Pantheon Infrastructure Plc Annualreport 2022 ## Access to high-quality ## global infrastructure assets ## Annual report ## 31 December 2022 ## Purpose ## Our purpose is to provide access to a globally diversified portfolio of ## high-quality infrastructure assets which generate sustainable attractive ## returns over the long term. We achieve this by targeting assets which ## have strong environmental, social and governance (ESG) credentials, ## and underpin the transition to a low-carbon economy. We seek to invest ## in private assets which we believe will benefit from strong downside ## protection from inflation and other defensive characteristics. ## About us ## Pantheon Infrastructure Plc (the ‘Company’ or ‘PINT’) is a closed-ended ## investment company and an approved UK investment trust, listed on ## the Premium Segment of the London Stock Exchange’s Main Market. ### PINT provides exposure to a global, diversified portfolio (the ‘Portfolio’) through direct ### co-investments in high-quality infrastructure assets with strong defensive characteristics, ### typically benefiting from contracted cash flows, inflation protection and conservative ### leverage profiles. Our assets have strong ESG credentials and include projects that support ### the transition to a low‑carbon economy. The Portfolio focuses on assets benefiting from ### long-term secular tailwinds. ### The Company is overseen by an independent Board of non-executive Directors and managed ### by Pantheon Ventures (UK) LLP (‘Pantheon’), a leading multi-strategy Investment Manager ### in infrastructure and real assets, private equity, private debt and real estate. 1 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Highlights Contents | At a glance as at 31 December 2022 | | Strategic report | Financial statements | | --- | --- | --- | --- | | | | Highlights 1 | Independent Auditor’s report 105 | | | | Why invest in PINT 2 | Income statement 112 | | | | PINT at a glance 6 | Statement of changes in equity 113 | | Capital committed: | Net asset value (NAV): | | | | | | Chair’s statement 8 | Balance sheet 114 | | | | PINT timeline 11 | Cash flow statement 115 | ## 1 Investment Manager’s report 12 Notes to the financial statements 116 ## £389m £475m Alternative Performance Measures 23 | | | Investment policy 25 | Other information | | --- | --- | --- | --- | | | | PINT investments 26 | AIFMD disclosures 132 | | | | Our market 37 | Glossary 134 | | Second interim H2 dividend per share: | Market cap: | | | | | | Sector spotlight 40 | Directors and advisers 136 | Business model 42 Investment strategy 51 ## 1p per share £449m Strategy in action 52 Full‑year dividend per share: 2p per share Responsible investing and ESG 53 S172(1) statement 66 Principal risks and uncertainties 72 Viability statement 77 NAV per share: ### Governance ## 98.9p Chair’s introduction to Corporate Governance 79 Board of Directors 80 Investment Manager 82 Statement on Corporate Governance 85 Audit and Risk Committee report 92 Nomination Committee report 95 1. This refers to the capital committed to assets which are: invested, committed and in legal closing. Invested assets represent those Directors’ remuneration report 96 that have reached financial close and have been, or are in the process of, being funded, and may include small amounts reserved Directors’ report 100 for follow‑on investments; committed assets represent those which are announced and are subject to final financial close; and in legal closing assets represent those which are not yet announced but are in the final stages of legal closing. There is no guarantee Directors’ responsibility statement 104 that commitments subject to legal closing will be closed. As at 31December2022, £346million of capital was committed to assets, with a further c.£43million in legal closing. 2 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Why invest in PINT ## The Company aims to build a global portfolio of investments with blended risk/return ## profiles,andsettargetsacrossdealtypes,sectorsandgeographiesfordiversification. ## 1 Unique access to private infrastructure co‑investment assets ## Pantheon, PINT’s Investment Manager, has a large and global infrastructure network ### PINT is managed by Pantheon’s global infrastructure Unique opportunities Enhanced economics investment team, which has a deep and broad sourcing PINT provides investors with the opportunity to access The use of co‑investments can reduce the overall expense network with leading private asset investment managers. Pantheon’s extensive deal flow network of blue‑chip ratio and gross‑to‑net performance spread of a portfolio, PINT invests in infrastructure assets via co‑investments infrastructure investors. There are fewer public market asmost deals are offered with no ongoing management alongside highly experienced general partners (‘Sponsors’), infrastructure opportunities to access private infrastructure feenor carried interest. typically on a management fee and carried interest free basis. assets, as infrastructure companies often remain private for ### Sponsor specialisation Thisis attractive for several reasons, including: long periods of time. Therefore, investing in PINT provides Pantheon, on behalf of PINT, is able to choose deals alongside access to high‑quality co‑investment infrastructure assets not a Sponsor with a distinct edge who may be best placed to normally accessible to public market investors. create value inthat particular sub‑strategy. ### Portfolio construction ### ESG Pantheon uses co‑investments to select individual assets to Pantheon is able to apply its integrated ESG approach gain exposure to, and tilt the Portfolio towards, sectors based to investments to the direct co‑investment as well as to on the Investment Manager’s view on relative value. theSponsor. ### Pantheon’s infrastructure experience ## $19.0bn 188 30 21 years AUM Investments Investment professionals Average years’ experience of Investment Committee 3 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Why invest in PINTcontinued ## 2 Favourable defensive long‑term characteristics ## Infrastructure assets can offer reliable income streams with inflation protection ### Infrastructure assets combine a range of attractive Stable cash flow profile Embedded downside protection characteristics for long‑term investors. Distinctively, Infrastructure may provide a compelling, stable distribution The vital role that many infrastructure sub‑sectors play infrastructure may mitigate the adverse effects of rising profile similar to traditional fixed income. Infrastructure in ourdaily lives can make them an innately defensive inflation and may provide an income‑generating investment assetsoften offer reliable income streams governed by investment. The tangible nature of infrastructure investments outside of traditional fixed income. Infrastructure assets may regulation, hedges or long‑term contracts with reputable can provide a basis for liquidation and recovery value in also provide embedded value and downside protection across counterparties. downside cases. Cash flows that have a high portion of market cycles given the regulated and contracted nature of protection through contractual structures with high‑quality ### Inflation hedge many of the underlying cash flows. Infrastructure assets may counterparties offer further downside protection. Infrastructure investments can provide a natural hedge provide a range of attractive investment attributes, including ### to rising inflation in portfolios, as many sub‑sectors have Diversification thefollowing: contracts with explicit inflation‑linkage or implicit protection Infrastructure can be a valuable portfolio diversifier alongside through regulation or market position. The majority of PINT’s traditional and alternative investments. Historically, listed assets have explicit inflation‑linkage or implicit protection infrastructure returns have been only moderately correlated through regulation or market position. to traditional asset classes. The sub‑sectors within the infrastructure universe and the drivers of such sub‑sector returns tend not to be correlated with one another. 4 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Why invest in PINTcontinued ## 3 Access to secular trends ## PINT continues to develop its diversified Portfolio across sectors that benefit from secular trends Pantheon has taken and continues to take a disciplined Digital Power approach to PINT’s strategy to construct a globally diversified | | Infrastructure | | & Utilities | | | --- | --- | --- | --- | --- | | portfolio with exposure across sub‑sectors and geographies, | | 1 | | 1 | | | 41% | | 25% | | while maintaining the flexibility to tilt exposures based on opportunities which may present compelling relative value. The Company aims to build a global portfolio of investments with blended risk/return profiles, and set targets across deal types, sectors and geographies for diversification. Please refer to page 25 for more detail. | Data centres, fibre networks and towers | | Energy utilities, water and conventional power | | | --- | --- | --- | --- | | Renewables & | | Transport | | | Energy Efficiency | | & Logistics | | | | 1 | | 1 | | 9% | | 8% | | Wind, solar, sustainable waste and smart infrastructure Ports, rail and road, airports and e‑mobility 1. Proportion of gross assets of £484.3 million at 31 December 2022. Includes assets which have been invested, committed and/or were in legal closing as at 31December 2022. Figures do not total to 100% because of uncommitted cash totalling 17% of gross assets. 5 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Why invest in PINTcontinued ## 4 PINT seeks to generate attractive risk‑adjusted returns ## 1 ## 8‑10% p.a. ## Targeting capital growth and dividend returns The Company seeks to generate attractive risk‑adjusted total ### Target NAV Total Return returns for shareholders over the longer term. This comprises ### per share capital growth with a progressive dividend, through the acquisition of equity or equity‑related investments in a diversified portfolio of infrastructure assets with a primary focus on developed OECD markets. ## 2 ## The Company is targeting a NAV Total Return per 2p per share share of8‑10% p.a. following full investment of IPO and subscription share proceeds. ### Full‑year 2022 dividend ## 2 ## 4p per share ### Target 2023 dividend, progressive ### thereafter 1. NAV Total Return per share is defined as the growth in the NAV per share, together with all distributions (ofanincome or capital nature) paid in respect of such share. 2. Following the first year dividend of 2p per share, the Company is targeting an increased dividend of 4p per share for the year ending 31December2023 and, thereafter, a progressive dividend. 6 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## PINT at a glance ## Eleveninfrastructure Digital ### 1 Infrastructure ## co‑investmentassets 1 ### Geographic diversifi cation ### Power Europe | 41% ### & Utilities North America | 34% UK | 8% Uncommitted | 17% ### Renewables & ### Energy Effi ciency 1 ### Sector diversifi cation  Digital Infrastructure | 41%  Power & Utilities | 25%  Renewables & Energy Effi ciency | 9% ### Transport  Transport & Logistics | 8% ### & Logistics Uncommitted | 17% 1. Based on assets invested, committed and in legal closing at 31 December 2022. 7 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## PINT at a glancecontinued ### United Kingdom 1 National Gas ### North America CyrusOne Cartier Energy Holdings ### Netherlands Calpine Delta Fiber Vantage Data Centers Fudura Vertical Bridge ### Ireland National Broadband Ireland ### Germany/Austria 1 GD Towers ### Spain Primafrio 1. Based on assets invested, committed and in legal closing at 31 December 2022. 8 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Chair’s statement ## Investingininfrastructure ### £389 million of net IPO and 1 ## hasneverbeensoimportant. subscription share proceeds committed ## 1p ## per share ### We are pleased with the Portfolio assembled to ### Vagn Sørensen ### date and have confidence in the future of the Second interim dividend Chair ### Company and its Portfolio, and the high‑quality declared for the period ### pipeline of opportunities. ### Introduction The Company is targeting a NAV Total Return per share of between ### Vagn Sørensen I would like to thank all of PINT’s investors who have 8% and 10% p.a. Following the payment of the interim dividend Chair, Pantheon Infrastructure Plc supportedtheCompany since its launch and have been of 1p per share in October, the Board is recommending a further instrumental in its success. dividend of 1p per share for the period to 31December2022, in line with our targets, which we expect to rise to 4p perOrdinary Share PINT’s IPO was oversubscribed and hit its hard cap, reaching for the financial year ending 31December 2023, and aprogressive £400million of gross proceeds (the largest new infrastructure dividend thereafter. TheCompany intends to pay dividends investment company launch of 2021), which were augmented onasemi‑annualbasis. by £80.8million of gross proceeds from the exercise of its subscription share offering in the summer of 2022. PINT’s purpose is to enable investors to gain exposure to a mix ofhigh‑quality growth and income‑generating private infrastructureassets in developed markets. We target those assets withstrong downside and inflation protection and invest alongsideleading Sponsors and institutional investors. 1. This refers to the capital committed to assets which are: invested, committed and in legal closing at 31 December 2022. 9 Pantheon Infrastructure Plc^{}[] Annual report 2022 Strategic report Governance Financial statements Other information ## Chair's statement continued ### Market environment and C shares The period under review, which covers a little over a year since the Company's IPO in November 2021, was challenging in terms of geopolitics, macroeconomic factors and broad market volatility. In February 2022, Russia's invasion of Ukraine caused a spike in energy prices and higher inflation at a time when concerns were already rising about slowing global growth. The UK's so called 'mini-budget' in September included significant unfunded tax cuts to which markets reacted negatively and strongly. The cost of UK government debt rose with unprecedented speed, and the associated fall in value of gilts triggered a sell-off in UK equities as pension funds were forced to liquidate assets to meet collateral calls. With this backdrop, it was pleasing that PINT's portfolio of infrastructure assets proved very resilient, benefiting from geographic and sector diversification and downside protections. However, the shares of investment trusts across all sectors, including infrastructure, were not immune to the fall in the broader UK equity indices. PINT's shares fell to trading at a discount for the first time since launch and, as a result, the Board concluded that the issue of new equity C shares proposed for September 2022 should not proceed. Since that time, under a new UK Prime Minister and Chancellor of the Exchequer, the destabilising changes proposed under the mini-budget have been reversed. Whilst the listed infrastructure sector continues to trade at a discount, we remain confident of the high quality characteristics of infrastructure assets which are largely uncorrelated with more volatile asset classes. ### Deployment and performance As at 31 December 2022, the Company had committed to ten assets totalling £346 million, with a further £43 million committed post the year end into GD Towers. In total this amounts to £389 million, which compares favourably with our initial target of committing to up to twelve assets in the first twelve months and means that the Company is substantially fully invested, after allowing for required working capital and cash retentions. NAV per share as at 31 December 2022 was 98.9p, up 0.9p per share for the period since IPO, principally attributable to underlying gains on the Portfolio, which was valued at £301 million, reflecting the nine assets invested at 31 December 2022. Given the recency of the Company's new investments, these were modest gains and no significant valuation movements were recognised in the period. ### Strategy and portfolio The Company seeks to generate attractive risk-adjusted returns by constructing a diversified portfolio of high-quality assets across the global infrastructure investment universe, with a focus on assets that offer downside and inflation protection, which is particularly relevant in the current market environment. Leveraging Pantheon's extensive 13-year experience in infrastructure investing and its c$19 billion infrastructure platform, PINT targets specific transactions that Pantheon deems to be most attractive, notably opportunities in businesses with strong operations and growth potential, in sub-sectors benefiting from long-term positive trends and managed by high-quality Sponsors. We do, however, remain alert to the challenges in the current environment and there are several key themes that we believe are important to consider. #### Inflation Despite policy intervention, inflation is at levels which have not been seen for over 40 years. PINT's Portfolio is positively correlated against inflation as many of its underlying cash flows are contractually index-linked, or capture inflationary benefits through regulation or market position. #### Interest rates Rates have risen faster than at any other time in history, with bond yields driving up risk-free rates; however, transactional evidence is showing limited to modest increases in discount rates. Portfolio financings have been executed on favourable terms, which mitigate this risk, however, new platforms are factoring in higher debt costs. #### Global economic slowdown Real GDP growth expectations have been cut sharply, with global demand expected to weaken throughout 2023 as central bank intervention continues. GDP correlation and leverage continue to be areas of diligence focus when considering investments for PINT. ![img-0.jpeg](img-0.jpeg) 10 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Chair’s statementcontinued Pantheon has selected a number of top‑tier advisers for PINT, ### Strong governance Outlook including Investec as broker, Hogan Lovells as Legal Counsel and The Board takes its responsibilities to its shareholders, in The need for new infrastructure has notdiminished because of EY as auditors. accordance with good governance standards, very seriously. the global economic outlook. Thedeveloped world continues to Tothat end, we have assembled a highly experienced and Pantheon has a proven track record of delivering strong returns embark on an aggressive path towards decarbonisation, and the independent Board of Directors. All the Board members have by applying a disciplined investment process across a globally road to net zero globally will require sustained and extraordinary worked extensively in the infrastructure sector and have a diversified portfolio and we are confident that its approach, to focus investment in new infrastructure. Private infrastructure has combined experience across the industry in excess of 100 on co‑investing, thus minimising fees while maximising the number demonstrated a necessary role in filling that gap, and we believe years. Allthe Directors are non‑executive and are independent of of investment opportunities it can access, offers a compelling and it will continue to play an important part in funding global Pantheon. We have recently completed our first internal Board differentiated opportunity for investors. infrastructure investments. Evaluation, a process which we will carry out annually hereafter. PINT’s Directors collectively own a total of 240,000 shares in the The market for infrastructure investments remains competitive, At present, the Board has concluded it is of an appropriate size Company. In addition, thirteen Partners of Pantheon collectively with significant fundraising activity in private markets further relative to the assets of the Company, with good diversity of skills, hold a further 1,232,570 shares. driving strong demand for high‑quality infrastructure assets. gender and experience. As a relatively new Board, no Directors are PINT’s strategy continues to be to identify and target companies ### expected to retire in the short term. However, we are aware of the ESG that benefit from key sectoral tailwinds whilst exhibiting need to consider Board tenure and ensure continuity and a smooth The Board recognises the importance of ESG to the operations of defensive characteristics, delivering growth in real terms across transition of Directors in the future, as well as adding further the Company as well as to the operations of those whose services the economic cycle. Pantheon’s wide capability to source new diversity, and will consider this in our succession planning in the it uses and the companies it invests in. TheBoard as a whole fulfils investments through its vast network and established partnerships, coming years. the responsibilities of the ESG Committee, which include: as demonstrated since PINT’s IPO, is all the more crucial in current The Board of Directors is responsible for managing the business • monitoring the Company’s compliance with applicable ESG market conditions. The Board remains optimistic about PINT’s affairs of the Company in accordance with the Articles and has policies and regulations; and future investment opportunities and value creation potential. overall responsibility for the Company’s activities, including ### • oversight of new and developing ESG legislation. setting strategy, approving future capital raising activity, the As part of fulfilling its responsibilities, the committee receives ESG review of investment activity and performance, and the overall updates from Pantheon. supervision of Pantheon as Investment Manager. The PINT team ### Vagn Sørensen at Pantheon is led by Richard Sem, a Partner with over 25 years of We are impressed with the ESG activities and plans proposed by Chair experience investing in infrastructure. The Board is confident that the portfolio companies. More details can be found in the ‘ESG’ 1 March 2023 the Pantheon team has the depth and expertise to enable PINT to andthe ‘PINT Investments’ sections of this report. achieve its long‑term objectives. ### Annual General Meeting The Directors may delegate certain functions to other parties such The first Annual General Meeting (AGM) of the Company will be as the Investment Manager, the Administrator, the Depositary held at 11:00am on 30 March 2023 at 10FinsburySquare, 4thFloor, and the Registrar. In particular, the Directors have delegated London, EC2A 1AF. All shareholders are encouraged to attend. responsibility for managing the Company’s investment portfolio to Pantheon as the Investment Manager. 11 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## PINT timeline | Commitment of £23m to | | Publication of first | | | | --- | --- | --- | --- | --- | | | | | Commitment | Commitment | | Delta Fiber – European | | interim report to | | | | | | | of £47m to | of £43m to | | Digital Infrastructure | | 30June 2022 | | | | | Commitment | | National | GD Towers | Company | | | | | of £46m to | Raised £81m of | Broadband | – German | | --- | --- | --- | --- | --- | --- | --- | --- | | | | Commitment of £24m | | Calpine – | gross proceeds | Ireland – | and Austrian | | | | to Vertical Bridge – | | US Power | through exercise | Irish Digital | Digital | | Raised £400m gross | | USDigital Infrastructure | | generation | of Subscription | Infrastructure | Infrastructure | | IPOproceeds | | company | | business | Shares | Company | Company | | November 2021 | April 2022 | | June 2022 September 2022 November 2022 January 2023 | | | | | March 2022 May 2022 July 2022 October 2022 December 2022 March 2023 | Signing of maiden | Commitment | Commitment of £29m | Paid first interim | Agreed £63m | Declared second | | --- | --- | --- | --- | --- | --- | | investment £40m | of £33m | to Vantage Data Centers | dividend of | multi‑currency | interim dividend | | commitment to Primafrio | to Cartier | – North American data | 1ppershare | revolving | of 1p per share | | – European Transport | Energy – | centre business | | creditfacility | to be paid on | | and Logistics | US District | | | | 31March2023 | Commitment of £41m Energy Commitment of £25m to to Fudura – Dutch Platform CyrusOne – Data Centre Electricity Infrastructure Business Provider Commitment of £40m to National Gas Transmission – UK‑Regulated Gas Transmission Network and Metering Business Key: Digital Infrastructure Renewables & Energy Efficiency Power & Utilities Transport & Logistics PINT commitments translated to GBP at 31 December 2022 foreign exchange rates. 12 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information # Investment Manager's report Founded in 1982, Pantheon has established itself as a leading global multi-strategy investor in private equity, infrastructure and real assets, private debt and real estate. ## Pantheon's infrastructure experience Since 2009, Pantheon has completed 188 infrastructure investments across primaries, secondaries and co-investments alongside more than 56 asset sourcing partners, solidifying its position as one of the largest managers investing in infrastructure. Total infrastructure co-investment and Sponsor relationships exceeded 50 as of December 2022, including investments closed or in legal closing. The global infrastructure investment team managed $19.0 billion in AUM as at 30 September 2022. ## Pantheon platform ![img-1.jpeg](img-1.jpeg) ## Pantheon private infrastructure ![img-2.jpeg](img-2.jpeg) ## Pantheon private infrastructure co-investments ![img-3.jpeg](img-3.jpeg) 1. As at 30 September 2022, This figure includes assets subject to discretionary or non-discretionary management or advice. Infrastructure AUM includes all infrastructure and real asset programmes which have an allocation to natural resources. 2. Performance data as of 30 September 2022. Past performance is not indicative of future results. Future performance is not guaranteed and a loss of principal may occur. Performance data includes all infrastructure co-investments approved by Pantheon's Global Infrastructure and Real Assets Committee (GIRAC) since 2015, when Pantheon established its infrastructure co-investment strategy. National net performance is based on an average forecast annualised fee of 1.5% of NAV. 13 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Investment Manager’s reportcontinued Pantheon has extensive experience of and expertise in primary, ### Pantheon primary Sponsors require Pantheon co‑investment secondary and co‑investments, which are defined as follows: ### funds strategy co‑investment partner strategy ### • Primary investments: involve a commitment to a newly launched limited life fund managed by a Sponsor, seeking to exit improved businesses in the later years of the fund term ### AUM in primary Co‑investment opportunities Committed across ataprofit | | | | 1 | | 2 | | | --- | --- | --- | --- | --- | --- | --- | | | | companies since 2009 | | screened since 2015 | | 52 co‑investment assets | | • | Secondary investments: traditionally involve the purchase | | | | | | of an interest in an established private fund or a portfolio of companies from an existing investor ### • Co‑investments: afford the opportunity for investors to invest alongside Sponsors in specific Portfolio Companies, typically ona fee and carried interest‑free basis ### $9.0bn $70bn $4.4bn PINT focuses on gaining exposure to infrastructure assets via co‑investments. Committed across 52 3 co‑investment assets Sponsors may offer co‑investments ### • Pantheon develops long‑term • Access to co‑investment for the following reasons: relationships with top tier assets, typically on a no‑fee, sponsors by investing in their no‑carrybasis. ### • size of transaction; underlying flagshipfunds. | | | | | | • | Proven track record as a | | --- | --- | --- | --- | --- | --- | --- | | | | | • | manage concentration limits; | | | | | • | Sponsors consider Pantheon | | | | valuable partner by providing | | | | | • | raise follow‑on capital; and | | | | 1. As at 30 September 2022. This figure includes assets subject to discretionary | | to be a strategic partner, rather | | | | experience in complexdeals; | | | | | • | strengthen investor | | | or non‑discretionary management or advice. Infrastructure AUM includes than a directcompetitor. speed and certainty of all infrastructure and real asset programmes which have an allocation to relationships. deal execution within short naturalresources. timeframes. 2. Pantheon internal data from 2015 to December 2022. Screened deal flow is based ### on total value of transactions ($). • Co‑investment track record 3. Total infrastructure co‑investment count and committed amount as of December has produced notional net IRR 2022, includes all Pantheon infrastructure co‑investments closed or in legal closing. 4 of12.3% . 4. Performance data as of 30 September 2022. Performance data includes all consummated infrastructure co‑investments approved by GIRAC since 2015, whenPantheon established its infrastructure co‑investment strategy. 14 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Investment Manager’s reportcontinued ### Portfolio ### NAV pence per share movement (period to 31 December 2022) PINT is constructing a diversified global portfolio with a focus on developed market OECD countries, with the majority of exposure NAV per share over the period increased by 0.9p per share, after adjusting for the interim dividend paid of 1.0p per share paid in Western Europe and North America. Over the medium term, in October 2022. The movement in the period was principally driven by fair value gains of 2.0p per share and foreign exchange theInvestment Manager expects, in line with the initial prospectus, the movements of 2.1p per share attributable to the strengthening of the USD in the period, which was partially offset by a (1.8)p per composition of the Portfolio to include investments in the following share movement from the foreign exchange hedging programme. Investment Income from the Portfolio and interest on cash sub‑sectors: DigitalInfrastructure, Power & Utilities, Transport & Logistics, deposits contributed 0.4p per share, offset by (1.0)p per share related to fund operating expenses, and (1.0)p per share dividend, Renewables & Energy Efficiency and Social &Other Infrastructure. resulting in a closing NAV of 98.9p per share. This will be reduced after the second interim dividend of 1ppershare, which will be paid on 31March2023. There are no dilutive securities in issue. In the period to 31 December 2022, the Company committed £346million across ten investments, of which £288million was invested across nine investments. 1. Represents return of capital from co‑investment manager After the period end a further £43million was committed to a 2.1 digital investment, GD Towers, and the total amount invested increased by £84million to £372million, principally due to funding 0.4 calls on GD Towers and NGT. 2.0 The Portfolio assembled to date is diversified across sectors (1.8) and geographies, and the Investment Manager believes that it (1.0) 98.9 will endure through the current and near‑term volatile market 0.2 (1.0) 98.0 environment. The Portfolio investments typically benefit from defensive characteristics, including long‑term contracted cash flows, inflation protection and robust capital structures. Five investments are in Digital Infrastructure, representing 41% of gross assets, across the data centre, towers and fibre sub‑sectors. Three investments, representing 25%, are in the Power & Utilities sector including: gas transmission, district heating and electricity generation, with the remaining investments in Renewables & 2 | | Energy Efficiency (9%) and Transport & Logistics (8%). The largest | | As at | | Subscription | | Fair | Foreign | Foreign | Investment | Expenses | Dividends | | As at | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 16 November | | | | share | value | exchange | exchange | income/yield | | | paid | | | pence per share | percentage of the exposure is in North America (41%), with the | | | | | | | | | | | | | | | | | | 2021 | | | issue | gains | movement | hedge | | | | | 2022 | | | remaining exposure in Europe (34%), and the UK (8%). | | | 1 | | | | | | | | | | | The weighted average Sponsor case IRR of the Portfolio, based on 1. NAV per share as at 16 November 2021 (IPO date) which comprised the net proceeds from the IPO. total commitments at 31 December 2022, was 13.9%. The weighted 2. Expenses include operating and capital expenses. average gearing was 38%. 31 December (IPO date) 15 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Investment Manager’s reportcontinued 1 2 3 The breakdown of the Company’s gross assets as at 31 December 2022 is shown below by reference to sector and geography. The breakdowns are shown relative to amounts invested and committed . | Sector diversification (as at 31 December 2022) | | | Geographic diversification (as at 31 December 2022) | | | | --- | --- | --- | --- | --- | --- | | | 2 | 3 | Outer ring: total (invested + committed) | | | | Outer ring: total (invested | + committed | ) | | | | | | | | | 2 | 3 | | Inner ring: invested and committed breakdown | | | Inner ring: invested | and committed | breakdown | | Digital Infrastructure \| 41% | Europe \| 41% | | --- | --- | | Invested \| 29%  Committed \| 12% | Invested \| 30% Committed \| 11% | | Power & Utilities \| 25% | North America \| 34% | | Invested \| 17%  Committed \| 8% | Invested \| 32% Committed \| 2% | | Renewables & Energy Efficiency \| 9% | UK \| 8% | | Invested \| 9%  Committed \| <1% | Invested \| — Committed \| 8% | 4 Transport & Logistics | 8% Remaining cash | 17% Invested | 8%  Committed | <1% 4 Remaining cash | 17% 1. Gross assets of £484.3million consisting of the £301.4million Portfolio fair value and £182.9million of cash and cash equivalents at 31 December 2022. 2. Invested amounts at 31 December 2022 totalled £301.4million, representing the fair value of the Company’s funded investments in those sectors or geographies. 3. Committed amounts at 31 December 2022 totalled £101.2million, representing cash held in respect of as yet undrawn commitments and/or deals in legal closing in those sectors or geographies. Undrawn commitments are a feature of the Company’s investments andoccur when completions are deferred due to commercial or regulatory approval processes, or where capital calls are intentionally staggered over time for follow‑on purposes, for example for capex or M&A requirements. 4. Remaining cash at 31 December 2022 totalled £81.7million, representing £9.7million of cash retained against buffers not covered by the Company’s revolving credit facility, and £72.0million of remaining funds available to invest. 16 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Investment Manager’s reportcontinued Portfolio NAV Unfunded 1 31 December 2022 Commitments Asset Status Investment date Sector Region Sponsor (£m) (£m) Portfolio assets 31 December 2022 CyrusOne Invested March 2022 Digital: Data Centre North America KKR 23 4 Cartier Energy Holdings Invested April 2022 Power & Utilities: District Heating North America Vauban 35 — Delta Fiber Invested May 2022 Digital: Fibre Europe Stonepeak 23 2 Vertical Bridge Invested May 2022 Digital: Towers North America Digital Bridge 27 — Calpine Invested July 2022 Power & Utilities: Electricity Generation North America ECP 47 — Fudura Invested July 2022 Renewables & Energy Efficiency Europe DIF 41 2 Primafrio Invested July 2022 Transport &Logistics Europe Apollo 40 1 Vantage Data Centres Invested August 2022 Digital: Data Centre North America Digital Bridge 22 5 National Broadband Ireland Invested November 2022 Digital: Fibre Europe Asterion Industr ial Partners 43 4 2 National Gas Invested January 2023 Power & Utilities: Gas Transmission UK Macquarie — 41 301 58 Assets committed and in legal closing at 31 December 2022 3 GD Towers Invested January 2023 Digital: Towers Europe Digital Bridge 43 301 101 Key: Digital Infrastructure Renewables & Energy Efficiency Power & Utilities Transport & Logistics 1. Commitments based on undrawn amounts of deals committed or in legal closing, converted into GBP as necessary, at 31 December 2022. 2. The financial close of National Gas was subject to regulatory clearances, with the investment completing post 31 December 2022. 3. The financial close of GD Towers occurred post 31 December 2022. 17 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information # Investment Manager's report continued ## Performance Portfolio movement (period to 31 December 2022) ![img-4.jpeg](img-4.jpeg) During the period the Portfolio generated underlying growth of £9.6 million, reflecting a 3.3% movement on the capital invested, before adjusting for capital distributions totalling £4.0 million. Movements in foreign currencies resulted in a foreign exchange gain of £7.7 million, before adjusting for the impact of the foreign exchange hedging programme, resulting in a closing value of £301.4 million at 31 December 2022. There were no material performance updates across the Portfolio during the period, and the Investment Manager remains confident of the investment theses and underwriting that underpins the Company's investments. No changes were proposed by Sponsors to any of their underlying business plans, and in some cases additional high conviction growth opportunities were identified. Under the Company's valuation policy investments are carried at fair value in accordance with FRS 102 and the International Private Equity and Venture Capital Valuation (IPEV) guidelines. In private market transactions, the purchase cost of the investment is an indication of its initial fair value and is thereafter calibrated for subsequent events and changes in valuation inputs. At the period end a number of the Company's investments were valued at a price consistent with the purchase price, and Pantheon does not consider this to be unexpected or unreasonable given the recency and stage of some of the Portfolio investments by the Sponsors, all of which have been held for less than twelve months. 1. WADR of 14.0% is based on the discount rate of each completed investment at 31 December 2022, weighted by total contribution to Portfolio NAV at that date. 2. Based on the Sponsor base case IRR of each completed investment at 31 December 2022, weighted by total commitment rate, converted to GBP as necessary. The Portfolio had a weighted average discount rate (WADR) of 14.2%¹ at the period end. This is slightly higher than the weighted average Sponsor case IRR of the Portfolio of 13.9%¹, due to some modest increases in discount rates across the Digital Infrastructure sector, and the effect of undrawn commitments. ## Outlook The Investment Manager remains confident in the volume of attractive opportunities for the Company going forward. The tailwinds that support the demand for new infrastructure and the growth opportunities that accompany it remain strong across all the sub-sectors the Company is active in, which provides protection against any potential market softening. Overall, the Investment Manager does not expect to see significant movements in the Company's valuations arising due to current market considerations. There has been limited transactional evidence to support downward valuation trends, and reference valuations for private market infrastructure funds have traditionally been marked lower than the prices ultimately realised at exit, which adds in further long-term headroom and supports the notion that private markets assets demonstrate less volatility than public proxies in times of market disruption. Higher debt costs arising from increasing interest rates do have the potential to impact valuations where capital structures do not allow for interest rate risk to be fully mitigated, as more cash flow are diverted to servicing debt. However, in general gearing levels remain low compared to previous financial crises, and the Investment Manager continues to exercise a diligent approach to underwriting which typically involves allowing for additional pricing premiums for any uncommitted debt financing packages, relative to Sponsor base cases. The consensus amongst Sponsors that the Investment Manager works with is that discount rates will either remain flat or see some modest increases. Most Sponsors believe that valuations will more generally likely remain flat in the short term as underlying performance is offset by higher operating costs and/or capital expenditure. From a wider market perspective, there continue to be significant allocations to infrastructure as an asset class, and to the private infrastructure market specifically, which creates sustained competition for assets and further supports valuations. Specifically, there remains high interest in assets with some form of inflation linkage and those that play a role in the energy transition. ![img-5.jpeg](img-5.jpeg) 18 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Investment Manager’s reportcontinued | Dividend | | EUR Notional | | USD Notional | Mark-to-market | Buffer | | --- | --- | --- | --- | --- | --- | --- | | | Counterparty | | (€m) | ($m) | (£m) | (£m) | | In the IPO Prospectus, the Company said it would target a NAV Total Return of 8‑10% p.a. following | A — 82.3 (3.2) 6.2 | | | | | | | full investment of the IPO proceeds and an initial dividend of at least 2p per share for the first financial | B — 84.2 (3.4) 6.3 | | | | | | period ended 31 December 2022, rising to 4p per share for the year ending 31December2023 and a C 91.0 12.4 (1.4) 9.1 progressive dividend thereafter. D 23.7 —(0.2) 1.8 As part of this annual results announcement, the Board is declaring the Company’s second interim E 23.7 8.8 (0.3) 2.5 dividend of 1p per share in respect of the period 1 July 2022 to 31December2022, which will be paid Total 138.4 187.7 (8.5) 25.8 on 31 March 2023. This is in line with the Company’s target. Over the medium term, the Company expects the Portfolio to generate both yield and capital growth to support the progressive dividend policy and expects to maintain a healthy dividend cover from income ### NAV foreign exchange and hedging distributions and surplus capital profits throughrealisations. ### Foreign exchange impact 2.9 1.1 In order to limit the potential impact from material movements in major foreign exchange rates 0.0 on non‑local currency investments, the Company has put in place a foreign exchange hedging programme. The aim of this programme is to reduce (rather than eliminate) the impact of movements (0.1) % of NAV in foreign exchange rates on the Company’s NAV, and to this end the Company has adopted an internal (1.0) policy to seek to limit its unhedged exposure to 25% of NAV at any time. This is achieved through the (2.5) execution of foreign exchange hedging contracts relative to the ongoing non‑local currency investment (3.7) exposure. Any such hedging strategy for PINT is subject to, inter alia, market liquidity and pricing for IPO to Mar 2022 Apr – Jun 2022 Jul – Sep 2022 Oct – Dec 2022 hedges, foreign exchange volatilities, the composition of the Company’s portfolio and the Company’s Hedge movement Asset FX movement Net movement balance sheet. To date the Company has arrangements with five hedging counterparties, all on an unsecured basis and subject only to margin calls if pre‑specified credit limits are breached on an individual counterparty (not aggregate) basis. Furthermore, in line with the Investment Manager’s risk policies, the Company has adopted a policy to maintain strict liquidity buffers in relation to these hedging positions to protect 3.5 against extreme volatility‑driven margin requirements. The details of the Company’s hedging positions and associated cash buffers are set out in the tableopposite. The depreciation of GBP resulted in a positive Portfolio and non‑Portfolio foreign exchange movement in the period to 31December 2022 of £9.9million, which was offset by a loss on thehedging programme of £8.5million. 19 Pantheon Infrastructure Plc^{}[] Annual report 2022 Strategic report Governance Financial statements Other information # Investment Manager's report continued ## Borrowings In December 2022, the Company entered into a new three year multi-currency revolving credit facility (RCF) for an aggregate commitment of £62.5 million with Lloyds Bank Corporate Markets plc. The RCF allows the Company to maintain liquidity for unfunded commitments and working capital requirements whilst minimising the inefficiencies of holding excessive cash. The RCF, which is secured on the assets of the Company, includes an uncommitted accordion feature, which will be accessible, subject to approval, by additional lenders, and is intended to increase over time in line with the Company's NAV and its borrowing policy. ## Cash and liquidity management At the period end, the Company had total available liquidity of £245.4 million, comprising £182.9 million of cash and £62.5 million of undrawn RCF. The Company maintains a policy to hold liquidity sufficient to cover all investment commitments and amounts in legal closing due in the next twelve months. At the period end, this amount totalled £101.2 million, inclusive of £84.2 million in respect of the National Gas and GD Towers transactions which were subsequently drawn post period end. In addition to this, the Company has adopted a risk-based policy to hold specific cash buffers in respect of potential further liquidity requirements. These buffers include forecast operating costs, dividend payments, FX hedge settlements due (based on mark-to-market valuations), an allowance for emergency co-investment capital across the portfolio, allowances for FX movements on undrawn non-GBP commitments, and amounts held against the Company's FX hedging positions (calculated relative to notional amounts and contractual maturity). At the period end, these amounts totalled £72.2 million. The net balance of all these considerations represents the funds available to the Company for further investment. As at the period end this amount stood at £72.0 million, which was significantly boosted after completion of the Company's RCF in December 2022. | | £m | | --- | --- | | **Sources** | | | Cash & equivalents | 182.9 | | RCF | 62.5 | | **Total (A)** | **245.4** | | **Commitments** | | | Undrawn investment commitments | 57.9 | | Investments in legal closing | 43.4 | | **Total (B)** | **101.2** | | **Buffers** | | | Operating costs | 7.4 | | FX M&M | 4.5 | | Dividends | 14.4 | | Co-investment buffers | 16.0 | | FX buffers on undrawn investment commitments | 4.1 | | FX hedging buffers | 25.8 | | **Total (C)** | **72.2** | | **Available funds (= A - B - C)** | **72.0** | 1. Totals do not match due to rounding. ## Ongoing Charges The Company's ongoing charges figure is calculated in accordance with the Association of Investment Companies (AIC) recommended methodology and was 1.02% for the period to 31 December 2022, reported on an annualised basis. The ongoing charges are lower in the first year as no management fee was paid on undeployed cash until 75% of the Net Issue Proceeds were deployed. This was achieved in the quarter to 30 September 2022. 20 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Investment Manager’s reportcontinued ## Inflation ### Impact of inflation Inflationary characteristics of infrastructure revenues and costs: Since IPO, inflation across the Company’s target geographies ### Contractual Regulated Demand has been at historic highs and materially above central bank targets. Accordingly it has become an area of even greater focus to investors and therefore during the transaction Non‑contractual revenues (or short‑term Regulated revenues determined by real underwritingprocess. Contractual revenues subject to specific contracts) without explicit inflation linkage price control mechanisms which allow for uprating provisions, usually annually and Historically, infrastructure as an asset class has benefited from but where market dynamics (such as high annual uprating by reference to a specified by reference to either a fixed escalator strong inflation linkage owing to the nature of its underlying revenue barriers to entry or monopoly positioning) inflation measure. or a specified inflation measure. In some mechanisms and pricing power. Typically this would serve to at provide potential for repricing that can cases such uprating will be subject to caps least protect against the impact inflation has on an infrastructure capture inflation. or floors which limit the extent to which asset’s cost base, and in some cases would provide for an inflation is captured. inflationary element to net returns. The extent to which an investment’s valuation will be impacted by ### Valuation impact material changes in actual and forecast inflation, and therefore the Company’s correlation to it, is determined by the proportion of income and costs that are linked to inflation. This varies across The impact of changes in inflation assumptions on the valuation of assets is determined by the types of underlying revenues and input costs, sectors and specific investments, and no two businesses will and the size of the cost base relative to its revenues. Where expected increases in revenues exceed any expected increases in costs in a higher behave identically to changes in inflation. inflation scenario, forecast net cash flows will increase resulting in positive inflation correlation. Where expected increases in costs exceed any expected increases in revenues, forecast net cash flows will decrease resulting in negative inflation correlation. The revenues and costs of infrastructure assets can be considered to fall within a number of broad categories which all capture inflation in different ways, as set out in the exhibit opposite. ### Capital costs Operating costs Financing costs Capital expenditure costs such as Operating costs such as labour and utilities Borrowing costs are impacted by inflation construction, equipment and labour costs which more broadly align with wider either directly, where index‑linked debt is costs that are often subject to unique and inflationary outturn. in place, or indirectly due to the fact that sector‑specific supply side inflationary central bank rates are used as a tool to pressures. On larger capital initiatives this curb high inflation. This impact may be risk may be passed down to suppliers. avoided or reduced where interest rate hedging has been used. 21 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information # Investment Manager's report continued ## Inflation ### PINT's Portfolio All of the Company's investments are unique and the extent to which inflation impacts them varies according to sector: - **Data centre** and **towers** assets tend to be characterised by fixed or capped escalators, which limits revenue upsides in high inflationary scenarios. However, these investments also often include separate pass-through mechanisms for utility costs, which limits cost inflationary pressures. - **Fibre** assets may have greater direct linkage to inflation measures through wholesale pricing contracts, but also carry a greater degree of exposure to capex inflation that is not usually passed on to suppliers. - **Utility** assets typically have regulated indexing arrangements where ongoing revenues are a direct function of inflation. - **Power** and **Renewables** assets will normally benefit from a mixture of short and medium term "fixed price" contracted revenues with a variety of different escalators, and long-term un-contracted wholesale revenues that are assumed to increase in line with inflation and over time. For new developments, spikes in capex cost inflation can be mitigated with pass-through or price adjustment mechanisms in offtake agreements. - **Transport** assets exposed to demand risk or short-term contracts may only have implicit inflation protection depending on the ability to re-price tariffs/tolls. ### Methodology The inflation or escalation assumptions that impact on the valuation and forecast returns of the Portfolio are determined by Sponsors, reflective of underlying contractual or market specific factors, as noted above, as well as the inflationary environment more generally. Where revenues or costs are not expressly linked to an inflation measure, Sponsors will take a view on the extent to which those revenues or costs will change relative to inflation more generally. All inflation assumptions are subject to detailed review and analysis by the Investment Manager during the underwriting process, and may be adjusted in the Company's underwriting base case. Where revenues or costs have express linkage to a local inflationary measure, such as CPI, the underwriting base case will adopt long term central bank forecasts, and where future business growth is included in the underwriting case, associated revenues and costs are assumed to respond in the same manner as current revenues and costs. ### Sensitivity In line with their information reporting obligations, Sponsors are required to perform a number of valuation sensitivities on the Company's behalf against key inputs including inflation, interest rates and discount rates. The aggregated results of these sensitivities across the Portfolio are shown in the chart below. Owing to the nature of the underlying revenues across the Portfolio, the Company benefits from a net positive correlation with inflation. Conversely, the Portfolio is negatively correlated to interest rate movements, where rises would result in reduced free cash flows. The impact of this across the Portfolio is mitigated by hedged or fixed rate debt at investment level. Valuation sensitivity at 31 December 2022¹ ![img-6.jpeg](img-6.jpeg) 1. Based on assets invested, committed and integral closing at 31 December 2022. Sensitivity results are provided by Sponsors based on adjustments to the relevant underlying assumptions in base case financial models across the expected life of each investment. 22 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information # Investment Manager's report continued ## Post balance sheet events The Company has seen significant activity since the accounts date of 31 December 2022, most notably the commitment of £43.4 million to GD Towers, of which £37.9 million was invested, and the movement to legal closing of a £25.0 million transaction in a US renewables asset. Additionally, a further £45.0 million was invested in respect of prior investment commitments across a number of deals, most notably £40.8 million in respect of NGT. The updated breakdown of the Company's gross assets' as at 24 February 2023 is shown below by reference to sector and geography. The breakdowns are shown relative to amounts invested and committed.³ ### Sector diversification (as at 24 February 2023) Outer ring: total (invested + committed) Inner ring: invested and committed breakdown ![img-7.jpeg](img-7.jpeg) ### Geographic diversification (as at 24 February 2023) Outer ring: total (invested + committed) Inner ring: invested and committed breakdown ![img-8.jpeg](img-8.jpeg) 1. Gross assets of £482.8 million consisting of £383.0 million of adjusted (for invested amounts and distributions) Portfolio fair value and £99.8 million of cash and cash equivalents at 24 February 2023. 2. Invested amounts at 24 February 2023 totalled £383.0 million, representing the adjusted (for invested amounts and distributions) fair value of the Company's funded investments in those sectors or geographies. 3. Committed amounts at 24 February 2023 totalled £43.4 million, representing cash held in respect of as yet unshown commitments and/or deals in legal closing in those sectors or geographies. Unshown commitments are a feature of the Company's investments and/or other comprehensive are deferred due to commercial or regulatory approval processes, or where capital calls are intentionally staggered over time for follow-on purposes, for example for capex or M&A requirements. 4. Remaining cash at 24 February 2023 totalled £57.4 million, representing £9.7 million of cash retained against buffers not covered by the Company's ROF, and £47.7 million of remaining funds available to invest. 23 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Alternative Performance Measures (APMs) PINT assesses its performance using a variety of measures that are not specifically defined under FRS 102 and are therefore termedAPMs. TheAPMs used may not be directly comparable with those used by other companies. TheseAPMs provide additional information as to how the Company has performed over the period and allow the Board, managementand stakeholders to compare itsperformance. APM Details Calculation Reconciliation to FRS 102 NAV Total Return Total return comprises the investment return from the Portfolio and It is calculated as the total return of £8.0million, as shown in The calculation uses FRS income from any cash balances, net of management and operating the Income Statement, as a percentage of the opening NAV of 102measures. and finance costs. It also includes foreign exchange movement and £392.1million which is based on the net IPO Proceeds. movement in the fair value of derivatives and taxes. Net asset value per share A measure of the NAV per share in the Company. It is calculated as the NAV divided by the total number of shares The calculation uses FRS inissue at the balance sheet date. 102measures and is set out in Note 18 to the accounts. Annual distribution This measure reflects the dividends distributed to shareholders in The dividend is measured on a pence per share basis. The calculation uses FRS | | respect of each year. | | 102measures. | | --- | --- | --- | --- | | Investment value and | A measure of the size of the investment portfolio including the | It is calculated as the Portfolio asset value plus the amount of | The Portfolio asset value | | outstanding commitments | value of further contracted future investments committed by | contracted commitments. | uses the FRS 102 measure | | | theCompany. | | Investments at fair value, | set out in Note1. The value of future commitments is set out in Note21 to the accounts. 24 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Alternative Performance Measures (APMs) continued | NAV Total Return | Definition | | How has PINT performed? | | --- | --- | --- | --- | | | • | Total return is how we measure the overall financial | Total return for the period to 31 December 2022 was 2.0%. | | | | performance of the Company. | Giventhe recent acquisition of the investments, no significant | ### The Company is targeting a NAV portfolio gains have been recognised in the period, but the ### • Total return comprises the investment return from the ### Total Return per share of 8‑10% Portfolio is well positioned to deliver on PINT’s returntargets. Portfolio and income from any cash balances, net of ### p.a. following full investment of the management and operating and finance costs. It also ### IPO proceeds. includes foreign exchange movement and movement in the fair value of derivatives andtaxes. ### • Total return is measured against the opening NAV, netof the final dividend for the previous year, and adjusted (onatime‑weighted average basis) to take into account any equity issued in the year. | Annual distribution | Definition | | How has PINT performed? | | --- | --- | --- | --- | | | • | This measure reflects the dividends distributed to | Second interim dividend of 1p per share declared for the | | | | shareholders eachyear. | period from 1July2022 to 31December2022, to be paid on | ### The Company is targeting a 2p per share 31March2023, which together with the dividend of 1ppershare ### • The Company’s investment objective is to generate returns ### dividend in the first year, 4p per share in paid in October2022 totals 2p per share for the period ended from Portfolio income and capital returns (through value ### the second year, followed by a progressive 31December2022. TheCompany intends to pay dividends on growth and realised capital profits). asemi‑annual basis in line with its progressive dividend policy. ### dividend policy thereafter. • The dividend is measured on a pence per share basis, andistargeted to be progressive. 25 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Investment policy The Company invests in a diversified portfolio of high‑quality operational infrastructure assets which provide In each case where the Investment Manager believes it can generate the most attractive essential physical structures, systems and/or services to allow economies and communities to function risk‑adjustedreturns. effectively. The Company invests in both yielding and growth infrastructure assets which the Investment The Company focuses on gaining exposure to infrastructure assets via co‑investments alongside Manager believes offer strong downside protection and typically offer strong inflation protection. leading third‑party private direct infrastructure asset investment managers who are acting as general The Company invests globally, with a primary focus on developed OECD markets, with the majority partner or manager of a fund in which Pantheon, or any investment scheme, pooled investment vehicle of its investments in Europe and North America. The Company’s portfolio is diversified across or portfolio fund managed by Pantheon, has invested or may invest (‘Sponsors’). In doing so, the infrastructure sectors, which includes (but is not limited to): Company may invest on its own or alongside other institutional clients of the Investment Manager. TheCompany may also invest in other direct or single asset investment opportunities originated by the Investment Manager or by other third‑party asset sourcing partners. The Company does not invest in ### Digital Infrastructure private funds targeting a diversified portfolio of infrastructure investments. (including wireless towers, data centres, and fibre‑optic networks) ### Investment restrictions The Company invests and manages its assets with the objective of spreading risk and, in doing so, issubject to the following investment restrictions, which are measured at the time of investment: ### Renewables & Energy Efficiency • no single Portfolio Investment will represent more than 15% of Gross Asset Value; ### • no more than 20% of Gross Asset Value will be invested in investments where the underlying (including smart infrastructure, wind, solar, and sustainable waste) infrastructure asset is located in a non‑OECD country; and ### • no more than 30% of Gross Asset Value will be invested alongside funds or accounts of anysingle Sponsor (other than Pantheon). ### Power & Utilities In addition, the Company does not invest in infrastructure assets whose principal operations are in anyof the following sectors (each a ‘Restricted Sector’): (including transmission and distribution networks, regulated utility companies and ### efficient conventional power assets) • coal (including coal‑fired generation, transportation and mining); ### • oil (including upstream, midstream and storage); ### • upstream gas; ### Transport & Logistics • nuclear energy; and ### • mining. (including ports, rail, roads, airports and logistics assets) The Company may invest in infrastructure assets whose principal operations are not in a Restricted Sector but that nonetheless have some exposure to a Restricted Sector (for example, a diversified freight rail transportation asset that has some exposure to the coal sector), provided that: (i)nomore than 15% of any such infrastructure asset’s total revenues are derived from Restricted Sectors; ### Social & Other Infrastructure (ii)nomore than 5% of total revenues across the Portfolio (measured on a look‑through basis) will (including education, healthcare, government and community buildings) bederived. 26 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## PINT investments 2 ### Transaction/company overview ESG ## Transport & Logistics ### • Pomodoro Holdings Ltd (Primafrio) was founded in 2007 and • Ranked in 2nd percentile (low risk) of all transportation is a specialised, temperature‑controlled transportation and companies globally assessed by Sustainalytics logistics company in Europe primarily focused on the export of (aMorningstarcompany). fresh fruit and vegetables from Iberia to broader Europe and the ### • Dedicated R&D and ESG team highly focused on sustainability ## Primafrio import of various high‑value and temperature‑sensitive goods initiatives with a net zero carbon strategy by 2030. including pharmaceutical products. ### • Rollout of ‘Smart Truck’ to improve fuel efficiency and reduce ### • Primafrio is an Iberian market leader, benefiting from substantial emissions with investment into the latest technology for its scale, operational excellence and long‑standing client transport fleet. relationships. 1 ### Investment thesis and value creation strategy ### • Niche market leader providing an essential service to resilient end markets. The company has demonstrated strong organic growth over a 15+ year operating history, including during major economic dislocations (2008‑2009 global financial crisis and 2020‑2021 Covid‑19). The defensive qualities of Primafrio’s market and its operations provide strong downside protection. ### Sector: Transport & Logistics • Value creation opportunities include inorganic growth, strategic M&A, and continued investment in Primafrio’s cold Geography: Europe storage logistics infrastructure footprint. Sponsor: Apollo Infrastructure Website: www.primafrio.com Date of commitment: 21.03.2022 PINT NAV 31 December 2022: £40m 1. There is no guarantee that the investment thesis will be achieved. Pantheonopinion. 2. Source: www.primafrio.com. Past performance is not indicative of future results. Future results are not guaranteed, and loss of principal may occur. Please refer to ‘Disclosure 1 – Investments’ towards the back of this report. 27 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## PINT investmentscontinued 2 ### Transaction/company overview ESG ## Digital Infrastructure ### • CyrusOne comprises a portfolio of more than • The company’s Sustainability Working Group was established in 50high‑performance data centres representing more than 2019 to integrate sustainability and ESG strategy and planning fourmillion sq ft of capacity across North America and Europe. into each function at CyrusOne. • The company specialises in the design, construction and • Environmental targets directly aligned with the UN’s Sustainable ## CyrusOne operation of mission‑critical facilities that ensure the Development Goals; environmental topics identified using continued operation of IT infrastructure for approximately guidance from the Sustainability Accounting Standards Board 1,000 customers, including approximately 200 Fortune 1000 (SASB). companies. ### • Energy efficiency strategy: ### • minimise data hall heat using uninterruptible power supplies, 1 ### Investment thesis and value creation strategy ultrasonic humidification and LED lighting; ### • Growth in data usage continues to drive data centre ### • deliver efficient cooling using a number of technologies demand. In particular, the hyperscalesegment represents a including building management systems, economisers and strong growth opportunity due to increasingcloud adoption high‑efficiency coolers; and and increasingly data‑heavy technologies (5G, AI, gaming, ### videostreaming). • supplier partnerships to identify new, high‑efficiency green technologies. ### • Benefit from defensive characteristics such as long‑term contracts with a largely investment grade credit quality Sector: Digital: Data Centre customer base, price escalators, and limited historical customerchurn. Geography: North America Sponsor: KKR Website: www.cyrusone.com Date of commitment: 28.03.2022 PINT NAV 31 December 2022: £23m 1. There is no guarantee that the investment thesis will be achieved. Pantheonopinion. 2. Source: www.cyrusone.com, Sustainability Report 2022. Past performance is not indicative of future results. Future results are not guaranteed, and loss of principal may occur. Please refer to ‘Disclosure1– Investments’ towards the back of this report. 28 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## PINT investmentscontinued 2 ### Transaction/company overview ESG ## Power & Utilities • National Gas is the owner and operator of the UK’s sole gas • National Gas is preparing the path for fossil‑free energy by transmission network, regulated by Ofgem, and an independent, integrating renewable natural gas (RNG) and hydrogen into highly contracted metering business. supply, anticipating the future development of supportive regulatory and policy frameworks. ### • Its 7,630km network transports and connects gas to ## National Gas ### • Aims to achieve a 100% fossil‑free gas network by 2050 at approximately 85% of the UK’s households, as well as to the latest, with a proportion of the network transporting 100% industries and power sectors to meet the country’s electricity green hydrogen and a proportion transporting a blend of green needs, playing a critical role in ensuring the UK’s energy security. hydrogen (hydrogen produced from green sources of energy, ### • The company intends to support the UK government’s e.g.solar and electrolysis) and RNG. commitment towards net zero carbon by 2050, facilitating the ### • Transition to clean energy: extensive engagement with other shift towards low‑carbon heating. businesses, governments; participation in climate change 1 organisations; a Principal Partner of COP 26. ### Investment thesis and value creation strategy ### • Highly stable inflation-linked cash flows and high yielding • Detailed review of exposure to climate change risk and returns are positively correlated with higher inflation, supported assessment is set out in response to TCFD framework. by tailwinds of the current macroeconomic environment. ### • Strong downside protection; regulatory framework allows for the recovery of costs and guarantees a minimum Sector: Power & Utilities: Gas utility and metering return on capital. The company also holds a monopolistic Geography: UK position through sole ownership of the UK’s backbone gas Sponsor: Macquarie Asset Management transmissionnetwork. ### • Significant growth opportunity. The transmission system Website: www.nationalgas.com should play a leading role in making the network ready for the Date of commitment: 28.03.2022 transition from natural gas to hydrogen. It will support the PINT commitment December 2022: £41m expansion of hydrogen’s role in the energy mix while working closely with the government and Ofgem to maintain security ofsupply. 1. There is no guarantee that the investment thesis will be achieved. Pantheonopinion. 2. Source: www.nationalgrid.com, Responsible Business Report 2022. Past performance is not indicative of future results. Future results are not guaranteed, and loss of principal may occur. Please refer to ‘Disclosure 1 – Investments’ towards the back of this report. 29 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## PINT investmentscontinued 2 ### Transaction/company overview ESG ## Digital Infrastructure • Vertical Bridge is the largest private owner and operator of • In June 2020, Vertical Bridge became the world’s first tower towers and other wireless infrastructure in the US, with ~7,000 company to be certified as carbon neutral. owned towers across the country. ### • Vertical Bridge supports several projects in North America in • The company benefits from an average remaining lease term line with its carbon‑lowering strategy, including landfill gas, ## VerticalBridge of over 22 years (including extensions) primarily with the ‘big 4’ waste‑to‑energy, and forest and grassland conservation/ mobile network operators. re‑forestation. ### • Protecting wildlife is also a priority, including through wildlife 1 ### Investment thesis and value creation strategy safety measures and tower lighting with avian‑friendly systems ### • Track record of organic and inorganic growth: since its to provide a safer environment for migratory and nesting birds. founding in 2014, Vertical Bridge has been one of the most active acquirers and ‘build‑to‑suit’ developers amongst tower companies, and expects to further accelerate theseactivities. ### • 5G build-out supporting continued growth: US carrier annual capex is forecast to increase over 30% by 2025, prioritising macro towers in the 5G rollout. ### • Top-tier management team and Sponsor: key members of Vertical Bridge and DigitalBridge (including both CEOs) have Sector: Digital: Towers worked together since the founding of Global Tower Partners in Geography: North America 2003, and exceeded the original Vertical Bridge business plan. Sponsor: DigitalBridge Website: www.verticalbridge.com Date of commitment: 04.04.2022 PINT NAV 31 December 2022: £27m 1. There is no guarantee that the investment thesis will be achieved. Pantheonopinion. 2. Source: www.verticalbridge.com. While DigitalBridge may consider ESG factors when making an investment decision, DigitalBridge does not pursue an ESG‑based investment strategy or limit its investments to those that meet specific ESG criteria or standards. Any reference herein to environmental or social considerations is not intended to qualify DigitalBridge’s duty to maximise risk‑adjustedreturns. Past performance is not indicative of future results. Future performance is not guaranteed, and loss of principal may occur. Please refer to ‘Disclosure 1 – Investments’ towards the back of this report. 30 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information # PINT investments continued # Digital Infrastructure # Delta Fiber ![img-9.jpeg](img-9.jpeg) | Section | Digital Fiber | | --- | --- | | University | Europe | | Sponsor | Strangium | | Website | www.deltalifiberunderland.nl | | Date of commitment | 28.04.2022 | | PINT NAV 31 December 2022 | £23m | 1. Please note that we feel that the investment thesis will be achieved in March 2023. 2. Source: www.deltalifiber.nl. Click report 2022. Footprint is included in the statement of future results. Future improvements are guaranteed, and cost of product is very small. Please refer to: Document 1 Investments: Analysis the best of the report. # Transaction/company overview - Delta Fiber is an owner and operator of fixed telecom infrastructure in the Netherlands, providing broadband, TV, telephone and mobile services to B2C, B2B and wholesale customers over a predominantly fibre network. - The company was formed through the acquisitions of DELTA and Calway and is the third-largest fixed network infrastructure provider in the Netherlands with ~1.0 million homes passed (HP). - The company aims to deliver substantial further growth through roll out of a fibre to the home (FTTH) programme (1 million HP), with a national target coverage of 25% by 2025. # Investment thesis and value creation strategy¹ - Opportunity to invest in high quality fibre network with high barriers to entry as a regional leader in its core footprint of suburban and rural areas with historically high penetration and low churn rates. - Well positioned to capitalise on extensive rollout programme via first mover advantage in its core markets, exhibited through its track record of fast build rates and ramp up of construction capacity. # ESG² - Delta Fiber limits the impact on the environment by using 100% green energy, offsetting its own CO₂ emissions. - Contributes to seven of the UN Sustainable Development Goals (SDGs) through four focus areas to ensure sustainability-improvement initiatives are targeted: enabling a better digital life; contributing to society, taking care of stakeholders, respecting our planet. - Target becoming net zero carbon by 2045. - In 2021, achieved a net zero emission carbon level for business operations (Scope 1 and 2). - Delta Fiber Fund helps foundations and organisations in start-up phase or that are launching a new product with social value. - Supports school projects for IT students. - In Q4 2020, earned the highest score in the Consumer Association's test with a provider rating of 8.3. In 2021, providercheck.nl awarded Delta Fiber the title of 'best customer service'. 31 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## PINT investmentscontinued 2 ### Transaction/company overview ESG ## Power & Utilities • Platform of eight district energy systems located across the • District energy is inherently more sustainable compared to Northeast, Mid‑Atlantic and Midwest of the US. alternatives (UN Sustainable Development Goal #9), allowing more efficient use of resources. ### • Provides diversified energy services such as steam, electricity, chilled water and hot water to around 190 buildings across • Cartier delivers reliable, cost effective and sustainable energy ## Cartier Energy the higher education, healthcare, commercial, manufacturing, (SDG #7) to US customers to support path to a low‑carbon hospitality, government and retail sectors. economy (SDG #13). • District energy systems are sustainable, resilient and energy • Cartier assets serve key sectors of the community: healthcare, efficient, and can be more environmentally friendly compared to higher education and government entities (SDG #11). conventional on‑site energy systems due to the aggregation of ### • Active asset management supported by ESG targets diverse load profiles and economies of scale. leveraging the Sponsor’s track record in European district energytechnologies. 1 ### Investment thesis and value creation strategy ### • Gross margin structure underpinned by availability-based fixed capacity payments and consumption charges, and pass‑through pricing mechanism limits commodity price exposure providing robust downside protection. ### • ‘Sticky’ customer base with an average relationship Sector: Power & Utilities: District Heating tenure of ~15‑20 years and ~10‑12 year average remaining Geography: North America contractuallife. ### • Provides customers with a path to decarbonisation and Sponsor: Vauban Infrastructure Partners increased thermal efficiency. Website: To be created Date of commitment: 23.05.2022 PINT NAV 31 December 2022: £35m 1. There is no guarantee that the investment thesis will be achieved. Pantheonopinion. 2. Source: Cartier Energy. Past performance is not indicative of future results. Future performance is not guaranteed, and loss of principal may occur. Please refer to ‘Disclosure 1 – Investments’ towards the back of this report. 32 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## PINT investmentscontinued 2 ### Transaction/company overview ESG ## Power & Utilities • ECP raised a $1.6 billion continuation vehicle to acquire an • Employs an efficient fleet of combined‑cycle gas turbine indirect interest in Calpine (~20% equity). technologies and provides baseload power generation andcapacity. ### • Calpine provides exposure to one of the largest electricity ### generators in the US with ~26GW of capacity (including • Operator of Geysers, the largest geothermal power generation ## Calpine ~770MW of operational renewables) benefiting from strategic facility in the US, which produces ~7% of California’s 2020 market positions, growing importance of reliable baseload renewables portfolio standard requirements. generation, contracted EBITDA profile, and a high‑quality ### • Current renewable footprint also includes solar and Sponsor and management team. batterystorage. ### • Calpine’s free cash flow will also fund other technologies like 1 ### Investment thesis and value creation strategy carbon capture andhydrogen. ### • Vital supplier to the US electricity grid, providing reliable ### • Vocal supporter of state and federal policies to achieve power generation capacity and playing an important role in the reductions in emissions that contribute to climate change and energy transition as the US targets net zero carbon by 2050. health problems. Calpine benefits from highly predictable diversified cash flows underpinned by contracts supported by a robust hedging programme. ### • Strong renewables development pipeline of solar and battery Sector: Power & Utilities: Electricity Generation projects, financeable through the cash flows generated by existing assets, which are projected to nearly triple its Geography: North America renewables power generation capacity over the next five to Sponsor: ECP sixyears. Website: www.calpine.com Date of commitment: 27.06.2022 PINT NAV 31 December 2022: £47m 1. There is no guarantee that the investment thesis will be achieved. Pantheonopinion. 2. Source: www.calpineactsonclimate.com, 2020 Sustainability Report. Past performance is not indicative of future results. Future performance is not guaranteed, and loss of principal may occur. Please refer to ‘Disclosure 1 – Investments’ towards the back of this report. 33 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## PINT investmentscontinued 2 ### Transaction/company overview ESG ## Digital Infrastructure • Vantage Data Centers is a leading provider of wholesale data • Vantage has stated that it is committed to reach net zero centre infrastructure to large enterprises and hyperscale carbon emissions by 2030; Vantage’s goal targets reductions cloudproviders. for emissions that it controls, including Scope 1 and 2 emissions, as well as reductions that it guides or influences ### • Vantage’s North American business has data centre campuses ## Vantage inits supply chain. in Santa Clara, Quincy, Ashburn, Phoenix, Montreal and ### QuebecCity. • Vantage is creating interim reduction targets that are in alignment with the Science Based Target initiative (SBTi) ### • The investment will support Vantage’s North American methodology, which defines and promotes emissions reduction business’ capital needs as the business continues to grow in line with climate science. with a strong near‑term sales pipeline to both existing and newcustomers. 1 ### Investment thesis and value creation strategy ### • Secular data usage growth through increasing cloud adoption and increasing data‑heavy technologies continues to drive data centre demand. ### • Strong growth pipeline from favourable existing relationships with hyperscale customers. Sector: Digital: Data Centre ### • Downside protection from strong position in Geography: North America supply‑constrained core geographies, long‑term contract durations with investment‑grade counterparties, and low churn Sponsor: DigitalBridge due to high switching costs and barriers to entry. Website: www.vantage-dc.com Date of commitment: 01.07.2022 PINT NAV 31 December 2022: £22m 1. There is no guarantee that the investment thesis will be achieved. Pantheonopinion. 2. Source: www.vantage‑dc.com. While DigitalBridge may consider ESG factors when making an investment decision, DigitalBridge does not pursue an ESG‑based investment strategy or limit its investments to those that meet specific ESG criteria or standards. Past performance is not indicative of future results. Future results are not guaranteed, and loss of principal may occur. Please refer to ‘Disclosure 1 – Investments’ towards the back of this report. 34 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## PINT investmentscontinued 2 ### Transaction/company overview ESG ## Renewables & Energy Efficiency • Fudura is a Dutch market‑leading business‑to‑business owner • Fudura provides customers with the design, installation and and provider of medium‑voltage electricity infrastructure, management of sustainable energy infrastructure solutions to with a focus on transformers, metering devices and related assist customers in managing their energy performance. dataservices. ### • Growth strategy targets to become a one‑stop shop for ## Fudura ### • Fudura is active in offering services to companies seeking customers seeking to implement renewable and decentralised solutions for energy efficiency, security of energy supply and energy solutions, further aiding the Netherlands’ long‑term CO neutrality. Fudura currently has approximately 22,000 decarbonisation targets. 2 business customers, being a combination of larger companies, ### • Fudura targets carbon emission savings through KPIs that its public institutions such as hospitals, and small to medium‑sized management seek to implement on an annual basis. enterprises. 1 ### Investment thesis and value creation strategy ### • Highly stable inflation-linked cash flows from large and diversified locked‑in customer base with long‑term contracts, low churn and inflation protection. ### • Strong downside protection with a quasi‑monopoly positioning in its core regional markets characterised by high barriers Sector: Renewables & Energy Efficiency toentry. ### Geography: Europe • Energy efficiency and decarbonisation tailwinds driving growth opportunities to broaden service offering to customers Sponsor: DIF Capital Partners including electric vehicle charging, solar panels, heat pumps and Website: www.fudura.nl battery storage. Date of commitment: 25.07.2022 PINT NAV 31 December 2022: £41m 1. There is no guarantee that the investment thesis will be achieved. Pantheonopinion. 2. Source: Fudura. Past performance is not indicative of future results. Future performance is not guaranteed, and loss of principal may occur. Please refer to ‘Disclosure 1 – Investments’ towards the back of this report. 35 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## PINT investmentscontinued 2 ### Transaction/company overview ESG ## Digital Infrastructure • NBI is a fibre‑to‑the‑premises network developer and operator • Under the project agreement NBI provides access to affordable working with the Irish government to support the rollout high‑speed broadband in rural communities that could of the National Broadband Plan. This programme seeks to previously have been underserved by commercial providers connect every premise in the country to high‑speed broadband without intervention. ## NBI by 2027 and is the biggest investment in rural Ireland ### • Connecting remote premises to affordable fibre broadband sinceelectrification. is expected to deliver economic benefits to the region, ### • NBI is responsible for passing and connecting approximately support job creation and ensure that rural areas are not 560,000 premises in rural areas, covering 96% of the land mass disadvantaged compared to urban areas which are well‑served of the country and serving around 23% of the population and by incumbentproviders. 69% of the country’s farms. ### • NBI’s network area includes public facilities such as schools and libraries, improving the benefit such infrastructure provides 1 ### Investment thesis and value creation strategy to local communities. ### • Stable cash flows with inflation protection expected through ### • The project is expected to directly support 1,800 jobs in the the terms of the project agreement and the prices NBI can region at its peak. charge to internet service providers for access. ### • Downside protection through a unique positioning in the intervention area (the franchise area granted by the Irish Company name: National Broadband Ireland (NBI) government) and a flexible government subsidy regime. ### Sector: Communications • Attractive macro trends including increased working from home, demographics and growth in fibre broadband take‑up to Geography: Ireland date underpin the long‑term commercial viability of the network. Sponsor: Asterion Industrial Partners Website: www.nbi.ie Date of commitment: 09.11.2022 PINT NAV 31 December 2022: £43m 1. There is no guarantee that the investment thesis will be achieved. Pantheonopinion. 2. Source: NBI. Past performance is not indicative of future results. Future performance is not guaranteed, and loss of principal may occur. Please refer to ‘Disclosure1– Investments’ towards the back of this report. 36 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## PINT investments continued 2 ### Transaction/company overview ESG ## Digital Infrastructure ### • In July 2022, DigitalBridge, alongside Brookfield Asset • Deutsche Telekom AG has a net zero carbon strategy that is Management, agreed to buy 51% of GD Towers from Deutsche aligned with the Science Based Targets initiative and has been Telekom for a total enterprise value of €17.5 billion. highly rated by Carbon Disclosure Project. ### • GD Towers is one of the largest tower and telecom • The majority of power for the tower sites now comes from ## GD Towers infrastructure networks in Western Europe with c.40,000 tower renewable sources, with carbon offsetting arrangements in sites across Germany and Austria, making it the market leader place for any fossil fuel power consumption. in Germany and second largest in Austria. ### • GD Towers’ high‑quality portfolio is supported by an anchor tenancy agreement with Deutsche Telekom, which has retained a 49% ownership stake in GD Towers. 1 ### Investment thesis and value creation strategy ### • Majority of cash flows are contracted and index-linked, offering strong downside protection in challenging macroeconomic conditions. ### • Favourable market tailwinds from regulatory‑driven 5G coverage requirements with significant growth opportunities. Sector: Digital: Towers ### • Organic and inorganic growth opportunities arising from other Geography: Europe market participants, and numerous consolidation opportunities in Europe. Sponsor: DigitalBridge Website: To be created Date of announcement: 31.01.2023 PINT commitment: £43m 1. There is no guarantee that the investment thesis will be achieved. Pantheonopinion. 2. Source: ERM. While DigitalBridge may consider ESG factors when making an investment decision, DigitalBridge does not pursue an ESG‑based investment strategy or limit its investments to those that meet specific ESG criteria or standards. Any reference herein to environmental or social considerations is not intended to qualify DigitalBridge’s duty to maximise risk‑adjusted returns. Past performance is not indicative of future results. Future results are not guaranteed, and loss of principal may occur. Please refer to ‘Disclosure 1 – Investments’ towards the back of this report. 37 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information # Our market Infrastructure continues to demonstrate resilience against a challenging macroeconomic backdrop. ## Market growth In 2022, AUM in the private infrastructure market grew to in excess of $1 trillion, with a projected CAGR of ~11% between 2022 and 2027. Against this backdrop, competition for assets has intensified, with allocations to infrastructure increasing and new participants entering the market in specialised sub-sectors. Increased competition in the market has necessitated a focus on maintaining a disciplined and selective investment approach. ## Macro Deterioration in the global macro economy has continued to demonstrate the resilience of the infrastructure asset class. Rising inflation, although directly benefiting those assets with inflation linkage, has led to central bank policy tightening throughout 2022. However, Pantheon's experience is that any upward pressure on discount rates for infrastructure asset valuations has largely been offset by valuation benefits associated with inflation and other sector-specific tailwinds. In this environment, demand for infrastructure assets can increase as investors seek to benefit from infrastructure's defensive characteristics including low correlation to other asset classes. 1 Source: Pheigh Special Report – The Future of Alternatives in 2022. Closed ended funds only. October 2022 ## Key macro themes ### 01. Rising inflation - Inflation remains at levels not seen since the 1980s although peak inflation may have passed. - Contracted and inflation-linked revenues can provide protection during periods of rising inflation. ### 02. Rising energy prices - Energy markets have dramatically changed over the past year, which has knock-on effects for certain types of infrastructure assets. - Power generation assets with merchant price exposure should continue to see yield and valuation benefits. - Assets with pricing power will continue to pass on higher energy costs to customers. - Energy-intensive infrastructure assets may experience headwinds as a result of higher costs. ### 03. Interest rates - Rising bond yields are driving up risk-free rates (although transactional evidence is not showing any significant increase in discount rates). - Historic refinancing on favourable terms, hedging and availability of longer-term fixed debt have provided a good degree of downside protection. Higher future refinancing rates could lead to lower enterprise valuations if debt structures are not portable. ### 04. Foreign exchange - Although PINT's foreign exchange risk is partly hedged at the company level, USD strength will continue to benefit assets with USD-denominated revenue. 38 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Our market continued ## Infrastructuremarketindicators Strong upward trends in deal activity, fundraising and investor sentiment provide a positive backdrop for future growth. 1 1 ### Deal activity by geography ($bn) Deal activity by sector ($bn) North America    Europe    Asia & RoW 893 Energy infrastructure Social & other Renewables 755 755 Telecommunications Power Transport 576 574 553 576 574 553 429 429 371 371 351 351 CAGR +12% CAGR +12% 2 ### Infrastructure fundraising Investor sentiment for future 3 ### infrastructure allocations Pantheon opinion. There is no guarantee that these trends will persist. $159 893 1. Source: Inframation, April 2022, $133 $126  Increase/ based on greenfield and brownfield $119 $212 transactions from 2015 to 2022. maintain | 89% $95 $87 2. Source: Preqin as of January 2023. $76 Decrease | 11% Infrastructure fundraising is based CAGR +14% on the year capital was closed, including funds which have not held afinalclosing. 3. Source: Preqin Global Infrastructure Report 2023. Capital raised ($bn) 2015 2022 2015 2016 2017 2018 2019 2020 2021 2022 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 20222015 39 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Our market continued ## Thewayinwhichsocietiesandeconomiesfunctionovertimeischanging,whichcreatesnewlong‑term ## tailwindsforthesectorsthatservethem.PINTislookingtoconstructaportfoliointhesegrowingmarkets ## withfavourabletailwindswhichwillprovidesustainablereturnstoshareholders. ## Global changes Keysectorthemes ### Utilities Energy transition Transportation ### Urbanisation ### • The role of hydrogen is expected by some • Governments and supranational • Increased demand for cleaner modes to be significant in energy transition, organisations globally are prioritising of transport in line with aforementioned ### Digitalisation | | | which impacts utilities such as gas | climate change issues and clean energy, | | globaltrends. | | --- | --- | --- | --- | --- | --- | | | | transmission and distribution companies. | leading to tangible and publicly stated | | | | | | | | • | There has been a post Covid‑19 recovery | | Smart cities | | | targets for many organisations. | | | | | • | Revenues tend to be inflation‑linked, | | | in travel volumes, although air travel | 1 | which is highly beneficial in the current | • | Infrastructure supporting the development | | remains at c.75% of 2019 levels. | | --- | --- | --- | --- | --- | | market environment. | | of energy transition is still under‑developed | | | | | | | • | After significant increases in 2021, freight | ### Telecommunications in areas such as the electric grid/EVs; further | | • | High demand and lack of supply in the | | prices fell during 2022 due to softening | | | --- | --- | --- | --- | --- | --- | | | | | investment in this sector is in high demand. | | 2 | | | | market has driven asset prices up. | | global demand. | | | Work from home | | | However, the process to build/transition | | | ### • relevant assets is comparatively slow. ### Decarbonisation ### Digital ### Social & healthcare ### • Significant increase in demand due to ### Population growth ### global trends requiring major increase • Increased demand for childcare facilities in data/connectivity (WFH, gaming, AI, driven by the return to the office ### Supply chain streaming, videos etc.). post‑Covid‑19 and population growth. ### realignment ### • Labour and supply chain shortages/ • Growth in life sciences, medical services issues are impacting certain build‑out & research, and an ageing population Pantheon opinion. There is no guarantee that thesetrends and development projects. are driving demand for infrastructure in willpersist. thissector. 1. Source: IATA, November 2022. 2. Source: Freightos, February 2023. 40 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information Strategic report Governance Financial statements Other information ## Sector spotlight ## Digital Infrastructure ## Data Centres ### Overview Enterprise – facilities that are built, owned, and operated by individual companies for their own useandwhich are optimized for their end users Data centres are the physical facilities that enable organisations to run their business‑critical applications and to store data. This is achieved by hosting and supporting the physical servers Hyperscale – vast single‑user facilities operated exclusively for their specifi c requirements andsystems that are necessary to facilitate the processing, redirecting and storage of large bythetwodozen or so global Internet‑based companies referred to as “hyperscalers” volumesofdata such that it is readily accessible and transferable. ### These facilities require capital‑intensive infrastructure to support the equipment they house, Demand includingpower sub‑systems, uninterruptible power supplies, ventilation and cooling systems, Whether globally, regionally or nationally, digital communications networks are continuing to carry fi resuppression and high bandwidth physical connections to external networks. extremely high volumes of data and moreover are witnessing sustained and strong levels of traffi c Data centre owners provide their customers with a variety of services. The exact specifi cations will growth. Whilst increases in the amounts of data carried to date have been impressive, numerous varybytype and locations, but broadly these include a mixture of: studies suggest that this rate of growth will continue for many years to come. The key drivers for data centres, and digital infrastructure more broadly, include: • Physical space • Power consumption • Online streaming • Data connectivity • Working from home • Cross‑connection • Internet of things • Labour and technical support ### Classifi cation ### Types The specifi cations of data centres vary according to type and the needs of the customers they serve. The integrity and resilience of data centres can be classifi ed by the following tiers: Not all data centres are the same, and there are a number of different categorisations depending onthefunction and type of customers they support. These include: Tier 1 – Basic site infrastructure with limited protection against physical events, allowing for up to 29hours of downtime a year (an uptime of 99.67%). Tier 1 facilities are suited to small businesses and Co‑location – large facilities which rent out space or servers to multiple users, for whom constructing start‑ups that do not have complex IT requirements and that require an affordable hosting option. their own facilities would be uneconomical Tier 2 – Redundant‑capacity site infrastructure, offering improved protection against physical events, Edge – smaller facilities located on the edge of networks and in closer proximity to end users, allowing for up to 22 hours of downtime a year (an uptime of 99.74%). Tier 2 facilities are the preferred providingcustomers with the benefi t of lower latency, higher security and reduced intermittency option for SMEs that need a cost‑effective but more reliable option than a tier 1 facility. ### [] 41 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information Strategic report Governance Financial statements Other information ## Sector spotlight continued ## Digital Infrastructure continued ## Data Centres continued Classifi cation continued The infrastructure owner earns a profi t after covering the costs of the data centre, including site maintenance, insurance, temperature control systems, electrical systems, customer care Tier 3 – Concurrently maintainable site infrastructure protecting against virtually all physical (includinglabour on site and management of the data centre’s operations) and the capital events,allowing for up to 1.5 hours of downtime a year (an uptime of 99.98%). Tier 3 facilities costsinvolved. aretargeted at large companies with advanced IT operations that need further fail‑safes and that hostextensive data (particularly customer data). ### PINT approach Tier 4 – Fault‑tolerant site infrastructure providing the highest levels of tolerance and redundancy, PINT’s investment approach to data centres and digital assets more generally is to seek opportunities allowing for only 0.5 hours of downtime a year (an uptime of 99.99%). These data centres host in delivery platforms that benefi t from an established operating base as well as being well positioned to enterprises which require uninterrupted availability, such as governments and large enterprises, capture growth opportunities going forward. These individual platforms will have dedicated underlying withmission‑critical servers and sustained customer or business demands. management teams focused on development activity, technical operations and maintenance, ### Business case andfi nancial management. Data centres exhibit a number of attractive investment features which drive value growth including; To date PINT has invested in two data centre assets, CyrusOne and Vantage. Both of these business recurring long‑term contracts (often with built in escalator clauses) with predictable cash fl ows, have a focus on the hyperscale segment of the market and have ambitions to source all their energy limitedobsolescence risk and high location‑based barriers to entry. needs from renewable sources. Pantheon believes that the hyperscale segment is a particularly The owner of the data centre typically benefi ts from: attractive sub‑segment of the cash fl ows market. It benefi ts from both the proliferation of mobile devices and demand for mobile gaming and streaming and the increase adoption of public clouds by • Long contracts or frequent annual renewals – customers contract for 5‑10+ years for enterprises and government with continued expansion to meet redundancy requirements essential to scaledeployment (which can be customised for larger tenants). Co‑location customers servicing public clouds. typicallycontract for 1‑3 years, but usually with automatic renewal. In many instances, contractsare based on power consumed (as opposed to square footage used) plus fees forpower availability and additional services (such as cross connects). • High renewal rates resulting in a sticky customer base – the typical tenant retention ratesare70‑90% owing to the high costs associated with switching. • Contractual escalators – leases typically have annual escalators at 2‑5% per annum. 42 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Business model ### What sets us apart Capturing secular growth ## Purpose ## The Company aims to ## 1 Deal selectivity: ## buildaglobalPortfolioof ### Digital Infrastructure ## investments with blended risk/ Sponsor relationships drive strong ### • Growth in mobile data traffic deal flow, allowing for highly selective ## returnprofiles,andsettargets • Growth in 5G connected devices investmentprocess. ## acrossdealtypes,sectorsand ## geographiesfordiversification. | | 2 | Diversification: | | | | --- | --- | --- | --- | --- | | Our co‑investment strategy differentiates us in the listed | | | Renewables & Energy Efficiency | | | infrastructure market. | | Access to investments across sourcing | | | | | | | • | Average cost reduction for solar/wind | Sponsors, sectors and geographies. ### • Increasing global installed wind/solar capacity ## 3 Sponsor specialisation: ### Power & Utilities Ability for investors to choose deals alongside ### • US/Europe transitioning grid to renewables a Sponsor with a distinct edge who may be ### • US coal power plant retirements best placed to create value. ## 4 Fee efficient: ### Transport & Logistics Co-investments typically offered with no ### • Increased global trade ongoing management fee/carried interest. ### • Higher e-commerce penetration 43 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Business model continued ### How we create value Value creation ### Investors PINT’s business model creates ### value by allowing Pantheon, the ## 8–10% p.a. ### Investment Manager, to allocate ### Shareholders ### NAV Total Return per share ### capital and invest on its behalf Investors in PINT can participate in a globally ### diversified portfolio of core infrastructure assets alongside the Sponsors that it alongside other leading private asset managers and ### believes have a distinct edge in institutional investors. ### a particular infrastructure sector. ## 1 ## 4p per share ### Vehicle ### second year dividend, ## PINT Other Pantheon Funds ### progressive thereafter ### (public) (private) PINT has access to Pantheon’s deal sourcing platform. Pantheon provides a broad sourcing network with leading private asset investment managers and has strong Since PINT is publicly listed, any retail or institutional relationships with Sponsors it can leverage on behalf of PINT. investor is able to benefit from any value it creates. Refer to the Investment Manager’s report for more details. ### Portfolio ### Infrastructure assets High‑quality infrastructure assets typically benefit from long‑term contractual cash flows, positive correlation to inflation and exposure to secular changes in society. 1. The Company is targeting a dividend of 4p per share in the year ending 31 December 2023, and, thereafter, progressive. 44 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Business model continued ## Backgroundtoco‑investments There are broadly three routes to investing in private infrastructure assets: ### Co‑investments Primaries Secondaries Co‑investments give investors the opportunity to invest Primaries involve a commitment to a newly launched limited Secondaries traditionally involve the purchase of an interest alongside Sponsors in specific portfolio companies. life fund managed by a Sponsor who will build a portfolio of in an established private fund or a portfolio of funds from an Allocating to co‑investments can provide incremental private investments and seek to exit improved businesses in existing investor. advantages to investors, including targeted deal selection the later years of the fund term at a profit. and fee‑efficient exposure to transactions which are often offered on a no‑fee and no‑carry basis. PINT’s investment policy is to gain exposure to infrastructure assets via co‑investments. This can take the form of the following Sale process initiated Final bid submitted Deal signing types of transaction: ### • Co‑bid: Partnering with a lead Sponsor to underwrite a deal prior to final bid submission, requiring the need for a sophisticated investor who can lead independent due diligence on an asset. ### Co‑bid Targeted syndication ### • Targeted syndication: Following the signing of a deal, a Sponsor will offer a select group of investors a portion of ### the deal. This will typically comprise fewer than five parties, General syndication who may have undertaken some early due diligence on thetransaction. ### • General syndication: Following the signing of a deal, a Sponsor will offer all of its existing fund investors the opportunity to gain exposure to a transaction. 45 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Business model continued ## Backgroundtoco‑investmentscontinued ### Advantages of investing in infrastructure via co‑investments Investing in co‑investments can be an attractive way to gain access to private infrastructure for several reasons, including: ### Access: Enhanced economics: Alignment: There are fewer public market opportunities to access The use of co‑investments can reduce the overall expense The structure of co‑investments provides significant infrastructure assets, as infrastructure companies tend to ratio and gross‑to‑net performance spread of a portfolio, as alignment through the incentivisation of both deal Sponsors, remain private for longer periods of time. Therefore, investing most deals are offered with no ongoing management fee or who typically provide the majority of capital through their through co‑investments provides access to assets not carried interest. primary fund vehicles, and management who are typically normally accessible by public market investors. tied in under long‑term incentive programmes. ### Portfolio construction: Diversification: Exposure to nascent sectors: Sponsor specialisation: Pantheon is able to utilise co‑investments Co‑investments are a critical part of Co‑investments can provide access to Co‑investors have the ability to choose to select individual assets to gain exposure portfolio construction in having the nascent and emerging sectors that may deals alongside a Sponsor with a to, and tilt the Portfolio towards, sectors ability to build a programme that is truly otherwise be underweight or not be distinct edge who may be best placed based on the Investment Manager’s view diversified across infrastructure sectors, available within primary or secondary tocreatevalue. on relative value. geographies, stages and Sponsor. investment opportunities. 46 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Business model continued ## Pantheon’sinvestment Sourcing ExecutionScreening Due diligence Approval ## process ### Sourcing and origination Global sourcing and rigorous screening with highly selective conversion rate In its role as investment manager to the Company, Pantheon is ### Pantheon’s infrastructure co‑investment Pantheon: annual infrastructure responsible for the sourcing and execution of transactions on ### deal funnel (2015‑2022): co‑investments screened: behalf of PINT. The Investment Manager’s sourcing leads to a wide array of Deals screened investment opportunities as Sponsors embrace new transaction $70.1bn 728 deals 13.7 models and co‑investment appetite from investors increases. 12.4 Pantheon’s primary relationships and network of Sponsors 11.9 Advanced diligence allows it to be a preferred co‑investor, screening a high volume of 9.7 proprietary transactions. Pantheon’s ability to work with partners $6.5bn 75 deals to provide capital solutions in complex scenarios is expected to 8.1 continue to generate differentiated deal flow and allow it to acquire high‑quality and difficult‑to‑access assets for the Company’s 5.2 5.1 Portfolio and other Pantheon clients. 6% +17.4% 3.9 Co‑investment capital makes up a sizeable portion of the conversion Deals Screened rate infrastructure investment universe, and Pantheon continues to see ($bn) CAGR strong deal flow, with continued signs of growth. This is driven by Sponsors continuing to see the wider franchise benefit in offering Closed 2015 2016 2017 2018 2019 2022 2020 2021 their trusted partners co‑investment deal flow, and in particular due $4.4bn 52 deals to such Sponsors being constrained by fund concentration limits. Such limits may restrict the volume of capital many Sponsors can invest from their funds in larger transactions, potentially restricting their access to many deals unless they have access to additional co‑investment capital. Deals screened ($bn) 47 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Business model continued ## Pantheon’sinvestment Sourcing Execution Screening Due diligence Approval ## process continued ### Screening Due diligence and underwriting Screening is the first of three stages of the Pantheon investment After Screening, due diligence will be undertaken as part of the If a deal is approved at Advanced Notice stage, it will proceed due diligence and approval process. This stage involves preliminary Advanced Notice stage, including: to the final investment committee stage, Investment Thesis. due diligence of the opportunity, which will include: Transactional and due diligence work undertaken ahead of ### • Review financial model and underlying assumptions thisincludes: ### • Assessing the deal fittofundstrategy ### • Review internal and company databases ### • Benchmark performance ### • Review potential returns profile ### • Evaluate macro trends and sector themes/outlook and review ### • Extensive asset due diligence ### • Explore risk factors compatibility with assumptions ### • Assess downside protection ### • Determine manager track record • Identify risks and mitigants ### • Finalise financial model ### • Understand transaction dynamics andsponsoralignment ### Reasons to decline • Onsite manager visits ### • Conduct fund/companyoverview ### Asset‑related risk factors: • ESG and climate change risk assessment ### • ### Reasons to decline High debt levels • Tax due diligence ### • ### High purchase price • Conduct background checks/reference calls ### • Poor‑quality assets • ### Commodity price risk • Complete “Investment Thesis” for submission to GIRAC ### • Business/firm franchise issue • ### • Lack of coverage • Concentration risk ### Reasons to decline ### • Overly competitive process • Quality of assets/Sponsors ### Limited Pantheon edge Lack of embedded value • Legal considerations ### • • ### Poor fit with portfolio strategy Pricing disconnect • Limited downside protection ### • • ### ESG considerations • Inconclusive references ### • ### • Weak governance 48 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Business model continued ## Pantheon’sinvestment Sourcing ExecutionDue diligence ApprovalScreening ## process continued ### Due diligence and underwriting continued For co‑investments, the Company is typically entering the The base case prepared during the underwriting process forms the • Multiple expansion: returns generated from delivering an exit acquisition at the same time as the Sponsor which sets the basis of the final Investment Thesis. The investment return targets at an increased earnings multiple relative to the initial entry valuation and enters at the same amount, creating alignment with can be attributed to several key components of a target business, valuation. An increased exit multiple would be in keeping with the Company. The Sponsor provides its valuation assumptions which may include: the expectations to both increase the scale of the target as well for the target asset and the Investment Manager will seek to as reducing the risk‑profile over time. ### • Existing business: returns from the profitability of the target’s verify them, and either underwrite the deal at the same return The expected holding period for each co‑investment is between existing assets/contracts. target as the Sponsor, or take a more conservative view on 5to 7 years, however this does not form the basis of any ### • Organic growth: returns derived from initiatives to greater some of the valuation assumptions which may result in a lower guaranteed exit timing or method from the Sponsor. Thefinal utilise existing infrastructure, such as leasing further antennae underwritten return target. This process involves the Investment timing of a co‑investment exit will be a function of business capacity on an existing tower installation or supplying other Manager conducting its own independent review of the valuation performance and economic conditions, and accordingly this is energy products to existing clients of a district heating business. assumptions which includes, but is not limited to, the following sensitised during the underwriting process to ensure any delays will ### • Growth capital: returns generated from additional profitability analysis as part of the Investment Thesis: not materially compromise expected returns. arising from capital expenditure initiatives, taking the form ### • review of all due diligence material available, including technical, Several key financial metrics are used for analytical purposes, of expanding and/or upgrading existing or developing new market, legal, financial and tax. Assumptions for the valuation including internal rate of return (IRR) and multiple on invested infrastructure. Such initiatives will depend on the target are driven from these third‑party independent consultant capital (MOIC). IRR is the annual rate of growth that an investment company’s ability to source and execute on a pipeline of growth reports; is expected to generate over its life, and MOIC measures opportunities. • consult with external market contacts to verify key assumptions; investment returns by comparing the total realised value of ### • Capital structure: returns generated from optimising the an investment at the exit date relative to the initial investment ### • review financial model driving the valuation; and target’s debt structure in tandem with its growth trajectory. amount. The illustrative bridge chart opposite demonstrates the ### • conduct downside and upside sensitivities to prepare a ### • M&A activity: returns generated from the increased scale and contributions to expected returns of certain assumptions in a Pantheon base case that can be underwritten and that meets efficiencies achieved through bolt‑on acquisition activity. typical private market infrastructure co‑investment transaction. relevant return requirements. ### • Operational efficiencies: increased returns generated from reduced operating costs achievable through greater businessscale. 49 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Business model continued ## Pantheon’sinvestment Sourcing ExecutionApprovalScreening Due diligence ## process continued ### Due diligence and underwriting continued Approval and execution The final path approval of a deal includes: 1 ### Illustrative MOIC composition Presentation of final investment thesis ### • ### • Approval by GIRAC 0.30 2.75 3.0x | | | | | • | Allocation between Pantheon clients in line with | | --- | --- | --- | --- | --- | --- | | | | | 0.35 | | Allocationpolicy | | 2.5x | | | | • | Funding ringfenced pending completion | | | 0.15 | 2.10 | | | | Once a deal has been approved, it will move in to legal closing 0.20 andexecution, which involves: 2.0x 0.15 1.75 ### 0.15 • Optimising deal structure 0.10 ### 1.5x • Review and negotiateagreements 0.20 ### 0.15 • Finalise reporting requirements 0.10 Negotiate preferential termsand rights ### • | 1.0x | 0.90 | | | | --- | --- | --- | --- | | | | • | Execute transfer and payments | | | | • | Implement hedging initiatives | 0.5x 0.0x High case case M&A Capital Existing business structure potential base case Additional Additional expansion Operational Exit multiple Development Underwriting Sponsor base Further upside Contracted and in construction with exclusivity High conviction conviction M&A Sponsor upside efficiencies of scale development pipeline development pipeline 1. Figures are based on illustrative returns for a hypothetical transaction. 50 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Business model continued ## TheCompanyinvestsininfrastructureassets ## typicallythroughaco‑investmentprogramme. ### Valuations The Company invests in infrastructure assets typically through In private market transactions, the purchase cost of the investment ### Valuation governance a co‑investment programme. In a typical co‑investment the is an indication of its initial fair value and is thereafter calibrated for Pantheon operates a valuation committee, which is independent Company partakes in the investment alongside a lead investor subsequent events and changes in valuation inputs. Infrastructure of the investment and investor relations teams, and chaired or aSponsor. The Sponsor will typically set up a co‑investment assets often display particular characteristics allowing long‑term by Pantheon’s Chief Risk Officer, which ensures that there vehicle, subject to annual statutory audits, that invests into an financial forecasts to be prepared, which tends to result in a higher are robust governance, oversight and process frameworks in underlying infrastructure investment and will issue a NAV and prevalence of Discounted Cash Flows (DCF) in the valuation. place, guaranteeing compliance with standards and consistent capital accounts on a quarterlybasis. Insuch cases fair value is estimated by deriving the present application of policy. value of the expected cash flows generated by the investment The Sponsor will usually own the majority of equity and have The valuation committee review and challenges the valuations through the use of reasonable assumptions such as appropriate significant or controlling influence in the asset. Accordingly Pantheon provided by the Sponsors and reviews the accounting policies and discount rates to reflect the inherent risk of the assets forming considers the Sponsor to be the responsible party for preparing the valuations methodologies applied. The valuation committee has theinvestment. valuation on behalf of the co‑investment vehicle, and may rely upon responsibility for approving investment valuations which determine the valuations prepared by the Sponsor that have been prepared the fair value of the Portfolio, with input from the investment team in‑line with the relevant accounting standards and IPEV guidelines. who are responsible for managing the Portfolio. In private market investing, the Sponsor is usually considered to be the best party to determine the appropriate valuation due to thefollowing: ### • intimate knowledge of the underlying infrastructure asset held in the SPV and its business and the fundamental business environment in which it operates; ### • a comprehensive understanding of the underlying infrastructure asset held in the SPV and its financials; ### • knowledge of the market environment in which transactions ofcomparable companies take place; and ### • the Company’s economic interest in an investment as aco‑investor isaligned with that of the Sponsor. 51 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Investment strategy ## TheCompanyseekstogenerateattractiverisk‑adjustedtotalreturnsforshareholdersover ## thelongterm,comprisingbothcapitalgrowthandaprogressivedividend.Throughthe ## acquisitionofequityorequity‑relatedinvestments,PINToffersadiversifiedportfolio ## ofinfrastructureassetswithaprimaryfocusondevelopedOECDmarkets. ### Global portfolio with exposure to regions, sectors Exposure to growth dynamics within infrastructure ## Capturing ### and sourcing partners and the ability to tilt sub‑sectors including the transition to a net zero ## Diversification long‑term ### the Portfolio over time to the best risk/return carbon economy and the digitalisation of social and ## opportunities. growth economic activity. ### Emphasis on direct infrastructure assets with Assets where added value can be created through Resilient cash substantial contracted cash flows and conservative Value‑creation operational optimisation, incremental expansion of ### leverage creates a portfolio with downside a platform or industry consolidation, utilising the ## flow assets opportunities ### protection. skill‑set and track record of Sponsors. ### Robust asset and Sponsor ESG risk assessment ### through due diligence, ongoing asset monitoring ## Inflation Natural hedge against rising inflation with certain Strong ESG ### and exclusion of high‑risk ESG sectors from the ### assets benefiting from inflation protection. ## protection characteristics ### strategy, including coal, oil, gas (upstream), mining ### and nuclear. 52 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Strategy in action ## Diversifi cation ## “This transaction represents a ## high‑quality fi bre asset alongside ## National Broadband Ireland ## our long‑standing partner Asterion. ## NBI’s commitment to providing In November 2022 PINT committed approximately €52.7million in Asterion Industrial Partners’ interest in National Broadband Ireland (NBI), an Irish fi bre to the premises (FTTP) network developer ## high‑speed broadband to underserved andoperator. NBI was selected by the Irish Department for Environment, Climate and Communications to support areas in Ireland makes it a compelling the country’s National Broadband Plan, a programme that seeks to connect every business, public ## investment proposition which has a and residential premises in the country to high‑speed broadband by 2027. NBI is responsible for passing and connecting approximately 560,000 premises in rural areas stretching across 96% of ## positive impact on local communities.” the land mass of Ireland, serving around 23% of the population and 69% of the country’s farms, making this the largest infrastructural project in rural Ireland since rural electrifi cation. Deployment is split into 227 Development Areas with the rollout occurring in all counties simultaneously. The Irish government is providing subsidies alongside the capital committed ### by shareholders and revenue generated to support the design, procurement, construction and Richard Sem maintenance of the network under a 25‑year project agreement. The project is expected to help Partner at Pantheon, PINT’s Investment Manager bridge the digital divide between rural and urban areas in Ireland. The investment is in line with PINT’s strategy of building a diversifi ed portfolio of infrastructure assets benefi ting from structural growth drivers. Investment in digital infrastructure is essential to ensure everyone benefi ts from the deployment of high‑speed networks. PINT has invested through Asterion Industrial Partners, a leading European infrastructure investment manager specialising in the telecoms, energy & utilities, and mobility sectors, with fellow investor GranahanMcCourt retaining its current interest in NBI. 53 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Responsible investing and ESG ## Pantheon has strong credentials as a ESG reporting in relation to PINT ### PINT’s ESG characteristics The Investment Manager is in the process of collating data ## responsible Investment Manager Following an internal assessment of the application of regarding the performance of PINT’s investments against certain The Board has appointed Pantheon as its Investment Manager the Sustainable Finance Disclosure Regulations (SFDR), sustainability indicators. This is for the purpose of reporting the todeliver its Environmental, Social and Governance (ESG) policies, TheInvestment Manager has chosen to disclose the extent to which the Company’s investments have met its ESG which are reviewed and overseen by an ESG Committee of Company’s ESG characteristics in accordance with Article 8 characteristics over the course of the reporting period. Theresults Pantheon. Pantheon is committed to considering ESG issues in of the SFDR. As a fund that promotes certain environmental of PINT’s investments’ ESG performance will be published in both the operation of its business and in its investments for the and/or social characteristics, PINT targets investments accordance with the requirements of Article 11 of the SFDR benefit of its stakeholders, includingclients, the local communities with strong environmental, social and governance (ESG) (including in accordance with the regulatory technical standards in which the firm operates, and society as a whole. Pantheon, credentials, with a focus on companies and projects that set out in Commission Delegated Regulation (EU) 2022/1288) in turn, operates its own group‑wide ESG policy, the objective of can support thetransition to a low‑carbon economy, and andas part of PINT’s Sustainability Report, which is to be published which is to ensure that, wherever possible, ESG considerations are 1 negatively screens for certain sectors. onthe Company’s website in the course of Q32023. appropriately reflected in Pantheon’s investment process. Pantheon PINT will not invest in coal, nuclear energy, oil (upstream, believes this is crucial to harnessing the potential for value creation, midstream, storage), gas (upstream) or mining. If an asset as well as in protecting the interests and reputations of its firm has some element of exposure to the above sectors, and clients. ESG due diligence findings are formally documented then there will be a look‑through limitation of <5% of total in investment recommendations, with potential concerns flagged revenues of the portfolio and <15% of total revenues of for consideration by Pantheon investment committees. Following the asset, provided there is a planned trajectory to reduce the closing of an investment, Pantheon actively monitors ESG and exposure over time to these sectors. climate change risk across its infrastructure portfolios, engaging with Sponsors to advocate for improvement inthe event of any negative incidents. 1. Prospective investors in the Company will need to undergo their own internal assessment process to determine if they are satisfied that investing in the Company is compliant with their own investment policies and/or regulatory requirements, including but not limited to the investor’s internal ESG policy and any other underlying obligations to its investor. 54 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Responsible investing and ESG continued Pantheon’s approach to assessing ESG opportunities and risk is multi‑faceted and includes a robust assessment of both Sponsor‑level and asset‑level factors. Given that all of Pantheon’s infrastructure co‑investments have been completed alongside a core roster of Sponsors, the team conducts extensive diligence at the Sponsor level using several ESG key performance indicators (KPIs). Pantheon’sESG analysis of potential infrastructure co‑investments also involves assessment of ESG risk at the Portfolio Company level. Specifi c areas of ESG assessment conductedinclude: ### Sponsor ESG KPIs Portfolio Company ESG KPIs ### Adoption of ESG industry standards Sector risk ### Established ESG approach in investment process Company risk ### and ongoing portfolio management ## EimearPalmer, ### Integration of climate change risk diligence Country risk ## TheInvestmentManager’s ### and monitoring ## Head of ESG ### Signifi cant prior ESG events at the fi rm Prior ESG company incidents In 2022, Pantheon hired Eimear Palmer as Head of ESG. Sheis responsible for overseeing and developing the fi rm’s established ESG strategy and range of initiatives. ### Reputation checks and referencing ESG benefi ts to company Eimear is highly experienced in ESG with a focus on private markets, having worked at ICG and Carlyle Group in similar roles. Pantheon also has an ESG Committee which ### Diversity and inclusion policies and diversity Background checks on company/key professionals is responsible for coordinating its internal and external ### ratios of investment team efforts in this area. The Committee sets Pantheon’s ESG strategy and policy and provides feedback to the wider ### Corporate governance controls Historical greenhouse gas emissions fi rm and externally to its Sponsors and stakeholders on any ESG issues that arise. TheESG Committee comprises senior staff from across Pantheon’s investment strategies ### Adoption of anti‑corruption and Physical climate change risk and operational businessfunctions. ### anti‑bribery policies ### Cyber security and business continuity plans Transition climate change risk 55 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Responsible investing and ESG continued ## InvestmentManager’sapproach Pantheon has been highly engaged with the PRI Steering ### Industry partnerships Committee since becoming a signatory and has worked directly Pantheon was one of the fi rst private equity investors to sign up to with the UN PRI in rolling out their framework of principles specifi c the PRI back in 2007 and has used these principles as a framework toprivatemarkets. to develop its ESG policy across all its investment activities. Since then, it has been at the forefront of ESG adoption, both through its involvement with associates and industry bodies, and Appointed RepRisk Integration of through its integration of ESG analysis into its investmentprocess. as data provider for RepRisk into due 1 ESG monitoring diligence processes | | | | | | | UN PRI awarded A+ | | UN PRI awarded | | UN PRI awarded | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Successfully | | | | | for Private Equity | | A+ for Strategy | | A+ for Strategy | | | Established an | integrated the PRI | Implemented | | | | and Infrastructure | | and Governance, | | and Governance, | | | internal ESG | into investment | pioneering reporting | | Enhanced ESG | | and A for Strategy | | Private Equity and | | Private Equity | | | | | | 1 | | 1 | | | | | | | | workinggroup | processes | to clients on ESG | | reporting forclients | | and Governance | | Infrastructure | | andInfrastructure | | | 2008 | 2010 | 2012 | | 2014 | | 2016 | A+ | 2018 | A+ | 2020 | A+ | | 2007 | 2009 | 2011 | 2013 | 2015 | A+ | 2017 | A+ | 2019 | A+ | 2021 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Signed up to | Joined the PRI | Ranked in the top | Adopted ESG | UN PRI awarded | | Joined PRI Private | | UN PRI awarded | | Became a | | the Principles | Steering Committee | quartile for all six | Disclosure | A+ for Overarching | | Equity Advisory | | A+ for Strategy | | signatory to the | 1 for Responsible Principles of thePRI Framework Approach and Committee and Governance, Task Force on Investment (PRI) PrivateEquity Private Equity Climate‑related andInfrastructure Financial UN PRI awarded and A for Disclosures (TCFD) A+ for Strategy and PrivateEquity Governance and A | | for Private Equity | | | Strong scores | | --- | --- | --- | --- | --- | | | and Infrastructure | Appointed ERM | | in PRI’s 2021 | | | | as data provider | | assessment, | | | | for climate risk | | including 100/100 | | 1. Pantheon is a signatory to the UN PRI and has used these principles as a framework to develop its ESG policy across all its investment activities. Asasignatory of the PRI, | | | 1 | | | | | monitoring | | for Private Equity | Pantheon is required to complete an annual assessment which seeks to facilitate learning and development, identify areas for further improvement and facilitate dialogue and Infrastructure between asset owners and investment managers on responsible investment activities and capabilities. Please note that this is not intended to meet Article 8 or 9 standards of the SFDR. An investment’s ESG profi le and risk is only one of a number of factors Pantheon considers when evaluating managers and investments, and such ESG considerations are not solely determinative of any selection of a manager or investment. 56 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Responsible investing and ESG continued ## InvestmentManager’sapproach ### Consultant partnerships Pantheon also subscribes to the Refinitiv World Check One Pantheon subscribes to RepRisk in order to improve its ESG due database, a third‑party provider which Pantheon typically uses Modern Slavery Act diligence and ongoing risk monitoring. RepRiskis a global leader to look for adverse publicity and assorted anti‑money laundering PINT is an investment company with no employees and in the provision of business intelligence on ESG risk and provides issues for the Sponsor and for certain individuals. Refinitiv allows has appointed Pantheon to act as its investment manager. ESG news flow and company ratings based on media reports and Pantheon to screen reputational risks across individuals and TheUK’s Modern Slavery Act 2015 requires Pantheon to other public sources external to Pantheon. Aswellas enabling an Pantheon screens management and deal teams. report annually on the steps taken to ensure that slavery and enhanced level of proactive portfolio monitoring and increased human trafficking are not taking place anywhere within the Pantheon has incorporated the SASB sustainability mapping tool engagement opportunities, integration of the RepRisk data set with business or supply chains. Both PINT and Pantheon’s ESG into its co‑investment due diligence process. Thistool provides a its in‑house systems provides the capability to provide bespoke policies are already aligned with a zero tolerance approach breakdown of the most material ESG risks that a specific industry ESG reporting for itsclients. to modern slavery and trafficking, and both the policy and sector may face across five dimensions including environment, the Modern Slavery Statement can be found on Pantheon’s Sustainability consultancy ERM is supporting Pantheon in social capital, human capital, business model and innovation, website (www.pantheon.com). identifying the physical and transition risks in its infrastructure and leadership and government. SASB identifies a further 26 investments. Mapping of these risks (and opportunities) across sustainability‑related business issues, whichencompass a range the infrastructure sector over different temperature scenarios of disclosure topics and their associated accounting metrics. and time‑horizons will enable Pantheon to understand its existing Identificationand awareness of material issues at the sector level in ### Sustainable Development Goals portfolio risk better and support the portfolio planning and turn enable Pantheon to focus on ESG risks to Portfolio Companies As part of its integrated ESG analysis in investment monitoring of climate change‑related risk in new programmes. within the specifiedindustry. due diligence, Pantheon considers the alignment of Pantheon then plans to report to clients on its approach and on each SDG applicable to the assets and presents these climate change risks and opportunities in client programmes, to the Investment Committee. Within infrastructure, including greenhouse gas emissions reporting. Pantheon is now Pantheonmaps to the following SDGs: collecting greenhouse gas emissions data across its infrastructure assets on an annual basis and has developed detailed transition/ physical risks and opportunities, mapping across its top 20investment sectors in partnership withERM. 57 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Responsible investing and ESG continued ## InvestmentManager’sapproach ## Pantheon’s approach to climate change Climate change analysis Pantheon believes that infrastructure is a natural place to start in this process given the physical nature of the assets, the essential role ## analysis in investing of many of the types of assets typically invested in, such as utilities, and the long‑term investment horizons. In addition, infrastructure Pantheon has been providing ESG reporting to clients since is expected to play a central role in the transition to a low‑carbon economy. The IEA estimates that the majority (~70%) of clean energy 2012, undertaking fund manager ESG analysis since 2015, and 2 investment will need to come from financiers, rather than government funding , highlighting the key role that private capital has to play. incorporating climate change risk questions into investment due diligence for primary fund investments since 2018. Aspart of its In the first instance, Pantheon has conducted the analysis for PINT’s Infrastructure portfolio. The objectives were to: commitment to the ‘E’ of ESG, Pantheon believes that investors need clear and comprehensive information on the potential effects Better understand the investment implications of the transition to a low‑carbon environment and how different sectors are ### of climate change on investments. Thisincludes understanding the 01 likely to be impacted in the future. implications of rising temperatures and climate‑relatedpolicy. In order to improve and increase reporting on climate‑related Gain an understanding of the investment risks associated with climate change, including the potential impact of the changing financial information, the Financial Stability Board (FSB) – ### 02 intensity and/or frequency of physical climate events. aninternational body formed by the G20 that monitors and makes recommendations about the global financial system – established the Task Force on Climate‑related Financial Disclosures (TCFD). Assess how investments across current portfolios are likely to be affected by climate‑affected risks and the potential ### 03 This was driven by concerns that the risks associated with implication for future strategy. the transition to a low‑carbon economy were being mispriced 1 by market participants . Pantheon supported this endeavour and for the past three years has been working with a global sustainability‑focused consultancy on climate change risk analysis. This analysis has initially been conducted across Infrastructure and Real Assets portfolios, given the assets’ physical nature and particularly long investment horizons. Given the challenges of collating non‑standard data, Pantheon believes the TCFD will drive a meaningful improvement in the flow of climate‑related financial information. Pantheon therefore made the decision to engage global sustainability‑focused consultancy ERM in 2019 to better understand climate change‑related risks and opportunities. Additionally, Pantheon became a signatory to the TCFD in 2021. 1. Task Force on Climate‑related Financial Disclosures website, https://www.fsb‑tcfd.org/about/ 2. Source: International Energy Agency, ‘World Energy Outlook 2021 – Mobilising investment and finance’, https://www.iea.org/reports/world‑energy‑outlook‑2021/mobilising‑investment‑and‑finance 58 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Responsible investing and ESG continued ## InvestmentManager’sapproach ### Incorporating the topic into the Investment Looking forward Future plans for climate risk assessment and due ### Manager’s ESG due diligence procedures diligence integration ### A focus on greenhouse gas (GHG) emissions In order to incorporate its work on climate risk and other ESG Pantheon plans to continue refining its climate risk/opportunity Pantheon has engaged an external consultant to support it considerations into its due diligence process, Pantheon has assessment capabilities. A potential next step will be to extend to estimate and analyse GHG emissions within Pantheon’s revised its procedures for deal teams to utilise the results of the its current sector/geography‑level climate risk assessment infrastructure portfolio. AsPantheon generally does not work with ERM in the diligence process and investment memos. capabilities down to the asset level. Pantheonalso continues to invest directly into assets, itrelied on information provided by Dealteams assess the ‘climate risk outlook’ of each investment, refine its integration of climate risk and other ESG considerations themanagers in its portfolio. Pantheonrequested each manager where they note the physical and transition risk and opportunity into its due diligence process. EimearPalmer, Partnerand Global provides Scope1, 2 and 3 GHG emissions (as per the GHG profile of the target sector and geography. To the extent that the Head of ESG, hasbegun a review of Pantheon’s current ESG and Protocol) for each individual asset. Therehas been substantial assets face material physical and/or transition risks (particularly climate due diligence procedures following her joining Pantheon progress in this area across the industry, somethingit expects in the near term), Pantheon incorporates this into its other ESG in August2022. Thisincludes developing more comprehensive to continue to improve. Pantheon has used estimated data due diligence considerations. Pantheon also uses the Sustainable and standardised questions for Sponsors and management teams to complement this to provide a more complete coverage. Accounting Standards Board (SASB) guidelines for each sector around their own ESG analysis and procedures to enable earlier Thisshouldhelp Pantheon to (i) identify the relatively higher to identify which potential ESG risks to prioritise in due diligence identification of potential ESG and climate risks and opportunities, emitting assets, fundsand Sponsors, (ii) prioritise Pantheon’s and to then discuss with the Sponsor. If an item presents material along with a deeper consideration of how those climate‑related engagement with these managers to better understand the likely ESG risk, Pantheon devotes further analysis to it in collaboration risks will be mitigated during the investmentperiod. drivers of such emissions, and (iii) identify trends by comparing with the Sponsor and summarises its findings through additional 2022 results with 2021 results. Pantheon is focused on working materials in the final investment memo. Pantheon is in the process with Pantheon’s Sponsors to increase the coverage of assets with of incorporating these procedures into an ESG screening and due reported emissions, therefore reducing the number of estimates diligence ‘scorecard’, which will alsoprovide climate risk ratings required, inorder to create as accurate a picture for the portfolio for investment opportunities utilising various data sources such as as possible. Looking forward, Pantheon expects to enhance ThinkHazard, Climate Change Performance Index and the World its climate‑related due diligence and monitoring processes. Bank Carbon Pricingdashboard. Pantheonexpects these activities will further enhance the efficacy of its engagement with Sponsors and ultimately drive real world ### ESG screening action by decreasing the carbon footprint of Pantheon’s portfolio. Over the past year, Pantheon has declined a number of transactions solely for ESG reasons: ### • Energy company: Business revenues derived from fossilfuels. ### • Care home: Lack of staff vetting process and safeguardingprocedures. ### • Healthcare: Declined addiction clinic and, separately, eating disorder clinic due to concerns over profiting from theseissues. 59 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Responsible investing and ESG continued ## InvestmentManager’sapproach These disclosures demonstrate Pantheon’s open and transparent Pantheon is committed to continuous progress and while it ## Pantheon as an investment manager: approach to conducting our business, while recognising the recognises that there is still some way to go, its approach is to be ## diversity and inclusion increasing focus on diversity within the private markets industry transparent, to be visible, toadvocate, toengage with and support Pantheon is fully committed to progressing opportunities for and fi nancial services more broadly. When compared to a recent carefully selected external partners in Pantheon’s key geographic all its staff and to optimising diversity within the fi rm. 43% of its (2021) industry survey by Level20 and the BVCA, Pantheon’s markets. Pantheon is proud to work in collaboration with the investment teams’ heads are women – USA Primaries, European diversity profi le outstripped that of the private equity cohort. following external global partnerships: Primaries, USA Infrastructure and Real Assets and European For example, the industry survey found that private equity 1 Infrastructure and Real Assets . fi rms’ senior female investment professionals represented 10%, Pantheon was the fi rst private equity fi rm to publish gender whileat Pantheon, 43%of its investment team heads are female. diversity data, and in 2018, became one of the fi rst private markets Theindustry survey also reported that 20% of individuals working fi rms to sign the UK’s government’s Women in Finance Charter. in private equity and venture capital are from non‑white ethnic Inregard to the latter, Pantheon has set an annual target of backgrounds, whileclose to 37% of Pantheon’s global workforce achieving at least 33% women who are represented on its Executive identifi es as having a non‑white ethnic background. Committee or are a Global Head of a Department. Pantheon’s2021 2 representation was 37% . ### Global partnerships 1. Data as of January 2022; data is subject to rounding. Response rate among all global staff was 73%. Investment team includes members of Pantheon’s Investment Structuring and Strategy Team. 2. Leadership data response rate is 100%. Data as of January 2022; data may be subject to rounding. 60 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Responsible investing and ESG continued ## Spotlight on Future growth driven by electrification CO emissions reductions 2 ### Fudura is the country’s largest provider of medium voltage • Fudura reduced its CO footprint by 32% between 2014 2 electricity infrastructure and its future growth is driven by: and2020. ## Fudura ### • The core product provision of electricity transformers, 1. The Netherlands‘ rapid electrification and Fudura’s strong | Provider of energy efficiency solutions, | | metering and renewable energy solutions does not emit CO | . | | --- | --- | --- | --- | | | market position. Fudura serves its customers’ increasing | | 2 | | renewable energy and decentralised power | | Fudura’s Scope 1 emissions are derived from the operational | | electricity demand by providing critical infrastructure to running of the company: ### to businesses across the Netherlands secure access toelectricity; ### • vehicle fleet to respond to customers/provide maintenance 2. Aims for Fudura to lever its strong position in its customers’ services (c.80% of Scope 1 emissions); and electrical infrastructure system, by further supporting ### customers’ electrification process via added services • office buildings usage (c.20% of Scope 1 emissions). including EV charging, battery storage, solar PV, heat ### • Management objective to annually save 5% CO emissions 2 solutions and energy analytics; and per FTE of direct and indirect emissions compared to the 3. The Dutch government‘s aims to reduce the Netherlands’ previousyear. greenhouse gas emissions by 49% by 2030 and 95% by 2050 (vs 1990s levels). Fudura’s ambition to accelerate electrification and provide renewable and decentralised electricity generation solutions to customers will contribute tothe nation’s carbon reduction targets. Source: Climate policy | Climate change | Government.nl_actieplan_def.pdf 61 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Responsible investing and ESG continued | Spotlight on | Shaping the future of UK gas markets | | Key ESG benefits | | | --- | --- | --- | --- | --- | | | • | In June 2019, the UK became the first major economy in the | • | Strong leadership with a corporate strategy aligning with | | | | world to commit to reaching net zero by 2050. | | defined ESG ambitions. | ## National ### • Gas represents up to c.40% of the power consumed in the • Development of hydrogen transmission pipeline to support UK; heating over 80% of UK homes and providing the energy the nation’s goal to reach net zero. needs for more than half of UK industrial activity. The use of ## Gas gas is particularly central to the production of steel, glass and chemicals. ### The UK’s sole gas transmission network ### • National Gas is strategically positioned to host the nation’s introduction of and shift to cleaner gas through the country with hydrogen which produces water vapour rather than carbon emissions when it isburnt. ### • Hydrogen, when produced from a variety of sources such as natural gas with carbon capture and renewable or low‑carbon sources of electricity powering electrolysis, is a cleaner alternative to methane (also known as natural gas), as well as being one of the most abundant chemical elements available. ### • In order for hydrogen to be rolled out at scale, it requires the existing current infrastructure to be adapted to transport the gas from source to customer, which National Gas is committing to in order to achieve net zero by 2050. Source: National Gas 62 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Responsible investing and ESG continued ## Spotlight on Critical and highly efficient natural gas Strong focus on continuing to drive ### electricity generation assets decarbonisation efforts ### • The young age and high efficiency of Calpine’s combined • Calpine’s three decarbonisation focus areas include: ## Calpine cycle gas turbine (CCGT) power generation assets enables 1. sensible sustainability process offered through its the provision of efficient and reliable baseload power to retail business to help customers achieve renewable ### US independent power producer communities. energyobjectives; ### • Critical to support grid reliability due to their proximity to 2. deploying large-scale energy storage and solar loadcentres. projects through a 1.3GW development pipeline, ### • With ongoing coal power retirements, Calpine’s natural gas largely being developed on Calpine‑owned sites with generation will remain one of the most effective sources of existing interconnections, permitting strong community baseload capacity with some reliance on gas generation relationships, and little to no system upgrade costs; and needed to achieve net-zero goals. 3. advancing carbon capture utilisation and storage (CCUS) technology. Calpine has received three grants from the ### Strong focus on workforce safety and water Department of Energy to pilot and conduct studies on ### management CCUS projects. Since then, Calpine has launched four ### • Calpine’s safety performance ranks among the best in the projects around the US to commercialise carbon capture industry based on lost‑time and total recordable incident technology across all their plants. rates, the primary indicators of industrial safety performance. ### • Calpine’s Geysers are the largest renewable ### • Calpine’s water-sourcing methods conserve millions of geothermal power plants in the US producing ~6TWh/ gallons of cooling water daily. It uses technologies to limit yr (7% of California’s 2020 renewable energy procurement usage of fresh water, including air cooled (vs. water cooled) requirements) across 13operating plants. equipment and use of recycled water for its gas‑fired fleet and geothermal assets. Source: Company data 63 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Responsible investing and ESG continued ## Spotlight on Delivery of reliable, cost‑effective and Leading efforts to accelerate ESG ### sustainable energy to US customers to performance through decarbonisation ### support the path to a low‑carbon economy and community impact ## Cartier ### Supporting the path to a low‑carbon economy Active ESG asset management ### Platform of eight district energy systems Active asset management supported by ESG targets ### through efficiencies • that provide diversified energy services such According to the United Nations Energy Program (UNEP) leveraging the Sponsor’s track record in European district ### • as steam, electricity, chilled water and hot atransition to modern district energy systems could contribute energy technologies. water to buildings across the higher education, to 60% of required energy sector emissions reductions by Leveraging leading third parties to adopt the best ### • ### healthcare, commercial, manufacturing, 2050, and reduce primary energy consumption by up to 50%. marketpractices. ### hospitality, government and retail sectors • District energy systems support the transition to a low‑carbon ### Strategic initiatives to reduce the carbon footprint economy through reducing the energy demand in cities. ### of the platform With the right management, district energy systems are ### • The current system is fuelled with natural gas, but Cartier sustainable, resilient and energy-efficient. is looking to implement a long-term strategy to include ### • On‑site heating and cooling of space and water currently renewables in the energy mix and reduce its carbon footprint, presents systemic inefficiencies that account for a whilemaintaining affordability. significant proportion of energy consumption in many ### • Upgrading plants to take advantage of increasingly cities. District energy systems, such as Cartier’s, contribute decarbonised grids and move towards electrically powered to reduce such inefficiencies through the aggregation of heating and cooling systems. diverse load profiles and economies of scale. ### • Opportunity to develop a variety of digital tools to optimise the system from end to end to increase energy efficiency: smart metering, predictive load forecasting, demand response programmes. ### • Cartier assets serve key sectors of the community: healthcare, higher education and government entities. ### • Cartier operates in markets with a supportive regulatory environment and has a demonstrated history of delivering clean and cost-effective energy alternatives for critical serviceproviders. Source: Company data, United Nations Energy Program Source: “Modernizing district energy systems could reduce heating and cooling energy primary consumption by up to 50% finds new report” – UNEP, 2015 64 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Responsible investing and ESG continued ## Spotlight on Developing a fi bre network across rural Benefi t to rural Ireland ### • The ‘digital divide’ has widened the inequality between those ### Ireland to provide access to affordable, that could work remotely during the pandemic and those that ### high‑speed broadband ## National could not due to the quality of theirconnection. ### • National Broadband Ireland (NBI) is working with the Irish ### government to deliver the National Broadband Plan, an • High‑speed broadband is a key pillar of the European ambitious plan to connect every premises in the country to Commission’s strategy for economic and social development, ## Broadband affordable, high‑speed broadband by 2027. setting the target that all households should have access to gigabit capable broadband by2030. ### • NBI was selected to design, build, operate and maintain a ## Ireland (NBI) ### network covering 96% of the country’s landmass and 23% • The unique characteristics of Ireland signifi cantly increase of its population, supported by subsidies provided by the the cost per premises to deploy fi bre and would not be ### Fibre‑to‑the‑premises network developer Irishgovernment. commercially viable for the private sector withoutsubsidies. ### and operator working with the Irish government ### This project will involve passing and connecting • Estimated benefi ts of c.€5.9 billion from delivery of ### • ### to support the rollout of the National approximately 560,000 premises across the country, including the National Broadband Plan, a signifi cant increase ### Broadband Plan its remote islands, and represents the largest investment in post‑pandemic due to the increase in homeworking. rural Ireland sinceelectrifi cation. ### • The network area will include public facilities such as schools and libraries, improving the services they provide to their localcommunities. ### • NBI will provide wholesale network access to Internet Service Providers, giving consumers and businesses in the region an expanded choice of services and providers and ensuring they can benefi t from a competitive supply market. Source: Welcome to National Broadband Ireland – NBI gov.ie – The National Broadband Plan (www.gov.ie) Connecting Irish rural communities with the National Broadband Plan | EY Ireland Source: Primafrio 65 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Responsible investing and ESG continued ## Spotlight on Primafrio targets to reach net zero Achievements ### emissions by 2030 ### Environmental ### 1. Smart truck: • Invest in sustainability‑oriented infrastructure such as building ## Primafrio Developing the most advanced and energy efficient road new logistics facilities and operating a fleet of vehicles with transport fleet to reduce emissions and automate logistics the most fuel‑efficient engines available on themarket. ### European transport and activities. ### logistics company ### Social ### 2. Smart building: • 40% of Primafrio’s executives are female. ### Highly automated and energy efficient logistics centres with • The Sponsor’s Board influence can support initiatives to zero emissions standards, connected in real time with fleet and continue to improve diversity and inclusionprofile. planning department. ### Governance ### 3. Smart IT: • Focus on institutionalising the company, which has been Latest technologies to automate processes contributing to the family‑owned and private since inception until the investment reduction of emissions whilst utilising data mining for daily made by funds managed by Apollo. operations. ### 4. Smart training: Improved driver training and vehicle monitoring reduces fuel consumption, improves energy efficiency and promotes safer operations and more higher quality services for customers. Source: Primafrio 66 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## S172(1) statement ## Directors’ duties Decision‑making ## TheDirectors’overarchingduty The importance of stakeholder considerations, in particular in ### Overview the context of decision‑making, is taken into account at every ## istoactingoodfaithandina The Directors’ overarching duty is to act in good faith and in a way Board meeting. All discussions involve careful consideration that is most likely to promote the success of the Company, as set ## way that is most likely to promote of the longer‑term consequences of any decisions and their out in section 172 of the Companies Act 2006. In doing so, the implications for stakeholders. Further information on the role of Directors must take into consideration the interests of the various ## thesuccessoftheCompany, the Board in safeguarding stakeholder interests and monitoring stakeholders of the Company, the impact the Company has on ongoing investment activity can be found on pages 66 to 71 of the ## assetoutinsection172ofthe the community and the environment, take a long‑term view on strategicreport. the consequences of the decisions they make, aswell as aim to ## CompaniesAct2006. maintain a reputation for high standards of business conduct and ### Stakeholders fair treatment between the members of theCompany. The Board seeks to understand the needs and priorities of the Fulfilling this duty supports the Company in achieving its Company’s stakeholders and these are taken into account during investment strategy and helps to ensure that all decisions are all of its discussions and as part of its decision‑making. During made in a responsible and sustainable way. In accordance with the period under review, the Board discussed which parties should the requirements of the Companies (Miscellaneous Reporting) be considered as stakeholders of the Company and concluded Regulations 2018, the Company explains how the Directors have that, asthe Company is an externally managed investment discharged their duties under section 172 below. company and does not have any employees or customers, its key stakeholders comprise its shareholders, the Investment Manager, To ensure that the Directors are aware of and understand their Sponsors, Portfolio Companies, service providers, lenders and duties, they are provided with pertinent information when they first regulators. The section below discusses why these stakeholders join the Board and receive regular and ongoing updates and training are considered of importance to the Company, and the actions on relevant matters. They also have continued access to the taken to ensure that their interests are taken into account. 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 and Risk Committee has responsibility for the ongoing review of the Company’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 in the Company’s risk register and are subject to regular review and monitoring. 67 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## S172(1) statement continued ### Shareholders Importance Board engagement Continued shareholder support and The Board is committed to maintaining open channels of communication and to engaging with shareholders in a manner which they find most meaningful, engagement are critical to the business inorder to gain an understanding of their views. These include: and the delivery of its long‑term strategy. ### • AGM Furtherdetails on what PINT offers to its The Company will hold its first AGM on 30 March 2023 and welcomes and encourages attendance and participation from shareholders at the AGM. investors can be found on pages1 to 5 of Shareholders will have the opportunity to meet the Directors and the Investment Manager, and to address questions to them directly. Pantheonwill the strategicreport. attend the AGM and give a presentation on the Company’s performance and the future outlook. The Company values any feedback andquestions 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 PINT’s website (www.pantheoninfrastructure.com) and the annual report is circulated toshareholders. These reports provide shareholders with a clear understanding of the Company’s business model, strategy, portfolio and financial position. 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 Unlike trading companies, shareholder meetings often take the form of meetings with the Investment Manager rather than members of the Board. Shareholders are able to meet with Pantheon throughout the year and the Investment Manager provides information on the Company. Feedback from all meetings between the Investment Manager and shareholders is shared with the Board. The Chair, the Senior Independent Director, the Chair of the Audit and Risk Committee and other members of the Board are available to meet with shareholders to understand their views on governance and the Company’s performance should they wish to do so. With assistance from the Investment Manager, the Chair seeks meetings with shareholders who might wish to meet withhim. As a result, in late 2022 and early 2023, the Chair and the Chair of the Audit and Risk Committee met 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, in particular the Senior Independent Director, are also available to shareholders if they have concerns that have not been addressed through thenormalchannels. ### • Investor Relations updates At every Board meeting, the Directors receive updates from the Company’s broker on the Company’s share trading activity and share price performance, as wellas an update from the Investment Manager on specific shareholder feedback. Any pertinent feedback is taken into account when Directors discuss investment strategy. 68 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## S172(1) statement continued ## Other stakeholders ### The Investment Manager Importance Board engagement Holding the Company’s shares offers Maintaining a close and constructive working relationship with the Investment Manager is crucial as the Board and the Investment Manager both aim to investors a liquid investment vehicle achieve consistent, long‑term returns in line with the Company’s investment strategy. The Board is in regular contact with the Investment Manager to receive through which they can obtain exposure updates on investment activity. Important components in the collaboration with the Investment Manager, representative of the Company’s culture, are: to PINT’s portfolio of infrastructure • encouraging an open discussion with the Investment Manager, allowing time and space for original and innovative thinking; investment opportunities and • recognising that the interests of shareholders and the Investment Manager are, for the most part, well aligned, adopting a tone of constructive challenge, Pantheon’s relationships with Sponsors. balanced with robust negotiation of the Investment Manager’s terms of engagement if those interests should not be fully united; TheInvestment Manager’s performance ### • the regular review of underlying strategic and investment objectives; is critical for the Company to deliver its investment strategy successfully and meet • drawing on Directors’ individual experience and knowledge to support and challenge the Investment Manager in its monitoring of Portfolio Companies its objective to provide shareholders with and engagement with Sponsors; and attractive and consistent returns over the • willingness to make the Directors’ experience available to support and challenge the Investment Manager in the sound long‑term development of its long term. Further details of the Investment business and resources, recognising that the long‑term health of the Investment Manager’s business is in the interests of shareholders in the Company. Manager’s investment approach can be found on pages12 to 22 and 46 to 49 of the strategicreport. ### Sponsors/Portfolio Companies Importance Board engagement Part of PINT’s investment strategy is Day‑to‑day engagement with Sponsors is undertaken by Pantheon. The Board receives updates at each scheduled Board meeting from the Investment focused on co‑investing with Sponsors Manager on specific investments, including regular valuation reports and detailed portfolio and returns analyses. Pantheon’s engagement with who create sustainable value in the Sponsors and due diligence of Portfolio Companies through the investment process and its investment strategies can be found in the strategic report on underlying Portfolio Companies. pages12to22 and pages46 to 49 and in the Investment Manager’s report. TheInvestment Manager has extensive networks and relationships with Sponsors globally, which gives the Company access to the best investment opportunities. 69 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## S172(1) statement continued ### The Administrator, the Company Secretary, the Registrar, the Depositary and the Broker Importance Board engagement In order to function as an investment trust The Board maintains regular contact with its key external providers and receives regular reporting from them, both through Board and committee meetings, with a premium listing on the London as well as outside the regular meeting cycle. Their advice, as well as their needs and views, are routinely taken into account. Stock Exchange, the Company relies on The Board (through the Management Engagement Committee) formally assesses their performance, fees and continuing appointment annually to ensure a diverse range of reputable advisers for that the key service providers continue to function at an acceptable level and are appropriately remunerated to deliver the expected level of service. support in meeting all relevant obligations. TheAudit and Risk Committee reviews and evaluates the financial reporting control environment in place at each service provider. ### The environment and society Importance Board engagement The Board regards ESG credentials as an The Board receives regular updates on Pantheon’s ESG strategy and provides feedback on its approach, which in turn can lead to changes in Pantheon’s important component of the Company’s investmentapproach. investment processes, portfolio Full details on the Investment Manager’s ESG practices, including examples of interaction with Sponsors, can be found on pages53 to 65. construction considerations and overall strong governance. The Board and the Investment Manager are fully committed to managing the business and its investment strategyresponsibly. 70 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## S172(1) statement continued ### Revolving credit facility provider Importance Board engagement Availability of funding is crucial to PINT’s The Company aims to demonstrate to its facility provider, Lloyds Bank Corporate Markets plc (‘Lloyds’) that it is a well‑managed business, capable of ability to take advantage of investment consistently delivering long‑term returns. Regular dialogue between the Investment Manager and lenders is crucial to supporting the Company’s relationship opportunities as they arise, as well as to with its lenders. Further details of the Board’s decision to enter into the RCF during the year can be found on page 71. meet future unfunded commitments. ### Regulators Importance Board engagement The Company can only operate as an The Company regularly considers how it meets various regulatory and statutory obligations and how any governance decisions it makes can have an impact investment trust if it conducts its affairs in on its stakeholders, both in the shorter and in the longer term. The Board receives reports from the Company Secretary on the Company’s compliance compliance with such status. Interaction and from the Investment Manager and Auditor on their respective regulatory compliance and any inspections or reviews that are commissioned by through the Company Secretary with regulatorybodies. 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, as well as industry bodies such as the AIC, is overseen by the Board. 71 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## S172(1) statement continued 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: ### Stakeholder considerations ### Principal decision Long‑term impact ### and engagement To enter into a new multi‑currency RCF. Following extensive discussions by the Board throughout the Effective engagement by the Investment Manager with Lloyds period, on 20 December 2022, PINT announced that it had was key to agreeing the new facility. The Board considers that agreed a new multi‑currency RCF for an aggregate commitment the additional liquidity available for working capital, and to of £62.5million with Lloyds. The RCF, which is secured on the support further investment in high‑quality infrastructure assets assets of the Company, includes an uncommitted accordion from PINT’s near‑term investment pipeline, will help support feature, which will be accessible, subject to approval, by the Company’s growth opportunities while also maintaining a additional lenders, and is intended to increase over time in line robust balancesheet. with the Company’s NAV and its borrowing policy. The RCF is denominated in GBP, with the option to be utilised in other major currencies. PINT will pay an initial margin of 2.85% per annum over the relevant currency benchmark rate or compounded reference rate on drawn amounts, reducing to 2.65% per annum once certain expansion thresholds have been met. Acommitment fee of 1.00% per annum is payable on undrawn amounts, and the tenor of the RCF is three years, withthe option to extend this further subject to lender approval. 72 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Principal risks and uncertainties The Company is exposed to a variety of risks and uncertainties and the Board is ultimately responsible for the risk management of ### Risk management procedure the Company. It seeks to achieve an appropriate balance between mitigating risk and generating long‑term sustainable risk‑adjusted returns for shareholders. Integrity, objectivity and accountability ### Risk are embedded in the Company’s approach to risk management. ### Risk ### The Board exercises oversight of this framework, through its Audit identifi cation ### appetite ### and Risk Committee, and has undertaken a robust assessment and assessment and review of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. ### Monitoring and Control The Company is reliant on the risk management frameworks of ### reporting and mitigation the Investment Manager and other key service providers, as well as on the risk management operations of each Portfolio Company. ## Integrity,objectivityand The Board manages risks through reports from the Investment ## accountabilityareembedded Manager and other service providers and through regular updates on the operational and fi nancial performance of Portfolio ## intheCompany’sapproach Companies. For each risk, and emerging risks, the likelihood and consequences ## toriskmanagement. are identifi ed, and the management controls and frequency of monitoring are confi rmed and reviewed during Audit and Risk ### Patrick O’Donnell Bourke Committee meetings. Please see on the next page a summary Chair of the Audit and Risk Committee ofthe principal risks and their mitigation. 73 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Principal risks and uncertaintiescontinued ### Infrastructure asset risks Key: Higher    Level    Reducing ### Risk Description of risk Mitigation Market conditions • Macroeconomic or market volatility, as the result of the • The Company targets a diversified infrastructure programme with exposures across sectors and Russian invasion of Ukraine and the recovery from Covid‑19, geographies; historically, infrastructure sub‑sectors have exhibited low to moderate correlation presents a significant threat to the global economy, resulting of returns relative to one another. in a combination of rising inflation, interest rates and ### • Portfolio Companies could put in place inflation protection by seeking to include inflation uncertain supply chains, which flows through to pricing, adjustment mechanisms in their contracts. valuations and portfolio performance. ### • Certain Portfolio assets already provide inflation protection via contracted revenues linked ### • Recession in Europe, the US or the UK could impact the toinflation. growth prospects of one or more of the Portfolio Companies. ### • Portfolio Companies could also put in place interest rate hedges. ### • Rising inflation and interest rates may lead to higher financing costs for a Portfolio Company which could adversely impact its profits. ### • Discount rate pressures in light of the rising interest rate environment. Political and • Political actions and regulatory changes may adversely • The Company predominantly targets investments in North America, Europe and Australasia impact the operating and revenue structure of which have broadly stable legal, political and regulatory regimes. ### regulatory changes PortfolioCompanies. ### • The Investment Manager conducts due diligence on the regulatory risks of a prospective • Complexity of government regulatory standards may result Portfolio Company to ensure protections in the underlying contracts are in place. in litigation/disputes over interpretation and enforceability. Falls in demand • A fall in demand for the Portfolio Companies’ services or • The Investment Manager conducts sensitivity analysis and demand stress testing in its due products. A Portfolio Company’s revenue is exposed to diligence for assets. market supply and demand forces. Falls in demand that are ### • The investment strategy is to target assets that have the majority of their cash flows protected below the levels used in underlying valuation assumptions through contractual structures, which limits demand risk. could lead to adverse financial performance of the PortfolioCompany. 74 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Principal risks and uncertaintiescontinued ### Investment strategy risks Key: Higher    Level    Reducing ### Risk Description of risk Mitigation Returns target • The Company may not meet its investment objective; this • The Investment Manager adheres to the investment policy and criteria when making could result in returns being materially lower than targeted investmentdecisions. and dissatisfied investors. ### • The Board reviews the investment performance of the Company on a quarterly basis to ensure adherence to the investment policy. Investor sentiment • Investor sentiment could lead to the Company share price • Alternative forms of capital such as debt could be considered. falling below its NAV, which if it persisted for a long time, ### • Opportunistic sale of targeted existing assets. would inhibit new equity capital raises. An inability to raise ### • The Company has the ability to buy back shares. new equity capital could be inhibitive to scaling the Portfolio ### • The Investment Manager constantly targets new shareholders. and disrupt liquidity levels. Lack of suitable • Unavailability of appropriate investments to acquire due to • The Board reviews investment guidelines and will make appropriate recommendations to unfavourable deal terms. shareholders if it believes changes are needed. ### investment • Re‑investment risk which could arise from delayed • The Investment Manager seeks to continue actively sourcing appropriate investments by ### opportunities redeployment of any proceeds from the sale of assets. engaging with its Sponsors and negotiate co‑investment rights when committing capital to the Sponsors’ underlying funds. ### • The demand and need for infrastructure should ensure continuing deal flow. Liquidity • Failure to manage the Company’s liquidity position, including • Regular reporting of current and projected liquidity, under both normal and stress conditions. cash and credit facilities, could result in insufficient liquidity ### management • Liquidity availability is assessed during the allocation of new investment opportunities. to pay dividends and operating expenses or to make new or ### including level and • The Board and Investment Manager review Company debt levels and covenants, on a quarterly support investments. basis, to ensure they stay within the leverage cap that has been established to limit exposure to ### cost of debt ### • Excessive cash balances, introducing cash drag on the debt‑related risks. Company’s returns. ### • Debt levels within Portfolio Companies are reviewed by the Investment Manager as part of ### • High levels and cost of debt within the Company and/or duediligence. the special purpose vehicles which invest in the Portfolio Companies could result in covenant breaches and/or increased volatility in the Company’s NAV. 75 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Principal risks and uncertaintiescontinued ### Investment strategy risks continued Key: Higher    Level    Reducing ### Risk Description of risk Mitigation Portfolio • Portfolio concentration risk in relation to exposure to • The Board conducts quarterly reviews of the investment portfolio against the Company’s individual assets, operators, geographies and asset types. investment policy and criteria. ### concentration risk This could impact NAV and ultimately affect the Company’s ### • Investment restrictions outlined in the investment policy are designed to reduce portfolio targeted rate of return. concentration risk. ### Operational risks ### Risk Description of risk Mitigation Investment • An over‑reliance on the Investment Manager. A failure of • The Board performs an ongoing review of the Investment Manager’s performance in addition to the Investment Manager to retain or recruit appropriately a formal annual review. ### Manager qualified personnel may have a material adverse effect on ### • Pantheon continues to invest in its talent and regularly considers succession planning. the Company’s overall performance. Tax status • Failure to observe requirements to maintain investment trust • The Board, through the Company Secretary, ensures that the Company meets the criteria to tax status in the UK. maintain the current investment trust status of the Company. ### and legislation • Failure to understand tax risks when investing or divesting • The Board has engaged a third party to provide taxation advice and Pantheon’s investment could lead to tax exposure or financial loss. process incorporates the assessment of tax. Third‑party • Poor performance by third‑party service providers could • The Board reviews and signs off contractual arrangements with all key service providers. result in inability to perform key functions (e.g. reporting, ### providers • The Board reviews the performance of key service providers annually. record keeping etc.) effectively. This could result in loss of Company information, errors in published information or damage to its reputation. 76 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Principal risks and uncertaintiescontinued ### Operational risks continued Key: Higher    Level    Reducing ### Risk Description of risk Mitigation Cyber security • Cyber security risk which could arise from reputational • The Audit and Risk Committee reviews service providers’ cyber security arrangements, controls damage from theft or loss of confidential data through and business continuity processes to ensure any data loss is mitigated and reputational damage cyberhacking. is minimised. ### Other risks ### Risk Description of risk Mitigation Geopolitical • Geopolitical turbulence (e.g. Ukraine/Russia conflict): • This risk is considered on an asset‑by‑asset basis. medium and long‑term impact of global economies, ### turbulence • The Company also monitors the impact of geopolitical trends on the overall Portfolio as well as including energy prices and interest rates, and individual on individual sectors and companies. companies to which the Company has exposure. Climate • Climate change causing physical and transition risks could • The Investment Manager conducts due diligence in relation to climate change matters impact the financial performance of the Portfolio. Physical beforemaking investment decisions. ### change risks arising from extreme weather events could impact the ### • The Company invests in assets with strong management teams that have a long track record operations of a Portfolio Company. In addition, transition risk ofactively managing physical risks such as maintenance schedules. in terms of policy, legal, technological, market and reputation ### • The Company has in place an ESG policy, including taking account of sector exclusions. risks could negatively impact the operations of the assets. 77 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Viability statement Pursuant to provision 31 of the UK Corporate Governance Code The Investment Manager considers the future cash requirements To support their statement, the Directors also took into account 2018, and the AIC Code of Corporate Governance, the Board has of the Company before acquiring or funding Portfolio Companies. the nature of the Company’s business, including the available assessed the viability of the Company over a three‑year period from Furthermore, the Board receives regular updates from the liquidity, the potential of its portfolio of investments to generate 31 December 2022. The Directors consider that a three‑year period Investment Manager on the Company’s cash and debt position, future income and capital proceeds, and the ability of the Directors to December 2025 is appropriate for assessing the Company’s which allows the Board to maintain its fiduciary responsibility to minimise the level of cash outflows, if necessary. Based on the viability. There is greater predictability of the Company’s cash to the shareholders and, if required, limit funding for existing above assessment, the Directors have a reasonable expectation flows over that time period and increased uncertainty surrounding commitments. that the Company will be able to continue in operation and economic, political and regulatory changes over the longer term. meet its liabilities as they fall due over the three‑year period to The Board considered the Company’s viability over the three December2025. The Company has a diverse Portfolio of infrastructure investments, year period based on a working capital model prepared by the expected to produce good and reasonably predictable levels Investment Manager. The working capital model forecasts key cash On behalf of the Board of income which cover the costs, and expected to cover the flow drivers such as capital deployment rate, investment returns Company’s dividend target as the Portfolio matures. The defensive and operating expenses. In connection with the preparation of the nature of the Portfolio and of the essential services that the working capital model, capital raises, realisations and distribution businesses in which the Company invest provide to their customers payments were assumed not to occur during the three‑year period, ### Vagn Sørensen are being demonstrated in the current climate, with infrastructure unless already predetermined. The working capital model also Chair assets providing strong downside protection across market considered other scenarios including an increase in the cost of debt 1 March 2023 cycles given the regulated and contracted nature of cash flows, and restriction in debt availability, and an inability for the Company whichtypically offer strong inflation protection. to raise equity. Against this background, in making their assessment, the Directors The results of stress testing showed that the Company would reviewed the reports of the Investment Manager in relation to the be able to withstand the impact of various scenarios occurring resilience of the Company, taking account of its current position, over the three‑year period. The Directors also considered the the principal risks facing it in a downside scenario due to the Company’s position with reference to its investment trust geopolitical uncertainties as a result of the Russia‑Ukraine conflict, structure, its business model, its business objectives, the principal including disruption to the supply chain and increases in the cost of risks and uncertainties as detailed on pages 72 to 76 of this living as a result of this conflict, inflationary expectations, interest report and its present and projected financial position. As part rate rises and, the impact of climate change on the Company’s of the overall assessment, the Directors took into account the portfolio. Asdiscussed in Note 1 to the financial statements, the Investment Manager’s culture, which emphasises collaboration effectiveness of any mitigating actions and the Company’s risk and accountability, the Investment Manager’s conservative appetite were also considered as part of the various downside approach to balance sheet management, and its emphasis on liquidity scenario modelling carried out, after which the Directors investing with underlying Sponsors that are focused on generating came to their conclusion as to the Company’s viability over the outperformance. three year period. 78 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Governance ### What’s in this section Chair’s introduction to Corporate Governance 79 Board of Directors 80 Investment Manager 82 Statement on Corporate Governance 85 Audit and Risk Committee report 92 Nomination Committee report 95 Directors’ remuneration report 96 Directors’ report 100 Directors’ responsibility statement 104 79 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Chair's introduction to Corporate Governance ### Statement of compliance The principles of the AIC Code This statement, together with the statement of Directors’ The AIC Code is made up of 17 principles split into five sections responsibilities on page 104 forms part of the Directors' Report covering: and indicates how the Company has applied the principles of ### • board leadership and purpose; recommended governance of the Financial Reporting Council's ### • division of responsibilities; (FRC) 2018 UK Corporate Governance Code (the ‘UK Code’). ### • composition, succession and evaluation; TheAIC Code complements the UK Code and provides a ### framework of best practice for investment trusts. • audit, risk and internal control; and ### • remuneration. The Board considers that reporting against the principles and provisions of the AIC Code, which has been endorsed by the FRC, Details of how the Company has applied the principles of the AIC provides more relevant information to shareholders and that by Code are set out in this report. reporting against the AIC Code the Company meets its obligations ### in relation to the UK Code and associated disclosure requirements Viability statement under paragraph 9.8.6 of the Listing Rules. The viability statement can be found on page 77. ### Vagn Sørensen The UK Code is available on the FRC website (www.frc.org.uk). Chair 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. I am pleased to introduce the Company’s first Corporate Governance Statement. In this statement, we report on our Throughout the period ended 31December2022, the Company compliance with the AIC Code of Corporate Governance (the 'AIC complied with the principles and provisions of the AIC Code which Code') and set out how the Board has operated during the past incorporates the UK Code. The Board attaches great importance year. The AIC Code, as published in 2019, sets out principles and to the matters set out in the UK Code and strives to observe its provisions regarding matters including stakeholder engagement principles in a manner that would enable shareholders to evaluate and the culture of the Company, against which the Company how the principles have been applied. However, it should be reports in the strategic report. The Company is committed to noted that where the principles and provisions are related to the maintaining the highest standard of corporate governance and the role of the Chief Executive, executive directors’ remuneration Directors are accountable to shareholders for the governance of and the establishment of a Remuneration Committee, the the Company’s affairs. Board considers these principles and provisions not relevant as Pantheon Infrastructure Plc is an externally managed Company with an entirely non‑executive Board and no employees or internaloperations. 80 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Board of Directors | | C | C | | C | | --- | --- | --- | --- | --- | | Vagn Sørensen | | | Patrick O’Donnell Bourke | | | Chair and Nomination Committee Chair | | | Audit and Risk Committee Chair | | | Appointed to the Board 4 October 2021 | | | Appointed to the Board 4 October 2021 | | | Mr Vagn Sørensen is an experienced non‑executive chair and director of listed and private companies. | | | Mr Patrick O’Donnell Bourke is an experienced board member with more than 25 years of experience | | inenergy and infrastructure. After attending Aarhus Business School and graduating with a MSc degree in Economics and Business Administration, Mr Sørensen began his career at Scandinavian Airlines Systems in Sweden, After graduating from Cambridge University, Mr O’Donnell Bourke started his career at Peat Marwick, rising through numerous positions in a 17‑year career before becoming Deputy CEO with special Chartered Accountants (now KPMG) and qualified as a Chartered Accountant. After that he held a responsibility for Denmark. Between 2001 and 2006, Mr Sørensen was President and Chief Executive variety of investment banking positions at Hill Samuel and Barclays de Zoete Wedd. In 1995, hejoined Officer for Austrian Airlines Group in Austria, a business with approximately €2.5 billion of turnover, Powergen Plc, where he was responsible for mergers and acquisitions before becoming Group 8,000 employees and listed on the Vienna Stock Exchange. Mr Sørensen also served as Chair of the Treasurer. In 2000, Mr O'Donnell Bourke joined Viridian Group Plc as Group Finance Director and later Association of European Airlines in 2004. Since 1999, Mr Sørensen has been a Tier 1 senior industrial became Chief Executive, appointed by the private equity shareholder following take‑over in 2006. adviser to EQT, a private equity sponsor, and has been a non‑executive director or Chair of a number In2011, he joined JohnLaing Group, a specialist international investor in, and manager of, greenfield of their Portfolio Companies. Since 2008, Mr Sørensen has been a senior adviser to Morgan Stanley infrastructure assets where he served as CFO until his retirement in 2019. While at John Laing, hewas Investment Bank. part of the team which launched the John Laing Environmental Assets Fund on the London Stock Exchange in 2014. Mr Sørensen is currently Chair of Air Canada (since 2017) and a non‑executive director of CNH Industrial and Royal Caribbean Cruises. Notable previous non‑executive appointments have included Mr O’Donnell Bourke currently serves as Chair of Ecofin US Renewables Infrastructure Trust Plc and Chair of SSP Group (2006 to February 2020), Chair of Scandic Hotels AB (2007‑2018), Chair of TDC as Chair of the Audit Committee of Harworth Group Plc (a leading UK regenerator of land and property A/S (2006‑2017) and Chair of FLSmidth & Co (2009‑2022). for development and investment). Mr O’Donnell Bourke was previously Chair of the Audit and Risk Committee at Calisen Plc (an owner and operator of smart meters in the UK) and Chair of the Audit Committee atAffinity Water. Audit and Risk Committee Management Engagement Committee Nomination Committee Remuneration Committee Disclosure Committee C Committee Chair 81 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Board of Directors continued ![img-10.jpeg](img-10.jpeg) ### Anne Baldock Remuneration Committee Chair and Senior Independent Director #### Appointed to the Board 4 October 2021 Ms Anne Baldock is an experienced board member and lawyer with over 30 years' experience in the infrastructure sector. Ms Baldock graduated in law from the London School of Economics and was a qualified Solicitor in England and Wales from 1984 to 2012. Ms Baldock was a Partner at Allen & Overy LLP between 1990 and 2012, during which time she was Managing Partner, Projects Group London (1995-2007), member of the firm's Global/Main Strategic Board (2000-2006) and Global Head of Projects, Energy and Infrastructure (2007-2012). Notable transactions included the Second Severn Crossing, Eurostar, the securitisation of a major UK water utility and several major PPP projects in the UK and abroad. Ms Baldock's current roles include Senior Independent Director for the Restoration and Renewal Delivery Authority Limited (the delivery body created by parliament to deal with the restoration of the Houses of Parliament); Senior Independent Director and Chair of Audit and Risk Committee for East West Railways Limited (the Government-owned company constructing the new Oxford to Cambridge railway) and non-executive director of Electricity North West Limited. Amongst previous roles, Ms Baldock was non-executive director of Thames Tideway Tunnel, non-executive director of Hydrogen Group (AIM-listed) and Trustee of Cancer Research UK. ![img-11.jpeg](img-11.jpeg) ### Andrea Finegan Management Engagement Committee Chair #### Appointed to the Board 4 October 2021 Ms Andrea Finegan is an experienced infrastructure asset management professional with over 30 years of sector experience. After graduating from Loughborough University, Ms Finegan held investment banking roles at Deutsche Bank and Barclays Capital, before joining Hyder Investments as Head of the Deal Closing Team. Between 1999 and 2007, Ms Finegan worked at Innisfree Limited, the investment manager of an E8 billion infrastructure asset portfolio, latterly as Board Director and Head of Asset Management. Ms Finegan was subsequently Chief Operating Officer, ING Infrastructure Funds and Fund Consultant to Climate Change Capital. In 2012, Ms Finegan joined Greencoat Capital LLP for the set up and launch of Greencoat UK Wind Plc, the renewable infrastructure investment trust, in 2013, then became Chief Operating Officer until 2018, a position that included structuring and launching another renewable energy infrastructure fund listed on the London Stock Exchange and Euronext Dublin (Greencoat Renewables Plc) and a number of private markets solar energy funds. Ms Finegan is currently Chair of the Valuation Committee of Schroders Greencoat LLP, a role she has held since 2015, and independent consultant to the board of Sequoia Economic Infrastructure Income Fund Limited, working closely with the ESG & Stakeholder Committee and the Risk Committee. Audit and Risk Committee Management Engagement Committee Nomination Committee Remuneration Committee Disclosure Committee Committee Chair ![img-12.jpeg](img-12.jpeg) 82 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Investment Manager ## Global Infrastructure and Real Assets Investment Committee ### Key Pantheon personnel | Richard Sem | Kathryn Leaf | Andrea Echberg | Paul Barr | | --- | --- | --- | --- | | Partner and manager of PINT | Partner (joined 2008, 24 years | Partner (joined 2012, 26years | Partner (joined 2021, 20 years | | (joined 2017, 26 years of private | of private marketsexperience) | of private marketsexperience) | of private markets experience) | markets experience) | Richard is a Partner and Head of Europe | Kathryn is a Partner and Global Head of Real | Andrea is a Partner and Head of Pantheon’s | Paul is a Partner in Pantheon’s | | --- | --- | --- | --- | | in Pantheon’s Global Infrastructure and | Assets, whichincludes infrastructure, real | Global Infrastructure and Real Assets Team. | Global Infrastructure and Real Assets | | Real Assets Investment Team where he | estate and other real assets. Kathryn is a | Andreais responsible for global infrastructure | Investment Team and a member of the | | leads its European investment activity | member of Pantheon’s Partnership Board, | and real assets investments covering primary, | GlobalInfrastructure and Real Assets | | and team. Richardis a member of the | InternationalInvestment Committee, Global | secondaryand co‑investments. Andreais | Committee. Paulworked previously at | | Global Infrastructure and Real Assets | Infrastructure and RealAssets Committee | a member of the International Investment | GIC, from 2012, where he was Senior Vice | | Committee. Richard has 25 years of | and Real Estate Investment Committee. | Committee and Global Infrastructure and Real | President, Infrastructurewith a global | | experience in infrastructure private equity, | Priorto joining Pantheon, Kathryn was with | Assets Committee. Andrea has an engineering | remit focusing on primary, secondary and | | corporatefinance and project finance at | GIC Special Investments, before which she | industry background followed by 21 years’ | co‑investment opportunities. Paulalso has | | leading institutions including InfraRed Capital | was responsible for direct investments at | experience in the infrastructure finance | expertise in infrastructure direct investing and | | Partners, HSBC, ABN AMRO, andBNP | Centre Partners, a New York‑based private | and investment sectors. Priorto joining | infrastructure debt transactions. Prior to GIC, | | Paribas. Richard'sexperience spans investing | equityfirm. Kathryn began her career in | Pantheon, Andrealed infrastructure direct and | Paul worked at Challenger Infrastructure and | | in primary, secondary, co‑investments and | Morgan Stanley's Investment Banking | co‑investment teams for Société Générale, | Macquarie Capital. Paulis currently based in | | direct‑investments across all infrastructure | Division where she pursued real estate | Macquarie Capital and ABN AMRO delivering | London but will relocate to San Francisco. | | sub‑sectors and global OECD markets. | investments. Kathryn has a bachelor’s and | successful investments in both brownfield | | | Richardholds a BSc and MBA from Imperial | a master’s degree in modern languages | operating and greenfield PPP assets. Andrea | | | College of Science, Technology and Medicine. | from Oxford University, andis based in | has a BEng in mechanical engineering from | | | Richardis based in London. | SanFrancisco. | Imperial College of Science, Technologyand | | Medicine. Andreais based inLondon. 83 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Investment Manager continued ## Global Infrastructure and Real Assets Investment Committee ### Key Pantheon personnel continued | Evan Corley | Jérôme Duthu-Bengtzon | Matt Garfunkle | Dinesh Ramasamy | | --- | --- | --- | --- | | Partner (joined 2004, 17 years | Partner (joined 2007, 19 years | Partner (joined 1999, 24 years | Partner, Global Infrastructure | | of private markets experience) | of private markets experience) | of private markets experience) | and Real Assets | | Evan is a Partner in Pantheon’s Global | Jérôme is a member of Pantheon’s Global | | | | --- | --- | --- | --- | | | | Matt is a Partner in Pantheon’s US | Dinesh is a Partner in Pantheon’s Global | | Infrastructure and RealAssets Investment | Infrastructure and Real Assets Investment | | | | | | InvestmentTeam where he is actively | Infrastructure and Real Assets Investment | | Team and a member of Pantheon’s Global | Team where he focuses on the analysis, | | | | | | involved in both the US private equity | Team where he focuses on the analysis, | | Infrastructure and Real Assets Investment | evaluation and completion of infrastructure | | | | | | secondary investment activity as well as | evaluation and completion of infrastructure | | Committee. Priorto joining Pantheon, | and real assets transactions in Europe. | | | | | | the US Infrastructure and RealAssets | and real asset investment opportunities in | | Evanheld positions at Polaris Venture | Jérômeis a member of Pantheon’s Global | | | | | | investment activity. Mattis a member of the | the US. Prior to joining Pantheon, Dinesh was | | Partners in Boston and JP Morgan in London. | Infrastructure and Real Assets Investment | | | | | | GlobalSecondary Investment Committee | a Vice President in Goldman Sachs’ Global | | Evanreceived a BS from Boston University’s | Committee and ESG Committee. Jérôme | | | | | | and the GlobalInfrastructure and Real Assets | Natural Resources group where he executed | | School of Management with a concentration | joined from Paris‑based placement agent | | | | | | Committee. Mattjoined Pantheon in July | on a variety of M&A and capital markets | | in finance and a minor in economics. | Global Private Equity, wherehe worked for | | | | | | 1999, havingworked the previous three years | transactions across the infrastructure, power | | Evanisbased in SanFrancisco. | over three years. Jérômeholds an MSc | | | | | | with Cambridge Associates in their Boston | and utilities sectors. Previously, Dinesh was in | in telecommunications from ESIGELEC and Menlo Park offices. Mattreceived a BA in the Power & Utilities group in the Investment engineering school and a Master in Business history and economics from Brown University, Banking Division at RBC in New York. from the ESCP‑EAP European School of andis a CFA Charterholder. Mattis based in Dineshholds a BS in Electrical and Computer Management. Jérômeis based inLondon. SanFrancisco. Engineering from Cornell University and MBA from NYU’s Stern School of Business. Dineshis based in San Francisco. 84 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Investment Manager continued ### Other key personnel | Alex Denny | Ben Perkins | Harriet Alexander | Farid Barekati | | --- | --- | --- | --- | | Managing Director (joined 2022, | Principal (joined 2022, 15 years | Vice President (joined 2022, | Senior Product Controller, | | 19 years of market experience) | of market experience) | 13years of market experience) | (joined 2020, 12years of market | experience) | Alex is a Managing Director, European | Ben is a Principal in Pantheon’s Global | Harriet is a Vice President in Pantheon’s | Farid is a Senior Product Controller within | | --- | --- | --- | --- | | Private Wealth focusing on the distribution | Infrastructure & Real Assets team, where | Global Infrastructure & Real Assets team, | Pantheon’s Product Control Team, where he | | of Pantheon’s investment trusts and other | he is focused on portfolio management | where she is responsible for investor relations | has operational oversight for the reporting, | | retail‑focused products. He was previously | for PINT. Ben has previously worked in | and marketing activities focusing on PINT. | valuation and external audit of Pantheon's UK | | Head of Investment Trusts at Fidelity | investment management roles at Gravis | Harriet previously worked in the Infrastructure | listed products including PINT. Prior to joining | | International and is Non‑Executive Director | Capital Management, Hadrian's Wall | team at Federated Hermes in business | Pantheon, Farid was the Financial Controller | | of the Association of Investment Companies. | Capital and John Laing. Ben holds a BEng | development. Harriet has also held roles | for JohnLaing Capital Management, | | He has undergraduate degrees in Chemistry | (Hons) in Manufacturing and Mechanical | at King Street, Värde, Ashmore and UBS. | responsiblefor their listed funds. He also | | and Law from the University of Bristol. Alex is | Engineering from the University of Warwick | Sheholds a bachelor’s degree in International | spent time in various finance and operations | | based in London. | and has completed all three levels of the CFA | Management with French from the University | roles within 3i Group plc, before moving to | | | qualification. Ben is based in London. | of Bath. Harriet is based in London. | their listed infrastructure fund. Farid holds | a BSc(Hons) in Accounting & Computing from Oxford Brookes University and is a qualified chartered accountant. Farid is basedinLondon. 85 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Statement on Corporate Governance A formal process will be established for the selection of new ### The Board of Directors Performance evaluation Directors to the Company and the level of remuneration of the The Board consists of four non‑executive Directors (two male and During the year, in order to review the effectiveness of the Board Directors has been set in order to attract individuals of a calibre two female) and the Company has no employees. TheBoard is as a whole, its Committees and individual Directors, including the appropriate to the future development of theCompany. responsible for all matters of direction and control of the Company independence of each Director, the Directors undertook an internal and no one individual has unfettered powers ofdecision. Further details on the Company's Board composition and diversity Board evaluation. Led by the Chair, the evaluation was conducted can be found on page 87. using tailored questionnaires structured to analyse the focus of The Board seeks to ensure that it has the appropriate balance of Board composition and effectiveness, the efficiency of Board and skills, experience, ages and lengths of service among its members. The terms and conditions of the appointment of the non‑executive Committee meetings, and to assess whether the operation of TheDirectors possess a wide range of business, financial and Directors are set out in letters of appointment, copies of which are such meetings was appropriate, as well as whether any additional infrastructure expertise relevant to the direction of the Company. available for inspection at the registered office of the Company and information may be required to facilitate better Board discussions. During the period, the Board satisfied itself that all Directors were will be available at the AGM. None of the Directors has a contract of The Board was also asked to consider Board support, strategic and remain able to commit sufficient time to discharge their service with the Company. operational oversight, culture, shareholder engagement and responsibilities effectively having given due consideration to their Further details on the Company’s purpose, culture and values can succession planning, and responses were collated by the Company other significant commitments. be found in the strategic report on pages66to71. Secretary and the Chair and discussed between the Board An external search consultancy, Nurole Limited ('Nurole'), was members. The independence of the Directors and their ability to ### used to provide a shortlist of Directors as part of the recruitment Board and Committee meeting attendance commit sufficient time to the Company’s activities was considered process for the non‑executive Directors at IPO and Investec Bank The Board has at least four scheduled meetings a year, as part of the evaluation process. The performance of the Chair plc ('Investec') were also involved in the process. Neither Nurole nor withadditional meetings if necessary. Directors’ attendance at was similarly evaluated by the other Directors, led by the Senior Investec have any connection to any of the non‑executiveDirectors. scheduled Board and Committee meetings held during the period Independent Director (SID). to 31December2022 is set out in the table below. Biographies of the Directors, including details of their other directorships and significant commitments, can be found on pages 80 and 81. ### Board and Committee meeting attendance In accordance with the Board Diversity Policy, the appointment of any new Director will always be made on the basis of a candidate’s Audit and Risk Management Nomination Remuneration Disclosure Scheduled Committee Engagement Committee Committee Committee merits and the skills/experience identified by the Board as being Board meetings meetings Committee meetings meetings meetings meetings desirable to complement those of the existing Directors. TheBoard acknowledges the benefits of greater diversity, including diversity Vagn Sørensen 6/6 3/3 1/1 1/1 1/1 2/2 of social and professional background, cognitive and personal Andrea Finegan 6/6 3/3 1/1 1/1 1/1 2/2 strengths, sexualorientation, disability status, gender and ethnicity, and the Board remains committed to ensuring that the Company’s Patrick O’Donnell Bourke 6/6 3/3 1/1 1/1 1/1 2/2 Directors bring a wide range of skills, knowledge, experience, Anne Baldock 6/6 3/3 1/1 1/1 1/1 2/2 backgrounds andperspectives. 86 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Statement on Corporate Governance continued ### Performance evaluation continued Insurance and indemnity provisions Division of responsibilities To complement the external evaluation, the Chair also held The Board has formalised arrangements under which the The following sets out the division of responsibilities between follow‑up discussions with each Director to review their individual Directors, in the furtherance of their duties, may take independent theChair and the SID. performance and the issues that arose from the Board evaluation. professional advice at the Company’s expense. The Company has ### Role of the Chair arranged a Directors’ and Officers’ liability insurance policy which The results of the evaluation process indicated that the Board The Chair leads the Board and is responsible for its overall includes cover for legal expenses. continues to work well and there are no significant concerns effectiveness in directing the Company. The Chair: among the Directors about the Board’s effectiveness. The resulting Under the terms of appointment of each Director, the Company ### • demonstrates objective judgement; actions agreed by the Directors will be monitored during the 2023 has agreed, subject to the restrictions and limitations imposed by financial year. statute and by the Company’s Articles of Association, to indemnify • promotes a culture of openness and debate; each Director against all costs, expenses, losses and liabilities facilitates constructive board relations and the effective ### As a result of the evaluation, the Board is satisfied that all the • incurred in execution of his/her office as Director or otherwise in contribution of all Non‑Executive Directors; current Directors contribute effectively and have the skills and relation to such office. Save for such indemnity provisions in the experience relevant to the leadership and direction of theCompany. • ensures that Directors receive accurate, timely and clear Company’s Articles of Association and in the Directors’ terms information; The Directors’ biographical details are set out on pages 80 and81 of appointment, there are no qualifying third‑party indemnity ### • in addition to formal general meetings, offers regular of this Report. These demonstrate the wide range of skills and provisions inforce. engagement with major shareholders in order to understand experience that they bring to the Board. All Directors will retire and their views on governance and performance against the ### stand for re‑election at the Company's AGMon 30 March 2023. Chair and Senior Independent Director Company’s investment objective and investment policy; Theindividual performance of each Director standing for election The Board appointed Vagn Sørensen as Chair of the Company has been evaluated and it is recommended that shareholders vote • ensures that the Board as a whole has a clear understanding on 4October2021. Vagn Sørensen is deemed by his fellow in favour of their election atthe AGM. ofthe views of shareholders; and independent Board members to be independent. He considers himself to have sufficient time to commit to the Company’s affairs. • acts on the results of the annual evaluation of the performance His other commitments are disclosed in his biography on page 80. of the Board, its Committees and individual Directors by recognising the strengths and addressing any weaknesses Anne Baldock was appointed SID of the Company on ofthe Board. 4November2022. She provides a channel for any shareholder concerns regarding the Chair and leads the Chair’s annual ### Role of the SID performance evaluation. The role of the SID is to provide a sounding board to the Chair and to serve as an intermediary for the other directors and shareholders. Led by the SID, the non‑executive directors meet without the Chair present at least annually to appraise the Chair’s performance, and on other occasions as necessary. 87 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Statement on Corporate Governance continued TheDirectors were provided with the prescribed table and asked ### Directors' independence Board diversity to confirm based on how they identify. Although not yet applicable In accordance with the Listing Rules that apply to closed‑ended The Board acknowledges the new Financial Conduct Authority to the Company, the Board is mindful of the FCA’s new diversity investment entities, and taking into consideration the AIC Code, (FCA) amendments to the Listing Rules which apply for targets and while pleased that it has met most of them, notes that theBoard has reviewed the status of its individual Directors financial years starting on or after 1 April 2022 and which set it does not yet meet the requirement to have at least one Director and theBoard as a whole. All Directors are considered to be positive diversity targets for listed companies and build on the from an ethnic minority background. independent in both character andjudgement. recommendations from the Hampton‑Alexander Review on gender diversity on boards and the Parker Review regarding ethnic Whilst the Board does not feel that it would be appropriate to set ### Chair and Director tenure/re-appointment representation on boards. The Directors are pleased to report that targets as all appointments must be made on merit, the Board of Directors as at the reference date of 31 December 2022 and as at the latest supports the recommendation to have ethnic representation on the In accordance with the AIC Code, the Board has determined that its practicable date, 50% of the Company’s Non‑Executive Directors Board and will include this as a key consideration in its succession policy on the tenure of the Chair and the Directors is that the Chair are women, and the SID is a woman. None of the Directors identify planning. Please refer to the Nomination Committee report on and all Directors will be subject to annual re‑election at each AGM. as an ethnic minority individual. Theinformation presented in the page95. Accordingly, resolutions to elect all Directors are contained within following tables was collected ona self‑reportingbasis. the 2023 AGM Notice ofMeeting. 1,2 ### Board composition and diversity Number of senior positions on the Number of Board members Percentage of the Board Board (SID and Chair) Men 2 50% 1 Women 2 50% 1 Not specified/prefer not to say — — —  Numberofseniorpositionsonthe Number of Board members Percentage of the Board Board (SID and Chair) White British 2 50% 1 Other White (including 2 50% 1 minority‑white groups) 1. The composition of the Board is shown at the latest practicable date. 2. As an investment trust, the additional reporting relating to executive management under the Listing Rules is not applicable. 88 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Statement on Corporate Governance continued Decisions to invest in, and management of, the Company’s assets ### Board responsibilities and relationship Institutional investors – use of voting rights are delegated to Pantheon. Ateach Board meeting, representatives ### with the Investment Manager The Company has delegated the exercise of its voting rights to the of Pantheon are in attendance to present verbal and written reports There is a clear division of responsibilities between the Chair, Investment Manager. Pantheon consults with the Directors of the covering its activity, the portfolio and investment performance the Directors, the Investment Manager and the Company's other Company in the case of any corporate action where either there is over the preceding period. Ongoing communication with the third‑party service providers. The Directors are responsible for the a conflict of interest between PINT and other Pantheon clients, or Board is maintained between formal meetings. The Investment determination and implementation of the Company’s investment where for any reason the proposed voting is inconsistent with the Manager ensures that Directors have timely access to all relevant policy and for monitoring compliance with the Company’s advice given to Pantheon’s other clients. management, financial and regulatory information to enable objectives. The Company has contracted with the Investment informed decisions to be made and contacts the Board as required ### Conflicts of interest Manager to implement its strategy. At each Board meeting, for specific guidance on particular issues. Pantheon has discretion The Articles of Association permit the Board to consider and, the Directors follow a formal agenda to review the Company’s to manage the assets of the Company in accordance with the ifitsees fit, to authorise situations where a Director has an interest investments and other important issues, such as asset allocation, Company’s investment objectives and policies, subject to certain that conflicts, or may possibly conflict, with the interests of the gearing policy, corporate strategic issues, cash management, additional investment restrictions (which may be amended by the Company. There is in place a formal system for the Board to peergroup performance, marketing, investor relations, governance Company from time to time with the consent of the Investment consider authorising such conflicts, whereby the Directors who and investment outlook, to ensure that control is maintained over Manager). have no interest in the matter decide whether to authorise the the Company’s affairs. conflict and any conditions to be attached to such authorisations. The Board determines the parameters of investment strategy The Directors regularly consider its overall strategy and monitor the The process in place for authorising potential conflicts of interest and risk management policies within which the Investment share price and level of premium or discount. has operated effectively during the period. Manager can exercise judgement and sets the investment and The Directors are responsible for the investment policy and risk management strategies in relation to currency exposure. The Directors are able to impose limits or conditions when giving strategic and operational decisions of the Company and for TheCompany Secretary and Investment Manager prepare briefing authorisation if they think this is appropriate in the circumstances. ensuring that the Company is run in accordance with all regulatory notes for Board consideration on matters of relevance, for example A register of potential conflicts is maintained by the Company and statutory requirements. These procedures have been changes to the Company’s economic and financial environment, Secretary and is reviewed at each Board meeting, to ensure that formalised in a schedule of matters reserved for decision by the statutory and regulatory changes and Corporate Governance any authorised conflicts remain appropriate. Directors are required full Board, whichhas been adopted for all meetings. Thisincludes bestpractice. to confirm at these meetings whether there has been any change to establishing the investment policy, long‑term objectives, theirposition. commercial strategy and benchmarks, the level of permitted The Directors must also comply with the statutory rules requiring gearing and borrowing and the Company’s policies on treasury and company directors to declare any interest in an actual or proposed share buybacks. transaction or arrangement with the Company. 89 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Statement on Corporate Governance continued ### Committees of the Board Nomination Committee Disclosure Committee The Board has formed a number of Committees, as set out below, The Nomination Committee comprises all the Directors and is The Disclosure Committee comprises the whole Board and is to which certain Board functions have been delegated. Eachof chaired by Mr Vagn Sørensen, except when considering succession chaired by Mr Vagn Sørensen. The Disclosure Committee meets these Committees has formal written terms of reference approved of the Chair. It is considered appropriate that all Directors are as required. The Board has delegated to the Disclosure Committee by the Board, which clearly define its responsibilities and these can members of the Nomination Committee given the size of the Board the responsibility for overseeing the disclosure of information be inspected at the registered office of the Company and viewed on and that all Directors are independent. The Nomination Committee by the Company to meet its obligations under the Market Abuse the Company’s website (www.pantheoninfrastructure.com). meets at least once a year or more often if required. Regulation and the FCA’s Listing Rules and the Disclosure and Transparency Rules. Please refer to the Nomination Committee report on page 95. ### Audit and Risk Committee ### The Audit and Risk Committee comprises all Board members. Management Engagement Committee ### Remuneration Committee MrO’Donnell Bourke, who is the Chair of the Audit and Risk The Management Engagement Committee (MEC) comprises all The Remuneration Committee meets at least once a year, Committee, is a qualified Chartered Accountant and contributes Board members and is chaired by Ms Andrea Finegan. TheMEC comprises the whole Board, and is chaired by MsAnneBaldock, his knowledge and experience to the Audit and Risk Committee. meets at least once a year or more often if required. The Board has who also serves as the SID. TheCompany has no employees It is felt by the Committee that he is sufficiently qualified for the delegated to the MEC responsibility for monitoring and evaluating and the Board is composed solely of non‑executive Directors. position of Chair of the Auditand Risk Committee given he has the performance of the Investment Manager andthe Investment It is the responsibility of the Remuneration Committee as a recent and relevant financial experience. Manager’s compliance with the Investment Management whole to determine and approve Directors’ fees, following proper Agreement, as well as assessing the performance and services Mr Vagn Sørensen is an experienced non‑executive Chair and consideration and having regard to the industry generally, the role provided by the Company’s other service providers (including the director of listed and private companies and it is considered that individual Directors fulfil in respect of Board and Committee Administrator, Depositary, Registrar and Secretary). The MEC is appropriate for the Chair of the Company to be a member of the responsibilities, the time committed to the Company’s affairs and also responsible for reasonably satisfying itself that the systems Audit and Risk Committee as he provides a valuable contribution to remuneration levels generally within the investment trust sector. put in place by the Investment Manager are adequate to meet the deliberations of the Committee. The size of the Board and the The Chair’s remuneration is decided and approved by the Board relevant legal and regulatory requirements and for reviewing the dual function of the Committee in audit and risk matters are also under the leadership of the SID. composition and performance of the key personnel performing noted as factors. Detailed information on the remuneration arrangements for the services on behalf of the Investment Manager and ensuring The Audit and Risk Committee meets at least twice a year at the Directors of the Company can be found in the Directors’ the continuing appointment of the Investment Manager is in the appropriate intervals in the financial reporting and audit cycle and remuneration report on pages 96 to 99. interests of the shareholders as a whole. to review the Company's internal financial controls and internal control and risk management systems. The Committee met on three occasions during the period ended 31 December 2022. It is intended that the Committee will continue to meet at least two times a year, to review the half‑yearly report and to approve the Company’s annual report andaccounts, and otherwise as required. The report of the Audit and Risk Committee can be found on pages 92 to 94. 90 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Statement on Corporate Governance continued In arriving at its judgement as to the risks the Company faces, the • BNP Paribas Trust Corporation UK Limited (previously BNP ### Internal control review Board has considered the Company’s operations in the light of the Paribas Securities Services, London Branch) has been The Directors acknowledge that they are responsible for the following factors: appointed as Depositary; Company’s risk management and systems of internal control and ### for reviewing their effectiveness. • the provision of administration and accounting is the ### • the nature and extent of risks which it regards as acceptable for responsibility of Link Alternative Fund Administrators Limited; the Company to bear within its overall business objective; An ongoing process, in accordance with the guidance provided by ### • the provision of company secretarial duties is the responsibility ### the FRC on risk management, internal control and related finance • the threat of such risks becoming a reality; of Link Company Matters Limited; and business reporting has been established for identifying, the Company’s ability to reduce the incidence and impact of risk ### • ### evaluating and managing the risks faced by the Company. • investment management is provided by Pantheon. The Board on its performance; Thisprocess, together with key procedures established with a is responsible for the implementation of the overall investment ### • the cost to the Company and benefits related to the review of view to providing effective financial control, has been in place policy and monitors the actions of the Investment Manager at risk and associated controls of the Company; and throughout the period and up to the date the financial statements regular Boardmeetings; ### • the extent to which third parties operate the relevant controls. were approved. Full details of the principal risks and uncertainties the Directors of the Company clearly define the duties and ### • faced by the Company can be found on pages 72 to 76. Against this background, the Board has split the review into four responsibilities of their agents and advisers in the terms of sections reflecting the nature of the risks being addressed. their contracts. The appointment of key agents and advisers is The risk management process and systems of internal control Given the nature of the Company’s activities and the fact that most conducted by the Board after consideration of the quality of the are designed to manage, rather than eliminate, the risk of failure functions are sub‑contracted, the Directors obtain information parties involved; the Board, via the MEC, monitors their ongoing to achieve the Company’s objectives. It should be recognised that from key third‑party suppliers regarding the controls operated by performance and contractual arrangements; such systems can only provide reasonable, rather than absolute, assurance against material misstatement or loss. them. To enable the Board to make an appropriate risk and control the duties of investment management and accounting are ### • assessment, the information and assurances sought from third segregated. The procedures of the individual parties are ### Internal control assessment process parties include the following: designed to complement one another; and Regular risk assessments and reviews of internal controls ### • details of the control environment; • the Board reviews detailed financial information produced by the and the Company’s risk appetite are undertaken by the Board Investment Manager and the Administrator on a regular basis. ### • identification and evaluation of risks and control objectives; in the context of the Company’s overall investment objective. ### • assessment of communication procedures; and The Company does not have an internal audit function. All of the TheBoard, throughdelegation to the Audit and Risk Committee, Company’s management functions are delegated to independent ### has undertaken a robust assessment and review of the emerging • assessment of control procedures operated. third parties whose controls are reviewed by the Board. It is and principal risks facing the Company. The review covers the There were no significant matters of concern identified in the therefore felt that there is no need for the Company to have an key business, operational, compliance and financial risks facing Board’s review of the internal controls of its third‑party suppliers. internal audit function. This need is reviewed periodically. theCompany. The key procedures which have been established to provide In accordance with guidance issued to directors of listed effective internal financial controls are as follows: 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including financial, operational and compliance controls and found there to be no matters of concern. 91 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Statement on Corporate Governance continued At each AGM, a presentation will be given by the Investment Further details of our engagement with the Company’s ### Company Secretary Manager to all shareholderspresent. stakeholders and how the Board has regard to those stakeholders The Board has direct access to the advice and services of the in the Board’s decision‑making processes are set out in the Company Secretary, Link Company Matters Limited, who is There is regular dialogue with institutional shareholders and strategic report on pages 66 to 71. responsible for ensuring that Board and Committee procedures a structured programme of shareholder presentations by the arefollowed and that applicable regulations are complied with. Investment Manager to institutional investors will take place On behalf of the Board following publication of the annual and half‑yearly results. The Company Secretary is also responsible to the Board for Adetailed list of the Company’s shareholders is reviewed at ensuring the timely delivery of information and reports and for eachBoard meeting. ensuring that statutory obligations of the Company are met. ### The half‑yearly and annual reports of the Company are prepared Vagn Sørensen ### Dialogue with shareholders by the Board and its advisers to present a full and readily Chair Communication with shareholders is given a high priority by the understandable review of the Company’sperformance. 1 March 2023 Board and the Investment Manager, and all Directors are available Copies are dispatched to shareholders by mail or electronically to enter into dialogue with shareholders. All shareholders are as requested and are also available on the Company’s website: encouraged to attend and vote at the AGM, during which the Board www.pantheoninfrastructure.com. TheCompany always responds and the Investment Manager will be available to discuss issues to communications from shareholders. Shareholders wishing to affecting the Company, and shareholders will have the opportunity communicate directly with the Board should contact the Company to address questions to the Investment Manager, the Board and the Secretary, by email to pint_cosec@linkgroup.co.uk or by writing to Chairs of the Board’s Committees. the registered office shown on page 136, who will arrange for the relevant Board member to contactthem. 92 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Audit and Risk Committee report The Audit and Risk Committee also reviews the Investment ### Role of the Audit and Risk Committee Manager’s compliance, whistleblowing and fraudprocedures. Clearly defined terms of reference, which were reviewed and updated during the period, have been established by the Board. The Audit and Risk Committee has direct access to the Auditor, Theprimary responsibilities of the Audit and Risk Committee are: Ernst & Young (EY), and representatives of EY attend each Audit and Risk Committee meeting. ### • to monitor the integrity of the financial statements, the financial reporting process and the accounting policies of the Company; ### Matters considered during the period ### • to provide advice (where requested by the Board) on whether the We met on three occasions during the period ended annual report and accounts, taken as a whole, are fair, balanced 31December2022 and once since the period end. and understandable; whether suitable and appropriate estimates TheBoardandCommittee meeting attendance table can and judgements have been made in respect of areas which could befoundon page85. Atthose meetings, the Audit and Risk have a material impact on the financial statements; and provide the Committee: information necessary for shareholders to assess the Company’s ### • reviewed and agreed the half‑year and year‑end portfolio position and performance, business model and strategy; valuation and the Company's NAVs; ### • to review the effectiveness of the internal control environment ### • reviewed the Company’s financial statements for the half‑year ### Patrick O’Donnell Bourke of the Company, including its service providers, and its and year‑end and made formal recommendations to the Board; Audit and Risk Committee Chair reporting processes and to monitor adherence to best practice ### • reviewed the Company’s going concern and viability statements; in Corporate Governance and compliance with applicable ### • reviewed the internal controls and risk management systems of regulatory and legal requirements; I am pleased to present the Audit and Risk Committee report for the Company and its third‑party service providers; ### • to advise the Board on the Company’s overall risk appetite, the period ended 31December2022. ### • agreed the audit plan and fees with the Auditor, including tolerance and strategy and the principal and emerging risks the The Audit and Risk Committee comprises myself, as Chair, and the the principal areas of focus, as well as the reporting by the Company is willing to take in order to meet its long‑termobjectives; other members of the Board. Auditor on its review and audit of the Company's 30June and ### • to assess the Company’s emerging and principal risks and monitor 31December financial statements respectively; Further details about the composition of the Audit and Risk the Company’s risk management and internal financial controls and ### Committee are set out on pages 80 and 81. • reviewed the risk matrix covering the Company's key investment to seek assurance regarding the risk exposures of the Company and and operating risks including how they are classified and Audit and Risk Committee members consider that, individually and the effectiveness of risk management and internal control systems; mitigated; collectively, they are independent and appropriately experienced ### • to make recommendations to the Board in relation to the tender ### • reviewed the whistleblowing policy together with the data to fulfil the role required within the sector in which the Company process, the appointment, re‑appointment and removal of the protection, fraud prevention and anti‑money laundering policies operates. The constitution and performance of the Audit and Risk external Auditor and to approve the Auditor’s remuneration and of the Investment Manager (no incidents or risk areas were Committee is reviewed on a regular basis. terms of engagement, including scope of work; reported during the period); and ### • to review and monitor the Auditor’s independence and reviewed compliance with the AIC code and its own terms ### • objectivity and the effectiveness of the audit process; and ofreference. ### • to provide a forum through which the Company’s Auditor reports to the Board. 93 Pantheon Infrastructure Plc^{}[] Annual report 2022 Strategic report Governance Financial statements Other information # Audit and Risk Committee report continued ## Matters considered during the period continued The principal issues considered by the Committee were: ### A. Valuation of assets The Committee reviewed the basis of valuation of each investment held by the Company at 31 December 2022 prepared by the Investment Manager from information provided by each relevant Sponsor. Questions raised by the Committee were addressed by the Investment Manager. The Committee also reviewed the Auditor's reporting on its testing of investment valuations using its specialists as part of the year end audit. As a result, the Committee satisfied itself that the Company's Portfolio was held at fair value. ### B. Going concern and long-term viability The Committee considered the Company's financial requirements and viability for the twelve months from the date of these financial statements, and over the subsequent two years. This assessment included the review of various downside cases with varying degrees of decline in investment valuations on financial statement disclosures including those relating to principal risks. As a result of this assessment, the Committee concluded that the Company had adequate resources to continue in operation and meet its liabilities as they fall due both for the twelve months from the date of these financial statements, and over the subsequent two years. Related going concern and long-term viability disclosures are set out on pages 77, 93 and 102 and Note 1 on page 116. ### C. Maintenance of investment trust status The Investment Manager and Administrator reported to the Committee to confirm continuing compliance with the requirements for maintaining investment trust status. These requirements are also discussed with the Auditor as part of the audit process. ### D. Internal controls The Audit and Risk Committee reviewed and updated, where appropriate, the Company's risk matrix. This document is reviewed by the Audit and Risk Committee every six months. It is satisfied with the extent, frequency and quality of the reporting of the Investment Manager's monitoring to enable the Audit and Risk Committee to assess the degree of control of the Company and the effect with which risk is managed and mitigated. The Audit and Risk Committee also received reports on internal controls from each of the Company's service providers. No incidents of significant control failings or weaknesses were identified during the period ended 31 December 2022, within the Company or its third-party suppliers. It is noted that the Company Secretary does not ordinarily produce internal control reports due to the non-financial nature of services it provides to the Board and does not provide services outsourced by the Investment Manager. Notwithstanding this, the Secretary has provided a letter to the Committee as part of the annual report process, which confirms that there have been no significant control failings or weaknesses identified during the period. 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 and Risk 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 remained appropriate and sufficient. ### External audit The Audit and Risk 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 fees incurred were £135,000 for the audit of the 2022 financial statements and £25,000 for the audit of the initial accounts to 30 June 2022 to support the first dividend distribution. The Audit and Risk Committee will continue to monitor the level of audit fees closely. ### Non-audit fees/independence and objectivity of the Auditor The Audit and Risk 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 £35,000 were provided during the period ended 31 December 2022, relating to the review of the half-year report and the year-end NAV calculations. The Company also paid EY fees of £70,000 prior to its launch for acting as Reporting Accountant in respect of the Company's IPO and for advice relating to the C share issue proposed for September 2022, the latter of which did not proceed due to market conditions. The ratio of non-audit to audit fees is 66%. The Audit and Risk Committee believes that it is appropriate for the Company's Auditor to provide such services to the Company as these services are audit related and (subsequent to the Company's launch) are considerably less than the annual statutory audit fee. The Audit and Risk Committee has received assurances from the Auditor that its independence is not compromised by the supply of these services. ![img-13.jpeg](img-13.jpeg) 94 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Audit and Risk Committee report continued The Committee monitors the Company’s relationship with the ### Effectiveness of external audit process Fair, balanced and understandable Auditor and has discussed and considered its independence The Audit and Risk Committee meets at least twice a year with the As a result of the work performed, the Audit and Risk Committee and objectivity. The Auditor also provides confirmation that it is Auditor. The Auditor provides a planning report in advance of the has concluded that the annual report for the period ended independent within the meaning of all regulatory and professional annual audit, a report on the annual audit and a report on its review 31December2022, taken as a whole, is fair, balanced and requirements and that objectivity of the audit is not impaired. of the half‑year financial statements. The Audit and Risk Committee understandable and provides the information necessary for TheCommittee is therefore satisfied that EY is independent, has an opportunity to question and challenge the Auditor in respect shareholders to assess the Company’s position and performance, especially considering the term of appointment to date, and will of each of these reports. In addition, at least once a year, theAudit business model and strategy, and has reported on these findings continue to monitor this position. and Risk Committee has an opportunity to discuss any aspect of tothe Board. the Auditor’s work with the Auditor in the absence of the Investment Takinginto account the performance and effectiveness of the Manager. Aftereach audit, the Audit and Risk Committee reviews Auditor and the confirmation of its independence, the Committee the audit process and considers its effectiveness. has recommended to the Board that a resolution to re‑appoint EY as Auditor be put to shareholders at the forthcoming AGM. EY has ### Patrick O’Donnell Bourke ### Appointment of the Auditor confirmed its willingness to continue in office. Audit and Risk Committee Chair The Board of PINT appointed EY as PINT’s first auditors in 2021. A resolution to re‑appoint EY as the Company’s Auditor will be 1 March 2023 proposed at the Company’s AGM. A competitive tender must be carried out by the Company at least every tenyears. The Company is therefore required to carry out a tender no later than in respect of the financial period ending 31December2033. The current lead audit partner, MrMatthew Price, has been in place since the IPO in 2021. Ethicalstandards generally require the rotation of the lead audit partner every five years for a listed client. 95 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Nomination Committee report TheNomination Committee, asand when necessary, makes The UK Listing Rules require listed companies to disclose annually recommendations to the Board with regard to criteria for future their position against the following board diversity targets: Board appointments and the methods ofselection. Italso ### • at least 40% of women on the Board; considers and reviews the appointment of a SID, membership of ### • at least one of the senior Board positions to be held by a woman the Board’s Committees, and the re‑appointment of those Directors (such as Chair, SID, ChiefExecutive or Chief Financial Officer); and standing for re‑election atAGMs. ### • at least one Director from an ethnic minority background. In addition, the Nomination Committee is responsible for assessing At 31 December 2022, PINT met two of the three targets above, with 50% the time commitment required for each Board appointment and women on the Board and MsAnneBaldock in the position of SID. ensuring that the present incumbents have sufficient time to undertake them, and for reviewing the Directors’ performance During the year, the Nomination Committee met once and all Committee appraisalprocess. members were in attendance. The Committee agreed and recommended to the Board a Diversity Policy and reviewed the balance of skills and As part of ongoing succession planning, the Nomination diversity on the Board. Further information on the Diversity Policy is set Committee ensures that all Board appointments are subject to a out on page 87. Itwas agreed that whilst the current structure, size and formal, rigorous and transparent procedure. TheCompany seeks composition of the Board was appropriate and balanced and that it was to ensure that any Board vacancies are filled by the most qualified ### Vagn Sørensen too early to begin succession planning for the Chair or the non‑executive candidates based on objective criteria and merit in the context of Nomination Committee Chair Directors in 2022, the Nomination Committee would review this position the skills, knowledgeand experience that are needed for the Board during 2023 and any potential additions to the Board would include to be effective. a preference for candidates from an ethnic minority background. TheBoard supports diversity and inclusion at Board level and The Nomination Committee comprises all the Directors and is The Nomination Committee is also responsible for conducting an acknowledges the benefits of diversity, includingdiversity of chaired by MrVagnSørensen, exceptwhen considering succession annual performance evaluation of the Board, theBoard’s Committees gender, socio‑economic and ethnic background, sexualorientation, of the Chair. It is considered appropriate that all Directors are and individual Directors and for reviewing the results of the performance disability and cognitive and personal strengths. TheBoard remains members of the Nomination Committee given the size of the Board evaluation that relate to the composition of the Board and succession committed to ensuring that the Company’s Directors bring a and that all Directors are independent. TheNomination Committee planning. TheNomination Committee will also review the effectiveness wide range of skills, knowledge, experience, backgrounds and meets at least once a year or more often ifrequired. of the performance evaluation process as a whole and ensure its perspectives to the Board. The role of the Nomination Committee is to undertake the formal ongoing suitability. Detailsof the performance evaluation of the Board The Board welcomes the recent changes to the Listing Rules which process of reviewing the balance, effectiveness and diversity of undertaken shortly after the year end and the rationale for re‑election of incorporate the recommendations from the Hampton‑Alexander the Board and to consider succession planning, identifyingthe the Directors are provided on pages 85 and 86. Review on gender diversity on boards and the Parker Review skills and expertise needed to meet the future challenges and regarding ethnic representation on boards, into law. opportunities facing the Company and the individuals who might best provide them. ### Vagn Sørensen Nomination Committee Chair 1 March 2023 96 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information # Directors' remuneration report ![img-14.jpeg](img-14.jpeg) **Anne Baldock** Remuneration Committee Chair 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 105 to 111. ## Statement from the Chair I am pleased to present the Directors' remuneration report for the period ended 31 December 2022. The Remuneration Committee comprises myself, as Chair, and the other members of the Board. It is considered appropriate for all Directors to be members of the Remuneration Committee given the size of the Board and it is felt that members are, individually and collectively, independent and appropriately experienced to fulfil the role required within the sector in which the Company operates. Directors' remuneration is determined by the Remuneration Committee, at its discretion within an aggregate limit of £500,000 per annum, set out in the Company's Articles of Association and in accordance with the AIC Code of Corporate Governance. No Director is involved in deciding his or her own remuneration. During the period the Remuneration Committee held one meeting. Individual attendance by the Directors is included in the table on page 85. The Remuneration Committee's main functions include: (i) agreeing the policy for the remuneration of the Directors and reviewing and proposing changes to the policy, as necessary; (ii) agreeing the policy for authorising claims for expenses from Directors; and (iii) establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the Committee (currently none). 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. The Board consists entirely of non-executive Directors and the Company has no employees. There is, therefore, nothing to report on those aspects of remuneration that relate to executive Directors. In accordance with the Remuneration Policy, the fees payable to Directors were set at the rate of £55,000 for the Chair, £45,000 for the Chair of the Audit and Risk Committee and £40,000 for the other Directors. ## Directors' Remuneration Policy The Directors' Remuneration Policy (the 'Policy') will be put to shareholders' vote at least once every three years, and in any year that a change in the Policy is proposed. A resolution to approve the Policy will be put to shareholders at the Company's first AGM which is scheduled for 30 March 2023. The results of the votes cast at the 2023 AGM relating to the remuneration report and Remuneration Policy will be included in the subsequent annual report for reference. 97 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Directors’ remuneration report continued ### Directors' remuneration components The fee for any new Director appointed to the Board will be ### The policy The Directors are entitled only to the fees as set out in the table determined on the same basis. The Company is committed The Board’s policy is that remuneration of non‑executive below from the date of their appointment. No component of to ongoing Shareholder dialogue and any views expressed by Directors should reflect the experience of the Board as a whole Directors’ remuneration is subject to performance factors. Shareholders on the fees being paid to Directors would be taken and be determined with reference to comparable organisations into consideration by the Board when reviewing the Directors’ and appointments. The level of remuneration has been set Fees will be reviewed annually in accordance with the policy below. Remuneration Policy and in the annual review of Directors’ fees. 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 Remuneration type Description and approach to determination Company’s affairs. Fixed fees Annual fees are set for each of the Directors, reflect the experience of the Board as a whole and are determined The Chair does not participate in any discussions relating to his with reference to comparable organisations and appointments. own fee, which is determined by the other Directors. Directors When making recommendations for any changes in fees, the Committee will consider wider factors such as the are entitled to be paid all travelling, hotel or other expenses average rate of inflation over the period since the previous review, and the level and any change in complexity properly incurred by them in connection with their attendance of the Directors’ responsibilities (including additional time commitments as a result of increased regulatory or at Director or shareholder meetings or otherwise in connection corporate governance requirements). with the discharge of their duties as Directors. There are no performance conditions attaching to the remuneration of the The total amount of the fees paid to all of the Non‑Executive Directors excluding any remuneration for special or Directors as the Board does not believe that this is appropriate for additional services paid as set out below shall not exceed £500,000 in each year or any higher amount decided non‑executive Directors. Under the Company's Articles, the Board by the Company by ordinary resolution. and a Non‑executive Director may agree that any fee payable The Chair does not participate in any discussions relating to his own fee, which is determined by the to the Non‑executive Director may consist (wholly or partly) of otherDirectors. payments by way of pension contributions or premiums to secure pension benefits, whether in accordance with a pension scheme or Additional fees The Board may decide to award extra fees (whether by way of salary, commission, percentage of profits or otherwise. The Directors do not currently receive pension benefits, otherwise) to a Director (holding either an executive or a non‑executive office) who serves on a committee, nor do they receive long‑term incentive schemes or share options. acts as chair or deputy chair, devotes special attention to the Company's business or who otherwise performs services which the Board decides are outside the scope of his or her ordinary duties; or goes or lives abroad in All Directors act in a non‑executive capacity and the fees for their connection with the Company's business. services are approved by the whole Board. There are no service contracts in place. Each directorship may be terminated by either Expenses Directors are entitled to be paid all travelling, hotel or other expenses properly incurred by them in connection party on three months' prior written notice. The fees for the with their attendance at Director or shareholder meetings or otherwise in connection with the discharge of their Directors are determined within the limits set out in the Company’s duties as Directors. Articles of Association, or any greater sum that may be determined Other The Board and a Non‑executive Director may agree that any fee payable to the Non‑executive Director may by ordinary resolution of the Company. consist (wholly or partly) of payments by way of pension contributions or premiums to secure pension benefits, Directors’ and Officers’ liability insurance cover is maintained by whether in accordance with a pension scheme or otherwise. The Directors do not currently receive pension theCompany on behalf of the Directors. benefits, nor do they receive long‑term incentive schemes or share options. 98 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Directors’ remuneration report continued ### The policy continued Annual report on Directors’ remuneration Period ended 31 December 2022 | Directors’ service contracts | Directors’ remuneration for the period ended | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | Remuneration | | | Taxable | Total | | | None of the Directors have a contract of service with the Company. | 31 December 2022 (audited) | | | | | | | | | | | Director | | £ | benefits£ | | | £ | | Each Director has entered into terms of appointment as a | The Directors who served during the period received the amounts | | | | | | | | Vagn Sørensen 67,128 – 67,128 non‑executive Director of the Company. There has been no other set out in the table opposite for services as non‑executive Directors contract or arrangement between the Company and any Director for the period ended 31December2022 as well as reimbursements Patrick O’Donnell 1 at any time during the year. Under the Articles of Association, each for expenses necessarily incurred. Bourke 54,923 55 54,978 Director shall retire and be subject to re‑appointment at the first AGM An additional non‑taxable reimbursement of expenses of £141 was Andrea Finegan 48,821 – 48,821 following appointment, and at least every three years thereafter. After paid in the first quarter of 2023 in respect of Directors' expenses. nine years’ service, Directors are subject to annual re‑appointment. Anne Baldock 48,821 – 48,821 Noother additional fees are payable for membership of the In accordance with the AIC Code, all Directors are subject to annual Board’sCommittees. 219,693 55 219,748 re‑election at each AGM. There are no agreements between the No sums were paid to any third parties in respect of Directors’ Company and its Directors concerning compensation for loss of office services and no sums were paid to any third parties in respect 1. A reimbursable expense of £55 was claimed during the period. An additional or which could give rise to, or impact on, remuneration payments. reimbursable expense of £141 was claimed in Q1 2023. ofadvice from remuneration advisers. ### Directors' fee levels per annum (effective from Fees for any new Director appointed will be made on the ### Company performance ### 1 January 2023) above basis. Fees payable in respect of subsequent years In setting Directors’ remuneration, consideration is given to the will be determined following market reviews to ensure fees relative size and performance of the Company. The table below Expected fees Fees for remainappropriate. for year to period to sets out PINT’s total NAV and share price returns to ordinary 31 December 31 December Any views expressed by shareholders on the fees being paid to shareholders since launch, compared with the S&P Global 4 2023 2022 Directors would be taken into consideration by the Board. Infrastructure Index over the same period. The S&P Global £ £ Infrastructure Index is used as a benchmark as the constituents 1 are comparable in asset type with the Company’s investments Chair 55,000 67,128 portfolio. For the year ended 31December2022, total shareholder Audit and Risk return was (10.0%), compared with the S&P Global Infrastructure 2 CommitteeChair 45,000 54,923 Index which was 6.4%. Non‑executive Director 40,000 48,821 3 Expenses 2023 Q1 expense 141 55 Since launch Period Three months Six months One year (Nov-21) 1. The Chair of the Board is paid a higher fee than the other Directors to reflect the NAV per share (0.4%) 3.1% 1.9% (0.1%) more onerous role. 2. The Chair of the Audit and Risk Committee is paid a higher fee than the other Share price (1.3%) (10.8%) (11.7%) (10.0%) Directors to reflect the more onerous role. 3. Reimbursement of expenses incurred in the performance of duties as a Director. S&P Global Infrastructure Index (TR) 5.7% (3.5%) 0.8% 6.4% 4. From 12 October 2021 to 31 December 2022. 99 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information # Directors' remuneration report continued ## Annual report on Directors' remuneration continued ### Relative importance of spend on pay The table below shows the proportion of the Company's income spent on pay. | | 12 October 2021 to 31 December 2022 | | | --- | --- | --- | | | £ | % | | Directors' fees | 219,693 | 2.7 | | Management fee and other expenses | 3,194,000 | 38.9 | | Dividend payments | 4,800,000 | 58.4 | | Share buybacks | — | — | ### Annual percentage change in Directors' remuneration Directors' fees were unchanged in the period from inception to 31 December 2022. ### Directors' interests (audited) The Company's Articles of Association do not require a Director to own shares in the Company. The interests of the Directors and any connected persons in the Ordinary Shares of the Company at 31 December 2022 and at 31 December 2021 are shown in the table below: | Director | Number of shares 31 December 2022 | Number of shares 31 December 2021 | | --- | --- | --- | | Richard Senf | N/A | — | | Andrea Echberg^{1} | N/A | — | | Vagn Sørensen | 120,000 | 100,000 | | Anne Baldock | 30,000 | 25,000 | | Andrea Finegan | 30,000 | 25,000 | | Patrick O'Donnell Bourke | 60,000 | 50,000 | 1. Mr Sørr retired from the Board on 4 October 2021. 2. Ms Echberg retired from the Board on 4 October 2021. All the holdings of the Directors are beneficial. None of the Directors or any person connected with them had a material interest in the Company's transactions, arrangements or agreements during the period. There have been no changes in the Directors' interests between 31 December 2022 and the date of this report. ### Approval On behalf of the Board and in accordance with Part 2 of Schedule B of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013, I confirm that the above report on remuneration summarises, as applicable, for the period to 31 December 2022: - the major decisions on Directors' remuneration; - any substantial changes relating to Directors' remuneration made during the period; and - the context in which the changes, if any, occurred and decisions have been taken. The Directors' remuneration report was approved by the Board of Directors and signed on its behalf by: ### Anne Baldock Remuneration Committee Chair 1 March 2023 100 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information # Directors' report The Directors are pleased to present their report, together with the audited financial statements of the Company, for the period ended 31 December 2022. In accordance with the Companies Act 2006 (as amended), the Listing Rules and the Disclosure Guidance and Transparency Rules, the Corporate Governance Statement, Directors' remuneration report, report from the Audit and Risk Committee and the statement of Directors' responsibilities should be read in conjunction with one another and the strategic report. As permitted by legislation, some of the matters normally 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 1 to 52 and information regarding ESG issues can be found on pages 53 to 65. Particulars of important events affecting the Company which have occurred since 31 December 2022 are contained in Note 25 to the financial statements. Information required to be part of this Directors' report can be found elsewhere in the annual report and is incorporated into this report by reference, as indicated below: - events subsequent to 31 December 2022 can be found in Note 25 to the financial statements; - board engagement with key stakeholders can be found on pages 66 to 70; and - principal decisions taken during the period can be found on page 71. ## Directors The Directors during the period were: | | Appointed | Resigned | | --- | --- | --- | | Richard Sem | 9 September 2021 | 4 October 2021 | | Andrea Echberg | 9 September 2021 | 4 October 2021 | | Vagn Sørensen | 4 October 2021 | | | Anne Baldock | 4 October 2021 | | | Andrea Finegan | 4 October 2021 | | | Patrick O'Donnell Bourke | 4 October 2021 | | The names and full biographies of the Directors can be found on pages 80 and 81. As at 31 December 2022 and as at the latest practicable date prior to publication of this report, the Board comprised two male Directors and two female Directors. All Directors will retire and stand for election at the AGM on 30 March 2023. Further details regarding the selection and appointment of Directors, including the Company's policy on diversity, can be found on page 87. The rules concerning the appointment and replacement of Directors are set out in the Company's Articles of Association and in the Companies Act 2006. There are no agreements between the Company and its Directors concerning any compensation for their loss of office that occurs because of a takeover bid. ## 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 16 of the financial statements. As at 31 December 2022 and as at the date of this report, the Company had shares in issue as shown in the table overleaf, all of which were listed on the official list maintained by the FCA and admitted to trading on the London Stock Exchange. No shares were held in treasury at the year end. There are no restrictions on the free transferability of the Shares, subject to compliance with applicable securities laws and provisions in the Articles entitling the Board to decline to register certain transfers in a limited number of circumstances, such as where the transfer might cause the Company to be subject to or operate in accordance with ERISA and other US laws. The powers given to the Directors are contained within the Company's articles, are subject to relevant legislation and, in certain circumstances (including in relation to the issuing or buying back by the Company of its shares), are subject to the authority being given to the Directors by shareholders. Prior to the Company's listing on 13 October 2021, the Directors were authorised in accordance with the Articles to allot up to a maximum of two billion Ordinary and/or C Shares and to disapply pre-emption rights in respect of those Ordinary and/or C shares, such authority to expire on 13 October 2024. To date, no Shares have been allotted under this authority. ![img-15.jpeg](img-15.jpeg) 101 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information # Directors' report continued ## Share capital continued An authority to repurchase up to 14.99% of the Company's issued share capital to be held in treasury or for cancellation was also granted to the Directors on 12 October 2021, however this will expire at the conclusion of the 2023 AGM when a resolution for its renewal will be proposed, as explained in the separate 2023 AGM Notice. To date, no Shares have been repurchased by the Company under this existing authority. | Share capital and voting rights | Number of shares in issue | Voting rights attached to shares | Number of shares held in treasury | | --- | --- | --- | --- | | **At Initial Public Offering** | | | | | Ordinary Shares of 0.01p each | 400,000,000 | 400,000,000 | — | | Subscription Shares of 0.01p each | 80,000,000 | 80,000,000 | — | | **At 31 December 2022** | | | | | Ordinary Shares at 0.01p each | **480,000,000** | **480,000,000** | — | ## Dividends The Board is declaring a second interim dividend of 1p per share for the period ended 31 December 2022, payable on 31 March 2023. A first interim dividend of 1p per Ordinary Share for the period ended 30 June 2022 was paid on 28 October 2022. ## Financial risk management Details in relation to the Company's use of derivative financial instruments, financial risk management objectives and policies, including policies for hedging each major type of forecasted transaction for which hedge accounting is used, as well as the Company's exposure to price, credit, liquidity, or cash flow risk are set out in Note 23 to the financial statements. ## Management The Company entered into an Investment Management Agreement with the Company's Investment Manager, Pantheon, on 13 October 2021, under which Pantheon was appointed as the Company's Alternative Investment Fund Manager (AIFM). Pantheon, which is part of the Pantheon Group, has been approved as an AIFM by the FCA. Pantheon is one of the world's foremost private equity fund investors and has acted as Investment Manager to the Company since the Company's inception in 2021. 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 economics 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 Investment Management Agreement, Pantheon 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 Investment Manager is entitled to a monthly management fee at an annual rate of: - i. 1.0% of the part of the Company's NAV up to and including £750 million; and - ii. 0.9% of the part of such NAV in excess of £750 million. The Management Agreement is capable of being terminated (without penalty to the Company) by either party giving not less than twelve months' notice in writing at any time on or after the fourth anniversary of the admission of the Ordinary Shares of the Company on the Main Market of the London Stock Exchange and on the Official List of the FCA as contemplated by the Company's Prospectus dated 13 October 2021 (or at the Company's option, by making a payment in lieu of such notice). The Management Agreement is capable of being terminated by the Company (without penalty to the Company) immediately if, among other things, the Investment Manager materially breaches its obligations (and cannot or does not remedy the breach) or goes into liquidation. The Investment Manager has the benefit of an indemnity from the Company in respect of liabilities arising out of the proper performance by the Investment 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 fraud, gross negligence, wilful default, bad faith or knowing violation of applicable laws. ![img-16.jpeg](img-16.jpeg) 102 Pantheon Infrastructure Plc^{}[] Annual report 2022 Strategy report Governance Financial statements Other information ## Directors' report continued ### Management continued Pantheon 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. ### Related party transactions Related party transactions for the period can be found in Note 24 to the financial statements. ### Continuing appointment of the Investment Manager The Board keeps the performance of the Investment Manager under continual review, and the MEC carries out an annual review of the Investment Manager's performance and the terms of the Management Agreement. The ongoing review of the Investment 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 Investment 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 Investment Manager are set out on page 68. ### Service providers BNP Paribas Trust Corporation UK Limited (previously BNP Paribas Securities Services, London Branch) acts as the Company's Depositary in accordance with the AIFM Directive, subject to the terms 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. Full details of the Board's engagement with service providers are set out on page 69. ### Going concern The Company's business activities, together with the factors likely to affect its future development, performance and position, including its financial position, are set out in the strategic report and Investment Manager's report. The Directors have made an assessment of going concern, taking into account both the Company's financial position at the balance sheet date and the expected performance of the Company, using the information available up to the date of issue of the financial statements. Total available financing as at 31 December 2022 stood at £245.4 million, comprising £182.9 million in available cash balances and £62.5 million through the Company's RCF, which matures in December 2025. The Company maintains a policy to hold liquidity sufficient to cover all future operating and financial commitments due in the next twelve months. This includes all forecast operating costs, dividend payments, foreign exchange hedge settlements due (based on mark-to-market valuations), and all unfunded investment commitments which could be called during the period as detailed in the Cash and liquidity management section on page 19. The Directors considered downside liquidity modelling scenarios with varying degrees of decline in investment valuations and key drivers such as deployment rate, investment returns and operating expenses. In connection with the preparation of the model, capital raises, realisations and distribution payments were assumed not to occur during the assessment period. In the event of a downside scenario, the Company can take steps to limit or mitigate the impact on the balance sheet, including drawing on its RCF, which includes the provision of additional liquidity for working capital. After due consideration of the activities of the Company, its assets, liabilities, commitments and financial resources, the Directors concluded that the Company has adequate resources to continue in operation for at least twelve months from the approval of the financial statements as at 31 December 2022. For this reason, they consider it appropriate to continue to adopt the going concern basis in preparing the financial statements. ### Political donations The Company made no political donations during the period to 31 December 2022. The Company has in place an anti-bribery and charitable & political donations policy which was approved by the Board in May 2022. ![img-17.jpeg](img-17.jpeg) 103 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information # Directors' report continued ## Substantial shareholdings As at 31 December 2022, the Company had received notification of the following disclosable interests in the voting rights of the Company: | Shareholders | Number of shares held | % of total voting rights | | --- | --- | --- | | Investec Wealth & Investment Limited | 90,563,698 | 18.87% | | Evelyn Partners Limited | 59,914,479 | 12.48% | | Close Asset Management Limited | 20,870,685 | 4.78% | | Quilter PLC | 41,171,287 | 8.58% | 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 December 2022. However, notification of any change is not required until the next applicable threshold is crossed. - On 2 February 2023, Evelyn Partners Limited notified the Company that it had reduced its shareholding to 11.99%. - On 23 February 2023, Investec Wealth & Investment Limited notified the Company that it had reduced its shareholding to 17.99%. ## Greenhouse gas emissions and Task Force on Climate-related Financial Disclosures (TCFD) All 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. Under Listing Rule 15.4.29(R), the Company, as a closed-ended investment fund, is currently exempt from complying with the TCFD. Further details of the Investment Manager's approach to responsible investment practices and ESG standards can be found in the strategic report on pages 53 to 59. ## Modern Slavery 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 Company is not in scope of the Modern Slavery Act (the 'Act') 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. However, the Company has a zero-tolerance approach to modern slavery and as such has adopted its own Modern Slavery and Human Trafficking Statement which was approved by the Board of Directors in May 2022. Details of the Company's approach to modern slavery can be found in the strategic report on page 56. ## Future developments The outlook for the Company is set out in the Chair's statement on page 10. ## 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 30 March 2023. The business to be proposed at the AGM will be set out in a separate Notice of Meeting which will be published shortly. ## Audit information The Directors who held office at the date of approval of the Directors' report 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 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 ## Vagn Sørensen Chair 1 March 2023 104 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Directors’ responsibility statement The Directors are responsible for preparing the annual report The Directors are responsible for keeping adequate accounting The UK Corporate Governance Code requires Directors to ensure and the financial statements in accordance with applicable laws records that are sufficient to show and explain the Company’s that the annual report and financial statements are fair, balanced and regulations. Company law requires the Directors to prepare transactions and disclose with reasonable accuracy at any time and understandable. In order to reach a conclusion on this matter, financial statements for each financial year. Under that law they the financial position of the Company and enable them to ensure the Board has requested that the Audit and Risk Committee have elected to prepare the financial statements in accordance that the financial statements comply with the Companies Act2006. advises on whether it considers that the annual report and financial with applicable law and UK Accounting Standards (United Kingdom They are also responsible for safeguarding the assets of the statements fulfil these requirements. The process by which the Generally Accepted Accounting Practice). Under company law the Company and hence for taking reasonable steps for the prevention Audit and Risk Committee has reached these conclusions is set out Directors must not approve the financial statements unless they and detection of fraud and other irregularities. in its report on pages92 to 94. As a result, the Board has concluded are satisfied that they give a true and fair view of the state of affairs that the annual report and financial statements for the period The Directors are also responsible for preparing the strategic of the Company as at the end of each financial year and of the profit ended 31December2022, taken as a whole, are fair, balanced report, the Directors’ report, the Directors’ remuneration report, or loss of the Company for that period. and understandable and provide the information necessary for the Corporate Governance Statement and the report of the Audit shareholders to assess the Company’s position and performance, In preparing these financial statements, the Directors are and Risk Committee in accordance with the Companies Act business model and strategy. requiredto: 2006 and applicable regulations, including the requirements of the Listing Rules and the Disclosure Guidance and Transparency Signed on behalf of the Board by ### • present a true and fair view of the financial position, financial Rules. TheDirectors have delegated responsibility to the performance and cash flows of the Company; Investment Manager for the maintenance and integrity of the ### • select suitable accounting policies in accordance with FRS102 Company’s corporate and financial information included on and then apply them consistently; the Company’s website (www.pantheoninfrastructure.com). ### Vagn Sørensen ### • present information, including accounting policies, in a Legislation in the United Kingdom governing the preparation and Chair manner that provides relevant, reliable, comparable and dissemination of financial statements may differ from legislation understandableinformation; 1 March 2023 inotherjurisdictions. ### • make judgements and estimates that are reasonable Each of the Directors, whose names are listed on pages80 and 81, andprudent; confirms that to the best of his or her knowledge: ### • state whether applicable UK Accounting Standards have been ### • the financial statements, prepared in accordance with applicable followed, subject to any material departures disclosed and accounting standards, give a true and fair view of the assets, explained in the financial statements; and liabilities, financial position and profit of the Company; and ### • prepare the financial statements on a going concern basis ### • the strategic report contained in the annual report and unless it is inappropriate to presume that the Company will financial statements includes a fair review of the development continue in business. and performance of the business and the position of the Company, together with a description of the principal risks anduncertainties that it faces. 1. Rebranded Evelyn Partners from 14 June 2022. 105 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Opinion Conclusions relating to going concern ## Independent We have audited the financial statements of Pantheon Infrastructure Plc In auditing the financial statements, we have concluded that the Directors’ use of the Auditor’s (the‘Company’) for the period ended 31December2022 which comprise the going concern basis of accounting in the preparation of the financial statements is income statement, the statement of changes in equity, the balance sheet, the cash appropriate. Our evaluation of the Directors’ assessment of the Company’s ability to ## report flow statement, and the related notes 1 to 25 including a summary of significant continue to adopt the going concern basis of accounting included: accounting policies. The financial reporting framework that has been applied in their ### to the members • confirming our understanding of the Company’s going concern assessment preparation is applicable law and United Kingdom Accounting Standards including process and engaging with the Directors and the Company Secretary to ### of Pantheon FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of determine if all key factors were considered in their assessment; ### Infrastructure Plc Ireland’ (United Kingdom Generally Accepted Accounting Practice). ### • inspecting the Directors’ assessment of going concern, including the portfolio In our opinion, the financial statements: cash flow forecast, for the periods to 1 March 2024 which is at least twelve months from the date the financial statements were authorised for issue. ### • give a true and fair view of the Company’s affairs as at 31 December 2022 and Inpreparing the portfolio cash flow forecast, the Company has concluded ofits profit for the period then ended; thatitis able to continue to meet its ongoing costs as they fall due; ### • have been properly prepared in accordance with United Kingdom Generally ### • reviewing the factors and assumptions, including the impact of the Covid-19 Accepted Accounting Practice; and pandemic and the Russia/Ukraine conflict, applied to the portfolio cash flow ### • have been prepared in accordance with the requirements of the Companies forecast and the liquidity assessment of the investment portfolio. We considered Act2006. the appropriateness of the methods used to calculate the portfolio cash flow We conducted our audit in accordance with International Standards on Auditing forecast and the liquidity assessment and determined, through testing of the (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards methodology and calculations, that the methods, inputs and assumptions are further described in the Auditor’s responsibilities for the audit of the financial utilised were appropriate to be able to make an assessment for the Company; statements section of our report. ### • inspecting the Directors’ assessment of the risk of breaching the loan facility We believe that the audit evidence we have obtained is sufficient and appropriate covenants as a result of a reduction in the value of the Company’s portfolio. toprovide a basis for our opinion. We recalculated the Company’s compliance with loan facility covenants in the scenarios assessed by the Directors, who also performed reverse stress testing ## Independence in order to identify what factors would lead to the Company breaching the We are independent of the Company in accordance with the ethical requirements financial covenants; that are relevant to our audit of the financial statements in the UK, including the • considering the mitigating factors included in the portfolio cash flow forecasts Financial Reporting Council’s Ethical Standard as applied to public interest entities, and covenant calculations that are within the control of the Company; and and we have fulfilled our other ethical responsibilities in accordance with these ### • reviewing the Company’s going concern disclosures included in the annual requirements. report in order to assess that the disclosures were appropriate and in conformity The non-audit services prohibited by the FRC’s Ethical Standard were not provided with the reporting standards. to the Company and we remain independent of Company in conducting the audit. 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 to 1 March 2024. 106 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Conclusions relating to going concern continued ## Independent In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Auditor’s 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 ## report events or conditions can be predicted, this statement is not a guarantee as to the Company’s ability to continue as a going concern. ### to the members ## Overview of our audit approach ### of Pantheon ### Infrastructure Plc ### Key audit matters • Risk of inaccurate valuation of investments. ### continued ### Materiality • Overall materiality of £4.7million which represents 1% of shareholders’ funds. ## 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, including controls and changes in the business environment, when assessing the level of work to be performed. All audit work was performed directly by the audit engagement team based in London. ### Climate change Stakeholders are increasingly interested in how climate change will impact the Company. The Company has determined that the most significant future impacts from climate change on its operations will be from changes in regulations that may adversely affect its underlying portfolio investments. Its approach to managing climate and other ESG risks as part of managing investment risk is explained on pages 72 to 76 of the strategic report, which form part of the ‘Other information’, rather than the audited financial statements. Our procedures on these 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. 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 going concern and viability and associated disclosures. Where considerations of climate change were relevant to our assessment of going concern, these are describedabove. 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. 107 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Key audit matters ## Independent Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include Auditor’s 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 ## report of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters. ### to the members ### Risk Our response to the risk ### of Pantheon ### Infrastructure Plc Risk of inaccurate valuation of investments We performed the following procedures: ### (£301.4 million) We obtained an understanding of the Company’s processes and controls surrounding investment ### continued Refer to the Audit and Risk Committee report (page 93); valuation by performing walkthroughs to assess the design and implementation of controls in place Accounting policies (page 116); and Note 10 of the financial and attending the Investment Manager’s period end valuation committee as an observer. statements (page 123). With the assistance of our valuation specialists, we obtained and reviewed the valuation models Investments represent 63% of the net asset value (NAV) used to calibrate the purchase price for a sample of investments in order to validate that the cost of of the Company and consist of unlisted investments in investment represents fair value consistent with the requirement of FRS 102 and the IPEV guidelines. infrastructureassets. We held discussions with the Investment Manager and attended its period end valuation committee The valuation of the assets held in the investment portfolio to understand the key movements in the valuation models and with the assistance of our valuation is the key driver of the Company’s net asset value and total specialists, assess their appropriateness based on the nature of the asset and our understanding of return. Incorrect investment valuation could have a significant the relevant markets in which they operate. impact on the return generated for shareholders. We checked the clerical accuracy of the valuation models, agreed key inputs to supporting We attribute a higher risk of estimation uncertainty to a documents and substantiated unrealised FX gains/losses which were a principal driver of fair portfolio of this nature and deem the valuation of unlisted valuation movements during the period. investments at fair value to be a fraud and significant auditrisk. Where applicable, we corroborated key performance metrics relevant to the underlying infrastructure investments during 2022 to supporting documentation and reporting provided by the General Partners to the Investment Manager. For a sample of investments, our specialists reviewed the market data of comparable companies and observable transactions to provide a benchmarking analysis of the implied movements in Enterprise Value and Transaction Multiples as at 31 December 2022, which was then compared to the movement in fair value applied to the investments sampled subsequent to their purchase up to the period end. ### Key observations communicated to the Audit and Risk Committee The results of our procedures identified no material misstatement in relation to the risk of inaccurate valuation of investments. 108 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Our application of materiality Other information ## Independent We apply the concept of materiality in planning and performing the audit, in The other information comprises the information included in the annual report, other Auditor’s evaluating the effect of identified misstatements on the audit and in forming our than the financial statements and our Auditor’s report thereon. The Directors are audit opinion. responsible for the other information contained within the annual report. ## report Our opinion on the financial statements does not cover the other information and, ### Materiality ### to the members except to the extent otherwise explicitly stated in this report, we do not express any The magnitude of an omission or misstatement that, individually or in the form of assurance conclusion thereon. ### of Pantheon aggregate, could reasonably be expected to influence the economic decisions of the users ofthe financial statements. Materiality provides a basis for determining Our responsibility is to read the other information and, in doing so, consider whether ### Infrastructure Plc the nature and extent of our audit procedures. the other information is materially inconsistent with the financial statements or ### continued our knowledge obtained in the course of the audit or otherwise appears to be We determined materiality for the Company to be £4.7million, which is 1% of materially misstated. If we identify such material inconsistencies or apparent shareholders’ funds. We believe that shareholders’ funds provide us with materiality material misstatements, we are required to determine whether this gives rise to a aligned tothe key measure of the Company’s performance. material misstatement in the financial statements themselves. If, based on the work During the course of our audit, we reassessed initial materiality and made no we have performed, we conclude that there is a material misstatement of the other changes to the basis of calculation from our original assessment at the planning information, we are required to report that fact. stage. We have nothing to report in this regard. ### 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. On the basis of our risk assessments, together with our assessment of the Company’s overall control environment, our judgement was that performance materiality was 50% of our planning materiality, namely £2.4million. We set performance materiality at this percentage due to this being the first annual report and financial statements of theCompany. ### Reporting threshold An amount below which identified misstatements are considered as being clearlytrivial. We agreed with the Audit and Risk Committee that we would report to them all uncorrected audit differences in excess of £0.2million, 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. 109 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Opinions on other matters prescribed by the Corporate Governance Statement ## Independent We have reviewed the Directors’ statement in relation to going concern, longer-term ## Companies Act 2006 ## Auditor’s viability and that part of the Corporate Governance Statement relating to the In our opinion, the part of the Directors’ remuneration report to be audited has been Company’s compliance with the provisions of the UK Corporate Governance Code properly prepared in accordance with the Companies Act 2006. ## report specified for our review by the Listing Rules. In our opinion, based on the work undertaken in the course of the audit: ### to the members Based on the work undertaken as part of our audit, we have concluded that each ### • the information given in the strategic report and the Directors’ report for the of the following elements of the Corporate Governance Statement is materially ### of Pantheon financial period for which the financial statements are prepared is consistent with consistent with the financial statements or our knowledge obtained during the audit: ### Infrastructure Plc the financial statements; and ### • the Directors’ statement with regard to the appropriateness of adopting the going ### continued • the strategic report and Directors’ report have been prepared in accordance with concern basis of accounting and any material uncertainties identified set out on applicable legal requirements. page 102; ### • the Directors’ explanation as to their assessment of the Company’s prospects, ## Matters on which we are required to report the period this assessment covers and why the period is appropriate set out on ## by exception page77; In light of the knowledge and understanding of the Company and its environment ### • the Directors’ statement on whether they have a reasonable expectation that the obtained in the course of the audit, we have not identified material misstatements in Company will be able to continue in operation and meets its liabilities set out on the strategic report or Directors’ report. page 102; We have nothing to report in respect of the following matters in relation to which the • the Directors’ statement on fair, balanced and understandable set out on page94; Companies Act 2006 requires us to report to you if, in our opinion: ### • the Board’s confirmation that it has carried out a robust assessment of the adequate accounting records have not been kept, or returns adequate for our emerging and principal risks set out on page 104; ### • audit have not been received from branches not visited by us; • the section of the annual report that describes the review of effectiveness of risk the financial statements and the part of the Directors’ remuneration report to be management and internal control systems set out on page 93; and ### • audited are not in agreement with the accounting records and returns; • the section describing the work of the Audit and Risk Committee set out on certain disclosures of Directors’ remuneration specified by law are not made; or page92. ### • ### • we have not received all the information and explanations we require for our audit. 110 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Responsibilities of Directors Explanation as to what extent the audit was ## Independent As explained more fully in the Directors’ responsibilities statement set out on ## considered capable of detecting irregularities, ## Auditor’s page104, the Directors are responsible for the preparation of the financial ## including fraud statements and for being satisfied that they give a true and fair view, and for such ## report Irregularities, including fraud, are instances of non-compliance with laws and internal control as the Directors determine is necessary to enable the preparation of regulations. We design procedures in line with our responsibilities, outlined financial statements that are free from material misstatement, whether due to fraud ### to the members above, todetect irregularities, including fraud. The risk of not detecting a material or error. ### of Pantheon misstatement due to fraud is higher than the risk of not detecting one resulting In preparing the financial statements, the Directors are responsible for assessing the from error, as fraud may involve deliberate concealment by, for example, forgeryor ### Infrastructure Plc Company’s ability to continue as a going concern, disclosing, as applicable, matters intentional misrepresentations, or through collusion. The extent to which our ### continued related to going concern and using the going concern basis of accounting unless the procedures are capable of detecting irregularities, including fraud, is detailed below. Directors either intend to liquidate the Company or to cease operations, or have no However, the primary responsibility for the prevention and detection of fraud rests realistic alternative but to do so. with both those charged with governance of the Company and management. Weobtained an understanding of the legal and regulatory frameworks that are ## Auditor’s responsibilities for the audit of the applicable to the Company and determined that the most significant are United ## financial statements Kingdom Generally Accepted Accounting Practice, the Companies Act 2006, the Our objectives are to obtain reasonable assurance about whether the financial Listing Rules, the UK Corporate Governance Code, the Association of Investment statements as a whole are free from material misstatement, whether due to fraud Companies’ Code and Statement of Recommended Practice, section1158 of or error, and to issue an auditor’s report that includes our opinion. Reasonable the Corporation Tax Act 2010 and The Companies (Miscellaneous Reporting) assurance is a high level of assurance, but is not a guarantee that an audit conducted Regulations 2018. 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. 111 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Explanation as to what extent the audit was Use of our report ## Independent This report is made solely to the Company’s members, as a body, in accordance ## considered capable of detecting irregularities, ## Auditor’s with Chapter 3 of Part 16 of the Companies Act 2006. Ouraudit work has been ## including fraud continued continued undertaken so that we might state to the Company’s members those matters we ## report We understood how the Company is complying with those frameworks through are required to state to them in an auditor’s report and for no other purpose. Tothe discussions with the Audit and Risk Committee and the Company Secretary and a fullest extent permitted by law, we do not accept or assume responsibility to anyone ### to the members review of Board minutes and the Company’s documented policies and procedures. other than the Company and the Company’s members as a body, forour audit work, ### of Pantheon • We assessed the susceptibility of the Company’s financial statements to for this report, or for the opinions we have formed. ### Infrastructure Plc material misstatement, including how fraud might occur, by considering the key risks impacting the financial statements. We identified a fraud risk with respect ### continued to management override in relation to investments and investment income. Furtherdiscussion of our approach is set out in the section on the key audit ### Matthew Price (Senior statutory auditor) mattersabove. for and on behalf of Ernst & Young LLP, Statutory Auditor ### • Based on this understanding we designed our audit procedures to identify London non-compliance with such laws and regulations. Our procedures involved a review of the Company Secretary’s reporting to the Directors with respect to 1 March 2023 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 https://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 and Risk Committee, we were appointed by the Company on 4 August2022 to audit the financial statements for the period ended 31December2022 and subsequent financial periods. ### • The period of total uninterrupted engagement including previous renewals and reappointments is oneyear, covering the period ended 31December2022. ### • The audit opinion is consistent with the additional report to the Audit and RiskCommittee. 112 Pantheon Infrastructure Plc^{}[] Annual report 2022 Strategic report Governance Financial statements Other information ## Income statement For the period from 9 September 2021 to 31 December 2022 | | Note | 9 September 2021 to 31 December 2022 | | | | --- | --- | --- | --- | --- | | | | Revenue £'000 | Capital £'000 | Total £'000 | | Gain on investments at fair value through profit or loss^{1} | 10 | — | 19,592 | 19,592 | | Losses on derivative financial instruments at fair value through profit or loss | 13 | — | (8,520) | (8,520) | | Foreign exchange gains on cash and cash equivalents | | — | 5 | 5 | | Investment management fees | 2 | (3,194) | — | (3,194) | | Other expenses | 3 | (1,360) | (555) | (1,915) | | **(Loss)/profit before financing and taxation** | | **(4,554)** | **10,522** | **5,968** | | Finance income | 5 | 2,096 | — | 2,096 | | Interest payable and similar expenses | 6 | (36) | — | (36) | | **(Loss)/profit before taxation** | | **(2,494)** | **10,522** | **8,028** | | Taxation recovered/(paid) | 7 | — | — | — | | **(Loss)/profit for the period, being total comprehensive income for the period** | | **(2,494)** | **10,522** | **8,028** | | **Earnings per share – basic and diluted** | 8 | **(0.58p)** | **2.45p** | **1.87p** | 1 Includes foreign exchange movements on investments. The Company does not have any income or expense that is not included in the return for the period, therefore the return for the period is also the total comprehensive income for the period. The supplementary revenue and capital columns are prepared under guidance published in the Statement of Recommended Practice (SORP) issued by the Association of Investment Companies (AIC). The total column of the statement represents the Company's statement of total comprehensive income prepared in accordance with FRS 102. All revenue and capital items in the above statement relate to continuing operations. The Notes on pages 116 to 131 form part of these financial statements. 113 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information Capital ## Statement | | | Share | Share | redemption | Capital | Revenue | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | 1 | 1 | 1 | | | | capital | premium | reserve | reserve | reserve | Total | | of changes | Note | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | Balance at 9 September 2021 — — — — — — ## in equity Share issue costs – (9,267) — — — (9,267) ### For the period from Ordinary Shares issued 16 4,800 395,200 — — — 400,000 ### 9 September 2021 to Subscription shares issued (subsequently ### 31 December 2022 converted to Ordinary Shares) 16 — 80,800 — — — 80,800 Cancellation of share premium — (387,284) 387,284 — — — Interim dividend paid 9 — — (4,800) — — (4,800) Profit/(loss) for the period — — — 10,522 (2,494) 8,028 Closing equity shareholders’ funds 4,800 79,449 382,484 10,522 (2,494) 474,761 1. The capital redemption reserve, capital reserve and revenue reserve are all the Company’s distributable reserves. The capital redemption reserve has arisen from the cancellation of the Company’s share premium account and is a distributable reserve. The Notes on pages 116 to 131 form part of these financial statements. 114 Pantheon Infrastructure Plc^{}[] Annual report 2022 Strategic report Governance Financial statements Other information ## Balance sheet As at 31 December | | Note | 31 December 2022 €'000 | | --- | --- | --- | | **Non-current assets** | | | | Investments at fair value | 10 | 301,382 | | Debtors | 11 | 740 | | **Current assets** | | | | Debtors | 11 | 959 | | Cash and cash equivalents | 12 | 182,937 | | | | 183,896 | | **Creditors: Amounts falling due within one year** | | | | Other creditors | 14 | (2,737) | | | | (2,737) | | **Net current assets** | | 181,159 | | **Total assets less current liabilities** | | 483,281 | | **Creditors: Amounts falling due after one year** | | | | Derivative financial instruments | 13 | (8,520) | | **Net assets** | | 474,761 | | **Capital and reserves** | | | | Called-up share capital | 16 | 4,800 | | Share premium | 17 | 79,449 | | Capital redemption reserve | 17 | 382,484 | | Capital reserve | 17 | 10,522 | | Revenue reserve | 17 | (2,494) | | **Total equity shareholders' funds** | | 474,761 | | **NAV per Ordinary Share** | 18 | 98.9p | The financial statements were approved by the Board of Pantheon Infrastructure Plc on 1 March 2023 and were authorised for issue by: ### Vagn Sørensen Chair Company Number: 13611678 The Notes on pages 116 to 131 form part of these financial statements. 115 Pantheon Infrastructure Plc^{}[] Annual report 2022 Strategic report Governance Financial statements Other information ## Cash flow statement For the period from 9 September 2021 to 31 December 2022 | | 9 September 2021 to 31 December 2022 £'000 | | --- | --- | | **Cash flow from operating activities** | | | Investment management fees paid | (1,994) | | Operating fees paid | (1,581) | | Other cash payments | (110) | | **Net cash outflow from operating activities** | **(3,685)** | | **Cash flow from investing activities** | | | Purchase of investments | (281,790) | | **Net cash outflow from investing activities** | **(281,790)** | | **Cash flow from financing activities** | | | Share issue proceeds | 480,800 | | Share issue costs | (9,267) | | Dividends paid | (4,800) | | Bank charges | (1) | | Finance income | 1,675 | | **Net cash inflow from financing activities** | **468,407** | | **Increase in cash in the period** | **182,932** | | **Cash and cash equivalents at the beginning of the period** | **—** | | **Foreign exchange gains on cash and cash equivalents** | **5** | | **Cash and cash equivalents at the end of the period** | **182,937** | The Notes on pages 116 to 131 form part of these financial statements. 116 Pantheon Infrastructure Plc^{}[] Annual report 2022 Strategic report Governance Financial statements Other information ## Notes to the financial statements ### 1. Accounting policies Pantheon Infrastructure Plc (the 'Company') is a listed closed-ended investment company incorporated in England and Wales on 9 September 2021, with registered 'company number' 13611678. The Company began trading on 15 November 2021 when the Company's shares were admitted to trading on the London Stock Exchange. The registered office of the Company is Link Company Matters Limited, 6th Floor, 65 Gresham Street, London, EC2V 7NQ. #### A. Basis of preparation The Company's financial statements have been prepared in compliance with FRS 102 as it applies to the financial statements of the Company for the period from 9 September 2021 to 31 December 2022. They have also been prepared on the assumption that approval as an investment trust will continue to be granted. The Company's audited financial statements are presented in GBP and all values are rounded to the nearest thousand pounds (£'000) except when indicated otherwise. The financial statements have been prepared in accordance with the SORP for the financial statements of investment trust companies and venture capital trusts issued by the AIC in July 2022. The financial statements comprise the results of the Company only. The Company has control over a number of subsidiaries, further details of which are given in Note 20. Where the Company owns a subsidiary that is held as part of the investment portfolio and its value to the Company is through the fair value rather than as the medium through which the Group carries out business, the Company excludes it from consolidation. The subsidiaries have not been consolidated in the financial statements under FRS 102. These subsidiaries are included at fair value within investments in accordance with 9.9C(a) of FRS 102. These are the Company's first annual financial statements, for the period 9 September 2021 to 31 December 2022. Consequently, there are no comparatives for a previous period. #### B. Going concern The financial statements have been prepared on the going concern basis and under the historical cost basis of accounting, modified to include the revaluation of certain 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 December 2022. In addition, the Directors have assessed the outlook, which considers the ongoing geopolitical uncertainties as a result of the Russia-Ukraine conflict including disruption to global supply chains and increases in the cost of living as a result of this conflict, persistent inflation, interest rate rises and the impact of climate change on the Company's Portfolio using the information available up to the date of issue of the financial statements. In reaching this conclusion, the Board considered budgeted and projected results of the business, including projected cash flows, various downside modelling scenarios and the risks that could impact the Company's liquidity. Having performed their assessment, the Directors considered it appropriate to prepare the financial statements of the Company on a going concern basis. The Company has sufficient financial resources and liquidity, is well placed to manage business risks in the current economic environment, and can continue operations for a period of at least twelve months from the date of issue of these financial statements. #### C. Segmental reporting The Directors are of the opinion that the Company is engaged in a single segment of business, being investment in infrastructure to generate investment returns while preserving capital. The financial information used by the Directors and Investment Manager to allocate resources and manage the Company presents the business as a single segment comprising a homogeneous portfolio. #### D. Investments The nature of the Company's underlying assets comprises unlisted investments, the majority of which are held through its subsidiary, Pantheon Infrastructure Holdings LP (PIH LP) with one held directly. While the Company operates a robust and consistent valuation process, there is significant estimation uncertainty in the underlying asset valuations which are estimated at a point in time. Accordingly, 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'. The Company's business is investing in infrastructure assets with a view to profiting from their total return in the form of interest, dividends or increases in fair value. The investments are recognised at fair value on initial recognition represented by the cost of acquisition and the Company manages and evaluates the performance of its investments on a fair value basis. ![img-18.jpeg](img-18.jpeg) 117 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information The fair value will generally reflect the latest valuations available from the Sponsor ## 1. Accounting policies continued ## Notes to which may not coincide with the Company’s reporting date. In such cases the ### D. Investments continued Investment Manager performs a roll forward from the latest available valuation ## the financial Upon initial recognition investments held by the Company are classified ‘at fair value to the relevant reporting date. The roll forward process takes consideration of the through profit or loss’. All gains and losses are allocated to the capital column within following factors: ## statements the Income Statement as ‘Gains on investments held at fair value through profit or i. transactions and foreign-exchange movements in the intervening period; and loss’. When a purchase or sale is made under a contract, the terms of which require ### continued ii. adjustments for expected performance of the investment in the intervening delivery within the time frame of the relevant market, the investments concerned period. are recognised or derecognised on the trade date. Subsequent to initial recognition, investments are valued at fair value through profit or loss. The fair values for This may also include, but is not limited to, in consultation with the Sponsor, the Company’s investments are established by the Directors after discussion changes in multiples/discount rates, asset fundamentals (for instance operating with the Investment Manager using valuation techniques in accordance with the performance) and the macroeconomic environment. International Private Equity and Venture Capital (IPEV) guidelines. Valuations are On an annual basis the Investment Manager receives the annual audited financial based on the net asset value of those funds ascertained from periodic valuations statements from the Sponsors of the asset. The Investment Manager utilises the provided by the Sponsors of the investments and recorded up to the measurement audited accounts to gain comfort that the underlying infrastructure asset is fair date. Such valuations are necessarily dependent upon the reasonableness of the valued in line with recognised accounting standards and audited by a recognised valuations by the Sponsor of the underlying assets. In the absence of contrary auditor. This is in addition to the analysis performed by the Investment Manager information the values are assumed to be reliable. These valuations are reviewed to determine the reasonableness of the valuation and that it is appropriate to the periodically for reasonableness and recorded up to the measurement date. investment and performance thereof. TheSponsor is usually the best placed party to determine the appropriate valuation. If the Sponsor does not provide audited financial statements, to the extent that The annual and quarterly reports received from the Sponsors are reviewed by the the Board of the Company or the Investment Manager deem it appropriate, and it Investment Manager to ensure consistency and appropriateness of approach to is possible to do in conjunction with the Sponsor, the valuation of the underlying reported valuations. infrastructure asset is independently verified. The scope of this verification is The basis of valuation for infrastructure assets provided by the Sponsors depends determined on a case-by-case basis and, dependent on the asset, could include an on the nature of the underlying assets and will typically involve a fair value approach independent valuation report from a valuation provider engaged by the Investment in line with recognised accounting standards and industry best practice guidelines Manager. The Investment Manager then analyses the independent valuation report such as IPEV. Infrastructure assets often display particular characteristics which will to determine the reasonableness of the valuation and that it is appropriate to the affect the valuation approach tending to result in a higher prevalence of discounted investment and performance thereof before presenting to the Investment Manager’s cash flows in the valuation, where the fair value is estimated by deriving the present Valuation Committee and the Board for approval. value of the expected cash flows generated by the investment through the use of reasonable assumptions such as appropriate discount rate(s) to reflect the inherent risk of the asset(s) forming the investment. The discounted cash flow basis requires assumptions to be made regarding future cash flows, terminal value and the discount rate to be applied to these cash flows. There is also consideration given to the impact of wider megatrends such as the transition to a lower-carbon economy and climate change. 118 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## 1. Accounting policies continued G. Expenses ## Notes to All expenses are accounted for on an accruals basis. Expenses, including ### E. Financial instruments investment management fees, are charged through the revenue account, ## the financial The Company makes investments and has commitments in currencies other exceptexpenses which are incidental to the acquisition or disposal of an than GBP, its reporting currency, and accordingly, a significant proportion of its ## statements investment. Theseare treated as capital costs, separatelyidentified, and investments and cash balances are in currencies other than GBP. TheCompany chargedtothe capital account of the Income Statement. uses forward foreign currency exchange contracts to hedge foreign exchange risks ### continued ### associated with its underlying investment activities. Thecontracts entered into H. Finance income bythe Company are denominated in the currency of the geographic area in which Finance income comprises interest received on funds invested into deposit the Company has significant exposure against its reportingcurrency. accounts. Financeincome is accounted for on an accrualsbasis. Forward foreign currency exchange contracts are initially recognised and ### I. Finance costs subsequently measured at fair value, the amount for which an asset, liability Finance costs consist of interest and other costs that the Company incurs in or equity instrument could be exchanged or settled between knowledgeable, connection with bank and other borrowings. Finance costs also include the willingparties in an arm’s length transaction. Premiumspayable under such amortisation charge of arrangement or other costs associated with the set-up arrangements are initially capitalised on the Balance Sheet. of borrowings; these are amortised over the period of the loan. Allother finance The Company uses valuation techniques that are appropriate in the circumstances costsare expensed in the period in which theyoccur. and for which sufficient data is available to measure fair value, maximising the ### use of relevant observable inputs and minimising the use of unobservable inputs J. Taxation significant to the fair value measurement as a whole. TheCompany has elected Corporation tax is recognised in profit or loss except to the extent that it relates not to apply hedge accounting and therefore changes in the fair value of forward toitems recognised directly in equity, in which case it is recognised inequity. foreign currency exchange contracts are recognised within the capital column of Deferred tax is provided on temporary differences between the carrying amounts theIncome Statement in the period in which theyoccur. of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Theamount of deferred tax that is provided is based on the ### F. Income expected manner of realisation or settlement of the carrying amount of assets and Distributions receivable are recognised on the ex-dividend date. Whereno liabilities, using tax rates enacted or substantially enacted at the period enddate. ex-dividend date is quoted, distributions are recognised when the Company’s right to receive payment is established. UKdistributions are shown net of tax credits Deferred tax is not provided on capital gains and losses arising on the revaluation and foreign dividends are gross of the appropriate rate of withholding tax, with any ordisposal of investments because the Company meets (and intends to continue withholding tax suffered being accounted for separately. for the foreseeable future to meet) the conditions for approval as an investment trust company, pursuant to sections 1158 and 1159 of theCTA. Other income is accounted for on an accruals basis. Deferred tax assets are only recognised if it is considered more likely than not that Gains or losses resulting from the movement in fair value of the Company’s there will be suitable profits from which the future reversal of timing differences can investments held at fair value through profit or loss are recognised in the Income bededucted. Statement at each valuationpoint. 119 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## 1. Accounting policies continued Q. Capital redemption reserve ## Notes to The capital redemption reserve represents cancelled share premium less dividends ### K. Cash and cash equivalents paid from this reserve. Thisis a distributable reserve. Thisreserve also includes the ## the financial Cash and cash equivalents include cash in hand, deposits held at call with banks cost of acquiring theCompany’s Ordinary Shares if the Company is in a position to and other short-term highly liquid investments with original maturities of three ## statements buy backshares. 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 R. Capital reserve ### continued changes invalue. The following are accounted for in this reserve: ### • gains and losses on the realisation of investments; ### L. Debtors ### Trade and other debtors are initially recognised at transaction value. • unrealised gains and losses on investments; Subsequentmeasurement is at the initially recognised value less any cash • gains and losses on foreign exchange forward contracts; payments from the debtor, and less provision or write off for doubtful debts. ### • realised foreign exchange differences of a capital nature; and Aprovision is made where there is objective evidence that the Company will not be ### • expenses, together with related taxation effect, charged to this reserve able to recover balances in full. Anyadjustment is recognised in profit or loss as an inaccordance with theabovepolicies. impairment gainorloss. ### S. Revenue reserve ### M. Creditors The revenue reserve represents the surplus of accumulated profits from the revenue Trade and other creditors are initially recognised at fair value and subsequently held column oftheIncome Statement and isdistributable. at amortisedcost. ### T. Foreign exchange ### N. Interest-bearing loans and liabilities The functional and presentational currency of the Company is GBP because All bank borrowings are initially recognised at transaction value net of attributable it is the primary currency in the economic environment in which the Company transaction costs. Afterinitial recognition, allbank borrowings are measured at operates and, as a UK listed company, GBP is also its capital raising currency. amortised cost using the effective interestmethod. Transactionsdenominated in foreign currencies are recorded in the local currency at actual foreign exchange rates as at the date of transaction. Monetary assets and ### O. Dividends payable to shareholders liabilities denominated in foreign currencies at the period end are reported at the Equity dividends are recognised when they become legally payable. Interimequity rates of foreign exchange prevailing at the period end. Anygain or loss arising from dividends are recognised when paid. Finalequity dividends are recognised when a change in exchange rates subsequent to the date of the transaction is included approved by shareholders at an Annual GeneralMeeting. as a foreign exchange gain or loss in the revenue or capital column of the Income ### P. Share premium Statement depending on whether the gain or loss is of a capital or revenue nature. The share premium account represents the accumulated premium paid for shares Fornon-monetary assets these are recognised as fair valueadjustments. issued above their nominal value less issue expenses. Thisis a reserve forming part of the non-distributable reserves. Thefollowing items are taken to thisreserve: ### • costs associated with the issue of equity; and ### • premium on the issue of shares. 120 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information # Notes to the financial statements continued # 1. Accounting policies continued # U. Significant judgements, estimates and assumptions The preparation of financial statements requires the Company and Investment Manager to make judgements, estimates and assumptions that affect the reported amounts of investments at fair value at the financial reporting date and the reported fair value movements during the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the investments at fair value in future years. Details of how the fair values of infrastructure assets 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. # 2. Investment management fees | | Period ended 31 December 2022 | | | | --- | --- | --- | --- | | | Revenue £'000 | Capital £'000 | Total £'000 | | Investment management fees | 3,194 | – | 3,194 | | | 3,194 | – | 3,194 | The Investment Manager is entitled to a quarterly management fee as at an annual rate of: - 1.0% of the part of the Company's Net Asset Value up to and including £750 million and - 0.9% of the part of such Net Asset Value in excess of £750 million. As at 31 December 2022, £1,199,679 was owed for investment management fees. The Investment Manager does not charge a performance fee. 121 Pantheon Infrastructure Plc^{}[] Annual report 2022 Strategic report Governance Financial statements Other information ## Notes to the financial statements continued ### 3. Other expenses | | Period ended 31 December 2022 | | | | --- | --- | --- | --- | | | Revenue £'000 | Capital £'000 | Total £'000 | | Secretarial and accountancy services | 201 | — | 201 | | Depository services | 74 | — | 74 | | Fees payable to the Company's Auditor for audit-related assurance services | | | | | – Initial accounts | 25 | — | 25 | | – Annual financial statements | 135 | — | 135 | | Fees payable to the Company's Auditor for non-audit-related assurance service^{1} | 35 | — | 35 | | Directors' remuneration (see Note 4) | 220 | — | 220 | | Employer's National Insurance (see Note 4) | 24 | — | 24 | | Legal and professional fees | 186 | 534 | 720 | | Other fees | 460 | 21 | 481 | | | **1,360** | **555** | **1,915** | 1. The non-audit fees payable to the Auditor relate to the review performed by EY of the Company's Half-Yearly Report for the period ended 30 June 2022. In addition, the Company paid EY £70,000 for acting as the Reporting Accountant in respect of the Company's IPO and the C share issue proposed for September 2022, which did not proceed due to market conditions. This fee has been included within the share issue costs charged to share premium. ### 4. Directors' remuneration | | Period ended 31 December 2022 £'000 | | --- | --- | | Directors' fees | 220 | | Employer's National Insurance | 24 | | **Total remuneration** | **244** | As at 31 December 2022, there were no outstanding liabilities in relation to Directors' fees and Employer's National Insurance. A breakdown is provided in the Directors' remuneration report on pages 96 to 99. 122 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## 5. Finance income 7. Taxation ## Notes to Period ended ### Tax charge 31 December ## the financial 2022 The tax credit/(charge) for the period differs from the standard rate of corporation £’000 tax in the UK (19%). Thedifferences are explainedbelow: ## statements Finance income 73 Period ended 31 December 2022 ### continued Revenue Capital Total Bank Interest 2,023 £’000 £’000 £’000 Total 2,096 (Loss)/profit before tax (2,494) 10,522 8,028 Tax at UK corporation tax rate ## 6. Interest payable and similar expenses of 19% (474) 1,999 1,525 Period ended | 31 December | Non-taxable investment, | | --- | --- | | 2022 | derivative and foreign | | £’000 | exchange gains — (1,999) 1,999 | Commitment fees payable on borrowings 22 Carry forward management Amortisation of loan arrangement fee 13 expenses 474 — 474 Bank interest expense 1 — — — 36 ### Factors that may affect future tax charges The Company is an investment trust and is therefore not subject to tax on capital gains. Deferredtax is not provided on capital gains and losses arising on the revaluation or disposal of investments because the Company meets (and intends to meet for the foreseeable future) the conditions for approval as an investment trust company. Nodeferred tax asset has been recognised in respect of 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December2022, the Company had no unprovided deferred tax liabilities. As at 31 December 2022, excess management expenses are £3.05million as at 31December 2022. The UK Government has announced that it intends to increase the main rate of corporation tax from 19% to 25% from April 2023. As the Company is an investment trust it is not anticipated that the change in the corporation tax rate will impact theCompany. 123 Pantheon Infrastructure Plc^{}[] Annual report 2022 Strategic report Governance Financial statements Other information ## Notes to the financial statements continued ### 8. Earnings per share Earnings per share (EPS) are calculated by dividing profit for the period attributable to ordinary equity holders of the Company by the weighted average number of Ordinary Shares in issue since IPO. As there are no dilutive instruments outstanding, basic and diluted earnings per share are shown below. | | Revenue | Capital | Total | | --- | --- | --- | --- | | Earnings from 9 September 2021 to 31 December 2022 (£'000) | (2,494) | 10,522 | 8,028 | | Weighted average Ordinary Shares (number) | – | – | 428,272,575 | | **Basic earnings per share** | **(0.58)p** | **2.45p** | **1.87p** | | **Diluted earnings per share** | **(0.58)p** | **2.45p** | **1.87p** | There were no meaningful shareholders or corporate activity between incorporation of the Company on 9 September 2021 and 16 November 2021, the IPO date, and therefore this period has not been included for the purpose of calculating the weighted average number of shares. ### 9. Dividends paid | | Period ended 31 December 2022 £'000 | | --- | --- | | Interim dividends paid during the period | 4,800 | | | **4,800** | On 22 September 2022 the Company announced its first interim dividend of 1p per Ordinary Share for the period ended 30 June 2022. The dividend was paid on 28 October 2022 and was marked as ex-dividend on 6 October 2022. ### 10. Investments | | 31 December 2022 £'000 | | --- | --- | | Cost brought forward | – | | Opening unrealised appreciation on investments held | | | – Unlisted investments | – | | Valuation of investments brought forward | – | | Movement in period | | | Acquisitions at cost | 281,790 | | Appreciation on investments held | 19,592 | | **Valuation of investments at period end** | **301,382** | | Cost at period end | 281,790 | | Closing unrealised appreciation on investments held | | | – Unlisted investments | 19,592 | | **Valuation of investments at period end** | **301,382** | 124 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information # Notes to the financial statements continued ## 11. Debtors | | 31 December 2022 £'000 | | --- | --- | | Other debtors – non-current^{1} | 740 | | Other debtors – current | 486 | | Prepayments and accrued income | 473 | | | 1,699 | 1. Relates to the RCF arrangement fees which are to be released to the Income Statement until the loan maturity date of 18 December 2022. ## 12. Cash and cash equivalents | | 31 December 2022 £'000 | | --- | --- | | Cash | 26,670 | | Cash equivalents | 156,267 | | | 182,937 | Cash equivalents of £156,267,000 were held in a money market fund at 31 December 2022. ## 13. Derivative financial instruments | | 31 December 2022 £'000 | | --- | --- | | Financial Liabilities; derivatives at fair value | 8,520 | | | 8,520 | The Company uses forward foreign currency exchange contracts to minimise the effect of fluctuations in the investment portfolio from movements in exchange rates. The fair value of these contracts is recorded in the Balance Sheet. No contracts are designated as hedging instruments and consequently all changes in fair value are taken through profit or loss. As at 31 December 2022, the notional amount of the forward foreign currency exchange contracts held by the Company was £278.9 million. ## 14. Other creditors | | 31 December 2022 £'000 | | --- | --- | | Investment management fees payable | 1,200 | | Other creditors and accruals | 1,537 | | | 2,737 | ## 15. Interest-bearing loans and borrowings | | 31 December 2022 £'000 | | --- | --- | | Interest-bearing loans and borrowings | – | | Loan arrangement fee incurred in the period | 1,100 | | Amortised loan arrangement fee for the period | (13) | | **Loan arrangement fee carried forward** | **1,087** | | **Total credit facility payable** | **–** | The Company entered into a £62.5 million revolving credit facility (RCF) with Lloyds Bank Corporate Markets in December 2022. The RCF remained undrawn as at 31 December 2022. The RCF is denominated in GBP, with the option to be utilised in other major currencies. The rate of interest will be the relevant currency benchmark plus an initial margin of 2.85% per annum. A commitment fee of 1.00% per annum is payable on undrawn amounts, and the tenor of the RCF is three years. The facility is secured against the assets held in the Company's subsidiary, Pantheon Infrastructure Holdings LP. Borrowing costs associated with the RCF are shown as interest payable and similar expenses in Note 6 to these financial statements. ![img-19.jpeg](img-19.jpeg) 125 Pantheon Infrastructure Plc^{}[] Annual report 2022 Strategic report Governance Financial statements Other information ## Notes to the financial statements continued ### 16. Called-up share capital | Allotted, called up and fully paid: | 31 December 2022 | | | --- | --- | --- | | | Shares | £'000 | | **Ordinary Shares of £0.01** | | | | Opening Balance | — | — | | Ordinary Shares issued in the period | 400,000,000 | 4,000 | | Conversion of subscription shares to Ordinary Shares in the period | 80,000,000 | 800 | | **Closing balance** | **480,000,000** | **4,800** | | **Total called-up share capital** | **480,000,000** | **4,800** | On 11 November 2021, the Company raised gross proceeds of £400.0 million through the issue of 400 million Ordinary Shares at IPO for an issue price of 180p per Ordinary Share. 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. Subscription Shares were issued to subscribers as part of the Company's IPO on the basis of one Subscription Share for every five Ordinary Shares subscribed for. Each Subscription Share conferred the right (but not the obligation) to subscribe for one Ordinary Share on exercise of the rights attaching to the Subscription Shares. The subscription price per Ordinary Share payable on the exercise of the subscription rights was 101p, exercisable on either 30 June 2022, 29 July 2022 or 31 August 2022. The Company announced on 5 July 2022 that 36,509,658 Subscription Shares had been converted into 36,509,658 Ordinary Shares which were admitted to trading on the Main Market of London Stock Exchange plc on 13 July 2022. The Company announced on 3 August 2022 that 13,188,554 Subscription Shares had been converted into 13,188,554 Ordinary Shares which were admitted to trading on the Main Market of London Stock Exchange plc on 11 August 2022. The Company announced on 2 September 2022 that 24,117,160 Subscription Shares had been converted into 24,117,160 Ordinary Shares. In addition, the Final Subscription Trustee exercised the Subscription Rights attaching to the 6,184,628 outstanding Subscription Shares on the same terms. Therefore, in aggregate, 30,301,788 new Ordinary Shares were admitted to trading on the Main Market of London Stock Exchange plc on 9 September 2022. There remain no Subscription Shares in issue and the Subscription Share line was cancelled on 9 September 2022. ![img-20.jpeg](img-20.jpeg) 126 Pantheon Infrastructure Plc^{}[] Annual report 2022 Strategic report Governance Financial statements Other information ## Notes to the financial statements continued ### 17. Reserves | | Share premium £'000 | Capital redemption reserve £'000 | Capital reserve £'000 | Revenue reserve £'000 | Total £'000 | | --- | --- | --- | --- | --- | --- | | Opening balance | — | — | — | — | — | | Ordinary Shares issued | 395,200 | — | — | — | 395,200 | | Subscription shares issued (subsequently converted to Ordinary Shares) | 80,800 | — | — | — | 80,800 | | Share issue costs | (9,267) | — | — | — | (9,267) | | Cancellation of share premium | (387,284) | 387,284 | — | — | — | | Losses on derivative financial instruments at fair value through profit or loss | — | — | (8,520) | — | (8,520) | | Gain on investments at fair value through profit or loss | — | — | 19,592 | — | 19,592 | | Foreign exchange gains on cash and cash equivalents | — | — | 5 | — | 5 | | Legal and professional expenses charged to capital | — | — | (534) | — | (534) | | Other fees | — | — | (21) | — | (21) | | Profit/(loss) for the period | — | — | — | (2,494) | (2,494) | | Interim dividend paid | — | (4,800) | — | — | (4,800) | | **Closing balance** | **79,449** | **382,484** | **10,522** | **(2,494)** | **469,961** | On 17 June 2022, the Company announced that the share premium account had been cancelled in accordance with the provisions of the Companies Act 2006 in order to create a distributable reserve, the capital redemption reserve, that is capable of being applied in any manner in which the Company's profits available for distribution are lawfully able to be applied. The Company is able to distribute realised gains from the capital reserve. As at 31 December 2022 there were £nil reserves available for distribution from this reserve. 127 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Notes to the financial statements continued ### 18. Net asset value per share NAV per share is calculated by dividing net assets in the Balance Sheet attributable to ordinary equity holders of the Company by the number of Ordinary Shares outstanding at the end of the period. As there are no dilutive instruments outstanding, both basic and diluted NAV per share are shown below: | | 31 December 2022 | | --- | --- | | Net assets attributable (£'000) | 474,761 | | Ordinary Shares | 480,000,000 | | **NAV per Ordinary Share** | **98.9p** | ### 19. Reconciliation of loss before financing costs and taxation to net cash flows from operating activities | | 9 September 2021 to 31 December 2022 £'000 | | --- | --- | | Profit before financing costs and taxation | 5,968 | | Gains on investments | (19,592) | | Foreign exchange gains on cash and non-portfolio assets | (5) | | Increase in debtors | (182) | | Increase in creditors | 1,606 | | Losses on derivative financial instruments at fair value through profit or loss | 8,520 | | **Net cash flows from operating activities** | **(3,685)** | ### 20. Subsidiaries The Company has formed two wholly owned subsidiaries. The Company has ownership and control over these two entities and as such they have been deemed to be subsidiaries by the Board. i. PIH LP was incorporated on 5 November 2021 with a registered address in the State of Delaware, National Registered Agents, Inc., 209 Orange Street, Wilmington, Delaware, 19801, USA and is wholly owned by the Company. The Company holds an investment in PIH LP. In accordance with FRS 102, the Company has not consolidated the subsidiary on the grounds it does not carry out business through the subsidiary and that it is held exclusively with a view to subsequent resale. It is therefore considered part of an investment portfolio. Several of the investments in the Portfolio are held through PIH LP and are valued based on the fair value of the investments held in those entities. The Company holds a 99.9% investment in PIH LP, with the remaining holding held by Pantheon Infrastructure Holdings GP LLC (PIH GP). ii. PIH GP was incorporated on 5 November 2021 with a registered address in the State of Delaware, National Registered Agents, Inc., 209 Orange Street, Wilmington, Delaware, 19801, USA and is wholly owned by the Company. The Company has not consolidated PIH GP as it is immaterial. This treatment is supported by the Companies Act 2006, section 405 (2), whereby a subsidiary undertaking may be excluded from consolidation if its inclusion is not material for the purpose of giving a true and fair view. ### 21. Contingencies, guarantees and financial commitments At 31 December 2022, there were capital commitments outstanding of £57.9 million in respect of investments in infrastructure assets. The Company expects 100% of the capital commitments outstanding to be called within the next twelve months. These commitments will be funded using the Company's cash resources. ![img-21.jpeg](img-21.jpeg) 128 Pantheon Infrastructure Plc^{}[] Annual report 2022 Strategic report Governance Financial statements Other information ## Notes to the financial statements continued ### 22. Fair value #### Fair value hierarchy Financial assets are carried in the Balance Sheet at their fair value or approximation of fair value. The fair value is the amount at which the asset could be sold in an orderly transaction between market participants, at the measurement date, other than a forced liquidation sale. The Company measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements. Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant assets as follows: Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities. Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation at the end of each reporting period. #### Financial assets and liabilities at fair value through profit or loss at 31 December 2022 | | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000 | | --- | --- | --- | --- | --- | | Investments | — | — | 301,382 | 301,382 | | Derivatives – financial instruments | — | (8,520) | — | (8,520) | | | — | (8,520) | 301,382 | 292,862 | The fair value of these investments and Derivatives – financial instruments is recorded in the Balance Sheet as at the period end. There have been no transfers between Level 1 and Level 2 during the period, nor have there been any transfers between Level 2 and Level 3 during the period. The carrying amount of all assets and liabilities, detailed within the Balance Sheet, is considered to be the same as their fair value. The majority of the assets held within Level 3 are valued on a discounted cash flow basis, hence, the valuations are sensitive to the discount rate assumed in the valuation of each asset. Other significant unobservable inputs include the inflation rate assumption and the interest rates assumption used to project the future cash flows and the forecast cash flows themselves. Increasing the discount rate used in the valuation of each asset by 0.5% would reduce the value of the Portfolio by £10.5 million. Decreasing the discount rate used in the valuation of each asset by 0.5% would increase the value of the Portfolio by £11.2 million. The WADR of the Portfolio at 31 December 2022 is 14.2%. The majority of assets held within Level 3 have revenues that are linked, partially linked or in some way correlated to inflation. The impact of increasing the inflation rate assumption by 0.5% would increase the value of the Portfolio by £3.7 million. Decreasing the inflation rate assumption used in the valuation of each asset by 0.5% would decrease the value of the Portfolio by £2.6 million. The valuations are sensitive to changes in interest rates. These comprise a wide range of interest rates from short-term deposit rates to longer-term borrowing rates across a broad range of debt products. Increasing the cost of borrowing assumption for each asset by 0.5% would reduce the value of the Portfolio by £5.9 million. Decreasing the interest rate assumption borrowings used in the valuation of each asset by 0.5% would increase the value of the Portfolio by £6.0 million. This calculation does not take account of any offsetting factors which may be expected to prevail if interest rates changed, including the impact of inflation discussed above. 129 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Notes to the financial statements continued ### 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 equity or equity-related investments in a diversified portfolio of infrastructure assets. Investments are not restricted to a single market and are made when opportunities arise and on an international basis. The Company's financial instruments comprise infrastructure investments and derivatives. The principal risks the Company faces in its portfolio management activities are: - liquidity risk; - interest rate risk; - credit risk; - market price risk; and - foreign exchange risk. The Investment Manager monitors the financial risks affecting the Company on a regular basis and the Directors regularly receive financial information, which is used to identify and monitor risk. In accordance with FRS 102, an analysis of financial assets and liabilities, which identifies the risk to the Company of holding such items, is given below. #### Liquidity risk Due to the nature of the Company's investment policy, the largest proportion of the Portfolio is invested in infrastructure assets through the Company's subsidiary, which are generally less readily marketable than listed 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 are monitored by the Board on a regular basis. As a result, the Company may not be able to quickly liquidate its investments at an amount close to their fair value in order to meet its liquidity requirements, including the need to meet outstanding undrawn commitments. The Company manages its liquid investments to ensure sufficient cash is available to meet contractual commitments and also seeks to have cash available to meet other short-term financial needs. As at 31 December 2022, liquidity risk was considered low given the cash and cash equivalents available to the Company. | | 31 December 2022 £'000 | | --- | --- | | Cash and cash equivalents | 182,937 | | Other creditors | (2,737) | As at 31 December 2022, the capital commitments outstanding totalled £57.9 million, therefore liquid resources available after commitments were £184.8 million. #### Interest rate risk Interest rate movements may affect the level of income receivable on cash deposits and interest payable on variable rate borrowings. Cash deposits generally comprise overnight call or short-term money market deposits and earn interest at floating rates based on prevailing bank base rates. Increases in interest rates may also ultimately impact the discount rates used to value investments. Interest rate movements may affect the interest rate paid on financial liabilities. Interest on the RCF is payable at variable rates determined subject to drawdown. As at 31 December 2022, the RCF had not been drawn down. Changes in interest rates may have an impact on consolidated earnings over the longer term. The table below provides indicative sensitivity data. | Effect on profit before tax | 31 December 2022 £'000 | | | --- | --- | --- | | | Increase in interest rates by 1% | Decrease in interest rates by 1% | | Increase/(decrease) | 2,422 | (1,205) | ![img-22.jpeg](img-22.jpeg) 130 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information Thecontracts are measured at fair value and are recorded in the balance sheet as ## 23. Analysis of financial assets and liabilities ## Notes to Derivatives – financial instruments. TheCompany has not elected to apply hedge ### continued accounting therefore the fair value changes are taken to the capital reserve. ## the financial ### Credit risk The table below sets out the Company’s foreign exchange exposure: | statements | Credit risk is the risk that a counterparty will cause a financial loss to the Company | | | | 1 | | 1 | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | GBP | USD | | EUR | Total | | | by failing to discharge its obligations to the Company when they fall due. | Foreign exchange risk | £’000 | £’000 | £’000 | | £’000 | | continued | Cashdeposits are placed with approved counterparties, all of whom have a credit | | | | | | | At 31 December 2022 rating of A- or above. Cash and cash At the period end, the Company’s financial assets exposed to credit risk amounted equivalents 181,987 828 122 182,937 to the following: Investments held at 31 December fair value through 2022 profitorloss — 217,282 84,100 301,382 £’000 Cash and cash equivalents 182,937 Other debtors 1,699 — — 1,699 Other payables (2,737) — — (2,737) ### Market price risk Derivatives – financial The fair value of future cash flows of an investment held by the Company may liabilities (8,520) — — (8,520) fluctuate. This market risk may comprise: foreign exchange risk, and/or fair value risk. TheBoard of Directors reviews and agrees policies for managing these risks. 1. These values are expressed in GBP. TheInvestment Manager assesses the exposure to market risk when making If there had been an increase/(decrease) in the GBP/USD exchange rate of 10% each investment decision, and monitors the overall level of market risk across the it would have the effect of (decreasing)/increasing equity shareholders’ funds Company’s investments on an ongoing basis. by £(6.8)million/£8.3million which includes the impact of the foreign currency exchange contracts to partially offset the movement in value. The calculations are The nature of the Company’s investments means that they are valued by the based on the financial assets and liabilities and the foreign exchange rate as at Directors after due consideration of the most recent available information. 31December2022 of 1.2029GBP/USD. If the Portfolio fell by 20% from its 31 December 2022 valuation, with all other If there had been an increase/(decrease) in the GBP/EUR exchange rate of 10% variables held constant, this would have led to a reduction of £64.5million in the it would have the effect of (decreasing)/increasing equity shareholders’ funds return before taxation. An increase of 20% would increase the return before taxation by £3.1million/£(3.7)million which includes the impact of the foreign currency by £53.9million. exchange contracts to partially offset the movement in value. The calculations are ### Foreign exchange risk based on the financial assets and liabilities and the foreign exchange rate as at Since it is the Company’s policy to invest in a diverse portfolio of investments based 31December2022 of 1.1271GBP/EUR. in a number of countries, the Company is exposed to the risk of movement in foreign exchange rates. The Company enters into forward foreign currency exchange contracts to hedge the foreign exchange risks associated with its investment portfolio. Thecontracts entered into by the Company are denominated in the currency of the geographic areas in which the Company has significant exposure against its reporting currency. 131 Pantheon Infrastructure Plc^{}[] Annual report 2022 Strategic report Governance Financial statements Other information ## Notes to the financial statements continued ### 23. Analysis of financial assets and liabilities continued #### Managing capital The Company's equity comprises Ordinary Shares as described in Note 17. Capital is managed so as to maximise the return to shareholders while maintaining a capital base that allows the Company to operate effectively in the marketplace and sustain future development of the business. The Company considers its capital to comprise called-up share capital and reserves. As at 31 December 2022, the Company had entered into an RCF to increase the Company's liquidity. Details of available borrowings at the period end can be found earlier in this note. The Company's assets and borrowing levels and the Company's capital requirements are reviewed regularly by the Board of Directors. ### 24. Transactions with the Investment Manager and related parties The amounts payable to the Investment Manager, together with the details of the Investment Management Agreement, and outstanding amounts are disclosed in Note 2. The existence of an independent Board of Directors demonstrates that the Company is free to pursue its own financial and operating policies and therefore, under the AIC SDRP, the Investment Manager is not considered to be a related party. The Company's related parties are its Directors and the fees paid to the Company's Board are disclosed in Note 4 alongside the outstanding amounts payable as at 31 December 2022. There are no other identifiable related parties at the period end. ### 25. Subsequent events #### Commitments In the period to 31 December 2022, the Company committed to £346 million across ten investments. At 31 December the Company had undrawn commitments of £57.9 million outstanding. On 31 January 2023 the Company completed an investment in GD Towers, a leading digital infrastructure company, committing £43.4 million. ![img-23.jpeg](img-23.jpeg) 132 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements 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 Investment Manager was appointed as its Alternative Investment Fund Manager (AIFM) for the purposes of the AIFMD. The Investment 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 are 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 1 to 77), the Investment Manager's report (pages 12 to 22) and the financial statements (pages 105 to 131). 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 Investment Manager as at 31 December 2022, including staff remunerated by affiliates of the Investment Manager, was approximately 465, of whom 22 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 Investment Manager and its affiliates to staff of the Investment Manager in respect of the period ended 31 December 2022 attributable to work relating to the Company was as follows: | £'000 | 12 months to 31 December 2022 | | | | --- | --- | --- | --- | | | Fixed | Variable | Total | | Senior management | 70 | 96 | 166 | | Staff | 190 | 143 | 333 | | **Total staff** | **260** | **238** | **499** | | Identified staff | 44 | 61 | 105 | No carried interest was paid in respect of the Company during the period. The above disclosures reflect only that element of the individuals' remuneration which is attributable to the activities of the Investment 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 Investment Manager takes into account a number of factors including the performance of the Company, the Investment Manager and each individual member of staff. These factors are considered over a multi-year framework and include whether staff have met the Investment Manager's compliance standards. In addition, the Investment 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 Investment Manager's staff) can be found at http://pantheonms.wpenginepower.com/wp-content/uploads/2021/10/Pillar-3-disclosure-Pantheon-2020.pdf. The AIFMD requires the Investment 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 NAV 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. the maximum leverage of the Company calculated in accordance with the gross method (under Article 7 of Commission Delegated Regulation No. 231/2013 is 450%; and ii. the maximum leverage of the Company calculated in accordance with the commitment method (under Article 8 of the AIFMD Regulation) is 450%. ![img-24.jpeg](img-24.jpeg) 133 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ## Remuneration disclosure continued Article 23(1) disclosures to investors ## AIFMD Using the methodologies prescribed under the AIFMD, the Company’s leverage as at The AIFMD requires certain information to be made available to investors in the disclosures 31December2022 is shown below: Company before they invest and requires that material changes to this information Commitment be disclosed in the annual report of the Company. The information required to be ### continued Gross method method disclosed is contained in the document ‘Information for Investors’, which is available Leverage ratio 121% 160% on the Company’s website at www.pantheoninfrastructure.com. There have been no material changes to this information requiring disclosure. There have been no changes to the maximum level of leverage which the Investment Manager may employ on behalf of the Company during the period to 31December2022. Thereare no collateral or asset reuse arrangements in place as at the period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 72 to 76) and also in Note23 to the financial statements (pages 129 to 131). 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 25) and under ‘Boardresponsibilities and relationship with the Investment Manager’ in the Statement on Corporate Governance (page85 to 91). Additionally, the individual counterparty exposure limit for deposits with each of the Company’s bank counterparties has been set at c.£135million or the equivalent in foreign currencies. The Investment Manager’s risk management system incorporates regular review of the principal risks facing the Company and the investment restrictions applicable to the Company. TheInvestment 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 72 to 76). Theseinvestment restrictions were not exceeded in the period to31December2022. 134 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ### AIC Funds under management ## Glossary The Association of Investment Companies. Funds under management includes both assets under management and assets under advisory (assets managed on a non-discretionary basis and ### AIC Code oradvisorybasis). The AIC Code of Corporate Governance. ### GIRAC ### Approved investment trust company Global Infrastructure and Real Assets Committee. An approved investment trust company is a corporate UK tax resident which fulfils ### particular UK tax requirements and rules which include that for the company to Initial public offering (IPO) undertake portfolio investment activity it must aim to spread investment risk. The first offering by a company of its own shares to the public on a regulated Inaddition, the company’s shares must be listed on an approved stock exchange. stockexchange. The ‘approved’ status for an investment trust must be authorised by the UK tax ### Internet of things authorities and its key benefit is that a portion of the profits of the company, This term describes the network of physical objects (things) that are embedded principallyits capital profits, are not taxable in theUK. with technologies such as sensors or software for the purpose of connecting ### AUM andexchanging data with other devices and systems via the internet. Assets Under Management are the total market value of investments held under ### Investment thesis management by an individual or institution. When referring to Pantheon’s AUM, Pantheon’s final stage of approval for infrastructure co-investments. thisfigure includes assets managed on a fully discretionary basis. ### Investment Manager ### Carried interest Pantheon Ventures (UK) LLP. Portion of realised investment gains payable to a Sponsor as a profit share. ### IRR ### Cloud Internal Rate of Return is the annual rate of growth that an investment is expected Cloud computing is the on-demand availability of computer system resources, togenerate over its life. especially data storage (cloud storage) and computing power, without direct active management by the user. ### Latency The delay before a transfer of data begins following an instruction for its transfer. ### Co-investment Direct shareholding in a company by invitation alongside a Sponsor. ### Market capitalisation Share price multiplied by the number of shares outstanding. ### Commitment The amount of capital that the Company agrees to contribute to an investment ### Multiple of invested capital (MOIC or cost multiple) whenandas called by the Sponsor. 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. ### Company Pantheon Infrastructure Plc or ‘PINT’. ### Net asset value (NAV) Amount by which the value of assets of a company exceeds its liabilities. ### Exit Realisation of an investment, usually through trade sale, sale by public offering(including IPO), orsale to a financial buyer. 135 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ### Portfolio or operating company ## Glossary A company that PINT invests in. These portfolio or operating companies in turn ownand operate infrastructureassets. ### continued ### Portfolio investment return Total movement in the valuation of the underlying assets comprising the Portfolio, expressed as a percentage of opening portfolio value. Foreign exchange effects andother expenses are excluded from thecalculation. ### 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. ### Secondaries Purchase of existing private equity fund or company interests and commitments from an investor seeking liquidity in such funds or companies. ### Share price premium (discount) Occurs when a company’s share price is higher (lower) than the NAV pershare. ### Sponsor or general partner The entity managing a private equity fund that has been established as a limited partnership, also commonly referred to as the Sponsor. ### Total return This is expressed as a percentage. The denominator is the opening NAV, net of the final dividend for the previous year, and adjusted (on a time weighted average basis) to take into account any equity capital raised or capital returned in the year. Thenumerator is total NAV growth and dividends paid. ### Total shareholder return Return based on interim dividends paid plus Share Price movement in the period, divided by the opening share price. ### WADR Weighted average discount rate based on each investment’s relative proportion ofPortfolio valuation. 136 Pantheon Infrastructure Plc Annual report 2022 Strategic report Governance Financial statements Other information ### Directors Broker ## Directors Vagn Sørensen ### Investec Bank plc Anne Baldock ## and advisers 30 Gresham Street Andrea Finegan London Patrick O’Donnell Bourke EC2V 7QP ### Investment Manager ### Depositary ### Pantheon Ventures (UK) LLP ### BNP Paribas Trust Corporation UK Limited Authorised and regulated by the FCA 10 Harewood Avenue 10 Finsbury Square London 4th Floor NW16 6AA London ### Registrar EC2A 1AF ### Link Group Email: pint@pantheon.com 10th Floor PINT website: www.pantheoninfrastructure.com Central Square Pantheon website: www.pantheon.com 29 Wellington Street Leeds ### Secretary and registered office LS1 4DL ### Link Company Matters Limited ### Solicitors 6th Floor, 65 Gresham Street ### London Hogan Lovells International LLP EC2V 7NQ Atlantic House Holborn Viaduct Telephone: +44 (0)333 300 1950 London ### Auditor EC1A 2FG ### Ernst & Young LLP 25 Churchill Place London E14 5EY Designed and produced by ### Disclosure 1 – Investments lyonsbennett.com This annual report provides information about certain investments ® made by PINT. Theyshould NOT be regarded as a recommendation. This report is printed on Nautilus which is made from 100% FSC recycled certifi ed ® Pantheon makes no representation or forecast about the post-consumer waste pulp which is PCF (Process Chlorine Free). The FSC label on this performance, profi tability or success of suchinvestments. report ensures responsible use of the world’s forest resources. Printed sustainably in ® ® Youshould not assume that future investments will be the UK by Pureprint, a CarbonNeutral company with FSC chain of custody who recycle profi tableor will equal the performance of past recommendations. 100% of all dry waste. Both the mill and Pureprint are ISO 14001 certifi ed (environmental Thestatementsmade refl ect the views and opinions of Pantheon management system). If you have fi nished with this document and no longer wish to retain asof thedate of the investment analysis. it, please pass it on to other interested readers or dispose of it in your recycled waste. Pantheon Infrastructure Plc 10 Finsbury Square 4th Floor London EC2A 1AF United Kingdom Telephone +44 (0)20 3356 1800 Email pint@pantheon.com Pantheon Infrastructure Plc Annualreport 2022 Website www.pantheoninfrastructure.com Registered in England number: 13611678 A member of the Association of Investment Companies