REG - Riverstone Energy Ld - Annual Report and Financial Statements 2024
28/02/2025 07:15
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RNS Number : 7953Y Riverstone Energy Limited 28 February 2025
Riverstone Energy Limited
The Company seeks to achieve superior risk-adjusted returns through investing
in the energy sector.
The Company's Investment Manager is RIGL Holdings, LP, which is majority-owned
and controlled by affiliates of Riverstone.
Riverstone was founded in 2000 and is currently one of the world's largest and
most experienced investment firms focused on energy, power, infrastructure and
decarbonisation. The Firm has raised approximately $45 billion of capital and
committed approximately $45 billion to 200+ investments in North America,
South America, Europe, Africa, Asia and Australia. Headquartered in New York,
Riverstone has built a global platform with additional offices located in
Amsterdam and Mexico City.
The registered office of the Company is PO Box 286, Floor 2, Trafalgar
Court, Les Banques, St Peter Port, Guernsey, GY1 4LY.
Financial and Operational Highlights((1)(2))
Underlying investment fair value write-offs during the year ended 31 December (i) $17.4 million from T-Rex
2024
(ii) $10.0 million from DCFC Tritium Loan
(iii) $3.5 million from FreeWire
(iv) $3.1 million from Our Next Energy
(v) $2.7 million from Ionic I & II (Samsung Ventures)
(vi) $0.8 million from Enviva
(vii) $0.6 million from Tritium DCFC (Backstop)
(viii) $0.1 million from DCFC Tritium Sponsor fka DCRN Sponsor
Each of these investments were written down further to nil during the year.
Remaining potential unfunded commitments at 31 December 2024 (i) $6.2 million((3)) in Onyx Power
Realisations and distributions received during the year ended 31 December 2024 Realised and distributions received of $13.0 million((2)), all of which was
pursuant to the legacy conventional strategy:
(i) $7.2 million distributions from Permian Resources
(ii) $5.0 million realisation from Rock Oil
(iii) $0.8 million distributions from Veren Inc.
Key Financials
2024 2023
NAV as at 31 December $376 million / $674 million /
£299 million((4)) £529 million((4))
NAV per Share as at 31 December $14.83 / £11.81((4)) $15.96 / £12.53((4))
Per cent. change in NAV per Share (USD) for the year ended 31 December (7.08) per cent. 9.92 per cent.
Market capitalisation at 31 December $250 million / $430 million /
£199 million((4)) £338 million ((4))
Share price at 31 December $9.87 / £7.86((4)) $10.20 / £8.01
Per cent. change in Share price in US Dollar and Sterling for the year ended (3.2) per cent. (in $) / (1.9) per cent. (in £) 24.2 per cent (in $) / 18.1 per cent. (in £)
31 December
Share price discount to NAV (33.4) per cent. (36.1) per cent.
Cash and cash equivalents at 31 December $78.5 million ((5)) / $291 million ((5)) /
£62.5 million((4)) £228 million((4))
Marketable securities (unrestricted) at 31 December $201 million ((6)) / $150 million ((6)) /
£160 million((4)) £117 million((4))
Marketable securities (restricted) at 31 December $nil million ((7)) / $58 million ((7)) /
£nil million((4)) £45 million((4))
Total comprehensive (loss) for the year ended 31 December $(79.7) million $(2.3) million
Basic and diluted (loss) per Share for the year ended 31 December (264.36) cents / (210.51) pence((4)) (4.86) cents / (3.82) pence((4))
Number of shares repurchased through buyback and tender offer/average price 16,853,098 8,695,869
per Share for the year ended 31 December ((8))
$12.85 / £10.23 $7.24 / £5.75
Number of Shares outstanding at 31 December 25,342,691 42,195,789
( )
((1) ) Amounts shown reflect investment-related activity at the Investment
Undertaking level, not the Company.
((2)) Amounts may vary due to rounding.
((3)) The expected funding of the remaining unfunded commitment to Onyx at 31
December 2024 is $nil in 2025 and $nil in 2026. The residual amounts are to be
funded as needed in 2027 and later years.
((4)) Based on exchange rate of 1.2558 $/£ at 31 December 2024 (1.2736 $/£
at 31 December 2023).
((5)) At 31 December 2024 and 2023, respectively, amounts are comprised of
$1.5 million and $5.8 million held at the Company, $62.6 million and $283
million held at the Partnership and $14.4 million and $2 million held at REL
US Corp.
((6)) Unrestricted marketable securities held by the Partnership consist of
publicly-traded shares of Permian Resources, Solid Power, Hyzon and Veren for
which the aggregate fair value was $201 million at 31 December 2024, and $192
million as of 24 February 2025 (31 December 2023: $150 million).
((7)) At 31 December 2024 and 24 February 2025, the Partnership no longer held
restricted marketable securities (31 December 2023: $58 million consisting of
publicly traded shares of Veren Inc.).
((8)) Inception to date total number of shares repurchased was 59,137,373 at
an average price per share of £6.60 ($8.29).
( )
board Chair's Statement
Dear Shareholder,
M&A remains buoyant despite uncertainty in outlook
2024 was another very active year for the energy markets in both the
conventional and the low carbon energy sectors as demand growth highlighted
that the world will continue to need all forms of energy for many years to
come. At the same time geopolitical uncertainty, notably the conflicts in
Ukraine and the Middle East, continued to impact oil prices and kept energy
security at the top of the agenda. Towards the end of the period the U.S.
election results heralded a likely change in approach towards the country's
energy and decarbonisation policies which could have potentially far-reaching
consequences.
Nevertheless, there were signs of optimism in the sector in 2024. We saw
further consolidation in upstream ventures particularly through merger and
acquisition (M&A) activity as part of the global trend of increased
M&A across the board. ConocoPhillips' acquisition of Marathon Oil and the
completion of ExxonMobil's acquisition of Pioneer Natural Resources were
emblematic of wider activity in the upstream sector. The drivers of much of
this activity have largely been cost efficiencies, scaling portfolios and
improving liquidity. REL also benefitted from this increase in activity, as
evidenced by our portfolio company, Permian Resources' bolt-on acquisition of
Barilla Draw during the year.
Whether M&A activity is sustained at this level into 2025 remains to be
seen - the consultancy firm Wood Mackenzie expects to see lower levels of
M&A spend in 2025 versus 2023 and 2024. Nonetheless we anticipate that
consolidation activity is likely to continue with bolt-on acquisitions and
mergers of equals the most probable routes for companies to create strong
synergies, increase inventories and monetise investments.
Improved operational performance as commodity prices stay weak
Despite the uptick in M&A activity, oil price weakness and volatility
continued to weigh on public market valuations in 2024. The volatility
reflects how finely balanced price drivers are currently. The bullish outlook
argues that conflict-related supply disruption combined with Chinese stimulus
propping up demand will support prices in the medium term. However, the bear
case is that weaker demand in the West plus strong US shale growth and OPEC+
oversupply will suppress prices. Both views have their merits and until a
clearer picture on demand or supply emerges we expect the swings in sentiment
and price to continue into 2025.
The polarising effect of geopolitics and macroeconomic factors has meant that
despite volatility over the course of the year the oil price has stayed flat
during 2024. The average annual WTI oil price was $76.79 in 2024, largely in
line with the 2023 average of $77.58 per barrel. Henry Hub gas prices trended
a little lower in 2024, averaging $2.21 per MMBtu compared with $2.57 per
MMBtu in 2023. This was a result of mild weather holding back demand at the
same time as a global supply glut.
Despite this challenging economic backdrop and continued commodity price
weakness, operational performance has improved in the sector. Drilling costs
have declined 15 per cent. this year and 50 per cent. over the last three
years. Similarly, we have seen completion costs fall by a third over the last
three years. These material improvements in productivity and cost efficiency
support current and future free cash flow growth and improved returns over
time.
Low carbon energy
There is also still much to be optimistic about in the low carbon energy
sector despite another difficult year for the performance of renewable and
decarbonisation assets. A recent KPMG survey stated that 72 per cent. of
investors (including banks, asset managers, venture capital, private equity
and infrastructure funds) are seeing a rapid increase in investment in energy
transition assets. The survey also highlighted that investors are focusing on
a wide range of asset types, with 56 per cent. investing in renewable and
low-carbon energy; 54 per cent. in energy storage and grid infrastructure; and
51 per cent. in transportation and related infrastructure.
REL continues to take full advantage of this broad range of investment
opportunities, for example our investment in Onyx Power - a power-generation
company which, among other power plants, operates two of Europe's most
recently constructed thermal plants. We are working hard to develop these
opportunities into positive returns for our portfolio and our shareholders.
A mixed outlook for the Power sector
In the power sector there has been a clear divide in performance between
Europe and the US. In Europe, power prices have remained stubbornly weak,
continuing the trend of 2023. This was driven by excess supply of low-cost
gas, as well as lower-than-expected power demand due to mild weather.
Oversupply from strong renewable power generation, especially offshore wind
and solar, has also continued to play a role.
By contrast, US power generation has had a breakout year. Traditionally
considered an afterthought by the energy sector, the US power sector saw a
step-change in interest in 2024. Booming power demand from data centres,
driven by AI, has fundamentally shifted the outlook for the sector. Cash-rich
technology companies have arrived, playing a role as large corporate
off-takers with relatively limited sensitivity to price for non-intermittent
renewable power. Increasingly these, and other companies, are willing to
invest directly into energy infrastructure. These new actors in the market
have also contributed to a shift in how nuclear is viewed - increasingly seen
as "clean" insofar as it doesn't emit greenhouse gases. Gas fired power
stations, particularly when combined with carbon capture, are also being seen
in a more favourable light compared to just a few years ago.
Investment portfolio summary and performance
As of 31 December 2024, REL's portfolio comprised eight active investments,
with five companies in the decarbonisation portfolio and three companies in
the conventional assets.
Both sectors of the portfolio saw drops in 2024. The conventional assets
decreased in value by $31 million or 12 per cent., and the decarbonisation
portfolio decreased in value by $50 million or 44 per cent. These downturns in
portfolio NAV resulted in a reduction in NAV per share of 12 per cent., which
was partially offset by an increase in NAV per share of 5 per cent. resulting
from the Tender Offer and the Share Buyback Programme. In total, NAV per share
decreased by 7 per cent. to $14.83 per share (or 6 per cent. to £11.81 per
share) while the overall impact to total portfolio NAV of the investment
declines and the Tender Offer saw a decrease of 44 per cent. to $375.8
million.
In September 2024, REL's portfolio company Permian Resources (PR) closed the
previously announced Barilla Draw bolt-on acquisition of approximately 29,500
net acres, 9,900 net royalty acres and substantial midstream infrastructure
located in the core of the Delaware Basin. Alongside this, PR delivered its
first quarterly base dividend under its new capital returns policy, which
represented a 150 per cent. increase compared to its prior base dividend and
provided a strong base dividend yield compared to other U.S. independent
E&Ps.
Our portfolio remains well diversified across the key industries that are
critical to the world's decarbonisation and energy needs. Infinitum, for
example, was among 14 companies selected by the U.S. Department of Energy's
Office of Manufacturing and Energy Supply Chains (MESC) to negotiate funding
for projects that accelerate domestic clean energy manufacturing in
de-commissioned coal communities and address critical energy supply chain
vulnerabilities.
Looking ahead, we are positioned for further gains and distributions in 2025
as our conventional portfolio assets continue to benefit from solid cash flow
generation, low to no leverage, and supportive underlying commodity prices
with potential support from a likely beneficial regulatory environment in the
U.S.. In terms of our energy transition and decarbonisation investments, 2024
has been a challenging year and included write-offs of the following
companies: T-Rex Group, DCRN/Tritium DCFC, Our Next Energy (ONE), FreeWire,
Ionic I & II, and Enviva, totalling $38.1 million of value. For the
remaining decarbonisation portfolio, we are optimistic over the medium term.
Current investment trends in the sector remain positive, with the IEA
reporting that two-thirds of total investment in new energy generation assets
($2 trillion out of $3 trillion) was made in clean energy in the full-year
2024.
Changes to the Board
During the first half of 2024, we announced several changes to the Board, with
John Roche succeeding Patrick Firth as Chair of the Audit Committee and Jeremy
Thompson becoming the Board's Senior Independent Director. At the Company's
AGM in May 2024, Patrick retired as a Non-Executive Independent Director of
the Company and the Board. The Board would like to thank Patrick for his many
years of service and contribution to the Company.
Update on tender offer and share buyback programme
As a Board, we remain strongly committed to delivering increased shareholder
value over time, while improving our balance sheet strength, and reducing the
valuation discount of the ordinary share price to NAV.
In February 2024, we announced an EGM and Tender Offer to shareholders,
proposing the acquisition and cancellation of 15,047,619 of the Company's
ordinary shares at a price of £10.50 per share, approximately 36 per cent. of
all outstanding ordinary shares at the time. This price represented a premium
of approximately 14 per cent. to the closing REL share price of £9.20 on 21
February 2024 and a discount of approximately 16 per cent. to the unaudited
NAV per share of £12.53 as at 31 December 2023. Following shareholder
approval in March of the full proposed amount, we returned £158 million ($199
million) to our shareholders.
Separately to the Tender Offer, and as part of our continued efforts to
strengthen REL's capital management objectives, we have continued the share
buyback programme originally announced in May 2023.
During the 2024 AGM, shareholders approved the Board's request to continue
this strategy, and we embarked on the current programme of £22 million ($28
million). Over the course of 2024, in addition to the Tender Offer, the
Company returned £14 million ($19 million) to shareholders through the
purchase of 1,805,479 shares at an average price of £8.01 per ordinary share,
and continues to maintain its buyback strategy moving forward in 2025. As of
31 December 2024, 25,342,691 ordinary shares remained in issue.
Phasing down, not phasing out
The tenth anniversary of the Paris Agreement will fall in 2025 and is likely
to feature a period of reflection on the world's energy transition efforts and
its continued energy needs. Doubtless this will include criticism and key
learnings alongside an audit of the progress made to date and will be set
against the backdrop of a new U.S. administration, with materially different
priorities for energy policy when compared with the Biden administration, and
other countries.
In our view it is apparent that reality has begun to set in on the likely
timings and costs of the energy transition. While cleaner, economic and more
diverse forms of energy are universally desired, there is a growing acceptance
that the transition will take longer, and a significant portion of the world
will continue to rely on conventional energy sources. This is particularly
true in the developing world. This new reality is likely to see an "all of the
above approach" to energy with traditional energy being "phased down" rather
than "phased out" as cost, efficiency, timing, energy security and returns for
investors remain front of mind for many.
Jeremy Thompson as Senior Independent Director and I have engaged frequently
with a wide range of shareholders on both the Investment Management Agreement
and the strategic direction of the Company over the last year. The Board
remains open to discussions with shareholders and to communicate any concerns
they have to the Investment Manager. The Board has engaged in frequent
discussions with the Investment Manager on these matters and hopes to resolve
them in the near term.
Thank you for your continued support of REL, its management and its strategy.
I look forward to working with you all in the year ahead as we continue to
execute our strategy.
Richard Horlick
Chair of the Board
27 February 2025
Environmental, Social and Governance REPORT
Riverstone's ESG Report
Since Riverstone's foundation in 2000, we have always been guided by a
commitment to excellence, long-term value creation, and the integration of
environmental, social, and governance (ESG) principles into our investment
strategy. Our journey into ESG integration occurred long before the widespread
integration we see today.
Reflecting on how we have integrated ESG into our investment processes, we
remain proud of how our ESG programme has developed thoughtfully-both
informally and since 2019 in a systematic fashion. We are deeply grateful for
the partnerships we have forged, the innovations we have championed, and the
lives we believe we have had a positive impact on.
As we continue to exit our current investments, our commitment to ESG remains
unwavering. The process of exiting investments is not only about financial
returns, but also ensuring that the legacy of our efforts endures. Throughout
the life of our investments, we have worked to integrate ESG into the DNA of
our portfolio companies, fostering sustainable practices that will continue to
drive value well beyond our ownership.
Going forward, we remain dedicated to responsible exits. Our focus is on
ensuring that the companies and assets we transition to new owners are
equipped with the personnel, tools, strategies and frameworks to maintain
their sustainable commitments. This includes attempting to secure buyers who
share our vision for sustainable growth and resilience.
We are deeply grateful to our investors, team members, and portfolio companies
for their trust and collaboration over the years. Together, we have
demonstrated that ESG is not just a framework-it is a driver of innovation,
resilience, and meaningful change. We remain committed to transparency,
accountability, and the positive legacy we leave behind. Thank you for your
continued support.
Riverstone's ESG Policy
Riverstone's ESG policy, which was updated in 2024, outlines our commitment to
robust ESG principles including: (i) adhering to the highest standards of
conduct and business practices, in accordance with all applicable laws and
regulations, our code of conduct and other firm policies; (ii) conducting our
business dealings to the highest standard of honesty, integrity, fairness and
respect; (iii) complying with all relevant regulations governing the
protection of human rights, occupational health and safety standards,
environmental compliance, and labour and business practices within the
jurisdictions in which we conduct business, (iv) ensuring our partners are
aware of our expectations regarding responsible business practices and
consideration of ESG factors; and (v) distributing our ESG policy and related
ESG information to our investment professionals and to our portfolio companies
and ensure they understand the expectations set forth in our guidance.
Riverstone has continuously evolved its ESG policy in conjunction with
third-party ESG experts to strive towards best practices across the board. A
copy of Riverstone's updated ESG policy is available online:
https://www.riverstonellc.com/media/1358/2024_riverstone_esg_policy-final-october-2024.pdf
(https://www.riverstonellc.com/media/1358/2024_riverstone_esg_policy-final-october-2024.pdf)
RIGL Holdings, LP
27 February 2025
Investment Manager's Report
2024 was a year of contrast as market optimism, buoyed by an increase in
mergers and acquisitions (M&A) activity and lower interest rates was set
against a range of potentially destabilising geopolitical factors and concerns
about global economic growth. Renewed instability in the Middle East added to
uncertainties already created by the conflict in Ukraine and tensions between
the U.S. and China. Economic growth remained sluggish in a range of major
economies, including Europe, China and the UK with any stimulus efforts having
a limited impact.
Combined, these factors had an impact on public markets. The FTSE 100 was up
only 5 per cent. in GBP during 2024 while the S&P 500 was up 25 per cent
in USD. Without the exceptional performance of the "Magnificent 7" technology
stocks, which include Alphabet, Apple and Microsoft, the S&P 500 would
have been down and the returns these stocks have generated have masked that
the S&P's performance has been largely flat over the last two years.
Despite the markets concerns, global GDP growth remained modest, but
resilient, with the International Monetary Fund (IMF) predicting a rate of 3.2
per cent. for 2024.The rate of growth is expected to be similar in 2025,
according to the Peterson Institute of International Economics, but it of
course varies among advanced economies and emerging markets with a number of
geopolitical factors posing risks: U.S. economic policy changes, the
likelihood of trade tariffs being more widely implemented, and continued
conflict in the Middle East and Ukraine.
Looking to the energy markets, the oil price remained flat on the year as a
result of the macroeconomic factors and geopolitical impacts, as well as
milder weather reducing demand. Over the year, the average annual WTI oil
price was $76.79 consistent with 2023 prices, while Henry Hub traded at a
lower rate of $2.21 per MMBtu on average, compared with 2023 figures of $2.57
per MMBtu.
In terms of our portfolio, although our conventional energy assets benefitted
from a broadly positive year for the sector, supported by increased
consolidation, solid cash flow generation and supportive underlying commodity
prices, the assets experienced a fall in unrealised value. The conventional
portfolio, which now consists of three active investments, saw a combined
decrease in value of $31 million or (12) per cent. Overall, the conventional
asset portfolio saw a Gross MOIC of 1.26x at 31 December 2024. The value of
the conventional portfolio is now $234 million/£186 million, accounting now
for 79 per cent. of the unrealised value in the portfolio overall.
By contrast, the decarbonisation portfolio, despite its well diversified
investment base, declined in value as the sector continued to be affected by
higher supply chain costs, increased interest rates, lower risk appetite from
investors and administrative foundering. This equates to a reduction in value
of $50 million or £40 million.
The combination of the Tender Offer, for an aggregate $199 million/£158
million, and the aforementioned performance downturns, resulted in the NAV of
the Company decreasing over the year, ending the period 31 December 2024 at
$376 million or £299 million, a decrease of 44 per cent. in USD or 43 per
cent. in GBP vs 31 December 2023.
Elsewhere in the decarbonisation portfolio, Exicom Tele-systems Limited,
India's largest EV manufacturer, announced that it would acquire the business
and assets of REL portfolio company, Tritium DCFC. Based on the terms of the
agreement, REL does not expect to receive any further proceeds from its loan
investment in Tritium, and $10.6 million was further written down in 2024.
Within the conventional asset portfolio, REL continued to benefit from
distributions from its portfolio companies. Permian Resources announced an
increase to its quarterly base dividend from $0.06 per share to $0.15 per
share, while Veren declared a CAD 0.115 per share quarterly base dividend.
In terms of shareholder returns, the Board took several steps to deliver
further value to shareholders and return excess capital. In February, REL
announced that it proposed to return £158 million ($198 million) to our
shareholders via a Tender Offer. Following approval by shareholders in March,
the full amount was returned to shareholders. Elsewhere, our share buyback
programme, originally announced in May 2023, continued and the Board embarked
on the current programme of £22 million ($28 million) following the Company's
AGM in May 2024. Over the course of 2024, in addition to the Tender Offer, the
Company returned £14 million ($19 million) to shareholders through the
purchase of 1,805,479 shares at an average price of £8.01 per ordinary share.
Looking ahead, the Investment Manager maintains a diversified portfolio but
one that is more heavily weighted towards conventional assets. REL's portfolio
balance is a reflection of the current macro trends in global markets and our
conventional energy assets will help lessen the impacts to our decarbonisation
businesses.
Outlook
Macro-economic uncertainty is expected to continue in 2025, compounded by the
arrival of a new U.S. administration with a radically different set of energy
policy priorities. The new U.S administration's plans include prioritising
expanded U.S. drilling, renewed focus around natural gas exports, and rolling
back climate commitments and clean energy incentives, all of which have
positive and negative downstream effects on the portfolio. Despite this, there
are signs that the development of decarbonisation technologies and renewable
energy assets will continue to be a priority for governments and investors as
the world strives to achieve a sustainable power mix of conventional and
renewable energy sources.
Current Portfolio - Conventional((12))
Investment (Public/Private) Gross Committed Capital ($mm) Invested Gross Realised Gross Unrealised Value Gross Realised Capital & Unrealised Value ($mm) 31 Dec 2024 Gross MOIC((2)) 31 Dec 2023
Capital ($mm) Capital ($mm)((1)) ($mm)((2)) Gross MOIC((2))
Permian Resources ((4)) (Public) 268 268 232 145 377 1.41x 1.35x
Onyx (Private) 66 60 121 46 167 2.80x 3.20x
Veren (Crescent Point Energy) ((10)) (Public) 296 296 199 43 242 0.82x 0.87x
Total Current Portfolio - Conventional - Public((3)) $564 $564 $431 $188 $619 1.10x 1.10x
Total Current Portfolio - Conventional - Private((3)) $66 $60 $121 $46 $167 2.80x 3.20x
Total Current Portfolio - Conventional - Public & Private((3)) $630 $624 $552 $234 $786 1.26x 1.30x
Current Portfolio - Decarbonisation((12))
Investment (Public/Private) Gross Committed Capital ($mm) Invested Gross Realised Gross Unrealised Value Gross Realised Capital & Unrealised Value ($mm) 31 Dec 2024 31 Dec 2023
Capital ($mm) Capital ($mm)((1)) ($mm)((2)) Gross MOIC((2)) Gross MOIC((2))
GoodLeap (Private) 25 25 2 23 25 1.00x 1.25x
Infinitum 27 27 - 23 23 0.85x 1.10x
(Private)
Solid Power((4)) (Public) 48 48 - 14 14 0.29x 0.22x
Group14 4 4 - 3 3 0.75x 1.00x
(Private)
Hyzon Motors (Public) 10 10 - - 0.00x 0.09x
Total Current Portfolio - Decarbonisation - Public((3)) $58 $58 - $14 $14 0.24x 0.23x
Total Current Portfolio - Decarbonisation - Private((3)) $56 $56 $2 $49 $51 0.93x 0.73x
Total Current Portfolio - Decarbonisation - Public & Private((3)) $114 $114 $2 $63 $65 0.58x 0.50x
Total Current Portfolio - Conventional & Decarbonisation - Public & $744 $738 $554 $297 $851 1.16x 1.08x
Private((3))
Cash and Cash Equivalents((9)) $79
Total Liquidity((11)) $281
Total Market Capitalisation $250
Realisations
Investment Gross Committed Capital Invested Gross Realised Gross Unrealised Value Gross Realised Capital & Unrealised Value ($mm) 31 Dec 2024 31 Dec 2023
(Initial Investment Date) ($mm) Capital ($mm) Capital ($mm)((1)) ($mm)((2)) Gross Gross MOIC((2))
MOIC((2))
Rock Oil((5)) 114 114 239 - 239 2.09x 2.08x
(12 Mar 2014)
Three Rivers III 94 94 204 - 204 2.17x 2.17x
(7 Apr 2015)
ILX III 179 179 172 - 172 0.96x 0.96x
(8 Oct 2015)
Meritage III((6)) 40 40 88 - 88 2.20x 2.20x
(17 Apr 2015)
RCO((7)) 80 80 80 - 80 0.99x 0.99x
(2 Feb 2015)
Carrier II 110 110 67 - 67 0.61x 0.61x
(22 May 2015)
Pipestone Energy (formerly CNOR) 90 90 58 - 58 0.64x 0.64x
Sierra 18 18 38 - 38 2.06x 2.06x
(24 Sept 2014)
Aleph Midstream 23 23 23 - 23 1.00x 1.00x
(9 Jul 2019)
Ridgebury H3 18 18 22 - 22 1.22x 1.22x
(19 Feb 2019)
Castex 2014 52 52 14 - 14 0.27x 0.27x
(3 Sep 2014)
Total Realisations((3)) $818 $818 $1,005 $0 $1,005 1.23x 1.23x
Withdrawn Commitments and Investment Write-Offs((8)) 467 467 10 - 10 0.02x 0.02x
Total Investments((3)) $2,029 $2,023 $1,569 $297 $1,866 0.92x 0.96x
Total Investments & Cash and Cash Equivalents((3), (9)) $376
((1)) Gross realised capital is total gross proceeds realised on invested
capital. Of the $1,569 million of capital realised to date, $1,201 million is
the return of the cost basis, and the remainder is profit.
((2)) Gross Unrealised Value and Gross MOIC (Gross Multiple of Invested
Capital) are before transaction costs, taxes (approximately 21 to 27.5 per
cent. of U.S. sourced taxable income) and 20 per cent. carried interest on
applicable gross profits in accordance with the revised terms announced on 3
January 2020, but effective 30 June 2019. Since there was no netting of losses
against gains before the aforementioned revised terms, the effective carried
interest rate on the portfolio as a whole will be greater than 20 per cent. No
further carried interest will be payable until the $156.7 million of realised
and unrealised losses to date at 31 December 2024 are made whole with future
gains. Since REL has not yet met the appropriate Cost Benchmark at 31 December
2024, $29 million in Performance Allocation fees that would have been due
under the prior agreement were not accrued. In addition, there is a management
fee of 1.5 per cent. of net assets (including cash) per annum and other
expenses. Given these costs, fees and expenses are in aggregate expected to be
considerable, Total Net Value and Net MOIC will be materially less than Gross
Unrealised Value and Gross MOIC. Local taxes, primarily on U.S. assets, may
apply at the jurisdictional level on profits arising in operating entity
investments. Further withholding taxes may apply on distributions from such
operating entity investments. In the normal course of business, REL may form
wholly-owned subsidiaries, to be treated as C Corporations for US tax
purposes. The C Corporations serve to protect REL's public investors from
incurring U.S. effectively connected income. The C Corporations file U.S.
corporate tax returns with the U.S. Internal Revenue Service and pay U.S.
corporate taxes on its taxable income.
((3)) Amounts may vary due to rounding.
((4)) Represents closing price per share in USD for publicly traded shares
Permian Resources Corporation (NASDAQ:PR - 31-12-2024: $14.14 per share);
Enviva, Inc. (NYSE:EVA - 31-12-2024: $nil per share); Solid Power, Inc.
(NASDAQ:SLDP - 31-12-2024: $1.89 per share); Hyzon Motors, Inc. (NASDAQ:HYZN -
31-12-2024: $1.07 per share); and Veren (NASDAQ: VRN - 31-12-2024: CAD 7.39
per share).
((5)) The unrealised value of Rock Oil investment is made up of funds held
in escrow from the sale of rights to mineral acres
((6)) Midstream investment.
((7)) Credit investment
((8)) Withdrawn commitments and investment write-offs consist of Origo ($9
million),CanEra III ($1 million), Liberty II ($142 million), Fieldwood ($80
million), Eagle II ($62 million), Castex 2005 ($48 million), Tritium ($25
million), T-Rex ($21 million), Enviva ($21 million) Anuvia Plant Nutrients
($20 million), FreeWire ($14 million), Our Next Energy ($12 million) and Ionic
I & II ($3 million).
((9)) This figure is comprised of $1.5 million held at the Company, $62.6
million held at the Partnership and $14.4 million held at REL US Corp.
((10)) Veren shares were acquired via realisation of Crescent Point Energy.
((11)) Total liquidity comprises remaining fair value of all public
investments and all cash held at REL and within RELIP structure.
((12)) The investments in the tables are held within the Partnership.
Investment Portfolio Summary
As of 31 December 2024, REL's portfolio comprised eight active investments
including two E&P investments, five decarbonisation investments and one
power investment.
Permian Resources
As of 31 December 2024, REL, through the Partnership, has invested in full its
$268 million commitment to Permian Resources. Headquartered in Midland, Texas,
Permian Resources is a large pure-play E&P company in the Delaware Basin.
During Q4 2024, Permian Resources increased its quarterly base dividend from
$0.06/share to $0.15/share and announced the sale of its natural gas and oil
gathering systems primarily located in Reeves County, Texas to Kinetik
Holdings Inc. (NYSE: KNTK) for a total cash consideration of $180 million. The
Company also increased mid-point of full year oil and total production
guidance by over 4 per cent. to 158.5 MBbls/d and 341.0 MBoe/d. The pro-forma
company has hedged approximately 29 per cent. of forecasted 2024 crude oil
production at a weighted average price of $75.08 per barrel and 20 per cent.
of forecasted 2024 natural gas production at a weighted average price of $3.86
per Mcf.
As of 31 December 2024, REL's interest in Permian Resources, through the
Partnership, was valued at 1.41x Gross MOIC or $377 million (Realised: $232
million, Unrealised: $145 million). The Gross MOIC, which reflects the
mark-to-market value of REL's shareholding, increased over the period.
Onyx
As of 31 December 2024, REL, through the Partnership, has invested $60 million
of its $66 million commitment to Onyx. Onyx is a European-based independent
power producer that was created through the successful acquisition of 2,350MW
of gross installed capacity (1,941MW of net installed capacity, which reduced
to 1,641MW following the decommissioning of Farge) of coal-, gas-, and
biomass-fired power plants in Germany and the Netherlands from Engie SA. Two
of the facilities in the current portfolio are among Europe's most recently
constructed thermal plants, which benefit from high efficiencies, substantial
environmental controls, low emissions profiles and the potential use of
sustainable biomass.
CDS margins have reduced materially since the highs of 2022 due to high gas
storage levels, warm winter weather and high wind generation. The effect is
partially offset by hedging activities at the company. Onyx received a
withholding tax exemption certificate for OSIM II from BZSt (German federal
tax office). The management team is working on organic growth initiatives,
including the implementation of operational performance improvements and the
development of projects related to the energy transition.
As of 31 December 2024, REL's interest in Onyx, through the Partnership, was
valued at 2.80x Gross MOIC((1)) or $167 million (Realised: $121 million,
Unrealised: $46 million). The Gross MOIC((1)) decreased from 3.20x to 2.80x
during 2024.
Veren
As of 31 December 2024, REL, through the Partnership, has invested its $296
million original commitment to Hammerhead Energy which was subsequently
acquired by Veren, a company focused on liquids-rich unconventional resources
in the Montney and Duvernay resource play in Western Canada. REL provided an
initial equity commitment to Hammerhead Energy in 1Q14; since the initial
commitment, REL has made several additional investments into Hammerhead
Energy. Prior to the acquisition, Hammerhead Energy had aggregated a position
of ~190,000 net acres in the Montney and ~100,000 net acres in the Duvernay
formations and operated 100 per cent. of its asset base.
Over 2024, Veren's shares have traded down 19.6 per cent. compared to a 15.0
per cent. increase in its peer group, and a 0.8 per cent. rally in WTI over
the same period. In October 2024, Veren announced its Q3 2024 results, which
were below expectations. Veren also announced its 2025 budget which expects
C$775 million of excess cash flow at current commodity prices. Excess cash
will be spent on debt reduction and shareholder returns. Veren's 2029 plan
targets 7 per cent. production CAGR and corporate production of 250 Mboe/d. In
Q4 2024, Veren delivered its quarterly dividend of C$0.115/share, implying an
annualised dividend yield of 6.2 per cent.
As of 31 December 2024, REL's interest in Veren, was valued at 0.82x Gross
MOIC((1)) or $242 million (Realised: $199 million, Unrealised: $43 million).
The Gross MOIC((1)) decreased over the period.
GoodLeap
As of 31 December 2024, REL, through the Partnership, has invested in full its
$25 million commitment to GoodLeap. The company is a technology-enabled solar
power and home improvement loan originator, providing a point-of-sale lending
platform used by key residential contractors. GoodLeap does not take funding
risk. The company pre-sells its originated loans via forward purchase
agreements to large asset managers. The company's attractive unit economics
and asset-light business model allow for rapid growth. Additionally, this
enables GoodLeap to scale faster than its competitors while generating free
cash flow by capitalising on upfront net cash payments on the flow of loan
originations and avoiding costly SG&A and capital expenditures incurred by
other portions of the value chain.
The company closed a $1.5 billion financing for Lease/PPA business with two
strategic partners (TIP and ATLAS SP), extending funding pipeline well into
2025. In H2 2024, the company also launched GoodLeap Payments and homeowner
mobile app in a strong debut. That said, political uncertainty is creating
challenges at the business. The management team is assessing potential changes
to the Solar Investment Tax Credit, which provides a 30 per cent. tax credit
for qualifying solar installations, tariffs, and interest rates. GoodLeap's
rapid transition to home improvement sales is expected to cushion these
impacts.
The valuation multiple for GoodLeap fell from 1.25x to 1.00x Gross MOIC during
the year.
Infinitum
As of 31 December 2024, REL, through the Partnership, has fully invested its
$27.4 million commitment to Infinitum. Infinitum's patented air-core motors
offer superior performance in half the weight and size, at a fraction of the
carbon footprint of traditional motors, making them pound for pound one of the
most efficient in the world. Infinitum motors open up sustainable design
possibilities for the machines we rely on to be smaller, lighter and quieter,
improving our quality of life while also saving energy.
Infinitum is experiencing longer-than-expected sales cycles with its
customers; in response to these headwinds, the company is taking steps to
limit cash burn and extend its operating runway after its Series E extension
close in July 2024.
In November, Infinitum announced it has been selected by the U.S. Department
of Energy to negotiate funding for a manufacturing facility to produce
high-powered printed circuit board (HP-PCB) stators, the key component of
Infinitum's high-efficiency, axial-flux motors. This facility is expected to
be located in Rockdale, Texas and could create up to 170 operating jobs and
125 construction jobs in the community. At the time of the announcement,
Infinitum's award from the DOE Office of Manufacturing and Energy Supply
Chains (MESC) is under negotiation but projected to be $34 million.
The valuation multiple for Infinitum was lowered from 1.10x to 0.85x Gross
MOIC during the year.
Solid Power
As of 31 December 2024, REL, through the Partnership, has fully invested its
$47.8 million commitment to Solid Power. Riverstone sponsored DCRC's $350
million IPO on 23 March 2021. REL made a $0.6 million investment in DCRC at
the time of the IPO, as the blank check company began to pursue merger
candidates. On 15 June 2021, DCRC announced its business combination agreement
with Solid Power, a Louisville, Colorado based producer of all solid-state
batteries for electric vehicles, to which REL, through the Partnership,
committed an additional $20 million to the $165 million PIPE that was raised.
On 17 August 2021, REL announced the purchase of an interest in one of Samsung
Ventures' battery technology focused venture capital portfolios (the "Samsung
Portfolio") for $30.0 million, of which $27.2 million related to the purchase
of 1.66 million shares of Solid Power.
The business combination between DCRC and Solid Power closed on 8 December
2021, with Solid Power beginning to trade on NASDAQ under the ticker "SLDP".
As of 31 December 2024, REL's interest in Solid Power, through the
Partnership, consisted of the $0.6 million sponsor investment, which was
valued at 1.71x Gross MOIC((1)) or $1.0 million (Realised: nil, Unrealised:
$1.0 million), the $20 million PIPE investment, which was valued at 0.19x
Gross MOIC((1)) or $3.8 million (Realised: nil, Unrealised: $3.8 million), and
the $27.2 million secondary purchase from Samsung Ventures, which was valued
at 0.33x Gross MOIC((1)) or $9.1 million (Realised: nil, Unrealised: $9.1
million).
Group14
In April 2022, REL, through the Partnership, invested $4 million into Group14
Technologies, Inc.'s $400 million Series C funding round. The Series C round
was led by Porsche AG, with participation from OMERS Capital Markets,
Decarbonisation Partners, Vsquared Ventures, and others. Group14 is a battery
materials technology company founded in 2015. The company has developed a
proprietary silicon-based anode battery material to replace graphite in
conventional lithium-ion batteries.
Group14's challenges stem mostly from delays in revenue recognition. These
delays arose from setbacks in the company's spending schedule-mainly related
to factory site issues-that have postponed the EV related start of production
at the Washington plant. Separately in September of this year, Group14
announced it had been selected for an award of up to $200 million by
the U.S. DOE's Office of Manufacturing and Energy Supply Chains as part of
the second set of projects funded by the Bipartisan Infrastructure Law to
expand domestic battery manufacturing for electric vehicles and the electrical
grid. The DOE award would allow Group14 to build a silane factory using its
proprietary technology, which produces silane at a significantly reduced
capital and energy requirement from the conventional process.
The valuation multiple for Group14 decreased from 1.00x Gross MOIC to 0.75x
Gross MOIC during the year.
Hyzon
In connection with the closing of the previously announced merger between DCRB
and Hyzon Motors Inc. (NASDAQ: HYZN), REL purchased $10 million of DCRB common
stock in a private placement transaction at $10 per share in July 2021. Hyzon
is a global supplier of zero-emissions hydrogen fuel cell powered commercial
vehicles.
During 2024, REL's interest in Hyzon decreased from 0.09x Gross MOIC to 0.00x
Gross MOIC as a result of the dramatic stock drop-off starting in April
2024. On 20 February 2025, Hyzon announced its intention to delist from the
NASDAQ and deregister from the SEC.
Investment Write-Offs
The following companies were written down to 0.00x Gross MOIC during the year
resulting in an aggregate loss of $38.1 million due to a range of negative
developments:
T-Rex Group
The valuation multiple for T-REX was written down to 0.00x Gross MOIC during
2024. In September 2023, an investment bank was hired to run a sales process
for the company. After over 6-months no LOIs were submitted and in April 2024,
the company initiated an orderly wind-down due to limited cash runway (to mid
May 2024). During the year ended 31 December 2024, $17.4 million has been
written-off as a result of T-Rex's valuation decrease.
DCRN/Tritium DCFC
At 31 December 2024, REL's debt investment was written down to 0.00x Gross
MOIC. On 8 August 2024, Exicom Tele-systems Limited (NSE: EXICOM) (along
with its subsidiaries together referred to as, "Exicom"), India's largest EV
charger manufacturer, announced that it had entered into a definitive
agreement under which it will acquire the business and assets of Tritium.
Based on the terms of the definitive agreement, the Company does not expect to
receive any further proceeds regarding its loan investment in Tritium. During
the year ended 31 December 2024, $10.7 million was written-off as a result of
DCRN/Tritium DCFC's valuation decrease.
Our Next Energy (ONE)
The valuation multiple for ONE was written down to 0.00x Gross
MOIC((1)) during 2024. In Q1 2024, the company raised capital by way of its
insider-led convertible note, a financing in which Riverstone elected not to
participate. As a result of not participating, REL's ownership stake was
significantly diluted and subordinated. During the year ended 31 December
2024, $3.1 million has been written-off as a result of ONE's valuation
decrease.
FreeWire
The valuation multiple for FreeWire decreased to 0.00x Gross MOIC during 2024.
On 3 February 2024, a potential acquiror of FreeWire, who had been under
exclusivity, withdrew from the company's sale process. Given the accelerating
cash constraints and a limited runway in combination with the sale process
withdrawal, FreeWire evaluated all alternatives, which culminated in a sale on
20 February 2024 to a private investor. The consideration with respect to the
sale was 100% assumption of all company assets and liabilities. During the
year ended 31 December 2024, $3.5 million has been written-off as a result of
FreeWire's valuation decrease.
Ionic I & II
During 2024, the valuation multiple for Ionic Materials decreased to 0.00x
Gross MOIC. Ionic was in the midst of demonstrating within-spec, roll-to-roll
LCP manufacturing capabilities with the hopes that it would be acquired by a
Korean corporation/manufacturing partner looking to vertically integrate.
Together with Goldman Sachs, Ionic Materials worked hard to monetise the LCP,
and had the parameters of deal worked out pending proof of manufacturing
capabilities. However, Ionic Materials lacked the cash runway to achieve that
goal. During the year ended 31 December 2024, $2.7 million has been
written-off as a result of Ionic I & II's valuation decrease.
Enviva
The valuation multiple for Enviva decreased to 0.00x Gross MOIC during 2024.
On 4 October 2024, following the filing of Enviva's Form 8-K related to the
Amended Joint Chapter 11 Plan of Reorganisation of Enviva Inc. ("Amended
Plan"), the New York Stock Exchange (NYSE) Regulation reached its decision
that Enviva is no longer suitable for listing pursuant to NYSE Listed Company
Manual and delisted the company. In reaching its delisting determination,
NYSE Regulation notes that pursuant to the Amended Plan, existing equity
interests of the company, including REL's equity interests, will be cancelled
and holders thereof will receive no recovery. In December 2024, Enviva emerged
from Chapter 11 bankruptcy. During the year ended 31 December 2024, $0.8
million has been written-off as a result of Enviva's valuation decrease.
Valuation
The Investment Manager is charged with proposing the valuation of the assets
held by REL through the Partnership. The Partnership values its securities and
instruments at fair value. REL's valuation policy is compliant with IFRS and
IPEV Valuation Guidelines and has been applied consistently from period to
period since inception. As the Company's investments, through the Partnership,
have tended to be generally not publicly quoted, valuations require meaningful
judgement to establish a range of values, and the ultimate value at which an
investment is realised may differ from its most recent valuation and the
difference may be significant.
The Investment Manager values each underlying investment in accordance with
the Riverstone valuation policy, the IFRS accounting standards and IPEV
Valuation Guidelines. The value of REL's portion of that investment is derived
by multiplying its ownership percentage by the value of the underlying
investment. If there is any divergence between the Riverstone valuation policy
and REL's valuation policy, the Partnership's proportion of the total holding
will follow REL's valuation policy. Valuations of REL's investments through
the Partnership are determined by the Investment Manager and disclosed
quarterly to investors, subject to Board approval.
Riverstone values its investments using common industry valuation techniques,
including comparable public market valuation, comparable merger and
acquisition transaction valuation, and discounted cash flow valuation.
For development-type investments, Riverstone also considers the recognition of
appreciation or depreciation of subsequent financing rounds, if any. For
early-stage private investments, Riverstone's investment due diligence process
includes assumptions about short-term financial results in determining the
appropriate purchase price for the investment.
Riverstone reviews the valuations on a quarterly basis with the assistance of
the Riverstone Performance Review Team ("PRT") as part of the valuation
process. The PRT was formed to serve as a single structure overseeing the
existing Riverstone portfolio with the goal of improving operational and
financial performance.
The Audit Committee reviews the valuations of the Company's investments held
through the Partnership and makes a recommendation to the Board for formal
consideration and acceptance.
Uninvested Cash
As of 31 December 2024, REL had a cash balance of $1.5 million and the
Partnership, including its wholly-owned subsidiaries, REL Cayman Holdings, LP,
REL US Corp and REL US Centennial Holdings, LLC, had uninvested funds of over
$77 million held as cash, United States Treasury Bills and short-term money
market fixed deposits, gross of the accrued management fee of $1.04 million.
After the accrued management fee, REL's aggregate cash balance is $77.4
million. As in prior years, in accordance with the Partnership Agreement, if
the Company requires additional funds for working capital, it is entitled to
receive further distributions from the Partnership. The Partnership maintains
deposit accounts with several leading international banks. In addition, the
Partnership invests a portion of its cash deposits in short-term money market
fixed deposits. REL's treasury policy seeks to protect the principal value of
cash deposits utilising low risk investments with top-tier counterparts.
Uninvested cash earned approximately 460 basis points during the year ended 31
December 2024. All cash deposits referred to in this paragraph are denominated
in U.S. dollars.
Post-Year End Update
As of the date of this report, there are no matters to report.
Outlook
On the campaign trail the Trump Administration made no secret of its intention
to use tariffs as a tool to improve the US balance of payments, protect US
jobs and build up the country's industrial base. Since the inauguration, a
range of tariffs has been proposed or implemented, hitting neighbours and
competitors alike across many products and industries. These have been largely
met with reciprocal tariffs from US trade partners. It is still early to judge
the likely long-term impact of these policies and indeed the extent to which
announced tariffs will be fully implemented.
When it comes to the energy sector, it appears the Administration is taking a
differentiated approach. For instance, the initial round of tariffs placed a
25% tariff on Mexican energy imports, while Canadian imports faced a 10%
tariff - likely in recognition of the far greater dependence of US refineries
on Canada's oil. What is not in doubt is that the combination of these
tariffs, including those on steel and, in particular, aluminium, will impact
costs in the supply chain for US companies including those in the energy
sector.
Looking ahead, the potential for a peaceful resolution to the Ukraine conflict
and reduced tensions in the Middle East could significantly impact the energy
sector over the next twelve months. While a return to pre-conflict gas volumes
from Russia to Europe seems unlikely in the near to medium term, a
stabilisation of the situation in Ukraine and improved geopolitical stability
in the Middle East could open new supply channels for global markets.
Concurrently, rising geopolitical competition between the West and China may
introduce further friction in global supply chains, potentially restricting
access to critical components needed for renewable infrastructure growth in
North America and Europe. These developments, coupled with a more active trade
agenda in the US and EU, create a mixed outlook, with lower-cost conventional
energy supplies becoming more competitive with renewable power sources. Given
these factors, driving operational efficiencies within our portfolio companies
- both on the conventional side and the decarbonisation side - will be crucial
to maintaining and growing shareholder returns.
RIGL Holdings, LP
27 February 2025
Investment POLICY
The Company's investment objective is to generate long term capital growth by
making investments in the global energy sector.
For so long as the Investment Manager (or any of its affiliates) remains the
investment manager of the Company, the Company shall have the option to
participate in all Qualifying Investments in which the Private Riverstone
Funds invest.
Asset Allocation
The Company shall acquire its interests in each Qualifying Investment at the
same time (or as near as practicable thereto) as, and on substantially the
same economic and financial terms as, the relevant Private Riverstone Fund
which may involve the Private Riverstone Fund acquiring all or some of such
Qualifying Investment and selling it on to the Company on the same terms on
which the Private Riverstone Fund acquired the transferred interest in the
Qualifying Investment.
The Company and either Fund V or Fund VI has participated in each applicable
Qualifying Investment in which Fund V or Fund VI, respectively, invests in a
ratio of one-third to two-thirds. This investment ratio was subject to
adjustment on a case-by-case basis (a) to take account of the liquid assets
available to each of the Company and Fund V or Fund VI for investment at the
relevant time and any other investment limitations applicable to either of
them or otherwise if (b) both (i) a majority of the Company's independent
Directors and (ii) the Investment Manager agree that the investment ratio
should be adjusted for specific Qualifying Investments.
For each Private Riverstone Fund subsequent to Fund V which is of a similar
target equity size as Fund V (i.e. US$7.7 billion) and has a similar
investment policy to the Company, Riverstone shall seek to ensure that,
subject to the investment capacity of the Company at the time, the Company and
the Private Riverstone Fund invest in applicable Qualifying Investments in an
investment ratio of one-third to two-thirds or in such other ratio as the
Company's independent Directors and the Investment Manager agree at or prior
to the first closing of such Private Riverstone Fund.
Such investment ratio may be adjusted by agreement between the Company's
independent Directors and the Investment Manager on subsequent closings of a
Private Riverstone Fund having regard to the total capital commitments raised
by that Private Riverstone Fund during its commitment period, the liquid
assets available to the Company at that time and any other investment
limitations applicable to either of them.
The Investment Manager will typically seek to ensure that the Company and the
Private Riverstone Funds dispose of their interests in Qualifying Investments
at the same time and on substantially the same terms, and in the case of
partial disposals, in the same ratio as the relevant Qualifying Investment was
acquired, but this may not always be the case.
In addition, the Company may at any time make investments consistent with its
investment policy independent from Private Riverstone Funds, which may include
investments alongside Riverstone employee co-investment vehicles or other
Riverstone-managed co-investment arrangements.
The Company may hold controlling or non-controlling positions in its
investments and may make investments in the form of equity, equity-related
instruments, derivatives or indebtedness (to the extent that such indebtedness
is a precursor to an ultimate equity investment). The Company may invest in
public or private securities. The Company will not permit any investments to
be the subject of stock lending or sale and repurchase.
In selecting investments, the Investment Manager will target investments that
are expected to generate long term capital growth and, in particular,
investments that are expected to generate a Gross IRR of between 20 and 30 per
cent.
Diversification
No one investment made by the Company may (at the time of the relevant
investment) represent more than 25 per cent. of the Company's gross assets,
including cash holdings, measured at the time the investment is made. The
Company shall utilise the Partnership and its Investment Undertakings or other
similar investment holding structures to make investments and this limitation
shall not apply to its ownership interest in the Partnership or any such
Investment Undertaking.
Gearing
The Company may, but shall not be required to, incur indebtedness for
investment purposes, working capital requirements and to fund own-share
purchases or redemptions up to a maximum of 30 per cent. of the last published
NAV as at the time of the borrowing, or such greater amount as may be approved
by the Shareholders passing an ordinary resolution. The consent of a majority
of the Company's Directors shall be required for the Company or the
Partnership to enter into any credit or other borrowing facility. This
limitation will not apply to portfolio level entities in respect of which the
Company is invested or is proposing to invest. The Company currently has not
had any indebtedness during the period of this Annual Report.
Investment Restrictions
The Company is subject to the following investment restrictions:
· for so long as required by the UK Listing Rules, it will at all
times seek to ensure that the Investment Manager invests and manages the
Company's and the Partnership's assets in a way which is consistent with the
Company's objective of spreading risk and in accordance with the Company's
investment policy;
· for so long as required by the UK Listing Rules, it must not
conduct a trading activity which is significant in the context of the Company
and its Investment Undertakings;
· for so long as required by the UK Listing Rules, not more than 10
per cent. of the value of its total assets will be invested in other UK-listed
closed-ended investment funds, except for those which themselves have
published investment policies to invest not more than 15 per cent. of their
total assets in other UK-listed closed-ended investment funds; in addition,
the Company will not invest more than 15 per cent. of the value of its total
assets in other UK-listed closed-ended investment funds; and
· any investment restrictions that may be imposed by Guernsey law
(although no such restrictions currently exist).
Currency and interest rate hedging transactions will only be undertaken for
the purpose of efficient portfolio management and these transactions will not
be undertaken for speculative purposes.
Board of Directors
Richard Horlick (65), Chair of the Board and Non-Executive Independent
Director
Appointment: Appointed to the Board in October 2022 and appointed as Chair of
the Board in February 2023.
Experience: Richard Horlick serves as a Non-Executive Director and chair of BH
Macro Limited and a Non-Executive Director of VH Global Energy Infrastructure
PLC, each of which is admitted to trading on the Main Market of the London
Stock Exchange. In addition to his listed positions, he is currently the
Non-Executive Chairman of CCLA Investment Management Limited, which manages
assets for over 38,000 charities and church and local authority funds, as well
as a Director for Global Asset Tracking Limited. Richard Horlick is a UK
resident and has served on a number of closed end fund boards and was
previously head of investment and main board Director of Schroders Plc and
President, Institutional, of Fidelity International and subsequently chairman
of the Trust Bank for the Fidelity Mutual funds in the US. He has had a long
and distinguished career in investment management since graduating from
Cambridge University in 1980 with an MA in Modern History.
Committee Memberships: Audit Committee Member; Nomination and Remuneration
Committee Member; Management Engagement Committee Member.
Karen McClellan (64), Non-Executive Independent Director
Appointment: Appointed to the Board in May 2023.
Experience:
Karen McClellan is a Director of Green Epoch Limited and was until recently an
advisory board member of TT International's Environmental Solutions Fund. As a
banker, asset manager and university lecturer, Karen McClellan has spent most
of her career in carbon policy, clean infrastructure finance and zero-carbon
technologies, having raised and deployed more than £700 million in renewable
energy and carbon funds and transactions. During two decades as an investment
banker at Lehman Brothers, Robert Fleming and the EBRD, and as Head of Asset
Management at Carbon Capital Markets, Karen McClellan raised innovative
investment funds backed by emission reductions, energy savings and methane
capture, and served on their investment committees. Karen is a Lecturer in
Management at the Stanford Graduate School of Business and holds degrees from
Stanford University (MBA) and Yale University (BA Economics). She serves as an
appointed expert for the UK Accelerated Climate Transitions programme and on
the Climate Tech Council (London). Karen McClellan is a UK resident.
Committee Memberships: Audit Committee Member; Nomination and Remuneration
Committee Member, Management Engagement Committee Member.
John Roche (59), Non-Executive Independent Director
Appointment: Appointed to the Board in December 2022.
Experience:
John Roche qualified as an Irish Chartered Accountant in 1988 and moved
immediately to Guernsey to join the PwC predecessor firm, Coopers &
Lybrand. He seconded to the investment management practices at PwC Ireland
(1996-1998) and PwC UK (2003-2008) returning on a full-time basis in 2009 to
PwC Channel Islands, Guernsey office. Promoted to partner in 2006, he is now
recently retired with a strong background in auditing as well as IPO and
capital markets transactions for investment companies on the various London
markets. He focussed on delivering audit services to alternative investment
managers, specialising in private equity, secondaries, private debt,
infrastructure and real estate in the listed and private sectors. John Roche
has been the PwC Channel Islands firm's Risk Management Partner (2008-2015),
Partner Responsible for Independence/Ethics & Business Conduct (2008-2015
& 2018-2022), as well as the Guernsey Office Managing Partner (2013-2020).
He was also President of the Guernsey Society of Chartered and Certified
Accountants (2013-2015). John Roche was appointed to the board of Syncona
Limited, a London listed life sciences investment company on 1 October 2024
and he is a Guernsey resident.
Committee Memberships: Audit Committee Chair; Nomination and Remuneration
Committee Member; Management Engagement Committee Member.
Jeremy Thompson (69), Non-Executive Senior Independent Director
Appointment: Appointed to the Board in May 2016 and became Senior Independent
Director following Patrick Firth's retirement on 21 May 2024.
Experience: Jeremy Thompson has sector experience in Finance, Telecoms,
Engineering and Oil & Gas. He acts as an independent Non-Executive
Director for both listed, including DP Aircraft 1 Limited, and PE funds. Prior
to that, he has worked in private equity and was CEO of four autonomous global
businesses within Cable & Wireless Plc and earlier held CEO roles within
the Dowty Group. He currently serves as chairman of the States of Guernsey
Renewable Energy Team and is a commissioner of the Alderney Gambling Control
Commission. He is also an independent member of the Guernsey Tax Tribunal
panel. He is a graduate of Brunel (B.Sc), Cranfield (MBA) and Bournemouth
(M.Sc) Universities and attended the Royal College of Defence Studies (RCDS)
as an industry member. He is a member of the IoD and holds the IoD's
Certificate and Diploma in Company Direction, is an associate of the Chartered
Institute of Arbitration and a chartered Company Secretary. Jeremy Thompson
is a resident of Guernsey.
Committee Memberships: Audit Committee Member; Nomination and Remuneration
Committee Chair; Management Engagement Committee Member.
Claire Whittet (69), Non-Executive Independent Director
Appointment: Appointed to the Board in May 2015.
Experience:
Claire Whittet has over 45 years of experience in the financial services
industry. After obtaining a MA (Hons) in Geography from the University of
Edinburgh, she joined the Bank of Scotland for 19 years and undertook a wide
variety of roles. She moved to Guernsey in 1996 and was Global Head of Private
Client Credit for Bank of Bermuda before joining the Board of Rothschild &
Co Bank International Limited in 2003, initially as Director of Lending and
latterly as Managing Director and Co-Head until May 2016 when she became a
Non-Executive Director until her retirement in July 2023. Claire Whittet is an
ACIB member of the Chartered Institute of Bankers in Scotland, a Chartered
Banker, a member of the Chartered Insurance Institute and holds an IoD Diploma
in Company Direction. She is an experienced Non-Executive Director and
currently sits on the boards of two other listed funds (Eurocastle Investment
Limited and Third Point Offshore Investors Limited) and various PE funds.
Claire Whittet is a Guernsey resident.
Committee Memberships: Audit Committee Member; Nomination and Remuneration
Committee Member; Management Engagement Committee Chair.
Report of the Directors
The Directors hereby submit the Annual Report and Audited Financial Statements
for the Company for the year ended 31 December 2024. This Report of the
Directors should be read together with the Corporate Governance Report.
General Information
REL is a company limited by shares, which was incorporated on 23 May 2013 in
Guernsey with an unlimited life and registered with the Commission as a
Registered Closed-ended Collective Investment Scheme pursuant to the POI Law.
It has been listed on the London Stock Exchange since 24 October 2013. The
registered office of the Company is PO Box 286, Floor 2, Trafalgar Court, Les
Banques, St Peter Port, Guernsey, GY1 4LY.
Principal Activities
The principal activity of the Company is to act as an investment entity
through the Partnership and make investments in the energy sector.
The Company's investment objective is to generate long-term capital growth by
investing in the global energy sector.
Business Review
A review of the Company's business and its likely future development is
provided in the Board Chair's Statement and in the Investment Manager's
Report.
Listing Requirements
Since being admitted on 24 October 2013 to the Official List of the UK Listing
Authority, maintained by the FCA, the Company has complied with the applicable
UK Listing Rules.
Results and Dividend
The results of the Company for the year are shown in the audited Statement of
Comprehensive Income.
The Net Asset Value of the Company as at 31 December 2024 was $376 million (31
December 2023: $674 million).
The Directors do not recommend the payment of a dividend in respect of the
year ended 31 December 2024 (31 December 2023: $nil).
Share Capital
At incorporation on 23 May 2013, the Company issued one founder Ordinary Share
of no par value. On 29 October 2013, the Company issued 71,032,057 Ordinary
Shares of no par value at £10 per Ordinary Share in an initial public
offering raising a total of $1,138 million.
KFI, one of the Cornerstone Investors in the Company, paid for and acquired 10
million Ordinary Shares in two equal tranches of £50 million. The first
tranche was paid on Admission and the second tranche of 5,000,000 Ordinary
Shares was paid on 26 September 2014.
On 11 December 2015, the Company raised £67.6 million ($102.3 million) ((1))
through the issuance of 8,448,006 new Ordinary Shares at £8.00 per Ordinary
Share.
On 15 October 2018, the Company announced a Tender Offer for £55.0 million
($71 million) in value of the Company's Ordinary Shares. The Company acquired
4,583,333 Ordinary Shares at £12.00 ($15.48) per share, which were cancelled
on 23 November 2018.
On 1 May 2020, the Company announced a buyback programme with the intention of
returning £50 million to Shareholders via on market buybacks; which was
completed on 9 March 2021. Since the announcement, the Company has purchased
17,214,197 shares, in aggregate, for £50 million ($63 million) at an average
share price of £2.90 ($3.67).
On 11 May 2021, the Company announced a buyback programme with the intention
of returning £20 million to Shareholders via on market buybacks, which
subsequently, on 4 October 2021, was increased to £40 million. Since the
announcement, the Company has purchased 7,744,935 shares, in aggregate, for
£36 million ($50 million) at an average share price of £4.65 ($6.40).
On 14 February 2022, the Company announced that the Board and Investment
Manager agreed to allocate an additional £46.0 million ($62.4 million) to the
programme, which subsequently on 15 May 2023, was increased by a further £30
million ($37.4 million).
In addition to the buyback programme, the Company acquired 3,182,196 ordinary
shares pursuant to a Tender Offer announced on 17 August 2023 at a total cost
of approximately £18.4 million ($23.4 million).
On 8 February 2024, the Company announced that it proposed to return £158
million ($199 million) of its excess capital to shareholders by means of a
tender offer at a price of £10.50 per ordinary share. The Company launched
the Tender Offer on 23 February 2024 which closed on 25 March 2024. On 2 April
2024 REL announced that it had acquired, as of 28 March 2024, 15,047,619 of
the Company's ordinary shares at a price of £10.50, equating to approximately
36 per cent. of all outstanding ordinary shares, and that all shares
repurchased by the Company had been cancelled.
At the 2024 AGM, the shareholders renewed the authorisation for the Board to
continue with share buybacks and the Board duly commenced the current
programme, allocating an amount of approximately £22 million ($28 million).
On 4 July 2024, the Company announced that it has entered into an irrevocable
agreement with Deutsche Numis to continue this share buyback programme.
Since the announcement in May 2024, in addition to the Tender Offer, 1,805,479
ordinary shares have been bought back at a total cost of approximately £14
million ($19 million) at an average share price of approximately £8.01
($10.06). The Company continues to maintain its buyback strategy moving
forward in 2025.
As at 31 December 2024, the share capital of the Company is 25,342,691
Ordinary Shares in aggregate.
The Company has one class of Ordinary Shares. The issued value of the Ordinary
Shares represents 100 per cent. of the total issued value of all share
capital. Under the Company's Articles of Incorporation, on a show of hands,
each Shareholder present in person or by proxy has the right to one vote at
general meetings. On a poll, each Shareholder is entitled to one vote for
every share held.
Shareholders are entitled to all dividends paid by the Company and, on a
winding up, provided the Company has satisfied all of its liabilities, the
Shareholders are entitled to all of the surplus assets of the Company. The
Company has not declared or paid dividends from inception to 31 December 2024,
and has no intention to do so.
The Ordinary Shares have no right to fixed income.
((1)) Gross of share issuance costs of $3.6 million.
Shareholdings of the Directors
The Directors with beneficial interests in the shares of the Company as at 31
December 2024 and 2023 are detailed below:
Director Ordinary Per cent. Ordinary Per cent.
Shares held Holding at Shares held Holding at
31 December 31 December 31 December 31 December
2024 2024 2023 2023
Richard Horlick((1)) 10,000 0.039 10,000 0.024
Jeremy Thompson((2)) 3,751 0.015 3,751 0.009
Claire Whittet((1)(3)) 2,250 0.010 2,250 0.005
John Roche((1)) 2,201 0.010 2,201 0.005
Karen McClellan((1)) - - - -
((1) ) Non-Executive Independent Director.
((2) ) Senior Independent Director (from 21 May 2024)
((3)) Ordinary Shares held indirectly with spouse.
In addition, the Company also provides the same information as at 24 February
2025, being the most current information available.
Director Ordinary Per cent.
Shares held Holding at
24 February 2025 24 February 2025
Richard Horlick((1)) 10,000 0.039
Jeremy Thompson((2)) 3,751 0.015
Claire Whittet((1)(3)) 2,250 0.010
John Roche((1)) 2,201 0.010
Karen McClellan((1)) - -
((1)) Non-Executive Independent Director
((2)) Senior Independent Director (from 21 May 2024)
((3)) Ordinary Shares held indirectly with spouse
Directors' Authority to Buyback Shares
At the AGM on 21 May 2024 in St Peter Port, Guernsey, the Company renewed the
authority to make market purchases of up to a maximum of 14.99 per cent. of
the issued share capital of the Company. Any buyback of the Company's Ordinary
Shares will be made subject to Companies Law (''Companies (Guernsey) Law,
2008, (as amended)'') and within any guidelines established from time to time
by the Board. The making and timing of any buybacks will be at the absolute
discretion of the Board, with consent of the Investment Manager, and not at
the option of the Shareholders. Purchases of the Company's Ordinary Shares
will only be made through the market for cash at prices below the prevailing
Net Asset Value of the Company's Ordinary Shares (as last calculated) where
the Directors believe such purchases will enhance Shareholder value. Such
purchases will also only be made in accordance with the UK Listing Rules.
In accordance with the Company's Articles of Incorporation and Companies Law,
up to 100 per cent. of the Company's Ordinary Shares may be held as treasury
shares.
Directors' and Officers' Liability Insurance
The Company maintains insurance in respect of Directors' and Officers'
liability in relation to their acts on behalf of the Company.
Substantial Shareholdings
As at 31 December 2024, the Company had been notified, in accordance with
Chapter 5 of the Disclosure Guidance and Transparency Rules, of the following
substantial voting rights as Shareholders of the Company.
Shareholder Shareholding Per cent. Nature of
Holding Holding
Moore Capital Mgt 5,348,912 21.03 Indirect
Quilter Investors 3,018,483 11.87 Indirect
Riverstone Related Holdings 2,053,339 8.10 Direct
Helvetische Bank 1,274,059 5.01 Direct
Metage Capital Mgt 1,100,495 4.33 Direct
In addition, the Company also provides the same information as at 24 February
2025, being the most current information available.
Shareholder Shareholding Per cent. Nature of
Holding Holding
Moore Capital Mgt 5,348,912 21.19 Indirect
Quilter Investors 3,018,483 11.96 Indirect
Riverstone Related Holdings 2,053,339 8.14 Direct
Helvetische Bank 1,284,059 5.09 Direct
Metage Capital Mgt 1,100,495 4.36 Direct
The Directors confirm that there are no securities in issue that carry special
rights with regards to the control of the Company.
Independent External Auditor
Ernst & Young LLP has been the Company's external auditor since
incorporation in 2013. The Audit Committee reviews the appointment of the
external auditor, its effectiveness and its relationship with the Company,
which includes monitoring the use of the external auditor for non-audit
services and the balance of audit and non-audit fees paid.
Following a review of the independence and effectiveness of the external
auditor, a resolution will be proposed at the 2025 Annual General Meeting to
reappoint Ernst & Young LLP. Each Director believes that there is no
relevant information of which the external auditor is unaware. Each has taken
all steps necessary, as a Director, to be aware of any relevant audit
information and to establish that Ernst & Young LLP is made aware of any
pertinent information. This confirmation is given and should be interpreted in
accordance with the provisions of Section 249 of the Companies Law. Further
information on the work of the external auditor is set out in the Report of
the Audit Committee.
Articles of Incorporation
The Company's Articles of Incorporation may only be amended by special
resolution of the Shareholders. At the AGM on 25 May 2021, the Company adopted
Amended and Restated Articles.
AIFMD
REL is regarded as an externally managed non-EEA AIF under the AIFM Directive.
RIGL is the Investment Manager of the Company as its non-EEA AIFM. The AIFMD
outlines the required information which has to be made available to investors
in an AIF and directs that material changes to this information be disclosed
in the Annual Report of the AIF. All information required to be disclosed
under the AIFMD is either disclosed in this Annual Report or is detailed in
the Appendix entitled AIFMD Disclosures on page 178 in REL's latest Prospectus
which can be obtained through the Company's website:
www.riverstonerel.com/investors/reports-and-presentations/ The AIFM has no
remuneration within the current or prior year that falls within the scope of
Article 22 of the Directive.
RIGL provides AIFMD compliant management services to REL. The AIFM acting on
behalf of the AIF, has appointed Ocorian Depositary Company (UK) Limited to
provide depositary services to the AIF. The appointment of the Depositary is
intended to adhere to, and meet the conditions placed on the Depositary and
the AIFM under Article 21 and other related articles of the AIFMD. The
Depositary shall only provide depositary services to the AIF should it admit
one or more German and/or Danish investors following marketing activity
towards them. At that time, the Depositary shall observe and comply with the
Danish and German regulations applying to the provision of depositary services
to a non-EEA AIF marketed in Denmark or Germany, as the case may be, by a
non-EEA AIFM.
UCITS Eligibility
The Investment Manager is a relying adviser of Riverstone Investment Group
LLC. Riverstone Investment Group LLC is registered as an investment adviser
with the SEC under the U.S. Investment Advisers Act. As such, the Investment
Manager is subject to Riverstone Investment Group LLC's supervision and
control, the advisory activities of the Investment Manager are subject to the
U.S. Investment Advisers Act and the rules thereunder and the Investment
Manager is subject to examination by the SEC. Accordingly the Company has been
advised that its Ordinary Shares should be "transferable securities" and,
therefore, should be eligible for investment by authorised funds in accordance
with the UCITS Directive or NURS on the basis that:
· the Company is a closed end investment company;
· the Ordinary Shares are admitted to trading on the Main Market of
the London Stock Exchange; and
· the Ordinary Shares have equal voting rights.
However, the manager of the relevant UCITS or NURS should satisfy itself that
the Ordinary Shares are eligible for investment by the relevant UCITS or NURS.
AEOI Rules
Under AEOI Rules the Company continues to comply with both FATCA and CRS
requirements to the extent applicable to the Company.
General Partner's Performance Allocation and Management Fees
The General Partner's Performance Allocation is equal to 20 per cent. of all
applicable realised pre-tax profits, in accordance with the revised terms
announced on 3 January 2020, but effective 30 June 2019 (see Note 9 for
further detail). In particular, taxes on realised gains from ECI investments,
as shown in the Investment Manager's Report, in excess of existing net
operating losses, can be substantial at rates up to 27.5 per cent. The Company
is not an umbrella collective investment undertaking and therefore has no
gross liability. In the normal course of business, REL may form wholly-owned
subsidiaries, to be treated as C Corporations for U.S. tax purposes. The C
Corporations serve to protect REL's public investors from incurring U.S. ECI.
The C Corporations file U.S. corporate tax returns with the U.S. IRS and pay
U.S. corporate taxes on its taxable income.
The General Partner's Performance Allocation is calculated under the
aforementioned revised terms of the Partnership Agreement announced on 3
January 2020, but effective 30 June 2019, and as described in the
Prospectuses.
The accrued Performance Allocation is calculated on a quarterly basis, with a
decision being taken as to whether or not to provide for it when calculating
the fair value of the Company's investment in the Partnership, as described in
Note 10. In view of the substantial deficit of $156.7 million noted in the
Company's Portfolio Cost Benchmark Test, the Company continues to not accrue
any calculated Performance Allocation as at 31 December 2024 ($Nil: 31
December 2023). The fair value of the Company's investment in the
Partnership is after the calculation of management fees, as described in Note
9.
The financial effect of the General Partner's Performance Allocation,
management fees and any taxes on ECI investments is shown in Note 6. The
Investment Management Agreement continues into perpetuity post the seventh
year anniversary as the Discontinuation Resolution was not passed in 2020,
subject to the termination for cause provisions described in Note 9.
However, either the Board or a 10 per cent. Shareholder or group can request
an EGM to vote on a wind-up of the Company at any time. If passed, such
actions would trigger an exit fee equal to 20 times the most recent quarterly
management fee totalling $28.2 million.
Going Concern
The Audit Committee has reviewed the appropriateness of the Company's
Financial Statements prepared in accordance with Companies Law and IFRS and
presented on a going concern basis, which it has recommended to the Board. As
further disclosed in the Corporate Governance Report, the Company is a member
of the AIC and complies with the AIC Code. The Financial Statements have been
prepared on a going concern basis for the reasons set out below and as the
Directors, with the recommendation from the Audit Committee, have a reasonable
expectation that the Company has adequate resources to continue in operational
existence for the foreseeable future, which is defined as the period from the
date of approval of Financial Statements up until 31 March 2026. In reaching
this conclusion, the Directors, with the recommendation from the Audit
Committee, have considered the risks that could impact the Company's liquidity
over the period from the date of approval of the Financial Statements up until
31 March 2026.
In reaching the conclusion that the audited Financial Statements are prepared
on a going concern basis, the Directors have considered the principal risks
faced by the Company; the substantial level of cash/cash equivalent balances
held by the Company and the Partnership as at 31 December 2024; the liquidity
of the material listed investments held, the cash flow forecasts for the
Company outlining the requirements to settle current and expected liabilities
(including the funding of the Company's share buyback programme); and the
potential unfunded commitments of the Partnership.
Viability Statement
The Directors, with recommendation from the Audit Committee, have assessed the
prospects of the Company and relevant stresses (i.e. additional funding
requirements to existing portfolio companies, share buyback programme,
management fees and expenses) over a longer period than required by the going
concern provision. With recommendation from the Audit Committee, the Board
chose to conduct a review for a period of three years to 31 December 2027 as
it was determined to be an appropriate timeframe based on the historical
investment cycle of the Company's investments, through the Partnership, and
its financial planning processes. On a rolling basis the Directors evaluate
the outcome of the investments and the Company's financial position as a
whole. While an unprecedented and long-term decline in global oil and gas
consumption could threaten the Company's performance, it would not necessarily
threaten its viability, not least as a result of the ample cash/cash
equivalents available at the Company and the Partnership and other liquid
assets.
In support of this statement, the Audit Committee recommended to the Directors
to take into account all of the principal risks and their mitigation as
identified in the Principal Risk and Uncertainties section of the Corporate
Governance Report, the nature of the Company's business; including the cash
reserves, money market deposits and other liquid investments held at the
Partnership, the potential of its portfolio of investments to generate future
income and capital proceeds, and the ability of the Directors to minimise the
level of cash outflows, if necessary. The most relevant potential impacts of
the identified Principal Risks and Uncertainties on viability were determined
to be:
· An investment's capital requirements may exceed the Company's
ability to provide capital; and
· The Company may not have sufficient capital available to
participate in all investment opportunities presented.
Each quarter, the Directors, through the Audit Committee, review threats to
the Company's viability utilising the Company's risk matrix, which it updates
as required due to recent developments and/or changes in the global market.
The Board also relies on periodic reports provided by the Investment Manager
and the Administrator regarding risks faced by the Company. When required,
experts are utilised to gather relevant and necessary information, regarding
tax, legal, and other factors.
The Investment Manager considers the future cash requirements of the Company
before follow-on funding for current portfolio companies. Furthermore, the
Board receives regular updates from the Investment Manager on the Company's
cash position, which allows the Board to maintain their fiduciary
responsibility to the Shareholders and, if required, limit funding for
existing commitments.
Based on the aforementioned procedures and the existing internal controls of
the Company and Investment Manager, the Board, with recommendation from the
Audit Committee, has concluded there is a reasonable expectation that the
Company will be able to continue in operation and meet its liabilities as they
fall due over the three-year period of the assessment.
Directors' Responsibilities
Although the Company is domiciled in Guernsey, in accordance with the guidance
set out in the AIC Code, the Directors describe in this Annual Report how the
matters set out in Section 172 of the UK Companies Act 2006 have been
considered in their board discussions and decision-making. Section 172 of
the Companies Act requires that the directors of a company act in the way that
they consider, in good faith, is most likely to promote the success of the
company for the benefit of its members as a whole, and in doing so have regard
(amongst other matters) to the likely consequences of any decision in the long
term and the interests of all the company's stakeholders.
The Board seeks to encourage engagement between the Company's Shareholders and
the Chair of the Board, the Chairs of the Audit and Management Engagement
Committees and the Senior Independent Director, which has been facilitated
throughout the year. Up to date quarterly reporting also provides the Board
with accurate, timely information on shareholder sentiment and direct feedback
from service providers, impacted by the Company's operations, and is canvassed
at least annually by the Chair of the Management Engagement Committee. It is
against this backdrop that key decisions which are either material to the
Company or are significant to any of the Company's key stakeholders are taken.
The below key decisions were made or approved by the Directors during the
year, with the overall aim of promoting the success of the Company, having
regard to the long term, while considering the impact on its members,
stakeholders and the wider society as outlined in the ESG section.
Engagement with Shareholders
The Company reports to Shareholders in a number of formal ways, including its
Annual Report, Interim Report and regulatory news releases, all of which are
approved by the Board. In addition, the Company's website contains
comprehensive information for Shareholders. The Chair and the SID have met
with a number of investors over the period.
On 8 February 2024, the Company announced a Tender Offer for £158 million
($199 million) in the value of the Company's Ordinary Shares. During 2024, the
Company acquired 15,047,619 Ordinary Shares which were subsequently cancelled
on 2 April 2024.
At the 2024 AGM, the shareholders renewed the authorisation for the Board to
continue with share buybacks and the Board duly commenced the current
programme, allocating an amount of approximately £22 million ($28 million).
During 2024, in addition to the Tender Offer, the Company acquired 1,805,479
Ordinary Shares which were subsequently cancelled.
Following the cancellation of Ordinary Shares from the Tender Offer and share
buyback programme, the share capital of the Company is 25,342,691 Ordinary
Shares in aggregate.
Financial Risk Management Objectives
Financial Risk Management Objectives are disclosed in Note 10.
Principal Risk and Uncertainties
Principal Risk and Uncertainties are discussed in the Corporate Governance
Report.
Annual General Meetings
The AGM of the Company will be held at 11:00 BST on 20 May 2025 at the offices
of Ocorian Administration (Guernsey) Limited, Trafalgar Court, Les Banques,
St Peter Port, Guernsey, Channel Islands. Details of the resolutions to be
proposed at the AGM, together with explanations, will appear in the notices of
meetings to be distributed to Shareholders listed on the register as at 31
December 2024 together with this Annual Report. As a matter of good practice,
all resolutions will be conducted on a poll and the results will be announced
to the market as soon as possible after the meeting.
Members of the Board, including the Chair of the Board and the Chair of each
Committee, intend to be in attendance at the AGM, and will be available to
answer Shareholder questions. Additionally, Shareholders can submit questions
in advance to LPRelations@RiverstoneLLC.com addressed for the attention of the
Board.
By order of the Board
Richard Horlick
Chair of the Board
27 February 2025
Directors' Responsibilities Statement
The Directors are responsible for preparing the Annual Report and Financial
Statements in accordance with applicable law and regulations.
The Companies Law requires the Directors to prepare Financial Statements for
each financial year. Under the Companies Law, the Directors must not approve
the Financial Statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Company and of the profit or loss of
the Company for that period. In preparing these Financial Statements, the
Directors are required to:
· select suitable accounting policies and apply them consistently;
· make judgements and estimates that are reasonable and prudent;
· present information, including accounting policies, in a manner
that provides relevant, reliable, comparable and understandable information;
· provide additional disclosures when compliance with the specific
requirements in IFRS are insufficient to enable users to understand the impact
of particular transactions, other events and conditions on the Company's
financial position and financial performance;
· state that the Company has complied with IFRS, subject to any
material departures disclosed and explained in the Financial Statements; and
· prepare the Financial Statements on a going concern basis unless
it is inappropriate to presume that the Company will continue in business.
The Directors confirm that they have complied with the above requirements in
preparing the Financial Statements.
The Directors are responsible for keeping proper accounting records, which
disclose with reasonable accuracy at any time, the financial position of the
Company and enable them to ensure that the Financial Statements comply with
Companies Law. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and detection
of fraud, error and non-compliance with law and regulations.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website
(www.RiverstoneREL.com). The work carried out by the external auditor does not
involve considerations of these matters and, accordingly, the external auditor
accepts no responsibility for any changes that may have occurred to the
Financial Statements since they were initially presented on the website.
Legislation in Guernsey governing the preparation and dissemination of the
Financial Statements may differ from legislation in other jurisdictions.
Responsibility Statement of the Directors in Respect of the Annual Report under the Disclosure GUIDANCE and Transparency Rules
Each of the Directors confirms to the best of their knowledge and belief that:
· the Financial Statements, prepared in accordance with IFRS, give
a true and fair view of the assets, liabilities, financial position and profit
or loss of the Company;
· the Annual Report includes a fair review of the development and
performance of the business and the position of the Company, together with a
description of the principal risks and uncertainties faced; and
· the Annual Report and Financial Statements include information
required by the UK Financial Conduct Authority so that the Company complies
with the provisions of the UK Listing Rules, Disclosure Guidance and
Transparency Rules of the UK Listing Authority. With regard to corporate
governance, the Company is required to disclose how it has applied the
principles and complied with the provisions of the corporate governance code
applicable to the Company.
The Directors are responsible for preparing the Annual Report and Financial
Statements in accordance with applicable law and regulations. As part of the
preparation of the Annual Report and Financial Statements, the Directors have
received reports and information from the Company's Administrator and
Investment Manager. The Directors have considered, reviewed and commented upon
the Annual Report and Financial Statements throughout the drafting process in
order to satisfy itself in respect of the content. In the opinion of the
Directors, the Annual Report and Financial Statements, taken as a whole, are
fair, balanced and understandable and provide the information necessary for
Shareholders to assess the Company's performance, business model and strategy.
By order of the Board
Richard Horlick John Roche
Chair of the Board Director
27 February 2025 27 February 2025
Corporate Governance Report
As a UK listed Company, REL's governance policies and procedures are based on
the principles of the UK Code as required under the UK Listing Rules. The UK
Code is available on the Financial Reporting Council's website,
www.frc.org.uk.
The Company is subject to the GFSC Code, which applies to all companies
registered as collective investment schemes in Guernsey. The GFSC has also
confirmed that companies that report against the UK Code or the AIC Code are
deemed to meet the GFSC Code.
The Board monitors developments in corporate governance to ensure the Board
remains aligned with best practice especially with respect to the increased
desired focus on greater gender and ethnic diversity on the boards of listed
companies. The Board recognises and supports the Hampton Alexander Review and
the Parker Review and acknowledges the importance of having a variety of
backgrounds and experiences represented in the boardroom for the effective
functioning of the Board. It is the ongoing aspiration of the Board to have a
well-diversified representation. The Board also values diversity of business
skills and experience because Directors with diverse skills sets, capabilities
and experience gained from different geographical backgrounds enhance the
Board by bringing a wide range of perspectives to the Company. The Board is
satisfied with the current composition and functioning of its members and
notes a 40 per cent. female representation, meeting the Hampton Alexander
target. The Board is cognisant that it does not currently have an ethic
minority representation, contrary to the FCA diversity guidelines. The Board's
view has been and, continues to be, that all appointments to the Board should
be merit based, assessed against objective selection criteria. The Board has a
Diversity Policy which is actively implemented as part of the board succession
process and whilst the Board has not become more ethnically diverse as a
result of recruitment in 2023, this continues to be a key focus during future
succession planning. To avoid precluding any deserving candidate from
consideration, executive search consultants will be asked to provide
candidates from a diverse range of backgrounds.
The AIC Code addresses all the principles set out in the UK Code, as well as
setting out additional principles and recommendations on issues that are of
specific relevance to investment companies such as the Company. The Board
considers that reporting against the principles and recommendations of the AIC
Code provides better information to Shareholders.
The Company has complied with the recommendations of the AIC Code and the
relevant provisions of the UK Code, except as set out below.
The UK Code includes provisions relating to:
· the role of the chief executive;
· executive directors' remuneration; and
· the need for an internal audit function.
As explained in the UK Code, the Board considers that the above provisions are
not currently relevant to the position of the Company, being an externally
managed investment company, which delegates most day-to-day functions to third
parties.
The Company does not have a Chief Executive or any Executive Directors.
The Company has no employees or internal operations and has therefore not
reported further in respect of these provisions. The need for an internal
audit function is discussed in the Audit Committee report.
The Board
The Company is led and controlled by a Board of Directors, which is
collectively responsible for the long-term sustainable success of the Company.
It does so by creating and preserving value and has as its foremost principle
acting in the interests of Shareholders as a whole and the Company's
stakeholders.
The Company believes that the composition of the Board is a fundamental driver
of its success as the Board must provide strong and effective leadership of
the Company. The current Board was selected, as their biographies illustrate,
to bring a breadth of knowledge, skills and business experience to the
Company. The Non-Executive Directors provide independent challenge and review,
bringing wide experience, specific expertise and a fresh objective
perspective.
The Board presently consists of five Non-Executive Directors all of whom,
including the Chair of the Board, are independent of the Company's Investment
Manager; Richard Horlick, Claire Whittet, John Roche, Jeremy Thompson and
Karen McClellan. All Directors served during the year. John Roche succeeded
Patrick Firth as Chair of the Audit Committee with effect from 1 January 2024
and Jeremy Thompson was appointed Senior Independent Director on 21 May 2024,
on the retirement of Patrick Firth.
The Chair of the Board is independent and is appointed in accordance with the
Company's Articles of Incorporation. Richard Horlick is considered to be
independent because he:
· has no current nor historical employment with the Investment
Manager;
· has no current directorships nor partnerships in any other
investment funds managed by the Investment Manager; and
· is not an executive of a self-managed company nor an ex-employee
who has left the executive team of a self-managed company within the last five
years.
The Board is of the view that no individual nor group of individuals dominates
decision making.
New Directors receive an induction from the Investment Manager and all
Directors receive other relevant training as necessary.
At each subsequent Annual General Meeting of the Company, each of the
Directors at the date of the notice convening the Annual General Meeting shall
retire from office and may offer themselves for election or re-election by the
Shareholders.
The Board meets at least four times a year for regular, scheduled meetings and
should the nature of the activity of the Company require it, additional
meetings may be held, some at short notice. At each meeting the Board follows
a formal agenda that covers the business to be discussed. The primary focus at
Board meetings is a review of investment performance and associated matters
such as asset allocation, share price discount/premium management, investor
relations, peer group information, gearing, industry issues and principal
risks and uncertainties, in particular those identified at the end of this
report. Additionally, since the Company's modified investment strategy was
implemented in 2020, the Board is required to regularly hold meetings to
consent to all new investments when brought forward by the Investment Manager.
Between meetings the Board or selected Directors visit the Investment Manager
at least annually, and there is regular contact with the Administrator. The
Board requires to be supplied in a timely manner with information by the
Investment Manager, the Administrator, the Company Secretary and other
advisers in a form and of a sufficient quality to enable it to discharge its
duties.
The Company has adopted a share dealing code for the Board and will seek to
ensure compliance by the Board and relevant personnel of the Investment
Manager and other third-party service providers with the terms of the share
dealing code.
Board Tenure and Re-election
In accordance with the AIC Code, when and if any Director shall have been in
office (or on re-election would at the end of that term of office) for more
than nine years, the Company will consider further whether there is a risk
that such a Director might reasonably be deemed to have lost independence
through such long service. Patrick Firth had served for more than nine years
when he retired on 21 May 2024 with his longer tenure being deemed necessary
for succession planning purposes. As at the date of the Company's 2024 AGM and
during this reporting period, Claire Whittet had served for more than nine
years with the Board considering her to be independent throughout this period.
Claire Whittet has advised that she will not seek re-election to the Board at
the forthcoming 2025 AGM. Additionally as at the date of the Company's 2025
AGM, Jeremy Thompson will have just reached his nine year tenure on the Board
and it has been agreed that he will offer himself for re-election for one
further year. The Board continues to consider him to be independent. The
re-election of Jeremy Thompson for one further year as the Senior Independent
Director will support the Company during 2025 with expected increased
shareholder and Investment Manager engagement arising from the narrative at
the conclusion of the Chair's Statement. The Board considers its composition
and succession planning on an ongoing basis. Unless otherwise advised, all
Directors stand for annual re-election at the AGM.
A Director who retires at an Annual General Meeting may, if willing to
continue to act, be elected or re-elected at that meeting. If, at a general
meeting at which a Director retires, the Company neither re-elects that
Director nor appoints another person to the Board in the place of that
Director, the retiring Director shall, if willing to act, be deemed to have
been re-elected unless at the general meeting it is resolved not to fill the
vacancy or unless a resolution for the re-election of the Director is put to
the meeting and not passed.
Directors are appointed under letters of appointment, copies of which are
available at the registered office of the Company.
Directors' Remuneration
The level of remuneration of the Directors reflects the time commitment and
responsibilities of their roles. The remuneration of the Directors does not
include any share options or other performance related elements and there are
no plans to seek any Shareholder waivers to deviate from this.
With effect from 1 July 2023, a 10 per cent. increase was applied to the
Directors remuneration.
The Chair of the Board is entitled to annual remuneration of £145,200 (31
December 2023: £145,200). The Chair of the Audit Committee is entitled to
annual remuneration of £90,750 (31 December 2023: £90,750) and the Chair of
the Management Engagement Committee is entitled to annual remuneration of
£78,650 (31 December 2023: £78,650). The Chair of the Nomination and
Remuneration Committee is entitled to remuneration of £78,650 (31 December
2023: £78,650). The other independent Directors are entitled to annual
remuneration of £72,600 (31 December 2023: £72,600).
During the year ended 31 December 2024 and 31 December 2023, the Directors'
remuneration was as follows:
Director 2024 2023
($'000) ($'000)
Richard Horlick((1)) 182 159
Jeremy Thompson((2)(5)) 99 93
Claire Whittet((1)(4)) 99 93
John Roche((1)(3)) 114 86
Karen McClellan((1)) 91 54
((1)) Non-Executive Independent Director
((2)) Chair of the Nominations and Remuneration Committee
((3)) Chair of the Audit Committee
((4)) Chair of the Management Engagement Committee
((5)) Senior Independent Director
The above fees due to the Directors are for the year ended 31 December 2024
and 31 December 2023, and none were outstanding at 31 December 2024 (31
December 2023: $nil).
Duties and Responsibilities
The Board is responsible to Shareholders for the overall management of the
Company. The duties and powers reserved for the Board include decisions
relating to the determination of investment policy and approval of investments
in certain instances, strategy, capital raising, statutory obligations and
public disclosure, financial reporting and entering into any material
contracts by the Company.
The Board retains direct responsibility for certain matters, including (but
not limited to):
· approving the Company's long-term objective and any decisions of
a strategic nature including any change in investment objective, policy and
restrictions, including those which may need to be submitted to Shareholders
for approval;
· reviewing the performance of the Company in light of the
Company's strategy objectives and budgets ensuring that any necessary
corrective action is taken;
· the appointment, overall supervision and removal of key service
providers and any material amendments to the agreements or contractual
arrangements with any key delegates or service providers;
· approving any transactions with ''related parties'' for the
purposes of the Company's voluntary compliance with the applicable sections of
the UK Listing Rules;
· the review of the Company's valuation policy;
· the review of the Company's corporate governance arrangements;
and
· approving any actual or potential conflicts of interest.
The Directors have access to the advice and services of the Administrator, who
is responsible to the Board for ensuring that Board procedures are followed
and that it complies with Companies Law and applicable rules and regulations
of the GFSC and the LSE. Where necessary, in carrying out their duties, the
Directors may seek independent professional advice services at the expense of
the Company. The Company maintains Directors' and Officers' liability
insurance in respect of legal action against its Directors on an ongoing
basis.
The Board's responsibilities for the Annual Report are set out in the
Directors' Responsibility Statement. The Board is also responsible for issuing
appropriate half-yearly financial reports, quarterly portfolio valuations and
other price-sensitive public reports.
Directors' attendance at Board and Committee Meetings:
One of the key criteria the Company uses when selecting Directors is their
confirmation prior to their appointment that they will be able to allocate
sufficient time to the Company to discharge their responsibilities in a timely
and effective manner.
The Board formally met four times during the year. The Board has held a number
of ad hoc meetings, and the sub committees of the Board have met frequently,
during the course of 2024. Directors are encouraged when they are unable to
attend a meeting to give the Chair of the Board their views and comments on
matters to be discussed, in advance. In addition to their meeting commitments,
the Non-Executive Directors also liaise with the Investment Manager whenever
required and there is regular contact outside the Board meeting schedule. In
addition to the Board members, members of the Investment Manager attend
relevant sections of the Board meetings by invitation.
Attendance is further set out below:
Board Meetings Audit Nomination and Remuneration Management Tenure as at 31 December 2024
Committee Committee Engagement
Meetings Meetings Committee
Meetings
Director
Richard Horlick((1)) 4 4 4 2 2 years and 2 months
Jeremy Thompson((2)) 4 4 4 2 8 years and 8 months
Karen McClellan((1)) 4 4 4 2 1 year and 8 months
John Roche((1)) 4 4 4 2 2 years and 1 month
Claire Whittet((1)) 4 4 4 2 9 years and 8 months
((1)) (Non-Executive Independent Director)
((2)) (Senior Independent Director)
( )
A quorum is comprised of any two or more members of the Board from time to
time, to perform administrative and other routine functions on behalf of the
Board, subject to such limitations as the Board may expressly impose on this
committee from time to time.
Board members who are not ordinarily resident in Guernsey were sometimes
unable to travel and attend certain Board and committee meetings in person
during 2024. In those cases, the relevant Board members attended those
meetings by telephone or video link and are shown as being in attendance at
the relevant meeting in the table above.
Conflicts of interest
A Director has a duty to avoid a situation in which he or she has, or can
have, a direct or indirect interest that conflicts, or possibly may conflict,
with the interests of the Company. The Board requires Directors to declare all
appointments and other situations that could result in a possible conflict of
interest and has adopted appropriate procedures to manage and, if appropriate,
approve any such conflicts. The Board is satisfied that there is no compromise
to the independence of those Directors who have appointments on the boards of,
or relationships with, companies outside the Company.
Committees of the Board
The Board believes that it and its committees have an appropriate composition
and blend of skills, experience, independence and diversity of backgrounds to
discharge their duties and responsibilities effectively. The Board keeps its
membership, and that of its committees, under review to ensure that an
acceptable balance is maintained, and that the collective skills and
experience of its members continue to be refreshed. It is satisfied that all
Directors have sufficient time to devote to their roles and that undue
reliance is not placed on any individual.
Each committee of the Board has written terms of reference, approved by the
Board, summarising its objectives, remit and powers, which are available on
the Company's website (www.RiverstoneREL.com (http://www.RiverstoneREL.com) )
and reviewed on an annual basis. All committee members are provided with
appropriate induction on joining their respective committees, as well as
on-going access to training. Minutes of all meetings of the committees (save
for the private sessions of committee members at the end of meetings) are made
available to all Directors and feedback from each of the committees is
provided to the Board by the respective committee Chairs at the next Board
meeting. The Chair of each committee attends the AGM to answer any questions
on their committee's activities.
The Board and its committees are supplied with regular, comprehensive and
timely information in a form and of a quality that enables them to discharge
their duties effectively. All Directors are able to make further enquiries of
management whenever necessary and have access to the services of the Company
Secretary.
Audit Committee
The Audit Committee has been chaired by John Roche since 1 January 2024. It
comprises Richard Horlick, Karen McClellan, Jeremy Thompson, and Claire
Whittet, all of whom held office throughout the year. The Chair of the Audit
Committee, the Investment Manager and the external auditor, Ernst & Young
LLP, have held discussions regarding the audit approach and identified risks.
The external auditors attend Audit Committee meetings in addition to a number
of meetings between the Audit Committee Chair and the audit partner, and a
private meeting is routinely held by the Audit Committee with the external
auditors to afford them the opportunity of discussions without the presence of
management. Despite Richard Horlick being the Chair of the Company, the Board
and the Audit Committee Chair remain satisfied that he should continue to be a
member of the Audit Committee as his contribution is valued and for a company
of this size, this is a relatively straightforward decision. The Audit
Committee activities are contained in the Report of the Audit Committee.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee is chaired by Jeremy Thompson and
comprises, Richard Horlick, Karen McClellan, John Roche and Claire Whittet,
all of whom held office throughout the year.
The Nomination and Remuneration Committee is convened for the purpose of
considering the appointment of additional Directors as and when considered
appropriate. The Nomination and Remuneration Committee recognises the
continuing importance of planning for the future and ensuring that succession
plans are in place. In considering appointments to the Board, the Nomination
and Remuneration Committee takes into account the ongoing requirements of the
Company and evaluates the balance of skills, experience, independence, and
knowledge of each candidate. Appointments are therefore made on personal merit
and against objective criteria with the aim of bringing new skills and
different perspectives to the Board whilst taking into account the existing
balance of knowledge, experience and diversity.
In the case of candidates for Directorships, care is taken to ascertain that
they have sufficient time to fulfil their Board and, where relevant, committee
responsibilities. The Board believes that the terms of reference of the
Nomination and Remuneration Committee ensure that it operates in a rigorous
and transparent manner. The Board also believes that diversity of experience
and approach, including gender diversity, amongst Board members is of great
importance and it is the Company's policy to give careful consideration to
issues of Board balance and diversity when making new appointments. The Board
remains focussed on the guidelines outlined by the Hampton Alexander Review
and The Parker Review.
In May 2023, the Nomination Committee changed its name to the Nomination and
Remuneration Committee and incorporated additional duties in the terms of
reference to determine and make recommendations to the Board regarding the
remuneration of the Directors. The appended Remuneration Committee utilised
the work of a local specialist before recommending a 10 per cent. increase,
which reflected no remuneration increase since 2016 and the relatively high
workload.
In accordance with both UK Listing Rules and AIC Guidelines the Board
composition is tabulated below. The Board will continue to take diversity into
account as part of its continuing succession planning and recruitment process.
Board Gender Identity at 31 December 2024
Number of Board Members Percentage of the Board Number of Senior Positions on the Board
Men 3 60.00% 2
Women 2 40.00% -
Board Ethnic Background at 31 December 2024
Number of Board Members Percentage of the Board Number of Senior Positions on the Board
White British or other white (including minority-white groups) 5 100% 2
Other ethnic group - - -
The Nomination and Remuneration Committee has reviewed the composition,
structure and diversity of the Board, succession planning, the independence of
the Directors and whether each of the Directors has sufficient time available
to discharge their duties effectively. The Nomination and Remuneration
Committee and the Board confirm that they believe that the Board has an
appropriate mix of skills and backgrounds, that all Directors can be
considered as Independent in accordance with the provisions of the AIC Code
and that all Directors have the time available to discharge their duties
effectively.
Management Engagement Committee
The Management Engagement Committee is chaired by Claire Whittet and comprises
Richard Horlick, Karen McClellan, Jeremy Thompson, and John Roche, all of whom
held office throughout the year. The Management Engagement Committee meets at
least once a year pursuant to its terms of reference.
The Management Engagement Committee provides a formal mechanism for the review
of the performance of the Investment Manager and the Company's other advisors
and service providers. It carries out this review through consideration of a
number of objective and subjective criteria and through a review of the terms
and conditions of the advisors' appointments with the aim of evaluating
performance, identifying any weaknesses and ensuring value for money for the
Shareholders.
The Company (as with all companies) continues to be exposed to external
cyber-security threats. The Company recognises the increased incidence of
cyber-security threats and through the Management Engagement Committee
regularly reviews its policies, procedures and defences to help mitigate
associated risks, as well as receiving confirmation of the policies,
procedures and defences of the Investment Manager, Administrator and key
service providers, and engages market-leading specialists where appropriate.
Board Performance and Evaluation
In accordance with Provision 26 of the AIC Code which requires a formal and
rigorous annual performance review, the Board formally reviews its performance
annually through an internal process. Internal evaluation of the Board, the
Audit Committee, the Nomination and Remuneration Committee, the Management
Engagement Committee and individual Directors has taken the form of
self-appraisal questionnaires and discussions to determine effectiveness and
performance in various areas as well as the Directors' continued independence.
In line with the provisions of the Code the Board has concluded that all
members of the Board are independent Non-Executive Directors and that all
members contribute effectively together to achieve the Company's objectives.
All Directors are subject to annual re-election.
The Nomination and Remuneration Committee is responsible for the timely
implementation of internal evaluations and the evaluation of third parties to
conduct independent externally facilitated Board reviews. The Board feels that
internal evaluations are value added and complementary to external reviews.
Both are conducted annually.
Whilst the Board is not a FTSE 350 company, in 2024, an externally facilitated
review of the Board, its committees and individual Directors (including the
Chair) was undertaken following a review of six potential providers. The Board
evaluation was again facilitated by Lintstock Ltd. The 2023 Board
effectiveness review took the form of a structured questionnaire which covered
a range of key topics including composition, skills, knowledge and experience
of the Board, the respective roles and responsibilities of the Directors,
quality of strategic and risk debate, the effectiveness of decision making and
interactions with management together, including the Chair. The 2024 review
built on the results and format of the 2023 results focussing on priority
areas. All Directors participated in the evaluation, and the findings were
collectively considered by the Board.
No significant areas of weaknesses were highlighted during the evaluation. The
Lintstock evaluation concluded that the priorities for the Board were
identified as continued emphasis on shareholder returns, shareholder
interactions, clarity on investment strategy and the future of the Company.
Lintstock reported that the REL Board engaged very well with the Board Review
process and the overall findings of the Review were positive, with areas
including the Board's dynamics and composition, the management of meetings and
the performance of the Board's Committees recognised as particular strengths.
The Board concluded that overall, it had operated effectively throughout 2024
and is confident in its ability to continue effectively to lead the Company
and oversee its affairs. The Board believes that the current mix of skills,
experience, knowledge and age of the Directors is appropriate to the
requirements of the Company.
New Directors receive an induction on joining the Board and regularly meet
with the senior management employed by the Investment Manager both formally
and informally to ensure that the Board remains regularly updated on all
issues. All members of the Board are members of professional bodies and serve
on other Boards, which ensures they are kept abreast of the latest technical
developments in their areas of expertise.
The Board arranges for presentations from the Investment Manager, the
Company's brokers and other advisors on matters relevant to the Company's
business. The Board assesses the training needs of Directors on an annual
basis. Members of the Board are responsible for their own continuous
professional development.
Internal Control and Financial Reporting
The Directors acknowledge that they are responsible for establishing and
maintaining the Company's system of internal control and reviewing its
effectiveness. Internal control systems are designed to manage rather than
eliminate the failure to achieve business objectives and can only provide
reasonable but not absolute assurance against material misstatements or loss.
However, the Board's objective is to ensure that REL has appropriate systems
in place for the identification and management of risks. The Directors carry
out a robust assessment of the principal risks facing the Company, including
those that would threaten its business model, future performance, solvency or
liquidity. The key procedures which have been established to provide internal
control are that:
· the Board has delegated the day-to-day operations of the Company
to the Administrator and Investment Manager; however, it retains
accountability for all functions it delegates;
· the Board clearly defines the duties and responsibilities of the
Company's agents and advisors and appointments are made by the Board after due
and careful consideration. The Board monitors the ongoing performance of such
agents and advisors and will continue to do so through the Management
Engagement Committee;
· the Board monitors the actions of the Investment Manager at
regular Board meetings and is given frequent updates on developments arising
from the operations and strategic direction of the underlying investee
companies;
· the Administrator provides administration and company secretarial
services to the Company.
The Administrator maintains a system of internal control on which they report
to the Board; and
· the Board has reviewed the need for an internal audit function
and has decided that the systems and procedures employed by the Administrator
and Investment Manager, including their own internal controls and procedures,
provide sufficient assurance that an appropriate level of risk management and
internal control, which safeguards Shareholders' investment and the Company's
assets, is maintained. An internal audit function specific to the Company is
therefore considered unnecessary.
Internal controls over financial reporting are designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of Financial Statements for external reporting purposes. The Administrator and
Investment Manager both operate risk-controlled frameworks on a continual
ongoing basis within a regulated environment. During 2024 the Administrator
continued to report to the Board on a quarterly basis with respect to their
performance in respect of financial accounting and financial reporting matters
together with other related matters through a compliance report. The
Administrator has undertaken an ISAE 3402: Assurance Reports on Controls at a
Service Organisation engagement and formally reports to the Board quarterly
through a compliance report, with the latest report being for the year ended
31 October 2024. The Investment Manager formally reports to the Board
quarterly including updates within Riverstone and also engages with the Board
on an ad-hoc basis as required. No weaknesses or failings within the relevant
operations of the Administrator or Investment Manager have been identified.
The systems of control referred to above are designed to ensure the
effectiveness and efficient operation of the relevant internal controls over
financial reporting and compliance with laws and regulations. In establishing
the systems of internal control which the Company relies upon, regard is paid
to the materiality of relevant risks, the likelihood of costs being incurred
and costs of control. It follows therefore that the systems of internal
control can only provide reasonable but not absolute assurance against the
risk of material misstatement in financial reporting or loss. These processes
at the Administrator and the Investment Manager have been in place for the
year under review and up to the date of approval of this Annual Report and
Financial Statements. These processes are reviewed by the Board, operating
largely via the Audit Committee and are in accordance with the FRC's internal
control publication: Guidance on Risk Management, Internal Control and Related
Financial and Business Reporting.
Investment Management Agreement
The Investment Manager is the sole Investment Manager of the Company and the
Partnership. Pursuant to the Investment Management Agreement, the Investment
Manager has responsibility for and discretion over investing and managing the
Company's and the Partnership's direct and indirect assets, subject to and in
accordance with the Company's investment policy. The Investment Manager is
entitled to delegate all or part of its functions under the Investment
Management Agreement to one or more of its affiliates.
The Company has delegated the provision of all services to external service
providers whose work is overseen by the Management Engagement Committee at its
regular scheduled meetings. Each year, a detailed review of performance
pursuant to their terms of engagement is undertaken by the Management
Engagement Committee. The Management Engagement Committee and the Investment
Manager continue to discuss fees, termination provisions, capital structure
management, the performance of the Company, and the basis of the Company's and
the Investment Manager's relationship and alignment of interests at length,
including the significant equity commitment of Riverstone to the Company as
one of its major Shareholders.
In accordance with UK Listing Rule 11.7.2R and having formally appraised the
performance and resources of the Investment Manager, in the opinion of the
Directors the continuing appointment of the Investment Manager on the terms
agreed is in the interests of the Shareholders as a whole.
On 3 January 2020, the Company announced amendments to the Performance
Allocation arrangements under the Investment Management Agreement that were
effective from 30 June 2019. The amended terms on which the Company is
required to pay a Performance Allocation in respect of its investment are as
follows:
· Portfolio level cost benchmark: A Performance Allocation will
only be distributed in respect of a realised investment if, at the time of the
realisation of the relevant investment, the aggregate of the fair market value
of all of the Company's then unrealised investments and the proceeds of all of
its realised investments since inception exceeds the aggregate acquisition
price of all of the Company's unrealised and realised investments. If this
portfolio level cost benchmark is not met at the time of realisation of the
relevant investment, distribution of the Performance Allocation is subject to
deferment as described further below. As of 31 December 2024, the portfolio
level cost benchmark was in deficit by $156.7 million.
· 8 per cent. Hurdle rate: A Performance Allocation will only be
accrued for payment upon the realisation of an investment if the proceeds from
that investment exceed an amount equal to its acquisition cost plus an 8 per
cent. annual cumulative hurdle rate calculated from the date of investment to
the date of realisation. If the hurdle is met, the Performance Allocation will
be 20 per cent of all Net Profits in respect of each such investment. As of 31
December 2024, four investments exceeded the hurdle rate with $29 million not
being accrued in light of the portfolio level cost benchmark being in material
deficit and additionally, the total portfolio's Gross IRR is approximately (2)
per cent.
· Full realisation: A Performance Allocation will only be
calculated and accrued on the full realisation of the entire interest in an
investment, unless a partial realisation results in the full return of all
capital invested in such investment. Otherwise, no Performance Allocation
will be payable on partial disposals and the ability for the Investment
Manager to elect to receive a Performance Allocation on an investment that has
been held by the Company for at least seven years (but not sold) has been
removed.
· Deferral: If the portfolio level cost benchmark is not met at the
time of full realisation of the relevant investment, it will be retested on a
quarterly basis for the following three years. If, at any time during those
three years, the benchmark is satisfied for four continuous quarters, the
relevant Performance Allocation will then become distributable without
interest. Any accrued but undistributed Performance Allocation that has been
deferred due to the portfolio level cost benchmark test will expire after 36
months.
The Investment Manager will continue to be required to apply each Performance
Allocation (net of taxes) to acquire ordinary shares of the Company.
During 2021, in compliance with the laws of the Cayman Islands, the Company
and its existing Investment Manager, Riverstone International Limited, a
Cayman Islands exempted company, assigned its investment advisory rights and
obligations under the Company's Investment Management Agreement to RIL's
immediate parent entity, RIGL Holdings, LP, a Cayman Islands exempted limited
partnership.
Furthermore, on 9 December 2020, the Company's Investment Management Agreement
was amended to remove the Investment Manager's ability to nominate directors
of the Company and to replace it with the ability to request that its
representatives attend Board meetings as observers instead, except in
circumstances where matters specifically regarding the Investment Manager and
its affiliates are being considered.
Distribution of Investment Proceeds
In addition, the Company and the Investment Manager have agreed that, going
forward, 20 per cent. of the Net Profits attributable to each fully realised
investment, net of taxes, withholdings or reserves for taxes will, at the
discretion of the Company, be available for distribution to the Company's
Shareholders, whether by dividend or share repurchases.
Our Culture
The Board has determined that the Company's culture is built around that of
the Investment Manager, with a focus on long lasting relationships with a
diverse investor base; sustainable investment excellence; and a world class
team demonstrating extensive industry knowledge. The Board monitors the
Company's culture on at least an annual basis through continued engagement
with Shareholders and the Investment Manager.
Relations with Shareholders
The Board welcomes Shareholders' views and places great importance on
communication with its Shareholders. In addition, Jeremy Thompson, as the
Senior Independent Director from May 2024, is available to Shareholders if
they have concerns which contact through the normal channels has failed to
resolve or for which such contact would be inappropriate. Claire Whittet,
Management Engagement Committee Chair, is available to discuss matters
regarding the service providers of REL. The Chair of the Board, Senior
Independent Director and other Directors are also available to meet with
Shareholders at other times, if required. At the request of several
Shareholders, the Chair of the Board, Senior Independent Director and other
Directors arranged meetings and addressed direct correspondence raised at the
quarterly Board meetings during the year.
The Company reports formally to Shareholders in a number of ways, including
regulatory news releases through the London Stock Exchange's Regulatory News
Service and announcements issued in response to events or routine reporting
obligations. Also, an Interim Report will be published each year outlining
performance to 30 June and the Annual Report will be published each year for
the year ended 31 December, both of which will be made available on the
Company's website. In addition, the Company's website contains comprehensive
information, including company notifications, share information, financial
reports, investment objectives and policy, investor contacts and information
on the Board and corporate governance. Shareholders and other interested
parties can subscribe to email news updates by registering online on the
website.
The Investment Manager is available for regular contact with Shareholders,
including the Cornerstone Investors, and any views that they may have are
communicated to the Board and vice versa. No sensitive information is provided
to the Cornerstone Investors that is not provided to the Shareholders as a
whole and at the same time. The Board is also kept fully informed of all
relevant market commentary on the Company by the Investment Manager and the
Corporate Broker. The Directors and Investment Manager receive informal
feedback from analysts and investors, which is presented to the Board by the
Company's Broker. The Company Secretary also receives informal feedback via
queries submitted through the Company's website and these are addressed by the
Board, the Investment Manager or the Company Secretary, where applicable.
Financial results, events, corporate reports, webcasts and fact books are all
stored in the Investor Relations section of our website:
www.riverstonerel.com/investors/ (http://www.riverstonerel.com/investors/) .
2025 Key Shareholder Engagements
February
Quarterly Portfolio Valuations
Full Year Results Approved
April
Notice of Annual General Meeting
Quarterly Portfolio Valuations
May
Annual General Meeting
July
Quarterly Portfolio Valuations
August
Half Year Results
October
Quarterly Portfolio Valuations
Engagement with Stakeholders
The wider stakeholders of the Company comprise its service providers, investee
companies and suppliers and the Board recognises and values these
stakeholders.
The Company's relationship with its service providers, including the
Investment Manager, is of particular importance. Service providers have been
selected and engaged based on due diligence and references including
consideration of their internal controls and expertise. The Company has a
Management Engagement Committee, who will review the performance of each
service provider annually and provide feedback as appropriate, to maintain
good working relationships.
Responsible investing principles have been applied to each of the investments
made, which ensures that appropriate due diligence has been conducted and that
the terms of the investments are clearly set out and agreed with investee
companies in advance.
The Board recognises that relationships with suppliers are enhanced by prompt
payment and the Company's Administrator, in conjunction with the Investment
Manager, ensures all payments are processed within the contractual terms
agreed with the individual suppliers.
Relations with Other Stakeholders
The Investment Manager meets regularly with analysts and investors to provide
further updates with how the Company and the investment portfolio are
performing.
The Directors and Investment Manager receive informal feedback from analysts
and investors, which is presented to the Board by the Company's Brokers. The
Company Secretary also receives informal feedback via queries submitted
through the Company's website and these are addressed by the Board, the
Investment Manager or the Company Secretary, where applicable.
The Directors recognise that the long-term success of the Company is linked to
the success of the communities in which Riverstone, and its investee
companies, operate.
Whistleblowing
The Board has considered arrangements by which staff of the Investment Manager
or Administrator may, in confidence, raise concerns within their respective
organisations about possible improprieties in matters of financial reporting
or other matters. It has concluded that adequate arrangements are in place for
the proportionate and independent investigation of such matters and, where
necessary, for appropriate follow-up action to be taken within their
organisation.
Principal Risks and Uncertainties
The Company's assets consist of listed and private equity investments, held
through the Partnership, in the conventional and decarbonisation portfolios.
Initially, there was a particular focus on opportunities in the global E&P
and midstream energy sub-sectors, but since 2020 REL has been exclusively
focussed on pursuing a global strategy across decarbonisation sectors
presented by Riverstone's investment platform. Its principal risks are
therefore related to market conditions in the energy and energy transition
sectors in general, but also to the particular circumstances of the businesses
in which it is invested through the Partnership. The Investment Manager,
through the Partnership, seeks to mitigate these risks through active asset
management initiatives and carrying out due diligence work on potential
targets before entering into any investments.
Each Director is fully aware of the risks inherent in the Company's business
and understands the importance of identifying, evaluating and monitoring these
risks. The Board has adopted procedures and controls that enable it to carry
out a robust assessment of the risks facing the Company, manage these risks
within acceptable limits and meet all of its legal and regulatory obligations.
The Board is committed to upholding and maintaining zero tolerance towards the
criminal facilitation of tax evasion.
The Board thoroughly considers the process for identifying, evaluating and
managing any significant risks faced by the Company on an ongoing basis and
these risks are reported and discussed at Audit Committee and Board meetings.
The Board ensures that effective controls are in place to properly mitigate
these risks to the greatest extent possible and that a satisfactory compliance
regime exists to ensure all applicable local and international laws and
regulations are upheld.
For each material risk, the likelihood and consequences are identified,
management controls and frequency of monitoring are confirmed, and results
reported and discussed at the quarterly Board meetings.
The Company's principal risk factors are fully discussed in the Prospectuses,
available on the Company's website (www.RiverstoneREL.com) and should be
reviewed by Shareholders. Please note that not all principal risks are
disclosed on the Company's website, only those established at the time of the
Prospectuses.
The Company's current principal areas of risk and mitigating actions being
taken are summarised below:
1. The Company initially intended to only invest in the global energy
sector, with a particular focus on oil and gas exploration and production, and
midstream investments, which exposed it to industry and sector concentration
risk.
Under the modified investment strategy, since 2020, the Company has pivoted to
focus on energy transition and decarbonisation and this provides an element of
diversification for the portfolio, albeit with the additional investment risks
noted below. While this pivot has not entirely de-risked the overall
investment portfolio, there is some reduced valuation risk with an increased
percentage held in listed investments in both strategies. Whilst the Company
still has a portfolio that is de-risked by sector, it is now more concentrated
by number of investments, as it relies on fewer core and decarbonisation
investments. This risk has increased during the year.
2. The Company's shares have, for a considerable period of time, been
trading at a discount to NAV per share for reasons, including, but not limited
to, general market conditions in the energy sector, liquidity concerns,
perceived issues with the terms of the Investment Management Agreement and
actual or expected Company performance as the Company transitions to maximise
value from the conventional portfolio allowing investment into its
decarbonisation strategy. This persistent discount to NAV has the potential to
lead to material shareholder dissatisfaction where any shareholder or
shareholder group which in aggregate totals 10 per cent or more of the shares
outstanding can call an EGM for a shareholder vote.
The Company has seen a marked improvement in the performance of its share
price since 2020, and over this time it has also been very active in
attempting to narrow this persistent discount with the introduction of a
well-funded and material series of successive buybacks, tender offers as well
as enhanced shareholder engagement. There is no guarantee that the continued
attempts to mitigate this discount will be successful or that the continued
use of discount control mechanisms will remain possible over time. There is a
risk that through successive buybacks to try and manage the share price
discount to NAV, that the Company may become too small to be viable or to be
able to make new or follow-on investments. This risk has remained unchanged
during the year.
2. Existing or future shareholders could use or obtain a material
ownership in the Company and exert influence through voting rights. During
2022, 2023 and into the early part of 2024 there has been notified shareholder
disquiet with the substantial discount to NAV of the ordinary shares in the
market and concern over the pivot of the investment strategy to
decarbonisation investments and performance to date of that strategy/use of
available cash versus the level of the share buyback programmes. This
disquiet tempered somewhat over this period with share price improvements and
the material return of surplus capital to shareholders via the Tender Offer in
April 2024. However, the future strategy of the Company and the return of
surplus capital remains a key concern for shareholders. This risk has
remained unchanged during the year.
4. The investment portfolio held by the Company in both the conventional
and decarbonisation strategies exposes the Company to a number of specific
investment and valuation risks, the most notable ones being:
· The risks and judgements associated with the fair valuation of the
private equity investments could result in the NAV of the Company being
materially misstated. These private equity investments expose the Company's
valuation models to changes over time in a number of variables including the
price of oil, interest rates, certain public market trading comparables,
transaction comparables, discounted cash flow rates, taxation etc.
Ultimately the success or otherwise of a private equity investment will only
be determined on eventual realisation.
· The Investment Manager has an extensive and consistent valuation
policy which is applied each quarter and fair values all private equity
investments held. All quarterly valuations firstly go through the valuation
processes adopted by the Investment Manager and when approved by the
Investment Manager are released to the Board for review and challenge.
Quarterly meetings are held by the Board with the Investment Manager to review
the draft valuations ahead of confirmation and release to the market.
· Potential changes to domestic policy, banking, regulatory and/or
the tax environment of target and existing investments in the Company's chosen
geographies may adversely affect the fair value/market value or liquidity of
those investments, their ability to borrow and transact business plans or
impact the Company's ability to properly realise those investments at
previously intended valuations or timescales.
The Investment Manager closely monitors the sectors and industries in which
the Company invests or intends to target investment. All investment
opportunities proposed only proceed after thorough due diligence processes
prior to acquisition and ongoing monitoring processes are employed while
investments are held in the portfolio.
· The specific investments in the decarbonisation portfolio can
expose the Company to additional investment and operational risks arising from
investment in the build-up and early/development stages where a company may
have little or no operating history, be more vulnerable to financial failure
than more established companies, have requirements to invest in further
funding rounds or suffer dilution/decrease in value, operating in emerging
industries with technologies that are as yet unproven and investments where
the Company is a minority investor with limited access.
· Significant global/regional conflict or the imposition of sanctions
or adverse publicity and/or poor ethical practices of the Company or, more
particularly, our portfolio companies, operating in hazardous industries which
are highly regulated by health and safety laws and where their supply chains
could lead to a significant increase in the risk of disruption to the supply
chains that are key for the Company and our portfolio companies and have an
adverse impact on the reputation of the Company and on the
valuations/realisation prospects of our portfolio companies.
The Investment Manager maintains dialogue with the portfolio companies to make
sure that they have appropriate plans and resources in place to prioritise the
health and safety of their employees, as well as to assess their wider
operational and macro environments to include supply chain disruptions and
ensure the normal operations of their businesses and to protect our
valuations. All investments are initially screened and then monitored
against the Investment Manager's ESG policy.
This risk has decreased during the year with less investments being subjected
to judgemental valuation processes. Although this risk is reducing over
time, there may be differences in the investment time horizons and fee
provisions between the Company and the private funds managed by Riverstone
where the Company has coinvested and these may create conflicts regarding the
allocation of investment opportunities and holding periods between the Company
and those funds, in particular as a result of step-downs in fees payable by a
private fund part way through its duration.
5. The Company is heavily reliant on the services provided by the
Investment Manager under the Investment Management Agreement, including
ongoing investment opportunities for REL. The Investment Management
Agreement requires the Investment Manager to provide competent, attentive, and
efficient services and personnel to the Company. If the Investment Manager was
not able to do this or if there was an unacceptable reduction in the service
received or investment competence levels of the personnel employed by the
Investment Manager, then the Company would not be able to terminate the
Investment Management Agreement as it does not expressly provide for
termination on notice without specific cause, and poor investment performance,
the departure of key Riverstone executives or a change of control of
Riverstone do not constitute cause for these purposes.
Furthermore, it will be costly for the Company to terminate the Investment
Management Agreement as the Company would be required to make a significant
termination payment presently in the region of $28.3 million, including if a
Discontinuation Resolution were to be proposed and passed by Shareholders or
if the Company was otherwise wound up.
The Board has been engaged over time with the Investment Manager to effect
some changes to the Investment Management Agreement most notably in the area
of performance fees. The Board continues to monitor the performance of the
Investment Manager and to discuss potential changes in light of the overall
financial performance of the Company. This risk has increased during the
year.
6. Affiliates of the Investment Manager and the Company's Cornerstone
Investors would be entitled to vote on any Discontinuation Resolution that may
be proposed. As the Investment Manager and its affiliates (and, indirectly,
the Cornerstone Investors) receive fees from the Company, they will most
probably be incentivised to vote against such resolution. As at 31 December
2024 and 24 February 2025, respectively, Riverstone and the Company's
Cornerstone Investors, in aggregate, own ~30 per cent. of outstanding Ordinary
Shares, with the largest Cornerstone Investor owning ~21 per cent. at both
period-ends. This risk has remained unchanged during the year.
7. The effects of climate change and the transition to a low carbon economy
could possibly reduce demand for some of the Company's existing investments,
as well as impact their valuations, and may limit future growth opportunities.
General sentiment may affect investor appetite and hence may lead to a
depression of the Company's share price. There is a risk that the change to
ESG investment focus is wrongly perceived by the market as being without
genuine foundation ("greenwashing"). Furthermore, there may be a perceived
over reliance on the Investment Manager's ESG credentials. Riverstone has
adopted what it believes are currently best practices for ESG investing having
adopted the UN Principles for Responsible Investment and Sustainable
Development Goals. This risk has remained unchanged during the year.
The above risks are mitigated and managed by the Board through continual
review, policy setting and updating of the Company's Risk Matrix at each Audit
Committee Meeting to ensure that procedures are in place with the intention of
minimising the impact of the above-mentioned risks. The Board relies on
periodic reports provided by the Investment Manager and Administrator
regarding risks that the Company faces. When required, experts will be
employed to gather information, including tax advisers, legal advisers, and
environmental advisers. As it is not possible to eliminate risks completely,
the purpose of the Company's risk management policies and procedures is not to
eliminate risks, but to reduce them and to ensure that the Company is
adequately prepared to respond to such risks and to minimise any impact if the
risk develops.
As part of its risk management framework, the Company continuously monitors
and assesses emerging risks that could have a material impact on the Company's
business, financial performance or long term strategy. Emerging risks are
defined as potential threats or opportunities that are uncertain in nature,
evolving, or not yet fully understood but may have significant implications
over time.
The approach to emerging risk identification involves horizon scanning where
the Company will assess macroeconomic, geopolitical, regulatory and other
developments; engagement with stakeholders to gain insights on emerging
trends; and evaluating, when deemed necessary, those potential impacts of
emerging risks through stress testing and strategic planning exercises.
The Company discloses key emerging risks where it believes they could
materially impact the business and none have been identified for disclosure as
at 31 December 2024.
By order of the Board
Richard Horlick
Chair of the Board
27 February 2025
Report of the Audit Committee
The Audit Committee operates within clearly defined terms of reference, which
are available from the Company's website www.RiverstoneREL.com
(http://www.RiverstoneREL.com) , and include all matters indicated by
Disclosure Guidance and Transparency Rule 7.1, the AIC Code and the UK Code.
John Roche replaced Patrick Firth as Chair of the Audit Committee with effect
from 1 January 2024. Its other members are Richard Horlick, Jeremy Thompson,
Karen McClellan and Claire Whittet. Members of the Audit Committee must be
independent of the Company's external auditor and Investment Manager. The
Audit Committee will meet no less than three times in a year, and at such
other times as the Audit Committee Chair shall require and will meet the
external auditor at least once a year.
The Committee members have considerable financial and business experience and
the Board has determined that the membership, as a whole, has sufficient
recent and relevant sector and financial experience to discharge its
responsibilities and that at least one member has competence in accounting or
auditing having a background as a chartered accountant.
Responsibilities
The main duties of the Audit Committee are:
· to monitor the integrity of the Company's Financial Statements
and regulatory announcements relating to its financial performance and review
significant financial reporting judgements;
· to report to the Board on the appropriateness of the Company's
accounting policies and practices;
· to review the valuations of the Company's investments prepared by
the Investment Manager, and provide a recommendation to the Board on the
valuation of the Company's investments;
· to oversee the relationship with the external auditors, including
agreeing their remuneration and terms of engagement, monitoring their
independence, objectivity and effectiveness, ensuring that policy surrounding
their engagement to provide non-audit services is appropriately applied, and
making recommendations to the Board on their appointment, reappointment or
removal, for it to put to the Shareholders in general meeting;
· to monitor and consider annually whether there is a need for the
Company to have its own internal audit function;
· to keep under review the effectiveness of the Company's internal
controls, including financial controls and risk management systems;
· to review and consider the UK Code, the AIC Code, the GFSC Code,
the AIC Guidance on Audit Committees and the Stewardship Code; and
· to report to the Board on how it has discharged its
responsibilities.
The Audit Committee is aware that the Annual Report is not subject to formal
statutory audit, including the Board Chair's Statement and the Investment
Manager's Report. Financial information in these sections is reviewed by the
Audit Committee.
The Audit Committee is required to report its findings to the Board,
identifying any matters on which it considers that action or improvement is
needed, and make recommendations on the steps to be taken.
The external auditor is invited to attend the Audit Committee meetings where
audit planning and approach discussions take place as well as the meetings at
which the Annual Report and Interim Financial Report are considered. These
meetings will at least annually facilitate an opportunity for the external
auditor to meet with the Audit Committee without representatives of the
Investment Manager or Administrator being present.
Financial Reporting
The primary role of the Audit Committee in relation to financial reporting is
to review with the Administrator, Investment Manager and the external auditor
and report to the Board on the appropriateness of the Annual Report and
Financial Statements and Interim Financial Report, concentrating on, amongst
other matters:
· the quality and acceptability of accounting policies and
practices;
· the clarity of the disclosures and compliance with financial
reporting standards and relevant financial and governance reporting
requirements;
· material areas in which significant judgements have been applied
or there has been discussion with the external auditor including the going
concern status of the Company and the viability statement;
· whether the Annual Report and Financial Statements, taken as a
whole, is fair, balanced and understandable and provides the information
necessary for Shareholders to assess the Company's performance, business model
and strategy; and
· any correspondence from regulators in relation to financial
reporting.
To aid its review, the Audit Committee considers reports from the
Administrator and Investment Manager and also reports from the external
auditor on the outcomes of their half-year review and annual audit. The Audit
Committee supports Ernst & Young LLP in displaying the necessary
professional scepticism their role requires.
Meetings
During the year ended 31 December 2024, the Audit Committee met formally four
times and maintained ongoing liaison and discussion between the external
auditor and the Chair of the Audit Committee and other members of the Audit
Committee with regards to the audit approach and the identified risks.
Additional ad hoc meetings or informal discussions have been convened at other
times during the year as the Audit Committee determined appropriate. The Audit
Committee, chaired by John Roche, has met on one occasion since the year-end
through to the date of this report on 24 February 2025. The matters discussed
at that and the other meetings include:
· review of the terms of reference of the audit committee for
approval by the Board;
· review of the accounting policies and format of the Financial
Statements;
· review and approval of the audit plan of the external auditor
including the scope of work for the interim review;
· discussion and approval of the fees for the external audit and
the interim review;
· detailed review of the quarterly and year end valuations of the
Company's investment portfolio held by the Partnership and recommendation for
approval by the Board;
· detailed review of the Annual Report and Financial Statements,
Interim Financial Report and the relevant quarterly portfolio valuations, and
recommendation for approval by the Board;
· assessment of the independence of the external auditor;
· assessment of the effectiveness of the external audit process as
described below;
· review of the Company's key risks and internal controls being
relied upon;
· consideration of going concern applicability;
· focus on ESG; and
· application of any IFRS changes.
Significant Areas of Judgement Considered by the Audit Committee
The Audit Committee has determined that a key risk of misstatement of the
Company's Financial Statements relates to the valuation of the investment in
the Partnership at fair value through profit or loss, in the context of the
judgements necessary to evaluate the individual fair values of the underlying
investments held through the Partnership.
The Directors have considered whether any discount or premium should be
applied to the net asset value of the Partnership, which is based on the fair
value of its underlying investments. In view of the Company's investment in
the Partnership and the nature of the Partnership's assets, no adjustment to
the net asset value of the Partnership has been made, as this is deemed
equivalent to fair value.
The Audit Committee reviews, considers and, if thought appropriate, recommends
for the purposes of the Company's Financial Statements, valuations prepared by
the Investment Manager in respect of the investments held through the
Partnership. As outlined in Note 6 to the Financial Statements, the total
carrying value of the investment in the Partnership at fair value through
profit or loss at 31 December 2024 was $373 million (31 December 2023: $666
million). Market quotations are not available for this financial asset such
that the value of the Company's investment is based on the fair value of the
Company's limited partner capital account with the Partnership, which itself
is based on the fair value of the Partnership's investments as determined by
the Investment Manager, along with the cash, fixed deposits and other short
term fixed interest securities held. The valuation for each individual
portfolio company investment held by the Partnership is determined by
reference to common industry valuation techniques, including reliance on
listed public market prices, comparable public market valuations, comparable
merger and acquisition transaction valuations, and discounted cash flow
valuations, as detailed in the Investment Manager's Report and Note 5 to the
Financial Statements.
The valuation process, methodology adopted and conclusions were variously
discussed with the Investment Manager and with the external auditor at the
Audit Committee meetings held on 28 October 2024 and 24 February 2025. The
Chair of the Audit Committee and one other Director are also actively involved
in discussions with the Investment Manager challenging and reviewing the
individual investment fair values proposed and finally concluding on the fair
values determined for investments as at 31 December 2024.
During the audit planning and completion phases, members of the Audit
Committee also sat in on various of the valuation meetings between the
Investment Manager and external auditor. During 2024, the Investment Manager
continued to carry out on an investment-by-investment basis, an inhouse
quarterly valuation, providing the overall summary and detailed valuation
papers and models to the Audit Committee and the Company at each quarter end,
including as at 31 December 2024 with all relevant changes in the valuation
processes explained. The Audit Committee has therefore also been active in
reviewing the quarter on quarter and particularly the year end investment
valuations throughout 2024.
The Audit Committee reviewed the Investment Manager's Report.
The external auditor explained the results of their audit work on individual
investment valuations within the scope of the year-end audit.
The Audit Committee considers, and if thought appropriate, recommends that the
Board adopts the going concern basis for preparing the Company's Financial
Statements. As outlined in the Report of the Directors, the Audit Committee
has considered the risks that could impact the Company's liquidity and
therefore its ability to meet its obligations as they fall due over the next
period from the date of approval of the Financial Statements up until March
2026.
The Audit Committee, based on the reasons set out in the Report of the
Directors, is satisfied, as of today's date, that it is appropriate to adopt
the going concern basis in preparing these Financial Statements and has
recommended this approach is adopted by the Board.
The Audit Committee considers, and if thought appropriate, recommends that the
Board considers the Company's viability over a period of three years to 31
December 2027. The Audit Committee has determined that the period of three
years continues to be deemed to be an appropriate timeframe and that there is
a reasonable expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over this period of
assessment, as further outlined in the Report of the Directors. Accordingly,
the Audit Committee has recommended the three-year period of assessment for
the Company's longer-term viability is adopted by the Board.
Risk Management
The Board is accountable for carrying out a robust assessment of the principal
risks facing the Company, including those threatening its business model,
future performance, solvency and liquidity. On behalf of the Board, the Audit
Committee reviews the effectiveness of the Company's risk management
processes, such processes being largely reliant on the effective functioning
of the key parties where the Company has outsourced functions, particularly
the outsourced functions provided by the Investment Manager and the
Administrator.
The Company's risk assessment process and the way in which significant
business risks are managed is a key area of focus for the Audit Committee.
The work of the Audit Committee was driven primarily by the Company's
assessment of its principal risks and uncertainties as set out in the
Corporate Governance Report. The Audit Committee receives reports from the
Investment Manager and Administrator on the Company's risk evaluation process
and reviews changes to significant risks identified.
Internal Audit
The Audit Committee shall consider at least once a year whether or not there
is a need for an internal audit function. Currently, the Audit Committee does
not consider there to be a need for an internal audit function, given that
there are no employees in the Company and all outsourced functions are with
parties who have their own internal controls and procedures.
External Audit
Ernst & Young LLP has been the Company's external auditor since the
Company's incorporation. This is the twelfth year of audit.
The external auditor is required to rotate the audit partner every five years.
The current Ernst & Young LLP lead audit partner, Richard Le Tissier,
started his tenure in 2023 and his current rotation will end with the audit of
the 2027 Annual Report and Financial Statements. There are no contractual
obligations restricting the choice of external auditor and the Company may put
the audit services contract out to tender periodically. It continues to be
decided that the audit services contract will not be put out to tender for the
next reporting period due to mutual benefits and efficiencies of Ernst &
Young's external audit contract for the Company with the audits of other
Riverstone private funds. Under Companies Law, the reappointment of the
external auditor is subject to Shareholder approval at the Annual General
Meeting.
The Audit Committee assessed the qualifications, expertise and resources, and
independence of the external auditor as well as the effectiveness of the audit
process. This review covered all aspects of the audit service provided by
Ernst & Young LLP, including obtaining a report on the audit firm's own
internal quality control procedures and consideration of the audit firm's
annual transparency reports. The Audit Committee also approved the external
audit terms of engagement and remuneration. During 2024 and into 2025, the
Audit Committee and/or the Audit Committee Chair held formal and ad hoc
private meetings with the external auditor. The Audit Committee Chair also
maintained regular contact with the audit partner throughout the year. These
meetings provide an opportunity for open dialogue with the external auditor
without management being present. Matters discussed included the auditor's
assessment of significant financial risks and the performance of management in
addressing these risks, the auditor's opinion of management's role in
fulfilling obligations for the maintenance of internal controls, the
transparency and responsiveness of interactions with management, confirmation
that no restrictions have been placed on them by management, maintaining the
independence of the audit, and how they have exercised professional challenge
and scepticism in dealing with material judgemental areas. The Audit Committee
will continue to monitor the performance of the external auditor on an annual
basis and will consider their independence and objectivity, taking account of
appropriate guidelines. In addition, the Audit Committee Chair will continue
to maintain regular contact with the lead audit partner outside the formal
Committee meeting schedule, not only to discuss formal agenda items for
upcoming meetings, but also to review any other significant matters. Members
of the Audit Committee also sat in on the valuation meetings between the
Investment Manager and external auditor.
The Audit Committee reviews the scope and results of the audit, its cost
effectiveness and the independence and objectivity of the external auditor,
with particular regard to the level of non-audit fees. The Audit Committee is
also monitoring developments, in this regard, with respect to the Crown
Dependencies' Audit Rules and Guidance. Notwithstanding such services the
Audit Committee considers Ernst & Young LLP to be independent of the
Company and that the provision of such non-audit services is not a threat to
the objectivity and independence of the conduct of the audit.
To further safeguard the objectivity and independence of the external auditor
from becoming compromised, the Audit Committee has a formal policy governing
the engagement of the external auditor to provide non-audit services. This
precludes Ernst & Young LLP from providing certain services such as
valuation work or the provision of accounting services and also sets a
presumption that Ernst & Young LLP should only be engaged for non-audit
services where Ernst & Young LLP are best placed to provide the non-audit
service for example, the interim review. Note 13 details services provided by
Ernst & Young LLP. In addition to processes put in place to ensure
segregation of audit and non-audit roles, Ernst & Young LLP is required,
as part of the assurance process in relation to the audit, to confirm to the
Audit Committee that it has both the appropriate independence and the
objectivity to allow it to continue to serve the members of the Company. This
confirmation is received every six months and no matters of concern were
identified by the Audit Committee.
To fulfil its responsibility regarding the independence of the external
auditor, the Audit Committee considers:
· discussions with or reports from the external auditor describing
its arrangements to identify, report and manage any conflicts of interest; and
· the extent of non-audit services provided by the external
auditor.
To assess the effectiveness of the external auditor, the committee reviews:
· the external auditor's fulfilment of the agreed audit plan and
variations from it;
· discussions or reports highlighting the major issues that arose
during the course of the audit; and
· feedback from other service providers evaluating the performance
of the audit team.
The Audit Committee is satisfied with Ernst & Young LLP's effectiveness
and independence as external auditor having considered the degree of diligence
and professional scepticism demonstrated by them. Having carried out the
review described above and having satisfied itself that the external auditor
remains independent and effective, the Audit Committee has recommended to the
Board that Ernst & Young LLP be reappointed as external auditor for the
year ending 31 December 2025.
The Audit Committee has provided the Board with its recommendation to the
Shareholders on the re-appointment of Ernst & Young LLP as external
auditor for the year ending 31 December 2025. Accordingly, a resolution
proposing the reappointment of Ernst & Young LLP as our external auditor
will be put to Shareholders at the Annual General Meeting.
On behalf of the Audit Committee
John Roche
Chair of the Audit Committee
27 February 2025
Statement of Financial Position
As at 31 December 2024
Note 31 December 31 December
2024 2023
$'000 $'000
Assets
Non-current assets
Investment at fair value through profit or loss 6 372,564 666,024
Total non-current assets 372,564 666,024
Current assets
Trade and other receivables 2,447 2,276
Cash and cash equivalents 7 1,459 5,781
Total current assets 3,906 8,057
Total assets 376,470 674,081
Current liabilities
Trade and other payables 626 512
Total current liabilities 626 512
Total liabilities 626 512
Net assets 375,844 673,569
Equity
Share capital 8 820,665 1,038,721
Retained deficit (444,821) (365,152)
Total equity 375,844 673,569
Number of Shares in issue at year end 8 25,342,691 42,195,789
Net Asset Value per Share ($) 12 14.83 15.96
The Financial Statements of the Company were approved and authorised for issue
by the Board of Directors on 27 February 2025 and signed on its behalf by:
Richard Horlick John Roche
Chair of the Board Director
The accompanying notes below form an integral part of the Company's Financial
Statements.
Statement of Comprehensive Income
For the year ended 31 December 2024
Note 1 January 1 January
2024 to 2023 to
31 December 31 December
2024 2023
$'000 $'000
Investment profit
Change in fair value of investment at fair value through profit or loss 6
(75,778) 2,722
Expenses
Directors' fees and expenses 9 (706) (902)
Legal and professional fees (415) (608)
Other operating expenses 13 (2,862) (3,654)
Total expenses (3,983) (5,164)
Operating loss for the financial year (79,761) (2,442)
Foreign exchange gain 92 174
Loss for the year (79,669) (2,268)
Total comprehensive loss for the year (79,669) (2,268)
Basic and Diluted Loss per Share (cents) 12 (264,36) (4.86)
All activities derive from continuing operations.
The accompanying notes below form an integral part of the Company's Financial
Statements.
Statement of Changes in Equity
For the year ended 31 December 2024
Share Retained Total
capital deficit equity
$'000 $'000 $'000
As at 1 January 2024 1,038,721 (365,152) 673,569
Loss for the financial year - (79,669) (79,669)
Total comprehensive loss for the year - (79,669) (79,669)
Tender offer/Buyback and cancellation of shares 8 (218,056) - (218,056)
As at 31 December 2024 820,665 (444,821) 375,844
Share Retained Total
capital deficit equity
$'000 $'000 $'000
As at 1 January 2023 1,101,674 (362,884) 738,790
Loss for the financial year - (2,268) (2,268)
Total comprehensive loss for the year - (2,268) (2,268)
Buyback and cancellation of shares 8 (62,953) - (62,953)
As at 31 December 2023 1,038,721 (365,152) 673,569
The accompanying notes below form an integral part of the Company's Financial
Statements.
Statement of Cash Flows
For the year ended 31 December 2024
Note 1 January 1 January
2024 to 2023 to
31 December 31 December
2024 2023
$'000 $'000
Cash flow used in operating activities
Loss for the financial year (79,669) (2,268)
Adjustments for:
Decrease/(Increase) in fair value of investment at fair value through profit 6 75,778 (2,722)
or loss
Foreign exchange gain (92) (174)
(Increase) in trade and other receivables (171) (1,678)
Increase/(Decrease) in trade and other payables 114 (153)
Net cash used in operating activities (4,040) (6,995)
Cash flow generated from investing activities
Distribution from the Partnership 6 217,682 59,800
Net cash generated from investing activities 217,682 59,800
Cash flow used in financing activities
Tender offer/Buyback of shares 8 (218,056) (62,953)
Net cash used in financing activities (218,056) (62,953)
Net movement in cash and cash equivalents during the year (4,414) (10,148)
Cash and cash equivalents at the beginning of the year 5,781 15,755
Effect of foreign exchange rate changes 92 174
Cash and cash equivalents at the end of the year 1,459 5,781
The accompanying notes below form an integral part of the Company's Financial
Statements
Notes to the Financial Statements
For the year ended 31 December 2024
1. General information
REL is a company limited by shares, which was incorporated on 23 May 2013 in
Guernsey with an unlimited life and registered with the GFSC as a Registered
Closed-ended Collective Investment Scheme pursuant to the POI Law. The
Company's Ordinary Shares were admitted to the UK Listing Authority's Official
List and to trading on the London Stock Exchange as part of its IPO which
completed on 24 October 2013. The registered office of the Company is PO Box
286, Floor 2, Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 4LY.
The Company makes its investments through the Partnership, a Cayman Islands
registered exempted limited partnership, in which the Company is the sole
limited partner. The principal place of business of the Partnership is the
Cayman Islands. Both the Company and the Partnership are subject to the
Investment Management Agreement with the Investment Manager, a partnership
registered and regulated in the Cayman Islands.
The Partnership has the right to invest alongside the Private Riverstone Funds
in all Qualifying Investments in which the Private Riverstone Funds
participate. These Private Riverstone Funds are managed and advised by
affiliates of the Investment Manager. Further detail of these investments is
provided in the Investment Manager's Report.
2. Accounting policies
Basis of preparation
The Financial Statements for the year ended 31 December 2024 have been
prepared in accordance with IFRS and with the Companies (Guernsey) Law, 2008,
(as amended) (the "Companies Law").
In the preparation of these Financial Statements, the Company followed the
same accounting policies and methods of computation as compared with those
applied in the previous year.
The Financial Statements have been prepared on a going concern basis. The
Board has examined areas of possible financial risk, in particular the
projected cash requirements for the Company and the Partnership. After due
consideration, the Directors believe that the Company has adequate financial
resources and suitable management arrangements in place to continue in
operational existence for a period of at least twelve months from the date of
approval of these Financial Statements. Accordingly, the Financial Statements
have been prepared on a going concern basis.
Foreign currencies
The functional currency of the Company is U.S. Dollars reflecting the primary
economic environment in which the Company operates.
The Company has chosen U.S. Dollars as its presentation currency for financial
reporting purposes.
Transactions during the year, including purchases and sales of investments,
income and expenses are translated into U.S. Dollars at the rate of exchange
prevailing on the date of the transaction. Monetary assets and liabilities
denominated in currencies other than U.S. Dollars are retranslated at the
functional currency rate of exchange ruling at the reporting date.
Non-monetary items that are measured in terms of historical cost in a currency
other than U.S. Dollars are translated using the exchange rates as at the
dates of the initial transactions. Non-monetary items measured at fair value
in a currency other than U.S. Dollars are translated using the exchange rates
at the date when the fair value was determined. Foreign currency transaction
gains and losses on financial instruments classified as at fair value through
profit or loss are included in profit or loss in the Statement of
Comprehensive Income as part of the "Change in fair value of investments at
fair value through profit or loss". Exchange differences on cash and cash
equivalents are included in profit or loss in the Statement of Comprehensive
Income as "Foreign exchange gain/(loss)".
Financial instruments
In accordance with IFRS 9, financial assets and financial liabilities are
recognised in the Company's Statement of Financial Position when the Company
becomes a party to the contractual provisions of the instrument.
Financial assets
At initial recognition, financial assets are classified based on the Company's
business model for managing the financial assets and the contractual cash flow
characteristics of the financial asset. The Company initially measures a
financial asset at its fair value.
a) Investment at fair value through profit or loss
i. Classification
Financial assets classified at FVTPL are those that do not meet the
contractual cash flow test and are managed with their performance evaluated on
a fair value basis in accordance with the Company's investment strategy. The
Company includes in this category its only investment, being the Partnership.
ii. Measurement
Investments made by the Company in the Partnership are measured initially and
subsequently at fair value, with changes in fair value taken to the Statement
of Comprehensive Income. These fair value movements are predominantly driven
by the fair value movements in the Partnership's underlying investments.
The Company has determined that the fair value of its investment in the
Partnership is $373 million (31 December 2023: $666 million), such valuation
being calculated in accordance with applicable IFRS accounting standards and
IPEV Valuation Guidelines. No adjustment to the net asset value of the
Partnership has been made, as this is deemed equivalent to fair value.
b) Cash and cash equivalents
Cash and cash equivalents comprises cash on hand and demand deposit. Cash
equivalents are held to meet short term cash commitments and comprise other
short-term highly liquid investments with an original maturity of three months
or less that are readily convertible to a known amount of cash and are subject
to an insignificant risk of changes in value.
c) Trade and other receivables
Trade receivables are classified as financial assets at amortised cost. They
are measured at amortised cost less impairment assessed using the simplified
approach of the expected credit loss model based on experience of previous
losses and expectations of future losses.
Trade and other payables
Trade payables are classified as financial liabilities at amortised cost.
Equity
The Company's Ordinary Shares are classified as equity and upon issuance, the
fair value of the consideration received is included in equity, net of share
issue costs (excluding share issue costs of the IPO). All formation and
initial expenses of the Company, including the share issue costs of its IPO,
have been borne by the Investment Manager.
Repurchase of Ordinary Shares for cancellation
The cost of repurchasing Ordinary Shares, including any related stamp duty and
transaction costs, is charged to 'Share Capital' and dealt with in the
Statement of Changes in Equity. Share repurchases are accounted for on a trade
date basis, with cancellation on settlement.
Expenses
Expenses include legal, accounting, auditing and other operating expenses.
They are recognised on an accruals basis in the Statement of Comprehensive
Income in the period in which they are incurred.
Provisions and Contingent Liabilities
In line with IAS 37 Provisions, Contingent Liabilities and Contingent Assets,
we recognise provisions when the Company has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation and the amount can be
reliably estimated.
Where this criterion is not met we disclose a contingent liability if the
Company has a possible obligation, or has a present obligation with an outflow
that is not probable or which cannot be reliably estimated. Provisions are
determined by discounting the expected future cash flows at a pre-tax rate
that reflects current market assessments of the time value of money and the
risks specific to the liability.
Amended standards and interpretations
Accounting standards and interpretations have been published and will be
mandatory for the Company's accounting periods beginning on or after 1 January
2024 or later periods. The following is the new or amended accounting standard
or interpretation applicable to the current accounting period of the Company:
· Classification of Liabilities as Current or Non-current
-Amendments to IAS 1 (applicable for annual periods beginning on or after 1
January 2024).
The impact of the amendment was not material to the reported results and
financial position of the Company.
Certain new accounting standards and amendments to accounting standards have
been published that are not mandatory for 31 December 2024 reporting periods
and have not been early adopted by the Company. The new amendments are not
expected to have a material impact. However, IFRS 18, which is not yet
effective, will change the presentation of the Statement of Comprehensive
Income but will not affect the valuation and measurement of balances. The
Company will continue to monitor IFRS 18 as new guidance is released.
· IFRS 18 - Presentation and Disclosure in Financial Statements
(replacing IAS 1 - Presentation of Financial Statements) (effective for annual
periods beginning on or after 1 January 2027);
· Amendments to IFRS 9 and IFRS 7 - Classification and Measurement
of Financial Instruments (effective for annual periods beginning on or after 1
January 2026); and
· Annual Improvements to IFRS Accounting Standards- Volume 11
effective for annual periods beginning on or after 1 January 2026
3. Accounting judgements, estimates and assumptions
The preparation of Financial Statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income
and expenses.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
Significant and other Judgements
In the process of applying the Company's accounting policies, management has
made the following significant and other judgements, which have the most
significant effect on the amounts recognised in the Financial Statements:
Significant judgements
Assessment of control over the Partnership
The Company makes its investments through the Partnership in which it is the
sole limited partner.
The Board has assessed whether the Company has all the elements of control as
prescribed by IFRS 10 in relation to the Company's investment in the
Partnership and has concluded that although the Company is the sole limited
partner, it has some influence but does not control the Partnership and
therefore accounts for the Partnership at fair value.
Assessment of the Partnership as a structured entity
The Company considers the Partnership to be a structured entity under IFRS 12.
Transfer of funds by the Partnership to the Company is determined by the
General Partner (see Note 9). The risks associated with the Company's
investment in the Partnership are disclosed in Note 10. The summarised
financial information for the Company's investment in the Partnership is
disclosed in Note 6.
Judgements
Assessment as an Investment entity
Although the Company only has one direct investment, it has indirect exposure
to more than one investment held through the underlying Partnership. The
Directors are of the opinion that the Company meets the essential criteria and
typical characteristics of an Investment Entity as defined in IFRS 10.
Contingent Liabilities - Performance Fee Allocation
In the ordinary course of business, we monitor the performance fee allocation
and provide for anticipated costs where an outflow of resources is considered
probable and a reasonable estimate can be made of the likely outcome.
Where an outflow is not probable, but is possible, a contingent liability may
still exist and its relevant details will be disclosed.
In January 2020, the Management Engagement Committee of REL, consisting of
REL's independent directors, agreed with RIGL Holdings, LP (formerly
Riverstone International Limited), REL's Investment Manager (the "Investment
Manager"), to amend the terms on which REL is required to pay a Performance
Allocation (the "Performance Allocation") in respect of REL's investments.
These terms are disclosed in Note 9.
At the reporting date we are not aware of any evidence to indicate that a
present obligation exists, nor is it probable that an outflow of resources
will be required such that any amount should be provided for, even though
there were realisations of certain investments during the period. This is due
to the Portfolio Level Cost Benchmark and 8 per cent. Hurdle Rate not being
met. The likelihood of the performance fee allocation becoming payable is
remote.
Estimates and assumptions
Fair valuation of investment in the Partnership
The area involving a high degree of judgement or complexity and where
assumptions and estimates are significant to the Financial Statements has been
identified as the risk of misstatement of the valuation of the investment in
the Partnership. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods affected.
The Board's determination that no discount or premium should be applied to the
net asset value of the Partnership involves a degree of judgement due to the
nature of the Partnership's investments and other assets and liabilities and
the valuation techniques and procedures adopted by the Partnership.
A summary of the more relevant aspects of IPEV to the valuation of the
Partnership's underlying valuations are set out below:
Marketable (Listed) Securities - where an active market exists for the
security, the value is stated at the bid price on the last trading day in the
period.
Unlisted Investments - are carried at such fair value as the Investment
Manager considers appropriate, and as approved or adjusted by the Board,
taking into account the performance of each investee company and the exercise
of ratchets, options or other incentive schemes. Methodologies used in
arriving at the fair value include prices of recent investment, earnings
multiples, net assets, discounted cash flows analysis and industry valuation
benchmarks. Valuations may be derived by reference to observable valuation
measures for comparable companies or transactions (examples include discount
rates, production multiples, volatility of comparable public traded prices,
and multiplying a key performance metric of the investee company such as
estimated, unobservable forecast revenues and EBITDA by a relevant valuation
multiple observed in the range of comparable companies or transactions),
adjusted for differences between the investment and the referenced comparable.
The resulting accounting estimates will, by definition, seldom equal the
related actual results.
Climate change
In preparing the Financial Statements, the Directors have considered the
impact of climate change, particularly in the context of the climate change
risks identified in the ESG Report.
In preparing the Financial Statements, the Directors have considered the
medium- and longer-term cash flow impacts of climate change on a number of key
estimates included within the Financial Statements.
In line with IFRS the Partnership's investments are valued at fair value.
The Level 1 are valued using quoted prices in active markets and therefore
these reflect a market participants' view of climate change risk. In
determining the value of Partnership's Level 3 investments consideration is
made as to whether there are any specific climate risks which could directly
impact the value of such investments, including the estimates of future cash
flows and future profitability. In the current and previous period there is
no material impact to the value of the Partnership's Level 3 investments.
Having assessed the impact of Climate Change on the Company, the Directors
concluded this is not expected to have a significant impact on the going
concern and viability assessments.
4. Taxation
The Company has made an election to, and currently expects to conduct its
activities so as to be treated as a partnership for U.S. federal income tax
purposes. Therefore, the Company expects that it generally will not be liable
for U.S. federal income taxes. In the normal course of business, REL may form
wholly owned subsidiaries, to be treated as C Corporations for U.S. tax
purposes. The C Corporations serve to protect REL's public investors from
incurring U.S. ECI. The C Corporations file U.S. corporate tax returns with
the U.S. IRS and pay U.S. corporate taxes on its income. Each of the Company's
Shareholders who are liable for U.S. taxes will take into account their
respective share of the Company's items of income, gain, loss and deduction in
computing its U.S. federal income tax liability as if such Shareholder had
earned such income directly, even if no cash distributions are made to the
Shareholder.
The Company is exempt from taxation in Guernsey under the provisions of the
Income Tax (Exempt Bodies) (Guernsey) Ordinance, 2008 and is charged an annual
exemption fee of £1,600.
The Cayman Islands at present impose no taxes on profit, income, capital gains
or appreciations in value of the Partnership. There are also currently no
taxes imposed in the Cayman Islands by withholding or otherwise on the Company
as a limited partner of the Partnership on profit, income, capital gains or
appreciations in respect of its partnership interest nor any taxes on the
Company as a limited partner of the Partnership in the nature of estate duty,
inheritance or capital transfer tax.
Local taxes may apply at the jurisdictional level on profits arising in
operating entity investments. Further taxes may apply on distributions from
such operating entity investments. The company is structured, and has
structured its investments, to eliminate the incurrence of ECI by REL's
investors. Based upon the current commitments and investments held through REL
US Corp., the future U.S. tax liability on profits is expected to be in the
range of 21 to 27.5 per cent. (31 December 2023: 21 to 27.5 per cent.).
Additionally, depending on REL US Corp's current and accumulated earnings and
profit, the future U.S. tax liability on distributions from REL US Corp is
expected to be 0 per cent. and 30 per cent., respectively, for those
distributions determined to be return of capital and dividend income. Any
applicable taxes are captured in the Company's NAV through the fair value
movements in the underlying investments held by the Partnership and its
related Investment Undertakings.
5. Fair value
IFRS 13 'Fair Value Measurement' requires disclosure of fair value measurement
by level. The level in the fair value hierarchy within which the financial
assets or financial liabilities are categorised is determined on the basis of
the lowest level input that is significant to the fair value measurement,
adjusted if necessary.
Financial assets and financial liabilities are classified in their entirety
into only one of the three levels:
· Level 1 - quoted prices (unadjusted) in active markets for
identical assets or liabilities;
· Level 2 - inputs other than quoted prices included within Level 1
that are observable for the assets or liabilities, either directly (i.e. as
prices) or indirectly (i.e. derived from prices);
· Level 3 - inputs for the assets or liabilities that are not based
on observable market data (unobservable inputs).
The Company's only financial instrument carried at fair value is its
investment in the Partnership which has been classified within Level 3 as it
is derived using unobservable inputs. Amounts classified under Level 3 for the
year ended 31 December 2024 were $373 million (31 December 2023: $666
million).
The fair value of all other financial instruments approximates to their
carrying value.
Transfers during the period
There have been no transfers between levels during the year ended 31 December
2024 (31 December 2023: $nil). Any transfers between the levels will be
accounted for on the last day of each financial period. Due to the nature of
the investment in the Partnership, it is always expected to be classified
under Level 3.
Valuation methodology and process
The Directors base the fair value of the investment in the Partnership on the
value of the limited partnership capital account received from the General
Partner, which is determined on the basis of the fair value of the
Partnership's assets and liabilities, adjusted if necessary, to reflect
liquidity, future commitments, and other specific factors of the Partnership.
This is based on the components within the Partnership, principally the value
of the Partnership's investments in addition to cash, cash equivalents and
short-term money market and other fixed income securities held. Any
fluctuation in the value of the Partnership's investments in addition to cash,
cash equivalents and short-term money market and other fixed income securities
held will directly impact on the value of the Company's investment in the
Partnership.
The Partnership's investments are valued using the techniques described in the
Company's valuation policy. The Investment Manager's assessment of fair value
of investments held by the Partnership, through Investment Undertakings, is
determined in accordance with IPEV Valuation Guidelines. When valuing the
Partnership's investments, the Investment Manager reviews information provided
by the underlying investee companies and other business partners and applies
IPEV methodologies, to estimate a fair value as at the date of the Statement
of Financial Position, subject to Board approval. It is the opinion of the
Directors, that the IPEV valuation methodology used in deriving a fair value
is generally not different from the fair value requirements of IFRS 13. In the
event that there is a difference, the requirements of IFRS 13 override the
IPEV requirements.
The Investment Manager values the investments on a quarterly basis using
common industry valuation techniques, including comparable public market
valuations, comparable merger and acquisition transaction valuations and
discounted cash flow valuations. For early-stage private investments,
Riverstone's investment due diligence process includes assumptions about
short-term financial results in determining the appropriate purchase price for
the investment.. The techniques used in determining the fair value of the
Company's investments through the Partnership are selected on an
investment-by-investment basis so as to maximise the use of market based
observable inputs.
REL's valuation policy is compliant with both IFRS and IPEV Valuation
Guidelines and is applied consistently from period to period. As the
Company's investments held in its structure are generally not publicly quoted,
valuations require meaningful judgement to establish a range of values, and
the ultimate value at which an investment is realised may differ from its most
recent valuation and the difference may be significant.
For the year ended 31 December 2024, the valuations of the Company's
investments, through the Partnership, are detailed in the Investment Manager's
Report.
Qualitative Information for the Partnership's Level 3 Fair Value Measurements
as at 31 December 2024
Industry: Energy
Range
Fair value of Level 3 Investments (in thousands) Valuation technique(s) Unobservable input(s) Low ((1)) High ((1)) Weighted Average ((1)) Sensitivity of the Fair value of Level 3
input to fair value of Investments affected by unobservable input ((3)) (in thousands)
Level 3 investments((2))
$49,531 Public comparables 2024E EV / EBITDA Multiple 19.0x 49.0x 47.0x 25 per cent. weighted average change in the input would result in 2 per cent. 23,156
change in the total fair value of Level 3 investments
2024E EV / Revenue Multiple((5)) 6.0x 12.0x 11.6x 25 per cent. weighted average change in the input would result in 1 per cent. 23,156
change in the total fair value of Level 3 investments
2025E EV / EBITDA Multiple 11.0x 31.0x 29.6x 25 per cent. weighted average change in the input would result in 2 per cent. 23,156
change in the total fair value of Level 3 investments
2025 EV / Revenue Multiple 1.5x 9.6x 7.1x 20 per cent. weighted average change in the input would result in 2 per cent. 49,531
change in the total fair value of Level 3 investments
2026E EV / Revenue Multiple 1.3x 5.7x 4.1x 20 per cent. weighted average change in the input would result in 2 per cent. 26,375
change in the total fair value of Level 3 investments
2027E EV / EBITDA Multiple((5)) 2.0x 4.0x 3.0x 15 per cent. weighted average change in the input would result in 1 per cent. 23,375
change in the total fair value of Level 3 investments
$46,576 Other((6))
$96,106 Total
Qualitative Information for the Partnership's Level 3 Fair Value Measurements as at 31 December 2023
Industry: Energy
Range
Fair value of Level 3 Investments (in thousands) Valuation technique(s) Unobservable input(s) Low ((1)) High ((1)) Weighted Average ((1)) Sensitivity of the Fair value of Level 3
input to fair value of Investments affected by unobservable input ((3)) (in thousands)
Level 3 investments((2))
$157,807 Public comparables 2024E EV / EBITDA Multiple 12.5x 27.5x 22.3x 30 per cent. weighted average change in the input would result in 2 per cent. 29,406
change in the total fair value of Level 3 investments
2024E EV / Revenue Multiple((5)) 1.3x 10.6x 7.4x 40 per cent. weighted average change in the input would result in 5 per cent. 80,493
change in the total fair value of Level 3 investments
2025E EV / Revenue Multiple 1.5x 2.0x 1.9x 20 per cent. weighted average change in the input would result in 1 per cent. 34,250
change in the total fair value of Level 3 investments
2026E EV / Revenue Multiple 1.3x 1.3x 1.3x 30 per cent. weighted average change in the input would result in 1 per cent. 7,125
change in the total fair value of Level 3 investments
2027E EV / Revenue Multiple 1.0x 2.0x 1.0x 30 per cent. weighted average change in the input would result in 1 per cent. 3,125
change in the total fair value of Level 3 investments
2027E EV / EBITDA Multiple((5)) 2.0x 6.0x 2.6x 30 per cent. weighted average change in the input would result in 1 per cent. 3,125
change in the total fair value of Level 3 investments
Transaction comparables Precedent M&A Transaction 6.6x 17.8x 12.8x 50 per cent. weighted average change in the input would result in 3 per cent. 17,385
change in the total fair value of Level 3 investments
Discounted cash flow Discount Rate((4)) 30% 10% 18% +/-50 per cent. weighted average change in the input would result in -/+1 per 70,189
cent. change in the total fair value of Level 3 investments
$16,934 Other((6))
$174,741 Total
((1)) Calculated based on fair values of the Partnership's Level 3
investments.
((2)) Based on its professional experience and recent market conditions, the
Investment Manager has provided the Board with these weighted average change
in the inputs with a forecasted time period of 6 to 12 months.
((3)) Some of the Partnership's Level 3 investments are valued using one or
more of the techniques which utilise one or more of the unobservable inputs,
so the amounts in the "Fair value of Level 3 investments" column will not
aggregate to the total fair value of the Partnership's Level 3 investments as
they have not been adjusted to reflect the specific weighting applied to each
method at the year end.
((4)) Discounted cash flow technique involves the use of a discount factor of
10] per cent.
((5)) As at 31 December 2024, the sensitivity of this unobservable input to
the total fair value of Level 3 investments was determined to be significant
by applying the same methodology that determined it not to be significant as
at 31 December 2023.
((6)) 'Other' include certain investments that are not subject to a
sensitivity analysis because they are insensitive to the changes in inputs set
out above as at 31 December 2024 and 31 December 2023, respectively.
((7)) Certain valuation techniques and/or unobservable inputs were used in the
valuations at 31 December 2023 but were no longer applicable at 31 December
2024. For example, transaction comparables was utilised at 31 December 2023
for an investment written off during the year ended 31 December 2024 and
discounted cash flows was utilised at 31 December 2023 for an investment that
market based evidence became available.
The Board reviews and considers the fair value of each of the Partnership's
investments arrived at by the Investment Manager before incorporating such
values into the fair value of the Partnership. The variety of valuation bases
adopted, quality of management information provided by the underlying investee
companies and the lack of liquid markets for a number of these investments
mean that there are inherent difficulties in determining the fair value of
these investments and such difficulties cannot be eliminated. Therefore, the
amounts realised on the sale of certain of these investments may differ from
the fair values reflected in these Financial Statements and incorporated into
the fair value of the Company's investment in the Partnership and the
differences may be significant.
The Board approves the valuations performed by the Investment Manager and
monitors the range of reasonably possible changes in significant observable
inputs on a regular basis with consultation from the Investment Manager. Using
its extensive industry experience, the Investment Manager provides the Board
with its determination of the reasonably possible changes in significant
unobservable inputs in normal market conditions as of the year end.
The Directors have considered whether a discount or premium should be applied
to the net asset value of the Partnership and have concluded that as the
Partnership's underlying assets are measured at fair value, no adjustment to
the net asset value of the Partnership has been deemed to be necessary (see
Note 3).
6. Investment at fair value through profit or loss
The movement in fair value is derived from the fair value movements in the
underlying investments held by the Partnership, net of income and expenses of
the Partnership and its related Investment Undertakings, including any
Performance Allocation and applicable taxes. The table below reconciles the
Company's Level 3 assets during the year.
31 December 31 December
2024 2023
$'000 $'000
Cost
Brought forward 987,014 1,046,814
Distribution from the Partnership (217,682) (59,800)
Carried forward 769,332 987,014
Fair value movement through profit or loss
Brought forward (320,990) (323,712)
Fair value movement during the year - see Summary Income Statement below (75,778) 2,722
Carried forward (396,768) (320,990)
Fair value at year end 372,564 666,024
Summary financial information for the Partnership's investments and its
related Investment Undertakings
Summary Balance Sheet 31 December 31 December
2024 2023
$'000 $'000
Investments at fair value 311,611 384,255
Cash and cash equivalents ((1)) 62,604 283,593
Management fee payable - see Note 9 (1,041) (2,193)
Other net assets (610) 369
Fair value of REL's investment in the Partnership 372,564 666,024
( )
((1)) These figures, together with the $14 million held at REL US Corp (31
December 2023: $2 million), comprise the $77 million cash and cash equivalents
held in the Partnership (31 December 2023: $286 million).
Reconciliation of Partnership's investments at fair value 31 December 31 December
2024 2023
$'000 $'000
Investments at fair value - Level 1 201,075 207,495
Investments at fair value - Level 3 - see Note 5 96,106 174,741
Investments at fair value((1)) 297,181 382,236
Cash and cash equivalents 14,430 2,019
Partnership's investments at fair value 311,611 384,255
((1) ) Partnership holds investments indirectly through
Investment Undertaking
Summary Income Statement 1 January 1 January
2024 to 2023 to
31 December 31 December
2024 2023
$'000 $'000
Unrealised and realised (loss)/gain on Partnership's investments (80,171) 5,315
Interest and other income 11,224 9,215
Management fee expense - see Note 9 (6,127) (9,431)
Other operating expenses (704) (2,377)
Portion of the operating (loss)/gain for the year attributable to REL's
investment in the Partnership
(75,778) 2,722
Reconciliation of unrealised and realised gain/(loss) on Partnership's 1 January 1 January
investments
2024 to 2023 to
31 December 31 December
2024 2023
$'000 $'000
Unrealised gain on Partnership's investments 3,843 48,358
Realised loss on Partnership's investments (83,880) (43,024)
General Partner's Performance Allocation - see Note 9 - -
Release of provision for taxation (134) (19)
Unrealised and realised (loss)/gain on Partnership's investments
(80,171) 5,315
7. Cash and cash equivalents
These comprise cash and short-term bank deposits available on demand. The
carrying amounts of these assets approximate to their fair value.
8. Share capital
31 December 31 December
2024 2023
$'000 $'000
Authorised:
Ordinary Shares of no par value Unlimited Unlimited
Total Total
No. No.
Issued and fully paid:
Unlimited Shares of no par value
Shares as at inception - -
Issued on 23 May 2013 1 1
Issued on 29 October 2013 71,032,057 71,032,057
Issued on 10 October 2014 5,000,000 5,000,000
Issued on 11 December 2015 8,448,006 8,448,006
Cancelled during year ended 31 December 2018 (4,583,333) (4,583,333)
Cancelled during year ended 31 December 2020 (16,958,265) (16,958,265)
Cancelled during year ended 31 December 2021 (8,000,867) (8,000,867)
Cancelled during year ended 31 December 2022 (4,045,941) (4,045,941)
Cancelled during year ended 31 December 2023 (8,695,869) (8,695,869)
Cancelled during year ended 31 December 2024 (16,853,098) -
Shares as at year end 25,342,691 42,195,789
Share capital $'000 $'000
Share capital brought forward 1,038,721 1,101,674
Movements for the year:
Cancellation of shares (218,056) (62,953)
Share capital as at year end 820,665 1,038,721
The Company has one class of Ordinary Shares. The issued value of the Ordinary
Shares represents 100 per cent. of the total issued value of all share
capital. Under the Company's Articles of Incorporation, on a show of hands,
each Shareholder present in person or by proxy has the right to one vote at
general meetings. On a poll, each Shareholder is entitled to one vote for
every Share held.
Shareholders are entitled to all dividends paid by the Company and, on a
winding up, providing the Company has satisfied all of its liabilities, the
Shareholders are entitled to all of the surplus assets of the Company. The
Ordinary Shares have no right to fixed income.
At the 2024 AGM, on 21 May 2024, the shareholders renewed the authorisation
for the Board to continue with share buybacks and the Board duly commenced the
current programme, allocating an amount of approximately £22 million ($28
million). Over the course of 2024, the Company returned £14 million ($19
million) to shareholders through the purchase of 1,805,479 shares at an
average price of £8.01 per ordinary share.
On 8 February 2024, the Company announced a Tender Offer for £158 million
($199 million) in the value of the Company's Ordinary Shares. The Company
acquired 15,047,619 Ordinary Shares which were cancelled on 28 March 2024.
During 2024, including the Tender Offer, the Company acquired 16,853,098
Ordinary Shares which were subsequently cancelled. Following the cancellation
of Ordinary Shares from the Tender Offer and share buyback programme, the
share capital of the Company is 25,342,691 Ordinary Shares in aggregate.
9. Related party transactions
The following parties are considered to be the Company's related parties as
defined by IFRS.
Directors
The Company has five Non-Executive Directors (31 December 2023: six). The
Chair of the Board is entitled to annual remuneration of £145,200 (31
December 2023: £145,200). The Chair of the Audit Committee is entitled to
annual remuneration of £90,750 (31 December 2023: £90,750), the Chair of the
Management Engagement Committee is entitled to annual remuneration of £78,650
(31 December 2023: £78,650) and the Chair of the Nomination and Remuneration
Committee is entitled to remuneration of £78,650 (31 December 2023:
£78,650). The other independent Directors are entitled to annual remuneration
of £72,600 (31 December 2023: £72,600).
Directors' fees and expenses for the year ended 31 December 2024 amounted to
$705,517 (31 December 2023: $901,531) which resulted in a reduction to the 31
December 2024 quarter-end management fee as further discussed below. $nil of
Directors' expenses were outstanding at year-end (31 December 2023: $nil).
Partnership
In accordance with section 4.1(a) of the Partnership Agreement, the Company
received distributions in aggregate of $217.7 million (31 December 2023: $59.8
million) from the Partnership through the year to 31 December 2024. In
accordance with section 4.1(a) of the Partnership Agreement, in the event of
the Company requiring additional funds for working capital, it is entitled to
receive distributions from the Partnership.
Investment Manager
The Investment Manager, an affiliate of Riverstone, provides advice to the
Company and the General Partner on the origination and completion of new
investments, on the management of the portfolio and on realisations, as well
as on funding requirements, subject to Board approval. For the provision of
services under the Investment Management Agreement, the Investment Manager is
paid in cash out of the assets of the Partnership an annual management fee
equal to 1.5 per cent. per annum of the Company's Net Asset Value (including
cash). The fee is payable quarterly in arrears and each payment is calculated
using the quarterly Net Asset Value as at the relevant quarter end.
The Investment Manager has agreed to deduct from its annual management fee all
fees, travel costs and related expenses of the Directors exceeding the
following annual limits:
Portion of NAV Limit (as a percentage of the then last published NAV)
Up to and including £500 million 0.084 per cent.
From £500 million to and including £600 million 0.084 per cent. at £500 million and thereafter adjusted downwards
proportionately to NAV to 0.07 per cent. at £600 million
From £600 million to and including £700 million 0.07 per cent. at £600 million and thereafter adjusted downwards
proportionately to NAV to 0.06 per cent. at £700 million
Above £700 million 0.06 per cent.
The above limits are subject to adjustment by agreement between the Investment
Manager and the Company acting by its independent Directors. Based on the last
published NAV as of 31 December 2024, the maximum amount of annual fees,
travel and related expenses of the Directors is $337,066 (31 December 2023:
$568,574). During the year ended 31 December 2024, fees and expenses of the
Directors amounted to $705,517 (31 December 2023: $901,531), resulting in a
reduction of $368,450 to the 31 December 2024 quarter-end management fee (31
December 2023: reduction of $332,957 of the quarter-end management fee).
During the year ended 31 December 2024, the Partnership incurred management
fees of $6,126,603 (31 December 2023: $9,430,572) of which $1,040,962 remained
outstanding as at the year-end (31 December 2023: $2,192,927). In addition,
the Company and Partnership, in aggregate, reimbursed the Investment Manager
$1,065,522 in respect of amounts paid on their behalf for the year (31
December 2023: $2,528,979), of which $783,800 related to legal and
professional fees of the Company and Partnership ($513,688 specific to the
Company) (31 December 2023: $2,498,492), and $27,754 related to travel and
other operating expenses of the Investment Manager (all specific to the
Company), (31 December 2023: $101,386), and reimbursable amounts from the
Investment Manager of $253,967 (31 December 2023: reimbursable amounts from
the Investment Manager of $70,900) related to expenses incurred by portfolio
companies (all specific to the Partnership).
The circumstances in which the Company and the Investment Manager may
terminate the Investment Management Agreement are as follows:
Event Notice period Consequences of termination
By the Company if the Investment Manager is in material breach which has not 12 months The General Partner is entitled to receive a payment equal to four times the
been rectified quarterly management fee payable to the Investment Manager on the basis of the
Company's most recent Net Asset Value ($5,653,264) and an amount equal to
the Performance Allocation due on the Company's investments on the basis, at
the Company's option, of the latest quarterly valuation ($nil) or the actual
realisation value for each investment. Payment of any Performance Allocation
due is dependent on the Company's portfolio cost benchmark being met at that
time.
By the Investment Manager if the Company is in material breach which has not 12 months The General Partner is entitled to receive a payment equal to twenty times the
been rectified quarterly management fee payable to the Investment Manager on the basis of the
Company's most recent Net Asset Value ($28,266,320) and an amount equal to the
Performance Allocation due on the Company's investments on the basis, at the
General Partner's option, of the latest quarterly valuation ($nil) or the
actual realisation value for each investment. Payment of any Performance
Allocation due is dependent on the Company's portfolio cost benchmark being
met at that time.
By the Company if the Investment Manager becomes insolvent or resolves to wind Immediate No payment to be made to the Investment Manager or the General Partner.
up or if the Investment Manager commits an act of fraud or wilful default in
relation to the Company which results in material harm to the Company
The Investment Management Agreement cannot be terminated by either the Company
or the Investment Manager without cause.
Following the seventh anniversary of the Company's London listing on 29
October 2020, a discontinuation resolution was proposed and not passed,
therefore the Investment Management Agreement will continue in perpetuity
subject to the termination for cause provisions described above. However,
either the Board or Shareholders holding in aggregate 10 per cent. of the
Company's voting securities can call an EGM at any time to vote on the
liquidation of the Company (75 per cent. of the votes cast in favour required)
or run-off of its portfolio (50 per cent. of the votes cast in favour
required).
Under both these scenarios, the General Partner would be entitled to twenty
times the most recent quarterly management fee payable to the Investment
Manager ($28.3 million as of 31 December 2024). Payment of any Performance
Allocation due is dependent on the Company's portfolio cost benchmark being
met at that time.
General Partner
The General Partner makes all management decisions, other than investment
management decisions, in relation to the Partnership and controls all other
actions by the Partnership and is entitled to receive a Performance
Allocation, calculated and payable at the underlying investment holding
subsidiary level, equal to 20 per cent. of the gross realised profits (if any)
in respect of a disposal, in whole or in part, of any underlying asset of the
Company.
The General Partner is entitled to receive its Performance Allocation in cash,
all of which, after tax, Riverstone, through its affiliate RELCP, reinvests in
Ordinary Shares of the Company on the terms summarised in Part I and Part VIII
of the IPO Prospectus.
During the year ended 31 December 2024, the Partnership paid Performance
Allocation of $nil (31 December 2023: $nil) of which $nil remained outstanding
as at the year-end (31 December 2023: $nil).
On 3 January 2020, the Company announced amendments to Performance Allocation
arrangements under the Investment Management Agreement that were effective
from 30 June 2019. The amended terms on which the Company is required to pay a
Performance Allocation in respect of its investment are as follows:
· Portfolio level cost benchmark: A Performance Allocation will
only be distributed in respect of a realised investment if, at the time of the
realisation of the relevant investment, the aggregate of the fair market value
of all of the Company's then unrealised investments and the proceeds of all of
its realised investments since inception exceeds the aggregate acquisition
price of all of the Company's unrealised and realised investments. If this
portfolio level cost benchmark is not met at the time of realisation of the
relevant investment, distribution of the Performance Allocation is subject to
deferment as described further below. As of 31 December 2024, the portfolio
level cost benchmark was in deficit by $156.7 million.
· 8 per cent. hurdle rate: A Performance Allocation will only be
accrued for payment upon the realisation of an investment if the proceeds from
that investment exceed an amount equal to its acquisition cost plus an 8 per
cent. annual cumulative hurdle rate calculated from the date of investment to
the date of realisation. If the hurdle is met, the Performance Allocation will
be 20 per cent. of all Net Profits in respect of each such investment. As of
31 December 2024, four investments exceeded the hurdle rate and the total
portfolio's Gross IRR was approximately (2) per cent.
· Full realisation: A Performance Allocation will only be
calculated and accrued on the full realisation of the entire interest in an
investment unless a partial realisation results in the full return of all
capital invested in such investment. Otherwise, no Performance Allocation
will be payable on partial disposals and the ability for the Investment
Manager to elect to receive a Performance Allocation on an investment that has
been held by the Company for at least seven years (but not sold) has been
removed.
· Deferral: If the portfolio level cost benchmark is not met at
the time of full realisation of the relevant investment, it will be retested
on a quarterly basis for the following three years. If, at any time during
those three years, the benchmark is satisfied for four continuous quarters,
the relevant Performance Allocation will then become distributable without
interest. Any accrued but undistributed Performance Allocation that has been
deferred due to the portfolio level cost benchmark test will expire after 36
months.
In accordance with the revised terms above, no further Performance Allocation
will be payable until the $156.7 million of realised and unrealised losses to
date at 31 December 2024 are made whole with future gains. Since REL has not
yet met the appropriate cost benchmark at 31 December 2024, $29.0 million in
Performance Allocation was not accrued in accordance with the terms of the
current agreement, which would have been accrued under the prior agreement.
The Investment Manager will continue to be required to apply each Performance
Allocation (net of taxes) to acquire ordinary shares of the Company.
Distribution of Investment Proceeds
In addition, the Company and the Investment Manager have agreed that, going
forward, 20 per cent. of the Net Profits attributable to each fully realised
investment, net of taxes, withholdings or reserves for taxes will, at the
discretion of the Company, be available for distribution to the Company's
Shareholders, whether by dividend or share repurchases.
Cornerstone Investors
Each of the Cornerstone Investors has acquired an indirect economic interest
in each of the General Partner and the Investment Manager depending on the
size of their commitment and the total issue size, up to an aggregate maximum
indirect economic interest of 20 per cent. in each, for nominal consideration.
These interests entitle the Cornerstone Investors to participate in the
economic returns generated by the General Partner, including from the
Performance Allocation, and the Investment Manager, which receives the
management fee.
10. Financial risk management
Financial risk management objectives
The Company's investing activities, through its investment in the Partnership,
intentionally expose it to various types of risks that are associated with the
underlying investee companies of the Partnership, including the ongoing
volatility in the oil and gas market. The Company makes the investment in
order to generate returns in accordance with its investment policy and
objectives.
The most important types of financial risks to which the Company is exposed
are market risk (including price, interest rate and foreign currency risk),
liquidity risk and credit risk. The Board of Directors has overall
responsibility for the determination of the Company's risk management and sets
policy to manage that risk at an acceptable level to achieve those objectives.
The policy and process for measuring and mitigating each of the main risks are
described below.
The Investment Manager and the Administrator provide advice to the Company
which allows it to monitor and manage financial risks relating to its
operations through internal risk reports which analyse exposures by degree and
magnitude of risks. The Investment Manager and the Administrator report to the
Board on a quarterly basis.
Categories of financial instruments
31 December 31 December
2024 2023
$'000 $'000
Financial assets
Investment at fair value through profit or loss:
Investment in the Partnership 372,564 666,024
Other financial assets:
Cash and cash equivalents 1,459 5,781
Trade and other receivables 2,447 2,276
Financial liabilities
Financial liabilities:
Trade and other payables (626) (512)
Capital risk management
The Company manages its capital to ensure that the Company will be able to
continue as a going concern while maximising the capital return to
Shareholders. The capital structure of the Company consists of issued share
capital and retained earnings, as stated in the Statement of Financial
Position.
In order to maintain or adjust the capital structure, the Company may buy back
shares or issue new shares. During the year, the Company bought and cancelled
16,853,098 Ordinary Shares. There are no external capital requirements imposed
on the Company.
The Company's investment policy is set out in the Investment Policy section of
the Annual Report.
Market risk
Market risk includes price risk, foreign currency risk and interest rate risk.
(a) Price risk
The underlying investments held by the Partnership present a potential risk of
loss of capital to the Partnership and hence to the Company. The Company
invests through the Partnership. Price risk arises from uncertainty about
future prices of underlying financial investments held by the Partnership,
which at year-end was $297,181,380 (31 December 2023: $368,027,035). Please
refer to Note 5 for quantitative information about the fair value measurements
of the Partnership's Level 3 investments, where they are sensitised. The Level
1 investments are sensitised here. There were $201 million (31 December 2023:
$207 million) Level 1 investments which are exposed to price risk as well. A
change of +/- 10 per cent. in the Level 1 investments would result in a +/-
$20.1 million change in their fair value (31 December 2023: a change of +/- 10
per cent. in the Level 1 investments would result in a +/- $20.7 million
change in their fair value).
The Partnership is exposed to a variety of risks which may have an impact on
the carrying value of the Company's investment in the Partnership. The
Partnership's risk factors are set out in (a)(i) to (a)(iii) below.
(i) Not actively traded
Some of the Partnership's investments are not generally traded in an active
market but are indirectly exposed to market price risk arising from
uncertainties about future values of the investments held. The underlying
investments of the Partnership vary as to industry sub-sector, geographic
distribution of operations and size, all of which may impact the
susceptibility of their valuation to uncertainty.
(ii) Concentration
The Company, through the Partnership, invests in the global energy sector,
with a particular focus on businesses that engage in oil and gas exploration
and production and midstream investments in that sector. This means that the
Company is exposed to the risk of only making investments in the global energy
sector, which may further relate to sub-sector, geography, and the relative
size of an investment or other factors. Whilst the Company is subject to the
investment and diversification restrictions in its investment policy, within
those limits, material concentrations of investments have arisen.
Although the investments are in the same industry, this risk is managed
through careful selection of investments within the specified limits of the
investment policy. The investments are monitored on a regular basis by the
Investment Manager.
The Board and the Investment Manager monitor the concentration of the
investment in the Partnership on a quarterly basis to ensure compliance with
the investment policy.
(iii) Liquidity
The Company's underlying investments through the Partnership are dynamic in
nature. The Partnership will maintain flexibility in funding by keeping
sufficient liquidity in cash and cash equivalents which may be invested on a
temporary basis in line with the cash management policy as agreed by the Board
from time to time.
As at 31 December 2024, $77 million((1)) or 20.5 per cent. (31 December 2023:
$285.6((1)) million or 42.6 per cent.) of the Partnership's financial assets,
including those held by its wholly-owned subsidiaries, REL US Corp and REL US
Centennial Holdings, LLC, were cash and cash equivalent balances, being a mix
of cash balances held on deposit with several A or higher rated banks and
short term fixed rate securities.
((1)) These figures are comprised of $62.6 million (2023: $283.6 million) held
at the Partnership and $14.4 million (2023: $2 million) held at REL US Corp.
(b) Foreign currency risk
The Company has exposure to foreign currency risk due to the payment of some
expenses in Pounds Sterling. Consequently, the Company is exposed to risks
that the exchange rate of its currency relative to other foreign currencies
may change in a manner that has an adverse effect on the value of that portion
of the Company's assets or liabilities denominated in currencies other than
the U.S. Dollar.
The following tables set out, in U.S. Dollars, the Company's total exposure by
currency and the net exposure to foreign currencies of the monetary assets and
liabilities:
As at 31 December 2024 $ £ Total
Assets $'000 $'000 $'000
Non-current assets
Investment in the Partnership((1)) 372,564 - 372,564
Total non-current assets 372,564 - 372,564
Current assets
Trade and other receivables 2,447 - 2,447
Cash and cash equivalents 1,167 292 1,459
Total current assets 3,614 292 3,906
Current liabilities
Trade and other payables 278 348 626
Total current liabilities 278 348 626
Total net assets 375,900 (56) 375,844
((1)) Includes the fair value of one investment held through the Partnership,
Veren, denominated in CAD and therefore subject to foreign currency risk. This
investment had an aggregate fair value of $42.2 million as at 31 December
2024.
As at 31 December 2023 $ £ Total
Assets $'000 $'000 $'000
Non-current assets
Investment in the Partnership((1)) 666,024 - 666,024
Total non-current assets 666,024 - 666,024
Current assets
Trade and other receivables 2,238 38 2,276
Cash and cash equivalents 932 4,849 5,781
Total current assets 3,170 4,887 8,057
Current liabilities
Trade and other payables 110 402 512
Total current liabilities 110 402 512
Total net assets 669,084 4,485 673,569
((1)) Includes the fair value of one investment held through the Partnership,
Veren denominated in CAD and therefore subject to foreign currency risk. This
investment had an aggregate fair value of $57.2 million as at 31 December
2023.
(c) Interest Rate Risk
The Company's exposure to interest rate risk relates to the Company's cash and
cash equivalents held through the Partnership. The Company is subject to risk
due to fluctuations in the prevailing levels of market interest rates. Any
excess cash and cash equivalents are invested at short-term market interest
rates. As at the date of the Statement of Financial Position, the majority of
the cash and cash equivalents were held by the Partnership on interest bearing
fixed deposit accounts and Treasury Bills. Any exposure to interest rate risk
at the underlying investment level is captured within price risk.
The Company has no other interest-bearing assets or liabilities as at the
reporting date. As a consequence, the Company is only exposed to minimal
variable market interest rate risk. Management does not expect any residual
interest rate risk to be material, and therefore sensitivity analysis has not
been provided.
31 December 31 December
2024 2023
$'000 $'000
Non-interest bearing
Cash and cash equivalents 1,459 5,781
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the Board of
Directors.
Liquidity risk is defined as the risk that the Company may not be able to
settle or meet its obligations on time or at a reasonable price.
The Company adopts a prudent approach to liquidity management and through the
preparation of budgets and cash flow forecasts maintains sufficient cash
reserves to meet its obligations. During the year, the Company received
distributions in aggregate of $217.7 million (£173.3 million) from the
Partnership (2023: $59.8/£47.1 million) to continue to fund the 2023 and 2024
share buyback programmes, the Tender Offer and ongoing expenses. As in prior
years, in accordance with the Partnership Agreement, if the Company requires
additional funds for working capital, it is entitled to receive further
distributions from the Partnership. In order to do so, the Company would
submit a distribution request approved by the Board to the Partnership, which
would then be required to arrange for the payment of the requested amount.
Since REL's inception, the Company has requested and received distributions
from the Partnership for working capital needs. As at 31 December 2024, REL,
through the Partnership, had available liquid resources of $77 million in
excess of potential unfunded commitments of $6.2 million.
The Company's financial assets (excluding equity investments) and liabilities
have an expected maturity of less than 12 months from 31 December 2024 (2023:
less than 12 months from 31 December 2023). Based on the assessment outlined
above, the Board has concluded that, as of the date of this report, the
Company and Partnership have sufficient available liquid resources to meet
current liabilities as they fall due over the next 12 months.
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Company. Any
exposure to credit risk at the underlying investment level is captured within
price risk.
Financial assets mainly consist of cash and cash equivalents, trade and other
receivables, and investments at fair value through profit or loss. The
Company's risk on liquid funds, including those held by the Partnership((1)),
is reduced because it can only deposit monies with institutions with a minimum
credit rating of "single A". The Company mitigates its credit risk exposure on
its investment at fair value through profit or loss by the exercise of due
diligence on the counterparties of the Partnership, its General Partner and
the Investment Manager.
The table below shows the material cash balances and the credit rating for the
counterparties used at the year-end date:
31 December 31 December
2024 2023
Counterparty Location Rating $'000 $'000
Barclays Bank Plc Guernsey A 1,459 5,781
((1)) The Partnership holds its cash and cash equivalents ($62.6 million) at
Barclays Bank Plc (Rating: A) and Citibank (Rating: A+).
The Company's maximum exposure to loss of capital from credit risk at the
year-end is shown below:
31 December 2024 Carrying Value and Maximum exposure
$'000
Other financial assets (including cash and cash equivalents but excluding 1,459
prepayments and loan from the Partnership)
31 December 2023 Carrying Value and Maximum exposure
$'000
Other financial assets (including cash and cash equivalents but excluding 4,039
prepayments)
Gearing
As at the date of these Financial Statements the Company itself has no
gearing. The Company may have indirect gearing through the operations of the
underlying investee companies.
11. Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of
Directors, as a whole. The key measure of performance used by the Board to
assess the Company's performance and to allocate resources is the Total Return
of the Company's Net Asset Value and therefore no reconciliation is required
between the measure of profit or loss used by the Board and that contained in
the Financial Statements.
For management purposes, the Company is organised into one main operating
segment, which invests in one limited partnership.
All of the Company and the Partnership's income is derived from within
Guernsey and the Cayman Islands.
All of the Company's non-current assets are located in the Cayman Islands.
Due to the Company's nature, it has no customers.
12. Loss per Share and Net Asset Value per Share
Loss per Share
31 December 2024 31 December 2023
Basic / Diluted Basic / Diluted
Loss for the year ($'000) (79,669) (2,268)
Weighted average numbers of Shares in issue 30,136,226 46,651,893
(Loss per share)/EPS (cents) (264.36) (4.86)
The (Loss)/Earnings per Share is based on the profit or loss of the Company
for the year and on the weighted average number of Shares the Company had in
issue for that year.
The weighted average number of Shares in issue during the year was 30,136,226
(31 December 2023: 46,651,893).
There are no dilutive Shares in issue as at 31 December 2024 (31 December
2023: nil).
Net Asset Value per Share
31 December 2024 31 December 2023
Basic / Diluted Basic / Diluted
NAV ($'000) 375,844 673,569
Number of Shares in issue 25,342,691 42,195,789
Net Asset Value per Share ($) 14.83 15.96
Net Asset Value per Share (£) 11.81 12.53
Share Price (£) 7.86 8.01
Discount to NAV (per cent.) 33.45 36.09
The Net Asset Value per Share is arrived at by dividing the net assets as at
the date of the Statement of Financial Position by the number of Ordinary
Shares in issue at that date. The Discount to NAV is arrived at by calculating
the percentage discount of the Company's Net Asset Value per Share to the
Company's closing Share price as at the date of the Statement of Financial
Position.
13. Auditor's Remuneration
Other operating expenses include but is not limited to all fees payable to the
auditor, which can be analysed as follows:
2024 2023
$'000 $'000
Ernst & Young LLP Audit fees 482 617
2024 2023
$'000 $'000
Ernst & Young LLP Interim Review fees 151 213
Ernst & Young Non-Audit fees 151 213
14. IFRS to US GAAP Reconciliation
The Company's Financial Statements are prepared in accordance with IFRS, which
in certain respects differ from US GAAP. These differences are not material
and therefore no reconciliation between IFRS and US GAAP has been presented.
For reference, please see below for a summary of the key judgments and
estimates taken into account with regards to the Company as of 31 December
2024, as well as the Shareholders' financial highlights required under US
GAAP.
Assessment as an Investment Entity
As stated in Note 2, REL meets the definition of an investment entity under
IFRS 10. Per US GAAP (Financial Services - Investment Companies (Topic 946):
Amendments to the Scope, Measurement, and Disclosure Requirements or "ASC
946"), REL meets the definition of an investment company, and as required by
ASC 946, REL measures its investment in the Partnership at FVTPL, which in
turn measures its investment in the underlying investments at FVTPL.
REL's Investment in the Partnership
As stated in Note 3, although the Company is the sole limited partner, it does
not control the Partnership (as that is attributable to the General Partner)
and, since REL meets the definition of an investment company in accordance
with IFRS 10, it measures its investment in the Partnership at FVTPL. Taking
into consideration all applicable US GAAP requirements (ASC 946 and ASC 323),
REL accounts for its investment in the Partnership at FVTPL which is similar
to the IFRS 10 requirements.
Fair Value Measurements
The fair value of the underlying investments held by the Partnership are
determined based on valuation techniques and inputs that are observable and
unobservable in the market which market participants have access to and will
use to determine the exit price or selling price of the investments. The
change in valuation of REL's investments held by the Partnership is then
reflected in the fair value of REL's investment in the Partnership. No
additional disclosures are needed, as the applicable fair value valuation
techniques and disclosures are consistent to those made under IFRS.
Shareholders' Financial Highlights
Year Ended Year Ended
31 December 31 December
2024 2023
Expense ratio((1)) 2.2% 2.5%
Performance Allocation ratio((1)) 0.0% 0.0%
Total Expense and Performance Allocation ratio 2.2% 2.5%
Net investment loss ratio((2)) (1.1)% (1.9) %
Internal rate of return((3)), beginning of year (3.7)% (3.8) %
Internal rate of return((3)), end of year (7.0)% (3.7) %
Net contributed capital to total capital commitments((4)) 100.0% 100.0%
1. The expense ratio is calculated using total expenses of the Company
and the Partnership allocated to the Shareholders divided by the Shareholders'
average capital balance for the year presented. For the years ended 31
December 2024 and 2023, the Performance Allocation realised by the General
Partner of the Partnership was $nil and $nil, respectively, and the
Performance Allocation accrued by the General Partner of the Partnership was
approximately $nil and $nil, respectively.
2. The net investment loss ratio is the Shareholders' investment
income of the Company and Partnership reduced by total expenses of the Company
and the Partnership divided by the Shareholders' average capital balance for
the year presented. However, net investment loss does not include any realised
or unrealised gains/losses generated from the sale or recapitalisation of an
investment of the Partnership. Thus, net investment loss includes dividend and
interest income of the Company and the Partnership less the total expenses of
the Company and the Partnership incurred during the year presented.
3. The internal rate of return since the commencement of operations
("IRR") is computed based on the dates of the Shareholders' capital
contributions to the Company, distributions from the Company to the
Shareholders, and the fair value of the Shareholders' NAV as of 31 December
2024. The IRR of the Shareholders is net of all fees and Performance
Allocation to the General Partner of the Partnership. The computation of the
IRR for an individual Shareholder may vary from the IRR presented above due to
the timing of capital transactions.
4. Net contributed capital is based on the Shareholders' gross capital
contributions.
15. Post-Year End Update
As of the date of this report, there are no matters to report.
Alternative performance measures ("APMs")
This Annual Report and Accounts contain APMs, which are financial measures not
defined in IFRS. These include certain financial and operational highlights
and key financials, as well as in the performance section of the Board Chair's
Statement. The definition of each of these APMs is shown below.
The Company assesses its performance using a variety of measures that are not
specifically defined under IFRS and are therefore termed APMs. The APMs that
the Company uses may not be directly comparable with those used by other
companies. These APMs are used to present a clearer picture of how the Company
has performed over the year and are all financial measures of historical
performance.
For the 2024 Annual Report, the APMs, Performance Allocation Ratio and Net
Contributed Capital to Total Capital Commitments are no longer deemed relevant
and have been removed from the below table. The Performance Allocation has
been nil since amendments to the Investment Management Agreement in 2020, as
the portfolio level cost benchmark has remained in deficit. The Shareholders'
gross capital contributions have remained at 100 per cent. for many years.
The table below defines our APMs.
APM Definition Purpose Calculation and (where relevant) reconciliation to IFRS
NAV per Ordinary Share The Company's NAV divided by the number of Ordinary Shares. A measure of the value of one ordinary share. The net assets as shown on the statement of financial position ($376 million
as at 31 December 2024 and $674 million as at 31 December 2023) divided by the
number of Ordinary Shares in issue as at the calculation date (25,342,691 as
at 31 December 2024 and 42,195,789 as at 31 December 2023).
Ordinary NAV total return The increase/(decrease) in the NAV per ordinary share. A measure of the overall financial performance of the Company. The difference in the NAV per Ordinary Share at the beginning and end of the
year from the statement of financial position ($14.83 for the year ended 31
December 2024 & $15.96 for the year ended 31 December 2023 as a percentage
of the opening NAV per Ordinary Share as shown in the Statement of Financial
Position (being $15.96 per ordinary share as at 31 December 2023 & $14.52
as at 31 December 2022).
Premium/(discount) to NAV The amount by which the ordinary share price is higher/lower than the NAV per A measure of the performance of the Company's share price relative to the NAV The difference between the Company's share price and NAV per Ordinary Share as
Ordinary Share, expressed as a percentage of the NAV per ordinary share. per Ordinary Share. a relative percentage of the NAV per Ordinary Share (33.4 per cent. as at 31
December 2024 and 36.1 per cent. as at 31 December 2023).
Annual total costs' impact on return per year The impact on return each year that total costs, including GP Performance A measure to show how total costs, including GP Performance Allocation, affect Annual total costs of the Company and Partnership as a per cent. of average
Allocation, have on the investment return. the return from the Company. NAV of the Company:
Total annual costs for the year ended 31 December 2024: $10,962,967 (31
December 2023: $16,989,622).
Average NAV of the Company for the year ended 31 December 2024: $506,199,348
(31 December 2023: $666,773,589).
Annual total costs' impact of return per year:
2.2 per cent. as of 31 December 2024 (2.5 per cent. as of 31 December 2023).
Reconciliation of Partnership's investments The annual investment value of the Partnership, including capital deployed A reconciliation of the Partnership's investments on an annual basis. For the year ended 31 December 2024:
into the Company's assets, cash received from the Company's investment
portfolio and the net unrealised change in value. $382 million - Brought Forward
$nil million - Capital Invested
$(5) million - Cash Proceeds
$(80) million - Change in Unrealised Gain/ (Loss)
$297 million - Carried Forward
For the year ended 31 December 2023:
$622 million - Brought Forward
$22 million - Capital Invested
$(272) million - Cash Proceeds
$10 million - Change in Unrealised Gain/(Loss)
$382 million - Carried Forward
Expense Ratio The impact on return each year that total costs, excluding GP Performance A measure to show how costs, excluding GP Performance Allocation, affect the As shown in Note 14, the expense ratio is calculated using total expenses of
Allocation, have on the investment return. return from the Company. the Company and the Partnership allocated to the Shareholders divided by the
Shareholders' average capital balance for the year presented 2.2 per cent. for
the year ended 31 December 2024 & 2.5 per cent. for the year ended 31
December 2023.
Net Investment Loss Ratio The impact on return each year that total costs, net of interest income, have A measure to show how total costs, net of interest income, affect the return As shown in Note 14, the net investment loss ratio is the Shareholders'
on the investment return. from the Company. investment income of the Company and Partnership reduced by total expenses of
the Company and the Partnership divided by the Shareholders' average capital
balance for the year presented. However, net investment loss does not include
any realised or unrealised gains/losses generated from the sale or
recapitalisation of an investment of the Partnership. Thus, net investment
loss includes dividend and interest income of the Company and the Partnership
less the total expenses of the Company and the Partnership incurred during the
year presented. (1.1 per cent. for the year ended 31 December 2024 & 1.9
per cent. for the year ended 31 December 2023).
Internal Rate of Return The cumulative return on Shareholders' investment. A measure to show the return from the Company. As shown in Note 14, the internal rate of return since the commencement of
operations ("IRR") is computed based on the dates of the Shareholders' capital
contributions to the Company, distributions from the Company to the
Shareholders, and the fair value of the Shareholders' NAV as of 31 December
2024. The IRR of the Shareholders is net of all fees and Performance
Allocation to the General Partner of the Partnership.
(7.0) per cent. as of 31 December 2024
(3.7) per cent. as of 31 December 2023
(3.8) per cent. as of 31 December 2022
Glossary of Capitalised Defined Terms
"Administrator" means Ocorian Administration (Guernsey) Limited (formerly
Estera International Fund Managers (Guernsey) Limited);
"Admission" means admission, on 24 October 2013, to the Official List and/or
admission to trading on the London Stock Exchange, as the context may require,
of the Ordinary Shares becoming effective in accordance with the UK Listing
Rules and/or the LSE Admission Standards as the context may require;
"AEOI Rules" means Automatic Exchange of Information;
"AIC" means the Association of Investment Companies;
"AIC Code" means the 2019 AIC Code of Corporate Governance;
"AIF" means Alternative Investment Funds;
"AIFM" means AIF Manager;
"AIFMD" means EU Alternative Investment Fund Managers Directive (No.
2011/61EU);
"Aleph Midstream" means Aleph Midstream S.A;
"Amended Plan" means the Amended Joint Chapter 11 Plan of Reorganisation of
Enviva Inc.;
"Annual General Meeting" or "AGM" means the general meeting of the Company;
"Annual Report and Financial Statements" means the annual publication of the
Company provided to the Shareholders to describe their operations and
financial conditions, together with their Financial Statements;
"Anuvia" means Anuvia Plant Nutrients;
"APMs" means Alternative Performance Measures;
"Articles of Incorporation" or "Articles" means the articles of incorporation
of the Company, as amended from time to time;
"ASC 946" means per US GAAP (Financial Services - Investment Companies (Topic
946): Amendments to the Scope, Measurement, and Disclosure Requirements;
"Audit Committee" means a formal committee of the Board with defined terms of
reference;
"Barilla Draw" means the Barilla Draw assets owned by Occidental Petroleum;
"Board" or "Directors" means the directors of the Company;
"CAD" or "C$" means Canadian dollar;
"CAGR" means Compound Annual Growth Rate;
"CanEra III" means CanEra Inc.;
"Carrier II" means Carrier Energy Partners II LLC;
"Castex 2005" means Castex Energy 2005 LLC;
"Castex 2014" means Castex Energy 2014 LLC;"CDS" means Clear Dark Spread;
"CNOR" means Canadian Non-Operated Resources LP;
"Companies Act" means Companies Act 2006;
"Companies Law" means the Companies (Guernsey) Law, 2008, (as amended);
"Company" or "REL" means Riverstone Energy Limited;
"Company Secretary" means Ocorian Administration (Guernsey) Limited (formerly
Estera International Fund Managers (Guernsey) Limited);
"ConocoPhillips" means ConocoPhillips Company;
"Cornerstone Investors" means those investors who have acquired Ordinary
Shares and acquired a minority economic interest in the General Partner and in
the Investment Manager, being AKRC Investments LLC, Casita, L.P., KFI and
McNair;
"Corporate Broker" means Deutsche Numis;
"C Corporation" means a C Corporation, under U.S. federal income tax law,
being a corporation that is taxed separately from its owners;
"Crescent Point Energy" means Crescent Point Energy Corp;
"CRS" means Common Reporting Standard;
"DCRC" means Solid Power, Inc.;
"DCRN" means Decarbonisation Plus Acquisition Corporation II;
"Depositary" means Ocorian Depositary Company (UK) Limited (formerly Estera
Depositary Company (UK) Limited);
"Disclosure Guidance and Transparency Rules" or "DTRs" mean the disclosure
guidance published by the FCA and the transparency rules made by the FCA under
section 73A of FSMA;
"Discontinuation Resolution" means a special resolution that was proposed and
not passed by the Company's Shareholders to discontinue the Company within six
weeks of the seventh anniversary of the Company's first Admission if the
trading price has not met the Target Price, and the Invested Capital Target
Return has not been met;
"Discount to NAV" means the situation where the Ordinary shares of the Company
are trading at a price lower than the Company's Net Asset Value;
"DTR" means Disclosure Guidance and Transparency Rules;
"E&P" means exploration and production;
"Eagle II" means Eagle Energy Exploration, LLC;
"Earnings per Share" or "EPS" or ''Loss per Share'' means the Earnings or Loss
per Ordinary Share and is expressed in U.S. dollars;
"EBITDA" means earnings before interest, taxes, depreciation and amortisation;
"ECI" means effectively connected income, which refers to all income from
sources within the United States connected with the conduct of a trade or
business;
"EEA" means European Economic Area;
"EGM" means an Extraordinary General Meeting of the Company;
"Enviva" means Enviva Holdings, LP;
"ESG" means Environmental, Social and Governance;
"EU" means the European Union;
"EV" means enterprise value;
"FATCA" means Foreign Account Tax Compliance Act;
"FCA" means the UK Financial Conduct Authority (or its successor bodies);
"Fieldwood" means Fieldwood Energy LLC;
"Financial Statements" means the audited financial statements of the Company,
including the Statement of Financial Position, the Statement of Comprehensive
Income, the Statement of Cash Flows, the Statement of Changes in Equity and
associated notes;
"FRC" means Financial Reporting Council;
"FTSE" means Financial Times Stock Exchange;
"FreeWire" means FreeWire Technologies, Inc.
"Fund V" means Riverstone Global Energy & Power Fund V, L.P.;
"Fund VI" means Riverstone Global Energy & Power Fund VI, L.P.;
"FVTPL" means Fair Value through the profit or loss;
"General Partner" means REL IP General Partner LP (acting through its general
partner, REL IP General Partner Limited), the general partner of the
Partnership and a member of the Riverstone group;
"GFSC" or "Commission" means the Guernsey Financial Services Commission;
"GFSC Code" means the GFSC Finance Sector Code of Corporate Governance;
"GoodLeap" means GoodLeap, LLC;
"Gross IRR" means an aggregate, annual, compound, gross internal rate of
return on investments. Gross IRR does not reflect expenses to be borne by the
relevant investment vehicle or its investors including, without limitation,
Performance Allocation, management fees, taxes and organisational, partnership
or transaction expenses;
"Gross MOIC" means gross multiple of invested capital;
"Group14" means Group14 Technologies, Inc.;
"Hampton Alexander Review" means a business-led initiative that aims to
improve gender diversity in leadership positions at FTSE companies;
"Henry Hub" means a pipeline interchange of natural gas in North America used
as a benchmark in gas pricing;
"Hyzon" means Hyzon Motors, Inc.;
"IAS" means international accounting standards as issued by the Board of the
International Accounting Standards Committee;
"IEA" means International Energy Agency;
"IFRS" means the International Financial Reporting Standards as adopted by the
European Union, being the principles-based accounting standards,
interpretations and the framework by that name issued by the International
Accounting Standards Board;
"ILX III" means ILX Holdings III LLC;
"Infinitum Electric" means Infinitum Electric, Inc.;
"IRR" means the internal rate of return since the commencement of operations;
"Interim Report" means the Company's half yearly report and unaudited interim
condensed financial statements for the period ended 30 June;
"Investment Manager" or "IM" means RIL (effective through 17 August 2020) and
RIGL (effective after 17 August 2020) which are both majority-owned and
controlled by Riverstone;
"Investment Management Agreement" or "IMA" means the investment management
agreement dated 24 September 2013 between RIL, the Company and the Partnership
(acting through its General Partner) under which RIL is appointed as the
Investment Manager of both the Company and the Partnership (effective 17
August 2020), the 2(nd) Amended & Restated investment management agreement
effective after 17 August 2020 between RIGL, the Company and the Partnership
(acting through its General Partner) under which RIGL is appointed as the
Investment Manager of both the Company and the Partnership and the 3(rd)
Amended & Restatement investment management agreement effective 9 December
2020 between RIGL, the Company and the Partnership (acting through its General
Partner);
"Invested Capital Target Return" means, as defined in the Articles, the Gross
IRR of 8 per cent. on the portion of the proceeds of the Issue (as such term
is defined in the Company's Prospectus) that have been invested or committed
to an investment ("Invested Capital") in respect of the period from the dates
of investment or commitment of that Invested Capital (being the dates from
which a management fee has been paid in respect of that Invested Capital) to
the seventh anniversary of the first Admission, calculated by reference to the
prevailing U.S. dollar valuations (as of the seventh anniversary of the first
Admission (or earlier disposal)) of the investment acquired with that Invested
Capital and sales proceeds of investments that have been disposed of prior to
such seventh anniversary and taking account of any distributions made on those
investments prior to the seventh anniversary of the first Admission;
"Investment Undertaking" means the Partnership, any intermediate holding or
investing entities that the Company or the Partnership may establish from time
to time for the purposes of efficient portfolio management and to assist with
tax planning generally and any subsidiary undertaking of the Company or the
Partnership from time to time;
"IPEV Valuation Guidelines" means the International Private Equity and Venture
Capital Valuation Guidelines;
"IPO" means the initial public offering of shares by a private company to the
public;
"IRS" means the Internal Revenue Service, the revenue service of the U.S.
federal government;
"ISAs (UK)" means International Standards on Auditing (UK);
"ISAE 3402" means International Standard on Assurance Engagements 3402,
"Assurance Reports on Controls at a Service Organisation";
"ISIN" means an International Securities Identification Number;
"KFI" means Moore Capital Management, formerly known as Kendall Family
Investments, LLC, a cornerstone investor in the Company;
"Liberty II" means Liberty Resources II LLC;
"Lintstock" means Lintstock Ltd;
"Listing Rules" means the UK listing rules made by the UK Listing Authority
under section 73A Financial Services and Markets Act 2000;
"LOI" means a Letter of Intent;;
"London Stock Exchange" or "LSE" means London Stock Exchange plc;
"LSE Admission Standards" means the rules issued by the London Stock Exchange
in relation to the admission to trading of, and continuing requirements for,
securities admitted to the Official List;
"M&A" means merger and acquisition;
"Magnificent 7" means the selection of seven high performing and influential
stocks in the US;
"Management Engagement Committee" means a formal committee of the Board with
defined terms of reference;
"Management Fee" means the management fee to which the Investment Manager is
entitled;
"Marathon Oil" means Marathon Oil Corporation;
"MBoe/d" means Thousand Barrels of Oil Equivalent Per Day;
"Mcf" means Thousand Cubic Feet of Natural Gas;
"McNair" means RCM Financial Services, L.P. for the purposes of acquiring
Ordinary Shares and Palmetto for the purposes of acquiring a minority economic
interest in the General Partner and the Investment Manager;
"Meritage III" means Meritage Midstream Services III, L.P.;
"Mmbtu" means one million British thermal units;
"NASDAQ" means National Association of Securities Dealers Automated Quotations
Stock Market;
"NAV per Share" means the Net Asset Value per Ordinary Share;
"Net Asset Value" or "NAV" means the value of the assets of the Company less
its liabilities as calculated in accordance with the Company's valuation
policy and expressed in U.S. dollars;
"Net MOIC" means gross multiple of invested capital net of taxes and
Performance Allocation on gross profit;
"Net Profits" means the proceeds received from each realised investment (after
the expenses related to its disposal) minus the acquisition price of that
realised investment;
"Nomination and Remuneration Committee" means a formal committee of the Board
with defined terms of reference;
"NURS" means non-UCITS retail schemes;
"NYSE" means The New York Stock Exchange;
"Official List" is the list maintained by the Financial Conduct Authority
(acting in its capacity as the UK Listing Authority) in accordance with
Section 74(1) of the Financial Services and Markets Act 2000;
"ONE" or "Our Next Energy" means Our Next Energy, Inc.;
"Onyx Power" means Onyx Strategic Investment Management I BV;
"OPEC" means the Organisation of the Petroleum Exporting Countries;
"Ordinary Shares" means redeemable ordinary shares of no par value in the
capital of the Company issued and designated as "Ordinary Shares" and having
the rights, restrictions and entitlements set out in the Articles;
"Origo" means Origo Exploration Holding AS;
"Parker Review" means an independent framework comprising business
professionals, commissioned to consult on the ethnic diversity of UK boards;
"Partnership" or "RELIP" means Riverstone Energy Investment Partnership, L.P.,
the Investment Undertaking in which the Company is the sole limited partner;
"Partnership Agreement" means the partnership agreement in respect of the
Partnership between inter alios the Company as the sole limited partner and
the General Partner as the sole general partner dated 23 September 2013;
"Performance Allocation" means the Performance Allocation to which the General
Partner is entitled as outlined in Note 9 to the financial statements;
"Permian Resources" means Permian Resources Corporation;
"POI Law" means the Protection of Investors (Bailiwick of Guernsey) Law, 2020,
as amended;
"Private Riverstone Funds" means Fund V and all other private multi-investor,
multi-investment funds that are launched after Admission and are managed or
advised by the Investment Manager (or one or more of its affiliates) and
excludes Riverstone employee co-investment vehicles and any Riverstone managed
or advised private co-investment vehicles that invest alongside either Fund V
or any multi-investor multi-investment funds that the Investment Manager (or
one or more of its affiliates) launches after Admission;
"Prospectuses" means the prospectus published on 24 September 2013 by the
Company in connection with the IPO of Ordinary Shares and further prospectus
published on 23 November 2015;
"PRT" means Riverstone Performance Review Team;
"Qualifying Investments" means all investments in which Private Riverstone
Funds participate which are consistent with the Company's investment objective
where the aggregate equity investment in each such investment (including
equity committed for future investment) available to the relevant Private
Riverstone Fund and the Company (and other co-investees, if any, procured by
the Investment Manager or its affiliates) is $100 million or greater, but
excluding any investments made by Private Riverstone Funds where both (a) a
majority of the Company's independent directors and (b) the Investment Manager
have agreed that the Company should not participate;
"RCO" means Riverstone Credit Opportunities, L.P.;
"REL" means Riverstone Energy Limited listed on LSE: RSE;
"RELCP" means Riverstone Energy Limited Capital Partners, LP (acting by its
general partner Riverstone Holdings II (Cayman) Ltd.) a Cayman exempted
limited partnership controlled by affiliates of Riverstone;
"Ridgebury H3" means Ridgebury H3, LLC;
"RIGL" means RIGL Holdings, LP;
"RIL" means Riverstone International Limited;
"Riverstone" means Riverstone Holdings LLC and its affiliated entities (other
than the Investment Manager and the General Partner), as the context may
require;
"Rock Oil" means Rock Oil Holdings, LLC;
"S&P 500" means Standard & Poor's 500 Composite Stock Price Index;
"SEC" means the U.S. Securities and Exchange Commission;
"SG&A" means selling, general and administrative expenses;
"Shareholder" means the holder of one or more Ordinary Shares;
"SID" means Senior Independent Director;
"Sierra" means Sierra Oil and Gas Holdings, L.P.;
"SLDP" means Solid Power, Inc.;
"Solid Power" means Solid Power, Inc.;
"Stewardship Code" means the UK Stewardship Code;
"Target Price" means, as defined in the Articles, £15.00, subject to (a)
downward adjustment in respect of the amount of all dividends and other
distributions, stock splits and equity issuances below the prevailing NAV per
Ordinary Share made following the first Admission and (b) upward adjustment to
take account of any share consolidations made following the first Admission;
"Tender Offer" means the £158.0 million in value of ordinary shares acquired
by the Company in 2024;
"Three Rivers III" means Three Rivers Natural Resources Holdings III LLC;
"Total Return of the Company's Net Asset Value" means the capital appreciation
of the Company's Net Asset Value plus the income received from the Company in
the form of dividends;
"T-REX" or "T-REX Group" means T-REX Group, Inc.;
"Tritium" means Tritium DCFC Limited;
"UCITS" means undertakings for collective investment in transferable
securities;
"UK" or "United Kingdom" means the United Kingdom of Great Britain and
Northern Ireland;
"UK Code" means The UK Corporate Governance Code 2018, issued by the FRC;
"UK Listing Authority" or "UKLA" means the Financial Conduct Authority;
"U.S." or "United States" means the United States of America, its territories
and possessions, any state of the United States and the District of Columbia;
"US GAAP" means the accounting principles generally accepted in the United
States;
"VME" means Valuation, Modelling and Economics;
"WTI" means West Texas Intermediate which is a grade of crude oil used as a
benchmark in oil pricing;
"£" or "Pounds Sterling" or "Sterling" means British pound sterling and
"pence" means British pence; and
"$" means United States dollars and "cents" means United States cents.
Directors and General Information
Directors Administrator and Company Secretary English solicitors to the Company
Richard Horlick (Chair) Ocorian Administration (Guernsey) Limited Hogan Lovells International LLP
Atlantic House
Karen McClellan PO Box 286
Holborn Viaduct
London
John Roche Floor 2
EC1A 2FG
Jeremy Thompson Trafalgar Court
United Kingdom
Claire Whittet Les Banques
St Peter Port
Guernsey advocates to the Company
Audit Committee Guernsey
Carey Olsen (Guernsey) LLP
John Roche (Chair) GY1 4LY
Carey House
Richard Horlick Channel Islands
PO Box 98
Karen McClellan
Les Banques
Jeremy Thompson Registered office
St Peter Port
Claire Whittet PO Box 286
Guernesey
Floor 2
GY1 4BZ
Management Engagement Committee Trafalgar Court
Channel Islands
Claire Whittet (Chair) Les Banques
Richard Horlick St Peter Port
U.S. legal advisors to the Company
Karen McClellan Guernsey
Vinson & Elkins LLP
John Roche GY1 4LY
1001 Fannin Street
Jeremy Thompson Channel Islands
Suite 2500
Houston, Texas
Nomination and Remuneration Committee Registrar
TX 77002
Jeremy Thompson (Chair) MUFG Corporate Markets
United States of America
Richard Horlick 51 Lime Street
Karen McClellan London
Independent auditor
John Roche EC3M 7DQ
Ernst & Young LLP
Claire Whittet United Kingdom
PO Box 9, Royal Chambers
St Julian's Avenue
Investment Manager Principal banker and custodian
St Peter Port
RIGL Holdings, LP Barclays Bank PLC
Guernsey
190 Elgin Avenue PO Box 41
Le Marchant House GY1 4AF
George Town
Le Truchot Channel Islands
Grand Cayman
St Peter Port
Guernsey
KY1-9005
GY1 3BE
Corporate Broker
Cayman Islands Channel Islands
Deutsche Numis Securities Limited
Investment Manager's Performance Review Team
45 Gresham St
Pierre Lapeyre
London
David Leuschen
EC2V 7BF
Baran Tekkora
United Kingdom
Website: www.RiverstoneREL.com
ISIN: GG00BBHXCL35
Ticker: RSE
SWISS SUPPLEMENT
ADDITIONAL INFORMATION FOR INVESTORS IN SWITZERLAND
This Swiss Supplement is supplemental to, forms part of and should be read in
conjunction with the Audited Financial Statements for the year ended 31
December 2024 for RIVERSTONE ENERGY LIMITED (the "Fund").
Effective from 20 July 2015, the Fund had appointed Société Générale as
Swiss Representative and Paying Agent. The current Prospectus, the Memorandum
and Articles of Association and the annual report of the Fund can be obtained
free of charge from the representative in Switzerland, Société Générale,
Paris, Zurich Branch, Talacker 50, P.O. Box 5070, CH-8021 Zurich. The paying
agent of the Fund in Switzerland is Société Générale, Paris, Zurich
Branch, Talacker 50, P.O. Box 5070, CH-8021 Zurich. The Company may offer
Shares only to qualified investors in Switzerland. In respect of the Shares
distributed in and from Switzerland, the place of performance and jurisdiction
is the registered office of the Swiss Representative.
Cautionary Statement
The Board Chair's Statement, the Investment Manager's Report and the Report of
the Directors have been prepared solely to provide additional information for
Shareholders to assess the Company's strategies and the potential for those
strategies to succeed. These should not be relied on by any other party or for
any other purpose.
The Board Chair's Statement, the Investment Manager's Report and the Report of
the Directors may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "expects", "intends", "may", "will" or
"should" or, in each case, their negative or other variations or comparable
terminology.
These forward-looking statements include all matters that are not historical
facts. They appear in a number of places throughout this document and include
statements regarding the intentions, beliefs or current expectations of the
Directors and the Investment Adviser, concerning, amongst other things, the
investment objectives and investment policy, financing strategies, investment
performance, results of operations, financial condition, liquidity, prospects,
and distribution policy of the Company and the markets in which it invests.
By their nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may or may not
occur in the future. Forward-looking statements are not guarantees of future
performance.
The Company's actual investment performance, results of operations, financial
condition, liquidity, distribution policy and the development of its financing
strategies may differ materially from the impression created by the
forward-looking statements contained in this document.
Subject to their legal and regulatory obligations, the Directors and the
Investment Manager expressly disclaim any obligations to update or revise any
forward-looking statement contained herein to reflect any change in
expectations with regard thereto or any change in events, conditions or
circumstances on which any statement is based.
Riverstone Energy Limited
PO Box 286, Floor 2,
Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 4LY, Channel
Islands.
T 44 (0) 1481 742742
F 44 (0) 1481 742698
Further information available online:
www.RiverstoneREL.com (http://www.RiverstoneREL.com)
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