cent (2024: 5.0 per cent) for the goodwill
to be impaired.
Intangible assets
The intangible assets arose as part of the acquisition and represents existing
customer relationships of PSCHL. The intangible assets have a finite life,
which is estimated to be up to the end of 2029, and so the intangibles are
amortised on a straight-line basis up to the end of 2029 and are included in
Administration costs on the statement of profit or loss and other
comprehensive income. See Notes 2 and 4 for further information on intangible
assets.
Carried interest assets
The following table shows the total value of the carried interest held by the
Group, which includes carried interest accounted for under IFRS 9 (for carried
interest partnerships acquired as part of the Combination) and under IFRS 15
(for non-acquired carried interest partnerships).
Group As at As at
31 December 2025 31 December 2024
£'000 £'000
Carried interest at fair value 25,821 21,090
Carried interest receivable 6,095 3,983
Closing balance 31,916 25,073
The Company has no carried interest entitlement (2024: nil).
Carried interest assets at fair value through profit or loss
a) Movements during the year
Group For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Opening balance 21,090 15,967
Net changes in fair value movement 5,048 5,123
Realised proceeds (317) -
Closing balance 25,821 21,090
b) Fair value classification of carried interest at fair
value through profit or loss
Carried Interest at fair value through profit or loss is classified as a level
3 asset with a value as at 31 December 2025 of £25.8 million (2024: £21.1
million). There were no movements between the fair value hierarchies during
the year (2024: no movements).
c) Sensitivity analysis of carried interest at fair
value through profit or loss
The following table shows the sensitivity impact on the inputs applied to the
carried interest assets at FVTPL. The sensitivity parameters are considered
reasonable assumptions in the movement in inputs:
As at 31 December 2025 As at 31 December 2024
Valuation Parameter Sensitivity applied Increase £'000 Decrease £'000 Increase £'000 Decrease £'000
Fund NAV +/- 10% 5,462 (5,353) 5,874 (4,886)
Option volatility +/- 10% 699 (218) 1,696 (504)
Option time to maturity +/- 1 Year 1,724 (1,726) 2,086 (1,819)
Option risk free rate +/- 1% 496 (501) 829 (384)
Carried interest receivable
Movements during the year
Group As at As at
31 December 2025 31 December 2024
£'000 £'000
Opening balance 3,983 1,365
Carried interest income recognised in the profit or loss 2,112 2,618
Closing balance 6,095 3,983
Trade and other receivables
The following table shows a breakdown of the Group receivables:
Group As at As at
31 December 2025 31 December 2024
£'000 £'000
Management and performance fees 5,773 17,762
Amounts due from debtors - 50
Prepayments and other receivables 26,702 17,730
Closing balance 32,475 35,542
The receivables do not carry any interest and are short term in nature. The
Group considers that the carrying values of these receivables approximate
their fair value. There were no expected credit losses on receivables recorded
during the year (2024: nil).
The following table shows a breakdown of the Company receivables:
Company As at As at
31 December 2025 31 December 2024
£'000 £'000
Amounts due from debtors 1,771 1,486
Promissory note 22,500 22,500
Closing balance 24,271 23,986
The receivables in the Company include an amount due from Pollen Street
Limited of £0.8 million (2024: £1.4 million) and from Pollen Street Capital
Holdings Limited of £45k (2024: £74k). There were no expected credit losses
on receivables recorded during the year (2024: nil).
Derivative financial assets & liabilities
The following table shows the movement in the undiscounted notional values of
the foreign exchange forward contracts for the Group:
Group For the year ended For the year ended
31 December 2025 31 December 2024
EUR USD EUR USD
£'000 £'000 £'000 £'000
Opening notional balance 28,772 43,522 42,987 19,360
Net movement in notional value 40,212 (1,701) (14,215) 24,162
Closing notional balance 68,984 41,821 28,772 43,522
The Company has no derivative financial assets (2024: nil).
The following table shows the mark-to-market of the foreign exchange forward
contracts as at the end of the year for the Group:
Group For the year ended For the year ended
31 December 2025 31 December 2024
EUR USD Total EUR USD Total
£'000 £'000 £'000 £'000 £'000 £'000
Opening balance 28 (1,495) (1,467) (191) 12 (179)
Fair value movement 507 1,648 2,155 219 (1,507) (1,288)
Closing balance 535 153 688 28 (1,495) (1,467)
The fair value for the forward contracts is based on the forward rate curves
for the respective currencies. The maturity date for derivatives that were
held as at 31 December 2025 was less than one year (2024: less than one year).
The mark-to-market value is presented in the Derivative Financial Liabilities
line on the statement of financial position.
Fair value classification of derivatives
The Group derivatives are classified as level 2 in the fair value hierarchy
with a GBP equivalent value on 31 December 2025 of £0.7 million (2024:
£(1.5) million). There were no movements between the fair value hierarchies
during the year. The derivatives are valued using market forward rates and are
contracts with a third party so are not traded on an exchange.
Interest-bearing borrowings
The following table shows a breakdown of the Group's interest-bearing
borrowings.
Group As at As at
31 December 2025 31 December 2024
£'000 £'000
Current liabilities
Interest and commitment fees 121 218
Prepaid arrangement and legal fees - 280
Total current liabilities 121 498
Non-current liabilities
Credit facility 201,270 190,500
Prepaid arrangement and legal fees (1,732) (2,733)
Total non-current liabilities 199,538 187,767
Total interest-bearing borrowings 199,659 188,265
As at 31 December 2025, the debt facility was drawn £201.3 million, being
£120.0 million on the term loan and £81.3 million on the revolving credit
facility. This debt facility is charged interest at SONIA plus a margin and
matures in June 2028.
The Company has no interest-bearing borrowings (2024: nil).
The following table shows the related debt costs incurred by the Group during
the year:
Group For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Interest and commitment fees 15,524 15,762
Other finance charges 944 825
Total finance costs 16,468 16,587
The following table shows the movements in interest-bearing borrowings of the
Group. Drawdowns and repayments of interest-bearing borrowings on revolving
facilities are shown gross.
Group For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Opening balance 188,265 210,764
Drawdowns of interest-bearing borrowings 111,670 240,500
Repayments of interest-bearing borrowing (100,900) (260,519)
Origination and legal fees 757 (2,880)
Finance costs 15,524 16,351
Interest paid on financing activities (15,657) (15,951)
Closing balance 199,659 188,265
The following tables analyse the Group's financial liabilities into relevant
maturity groupings.
As at 31 December 2025
Group <1 year £'000 1 - 5 years £'000 More than 5 years Total
£'000 £'000
Credit facility - 199,538 - 199,538
Interest and commitment fees 121 - - 121
Total exposure 121 199,538 - 199,659
As at 31 December 2024
Group <1 year £'000 1 - 5 years £'000 More than 5 years Total
£'000 £'000
Credit facility - 187,767 - 187,767
Interest and commitment fees 498 - - 498
Total exposure 498 187,767 - 188,265
Trade and other payables
The following table shows a breakdown of the Group payables:
Group As at As at
31 December 2025 31 December 2024
£'000 £'000
Staff salaries and bonuses 21,116 16,282
Audit fee accruals 951 953
Deferred income and other payables 18,332 12,014
Closing balance 40,399 29,249
The following table shows a breakdown of the Company payables:
Company As at As at
31 December 2025 31 December 2024
£'000 £'000
Amounts due to creditors 34,639 28,153
Deferred income and other payables 1,449 1,014
Closing balance 36,088 29,167
The payables in the Company include an amount due to Pollen Street Limited of
£34.6 million (2024: £28.1 million) and to Pollen Street Capital Holdings
Limited of £14k (2024: £43k).
Financial risk management
This Note details the management of financial risk and includes quantitative
data on specific financial risks.
The Group has a comprehensive risk management framework that includes risk
appetite statements, risk policies, procedures, a committee oversight
structure, a risk register, risk reporting, monitoring and risk controls. The
Board maintains oversight of this framework through the Board Risk Committee.
The most significant financial risks that the Group is exposed to are credit
risk, market risk, capital management and liquidity risk. Market risk includes
interest rate risk, foreign currency risk and price risk. Capital management
includes the risk of there being insufficient capital, including insufficient
capital of a particular type.
Credit risk
Credit risk is the risk of loss arising from failure of a counterparty to pay
the amounts that they are contractually due to pay. The Group is exposed to
credit risk principally through the Investment Company.
The Investment Committee approves all investment decisions, and all
investments are subject to extensive due diligence prior to approval. The
performance of each investment is monitored by the Investment Committee by way
of regular reviews of the investment and any collateral. Sector and asset
class concentrations across the investment portfolio are closely monitored and
controlled, with mitigating actions taken where appropriate.
Credit risk is mitigated through first loss protection, where the Group is
senior to equity in the partner and where the Group benefits from underlying
collateral, as well as diversification across the wide range of platforms that
makes up its portfolio.
Credit risk is analysed further in Note 19.
Market risk
In addition to the underlying trading performance of the Group's investment
portfolio, the fair value or future cash flows of a financial instrument held
by the Group may fluctuate because of changes in market prices. Market risk
can be summarised as comprising three types of risk:
· Interest rate risk - the risk of loss arising
from changes in market interest rates;
· Currency risk - the risk of loss arising from
changes in foreign exchange rates; and
· Price risk - the risk of loss arising from
changes in other market rates.
The Group's exposure, sensitivity to and management of each of these risks is
described in further detail below. Management of market risk is fundamental to
the Group's investment objective. The investment portfolio is continually
monitored to ensure an appropriate balance of risk and reward.
a) Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates
will affect future cash flows or the fair value of financial instruments.
The Group invests in Credit Assets which may be subject to a fixed rate of
interest, or a floating rate of interest (which may be linked to base rates or
other benchmarks). The Group's borrowings are subject to a floating rate of
interest.
The Group intends to manage the mismatch it has in respect of the income
generated by its Credit Assets, on the one hand, with the liabilities in
respect of its borrowings, on the other hand, by matching any floating rate
borrowings with investments in Credit Assets that are also subject to a
floating rate of interest. To the extent that the Group is unable to match its
funding in this way, it may use derivative instruments, including interest
rate swaps, to reduce its exposure to fluctuations in interest rates, however
some unmatched risk may remain. The Group has not used any interest rate
derivative instruments in the current or prior year.
Exposure of the Group's financial assets and liabilities to floating interest
rates (giving cash flow interest rate risk when rates are changed) and fixed
interest rates (giving fair value risk) is shown below:
As at 31 December 2025
Group Floating rate Fixed rate Total
£'000 £'000 £'000
Credit Assets at amortised cost 255,106 44,992 300,098
Cash and cash equivalents 11,899 - 11,899
Interest-bearing borrowings (199,659) - (199,659)
Total fixed and floating rate exposure 67,346 44,992 112,338
As at 31 December 2024
Group Floating rate Fixed rate Total
£'000 £'000 £'000
Credit Assets at amortised cost 224,315 85,108 309,423
Cash and cash equivalents 11,195 - 11,195
Interest-bearing borrowings (188,265) - (188,265)
Total fixed and floating rate exposure 47,245 85,108 132,353
The Company has no fixed or floating rate exposure (2024: nil).
A 1 per cent change in interest rates impacts Group income on the assets with
a floating rate by £3.0 million for year to 31 December 2025 (2024: £2.2
million). For the year ended 31 December 2025, a 1 per cent change in interest
rates impacts the debt expense on the floating rate liabilities by £2.0
million (2024: £1.9 million).
b) Currency risk
Currency risk arises from foreign currency assets and liabilities. The Group
uses economic hedges to hedge currency exposure between the Pound Sterling and
other currencies using foreign exchange contracts.
The Group monitors the fluctuations in foreign currency exchange rates and
uses forward foreign exchange contracts to hedge the currency exposure of the
Group's non-GBP denominated investments. The Group re-examines the currency
exposure on a regular basis in each currency and manages the Group's currency
exposure in accordance with market expectations. The Group did not designate
any derivatives as hedges for accounting purposes as described under IAS 39 or
IFRS 9 during the current or prior year and records its derivative activities
on a fair value basis.
The following table shows the Group's foreign exchange exposures:
As at As at
31 December 2025 31 December 2024
Group EUR USD EUR USD
£'000 £'000 £'000 £'000
Credit Assets at amortised cost 47,244 13,501 27,721 14,453
Investment Assets at fair value 15,892 51,220 928 13,602
Trade and other receivables 868 182 10,973 213
Cash and cash equivalents 1,441 1,069 1,530 1,440
Total assets 65,445 65,972 41,152 29,708
Trade and other payables (821) (295) - -
Total liabilities (821) (295) - -
Net assets 64,624 65,677 41,152 29,708
Derivatives notional (78,341) (56,117) (28,879) (42,026)
Net exposure (13,717) 9,560 12,273 (12,318)
If the GBP exchange rate increased by 10 per cent against the above
currencies, the impact on Group profit for the year ended 31 December 2025
would be £0.4 million (2024: £0.7 million).
The Company has no currency risk exposure (2024: nil).
c) Price risk
Price risk is the risk that the fair value of future cash flows of a financial
instrument will fluctuate because of changes in market prices (other than
those arising from interest rate risk or currency risk), whether those changes
are caused by factors specific to the individual financial instrument or its
issuer, or factors affecting similar financial instruments traded in the
market. Local, regional or global events such as war, acts of terrorism, the
spread of infectious illness or other public health issue, recessions, or
other events could have a significant impact on the Group and market prices of
its investments. This risk applies to financial instruments held by the Group,
including Equity Assets, Credit Assets, carried interest held at fair value
and derivatives. Sensitivity analysis on these financial instruments is
included in their respective notes to these financial statements.
Capital management
The Group manages its capital to ensure that the Group and its subsidiaries
have sufficient capital and the optimum combination of debt and equity. The
Group also manages its capital position to ensure compliance with capital
requirements imposed by the Financial Conduct Authority ("FCA") on certain
subsidiaries within the Group.
The Group monitors capital using a ratio of debt-to-gross investment assets.
Debt is calculated as total interest-bearing borrowings (as shown in the
Consolidated Statement of Financial Position). The Group's net debt-to-gross
investment assets ratio was 35 per cent as at 31 December 2025 (2024: 35 per
cent). It is less than the borrowing limit of 100 per cent set by the Board.
The Group's debt facility is subject to financial covenants. The Group's debt
facility agreements are subject to a ratio of total net debt to collateral
asset value of Credit Assets on a rolling annual period. During the year the
Group was fully compliant with regulatory capital requirements relating to its
regulated subsidiaries and the covenants on its debt facilities.
Liquidity risk
Liquidity risk is the risk that the Group will be unable to meet its
obligations in respect of financial liabilities as they fall due.
The Group manages its liquid resources to ensure sufficient cash is available
to meet its expected contractual commitments both under normal and stressed
conditions, without incurring unacceptable losses or risking damage to its
reputation. It monitors the level of short-term funding and balances the need
for access to short-term funding, with the long-term funding needs of the
Group.
As at 31 December 2025 the Group had a committed debt facility totalling £240
million (2024: £240 million) with a maturity date of June 2028. This facility
includes a term and revolving facility secured on a range of assets. The Group
has no other debt facilities following the repayment and extinguishing of the
prior year facilities. Further details of the Group's debt facilities are in
Note 16.
The Group utilises its treasury system data such as live cash balance, debt
balances and upcoming payment obligations in order to monitor liquidity on an
ongoing basis.
The following tables show the cash flows of the Group's and Company's
financial liabilities on an undiscounted basis by contractual maturity:
As at 31 December 2025
Group <3 months £'000 3-12 months £'000 1-5 years £'000 5+ years £'000 Total
£'000
Liabilities
Trade and other payables (26,102) (5,073) (9,224) - (40,399)
Lease liabilities (391) (1,173) (2,402) - (3,966)
Interest-bearing borrowings (121) - (199,538) - (199,659)
Total liabilities (26,614) (6,246) (211,164) - (244,024)
As at 31 December 2024
Group <3 months £'000 3-12 months £'000 1-5 years £'000 5+ years £'000 Total
£'000
Liabilities
Trade and other payables (19,561) (7,697) (1,991) - (29,249)
Lease liabilities (391) (1,173) (3,966) - (5,530)
Interest-bearing borrowings (498) - (187,767) - (188,265)
Total liabilities (20,450) (8,870) (193,724) - (223,044)
As at 31 December 2025
Company <3 months £'000 3-12 months £'000 1-5 years £'000 5+ years £'000 Total
£'000
Liabilities
Trade and other payables (36,088) - - - (36,088)
Total liabilities (36,088) - - - (36,088)
As at 31 December 2024
Company <3 months £'000 3-12 months £'000 1-5 years £'000 5+ years £'000 Total
£'000
Liabilities
Trade and other payables (29,167) - - - (29,167)
Total liabilities (29,167) - - - (29,167)
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a
financial loss for the other party by failing to discharge an obligation.
The Group's credit risks arise principally through exposures to loans
originated or acquired by the Group and cash deposited with banks, both of
which are subject to risk of borrower default.
The Group establishes and adheres to stringent underwriting criteria. The
Group invests in a granular portfolio of assets, diversified at the underlying
borrower level, with each loan being subject to a maximum single loan exposure
limit. This helps mitigate credit concentrations in relation to an individual
customer, a borrower group or a collection of related borrowers.
The credit quality of loans is assessed through evaluation of various factors,
including credit scores, payment data, collateral available from the borrower
and other information.
The Group further mitigates its exposure to credit risk by structuring
facilities so that they are secured and the borrower provides the first-loss
position, with the Group financing the senior risk and benefiting from
collateral to reduce potential credit losses.
The following table shows an analysis of the gross closing balances of the
Group's Credit Assets at amortised cost split between unsecured and secured as
at 31 December 2025:
Group As at 31 December 2025
Unsecured Secured Total
£'000 £'000 £'000
Credit Assets at amortised cost 55 306,706 306,761
Total secured and unsecured exposure 55 306,706 306,761
For the Group as at 31 December 2024:
Group As at 31 December 2024
Unsecured Secured Total
£'000 £'000 £'000
Credit Assets at amortised cost 13,632 304,695 318,327
Total secured and unsecured exposure 13,632 304,695 318,327
Equity
a) Share capital and premium
The following table shows the movement in shares of the Company during the
year:
For the year ended For the year ended
31 December 2025 31 December 2024
No. Issued, allocated and fully paid ordinary shares of £0.01 each Ordinary shares Treasury shares Ordinary shares Treasury shares
Opening number of shares 60,987,340 3,222,257 64,209,597 -
Number of shares bought back (833,844) 833,844 (3,222,257) 3,222,257
Closing number of shares 60,153,496 4,056,101 60,987,340 3,222,257
Share capital represents the number of ordinary shares issued in the capital
of the Company multiplied by their nominal value of £0.01 each. Share premium
substantially represents the aggregate of all amounts that have ever been paid
above nominal value to the Company when it has issued ordinary shares. The
nominal value of ordinary shares as at 31 December 2025 was £0.6 million
(2024: £0.6 million). Treasury shares have no entitlements to vote and are
held directly by the Company. Treasury shares are excluded from the
Consolidated Statement of Financial Position.
b) Other reserves
The Foreign Currency Translation Reserve reflects the foreign exchange
differences arising on translation that are recognised in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
Dividends
The following table shows the dividends paid during the year ended 31 December
2025 and 31 December 2024.
Payment Date Amount per Share (pence) Total
£'000
Interim dividend for the period to 31 December 2023 March 2024 13.0p 8,347
Interim dividend for the period to 30 June 2024 October 2024 26.5p 16,516
Second interim dividend for the period to 31 December 2024 May 2025 27.1p 16,528
Interim dividend for the period to 30 June 2025 October 2025 27.0p 16,251
Second interim dividend for the period to 31 December 2025 May 2026 31.0p 18,484
The second interim dividend for the period to 31 December 2025 of 31.0 pence
per share was approved on 25 March 2026 and will be paid on 1 May 2026.
The following table shows the total dividends declared and the total dividends
paid:
For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Total dividends paid in the year 32,778 24,863
Total dividends in relation to the year 34,735 33,043
Cash generated from operations
Group For the year ended For the year ended
31 December 2025 31 December 2024
Notes £'000 £'000
Profit before taxation 61,601 55,788
Adjustments for:
Charge in expected credit loss 8 472 593
Gains on Investment Assets held at fair value 9 (29,557) (18,684)
Net interest from Credit Assets at amortised cost (521) (7,855)
Finance costs 16 16,468 16,587
Foreign exchange revaluation 589 226
Gains in carried interest 13 (7,160) (7,741)
Depreciation of fixed assets 10 626 284
Depreciation of lease assets 11 1,534 1,451
Amortisation of intangible assets 12 640 640
Decrease / (increase) in receivables 14 3,067 (17,600)
Increase in payables 17 11,150 10,100
(Decrease) / increase in derivatives 15 (2,155) 1,288
Cash generated from operations 56,754 35,077
Company For the year ended For the year ended
31 December 2025 31 December 2024
Notes £'000 £'000
Profit before taxation 32,779 39,022
Adjustments for:
Increase in receivables 14 (285) (23,878)
Increase in payables 17 6,921 29,059
Cash generated from operations 39,415 44,203
Related party transactions
IAS 24 'Related Party Disclosures' requires the disclosure of the details of
material transactions between the Group and any related parties. Accordingly,
the disclosures required are set out below. The Group considers all
transactions with companies that are controlled by funds managed by the Group,
and the Group's investments in and commitments to funds and vehicles managed
or advised by the Group, as related party transactions.
The Group holds 4 per cent (2024: 4.0 per cent) equity in Tandem Money Limited
a portfolio company of Private Equity funds managed by the Group. This is
included in Investment Assets at fair value through profit or loss in Note 9.
During the year the Group's unsecured loan with Kingswood Group, a wealth and
investment manager that was controlled by Private Equity funds managed by the
Group, was fully repaid. This was replaced by a new loan facility with HSQ
Investments Limited, the holding company of Kingswood Group. As at 31 December
2025, the facility had an outstanding balance of £16.9 million (2024: £13.6
million).
The Group has a participation in debt instruments issued by Soteria Insurance
Limited ("Soteria"), a subsidiary of a portfolio company managed by the Group,
with a balance of £0.5 million (2024: £5.5 million). Soteria is also an LP
in PSC Credit III (B) SCSp and as a result the Group charges Soteria
management fee and carried interest. These credit instruments are included in
Credit Assets at amortised cost in Note 8.
The Group has made GP commitments to PSC Credit III (A) SCSp of £15.7
million, PSC Credit III (B) SCSp of £34.3 million, and PSC Credit IV (B) SCSp
of £70.0 million which are Private Credit funds managed by the Group. The
Group has made GP commitments to PSC Accelerator II (A) LP of £25.0 million,
PSC V (A) LP of £42.0 million, and PSC Plane (Guernsey) LP Incorporated of
£0.6 million which are Private Equity funds managed by the Group. On 1 August
2025, the Group increased its GP commitment to PSC Accelerator II (A) LP by
£4.2 million to £25.0 million as part of an upsizing of the fund. On 29
November 2024, the Group purchased a £11.3 million commitment in PSC Marlin
LP ("Marlin"). Please see Note 25 for analysis of Group GP commitments to
Pollen Street managed funds and any undrawn amount at year end.
During the year ended 31 December 2025, the Group offered employees the
opportunity to co-invest in PSC V and PSC Credit IV through the Group's
investment vehicle, PSC Employee Co-Investment LP, which in turn makes
commitments into the underlying fund(s) via PSC V Carry LP and PSC Credit IV
Carry SCSp. As at 31 December 2025, the Group had commitments under these
arrangements totalling £32.3 million (2024: £nil). Amounts drawn as at 31
December 2025 totalled £7.7 million (2024: £nil). The Group's balance with
PSC Employee Co-Investment LP was £8.0 million (2024: £nil) and is included
within Investment Assets at fair value through profit or loss in Note 9.
During the year, the Group carried out foreign exchange transactions with
Lumon Risk Management Limited ("Lumon") in relation to EUR and USD derivative
transactions. Lumon is one of the Group's panel providers of foreign exchange
and all foreign exchange transactions are carried out on a best execution
basis. Lumon is a portfolio company owned by a Private Equity fund that is
managed by the Group. The derivatives exposure with Lumon is disclosed in Note
15.
During the year, the Company bought back 833,844 ordinary shares (2024:
3,222,257).
The Board of Directors are considered to be the key management personnel of
the Group.
Contingent liabilities and capital commitments
As at 31 December 2025, there were no contingent liabilities for the Group
(2024: nil).
The Group had £60.3 million (2024: £38.0 million) of undrawn committed
credit facilities and £63.5 million (2024: £66.3 million) of undrawn
commitments in relation to direct Pollen Street managed fund investments.
Ultimate controlling party
It is the opinion of the Directors that there is no ultimate controlling party
of the Group.
Investments in subsidiaries
On 24 January 2024, Pollen Street Group Limited was introduced as the new
parent of Pollen Street Limited by way of a scheme of arrangement. Pollen
Street Limited subsequently distributed the entire issued share capital in
Pollen Street Capital Holdings Limited to Pollen Street Group Limited on 14
February 2024. The Company now has two wholly owned subsidiaries with a clear
and operationally useful distinction between the businesses carried on by the
Investment Company and the Asset Manager.
Company For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Opening balance 571,269 -
Increase in investments in subsidiaries - 571,269
Closing balance 571,269 571,269
a) Impairment testing
As per the requirements of IAS 36 "Impairment of assets", investments in
subsidiaries are tested at least annually for indicators of impairment. As the
carrying value for both subsidiaries exceeded the net assets of those
subsidiaries as at 31 December 2025, an impairment assessment was performed.
The carrying value of investments in subsidiaries is compared to a financial
model used to estimate the value in use of Pollen Street Limited ("PSL") and
Pollen Street Capital Holdings Limited ("PSCHL"). The value in use involves
identifying the independent cashflows associated with the revenue streams of
PSL and PCSHL and carrying out a forecast of future cashflows that are
discounted back to their net present value based on discount rates obtained
from relevant industry comparable information.
Investments in subsidiaries were tested for impairment on 31 December 2025 and
no impairment was identified.
The cashflows have been forecast three years into the future, where the final
year is assigned a terminal value. The value in use of the investments in
subsidiaries was £361 million for PSL and £611 million for PSCHL, which is
£29 million and £372 million respectively above the investments in
subsidiaries value presented by the Company. The value in use model has a
number of assumptions; the most significant assumptions are the future income
projections that are based on forecast profit after tax, the discount rate
used of 11.5 per cent for both PSL and PSCHL, and the long-term growth rate of
3.9 per cent for both PSL and PSCHL.
The future cashflow projections are based on management's best estimate using
historical performance and third-party data and applying assumptions to future
potential funds.
b) Sensitivities of key assumptions in calculating VIU
The following table shows the sensitivity impact on the inputs applied to the
investments in subsidiaries. The sensitivity parameters are considered
reasonable assumptions in the movement in inputs:
As at 31 December 2025 As at 31 December 2024
Valuation Parameter - PSL Sensitivity applied Increase £'000 Decrease £'000 Increase £'000 Decrease £'000
Future income projections +/- 10% 36,121 (36,121) 37,631 (37,631)
Discount rate +/- 100 bps (40,276) 52,467 (39,965) 50,516
Growth rate +/- 100 bps 47,150 (36,185) 39,911 (31,596)
As at 31 December 2025 As at 31 December 2024
Valuation Parameter - PSCHL Sensitivity applied Increase £'000 Decrease £'000 Increase £'000 Decrease £'000
Future income projections +/- 10% 61,092 (61,092) 36,568 (36,568)
Discount rate +/- 100 bps (71,314) 92,959 (39,611) 49,820
Growth rate +/- 100 bps 83,731 (64,258) 39,290 (31,288)
The movement in the key assumptions that would reduce headroom to nil would
be, for PSL, a reduction in future cash flows of 8 per cent, an increase in
the discount rate of 69 basis points or a decrease in the long-term growth
rate of 78 basis points; and, for PSCHL, a reduction in future cash flows of
61 per cent, an increase in the discount rate of 1,176 basis points or a
decrease in the long-term growth rate of 1,564 basis points.
Investments in consolidated entities
The consolidated financial statements of the Group include the following
subsidiaries:
Name Country on incorporation Class of shares Holding Activity
Avant Credit of UK, LLC USA Ordinary 100% Lending company
Bud Funding Limited UK Ordinary 100% Dormant
Financial Services Infrastructure Limited UK Ordinary 100% Dormant
Hanover Square GP S.a.r.l Luxembourg Ordinary 100% General partner
Hive Investments GP, LLC USA Ordinary 100% General partner
Honeycomb Finance Limited UK Ordinary 100% Lending company
Juniper Lending Fund GP S.a.r.l Luxembourg Ordinary 100% General partner
Pollen Street Capital (US) Holdings LLC USA Ordinary 100% Holding company
Pollen Street Capital (US) LLC USA Ordinary 100% Asset management services
Pollen Street Capital Holdings Limited Guernsey Ordinary 100% Holding company
Pollen Street Capital Limited UK Ordinary 100% Asset management services
Pollen Street Capital Partners Limited UK Ordinary 100% Holding company
Pollen Street Investments Limited Guernsey Ordinary 100% Investment company services
Pollen Street Limited UK Ordinary 100% Investment company services
PollenUp Limited UK Ordinary 100% Dormant
PSC 3 Funding Limited UK Ordinary 100% Dormant
PSC Accelerator GP Limited Guernsey Ordinary 100% General partner
PSC Accelerator II (C) GP Limited Guernsey Ordinary 100% General partner
PSC Accelerator II GP Limited Guernsey Ordinary 100% General partner
PSC Accelerator II GP S.a.r.l Luxembourg Ordinary 100% General partner
PSC Accelerator Nominee Limited Guernsey Ordinary 100% Nominee
PSC Accelerator Nominee II Limited Guernsey Ordinary 100% Nominee
PSC Credit (P) GP S.a.r.l Luxembourg Ordinary 100% General partner
PSC Credit (T) GP S.a.r.l Luxembourg Ordinary 100% General partner
PSC Credit Holdings LLP UK Capital contribution 100% Asset management services
PSC Credit III GP S.a.r.l Luxembourg Ordinary 100% General partner
PSC Credit IV GP S.a.r.l Luxembourg Ordinary 100% General partner
PSC Credit Limited Cayman Ordinary 100% Holding company
PSC Digital Limited UK Ordinary 100% Holding company
PSC Group Carry GP Limited Guernsey Ordinary 100% General partner
PSC III Carry GP Limited UK Ordinary 100% General partner
PSC III G GP Limited Guernsey Ordinary 100% General partner
PSC III GP Limited UK Ordinary 100% General partner
PSC Investments (Q) GP Limited UK Ordinary 100% General partner
PSC IV GP Limited Guernsey Ordinary 100% General partner
PSC IV GP S.a.r.l Luxembourg Ordinary 100% General partner
PSC Marlin GP Limited Guernsey Ordinary 100% General partner
PSC Nominee 1 Limited UK Ordinary 100% Dormant
PSC Nominee 3 Limited UK Ordinary 100% Dormant
PSC Nominee 4 Limited Guernsey Ordinary 100% Nominee
PSC Nominee 5 Limited Guernsey Ordinary 100% Nominee
PSC Plane GP (Guernsey) Limited Guernsey Ordinary 100% General partner
PSC Service Company Limited UK Ordinary 100% Service company
PSC US Credit GP MM LLC USA Ordinary 100% General partner
PSC V GP Limited Guernsey Ordinary 100% General partner
PSC V GP S.a.r.l Luxembourg Ordinary 100% General partner
Saturn GP Limited UK Ordinary 100% General partner
SOF Annex Nominees Limited UK Ordinary 100% Dormant
SOF General Partner (Cayman) Limited Cayman Ordinary 100% General partner
SOF General Partner (Scotland) II Limited UK Ordinary 100% General partner
SOF General Partner (UK) Limited UK Ordinary 100% General partner
Sting Funding Limited UK Ordinary 100% SPV
All shares held in the Group's subsidiaries represent ordinary shares except
otherwise stated.
On 3 December 2025, Avant Credit of UK, LLC was dissolved. Furthermore, on 3
December 2025 PSC Digital Limited, Pollen Street Capital Partners Limited and
PSC Credit Holdings LLP entered liquidation proceedings and on 22 December
2025 Sting Funding Limited entered liquidation proceedings.
Investments in unconsolidated structured entities
The Group has interests in a number of entities who act as general partner to
a number of funds structured as limited partnerships. The limited partnerships
are not treated as subsidiary undertakings of the Group because the rights of
the general partners are exercised on behalf of other investors in the limited
partnerships and, being fiduciary in nature, are not considered to result in
power over the relevant activities of the limited partnerships. As such, the
Group is considered an agent.
The list of such limited partnerships in which the Group has an interest at 31
December 2025 are:
Name Jurisdiction
Hanover Square SCSp Luxembourg
Hanover Square Feeder SCSp Luxembourg
Hive Investments, LP USA
Hive Investments AIV, LP USA
Hive Investments Cayman, LLC Cayman Islands
Juniper Lending Fund SCSp Luxembourg
PSC Accelerator Carry LP Guernsey
PSC Accelerator II (A) LP Guernsey
PSC Accelerator II (B) SCSp Luxembourg
PSC Accelerator II (C) LP Guernsey
PSC Accelerator II Carry LP Guernsey
PSC Accelerator LP Guernsey
PSC Employee Co-Investment LP Guernsey
PSC Credit (P) SCSp Luxembourg
PSC Credit (T) Carry SCSp Luxembourg
PSC Credit (T) SCSp Luxembourg
PSC Credit III (A) SCSp Luxembourg
PSC Credit III (B) SCSp Luxembourg
PSC Credit III Carry SCSp Luxembourg
PSC Credit IV (A) SCSp Luxembourg
PSC Credit IV (A) Feeder SCSp Luxembourg
PSC Credit IV (B) SCSp Luxembourg
PSC Credit IV (C) SCSp Luxembourg
PSC Credit IV Carry SCSp Luxembourg
PSC Glebe LP Guernsey
PSC III Carry LP UK
PSC III G, LP Guernsey
PSC III Pooling LP Canada
PSC Investments (C), LP Guernsey
PSC IV (B) LP Guernsey
PSC IV (C), SCSp Luxembourg
PSC IV Carry, LP Guernsey
PSC Partners LP Guernsey
PSC IV, LP Guernsey
PSC Leto LP Guernsey
PSC Marlin LP Guernsey
PSC Neptune LP Guernsey
PSC Plane (Guernsey) LP Incorporated Guernsey
PSC Plane Carry LP Guernsey
PSC Science SCSp Luxembourg
PSC Tiger LP Guernsey
PSC US Wolverine LLC Delaware
PSC V (A) LP Guernsey
PSC V (B) SCSp Luxembourg
PSC V Carry LP Guernsey
PSC Venus LP Guernsey
PSCM Carry LP Guernsey
PSCM Pooling LP Guernsey
Special Opportunities Fund Carry LP Guernsey
Special Opportunities Fund (Guernsey) LP Guernsey
Special Opportunities Fund A LP UK
Special Opportunities Fund B LP UK
Special Opportunities Fund C LP UK
Special Opportunities Fund D LP UK
Special Opportunities Fund Employee LP Cayman
Special Opportunities Fund F LP UK
Special Opportunities Fund G LP UK
Special Opportunities Fund J LP UK
Special Opportunities Fund S1 LP UK
Special Opportunities Fund S2 LP UK
The maximum exposure to loss for investments in unconsolidated limited
partnerships is the carrying amount of any investments in limited partnerships
and loss of future fees. As at 31 December 2025, the carrying amount was
£183.0 million (2024: £150.0 million).
Qualifying Limited Partnership
The Group holds an interest in Qualifying Limited Partnerships ("QLP"), the
balances and transactions of which have been incorporated into these financial
statements on a proportional consolidation basis. However, under proportional
consolidation and due to the de minimis interest in the QLPs, there is no
impact on the Consolidated Statement of Profit or Loss or the Consolidated
Statement of Financial Position.
The list of such qualifying limited partnerships in which the Group has an
interest at 31 December 2025 are:
Name Jurisdiction
PSC III LP UK
PSC Investments (Q) LP UK
PSC Investments B LP UK
PSC Investments LP UK
Associates
The Group accounts for investments in funds or carried interest partnerships
that give the Group significant influence, but not control, through
participation in the financial and operating policy decisions, as associates
at fair value through profit or loss. Information about the Group's
investments in associates measured at fair value is shown below.
The following tables show the carried interest partnerships that are accounted
for as associates. The carried interest partnerships are classified as part of
Carried interest in the Group's Consolidated Statement of Financial Position.
The list of associates in which the Group has significant influence, but not
control, at 31 December 2025 are:
Name Country of Incorporation Group's interest in the associate
PSC IV Carry LP Guernsey 25%
PSC V Carry LP Guernsey 25%
PSC Accelerator Carry LP Guernsey 25%
PSC Accelerator II Carry LP Guernsey 25%
PSC Credit III Carry SCSp Luxembourg 25%
PSC Credit IV Carry SCSP Luxembourg 25%
Juniper Lending Fund Carry SCSp Luxembourg 25%
The list of associates in which the Group has significant influence, but not
control, at 31 December 2024 are:
Name Country of Incorporation Group's interest in the associate
PSC IV Carry LP Guernsey 25%
PSC V Carry LP Guernsey 25%
PSC Accelerator Carry LP Guernsey 25%
PSC Accelerator II Carry LP Guernsey 25%
PSC Credit III Carry SCSp Luxembourg 25%
PSC Credit (T) Carry SCSp Luxembourg 25%
Subsequent events
On 25 March 2026 a dividend of 31.0 pence per share was approved for payment
on 1 May 2026.
Subsequent to the year end and up to the date of signing of these financial
statements, the Group repurchased 526,806 ordinary shares under the share
buyback programme.
Shareholders' Information
Directors, Advisers and Service Providers
Directors Financial advisers and brokers
Lynn Fordham Barclays Bank plc
Lindsey McMurray 1 Churchill Place
Jim Coyle Canary Wharf
Gustavo Cardenas London E14 5H
Joanne Lake England
Richard Rowney
James Gillies Investec Bank plc
Robert Ohrenstein 30 Gresham Street
all at the registered office below London EC2V 7QP
England
Registered office
Mont Crevelt House Registrar
Bulwer Avenue Computershare Investor Services plc
St Sampson 13 Castle Street, St Helier,
Guernsey GY2 4LH Jersey, JE1 1ES
Company secretary Website
MUFG Corporate Governance Limited http://www.pollenstreetgroup.com/ (http://www.pollenstreetgroup.com/)
19th Floor
51 Lime Street Share identifiers
London ISIN: GG00BMHG0H12
EC3M 7DQ Sedol: BMHG0H1
Ticker: POLN
Independent auditors
PricewaterhouseCoopers LLP
7 More London Riverside
London SE1 2RT
Website
The Company's website can be found at www.pollenstreetgroup.com. The site
provides visitors with Company information and literature downloads.
The Company's profile is also available on third-party sites such as
www.trustnet.com
(file://///lseg.stockex.local/data/CMData/RNS/CMAR/RNS%20Customer%20Services/PDF%20and%20DOCUMENT%20Upload%20Folder/www.trustnet.com)
and www.morningstar.co.uk.
Share prices and Net Asset Value information
The Company's ordinary shares of 1p each are quoted on the London Stock
Exchange:
· SEDOL number: BMHG0H1
· ISIN number: GG00BMHG0H12
· EPIC code: POLN
The codes above may be required to access trading information relating to the
Company on the internet.
Annual and half-yearly reports
The Group's audited Consolidated Annual Report and Accounts, half-yearly
reports and other formal communications are available on the Company's
website. To reduce costs the Company's half-yearly financial statements are
not posted to shareholders but are instead made available on the Company's
website.
Whistleblowing
The Company has established a whistleblowing policy. The Audit Committee
reviews the whistleblowing procedures of the Group to ensure that the concerns
of their staff may be raised in a confidential manner.
Warning to shareholders - share fraud scams
Fraudsters use persuasive and high-pressure tactics to lure investors into
scams. They may offer to sell shares that turn out to be worthless or
non-existent, or to buy shares at an inflated price in return for an upfront
payment. While high profits are promised, if you buy or sell shares in this
way, you will probably lose your money.
How to avoid share fraud
· Keep in mind that firms authorised by the FCA are
unlikely to contact you out of the blue with an offer to buy or sell shares
· Do not get into a conversation, note the name of
the person and firm contacting you and then end the call
· Check the Financial Services Register from
www.fca.org.uk
(file://///lseg.stockex.local/data/CMData/RNS/CMAR/RNS%20Customer%20Services/PDF%20and%20DOCUMENT%20Upload%20Folder/www.fca.org.uk)
to see if the person and firm contacting you is authorised by the FCA
· Beware of fraudsters claiming to be from an
authorised firm, copying its website or giving you false contact details
· Use the firm's contact details listed on the
Register if you want to call it back
· Call the FCA on 0800 111 6768 if the firm does
not have contact details on the Register or you are told they are out of date
· Search the list of unauthorised firms to avoid at
www.fca.org.uk/scams
· Consider that if you buy or sell shares from an
unauthorised firm you will not have access to the Financial Ombudsman Service
or Financial Services Compensation Scheme.
· Think about getting independent financial and
professional advice before you hand over any money
· Remember: if it sounds too good to be true, it
probably is!
5,000 people contact the Financial Conduct Authority about share fraud each
year, with victims losing an average of £20,000.
Report a scam
If you are approached by fraudsters, please tell the FCA using the share fraud
reporting form at fca.org.uk/scams, where you can find out more about
investment scams.
You can also call the FCA Consumer Helpline on 0800 111 6768.
If you have already paid money to share fraudsters, you should contact Action
Fraud on 0300 123 2040.
Definitions and Reconciliation to Alternative Performance Measures
Definitions
Asset-Based Lending Collateralised financing where loans are secured by a company's assets with
credit limits determined by the assets' liquidation value.
Asset Manager The business segment of the Group that is responsible for managing third-party
AuM and the Investment Company's assets. All activities of this segment reside
in Pollen Street Capital Holdings Limited and its subsidiaries.
AuM The assets under management of the Group, defined as:
· investor commitments for active Private Equity
funds;
· invested cost for other Private Equity funds;
· the total assets for the Investment Company; and
investor commitments for Private Credit funds.
Average Fee-Paying AuM The fee-paying asset under management of the Group, defined as:
· investor commitments for active fee-paying
Private Equity funds;
· invested cost for other fee-paying Private Equity
funds;
· the total assets for the Investment Company; and
· net invested amount for fee-paying Private Credit
funds.
The average is calculated using the opening and closing balances for the
period.
Average Number of Shares Average number of closing daily ordinary shares, excluding treasury shares.
Co-investment A direct investment made alongside or in a Fund taking a pro-rata share of all
instruments.
Combination The acquisition of 100 per cent of the share capital of Pollen Street Capital
Holdings Limited by Pollen Street Limited (formerly Honeycomb Investment Trust
plc) with newly issued shares in Pollen Street Limited as the consideration
that completed on 30 September 2022.
Credit Assets Loans made by the Group to counterparties, together with investments in
Private Credit funds managed or advised by the Group.
Equity Assets Instruments that have equity-like returns; that is, instruments that do not
contain a contractual obligation to pay and that evidence a residual interest
in the issuer's net assets. Examples include ordinary shares or investments in
Private Equity funds managed or advised by the Group. Carried interest
receivable by the Group is not classified as an Equity Asset.
Fair Value The amount that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants.
Fee-Paying AuM The fee-paying asset under management of the Group, defined as:
· investor commitments for active fee-paying
Private Equity funds;
· invested cost for other fee-paying Private Equity
funds;
· the total assets for the Investment Company; and
· net invested amount for fee-paying Private Credit
funds.
Fund Management EBITDA Fund Management Income less Fund Management Administration Costs.
Fund Management Income The income of the Group's Asset Manager according to IFRS reporting standards.
Fund Management EBITDA Margin The ratio of the Fund Management Adjusted EBITDA and the Fund Management
Income, expressed as a percentage.
Group Pollen Street Group Limited and its subsidiaries.
IFRS International Financial Reporting Standards as adopted by the United Kingdom.
Internal Rate of Return The discount rate that makes the net present value of all cash flows from a
particular investment equal to zero, effectively indicating the annualised
rate of return that the investment is expected to generate.
Investment Asset The Group's portfolio of Equity Assets and Credit Assets.
Investment Company The business segment of the Group that holds the Investment Asset portfolio
and the debt facilities. The activities of this segment predominately reside
within Pollen Street Limited, Pollen Street Investments Limited, Sting Funding
Limited and Bud Funding Limited.
Management Fee Rate The ratio of the Fund Management Income attributable to management fees and
the Average Fee-Paying AuM, annualised and expressed as a percentage.
Multiple on Invested Capital The return on an investment by comparing the total value realised to the
initial capital invested, indicating how many times the original investment
has been multiplied.
Net Investment Assets The Investment Assets plus surplus cash, net of debt.
Net Investment Asset Return The ratio of the income from Investment Company to the Net Investment Assets,
expressed as an annualised ratio.
Performance Fees Share of profits that the Asset Manager is due once it has returned the cost
of investment and agreed preferred return to investors.
Performance Fee Rate The ratio of the Fund Management Income attributable to carried interest and
performance fees and the total Fund Management Income, expressed as a
percentage.
Private Credit The Group's strategy for managing Credit Assets within its private funds.
Private Equity The Group's strategy for managing Equity Assets within its private funds.
Registrar An entity that manages the Company's shareholder register. The Company's
registrar is Computershare Investor Services plc.
Reported Net Investment Return The ratio of the income from Investment Company to the Net Investment Assets,
expressed as an annualised ratio.
Reorganisation The reorganisation that was affected on 14 February 2024, to distribute the
entire issued share capital of Pollen Street Capital Holdings Limited from
Pollen Street Limited to the Company referred to as the Distribution. The
Scheme and the Distribution are together referred to as the "Reorganisation".
The Scheme The scheme of arrangement that was affected on 24 January 2024, to change the
listing category of Pollen Street Limited's shares to that of a commercial
company from an investment company and to introduce the Company as a Guernsey
incorporated holding company as the new parent of the Group.
SMA Separately Managed Accounts
Sterling Overnight Interbank Average Rate ("SONIA") The effective overnight interest rate paid by banks for unsecured transactions
in the British sterling market.
Structured Loan Credit Asset whereby the Group typically has senior secured loans to
speciality finance companies, with security on the assets originated by the
speciality finance company and first loss protection deriving from the
speciality finance company's equity. Corporate guarantees are also typically
taken.
Underlying Net Investment Return The annualised ratio of gross income on Investment Assets, adjusted to exclude
equalisation effects and other non-recurring items, to Net Investment Assets.
Reconciliation to Alternative Performance Measures
The alternative performance measures are used to improve the comparability of
information between reporting periods, either by adjusting for uncontrollable
or one-off factors that impact upon IFRS measures or, by aggregating measures,
to aid the user to understand the activity taking place. Alternative
performance measures are not considered to be a substitute for IFRS measures
but provide additional insight on the performance of the business.
Management fee rate
Group For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Management fee income for the Asset Manager 69,926 55,475
Average Fee-Paying AuM 4,591,781 3,692,237
Management fee rate 1.52% 1.50%
The Management Fee Rate is calculated by dividing the management fee income
for the Asset Manager by the Average Fee-Paying AuM. The Management Fee Rate
is annualised.
Performance fee rate
Group For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Carried interest & performance fee income for the Asset Manager 11,153 11,320
Fund Management Income for the Asset Manager 81,079 66,795
Performance fee rate 14% 17%
The Performance Fee Rate is calculated by dividing the Carried interest and
performance fee income for the Asset Manager by the Fund Management Income for
the Asset Manager.
Fund Management EBITDA & Fund Management EBITDA Margin
Group For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Operating profit of the Asset Manager 31,721 27,174
Fund Management EBITDA 31,721 27,174
Fund Management Income for the Asset Manager 81,079 66,795
Fund Management EBITDA Margin 39% 41%
The Fund Management EBITDA is equal to the statutory Operating Profit of the
Asset Manager. The Fund Management EBITDA Margin is calculated by dividing the
Fund Management EBITDA by the Fund Management Income.
EBITDA
Group For the year ended For the year ended
31 December 2025 31 December 2024
£'000 £'000
Operating profit of the Asset Manager 31,721 27,174
Operating Profit of the Investment Company 32,917 31,789
EBITDA 64,638 58,963
EBITDA of the Group is calculated as the sum of the Fund Management EBITDA and
the Operating Profit of the Investment Company.
Dividends per Share
Group For the year ended For the year ended
31 December 2025 31 December 2024
£ pence £ pence
H1 interim dividend 27.0 26.5
H2 interim dividend 31.0 27.1
Dividend per share (pence) 58.0 53.6
Reported and Underlying Net Investment Return
Group For the year ended For the year ended
31 December 2025 31 December 2024
Investment Assets (£'m) 536 504
Average Net Investment Assets (£'m) 332 330
Income on Net Investment Assets (£'m) 32.9 31.8
Reported Net Investment Return (%) 9.9% 9.6%
Add back: Equalisation Impact (£'m) 2.4 -
Underlying Income on Net Investment Assets (£'m) 35.3 31.8
Underlying Net Investment Return (%) 10.6% 9.6%
Gross Investment Assets, Debt-to-Gross Investment Asset Ratio & Net
Debt-to-Gross Investment Asset Ratio
Group As at As at
31 December 2025 31 December 2024
£'000 £'000
Gross investment assets 536,152 503,599
Interest-bearing borrowings 199,659 188,265
Debt-to-Gross investment asset ratio 37.2% 37.4%
Cash and cash equivalents 11,899 11,195
Net debt-to-gross investment asset ratio 35.0% 35.2%
The debt-to-gross investment asset ratio is calculated as the Group's
interest-bearing debt divided by the gross investment asset value, expressed
as a percentage. The net debt-to-gross investment asset ratio is calculated as
the Group's interest-bearing debt less cash and cash equivalents, divided by
the gross investment asset value expressed, as a percentage.
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