Putting
shareholders
first
Pantheon International Plc
Annual Report and Accounts 2024
Full contents
Strategic Report Manager’s Review Governance Financial Statements Other Information
Pantheon International Plc Annual Report and Accounts 2024
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This report contains terminology that may be unfamiliar to some readers. The Glossary on page 182 provides definitions for frequently used terms.
Chair’s Statement
Progress
built on trust
05
Contents
Strategic Report
About PIP 03
About Pantheon 04
Chair’s Statement 05
Direct Investments 12
Uplifts Upon Exit 14
NAV Performance 18
Responsible Investment 20
Key Performance Indicators 22
Our Strategy 28
Our Investment Model 34
Investment Policy 41
Optimising PIP’s Capital Structure 42
Risk Management and Principal Risks 44
Directors’ Duties and Stakeholder Engagement 49
Viability Statement 54
Manager’s Review
Our Market 56
Responsible Investment 62
Portfolio 70
Performance 72
Sectors in Focus 76
Realisations 78
Net Portfolio Cash Flow 83
Distributions 84
Calls 95
New Commitments 96
Buyout Analysis 99
Largest 50 Companies by Value 102
Largest 50 Managers by Value 106
Key Pantheon Personnel Supporting PIP 110
Governance
Board of Directors 116
Directors’ Report 118
Statement on Corporate Governance 123
Audit Committee Report 130
Directors’ Remuneration Report 133
Directors’ Responsibility Statement 136
Independent Auditor’s Report to the Members
of Pantheon International Plc 137
Financial Statements
Income Statement 146
Statement of Changes in Equity 147
Balance Sheet 148
Cash Flow Statement 149
Notes to the Financial Statements 150
Other Information
AIFMD Disclosures 175
Alternative Performance Measures 177
Glossary of Terms 182
Directors and Advisers 184
Retail investors advised by independent
financial advisers
The Company currently conducts its affairs
so that its shares can be recommended by
independent financial advisers to retail private
investors in accordance with the Financial
Conduct Authority (FCA) rules in relation to
non-mainstream investment products.
The shares are excluded from the FCA’s
restrictions which apply to non-mainstream
investment products because they are shares
in a UK-listed investment trust.
2024Annual Report and AccountsPantheon International Plc 01Strategic Report Manager’s Review Governance Financial Statements Other Information
About PIP 03
About Pantheon 04
Chair’s Statement 05
Direct Investments 12
Uplifts Upon Exit 14
NAV Performance 18
Responsible Investment 20
Key Performance Indicators 22
Our Strategy 28
Our Investment Model 34
Investment Policy 41
Optimising PIP’s Capital Structure 42
Risk Management and Principal Risks 44
Directors’ Duties and Stakeholder Engagement 49
Viability Statement 54
Strategic Report
Strategic Report
Manager’s Review
Governance
Financial Statements
Other Information
2024Annual Report and AccountsPantheon International Plc 02
About PIP
Making the private, public
A share in Pantheon International Plc (“PIP” or the “Company”) provides
access to a high-quality diversified portfolio of private equity backed
companies around the world that would otherwise be inaccessible to
most investors. Shares in PIP can be bought and soldasthey would
inanyother publicly listed company.
PIP
PIP isa FTSE 250 private equity investment trust, actively managed byPantheon,
oneoftheleading private markets investment managers globally.
PIP is overseen by an independent Boardof Directors who come from arange
ofbackgrounds.
Shareholders
Invest via London
Stock Exchange
Pantheon
As at 31 May 2024
PIP
OVERSEES
PIP Board
APPOINTS
MANAGES
Awards
1 The uplift on full exit compares the value received upon realisation against the investment’s carrying value
12 months prior to exit or if known, the latest valuation unaffected by pricing effects arising from market
participants becoming aware of the imminent sale of an asset.
2 Loss ratio is calculated as the sum of 1) the loss made on realised investments which have exited below
cost and 2) the difference between the unrealised value and the cost of unrealised investments which are
held below cost, divided by the aggregate costs of all investments.
3 Ongoing charges are calculated based on the AIC definition. Including financing costs, PIP’s total ongoing
charges would be 1.87%. See page 180 of the Alternative Performance Measures section for calculations
and disclosures.
+11.9%
Annualised NAV per
share growth since 1987
(net of fees)
£2.3bn
Net asset value
(“NAV”)
+6.1%
NAV per share
growth in the year
+19.9%
Share price change
in the year
£1.5bn
Market capitalisation
+10.9%
Annualised share price
return since 1987
2.3%
2
Ten-year loss ratio
+20%
1
Weighted average
uplift at exit
1.31%
3
Association of Investment
Companies (“AIC”) ongoing
charges
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2024Annual Report and AccountsPantheon International Plc 03
About Pantheon
Managed by a leading, global
private equity investor
1 As at 31 December 2023.
2 As at 30 June 2024.
3 A location from which executives of the Pantheon Group perform client service activities.
4 A location from which executives of the Pantheon Group perform client service activities
but does not imply an office.
5 United Nations Principles for Responsible Investment.
15 years of UN PRI
5
membership, one of the first
private equity signatories
Invested in a better future
ESG committee member of:
LGBT+ NETWORK
GAIN
Girls Are INvestors
Pantheon’s long-term private equity experience and deep industry
connections, coupled with a conviction-driven, thematic investment
approach thatcombines sector expertise and operational know-how,
enables access to a wide range of differentiated direct company
investments andhard-to-reach funds to drive long-term value creation.
US$65bn
1
Discretionary assets under
management
13
Locations around
the world
642
2
Advisory board
seats
126
2
Investment
professionals
c.10,000
Private equity managers in
Pantheon’s database
> 650
1
Institutional
investors globally
Pantheon (the “Manager”)
provides PIP with access to its
global private equity platform.
Pantheon has been at the forefront of private markets investing for
more than 40 years, earning a reputation for providing innovative
solutions covering the full lifecycle of investments, from primary
fundcommitments to co-investments and secondary purchases.
Leveraging Pantheon’s global platform, PIP is able to build a global
portfolio of exciting private companies through direct co-investments,
single-asset secondary deals and primary investments in
access-constrained funds.
PANTHEON
SAN
FRANCISCO
28
HONG
KONG
4
2
NEW YORK
66
BOGOTÁ
5
TOKYO
6
SEOUL
7
CHICAGO
7
LONDON
315
people
DUBLIN
12
TEL AVIV
4
1
SINGAPORE
9
GENEVA
3
1
SWITZERLAND
1
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2024Annual Report and AccountsPantheon International Plc 04
Chair’s Statement
JOHN SINGER CBE
Chair
Comprehensive strategy to deliver
attractive risk-return to shareholders
When we started our original review of PIP’s
authenticity, relevance for shareholders
anddifferentiation, it was clear that our
governance required an integration of
corporate, investment and leverage
strategies from the start – even if the timing
and implementation of each would be
different. This required holistic thinking both
at the Board and Management Team levels.
Knowing that we are driven by this mindset
should provide investors with reassurance
of the Board’s focus on improving
performance over the long term. In this
financial year, we have made significant
progress in all three areas.
This year, progress for PIP has been based
on three factors. Firstly, Boards in our
sectorhave to go beyond stewardship
andadministration to greater strategic
proactivity to deliver on Net Asset Value
(NAV) and share price growth, based on
adeep understanding of private equity.
We should also proactively aim to increase
new demand for quoted private equity
fromboth retail and institutional investors.
Secondly, our Board’s corporate, investment
and leverage strategies have been closely
integrated to support each other to deliver
investor objectives. And thirdly, now more
than ever, our continuing growth and
progress must be built on trust – putting
shareholder interests’ ahead of all others
through all cycles. In setting out the year’s
results below I will focus more on the “why
and for whom” rather than just the “what
andhow” of everything we are doing.
Progress
built on trust
This has again been a year of great corporate and investment activity
forPIP. It has resulted, I am delighted to report, not only in a continuing
increase in the value of the underlying portfolio, but an even greater
one inour share price, increasing 20% during the period.
I would like to thank my fellow Board members and the PIP
Management Team, but even more so, the shareholders and
fellow colleagues in the sector for their encouragement and input
into ourprogress.
Share price increase
+20%
Share price
31 May 2023
Share price
31 May 2024
2024Annual Report and AccountsPantheon International Plc 05Strategic Report
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Corporate Strategy
After announcing the three-step corporate
programme in my Chair’s Statement in
August 2023, we have dedicated ourselves
to making progress on each of the three
steps that I outline here. These steps form
the backbone of our corporate strategy.
1
Step One
Following the launch of the share buyback
programme last summer, PIP embarked on
a £150m
1
reverse tender offer in October
2023, repurchasing 49.2m shares at a strike
price of 305.0p per share, which represented
a weighted average discount of 35% to
thethen-prevailing NAV per share.
Havingcompleted this part of the share
buyback programme successfully, we
turned to address the remaining component
of the £200m that had been announced
andallocated. Over the course of the year
to31May 2024, PIP bought back 64.3m
shares (12.1% of share capital) for a total
amount of £196.7m
1
, at an average price of
306.0p per share, equivalent to an average
35% discount to NAV, and representing
around 8% of opening NAV. In the weeks
after the year-end, we kept to our word and
completed further buybacks, ensuring that
the full £200m allocated to the programme
was indeed invested in share repurchases.
Overall, the share buybacks during the year
resulted in an uplift to year-end NAV per
share of 4.7%.
Chair’s Statement
I must reiterate that the purpose of the
sharebuybacks was not primarily to narrow
the discount but rather to prepare the
groundwork to enhance our chances of
success in stimulating demand for our
shares by reducing perceived obstacles
inthe minds of investors. Concerns, for
example, such as the overhang of legacy
shareholders, or whose interests the
Boardputs first. We are pleased to report
that the completion of theshare buyback
programme and tender offer have resulted
in a refreshed share register for PIP,
achieved through new buyers coming
ontothe register as well as afewlarge
legacy shareholders reducing their
holdingsthrough an equitable and
democratic process available to all.
This also represented an excellent
opportunity to invest in our own portfolio,
where we know the underlying investments
well and have conviction in the NAV, through
buying back £200m worth of shares at a
large discount.
We hope the success of this process and the
reasoning behind it will dispel perceptions
that Boards and managers do not put
shareholders’ interests first.
2
Step Two
With the initial share buyback programme
largely completed by 31 May 2024, and
twoimportant elements of our leverage
strategy in place, we were pleased to
announce our new Capital Allocation Policy.
When I originally announced the three-step
programme, I emphasised the importance
of a continuing commitment to share
buybacks during periods when the
discountof share price to NAV remains
high.This allows us to take advantage of
embedded value in the portfolio as well as
new investment opportunities at all points
inthe cycle. Buybacks, when discounts
widen, offer an opportunity to invest in
anexisting, high-quality portfolio that we
know extremely well, and where we benefit
both from embedded value implicit in the
discount, and from the eventual uplifts on
NAV that we typically experience at exit.
NAV per share and share price performance
NAV per share Share price Discount
28%
21%
35%
41%
500p
400p
300p
200p
0p
100p
34%
May 2020
May 2022May 2021 May 2023
FINANCIAL YEAR
May 2024
+4.7%
NAV per share uplift
from share buybacks
during theyear
1 Excluding costs and stamp duty.
2024Annual Report and AccountsPantheon International Plc 06Strategic Report
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Together with sector-wide initiatives to
dispel myths, we plan to increase our PIP
marketing effort. I am delighted to report
that, since the interim statement, the
Marketing Committee embarked on a
process to identify and appoint a marketing
agency, which was recently completed.
Ourwork over the coming months will focus
on clarity of branding, communication and
reasons to purchase and hold PIP shares for
the long term through increased marketing
spend. With our marketing agency, we are
increasing the resources and attention
dedicated to segmentation analysis.
Webelieve these efforts will result in
maintaining existing and attracting new
retail and institutional investment.
My deeply held belief is that building on the
trust and goodwill that we have created in
the market will bring in new investors who,
even when educated about the benefits of
Private Equity, feel uneasy about entrusting
money to what can appear as a complex
and opaque industry. It is incumbent on us
to explain the “why” at the heart of what we
do at PIP and “for whom” we are doing it.
Our deep culture and values have been
embedded over decades into investing
shareholder capital and help us maintain our
clear focus on investor interests and ensure
they are put first.
The corporate strategy and the associated
share buyback programme and Capital
Allocation Policy required detailed scenario
analysis and thoughtful consideration which
is woven into our investment and leverage
strategies as set out below.
Investment Strategy
Alongside the share buyback programme
and the allocation of capital to invest in our
own portfolio, £153m of capital has been
deployed this year into attractive new
investments globally with a continuing focus
on direct investments. These now represent
54% of the portfolio and are growing as we
maintain our investment target of around
one third of new capital earmarked for
co-investments and the same for single
asset GP-led secondaries. Over five years
ago, we started moving towards more direct
exposures, based on the conviction that
such a focus enables PIP to shape its
portfolio more precisely, as well as bringing
PIP closer to the assets and the GPs
managing them.
Chair’s Statement
With this objective in mind, we refined our
Capital Allocation Policy to provide clear
guidance on how we will seek to allocate
available cash between new investments
and share buybacks. We have deliberately
laid out a set of parameters linked to net
cash flow, which are to be applied based on
the prevailing discount at the end of each
financial quarter. This is designed to give
shareholders clarity on our approach, with
assessments made and the quantum
available for buybacks announced at
quarterly intervals, effective from 1 June
2024. The policy is clear, easy to understand
and measurable using underlying metrics
that are already reported to the market.
Welook forward to implementing this
continuing commitment to investing in
themost attractive opportunities, including
the repurchase of our own shares.
Themechanics of this are set out on
page29.
3
Step Three
The overall objective is to build on the
momentum created by steps one and two
tocreate more demand for PIP’s – and the
listed private equity sector’s – shares, which
should over time narrow the discount
between share price and NAV sustainably,
ina way in which steps one and two alone
could not be expected to achieve.
Our mission is to optimise the relevance and
attraction of our offering to both existing
andnew retail and institutional investors,
through two-way exchanges of conversation
and ideas with investors, brokers, investment
bodies, and fellow chairs of other investment
trusts, complemented by a more assertive
marketing strategy. As a sector, we must
come together to address the concerns of
shareholders, so that a rerating of our sector
can be earned.
Misunderstandings in the sector persist,
such as perceptions of inflated valuations,
fees and the lack of consistent disclosure.
Investors complain of inadequate disclosure
in areas of policy like leverage and buybacks,
and they are sometimes suspicious of the
relationship between Boards, managers and
shareholders. Bringing colleagues across
the industry together to provide education
and tackle these misconceptions would be
for the good of the sector overall and should
help to remove many of the obstacles
thatcurrently dampen demand for listed
private equity.
We refined our Capital
Allocation Policy to provide
clear guidance on how
wewill seek toallocate
available cashbetween
new investments and
sharebuybacks.
As a sector, we must
come together to address
the concerns of
shareholders, so that a
well-deserved rerating of
our sector can take place.
2024Annual Report and AccountsPantheon International Plc 07Strategic Report
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Chair’s Statement
The tilt towards direct investments in single
assets is already bearing fruit, both in terms
of returns and our proximity to the GPs.
Through the process of selection, monitoring,
valuation and advisory board support, we can
better alignour objectives on topics such as
sustainability, value creation methods and
timing of exit, with those of the GP and
management teams of the assets. Direct
investments have the added advantage of
carrying lower or no fees.
I continue to highlight the importance of our
having a number of Board members with
long experience in Private Equity, as well as a
highly experienced Private Equity Manager
in Pantheon, which gives us what I call
Thinking in line with Pantheon’s quality
GPsand working closely with them helps us
spot trends and capitalise on them swiftly.
This is especially the case in our expansion
in the dynamic GP-led secondaries space,
where we continue to be able to identify
opportunities alongside our GPs to invest
intop-performing businesses.
Another important differentiator PIP offers
retail and institutional portfolios is a truly
global exposure that is underpinned by
ourability to use global and local teams to
offer risk-monitored diversification across
sectors, geographies and currencies. PIP’s
portfolio is invested in the deepest and most
experienced private equity markets in the
world, with 54% in the USA, 31% in Europe,
8% in global assets and 7% in Asia.
“double-filter” Private Equity skills – an
additional lens added to that of the GP.
Importantly, we can use this double filter to
reduce risky reliance on the components of
value creation that cannot be controlled,
such as multiple arbitrage and reliance
onrising markets to boost returns; and
aggressive use of leverage that was a
low-cost way to augment returns between
the Global Financial Crisis and the start
ofinterest rates rising two years ago.
Duringthat period of cheap debt and rising
valuations, many GPs were able to generate
returns by virtue of market conditions but in
a risky and unsustainable way. To invest
consistently over market cycles and
generate returns whatever the macro
environment, we believe that investing with
GPs who are focused on revenue growth
and operating performance is superior to
investing in those relying on one-off cost
cutting and layering on aggressive debt
loads. The result of this can be seen in
the+17% of EBITDA growth within the
underlying portfolio companies over the
period. Even in thisdifficult year for trading
itwas in line with+19% of such earnings
growth over thelast five years.
17%
Weighted average
EBITDA growth for
the buyout portfolio
2
Sustainability, focusing in particular on
ESGconsiderations, is a component of
Pantheon’s investment process and
provides a further lens for risk management,
value creation and due diligence.
As a reminder, PIP invests directly into the
investment opportunities presented by
Pantheon, and is therefore able to control
itsportfolio construction and investment
deployment flexibly and proactively.
Theprocess of origination, due diligence,
execution and monitoring of investments
which is managed by Pantheon – and
overseen by our Board – reflects a
strongculture and set of values that is
encompassed in our Manager’s philosophy
and processes and mirrored in PIP’s Board.
Fundamental to the culture is transparency
and a genuine commitment to listening to
and understanding shareholder interests
and needs. Pantheon was founded on
principles of trust and putting the long-term
interests of investors first and, over its more
than 40 years of operations, throughout
cycles, has demonstrated its ability to
makethe relevant changes to maintain
thisbehaviour. The sharing of objectives
isexemplified by the alignment created
bythePIP holdings of the Directors and
Pantheon Partners that represent a total
shareholding of 5.3m (3.8m collectively
owned by the Board Directors and a
further1.5m shares held by 14 Partners
ofPantheon), representing a combined
valueof£17.2m as at 31 July2024.
The tilt towards direct
investments in single
assets is already bearing
fruit, both in terms of
returns and our proximity
to the GPs.
We believe that investing with GPs who are focused on
revenue growth and operating performance is superior
to investing in those relying on one-off cost cutting
and layering on aggressive debt loads.
2 The sample buyout figures for the 12 months to
31December 2023 were calculated using all the
information available to the Company. The figures
arebased on unaudited data. MSCI data was sourced
from Bloomberg. See pages 179 to 180 of the Alternative
Performance Measures section for sample calculations
and disclosures.
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Chair’s Statement
Performance
Against a challenging macroeconomic
backdrop and a period of scepticism about
private market valuations, I am pleased
toreport the strong performance that PIP
delivered over the year thanks to its robust,
balanced and high quality underlying
portfolio. In a market experiencing
continuing lower exit and distribution
levelsthan historically, and an increase
sector-wide in portfolio company holding
periods to six years, maintaining earnings
growth in those companies becomes an
even more critical differentiator. I am happy
to report that our portfolio companies
haveperformed well again this year, with
revenue and EBITDA growth CAGRs of 14%
(in line with the MSCI) and 17% (higher than
the MSCI at 13%) respectively.
These data points are based on all available
information at the company level and not on
a selected group of investments. In contrast
to public companies and investment trusts
that invest in listed equities, Private Equity
GPs can do much more operationally
withtheir portfolio companies. Through
investment into additional resources such
as portfolio support groups, Operating
Partners providing functional expertise
anddeal teams that work hand in hand
withthe company management, GPs are
able to drive superior EBITDA growth.
Through these two actions, we have secured
a diversity of lending mix, which not only
strengthened PIP’s balance sheet but also
provides wider geographic and financial
sector sourcing with carefully selected
players for today’s markets. A further
benefitwas increasing the number of
creditcounterparties from three to 10
withintwoseparate highly liquid markets.
Consequently, PIP is now much better
placed to replace any particular credit
counterparty that faces a similar situation
to Credit Suisse in the future.
After taking these two significant actions,
we have been transparent in disclosing in
great detail PIP’s gearing policy, the first
inthe sector to do so. Openness and
transparency are major elements of
PIP’sand Pantheon’s values and culture.
Webelieve in setting targets for leverage
whichwe respect, and honouring
investorexpectations.
These changes to PIP’s capital structure
better support the integrated investment
and corporate strategies during a time of
robust, high-quality deal flow while share
price discounts, though reduced, remain
wide. Our more flexible capital structure is
managed with thorough and well-defined
processes with a view to ensuring prudence.
In that context, we aim to improve
performance, beat the MSCI World index
over the medium to long term and provide
alternative safe options for new growth
through the cycles.
Leverage Strategy
The last component of PIP’s holistic and
integrated strategy is our approach to
leverage. In order to achieve our aims
ofdelivering attractive risk-return to
shareholders, we take a prudent approach
toleverage and seek a sensible risk balance.
As I reported in my interim statement,
weachieved two important milestones
during the year, culminating in a process
that hadbegun in the first half of 2023: the
refinancing of PIP’s revolving credit facility
and a private placement of long-dated
loannotes - a type of financing that had
notpreviously been used in the sector.
Theincorporation of prudent use of debt
marked a shift away from a net cash
position, with akey benefit to shareholders
being the reduction in idle cash on the
balance sheetand associated cash drag
onNAVperformance.
In October 2023, PIP refinanced its £500m
equivalent revolving credit facility, securing
amore favourable covenant package
andamargin increase of 46 basis points,
despitethe significant change in the lending
environment. Following that, on 12 January
2024, PIP completed a private placement of
$150m (£118m equivalent) of loan notes,
which were three times oversubscribed
andpurchased by five sophisticated North
American institutional investors with
considerable in-house knowledge of the
private equity asset class. Overall, there
wasno change in PIP’s overall leverage
immediately after the private placement,
asthose proceeds were used to part-repay
the RCF.
2.3%
Loss ratio over the last
tenyears
Moreover, PIP’s strategy of working in
partnership with these GPs and getting
closer to the assets allows us to target
investment opportunities with the most
attractive financial profiles and to influence
the growth we see in the portfolio. Contrary
to some perceptions that private equity
investments are necessarily risky, our
strategies result in a strong performance
ata lower level of risk demonstrated by a
lossratio of only 2.3%over ten years.
The annualised performance of NAV per
share over three-, five- and 10-year periods
was 12.5%, 12.1% and 13.5% respectively,
and 11.9% since inception, which reflect
theconsistent long-term value appreciation
that shareholders trust us to deliver. Over
the year to 31 May 2024, NAV per share
grew+6.1%.
2024Annual Report and AccountsPantheon International Plc 09Strategic Report
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The drivers of that performance were: the
valuation gains from the underlying portfolio
(+5.0%); and the impact of the share
buybacks (+4.7%), which were then offset
bythe effects of currency andexpenses.
Over recent years, some commentators
have claimed that the NAVs quoted by GPs
for their portfolio companies are inflated
andhaven’t reflected the movements in
publicmarkets.
that is core to PIP’s strategy (representing
46% of the portfolio) for good reason.
This segment of the market generally
employs lower leverage, which has servedto
limit the impact of high interest rates, which
ultimately protects margins. These factors,
combined with our robust valuation
processes (summarised onpage15 of the
report) should reassure shareholders of the
enhanced value being created for them.
Ultimately, the true endorsement of the
value of a company is the exit price achieved
on sale. Over the year to 31 May 2024,
PIPexperienced a 20% average uplift at exit.
The distribution case studies on pages 85 to
94 provide some examples of the value
creation thatour GPs have been able to
generate andthe uplift atexit that reflected
the transformation of those companies,
even in a challenging year. Overall, when
considering the long term performance of
PIP, I believe that we are delivering on our
goal to generate consistent returns over the
long term. Over various periods (and indeed
since inception), PIP continues to generate
outperformance relative to public market
benchmarks as wellas on an absolute basis.
While the share price discount to NAV
Chair’s Statement
NAV per share progression
550p
450p
400p
350p
300p
May
2023
462.4p
Valuation
gains
3,5
FX
impact
3
Investment
income
3
Share
buybacks
Expenses
and
taxes
3,4
May
2024
23.2p
3.2p
(10.7p)
21.8p
(9.4p)
+5.0% +0.7% (2.3%) (2.0%)+4.7%
+31.6%
+6.1%
490.5p
500p
remains at 34%, I am pleased with the
20% growth in share price over the year to
31 May 2024 and am excited to continue
our work on step three, bringing colleagues
in the sector together to increase demand
for quoted private equity with a view to
narrowing the discount overtime.
3 Figures are stated net of movements associated with the Asset Linked Loan Note (“ALN”) share of the reference portfolio.
4 Includes operating expenses, financing costs and withholding taxes on investment distributions.
5 PIP’s valuation policy for private equity funds is based on the latest valuations reported by the managers of the direct
investments and funds in which PIP has holdings. In the case of PIP’s valuation as at 31 May 2024, 95% of reported
valuations are dated 31 March 2024 or later.
6 Uplift on full exit compares the value received upon realisation against the investment’s carrying value 12 months prior
to exit or if known, the latest valuation unaffected by pricing effects arising from markets participants becoming aware
of the imminent sale of an asset.
+6.1%
NAV per share
growth, over the year
to 31 May 2024
In fact, PIP experienced a small contraction
in multiples used for EV/EBITDA valuation
ofover a turn to 17.3x, while the equivalent
metric for the MSCI increased more than
half a turn to 20.1x. This trend was also
observed in net debt / EBITDA multiples,
which fell since the interim report to 4.8x
forsmall/mid-market buyout and 5.2x for
large/mega buyout. Small/mid-market
buyouts are a part of thebuyout landscape
+20%
Average uplift on
exitrealisations
6
Governance
Underpinning all we do as a Board is the
basic tenet of putting shareholders first and
building on the trust that has been invested
in us. While some Boards may rely on their
managers, PIP’s Board works with them
asateam, always respecting the red
lineandseeking to ensure the highest
standardsofgovernance for the benefit
ofall stakeholders.
I am proud of this relationship and the
working practices that we follow with the
Pantheon team. The solid Private Equity
experience within the Board leads to greater
credibility and ease of working with the
Executive Team in governance terms, as
does the marketing and PR experience of
2024Annual Report and AccountsPantheon International Plc 10Strategic Report
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Directors. Moreover, PIP benefits not only
from the collaborative working with the
Management Team directly, but also from
access to the banking, marketing, risk and
support services teams at Pantheon.
In summary, the depth of the Board’s
experience, and its style of working with
theManagement Team, allow for a much
more informed debate and challenge
oninvestment, corporate and leverage
strategies. We are fully involved in all three
and not just a rubber stamp on Manager
recommendations. One example of the
increasing oversight and governance is
thepresence of the Audit Chair designate,
Zoe Clements, at the Pantheon Valuation
Committees, as well as the semi-annual
provision of a formal report from the
Valuation Committee to the Board.
As I reported in my Interim Statement, we
have welcomed two new Directors to the
Board, both of whom were elected at the
AGM last October. Zoe Clements and Rahul
Welde bring extensive experience and skills
tothe Board and Committees with Rahul
joining the Marketing Committee and Zoe
theFinance Committee. As we prepare with
sadness and much gratitude to bid farewell
toDavid Melvin at the next AGM, with Zoe
succeeding David in his role as Audit Chair,
we are appointing a search agency to identify
additional Non-Executive Directors and I look
forward to updating you on oursearch.
After a year that was extremely busy for
PIPwith a multitude of corporate actions
completed, while still attending to the
day-to-day operations, I would like to
thankmy fellow Board members and the
Pantheon Management Team for their
work,including Jie Gong for her input while
she was working with PIP. I would also liketo
take this opportunity to welcome Charlotte
Morris to the PIP team, who joins Helen
Steers asCo-Lead Manager.
Our work on steps one and two was widely
applauded by shareholders and analysts.
Indeed, the feedback I received directly
fromshareholders in my series of investor
meetings was a pleasing endorsement of
our emphasis on the “why” and “for whom”
elements of what we do. We were delighted
that the Board’s strong governance and
leadership, listening to shareholders and
prioritising their needs, was recognised
bythe award of “Board of the Year” at the
Citywire awards.
For whom are we making this journey?
For all our stakeholders, most certainly!
Butalso with an eye to attracting more new
shareholders – both retail and institutional –
to join those who became PIP shareholders
for the first time during the buy back process.
For existing and new we will be relying on our
integrated strategies set out above, and our
prudent investment pacing to ensure liquidity
in a market environment experiencing lower
exit and distribution levels than historically.
And our nimbleness to modify investment
strategy for PIP, will allow us to continue to
grow as a favoured route to long-term capital
gains, despite events such as the GFC in 2008
or the more recent post-Covid challenging
macroeconomic backdrop.
It is the high returns/low risk results,
decadeby decade, that convinced me
andmy colleagues at PIP to pursue the
democratisation of PE. Individuals, as
wellas institutions, should own this high
performing asset class as an element of
their portfolios, enhanced by the liquidity
offered by the quoted investment trust
vehicle, created and developed in the UK.
It is very encouraging to see that Defined
Contribution pension providers are
increasingly keen now to include private
markets asset classes in their offerings,
recognising the fact that PEprovides
outperformance, access to a broader
investment set, and diversification.
Outperformance achieved at low levels of
risk – contrary to misunderstandings about
the industry. Our portfolio demonstrates this
with a loss ratio of only 2.3% over 10 years
– a figure which includes not only realised
losses but also often temporarily impaired
valuations which can be reversed at exit.
We will, therefore, continue to apply the three
factors of strategic proactivity, integrated
strategies and further building on trust
toprovide PE exposure for any investor
(institutional or retail, small or large),
including those who do not have the size,
access, management resources or desire
tobuild a direct portfolio of PE investments.
Each share of PIP provides an investment in
a globally diversified, low–risk PE portfolio
that would take them many years and
significant financial resources to develop,
with a decades-long and solid track record
of generating returns, overseen by an
independent and highly experienced Board,
and managed by Pantheon.
We will continue the journey described here
in line with the principles that have provided
us with a very successful year in terms of
making progress in 2024 on our overall
strategic objectives, and very much hope
tohave you with us on this exciting journey.
PIP’s Strategic Report, set out on pages 2 to
54, has been approved by the Board and
should be read in its entirety by shareholders.
JOHN SINGER CBE
Chair
31 July 2024
A decades-long and solid track record of
generating returns, overseen by an independent
and highly experienced Board, and managed
by Pantheon.
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Direct Investments
PIPPIP
Funds
Via direct
co-investments
and manager-led
secondaries
3
2013
1
Funds
513 companies
4
922 companies
4
100%
54%46%
1 As at 30 June 2013.
2 As at 31 May 2024.
3 These typically involve single-asset secondary
transactions.
4 Comprises 80% of PIP’s total NAV exposure.
2024
2
Over the past few years, we
have focused on investing directly
inprivate companies alongside
ourmanagers. Today, over half
ofPIP’s portfolio comprises
carefully selected direct
companyinvestments, which are
complemented by hard-to-access,
oversubscribed funds.
Since PIP invests directly in the investments
sourced for it by Pantheon, ithas full
flexibility in terms of its portfolio
construction and investment deployment.
This means that PIP can redirect and
refineits investment strategy to meet
shareholders’ needs and control
deployment.
As a result of this approach, PIP’s portfolio
has become more concentrated but still has
an appropriate level of diversification to
mitigate risk. Stronger-performing individual
assets have the potential to boost PIP’s NAV
over the long term, whilethere is increased
and improved transparency and visibility
over the underlying assets.
Investing in this way brings other additional
benefits to PIP. As we select the individual
deals, we have more control over portfolio
construction and deployment pacing.
Wecan more easily assess the private
equity manager’s business plan and the
company’s prospects as well as identify
anyrisks, including those relating to
sustainainability issues. Co-investments
areattractive economically, since they
aretypically free ofmanagement fees
andcarried interest.
Finally, we apply our “double qualityfilter”
asboth the private equity manager and the
company must successfully passthrough
our stringentdue diligenceprocess.
Direct investments account
for majority of the portfolio
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1 The company sector chart is based on underlying company valuations
asat31 March 2024, adjusted for calls and distributions to 31 May 2024.
These account for 100% of PIP’s overall portfolio value.
2 Special situations investments can include distressed debt, mezzanine,
energy/utilities and turnarounds.
We believe PIP’s portfolio
offers an attractive investment mix
Type
– In addition to direct investments,
weinvest in selected hard-to-access,
“invitation only” funds with managers
whose funds are generally not available
on the secondary market.
Vintage
– The combination of younger and more
mature assets means that PIP benefits
from both the “value creation” and
“harvest” phases of our investments.
Sector
– PIP’s “all weather” portfolio tilts towards
companies in resilient, high-growth
sectors such as information technology
and healthcare that can perform well
through economic cycles. These
companies provide mission-critical
products and services, and often have
recurring revenue models.
– PIP’s exposure to the consumer sector
is mainly in resilient consumer staples
and services businesses, with limited
exposure to companies that are sensitive
to economic downturns.
Stage
– PIP’s portfolio is weighted towards
small/mid-market buyouts, which offer
more opportunities for value creation and
multiple routes to exit. PIP has verylittle
exposure to the more volatile venture
capital segment.
Information technology 33%
Healthcare 20%
Consumer 14%
Industrials 11%
Financials 10%
Communication services 7%
Energy 2%
Materials 2%
Other 1%
Small/mid buyout 46%
Large/mega buyout 26%
Growth 19%
Special situations
2
5%
Venture 4%
PIP’s portfolio is weighted towards high-growth and
resilient sectors
1
Focus on small/mid-market buyout opportunities
Direct Investments
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Proven strength, resilience and
fundamental value in our portfolio
Uplifts Upon Exit
Over Pantheon’s many yearsin the
industry, we have developed a deep
understanding of the valuation
methodologies of our private equity
managers, and track their accuracy
bymeasuring realisations from
theportfolio against the lastfull
holding valuation.
– Our portfolio valuations are based on the
most recent valuations that we receive
regularly fromour managers, which we
challenge andcorroborate.
– Pantheon’s Global Valuation Committee,
which is independent of the investment
and investor relations teams, is chaired
byPantheon’s Chief Risk Officer and ensures
robust governance, meaningful oversight
and consistent application of policy.
– Twice a year, PIP’s own Valuation
Committee isattended by representatives
ofthe PIP Audit Committee and observed
byour auditors.
– The PIP Valuation Committee also produces
a valuation report for the PIP Board twice
ayear.
– Asignificant proportion of the underlying
company and fund valuations are also
reviewed as part of our annual independent
audit.
– The significant uplifts, which are achieved
consistently, when companies inPIP’s
portfolio are sold, provide evidence that
theportfolio isnot overvalued.
Realised multiples are well above holding cost
multiples, which indicates conservative private
equity manager valuations
4.0x
2.0x
0x
3.0x
1.0x
Cost multiple of existing portfolio
1
Cost multiple at exit
2
1,000
800
400
0
600
200
100
80
40
0
60
20
8
4
0
6
2
YEARS PORTFOLIO NAV (%)
NUMBER OF COMPANIES
Jun
2012
Jun
2013
Jun
2014
Jun
2015
Jun
2016
Jun
2017
May
2018
May
2019
May
2020
May
2021
May
2022
Jun
2012
Jun
2013
Jun
2014
Jun
2015
Jun
2016
Jun
2017
May
2018
May
2019
May
2020
May
2021
May
2022
Jun
2012
Jun
2013
Jun
2014
Jun
2015
Jun
2016
Jun
2017
May
2018
May
2019
May
2020
May
2021
May
2022
VALUE-WEIGHTED AVERAGE UPLIFT ON EXIT
1.6x
3.0x
Potential uplift
1 The cost multiple of the existing portfolio refers to the sum of NAV and distributions ofunrealised investments compared with the initial cost ofinvestment.
2 Average cost multiple on exit since 2012.
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Uplifts Upon Exit
Continuous valuation inputs
– Annual and quarterly reports, financial
statements and board meeting materials
received from PE managers
– Assess and review accounting policies
andvaluation methodologies of private
equitymanagers
Continuous monitoring
– Investment team review of companies, funds
andprivate equity managers
– Risk assessment of investments
– Pre-investment due diligence
– Post-investment monitoring
– Feedback from participation on 642
1
advisoryboards globally
Annual external audit
– Independent assessment of valuations and controls
surrounding valuation process
– Pantheon ISAE 3402 report on controls
independently audited byKPMG LLP
– The annual EY audit process involves substantive
testing of the fair value of a sampleof investment
positions as at31 May
– EY conducts a comparisonof a sample
ofinvestment values reported in PIP’s NAVs to
their subsequently audited financial statements,
with any differences abovea certain
threshold reported to the Audit Committee
Monthly Valuation Committee
– Valuation Committee has ultimate responsibility for
approving investment valuations which determine
the fair value of investments
– Input from investment teams on potential
valuationissues
– Use insight to verify/challenge private equity
manager valuations
– Review and discuss accounting issues
Our robust
valuation process
1 30 June 2024.
PIP Board oversight
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Uplifts and cost multiples at exit demonstrate embedded value in PIP’s portfolio
1
– PIP’s portfolio has a consistent record of achieving
a cost multiple at exit that is well above the cost of
theinvestment.
– The average cost multiple on exit during the year to
31May 2024 was 3.2x.
– The average cost multiple on exit since PIP started
tracking this metric in 2012 is 3.0x.
– Realisation activity has continued despite uncertainties
in the macro environment.
– Proceeds from exit realisations were £130m during
financial year and were made up of over 400 liquidation
events.
– PIP continues to realise investments at a substantial
uplift
1
to holding value.
Uplifts Upon Exit
Confidence inthe valuations
reported byour underlying private
equitymanagers
– Our managers use fair market valuation
methodology, following international
guidelines.
– Our managers typically value their
portfolio companies conservatively;
the consistent uplifts on exit provide
evidence of this.
– Private equity managers have a
long-term investment horizon and
typicallycontrol their portfolio
companies; they can time when
to sellthem and arenot reliant on
Initialpublic offerings (IPOs).
– The vast majority of PIP’s exit realisations
are achieved via strategic sales and
secondary buyouts.
– PIP has achieved an average cost on
exit multiple, since 2012, of 3.0 times
compared to the cost of capital invested.
– PIP’s portfolio is mostly composed
ofsmall and mid-market private
businesses that operate in niche
sectorswhere there may not be
comparable publicly listed companies.
+20%
Weighted average uplift in
the year to 31 May 2024
+30%
Weighted average
uplift since 2012
50
40
20
0
30
10
2012 2016 2017 2018 2019 2020 2021 2022 2023 20242013 2014 2015
FINANCIAL YEAR
1,000
800
400
0
600
200
100
80
40
0
60
20
8
4
0
6
2
YEARS
PORTFOLIO NAV (%)
NUMBER OF COMPANIES
Jun
2012
Jun
2013
Jun
2014
Jun
2015
Jun
2016
Jun
2017
May
2018
May
2019
May
2020
May
2021
May
2022
Jun
2012
Jun
2013
Jun
2014
Jun
2015
Jun
2016
Jun
2017
May
2018
May
2019
May
2020
May
2021
May
2022
Jun
2012
Jun
2013
Jun
2014
Jun
2015
Jun
2016
Jun
2017
May
2018
May
2019
May
2020
May
2021
May
2022
VALUE-WEIGHTED AVERAGE
UPLIFT ON EXIT (%)
2.0x
0.0x
3.0x
1.0x
2012 2016 2017 2018 2019 2020 2021 2022 2023 20242013 2014 2015
COST MULTIPLES ON EXIT
FINANCIAL YEAR
1 The uplift on full exit compares the value received upon
realisation against the investment’s carrying value
12months prior to exit or if known, the latest valuation
unaffected by pricing effects arising from markets
participants becoming aware of the imminent sale of
anasset.
3.2x
Average cost multiple for the
year to 31 May 2024
3.0x
Average cost multiple
since2012
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Embedded Value
Annualised revenue and EBITDA growth
(2020 to 2024)
1
Loss ratio
2
The vast majority of the companies
in PIP’s portfolio are highly
profitable
– Our private equity managers have the
expertise andability to implement
operational improvements and actively
manage companies for growth.
– PIP’s portfolio is tilted towards
the information technology (IT)
andhealthcare sectors, which are
resilient and benefit from long-term
secular growth trends.
– IT businesses provide mission-critical
software and IT infrastructure.
– Healthcare businesses provide
essential healthcare products
andservices.
See pages 70, 76 and 77 for more
information on the sectors that PIP is
invested in.
1 Source: Bloomberg. Five-year annualised figures are
derived from underlying annual performance growth
datashown on page 99.
2 Loss ratio is calculated as the sum of 1) the loss made on
realised investments which have exited below cost and
2)the difference between the unrealised value and the
costof unrealised investments which are held below cost,
divided by the aggregate costs of all investments.
20
0
15
17%
8%
6%
19%
10
5-year annualised
revenue growth
%
5
5-year annualised
EBITDA growth
– Average Revenue and EBITDA growth in PIP’s buyout portfolio has continued to exceed MSCI growth over the last five years.
– PIP’s portfolio exhibits a low loss ratio, with only c.£100m lost or impaired versus a total cost of all investments of £4.5bn over
the past 10 years
2
.
PIP MSCI World
Uplifts Upon Exit
4,750
-250
(£102m)
£4,497m
1,750
Aggregate cost of
all investments
(£M)
Loss on investments
(last 10 years)
2,750
750
3,750
2 . 3%
Loss ratio
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Embedded Value
Long-term NAV outperformance
NAV Performance
13.5% p.a.
NAV performance over the past 10 years
PIP is one of the longest-established
private equity companies listed on the
LondonStock Exchange and itsNAV
has consistently outperformed its
public marketbenchmarks across
different economic cycles.
PIP’s NAV per share growth over the
past 10 years has been 13.5% p.a.
(net of fees), ahead of both the FTSE
and the MSCI World.
We have achieved this by actively
managing the portfolio and tilting
ittowards where we see the
bestopportunities.
We believe that PIP’s portfolio is
well-positioned to both withstand
uncertainty and benefit from more
favourable times.
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PIP’s long-term NAV outperformance
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2024
2022
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2024
2022
2023
4,000
7,000
3,000
2,000
1,000
0
5,000
PIP FINANCIAL YEAR
PERFORMANCE (RE-BASED TO 100)
6,000
PIP NAV PIP Ordinary Share Price
MSCI World Total Return (sterling) FTSE All-Share Total Return
PIP’s objective is to maximise capital growth over the longterm
Annualised performance as at 31 May 2024
1 yr 3 yrs 5 yrs 10 yrs
Since
inception
1
NAV per share 6.1% 12.5% 12.1% 13.5% 11.9%
Ordinary share price 19.9% 6.2% 7.9% 11.1% 10.9%
FTSE All-Share 15.4% 7.9% 6.5% 5.9% 7.6%
MSCI World, Total Return (sterling) 22.2% 11.2% 13.1% 12.8% 8.6%
NAV per share relative performance
1 yr 3 yrs 5 yrs 10 yrs
Since
inception
1
Versus FTSE All-Share, Total Return -9.3% 4.6% 5.6% 7.6% 4.3%
Versus MSCI World, Total Return (sterling) -16.1% 1.3% -1.0% 0.7% 3.3%
Share price relative performance
1 yr 3 yrs 5 yrs 10 yrs
Since
inception
1
Versus FTSE All-Share, Total Return 4.5% -1.7% 1.4% 5.2% 3.3%
Versus MSCI World, Total Return (sterling) -2.3% -5.0% -5.2% -1.7% 2.3%
1 Inception in September 1987.
NAV Performance
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Responsible Investment
An enhanced approach
to responsible investing
The Board of PIP recognises that
afocus on sustainability, is an
important tool for risk mitigation and
can lead to value creation across the
investment portfolio. Adherence to
sustainability principles has been
incorporated in Pantheon’s pre- and
post-investment processes for many
years and theManager will continue
to play an influential role in promoting
sustainability standards and diversity
& inclusion in private equity.
The Directors of PIP have oversight of
sustainability matters within PIP’s
portfolio and fully support Pantheon’s
longstanding commitment in this area.
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Responsible InvestmentResponsible Investment
1 As at 31 March 2024.
Pantheon’s enhanced sustainability framework
Screening
Sustainability screening applied to
all investment opportunities
Due diligence
Sustainability scorecard used to
assess:
– Private equity managers
– Private equity funds
– Single-company deals
– Multi-company deals
Monitoring/engagement
Monitoring:
– Private equity data collection
– Portfolio company data
collection
Engagement:
– Private equity managers:
targeted engagement based on
individual scorecards
– Industry: advocate for
sustainability best practice
through industry trade bodies
Reporting
Focusing efforts on standardised
sustainability reporting templates
to alignwith:
– Task Force on Climate-related
FinancialDisclosures
requirements
– ESG Data Convergence
Initiative (EDCI)
– EU Sustainable Finance
Disclosure Regulation (SFDR)
In practice:
Enhancing sustainability data collection systems
In practice:
Integrated into sustainability due
diligence scorecard
In practice:
Sustainability due diligence
scorecard output included in
Investment Committee memos
Signatory of:
LGBT+ NETWORK
GAIN
Girls Are INvestors
Sustainability committee member of:
Principles for
Responsible
Investment
Private equity action on climate change
initiative
climat
international
Invested in a better future
Pantheon has deeply embedded
sustainability considerations into its
investment processes, from the initial
screening of opportunities, through
duediligence andengagement and
post-investment monitoring.
Pantheon’s focus recently has been on
enhancing its screening and due diligence
on deals from a sustainability perspective. In
2023, Pantheon introduced an approach to
sustainability called TIES – which stands for
Transparency, Integration, Engagement and
Solutions – as this encapsulates thestrong
ties between Pantheon, the underlying
private equity managers and theportfolio
companies. As part of this, Pantheon
developed a proprietary sustainability due
diligence scorecard, incorporating a range
of topics including climate risk, reputational
risk, diversity, equity and inclusion (“DEI”)
and biodiversity.
PIP’s move towards a larger proportion
ofdirect company investments provides
theManager with more control over
sustainability and enables Pantheon to
undertake sustainability due diligence on
thecompany prior to investing.
Pantheon is committed to advocating for
sustainability practices across the private
equity industry through its participation in a
variety of industry initiatives and by using
itsposition on over 642
1
advisory boards
worldwide to promote high sustainability
standards on behalf of PIP among private
equity managers and investee companies.
See pages 62 to 69 for more information.
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2024Annual Report and AccountsPantheon International Plc 21
Key Performance Indicators
WHAT THIS IS
Total shareholder return constitutes the return
to investors, after taking into account share price
movements (capital growth) and any share buybacks
during the period.
The Board’s strategy is to deliver returns for
shareholders through the growth in NAV and not
through the payment of dividends.
HOW PIP HAS PERFORMED
– PIP’s ordinary shares had a closing price of 326.0p at
theyear end (31 May 2023: 272.0p). This was a 20%
increase compared with the prior financial year end.
– Narrowing of share price discount following the
implementation of PIP’s £200m share buyback
programme during the financial year.
– Share price discounts to NAV have remained wide
inthe listed private equity sector. Despite the
improvement in PIP’s share price during the period,
the discount on PIP’s shares was 34% at the year end
(31 May 2023: 41%). Themedian discount for listed
private equitypeers
1
at the same date was 34%
(31May2023: 39%).
LINK TO OUR STRATEGIC OBJECTIVES
– Maximise shareholder returns through long-term
capital growth.
– Promote better market liquidity and narrow the discount
by building demand for the Company’s shares.
EXAMPLES OF RELATED FACTORS THAT WE MONITOR
– Rate of NAV growth relative to listed markets.
– Trading volumes for the Company’s shares.
– Share price discount to NAV.
Five-year cumulative total shareholder return
80%
20%
40%
0%
31 May 2022 31 May 2024
31 May 2023
46.5%
60%
31.0%
64.8%
Performance
NAV per share growth
Five-year cumulative total
shareholder return
Portfolio investment return
Liquidity
1 Peer group comprised: CT Private Equity Trust PLC, HarbourVest
Global Private Equity Ltd, ICG Enterprise Trust PLC and Patria Private
Equity Trust.
Net portfolio cash flow
Undrawn coverage ratio
Gearing
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1 Excludes valuation gains and/or cash flows associated with the ALN.
Key Performance Indicators
WHAT THIS IS
NAV per share reflects the attributable value of a
shareholder’s holding in PIP. The provision of consistent
long-term NAV per share growth is central toour strategy.
NAV per share growth in any period is shown net
of foreign exchange movements and all costs
associated with running the Company.
The NAV is robustly calculated and the balance sheet
is audited by PIP’s auditors.
HOW PIP HAS PERFORMED
– NAV per share increased by 28.1p during the period to
490.5p (31 May 2023: 462.4p). This was an increase
of 6.1% compared with the prior financial year end.
– NAV per share growth was primarily driven by
valuation gains of +5.0% and share buybacks of
+4.7%and offset by foreign exchange movements
andexpenses and taxes.
LINK TO OUR STRATEGIC OBJECTIVES
– Investing in high-performing private companies
alongside and through top-tier private equity managers
globally, to maximise long-term capitalgrowth.
– Containing costs and risks by constructing a
well-diversified portfolio in a cost-efficient manner.
EXAMPLES OF RELATED FACTORS THAT WE MONITOR
– Valuations provided by the underlying private
equitymanagers.
– Fluctuations in currency exchange rates.
– Tax efficiency of investments.
– Effect of financing (cash drag) on performance.
– Ongoing charges relative to NAV growth
and listed private equity peer group.
35%
20%
5%
10%
0%
31 May 2022 31 May 2024
31 May 2023
31.0%
15%
25%
2.4%
6.1%
30%
NAV per share growth
Performance
NAV per share growth
1
Five-year cumulative total
shareholder return
Portfolio investment return
Liquidity
Net portfolio cash flow
Undrawn coverage ratio
Gearing
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1 Excludes valuation gains and/or cash flows associated with the ALN.
See page 179 of the Alternative Performance Measures section
forcalculations and disclosures.
Key Performance Indicators
WHAT THIS IS
Portfolio investment return measures the total
movement in the valuation of the underlying
companies and funds comprising PIP’s portfolio,
expressed as a percentage ofthe opening portfolio
value, before takingforeign exchange effects and
other expenses intoaccount.
HOW PIP HAS PERFORMED
– Modest increase in underlying portfolio valuation
against a backdrop of market volatility.
– PIP’s portfolio is actively managed and focuses
onresilient, high-growth sectors.
– PIP’s portfolio return for the year was mainly driven
by the buyout segment, which accounts for72% of
the portfolio.
LINK TO OUR STRATEGIC OBJECTIVES
– Maximise shareholder returns through
long-term capital growth.
EXAMPLES OF RELATED FACTORS THAT WE MONITOR
– Performance relative to listed markets and
listedprivate equity peer group.
– Valuations provided by the underlying private
equitymanagers.
30%
20%
5%
10%
0%
31 May 2022 31 May 2024
31 May 2023
26.2%
15%
3.5%
4.9%
25%
Portfolio investment return
PerformanceLiquidity
Portfolio investment return
1
NAV per share growth
Five-year cumulative total
shareholder return
Net portfolio cash flow
Undrawn coverage ratio
Gearing
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1 Excludes valuation gains and/or cash flows associated with theALN.
2 Excludes the portion of the reference portfolio attributable to the ALN.
Key Performance Indicators
WHAT THIS IS
Net portfolio cash flow is equal to distributions less
capital calls to finance investments, and reflects the
Company’s capacity to finance calls from existing
investment commitments.
PIP manages its maturity profile through a mix of
primaries, secondaries and co-investments to
ensure that its portfolio remains cash-generative at
the same time as maximising thepotential for growth.
HOW PIP HAS PERFORMED
– PIP’s portfolio generated £193m (31 May 2023:
£223m) of distributions versus £156m of calls
(31May 2023: £155m).
– In addition, the Company made new commitments
of £153m (31 May 2023: £441m) during the year,
£50m of which was drawn at the time of purchase
(31 May 2023: £190m).
– As at 31 May 2024, PIP’s portfolio had a weighted
average age of 5.2 years
2
(31 May 2023: 4.8 years).
LINK TO OUR STRATEGIC OBJECTIVES
– Maximise long-term capital growth through
ongoing portfolio renewal while controlling
financing risk.
EXAMPLES OF RELATED FACTORS THAT WE MONITOR
– Relationship between outstanding commitments
and NAV.
– Portfolio maturity and distribution rates by vintage.
– Commitment rate to new investment opportunities.
Net portfolio cash flow
£250m
£100m
£200m
£0m
31 May 2022 31 May 2024
31 May 2023
£37m
£68m
£232m
£50m
£150m
PerformanceLiquidity
NAV per share growth
Five-year cumulative total
shareholder return
Portfolio investment return
Net portfolio cash flow
1
Undrawn coverage ratio
Gearing
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Key Performance Indicators
WHAT THIS IS
The undrawn coverage ratio is the ratio of available
financing and 10% of private equity assets to undrawn
commitments. The undrawn coverage ratio is an
indicator of the Company’s ability to meet outstanding
commitments, even in the event of a market downturn.
HOW PIP HAS PERFORMED
– The current undrawn coverage ratio reflects
lowercash balances and modest usage of PIP’s
credit facility.
– The optimisation of PIP’s balance sheet will enable
the Company to further enhance its performance,
by allowing PIP to lean into attractive opportunities
across market cycles and by reducing cash drag.
– PIP’s undrawn coverage ratio remains healthy relative
to what is required under existing loan covenants.
LINK TO OUR STRATEGIC OBJECTIVES
– Flexibility in portfolio construction, allowing the
Company to select a mix of manager-led secondaries,
co-investments and primaries, and vary investment
pace, to achieve long-term capitalgrowth.
– The vintage diversification of unfunded commitments
helps PIP manage future capital calls.
EXAMPLES OF RELATED FACTORS THAT WE MONITOR
– Relative weighting of primary, secondary
andco-investments in the portfolio.
– Level of undrawn commitments relative
to gross assets.
– Trend in distribution rates.
– Ability to access debt markets on favourable terms.
Undrawn coverage ratio
120%
100%
20%
60%
0%
31 May 2022 31 May 202431 May 2023
108%
98%
89%
80%
40%
PerformanceLiquidity
Portfolio investment return
NAV per share growth
Five-year cumulative total
shareholder return
Undrawn coverage ratio
1
1 Outstanding commitments relating to funds outside their
investment period (>13 years old) amounting to £41.7m as at
31May 2024 (31 May 2023: £48.2m), were excluded from the
calculation as there is a low likelihood ofthese being drawn.
Net portfolio cash flow
Gearing
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Key Performance Indicators
WHAT THIS IS
Gearing relates to how much debt is utilised in
PIP’scapital structure and is expressed as net debt
(borrowings excluding the ALN less cash) as a
percentage of NAV.
The Board appreciates that the measured use of debt
can eliminate cash drag and enhance investment
returns. PIP’s approach to gearing remains
conservative. The Board does not currently expect
netleverage to exceed 10% of NAV under normal
market conditions.
HOW PIP HAS PERFORMED
– PIP’s net debt as a percentage of the Company’s
NAV as at 31 May 2024 was 8.1% (31May 2023:
netcash to NAV ratio was 2.6%).
– As at 31 May 2024, PIP has utilised £83m of its
£500m revolving credit facility, and has £118m
ofprivate placement loan notes outstanding.
– PIP’s net debt to NAV ratio is lower than the
relevantpeer group average of 11%
1
.
LINK TO OUR STRATEGIC OBJECTIVES
– Measured use of leverage to reduce cash drag
andenhance NAV growth.
– Adopt a more efficient use of balance sheet
capitalto reduce cash drag.
EXAMPLES OF RELATED FACTORS THAT WE MONITOR
– Utilisation level of the revolving credit facility.
– Anticipated distribution levels and impact on
liquidityposition.
– Leverage relative to listed private equity peer group.
15%
-10%
0%
-15%
31 May 2022 31 May 2024
31 May 2023
(8.1%)
5%
2.6%
9.4%
10%
-5%
Gearing
2
Performance
NAV per share growth
Five-year cumulative total
shareholder return
Portfolio investment return
Liquidity
Net portfolio cash flow
Undrawn coverage ratio
Gearing
1 Relevant peer group comprised: CT Private Equity Trust PLC,
HarbourVest Global Private Equity Ltd, ICG Enterprise Trust PLC
and Patria Private Equity Trust. Data as at 31 May 2024.
2 Net cash (debt) to net asset value.
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CAPITAL ALLOCATION POLICY
Capturing value for shareholders
INVESTMENT STRATEGY
Flexibility over portfolio construction and investment pacing
FINANCING STRATEGY
More flexible and diverse structure
CORPORATE STRATEGY
Balanced and cohesive strategy
2024Annual Report and AccountsPantheon International Plc 28Strategic Report
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The Board regularly reviews PIP’s overall
corporate strategy and this has formed a key
partof Board discussions throughout the year.
The Board and PIP’s Manager, Pantheon,
are in constant dialogue regarding PIP’s
overall strategy and the Company’s
progresstowards achieving its strategic
goals. Thisdialogue is informed by the
Manager’s assessment ofany changes in
market conditions, for example in the M&A
environment, and through stakeholder
engagement, including with shareholders
and peers in the market.
PIP’s strategy encompasses its corporate,
investment and financing strategy.
TheCompany’s three-step corporate
programme has already been outlined in
theChair’s Statement on pages 6 to 7 of
thisreport, and the Capital Allocation Policy
(step2) ishighlighted in more detail on the
followingpages.
The Company’s investment strategy is
recommended to the Board by the Manager,
discussed at length and then amended as
necessary. A similar process is followed
regarding PIP’s financing strategy, which
supports the Company’s corporate actions
and investment programme.
While the Company’s agreed investment
strategy, which is described in detail on
pages 30 to 32,sets the overall parameters
of the investment programme, for example
the tilttowards direct investments, small/
mid buyouts and certain sectors, the Board
will review individual investments that
exceed exposure limits, which are set at
appropriate level to reflect a diversified
approach. Attimes, the Manager may make
recommendations to the Board and seek
approval for certain investments that fall
outside of any limits expressed in the
agreedstrategic approach, but which
Pantheon believes to be a good investment
opportunity for PIP. The Board maintains
itsindependence at all times and robustly
challenges such recommendations to
ensure that they are in the best interests
ofshareholders.
The Manager also reports regularly to the
Board on PIP’s marketing and investor
relations activities, considering new
initiatives that could help to increase
PIP’sprofile, and to reach new potential
shareholders of the Company. Subsequent
to the end of the financial year, a marketing
agency was appointed to assist PIP with
thisobjective.
A cohesive and holistic
strategy to address
shareholders’ needs
Our Strategy
Culture and Purpose
It is a requirement for all companies to set out their culture and purpose. TheCompany’s defined
purpose is relatively simple: it is to deliver our investment strategy led by a Board that promotes
strong governance and along-term investment approach that actively considers the interests of
allstakeholders.
The Directors agree that establishing and maintaining a healthy corporate culture within the Board and
in its interactions with the Manager, shareholders and other stakeholders will support the delivery of
itspurpose, values and strategy. The Board seeks to promote a culture of openness and integrity
through ongoing dialogueandengagement with its service providers, principally the Manager.
CAPITAL ALLOCATION
POLICY
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Our Strategy
Capturing value for shareholders
PIP’s Capital Allocation Policy (“CAP”)
has been designed tocapture on behalf of
shareholders the exceptional value available
by investing in the Company’s own portfolio
when its shares are trading at a significant
discount to NAV.
From 1 June 2024, depending on the prevailing
level of discount, the Board intends to
allocate a portion of Adjusted NetPortfolio
Cash Flow(“aNPC”) to share repurchases.
The PIP Board remains committed to putting
shareholders’ interests first and therefore
intends to preserve flexibility in its ability to
carry out share repurchases. The CAP will be
reviewed on a regular basis by the Board to
ensure that it remains appropriate for the
Company and with consideration of the
prevailing market conditions.
The Capital Allocation Policy complements
PIP’s investment objective which is to
maximise returns for shareholders over
thelong term by investing in high-growth
private companies backed by many of the
best private equity managers in the world.
Since PIP primarily invests directly into the
deals sourced for it by Pantheon, and with a
majority of its underlying portfolio invested
directly into companies rather than funds,
the Company is able to substantially control
deployment to its advantage, manage
liquidity, and actively shape its portfolio
through what it deems to be the best use
ofcapital at any given time.
PIP will continue to invest in exciting new
private equity opportunities, capable of
generating market-beating returns over
thelong term, alongside share buybacks.
Distributions
Capital calls
Ongoing charges including financing costs
Near-term cash outflows such as debt principal repayments
aNPC
How we calculate Adjusted Net Portfolio Cash Flow
Share price
discount to NAV
Percentage
allocated to
share buybacks
51-75%
>50%
of aNPC
30-49%
26-50%
of aNPC
20-29%
0-25%
of aNPC
Discount thresholds dictate the allocation to share buybacks
Share buyback activities have been
conducted alongside new investment
activities during the financial year.
Share buybacks 56%
New commitments 44%
LAST YEAR CONTENT
INVESTMENT STRATEGY
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Our Strategy
investment type
Focus on direct investments
to boost performance
The Board believes that its oversight of the
Manager’s activities, while at the same time
allowing Pantheon the flexibility that it needs
to make the appropriate investment decisions
on the Company’s behalf, ensures that PIP
isable to deliver on its strategic objectives
for shareholders over the long term.
Primaries, manager-led secondaries
andco-investments all have attractive
characteristics, as highlighted in the
Investment Model section on pages 34 to
40. PIP’stransparent and direct investment
approach gives it the flexibility to take
advantage of prevailing market conditions
andto maximise control over theCompany’s
financing risk, including itsability to generate
positive cash flows.
As the weighting towards co-investments
has been increased over time, the three
different investment types have intentionally
taken on more equal weightings. These
weightings do not represent hard caps;
however, the Board and the Manager believe
that this is the optimal mix to benefit from
the cash generated by the more mature
assets in PIP’s portfolio while rejuvenating
the portfolio with the younger vintages
offered by primaries and co-investments.
Inaddition, we have been steering PIP’s
secondary investment strategy towards
manager-led secondaries which form
afast-growing part of the secondary
marketand are attractive for several
reasons ashighlighted on pages 60 to 61.
Theseinvestments also provide younger
vintagesto the portfolio.
With an increased weighting towards
co-investments and manager-led
secondaries, we expect the number
ofunderlying managers and portfolio
companies to which the Company is
exposed to continue to reduce over
time.Asa result, the potential for the
Company’s overall NAV to be driven by
theperformance of individual assets
shouldbe increased while maintaining
thebenefits of a portfolio that is well
diversified by type, stage, geography
andsector.
1 Fund investment type is based upon underlying fund valuations and accounts for 100% of PIP’s overall portfolio value.
The chart excludes the portion of thereference portfolio attributable to the ALN.
Investment type
1
Primaries 35%
Co-investments 34%
Manager-led secondaries 20%
Fund secondaries 11%
The Board believes that there are several
benefits to this investment approach:
risk is effectively managed through
diversification while the improved
transparency of PIP’s underlying portfolio,
and increased investment flexibility, should
create a clearer link between the strongest
performing companies in the portfolio and
the potential to boost NAV growth in the
future. Also, Pantheon can remain highly
selective and disciplined when assessing
deal flow, while at the same time reducing
the risk of PIP being excluded from exciting
opportunities due to investment constraints.
54% invested directly in companies
INVESTMENT STRATEGY
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investment stage
Focus on mid-market
andgrowth
PIP’s portfolio is diversified by stage.
While the Company’s strategy is to
maintaina healthy mix of all stages,
Pantheon and PIPfavour the buyout
segments, with aparticular focus
on thesmall and mid-market. The
small/mid-market buyout segment offers
distinct characteristics, when compared
with large deals, such as:
– More attractively priced assets which
tend to have lower levels ofleverage
than the broader market average;
– Greater visibility of the value drivers
andthe levers to improve operational
efficiency to better drive growth, both
organically and through buy-and-build
strategies; and
– More routes to exit including strategic
acquisitions, sales to other private
equity managers or IPOs. In PIP’s case,
itshould be noted that the majority ofexits
have consistently been to strategic buyers
and other private equitymanagers,
withIPOs accounting for a smaller
proportion of exits during the year
ended31 May 2024.
Venture accounts for a very small proportion
of PIP’s portfolio, and any investment
activity by PIP in early stage venture funds
isfocused oninvesting withtop-tier venture
managers, mainly through primary fund
investments, whoareable to identify
innovative opportunities with the potential
togeneratesignificant outperformance.
1 Stage chart is based upon underlying fund valuations and accounts for 100% of PIP’s overall portfolio value. The chart excludes the portion of the reference portfolio attributable to
theALN.
2 Special situations investments can include distressed debt, mezzanine, energy/utilities and turnarounds.
Stage
1
Small/mid buyout 46%
Large/mega buyout 26%
Growth 19%
Special situations
2
5%
Venture 4%
While special situations include assets
withunique characteristics which can
offerpotential for outperformance, it is
theBoard’s intention that special situations
investments will only be a small minority
oftheoverall portfolio.
Our Strategy
sector and geographic
exposure
Global with a focus on
high-growth and niche areas
The Board is committed to offering investors
a global portfolio with investments in North
America, Europe and Asia. The weightings of
thosegeographies may change in response to
market conditions but the Board supports
the majority of the Company’s capital being
invested in the USAand Europe where the
private equity markets are well established.
The Board relies on Pantheon’s investment
teams located around the world that can
take advantage of proprietary information
flows and access to opportunities through
their extensive networks of relationships.
It is Pantheon’s objective to identify managers
globally that are able to take a thematic
approach and focus on high-growth sectors,
many of whichmay not be fully represented
by the public markets. In addition, Pantheon
has a deliberate strategy of targeting sectors
experiencing dislocation, as well as niches
where underlying growth is less correlated
to GDP growth and they are benefiting from
long-term trends. As a result, the largest two
sectors in PIP’s portfolio are information
technology and healthcare. For more
information on the sectors inwhich PIP
hasinvested, see pages 70, 76 and 77.
1 Region is based upon underlying fund valuations and accounts for 100% of PIP’s overall portfolio value. Thechart excludes the portion of the reference portfolio attributable to
the ALN.
2 The company sector chart is based upon underlying company valuations as at 31 March 2024, adjusted for calls and distributions to 31 May 2024. These account for 100% of
PIP’s overall portfolio value.
Region
1
Information technology 33%
Healthcare 20%
Consumer 14%
Industrials 11%
Financials 10%
Communication services 7%
Energy 2%
Materials 2%
Other 1%
Company sectors
2
USA 54%
Europe 31%
Global 8%
Asia 7%
INVESTMENT STRATEGY
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Our Strategy
FINANCING STRATEGY
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Our Strategy
Flexible and diverse financing
structure
Diversified sources of financing
PIP has built a long-term, sustainable,
moreflexible, and diverse capital structure,
further strengthening the Company’s
balance sheet.
In October 2023, PIP agreed a new £500m
equivalent multi-tranche, multi-currency
revolving credit facility agreement
(the“Credit Facility”), which replaced the
previous £500m equivalent credit facility
and Credit Suisse AG London Branch
asalender.
In addition, PIP completed a private placement
of $150m of loan notes (“LoanNotes”) in
January 2024. Proceeds from the issuance
of the Loan Notes were used to partially
repay and convert Credit Facility drawings
into longer term funding at a blended
coupon that is lower than the all-in interest
cost payable on the Credit Facility.
When considered alongside the existing
Credit Facility, the issuance of the Loan
Notes means that PIP now has access to
aneven more diverse supply of liquidity
fromhigh quality counterparties.
The Credit Facility and the Loan Notes are
subject to market standard loan to value and
liquidity covenants. PIP’s covenant package
was structured to better support the
Company’s long-term investment and
capital allocation strategies.
Modest use of gearing
As per its Investment Policy, PIP may borrow
to make investments and typically uses
itsborrowing facilities to manage its cash
flowsflexibly, enabling the Company to
make investments as and when suitable
opportunities arise, and to meet calls in
relation to existing investments without
having to retain significant cash balances
for such purposes.
The Board currently does not expect net
leverage to exceed 10% of NAV under
normal market conditions.
PIP will pay a commitment fee of between 0.70% and 1.15% per annum on the undrawn portion of
the Credit Facility depending on the level of utilisation.
Revolving Credit Facility
with
commitments from five
relationship-focussed lenders
£400m
Three year tenor expiring in October 2026
Rate of interest equal to 2.95% over the
relevant benchmark rate
Multicurrency facility. Subject to lender
consent, the size of the facility can be
increased to £700m via an accordion option.
In addition, there is an ongoing option to
extend the maturity of the facility by 364
days at a time.
Tranche A
£100m
One year tenor expiring in October 2024
Rate of interest equal to 2.25% over the
relevant benchmark rate
Tranche B
Loan Notes
purchased by five
North American institutional
investors
$150m
$52.5m
$67.5m
$30.0m
Five-year loan notes
expiring in February 2029
Seven-year loan notes
expiring in February 2031
Ten-year loan notes
expiring in February 2034
Weighted average maturity of 6.9 years
Coupon: 6.49%
Private placement loan notes
Our Investment Model
What sets us apart
Proven track record and
focus on risk management
For 37 years, PIP has been able to adapt
quickly and effectively to changing market
conditions. This flexible and proactive
approach means that PIP is wellplaced to
continue to deliver onits long-term strategic
objectives. PIP’s NAVhas outperformed
itspublic market benchmark indices over
multipleperiods and since the Company’s
inception in 1987.
We pay close attention to the management of
risk. PIP provides a carefully constructed and
appropriately diversified global portfolio for
investors with a particular emphasis on
well-established companies in the buyout
stage. This is supported by a prudently
managed balance sheet which has the
strength to continue to meet its outstanding
commitments, even in moredifficult
economic times. See pages 41 to 42
formoreinformation on the balance sheet.
A global actively managed
portfolio
Just over half of PIP’s portfolio is invested
intheUSA, which is the deepest, most
developed private equity market in the world
and is often inaccessible to many investors in
other regions. The next largest proportion of
the portfolio isinvested in Europe, with an
emphasis on Northern Europe,while the
remaining exposure is to faster-growing
economies such as Asia.
The presence of Pantheon’s teams in its
13locations around the world means that
theyare on the ground locally, working with
their extensive networks of relationships
withprivate equity managers and taking
advantage of proprietary information
flowsand access toopportunities. These
relationships enable Pantheon to source and
respond quickly to thebest deal flow inthose
regions. In addition, through its participation
on over 642
1
advisory boards globally,
Pantheon actively engages with itsprivate
equity managers onportfolio monitoring
issues on a continuousbasis.
Strength through culture
anddiversity
Pantheon has a strong culture of openness
andinclusive teamwork, and encourages
theexchange of ideas. PIP is supported by
457people around the world, including a large
team of 126 investment professionals
2
.
PIPalso benefits from a dedicated and
experienced team that looks after it on
aday-to-day basis. In keeping with its
collaborative culture, Pantheon avoids
investments in private equity managers
with“star” individuals which would give
risetoa higher degree of key personrisk.
From day one, Pantheon has understood
thatadiverse workforce creates a more
productive environment. Each year, Pantheon
publishes statistics documenting its global
staff breakdowns according to gender
identity, ethnic diversity, LGBTQ+ and
disability profiles. The firm has consistently
exceeded industry averages forgender
diversity. Pantheon also supportsa number
of inclusion and diversity initiatives and
organisations around the world. See page 68
for moreinformation.
2 As at 30 June 2024.1 As at 31 March 2024.
2024Annual Report and AccountsPantheon International Plc 34Strategic Report
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Our Investment Model
PIP aims to deliver
consistent returns
over the long term
Our investment process
Investment opportunities
in companies and
complementary funds
areoriginated via
Pantheon’sextensive and
well-established platform.
We invest with many of the
bestprivate equity managers
whoare able to identify
andcreate value in their
portfoliocompanies.
Cash generated from the sale
ofthose companies is returned
toPIP and redeployed into
newinvestment opportunities,
including share buybacks in
accordance with the capital
allocation policy.
What we do
PIP invests directly in private companies
worldwide through co-investments alongside
selected private equity managers and through
manager-led opportunities, aswell as in
complementary private equityfunds.
– An investment in PIP offers shareholders
exposure to a growing private equity
market that is expected to exceed US$8.5tn
by 2028
1
, where thebestprivate equity
opportunities mightotherwise be
inaccessible to mostinvestors.
We aim to deliver attractive and consistent
returns to shareholders over the long term,
and at relatively low risk. The Board remains
committed to its policy of maximising capital
growth and therefore, as in previous years, is
not proposing the payment of a dividend.
Why we do it
Through Pantheon, we have an opportunity
toinvest with and alongside many of the best
private equity managers globally based on the
trust and experience built up over the 40 years
that Pantheon has been making investments.
– It is our aim to bring the attractive
credentials of private equity and its track
record of outperforming public markets
toa wider set of investors.
It is our mission to generate sustainably
highinvestment returns through an actively
managed, institutional grade portfolio of
private companies and funds built by
investing with the best managers globally.
How we do it
PIP’s Manager, Pantheon, has a
well-established platform built onthree
strategic pillars of investment: primary,
secondary, and co-investments, with each
offering their own merits.
We believe that, by combining the three
waysof accessing private equity investments,
we are able to:
– Build and maintain a well-balanced
portfolio in a combination thatwe monitor
and manage with the aim of maximising
capitalgrowth;
– Manage the maturity profile of the assets
so that PIP’s portfolio remains naturally
cash-generative on a sustainable basis;
and
– Ensure that the vehicle remains as
cost-effective as possible forour
shareholders by reducing any potential
drag on returns.
1 Source: Preqin Global Report Private Equity 2024.
2024Annual Report and AccountsPantheon International Plc 35Strategic Report
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We have full control over
portfolio construction
PIP has the opportunity to participate in all
of the private equity investments sourced
for it by Pantheon.
This means that:
– We have control of investment
strategy, overseen by the fully
independent Board.
– We have the flexibility to tilt the
portfolio towards where we see the
best fit for our long-term objectives.
– We can accept or decline deals
without being “tied in” to other
Pantheon fund strategies.
– We can control PIP’s investment
pacing according to its financial
resources at the time.
– We have the flexibility to vary
the size of its commitments as
appropriate and in line with any
adjustments to its investment
strategy.
– We avoid the additional costs
thatcan occur when investing
viaintermediate vehicles.
Our Investment Model
CompanyCompanyCompanyCompany
PIP and
Pantheon
Pantheon is PIP’s
investment manager
PIP
Pantheon
PIP invests in private equity funds
managed by many of the best private
equity managers globally
PIP invests alongside private equity
managers directly into companies via
co-investments and manager-led secondaries
Company
Third party
private
equity fund
Third party
private equity
manager
2024Annual Report and AccountsPantheon International Plc 36Strategic Report
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Our Investment Model
Our investment strategies:
YEARS
We invest in a company
directly, alongside a private
equity manager.
– Direct investment in individual companies which have attractive
growth characteristics and have effectively passed through a “double
quality filter”, alongside PIP’s leading private equity managers.
– This boosts the performance potential because of asset selection,
and there are typically very low or no fees, making it a cost-effective
way of capitalising on the high value added by PIP’s selected managers.
– Co-investments are through invitation only and are therefore not
accessible to most investors.
Direct company investments
54% of PIP's portfolio
1
Funds
46% of PIP's portfolio
1
Co-investments
Manager-led secondaries
Primaries
Fund secondaries
0
10 2 5 83 6 94 7 10 11 12
INVESTMENT PERIOD HARVEST PERIOD
NET
CASH
FLOW AT
EXIT
1 As at 31 May 2024.
CASH FLOW PROFILE
COMPANY
POINT
OF
ENTRY
2024Annual Report and AccountsPantheon International Plc 37Strategic Report
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Our Investment Model
Our investment strategies:
We invest in a company directly,
alongside a private equity
manager, that the manager has
already owned for a period of
time and therefore knows well.
– We partner with high-quality private equity managers to acquire,
as single transactions, their most attractive portfolio companies
via a continuation fund.
– Allows the private equity manager to hold onto a prized asset,
whichthey believe has potential for further growth, when the fund
in which it is held has limited time or capital remaining to the end of
its life.
Co-investments
Manager-led secondaries
Primaries
Fund secondaries
Direct company investments
54% of PIP's portfolio
1
Funds
46% of PIP's portfolio
1
1 As at 31 May 2024.
YEARS
0
10 2 5 83 6 94 7 10 11 12
INVESTMENT PERIOD HARVEST PERIOD
NET
CASH
FLOW AT
EXIT
FUND
CASH FLOW PROFILE
COMPANY
POINT
OF
ENTRY
2024Annual Report and AccountsPantheon International Plc 38Strategic Report
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Our Investment Model
Our investment strategies:
We invest in a new private
equity fund when it is
established.
– Captures exposure to top-tier, well-recognised managers as well
as to smaller niche funds that are generally hard to access.
– Targets leading managers predominantly in the USA and Europe,
witha focus on funds which are unlikely to become available in the
secondary market.
Primaries
Fund secondaries
Co-investments
Manager-led secondaries
YEARS
0
10 2 5 83 6 94 7 10 11 12
INVESTMENT PERIOD HARVEST PERIOD
FUND
NET
CASH
FLOW AT
EXIT
Direct company investments
54% of PIP's portfolio
1
Funds
46% of PIP's portfolio
1
1 As at 31 May 2024.
CASH FLOW PROFILE
POINT
OF
ENTRY
2024Annual Report and AccountsPantheon International Plc 39Strategic Report
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Our Investment Model
Our investment strategies:
We purchase the interests of
an investor in a fund or funds
typically late into, or after, the
investment period.
– Targets favoured companies and funds at a stage when the
underlying assets’ performance is visible and the funds are realising
investments, returning cash to PIP more quickly.
– One of the advantages of investing in secondaries is that earlier
feeswill have been borne by the seller so total expenses are lower.
Primaries
Fund secondaries
Co-investments
Manager-led secondaries
Direct company investments
54% of PIP's portfolio
1
Funds
46% of PIP's portfolio
1
1 As at 31 May 2024.
YEARS
0
10 2 5 83 6 94 7 10 11 12
INVESTMENT PERIOD HARVEST PERIOD
NET
CASH
FLOW AT
EXIT
FUND
CASH FLOW PROFILE
POINT
OF
ENTRY
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Investment Policy
Our investment policy is to
maximise capital growth
with acarefully managed
risk profile.
The Company’s policy is to make unquoted
investments. It does so by subscribing to
investments in new private equity funds
(“Primary Investment”), buying secondary
interests in existing private equity funds
(“Secondary Investment”) including
manager-led secondaries, and acquiring
direct holdings in unquoted companies
(“Co-investments”), usually either where
a vendor is seeking to sell a combined
portfolio of fund interests and direct
holdings or where there is a private equity
manager, well knownto the Company’s
Manager, investing on substantially
thesame terms.
The Company may, from time to time, hold
quoted investments as aconsequence of
such investments being distributed to the
Company from its fund investments as
theresult of an investment in an unquoted
company becoming quoted. In addition,
theCompany may invest in private equity
funds which are quoted. The Company will
not otherwise normally invest in quoted
securities, although it reserves the right to
do so should this be deemed to be in the
interests of the Company.
The Company may invest in any type of
financial instrument, including equity
and non-equity shares, debt securities,
subscription and conversion rights and
options in relation to such shares and
securities, and interests in partnerships
and limited partnerships and other
forms of collective investment schemes.
Investments in funds and companies
may be made either directly or indirectly,
through one or more holding, special
purpose or investment vehicles in which
oneor more co-investors may also have
an interest.
The Company employs a policy of
over-commitment. This means that the
Company may commit more than its
available uninvested assets to investments
in private equity funds on the basis that such
commitments can be met from anticipated
future cash flows to the Company and
through the use of borrowings and capital
raisings where necessary.
The Company’s policy is to adopt a global
investment approach. TheCompany’s
strategy is to mitigate investment risk
through diversification of its underlying
portfolio by geography, sector and
investment stage. Since the Company’s
assets are invested globally on the basis,
primarily, of the merits of individual
investment opportunities, the Company
does not adopt maximum or minimum
exposures to specific geographic regions,
industry sectors or the investment stage
ofunderlying investments.
In addition, the Company adopts the
following limitations for the purpose of
diversifying investment risk:
– No holding in a company will represent
more than 15% by value of the Company’s
investments at the time of investment
(inaccordance with the requirement for
approval as an investment trust which
applied to the Company in relation to
itsaccounting periods ended on and
before 30 June 2012).
– The aggregate of all the amounts invested
by the Company (including commitments
to or in respect of) in funds managed by
asingle management group may not, in
consequence of any such investment
being made, form more than 20% of
theaggregate of the most recently
determined gross asset value of the
Company and the Company’s aggregate
outstanding commitments inrespect of
investments at the time such investment
is made.
– The Company will invest no more than
15% of its total assets in other UK-listed
closed-ended investment funds (including
UK-listed investment trusts).
The Company may invest in funds and
othervehicles established and managed
oradvised by Pantheon or any Pantheon
affiliate. Indetermining the diversification
ofits portfolio and applying theManager’s
diversification requirement referred to
above, the Companylooks through vehicles
established and managed oradvised by
Pantheon or any Pantheon affiliate.
The Company may enter into derivatives
transactions for the purposes of efficient
portfolio management and hedging
(for example, hedging interest rate, currency
or market exposures).
Surplus cash of the Company may be
invested in fixed interest securities,
bank deposits or other similar securities.
The Company may borrow to make
investments and typically uses its borrowing
facilities to manage its cash flows flexibly,
enabling the Company to make investments
as and when suitable opportunities arise,
and to meet calls in relation to existing
investments without having to retain
significant cash balances for such
purposes. Under the Company’s Articles
ofAssociation, the Company’s borrowings
may not at any time exceed 100% of the
Company’s NAV. Typically, the Company
does not expect its gearing to exceed 30%
ofgross assets. However, gearing may
exceed this in the event that, forexample,
the Company’s future cash flows alter.
The Company may invest in private equity
funds, unquoted companies or special
purpose or investment holding vehicles
whichare geared by loan facilities that
rankahead of the Company’s investment.
The Company does not adopt restrictions
on the extent to which it is exposed to
gearing in funds or companies in which
itinvests.
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Optimising PIP’s Capital Structure
We aim to build a sustainable,
diverse and flexible capital
structure that can support
PIP’s corporate and
investment strategies.
During the period PIP agreeda new £500m
equivalent multi-currency revolving credit
facility (“Credit Facility”)provided by five
relationship lenders, replacing the previous
credit facility and Credit Suisse as a lender.
Inaddition, PIPsecured a private placement
of US$150m of loan notes (“Loan Notes”),
structured overdifferent maturities of five,
seven and 10 years. The transaction
provides PIP with access to long-term
funding at a blended US dollar coupon of
6.49%, which is cheaper than the all-in
interest cost currently payable on the
revolving credit facility.
As a result of these actions, PIP has
successfully diversified its financing
counterparties, expanded its sources of
liquidity and reduced refinancing risk.
Newinvestments, calls on undrawn
commitments and share buybacks will
befunded primarily bydistributions
and,where appropriate, short-term
drawdownsfrom the CreditFacility.
Minimal gearing level
As at 31 May 2024, PIP had £83m drawn
down under the Credit Facility and £118m of
sterling-equivalent Loan Notes outstanding.
Taken in conjunction with PIP’s net available
1 Net debt calculated as borrowings (excluding the outstanding balance of the ALN) less netavailable cash. The ALN is not considered in the calculation of gross borrowings or the
loan-to-value ratio, as defined in PIP’s Credit Facility and Loan Notes agreements. If the ALN is included, net debt to NAV was9.4% as at 31 May 2024.
2 Includes undrawn commitments attributable to the reference portfolio related to the ALN.
Net debt to NAV
Loan notes Drawn credit facility Net available cash NAV
£2,500m
£1,500m
£1,000m
£500m
£0m
-£500m
Net cash/(debt)
NAV
£2,000m
2,476 560
788
(£185m)
£2,284m
8.1%
Net debt to NAV
Undrawn commitments byvintage
2
PIP’s undrawn commitments were £789m as at
31 May 2024 (31 May 2023: £857m). Of the £789m
undrawn commitments as at the periodend, £42m
relate to funds that are more than 13years old, and
therefore outsidetheir investment periods. Generally,
when a fund is past its investment period, it cannot
make anynew investments and only drawscapital
tofund follow-on investments or topayexpenses.
As a result, the rate of capital callsbythese funds
tends to slowdramatically.
2023 and later 33%
2022 26%
2021 14%
2020 3%
2019 4%
2018 4%
2017 3%
2016 2%
2015 3%
2014 and
earlier
8%
cash of £16m, this results in a conservative
net debt
1
to NAV ratio of 8.1%. The Board
currently does not expect net leverage to
exceed 10% of NAV under normal market
conditions.
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Coverage ratios
Portfolio value Net available cash and credit facility
3
Undrawn commitments
4
£3,500m
£2,500m
£2,000m
£1,500m
£1,000m
£500m
£0m
Portfolio and available financing
Undrawn commitments
£3,000m
2,476 560
788
3.9x
financing cover
89%
undrawn
coverage
ratio
Optimising PIP’s Capital Structure
Managing our financing cover
We regularly stress test PIP’s balance sheet
against a range of scenarios and market
conditions to ensure that it is well positioned
for the long term. We manage PIP to
ensurethat it has sufficient liquidity to
finance itsundrawn commitments, which
represent capital committed to funds but
yetto be drawn by the private equity
managers, as well as to take advantage of
new investment opportunities. A critical part
of this exercise is ensuring that the undrawn
commitments do not become excessive
relative to PIP’s private equity portfolio and
available financing. We achieve this by
managing PIP’s investment pacing as well
as constructing its portfolio to ensure the
right balance of exposure to primaries,
manager-led secondaries and co-investments.
As at 31 May 2024, PIP had net available
cash
3
balances of £16m (31 May 2023:
£63m).
In addition to these cash balances,
PIP also has access to a £500m equivalent
credit facility, split as follows:
– Facility A: £400m, expiring in October
2026 with an ongoing option to extend,
byagreement, the maturity date by
364days at a time; and
– Facility B: £100m, expiring in October 2024.
Using exchange rates as at 31 May 2024,
the credit facility amounted to a sterling
equivalent of £482m, of which £398m
remained undrawn as at the yearend.
With £16m of net available cash and an
undrawn credit facility of £398m, PIP
had£414m of available financing as at
31May 2024 (31 May 2023: £554m) which,
along with the value of the private equity
portfolio, provides comfortable cover of
3.9times (31 May 2023: 3.7 times) relative
to undrawn commitments for funds within
their investment periods.
Another important measure is the undrawn
coverage ratio, which is the ratio of available
financing and 10% of private equity assets
toundrawn commitments. The undrawn
coverage ratio is a key indicator of the
Company’s ability to meet outstanding
commitments, even in the event of a market
downturn, and was 89%as at 31 May 2024
(31 May 2023: 98%)
4
.
3 The available cash and loan figure excludes the current
portion payable under the ALN, which amounted to
£0.4m as at 31 May 2024.
4 Excludes outstanding commitments relating to
fundsoutside their investment period (>13 years old),
amounting to £41.7m as at 31 May 2024 (31 May
2023:£48.2m).
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The Company is exposed to a variety of risks and uncertainties. The Board, through delegation to the Audit Committee, has undertaken a robust assessment and review of the principal risks facing PIP,
together with a review of any new and emerging risks that may have arisen during the year to 31 May 2024, including those that would threaten its business model, future performance, solvency, or liquidity.
Asummary of the risk management and internal control processes can be found in the Statement on Corporate Governance on pages 123 to 129.
Investment and strategy risk
Type and description of risk Potential impact Risk mitigation Outcome for the year
Investment performance
The Manager selects the investments for the
Company’s portfolio. The origination, investment
selection and management capabilities of both the
Manager and third-party managers are key to the
performance of the Company.
– Performance not comparable to
benchmark/industry average.
Consistently poor performance may
lead to a fall in the quoted share price
and impact the share price discount
toNAV.
– Pantheon has a long track record of investing alongside
private equity managers who have experience of navigating
economic cycles. Diversification by geography, stage,
vintage and sector, helps to mitigate the effect of public
market movements on the Company’s performance.
Stable during the year
– PIP continues to adopt a diversified approach toportfolio
construction.
– In historical periods of significant public market volatility,
private equity market valuations have typically been
lessaffected than public equity market valuations.
– Portfolio investment return of +4.9% in the year to 31 May 2024.
Market and macroeconomic
factors
Inflation, interest rates and equity market performance
can affect portfolio investment returns.
– Impact of general economic conditions
on underlying fund and company
valuations, exit opportunities and the
availability of credit.
– Higher risk of market volatility, price
shocks orasignificant market
correction.
– As part of its investment due diligence process, Pantheon
assesses the approach of its underlying managers to
company illiquidity and macroeconomic factors as well
as projected exit outcomes.
– Portfolio diversified across multiple countries
andsectors to reduce the impact of market and
macroeconomic factors.
Stable during the year
– Inflation pressures have decreased during the year in the
Global Economy. Interest rates remain at 10-year highs,
but early indications are that central banks could start to
reduce interest rates.
– Resilient performance of the portfolio despite achallenging
macro environment. Underlying portfolio Revenue growth
was 14% and EBITDA growth was 17% in the reporting period.
Valuations
In valuing its investments in private equity funds
andunquoted companies and publishing its NAV,
theCompany relies to a significant extent on the
accuracy of financial and other information provided
by third-party managers.
– Potential for inconsistency in the
valuation methods adopted by
third-party managers andfor valuations
to bemisstated.
– The valuation of investments is based on periodically
audited valuations that are provided by the underlying
private equity managers.
– Pantheon carries out a formal valuation process
involving monthly reviews of valuations, the verification
of audit reports and a review of any potential adjustments
required to ensure reasonable valuations in accordance
with fair market value principles under Generally
Accepted Accounting Principles (“GAAP”).
– Pantheon’s Valuation Committee, which is independent
of the investment and investor relations teams, and
comprised of senior team members, has ultimate
responsibility for approving valuations, ensuring that
there are robust governance, oversight and process
frameworks in place, guaranteeing compliance with
standards and consistent application of policy. The
Committee reports to the Board on a Semi-Annual Basis
or when there are any material matters arising.
– A member of the Audit and Risk Committee and EY
observe the Valuation Committee on a semi-annual basis.
Stable during the year
– No material misstatements concerning the valuations
provided by underlying private equity managers and the
existence of investments during the year.
– No changes in valuation policy in the year or changes to
US or International Valuation Standards.
Risk Management and Principal Risks
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Investment and strategy risk
Type and description of risk Potential impact Risk mitigation Outcome for the year
Level of discount
A decline in the popularity of the listed private equity
sector has contributed to a reduction in demand for
the Company’s shares.
– Market sentiment on the listed private
equity sector can affect the Company’s
share price andwiden discounts
relative to NAV, causing shareholder
dissatisfaction.
– Regular review of the level of discount or premium
relative to the sector.
– Consideration of ways in which share price performance
may be enhanced including the effectiveness of
marketing and policies such as share buybacks.
– The Board regularly discusses the shareholder register
with the Manager to monitor buying/selling activity and
to identify potential new investors.
– Pantheon and the Company’s brokers are in regular
contact with existing shareholders and prospective
newinvestors.
Stable during the year
– Private equity continues to outperform public markets
over the long term and has proved to be an attractive
asset class through various cycles.
– The Company invested £197m
1
in share buybacks during
the financial year to 31 May 2024. From 1 June 2024,
under the new Capital Allocation Policy, the Board intends
to dedicate aproportion of the Company’s adjusted net
portfolio cashflow future share buybacks.
– The Company’s share price discount to NAV decreased
during the year but, in line with the industr y, still trades at
a material discount.
Vehicle financing
Availability, level, and cost of credit for the Company.
– Potential impact on performance and
liquidity, especially in the event of a
market downturn.
– PlP’s Articles of Association and investment policy
impose limits on the amount of gearing that the
Company can take on.
– The periodic review of principal covenants for the
loanfacility ensures that the Company complies with
loan-to-value and liquidity ratios.
– The Board conducts regular reviews of the balance
sheetand long-term cash flow projections, including
downside scenarios that reflect the potential effects
ofsignificant declines in NAV performance, adverse
changes in call/distribution rates and restrained
liquidityin a distressed environment.
Falling during the year
– The Company issued US$150m in a private placement
ofloan notes and refinanced its £500m credit facility.
– Cash flow forecasts under normal and stress conditions
were reviewed with the Board. Downside scenario
modelling indicates that the Company has the available
financing in place tomeet investment commitments,
even in an environment characterised by large NAV
declines and a material reduction in distribution activity.
– The Board currently does not expect net leverage to
exceed 10% of NAV under normal market conditions.
TheCompany-level leverage was 8.1% asat the end of
thefinancial year.
Look-through gearing
Availability, level, and cost of debt for underlying
funds and portfolio companies.
– Rising interest rates can impact the
profitability and valuation of underlying
portfolio companies.
– A deterioration in credit availability can
potentially reduce investment activity.
– As part of its investment process, the Manager
undertakes a detailed assessment of the impact of debt
at the underlying fund level and underlying company level
on the risk-return profile of a specific investment.
Stable during the year
– Debt multiples in PlP’s buyout portfolio remain at
reasonable levels as at year end as interest rates have
stabilised.
– Rates of default or covenant breaches remain very low
inthe underlying portfolio.
Risk Management and Principal Risks
1 Excluding costs and stamp duty.
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Investment and strategy risk
Type and description of risk Potential impact Risk mitigation Outcome for the year
Liquidity management
Insufficient liquid resources to meet outstanding
commitments to private equity funds.
– The Company has outstanding
commitments that may be drawn
downat any time in excess of total
liquidity to private equity funds.
Theability to fund this difference is
dependent on receiving cash proceeds
from investments (the timing of which
are unpredictable) and the availability
offinancing facilities.
– PIP has a mature portfolio that is naturally cash
generative.
– If cash balances and cash distributions are insufficient
tocover capital calls, PIP has the ability to draw funds
from a credit facility.
– Pantheon manages the Company so that undrawn
commitments remain at an acceptable level relative
toitsportfolio assets and available financing.
– The Board conducts a comprehensive review of the
Company’s cash flow forecasts under different
scenarioson a regular basis.
Stable during the year
– PIP has access to a £500m-equivalent loan facility split
as follows:
– Facility A: £400m, expiring in October 2026 with an
ongoing option to extend, by agreement, the maturity
date by 364 days at a time; and
– Facility B: £100m, expiring in October 2024.
– Overall finance has strengthened in the period including
diversification of the facility lenders and diversifying the
maturity dates. However, distribution levels remain
significantly below long-term averages at 8% per annum.
– Together with PlP’s net available cash balances of £16m,
total available financing as at 31 May 2024 stood at
£414m. Total available financing, along with the private
equity portfolio, was greater than outstanding
commitments by a factor of 3.9 times.
Investment rate
Lack of suitable investment opportunities to meet
strategic objectives.
– Change in risk profile because of
manager, fundor company exposures
that are materially different from the
Company’s intended strategy.
– Pantheon has put in place a dedicated investment
management process designed to achieve the intended
investment strategy agreed with the Board.
– The Board regularly reviews investment and financial
reports to monitor the effectiveness of the Manager’s
investment processes.
Stable during the year
– During the year, PIP has invested within strategic limits
for vintage year, geography and stage allocations, as well
as within concentration limits for individual managers,
funds and companies.
– PIP invested £197m in share buybacks during the last year.
Foreign exchange risk
PIP has continued to expand its geographic
diversityby making investments in different
countries. Accordingly, a significant majority of
PlP’sinvestments are denominated in US dollars,
eurosand currencies other than sterling.
– Unhedged foreign exchange rate
movements could impact NAV
totalreturns.
– Pantheon monitors underlying foreign currency exposure
and, together with the Board, reviews hedging strategies
available to the Company.
– As part of its investment process, the Manager takes
currency denominations into account when assessing
the risk/return profile of a specific investment.
– The multi-currency credit facility is a natural hedge for
currency fluctuations.
Stable during the year
– There was no material change in the Company’s
exposure to foreign exchange currency risk in the year.
– Foreign exchange had a negative impact on NAV
performance during the year. Despite this, it remains
appropriate for the Company not to hedge its foreign
exchange.
Risk Management and Principal Risks
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Operational risk
Type and description of risk Potential impact Risk mitigation Outcome for the year
Sustainability and climate change
The risk that the Company or the Manager fails to
respond appropriately to the increasing global focus
on sustainability issues.
– The Company is exposed to the impact
of a mismanagement or failure to
recognise potential sustainability issues
at portfolio company level,industry
level, service provider, and Board level,
which could damage the reputation and
standing of the Company and ultimately
affect its investment performance.
– Pantheon has a responsible approach when making
investments on behalf of PIP. Adherence to sound
sustainabilityprinciples has been an integral part of
Pantheon’s pre-and post-investment processes for
several years. Pantheon continues to play an influential
role in promoting sustainability standards and Inclusion
and Diversity inprivate equity.
Stable during the year
– Pantheon has an established in-house sustainability
committee comprising senior individuals from its
investment, risk, legal and investor relations teams.
– Pantheon has recently published the Company’s
Sustainability report.
– Pantheon analyses the annual Sustainability Survey
responses and individual GP ratings to produce the
Private Markets Sustainability Index (“PMSI”) which is
publicly available on Pantheon’s website.
– The Board has nominated Dame Susan Owen DCB, to
leadengagement with Pantheon on behalf of the Board.
– The Board of PIP has oversight of sustainability
mattersin PlP’s portfolio.
Tax status
Changes in the Company’s tax status or in tax
legislation and practice.
– Failure to understand tax risks when
investing ordivesting could lead to tax
exposure or financial loss.
– Pantheon’s investment process incorporates an
assessment of tax.
– The Manager reviews the appropriateness of an
investment’s legal structure to minimise the potential
taximpact on the Company.
Stable during the year
– Taxes had a minimal effect on overall NAV performance
in the year.
Service providers
The Company is dependent on third parties for the
provision of services and systems, especially those
of the Manager, the Administrator and the Depositary.
– Business disruption should the services
of Pantheon and other third-party
suppliers cease to be available to the
Company.
– A failure of the Manager to retain or
recruit appropriately qualified personnel
may have a material adverse effect on
the Company’s overall performance.
– The Board keeps the services of the Manager and
third-party suppliers under continuous review.
– The Management Agreement is subject to a notice
period of two years, giving the Board adequate time to
make alternative arrangements in the event that the
services of Pantheon cease to be available.
– The Manager regularly updates the Board on team
developments and succession planning.
– The Board performs an ongoing review of the Manager’s
performance in addition to a formal annual review.
Stable during the year
– The Board has approved the continuing appointment of
the Manager and other service providers following an
assessment of their respective performance during
theyear.
– Pantheon operates a hybrid working model and is
confident of being able to continue to meet PlP’s needs
through this model.
Risk Management and Principal Risks
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Operational risk
Type and description of risk Potential impact Risk mitigation Outcome for the year
Cybersecurity
High dependency on effective information
technology systems to support key business
functions and the safeguarding of sensitive
information.
– Significant disruption to information
technology systems, including from a
potential cyber-attack, may result in
financial losses, the inability to perform
business-critical functions, loss or
theft of confidential data, regulatory
censure, legal liability and reputational
damage.
– Pantheon has a comprehensive set of policies,
standardsand procedures related to information
technology and cybersecurity.
– Ongoing investment and training to improve the reliability
and resilience of Pantheon’s information technology
processes and systems.
– Pantheon reviews all the service providers to ensure they
have appropriate procedures in place. Service providers
provide copies of cybersecurity policies, systems,
procedures, certificates and relevant insurance
documentation.
Stable during the year
– Pantheon’s systems, processes and technologies
havebeen thoroughly tested and are fully operational.
– An imposter website which used PlP’s branding
andmarketing material in relation to a fictitious
cryptocurrency investment continued to appear
undernew names.
– Pantheon has implemented an expert vendor who
canprovide the service of identifying new fraudulent
sites and facilitate the subsequent take-down
oncediscovered.
Global geopolitical risks
Geopolitical factors, including the Russia-Ukraine
war and the conflict in the Middle East, and the
resulting economic uncertainty may affect
theCompany.
– Market and currency volatility may
affect returns.
– New or increasing geopolitical risks
including further conflict, supply chain
disruption, sanctions, new legislation,
andinvestment restrictions could have
medium and long-term impact on
global economies, including energy
prices and interest rates, and individual
companies to which the Company
hasexposure.
– Geopolitical undercurrents may disrupt
long-term investment and capital
allocation decision-making.
– The Board and Pantheon continuously monitor
geopolitical developments and societal issues relevant
toits business.
– An assessment of geopolitical risk is embedded in
Pantheon’s investment process.
Rising during the year
– Pantheon’s established Risk, Legal and Tax functions
have ensured compliance with local laws and
regulations.
– PlP’s exposure to high-risk countries is minimal.
Artificial Intelligence (“AI”)
Disruption to business model of the Investment
Manager and underlying portfolio companies may
impact the long-term performance of the Company.
– Failure to successfully implement
market leading AI tools within
Pantheon’s investment process could
impact investment rates and long-term
performance.
– Sectors and Individual Portfolio
companies market position could be
challenged by competition from
companies using AI. Failure to respond
to the challenges could impacted
long-term performance and
attractiveness to potential buyers.
– Pantheon continues to evaluate further opportunities to
use AI within its Investment Management Processes and
wider business model.
– Pantheon assesses the potential risks and opportunities
of AI as part of its due diligence process and in ongoing
monitoring.
Rising during the year
– The use of AI throughout different sectors and
companies continues to grow year on year.
– No material impact from AI on the overall portfolio
duringthe year.
Risk Management and Principal Risks
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Directors’ Duties and Stakeholder Engagement
The Directors’ overarching
duty is to act in good faith and
in a way that is the most likely
to promote the success of PIP,
as set out in Section 172 of
the Companies Act 2006.
In doing so, the Directors must take into
consideration the interests of the various
stakeholders of the Company, the impact
PIP has on the community and the
environment, take a long-term view on the
consequences of the decisions they make,
as well as aim to maintain a reputation for
high standards of business conduct and
fairtreatment between the members of
theCompany.
Fulfilling this duty supports PIP in achieving
its investment strategy and helps to ensure
that all decisions are made in a responsible
and sustainable way. In accordance with
therequirements of the Companies
(Miscellaneous Reporting) Regulations
2018, the Company explains how the
Directors have discharged their duties
underSection 172 below.
To ensure that the Directors are aware
ofand understand their duties, they are
provided with pertinent information when
they first join the Board, and receive regular
and ongoing updates and training on
relevant matters. They also have continued
access to the advice and services of the
Company Secretary and, when deemed
necessary, the Directors can seek
independent professional advice.
The Schedule of Matters Reserved for the
Board, as well as the terms of reference
ofits Committees, are reviewed on an
annual basis and further describe Directors’
responsibilities and obligations, and
includeany statutory and regulatory duties.
TheAudit Committee has responsibility
forthe ongoing review of PIP’s risk
management systems and internal controls
and, to the extent that they are applicable,
risks related to the matters set out in Section
172 are included on PIP’srisk register and
are subject to regularreview and monitoring.
Decision-making
The importance of stakeholder
considerations, in particular in the contextof
decision-making, is taken intoaccount at
every Board meeting. Alldiscussions involve
careful consideration of the longer-term
consequences of any decisions and their
implications for stakeholders. Further
information on the role of the Board in
safeguarding stakeholder interests and
monitoring ongoing investment activity
canbe found on pages 22 to 27 of the
Strategic Report.
Stakeholders
The Board seeks to understand the
needsand priorities of PIP’s stakeholders
and these are taken into account
duringallitsdiscussions and as part of
itsdecision-making. During the period
underreview, the Board has continued to
discussand monitor which parties should
be considered as stakeholders of the
Company and has again concluded
that,asPIP is an externally managed
investment company and does not have
anyemployees or customers, its key
stakeholders comprise its shareholders,
theManager, General Partners, portfolio
companies and service providers.
Thesection below discusses why these
stakeholders are considered of importance
to the Company, and the actions taken
toensure that their interests are taken
intoaccount.
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Importance Board engagement
Shareholders
Continued shareholder support and engagement is
critical to the Company and the delivery of its long-term
strategy. Further details on what PIP offers to its
investors can be found on pages 3, 12 to 41 of
theStrategic Repor t.
The Board is committed to maintaining open
channels of communication and to engage
with shareholders in a meaningful manner in
order to gain an understanding of their views.
These include:
– AGM: The Company welcomes and
encourages attendance and participation
of shareholders at the Annual General
Meeting (“AGM”). Shareholders have the
opportunity to meet the Directors and
Manager, Pantheon, and toaddress
questions to them directly. Pantheon
attends the AGM and gives a presentation
on PIP’s performance and the future
outlook. The Company values any
feedback and questions that it may receive
from shareholders ahead of and during the
AGM, and will take action or make changes,
as and when appropriate;
– Publications: The Annual Report and
Half-Year results are made available on
PIP’s website (www.piplc.com) and
shareholders are notified when these
areavailable. These reports provide
shareholders with a clear understanding of
PIP’s business model, strategy, portfolio
and financial position. This information is
supplemented by a monthly newsletter,
which is available on the website, and the
publication of which isannounced via the
London Stock Exchange. In addition, a
quarterly “PIP News and Views” update is
circulated by the Manager to institutional
investors and analysts which provides a
round-up of news, research and views, and
highlights key points of interest relating to
PIP. Feedback and/or questions that the
Company receives from shareholders
helpthe Company to evolve its reporting,
aiming to render the reports and updates
transparent and understandable;
– Shareholder meetings: As PIP is an
investment trust, shareholder meetings
often take the form of meeting with the
Manager. Shareholders are able to meet
with Pantheon throughout the year and
theManager provides information on
theCompany. Feedback from meetings
between the Manager and shareholders
isshared with the Board. TheChair, the
Senior Independent Director, the Chair of
the Audit Committee and other members
of the Board are available to meet with
shareholders to understand theirviews on
governance and PIP’s performance should
they wish to do so. With assistance from
the Manager, the Chair seeks meetings
with shareholders who might wish to
meetwith him. Asignificant number of
meetings has been held with shareholders
throughout the year to 31 May 2024 and
the previous year, and an ongoing dialogue
has been established with a number
ofshareholders.
– Shareholder concerns: In the event
that shareholders wish to raise issues
orconcerns with the Directors, they are
welcome to do so at any time by writing
tothe Chair at the registered office. Other
members of the Board are also available
toshareholders if they have concerns that
have not been addressed through the
normal channels; and
– Investor Relations updates: At almost
every Board meeting, the Directors receive
updates from the Company’s brokers on
theshare trading activity and share price
performance, as well as an update from
Pantheon’s Head of Investor Relations &
Communications for PIP on specific
shareholder feedback. Any pertinent
feedback is taken into account when
theDirectors discuss the corporate and
investment strategy. The willingness of
theshareholders to maintain their holdings
over the long term is another way for the
Board to gauge how PIP is meeting
itsobjectives.
Directors’ Duties and Stakeholder Engagement
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Directors’ Duties and Stakeholder Engagement
Importance Board engagement
The Manager
Holding the Company’s shares offers investors a liquid
investment vehicle through which they can obtain
exposure to PIP’s diversified portfolio of private equity
investment opportunities and Pantheon’s relationships
with its private equity managers (General Partners
or“GPs”). The Manager’s performance is critical for
PIPto successfully deliver its investment strategy
andmeet its objective to provide shareholders with
attractive and consistent returns over the long term.
Further details of PIP’s investment approach can be
found on pages 28 to 41 of the Strategic Report.
Maintaining a close and constructive
working relationship with the Manager is
crucial as the Board and the Manager both
aim to achieve consistent, long-term returns
in line with PIP’s investment strategy. The
Board is in regular contact with the Manager
to receive updates on investment activity.
Important components in the collaboration
with the Manager, representative of the
Company’s culture are:
– Encouraging an open discussion with
theManager, allowing time and space
fororiginal and innovative thinking;
– Recognising that the interests of
shareholders and the Manager are, for the
most part, well aligned, adopting a tone
ofconstructive challenge, balanced with
robust negotiation of the Manager’s terms
of engagement if those interests should
not be fully aligned;
– The regular review of underlying strategic
and investment objectives;
– Drawing on the Directors’ individual
experience and knowledge to support and
challenge the Manager in its monitoring of
portfolio companies and engagement with
its GPs; and
– The Directors’ willingness to use their
experience to support and challenge
theManager in the sound long-term
development of its business and
resources, recognising that the long-term
health of the Manager’s business is in the
interests of shareholders in the Company.
GPs/portfolio companies
PIP’s investment strategy is focused on backing
managers that create sustainable value in the
underlying portfolio companies. The Manager has
extensive private equity networks and relationships
with private equity managers globally, which give the
Company increased access to the best investment
opportunities.
The relationship with Pantheon is
fundamental to ensuring PIP meets its
purpose. Day-to-day engagement with
GPsis undertaken by Pantheon. Details
ofhow Pantheon carries out portfolio
management, as well as information on how
GPs consistently transform companies to
createlong-term value, can be found in the
Manager’s Review on pages 56 to 109.
TheBoard receives updates at each
scheduled Board meeting from the Manager
on specific investments, including regular
valuation reports and detailed portfolio and
returns analyses. Pantheon’s engagement
with GPs and due diligence of portfolio
companies through the investment process
and its investment strategies can be found in
the Strategic Report on pages 28 to 41 and
pages 62 to 69 and in the Manager’s Review.
The Administrator, the Company
Secretary, the Registrar, the
Depositary and the Broker
In order to function as an investment trust with a
premium listing on the London Stock Exchange,
PIPrelies on a diverse range of reputable advisers
forsupport in meeting all relevant obligations.
The Board maintains regular contact with its
key external providers and receives regular
reports from them, both through the Board
and committee meetings, as well as outside
of the regular meeting cycle. Their advice, as
well as their needs and views, are routinely
taken into account.
The Board (through the Management
Engagement Committee) formally assesses
the performance, fees and continuing
appointment of key service providers
annually, to ensure that they continue to
function at an acceptable level and are
appropriately remunerated to deliver the
expected level of service. The Audit
Committee reviews and evaluates the
financial reporting control environments in
place at each service provider.
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Directors’ Duties and Stakeholder Engagement
Importance Board engagement
The environment and society
The Board continues to increase emphasis on the
importance of sustainability factors in its investment
deliberations. The Board and the Manager are fully
committed to managing the business and its
investment strategy responsibly.
The Board receives regular updates on
Pantheon’s sustainability strategy and
provides feedback on their approach,
whichin turn can lead to changes in its
investment approach.
Full details on the Manager’s approach
toembedding material sustainability
considerations throughout the investment
process, can be found on pages 62 to 69.
Revolving credit facility providers
and loan note holders
Availability of funding is crucial to PIP’s ability to take
advantage of investment opportunities as they arise
aswell as being able to meet future unfunded
commitments.
The Company aims to demonstrate to its facility syndicate and note holders that it is a well-managed business, capable of consistently
delivering long-term returns. Regular dialogue between the Manager, the syndicate and note holders is crucial to supporting PIP’s relationship
with its lenders.
Regulators
PIP can only operate as an investment trust if it
conducts its affairs in compliance with such status.
Interaction with regulators such as the Financial
Conduct Authority (“FCA”) and Financial Reporting
Council (“FRC”), who have a legitimate interest in how
the Company operates in the market and treats its
shareholders, and industry bodies such as the
Association of Investment Companies (“AIC”),
remainsan area of Board focus.
The Company regularly considers how it meets various regulatory and statutory obligations and how any governance decisions it makes can
have an impact on its stakeholders, both in the shorter and in the longer term. The Board receives reports from the Manager and Auditor on their
respective regulatory compliance and any inspections or reviews that are commissioned by regulatory bodies.
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Directors’ Duties and Stakeholder Engagement
The mechanisms for engaging with stakeholders are kept under review by the Directors and are discussed on a regular basis at Board meetings to ensure that they remain effective.
Examples of the Board’s principal decisions during the year, how the Board fulfilled its duties under section 172, and the related engagement activities, are set out below:
Principal decision Long-term impact Stakeholder considerations and engagement
Capital allocation
The Board continually explores how to optimise
the investment trust structure in order to
maximise benefits to shareholders. This
includes discussion of the Capital Allocation
Policy with Pantheon, and considering buying
back the Company’s shareswhen this is likely
to outperform new investments due to the
prevailing discount toNAV.
During this and the previous year, the Chair met with a significant number of shareholders
and has established an ongoing dialogue with a number of these. This engagement has
formed the foundation of a number of key decisions made during the year.
A significant amount of funds were made available for share buybacks during the year and
64.3 million shares were bought back. As discussed in the Chair’s Statement on pages 6
and 7, during the year the Board has extensively discussed the options available to take
advantage of the investment opportunity offered by the prevailing level of discount, and
published an updated Capital Allocation Policy taking shareholder feedback into account.
Refinancing
A diverse and flexible capital structure and
appropriate use of leverage strengthens
shareholder returns.
In order to increase the Company’s flexibility and balance sheet strength, its revolving
credit facilities were refinanced and private placement loan notes were issued during the
year. Increasing the number of credit counterparties provides flexibility and improved
liquidity. As discussed on page 9, the Board has extensively considered how gearing canbe
best used to benefit shareholders during the year under review.
Board succession planning
Effective succession planning, leading to the
refreshment of the Board and its diversity, is
necessary for PIP’s long-term success.
The Nomination Committee is responsible for Board recruitment and conducts a
continuous and proactive process of planning and assessment, taking into account the
Company’s strategic priorities and the main trends and factors affecting PIP’s long-term
success and future viability. During the year, following a review of the balance of skills
anddiversity on the Board, as well as the Diversity Policy, and following a search process,
MrWelde and Ms Clements were appointed to the Board. Their appointments have
increased both the ethnic and gender diversity of the Board and brought this in line with
thethree targets set in the Listing Rules
1
. For further information see pages 127 to 128.
Marketing initiatives
Various marketing initiatives have been agreed
with the Board during the period to increase
theattractiveness of PIP to new and existing
investors and improve the liquidity of the stock.
In order to increase clarity of branding, communication and to encourage long-term
holding of PIP shares, the Board increased the Company’s marketing spend and
established a Marketing sub-committee of the Board. A selection process for a marketing
agency was carried out, resulting in an appointment. The Board believes that these
decisions will aid in maintaining existing, and attracting new retail, and institutional
investment which will be beneficial to all stakeholders.
1 References to the Listing Rules throughout this Report refer to the FCA’s Listing Rules as these were in effect during the year under review. References will be updated for the new Listing Rules, which took effect on 29 July 2024, in the 2025 Annual Report.
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Viability Statement
Pursuant to provision 31 of
theUK Corporate Governance
Code 2018, and the AIC Code
of Corporate Governance,
theBoard has assessed the
viability of the Company over a
three-year period from 31 May
2024. It has chosen this period
as it falls within the Board’s
strategic planning horizon.
The Company invests in a portfolio of
privateequity assets that is diversified by
geography, sector, stage, manager and
vintage; it does so via both fund investments
and by co-investing directly into companies
alongside selected privateequity managers.
The Company invests significantly in the
private equity secondaries market as this
allows the Company to maintain a more
mature portfolio profile that is naturally
cash-generative in any particular year.
The Company seeks to maximise long-term
capital growth by investing with top-tier
private equity managers that are focused
ongenerating outperformance against
thebroader private equity market. As an
investment trust, the Company’s permanent
capital structure is well suited to investing in
private equity, a long-term asset class. The
Company’s Manager has a long-standing
culture that emphasises collaboration and
accountability, facilitating open dialogue
with underlying private equity managers
thathelp the Company to anticipate market
conditions and maintain a conservative
approach to balance sheet management.
The resilience of the Company, positioning
of the portfolio, and durability of the private
equity market are detailed on pages 56
to61.
In making this statement, the Directors have
reviewed the reports of the Manager in
relation to the resilience of the Company,
taking account of its current position, the
principal risks facing it in a downside case
scenario whichconsiders the potential
further impact of the ongoing international
conflicts and election cycles which have
brought about increased geopolitical
uncertainties including the disruption to
theglobal supply chain and increases in
thecost of living as result, persistent
inflation, interest rate rises and the impact
ofclimate change on PIP’s portfolio, the
effectiveness of any mitigating actions
andthe Company’s risk appetite. The
assessment also considers the impact
ofthe Company’s Capital Allocation
Policyinregard to share buybacks.
As part of the assessment, this also included
a combined reverse stress test that
analyses the factors that would have to
simultaneously occur for the Company to be
forced into a wind-down scenario where the
Company’s business model would no longer
remain viable. These circumstances include
a significant peak inthe outstanding
commitments called within a 12-month
period, combined withasignificant decline
in the portfolio valuations and distributions.
Overall, thereverse stress tests are
sufficiently improbable as to provide a
lowlikely risk ofimpact to the Company’s
viability and medium-term resilience.
Commitments to new funds are controlled
relative to the Company’s assets, and
theCompany’s available liquid financial
resources are managed to maintain a
reasonable expectation of being able to
finance the calls, which arise from such
commitments, out of internally generated
cash flow. The Company has put in place a
revolving credit facility to ensure that it is
able to finance such calls inthe event that
distributions received from investments in
the period are insufficient to finance calls.
Inaddition, the Company agreed a private
placement of $150m long-dated loan notes,
giving it access to aneven more diverse
supply of liquidity. TheBoard reviews the
Company’s financing arrangements at least
quarterly to ensure that the Company is in a
strong position to finance all outstanding
commitments on existing investments
aswell as being able tofinance new
investments.
In reviewing the Company’s viability, the
Board has considered the Company’s
position with reference to its investment
trust structure, its business model, its
business objectives, the principal risks and
uncertainties, as detailed on pages 44 to 48
of this report, and its present and expected
financial position. In addition, the Board
hasalso considered the Company’s
conservative approach to Balance Sheet
management, which allows it to take
advantage of significant investment
opportunities, and the appropriateness
ofthe Company’s current investment
objectives in the prevailing investment
market and environment.
The Board regularly reviews the prospects
for the Company’s portfolio and the
opportunities for new investment under
arange of potential scenarios to ensure it
can expect to be able to continue to finance
its activities for the medium-term future.
Based on its review, the Board has a
reasonable expectation that the Company
will be able to continue in operation and
meet its liabilities as they fall due over a
three-year period ending on 31 May 2027.
On behalf of the Board
JOHN SINGER CBE
31 July 2024
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Manager’s Review
Our Market 56
Responsible Investment 62
Portfolio 70
Performance 72
Sectors in Focus 76
Realisations 78
Net Portfolio Cash Flow 83
Distributions 84
Calls 95
New Commitments 96
Buyout Analysis 99
Largest 50 Companies by Value 102
Largest 50 Managers by Value 106
Key Pantheon Personnel Supporting PIP 110
2024Annual Report and AccountsPantheon International Plc 55
Other Information
Financial Statements
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2024Annual Report and AccountsPantheon International Plc 56
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HELEN STEERS AND
CHARLOTTE MORRIS
Partners at Pantheon
and Co-Lead
Managersof PIP
1 Source: PitchBook and World Federation of Exchanges as at 31 December 2023.
Our Market
Public markets continue to shrink while the number of PE-backed
companies is growing
1
PE-Backed Companies
Listed Companies
24
30,000
20,000
15,000
10,000
5,000
0
YEAR
25,000
2001
2007
2009
2011
2013
2015
2023
2017
2019
2003
2005
2021
Median Median private equity fund
Lower quartile private equity fund MSCI World PME
Number of companies globally
NUMBER OF COMPANIES
GLOBALLY
As we consider the significant challenges
that have arisen during the last few years,
asa result of major macroeconomic and
geopolitical events as well as the aftermath
of the COVID-19 pandemic, investors are
increasingly looking for stability, predictability
and consistent returns. Whilenot immune to
what is happening inthe world, private equity
offers an interesting proposition as part of a
diversified investment portfolio. With public
markets becoming ever more concentrated,
and arguably covering only a small subset
ofthe broader range of investment
opportunities, private markets are able to
provide access to exciting, fast growing
andniche orientated businesses that are
focused on compelling sub-sectors such
asenterprise software and healthtech.
Furthermore, numerous studies and
sources have demonstrated that private
equity can outperform public markets over
the medium and long term. In our view, the
best quality, most experienced private equity
managers are particularly well-suited to
successfully navigate uncertainty and, with
their nimbleness and long-term investment
horizon, take advantage of periodic market
dislocations by sourcing compelling deals,
often at attractive valuations. Also, they are
able to develop innovative solutions for their
investors: the rise of manager-led deals in
the secondary market is an example of this.
One of the fundamental characteristics of the
private equity industry is its ability toadapt,
evolve and respond flexibly to prevailing
market conditions. For example, nowadays
the best private equity managers are no
longer the “financial engineers” that were
more common several decades ago atthe
dawn of the industry, but now are sophisticated
operators of businesses. Theyhave experts
on staff who take a “hands-on” approach by
getting to know their portfolio companies
inside out, working with well-aligned
management teams and hand-picked
industry experts to implement operational
improvements. In addition to delivering
organic revenue and profit growth, successful
private equity managers identify add-on
acquisitions to fuel company growth
geographically or in complementary
products and services.
Strength and
resilience
Helen Steers and Charlotte Morris, Partners at Pantheon
and Co-Lead Managers of PIP, discuss how the private
equity market continues to successfully navigate the
challenging macroeconomic environment.
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Our Market
Private equity managers are patient as well
as active investors; they typically hold their
companies for an average of six years, away
from the glare and perhaps more short-term
mindset of the public markets, making
strategic decisions that they believe will
deliver in the medium and long term even
though they may not have an immediate
impact on earnings in the shortterm.
Investing in resilient, growing sectors
Although recent performance of the private
equity industry has been impacted by the
unwinding of quantitative easing, interest
rate hikes, high inflation and lower valuation
multiples, it has nevertheless demonstrated
its resilience, continuing to outperform public
markets over the medium and long term.
Wehave seen this within PIP’s own portfolio
which, over the past couple of years, has not
experienced the valuation impairments that
were perhaps expected bypublic market
commentators. One of the reasons for this
is because, on behalf of PIP, we are backing
top quality managers who are sector
specialists, focusing on resilient, non-cyclical
sectors that are benefitting from long-term
trends such as automation and digitalisation,
ageing demographics and sustainability.
Inaddition, we are investing directly in the
most exciting sub-sectors of the market
through co-investments and single-asset,
manager-led secondaries, deploying our
“double filter” to identify and access the
most attractive company opportunities.
Many private equity managers, and Pantheon
itself, use artificial intelligence (AI) tools, which
bring a number of benefits and efficiencies
to the due diligence process, monitoring and
the management of the portfolio. From an
investment standpoint, private equity is
actively targeting companies that provide
products and services enabling the adoption
and implementation of large-scale AI strategies.
While the promise of AI has been around
foryears, there has been a resurgence of
interest due to the advent of more accessible
machine learning models, reusable large
language models (LLMs), and the sheer
amount of data that enterprises have to
manage dynamically. An example ofone of
PIP’s portfolio companies which isenabling
its customers to solve AI data strategy
problems is Confluent, which is featured
asa case study on page 89 of this report.
We believe that these longer-term trends,
including AI, are here to stay regardless
ofwhat is happening in the broader
macroeconomic environment, and will
continue to provide tailwinds to PIP’s
portfolio companies. As shown on pages 70,
76 and 77 of this report, PIP’s portfolio gives
investors exposure to exciting businesses in
niche sectors that are not typically available
via thepublic markets and which benefit
from these secular trends.
Average Annual Returns During Market Cycles (2000 - 2023)
2
20
12
8
4
0
Bull
3
YEAR
Bear
4
16
17%
14%
5%
2%
Private Equity
MSCI World TR
Private equity consistently outperforms the public markets over
thelong term
2
1,400
800
600
400
200
0
YEAR
1,000
1,200
2001
2013
2015
2023
2017
2019
2021
2003
2005
2007
2009
2011
Median Median private equity fund
Lower quartile private equity fund MSCI World PME
INDEX LEVEL
(RE-BASED TO DEC. 2000)
Private Equity
MSCI World TR
2 Preqin, as at March 2024.
3 The bull market covers the years ending: 31 December
20 04 to 31 December 2006; 31 December 2009
to31December 2018; 31 December 2020; and
31December 2023.
4 The bear market cover the years ending: 31 December
20 00 to 31 December 2002; 31 December 2006
to31December 2008; 31 December 2019; and
31December 2022 to 31 December 2023.
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is the majority owner and can therefore
choose when and how to exit a portfolio
company. In other words, private equity
managers control their realisations and
importantly, they are not forced sellers.
As a result of the current macroeconomic
environment, many of our managers are
holding on to their companies for longer than
usual while they wait for the right time to
commence a sales process. Indications are
that the average holding period has increased
from around five yearsin 2019 to around six
years in 2023
5
. More generally, the slowdown
in M&A transactions over the past two years
means that private equity deal flow was lower
in 2023, compared to 2022 and 2021, although
add-on acquisitions continued apace as
private equity managers executed on their
“buy-and-build” strategies, snapping up smaller,
Our Market
Overall, profitable, growing technology and
healthcare companies make up a considerable
proportion of PIP’s exposure. Our preference
is to “lean in” to the dynamic parts of the
global economy and this underpins our focus
on generating appropriate risk-adjusted
returns over the long term. Many of the
companies in PIP’s portfolio are able to pass
their costs on to their customers efficiently
because of the differentiated must-have
products and services that they offer. For
example, software-as-a-service (SaaS)
providers suchas Visma, one of PIP’s largest
companies, have the advantage that their
clients often cannot do without these
essential business tools, and price increases
can be implemented immediately. PIP’s
private equity managers are also seeking to
contain costs in their underlying companies,
obtain better terms from suppliers and drive
through change. Notably, they are using
technology (including AI) for a variety of
purposes, such as improving productivity
and making efficiency gains, and for better
risk management.
The effects of these actions can be evidenced
by the fact that the average annual EBITDA
growth of PIP’s buyout portfolio inthe last
five years is a robust +19%. Inaddition, when
our portfolio companies are sold, they are
typically realised at an uplift to the carrying
value of the company. In PIP’s portfolio, the
weighted average uplift of the companies
that were sold was +20% during the financial
synergistic companies at attractive valuations
to bolt on to their platform companies.
We are hopeful that we will start to see
increased deal activity as more certainty
returns to the inflation and interest rate
environment, and the opening of the initial
public offering (IPO) market accelerates.
Although PIP is not dependent on its portfolio
companies going public for exits, healthy IPO
markets boost overall market confidence and
support both private equity and strategic/trade
buyer activity. Both we and our managers are
unable to predict the timing of a resurgent
M&A market, but there are very early signs
that the tide may be starting to turn, which
means that several of PIP’s portfolio
companies, which are already being prepared
for exit, will be ready for sale as the outlook
improves. Indeed, deal activity does seem to
year to 31 May 2024. This indicates that our
portfolio companies are valued conservatively,
and continues the trend that we have
observed for many years; since 2012 the
average uplift upon exit of PIP’s portfolio
companies has been +30%. There is a
broader explanation of this phenomenon,
which applies more generally to the private
equity market; managers “smooth” valuations
and prefer to surprise their closed-end fund
investors on the upside. In addition, it is
important to note that private equity
managers generally do not receive their
performance fee until the majority of the
fund has been fully exited andthe overall
returns have exceeded a challenging
“highwater” mark. Therefore, private equity
managers have little incentive to excessively
write up the valuations of theirportfolio
companies. These factors addfurther
weight to our view that the scepticism of
public market commentators as to the
validity of the valuations in private equity,
isunwarranted. Some of the case studies in
this report (for example, pages 82, 86 and
88) demonstrate how ourmanagers have
created value in theirportfolio companies.
Deal activity and exit environment
in private equity
As well as understanding the valuation
methodologies of our underlying managers,
part of our detailed investment due diligence
process also includes analysing the investment
rationale, the value creation levers available
and the expected exit routes for the target
business. A majority of PIP’s portfolio is
invested in buyouts, where the private equity
manager (sometimes alongside co-investors)
5 Source: Bain & Company, Global Private Equity
Report2024.
6 Source: Preqin, as at 31 December 2023. Forecasts
from “Preqin Special Report: Futures of Alternatives
2028” (February 2024).
Private Equity assets under management (“AUM”)
6
6.0
5.0
3.0
2.0
1.0
0
YEAR
4.0
USD$TN
7.0
9.0
8.0
’10 ’11
’12
’13
’14 ’15 ’16
’17
’18 ’19 ’20 ’21
’22
’23
’24F
’25F
’26F
’27F ’28F
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be picking up – for example recently released
data shows that new transactions in Europe
increased markedly in Q2 2024, with newly
recorded deals increasing by 5% by number,
and by 73% by aggregate deal value
7
.
In addition to more confidence returning to
the overall M&A market, there are record
levels of dry powder (c.US$1.5tn
8
) in our
industry, which is capital that has been
raised and is available to invest but has not
yet been deployed, however a majority of
this is concentrated among the largest
buyout funds. This capital sitting above us
atthe mega end of the market is positive for
PIP as these managers can, and often do,
buy our smaller portfolio companies to take
them onto their next stage of development.
The most recent European deal data appears
to point to greater activity by the large and
mega buyout focused managers, who are
under pressure to deploy capital.
Perhaps unsurprisingly in the current
macroeconomic environment, private equity
fundraising remained challenging during 2023.
However, we observed that the highest quality
private equity managers were not held back
and were still able to fundraise while those
of lesser quality struggled. Fundraising is
taking longer on average and there are fewer
first time funds than has been the case in the
past. Nevertheless, the buyout segment of
the global private equity market had its best
year on record for fundraising and private
equity assets under management are
Our Market
expected to exceed US$8.5tn
9
by 2028. On
behalf of PIP, we focus on small-mid market
buyouts as we believe that this part of the
market offers compelling characteristics
and multiple opportunities for value creation.
See the “Unlocking value in the mid-market”
commentary for more information.
Despite the difficult conditions, indications
are that institutional investors remain
committed to private equity with the majority
responding in surveys that they plan to
maintain or increase their allocations to the
asset class over the longer term
10
.However,
many of these investors are underpressure
because of diminished distributions over the
past two years, and are keen to see capital
returned from their existing private equity
funds, in order to be able to commit to new
funds. The so-called “denominator” effect,
which occurs when investors find that their
investment portfolios are overallocated to
private equity versus their public equity
exposure, has persisted, even though public
markets have rebounded since the end of
2023. This phenomenon, coupled with the
softer exit and distribution environment has
led to an increase in the number of manager-led
secondary deals through 2023 as pressure
for liquidity generation from fund investors
continued to mount. This proliferation of
secondary deals that are led by the private
equity managers themselves has provided
attractive opportunities for a seasoned
secondary market investor such as Pantheon.
See the interview with Charlotte Morris,
Pantheon Partner and Co-Lead Manager
ofPIP, on pages 60 to 61 to find out more
about this fast-growing part of the private
equity market.
Unlocking value in the mid-market
The majority of PIP’s portfolio is invested in
buyouts, which are well-established businesses
where institutional investors have control of the
company alongside suitably aligned management
teams. PIP focuses on small/mid-market
buyouts in the developed markets of the USA
andEurope. We favour this part of the market
aswe believe that it offers a number ofbenefits:
– Attractive supply/demand profile and
favourable deal dynamics: The target
companies are often founder or family-led and
may be receiving institutional capital for the
first time. This means that the investment
process can be inefficient, with less likelihood of
a highly intermediated deal, resulting in a lower
entry price.
– Multiple growth and value creation levers:
Small/midsized companies receiving capital
for the first time (“primary buyouts”) will often
need helpin setting up a modern reporting
system, improving their financial accounting
and optimising their capital structure. These
are “quick wins” that form part of a classical
private equity “playbook” and can generate
significant value in the first 100 days of an
investment. There are many subsequent
pathways for value creation as the companies
achieve operational improvements, increase
their scale, expand geographically and
complete add-on acquisitions, all withthe help
(aswell as the capital provided) of the private
equity manager and their operational experts.
All these potential activities enhance returns
for investors.
– Leverage: Small/mid cap private equity
managers typically use more moderate levels
of debt compared to those at the large/mega
end of the industry, and rely more on operational
improvement than financial engineering to
create value. Thisresults in a lower level of
leverage riskassociated with small/mid
sizedbusinesses.
– More exit routes: Private equity backed,
mid-market companies are prime targets for
strategic (or trade) buyers, who can underwrite
operating synergies and potentially pay higher
multiples, as well asfor large/mega buyout
private equity managers, who can take the
companies through their next stage of growth.
As a result, mid-market private equity managers
are less dependent on IPOs toexit their
portfolio companies and therefore they arenot
as impacted by the health and cyclicality of the
IPO market. During thefinancial year to 31 May
2024, 41% of the exits in PIP’s portfolio were to
strategic buyers, 41% to private equity buyers,
and only 15% to IPO.
7 Source: Preqin data, as at 11 July 2024.
8 Source: Preqin data, as at 8 July 2024.
9 Source: Preqin Global Report Private Equity 2024.
10 Source: Preqin Institutional Allocation Survey 2024.
Manager and deal selection is important
It should be noted that despite the many attractions of
investing in the asset class, there is a wide dispersion
of returns in private equity, and the best managers,
who generate the most exciting investment
opportunities, are routinely access-constrained.
Furthermore, co-investment and secondary
deal sourcing from the best managers
requires a deep network and strong
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relationships that can only be generated
over decades of private markets investment.
Sourcing a large funnel of deals from a
global platform of relationships is only the
beginning; successful co-investors and
secondaries investors require specialised
deal analysis and execution skills, which
arebuilt up over a long period oftime.
Both manager and deal selection (the
“double filter”) are critical to generating
outperformance, and a detailed knowledge
of the market is essential to finding and
executing the best investment opportunities.
Pantheon has more than 40 years of
experience investing in private equity funds
and companies, and we believe that our
positions on 642 advisory boards
11
give
usan information and relationship edge,
allowing us to position ourselves well for
future deal flow. PIP benefits from being an
integral part of Pantheon’s platform, having
access to a broad set of global relationships,
deal opportunities and expertise.
We have managed and advised PIP since
itwas launched in 1987 and it has been
designed to provide an “all weather”,
high-quality, low risk portfolio that can
withstand macroeconomic volatility and
market cycles. As we look back at the last
financial year andmore broadly at PIP’s
history through several economic cycles,
wecan see the evidence of this approach
coming to fruition and remain highly
confident in the Company’s prospects
inthefuture.
Taking advantage of the
attractive manager-led
secondary market
Charlotte Morris, Partner at Pantheon and
Co-Lead Manager of PIP, discusses the
manager-led secondary market and why
single-asset secondaries in particular are
afocus for PIP.
Q
Over recent years, PIP has
tilted its portfolio towards
direct company investments
and manager-led secondaries
now account for 20%of the
portfolio
12
. But what is a
manager-led secondary?
A
Manager-led secondaries are
when the private equity managers
themselves instigate deals and they can
consist of eithermulti-asset portfolios or
single-asset secondaries. We focus on
single-asset secondaries which are attractive
to investors like PIP for a numberof reasons.
A single-asset secondary is an investment
into an individual company owned by an
existing private equity fund. The private
equity manager may see further growth
opportunities for the company in the
near-term but be restricted by the fund
termor under pressure to sell the company
to provide liquidity to existing investors.
Another common situation is where the
manager may be looking to secure further
capital to support growth which may not be
available in the current structure. However,
the company in question could be a highly
prized asset that the manager believes has
significant further potential for growth and
as such wants to continue to hold on to it.
These competing priorities can be resolved
by bringing in new investment, typically
fromspecialised secondary firms, and
carving the company out into a new
structure which is often termed a
“continuation fund”. Existing investors are
able to sell and take the liquidity on offer,
should they wish, or they can choose to
rolltheir interests into the new vehicle
thathouses the company and continue to
participate in the value creation phase of
theinvestment. These transactions allow
the fund managers to remain invested and
keep control of the asset, which they would
otherwise have been required to sell. So, in
other words, a single-asset secondary is
aninvestment into a company backed by
newcapital, but managed by the same
PEmanager with a view to realising as-yet
untapped growth potential.
For us, as a secondary investor coming into
these deals, when we choose to invest
weare doing so alongside a private equity
manager and a management team who
know that company inside out and have
aclear plan for creating further value. This
provides an opportunity for fund managers
and company management to continue a
positive working relationship and build on
aproven strategy of growth, while avoiding
the disruption that a change in ownership
can bring.
Q
What is the difference
between a co-investment and
a single-asset secondary?
A
Both are investments directly into
private companies. When PIP invests
in a co-investment, it is typically when the
private equity manager is also investing in
the company for the first time, unlike a
Our Market
11 As at 31 March 2024.
12 As at 31 May 2024.
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Our Market
single-asset secondary where the manager
has already owned the company for some
time. Therefore the risk-return profile of
thetwotypes of investment are different.
Aco-investment could be considered to
carry more risk, since it is a new investment.
A single-asset secondary may be thought
ofas less risky because it is in an existing
holding. It should be noted that
co-investments are typically free of fees
which makes them economically attractive
for PIP, whereas single-asset secondaries
will carry a small fee and carried interest,
although this is generally ratcheted and
tieddirectly to the performance of the
investment.
All of our co-investment opportunities and
single asset secondaries pass through a
“double quality filter”, since each opportunity
has first been evaluated by a private equity
manager, who themselves have passed
ourrigorous manager selection hurdles.
Theopportunity is then subjected to our
owndetailed due diligence process, carried
out by our dedicated co-investment or
secondaries teams, who will confirm,
among other things, that the deal is a
goodfit for the manager.
Our stringent process means that our
approval rate for the co-investment deals
that we reviewed in2023 was just 12%,
which is in line with our long-term average,
and our approval rate for single-asset
secondaries was 7.7%.
Q
What are you looking for in a
single-asset secondary?
A
This is a very specialised area of the
secondaries market that requires
significant resources and expertise to carry
out the necessarily detailed due diligence
onthe assets. PIP benefits from Pantheon’s
extensive platform and 36-year history of
investing in the secondary market. Pantheon
has over 14 years’ experience in manager-led
transactions and decades-long relationships
that can be leveraged for sourcing and
information. I sit on Pantheon’s Global
Secondaries Investment Committee, which
approves all the deals that are recommended
by our in-house team for investment, and so
I see first-hand how wehave maintained our
discipline andselectivity.
When assessing a single-asset secondary,
we are looking to invest alongside a
high-quality manager, with whom we have
an existing relationship and which allows
usto start from a foundation of trust. This
also means that often we are evaluating
companies we have either already backed
insome way in the past, or that we have
followed for some time. We are looking
forwhat we consider to be ‘trophy’ assets:
high-quality, resilient companies, with a clear
path for value creation; and continuation of
the growth strategy that the company has
pursued over the last few years with the
support of the existing manager that we
areinvesting alongside.
In addition to the quality of the asset, the
alignment of interest between ourselves,
theprivate equity manager and the company
management is also very important. The PE
manager usually re-invests the vast majority
of the proceeds generated from exiting
theolder fund – andwill also often invest
additional capital into the transaction.
Assuch, the private equity manager’s
investment into such transactions can
represent a significantly higher proportion of
capital compared to sponsoring manager’s
typical commitment into a private equity
fund – and in fact is often the largest personal
investment into any portfolio company by
the manager.
At the asset level, entry valuation continues
to be a common reason for a deal to be
screened out at the stage that it is brought
tothe investment committee, although a
number of other factors are also considered,
including the resilience of the company’s
end market, competitive differentiation
andrevenue quality. We may also decline
atransaction where we have concerns
regarding the manager’s rationale for the
continuation fund or where alignment with
the manager is weak.
As with the other types of investments that
we make on behalf of PIP, we are particularly
focused on the small/mid-market stage
managed by top quality private equity
managers. Altogether, PIP has committed
£266m to single-asset secondaries through
the Pantheon Secondaries Opportunity
Funds I and II and at the time ofwriting,
£125m has been deployed.
Q
What is the outlook for this part
of the market?
A
We have seen record deal flow
exceeding US $100bn of transaction
volume across the secondaries market
inthe past three years, with similar
expectations for 2024. Manager-led
secondaries have been a key part of this
growth and accounted for 45% of secondary
volumes in 2023
13
. Of these transactions,
88% were single-asset secondaries
14
. In the
current market environment, we expect
momentum to continue as managers look
for ways to provide liquidity to investors
atatime when other exit routes are more
challenged. The supply/demand imbalance
favours buyers like us and we are currently
seeing the best buying opportunity that we
have seen in a decade.
We expect to see further growth in this part
of the market as it continues to mature and
evolve in the years ahead. We believe that
through our flexible and highly selective
approach, we are well-positioned to continue
to capitalise on this growing and exciting
opportunity on behalf of PIP.
13 Source: FY 23 Evercore Secondary Market Survey.
14 Source: Jefferies Global Secondary Market Report 2023.
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Screening
Sustainability screening
applied to all investment
opportunities
Due diligence
Sustainability scorecard
used to assess:
– Private equity managers
– Private equity funds
– Single-company deals
– Multi-company deals
Monitoring/
engagement
Monitoring:
– Private equity data
collection
– Portfolio company
data collection
Engagement:
– Private equity managers:
targeted engagement
based on individual
scorecards
– Industry: advocate for
sustainability best
practice through
industry trade bodies
Responsible Investment
An enhanced approach
to investing responsibly
Reporting
Focusing efforts on
standardised sustainability
reporting templates to
alignwith:
– Task Force on
Climate-related
FinancialDisclosures
requirements
– ESG Data Convergence
Initiative (EDCI)
– EU Sustainable Finance
Disclosure Regulation
(SFDR)
In practice:
Enhancing sustainability data collection systems
In practice:
Integrated into
sustainability due diligence
scorecard
In practice:
Sustainability due diligence
scorecard output included
in Investment Committee
memos
EIMEAR PALMER
Partner and Global Head of Sustainability
The Board of PIP and Pantheon are aligned in the belief
that a focus on sustainability risks and opportunities is an
important tool for risk mitigation and can lead to value
creation across PIP’s investment portfolio. Accordingly, on
behalf of PIP, Pantheon addresses and assesses private
equity and portfolio company-level sustainability-related
risks and opportunities across the investment lifecycle:
from screening and due diligence to monitoring,
engagement and reporting.
We believe that the private equity industry is at a point
where demonstrating a robust approach to sustainability
is often imperative for our investors and other stakeholders.
Increasingly, it is being recognised by both our managers
and their portfolio companies that operating more
sustainably enables portfolio companies to become more
resilient through improved efficiencies, greater innovation
Eimear Palmer, Pantheon Partner and
Global Head of Sustainability, discusses
how material sustainability considerations
are embedded throughout Pantheon’s
investment processes and how PIP
benefits from them.
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Making a positive
contribution to the
global economy
As many parts of the world continue
to grapple with macroeconomic
pressures, the private equity sector
iswell placed tomake a positive
contribution to stimulating growth
through the creationand support
of jobs.
The most recently available
statistics show that in Europe,
private equity-backed companies
employed 10.9m people at the end
of 2022, representing 5% of the
entire workforce
1
and anincrease
of 7.2% from the end of 2021. In
the USA, 12m people are employed
by private equity-backed businesses
and 34m Americans depend on
private equity tosupport their
retirements
2
. This is positive, not
just for the people employed by
those companies, but also for
those impacted through supply
chains, and thecustomers who
value the products and services
offered bythem.
What also matters of course is
how private equity managers
behave towards the businesses
that they own. For years, private
equity has been extremely
successful at incorporating robust
governance structures. Managers
typically invest in portfolio
companies alongside the existing
management teams and they
workclosely together togrow the
business over the long term.
Company management, the
private equity manager and their
investors all exit thebusiness
atthe same time, meaning
thatthereis a real alignment
ofinterest.There are direct lines
ofcommunication between the
private equity managers and the
executive teams so they are able
toadopt a much more proactive,
collaborative approach and
respond quickly to any issues that
may arise.
Finally, private equity managers
are alertto the investment
opportunities arising from the
need to provide solutions toenable
the green transition, decarbonisation,
and to harness thebenefits of a
circular economy. WithinPIP’s
own portfolio, a number of
investments have been made,
based inpart on the growth
opportunities enabled by the
sustainability characteristics
ofthe specific investments.
Forexample, during the period,
PIPcommitted to Altor’s ACT I
fund, which is a fund focused
oninvestment opportunities in
Europe thathave a specific
greentransition orindustrial
decarbonisation theme.
See the case study on page 97.
Responsible Investment
and reduced costs, which resultin companies
strengthening their positioning and
reputation in the market. Asa result of their
actions, companies areina better position
to gain investor confidence, and it reduces
regulatory uncertainty byensuring that
theirbusinesses are well-positioned and
moreprepared for sustainability-related and
climate-related regulation and compliance.
We continue to see European private equity
managers leading the way in driving the
sustainability agenda, with managers in
theUSA and Asia increasingly recognising
that the decisions they make can have a
tangible impact on their stakeholders and
the communities in which they operate.
A growing number of Asian investors in
particular are focusing more and more on
climate commitments and understanding
the carbon footprint of their portfolios.
With increasing investor demand for impact
investments, we are starting to see some of
our mainstream European managers launch
impact strategies, which are particularly
focused on climate transition. It’s important
to note that these impact strategies do not
compromise on market-leading returns,
sothe impact achieved and financial return
generated are highly correlated.
Robust oversight and implementation
of sustainability matters
Within Pantheon we have a formal
sustainability governance structure in place.
I sit on Pantheon’s International Investment
Committee which means that I can exert
real influence in terms of how sustainability
is factored into investment decision-making
1 Source: Invest Europe, Private Equit y at Work, April 2024.
2 Source: American Investment Council
(www.investmentcouncil.org).
for all deals that are considered by Pantheon
for investment on behalf of PIP.
In addition, I chair Pantheon’s well-established
Sustainability Committee which comprises
representatives from our key investment
strategies, operations, investor relations,
marketing and legal & compliance
teams.The Committee is responsible for
overseeing and monitoring our sustainability
programme across core projects relating to
strategy, integration, regulation and data.
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Transparency
Solutions
Integration
Engagement
Pantheon
TIES
Each project has a designated sponsor from
the Committee to support the necessary
monitoring, delivery and leadership.
TheCommittee also reviews and updates
Pantheon’s group-wide Sustainability Policy
on a periodic basis, and the objective is to
complete this task at least annually.
The Directors of PIP have oversight of
sustainability matters within PIP’s portfolio
and fully support Pantheon’s long-standing
commitment in this area. We have
commenced an annual sustainability
training session for the Directors and they
receive periodic updates on Pantheon’s
sustainability strategy and progress
towards our goals.
Dame Susan Owen DCB has been nominated
as sustainability lead for the PIPBoard,
andin this capacity she is responsible for
monitoring and reviewing Pantheon’s
sustainability integration approach. She
willalso ensure that the Board discusses
Pantheon’s overall approach to sustainability
and climate-related considerations, and
isinformed at least annually on material
sustainability andclimate risks that might
impact PIP’sportfolio.
Encapsulating our ethos and
approach to sustainability
As the sustainability integration landscape
has changed and matured across our
industry, Pantheon has continued to
innovate, building upon our policies,
processes and practices across our teams
and strategies. Recent enhancements
include the introduction in 2023 of a
sustainability approach called TIES
(Transparency, Integration, Engagement
and Solutions) and the launch of proprietary
Sustainability Scorecards. We continue to
use RepRisk, a third-party news information
service which has been integrated into
oursystems since 2017, as part of our
screening, due diligence and pre- and
post-monitoring processes to ensure
extensive coverage of any sustainability
incidents within PIP’s portfolio.
Since the period end, we were pleased to
publish PIP’s 2023 Sustainability Report,
which is its first report of this kind and
showcases our achievements over the year
and how they have benefited PIP and its
portfolio. The report also includes specific
climate-related disclosures based on the
recommendations of the Task Force on
Climate-Related Financial Disclosures
(“TCFD”). The report can be found on
PIP’swebsite (www.piplc.com).
An investment’s sustainability profile is one
of a number of factors that Pantheon
considers when evaluating private equity
managers and investments. The “TIES”
framework, which we introduced in 2023,
sets out our enhanced, comprehensive
and cohesive approach to sustainability
through processes and procedures that
support Transparency, Integration,
Engagement and Solutions.
We believe that greater transparency leads
to more insight, which in turn will lead
tomore thoughtful decision-making.
Integration refers to our approach to
3 As at 31 March 2024.
Enhanced transparency
through improved
sustainability practices,
tools and resources
Consistent GP, industry
and investor engagement
to develop and share best
practice on assessing
sustainability factors
Developing innovative
investment solutions
to meet our clients’
requirements
Integration of
sustainability factors
into each stage of the
investment process
integrating sustainability across the
investment lifecycle from screening,
due diligence, monitoring and reporting.
Engagement through our extensive industry
participation and our positions on 642
advisory boards
3
enable us to drive and
share best practice across the private
equitysector. And finally, “Solutions” is
aboutproviding clarity to our investors
around keyconcepts, such as “impact”
and “sustainable”, and understanding the
investment solutions that can be developed
to support the transition to a more
sustainable economy; this will allow us to
explore an even greater range of investment
opportunities for PIP and the role that they
can play in its diversified portfolio.
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Pantheon has developed our own Sustainability Scorecards to provide a comprehensive
view of each investment during due diligence and to support ongoing monitoring
Private Equity Manager
– Oversight &
Implementation
– Reputation
– Climate
– Diversity, Equity & Inclusion
– Biodiversity
Fund
– Track record
– Sustainability
Commitments
– Climate
– Reporting
Single Asset
– Inherent Sector Risk
– Oversight & Implementation
– Country Risk
– Reputation
– Climate
– Biodiversity
Multi-Asset
– Inherent Sector Risk
– Country Risk
– Reputation
– Climate
– Biodiviersity
Multi-Asset rating
Private equity manager rating
Sustainability scorecards
Fund rating Single Asset rating
Using data effectively to assess our
private equity managers and deal
opportunities
Pantheon leverages a combination of
scorecards, which we introduced in 2023,
depending on the transaction type, for
bothpre-investment evaluation and
post-investment monitoring, engagement
and reporting. We believe that these
scorecards provide clarity and transparency
on material sustainability maturity across
fund managers and for new investments,
aswellas to support effective GPs (General
Partners) benchmarking and engagement
and improved investor reporting.
Our four proprietary scorecards, which are
populated by our investment teams, are
tailored according to the type of prospective
investment opportunity: manager, fund,
single-asset, and multi-asset. For example,
when assessing a co-investment opportunity,
the investment team completesboth a
manager scorecard and asingle-asset
scorecard. The single-asset scorecard
assesses each portfolio company through
adual scoring system covering inherent
sector risk and a company risk rating based
on specific criteria. The output of each
scorecard is a sustainability rating
(Leading to Emerging) which is based on
ourassessment of many sustainability
considerations, and by utilising various
industry data sources and leading sustainability
indicators to assess private equity managers,
funds and portfolio companies throughout
the due diligence process.
The manager scorecard, which is populated
by our investment teams, is supported by
the results of our annual sustainability
survey, which we use to obtain up-to-date
information on our private equity managers.
The survey covers a range of topics,
including how our managers measure and
report on sustainability, their approach to
climate change, including climate-related
commitments and targets, their integration
of Equity, Inclusion and Diversity, and how
consideration of biodiversity is addressed in
their investment decisions. Each manager
isprovided with an individual sustainability
maturity rating, along with Pantheon’s peer
benchmarking relative to other private equity
managers in the same geography. These
ratings provide Pantheon with a database
ofsustainability maturity by private equity
manager and an engagement tool to
encourage them to improve their practices.
Pantheon analyses the annual Sustainability
Survey responses and individual GP ratings
to produce the Private Markets Sustainability
Index (“PMSI”) which is publicly available
onPantheon’s website. The PMSI, which
was the first in the industry when it was
published in December 2023, provides an
overview of sustainability maturity across
private markets based on the ratings of
approximately 200 Pantheon managers,
with the aim of moving beyond data
collection to creating opportunities
fordialogue and encouraging the
implementation of best practice. In 2023,
this included 107 of PIP’s underlying
privateequity managers, representing
71% of NAV as at 31 December 2023.
We understand that data collection can
bedifficult for our managers, given that
small and medium-sized businesses often
have little in-house sustainability expertise
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or systems to collect, measure and analyse
sustainability data. Recognising the
challenges that our underlying managers
face across multiple jurisdictions, Pantheon
supports efforts to standardise sustainability
data collection and improve transparency of
sustainability performance across the
industry. Pantheon is a signatory to the ESG
Data Convergence Initiative (“EDCI”), a global
initiative focused on collating performance-
based, comparable sustainability metrics.
Encouragingly, 60% of PIP’s primary private
equity managers have indicated that they
would be prepared to disclose portfolio
company information using the EDCI
template
4
. We expect data availability to
increase over time given that industry
support for this initiative continues to grow.
Developing our understanding of
the impact of climate change on
PIP’s portfolio
In addition to integrating climate change
analysis into its due diligence processes,
Pantheon has continued to refine its approach
to climate risk analysis with respect to the
current PIP portfolio. Pantheon conducted
its first climate change risk analysis for its
Infrastructure portfolios in 2022. This year, a
climate scenario analysis tool was developed
to support Pantheon in undertaking a high-level
initial analysis of the potential impacts of the
climate transition across all its investments,
providing sector and region analysis that
serves as a tool for identifying potential
risksand opportunities within PIP’s portfolio.
The climate scenario analysis tool considers
physical and transition climate-related risks:
– Physical: Acute risks related to direct
consequences of climate change, for
example, extreme weather events and
environmental impacts; and
– Transition: Indirect risks of transitioning
to a low-carbon economy, for example,
related to changes in regulation, law,
technology and market practices.
Refer to PIP’s 2023 Sustainability Report
formore information.
We are continuing to develop and
enhance our approach to understanding
climate-related risk. We have not yet
conducted an analysis of the climate value
at risk or the climate warming scenario with
which PIP’s portfolio is aligned. In our view,
current climate modelling tools are at an
early stage of development and do not
yetprovide sufficiently reliable results.
Inaddition, company-specific data on
whichto conduct such analysis remains
less readily available across private markets.
As such, for funds like PIP, the results could
be misleading. We will, however, continue to
keep this under review and assess climate
modelling tools as they develop.
We continue to engage with the
industry on sustainability matters
The consideration of sustainability factors
has been a part of how Pantheon does
business for many years. Back in 2007,
wewere one of the first private equity
signatories to the United Nations-backed
Principles for Responsible Investment
(“UNPRI”). The six Principles of the UNPRI
underpin our sustainability strategy, and
wehave consistently achieved high scores
in their annual assessments.
In 2020, I co-founded the UK network of
Initiative Climat International (“iCI”) which
isthe largest climate-focused private
marketinitiative with over 230 signatories,
including Pantheon, that seeks to improve
the industry’s understanding and management
of the risks and opportunities associated
with climate change. I co-chair the iCI
Regulatory working group and we are also a
member of the iCI Net Zero working group.
In addition, our positions on the British
Private Equity & Venture Capital Association
(BVCA) Responsible Investment Roundtable
and on the ESG Committee of Invest Europe,
combined with our advisory board seats,
provide us with numerous opportunities
tocollaborate with our peers and drive
sustainability best practice across
the industry.
Looking ahead
In an ever-changing and at times conflicting
environment, where investor expectations
are increasing, consumers are demanding
amore sustainable approach to doing
business, and sustainability regulatory
requirements are becoming more complex,
we are increasingly focusing on the material
risks and opportunities for value creation.
To support this, we are continually seeking
to enhance our sustainability systems to
improve our reporting and provide better
transparency to our investors on the
sustainability credentials of their portfolios.
At Pantheon we believe that private markets
have a key role to play in the transition to a
more sustainable society. We believe that
wealso have a key role to play in supporting
ourmanagers and driving and encouraging
sustainability best practice. With the focus
onclimate change more than ever before,
wecontinue to engage with our GPs on
climate-related matters, particularly on
supporting portfolio companies to assess
risks, makeclimate commitments and set
decarbonisation targets.
Pantheon’s commitment to invest with
purpose and lead with expertise to build
secure futures centres on generating strong,
long-term investment returns through an
investment discipline focused on financial
value creation and risk mitigation. As a
global investment firm and a leading
specialist investor in private markets, we
recognise the crucial role that sustainability
factors can play in influencing long-term
investment performance.
Effectively analysing and monitoring
all investment opportunities from a
sustainability perspective on behalf of
PIP remains our priority as we strive to
exceed our clients’ expectations.
4 Source: Pantheon’s 2023 annual sustainability survey
of its underlying private equity managers. The results
are based on a 76% response rate from the primary
private equity managers in PIP’s portfolio.
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Taking “Action” for
sustainability
In 2020, and subsequently in
2023, PIP made investments
inAction, a leading European
general merchandise discount
retailer operating across
12countries, which is backed
by3i Group plc, an international
investment company focusingon
private equity and infrastructure.
Action believes that sustainability
should be accessible for all, by providing
customers with good quality, sustainable
products at the lowest price.
To achieve this, the company has set
itself ambitious and measurable targets
through the implementation of the
ActionSustainability Programme.
Initiatives delivered to date as part of
thisprogramme include:
– A commitment to reduce Scope 1 and
2 carbon emissions by at least 60% by
the end of 2030, from a 2021 baseline.
In the last two years, and while significantly
growing the store and distribution
network, the company has already
achieved a 46% reduction as part of
this target. This was delivered by
procuring c.90% of electricity from
renewable sources, disconnecting
most stores from the gas supply,
improving energy efficiency of stores,
installing solar panels at seven out of
13 distribution centres, switching to
biodiesel for 150 Action trucks, and
piloting four new zero-emission e-trucks;
– Ambitions to reduce its emissions from
the supply chain. The company has now
established a full baseline for Scope 3,
which represents 99% of its total carbon
footprint (of which product raw materials,
manufacturing and transportation
represent 75% of the total);
– A focus on product circularity, working
in partnership with Circle Economy, the
Ellen MacArthur Foundation and Delft
University of Technology. The company
is working end-to-end from initial
product design to disposal to improve
material inflow, product lifespan and
ease of recyclability;
– In 2023, Action delivered circularity
improvements of +4.85% across all
product categories and launched its
first ever circular product in the form of
plastic storage baskets. These baskets
are a closed-loop product, made entirely
from damaged items that have been
returned by customers, thereby
avoiding 5,000kg of waste. The company
will look to expand its range of recycled,
closed-loop products in the future; and
– Action has made significant progress
inits goals to source more certified
sustainable products. During 2023,
Action sourced 100% sustainable
cotton (private and white label
products) and cocoa (private label
products), and made significant
progress towards its goal of achieving
100% sustainably sourced timber by
2024, with 95% of timber products
certified as sustainable in 2023.
Action intends to build on its progress
sofar to ensure that it is able to meet
theexpectations of its cost- and
eco-conscious customers.
c.90% of
electricity procured
by Action from
renewable sources
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One united, diverse culture
atPantheon
At Pantheon, the application of diversity
and equality principles and the promotion
of inclusion is a strategic imperative.
Our inclusion and diversity (I&D) practices
foster an environment where all individuals
feel supported and valued,and are
evaluated based on their capability and
contribution to growing ourbusiness.
Wepromote I&D in the workplace through
fair recruitment, selection, and pay and
promotion practices. In addition, we invest
in trainingand development opportunities
for all employees to promote education
and skills development. We have an
established I&D Committee, comprising
representatives from across the business,
which meets monthly, and there are
separate I&D workstreams that meet
more regularly.
Pantheon recognises the importance of
gender equality and has made it a priority
to contribute to the advancement of
women in financial services, both within
the firm and across the wider industry.
Weimplement and promote opportunities
for females to enter and succeed in
investment roles, including through
ourrange of inclusion and diversity
partnerships – and we are proud to report
that half of our investment team heads
are women. As a signatory to the UK
Government’s Women in Finance Charter,
Pantheon is committed to setting internal
targets for gender diversity in senior
management roles. The proportion
ofwomen who are engaged in the
day-to-day management and operations
of our firm (identified as Global Heads
ofDepartments and/or members of
Pantheon’s Partnership Board) was 42%
as at January 2024, exceeding the target
of 33%. In addition, three of the seven
Directors on PIP’s Board are female.
Our commitment to I&D does not sit
onlywithin Pantheon. We have long
incorporated I&D within our investment
process with a dedicated section in
ourdue diligence questionnaire on the
topicthat is completed by prospective
private equity managers for a primary
investment.
While the wider sector still has
significantimprovements to make, we
areencouraged by the progress that is
being made and note that many of our
managers have improved recruitment
processes to increase their diversity.
Our inclusion practices extend to
community engagement, with partnerships
supporting initiatives that empower those
in underserved communities and work
towards to reducing inequalities. Some of
our partnerships across the investment
management sector include Girls
areInvestors, Jopwell, Sponsors for
Educational Opportunity (“SEO”), 10,000
Black Interns and the Diversity Project.
Pantheon is also proud to sponsor
Level20, a not-for-profit organisation
established to inspire women to join and
succeed in the private equity industry.
Helen Steers, Partner at Pantheon, and
Co-Lead Manager of PIP isa co-founder
of Level 20.
42%
The proportion ofwomen who
are engaged in the day-to-day
management and operations
of our firm
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1 Data is based on aggregated and anonymised
information inputted to our HR system by our
Global Staff, defined as permanent staff and
partners. The percentage of input for this year
was100%, compared to 89% in 2023.
White 60%
Asian 24%
Mixed/multiple ethnic
groups
5%
Black 3%
Hispanic/Latino 3%
Prefer not to say 3%
Middle Eastern 1%
Other 1%
Global staff racial identity profile
1
Pantheon: Inclusion and diversity
stats 2024
We believe the foundation of
creating a truly inclusive workplace
is transparency, which is why
wepublish statistics each year
documenting our global staff
breakdowns according to gender
identity, ethnic diversity, LGBTQ+
and disability profiles.
Male 61%
Female 37%
Prefer not
to say
2%
Global staff gender identity profile
1
Male 50%
Female 50%
Investment team heads
1
No 94%
Prefer not
to say
6%
Yes 0%
No 92%
Yes 3%
Prefer not to say 5%
Global staff disability profile
1
Global staff LGBTQ+ profile
1
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Portfolio As at 31 May 2024
Since its inception, PIP has been able to
generate market-beating returns while at
thesame time structuring its portfolio to
minimise the risks typically associated with
private equity investments. Our established
portfolio of assets has been carefully
selected, based onthe strengths of our
appointed private equity managers, actively
monitored and diversified to reduce specific
timing, regional and sector risks; and
managed to maximise growth and liquidity
over time.
Flexible approach to portfolio construction increases potential
for outperformance.
Weighted towards the more developed private equity markets
in the USA and Europe.
1 Investment type, region and stage charts are based
uponunderlying fund and company valuations.
The charts exclude the portion of the reference
portfolio attributable to the Asset Linked Note (ALN).
2 Global category contains funds with no target
allocation to any particular region equal to or
exceeding 60%.
3 The company sector chart is based upon underlying
company valuations as at 31 March 2024, adjusted for
calls and distributions to 31 May 2024. These account
for 100% of PIP ’s overall por tfoliovalue.
Investment type
1
Region
1
54% invested directly in companies
Type, region, sector
andstage
Vintage profile
USA 54%
Europe 31%
Global
2
8%
Asia 7%
Primaries 35%
Co-investments 34%
Manager-led
secondaries
20%
Fund secondaries 11%
Stage
1
Small/mid buyout 46%
Large/mega buyout 26%
Growth 19%
Special situations 5%
Venture 4%
Well-diversified with an emphasis on the buyout stages.
Sector
3
Information
technology
33%
Healthcare 20%
Consumer 14%
Industrials 11%
Financials 10%
Communication
services
7%
Energy 2%
Materials 2%
Others 1%
Focus on high-growth and resilient sectors.
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PIP’s portfolio has a weighted average age of 5.2 years.
1 The vintage profile chart is based uponunderlying
fund and company valuations. The charts exclude
theportion of the reference portfolio attributable to
theALN.
20%
16%
8%
0%
2014 and
earlier
2015
2016 2017 2018 2019
2020
2021
2022
2023 and
later
12%
4%
INVESTMENT VINTAGE
18%
14%
10%
6%
2%
% OF PORTFOLIO NAV
Portfolio As at 31 May 2024
Type, region, sector
andstage
Vintage profile
1
Since its inception, PIP has been able to
generate market-beating returns while at
thesame time structuring its portfolio to
minimise the risks typically associated with
private equity investments. Our established
portfolio of assets has been carefully
selected, based onthe strengths of our
appointed private equity managers, actively
monitored and diversified to reduce specific
timing, regional and sector risks; and
managed to maximise growth and liquidity
over time.
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PIP’s portfolio value has increased modestly
over the period. Access to top-performing
managers and a tilt towards resilient and
high-growth sectors have helped PIP
withstand the current macroeconomic
environment.
PIP’sportfolio generated returns of +4.9% during the year
1
.
1 Excluding returns attributable to the ALN share of
the portfolio.
2 Amount drawn down at the time of commitment.
Performance
Valuation movement
by type
Private equity portfolio
movements
Valuation movement
bystage
Valuation movement
by region
£3,000m
£2,000m
£1,500m
£1,000m
£500m
Portfolio value
31 May 2023
Foreign
exchange impact
Calls
New
investments
2
Portfolio value
31 May 2024
Valuation
gains
Distributions
£2,387m
£118m
(£193m)
£156m
(£50m)
£2,468m(£50m)
£2,500m
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Resilient portfolio performance despite the current challenging macroeconomic environment. The return on manager-led
secondaries reflects the relative immaturity of this segment of the portfolio.
10%
6%
2%
Manager-led
secondaries
Fund secondaries
RETURN
7.4%
Closing
portfolio
NAV%
35%
20%
Co-investments
34%
0%
4%
Primaries
11%
4.6%
1.9%
3.5%
8%
1 Portfolio returns include income, exclude gains
andlosses from foreign exchange movements,
and look-through underlying vehicle structures to
the underlying funds. Portfolio returns exclude returns
generated by the portion of the reference portfolio
attributable to the ALN, and are calculated by dividing
valuation gains by opening portfolio values.
Performance
PIP’s portfolio value has increased modestly
over the period. Access to top-performing
managers and a tilt towards resilient and
high-growth sectors have helped PIP
withstand the current macroeconomic
environment.
Valuation movement
by type
1
Private equity portfolio
movements
Valuation movement
bystage
Valuation movement
by region
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Performance
Positive performance across the whole of PIP’s portfolio.
8%
5%
4%
3%
0%
Large/
mega buyout
Growth
Venture
Small/
mid buyout
Special
situations
6.2%
4.3%
3.9%
3.6%
2.0%
RETURN
Closing
portfolio
NAV%
26% 46% 5%19% 4%
6%
2%
1%
7%
1 Portfolio returns include income, exclude gains
andlosses from foreign exchange movements,
andlook-through underlying vehicle structures to
theunderlying funds. Portfolio returns exclude returns
generated by the portion of the reference portfolio
attributable to the ALN, andare calculated by dividing
valuation gains byopening portfolio values.
PIP’s portfolio value has increased modestly
over the period. Access to top-performing
managers and a tilt towards resilient and
high-growth sectors have helped PIP
withstand the current macroeconomic
environment.
Valuation movement
by type
Private equity portfolio
movements
Valuation movement
by stage
1
Valuation movement
by region
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PIP’s portfolio is weighted towards investments in the USA and Europe, which generated positive returns during the period.
The performance of Global and Asia were affected by a handful of company-specific writedowns.
8%
6%
4%
2%
0%
-2%
Europe
Global Asia
USA
6.2%
(0.5%)
5.4%
(0.7%)
RETURN
Closing
portfolio
NAV%
31%
54%
8%
7%
1 Portfolio returns include income, exclude gains
andlosses from foreign exchange movements,
andlook-through underlying vehicle structures to
theunderlying funds. Portfolio returns exclude returns
generated by the portion of the reference portfolio
attributable to the ALN, andare calculated by dividing
valuation gains byopening portfolio values.
PerformancePerformance
PIP’s portfolio value has increased modestly
over the period. Access to top-performing
managers and a tilt towards resilient and
high-growth sectors have helped PIP
withstand the current macroeconomic
environment.
Valuation movement
by type
Private equity portfolio
movements
Valuation movement
bystage
1
Valuation movement
by region
1
In focus:
Information
technology
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Sectors in Focus
Information technology continues to attract
substantial levels of private equity investment,
drivenby the trend towards greater digitalisation
andautomation of the global economy. PIP’s
exposure to this important sector is heavily
weightedtowards enterprise software.
PIP invests in software companies that are
high-growth, capital-light and scalable, and typically
employ subscription models that provide predictable
revenue streams and cash flows.
PIP
MSCI World
1
Total exposure
to the sector Five largest companiesLargest sub-sector exposure
Designer and
manufacturer
ofconsumer
electronics
Developer of
computer
software systems
and applications
Leading
manufacturer
ofgraphic
processing units
Manufacturer of
semi-conductors
Manufacturer
ofchip-making
equipment
1 As at 31 May 2024.
Provider of IT
management
andmonitoring
software
services
Developer of a
cloud-based
modelling
andplanning
platform
Mobile phone
insurance
company
Cloud consulting
and engineering
services company
Provider of
enterprise identity
governance
solutions
33%
23%
System
software
6%
Application
software
18%
IT
services
4%
Others
5%
Systems
software
6%
Technology hardware,
storage & peripherals
6%
Semi-conductors
5%
Application
software
3%
Others
3%
3.7% of PIP’s NAV in these five companies
12.5% of the MSCI World in these five companies
In focus:
Healthcare
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Sectors in Focus
The demand for high-quality healthcare has never
been greater. In partnership with an array of specialist
healthcare sector managers, PIP invests in asset-light,
highly defensive companies that aim to improve
access to in-demand healthcare services, and provide
industry professionals with solutions that allow them
to focus their efforts on patient care.
PIP
MSCI World
1
Total exposure
to the sector Five largest companiesLargest sub-sector exposure
Specialist eye
treatment
provider
Provider of
disclosure
management
services
Orthodontic
treatments
provider
Provider of
medical
equipment and
implants
Provides
teleradiology
reporting services
1 As at 31 May 2024.
Provider of
medical care
benefits
Manufacturer
ofhealthcare
products
Pharmaceutical
company
Pharmaceutical
company
Pharmaceutical
company
20%
12%
Pharmaceuticals
5%
Healthcare
equipment
2%
Biotechnology
2%
Managed
healthcare
1%
Others
2%
Healthcare
services
9%
Healthcare
technology
4%
Pharmaceuticals
3%
Healthcare
equipment
2%
Others
2%
2.9% of PIP’s NAV in these five companies
3.3% of the MSCI World in these five companies
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The value-weighted average uplift on exit realisations in the year was 20%, consistent with our view that realisations can be
incremental to returns.
The method used to calculate the average uplift is to compare the value at exit with the value of the investment 12 months prior
toexit or, if known, the latest valuation unaffected by pricing effects arising from market participants becoming aware of the
imminent sale of an asset. Since 2012, the weighted average uplift on exit is 30%.
1 See page 180 of the Alternative Performance
Measures section for sample calculations
anddisclosures.
Number of
distributions
30%
20%
15%
10%
5%
0%
PERCENTAGE UPLIFT ON EXIT
>(150)
–(100)
>(50)
–(25)
>(10)
–0
>(25)
–(10)
>10
–25
>50
–75
>75
–100
>100
–150
2%
4%
3%
6%
38% 11% 16%
25%
>(100)
–(50)
12%
7%
>0
–10
>25
–50
THE DISTRIBUTION % OF UPLIFTS ON
EXIT REALISATION PROCEEDS
Value-weighted
average uplift = 20%
For the year to 31 May 2024
Realisations
PIP’s mature portfolio continued to
generatedistributions despite a subdued
exitenvironment. Distributions have been
incremental to returns, with many reflecting
realisations at significant uplifts to carrying
value. There have been c.400 distributions
from PIP’s portfolio during the period.
Cost multiples on exit
realisations
Uplifts on exit realisations
1
Exit realisations by sector
and type
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Realisations
The average cost multiple on exit realisations of the sample was 3.2 times for the year ended 31 May 2024. The cost multiple for
this financial year was above the 3.0 times average annual cost multiple achieved on exit since 2012. This demonstrates value
creation over the course of PIP’s investment.
1 See page 180 of the Alternative Performance
Measures section for sample calculations
anddisclosures.
Number of
distributions
40%
25%
15%
10%
0%
MULTIPLES ON INITIAL COST
>0.0x0.5x >0.5x–1.0x
>1.5x–2.0x
>1.0x–1.5x >2.0x–3.0x >3.0x–4.0x
>4.0x–5.0x
>5.0x
194
6 57 12
8 11 10
5%
20%
30%
35%
THE DISTRIBUTION % OF COST MULTIPLES
ON EXIT REALISATIONS
Average cost multiple
on exit = 3.2x
For the year to 31 May 2024
PIP’s mature portfolio continued to
generatedistributions despite a subdued
exitenvironment. Distributions have been
incremental to returns, with many reflecting
realisations at significant uplifts to carrying
value. There have been c.400 distributions
from PIP’s portfolio during the period.
Cost multiples on exit
realisations
1
Uplifts on exit realisations
Exit realisations by sector
and type
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Realisation activity was strongest in the communication services and financials sectors. Strategic sales and secondary buyouts
represented the most significant sources of exit activity during the year.
Communication services 35%
Financials 31%
Information technology 10%
Industrials 9%
Healthcare 8%
Consumer 4%
Energy 3%
Strategic sales 41%
Secondary buyouts 41%
IPO
1
and secondary share sale 15%
Refinancing and recapitalisation 3%
Exit realisations by sector
2
For the year to 31 May 2024
Exit realisations by type
2
For the year to 31 May 2024
Realisations
PIP’s mature portfolio continued to
generatedistributions despite a subdued
exitenvironment. Distributions have been
incremental to returns, with many reflecting
realisations at significant uplifts to carrying
value. There have been c.400 distributions
from PIP’s portfolio during the period.
Cost multiples on exit
realisations
Uplifts on exit realisations
Exit realisations by sector
and type
1 Initial public offering.
2 The data in the sample provides coverage for 100%
(for exit realisations by sector) and 96% (for exit
realisations by type) ofproceeds from exit
realisations received during the period.
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Exit Realisation case study
Proceeds
£1.8m
Manager
ABS Capital Partners
(“ABS Capital”)
Geography
USA
Type
Fund secondary
Sector
Information technology
Stage
Growth
Vintage
2018
Exit type
Secondary buyout
Exit money
multiple
5.7x
IRR
74%
Accelerated
growth trajectory
in cybersecurity
GuidePoint Security is a US-based global provider of consulting services
tothe public sector and commercial markets, focusing on management,
technology and risk consulting.
The company is headquartered in Washington D.C. and employs more than
17,000 professionals in more than 55 locations globally. GuidePoint Security
is led by seasoned professionals with proven and diverse expertise in
traditional and emerging technologies, markets, and agenda-setting issues
driving national and global economies.
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Investment rationale
– Complexity of the cybersecurity
landscape is becoming more pronounced,
with ever-evolving threats and thousands
of products available tocustomers.
Therefore, demand forcybersecurity
services from organisations is set
togrow.
– GuidePoint Security had the potential
toscale rapidly via a buy-and-build
strategy and organic growth.
– The business had a team of highly
experienced cybersecurity practitioners
and consultants with deep domain
knowledge and expertise. They had
developed a best practice approach
toevaluating, selecting, implementing,
managing and optimising cybersecurity
solutions.
Private equity manager profile
– ABS Capital provides growth equity
capital to business-to-business (“B2B”)
software and tech-enabled services
businesses. The businesses are typically
underpinned by strong technology and
data and are looking to scale up with the
right partners.
– The private equity manager has over
30years of investment experience
andhas invested in approximately
130companies across eight funds.
Our relationship
Pantheon has a long-established
relationship with ABS Capital. It has
madeseveral primary and secondary
investments in various ABS Capital funds
and has also previously co-invested
alongside the manager.
Active management and
valuecreation
– ABS Capital accelerated the growth
trajectory of GuidePoint Security by
focusing on itsorganic growth and
geographic expansion. This has
broadened the client base across the
USAand positioned it for international
expansion. GuidePoint Security has more
than 3,800client organisations across the
USA, including one third of the Fortune 50
and 40% of the Fortune 500, alongwith
more than half of the US government
cabinet-level agencies.
– ABS Capital joined GuidePoint Security’s
board of directors. This has brought
additional expertise and strategic
guidance to the company.
– ABS Capital also recruited top executives
with experience in building and leading
finance teams for high-growth technology
companies.
– ABS Capital has supported GuidePoint
Security’s commitment to hiring top
cybersecurity talent and investing in
innovative service offerings to address
new and emerging risks.
Exit
– In October 2023, GuidePoint Security
received another round of funding from
Audax Private Equity, a middle market
investment firm. PIP took the opportunity
to partially exit the investment at a money
multiple of 5.7x and an internal rate of
return (“IRR”) of74%.
Exit Realisation case study
Value creation bridge
7.0x
5.0x
3.0x
0
Capital
invested
EBITDA
growth
DeleverageMultiple
expansion
Other
1
Exit money
multiple
2.1x
2.8x
(0.7x)
0.5x
5.7x
+31.6%
6.0x
4.0x
2.0x
1.0x
1.0x
1 “Other” relates to dividend paid to ABS shareholder before the sale of the business.
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Net Portfolio Cash Flow
Net portfolio cash flow equals distributions
less capital calls.
A continued focus on the portfolio’s maturity
profile means that PIP is well-positioned to
generate positive cash flows.
With an average distribution rate of 22%
since 2012, PIP’s portfolio has been cash
flow positive since 2010.
During the year, PIP’s net portfolio cash flow
was £37m. PIP has generated £1.6bn of net
cash over the last 10 years.
Net portfolio cash flow
Net positive cash flow generation has continued despite lower levels of exit and new deal activity. Refer to the Market Review
section for more details on how the private markets have performed on page 56.
250
200
100
0
FY2015
FY2016
FY2017 FY2018 FY2019 FY2020
FY2021
FY2022
FY2023
FY2024
150
50
FINANCIAL YEAR
NET PORTFOLIO CASH FLOW (£M)
Net portfolio cash flow
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Distributions
Despite a slowdown in distributions during the period, in line with the wider private equity market, PIP’s portfolio has continued to
generate cash.
1 Distribution rate equals distributions inthe period
(annualised) divided byopening portfolio value.
40%
30%
20%
10%
0%
Aug
19
Nov
19
Feb
20
May
20
Aug
20
Nov
20
Feb
21
May
21
Aug
21
Nov
21
Feb
22
May
22
Aug
22
Nov
22
Feb
23
May
23
Aug
23
May
24
Nov
23
Feb
24
ANNUALISED DISTRIBUTION RATE BY QUARTER
With a weighted average fund maturity of
5.2 years at 31 May 2024 (31May 2023:
4.8 years), PIP’s portfolio continued
togenerate positive net cash.
PIP received £193m in proceeds from
PIP’sportfolio in the year to 31 May 2024
(31May 2023: £223m) equivalent toan
annualised distribution
1
rate of 8% of
opening portfolio value (31May 2023: 10%).
Quarterly distribution rates
1
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Distributions case study
Proceeds
£2.1m
Manager
Altor Equity Partners
(“Altor”)
Geography
Europe
Investment type
Primary
Sector
Industrials
Stage
Mid-market buyout
Vintage
2019
Exit type
Strategic sale
Exit money
multiple
5.1x
IRR
60%
Vital infrastructure to
deliver the green transition
Eleda is a group of Nordic businesses that provide infrastructure
development and services. The network of companies operates
independently within several segments, addressing the need for green
transition, including water and sewerage, power distribution, district heating,
roads, data centres, railways and electric vehicle charging stations.
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Business description
– Eleda’s decentralised operating model
allows its companies to deliver the
highest quality services to their customers
with the optimal mix of localpresence and
the resources of alarger organisation.
– The company’s headquarters are in
Stockholm, Sweden. It has more than
3,100 employees and a turnover
exceeding SEK 16bn (equivalent
toUS$1.5bn).
Investment rationale
– The company is well placed to take
advantage of key developing sustainability
trends like electrification, renewable
energy and water preservation.
– The private equity manager has specialist
experience in thesustainability sector and
a proven investment track record in the
Nordic mid-market space.
Private equity manager profile
– Altor has raised more than EUR 11bn in
total commitments since inception and
has invested in nearly 100 companies.
– The investments have been made in
medium-sized Nordic and DACH
1
companies with the aim of creating
valuethrough growth initiatives and
operational improvements.
– Among current and past investments
areTrioworld, OX2, FLSmidth , H2 Green
Steel and Piab.
Our relationship
Pantheon has a long-established
relationship with Altor Equity Partners.
Pantheon was one of the founding limited
partners in Altor in 2003, and has continued
to support the franchise, investing in
Altor’sfive successor funds and in ACT I,
itsclimate transition fund.
Active management and
valuecreation
Altor created Eleda in April 2020 through
themerger of three well-positioned
infrastructure services platforms. At the
time of the merger, the company had a
turnover of approximately SEK 6bn. Today,
Eleda has over SEK 15bn of revenues, driven
by strong organic growth ofmore than 10%
per annum, and through 19acquisitions.
Exit
Eleda was acquired by Bain Capital, a global
private markets investment firm, in
December 2023. PIP made a return of 5.1x
on the original cost and an IRR of 60%.
Value creation bridge
9.0x
7.0x
5.0x
3.0x
0
Capital
invested
EBITDA
growth
DeleverageMultiple
expansion
Other Exit money
multiple
3.6x
3.3x
(2.9x)
0.1x 5.1x
+31.6%
8.0x
6.0x
4.0x
2.0x
1.0x
1.0x
1 DACH comprises three countries: Germany, Austria
and Switzerland.
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Distributions case study
Proceeds
£3.2m
Manager
Abris Capital Partners
(“Abris”)
Geography
Europe
Investment type
Co-investment
Sector
Consumer
Stage
Mid-market buyout
Vintage
2018
Exit type
Secondary buyout
Exit money
multiple
4.1x
IRR
30%
An iconic
consumer brand
Based in Poland, Velvet CARE is a major producer and distributor of branded
paper tissue products, including toilet paper, facial tissues, kitchen towels,
moist wipes, cosmetic pads and buds. It employs more than 850 people
across offices and manufacturing facilities in Poland and the Czech Republic.
The company owns the iconic Velvet CARE brand in Poland, which has a
20-year history and a brand recognition of 97% inthe country.
Investment rationale
– Abris has a strong track record in the
tissue manufacturing sector. Through
itsprior investment in a jumbo roll
paperproducer in the region, and
theevaluation of potential add-on
acquisitions, Abris has developed
significant insights and sector
knowledgein the space.
– Velvet CARE is a non-discretionary
consumer staples business, where
industry growth is driven by the increase
of tissue consumption per capita in
theCentral and Eastern Europe (CEE)
region, as well as product innovations.
– At the time of the investment, Velvet
CAREwas considered to benefit from
anumber of competitive advantages:
strong brand awareness; private label
growth opportunities; and margin
improvement potential following recent
capital expenditure investment for the
installation of a newjumbo roll machine.
– In addition, Abris identified upside
potential from a possible merger with
upstream and downstream value
chainplayers, including those that
werealready identified by Velvet
CARE’smanagement team, thus offering
the potential to create a regional leader.
Our relationship
Pantheon has a long-established
relationship with Abris, having invested in
the two most recent funds through both
primary and secondary investments.
Pantheon is also an LPAC
1
member in
bothfunds.
Active management and
valuecreation
– During Abris’ investment holding period,
Velvet CARE sales increased by 2.3 times
and the company’s EBITDA grewby
seventimes.
– Velvet CARE expanded its export business
fivefold.
– In 2020, the company completed the
add-on acquisition of Moracell, the largest
manufacturer of paper hygiene products
in the Czech Republic. Thisconsolidated
Velvet CARE’s presence inthe CEE
market, strengthened the company’s
position asaregional leader, and
expanded its international footprint
withlimited client overlap.
– More than EUR 130m was spent on
production, automation and storage
capital expenditure to improve
competitive positioning across allproduct
categories. In addition, thisimproved
profitability and productquality.
– Following the development and
implementation of a comprehensive
Environmental, Social and Governance
(“ESG”) programme Velvet CARE
receivedB Corp certification in 2023,
demonstrating the highest standards of
social and environmental performance.
– The company also received a gold
medalfrom EcoVadis, an independent
sustainability rating agency.
Exit
Velvet CARE was acquired by a fund
managed by Partners Group in December
2023. PIP achieved a IRR of 30% andnet
multiple of invested capital (MOIC)of 4.1x.
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Value creation bridge
6.0x
5.0x
3.0x
0
Capital
invested
1.0x
EBITDA
growth
DeleverageMultiple
expansion
Other Exit money
multiple
2.9x
0.8x
(0.4x)
(0.2x)
4.1x
+31.6%
4.0x
2.0x
1.0x
1 Limited Partner Advisory Committee.
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Proceeds
£2.7m
Manager
Index Ventures (“Index”)
Geography
USA
Investment type
Primary
Sector
Information technology
Stage
Venture
Vintage
2015
Exit type
IPO
Supporting businesses
with enhanced data insight
Confluent is a US-based technology company that offers a data
platform to help enterprises harness business value from tracking
and streaming data points such as sales, trades, orders and
customer feedback.
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Business description
– The company’s solutions transform its
customers’ data into data products,
spanning various end-user domains,
including financial services, manufacturing,
Internet of Things (IoT), retail and
ecommerce.
– Confluent’s cloud-native platform acts as
a central nervous system for companies,
allowing them to connect all their
applications around real-time data
streams, providing data integration,
dataprocessing and analytics.
– Confluent’s offering is based on Apache
Kafka, an open-source data streaming
platform that is reliable, durable and
scalable. Thousands of organisations
(including more than 75% of the
Fortune500) use Kafka.
Investment rationale
– Strong upside potential, with businesses
becoming ever more reliant on using data
to drive decision-making. Confluent
provides a unique solution by offering
theinfrastructure that connects data
across organisations.
– Index Ventures has a very strong track
record of providing venture capital
backing to innovative entrepreneurs in
theIT space. Index led the Series B round
of funding in Confluent, in April 2015.
– The founders of the business were
originally with LinkedIn, where they had
been working on Apache Kafka, an
open-source data streaming platform,
and therefore were well placed to
commercialise the technology with
backing from Index Ventures.
Private equity manager profile
– Index Ventures is a leading European
venture capital firm with offices in London,
San Francisco, New York, Jersey and
Geneva. It invests in technology-enabled
companies with a focus on artificial
intelligence, e-commerce, fintech, mobility
and security. Since being founded in 1996,
the firm has raised and invested more
than $15 billion.
– Index Ventures has a strong investment
track record, with notable successful
investments including Adyen, Deliveroo,
Dropbox, Farfetch, King and Slack.
Our relationship
– Pantheon has a 20-year relationship with
Index Ventures. It has several primary and
secondary investments in Index Ventures’
funds and has also co-invested alongside
Index in certain growth opportunities.
– Pantheon is a member of multiple Index
Ventures and Index Growth Advisory
Committees.
Active management and
valuecreation
– During Index’s period of active ownership,
Confluent has emerged as a key player in
the big-data software industry, with the
demands imposed by artificial intelligence
(AI) workloads fuelling growth further.
– The company’s data infrastructure
software platform has gained significant
traction among enterprises, with a
clientportfolio that now has over 2,500
customers.
– As an active investor, Index made over
50C-suite level introductions, significantly
contributing to early-stage enterprise
customer deals.
– In addition, Index participated in executive
level hiring at Confluent, from introducing
suitable candidates to helping Confluent
complete executive hires, to working
closely with the CEO and President on
several executive transitions.
– Index headed the company’s M&A
sub-committee, with active involvement
inseveral M&A transactions, and actively
participated in the company’s strategic
development, especially in the creation of
Confluent’s key product, ConfluentCloud.
– With Index’s backing, Confluent was
successful in initiating partnerships with
giant tech incumbents to broaden its
reach. In April 2019, it partnered with
Google Cloud and integrated Confluent’s
managed service with Google Cloud
Platform. Additionally, in November 2020
the company announced plans for a
partnership with IBM, when the computer
manufacturer agreed to resell Confluent
Platform to its own users.
– Confluent’s last private valuation in 2019
was US$2.5 billion and by June 2021,
when it completed an IPO on the Nasdaq,
it was valued at US$ 9.0 billion.
Exit
– Index co-led the discussions for the Series
C and D investments with external
investors, and actively participated in the
IPO process, including investment banker
selection and pricing.
– After publicly listing Confluent on the
Nasdaq in 2021, Index Ventures has been
steadily selling down stock. It recently
exited a significant portion of its holdings.
So far, PIP has made a blended net return
of c. 8.2x cost and a blended net IRR of
c.45% on its investment (in USD terms),
with more than 7x the original cost of the
investment having been distributed to date.
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Distributions case study
Proceeds
£2.5m
Manager
IK Partners
Geography
Europe
Investment type
Fund secondary
Sector
Information technology
Stage
Mid-market buyout
Vintage
2018
Exit type
Secondary buyout
Exit money
multiple
2.8x
IRR
25%
Scaling enhanced
cybersecurity across Europe
Nomios provides cybersecurity and networking solutions for enterprises.
The company’s services include managed detection and response, network
security, and secure access service edge (SASE). The business aims to
simplify and automate network operations while enhancing security.
Headquartered in France, Nomios has a presence in 20 offices across
Europe and has more than 600 employees.
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Investment rationale
– The company operates in a large and
growing cybersecurity market.
– It is the market leader in the Netherlands
and France, with a growing presence in
the UK, Belgium, Germany and Poland.
– At the time of the investment, there was
asignificant opportunity to conduct a
buy-and-build strategy and drive
consolidation in the market.
Private equity manager profile
– IK Partners is a London-headquartered
European mid-market private equity firm
focused on investments in the Benelux,
DACH (Germany, Austria, Switzerland),
France, Nordics, and the UK, with an
emphasis on leveraging local expertise
and market knowledge.
– Since its founding in 1989, IK Partners
has raised more than €17 billion of
capitaland invested in over 190 European
companies.
– IK Partners targets investments across
various sectors, including business
services, healthcare, consumer and
industrials.
Our relationship
– Pantheon has a long-established
relationship with IK Partners. It has
several primary and secondary
investments in various IK Partners
fundsand has also completed multiple
co-investments alongside the private
equity manager.
Active management and
valuecreation
– Since IK Partners acquired the company
in January 2019, Nomios has undergone
atransition towards becoming a
cybersecurity business of scale across
Europe.
– The company successfully doubled its
revenues through organic growth, which
has been realised across service lines
andgeographies.
– Nomios capitalised on its proven track
record of client stickiness, maintaining
and achieving high vendor accreditations
and high employee loyalty.
– Nomios has also launched several
newstrategic initiatives, including the
successful unveiling of various security
operating centres (SOC’s) in its key
markets.
– The company has also expanded its
footprint in Europe through two
acquisitions in Poland and Italy.
Exit
– In November 2023, Nomios was acquired
by Keensight Capital, a private equity
manager focused on pan-European
growth buyout investments. PIP made
areturn of 2.8x on the original cost and
IRRof 25%.
Value creation bridge
4.0x
3.0x
0
Capital
invested
EBITDA
growth
DeleverageMultiple
expansion
Other Exit money
multiple
(0.1x)
(0.3x)
2.8x
+31.6%
2.0x
1.0x
1.0x
1.7x
0.5x
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Proceeds
£1.5m
Manager
CBPE
Geography
Europe
Investment type
Secondary
Sector
Financials
Stage
Small buyout
Vintage
2020
Exit type
Secondary buyout
UK-wide diversified
wealth manager
Perspective is a wealth and investment manager with 143 advisers providing
coverage of the UK market through a network of 40 local offices.
Headquartered in Chorley, United Kingdom, the business provides financial
advisory services in the areas of retirement planning, asset management,
personal wealth and corporate planning for customers in the United Kingdom.
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Investment rationale
– The financial advisory market in the UK
ishighly fragmented. CBPE saw the
potential to consolidate the market
through Perspective.
– The business had strong foundations
from which to launch a buy-and-build
strategy. With a strong compliance
culture, client and adviser churn was low.
The team was highly experienced and
well-aligned with CBPE on strategy.
Thebusiness had experience of
undertaking M&A but had only
recentlystarted its M&A journey.
– CBPE and the team recognised the
opportunity to build a diversified wealth
manager of scale through acquisitive
growth of the long tail of relatively small
Independent Financial Adviser (“IFA”)
firms. Many of these IFAs were
approaching retirement and did not
havethe resources to invest in new
technology and compliance systems.
– CBPE partnered with Perspective’s
management team, who all reinvested
inthe business, therefore ensuring a
strong alignment of business objectives.
– CBPE understood the key element of
asuccessful wealth business and the
importance of maintaining Perspective’s
client-centric culture, which reduced
compliance risks and ensured client
retention and growth.
Private equity manager profile
– Founded in 1984, CBPE is a London-based
private equity investment firm that
specialises in investing in small and
middle-market companies in the UK.
Thefirm has a particular focus on
acquiring businesses from founders
andmanagement teams in sectors such
ashealthcare, business and financial
services, industrials and technology.
– Since becoming an independent business
in 2008, CBPE has raised threefunds and
has over £1bn in assetsunder management.
– CBPE works very closely with the
management teams of its portfolio
companies to drive growth, and is adept
atimplementing buy-and-build strategies.
Since 2008, CBPE has completed more than
180 investments, demonstrating its active
rolein themarket.
Our relationship
– Pantheon has a long-established
relationship with CBPE. It is a primary
investor in several funds, and a secondary
investor in CBPE IX and has also previously
co-invested alongside the manager.
Active management and valuecreation
– During CBPE’s investment, the business
grew significantly from £2.6bn to £8.0bn
of assets under management through a
focused buy-and-build investment strategy,
supported by strong organic growth.
– Together with Perspective, CBPE built
ahighly efficient M&A execution and
integration team, which allowed Perspective
to become the go-to acquirer for retiring
Independent Financial Adviser businesses.
Perspective has completed over 50
acquisitions since CBPE invested in it.
– CBPE facilitated significant investments in
central support functions and technology.
This enabled all acquisitions to benefit
from consistently high standards of
advice and compliance.
Exit
– In February 2024, Perspective agreed
asale to Charlesbank Capital Partners,
aUS middle-market private equity firm.
Thetransaction closed in May 2024. PIP
made a return of 5.4x on the original cost.
Distributions case study
Value creation bridge
10.0x
0
Capital
invested
EBITDA
growth
DeleverageMultiple
expansion
Other Exit money
multiple
3.8x
3.5x
(2.8x)
(0.1x)
5.4x
+31.6%
6.0x
4.0x
2.0x
8.0x
1.0x
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The annualised call rate
1
for the year ended 31 May 2024 was equivalent to 18% of opening undrawn commitments (31 May 2023: 21%).
The observed call rate is below historical average levels and is a reflection of the subdued Mergers & Acquisitions (“M&A”) market.
40%
30%
20%
10%
0%
Aug
19
Nov
19
Feb
20
May
20
Aug
20
Nov
20
Feb
21
May
21
Aug
21
Nov
21
Feb
22
May
22
Aug
22
Nov
22
Feb
23
May
23
Aug
23
May
24
35%
25%
15%
5%
Nov
23
Feb
24
ANNUALISED CALL RATE BY QUARTER
1 Call rate equals calls in the period (annualised) divided
by opening undrawn commitments. All call figures
exclude the acquisition cost of new secondary and
co-investment transactions.
Calls
PIP paid £156m to finance calls on
undrawn commitments during the year
(31 May 2023: £155m).
Quarterly call rate
1
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New commitments by region New commitments by stage New commitments by type
Europe 53%
USA 35%
Global 12%
New Commitments
Our investment process
Investment opportunities in
companies and complementary
funds are originated via Pantheon’s
extensive and well-established
platform.
We invest with many of the best
private equity managers who are
able to identify and create value
in their portfolio companies.
Cash generated from the sale of
those companies is returned to PIP
and redeployed into new investment
opportunities, including share
buybacks in accordance with the
capital allocation policy.
New commitments
by region, by stage
andbytype
Growth 46%
Small/mid buyout 21%
Venture 20%
Large/mega buyout 13%
Primaries 64%
Co-investments 28%
Manager-led secondaries 8%
The Company intentionally managed
investment pacing to ensure liquidity
waspreserved in a market environment
experiencing lower exit levels than
historically.
PIP made 16 new investments during
theyear to 31 May 2024, amounting to
£153m innew commitments. These
commitments were to nine primary funds
(£99m), six co-investments (£42m) and
onemanager-led secondary (£12m).
In addition, PIP was able to deploy a
significant amount of capital despite low
levels of deal flow, and capture value for its
shareholders, by acquiring its own shares
at a significant discount to NAV. During
thefinancial year, the Company invested
£197m
1
in share buybacks at an average
discount of 35%.
1 Excluding costs and stamp duty
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It is a signatory to the Science Based Targets
initiative (“SBTi”) and it is supporting its portfolio
companies to develop science-based targets
and implement decarbonisation pathways.
Altor’s ambition is to make everyAltor-backed
company a sustainability leader in its respective
industry.
PIP has backed Altor since 2003 and,
in March 2024, made a commitment to
Altor’sACT I, which is a fund focused on
investment opportunities that have a specific
green transition or industrial decarbonisation
theme. In Europe, there isa significant and
growing push to decarbonise supply chains
inorder to meetthe European Union’s target
toreduce net greenhouse gas emissions by at
least 55% by 2030, compared to 1990levels.
Asa result, Altor believes that many businesses
are seeking tosecure compliant, more
sustainable supply chainsto achieve their
owntargets, and this push is leading to an
increase inbusinesses that can help to deliver
sustainable supply chains at significant scale
within the next five to 10 years.
Altor’s ACT I aims to primarily invest
incompanies across a range of sectors where
the green transition is central to theirbusiness
models, and will include businesses that either
have existing green transition value chains
orbusinesses thatare developing newer but
proven industrial processes to directly deliver
green end-solutions.
Altor has already identified a long list
ofattractive targets within a range of
investment themes.
Commitment
£20.0m
Private equity
fund
Altor ACT I
Manager
Altor Equity Partners
(“Altor”)
Geography
Europe
Investment type
Primary
Founded in 2003, Altor is a mid-market private equity firm based in
Europe that seeks to scale and optimise companies with world-class
potential through fundamental business improvements and
earnings growth.
The consideration of sustainability is one of many factors that form
part of Altor’s investment approach. Beyond mitigating sustainability
risks as part of its investment process, Altor has implemented a
framework of comprehensive sustainability performance monitoring
of its portfolio companies.
New Commitments case study
Driving the green
transition
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Investment rationale
– Yellow Hive had a high-quality platform
displaying robust historical organic
growth supplemented by proven
buy-and-build capabilities.
– Resilient business model with expansion
into higher margin MGA/niche sectors,
which will drive cross-selling opportunities
with the potential for significant synergies
and economies ofscale.
– Fragmented and growing underlying
market provides an attractive
buy-and-build opportunity.
– A strong alignment with a core,
high-quality private equity manager.
Our relationship
Pantheon is an existing primary investor
inIK’s Small Cap Fund II and has been an
active investor with the private equity
manager since 2000, having invested in
several of their mid-cap funds on a primary
basis and completed eight co-investments.
Active management and
valuecreation
– IK acquired Yellow Hive in 2020 and has
since grown revenue and EBITDA by
5.5and 6.0 times respectively.
– Mergers & Acquisitions are in the DNAof
the company. All the business segments
are supported by a shared services centre,
which enables the business to seamlessly
integrate new businesses to the platform,
driving efficiency and generating
synergies. Furthermore, the company
hasa good track record of transferring
itsportfolio of policies into its own MGA
channel, andtherefore further synergies
areanticipated.
– Yellow Hive has the long-term goal of
replicating the platform that it has today
on apan-European scale. The company,
assisted by IK, has built a pipeline of
targets into its plan and aims to execute
on this to grow business earnings.
New Commitments case study
Commitment
£11.6m
Private equity
fund
Financials
Manager
IK Partners (“IK”)
Geography
Europe
Investment type
Manager-led secondary
Stage
Mid-market buyout
Making critical
connections for insurers
Yellow Hive is a leading Dutch insurance distribution platform with
active broker and managing general agent (“MGA”) capabilities.
Thecompany, which serves both small and medium-sized
enterprises and consumers, is a financial services intermediary
forproperty and casualty insurances, employee benefits, risk
assessment and mortgages.
The business is headquartered in the Netherlands and has more
than 500employees.
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Buyout Analysis
1
Over the past 12 months, the weighted-average
revenue and EBITDA growth for PIP’s buyout
portfolio was 14% and 17% respectively.
PIP’s five year average revenue and for
EBITDA growth have exceeded growth rates
seen among companies that constitute
theMSCI World Index. Strong top-line
performance, disciplined cost control,
operational expertise and good earnings
growth, together with an efficient use of
capital, underpin the investment thesis of
our private equity managers.
30%
20%
0%
-20%
Dec
19
Dec
21
10%
-10%
Dec
22
Dec
23
Dec
20
Annual revenue growth
2
10%
-10%
-30%
Dec
19
Dec
21
0%
30%
Dec
20
Dec
23
20%
-20%
Dec
22
Annual EBITDA growth
2
PIP buyout sample MSCI World
1 The sample buyout figures for the 12 months to
31 December 2023 were calculated using all the
information available to the Company. The figures
arebased on unaudited data. MSCI data was sourced
from Bloomberg. See pages 179 to 180 of the
Alternative Performance Measures section for
samplecalculations and disclosures.
2 MSCI World, 2023 and 2022 aggregate market-weighted
revenue and EBITDA growth data is derivedfrom
constituent companies compared on a year-on-year
basis for the financial years ending 31 December 2023
and 2022.
Valuation multiple
Revenue and EBITDA
growth
Debt multiples
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Valuation multiple
Revenue and EBITDA
growth
Debt multiples
25.0x
10.0x
15.0x
5.0x
PIP buyout sample MSCI World
2
17.3x
20.1x
20.0x
Accounting standards require private equity
managers to value their portfolios at fair
value. Public market movements can be
reflected in valuations.
PIP’s sample-weighted average Enterprise
Value (EV)/EBITDA was 17.3 times
compared with 20.1 times for the MSCI
World Index.
PIP invests proportionately more in
high-growth sectors such as mission-critical
B2B information technology and healthcare,
and these sectors tend to trade at a
premium to othersectors.
1 The sample buyout figures for the 12 months to
31 December 2023 were calculated using all the
information available to the Company. The figures
arebased onunaudited data. MSCI data was sourced
from Bloomberg. See pages 179 to 180 of the
Alternative Performance Measures section for
samplecalculations and disclosures.
2 The MSCI World valuation multiple is derived from
weighted valuation multiples data of the constituent
companies as at 31 December 2023.
3 100% coverage of buyout portfolio.
4 As at 31 May 2024.
Information technology 27%
Healthcare 21%
Consumer 17%
Industrials 14%
Financials 12%
Communication services 5%
Materials 3%
Others 1%
Buyout portfolio
3
Information technology 23%
Consumer 18%
Financials 15%
Healthcare 12%
Industrials 12%
Others 9%
Communication services 7%
Materials 4%
MSCI World
4
Buyout Analysis
1
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Buyout Analysis
1
Venture, growth and buyout investments
have differing leverage characteristics.
Average debt multiples for small/mid buyout
investments, which represent the largest
segment of PIP’s buyout portfolio, are
typically lower than debt levels in the
large/mega-buyout segment.
The venture and growth portfolios have
littleor no leverage.
% of PIP’s
portfolio
46%
26%
6.0x
4.0x
2.0x
0.0x
Small/mid buyout
4.8x
1.0x
3.0x
5.0x
5.2x
Large/mega buyout
1 The sample buyout figures for the 12 months to
31 December 2023 were calculated using all the
information available to the Company. The figures
arebased on unaudited data. MSCI data was sourced
from Bloomberg. See pages 179 to 180 of the
Alternative Performance Measures section for
samplecalculations and disclosures.
Valuation multiple
Revenue and EBITDA
growth
Debt multiples
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Largest 50 Companies by Value
1
Company Website Country Sector Investment type Description
% of PIP
portfolio
1 Netherlands Consumer Manager-led Secondary General merchandise discount stores 1.2%
2
Switzerland Information Technology
Co-investment; Fund
Secondary
Provider of IT management and monitoring
software services
1.2%
3
Norway Information Technology Primary; Co-investment
Provider of software solutions for finance
and HR departments
1.1%
4
USA Healthcare Manager-led Secondary Orthodontic treatments and services provider 0.9%
5
USA Healthcare Manager-led Secondary Recruitment platform for nurses 0.8%
6
Germany Information Technology Manager-led Secondary Digital consulting and software company 0.8%
7
USA Healthcare Co-investment; Primary Provider of disclosure management services 0.8%
8
United Kingdom Consumer Manager-led Secondary Ice cream and frozen food manufacturer 0.8%
9
USA Healthcare Manager-led Secondary Specialist eye treatment provider 0.8%
10
USA Information Technology Co-investment; Primary
Developer of a cloud-based modelling and
planning platform
0.7%
11
USA Financials Manager-led Secondary Mobile phone insurance company 0.7%
12
Spain Communication Services Co-investment Digital advertising company 0.7%
13
USA Healthcare
Co-investment; Manager-led
Secondary
Healthcare provider 0.7%
1 The largest 50 companies table is based upon underlying company valuations at 31 March 2024 adjusted for known call and distributions to 31 May 2024, and includes the portion of the reference portfolio attributable to the ALN.
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Company Website Country Sector Investment type Description
% of PIP
portfolio
14 USA Industrials Manager-led Secondary Consultant to telecommunication service providers 0.7%
15
USA Financials Co-investment; Primary
Provider of technology-enabled retirement and
investment services
0.7%
16
USA Healthcare Manager-led Secondary
Commercial services platform for the life
sciences sector
0.7%
17
USA Information Technology Co-investment Provider of cloud consulting and engineering services 0.7%
18
USA Information Technology
Primary; Co-Investment;
Fund Secondary
Cybersecurity software company 0.7%
19
Hong Kong Consumer Primary; Co-Investment Operator of educational institutions 0.7%
20
USA Energy Fund Secondary Natural gas and oil producer 0.6%
21
USA Financials Co-investment Commercial insurance broker 0.6%
22
USA Healthcare Co-investment
A provider of healthcare payment integrity and
analytical solutions
0.6%
23
Kazakhstan Financials Primary Banking products and services provider 0.6%
24
USA Healthcare Manager-led Secondary
Developer of cloud-based patient safety and risk
management software
0.6%
25
USA Information Technology Co-investment; Primary Provider of enterprise identity governance solutions 0.6%
26
Israel Healthcare Manager-led Secondary Provider of medical equipment and implants 0.5%
Largest 50 Companies by Value
1
1 The largest 50 companies table is based upon underlying company valuations at 31 March 2024 adjusted for known call and distributions to 31 May 2024, and includes the portion of the reference portfolio attributable to the ALN.
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Company Website Country Sector Investment type Description
% of PIP
portfolio
27 USA Consumer Co-investment; Primary Operator of fast food chain stores 0.5%
28
USA Industrials Manager-led Secondary Digital marketing and recruitment services provider 0.5%
29
United Kingdom Information Technology Co-investment
Provider of business management software
solutions to SMEs
0.5%
30
USA Industrials Co-investment Provider of food waste recycling services 0.5%
31
USA Information Technology Manager-led Secondary Provider of wireless internet connectivity solutions 0.5%
32
Sweden Information Technology Co-investment; Primary Developer of enterprise resource planning software 0.5%
33
Australia Consumer Manager-led Secondary Producer of beef and other animal protein products 0.5%
34
Spain Information Technology Co-investment
Satellite communication equipment provider
for the maritime industry
0.5%
35
USA Information Technology Co-investment IT services management company 0.5%
36
USA Information Technology Co-investment Cybersecurity services provider 0.5%
37
USA Information Technology
Primary; Co-Investment;
Fund Secondary
Managed IT service provider 0.5%
38
USA Consumer Co-investment Restaurant franchise company 0.5%
39
USA Consumer Manager-led Secondary Restaurant franchise company 0.5%
Largest 50 Companies by Value
1
1 The largest 50 companies table is based upon underlying company valuations at 31 March 2024 adjusted for known call and distributions to 31 May 2024, and includes the portion of the reference portfolio attributable to the ALN.
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Company Website Country Sector Investment type Description
% of PIP
portfolio
40 USA Healthcare Manager-led Secondary
Provider of solutions to mitigate health insurance
costs for mid-size employers
0.5%
41
United Kingdom Financials Co-investment Provides lending and savings financial products 0.4%
42
USA Information Technology Co-investment
Provider of 3D design, engineering and
manufacturing solutions
0.4%
43
United Kingdom Healthcare Co-investment
Provides teleradiology reporting services to
public and private health organisations
0.4%
44
Germany Industrials Manager-led Secondary Manufacturer of fire protection products and systems 0.4%
45
Switzerland Information Technology Primary; Fund Secondary Developer of coding software 0.4%
46
Germany Healthcare Manager-led Secondary
Contract Development and Manufacturing
Organisation
0.4%
47
Sweden Healthcare Co-investment
Develops products and services for human protein
biomarker discovery
0.4%
48
USA Consumer
Co-investment; Fund
Secondary
Manufactures air suspension products and
accessories for trucks and vehicles
0.4%
49
Norway Information Technology
Primary; Manager-led
Secondary
Developer of content production tools for the
digital media industry
0.4%
50
Romania Healthcare Manager-led Secondary Provides private healthcare services 0.4%
Coverage of PIP’s private equity asset value 30.5%
Largest 50 Companies by Value
1
1 The largest 50 companies table is based upon underlying company valuations at 31 March 2024 adjusted for known call and distributions to 31 May 2024, and includes the portion of the reference portfolio attributable to the ALN.
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Largest 50 Managers by Value
Rank Manager Website Region
1
Stage
% of total private
equity asset value
2
1 USA Growth 7.1%
2
Global Venture, Growth 3.6%
3
Europe Buyout 3.6%
4
USA Buyout 3.1%
5
USA Buyout 2.5%
6
USA Buyout 2.4%
7
Europe Buyout 2.4%
8
Global Buyout 2.4%
9
USA Buyout 2.0%
10
USA Buyout 1.9%
11
Europe Buyout 1.5%
12
(Previously Apax Partners SAS)
Europe Buyout 1.5%
13
USA Buyout 1.4%
1 Refers to the regional exposure of funds.
2 Percentages look through underlying vehicle structures and exclude the portion of the reference portfolio attributable to the ALN.
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Rank Manager Website Region
1
Stage
% of total private
equity asset value
2
14 USA Buyout 1.4%
15
Europe Buyout 1.3%
16
Global Special Situations 1.3%
17
Asia Growth 1.3%
18
USA Buyout 1.3%
19
Europe Buyout 1.2%
20
Global Growth 1.2%
21
Global Buyout 1.2%
22
Europe Buyout 1.1%
23
USA Buyout 1.1%
24
USA Buyout 1.1%
25
Global Buyout 1.1%
26
USA Growth 1.1%
Largest 50 Managers by Value
1 Refers to the regional exposure of funds.
2 Percentages look through underlying vehicle structures and exclude the portion of the reference portfolio attributable to the ALN.
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1 Refers to the regional exposure of funds.
2 Percentages look through underlying vehicle structures and exclude the portion of the reference portfolio attributable to the ALN.
3 The private equity manager does not permit the Company to disclose this information.
Rank Manager Website Region
1
Stage
% of total private
equity asset value
2
27 USA Buyout 1.0%
28
(Previously Ergon Capital)
Europe Buyout 1.0%
29 Growth fund
3
USA Growth 1.0%
30
Europe Buyout 1.0%
31
Europe Buyout 1.0%
32
USA Buyout 0.9%
33
USA Buyout 0.9%
34
Europe Buyout 0.9%
35
USA Buyout 0.9%
36
USA Special Situations 0.9%
37
USA Buyout 0.8%
38
Europe Growth 0.8%
Largest 50 Managers by Value
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Largest 50 Managers by Value
Rank Manager Website Region
1
Stage
% of total private
equity asset value
2
39 USA Buyout 0.8%
40
USA Growth 0.8%
41
USA Buyout 0.8%
42
USA Buyout 0.8%
43
Europe Buyout 0.8%
44
Global Buyout 0.8%
45
Europe Buyout 0.8%
46
USA Buyout 0.7%
47
USA Buyout 0.7%
48
USA Buyout 0.7%
49
USA Buyout 0.6%
50
Europe Growth 0.6%
Coverage of PIP’s private equity asset value 71.1%
1 Refers to the regional exposure of funds.
2 Percentages look through underlying vehicle structures and exclude the portion of the reference portfolio attributable to the ALN.
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Key Pantheon Personnel Supporting PIP
Helen Steers
PIP and European Investment, Partner
Joined 2004; 34 years of private equity
experience. Helen is a Partner in Pantheon’s
European Investment Team and is responsible
for co-managing the activities ofPIP. She is
amember of Pantheon’s International
Investment Committee, European Investment
Committee and Global Co-investment
Committee. Prior to joining Pantheon, Helen
held senior positions at Russell Investments in
Paris and at the Caisse de dépôt et placement
du Québec in Montréal. Helen is a past Chair
and member of the Council (Board) of the
British Private Equity and Venture Capital
Association (“BVCA”). She has also served
asaBoard member of Invest Europe and is
aco-founder of Level 20.
Vicki Bradley
Head of Investor Relations and
Communications for PIP
Joined 2016; over 14 years of investor relations
and communications experience with publicly
listed companies. Vicki is also a member of the
UK Investor Relations Society Policy Committee.
Prior to joining Pantheon, she heldsenior roles
at FTSE 100 and FTSE 250 companies, as well
as at a Dutch-listed investment trust.
Charlotte Morris
PIP and Secondary Investment, Partner
Joined 2006; 20 years of private equity
experience. Charlotte is a Partner in
Pantheon’s Global Secondaries Team and is
responsible for co-managing the activities
ofPIP. She is involved in all aspects of the
secondaries business including the analysis,
evaluation and completion of secondary
investment opportunities. Charlotte joined
Pantheon in 2006 from Cdb Web Tech,
aninvestment vehicle listed on the Milan
StockExchange, and spent 2.5 years
workinginPantheon’s San Francisco office.
Sheserves as a member of Pantheon’s
GlobalSecondaries Investment Committee,
Investment Management Committee
andSustainability Committee, and is
engagedacross Pantheon’s transactional
investmentactivities.
Maria Candelario
Principal, PIP
Joined 2014; 14 years of private equity and
investment banking experience. Maria is
responsible for investment strategy, portfolio
management, vehicle financing and reporting
for PIP. Prior to joining Pantheon, Maria worked
in mergers and acquisitions at Credit Suisse,
where she evaluated investments andwas
responsible for executing buy and sell-side
M&A transactions across a variety ofsectors.
She has also held senior finance positions at
Citi and IBM.
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Key Pantheon Personnel Supporting PIP
Kalonga Mumba
Vice President, PIP
Joined 2023; 12 years’ experience in advisory,
equity research and private equity. Kalonga is
responsible for portfolio analysis, investment
analysis, financial forecasting, optimising
vehicle financing, reporting and vehicle
management. Prior to joining Pantheon, he
worked as a freelance consultant on various
corporate finance assignments. He also held
assurance and advisory roles at PwC and later
as an equity research analyst at a boutique
research firm. He qualified as a certified
chartered accountant with PwC.
Amar Pervaz
Senior Associate, Fund Finance
Joined 2021; over 5 years of private equity
experience. Amar is a Senior Associate within
Pantheon’s Fund Finance Team, where he is
responsible for the reporting, valuation and
external audit of PIP. Prior to joining Pantheon,
Amar spent time in various finance and
operations roles working across multiple
products, working for both Fund Administrators
and Asset Managers. Amar is a fellow of the
Association of Chartered Certified Accountants
(ACCA).
Brett Perryman
Global Head of Marketing and
Communications, Partner
Joined 2021; Brett is a Partner and
Pantheon’s Global Head of Marketing and
Communications. Prior to joining Pantheon,
she was Head of External Relations at
FCLTGlobal, a non-profit research organisation
focused on rebalancing capital markets to
support a long-term, sustainable economy.
Before that, Brett was Head of Corporate
Communications at BrightSphere Investment
Group (NYSE: BSIG), a global multi-boutique
asset management company based in Boston.
Farid Barekati
Vice President, Fund Finance
Joined 2020; 10 years of private equity
experience. Farid is a Vice President within
Pantheon’s Fund Finance Team, where he
hasoperational oversight for the reporting,
valuation and external audit of Pantheon’s UK
listed products, including PIP and Pantheon
Infrastructure Plc. Prior to joining Pantheon,
Farid was the Financial Controller for John
Laing Capital Management, responsible
fortheir listed funds. He also spent time in
variousfinance and operations roles within
3i Group Plc, before moving to their listed
infrastructure fund.
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Key Pantheon Personnel Supporting PIP
Kathryn Leaf
Partner, Co-Head of Investment
Joined 2008; 26 years of private equity
experience. Kathryn is a Partner, Co-Head of
Investment and Global Head of Real Assets,
which includes infrastructure, real estate
andother real assets. She is a member
ofPantheon’s Partnership Board and
International Investment Committee. Prior
tojoining Pantheon, Kathryn was with GIC
Special Investments, before which she was
responsible for direct investments at Centre
Partners, a New York-based private equity firm.
Kathryn began her career in Morgan Stanley’s
Investment Banking Division whereshe
pursued real estate investments.
Paul Ward
Managing Partner
Joined 2003; 25 years of private equity
experience. Paul is Pantheon’s Managing
Partner and is a member of the Partnership
Board. Paul joined Pantheon from Lehman
Brothers Private Equity Group, where he was
Investment Director. Previously, he worked
forLehman Brothers Investment Bank in
NewYork and London on M&A and corporate
finance advisory services and, prior to that,
was a management consultant for PA
Consulting.
Jeff Miller
Global Head of Private Equity, Partner
Joined 2008; 22 years of private equity
experience. Jeff is a Partner and Global
Headof Private Equity. He is also Global
Headof Co-investments, leading all underlying
co-investment activities and team management,
and is a member of Pantheon’s Global
Partnership Board, International Investment
Committee, Co-investment Committee and
USInvestment Committee. Prior to joining
Pantheon, Jeff was a Principal at Allied Capital,
where he was responsible forevaluating and
executing private equity andmezzanine
investments. Previously, hewasaVice
President in Lehman Brothers’ investment
banking division.
Eimear Palmer
Global Head of Sustainability, Partner
Joined 2022; 15 years of private markets
experience. Eimear is a Partner and Global
Head of Sustainability, with responsibility
foroverseeing and developing Pantheon’s
sustainability strategy, frameworks and range
of initiatives. Eimear chairs Pantheon’s
Sustainability Committee and is amember
ofthe International Investment Committee.
Prior to joining the firm, Eimear worked for
14years in private equity-focused sustainability
roles,including most recently as Managing
Directorand Head of Responsible Investment
at Intermediate Capital Group (“ICG”). Before
that she worked at the CarlyleGroup.
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Key Pantheon Personnel Supporting PIP
Susan Long-McAndrews
US Primary Investment, Partner
Joined 2002; 27 years of private equity
experience. Susan is a Partner in Pantheon’s
US Investment Team and leads Pantheon’s
global business development. She is a member
of Pantheon’s Partnership Board, Executive
Committee, International Investment
Committee and US Investment Committee,
and is the Chief Executive Officer of Pantheon
Securities, LLC. Prior to joining Pantheon,
Susan was a principal at Capital Z Partners in
Asia, and a director at Russell Investments’
private equity group. Susan has served on the
Board of the American Investment Council, the
Investment Committee for the Archdiocese
ofSan Francisco and was a Term Member of
theCouncil on Foreign Relations.
Graeme Keenan
Chief Risk Officer, Partner
Joined 1999; 23 years of private markets
experience. Graeme is a Partner and Pantheon’s
Chief Risk Officer, with responsibility for global
risk management. Graeme also heads up
thePerformance Analytics function. He is a
member of Pantheon’s Risk Committee and
Sustainability Committee. Prior to taking on
the role of ChiefRisk Officer, Graeme was
Pantheon’s Global Head of Operations,
responsible for global client financial reporting,
handling the processing, maintenance and
reconciliation of transactions, valuations
andcompany data forclients and Pantheon
fund-of-funds within Pantheon’s in-house
systems.
Bradley Mitchell
Vice President, Fund Management
Joined 2022; 11 years of private equity and
banking experience. Brad is a Vice President
inPantheon’s Fund Management team, part
ofthe Investment team, where he focuses on
fund debt strategies and solutions. Prior to
joining Pantheon, he worked at NatWest Group
as a Director in its Institutional Banking, Funds
Finance division. Brad has passed all three
levels of the CFA Program.
Imogen Richards
Primary Investment, Partner
Joined 2005; 21 years of private markets
experience. Imogen is a Partner on the
European Private Equity team with responsibility
for European primaries and co-investments,
and also the portfolio strategy and treasury &
fund management teams. Prior to Pantheon,
Imogen worked onsmall and mid-market
private equity and mezzanine transactions
forAnglo Irish Bankin Dublin.
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Key Pantheon Personnel Supporting PIP
Petra Bukovec
Secondary Investment, Partner
Joined 2006; 17 years of private equity
experience. Petra is a Partner in Pantheon’s
Global Secondaries Team, where she is
involved in all aspects of secondary investments
including the analysis, evaluation and completion
of secondary transactions. She is a member of
the Global Secondary Investment Committee
and has been a member of the Global
Secondaries Team since joining Pantheon in
2006. Prior to joining Pantheon, Petra was an
investment banking analyst at Lehman Brothers,
focusing on M&A and other corporate finance
mandates.
Erik Wong
Co-investment, Partner
Joined 2007; 23 years of private equity
experience. Erik is a Partner in Pantheon’s
Global Co-investment Team and a member of
the Co-investment Committee and European
Investment Committee. Erik is responsible
forsourcing, execution and monitoring
co-investments in Europe. Prior toPantheon,
Erikworked for the Abu Dhabi Investment
Authority, IFRS Foundation in theUK and with
Quilvest Asia in Hong Kong.
Matt Cashion
Co-investment, Partner
Joined 2020; 25 years of private equity
experience. Matt is a Partner in Pantheon’s
Global Co-investment Team. Matt is
responsible forsourcing, execution and
monitoring co-investments in the USA.
Prior to joining Pantheon, Matt was a
Managing Principal at GoldPoint Partners,
where he was product head for the firm’s
co-investment business and also responsible
for evaluating and executing private equityfund
investments and private credit transactions in
North America and Europe. Previously, Matt
was anAnalyst in thePrivate Finance Group
ofNew York Life, specialising inbank loans
andprivate high-yield investments.
Amyn Hassanally
Global Head of Private Equity Secondaries,
Partner
Joined 2022; 23 years of private markets
experience. Amyn is a Partner and Global
Headof Private Equity Secondaries. He is a
member of the Global Secondary Investment
Committee. Prior to joining Pantheon, Amyn
was an Investment Partner at Coller Capital,
where he worked for17 years in both London
and New York and was formerly the global
Co-Head of Investment Execution. Prior to
joining Coller, he practised corporate law,
focusing on private equity transactions and
fund structuring.
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Governance
Board of Directors 116
Directors’ Report 118
Statement on Corporate Governance 123
Audit Committee Report 130
Directors’ Remuneration Report 133
Directors’ Responsibility Statement 136
Independent Auditor’s Report to the
Members of Pantheon International Plc 137
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Board of Directors
John Singer CBE
Chair
Appointed to the Board 23 November 2016
Mr Singer is an investment and financial services professional with over 30 years’ experience in private
equity. Mr Singer spent over 20 years with Advent International where he was a member of the Global
Executive Committee and, until 2012, Chair of European Operations. He was Managing Director
andfounderof Granville Europe plc, one of the first pan-European private equity funds. In addition,
he was Chair of the European Venture Capital Association.
Mr Singer is involved with several organisations within the arts and education sectors and is Chair of
CityofLondon Sinfonia.
A
M
N
I
David Melvin
Audit Committee Chair
Appointed to the Board 23 February 2015
Mr Melvin is an investment and financial services
professional with over 30 years of experience
ininvestment banking and private equity. He is
currently a senior adviser at Bixteth Partners
Limited, a boutique advisory firm, Chair of HBA
Media Limited, Principal at 24 Haymarket Private
Capital and a member of the Investment Committee
of Gonville and Caius College, Cambridge.
Mr Melvin was formerly a Partner at TDR Capital,
aEuropean private equity firm, where he was a
member of the Investment Committee and Head of
Investor Relations. Prior to that, he spent 24 years at
Merrill Lynch, where he held a number of leadership
positions, including Global Co -Head of Financial
Sponsors and Chair of EMEA Financial Sponsors
and Leverage Finance. He is a qualified Chartered
Accountant.
A
M
N
IA
M
N
I
Mary Ann Sieghart
Senior Independent Director
Appointed to the Board 30 October 2019
Ms Sieghart is a Non-Executive Director of the
Guardian Media Group and was formerly a
Non-Executive Director of The Merchants Trust
PLCand until 2022 was the Chair of the Investment
Committee of the Scott Trust, overseeing its
£1.2bnendowment. In addition, she is a Trustee
ofthe Kennedy Memorial Trust and Esmée
FairbairnFoundation.
Ms Sieghart is also a journalist, broadcaster and
author of The Authority Gap: Why Women Are Still
Taken Less Seriously Than Men, and What We Can
Do About It. She was formerly Assistant Editor of
The Times, a Lex columnist at the Financial Times
and City Editor of Today. She is a Visiting Professor
of King’s College London and also spentthe
academic year 2018–19 as a Visiting Fellow of
AllSouls College, Oxford.
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Board of Directors
KEY
A
Member of the Audit Committee
M
Member of the Management Engagement
Committee
N
Member of the Nomination Committee
I
Independent of the Manager
John Burgess
Appointed to the Board 23 November 2016
Mr Burgess has over 20 years’ experience within
private equity, following eight years with the Boston
Consulting Group in Paris and London, where he
became a Partner.
Subsequently, he held senior roles with F&C
Ventures Ltd and Candover Investments Plc before
co-founding BC Partners (formerly Baring Capital
Investors Ltd) in 1986, where he was a Managing
Partner until 2005. While at BC Par tners, he held
directorships of a variety of companies across the
UK and Continental Europe.
Since 2005, he has remained actively involved in
private equity, as well as increasing his investment
interests in the public markets. Mr Burgess is an
Independent Member of the Governing Body of the
Royal Academy of Music and was a Director of the
Business Growth Fund Plc.
A
M
N
I
Dame Susan Owen DCB
Appointed to the Board 31 October 2019
Dame Sue Owen is an economist with 30 years’
experience in government, including 14 years at the
Treasur y. She led the Department for Digital, Culture,
Media and Sport 2013-2019, having also worked in
the British Embassy in Washington D.C., No.10 and
the Department for International Development, and
as Strategy Director General in the Department for
Work and Pensions overseeing a £200bn budget.
She has considerable experience of governance,
advising ministers on board and chair appointments
of 45 arm’s-length bodies. She chaired the Civil
Service Charity and was Civil Service Diversity
Champion.
Currently, Dame Sue chairs the UK Debt
Management Office Advisor y Board, is Non-
Executive Director at Serco plc, Pool Re, and DAF NV
Supervisory Board. She is an ad hoc adviser at Flint
Global; in pro-bono roles she chairs the Royal Ballet
Governors, is a trustee of Opera Holland Park and
NED at Methera Global start-up.
A
M
N
I
Zoe Clements
Appointed to the Board 5 July 2023
Ms Clements is an investment, private equity and
finance professional with over 15 years of board
experience, and over 25 years of executive
experience, notably in a private equity context at
leading firms including Palatine Private Equity,
Electra Par tners, LGV Capital and Royal Bank
ofScotland.
She is a current Non-Executive Director of
JPMorgan Emerging Markets Investment Trust plc
and is also a Member of the Social Investment
Advisory Committee of the Growth Impact Fund
and a Trustee of the Money and Mental Health
Policy Institute. Ms Clements will also be appointed
as non-executive Director of Senior plc with effect
from 1 September 2024. She has previously sat on
arange ofconsumer, retail, leisure, healthcare and
professional services boards as a Non-Executive
Director. She qualified as a Chartered Accountant
with PwC.
A
M
N
I
Rahul Welde
Appointed to the Board 25 July 2023
Mr Welde is a marketing and digital professional
who spent almost 31 years in senior, international
roles at Unilever. He is a current Non-Executive
Director of Entain Plc and Parentinc Pte Ltd
(Singapore), and is Chair of the Advisory Board of
Migrant Leaders, a UK charity. He also serves in an
advisory capacity to corporations and technology-
led companies including those at the start-up and
scale-up stages.
A
M
N
I
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Directors’ Report
Directors, including the Company’s position
on diversity, can be found on pages 123
and127.
The rules concerning the appointment
andreplacement of Directors are set out
inthe Company’s Articles of Association.
There are no agreements between the
Company and its Directors concerning
anycompensation for their loss of office.
Articles of Association
Any amendments to the Articles of Association
must be made by special resolution at a
general meeting of the shareholders.
Share capital
The rights attaching to the Company’s
shares are set out in the Company’s Articles
of Association. Further details can be found
in Note 17 of the financial statements.
Authorities given to the Directors at the AGM
on19 October 2023 to allot shares, disapply
statutory pre-emption rights and buy back
shares will expire at the forthcoming AGM.
Inorder to take advantage of the investment
opportunity offered by the discount to NAV
onthe shares, during the year to 31 May
2024, 64,279,846 shares, representing
12.1% of the called-up share capital and
anominal value of £4,306,749.68, were
bought back for an aggregate amount of
£196,702,929 (excluding costs and stamp
duty) subsequently cancelled. As at 31 May
2024, authority to buy back afurther
67,002,984 shares remained.
As at 31 May 2024, the Company had shares
in issue as shown in the table below, all
ofwhich were listed on the official list
maintained by the Financial Conduct
Authority (“FCA”) and admitted to trading
onthe London Stock Exchange. No shares
were held in Treasury atthe year end or as
atthe date of this Report. The number of
shares in issue and the voting rights as at
the date of this report are 464,321,308.
The Company’s ordinary shares are freely
transferable. However, the Directors may
refuse to register a transfer of shares held in
certificated form which are not fully paid
unless the instrument of transfer is (i) lodged,
duly stamped at the Company’s registered
office,accompanied by the relevant share
certificate(s) and such other evidence (if any)
as the Directors may reasonably require to
show the right of the transferor to make the
transfer and (ii) not in favour of more than
four persons jointly. The Directors may decline
to register a transfer of an uncertificated
share in the circumstances set out in the
Uncertified Securities Regulations 2001 and
where, in the case of a transfer to joint holders,
the number of joint holders towhom the
uncertificated share isto be transferred
exceeds four. If the Directors decline to
register a transfer, they are required to send
notice of the refusal to the transferee within
two months, giving reasons for their decision.
The Directors are pleased to
present their report, together
with the audited financial
statements of the Company
for the year ended 31 May 2024.
Some of the matters required to be included
in the Directors’ Report have instead been
included in the Strategic Report, as the
Board considers them to be of strategic
importance. Therefore, a review of the
business of the Company, recent events and
outlook can be found on pages 56 to 61 and
information on our sustainability reporting
can be found on pages 62 to 69. Important
events affecting the Company and that
occurred after 31 May 2024 areincluded
inNote 25 to the financial statements.
Directors
The names and full biographies of the
Directors, as at the date of this report,
canbefound on pages 116 and 117.
MsZoe Clements and Mr Rahul Welde were
appointed to the Board during the year, on
5July 2023 and 25 July 2023 respectively.
As at 31 May 2024 and the date of this
report, the Board of Directors ofthe
Company comprised four male Directors
and three female Directors.
Apart from Mr Melvin, all Directors will retire
and stand for re-election at the Company’s
Annual General Meeting (“AGM”) on
16October 2024. Mr Melvin will retire at the
AGM and Ms Clements will succeed him
asAudit Committee Chair. Further details
regarding the selection and appointment of
Unless the Directors determine otherwise,
aholder of ordinary shares will cease to be
entitled to attend or vote at general meetings
ofthe Company or on any poll if he/she fails
tocomply with a request by the Company
toprovide details of any interest held by
anyperson in his/her ordinary shares
within14days of the request being made.
Additionally, if the shares represent at least
0.25%, any dividends payable in respect of
the shares will be withheld by the Company
and no transfers of any of the shares held in
certified form will be registered unless the
shareholder is not him/herself in default as
regards supplying the information required
(and the Directors are satisfied that no
person in default as regards supplying such
information is interested in any of the shares
that are subject of the transfer) or unless the
transfer arises asa result of the acceptance
of a takeover offeror a sale made through
arecognised investment exchange (or any
other stock exchange outside the UK on
which the Company’s shares are normally
traded) or is atransfer which the Directors
are satisfied is made in consequence of a
sale of the entire beneficial interest in the
shares to a person who is unconnected with
the shareholder and with any other person
appearing interested in the shares.
Share capital and voting rights
As at the date
ofthis Repor t
As at 31 May
2024
As at 31 May
2023
Number of ordinary shares of 6.7p each in issue 464,321,308 465,613,611 529,893,457
Voting rights attached to each share 1 1 1
Number of shares held in Treasury – – –
Total voting rights 464,321,308 465,613,611 529,893,457
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The Company’s Articles of Association
contain additional provisions enabling the
Directors to take certain steps where ordinary
shares are ormay be owned, or rights
attaching to such shares may be exercised,
by persons in circumstances which the
Directors determine would give rise to a
regulatory burden under certain US securities,
investment and pension laws and regulations.
Save as described above, there are no
restrictions concerning the transfer of
securities in the Company or on voting
rights; no special rights with regard to
control attached to securities; no
agreements between holders of securities
regarding their transfer known to the
Company; and no agreements which the
Company is party to that might affect its
control following a successful takeover bid.
The giving of authority to issue or buy
backthe Company’s shares requires an
appropriate resolution to be passed by
shareholders. Proposals for the renewal
ofthe Board’s current authorities to issue
and buy back shares will be set out in the
separate 2024 Notice of AGM.
Dividends
No final dividend is being recommended.
Investment Trust Status
The Company has received written approval
from HM Revenue & Customs (“HMRC”)
asan authorised investment trust under
Section 1158 of the Corporation Tax Act
2010. The Directors are of the opinion that
the Company has conducted its affairs in
compliance with such approval and intends
to continue doing so.
Financial risk management
The principal financial risks and the
Company’s policies for managing these
risks are set out in Note 23 to the financial
statements (on pages 169 to 172).
Management
The Company entered into a Management
Agreement with the Company’s Manager,
Pantheon Ventures (UK) (“Pantheon
Ventures”), on 22 July 2014, under which
Pantheon Ventures was appointed as
theCompany’s Alternative Investment
FundManager (“AIFM”) on the terms of
andsubject to the conditions of a new
investment Management Agreement
(the“Management Agreement”) between
the Company and Pantheon Ventures.
Pantheon Ventures, which is part of the
Pantheon Group, has been approved as
anAIFM by the FCA.
The Pantheon Group is one of the world’s
foremost private equity fund investors and
has acted as Manager to the Company since
the Company’s inception in 1987.
Affiliated Managers Group, Inc. (“AMG”),
alongside senior members of the Pantheon
team, acquired the Pantheon Group in 2010.
The ownership structure, with Pantheon
senior management owning ameaningful
share of the equity in the business, provides
a framework for long-term succession and
enables Pantheon management to continue
to direct the firm’s day-to-day operations.
AMG is a global asset management
company with equity investments in leading
boutique investment managementfirms.
Under the terms of the Management
Agreement, Pantheon Ventures has been
appointed as the sole and exclusive
discretionary manager of all the assets
ofthe Company and to provide certain
additional services in connection with the
management and administration of the
Company’s affairs, including monitoring the
performance of, and giving instructions
onbehalf of the Company to, other service
providers to the Company.
The Company entered into a Supplemental
Agreement with Pantheon Ventures on
18April 2017 to align the Management
Agreement with the change to the
Company’s accounting reference date
from30 June to 31 May of each year.
The Manager is entitled to a monthly
management fee at an annual rate of:
(i) 1.5% on the value of the Company’s
investment assets up to £150m; and
(ii) 1% on the value of such assets in
excessof £150m.
In addition, the Manager is entitled to a
monthly commitment fee of 0.5% per
annum on the aggregate amount
committed (but unpaid) in respect of
investments, up to a maximum amount
equal to the total value of the Company’s
investment assets.
The arrangements in respect of the
management fee and notice period are
materially unchanged.
The Manager is entitled to a performance
fee from the Company in respect of
each12-month calendar period.
Noperformance fee is payable in respect
oftheyear ended 31 May 2024 (period
ended 31 May 2023: £nil). Further detail as
to how the performance fee is calculated
isset outbelow.
The performance fee payable in respect of
each such calculation period is 5% of the
amount by which the net asset value at the
end of such a period exceeds 110% of the
applicable “high-water mark”, i.e., the net
asset value at the end of the previous
calculation period in respect of which a
performance fee was payable, compounded
annually at 10% for each subsequent
completed calculation period up to the start
of the calculation period for which the fee is
being calculated. For the calculation year
ended 31 May 2024, the notional performance
fee hurdle is a net asset value per share
of594.9p.
The performance fee is calculated so as to
ignore the effect on performance of any
performance fee payable in respect of the
period for which the fee is being calculated
or of any increase or decrease in the net
assets of the Company resulting from any
issue, redemption or purchase of any shares
or other securities, the sale of any treasury
shares or the issue or cancellation of any
subscription or conversion rights for any
shares or other securities and any other
reduction in the Company’s share capital
orany distribution to shareholders.
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Pantheon Ventures sources, evaluates and
manages investments on the Company’s
behalf, allocating investments to the
Company, in accordance with Pantheon’s
investment allocation policy, that are in line
with the strategy agreed with the Board
andthe Company’s investment objective
andpolicy.
Under the terms of the Management
Agreement, the Company is entitled to
participate in allocations made by the
Pantheon Group under its secondary
investment programme, in accordance
withthe allocation basis agreed from
timetotime between the Company and
theManager.
An alternative basis for the allocation to
theCompany of secondary investment
opportunities may be applied by Pantheon in
the context of Pantheon Global secondary
Fund VII and successor funds. In the event
of Pantheon and the Company beingunable
to agree any such alternative allocation
basis, Pantheon will cease to beentitled to
any performance fee for calculation periods
following that in which the alternative
allocation basis takes effectand the
Company will be entitled to terminate the
Management Agreement (without penalty
tothe Company) on sixmonths’ notice.
Continuing appointment of
the Manager
The Board keeps the performance of the
Manager under continual review, and the
Management Engagement Committee
carries out an annual review of the
Manager’s performance and the terms of
the Management Agreement. The ongoing
review of the Manager includes activities
and performance over the course of the
yearand review against the Company’s
peergroup.
The Board is of the opinion that it is inthe
interests of shareholders as a whole to
continue the appointment. The reasons for
this view are that the investment performance
is satisfactory andthe Manager is well
placed to continue to manage the assets of
the Company according to the Company’s
strategy. Further details of the Board’s
engagement with the Manager are set
outon pages 125 to 126.
Other service providers
Administrative, accounting and company
secretarial services are provided by Link
Alternative Fund Administrators Limited.
The Administration Agreement may be
terminated with 12 months’ written notice.
The Board has also appointed BNP Paribas
Trust Corporation UK Limited (previously
BNP Paribas Securities Services, London
Branch) to act as the Company’s Depositary
(as required by the AIFM Directive)
(the“Depositary”) subject to theterms
The value of investments in, and
outstanding commitments to, investment
funds managed or advised by the Pantheon
Group (“Pantheon Funds”) areexcluded in
calculating the monthly management fee
and the commitment fee. In addition, the
Manager has agreed that the total fees
(including performance fees) payable
byPantheon Funds to members of the
Pantheon Group and attributable to
theCompany’s investments in Pantheon
Funds shall be less than the total fees
(excluding the performance fee) that the
Company would have been charged
underthe Management Agreement had
itinvested directly in all of the underlying
investments of the relevant Pantheon
Fundsinstead of through the relevant
Pantheon Funds.
The Management Agreement is capable
ofbeing terminated (without penalty to the
Company) by either party giving two years’
notice in writing. It is capable of being
terminated by the Company (without penalty
to the Company) immediately if, among
other things, the Manager materially
breaches its obligations (and cannot or
doesnot remedy the breach) or goes into
liquidation, and on six months’ notice if there
is a change of control of the Manager or if
certain “key man” provisions are triggered.
The Manager has the benefit of an indemnity
from the Company in respect of liabilities
arising out of the proper performance by the
Manager of its duties and compliance with
instructions given to it by the Board and an
exclusion of liability save to the extent of any
negligence, fraud, wilful default or breach
ofduty.
andconditions of a Depositary Agreement,
asupdated in 2022 by a Deed of Novation
and Amendment, entered into between the
Company, the AIFM and the Depositary.
BNP Paribas Trust Corporation UK Limited
has also been appointed as Custodian.
Fulldetails of the Board’s engagement with
service providers are setout on page 129.
Related party transactions
Related party transactions are disclosed in
Note 24 to the financial statements.
Going concern
The Company’s business activities, together
with the factors likely to affect itsfuture
development, performance andfinancial
position, are set out in the Strategic Report
and Manager’s Review.
The Directors have made an assessment
ofgoing concern, taking into account the
Company’s current performance and
financial position as at 31 May 2024.
Inaddition, the Directors have assessed
theoutlook, which considers the potential
further impact of ongoing international
conflicts and election cycles which have
brought about increased geopolitical
uncertainties including the disruption to
theglobal supply chain and increases in
thecost of living as a result, persistent
inflation, high interest rates and the impact
of climate change on PIP’s portfolio using
the information available as at the date of
issue of these financial statements.
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The Directors have also considered the
Company’s position with reference to its
Investment Trust structure, its business
model, its business objectives, the
principalrisks and uncertainties as detailed
on pages 44 to 48 of this report and its
present and projected financial position.
TheDirectors have considered the impact
ofthe Company’s Capital Allocation Policy
inregards to share buybacks. As part of
theoverall assessment, the Directors have
taken into account the Manager’s culture,
which emphasises collaboration and
accountability, the Manager’s conservative
approach to balance sheet management,
and its emphasis on investing with
underlying private equity managers that
arefocused on market outperformance.
At each Board meeting, the Directors
reviewthe Company’s latest management
accounts and other financial information.
The Company’s commitments to private
equity investments are reviewed, together
with its financial resources, including cash
held and its borrowing capability. One-year
cash flow scenarios are also presented
anddiscussed at each meeting.
PIP’s Balance Sheet is managed to ensure
that the Company can finance itsundrawn
commitments, which are carefully
controlled relative to its assets and available
liquidity. This disciplined approach enables
the Company to withstand periods of
volatility such as those experienced as a
result of the ongoing international conflicts
and periods of historically low exit and
distribution levels.
Shareholdings
As at 31 May 2024, the Company’s 10 largest shareholders were:
Name Shareholding
% of total
voting rights
Rathbones 24,531,199 5.27
BlackRock 22,860,462 4.91
Hargreaves Lansdown 17,928, 329 3.85
Interactive Investor 17,798 , 4 34 3.82
West Midlands PF 17,551,94 0 3.77
Investec Wealth & Investment 17,403,673 3.74
Quilter Cheviot Investment
Management 15,691,871 3.37
Schroder Investment
Management 14,979,250 3.22
Suffolk CC PF 13,850,000 2.97
Contassur Assistance Conseil 13,101,4 40 2.81
Major interests in shares
As at 31 May 2024, the Company had received notification
ofthe following disclosable interests in the voting rights of
theCompany
1
. This information was correct at the date of
notification. It should be noted that these holdings may have
changed since notified to the Company and may not therefore
be wholly accurate statements of actual holdings as at 31May
2024. However, notification of any change is not required until
the next applicable threshold is crossed:
Number of
shares held
% of total
voting rights
Quilter Plc 23,292,326 4.95
AVI Global Trust Plc 14,055,700 2.98
Esperides S.A. Sicav-SIF 13,101,440 2.74
Universities Superannuation
Scheme Ltd 9,728,041 2.03
The Company has not received any further notifications in the
period from the financial year end to the date of this report.
The Directors have considered downside
liquidity modelling scenarios with varying
degrees of decline in investment valuations,
decreased investment distributions, and
increased call rates, with the worst being an
extreme downside scenario representing
animpact to theportfolio that is worse than
that experienced during the 2008–2009
global financial crisis.
In the event of a downside scenario, PIPcan
take steps to limit or mitigate the impact
onthe Balance Sheet, namely drawing
onthe credit facility and pausing new
commitments. In addition, subject to the
prevailing market environment, it could
raiseadditional credit or capital, and sell
assets to increase liquidity and reduce
outstanding commitments.
After due consideration of the Balance
Sheet, activities of the Company, its assets,
liabilities, commitments and financial
resources, the Directors have concluded
that the Company has adequate resources
to continue in operation for at least 12 months
from the approval of the financial statements
for the year ended 31 May 2024. For this
reason, they consider it appropriate to
continue to adopt the going concern basis
inpreparing the financial statements.
1 The Company previously reported that APG Asset
Management (“APG”) had notified the Company that
itsholding represented 3.96% of the voting rights.
Thisnotification was received on 8 July 2022. No further
notifications have been received by the Company from
APGsince that date; however, this holding has now been
removed from the above table as the Company has become
aware, through share register analysis, that APG’s holding
fellbelowthe 3% notification threshold in 2022.
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Corporate Governance
The Board consists solely of Non-Executive
Directors and no one individual has unfettered
powers of decision. The Board has put in
place levels of corporate governance which
it believes are appropriate for an investment
trust and toenable the Company to comply
with theAIC Code of Corporate Governance
(the“AIC Code”) published in February 2019.
The Board’s compliance with the AICCode
is detailed in the Statement on Corporate
Governance.
The Company’s Statement on Corporate
Governance, which forms part of this
Directors’ Report, is set out on pages 123
to129 and on its website (www.piplc.com).
Greenhouse gas emissions
All of the Company’s activities are
outsourced to third parties. As such it does
not have any physical assets, property,
employees or operations of its own and
does not generate any greenhouse gas or
other emissions or consume any energy
reportable under the Companies Act 2006
(Strategic Report and Directors’ Report)
Regulations 2013 or the Companies
(Directors’ Report) and Limited Liability
Partnerships (Energy and Carbon Report)
Regulations 2018, implementing the UK
Government’s policy on Streamlined Energy
and Carbon Reporting. Whilst the Company,
asaclosed endedinvestment fund, is
currently exempt from including a statement
on compliance with theTask Force on
Climate-related FinancialDisclosures under
Listing Rule 15.4.29(R), the Manager has
prepared a Sustainability Report during
theyear. This report, which includes a
product-level TCFD report is available
onwww.piplc.com/investor-relations/
reports-and-publications/.
Further details of the Manager’s approach
toresponsible investment practices and
sustainability standards and the Board’s
oversight of this can be found in the
Strategic Report on pages 62 to 69.
Modern Slavery Act
In 2015, the UK Government introduced
theModern Slavery Act (“the Act”). As an
Investment Trust, the Company does not
provide goods or services in the normal
course of business, and does not have
employees, customers or turnover.
Accordingly, the Directors consider that the
Company is not in scope because it does not
have turnover and is therefore not required
to make any slavery or human trafficking
statement under the Act. TheCompany’s
own supply chain, which consists
predominantly of professional advisers
andservice providers in the financial
services industry, is considered tobe low
risk in relation to this matter. In line with
theAct, the Manager reports annually on
thesteps taken to ensure that slavery and
human trafficking are not takingplace
anywhere within Pantheon’s business or its
supply chains. Pantheon’s Sustainability
Policy is aligned with a zero tolerance
approach to modern slavery and trafficking,
and both the policy and the modern slavery
statement can be found on Pantheon’s
website (www.pantheon.com).
Donations
The Company made no political or charitable
donations during the year (2023:£nil).
Future developments
The outlook for the Company is set out in the
Chair’s Statement on pages 5 to 11.
Requirements of the Listing Rules
Listing Rule 9.8.4 requires the Company
toinclude certain information in a single
identifiable section of the Annual Report or a
cross-reference table indicating where the
information is set out. The Directors confirm
that there are no disclosures to bemade in
this regard.
Annual General Meeting (“AGM”)
The Company’s AGM will be held on
16October 2024, and explanations of the
business proposed at the AGM will be set
out in a separate Notice of Meeting.
Audit information
The Directors who held office at the date
ofapproval of the Report of the Directors
confirm that, so far as they are aware, there
is no relevant audit information of which the
Company’s Auditor is unaware; and each
Director has taken all reasonable steps that
he or she ought to have taken as a Director
to make himself or herself aware of any
relevant audit information and to establish
that the Company’s Auditor is aware of
thatinformation.
Approval
The Directors’ Report has been approved by
the Board.
On behalf of the Board
JOHN SINGER CBE
Chair
31 July 2024
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Statement on Corporate Governance
Introduction from the Chair
I am pleased to introduce this year’s
Corporate Governance Statement. In this
statement, the Company reports on its
compliance with the AIC Code of Corporate
Governance (the “AIC Code”) and sets out
how the Board has operated during the past
year. The AIC Code, as published in February
2019, sets out principles and provisions
regarding matters including stakeholder
engagement and the culture ofthe Company,
against which the Company hasreported
inthe Strategic Report. TheCompany is
committed to maintaining the highest
standard of corporate governance and the
Directors are accountable to shareholders
for the governance of the Company’s affairs.
Statement of compliance
This statement, together with the Directors’
Responsibility Statement on page 136,
indicates how the Company has applied the
principles of recommended governance of
the Financial Reporting Council’s (“FRC”)
2018 UK Corporate Governance Code (the
“UK Code”) and the AIC Code issued in 2019,
which complements the UK Code and
provides a framework of best practice for
investment trusts. The Board notes the
publication of the 2024 UK Code, which will
apply to financial years beginning on or after
1 January 2025, and confirms that it has
reviewed the impact of the new UK Code
onthe Company and, where necessary,
hascommenced preparations to be able
toreporton compliance.
The Board considers that reporting against
the principles and provisions of the AIC Code,
which has been endorsed by the FRC, provides
more relevant information to shareholders
and that by reporting against the AIC Code
the Company has met its obligations in
relation to the UK Code and associated
disclosure requirements under paragraph
9.8.6 of the Listing Rules.
The UK Code is available on the FRC website
(www.frc.org.uk). The AIC Code is available
on the AIC website (www.theaic.co.uk) and
includes an explanation of how the AIC Code
adapts the principles and provisions set out
inthe UK Code to make them relevant for
investment companies.
Throughout the year ended 31 May 2024,
theCompany complied with the principles
and provisions of the AIC Code which
incorporates the UK Code. The Board
attaches great importance to the matters
set out in the UK Code and strives to apply
its principles in a manner that would enable
shareholders to evaluate how the principles
have been applied. However, it should be
noted that where the principles and provisions
are related to the role of the Chief Executive,
Executive Directors’ remuneration and the
establishment of a Remuneration Committee,
the Board considers these principles
andprovisions not relevant as Pantheon
International Plc is an externally managed
Company with an entirely Non-Executive
Board, and with no employees or internal
operations.
The principles of the AIC Code
The AIC Code is made up of 17 principles
split into five sections covering:
– Board leadership and purpose;
– Division of responsibilities;
– Composition, succession and evaluation;
– Audit, risk and internal control; and
– Remuneration.
Details of how the Company has applied
theprinciples of the AIC Code are set out
inthis report.
Viability Statement
The Viability Statement can be found on
page 54.
The Board of Directors
At the start of the year under review, the
Board consisted of five Non-Executive
Directors (three male and two female).
Following the appointments of Mr Welde
andMs Clements in July 2023, the Board
consisted of seven Non-Executive Directors
(four male and three female). The Company
has no employees. The Board is responsible
for all matters of direction and control of
theCompany.
The Board seeks to ensure that it has the
appropriate balance of skills, experience,
ages and lengths of service among its
members. The Directors possess a wide
range of business and financial expertise
relevant to the direction of the Company,
andconsider themselves as committing
sufficient time to the Company’s affairs.
Brief biographical details of the Directors,
including details of their other directorships
and significant commitments, can be found
on pages 116 and 117.
The appointment of a new Director is always
made on the basis of a candidate’s merits
and the skills/experience identified by the
Board as being desirable to complement
those of the existing Directors. The Board
acknowledges the benefits of greater
diversity, including gender and ethnic
diversity, and the Board remains committed
to ensuring that the Company’s Directors
bring a wide range of skills, knowledge,
experience, backgrounds and perspectives.
Aformal process exists for the selection of
new Directors to the Company, and the level
of remuneration of the Directors has been
setin order to attract individuals of a calibre
appropriate to the future development of
theCompany.
A formal induction process has been
established for new Directors which involves
the provision of a full induction pack
containing relevant information about the
Company. On appointment to the Board,
Directors are fully briefed as to their
responsibilities and are given the opportunity
to talk to the relevant executive members
ofthe Manager throughout their terms
inoffice.
The terms and conditions of the appointment
of the Non-Executive Directors are set out in
letters of appointment, copies of which are
available for inspection at the registered
office of the Company and will be available
atthe AGM. None of the Directors has a
contract of service with the Company.
Further details on the Company’s purpose,
culture and values can be found in the
Strategic Report on page 28.
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Statement on Corporate Governance
Board and Committee meeting
attendance
The Board has at least six scheduled
meetings a year, and more if required.
Directors’ attendance at scheduled Board
and Committee meetings held during
theyear to 31 May 2024 is set out on
thispage below.
Performance evaluation
During the year, in order to review the
effectiveness of the Board as a whole,
itsCommittees and individual Directors,
anexternal performance evaluation was
carried out. In line with the AIC Code, the
Company is required to carry out an externally
facilitated board evaluation at least every
three years. This was last done in 2021 and
therefore, the Company engaged Stogdale
St James Ltd, an independent external
consultancy with noconnection to the
Company to carry out this year’s Board
evaluation. The evaluation was conducted
through individual conversations with
eachof the Directors and using tailored
questionnaires. The questionnaires and
conversations were structured to analyse
Directors’ feedback onBoard composition
and effectiveness, the Board’s performance
in relation to shareholder relations and value,
governance, the efficiency of Board and
Committee meetings, and to assess whether
the operation of such meetings was
appropriate, as well as any additional
information that may be required to facilitate
better Board discussions. Theindependence
of the Directors and their ability to commit
sufficient time to theCompany’s activities
was considered as part of the evaluation
process. The performance of the Chair was
similarly evaluated by the other Directors.
Following conclusion of the review, Stogdale
St James Ltd provided a report on the
outcome of the evaluation, a summary of
strengths and areas for development and
feedback on how the Board could improve
ineach area of assessment. Thereport from
Stogdale St James Ltd was reviewed by
theNomination Committee as part of its
assessment ofBoard performance.
The results of the evaluation process
indicated that the Board continues to work
well and there are no significant concerns
among the Directors about the Board’s
effectiveness. The resulting actions agreed
by the Directors will be discussed in more
detail and monitored during the 2024–2025
financial year.
As a result of the evaluation, the Board is
satisfied that all the current Directors
contribute effectively and have the skills
andexperience relevant to the leadership
and direction of the Company.
During the year, the Board took a number
ofactions based on the Board evaluation
undertaken in the previous year. These
included the expansion of the Board by the
appointment and integration of two further
Directors, an ongoing focus on Strategy
discussions, including capital allocation and
increased interaction with shareholders.
Insurance and indemnity provisions
The Board has formalised arrangements
under which the Directors, in the furtherance
of their duties, may take independent
professional advice at the Company’s
expense. The Company has arranged a
Directors’ and Officers’ liability insurance
policy which includes cover for legal expenses.
The Company’s Articles of Association
takeadvantage of statutory provisions to
indemnify the Directors against certain
liabilities owed to third parties even
wheresuch liability arises from conduct
amounting to negligence or breach of duty
or of trust. In addition, under the terms
Board and Committee meeting attendance
Meetings attended
Scheduled
Board meetings
Scheduled
Audit
Committee
meetings
Scheduled
Management
Engagement
Committee
meetings
3
Scheduled
Nomination
Committee
meetings
3
J.B.H.C.A. Singer CBE
J.D. Burgess
Z. Clements
1
D.L. Melvin
Dame Sue Owen DCB
M.A. Sieghart
R.A. Welde
2
1 Ms Clements was appointed with effect from 5 July 2023.
2 Mr Welde was appointed with effect from 25 July 2023.
3 The Nomination Committee met on two further occasions; once to consider and recommend
MsClements’ appointment to the Board and once to discuss routine agenda items, discussion of
whichhad been postponed to ensure that sufficient time could beallocated to these. Twoadditional
Management Engagement Committee meetings also took place for this reason.
As well as those meetings detailed in the table above, additional Board meetings
were held during the year to approve the NAV, to approve the final versions of
theAnnual and Half-Year Reports, to approve Ms Clements’ appointment, to
discuss the Tender Offer carried out in the year and to discuss the delegation of
authority tobuy back the Company shares to the Company’s brokers. A Finance
Sub-Committee of the Board, comprising Messrs Singer, Melvin and Burgess,
andMs Clements, was established todiscuss PIP’s credit facility requirements,
private placement loan issurance and Capital Allocation Policy and to make
recommendations to the Board. This Sub-Committee met 10 times during the
yearunder review.
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ofappointment of each Director, the
Company has agreed, subject to the
restrictions and limitations imposed by
statute and by the Company’s Articles of
Association, to indemnify each Director
against all costs, expenses, losses and
liabilities incurred in execution of his/her
office as Director or otherwise in relation
tosuch office. Save for such indemnity
provisions in the Company’s Articles of
Association and in the Directors’ terms
ofappointment, there are no qualifying
third-party indemnity provisions in force.
Chair and Senior Independent Director
The Chair leads the Board and is responsible
for its overall effectiveness in directing the
affairs of the Company. Mr John Singer CBE
was deemed to be independent at the time
of his appointment as Director in 2016 and as
Chairin 2022 and, in line with the guidelines
ofthe AIC Code of Corporate Governance,
continues to be considered independent.
Heconsiders himself to have sufficient time
to commit to the Company’s affairs. He has
no significant commitments other than
those disclosed in his biography on page 116.
Ms Mary Ann Sieghart was appointed Senior
Independent Director of the Company at the
conclusion of the Company’s AGM in 2021.
She provides a channel for any shareholder
concerns regarding the Chair and leads the
Chair’s annual performance evaluation.
Directors’ independence
In accordance with the Listing Rules that
apply to closed-ended investment entities,
and taking into consideration the AIC Code,
the Board has reviewed the status of its
individual Directors and the Board as a whole.
All Directors were considered independent
of the Manager at the time of their
appointment and, in line with the guidelines
of the AIC Code of Corporate Governance,
allcontinue to be considered independent.
Chair and Director tenure/
re-appointment of Directors
Following the Company’s inclusion in the
FTSE 250 Index and in accordance with the
AIC Code, the Board has determined that
itspolicy on the tenure of the Chair and the
Directors is that the Chair and all Directors
will be subject to annual re-election at each
AGM. Accordingly, resolutions to re-elect
allDirectors, apart from Mr Melvin who will
retire, are contained within the2024 AGM
Notice of Meeting.
Board responsibilities and
relationship with the Manager
The Board is responsible for the
determination and implementation of
theCompany’s investment policy and for
monitoring compliance with the Company’s
objectives. At each Board meeting, the
Directors follow a formal agenda to review
the Company’s investments and all other
important issues, such as asset allocation,
gearing policy, corporate strategic
issues,cash management, peer group
performance, marketing and shareholder
relations, investment outlook and pacing,
revenue forecasts and outlook, to ensure
that control is maintained over the
Company’s affairs. The Board regularly
considers its overall strategy and monitors
the share price and level of discount.
The Board is responsible for the strategic
and operational decisions of the Company
and for ensuring that the Company is
runinaccordance with all regulatory and
statutory requirements. These procedures
have been formalised in a schedule of
matters reserved for decision by the full
Board, which has been adopted for all
meetings. These matters include:
– The maintenance of clear investment
objectives, investment strategy and risk
management policies, changes to which
require Board approval;
– The monitoring of the business activities
of the Company, including investment
performance and annual budgeting; and
– Review of matters delegated to the
Manager, Administrator or Company
Secretary.
The management of the Company’s assets
is delegated to Pantheon. At each Board
meeting, representatives of Pantheon are
inattendance to present verbal and written
reports covering its activities, the portfolio
and investment performance over the
preceding period. Ongoing communication
with the Board is maintained in between
formal meetings. The Manager ensures that
Directors have timely access to all relevant
management, financial and regulatory
information to enable informed decisions to
be made and contacts the Board as required
for specific guidance on particular issues.
Pantheon has discretion to manage the
assets of the Company in accordance with
the Company’s investment objectives and
policies, subject to certain additional
investment restrictions (which may be
amended by the Company from time to time
with the consent of the Manager). The
additional investment restrictions currently
imposed on the Manager are as follows:
– At the time of making an investment, the
aggregate of all amounts committed by
the Company in respect of investments
(excluding all amounts paid pursuant to
such commitments and including any
such commitments in respect of the
investment to be made) shall not exceed
300% of the available cash and loan
resources of the Company without the
prior approval of the Board.
– No direct or indirect investment in a single
company shall form more than 5% of the
gross value of the Company at the time
the investment is made.
– The amount invested (including amounts
committed for investment) in respect of
asingle fund shall not exceed 10% of the
aggregate of the gross asset value of the
Company and the aggregate outstanding
investment commitments of the Company
at the time the investment is made.
– The prior approval of the Board is required
for an investment (including investment
commitments) in respect of a single
secondary interest in an existing fund or a
portfolio of secondary interests in existing
funds and/or direct investments in one or
more companies exceeding 3% of the net
asset value of the Company at the time
the investment is made.
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– The prior approval of the Board is required
for a direct investment in a single company
exceeding 1% of the net asset value of the
Company at the time the investment
ismade.
The Manager has also agreed that it will
obtain the prior approval of the Board in
relation to any primary investment in a new
fund which is made otherwise than on a
prorata basis with other Pantheon clients
investing in the same fund and in relation
toany investment in a vehicle managed by
amember of the Pantheon Group, other
than holding, special purpose and feeder
vehicles where no fee is charged by the
Pantheon Group.
The Board determines the parameters of
investment strategy and risk management
policies within which the Manager can
exercise judgement and sets the investment
and risk management strategies in relation
to currency exposure. The Company Secretary
and Manager prepare briefing notes for Board
consideration on matters ofrelevance;
forexample, changes to theCompany’s
economic and financial environment,
statutory and regulatory changes and
corporate governance best practice.
Institutional investors – use of
voting rights
The Company has delegated the exercise of
its voting rights to the Manager. Pantheon
has a policy of advising its clients to vote
onall corporate actions in relation to
investments and does this on behalf of
theCompany. Pantheon consults with the
Directors of the Company in the case of any
corporate action where either there is a
conflict of interest between PIP and other
Pantheon clients, or where for any reason
the proposed voting is inconsistent with the
advice given toPantheon’s otherclients.
Conflicts of interest
The Articles of Association permit the Board
to consider and, if it sees fit, to authorise
situations where a Director has an interest
that conflicts, or may possibly conflict,
withthe interests of the Company. There is
in place a formal system for the Board
toconsider authorising such conflicts,
whereby the Directors who have no interest
in the matter decide whether to authorise
the conflict and any conditions tobe
attached to such authorisations. The
process in place for authorising potential
conflict of interest has operated effectively
during the year.
The Directors are able to impose limits or
conditions when giving authorisation if they
think this is appropriate in the circumstances.
A register of potential conflicts is maintained
by the Company Secretary and is reviewed
at each Board meeting, to ensure that any
authorised conflicts remain appropriate.
Directors arerequired to confirm at these
meetings whether there has been any
change to theirposition.
The Directors must also comply with the
statutory rules requiring company directors
to declare any interest in an actual or
proposed transaction or arrangement
withthe Company.
The above process for authorising potential
conflicts of interest has operated effectively
during the year.
Committees of the Board
The Board has appointed a number of
Committees, as set out below, to which
certain Board functions have been
delegated. Each of these Committees has
formal written terms of reference which
clearly define their responsibilities, and
these can be inspected at the registered
office of the Company and viewed on the
Company’s website (www.piplc.com).
Audit Committee
The Audit Committee comprises the whole
Board. Mr David Melvin, who is currently the
Chair of the Audit Committee, is due to retire
at the 2024 AGM. Following his retirement,
Ms Zoe Clements will succeed him in this
position. Both Mr Melvin and Ms Clements
are qualified Chartered Accountants and
contribute their knowledge and experience
to the Audit Committee. It is felt by the
Committee that both are sufficiently
qualified for the position of Chair of the
AuditCommittee.
Mr John Singer CBE is an investment and
financial professional with over 30 years
ofexperience in private equity, and it is
considered appropriate for the Chair of
theCompany to be a member of the Audit
Committee as he provides a valuable
contribution to the deliberations of the
Committee.
The Audit Committee met on five occasions
during the year ended 31 May 2024. It is
intended that the Committee willcontinue
tomeet at least four times, toreview the
Half-Yearly Report, to review the year-end
valuation of investments and to approve the
Company’s Annual Report andAccounts.
The Report of the Audit Committee can be
found on pages 130 to 132.
Management Engagement
Committee
The Management Engagement Committee
comprises all the Directors and is chaired by
Mr John Singer CBE. The Management
Engagement Committee met on three
occasions during the year under review.
The Board keeps the performance of the
Manager under continual review. In addition,
in accordance with the requirements of the
AIC Code, the Management Engagement
Committee reviews the performance
oftheManager’s obligations under the
Management Agreement and considers
theneed for any variation to the terms of
thisAgreement onan annual basis.
The Management Engagement Committee
then makes a recommendation to the
Boardabout the continuing appointment
ofthe Manager under the terms of the
Management Agreement.
The Management Engagement Committee
also reviews annually the performance of
theCompany Secretary, the Custodian,
theDepositary and the Registrar and
anymatters concerning their respective
agreements with the Company.
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Nomination Committee
The Nomination Committee comprises all
Directors and is chaired by Mr John Singer
CBE, except when the succession of the
Chair is being considered. The Nomination
Committee met four times during the year
under review.
The role of the Nomination Committee is to
undertake the formal process of reviewing
the balance, effectiveness and diversity
ofthe Board and to consider succession
planning, identifying the skills and expertise
needed to meet the future challenges and
opportunities facing the Company, and
those individuals who might best provide
them. The Nomination Committee, as and
when necessary, makes recommendations
to the Board with regard to the criteria
forfuture Board appointments and the
methods of selection. It also considers
andreviews the appointment of a Senior
Independent Director, membership of the
Board’s Committees, and the re-appointment
of those Directors standing for re-election
atAGMs.
In addition, the Nomination Committee is
responsible for assessing the time
commitment required for each Board
appointment and ensuring that the present
incumbents have sufficient time to devote
totheir role, and for reviewing the Directors’
performance appraisal process.
As part of ongoing succession planning,
theNomination Committee ensures that
allBoard appointments are subject to
aformal, rigorous and transparent
procedure. The Company seeks to ensure
that any Board vacancies are filled by
themost qualified candidates based on
objective criteria and merit and in the
context of the skills, knowledge and
experience that are needed for the Board
tobe effective. The Board supports
diversityand inclusion at Board level
andencourages candidates from all
educational backgrounds and walks of life.
During the year, the Nomination Committee
reviewed PIP’s Diversity Policy and satisfied
itself that the Board has a balance of skills,
qualifications and experience which are
relevant to the Company. As discussed in
the 2023 Annual Report, during the year
MsZoe Clements and Mr Rahul Welde were
appointed as Non-Executive Directors
following a recruitment process in which
the Company was assisted by Sapphire
Partners, an independent external
consultancy with noconnection to the
Company.
The Board acknowledges and welcomes
therecommendations from the Hampton-
Alexander Review on gender diversity on
boards and the Parker Review regarding
ethnic representation on boards. The
Hampton-Alexander Review recommended a
minimum of 40% female representation on
all FTSE 350 companies by the end of 2025.
PIP exceeded this recommendation during
the year, having 43% women on the Board as
at 31 May 2024. The Board has also met the
target of the Parker Review, which
recommended that by December 2024 all
FTSE 350 companies have at least one
person from a minority ethnic group on
itsBoard.
Gender identity or sex
Number of
Board members
Percentage on
the Board
Number of
senior positions
on the Board
1
Men 4 57 1
Women 3 43 1
Not specified/prefer not to say – – –
Ethnic background
Number of
Board members
Percentage
on the Board
Number of
senior positions
on the Board
1
White British or other White
(including minority white groups) 6 86 2
Mixed/Multiple Ethnic Groups 0 0 0
Asian/Asian British 1 14 0
Black/African/Caribbean/Black British 0 0 0
Other ethnic group, including Arab 0 0 0
Not specified/prefer not to say 0 0 0
1 As Listing Rule 9.8.6(9) includes only the positions of chair, chief executive, senior independent director
and chief financial officer in this category, only those positions have been included in the table above.
However, as the Company is an externally managed investment trust without employees, the Company
considers the position of Audit Committee Chair as a senior position in addition to those reported above.
This senior role is currently performed by a white man.
The data in the above tables was collected through self-reporting by the Directors,
who were asked to indicate which of the categories specified in the prescribed
tables were most applicable to them.
Further information regarding diversity and inclusion at Pantheon can be found on
pages 34 and 69.
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The Board also notes the FCA rules on
diversity and inclusion on company boards,
namely that from accounting periods
commencing on or after 1 April 2022
included in Listing Rule 9.8.6 (9-11):
– At least 40% of individuals on the Board
tobe women;
– At least one senior Board position to be
held by a woman; and
– At least one individual on the Board to
befrom a minority ethnic background.
The Board complies with each of the three
diversity targets set in the Listing Rules.
Inaccordance with Listing Rule 9 Annex 2.1,
the tables on the previous page, in
prescribed format, show the gender and
ethnic backgrounds of the Directors at
theyear end.
Remuneration Committee
As the Company has no employees and the
Board is composed solely of Non-Executive
Directors, it is not considered necessary to
have a Remuneration Committee. Led by
theSenior Independent Director, it is the
responsibility of the Board as a whole to
determine and approve Directors’ fees,
following proper consideration and having
regard to the industry generally, the role that
individual Directors fulfil in respect of Board
and Committee responsibilities, the time
committed to the Company’s affairs and
remuneration levels generally within the
investment trust sector. Each Director takes
no part in discussions concerning their
ownremuneration.
Detailed information on the remuneration
arrangements for the Directors of the
Company can be found in the Directors’
Remuneration Report on pages 133 to135.
Internal control review
The Directors acknowledge that they
areresponsible for the Company’s risk
management and systems of internal
control and for reviewing their effectiveness.
An ongoing process, in accordance with
theguidance provided by the FRC on risk
management, internal control and related
finance and business reporting, has been
established for identifying, evaluating and
managing risks faced by the Company.
Thisprocess, together with key procedures
established with a view to providing effective
financial control, has been in place throughout
the year and up to thedate thefinancial
statements were approved. Fulldetails of
the principal risks and uncertainties faced by
the Company can befound on pages 44
to48.
The risk management process and systems
of internal control are designed to manage,
rather than eliminate, the risk of failure to
achieve the Company’s objectives. It should
be recognised that such systems can only
provide reasonable, rather than absolute,
assurance against material misstatement
orloss.
Internal control assessment process
Regular risk assessments and reviews of
internal controls and the Company’s risk
appetite are undertaken by the Board in the
context of the Company’s overall investment
objective. The Board, through delegation to
the Audit Committee, has carried out a robust
assessment and review of the emerging and
principal risks facing the Company. The
review covers thekey business, operational,
compliance and financial risks facing the
Company. Inarriving at its judgement of
what risks the Company faces, the Board
has considered the Company’s operations
inthe light of the following factors:
– The nature and extent of risks which it
regards as acceptable for the Company to
bear within its overall business objective:
– The threat of such risks becoming
areality;
– The Company’s ability to reduce the
incidence and impact of risk on its
performance;
– The cost to the Company and benefits
related to the review of risk and
associated controls of the Company;
and
– The extent to which third parties operate
the relevant controls.
Against this background, the Board has split
the review into five sections reflecting the
nature of the risks being addressed.
The sections are as follows:
– Corporate strategy;
– Published information and compliance
with laws and regulations;
– Relationship with service providers;
– Investment risks; and
– Operational Risks.
Given the nature of the Company’s activities
and the fact that most functions are
sub-contracted, the Directors have obtained
information from key third-party suppliers
regarding the controls operated by them.
Toenable the Board to make an appropriate
risk and control assessment, the information
and assurances sought from third parties
include the following:
– Details of the control environment;
– Identification and evaluation of risks
andcontrol objectives;
– Assessment of the communication
procedures; and
– Assessment of the control procedures
operated.
There were no significant matters of
concern identified in the Board’s review
ofthe internal controls of its third-party
suppliers.
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The key procedures which have been
established to provide effective internal
financial controls are as follows:
– Investment management is provided by
Pantheon Ventures (UK) LLP. The Board is
responsible for the implementation ofthe
overall investment policy and monitors
the actions of the Manager atregular
Board meetings.
– BNP Paribas Trust Corporation UK Limited
(previously BNP Paribas Securities Services,
London Branch) has been appointed
asDepositary. Custody of assets is
alsoundertaken by BNP Paribas Trust
Corporation UK Limited as the Company’s
Custodian for equities and bonds.
– The provision of administration,
accounting and Company secretarial
duties is the responsibility of Link
Alternative Fund Administrators Limited.
– The provision of services is provided
byLinkMarket Services as Registrar of
theCompany.
– The duties of investment management,
accounting and custody of assets are
segregated. The procedures of the
individual parties are designed to
complement one another.
– The Directors of the Company clearly
define the duties and responsibilities of
their agents and advisers in the terms
oftheir contracts. The appointment of
agents and advisers is conducted by the
Board after consideration of the quality
ofthe parties involved; the Board, via the
Management Engagement Committee,
monitors their ongoing performance and
contractual arrangements.
– Mandates for authorisation of investment
transactions and expense payments are
set by the Board.
– The Board reviews detailed financial
information produced by the Manager
andthe Administrator on a regular basis.
The Company does not have an internal
audit function. All of the Company’s
management functions are delegated to
independent third parties whose controls
are reviewed by the Board. It is therefore felt
that there is no need for the Company to
have an internal audit function. Thisneed
isreviewed periodically.
In accordance with guidance issued
todirectors of listed companies, the
Directors have carried out a review of the
effectiveness of the various systems
ofinternal controls as operated by the
Company’s main service providers during
the year and found there to be no matters
ofconcern.
Company Secretary
The Board has direct access to the advice
and services of the Company Secretary,
LinkAlternative Fund Administrators
Limited, who is responsible for ensuring
thatBoard and Committee procedures are
followed and that applicable regulations
arecomplied with.
The Company Secretary is also responsible
to the Board for ensuring the timely delivery
of information and reports and for ensuring
that statutory obligations of the Company
are met.
Dialogue with shareholders
Communication with shareholders is
givenahigh priority by the Board and the
Manager, and all Directors are available
toenter into dialogue with shareholders.
TheChair hasheld a significant number
ofmeetings withshareholders during the
year. Allshareholders are encouraged to
attend and vote at the AGM, during which
the Boardand the Manager are available
todiscuss matters affecting the Company,
and shareholders have the opportunity
toaddress questions to the Manager,
theBoard and the Chairs of the Board’s
Committees. At each AGM, a presentation
isgiven by the Manager to all shareholders
present.
There is regular dialogue with institutional
shareholders and a structured programme
of shareholder presentations by the
Manager to institutional investors taking
place following publication of the Annual
and Half-Yearly results. A detailed list of
theCompany’s shareholders is reviewed
ateach Board meeting. PIP has also put
inplace a PR programme designed to
promote the benefits that PIP can provide
toan investor’s portfolio.
The Half-Yearly and Annual Reports of the
Company are prepared by the Board and
itsadvisers to present a full and readily
understandable review of the Company’s
performance. Copies are dispatched to
shareholders by mail or electronically as
requested and are also available on the
Company’s website: www.piplc.com.
TheCompany always responds to
communications from shareholders.
Shareholders wishing to communicate
directly with the Board should contact
theCompany Secretary by email to
pip_cosec@linkgroup.co.uk or by writing to
the registered office shown on page 184,
who will arrange for the relevant Board
member to contact them.
Further details of our engagement with all of
the Company’s stakeholders and how the
Board has regard to those stakeholders in
the Board’s decision-making processes are
set out in the Strategic Report on pages 49
to 53.
On behalf of the Board
JOHN SINGER CBE
Chair
31 July 2024
Statement on Corporate Governance
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I am pleased to present the Audit Committee
Report for the year ended 31 May 2024.
The Audit Committee comprises myself,
asChair, and the entire Board, who are all
independent Non-Executive Directors.
Following my retirement at the upcoming
AGM, Ms Clements will succeed me as
Chairof the Audit Committee.
Further details about the composition of the
Audit Committee are set out on page 126.
Audit Committee members consider that,
individually and collectively, they are each
independent and appropriately experienced
tofulfil the role required within the sector
inwhich the Company operates. The
constitution and performance of the Audit
Committee are reviewed on a regular basis.
Role of the Audit Committee
Clearly defined terms of reference, which
were reviewed and updated during the
year,have been established by the Board.
Theprimary responsibilities of the Audit
Committee are:
– To monitor the integrity of the financial
statements, the financial reporting
process and the accounting policies
oftheCompany;
– To review the effectiveness of the internal
control environment of the Company and
its reporting processes and to monitor
adherence to best practice in corporate
governance;
– To make recommendations to the Board
in relation to the re-appointment of the
Auditor and to approve the Auditor’s
remuneration and terms of engagement,
including scope of work;
– To review and monitor the Auditor’s
independence and objectivity and the
effectiveness of the audit process; and
– To provide a forum through which the
Company’s Auditor reports to the Board.
The Audit Committee also reviews the
Manager’s whistleblowing procedures.
The Audit Committee has direct access
tothe Company’s Auditor, Ernst & Young
(“EY”), and representatives of EY attend
eachAudit Committee meeting.
Matters considered in the year
We met on five occasions during the year
ended 31 May 2024. At those meetings,
theAudit Committee has:
– Reviewed and agreed the half-year and
year-end portfolio valuation and the net
asset values;
– Reviewed the Company’s financial
statements for the half year and year
endand made formal recommendations
to the Board;
– Reviewed the Company’s going concern
and viability statements;
– Reviewed the internal controls and risk
management systems (including
cybersecurity) of the Company and
itsthird-party service providers;
– Agreed the audit plan and fees with the
Auditor, including the principal areas
offocus;
– Reviewed and discussed the assessment
of the effectiveness of the external audit
process for the year ended 31 May 2023
and received feedback on the 2023 Half
Year Reporting process;
– Considered potential risks to audit quality;
– Discussed the use and purpose of case
studies in the Annual Report;
– Carried out an in-depth review of the
protocols of Pantheon’s Valuation
Committee and Board oversight onthese;
– Reviewed the whistleblowing policy of
theManager (no incidents were reported
during the period); and
– Reviewed its own performance as a
Committee and its own terms of reference.
The principal issues considered by the
Committee were as follows:
A. Valuation process
Discussions have been held with the Manager
about the valuation process, ownership of
assets and the systems in place at Pantheon
to ensure the accuracy ofthe valuation of
the Company’s portfolio.
The Audit Committee has received
reassurances about the robustness of
theManager’s valuation system from
Pantheon, including a memorandum setting
out the valuation process and thebasis for
underlying valuations. MsClements has
attended a recent Valuation Committee
meeting and intends to continue doing so
twice each year and report on these to the
AuditCommittee.
In addition, the Audit Committee reviewed
the outputs of Pantheon’s Investment
Valuation Committee and Pantheon’s
processes and internal controls around
theinvestment valuation process.
B. Undrawn commitments
As an investor in private equity, the Company
has outstanding commitments to fund
investments. Approximately 5.29% of these
uncalled commitments relate to funds that
are outside their investment periods. Generally,
when a fund is past its investment period,
which is typically between five andsix years,
it cannot make any new investments
andonly draws capital to fund follow-on
investments into existing portfolio companies,
or to pay expenses. As a result, the rate of
capital calls by these funds tends toslow
dramatically. The Audit Committee received
an externally audited control report from
Pantheon which provides comfort on the
systems and controls in place to track the
undrawn commitments as part of the
valuation entry process.
The Audit Committee also reviewed the
levelof undrawn commitments as part of
itsanalysis of PIP’s going concern and
long-term viability.
Audit Committee Report
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Audit Committee Report
C. Going concern and long-term viability
The Committee considered the Company’s
viability and made recommendations to
theBoard on whether it was appropriate to
prepare the Company’s financial statements
on the going concern basis. The Board’s
conclusions are set out on pages 54, 120 to
121 and Note 1 on page 150.
D. Maintenance of investment
truststatus
The Manager and Administrator have reported
to the Committee to confirm continuing
compliance with the requirements for
maintaining investment trust status.
Theposition is also discussedwith the
Auditor as part oftheaudit process.
E. Internal controls
The Audit Committee has reviewed and
updated, where appropriate, the Company’s
risk matrix. This document is reviewed by
the Audit Committee every sixmonths. It is
satisfied with the extent, frequency and
quality of the reporting of the Manager’s
monitoring to enable the Audit Committee to
assess the degree of control of the Company
and the effect with which risk is managed
and mitigated. The Audit Committee has
received reports on internal controls from
each of its service providers.
No incidents of significant control failings
orweaknesses have been identified during
theyear ended 31 May 2024, within the
Company or its third-party suppliers,
including Pantheon.
The Company does not have an internal
audit function as substantially all of its
day-to-day operations are delegated to third
parties, all of whom have their own internal
control procedures. The Audit Committee
discussed whether it would be appropriate
to establish an internal audit function
andagreed that the existing system of
monitoring and reporting by third parties
remains appropriate and sufficient.
FRC’s Minimum Standard for Audit
Committees
During the year, the Audit Committee also
carried out an in-depth review of the FRC’s
Minimum Standard for Audit Committees
(the “Minimum Standard”). While the
Minimum Standard has yet to become
mandatory, the Committee has undertaken
a number of actions to ensure compliance
with the Minimum Standard. These actions
include updating its Terms of Reference,
adding a number of standing agenda
itemsto its meetings throughout the year,
expanding the questionnaires for the annual
assessment of the auditor’s performance
and putting measures in place to ensure that
the requirements relating to Audit Tenders
are met when a tender is carried out next.
External audit
The Audit Committee monitors and reviews
the effectiveness of the external audit
process for the publication of the Annual
Report and makes recommendations to the
Board on the re-appointment, remuneration
and terms of engagement ofthe Auditor.
Audit fees
The audit fee incurred for the review of
the2024 Annual Report and Audit was
£149,000 (31 May 2023: £146,000).
TheAudit Committee continues to monitor
the level of audit feescarefully.
Non-audit fees/independence and
objectivity of the Auditor
The Audit Committee reviews the scope and
nature of all proposed non-audit services
before engagement, to ensure that the
independence and objectivity of the Auditor
are safeguarded. The Board’s policy is that
non-audit services may be carried out by the
Company’s Auditor unless there is a conflict
of interest or someone else is considered to
have morerelevant experience.
Non-audit services amounting to £46,000
were provided during the year ended 31May
2024 (31 May 2023: £44,000), relating to the
review of the Half-Yearly Report. Theratio
ofnon-audit to audit fees is 31%. The Audit
Committee believes that it is appropriate
forthe Company’s Auditor to provide these
services to the Company as these services
are audit-related.
The Audit Committee has received
assurances from the Auditor that its
independence is not compromised by
thesupply of these services.
Effectiveness of external audit process
The Audit Committee meets at least twice a
year with the Auditor. The Auditor provides
aplanning report in advance of the annual
audit, a report on the annual audit and a
report on their review of the half-year
financial statements. The Audit Committee
has an opportunity to question and
challenge the Auditor in respect of each
ofthese reports. In addition, at least
onceayear, the Audit Committee has an
opportunity to discuss any aspect of the
Auditor’s work with the Auditor in the
absence of the Manager. After each audit,
the Audit Committee reviews the audit
process and considers its effectiveness
based on input received from the various
parties involved in the audit, such as the
Administrator and Manager through
questionnaires. The assessment includes
an assessment of the Auditor’s ability to
exercise professional scepticism and
challenge. The Audit Committee specifically
discussed this with the Auditor at its
meeting held in July 2024 and the Auditor
reported that they had observed Pantheon
Valuation Committee meetings during the
year to assess the valuation processes, and
had no concerns to report. In addition, the
Auditor challenged the Audit Committee to
consider whether the period over which the
Company’s viability is assessed remains
themost suitable. Following consideration,
the Audit Committee agreed to continue to
consider viability over a three year period
forthe current Annual Report, but to keep
thematter under review.
2024Annual Report and AccountsPantheon International Plc 132
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Continuing appointment of the Auditor
EY was appointed as the Company’s Auditor
at the AGM in 2019 and this is therefore
thefifth audit of the Company’s financial
statements since its appointment.
A competitive tender must be carried out
bythe Company at least every 10 years.
TheCompany is therefore required to carry
out atender no later than in respect of the
financial year ending 31 May 2029. The
current lead audit partner, Mr Matthew Price,
has been in place since the appointment in
2019. Ethical standards generally require the
rotation of the lead audit partner every five
years for a listed company and preparations
are being made for Mr Price to rotate off
theaudit of the Company following the
conclusion of the current year’s audit.
The Committee monitors the Company’s
relationship with the Auditor and has
discussed and considered its independence
and objectivity. The Auditor also provides
confirmation that it is independent within the
meaning of all regulatory and professional
requirements and that objectivity of the
audit is not impaired. The Committee is
therefore satisfied that EY was independent,
especially considering the term of
appointment to date, and will continue
tomonitor this position.
Following the completion of the audit, the
Committee reviewed EY’s effectiveness by:
– Reviewing the overall audit process and
the audit procedures taken to address
theidentified principal issues;
– Considering feedback on the audit
provided by the Manager andLink Group;
and
– Reviewing the experience and continuity
of the audit team, including the audit
partner.
The Committee has considered the principal
issues identified by the audit team during the
audit of the financial statements for the year.
The feedback provided by the Manager
regarding the audit team’s performance
onthe audit was positive. TheAuditor
demonstrated a good understanding of the
Company, andhad identified and focused on
the areas of greatest financial reporting risk.
Itsreporting to the Audit Committee was
clear, open and thorough. The Committee is
satisfied that the Auditorhas demonstrated
professional scepticism and appropriately
challenged management’s judgements
relating to thevaluations of unlisted
investments. TheCommittee acknowledged
that the audit team, including the audit
partner, comprised staff with appropriate
levels ofknowledge and experience of the
investment trust and private equity sectors.
On the basis of these factors and
assessments, the Committee has
concluded that the external audit process
has been effective. Taking into account
theperformance and effectiveness of
theAuditor and the confirmation of
theirindependence, the Committee
hasrecommended to the Board that a
resolution to re-appoint EY as Auditor be
putto shareholders at the forthcoming
AGM. EYhas confirmed its willingness
tocontinue in office.
CMA Order
The Company complied throughout the year
ended 31 May 2024 with the provisions of
the Statutory Audit Services Order 2014,
issued by the Competition andMarkets
Authority (“CMA Order”).
Fair, balanced and understandable
As a result of the work performed, the Audit
Committee has concluded that the Annual
Report for the year ended 31 May 2024,
taken as a whole, is fair, balanced and
understandable and provides the
information necessary for shareholders
toassess the Company’s position and
performance, business model and strategy,
and has reported on these findings to the
Board.
DAVID MELVIN
Audit Committee Chair
31 July 2024
Audit Committee Report
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Other Information
The Board has prepared this
report in accordance with the
requirements of the Large and
Medium-sized Companies
and Groups (Accounts and
Reports) (Amendment)
Regulations 2013.
The law requires the Company’s Auditor to
audit certain disclosures provided. Where
disclosures have been audited, they are
indicated as such. The Auditor’s opinion
isincluded in the “Independent Auditor’s
Report” on pages 137 to 144.
Statement from the Chair
I am pleased to present the Directors’
Remuneration Report for the year ended
31May 2024.
Companies are required to ask shareholders
to approve the annual Remuneration Report,
which includes the annual remuneration
paid to Directors, each year and formally
toapprove the Directors’ Remuneration
Policy on a three-yearly basis. Any change
tothe Directors’ Remuneration Policy
requires shareholder approval. The vote
onthe Directors’ Remuneration Report
isanadvisory vote, while the Directors’
Remuneration Policy is subject to a
bindingvote.
A resolution to approve the Remuneration
Policy was last proposed and approved by
shareholders at the AGM of the Company
held on 18 October 2022. The Remuneration
Policy will apply until it is next put to
shareholders for renewal of that approval
atthe Company’s AGM in 2025, unless any
variations to the policy are proposed prior to
this. There will be no significant change in
the way that the Remuneration Policy will
beimplemented inthe course of the next
financial year.
A resolution to approve the Remuneration
Report will be proposed at the AGM of the
Company to be held on 16 October 2024.
The Board consists entirely of Non-Executive
Directors and the Company has no employees.
We have not, therefore, reported on those
aspects of remuneration that relateto
Executive Directors.
As explained on page 128, it is not considered
appropriate for the Company toestablish
aseparate Remuneration Committee. It is
therefore the practice forthe Board as a
whole to consider and approve Directors’
remuneration.
In accordance with PIP’s Remuneration
Policy adopted on 18 October 2022, fees
forthe Directors are increased annually,
effective from the first day of the Company’s
financial year, at a rate no greater than the
rate of the Consumer PriceIndex (“CPI”)
prevailing at the time.
In line with this policy, fees for the Directors
were increased with effect from 1 June 2024
by the prevailing CPI of 2% as at 31 May 2024.
Directors’ fees for the year (audited)
Fees Percentage change (%)
*
Year to
31 May 2024
£
Year to
31 May 2023
£ 2023–2024 2022–2023 2021–2022 2020–2021
J.B.H.C.A. Singer CBE (Chair) 84,000 66,549 26%
1
63%
1
2% 10%
D.L. Melvin 58,534 56,785 3% 6% 2% 36%
2
M.A. Sieghart 50,107 46,520 8%
3
14%
3
2% 10%
J.D. Burgess 44,598 43,264 3% 6% 2% 10%
Dame Sue Owen DCB 44,598 43,264 3% 6% 2% 10%
Z. Clements
4
40,424 N/A N/A N/A N/A N/A
R.A. Welde
5
38,023 N/A N/A N/A N/A N/A
T. Sakovska
6
N/A 7, 426 N/A N/A N/A N/A
Sir Laurie Magnus CBE
7
N/A 27,47 7 N/A N/A 2% 8%
Total 360,284 291,285
* The average percentage change over the previous financial years. Fees for Directors who were appointed during a year were calculated on a pro rata basis, in order to provide a
meaningful figure.
1 Mr Singer CBE was appointed as Chair of the Board on 18 October 2022, resulting in a higher fee from this date.
2 Mr Melvin was appointed as Chair of the Audit Committee in April 2020, resulting in a higher fee from this date.
3 Ms Sieghart was appointed as Senior Independent Director from 18 October 2022, resulting in a higher fee from this date.
4 Ms Clements joined the Board on 5 July 2023.
5 Mr Welde joined the Board on 25 July 2023.
6 Ms Sakovska joined the Board on 1 March 2022 and subsequently resigned on 22 July 2022.
7 Sir Laurie Magnus CBE retired from the Board on 18 October 2022.
Directors’ Remuneration Report
2024Annual Report and AccountsPantheon International Plc 134
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Directors’ Remuneration Report
Directors’ fees for the 12 months to 31 May 2025 are as set out on page 135.
No travel expenses or any other expenses were claimed by the Directors from the Company
during the year ended 31 May 2024 or as at the date of this Report.
Company performance
The graph below shows the total return to shareholders compared with the total shareholder
returns of the FTSE All-Share Total Return Index and MSCI World Total Return (Sterling)
Index. These indices have been selected as the most relevant, as there is no listed index that
is directly comparable with the Company’s portfolio.
Relative importance of spend on pay
The table below sets out, in respect of the financial year ended 31 May 2024 and the
preceding financial period, the total remuneration paid to Directors, the management fee
andshare buybacks and the percentage change between the two periods:
Year to
31 May 2024
£’000
Year to
31 May 2023
£’000
Change
%
Total remuneration paid to Directors 360 291 24%
Management fee 25,674 27,707 (7%)
Share buybacks 196,703
1
19,559 906%
1 Excluding costs and stamp duty.
Note: the items listed in the table above are as required by the Large and Medium-sized Companies and Groups (Accounts
and Reports) (Amendment) Regulations 2013 ss.20, with the exception of the management fee, which has been included
because the Directors believe that it will help shareholders’ understanding of the relative importance of the spend on pay.
The figures for this measure are the same as those shown in Note 3 to the financial statements.
Directors’ interests (audited)
There is no requirement under the Company’s Articles of Association or the terms of their
appointment for Directors to hold shares in the Company.
The interests of the Directors and any persons closely associated in the shares of the
Company as at 31 May 2024 are set out below:
31 May 2024 31 May 2023
J.B.H.C.A. Singer CBE (Chair) 436,620 399,820
J.D. Burgess
2
3,07 7,910 2,719,696
Z. Clements 22,143 –
D.L. Melvin
3
105,000 105,000
Dame Sue Owen DCB 22,500 17,5 00
M.A. Sieghart 47,250 37, 25 0
R.A. Welde 67,293 –
2 Includes 2,678,090 shares held by The November 1990 Trust, a connected person of Mr Burgess.
3 Held jointly with spouse.
There has been no change to the above interests between 31 May 2024 and the date of
thisreport.
750%
300%
150%
0
2010
PIP FINANCIAL YEAR
2012
2014
2015
2016
2017
2018
2019
2020
2024
2021
600%
450%
2011
2013
2022
2023
PIP Ordinary Share Price FTSE All-Share Total Return
MSCI World Total Return (Sterling)
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Voting at the AGM
The Directors’ Remuneration Policy and
theDirectors’ Remuneration Report for the
year ended 31 May 2023 were approved
byshareholders at the AGMs held on
18October 2022 and 19 October 2023
respectively.
The votes cast by proxy were as follows:
Remuneration Report
Number
of votes
% of
votes cast
For 223,584,580 99.94
Against 130,257 0.06
At Chair’s
discretion
– –
Total votes cast 223,714,837 100.00
Number of
votes withheld 137,966 –
Remuneration Policy
Number
of votes
% of
votes cast
For 287,784,289 99.98
Against 54,330 0.02
At Chair’s
discretion
– –
Total votes cast 287,838,619 100.00
Number of
votes withheld 71,047 –
Directors’ Remuneration Policy
The Directors’ Remuneration Policy
(the“Policy”) is put to shareholders’ vote at
least once every three years and in any year
if there is to be a change in the Policy.
A resolution to approve the Policy was
approved by shareholders at the AGM
heldon 18 October 2022.
The Policy
The Board’s policy is that remuneration of
Non-Executive Directors should reflect the
experience of the Board as a whole and is
determined with reference to comparable
organisations and appointments. The level
of remuneration has been set in order to
attract individuals of a calibre appropriate to
the future development of the Company and
to reflect the specific circumstances of the
Company, the duties and responsibilities of
the Directors, and the value and amount of
time committed to the Company’s affairs.
There are no performance conditions
attaching to the remuneration of the
Directors as the Board does not believe
thatthis is appropriate for Non-Executive
Directors. The Directors do not receive
pension benefits, share options nor
participate in long term incentive schemes.
All Directors act in a non-executive capacity,
and the fees for their services are approved
by the whole Board. The fees for the
Directors are determined within the limits
set out in the Company’s Articles of
Association, or any greater sum that may
bedetermined by ordinary resolution of
theCompany.
Since 1 June 2021, fees for the Directors are
increased annually, effective from the first
day of the Company’s financial year and,
since the 2022 AGM, the increase in Directors’
fees will be set at a rate no greater than the
rate of CPI prevailing at the time, with the
rate being determined at the discretion of
the Board.
The Chair does not participate in any
discussions relating to his own fee, which
isdetermined by the other Directors.
Directors are entitled to be paid all travelling,
hotel or other expenses properly incurred by
them in connection with their attendance
atDirector or shareholder meetings or
otherwise in connection with the discharge
of their duties as Directors.
No other additional fees are payable for
membership of the Board’s Committees.
Fees for any new Director appointed will be
made on the above basis. Fees payable
inrespect of subsequent years will be
determined following an annual CPI review,
with additional market reviews taking place as
appropriate, to ensure fees remain appropriate.
Expected
fees for
year to
31 May
2025
Year to
31 May
2024
Chair £85,680 £84,000
Chair of the Audit
Committee £59,704 £58,534
Senior Independent
Director £51,109 £50,107
Other Directors £45,489 £44,598
Directors’ service contracts
None of the Directors has a contract of service
with the Company. Each Director has entered
into terms of appointment as aNon-Executive
Director of the Company. There has been no
other contract or arrangement between the
Company and any Director at any time during
the year. Under the Articles of Association,
each Director shall retire and be subject to
re-appointment at the first AGM following
appointment, and at least every three years
thereafter. After nine years’ service, Directors
are subject to annual re-appointment.
Following the Company’s inclusion in the
FTSE 250, and in accordance with the AIC
Code, all Directors are subject to annual
re-election at each AGM. There are no
agreements between the Company and its
Directors concerning compensation for
lossof office.
Any views expressed by shareholders on the
fees being paid to Directors would be taken
into consideration by the Board.
Approval
The Directors’ Remuneration Report was
approved by the Board of Directors and
signed on its behalf by:
JOHN SINGER CBE
Chair
31 July 2024
Directors’ Remuneration Report
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Other Information
Directors’ Responsibility Statement
– State whether applicable UK Accounting
Standards have been followed, subject to
any material departures disclosed and
explained in the financial statements; and
– Prepare the financial statements on
agoing concern basis unless it is
inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Company’s
transactions and disclose withreasonable
accuracy at any time the financial position
ofthe Company and enable them to ensure
that the financial statements comply with
the Companies Act2006. They are also
responsible for safeguarding the assets
ofthe Company and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are also responsible for
preparing the Strategic Report, the Directors’
Report, the Directors’ Remuneration Report,
the Corporate Governance Statement
andthe Report of the Audit Committee in
accordance with the Companies Act 2006
and applicable regulations, including the
requirements ofthe Listing Rules and the
Disclosure Guidance and Transparency
Rules.
The Directors have delegated responsibility
to the Manager for the maintenance and
integrity of the Company’s corporate and
financial information included on the
Company’s website (www.piplc.com).
Legislation in the UK governing the
preparation and dissemination of financial
statements may differ from legislation in
other jurisdictions.
Each of the Directors, whose names are
listed on pages 116 and 117, confirms that
tothe best of their knowledge:
– The financial statements, prepared in
accordance with applicable accounting
standards, give a true and fair view of the
assets, liabilities, financial position and
profit of the Company; and
– The management report, which is
incorporated in the Directors’ Report and
Strategic Report, includes a fair review
ofthe development and performance
ofthe business and the position of the
Company, together with a description
ofthe principal risks and uncertainties
that it faces.
The UK Corporate Governance Code requires
Directors to ensure that the Annual Report and
financial statements are fair, balanced and
understandable. In order to reach a conclusion
The Directors are responsible for preparing
the Annual Report and the financial statements
in accordance with applicable laws and
regulations in accordance withFRS102.
Company law requires the Directors to
prepare financial statements for each
financial year. Under that law they have
elected to prepare the financial statements
in accordance with applicable law and UK
Accounting Standards (UK Generally Accepted
Accounting Practice). Under company law
the Directors must not approve the financial
statements unless they are satisfied that
they give a true andfair view of the state of
affairs of the Company as at the end of each
financial year and of the profit or loss of the
Company for that period.
In preparing these financial statements,
theDirectors are required to:
– Present a true and fair view of the financial
position, financial performance and cash
flows of the Company;
– Select suitable accounting policies in
accordance with United Kingdom GAAP
and then apply them consistently;
– Present information, including accounting
policies, in a manner that provides relevant,
reliable, comparable and understandable
information;
– Make judgements and estimates that are
reasonable and prudent;
on this matter, the Board has requested that
the Audit Committee advises on whether it
considers that the Annual Report and financial
statements fulfil these requirements. The
process by which the Audit Committee has
reached these conclusions is set out in its
report on pages 130 to 132.
As a result, the Board has concluded that the
Annual Report and financial statements for
the year ended 31May 2024, taken as a whole,
isfair, balanced and understandable and
provides the information necessary for
shareholders to assess the Company’s
position and performance, business model
and strategy.
Signed on behalf of the Board by
JOHN SINGER CBE
Chair
31 July 2024
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Independent Auditor’s Report to the Members of Pantheon International Plc
Opinion
We have audited the financial statements of
Pantheon International plc (the “Company”)
for the year ended 31 May 2024 which
comprise the Income Statement, the
Statement of Changes inEquity, the Balance
Sheet, the Cash FlowStatement, and the
related notes 1 to25, including a summary
of significant accounting policies. The
financial reporting framework that has been
applied in their preparation is applicable law
and United Kingdom Accounting Standards
including FRS 102 “The Financial Reporting
Standard applicable in the UK and Republic
of Ireland” (United Kingdom Generally
Accepted Accounting Practice).
In our opinion, the financial statements:
– give a true and fair view of the Company’s
affairs as at 31 May 2024 and of its profit
for the year then ended;
– have been properly prepared in accordance
with United Kingdom Generally Accepted
Accounting Practice; and
– have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance
withInternational Standards on Auditing
(UK) (ISAs (UK)) and applicable law.
Ourresponsibilities under those standards
arefurther described in the Auditor’s
responsibilities for the audit of the financial
statements section of our report. Webelieve
that the audit evidence we haveobtained is
sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Company in
accordance with the ethical requirements
that are relevant to our audit of the financial
statements in the UK, including the Financial
Reporting Council’s Ethical Standard as applied
to public interest entities, and wehave
fulfilled our other ethical responsibilities in
accordance withthese requirements.
The non-audit services prohibited by the
FRC’s Ethical Standard were not provided to
the Company and we remain independent
ofthe Company in conducting theaudit.
Conclusions relating to going
concern
In auditing the financial statements, we have
concluded that the Directors’ use of the
going concern basis of accounting in the
preparation of the financial statements is
appropriate. Our evaluation of the Directors’
assessment of the Company’s ability to
continue to adopt the going concern basis
ofaccounting included:
– We confirmed our understanding of the
Company’s going concern assessment
process and engaged with the Directors
and the Company Secretary to determine
if all key factors were considered in their
assessment.
– We inspected the Directors’ assessment
of going concern, including the portfolio
cashflow forecast, for the periods covering
at least twelve months from thedate the
financial statements were authorised for
issue. In preparing the portfolio cashflow
forecast, the Company has concluded
that it is able tocontinue to meet its
ongoing costs asthey fall due.
– We have reviewed the factors and
assumptions as applied to the portfolio
cashflow forecast and the liquidity
assessment of the investment portfolio.
We considered the appropriateness
ofthe methods used to calculate the
portfolio cashflow forecast and the
liquidity assessment and determined,
through testing of the methodology and
calculations, that the methods, inputsand
assumptions utilised were appropriate
tobe able to make an assessment for
theCompany.
– In relation to the Company’s borrowing
arrangements, we inspected the Directors’
assessment of the risk of breaching the
loan facility covenants as aresult of a
reduction in the value of the Company’s
portfolio. We recalculated the Company’s
compliance with loan facility covenants in
the scenarios assessed by the Directors
who also performed reverse stress testing
in order to identify what factors would
lead to theCompany breaching the
financial covenants.
– We considered the mitigating factors
included in the portfolio cashflow
forecasts and covenant calculations that
are within the control of the Company.
– We reviewed the Company’s going
concern disclosures included in the
annual report in order to assess that
thedisclosures were appropriate and in
conformity with the reporting standards.
Based on the work we have performed,
wehave not identified any material
uncertainties relating to events or conditions
that, individually or collectively, may cast
significant doubt on the Company’s ability to
continue as a going concern for the period of
at least 12 months from the date of issue of
these financial statements.
In relation to the Company’s reporting on
how they have applied the UK Corporate
Governance Code, we have nothing material
to add or draw attention to in relation to
theDirectors’ statement in the financial
statements about whether the Directors
considered it appropriate toadopt the
goingconcern basis of accounting.
Our responsibilities and the responsibilities
of the Directors with respect to going
concern are described in the relevant
sections of this report. However, because
not all future events or conditions can be
predicted, this statement is not a guarantee
as to the Company’s ability to continue as
agoing concern.
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An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation
of materiality and our allocation of performance
materiality determine our audit scope for
theCompany. This enables us to form an
opinion on the financial statements. We take
into account size, risk profile, the organisation
of the Company and effectiveness of controls,
the potential impact of climate change and
changes in the business environment when
assessing the level of work to be performed.
Climate change
Stakeholders are increasingly interested in
how climate change will impact Pantheon
International Plc. The Company has
determined that the most significant
futureimpacts from climate change on
itsoperations may be from changes in
Overview of our audit approach
Key audit
matters
– Risk of incorrect valuation of unlisted investments.
– Incorrect valuation of investments in third party managed funds and
co-investment vehicles which are audited on an annual basis and for which
periodic fair value information is provided to the Company.
– Incorrect valuation of investments in co-investment vehicles or third-party
funds which are not audited on an annual basis.
– Incorrect valuations of investments in funds and entities managed by
Pantheon Ventures (UK) LLP (“Pantheon”).
Materiality
– Overall materiality of £22.8m which represents 1% of shareholders’ funds.
regulations that may adversely affect
theirunderlying portfolio investments.
Theirapproach to managing climate and
other ESG risks as part of managing
investment risk is explained on page 47 of
the Strategic Report, which form part of the
“Other information”, rather than the audited
financial statements. Our procedures on
these unaudited disclosures therefore
consisted solely of considering whether they
are materially inconsistent with the financial
statements or our knowledge obtained in
the course of the audit or otherwise appear
to be materially misstated, in line with our
responsibilities on “Other information”.
In planning and performing our audit we
assessed the potential impacts of climate
change on the Company’s business and
anyconsequential material impact on its
financial statements.
Independent Auditor’s Report to the Members of Pantheon International Plc
Our audit effort in considering climate
change was focused on the adequacy of
theCompany’s disclosures in the financial
statements as set out in note 1 and
conclusion that there was no material
impact from climate change on the
financialstatements. We also challenged
the Directors’ considerations of climate
change in their assessment of viability
andassociated disclosures.
Based on our work we have not identified the
impact of climate change on the financial
statements to be a key audit matter or to
impact a key audit matter.
Key audit matters
Key audit matters are those matters that,
inour professional judgment, were of
mostsignificance in our audit of the financial
statements of the current period and include
the most significant assessed risks of
material misstatement (whether ornot due
to fraud) that we identified. These matters
included those which had the greatest effect
on: the overall audit strategy; the allocation
of resources in theaudit; and directing the
efforts of the engagement team. These
matters were addressed in the context of
our audit of the financial statements as a
whole, and in our opinion thereon, and we
donot provide a separate opinion on
thesematters.
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Risk Our response to the risk
Key observations communicated
tothe Audit Committee
Incorrect valuation of unlisted investments
(£2,496m, 2023: £2,416m)
Refer to the Audit Committee Report (page 130); Accounting policies
(page 150); and Note 9 of the Financial Statements (page 158)
The unlisted investment portfolio represents 99% of the Net Asset
Value (NAV) of the Company and consists of investments in:
– Third party managed funds
– Funds or entities managed by Pantheon
Within this investment portfolio are a pool of investments attributed
to the Company’s Asset Linked Note liability of £30m (2023: £31m).
The valuation of the assets held in the investment portfolio is the key
driver of the Company’s net asset value and total return. Incorrect
investment valuation could have a significant impact on the return
generated by the shareholders.
We attribute a higher risk of estimation uncertainty to a portfolio of
this nature. We therefore deem the valuation of unlisted investments
at fair value to be a fraud and significant audit risk.
We have further analysed the unlisted investment portfolio into
threecategories where specific audit procedures are performed in
addition to the general audit procedures on unlisted investments to
reflect the risk associated.
We performed the following procedures:
We obtained an understanding of Pantheon’s processes and controls surrounding the
investment valuation process including controls that are in place within the Company
and operated or performed by Pantheon by performing a walkthrough to assess the
design and implementation of controls in place.
We performed the following procedures for a sample of investments across all types
ofinvestments:
– We independently obtained the most recently available capital allocation statements
or direct confirmations from the relevant General Partner and compared the NAV
ofthe investment attributable to the Company to the valuation per the accounting
records.
– Where the most recently available capital allocation statements were non-coterminous
with the reporting date, we obtained details of adjustments for cashflows and fair
value made by Pantheon and corroborated these to call and distribution notices and
bank statements.
– For a sample of new investments during the year, we have obtained and reviewed the
due diligence performed by Pantheon to ensure that the investment recommendation
pack was appropriately completed prior to making new investments.
– For a sample of realised investments during the year, we agreed the proceeds of the
disposal to the capital account statements and performed back testing by comparing
the sale price and subsequent cash receipts to the most recent valuation recorded by
the Company for the investment.
– We reviewed the investment valuations and inquired of Pantheon regarding any
potential fair value adjustments as a result of updated information received or
observable market movements and obtained evidence to confirm these were
immaterial to the Company’s financial statements.
– We noted that management recognised a £3.7m adjustment over the valuations of
investments with listed underlying investments and where the most recent General
Partner valuation was as at March 2024. We obtained an understanding of the
adjustment posted and performed audit procedures to assess industry movements
aligned to the investment portfolio over the period March 2024 to May 2024.
The results of our procedures
identified no material misstatement
in relation to the risk of incorrect
valuation of unlisted investments.
Independent Auditor’s Report to the Members of Pantheon International Plc
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Risk Our response to the risk
Key observations communicated
tothe Audit Committee
Investments in third party managed funds
and co-investment vehicles which are
audited on an annual basis and for which
periodic fair value information is provided
tothe Company (£1,997m, 2023: £1,987m)
The investment portfolio is susceptible to material error due to the
investments being unquoted with no market price available and
management relying on third party information.
Additional procedures on investments in third party
managed funds and co-investments which are audited
on an annual basis and for which periodic fair value
information is provided to the Company
We have obtained the most recent audited financial statements for a sample of these
unlisted investments. Our sample included the testing of 197 investments, totalling
£1,629m (2023: 198 investments, totalling £1,570m). We performed the following
procedures where applicable:
– Inspected the Generally Accepted Accounting Principles (“GAAP”) applied and
reviewed accounting policies on key areas impacting the NAV and compared these
tothe fair value requirements per FRS102.
– Compared the NAV per the audited financial statements to the capital account
statements which are coterminous with the financial statements’ year end date for a
sample of investments with balances which are above our performance materiality.
– Determined whether the audit firm signing the financial statements was a
recognisedaudit firm and checked whether there were any modifications made to
their audit reports.
The results of our procedures
identified no material misstatement
in relation to the risk of incorrect
valuation of investments in
thirdparty managed funds and
co-investment vehicles which are
audited on an annual basis and for
which periodic fair value information
is provided to the Company.
Investments in third party managed funds
and co-investment vehicles which are
notaudited on an annual basis (£220m,
2023: £133m)
Pantheon obtains the underlying data from the investment
managers of these third-party funds or co-investment vehicles.
Pantheon applies the Company’s valuation policy and concludes
whether key assumptions used in valuing these assets are
reasonable. We consider the risk of management override to
bemore prevalent in this area.
Additional procedures on investments in third party
managed funds and co-investment vehicles which are
not audited on an annual basis
Where the investments in third party managed funds or co-investments were not
audited on an annual basis:
– We obtained the fair value calculations supporting the value held by the Company and,
where applicable, agreed key inputs to the supporting evidence.
– For investment vehicles with audited sponsor funds, we have inspected the GAAP
applied by the sponsor fund and reviewed accounting policies on key areas impacting
the NAV and compared these to the fair value requirements per FRS102.
Our sample included testing of 24 investments, totalling £201m (2023: 15 investments,
totalling £117m), which did not have an audit performed either for the investment vehicle
itself or a significant portion of its underlying holdings.
The results of our procedures
identified no material misstatement
in relation to the risk of incorrect
valuation of investments in third
party managed funds and
co-investment vehicles which are
notaudited on an annual basis.
Independent Auditor’s Report to the Members of Pantheon International Plc
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Independent Auditor’s Report to the Members of Pantheon International Plc
Risk Our response to the risk
Key observations communicated
tothe Audit Committee
Investments in other funds and
entitiesmanaged by Pantheon
(£279m,2023: £296m)
Where the Company invests in other entities managed by Pantheon,
there is an increased risk the fund fair values are susceptible to
manipulation due to the related party relationship as Pantheon is
performing the valuation.
Additional procedures on investments held in other funds
and entities managed by Pantheon
For a sample of investments in Pantheon managed funds which are audited, we have
obtained the most recent audited set of financial statements where available. Our
samples included testing of seven investments which had audited financial statements
within the structure, totalling £166m (2023: 10 investments, totalling £178m), and nine
investments, totalling £90m (2023: 11 investments, totalling £93m), from internally
managed funds which do not have annually audited financial statements. We performed
the following procedures where applicable:
– Inspected the GAAP applied and reviewed accounting policies on key areas impacting
the NAV and compared these to the fair value requirements per FRS102.
– Compared the NAV per the audited financials to the capital account statements
whichare coterminous with the financial statements’ year end date for a sample of
investments.
– Determined whether the audit firm signing the financial statements was a recognised
audit firm and checked whether there were modifications made to their audit report.
– For unaudited investments, we have performed a lookthrough into the investments
held by the entity to determine whether the underlying holdings were subject to audit.
For those that are audited, we have inspected the GAAP applied by the underlying
holdings and reviewed accounting policies on key areas impacting the NAV and
compared these to the fair value requirements per FRS102.
– Where the internally managed fund and its underlying investments are not audited,
wehave obtained the fair value calculations supporting the value held by the
Company and, where applicable, agreed key inputs to the supporting evidence.
The results of our procedures
identified no material misstatement
inrelation to the risk of incorrect
valuation of investments in other funds
and entities managed by Pantheon.
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Independent Auditor’s Report to the Members of Pantheon International Plc
On the basis of our risk assessments,
together with our assessment of the
Company’s overall control environment,
ourjudgment was that performance
materiality was 75% (2023: 75%) of our
planning materiality, namely £17.1m
(2023: £18.4m). We have set performance
materiality at this percentage due to our
understanding of the control environment
that indicates a lower risk of material
misstatements, both corrected and
uncorrected.
Reporting threshold
An amount below which identified
misstatements are considered as being
clearly trivial.
We agreed with the Audit Committee that
we would report to them all uncorrected
audit differences in excess of £1.14m
(2023:£1.23m), which is set at 5% of
planning materiality, as well as differences
below thatthreshold that, in our view,
warranted reporting on qualitative grounds.
We evaluate any uncorrected
misstatements against both the quantitative
measures of materiality discussed above
and in light of other relevant qualitative
considerations in forming our opinion.
Other information
The other information comprises the
information included in the annual report,
other than the financial statements and our
auditor’s report thereon. The Directors
areresponsible for the other information
contained within the annual report.
Our opinion on the financial statements
does not cover the other information and,
except to the extent otherwise explicitly
stated in this report, we do not express any
form of assurance conclusion thereon.
Our responsibility is to read the other
information and, in doing so, consider
whether the other information is materially
inconsistent with the financial statements or
our knowledge obtained in the course ofthe
audit or otherwise appears to be materially
misstated. If we identify such material
inconsistencies or apparent material
misstatements, we are required to
determine whether this gives rise to a
material misstatement in the financial
statements themselves. If, based on the
work we have performed, we conclude
thatthere is a material misstatement of
theother information, we are required
toreport that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed
by the Companies Act 2006
In our opinion the part of the Directors’
Remuneration Report to be audited has
been properly prepared in accordance
withthe Companies Act 2006.
In our opinion, based on the work
undertaken in the course of the audit:
– the information given in the Strategic
report and the Directors’ report for the
financial year for which the financial
statements are prepared is consistent
with the financial statements; and
Our application of materiality
We apply the concept of materiality in
planning and performing the audit,
inevaluating the effect of identified
misstatements on the audit and in
formingour audit opinion.
Materiality
The magnitude of an omission or
misstatement that, individually or in the
aggregate, could reasonably be expected
toinfluence the economic decisions of
theusers of the financial statements.
Materiality provides a basis for determining
thenature and extent of ouraudit procedures.
We determined materiality for the Company
to be £22.8 million (2023: £24.5 million),
which is 1% (2023: 1%) of shareholders’
funds. We believe that shareholders’ funds
provide us with materiality aligned to the key
measure of the Company’s performance.
During the course of our audit, we reassessed
initial materiality and made no changes to
thebasis of calculation from our original
assessment at the planning stage.
Performance materiality
The application of materiality at the individual
account or balance level. It is set at an amount
to reduce to an appropriately low level the
probability that the aggregate of uncorrected
and undetected misstatements exceeds
materiality.
– the Strategic report and Directors’ reports
have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to
report by exception
In the light of the knowledge and
understanding of the Company and its
environment obtained in the course of
theaudit, we have not identified material
misstatements in the Strategic report or
Directors’ report.
We have nothing to report in respect of the
following matters in relation to which the
Companies Act 2006 requires us to report
toyou if, in our opinion:
– adequate accounting records have not
been kept, or returns adequate for our
audit have not been received from
branches not visited by us; or
– the financial statements and the part of
the Directors’ Remuneration Report to
beaudited are not in agreement with
theaccounting records and returns; or
– certain disclosures of Directors’
remuneration specified by law are not
made; or
– we have not received all the information
and explanations we require for our audit.
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Independent Auditor’s Report to the Members of Pantheon International Plc
Corporate Governance Statement
We have reviewed the Directors’ statement
in relation to going concern, longer-term
viability and that part of the Corporate
Governance Statement relating to the
Company’s compliance with the provisions
of the UK Corporate Governance Code
specified for our review by the Listing Rules.
Based on the work undertaken as part of
ouraudit, we have concluded that each of
the following elements of the Corporate
Governance Statement is materially
consistent with the financial statements or
our knowledge obtained during the audit:
– The Directors’ statement with regards
tothe appropriateness of adopting the
going concern basis of accounting and
any material uncertainties identified set
out on pages 120 and 121;
– The Directors’ explanation as to its
assessment of the Company’s prospects,
the period this assessment covers and
why the period is appropriate set out on
page 54;
– The Directors’ statement on whether it
has a reasonable expectation that the
Company will be able to continue in
operation and meets its liabilities set
outon pages 120 and 121;
– The Directors’ statement on fair, balanced
and understandable set out onpage 136;
– The Board’s confirmation that it has
carried out a robust assessment of the
emerging and principal risks set out
onpage 44;
– The section of the annual report that
describes the review of effectiveness of
risk management and internal control
systems set out on page 128; and;
– The section describing the work of the
Audit Committee set out on page 130.
Responsibilities of Directors
As explained more fully in the Directors’
responsibilities statement set out on
page136, the Directors are responsible for
the preparation of the financial statements
and for being satisfied that they give a true
and fair view, and for such internal control
asthe Directors determine is necessary
toenable the preparation of financial
statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the
Directors are responsible for assessing the
Company’s ability to continue as a going
concern, disclosing, as applicable, matters
related to going concern and using the going
concern basis of accounting unless the
Directors either intend to liquidate the
Company or to cease operations, or have
norealistic alternative but to do so.
Auditor’s responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable
assurance is a high level of assurance, but
isnot a guarantee that anaudit conducted
inaccordance with ISAs (UK) will always
detect a material misstatement when it
exists. Misstatements can arise from fraud
orerror and are considered material if,
individually or in the aggregate, they could
reasonably be expected to influence the
economic decisions of users taken on
thebasis of these financial statements.
Explanation as to what extent the audit
was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances
of non-compliance with laws and regulations.
We design procedures in line with our
responsibilities, outlined above, todetect
irregularities, including fraud. Therisk of not
detecting a material misstatement due to
fraud is higher than therisk of not detecting
one resulting fromerror, as fraud may involve
deliberate concealment by, for example,
forgery orintentional misrepresentations,
orthrough collusion. The extent to which
ourprocedures are capable of detecting
irregularities, including fraud is detailed
below.
However, the primary responsibility for the
prevention and detection of fraud rests with
both those charged with governance of the
Company and management.
– We obtained an understanding of the
legaland regulatory frameworks that
areapplicable to the Company and
determined that the most significant are
the Companies Act 2006, the Listing
Rules, the UK Corporate Governance
Code, the Association of Investment
Companies’ Code and Statement of
Recommended Practice, Section 1158
ofthe Corporation Tax Act 2010 and
TheCompanies (Miscellaneous
Reporting) Regulations 2018.
– We understood how the Company is
complying with those frameworks through
discussions with the Audit Committee
and the Company Secretary and a review
of Board minutes and the Company’s
documented policies and procedures.
– We assessed the susceptibility of the
Company’s financial statements to
material misstatement, including how
fraud might occur by considering the key
risks impacting the financial statements.
We identified a fraud risk with respect
tomanagement override in relation
toinvestments in funds and entities
managed by Pantheon and investments
inthird party managed funds and
co-investment vehicles which are not
audited on an annual basis. Further
discussion of our approach is set out
inthe section on the key audit matters
above. In addition, we performed tests
ofjournal entries, focusing on unusual
and year-end manual journals.
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Other Information
Independent Auditor’s Report to the Members of Pantheon International Plc
Use of our report
This report is made solely to the Company’s
members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken
sothat we might state to the Company’s
members those matters we are required to
state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted
by law, we do not accept or assume
responsibility to anyone other than the
Company and the Company’s members as
abody, for our audit work, for this report,
or for the opinions we have formed.
MATTHEW PRICE
(SENIOR STATUTORY AUDITOR)
for and on behalf of
Ernst & Young LLP, Statutory Auditor
London
31 July 2024
– Based on this understanding we designed
our audit procedures to identify
non-compliance with such laws and
regulations. Our procedures involved
areview of Pantheon and the Company
Secretary’s reporting to the Directors
withrespect tothe application of the
documented policies and procedures and
review ofthe financial statements to
confirm compliance with the reporting
requirements of the Company.
A further description of our responsibilities
for the audit of the financial statements
islocated on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s
report.
Other matters we are required to address
Following the recommendation from the
Audit Committee, we were appointed by the
Company on 2 December 2019 to audit the
financial statements for the year ending
31May 2020 and subsequent financial
periods. The period of total uninterrupted
engagement including previous renewals
and reappointments isfive years, covering
the years ending 31May 2020 to 31 May 2024.
The audit opinion is consistent with the
additional report to the Audit Committee.
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Financial Statements
Income Statement 146
Statement of Changes in Equity 147
Balance Sheet 148
Cash Flow Statement 149
Notes to the Financial Statements 150
Strategic Report
Manager’s Review
Governance
Financial Statements
Other Information
2024Annual Report and AccountsPantheon International Plc 146
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Manager’s Review
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Financial Statements
Other Information
Income Statement Year ended 31 May 2024
Year ended 31 May 2024 Year ended 31 May 2023
Note
Revenue
£’000
Capital
£’000
Total
1
£’000
Revenue
£’000
Capital
£’000
Total
1
£’000
Gains on investments at fair value through profit or loss
9b
– 60,324 60,324 – 50,885 50,885
(Losses)/gains on financial instruments at fair value through profit or loss – ALN (675) (2,745) (3,420) (856) 4,240 3,384
Currency gains on cash and cash equivalents
18
– 5,491 5,491 – 9,179 9,179
Investment income
2
16,534 – 16,534 18,084 – 18,084
Investment management fees
3
(25,674) – (25,674) (27,707) – (27,707 )
Other expenses
4
(2,148) (3,374) (5,522) (2,059) (1,625) (3,684)
Return before financing and taxation (11,963) 59,696 47,733 (12,538) 62,679 50,141
Interest payable and similar expenses
6
(13,051) – (13,051) (6,366) – (6,366)
Return before taxation (25,014) 59,696 34,682 (18,904) 62,679 43,775
Taxation paid
7
(3,033) – (3,033) (1,494) – (1,494)
Return for the year, being total comprehensive income for the year (28,047) 59,696 31,649 (20,398) 62,679 42,281
Return per ordinary share
8
(5.68)p 12.08p 6.40p (3.83)p 11.77p 7.94p
1 The Company does not have any income or expenses that are not included in the return for the year, therefore the return for the year is also the total comprehensive income for the year. The supplementary revenue and capital columns are prepared
in accordance with Financial Repor ting Standards (“ FRS ”), and under guidance published in the Statement of Recommended Practice (“SORP”) issued by the Association of Investment Companies (“AIC”).
All revenue and capital items in the above statement relate to continuing operations. No operations were acquired or discontinued during the period.
The Notes on pages 150 to 173 form par t of these financial statements.
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Other Information
Statement of Changes in Equity Year ended 31 May 2024
Note
Share
capital
£’000
Share
premium
£’000
Capital
redemption
reserve
£’000
Other
capital
reserve
£’000
Capital
reserve on
investments
held
£’000
Revenue
reserve
£’000
Total
£’000
Movement for the year ended 31 May 2024
Opening equity shareholders’ funds 35,503 269,535 4,062 1,620,532 653,695 (133,255) 2,450,072
Return for the year – – – 70,382 (10,686) (28,047) 31,649
Ordinary shares bought back for cancellation in the market
1
17
(1,012) – 1,012 (47,030) – – (47,0 30)
Ordinary shares bought back for cancellation via Tender Offer
1
17
(3,295) – 3,295 (151,050) – – (151,050)
Closing equity shareholders’ funds 31,196 269,535 8,369 1,492,834 643,009 (161,302) 2,283,641
Movement for the year ended 31 May 2023
Opening equity shareholders’ funds 36,012 269,535 3,553 1,556,346 674,875 (112,857) 2,427,464
Return for the year – – – 83,859 (21,180) (20,398) 42,281
Ordinary shares bought back for cancellation in the market
1
17
(509) – 509 (19,673) – – (19,673)
Closing equity shareholders’ funds 35,503 269,535 4,062 1,620,532 653,695 (133,255) 2,450,072
1 The value of ordinary shares bought back include any associated fees and stamp duty.
The Notes on pages 150 to 173 form par t of these financial statements.
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Balance Sheet As at 31 May 2024
Note
31 May 2024
£’000
31 May 2023
£’000
Fixed assets
Investments at fair value
9a/b
2,498,505 2 , 417,620
Current assets
Debtors
11
2,487 2,347
Cash and cash equivalents
12
21,863 66,043
24,350 68,390
Creditors: Amounts falling due within one year
Bank loan (expiry October 2024)
14
(83,261) –
Other creditors
13
(7,752) (4,617)
(91,013) (4,617)
Net current (liabilities)/assets (66,663) 63,773
Total assets less current liabilities 2,431,842 2,481,393
Creditors: Amounts falling due after one year
Asset Linked Loan
15
(30,378) (31,321)
Private placement loan notes
16
(117, 823) –
(148,201) (31,321)
Net assets 2,283,641 2,450,072
Capital and reserves
Called-up share capital
17
31,196 35,503
Share premium
18
269,535 269,535
Capital redemption reserve
18
8,369 4,062
Other capital reserve
18
1,492,834 1,620,532
Capital reserve on investments held
18
643,009 653,695
Revenue reserve
18
(161,302) (133,255)
Total equity shareholders’ funds 2,283,641 2,450,072
Net asset value per ordinary share
19
490.46p 462.37p
The Notes on pages 150 to 173 form par t of these financial statements.
The financial statements were approved by the Board of Pantheon International Plc on 31July 2024 and were authorised for issue by
JOHN SINGER CBE
Chair
Company No. 2147984
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Cash Flow Statement Year ended 31 May 2024
Note
Year ended
31 May 2024
£’000
Year ended
31 May 2023
£’000
Cash flow from operating activities
Investment income received; comprising
– Dividend income 12,975 12,325
– Interest income 2,815 4,756
– Other investment income 86 211
Deposit and other interest received 669 780
Investment management fees paid (25,639) (27,5 8 6)
Secretarial fees paid (464) (354)
Depositary fees paid (236) (284)
Directors fees paid (343) (303)
Legal and professional fees paid (1,208) (1,996)
Capitalised project related legal costs (2,497) –
Other cash payments
1
(1,079) (1,036)
Withholding tax deducted (2,933) (1,502)
Net cash outflow from operating activities
21
(17,85 4) (14,989)
Cash flows from investing activities
Purchases of investments
2
(152,960) (289,020)
Disposals of investments
2
131,544 161,168
Net cash (outflow) from investing activities (21,416) (127,852)
Cash flows from financing activities
ALN repayments (4,650) (5,035)
Ordinary shares bought back for cancellation
3
(46,140) (19,678)
Ordinary shares bought back for cancellation
viaTender Offer
3
(151,050) –
Drawdown of loan 200,375 –
Repayment of loan (111,903) –
Loan commitment and arrangement fees paid (5,642) ( 7,071)
Loan interest paid (4,018) –
Private placement loan note funding 118,274 –
Note
Year ended
31 May 2024
£’000
Year ended
31 May 2023
£’000
Net cash outflow from financing activities (4,754) (31,784)
Decrease in cash in the year (44,024) (174,625)
Cash and cash equivalents at the beginning
oftheyear
66,043 231,458
Foreign exchange gains on cash accounts (156) 9,210
Cash and cash equivalents at the end of the year 21,863 66,043
1 Includes interest paid during the year of £nil (2023: £22,000).
2 Purchases and disposals do not include investments actioned by Pantheon International Holdings LP.
3 The value of ordinary shares bought back include any associated fees and stamp duty.
The Notes on pages 150 to 173 form par t of these financial statements.
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Notes to the Financial Statements
1 Accounting Policies
PIP is a listed public limited company incorporated in England and Wales. The registered office
is detailed on page 184. A summary of the principal accounting policies and measurement
bases, all of which have been applied consistently throughout the year, is set out below.
A. Basis of Preparation
The Company’s financial statements have been prepared in compliance with FRS 102 as it
applies to the financial statements of the Company for the year ended 31 May 2024. They
havealso been prepared on the assumption that approval as an investment trust willcontinue
to be granted. The Company’s financial statements arepresented in sterling and all values
are rounded to the nearest thousand pounds (£’000) except when indicated otherwise.
The investments in the subsidiaries are financial assets, and held at fair value through
profitorloss.
The financial statements have been prepared in accordance with theSORP for the financial
statements of investment trust companiesand venture capital trusts issued by the AIC, other
than where restrictions are imposed on the Company which prohibit specific disclosures.
B. Going Concern
The financial statements have been prepared on a going concern basis and under the historical
cost basis of accounting, modified to include the revaluation of certain assets at fair value.
The Directors have made an assessment of going concern, taking into account the Company’s
current performance and financial position as at 31 May 2024. In addition, theDirectors
haveassessed the outlook, which considers the potential further impact of the ongoing
international conflicts and election cycles which have brought about increased geopolitical
uncertainties including the disruption to the global supply chain and increases inthe cost of
living as a result, persistent inflation, high interest rates and the impact of climatechange
onPIP’s portfolio using the information available as at the date of issue ofthese financial
statements. As part of this assessment the Directors considered:
– Various downside liquidity modelling scenarios with varying degrees of decline in
investment valuations and decreased investment distributions, and increased call rates,
with the worst being a downside case downside scenario representing an impact to the
portfolio that is worse than that experienced during the Global Financial Crisis.
– The Company manages and monitors liquidity regularly ensuring it is adequate and
sufficient and is underpinned by its monitoring of investments, distributions, capital calls
and outstanding commitments. Total available financing
1
as at 31 May 2024 stood at
£414m (31 May 2023: £554m), comprising £16m (31 May 2023: £63m) in available cash
balances and £398m (31 May 2023: £491m) in undrawn, sterling equivalent, bank facilities.
– PIP’s 31 May 2024 valuation is primarily based on reported GP valuations with a reference
date of 31 March 2024, updated for capital movements and foreign exchange impacts.
– Unfunded commitments – PIP’s unfunded commitments at 31 May 2024 were £789m
(31May 2023: £857m). The Directors have considered the maximum level of unfunded
commitments which could theoretically be drawn in a 12-month period, the ageing of
commitments and available financing to fulfil these commitments. In these scenarios PIP
can take steps to limit or mitigate the impact on the Balance Sheet, namely drawing on
thecredit facility, pausing on new commitments, selling assets to increase liquidity and
reducing outstanding commitments if necessary. In addition, subject to market conditions,
the Company could also seek to raise additional debt or equity capital.
– The impact of share buybacks and the Company’s Capital Allocation Policy on available
liquidity.
– Tenure of credit facilities – A £100m equivalent tranche of the facility expires in October
2024 and will be repaid with cash or drawings from the other existing loan.
– The Directors also considered the impact of climate change on PIP’s portfolio and concluded
that there was no significant impact on the Company as a result of climate change.
Having performed the assessment on going concern, the Directors considered it appropriate
to prepare the financial statements of the Company on a going concern basis. The Company
has sufficient financial resources and liquidity, is well placed to manage business risks in the
current economic environment and can continue operations for a period of at least 12 months
from the date of issue of these financial statements.
C. Segmental Reporting
The Directors are of the opinion that the Company is engaged inasingle segment of business,
being an investment business. Consequently no business segmental analysis is provided.
1 See page 177 of the Alternative Performance Measures section for calculations and disclosures.
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1 Accounting Policies (continued)
D. Valuation of Investments
Given the nature of the Company’s assets which comprise predominantly unlisted fund
investments, while the Company operates a robust and consistent valuation process,
there is significant estimation uncertainty in the underlying fund valuations which are
estimated at a point in time. Accordingly, while the Company considers circumstances
where it might be appropriate to apply an override, for instance in response to a market
crash, this will be exercised only where it is judged necessary to reflect fair value.
Similarly, while relevant information relating to but received after the measurement date is
considered, the Directors will only consider an adjustment to the financial statements if it were
to have a significant impact and is indicative of conditions present at the measurement date.
The Company has fully adopted sections 11 and 12 of FRS 102. Allinvestments held by the
Company are classified as “fair value through profit or loss”. As the Company’s business
is investing in financial assets with a view to profiting from their total return in the form of
interest, dividends or increases in fair value, investments arerecognised at fair value on
initial recognition.
The Company manages and evaluates the performance of these investments on afair value
basis in accordance with its investment strategy. For investments actively traded in organised
financial markets, fair value is generally determined by reference to stock exchange quoted
market bid prices at the close of business at the Balance Sheet date. For investments that
are not actively traded in organised financial markets, fair value is determined using reliable
valuation techniques as described below:
i. Unquoted fixed asset investments are stated at the estimated fairvalue
In the case of investments in private equity funds, this is based on the net asset value of those
funds ascertained from periodic valuations provided by the managers of the funds and
recorded up to the measurement date. Such valuations are necessarily dependent upon the
reasonableness of the valuations by the fund managers of the underlying investments. In the
absence of contrary information, the values are assumed to be reliable. These valuations are
reviewed periodically for reasonableness and recorded up to the measurement date. If a class
of assets were sold post-period end, management would consider the effect, if any, on the
investment portfolio.
The Company may acquire secondary interests at either a premium or a discount to the
fundmanager’s valuation. Within the Company’s portfolio, those fund holdings are normally
revalued to their stated net asset values at the next reporting date unless an adjustment
against a specific investment is considered appropriate.
The fair value of each investment is derived at each reporting date. Inthe case of direct
investments in unquoted companies, the initial valuation is based on the transaction price.
Where further indications of fair value become available, such as through subsequent issues
of capital or dealings between third parties, the valuation is adjusted to reflect the new
evidence, at each reporting date. This information may include the valuations provided by
private equity managers who are also invested in the Company.
The Company holds an investment in its subsidiary, Pantheon International Holdings LP
(“PIHLP”), which itself holds a basket of investments held at fair value. The fair value of PIH LP
is based on its latest net asset value.
ii. Quoted investments are valued at the bid price on the relevant stockexchange
Private equity funds may contain a proportion of quoted shares from time to time; for example,
where the underlying company investments have been taken public but the holdings have not
yet been sold. The quoted market holdings at the date of the latest fund accounts are reviewed
and adjusted to the published prices of those holdings at the period end.
E. Asset Linked Note
As part of the share consolidation effected on 31 October 2017, the Company issued an ALN
with an initial principal amount of £200m to the Investor. Payments under the ALN are made
quarterly in arrears and are linked to the ALN share (c.75%) of the net cash flows from a
reference portfolio which consists of interests held by the Company in over 300 of its oldest
private equity funds, substantially 2006 and earlier vintages. The Company retains the net
cash flows relating to the remaining c.25% of the reference portfolio.
The ALN is held at fair value through profit or loss and therefore movements in fair value are
reflected in the Income Statement. Fair value is calculated as the sum of the ALN share of fair
value of the reference portfolio plus the ALN share of undistributed net cash flow. The fair
value movement is allocated between revenue and capital pro rata to the fair value gains and
income-generated movements in the reference portfolio.
A pro rata share of the Company’s total ongoing charges is allocated to the ALN, reducing
each quarterly payment (“the Expense Charge”) and deducted from Other Expenses through
the revenue account in the Income Statement.
The ALN’s share of net cash flow is calculated after withholding taxation suffered. These
amounts are deducted from taxation through the revenue account in the Income Statement.
See Note 15 for further information.
Notes to the Financial Statements
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Notes to the Financial Statements
1 Accounting Policies (continued)
F. Income
Dividends receivable on quoted equity shares are brought into account on the ex-dividend date.
Dividends receivable on equity shares where no ex-dividend date is quoted are brought into
account when the Company’s right to receive payment is established. The fixed return on a
debt security is recognised on a time apportionment basis.
Income distributions from funds are recognised when the right to distributions is established.
G. Taxation
Corporation tax payable is based on the taxable profit for the period. The charge for taxation
takes into account taxation deferred or accelerated because of timing differences between
the treatment of certain items for accounting and taxation purposes. Full provision for
deferred taxation is made under the liability method, without discounting, on all timing
differences that have arisen but not reversed by the Balance Sheet date.
The tax effect of different items of income/gain and expenditure/loss is allocated between
capital and revenue on the same basis as the particular item to which it relates, using the
marginal method.
Dividends receivable are recognised at an amount that may include withholding tax
(but excludes other taxes, such as attributable tax credits). Any withholding tax suffered
is shown as part of the revenue account tax charge.
Deferred tax is not provided on capital gains and losses arising on the revaluation or disposal
of investments because the Company meets (and intends to continue for the foreseeable
future to meet) the conditions for approval as an investment trust company, pursuant to
sections 1158 and 1159 of the CTA.
Deferred tax assets are only recognised if it is considered more likely than not that there will
be suitable profits from which the future reversal of timing differences can be deducted.
H. Expenses
All expenses are accounted for on an accruals basis. Expenses, including investment
management fees, are charged through the revenue account except as follows:
– Expenses which are incidental to the acquisition or disposal of an investment are treated
as capital costs and separately identified and disclosed in Note 4;
– Expenses of a capital nature are accounted for through the capital account; and
– Investment performance fees.
I. Foreign Currency
The functional and presentational currency of the Company is pounds sterling (“sterling”)
because it is the primary currency in the economic environment in which the Company operates.
Transactions denominated in foreign currencies are recorded in the local currency at actual
exchange rates as at the date of transaction. Monetary assets and liabilities denominated in
foreign currencies at the period end are reported at the rates of exchange prevailing at the
period end. Any gain or loss arising from a change in exchange rates subsequent to the date
ofthe transaction is included as an exchange gain or loss in the revenue or capital column of
the Income Statement depending on whether the gain or loss is of a capital or revenue nature.
For non-monetary assets, these are covered by fair value adjustments. For details of transactions
included in the capital column of the Income Statement please see (J) and (K) below.
J. Other Capital Reserve
The following are accounted for in this reserve:
– Investment performance fees;
– Gains and losses on the realisation of investments;
– Realised exchange difference of a capital nature;
– Expenses of a capital nature; and
– Costs of share buybacks.
Capital distributions received from investments are accounted for by firstly reducing any
costof that investment, with any gains being recognised as realised only when the cost
hasbeen reduced to nil.
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1 Accounting Policies (continued)
K. Capital Reserve on Investments Held
The following are accounted for in this reserve:
– Increases and decreases in the value of investments held at the year end and the ALN.
L. Investment Performance Fee
The Manager is entitled to a performance fee from the Company in respect of each 12 calendar
month period ending on 31 May in each year. The performance fee payable in respect of each
such calculation period is 5% of the amount by which the net asset value at the end of such
period exceeds 110% of the applicable “high-water mark”, i.e. the net asset value at the end
ofthe previous calculation period in respect of which a performance fee was payable,
compounded annually at 10% for each subsequent completed calculation period up to
thestartof the calculation period for which the fee is being calculated. For the calculation
periodended 31 May 2024, the notional performance fee hurdle is a net asset value per
shareof594.9p.
The performance fee is calculated using the adjusted net asset value. The net asset value
pershare at 31 May 2024 is 490.5p.
The performance fee is calculated so as to ignore the effect on performance of any
performance fee payable in respect of the period for which the fee is being calculated or
ofanyincrease or decrease in the net assets of the Company resulting from any issue,
redemption or purchase of any shares or other securities, the sale of any treasury shares
ortheissue or cancellation of any subscription or conversion rights for any shares or
othersecurities and any other reduction in the Company’s share capital or any distribution
toshareholders.
M. Significant Judgements and Estimates
The preparation of financial statements requires the Manager to make judgements, estimates
and assumptions that affect the reported amounts of investments at fair value at the financial
reporting date and the reported fair value movements during the reporting period. Actual
results may differ from these estimates. Details of how the fair values of unlisted investments
are estimated and any associated judgements applied are provided in Section (D) of this Note
and also within the Market Price Risk section in Note 23.
N. Derecognition/Recognition of Assets and Liabilities
Financial assets and financial liabilities are recognised on the Company’s Balance Sheet
when the Company becomes a party to the contractual provisions of the instrument.
Inaccordance with FRS102, financial assets are derecognised when the contractual rights
tothe cash flows from the instrument expire or the asset is transferred and the transfer
qualifies for derecognition. Financial liabilities are derecognised when the obligation is
discharged, extinguished or expired.
O. Cash and Cash Equivalents
Cash and cash equivalents include cash deposits held with banks and money market funds,
together with other short-term highly liquid investments with original maturities of three
months or less at the date of placement, free of any encumbrances, which are readily
convertible into known amounts of cash and subject to insignificant risk of changes in value.
The Manager uses money market funds for cash management purposes.
Notes to the Financial Statements
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Notes to the Financial Statements
2 Income
31 May 2024
£’000
31 May 2023
£’000
Income from investments
Investment income (comprising dividend income,
interestincome and other investment income) 15,882 17,292
15,882 17, 2 92
Other income
Deposit and other interest received 643 784
Retrocession income 11 –
Exchange difference on income (2) 8
652 792
Total income 16,534 18,084
Total income comprises
Dividend income 12,981 12,325
Interest income 2,815 4,756
Other investment income 86 211
Bank interest 172 767
Money market fund interest 471 17
Money market fund expense rebate 11 –
Exchange difference on income (2) 8
16,534 18,084
Analysis of income from investments
Unlisted 15,882 17, 292
15,882 17, 2 92
Geographical analysis
UK 359 1,055
US 12,035 9,243
Other overseas 3,488 6,994
15,882 17, 2 92
3 Investment Management Fees
31 May 2024 31 May 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Investment
management fees 25,674 – 25,674 27,707 – 27,707
25,674 – 25,674 27,707 – 27,707
The investment management fee is payable monthly in arrears at the rate set out in the
Directors’ Report on pages 119 and 120.
During the year, investment management services with a total value of £28,501,000 (period to
31 May 2023: £29,010,000), being £25,674,000 (period to 31 May 2023: £27,707,000) directly
from Pantheon Ventures (UK) LLP and £2,827,000 (period to 31 May 2023: £1,303,000) via
Pantheon managed fund investments were purchased by the Company.
The value of investments, in and outstanding commitments to, investment funds managed
oradvised by the Pantheon Group (“Pantheon Funds”) are excluded in calculating the
monthlymanagement fee and the commitment fee. The value of holdings in investments
managed bythe Pantheon Group totalled £1,235,005,000 as at 31 May 2024 (31 May 2023:
£1,131,118,000), including £1,082,057,000 from the Pantheon managed Pantheon
International Holdings subsidiaries (31 May 2023: £995,669,000). Please see Note 20
forfurther details.
In addition, the Manager has agreed that the total fees (including performance fees) payable
by Pantheon Funds to members of the Pantheon Group and attributable to the Company’s
investments in Pantheon Funds shall be less than the total fees (excluding the performance
fee) that the Company would have been charged under the Management Agreement had it
invested directly in all of the underlying investments of the relevant Pantheon Funds instead
ofthe relevant Pantheon Funds instead of through the relevant Pantheon Funds.
At 31 May 2024, £2,280,000 (31 May 2023: £2,245,000) was owed for investment
management fees. No performance fee is payable in respect of the year to 31 May 2024
(31May 2023: £nil). The basis upon which the performance fee is calculated is explained
inNote 1 (L) and in the Directors’ Report on pages 119 and 120.
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4 Other Expenses
31 May 2024 31 May 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Secretarial and accountancy services 474 – 474 353 – 353
Depositary fees 258 – 258 280 – 280
Custodian 20 – 20 16 – 16
Fees payable to the Company’s Auditor for the
– audit of the annual financial statements 149 – 149 146 – 146
Fees payable to the Company’s Auditor for
– audit-related assurance services – Half-Yearly Report 46 – 46 44 – 44
Directors’ remuneration (see Note 5) 360 – 360 291 – 291
Employer’s National Insurance 27 – 27 42 – 42
Irrecoverable VAT – – – (5) – (5)
Legal and professional fees
1
404 877 1,281 547 1,625 2,172
Project related costs
1
– 2,497 2,497 – – –
Other
2
872 – 872 831 – 831
ALN Expense Charge (see Note 1 (E))
3
(462) – (462) (486) – (486)
2,148 3,374 5,522 2,059 1,625 3,684
1 Legal fees incidental to the acquisition of investments and project related costs are charged to the Capital column of the Income Statement, since they are capital in nature. Project related costs consist of legal expenses incurred in relation to the
Share buyback tender offer and the loan note financing.
2 Other expenses predominantly comprise fees and expenses relating to printing, public relations, Stock Exchange listing, FCA fees, AIC Levy and share price publications.
3 A pro rata share of the Company’s total ongoing charges is allocated to the ALN, reducing each quarterly payment.
The Directors do not consider that the provision of non-audit work to the Company affects the independence of the Auditors due to the half year review being an assurance service.
5 Directors’ Remuneration
Directors’ emoluments comprise Directors’ fees. A breakdown is provided in the Directors’ Remuneration Report on pages 133 to 135.
Notes to the Financial Statements
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Notes to the Financial Statements
6 Interest Payable and Similar Expenses
31 May 2024
£’000
31 May 2023
£’000
Negative bank interest – 22
Loan commitment and arrangement fees 6,346 6,34 4
Loan interest 4,154 –
Private placement loan note coupon interest 2,551 –
13,051 6,366
On 19 October 2023, the Company announced that it has agreed a new £500m equivalent
multi-tranche, multi-currency revolving credit facility agreement (the “Loan Facility”), which on
20 October 2023, replaced the existing £500m equivalent credit facility and Credit Suisse AG
London Branch as a Lender. There are five Lenders of the new facility, being Lloyds Bank plc,
Mizuho, RBC Europe, Royal Bank of Scotland and State Street. Further details of the Loan
Facility are disclosed in Note 14.
On 12 January 2024, the Company agreed a Private Placement of US$150m in loan notes
withproceeds being received on 1 February 2024. The loan notes have been structured over
different maturities of five, seven and 10 years with varying coupon rates, further details are
disclosed in Note 16.
7 Taxation
31 May 2024 31 May 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Withholding tax deducted from distributions 3,033 – 3,033 1,494 – 1,494
Tax charge
The standard rate of corporation tax in the UK of 19% to 31 March 2023 rising to 25% from 1 April 2023, giving a weighted average for the year ended 31 May 2024 of 25%
(year ended 31 May 2023: 20%).
The differences are explained below:
Net return before tax (25,014) 59,696 34,682 (18,904) 62,679 43,775
Theoretical tax at UK corporation tax rate of 25% (31 May 2023: 20%) (6,254) 14,924 8,670 (3,781) 12,536 8,755
Non-taxable investment, derivative and currency gains – (15,143) (15,143) – (12,845) (12,845)
Effect of expenses in excess of taxable income – 219 219 – 309 309
Carry forward management expenses 6,254 – 6,254 3,781 – 3,781
Withholding tax deducted from distributions 3,033 – 3,033 1,494 – 1,494
3,033 – 3,033 1,494 – 1,494
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7 Taxation (continued)
The tax charge for the year ended 31 May 2024 is £3.0m (31 May 2023: £1.5m). The tax charge is wholly composed of irrecoverable withholding tax suffered.
Investment gains are exempt from capital gains tax owing to the Company’s status as an investment trust.
Factors That May Affect Future Tax Charges
The Company is an investment trust and therefore is not subject to tax on capital gains. Deferred tax is not provided on capital gains and losses arising on the revaluation or disposal of
investments because the Company meets (and intends to meet for the foreseeable future) the conditions for approval as an investment trust company.
No deferred tax asset has been recognised in respect of excess management expenses and expenses in excess of taxable income as they will only be recoverable to the extent that there is
sufficient future taxable revenue. As at 31 May 2024, excess management expenses are estimated to be in excess of £359m (31 May 2023: £330m).
At 31 May 2024, the Company had no unprovided deferred tax liabilities (31 May 2023: £nil).
8 Return per Share
31 May 2024 31 May 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Return for the financial year in £'000 (28,047) 59,696 31,649 (20,398) 62,679 42,281
Weighted average ordinary shares 494,296,359 5 32,707, 38 3
Return per share (5.68)p 12.08p 6.40p (3.83)p 11.77p 7.94p
There are no dilutive or potentially dilutive shares in issue.
Notes to the Financial Statements
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Notes to the Financial Statements
9a Movement on Investments
31 May 2024
£’000
31 May 2023
£’000
Book cost brought forward 1,734,850 1,530,419
Opening unrealised appreciation on investments held:
– Unlisted investments 682,437 706,707
– Listed investments 333 1,482
Valuation of investments brought forward 2,417,620 2,238,608
Movements in year:
Acquisitions at cost 152,960 289,020
Capital distributions – proceeds (132,396) ( 1 6 0 , 8 9 1 )
1
Capital distributions – realised gains on sales 68,262 76,302
1
Increase in appreciation on investments held (7,941) (25,419)
Valuation of investments at year end 2,498,505 2 ,417,620
Book cost at year end 1,823,676 1,734,850
Closing unrealised appreciation on investments held:
– Unlisted investments 673,924 682,437
– Listed investments 905 333
Valuation of investments at year end 2,498,505 2 ,417,620
Fair value of investments:
Unlisted investments 2,495,920 2,415,800
Listed investments 2,585 1,820
Valuation of investments at year end 2,498,505 2 ,417,620
1 On 1 October 2022, the Company transferred one investment, at a fair value of £3.10m, to its wholly-owned subsidiary Pantheon International Holdings LP, in return for a 99% investment in Pantheon International Holdings LP, being £3.07m and the
remaining 1% in Pantheon International Holdings GP LP, being £0.03m.
Further details in relation to the subsidiaries are included in Note 20.
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9b Analysis of Investments
Further analysis of the investment portfolio is provided in the Manager’s Review on pages 55 to 109.
The Company received £132,396,000 (2023: £160,891,000) from investments sold during the year. The book cost of these investments when they were purchased was £64,134,000
(2023:£84,589,000). These investments have been revalued over time until such time they were sold and up until that point, any unrealised gains or losses were included in the fair value of
theinvestments.
Transaction costs (incurred at the point of the transaction) incidental to the acquisition of investments totalled £nil (31 May 2023: £nil) and to the disposals of investments totalled £5,000
(31May 2023: £7,000) for the period. In addition, legal fees incidental to the acquisition of investments totalled £877,000 (31 May 2023: £1,625,000), as disclosed in Note 4, have been taken
tothe Capital column in the Income Statement since they are capital in nature.
Included in investment are also investments that the Company holds in its subsidiaries. Please see Note 20 for further details.
Gains on investment per income statement
31 May 2024
£’000
31 May 2023
£’000
Realised gains on sales 68,262 76,302
Amounts previously recognised as unrealised appreciation on those sales 333 1,482
Decrease in unrealised appreciation (8,274) (26,902)
Revaluation of amounts owed in respect of transactions 3 3
Gains on investments 60,324 50,885
Notes to the Financial Statements
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Notes to the Financial Statements
9b Analysis of Investments (continued)
Currency analysis of investment valuation
31 May 2024
£’000
31 May 2023
£’000
Sterling
Unlisted investments 1,126,722 1,042,249
1,126,722 1,042,249
US dollar
Unlisted investments 1,102,043 1,116,006
Listed investments 2,246 1,820
1,104,289 1,117,826
Euro
Unlisted investments 244,243 230,424
244,243 230,424
Other
Unlisted investments 22,912 27,121
Listed investments 339 –
23,251 27,121
Total valuation of investments 2,498,505 2,417,620
9c Material Investment
At the year end, the Company held no material holdings in any underlying company which exceeded 3% and funds which exceed 10% of any class of capital.
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10 Fair Value Hierarchy
The fair value hierarchy consists of the following three levels:
Level 1 – The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date. The Level 1 holdings include publicly listed
holdings held directly by the Company from in specie distributions received from underlying investments, but do not include listed holdings held indirectly through the Company’s underlying
private equity managers which are classified under Level 3 holdings;
Level 2 – Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e.derived from prices); and
Level 3 – Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
Financial Assets at Fair Value Through Profit or Loss at 31 May 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Unlisted holdings – – 2,495,920 2,495,920
Listed holdings 2,585 – – 2,585
2,585 – 2,495,920 2,498,505
Financial Assets at Fair Value Through Profit or Loss at 31 May 2023
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Unlisted holdings – – 2,415,800 2,415,800
Listed holdings 1,820 – – 1,820
1,820 – 2,415,800 2,417,620
Notes to the Financial Statements
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Notes to the Financial Statements
10 Fair Value Hierarchy (continued)
Financial Liabilities at Fair Value Through Profit or Loss at 31 May 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Asset Linked Note – – 30,815 30,815
– – 30,815 30,815
Financial Liabilities at Fair Value Through Profit or Loss at 31 May 2023
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Asset Linked Note – – 32,520 32,520
– – 32,520 32,520
11 Debtors
31 May 2024
£’000
31 May 2023
£’000
Amounts receivable from investment funds 1,131 290
Accrued interest – 17
Prepayments 1,356 2,040
2,487 2,347
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12 Cash and Cash Equivalents
31 May 2024
£’000
31 May 2023
£’000
Cash at bank 21,863 49,906
Cash equivalents – 16,137
21,863 66,043
As at 31 May 2024, cash equivalents of £nil were held in a USD money market fund (31 May 2023: £16,137,000).
13 Creditors Amounts Falling Due Within One Year
31 May 2024
£’000
31 May 2023
£’000
Investment management fees 2,280 2,245
Amounts owed in respect of share buybacks and trades 1,003 –
ALN repayment to the Investor 437 1,199
Private Placement loan note coupon interest 2,551 –
Other creditors and accruals 1,481 1,173
7,752 4,617
Notes to the Financial Statements
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Notes to the Financial Statements
14 Bank Loan
31 May 2024
£’000
31 May 2023
£’000
Short term
Tranche B (USD) $122,000,000 (£100,000,000) expiry October 2024 83,261 –
Long term
Tranche A1 (USD) $365,700,000 (£300,000,000) expiry October 2026 – –
Tranche A2 (EUR) Eur115,700,000 (£100,000,000) expiry October 2026 – –
83,261 –
On 19 October 2023, the Company announced that it has agreed a new £500m equivalent multi-tranche, multi-currency revolving credit facility agreement (the “Loan Facility”), which on
20October 2023, replaced the existing £500m equivalent credit facility and Credit Suisse AG London Branch as a Lender. There are five Lenders of the new facility, being Lloyds Bank plc,
Mizuho, RBC Europe, Royal Bank of Scotland and State Street. The new Loan Facility, which is secured by certain assets of the Company, is split as follows:
– Facility A: £400m, expiring in October 2026 with an ongoing option to extend, by agreement, the maturity date by 364 days at a time; and
– Facility B: £100m, expiring in October 2024.
The Company has sought to build a long-term, sustainable, more flexible, and diverse capital structure as part of this process, further strengthening the Company’s balance sheet.
Thestructure permits Facility A to be increased from £400m to £700m via an uncommitted accordion option, subject to the consent of the participating Lenders, with a covenant package
thatbetter supports utilisation under the Loan Facility, the announced Tender Offer and the ongoing share buyback programme.
Depending on the utilisation of the Loan Facility, PIP will pay a commitment fee of between 0.70% and 1.15% per annum on the undrawn portion of the Loan Facility. The rate of interest
payableon the drawn portion is the aggregate of the relevant benchmark rate plus 2.95% or 2.25% depending on whether Facility A or B is utilised respectively. See Note 23 for details regarding
loan covenants.
As at 31 May 2024, the Loan Facility had a sterling equivalent value of £83.3m, all drawn from the short term facility (Facility B).
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Notes to the Financial Statements
15 Creditors Amounts Falling Due After One Year – Asset Linked Note
31 May 2024
£’000
31 May 2023
£’000
Opening value of ALN 32,520 41,374
Repayment of net cash flows received (4,650) (5,035)
Fair value movement through profit or loss 3,420 (3,384)
Expense charge and ALN share of withholding taxes (475) (435)
Closing value of ALN (see Note 1(E)) 30,815 32,520
Transfer to creditors due within one year (437) (1,199)
30,378 31,321
16 Private Placement Loan Notes
On 12 January 2024, the Company agreed a private placement of US$150m in loan notes with proceeds being received on 1 February 2024. The loan notes have been structured over different
maturities of five, seven and 10 years with varying coupon rates, as follows:
31 May 2024
£’000
31 May 2023
£’000
Tranche A (USD) 6.36%. 1 February 2029 41,238 –
Tranche B (USD) 6.53%. 1 February 2031 53,020 –
Tranche C (USD) 6.65%. 1 February 2034 23,565 –
117, 823 –
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17 Called-up Share Capital
31 May 2024 31 May 2023
Shares £’000 Shares £’000
Allotted, called-up and fully paid:
Ordinary shares of 6.7p each
Opening position 529,893,457 35,503 537,493,640 36,012
Ordinary shares bought back for cancellation in the market (15,099,519) (1,012) (7,600,183) (509)
Ordinary shares bought back for cancellation via Tender Offer (49,180,327) (3,295) – –
Closing position 465,613,611 31,196 529,893,457 35,503
Total shares in issue 465,613,611 31,196 529,893,457 35,503
On 3 August 2023, upon publication of its annual results for the year ending 31 May 2023, the Company announced its intention to invest up to £200,000,000 in the Company’s portfolio by
buying back its own ordinary shares during the financial year to 31 May 2024. On 25 September 2023, the Company announced it would undertake a “Tender Offer”, conducted as a reverse
auction, for up to £150,000,000 in value (at the Strike Price, excluding costs and stamp duty) of ordinary shares with settlement taking place on 26 October 2023. Shareholders on the Register
on the Record Date of 17 October 2023 were invited to tender for sale some or all (subject to the overall size limit of the Tender Offer) of their ordinary shares.
On 19 October 2023, the result of the Tender Offer was announced, being that the Company had acquired 49,180,327 of the Company’s ordinary shares. All shares repurchased by the Company
have been cancelled. Each share acquired by the Company in the Tender Offer was purchased at the Strike Price of 305 pence per ordinary share.
During the year ended 31 May 2024, in addition to the Tender Offer, 15,099,519 ordinary shares were bought back in the market, for cancellation at a total cost, including stamp duty, of £47.0m.
During the year ended 31 May 2023, 7,600,183 ordinary shares were bought back for cancellation at a total cost, including stamp duty, of £19.7m.
As a result, there were 465,613,611 ordinary shares in issue as at 31 May 2024 (of which none are held in Treasury; year to 31 May 2023: 529,893,457 ordinary shares and no Treasury shares).
Each holder of ordinary shares is entitled, on a show of hands, to one vote and, on a poll, to one vote for each ordinary share held.
Notes to the Financial Statements
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Notes to the Financial Statements
18 Reserves
Movement for the year ended 31 May 2024
Share
premium
£’000
Capital
redemption
reserve
£’000
Other
capital
reserve
£’000
Capital
reserve on
investments
held
£’000
Revenue
reserve
1
£’000
Beginning of year 269,535 4,062 1,620,532 653,695 (133,255)
Net gain on realisation of investments – – 68,262 – –
Decrease in unrealised appreciation – – – (10,686) –
Revaluation of amounts owed in respect of transactions – – 3 – –
Exchange differences on currency – – 5,505 – –
Exchange differences on other capital items – – (14) – –
Legal and professional expenses charged to capital – – (1,851) – –
Other expenses charged to capital – – (1,523) – –
Share buybacks
2
– 4,307 (198,080) – –
Revenue return for the year – – – – (28,047)
End of year 269,535 8,369 1,492,834 643,009 (161,302)
Movement for the year ended 31 May 2023
Share
premium
£’000
Capital
redemption
reserve
£’000
Other
capital
reserve
£’000
Capital
reserve on
investments
held
£’000
Revenue
reserve
1
£’000
Beginning of year 269,535 3,553 1,556,346 674,875 (112,857)
Net gain on realisation of investments – – 76,302 – –
Decrease in unrealised appreciation – – – (21,180) –
Revaluation of amounts owed in respect of transactions – – 3 – –
Exchange differences on currency – – 9,210 – –
Exchange differences on other capital items – – (31) – –
Legal and professional expenses charged to capital – – (1,625) – –
Share buybacks
2
– 509 (19,673) – –
Revenue return for the year – – – – (20,398)
End of year 269,535 4,062 1,620,532 653,695 (133,255)
1 Reserves that are distributable by way of dividends. In addition,the Other Capital Reser ve can be used for share buybacks.
2 The value of ordinary shares bought back include any associated fees and stamp duty.
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19 Net Asset Value Per Share
31 May 2024 31 May 2023
Net assets attributable in £’000 2,283,641 2,450,072
Ordinary shares 465,613,611 529,893,457
Net asset value per ordinary share 490.46p 462.37p
20 Subsidiaries
The Company has formed three wholly-owned subsidiaries, to provide security for future
financial lending arrangements.
Pantheon International Holdings LP (“PIH LP”) was incorporated on 29 March 2021 with a
registered address in the State of Delaware (National Registered Agents, Inc., 209 Orange
Street, Wilmington, Delaware, 19801), and is wholly owned by the Company.
The Company holds an investment in PIH LP, which itself holds a basket of investments,
ratherthan to carry out business on the Company’s behalf. Investments held within PIH LP
arebased on the fair value of the investments held in those entities.
On 31 December 2021, the Company transferred several investments, at a fair value of
£627.1m, to its wholly-owned subsidiary Pantheon International Holdings LP in order to
provide security for the £500m multi-currency facility. On 1 October 2022, the Company
transferred one further investment, at a fair value of £3.1m. The investments that were
transferred are in addition to PIH LP making its own investments.
The aggregate amount of its capital and reserves as at 31 May 2024 is £1,082,132,000
(2023:£995,928,000) and the profit or loss for the year ended 31 May 2024 is £3,168,000
(2023: £3,491,000).
The General Partner for PIH LP is Pantheon International Holdings GP (“PIH GP”) Limited.
Incorporated on 17 March 2021 with a registered address c/o Maples Corporate Services
Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, and is
whollyowned by the Company.
The aggregate amount of its capital and reserves as at 31 May 2024 is £1 (2023: £1) and
theprofit or loss for the year ended 31 May 2024 is £nil (2023: £nil).
The General Partner and the Limited Partner formed an exempted limited partnership,
namedPantheon International Holdings GP LP (“PIH GP LP”), incorporated on 17 March 2021
with a registered address c/o Maples Corporate Services Limited, PO Box 309, Ugland House,
GrandCayman, KY1-1104, Cayman Islands. The Company holds an investment in PIH GP LP.
Any investments made by the Company into PIH LP, generally invest at 99% directly into
PIHLP, with the remaining 1% investing into PIH GP LP. PIH GP LP will then, in turn, wholly
invest those funds into PIH LP, so no funds remain in PIH GP LP.
In accordance with FRS 102, the Company is exempted from the requirement to prepare
consolidated financial statements on the grounds that its subsidiary PIH LP is held exclusively
with a view to a subsequent resale as it is considered part of an investment portfolio and the
Company meets the definition of an Investment Entity under FRS. PIH GP LP and PIH GP are
not material. Therefore, the Company has no requirement to prepare consolidated accounts,
and therefore the subsidiaries noted above are held as investments recognised at fair value
through profit or loss.
21 Reconciliation of Return Before Financing Costs and Taxation to Net
Cash Flow from Operating Activities
31 May 2024
£’000
31 May 2023
£’000
Return before finance costs and taxation 47,733 50,141
Withholding tax deducted (3,033) (1,494)
Gains on investments (60,324) (50,885)
Currency gains on cash and borrowings (5,491) (9,179)
Increase in creditors 205 394
Decrease/(increase) in other debtors 111 (147)
Gain/(reduction) of financial liabilities at fair value
through profit or loss (ALN) 3,420 (3,384)
Expenses and taxation associated with the ALN (475) (435)
Net cash outflow from operating activities (17,85 4) (14,989)
Notes to the Financial Statements
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Notes to the Financial Statements
21 Reconciliation of Return Before Financing Costs and Taxation to Net
Cash Flow from Operating Activities (continued)
Reconciliation of net cash/(debt)
31 May 2024
Reconciliation of net cash flow to movement in net debt £’000
Decrease in cash (44,024)
Net cash inflow from loans (88,471)
Cash inflow from private placement loan notes (118,274)
Change in net debt resulting from cash flows (250,769)
Foreign exchange movements 5,505
Movement in net debt (245,264)
Net cash at 1 June 2023 66,043
Net debt at 31 May 2024 (179,221)
Analysis in changes in net cash/(debt)
1 June 2023
£’000
Cash flows
£’000
Foreign
exchange
movements
£’000
31 May 2024
£’000
Cash and cash equivalents 66,043 (44,024) (156) 21,863
Debt due within one year
– Bank loan – (88,471) 5,210 (83,261)
Debt due after more
than one year
– Private placement
loan notes
– (118,274) 451 (117,823)
Net cash/(debt) 66,043 (250,769) 5,505 (179,221)
22 Contingencies, Guarantees and Financial Commitments
At 31 May 2024, there were financial commitments outstanding of £789m (31 May 2023:
£857m) in respect of investments in partly paid shares and interests in private equity funds.
We expect 18% of the financial commitments outstanding to be called within the next
12months.
Further detail of the available finance cover is provided in Note 23.
23 Analysis of Financial Assets and Liabilities
The primary investment objective of the Company is to seek to maximise long-term capital
growth for its shareholders by investing in funds specialising in unquoted investments,
acquiring unquoted portfolios and participating directly in private placements. Investments
are not restricted to a single market but are made when the opportunity arises and on an
international basis.
The Company’s financial instruments comprise securities and other investments, cash
balances and debtors and creditors that arise from its operations; for example, sales and
purchases awaiting settlement and debtors for accrued income.
The principal risks the Company faces in its portfolio management activities are:
– liquidity/marketability risk;
– interest rate risk;
– market price risk; and
– foreign currency risk.
The Manager only holds cash at banks with high credit ratings, therefore the Company has
little exposure to credit risk. The Manager monitors the financial risks affecting the Company
on a daily basis and the Directors regularly receive financial information, which is used to
identify and monitor risk.
In accordance with FRS 102 an analysis of financial assets and liabilities, which identifies
therisk to the Company of holding such items, is given below.
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23 Analysis of Financial Assets and Liabilities (continued)
Liquidity Risk
Due to the nature of the Company’s investment policy, the largest proportion of the portfolio is
invested in unquoted securities, many of which are less readily marketable than, for example,
“blue-chip” UK equities. The Directors believe that the Company, as a closed-end fund with no
fixed wind-up date, is ideally suited to making long-term investments in instruments with limited
marketability. The investments in unquoted securities are monitored by the Board on aregular basis.
There are times when opportunities for the Company to acquire secondary unquoted
portfolios of interests or co-investments may be limited due to the cyclical nature of their
occurrence. As a result, at times of low investment opportunity, some funds may be held
ondeposit or invested in gilts and other fixed interest government bonds. It is the nature of
investment in private equity that a commitment (see Note 22 for outstanding commitments
as at 31 May 2024) to invest will be made and that calls for payments will then be received
from the unlisted investee entity. These payments are usually on an ad hoc basis and may
becalled at any instance over a number of years. The Company’s ability to meet these
commitments is dependent on it receiving cash distributions from its private equity
investments and, to the extent these are insufficient, on the availability of financing facilities.
On 19 October 2023, the Company agreed a new £500m equivalent multi-tranche,
multi-currency revolving credit facility agreement (the “Loan Facility”), which on 20 October
2023, replaced the previous £500m equivalent credit facility and Credit Suisse AG London
Branch as a Lender. There are five Lenders of the new facility, being Lloyds Bank plc, Mizuho,
RBC Europe, Royal Bank of Scotland and State Street.
The new Loan Facility, which is secured by certain assets of the Company, is split as follows:
– Facility A: £400m, expiring in October 2026 with an ongoing option to extend, by agreement,
the maturity date by 364 days at a time; and
– Facility B: £100m, expiring in October 2024.
The Company has sought to build a long-term, sustainable, more flexible and diverse capital
structure as part of this process, further strengthening the Company’s balance sheet.
The structure permits Facility A to be increased from £400m to £700m via an uncommitted
accordion option, subject to the consent of the participating Lenders, with a covenant
package that better supports utilisation under the Loan Facility, the announced Tender
Offerand the ongoing share buyback programme.
For details of commitment fees and rates of interest, refer to Note 14. The Loan Facility is
subject to market standard loan to value and liquidity covenants.
The principal covenants that apply to the loan facility require:
(i) that gross borrowings do not exceed 35% of the adjusted borrowing base
1
; and
(ii) the liquidity ratio
2
does not exceed 4.1x undrawn commitment.
Total available financing as at 31 May 2024 stood at £414m (31 May 2023: £554m), comprising
£16m (31 May 2023: £63m) in cash balances and £398m (31 May 2023: £491m) (sterling
equivalent) in undrawn bank facilities. The available financing along with the private equity
portfolio exceeded the outstanding commitments by 3.9 times (31 May 2023: 3.7 times)
(which excludes any outstanding commitments relating to funds outside their investment
period (>13 years old) as there is a low likelihood of these being drawn).
Interest Rate Risk
The Company may use gearing to achieve its investment objectives and manage cash
flowsand uses a multi-currency revolving credit facility for this purpose.
Interest on the revolving credit facility is payable at variable rates determined subject to
drawdown. Variable rates are defined as relevant benchmark rates plus 2.95% or 2.25%
depending on whether Facility A or B is utilised respectively. The interest rate is then fixed
forthe duration that the loan is drawn down. At 31 May 2024, there was a sterling equivalent
of£83.3m funds drawn down on the loan facilities (31 May 2023: £nil). Ablended commitment
fee of 0.95% per annum is payable in respect of the amounts available for drawdown in
eachfacility.
Interest rate movements may affect:
– the level of interest receivable on cash deposits; and
– the interest payable on loan borrowings.
A 1% increase in market interest rates would be expected to decrease net assets,
byapproximately £0.8m (31 May 2023: nil), with all other factors being equal.
A 1% decrease would increase net assets by the same amount.
The loan notes issued by the Company pay a fixed rate of interest and therefore movements
ininterest rates will not affect net assets.
Notes to the Financial Statements
1 The adjusted borrowing base is the total collaterised propor tion of assets adjusted for loan agreement specific restrictions.
2 Liquidity Ratio is computed as: (10% of PE portfolio + Cash + Undrawn facility)/(Undrawn commitments).
2024Annual Report and AccountsPantheon International Plc 171
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23 Analysis of Financial Assets and Liabilities (continued)
The possible effects on fair value and cash flows that could arise as a result of changes in
interest rates are taken into account when making investment decisions.
Non-interest Rate Exposure
The remainder of the Company’s portfolio and current assets are not subject to interest
raterisks.
The interest rate and maturity profile of the Company’s financial assets as at 31 May 2024 was
as follows:
31 May 2024
Total
£’000
No
maturity
date
£’000
Matures
within
1 year
£’000
Matures
after
1 year
£’000
Fixed interest
average
interest rate
%
Fair value no
interest rate risk
financial assets
Sterling 1,128,658 1,128,658 – – –
US dollar 1,123,64 4 1,123,644 – – –
Euro 246,409 246,409 – – –
Other 23,907 23,907 – – –
2,522,618 2,522,618 – – –
The interest rate and maturity profile of the Company’s financial assets as at 31 May 2023 was
as follows:
31 May 2023
Total
£’000
No
maturity
date
£’000
Matures
within
1 year
£’000
Matures
after
1 year
£’000
Fixed interest
average
interest rate
%
Fair value no
interest rate risk
financial assets
Sterling 1,043,630 1,043,630 – – –
US dollar 1,171,627 1,171,627 – – –
Euro 240,745 240,745 – – –
Other 29,362 29,362 – – –
2,485,364 2,485,364 – – –
Financial Liabilities
At 31 May 2024, the Company had drawn the sterling equivalent of £83.3m (31 May 2023: £nil)
ofits new £500m multi-currency credit facility, £400m of which expires in October 2026 and
£100m expires in October 2024. Interest is incurred at a variable rate as agreed at the time of
drawdown and is payable at the maturity date of each advance. At the year end, interest of
£0.1m (31 May 2023: £nil) was accrued.
During the year ended 31 May 2024, the Company received US$150m through private
placement loan notes, that have been structured over different maturities of five, seven
and10years. At 31 May 2024, the sterling equivalent was £117.8m (31 May 2023: £nil).
At the year end, coupon interest of £2.6m (31 May 2023: £nil) was accrued.
At 31 May 2024 and 31 May 2023, other than the ALN and the private placement debt, all
financial liabilities were due withinone year and comprised drawn loans payable within
oneyear together with short-term creditors.
The ALN is repayable by no later than 31 August 2027.
Notes to the Financial Statements
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23 Analysis of Financial Assets and Liabilities (continued)
Market Price Risk
The method of valuation of the fixed asset investments is described in Note 1(D) on page 151.
The nature of the Company’s fixed asset investments, with a high proportion of the portfolio
invested in unquoted securities, means that the investments are valued by the Directors after
due consideration of the most recent available information from the underlying investments.
PIP’s portfolio is well diversified by the sectors in which the underlying companies operate.
This sectoral diversification helps to minimise the effects of cyclical trends within particular
industry segments.
If the investment portfolio fell by 20% from the 31 May 2024 valuation, with all other
variablesheld constant, there would have been a reduction of £499,701,000 (31 May 2023:
£483,524,000) in the return before taxation. An increase of 20% would have increased the
return before taxation by an equal and opposite amount.
Foreign Currency Risk
Since it is the Company’s policy to invest in a diverse portfolio of investments based in a number
of countries, the Company is exposed to the risk of movement in a number of foreign exchange
rates. A geographical analysis of the portfolio and hence its exposure to currency risk is given
on pages 46 and 70 and in Note 9b. Although it is permitted to do so, the Company did not
hedge the portfolio against the movement in exchange rates during the financial period.
The investment approach and the Manager’s consideration of the associated risk are
discussed in further detail in the Strategic Report on pages 44 to 48 and the Manager’s Review
on pages 55 to 61.
The Company settles its transactions from its bank accounts at an agreed rate of exchange
atthe date on which the bargain was made. As at 31 May 2024, realised exchange losses
of£14,000 (31 May 2023: £31,000) and realised gains relating to currency of £5,505,000
(31May 2023: realised gains of £9,210,000) have been taken to the capital reserve.
The Company’s exposure to foreign currency excluding private equity investments is shown
on the next page. In relation to this exposure, if the sterling/dollar and sterling/euro exchange
rate had reduced by 10% from that obtained at 31 May 2024, it would have the effect, with all
othervariables held constant, of decreasing shareholder funds by £20,343,000 (31 May 2023:
increasing shareholder funds by £7,065,000). If there had been an increase in the sterling/
dollar and sterling/euro exchange rate of 10% it would have the effect of increasing
shareholder funds by £16,645,000 (31May 2023: decreasing shareholder funds by
£5,780,000). The calculations are based on the financial assets and liabilities and the
exchange rate as at 31 May 2024 of 1.2731 (31 May 2023: 1.2394) sterling/dollar and
1.1727(31May 2023: 1.16265) sterling/euro.
An analysis of the Company’s exposure to foreign currency (excluding Investments) is given
below:
31 May 2024
Assets
£’000
31 May 2024
Liabilities
£’000
31 May 2023
Assets
£’000
31 May 2023
Liabilities
£’000
US dollar 19,355 204,488 53,801 478
Canadian dollar 276 – 32 –
Euro 2,166 123 10,321 59
Swedish krone 226 – 768 –
Norwegian krone 22 – – –
Australian dollar 132 – 1,441 –
22,177 204,611 66,363 537
Fair Value of Financial Assets and Financial Liabilities
Investments of the Company are held at fair value. All other financial assets are held at cost,
which is an approximation of fair value. Other than the ALN, the financial liabilities are held at
amortised cost, which is not materially different from fair value.
Managing Capital
The Company’s equity comprises ordinary shares as described in Note 17. Capital, which the
Company considers to be its equity, is managed so as to maximise the return to shareholders
while maintaining a capital base that allows the Company to operate effectively in the
marketplace and sustain future development of the business.
As at 31 May 2024 and 31 May 2023, the Company had bank debt facilities to increase the
Company’s liquidity. Details of actual and available borrowings at the period end can be found
earlier in this Note and in Note 14.
The Company’s assets and borrowing levels are reviewed regularly by the Board of Directors
with reference to the loan covenants.
The Company’s capital requirement is reviewed regularly by the Board of Directors.
Notes to the Financial Statements
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24 Transactions with the Manager and Related Parties
The amounts paid to the Manager, together with the details of the Investment Management
Agreement, are disclosed in Note 3.
The fees paid to the Company’s Board aredisclosed in the Directors’ Remuneration Report on
pages 133 to 135. The Company’s NationalInsurance contribution in relation to Directors’
remuneration is disclosed in Note 4.
Amounts outstanding for Directors’ fees as at 31 May 2024 amount to £62,000
(2023:£45,000).
The Company also has three wholly-owned subsidiaries. Please see Note 20 for further details.
There are no other identifiable related parties at the year end.
25 Post Balance Sheet Events
There are no post balance sheet events to report.
Notes to the Financial Statements
2024Annual Report and AccountsPantheon International Plc 1742024Annual Report and AccountsPantheon International Plc 174
Other Information
AIFMD Disclosures 175
Alternative Performance Measures 177
Glossary of Terms 182
Directors and Advisers 184
Strategic Report
Manager’s Review
Governance
Financial Statements
Other Information
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Other Information
AIFMD Disclosures
The Company is an alternative investment fund (“AIF”) for the purposes of the Alternative Investment Fund Managers Directive (Directive 2011/61/EU) (“AIFMD”), and the Manager was
appointed as its alternative investment fund manager (“AIFM”) for the purposes of the AIFMD with effect from 21 July 2014. The Manager is a “full scope” AIFM for the purposes of the AIFMD.
The AIFMD requires certain disclosures to be made in the Annual Report of the Company. Many of these disclosures were already required bythe Listing Rules and/or UK Accounting
Standards, and these continue to be presented in other sections of the Annual Report, principally the Strategic Report (pages 2 to 54), the Manager’s Review (pages 55 to 114) and the
financial statements (pages 145 to 173). Thissection completes the disclosures required by the AIFMD.
Assets subject to special arrangements
The Company holds no assets subject to special arrangements arising from their illiquid nature.
Remuneration disclosure
The total number of staff of the Manager for the period ended 31 May 2024, including staff remunerated by affiliates of the Manager, was approximately 450, of which 8 were senior
management or other members of staff whose actions have a material impact on the risk profile ofthe Company (“identified staff”).
The total remuneration paid by the Manager and its affiliates to staff of the Manager in respect of the financial year ended 31 May 2024 attributable to work relating to the Company was
as follows:
12 months to 31 May 2024 12 months to 31 May 2023
Fixed
£’000
Variable
£’000
Total
£’000
Fixed
£’000
Variable
£’000
Total
£’000
Senior management 473 677 1,150 459 634 1,094
Staff 1,492 909 2,401 1,643 933 2,576
Total staff 1,965 1,586 3,551 2,102 1,567 3,670
Identified staff 248 449 697 293 555 848
No carried interest was paid in respect of the Company during the year.
The above disclosures reflect only that element of the individuals’ remuneration which is attributable to the activities of the Manager relating to the Company. It is not possible to attribute
remuneration paid to individual staff directly to income received from any fund and hence the above figures represent a notional approximation only calculated by reference to the assets under
management of the Company as a proportion of the total assets under management of the Pantheon Group.
In determining the remuneration paid to its staff, the Manager takes into account a number of factors including the performance of the Company, the Manager and each individual member
ofstaff. These factors are considered over a multi-year framework and include whether staff have met the Manager’s compliance standards. In addition, the Manager seeks to ensure that its
remuneration policies and practices align financial incentives for staff with the risks undertaken and results achieved by investors; for example, by ensuring that a proportion of the variable
income received by identified staff is deferred for a period of at least three years.
Full details of the Pantheon Group’s remuneration policies and practices for staff (which includes the Manager’s staff) can be found at www.pantheon.com.
2024Annual Report and AccountsPantheon International Plc 176
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Leverage
The AIFMD requires the Manager of the Company to set leverage limits for the Company.
For the purposes of the AIFMD, leverage is any method by which the Company’s exposure is
increased, whether through the borrowing of cash or by the use of derivatives or by any other
means. The AIFMD requires leverage to be expressed as a ratio between the Company’s
exposure and its net asset value and prescribes twomethodologies, the gross method and
the commitment method (as set out in Commission Delegated Regulation No. 231/2013),
forcalculating such exposure.
The following leverage limits have been set for the Company:
(i) Borrowings shall not exceed 100% of the Company’s net asset value or such lower
amount as is agreed from time to time with the Company’s lenders.
(ii) Leverage calculated as the ratio between the exposure of the Company calculated in
accordance with the gross method referred to above and its net asset value shall not
exceed 200%.
(iii) Leverage calculated as the ratio between the exposure of the Company calculated in
accordance with the commitment method referred to above, and its net asset value
shall not exceed 200%.
Using the methodologies prescribed under the AIFMD, the Company’s leverage ratio as at
31 May 2024 is shown below:
Gross
method
Commitment
method
Leverage ratio 109.5% 110.5%
There have been no changes to the maximum level of leverage which the Manager may
employ on behalf of the Company during the financial year to 31 May 2024. There are no
collateral or asset reuse arrangements in place as at the year end.
Risk profile and risk management
The principal risks to which the Company is exposed and the approach to managing those
risks are set out in the Strategic Report (pages44to48) and also in Note 23 of the financial
statements (pages 169 to 172). The investment restrictions which seek to mitigate some
ofthose principal risks in relation to the Company’s investment activities are set out in the
investment policy (page 41) and under “Board responsibilities and relationship with the
Manager” in the Statement on Corporate Governance (page 125). Additionally, the individual
counterparty exposure limit for deposits with each of the Company’s bank counterparties has
been set at £70m or the equivalent in foreign currencies. The Manager’s risk management
system incorporates regular review of the principal risks facing the Company and the
investment restrictions applicable to the Company. The Manager has established appropriate
internal control processes to mitigate the risks, including those described in the “Mitigation”
column in the “Risk Management and Principal Risks” section of the Strategic Report
(pages 44to4 8). These investment restrictions have not been exceeded in the financial
year to 31 May 2024.
Article 23(1) disclosures to investors
The AIFMD requires certain information to be made available to investors in the Company
before they invest and requires that material changes to this information be disclosed in
the Annual Report of the Company. The information required to be disclosed is contained
in the document “Information for Investors”, which is available on the Company’s website
at www.piplc.com.
There have been no material changes to this information requiring disclosure.
AIFMD Disclosures
2024Annual Report and AccountsPantheon International Plc 177
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Alternative Performance Measures
We assess our performance using a variety of measures that are not specifically defined
under IFRS and are therefore termed “APMs”. The APMs that we use may not be directly
comparable with those used by other companies. The APMs used by the Company are
defined below.
Net available cash
Cash and net current assets/(liabilities) less next ALN repayment (see Notes 12 and 13).
Available financing
Sum of available cash and undrawn loan facility.
Page
31 May
2024
£m
31 May
2023
£m
Available cash 43 16 63 (a)
Undrawn loan facility 43 398 491 (b)
Available financing 414 554 (a + b)
Capital call
Call to limited partners (“LPs”) to pay in a portion of the LPs’ committed capital when the
general partner (“GP”) has identified a new investment for purchase.
Page
31 May
2024
£m
31 May
2023
£m
Acquisitions at cost 149 153 289 (a)
Recallable distributions (15) (20) (b)
Amount drawn for new commitments (50) (190) (c)
ALN share of calls – 1 (d)
PIH LP Investment (58) (191) (e)
Investments made through PIH LP 126 266 (f)
Capital calls 156 155 (a + b + c +
d + e + f)
Capital Allocation Policy (“CAP”)
Effective 1 June 2024, PIP will dedicate a portion of cash flows to share buybacks if the
Company’s shares are trading at a wide discount to net asset value. Refer to page 29 for
further details.
Capital call rate
Capital calls in the period divided by opening undrawn commitments.
31 May
2024
£m
31 May
2023
£m
Capital calls 156 155 (a)
Opening undrawn commitments 857 755 (b)
Capital call rate 18% 21% (a/b) x 100
Distribution
Cash or stock returned to the LPs after the fund has exited from an investment by selling it,
orfrom distributions received before a sale. Excludes such proceeds received relative to the
portion of the portfolio attributable to the ALN.
Page
31 May
2024
£m
31 May
2023
£m
Disposal of investments 149 132 161 (a)
Investment income received 146 16 18 (b)
Recallable distributions (15) (20) (c)
Withholding tax deducted (3) (1) (d)
ALN share of distributions (4) (5) (e)
Transferred investments to PIH LP – (3) (f)
Disposals of investments received
through PIH LP 67 73 (g)
Distributions from PIP’s portfolio 193 223 (a + b + c +
d + e + f + g)
2024Annual Report and AccountsPantheon International Plc 178
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Distribution rate
Distributions for the period divided by opening portfolio value.
Page
31 May
2024
£m
31 May
2023
£m
Distributions from PIP’s portfolio 193 223 (a)
Opening investments at fair value 161 2,418 2,239 (b)
ALN share of opening investments (31) (39) (c)
Opening portfolio value
(excluding the ALN) 2,387 2,200 (d) = (b + c)
Distribution rate from PIP’s portfolio 8% 10% (a/d) x 100
Financing cover
Ratio of available cash, private equity assets and undrawn loan facility to outstanding
commitments. Future calls from outstanding commitments are expected to be funded from
future distributions realised from the existing private equity assets portfolio, in addition to
distributions realised from future investments.
Page
31 May
2024
£m
31 May
2023
£m
Available financing 43 414 554 (a)
Investments at fair value 161 2,499 2,418 (b)
Total 2,913 2,972 (c) = (a + b)
Outstanding undrawn commitments
(excluding those outside their
investment period) 747 809 (d)
Financing cover 3.9x 3.7x (c/d)
The basis of calculation excludes any outstanding commitments relating to funds outside
their investment period (>13 years old) as there is a low likelihood of these being drawn.
Thisamounted to £41.7m as at 31 May 2024 and £48.2m as at 31 May 2023.
Net debt to NAV
Net debt calculated as borrowings (excluding the outstanding balance of the Asset Linked
Note) less net available cash. The ALN is not considered in the calculation of grossborrowings
or the loan-to-value ratio, as defined in PIP’s credit facility and loan noteagreements.
Page
31 May
2024
£m
31 May
2023
£m
Net available cash 43 16 63 (a)
Drawn credit facility 42 83 – (b)
Private placement loan notes 42 118 – (c)
Net asset value 2,284 2,450 (d)
Net debt as a % of NAV 8.1% 0.0% - (a - b - c)/(d)
Net portfolio cash flow
Income and capital distributions received from funds following exit realisations less capital
calls made to finance investments or expenses.
31 May
2024
£m
31 May
2023
£m
Distributions from PIP’s portfolio 193 223 (a)
Capital calls 156 155 (b)
Net portfolio cash flow 37 68 (a - b)
Alternative Performance Measures
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Alternative Performance Measures
Loss ratio
Loss ratio is calculated as the sum of 1) the loss made on realised investments which
haveexited below cost and 2) the difference between the unrealised value and the cost
ofunrealised investments which are held below cost, divided by the aggregate costs of
allinvestments.
31 May
2024
£m
31 May
2023
£m
For investments made in the last 10 years:
NAV of realised and unrealised
investments held below cost
300 275 (a)
Distributions on realised and unrealised
investments held below cost
9 52 (b)
Total value of realised and unrealised
investments held below cost
309 327 (c) = (a + b)
Total cost of realised and unrealised
investments held below cost
411 423 (d)
Loss on investments 102 96 (e) = (d - c)
Aggregate cost of all investments 4,497 4,274 (f)
Loss ratio 2.3% 2.2% (e/f)
Portfolio investment return
Total movement in the valuation of the underlying funds and companies comprising the
portfolio, expressed as a percentage of opening portfolio value. Foreign exchange effects and
other expenses are excluded from the calculation. The figure excludes returns attributable to
the ALN. A reconciliation of the return after taxation to the portfolio valuation movement is
shown below.
Page
31 May
2024
£m
31 May
2023
£m
Return after taxation
(per Income Statement)
146 32 42 (a)
Adjusted for non-portfolio income
and expenses
– Investment management fees 146 26 28 (b)
– Other expenses 146 6 4 (c)
– Interest payable and similar expenses 146 13 6 (d)
– Other income (1) (1) (e)
– Portfolio and other FX * 42 (3) (f)
Portfolio valuation movement 118 76 (g) = (a + b +
c + d + e + f)
Opening investments at fair value 161 2,418 2,239 (h)
ALN share of opening investments (31) (39) (i)
Opening portfolio value (excluding the ALN) 2,387 2,200 (j) = (h + i)
Portfolio investment return 4.9% 3.5% (g/j) x 100
* Includes -£51m of FX on the portfolio excluding the ALN (May 2023: (-£11m)).
Sample calculations and disclosures
The sample buyout figures for the 12 months to 31 December 2023 were calculated using all
the information available to the Company. The figures are based on unaudited data. MSCI data
was sourced from Bloomberg.
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Revenue and EBITDA
The revenue and EBITDA figures were based on the past 12 months to 31 December 2023 or,
where not available, the closest annual period disclosed, and provide coverage of 63% and
63% (12 months to 2022: 77% and 77%) for revenue and EBITDA growth respectively of PIP’s
buyout portfolio. Individual company revenue and EBITDA growth figures were capped if in
excess of -100% and +100% to avoid distortions from large outliers. Sample data for 2016–
2022 is based on the same methodology and provides coverage of 45%–75% of the portfolio
in each year.
Valuation multiple and debt multiple
Enterprise value is defined as equity value plus net debt. The net debt and enterprise value
figures were based on underlying valuations as at 31 December 2023, or the closest
disclosedperiod end. The valuation multiple sample covers approximately 47%
(31December 2022: 54%) of PIP’s buyout portfolio. The debt multiple sample covers
approximately 54% (31December 2022: 45%) of PIP’s buyout portfolio.
Cost multiple
The cost multiple data on page 79 is based on a sample that represented approximately 84%
by value of proceeds from exit realisations for the year to 31 May 2024. The data covers
primary investments and co-investments, and is based on gross cost multiples available
atthe time of the distribution.
Uplift
Realisation events are classified as exit realisations when proceeds equate to at least 80% of
total investment value and once confirmation of exit realisation is received from the underlying
private equity manager. Uplift on full exit compares the value received upon realisation against
the investment’s carrying value 12 months prior to exit or if known, the latest valuation
unaffected by pricing effects arising from markets participants becoming aware of the
imminent sale of an asset. The analysis on page 78 only includes exit realisations that
occurred during the period and disregards the impact of any proceeds received outside
the12-month period covered in the uplift analysis. The data in the sample represents 98%
(May2023: 100%) of proceeds from exit realisations and 66% (May 2023: 61%) of distributions
received during the period.
Ongoing charges
a) AIC ongoing charges
Annualised operating costs, excluding performance fees, financing costs and taxes, as a
percentage of the average month-end NAV over the year.
Page
31 May
2024
£’000
31 May
2023
£’000
Investment management fees 154 25,674 27,707
Look-through charges 2,827 1,303
Other expenses 146 2,148 2,059
Total expenses 30,649 31,069 (a)
Average month-end NAV 2,333,552 2,490,134 (b)
AIC ongoing charges 1.31% 1.25% (a/b) x 100
b) Total ongoing charges
Annualised operating costs, including financing costs and any performance fees charged by
Pantheon but excluding taxes, expressed as a percentage of the average month-end NAV
overthe year.
Page
31 May
2024
£’000
31 May
2023
£’000
Investment management fees 154 25,674 27,707
Performance fee payable to Pantheon – –
Look-through charges 2,827 1,303
Other revenue expenses 2,148 2,059
Interest payable and similar expenses 146 13,051 6,366
Total expenses and financing costs 43,700 37,4 35 (a)
Average month-end NAV 2,333,552 2,490,134 (b)
Total ongoing charges 1.87% 1.50% (a/b) x 100
Alternative Performance Measures
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Undrawn coverage ratio
Ratio of available financing and 10% of private equity assets to undrawn commitments.
Underthe terms of its loan facility, in order to make additional undrawn commitments,
PIP is required to maintain an undrawn coverage ratio of at least 33%.
Page
31 May
2024
£m
31 May
2023
£m
Available financing 43 414 554 (a)
Investments at fair value @ 10% 161 250 242 (b)
Total 664 796 (c) = (a + b)
Outstanding undrawn commitments
1
747 809 (d)
Undrawn coverage ratio 89% 98% (c/d) x 100
1 The basis of calculation excludes any outstanding commitments relating to funds outside their investment period
(>13years old) as there is a low likelihood of these being drawn. This amounted to £41.7m as at 31 May 2024 and
£48.2m as at 31 May 2023.
Alternative Performance Measures
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Glossary of Terms
AIFMD
Alternative Investment Fund Managers Directive.
Asset Linked Note (“ALN”)
Unlisted, subordinated note due August 2027, the repayment and the performance of which
are linked to a reference portfolio consisting of older vintage funds. The holder of the ALN
has rights to receive c.75% of net cash flows arising from the reference portfolio prior to the
repayment of any outstanding balance in August 2027.
Buyout funds
Funds that acquire controlling interests in companies with a view towards later selling
thosecompanies or taking them public.
Carried interest
Portion of realised investment gains payable to the General Partner as a profit share.
Co-investment
Direct shareholding in a company by invitation alongside a private equity fund.
Commitment
The amount of capital that each Limited Partner agrees to contribute to the fund when
andascalled by the General Partner.
Debt multiple
Ratio of net debt to EBITDA.
Deleverage
A reduction in a company’s total debt.
Dry powder
Capital raised and available to invest but not yet deployed.
Earnings before interest, taxes, depreciation andamortisation(“EBITDA”)
A measure of earnings before interest and taxes that excludes non-cash expenses.
Valuationmethods are commonly based on a comparison of private and public companies’
value as a multiple of EBITDA.
Enterprise value
The sum of a company’s market capitalisation and net debt (net debt equals debt less cash
and cash equivalents).
Exit
Realisation of an investment usually through trade sale, sale by public offering (including IPO),
or sale to a financial buyer.
Expense charge
A pro rata share of the Company’s Total Ongoing Charges allocated to the ALN, reducing each
quarterly payment. This is deducted from Other Expenses through the revenue account of
theIncome Statement.
Feeder fund
An investment vehicle, often a limited partnership, that pools capital commitments of
investors and invests or “feeds” such capital into an umbrella fund, often called a master
fund(“Master”), which directs and oversees all investments held in the Master portfolio.
Fund-of-funds
Private equity fund that invests in a portfolio of several private equity funds to achieve,
compared with a direct investment fund, a broader diversification of risk, including individual
private equity manager risk.
Fund management fee
Annual fee, typically charged by the GP as a percentage of LP commitments to the fund during
the investment period and attenuating thereafter, intended to cover the costs of running and
administering a fund.
General Partner (“GP”)
The entity managing a private equity fund that has been established as a limited partnership,
also commonly referred to as the private equity fund manager.
Initial public offering (“IPO”)
The first offering by a company of its own shares to the public on a regulated stock exchange.
Internal rate of return (“IRR”)
The IRR, a common measure of private equity performance, is calculated as an annualised
compounded rate of investment return based on the timing and quantity of cash flows.
Investment period
Period, typically five years, during which the GP is permitted to make new investments.
J-curve
Refers to the tendency of private equity funds to experience capital outflows and negative
returns in early years, and cash flow distributions and investment gains in later years,
asportfolio companies mature and are exited.
Limited Partner (“LP”)
An institution or individual who commits capital to a private equity fund established as a
limited partnership. Limited Partners are generally protected from legal actions and any
losses beyond their original commitment to the fund.
Liquidation
The sale of all remaining assets of a fund prior to its final cessation of operations.
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Other Information
Loss ratio
Loss ratio is calculated as the sum of 1) the loss made on realised investments which
haveexited below cost and 2) the difference between the unrealised value and the cost
ofunrealised investments which are held below cost, divided by the aggregate costs of
allinvestments.
Manager-led secondary
Purchase of an interest in a portfolio company alongside a private equity manager, where
the manager is seeking to extend the investment holding period in order to participate in
thecompany’s next phase of growth.
Market capitalisation
Share price multiplied by the number of shares outstanding.
Multiple of invested capital (“MOIC” or cost multiple)
A common measure of private equity performance, MOIC is calculated by dividing the
fund’scumulative distributions and residual value by the paid-in capital.
Net asset value (“NAV”)
Amount by which the value of assets of a fund exceeds liabilities, reflecting the value of an
investor’s attributable holding.
Net available cash
Cash and net current assets (liabilities) less next ALN repayment.
Net debt to NAV
Net debt calculated as borrowings (excluding the outstanding balance of the Asset Linked
Note (‘ALN’)) less net available cash. The ALN is not considered in the calculation of gross
borrowings or the loan-to-value ratio, as defined in PIP’s credit facility and loan note agreements.
Paid-in capital
Cumulative amount of capital that has been called.
Portfolio company
A company that is an investment within a private equity fund.
Portfolio investment return
Total movement in the valuation of the underlying funds and companies comprising the portfolio,
expressed as a percentage of opening portfolio value. Foreign exchange effects and other
expenses are excluded from the calculation. The figure excludes returns attributable to the ALN.
Primaries
Commitments made to private equity funds at the time such funds are formed.
Private equity
Privately negotiated investments typically made in non-public companies.
Reference portfolio
As defined under the terms of the ALN, a subset of PIP’s private equity portfolio assets,
substantially comprising the Company’s oldest funds (2006 and earlier vintages).
Secondaries
Purchase of existing private equity fund or company interests and commitments from an
investor seeking liquidity in such funds or companies.
Share buyback
A share buyback is where a company purchases its own shares from the market. This can be
done for several reasons, such as returning surplus cash to shareholders, taking advantage of
wide discounts in share prices to net asset values or providing liquidity to existing shareholders.
Share cancellation
Share cancellations refer to the process of reducing the number of shares outstanding.
Listedcompanies may cancel shares following a share buyback or to effect share capital
reduction and share forfeitures.
Share price premium (discount)
Occurs when a company’s share price is higher (lower) than the NAV per share.
Special situations
Special situations investments can include distressed debt, mezzanine, energy/utilities
andturnarounds.
Undrawn or outstanding commitments
Capital that is committed but is still to be drawn down by the GP for investment.
Uplift on exit
Uplift on full exit compares the value received upon realisation against the investment’s
carrying value 12 months prior to exit or if known, the latest valuation unaffected by pricing
effects arising from markets participants becoming aware of the imminent sale of an asset.
Valuation multiples
Multiple of earnings (typically EBITDA or net income) or revenue applied in valuing a business
enterprise.
Venture capital
Investment in early and development-stage companies, often used to finance technological
product and market development.
Vintage
The year in which a private equity fund makes its first investment.
Weighted average fund age
Average fund age for the portfolio is weighted by the fund’s respective closing net asset
values. Fund age refers to the number ofyears since a private equity fund’s first investment.
Glossary of Terms
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Governance
Financial Statements
Other Information
Directors and Advisers
Directors
John Singer CBE (Chair)
John Burgess
Zoe Clements
David Melvin
Dame Susan Owen DCB
Mary Ann Sieghart
Rahul Welde
Manager
Pantheon Ventures (UK) LLP
Authorised and regulated by the FCA
10 Finsbury Square
4th Floor
London
EC2A 1AF
Email: pip.ir@pantheon.com
PIP website: www.piplc.com
LinkedIn: www.linkedin.com/company/pantheon-international-plc
Pantheon website: www.pantheon.com
Secretary and registered office
Link Alternative Fund Administrators Limited
Waystone Group
Broadwalk House
Southernhay West
Exeter
EX1 1TS
Auditor
Ernst & Young LLP
25 Churchill Place
London
E14 5EY
Broker
Investec Bank plc
30 Gresham Street
London
EC2V 7QP
J.P. Morgan Cazenove
25 Bank Street
London
E14 5JP
Custodian and Depositary
BNP Paribas
10 Harewood Avenue
London
NW1 6AA
Registrar
Link Market Services
Central Square
29 Wellington Street
Leeds
LS1 4DL
Solicitors
Morgan, Lewis & Bockius UK LLP
Condor House
5–10 St Paul’s Churchyard
London
EC4M 8AL
Communications Adviser
Monfort Communications
2nd Floor
Berkeley Square House
Berkeley Square
London
W1J 6BD
Solicitors
Morgan, Lewis & Bockius UK LLP
Condor House
5–10 St Paul’s Churchyard
London
EC4M 8AL
Communications Adviser
Monfort Communications
2nd Floor
Berkeley Square House
Berkeley Square
London
W1J 6BD
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Electronic communications from the Company
Shareholders now have the opportunity to be notified by email when
theCompany’s Annual Reports, Notices of Meetings and other formal
communications are available on the Company’s website, instead of
receiving printed copies by post. This has environmental benefits due
tothereduction of paper, printing, energy and water usage, as well as
reducing costs to the Company. If you have not already elected to receive
electronic communications from the Company and wish to do so, visit
www.signalshares.com. To register, you will need your investor code,
whichcan be found on your share certificate.
Alternatively, you can contact Link’s Customer Support Centre, which is
available to answer any queries you have in relation to your shareholding:
By phone: call +4 4 (0)371 664 0300. Calls from outside the UK will be
charged at the applicable international rate. Link is open between 09:00
and17:30, on Monday to Friday (excluding public holidays in England
andWales).
By email: shareholder.enquiries@linkgroup.co.uk
By post: Link Group, Central Square, 29 Wellington Street, Leeds,
LS1 4DL, UK
Pantheon
International Plc
10 Finsbury Square
4th Floor
London
EC2A 1AF
United Kingdom
Telephone
+44 (0)20 3356 1800
Email
pip.ir@pantheon.com
Website
www.piplc.com
Registered in England
number: 2147984
A member of the Association
of Investment Companies