### ANNUAL REPORT 2023 ## PANTHEON ## INFRASTRUCTURE PLC ## ACCESS TO HIGH-QUALITY ## GLOBALINFRASTRUCTURE ASSETS ## PURPOSE ## Our purpose is to provide investors of all types with easy and ## immediate access to a diversified portfolio of high‑quality ## global infrastructure assets via a single vehicle, offering ## both a regular dividend payment and targeting capital ## growth. ### This portfolio, which is diversified by sector and geography, is designed to 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 invest in private assets which we believe will benefit from strong downside protection ### through inflation linkage 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. PINT targets assets which ### have strong sustainability credentials, which 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 a Board of independent non‑executive Directors and managed by Pantheon Ventures ### (UK) LLP (‘Pantheon’ or the 'Investment Manager'), a leading multi‑strategy investment manager ### in infrastructure and real assets, private equity, private debt and real estate. 1 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## HIGHLIGHTS CONTENTS ### At a glance as at 31 December 2023 ### Strategic report Governance Highlights ................................................. 1 Board of Directors ................................. 74 Why invest in PINT ..................................2 Management team ................................76 | | | | PINT at a glance ......................................6 | Chair's introduction | | --- | --- | --- | --- | --- | | | 1 | | | to corporate governance ......................79 | | £487m | | £504m | Chair’s statement ....................................8 | | ## 4p per share Audit and Risk Committee report ........85 Capital Net asset PINT investments .................................. 12 2 Total dividends committed value (NAV) Management Engagement PINT timeline ..........................................19 Committee report ................................90 Investment Manager’s report ..............20 Nomination Committee report ............92 Alternative Performance ESG & Sustainability Measures (APMs) ................................. 38 Committee report. ................................ 94 Investment policy ................................. 39 Directors’ remuneration report ........... 96 Q&A with the Directors’ report .................................. 101 Investment Manager ............................ 40 Directors’ responsibility Our market .............................................. 42 ## £397m 106.6p 10.4% statement ..............................................105 Sector spotlight .................................... 46 | Market cap | NAV per share | NAV Total Return | | | | --- | --- | --- | --- | --- | | | | | Business model..................................... 48 | Financial statements | | | | | Investment strategy .............................. 57 | Independent Auditor’s report ............ 107 | | | | | Responsible investing and ESG ...........58 | Income statement ............................... 113 | | | | | S172(1) statement ................................. 63 | Statement of changes in equity .........114 | | | | | Principal risks and uncertainties ........ 68 | Balance sheet .......................................115 | | | | | Viability statement ................................72 | Cash flow statement ........................... 116 | Notes to the financial statements .............................................117 ### Other information 1. This refers to the investment fair values or amounts committed as at 31 December 2023. Invested assets represent AIFMD disclosures ............................... 136 those that have reached financial close and have been, or are in the process of, being funded, and may include amounts reserved for follow‑on investments; and committed assets represent those which are announced and are subject to Glossary ................................................ 138 final financial close. As at 31 December 2023, £471.7 million was invested and £15.7 million was committed but not yet invested across 13 assets. Directors and advisers .......................140 2. Total dividends declared in relation to the year ended 31 December 2023. 2 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## WHY 1. UNIQUE ACCESS TO PRIVATE ## INVEST IN PINT INFRASTRUCTURE CO-INVESTMENT ASSETS ## The Company is building Pantheon, PINT’s Investment Manager, has a large ## a global portfolio of andglobal infrastructure network ## investments with blended ### PINT invests in infrastructure assets via co‑investments Portfolio construction risk/return profiles,in alongside highly experienced general partner sponsors Pantheon uses co‑investments to select individual assets to (‘Sponsors’), typically without additional management fees or gain exposure to, and tilt the Portfolio, within the parameters ## line withtargets across carried interest leakage. of PINT's investment policy, towards sectors based on the Investment Manager’s view on relative value. This leads to the ## deal types, sectors This is attractive for several reasons, including: creation of a global and diversified portfolio, with the ability to ## and geographies for Unique opportunities focus on major investment and economic tailwinds. PINT provides investors with the opportunity to access ## diversification. Cost‑effective access Pantheon’s substantial deal flow from its extensive network The use of co‑investments can reduce the overall expense of blue‑chip infrastructure investors. These opportunities ratio and gross‑to‑net performance spread of a portfolio, arise because Pantheon’s wider infrastructure platform as most deals are offered with no ongoing management fee invests directly into Sponsors’ funds and secondary or carried interest charged by the Sponsor. transactions. As a trusted investor of scale, Pantheon then ### gains access to Sponsors’ co‑investment deal flow. Sponsorspecialisation Pantheon, on behalf of PINT, is able to choose deals alongside ### Liquid access to illiquid markets a Sponsor with a distinct edge who may be best placed to There are fewer public market infrastructure opportunities create value in that particular sub‑sector. to access private infrastructure assets, as infrastructure ### companies often remain private for long periods of time ESG and are structured in longer‑term vehicles, which are Through the Investment Manager, PINT looks to partner aimed at institutional investors only. Investing in PINT with Sponsors that have demonstrated strong capabilities provides immediate access to high‑quality co‑investment in managing ESG risks and will actively engage with the infrastructure assets not normally accessible to public market Investment Manager where it identifies areas of concern. investors more broadly, both institutional and retail. Pantheon has developed a bespoke ESG due diligence process, which utilises an in‑house tool (an ESG scorecard) in addition to consultation with an external ESG specialist, which utilises a range of different data ESG sources. For more information, please refer to the ESG section on pages 58-62. 3 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## WHY 2. FAVOURABLE DEFENSIVE ## INVEST IN PINT CONTINUED LONG-TERM CHARACTERISTICS ## Infrastructure assets Infrastructure assets can offer reliable income ## combine a range of streamswith inflation protection ## attractive characteristics ### Infrastructure assets may provide embedded value and Embedded downside protection for long‑term investors. downside protection across market cycles given the regulated The vital role that many infrastructure sub‑sectors play and contracted nature of many of the underlying cash flows. in our daily lives can make them an innately defensive ## Distinctively, investment. The tangible nature of infrastructure investments Infrastructure assets may provide a range of attractive can provide a basis for liquidation and recovery value in ## infrastructure may investment attributes, including the following: downside cases. Furthermore, infrastructure investing ## mitigate the adverse Stable cash flow profile is generally focused on gaining exposure to assets in Infrastructure may provide a compelling, stable distribution a monopolistic or oligopolistic market which, with high ## effects of rising inflation profile similar to traditional fixed income, but backed by upfront costs, can be a barrier to entry for new participants. and may provide an tangible assets. Infrastructure assets often offer reliable Investments typically have long‑term contracts with income streams governed by regulation, hedges or long‑term price escalators or inflation linkage with high‑quality ## income‑generating contracts with reputable counterparties. counterparties, which offer further downside protection. ## investment outside of Finally, high friction costs in certain sectors have been seen ### Inflation hedge to discourage customers from switching providers, which can ## traditional fixed income. Infrastructure investments can provide a natural hedge provide a stable and long‑term customer base. to rising inflation, as many sub‑sectors have contracts ### with explicit inflation linkage or implicit protection through Diversification regulation or market position. The majority of PINT’s assets Infrastructure can be a valuable portfolio diversifier alongside benefit from such protection. traditional and alternative investments. Historically, listed infrastructure returns have been only moderately correlated 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 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## WHY 3. ACCESS TO ## INVEST IN PINT CONTINUED SECULAR TRENDS ## PINT continues to develop 3% 9% ## its diversified portfolio ## across sectors that Digital Infrastructure | 44% 17% Power & Utilities | 27% ## benefit from secular 44% Renewables & Energy Efficiency | 17% ## tailwinds. Transport & Logistics | 9% Pantheon has taken, and continues to take, a disciplined Net working capital | 3% approach to PINT’s strategy to construct a globally 27% diversified portfolio with exposure across sub‑sectors and geographies, while maintaining the flexibility to tilt exposures based on opportunities which may present compelling relative value. The Company has built a global portfolio of investments with blended risk/return profiles, in line with targets across deal types, sectors and geographies for diversification. Please refer to page 39 for more detail. | DIGITAL | | POWER | | | --- | --- | --- | --- | | INFRASTRUCTURE | | & UTILITIES | | | | 1 | | 1 | | 44% | | 27% | | | Data centres, fibre networks | | Energy utilities, water and | | | and towers | | conventional power | | | RENEWABLES & | | TRANSPORT | | | --- | --- | --- | --- | | ENERGY EFFICIENCY | | & LOGISTICS | | | | 1 | | 1 | | 17% | | 9% | | | Wind, solar, sustainable waste | | Ports, rail and road, airports | | | and smart infrastructure | | and e‑mobility | | 1. Proportion of NAV of £504 million at 31 December 2023. Includes assets which, at 31 December 2023, were invested, committed or in legal closing. 5 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## WHY 4. PINT SEEKS TO GENERATE ## INVEST IN PINT CONTINUED ATTRACTIVE RISK-ADJUSTED RETURNS ## Targeting capital growth ## and dividend returns. The Company seeks to generate attractive risk‑adjusted total returns for shareholders over the longer term. This comprises 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. The Company targets a NAV Total Return per share of 8-10% per annum. Calpine, The Geysers ## £487m £504m 2p per share Capital Net asset Second interim 1 committed value (NAV) dividend per share 1. Second interim dividend of 2p per share declared in relation to the year ended 31 December 2023. The Company is paying a total dividend of 4p per share for the year ended 31 December 2023 and, thereafter, is targeting a progressive dividend. 6 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## PINT ## AT A GLANCE ## Thirteen infrastructure 1 ## co‑investment assets 2 Geographic diversification ### DIGITAL 3% ### INFRASTRUCTURE 17% Europe North America 46% UK Net working capital 34% ### POWER ### & UTILITIES 2 Sector diversification 3% 9% Digital Infrastructure 17% Power & Utilities 44% ### Renewables & Energy RENEWABLES & ### ENERGY EFFICIENCY Efficiency Transport & Logistics 27% Net working capital ### TRANSPORT 1. Based on assets invested and committed at 31 December 2023. ### & LOGISTICS 2. Based on NAV of £504 million at 31 December 2023. 7 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## PINT ## AT A GLANCE CONTINUED ### Netherlands Delta Fiber Fudura ### Nordic ### United Kingdom GlobalConnect National Gas Zenobē ### Germany/Austria ### Ireland GD Towers NBI ### Spain ### North America Primafrio CyrusOne Cartier Energy Calpine Vantage Data Centers Vertical Bridge Key: DIGITAL INFRASTRUCTURE POWER & UTILITIES RENEWABLES & ENERGY EFFICIENCY TRANSPORT & LOGISTICS 6 PANTHEON INFRASTRUCTURE PLC^{}[] ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## CHAIR'S STATEMENT ### Investing in infrastructure has never been so important. "It is satisfying that the successful period of deployment has been followed up with strong portfolio performance." Chair, Pantheon Infrastructure Plc ![img-0.jpeg](img-0.jpeg) #### Introduction I am pleased to present the annual report for Pantheon Infrastructure Plc for the year ended 31 December 2023. This is the second annual report since the Company's launch, and it is pleasing to see the Company has now fully deployed its funds into a diversified portfolio of high-quality infrastructure assets, generating dividends in line with, and NAV Total Returns exceeding, its pre-IPO target. During the year, the Company's NAV per share grew by 7.8% to 106.6p per share, with earnings per share of 10.4p. Accounting for dividends of 3p per share paid in the year to 31 December 2023, this represents a NAV Total Return of 10.4% since 31 December 2022, or 10.7% after adjusting for the positive NAV impact of share buybacks, which exceeds the pre-IPO target of an 8-10% NAV Total Return per annum. Naturally, it is satisfying that the successful period of deployment has been followed up with strong portfolio performance. #### Economic environment The reporting period and subsequent months have continued to be characterised by further economic uncertainty. Most of the developed economies in which we invest have so far avoided the recessions that were widely expected in the first half of 2023, and market sentiment appears to foresee a soft rather than hard landing. Furthermore, there have been encouraging signs that central bank interventions have begun to curtail inflation, with strong indications that we have reached the interest rate peak, albeit one that policymakers have indicated will endure well into 2024. Nevertheless, the next twelve months will be characterised by important elections across a number of key market jurisdictions that might impact the future path of economic growth and interest rates, and regardless of when they may drop again, it looks likely that we have entered a new interest rate environment compared to that we have been in for the past 15 years. #### Investor sentiment and discount management With increased risk-free rates, some investors have sought to de-risk their portfolios with a move to the perceived safety of fixed income. Retail flows throughout the year were particularly affected by the increased cost of living resulting from high inflation and significantly higher mortgage servicing costs, which reduced the levels of surplus cash available for savings and investment. In this environment, demand for the shares of listed investment trusts as a whole, including the infrastructure sector and PINT, has been subdued. As at 31 December 2023, PINT's shares traded at a discount of 21% to NAV, despite the performance and valuations of the underlying assets being robust. We continue to believe that any share price discount to NAV is unjustified, as an investment in PINT offers a meaningful asset-backed yield, as well as capital growth and inflation protection that cannot be achieved by investment in a fixed income alternative. The Portfolio continues to perform robustly to varying economic and project-specific assumptions, including inflation, interest rates and valuation discount rates, as evidenced by the sensitivity analysis set out in the Investment Manager's report on page 35. As this demonstrates, portfolio diversification means the Company does not carry material exposure to any single sector-specific risk. The Board continues to focus on the current level of discount and the impact it has on Shareholders' reported returns. Having set out our views relating to discounts prior to the launch of the Company, we were quick to react as the discount widened. On 31 March 2023, the Board announced the commencement of a programme to buy back shares up to a total consideration of £10 million. 9 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # CHAIR'S STATEMENT CONTINUED # £487 million of assets invested or committed¹ # 4p per share total dividends declared for the year # Investor sentiment and discount management continued As at 31 December 2023, the Company had repurchased 7.4 million shares for a total consideration of £5.8 million, resulting in a NAV increase of 0.3p per share. Since that date, the Company has repurchased a further 3.1 million shares for a consideration of £2.6 million, resulting in a NAV increase of 0.1p per share. In total, the Company has now repurchased 10.5 million shares for £8.4 million since the buyback programme was announced. Despite the positive NAV impact of the buyback programme, the Board remains acutely aware of the continued discount to NAV at which the Company still trades, and continues to believe that share buybacks represent an attractive use of shareholders' capital where surplus means are available. Accordingly, the Board can confirm that an additional £8.4 million has been allocated for further share buybacks, to restore the total remaining programme commitment to £10 million. The Board will continue to regularly monitor the Company's approach to buybacks in consideration of the prevailing share price discount to NAV and the Company's available liquidity. 1. This refers to the capital committed to assets which were invested, committed and in legal closing at 31 December 2023. # Portfolio deployment and performance As at 31 December 2023, the Company had invested in or committed to 13 assets totalling £487 million. The Company announced three new investments during the year totalling £96 million: European towers business, GD Towers, Nordic fibre operator, GlobalConnect, and UK-based battery storage and electric bus fleet specialist, Zenobé. When considered alongside the total amounts deployed to and committed under the ongoing share buyback programme, the Company has now fully deployed its net IPO and subscription share proceeds. Whilst this clearly represents a major success for the Company and its shareholders, importantly it has been followed up with a period of strong performance across the Portfolio, with fair valuation gains translating to a higher NAV Total Return for the period versus the pre-IPO target. The Company declared dividends totalling 4p per share in relation to the year to 31 December 2023, and remains committed to paying a progressive dividend, commencing with the first interim dividend for 2024. The Board is considering the dividend level for the current financial year and will announce the level of the first interim dividend in due course. With all this considered, an investment into PINT continues to give an immediate exposure to a high-quality, established and highly diversified portfolio. Further details of the Portfolio Companies and their diversification can be found in the Investment Manager's report on page 12. # Revolving credit facility The Board was pleased to announce on 7 June 2023 a £52.5 million increase to its existing £62.5 million multi-currency revolving credit facility (RCF), bringing the total to £115 million. In addition, after the year end the Company extended the term of the RCF by 15 months, effectively resetting the tenor at three years with the same pricing and terms. The increase in and extension to the RCF provide the Company with an enduring and flexible way to cover its risk buffers and working capital needs. It also gives us additional liquidity to increase diversification through further investment in high-quality infrastructure assets from PINT's near-term investment pipeline, where we continue to see compelling opportunities. However, such investment will only be considered where it is materially accretive to shareholders in light of the current cost of such borrowings, and providing that the Company would not, as a result, become inappropriately levered or the facility to be fully drawn. 10 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## CHAIR'S ## STATEMENT CONTINUED Oversight of the investment process Through our oversight, such as the Primafrio site visit and Governance and sustainability andstrategy regular meetings with the Investment Manager, the Board The Board takes its responsibilities to its shareholders, in Investment management is delegated to Pantheon by the maintains comfort in the investment process and the quality accordance with good governance standards, very seriously, Board. Pantheon is responsible for reviewing, selecting of the Company’s portfolio. As evidenced by the continued and we continually strive to improve our oversight of the and executing investment opportunities for the Company. NAV growth, these businesses are in aggregate operating Company and its transparency. During the period, we have However, it is a vital part of the Board’s responsibilities to solidly and executing in line with the business plans on which had a particular focus on ESG matters and sustainability. oversee these activities, to ensure the investment process is our investments were based. To ensure sufficient focus on these matters, we have robust, and that the investments made are consistent with the ### Strategy formally created a new ESG & Sustainability Committee, aims, objectives and investment strategy of the Company. As it has done since launch, the Company seeks to which is chaired by Ms Finegan. Ms Finegan has been a To that end, the Board was delighted to join members of generate attractive risk‑adjusted returns by constructing a non‑executive Director of the Company since its launch and is Pantheon’s team on a site visit to Primafrio’s Head Office diversified portfolio of high‑quality assets across the global an experienced infrastructure asset management professional and major distribution centre in Murcia, Spain, in June 2023. infrastructure investment universe. The Company focuses with over 30 years of sector experience, performing a number Primafrio was the Company’s first investment commitment, on assets that offer downside and inflation protection, which of other board and advisory roles with an emphasis on ESG announced a few months after our launch, and it was very is particularly relevant in the current market environment. outcomes. pleasing to see the progress that it continues to make in the Leveraging Pantheon’s extensive 14‑year experience in PINT’s ESG & Sustainability Committee has responsibility development of existing and new distribution centres and infrastructure investing and its c.$22 billion infrastructure for: agreeing, overseeing and monitoring the Company’s logistics infrastructure. platform, PINT targets specific transactions that Pantheon ESG strategy; its ESG reporting and disclosure; its ESG risk deems to be most attractive, notably opportunities in The Board, the Investment Manager and our corporate management (alongside the Audit and Risk Committee); and businesses with strong operations and growth potential, in brokers, Investec, met with senior representatives from both ensuring effective stakeholder engagement. sub‑sectors benefiting from long‑term positive trends and Primafrio and Apollo, the Sponsor partner on the transaction. Under the oversight of this committee, the Company managed by high‑quality Sponsors. I am delighted that this The visit provided the Board with valuable insight into, and published its inaugural sustainability report on approach to investment is now evident in the Portfolio that the assurance regarding, the Investment Manager’s robust 19 September 2023, providing (among other things) Company has assembled through the opportunities provided investment and underwriting processes, the strength of further insight into the sustainability characteristics of by Pantheon. relationships with Sponsors, and an example of the access PINT’s portfolio and relevant emissions data. The full to the management teams of the Company’s underlying report can be found on the Company’s website: assets accorded to the Investment Manager. The Board was www.pantheoninfrastructure.com and a summary delighted to be able to extend this visibility to shareholders of the information can be found on page 58. when hosting the Company’s inaugural capital markets day in November, covering key topics including market outlook, Portfolio overview and introducing some of Pantheon’s key Sponsor relationships. We look forward to hosting more of these events in the future and welcome any suggestions on future content. 11 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## CHAIR'S ## STATEMENT CONTINUED ### Shareholder engagement Outlook With this in mind, and as already stated, we believe that A major part of the Board’s purpose is to represent the Infrastructure remains a key driver of economic growth, and the current level of discount is unjustified, and represents interests, needs and wishes of the Company’s shareholders. therefore the need for investment into new infrastructure a compelling value opportunity for those seeking to invest We are committed to maintaining open channels of is arguably stronger than ever. Indeed, in the current into a fully deployed and diversified portfolio of high‑quality communication and to engaging with shareholders in a environment, private investment is especially needed, and infrastructure assets. manner which they find most meaningful, in order to gain we believe will be ultimately rewarded, at a time where Currently, it appears that much of the market is focusing an understanding of their views. governments are facing significant budget deficits and rising purely on yield from gilts and bonds without considering debt levels. Shareholder meetings take place throughout the year prospects for capital appreciation. We continue to believe that with the Investment Manager, but as Chair I believe it is The last six months or so have seen an even greater PINT’s strategy means it is well positioned for when investors vitally important for the Board and I to hear views first international focus on decarbonisation. According to the again start to recognise the importance of growth potential in hand. Throughout the year, the Chair of the Audit and Risk World Meteorological Organization, 2023 was the warmest a well‑balanced investment strategy, and have been further Committee and I offered meetings to a significant number of year on record, and the annual average global temperature encouraged by the increased awareness relating to the shareholders representing a majority of the share register by approached 1.5°C above pre‑industrial levels. The road ongoing cost disclosures issues affecting AIFMs, which may issued share capital. Several of them accepted our offer and to net zero globally requires sustained and extraordinary in time provide further buying stimulus in a market showing we met with investors representing more than one‑fifth of the investment in new infrastructure. Private infrastructure has signs of recovery. The Board is confident of the Manager’s register. demonstrated a necessary role in filling that gap, and we ability to continue to source new assets and to manage the believe it will continue to play an important part in funding existing portfolio to deliver that growth. We also believe that Feedback from these meetings was overall very positive, and global infrastructure investments. infrastructure assets will provide much‑needed resilience in the engagement from the Board was well received. Naturally, the current uncertain world. shareholders were keen to see continued improvement and The market for infrastructure investment remains competitive, we have endeavoured to respond to many of the issues raised, and despite some recent signs of recovery, fundraising in Board composition such as: the share price discount to NAV (we have announced private markets was challenging in 2023. PINT’s strategy It is now over two years years since the Company’s launch, a programme of buybacks); providing confidence in valuations continues to be to identify and target companies that are and as Chair I have had no issues in committing the (we have continued to disclose valuation sensitivities); set to benefit from key sectoral tailwinds, whilst exhibiting necessary time to oversee the Company alongside my other and improved ESG and climate disclosures (we have since defensive characteristics and delivering growth in real terms non‑executive roles. Nevertheless, mindful of the perception, published our sustainability report). across the economic cycle. Pantheon’s wide capability if not the reality, of my capacity to act as Chair, I intend to to source new investments through its vast network and step‑down at the Company's annual general meeting in 2025. The Board always welcomes contact with shareholders, so established partnerships, as demonstrated since PINT’s It has been an extremely enjoyable experience to serve as if there are matters you wish to raise with us or if you would launch, is all the more crucial in current market conditions. Chair during such an exciting period for the Company, and like a meeting, please feel free to contact us at the registered The Board remains optimistic about PINT’s future investment I look forward to supporting the rest of the Board in the office or via the Company Secretary using the details on opportunities and value creation potential. process to appoint my successor in the coming months, page 140. which will be led by our Senior Independent Director (SID), Ms Baldock. ### Vagn Sørensen Chair 2 April 2024 12 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## PINT INVESTMENTS ## EXISTING PORTFOLIO TRANSPORT & POWER & DIGITAL LOGISTICS UTILITIES INFRASTRUCTURE ## National ## Primafrio CyrusOne Gas Specialised temperature‑controlled transportation Operates more than 50 high‑performance data centres The owner and operator of the UK’s sole gas and logistics company in Europe primarily focused on representing more than four million sq ft of capacity transmission network, regulated by Ofgem, and an the export of fresh fruit and vegetables from Iberia to across North America and Europe. independent, highly contracted metering business. Northern Europe. | Sector: Transport & Logistics | | | Sector: Digital: Data Centre | | | Sector: Power & Utilities: Gas Utility and Metering | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Geography: Europe | | | Geography: North America | | | Geography: UK | | | | Sponsor: Apollo | | | Sponsor: KKR | | | Sponsor: Macquarie | | | | Website: www.primafrio.com | | | Website: www.cyrusone.com | | | Website: www.nationalgas.com | | | | Date of commitment: 21.03.2022 | | | Date of commitment: 28.03.2022 | | | Date of commitment: 28.03.2022 | | | | PINT NAV 31 December 2023: £47m | | | PINT NAV 31 December 2023: £27m | | | PINT NAV 31 December 2023: £47m | | | | | | 1 | | | 1 | | | 1 | | Investment thesis and value creationstrategy | | | Investment thesis and value creationstrategy | | | Investment thesis and value creationstrategy | | | | • | Niche market leader providing an essential service to | | • Growth in data usage continues to drive data centre | | | • Stable inflation‑linked cash flows with returns positively | | | | | resilient end markets. The company has demonstrated | | | demand. In particular, the hyperscale segment represents a | | | correlated to inflation, supported by tailwinds of the current | | | | strong organic growth over a 15+ year operating history, | | | strong growth opportunity due to increasing cloud adoption | | | macroeconomic environment. | | | | including during major economic dislocations (2008-2009 | | | and increasingly data‑heavy technologies (5G, AI, gaming, | | • Strong downside protection; regulatory framework allows | | | | | global financial crisis and 2020-2021 Covid‑19). | | | video streaming). | | | for the recovery of costs and a minimum return on capital. | | | | The essential nature of Primafrio’s market and its operations | | | | | | The company also holds a monopolistic position through | | • Benefits from defensive characteristics such as long‑term provide strong downside protection. sole ownership of the UK’s gas transmission network. contracts with a largely investment grade credit quality Value creation opportunities include inorganic growth, customer base, price escalators and limited historical • Significant growth opportunity. The transmission system ### • will play a leading role in making the network ready for any strategic M&A, and continued investment in Primafrio’s cold customer churn. future transition from natural gas to hydrogen. It will support storage logistics infrastructure footprint. the 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. 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. 13 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## PINT INVESTMENTS ## EXISTING PORTFOLIO CONTINUED POWER & DIGITAL DIGITAL UTILITIES | INFRASTRUCTURE | | INFRASTRUCTURE | | | | --- | --- | --- | --- | --- | | | Vertical | | Delta | Cartier | | | Bridge | | Fiber | Energy | | | The largest private owner and operator of towers and | | Owner and operator of fixed telecom infrastructure in | Platform of eight district energy systems located across | | | other wireless infrastructure in the US, with more than | | the Netherlands, providing broadband, TV, telephone | the Northeast, Mid‑Atlantic and Midwest of the US. | | | 7,000 owned towers across the country. | | and mobile services to retail and wholesale customers | | over a predominantly fibre network. | Sector: Digital: Towers | | | Sector: Digital: Fibre | | | Sector: Power & Utilities: District Heating | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Geography: North America | | | Geography: Europe | | | Geography: North America | | | | Sponsor: DigitalBridge | | | Sponsor: Stonepeak | | | Sponsor: Vauban | | | | Website: www.verticalbridge.com | | | Website: www.deltafibernederland.nl | | | Website: Not available | | | | Date of commitment: 04.04.2022 | | | Date of commitment: 26.04.2022 | | | Date of commitment: 23.05.2022 | | | | PINT NAV 31 December 2023: £27m | | | PINT NAV 31 December 2023: £25m | | | PINT NAV 31 December 2023: £31m | | | | | | 1 | | | 1 | | | 1 | | Investment thesis and value creationstrategy | | | Investment thesis and value creationstrategy | | | Investment thesis and value creationstrategy | | | | • Track record of organic and inorganic growth: since its | | | • Opportunity to invest in high‑quality fibre network with high | | | • Gross margin structure underpinned by availability‑based | | | | | founding in 2014, Vertical Bridge has been one of the most | | | barriers to entry as a regional leader in its core footprint of | | | fixed capacity payments and consumption charges, and | | | | active acquirers and ‘build‑to‑suit’ developers amongst | | | suburban and rural areas with historically high penetration | | | pass‑through pricing mechanism limits commodity price | | | | tower companies, and expects to further accelerate these | | | and low churn rates. | | | exposure providing robust downside protection. | | | | activities. | | • Well positioned to capitalise on extensive rollout | | | • ‘Sticky’ customer base with an average relationship | | | | • 5G build‑out supporting continued growth: US carrier | | | | programme via first mover advantage in its core markets, | | | tenure of ~15-20 years and ~10-12‑year average remaining | | | | annual capex is forecast to increase by over 30% by 2025, | | | exhibited through its track record of fast build rates and | | | contractual life. | | | | prioritising macro towers in the 5G rollout. | | | ramp up of construction capacity. | | • Provides customers with a path to decarbonisation and | | | | • Top‑tier management team and Sponsor: key members of | | | | | | | increased thermal efficiency. | | Vertical Bridge and DigitalBridge (including both CEOs) have worked together since 2003, and have exceeded the original Vertical Bridge business plan. 1. There is no guarantee that the investment thesis will be achieved. Pantheon opinion. 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. 14 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## PINT INVESTMENTS ## EXISTING PORTFOLIO CONTINUED POWER & DIGITAL RENEWABLES & UTILITIES INFRASTRUCTURE ENERGY EFFICIENCY ## Vantage | Calpine | Data Centers | Fudura | | --- | --- | --- | | Independent power producer with c.26GW of | Leading provider of wholesale data centre | Dutch market‑leading owner and provider of | | principally gas‑fired generating capacity, including | infrastructure to large enterprises and hyperscale | medium‑voltage electricity infrastructure to business | | c.770MW of operational renewables. | cloud providers. | customers, with a focus on transformers, metering | devices and related data services. | Sector: Power & Utilities: Electricity Generation | | | Sector: Digital: Data Centre | | | Sector: Renewables & Energy Efficiency | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Geography: North America | | | Geography: North America | | | Geography: Europe | | | | Sponsor: ECP | | | Sponsor: DigitalBridge | | | Sponsor: DIF | | | | Website: www.calpine.com | | | Website: www.vantage‑dc.com | | | Website: www.fudura.nl | | | | Date of commitment: 27.06.2022 | | | Date of commitment: 01.07.2022 | | | Date of commitment: 25.07.2022 | | | | PINT NAV 31 December 2023: £56m | | | PINT NAV 31 December 2023: £26m | | | PINT NAV 31 December 2023: £46m | | | | | | 1 | | | 1 | | | 1 | | Investment thesis and value creationstrategy | | | Investment thesis and value creationstrategy | | | Investment thesis and value creationstrategy | | | | • Vital supplier to the US electricity grid, providing reliable | | | • Secular data usage growth through increasing cloud | | | • | Highly stable inflation‑linked cash flows from large | | | | power generation capacity and playing an important role in | | | adoption and increasing data‑heavy technologies continues | | | and diversified locked‑in customer base with long‑term | | | | the energy transition as the US targets net zero carbon by | | | to drive data centre demand. | | | contracts, low churn and inflation protection. | | | | 2050. Calpine benefits from highly predictable diversified | | • Strong growth pipeline from favourable existing | | | | Strong downside protection with a quasi‑monopoly | | ### • cash flows underpinned by contracts supported by a robust relationships with hyperscale customers. positioning in its core regional markets characterised by hedging programme. high barriers to entry. • Downside protection from strong position in • Strong renewables development pipeline of solar and supply‑constrained core geographies, long‑term contracts Energy efficiency and decarbonisation tailwinds driving ### • battery storage projects, financeable through the cash with investment‑grade counterparties, and low churn due to growth opportunities to broaden service offering to flows generated by existing assets, which are projected to high switching costs and barriers to entry. customers including EV charging, solar panels, heat pumps nearly triple its renewables power generation capacity over and battery storage. the next five to six years. 1. There is no guarantee that the investment thesis will be achieved. Pantheon opinion. 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. 15 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## PINT INVESTMENTS ## EXISTING PORTFOLIO CONTINUED DIGITAL INFRASTRUCTURE ## National Broadband ## Ireland ("NBI") Fibre‑to‑the‑premises network developer and operator working with the Irish Government to support the rollout of the National Broadband Plan, targeting connection to 560,000 rural homes. Sector: Digital: Fibre Geography: Ireland Sponsor: Asterion Website: www.nbi.ie Date of commitment: 09.11.2022 PINT NAV 31 December 2023: £47m 1 Investment thesis and value creation strategy • Stable cash flows with inflation protection expected through the terms of the project agreement and the prices NBI can charge to internet service providers for access. • Downside protection through a unique positioning in the intervention area (the franchise area granted by the Irish Government) and a flexible government subsidy regime. • Attractive macro trends including increased remote working, demographics and growth in fibre broadband take‑up to date underpin the long‑term commercial viability of the network. 1. There is no guarantee that the investment thesis will be achieved. Pantheon opinion. 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. 16 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## PINT INVESTMENTS ## NEW INVESTMENTS ### Transaction/company overview Investment thesis and value 1 ### • In Q3 2022, DigitalBridge, alongside Brookfield Asset creationstrategy ### Management, agreed to buy 51% of GD Towers from • Majority of cash flows are contracted and index‑linked, DIGITAL INFRASTRUCTURE Deutsche Telekom for a total enterprise value of offering strong downside protection in challenging €17.5 billion, with PINT investing as part of the subsequent macroeconomic conditions. ## GD Towers co‑investment syndication process. Favourable market tailwinds from regulatory‑driven ### • Largest tower operator and telecom • GD Towers has one of the largest tower and telecom 5G coverage requirements with significant growth infrastructure networks in Western Europe with c.40,000 opportunities. ### infrastructure network in Western Europe tower sites across Germany and Austria, making it the Organic and inorganic growth opportunities arising from ### • ### with c.40,000 tower sites across Germany market leader in Germany and second largest in Austria. other market participants, and numerous consolidation ### and Austria. ### • GD Towers’ high‑quality portfolio is supported by an opportunities in Europe. Sector: Digital: Towers anchor tenancy agreement with Deutsche Telekom, 2 ### ESG which has retained a 49% ownership stake in GD Towers. ### Geography: Europe • Deutsche Telekom AG has a net zero carbon strategy Sponsor: DigitalBridge that is aligned with the Science Based Targets initiative (SBTi) and has been highly rated by the Carbon Disclosure Website: Not available Project. Date of commitment: 31.01.2023 ### • The majority of power for the tower sites now comes from PINT NAV 31 December 2023: £38m renewable sources, with carbon offsetting arrangements in place for any fossil fuel power consumption. 1. There is no guarantee that the investment thesis will be achieved. Pantheon opinion. 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. 2. Source: ERM. While DigitalBridge may consider ESG factors when making an investment decision, DigitalBridge does not pursue an ESG‑based investment GD Towers 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. 17 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## PINT INVESTMENTS ## NEW INVESTMENTS CONTINUED ### Transaction/company overview Investment thesis and value 1 ### • In Q4 2022, EQT Infrastructure III announced the sale of a creationstrategy ### minority stake (15%) of its shareholding in GlobalConnect • Majority of cash flows are contracted and index‑linked, DIGITAL INFRASTRUCTURE (GC) to Mubadala. PINT invested alongside other offering downside protection in challenging co‑investors following this transaction, while EQT retained macroeconomic conditions. ## GlobalConnect a majority (controlling) stake. Favourable market tailwinds from regulatory‑driven ### • Leading pan‑Nordic wholesale and retail • GC is a pan‑Nordic digital infrastructure platform with a 5G coverage requirements with significant growth 155,000 km fibre network and 17 (35,000 m²) data centres. opportunities and long‑term secured revenues, protecting ### telecoms business with extensive fibre its market position. ### • GC is a leading challenger and is well positioned to ### network and data centre portfolio. ### increase its market share across verticals and geographies • Organic and inorganic growth opportunities arising from given its blue‑chip customer base, one‑stop‑shop solution rural fibre rollout, growing demand for larger bandwidth and high barriers to entry. and numerous consolidation opportunities. Sector: Digital: Fibre ### Geography: Europe ESG ### Sponsor: EQT • In June 2023, GC was approved by the SBTi, committing to reducing its absolute carbon emissions by 42% by 2030. Website: https://www.globalconnectgroup.com/ ### • In 2022, GC raised €1 billion in ESG‑linked financing and Date of commitment: 22.06.2023 recently won an award for the sustainability‑linked loan PINT NAV 31 December 2023: £20m of the year in Europe. ### • Its sustainable data centres, powered by 100% green energy, are achieving ~25% lower power usage than the European average. 1. There is no guarantee that the investment thesis will be achieved. Pantheon opinion. 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. 18 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## PINT INVESTMENTS ## NEW INVESTMENTS CONTINUED ### Transaction/company overview Investment thesis and value 1 ### • Co‑investment alongside Infracapital in their 2023 creationstrategy ### equity raise to support Zenobē’s business plan growth. • Substantial and growing market opportunity driven by RENEWABLES & ENERGY EFFICIENCY Infracapital retained a co‑control stake alongside a new significant capex required to meet demand for EV charging investor (KKR), forming a strategic partnership to support and electricity grid stability. ## Zenobē Zenobē’s expansion into North America, Europe and Market leader in core regions in a high‑growth sector with ### • Australasia. attractive expansion opportunities. ### Zenobē provides essential infrastructure ### • Zenobē develops, finances, owns and operates electric Downside protection and inflation protection via ### that contributes to international power and • buses and transmission grid‑scale batteries, providing long‑term availability‑style contracts with high‑quality ### transport sector decarbonisation targets. turnkey service offerings to its customers. counterparties. ### • Since Infracapital’s initial investment in 2020, Zenobē has 2 ### ESG Sector: Renewables & Energy Efficiency grown to establish itself as a market leader at the forefront ### • In addition to providing electrification solutions for vehicle of these increasingly important industries in UK, Benelux, Geography: UK fleet owners, Zenobē's batteries help balance the supply of Australia and New Zealand. Sponsor: Infracapital renewable energy to the grid. ### • By financing, designing, building and operating battery Website: www.Zenobe.com systems, Zenobē is accelerating the switch to electric Date of commitment: 07.09.2023 vehicles and maximising the uptake of renewable energy. PINT NAV 31 December 2023: £33m ### • Zenobē has committed to net zero value chain carbon emissions by 2050 and was awarded the IJGlobal ESG Award for Europe 2023. 1. There is no guarantee that the investment thesis will be achieved. Pantheon opinion. Past performance is not indicative of future results. Future results are not guaranteed, and loss of principal may occur. Please refer to the slide titled ‘Disclosure 1 – Investments’ towards the back of this report. Zenobē 2. Source: Infracapital and Zenobē. The information herein has been compiled by Pantheon based on information supplied to it by Infracapital and Zenobē. For the avoidance of doubt, Pantheon is not acting on behalf of Infracapital in communicating any information set out herein. 19 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## PINT ## TIMELINE Agreed £52.5m | | Commitment of | | | | | increase to RCF, | | | --- | --- | --- | --- | --- | --- | --- | --- | | | €28.4m to Delta | | | Commitment | | bringing total to | | | | Fiber – Dutch | | | of €52.7m | | £115m | | | | fibre company | | | to National | | Commitment | | | | Commitment | Commitment | Raised £81m of | Broadband | Commitment of | of €22.0m to | | | | of $30.2m to | of $55.4m to | gross proceeds | Ireland – | €47.2m to GD | GlobalConnect | | | Raised | Vertical Bridge | Calpine – US | through exercise | Irish digital | Towers – German | – Nordic fibre | PINT hosts | | £400m gross | – US towers | power generation | of subscriptions | Infrastructure | and Austrian | networks | maiden capital | | IPO proceeds | company | business | shares | company | towers company | company | markets day | November 2021 June 2022April 2022 September 2022 November 2022 January 2023 June 2023 November 2023 | March 2022 | | | July 2022 October 2022 March 2023 September 2023 | | | | | March 2024May 2022 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Commitment | Commitment of | | Commitment | Paid first interim | Paid second | Commitment of | | Agreed extension | | | of $47.6m | $41.4m to Cartier | | of $33.2m to | dividend of | interim dividend | £35m to Zenobē | | to existing £115m | | | to Primafrio | Energy – US | | Vantage Data | 1p per share | of 1p per share | – UK battery | | RCF, resetting | | | – European | district energy | | Centers – North | | Board announces | storage and | | maturity to | | | transport & | platform | | American data | | £10m share | electric bus fleet | | March 2027 | | | logistics business | | | centre business | | buyback | specialist | | | Declared second Commitment programme Declared first interim dividend Commitment of €47.0m to interim dividend for 2023 of of $32.3m to Fudura – Dutch for 2023 of 2p 2p per share, CyrusOne – electricity per share, paid payable on North American infrastructure on 27 October 23 April 2024 data centre provider 2023 business Commitment of £39.6m to National Gas – UK regulated gas transmission network and metering business Key: DIGITAL INFRASTRUCTURE RENEWABLES & ENERGY EFFICIENCY POWER & UTILITIES TRANSPORT & LOGISTICS CORPORATE 20 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INVESTMENT ## MANAGER'S REPORT ## Founded in 1982, Pantheon ## has established itself as a ## leading global multi‑strategy ### Pantheon ### 1 ## investor in private equity, 128 $95bn >1,000 13 ### platform Investment Funds under Institutional Global offices ## infrastructure and real professionals management investors globally ## assets, private debt and ## realestate. ### Pantheon’s infrastructure experience Since 2009, Pantheon has completed 218 infrastructure investments across primaries, secondaries and co‑investments alongside more than 58 asset sourcing ### partners, solidifying its position as one of the largest Pantheon ### 1 ## managers investing in infrastructure. Total infrastructure $22bn 218 33 22 years ### private | co‑investment and Sponsor relationships exceeded 50 as | infrastructure | AUM | Investments | Investment | Average years' | | --- | --- | --- | --- | --- | --- | | of December 2023, including investments closed or in legal | | | | professionals | experience of | | closing. The global infrastructure investment team managed | | | | | Investment Committee | c. $22 billion in AUM as at 30 September 2023. ### 1. As at 30 September 2023. This figure includes assets subject to discretionary Pantheon ## or non‑discretionary management or advice. Infrastructure AUM includes $4bn 52 58+ 13.2% ### private all infrastructure and real asset programmes which have an allocation to ### infrastructure Total Total Asset sourcing Notional natural resources. ### co‑investments 2 2. Performance data as of 30 September 2023. Past performance is not commitments investments partners net IRR 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. Notional net performance is based on an average forecast annualised fee of 1.5% of NAV. 21 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INVESTMENT ## MANAGER'S REPORT CONTINUED ### Pantheon’s infrastructure experience ### continued Pantheon primary Sponsors require Pantheon co‑investment Pantheon has extensive experience of and expertise in funds strategy co‑investment partner strategy primary, secondary and co‑investments, which are defined as follows: | • | primary investments: involve a commitment to a newly | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | AUM in primary commitments | | | Co‑investment opportunities | | | | Committed across | | | launched limited life fund managed by a Sponsor, seeking | | | 1 | | | 2 | | | | | | | since 2009 | | | screened since 2015 | | 52 co‑investment assets | | to exit improved businesses in the later years of the fund term at a profit; ### • secondary investments: traditionally involve the purchase of an interest in an established private fund or a portfolio of companies from an existing investor; and ### • co‑investments: afford the opportunity for investors to invest alongside Sponsors in specific Portfolio Companies, typically on a fee and carried interest‑free basis. ### $10bn $88bn $4bn PINT focuses on gaining exposure to infrastructure assets via co‑investments. Committed across 52 3 co‑investment assets | | | • Pantheon develops long‑term | | Sponsors may offer | • Access to co‑investment | | | --- | --- | --- | --- | --- | --- | --- | | | | | relationships with top tier | co‑investments for the following | | assets, typically on a no‑fee, | | | | | Sponsors by investing in their | reasons: | | no‑carry basis. | | | | | underlying flagship funds. | | • Proven track record as a | | | 1. As at 30 September 2023. This figure includes assets subject to discretionary | | | | • size of transaction; | | | | | or non‑discretionary management or advice. Infrastructure AUM includes | • Sponsors consider Pantheon | | | | valuable partner by providing | • manage concentration limits; all infrastructure and real asset programmes which have an allocation to to be a strategic partner, rather experience in complex deals; natural resources. • raise follow‑on capital; and than a direct competitor. speed and certainty of 2. Pantheon internal data from 2015 to December 2023. Screened deal flow is • strengthen investor deal execution within short based on total value of transactions ($). relationships. time frames. 3. Total infrastructure co‑investment count and committed amount as of December 2023, includes all Pantheon infrastructure co‑investments closed • Co‑investment track record or in legal closing. has produced notional net IRR 4. Performance data as of 30 September 2023. Performance data includes all 4 to date of 13.2% . consummated infrastructure co‑investments approved by GIRAC since 2015, when Pantheon established its infrastructure co‑investment strategy. 22 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INVESTMENT ## MANAGER'S REPORT CONTINUED ### NAV pence per share movement Interest on cash deposits contributed 0.7p per share (period ## PORTFOLIO ### (Year to 31December2023) to 31 December 2022: 0.4p per share), and share buybacks PINT is constructing a diversified global portfolio with NAV increased over the year by 7.7p per share (period to contributed 0.3p per share (period to 31 December 2022: nil), a focus on developed market OECD countries, with the 31 December 2022: 0.9p per share), after adjusting for the with a reduction of (1.9)p per share (period to 31 December majority of exposure in Western Europe and North America. dividends paid of 3.0p per share over the year (period to 2022: (1.0)p per share) related to fund operating and financing Over the medium term, the Investment Manager expects, 31 December 2022: 1.0p per share). The movement in the year expenses, resulting in a closing NAV of 106.6p per share. in line with the initial prospectus, the composition of the was principally driven by fair value gains of 12.0p per share This excludes the impact of the second interim dividend of Portfolio to include investments in the following sub‑sectors: (period to 31 December 2022: 2.0p per share), partially offset 2.0p per share, which is to be paid on 23 April 2024. Digital Infrastructure, Power & Utilities, Transport & Logistics, by foreign exchange movements of (3.0)p per share (period Renewables & Energy Efficiency and Social & Other to 31 December 2022: 2.1p per share), attributable to the Infrastructure. weakening of both EUR and USD during the year, which was In the year to 31 December 2023, the Company announced partially offset by a 2.6p per share movement from the foreign three further investments, amounting to £96 million, with exchange hedging programme (period to 31 December 2022: a total of £487 million now invested or committed across (1.8)p per share). 13 investments. The Portfolio assembled is diversified across sectors NAV Pence per share movement and geographies, and the Investment Manager believes | | | 12.0p | | 2.6p | 0.7p | | 0.3p | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | that it is well positioned to withstand any external market | | | | | | | | 106.6p | | challenges. The investments typically benefit from defensive | 98.9p | | (3.0)p | | | (1.9)p | | | (3.0)p characteristics including long‑term contracted cash flows, inflation protection and robust capital structures. Seven investments are in Digital Infrastructure, representing 1 44% of NAV , across the data centre, towers and fibre sub‑sectors. Three investments, representing 27%, are in the Power & Utilities sector including: gas transmission, district heating and electricity generation. Two investments are in Renewables & Energy Efficiency (17%) and the remaining investment is in Transport & Logistics (9%). The largest geographical exposure is in Europe (46%), with the remaining exposure in North America (34%) and the UK (17%). Net working capital reflects 3% of NAV. 1 paid 2022 gains Share 2023 hedge Foreign Foreign Finance income Fair value exchange exchange Expenses buybacks Dividends movement 31 December 31 December 1. Expenses include operating and capital expenses. 23 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INVESTMENT ## MANAGER'S REPORT CONTINUED 1 ## PORTFOLIO IN NUMBERS ### Exposure to operational infrastructure assets POWER & RENEWABLES & DIGITAL UTILITIES ENERGY EFFICIENCY INFRASTRUCTURE ## 26GW | | 67,000 | 1,444,000 | | --- | --- | --- | | of electric generation capacity, including 729MW | smart meters helping to reduce | homes connected | | of renewables, generating 111TWh annually | domestic energy bills | to high speed fibre | POWER & DIGITAL RENEWABLES & INFRASTRUCTURE ENERGY EFFICIENCY UTILITIES | 94 | 1,000 | | 8 | | --- | --- | --- | --- | | data centres providing | electric buses supported, saving 66,000 tonnes | | district heating networks, with 96 km | | 1,440MW of power capacity | of CO | annually | of piping serving 190 buildings | 2 1. Figures represent the total infrastructure assets across PINT’s Portfolio Companies. 24 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INVESTMENT ## MANAGER'S REPORT CONTINUED 1 ## PORTFOLIO IN NUMBERS CONTINUED ### Exposure to operational infrastructure assets continued RENEWABLES & DIGITAL TRANSPORT & ENERGY EFFICIENCY INFRASTRUCTURE LOGISTICS | 17,200 | 416,000 km | 2,500 | | --- | --- | --- | | medium and high voltage | of fibre cable, | temperature controlled trucks and 40,000 m² | | transformers | passing 2.9 million homes | of temperature controlled warehouse capacity | POWER & DIGITAL RENEWABLES & INFRASTRUCTURE UTILITIES ENERGY EFFICIENCY | 51,000 | 7,630 km | 1,494MW | | --- | --- | --- | | telecom towers of pressurised gas transmission pipes, | | of battery energy storage capacity, | | | 71 gas compressors and nine gas and LNG terminals | supporting the transition to net zero | 1. Figures represent the total infrastructure assets across PINT’s Portfolio Companies. 25 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INVESTMENT ## MANAGER'S REPORT CONTINUED ## PORTFOLIO CONTINUED 1 2 The breakdown of the Company’s NAV as at 31 December 2023 is shown below by reference to sector and geography. The breakdowns are shown relative to amounts invested 3 | and committed | . | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | 4 | | | | 4 | | Sector diversification (as at 31 December 2023) | | | | | Geographic diversification (as at 31 December 2023) | | | | | | | 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 | 43.9% Europe | 46.1% Invested | 41.8% Invested | 44.4% Committed | 2.1% Committed | 1.8% Power & Utilities | 26.7% North America | 34.0% Invested | 26.7% Invested | 33.2% Committed | 0.0% Committed | 0.8% Renewables & Energy Efficiency | 16.6% UK | 16.6% Invested | 15.7% Invested | 16.0% Committed | 0.9% Committed | 0.6% Transport & Logistics | 9.4% Net working capital | 3.3% Invested | 9.3% Committed | 0.1% Net working capital | 3.3% 1. Based on NAV of £504 million at 31 December 2023. 2. Invested amounts at 31 December 2023 totalled £471.7 million, representing the fair value of the Company’s funded investments in those sectors or geographies. 3. Committed but not yet invested amounts at 31 December 2023 totalled £15.7 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. Charts do not add up to 100.0% due to rounding 26 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INVESTMENT ## MANAGER'S REPORT CONTINUED ## PORTFOLIO CONTINUED 13.6% 36% 77% £60m | | WEIGHTED AVERAGE | | | | WEIGHTED AVERAGE | | | | WEIGHTED AVERAGE | | | | WEIGHTED | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | DISCOUNT RATE | | | | GEARING | | | | HEDGED DEBT | | AVERAGE EBITDA | | | Weighted average discount rate of | | | Weighted average gearing is calculated | | | | | Weighted average hedged debt | | | Weighted average EBITDA is based on | | | | 13.6% is based on the discount rate of | | | by reference to the ratio of net debt | | | | | calculated by reference to ratio of | | | the annual EBITDA of each Portfolio | | | | each Portfolio Company investment | | | to enterprise value of each Portfolio | | | | hedged debt relative to net debt of each | | | | Company at 31 December 2023, weighted | | | | at 31 December 2023, weighted on an | | | | Company, weighted across all | | | | | Portfolio Company. | | by PINT’s ownership of underlying | | | | investment fair value basis (excluding | | | | | 13 investments. | | | | | | Portfolio Companies and converted to GBP | | | | undrawn commitments), across all | | | | | | | | | | | | | as necessary. | 13 investments. Cartier Energy Zenobē 27 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INVESTMENT ## MANAGER'S REPORT CONTINUED Allocation of ## PORTFOLIO CONTINUED | | | Portfolio | | | | | | | | | | Portfolio | | | Undrawn | | | foreign | | Portfolio | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | value | | | | | Asset | | | | | value | commitments | | | exchange | | | total return | | | | 31 December | | | | | | valuation | | | FX | 31 December | | | 31 December | | | | hedge | | for the | | | | | | 2022 | Drawn | Distributions | | movement | | movement | | | | 2023 | | | 2023 | movements | | | | year | | Asset Region Sponsor | | | (£m) | (£m) | | (£m) | | (£m) | | (£m) | | | (£m) | | | (£m) | | | (£m) | | (£m) | Primafrio Europe Apollo 40.4 0.1 — 7.5 (1.0) 47.0 0.5 1.0 7.5 CyrusOne North America KKR 22.8 — — 5.2 (1.4) 26.6 3.8 1.2 5.0 National Gas UK Macquarie — 40.8 — 6.6 — 47.4 — — 6.6 Vertical Bridge North America DigitalBridge 27.0 — — 1.9 (1.6) 27.3 — 1.4 1.7 Delta Fiber Europe Stonepeak 23.0 — — 3.2 (1.4) 24.8 1.5 — 1.8 Cartier Energy North America Vauban 34.8 — — (1.5) (2.0) 31.3 — 1.7 (1.8) Calpine North America ECP 47.0 — (9.0) 21.0 (3.1) 55.9 — 2.8 20.7 Vantage Data Centers North America DigitalBridge 22.3 5.4 — — (1.4) 26.3 — 1.3 (0.1) Fudura Europe DIF 41.3 — — 5.9 (1.0) 46.2 1.6 1.0 5.9 National Broadband Ireland Europe Asterion 42.8 1.0 — 4.6 (1.0) 47.4 2.9 1.1 4.7 GD Towers Europe DigitalBridge — 39.3 (1.0) 0.6 (0.9) 38.0 2.5 0.6 0.3 GlobalConnect Europe EQT — 19.0 — 1.1 0.2 20.3 — — 1.3 Zenobē UK Infracapital — 32.1 — 1.1 — 33.2 2.9 — 1.1 Grand Total 301.4 137.7 (10.0) 57.2 (14.6) 471.7 15.7 12.1 54.7 Key: DIGITAL INFRASTRUCTURE RENEWABLES & ENERGY EFFICIENCY POWER & UTILITIES TRANSPORT & LOGISTICS 28 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INVESTMENT ## MANAGER'S REPORT CONTINUED ## PERFORMANCE ### Asset updates PRIMAFRIO CYRUSONE NATIONAL GAS VERTICAL BRIDGE Primafrio performed resiliently despite a CyrusOne recovered initial capex backlogs and National Gas experienced no material deviations Vertical Bridge shifted priorities to its build‑to‑suit challenging trading environment. With a backdrop earnings for the year were in line with the original from the original investment case, with the (BTS) business given an unfavourable market for of flat volumes arising from a weak macroeconomic investment case. The company entered into a joint operation of the existing regulated asset base on tower portfolio acquisitions. The most notable environment in key European markets, the company venture with Kansai Electric Power Company during track. The National Infrastructure Commission gave development to date is a joint venture announced has been able to continually grow revenue through the period, which is expected to unlock significant its backing to a long‑term backbone hydrogen with Verizon for up to 3,000 BTS developments. increasing market share and expanding into new opportunities in the Asian market, and AI‑based network to aid the decarbonisation of heavy The company still sees some delays to rollout due markets with new and existing clients. Whilst computing is expected to provide significant further industry. Furthermore, the government confirmed to carriers deferring capex spend given recent margins have recently been impacted by high cost tailwinds. its strategy to seek hydrogen blending up to 20% macroeconomic headwinds, but longer term rollout inflation and fuel costs, the Company's valuation across the existing network, following similar of increased coverage is not in doubt given 5G has benefited from strong downside protection moves on the continent. The recent successful coverage requirements. Furthermore, there have afforded to Apollo and its co‑investors within the pilot project to run 100% hydrogen in repurposed been some recent positive signals in the M&A transaction structure. gas transmission assets was a world first and an market for acquiring existing tower portfolios, with important step in support of hydrogen blending a number of transactions closing in the period and across the network. Stakeholders are working an executable pipeline emerging for 2024, which is towards the first blending to align with the start of now more in line with the original investment case scalable hydrogen production in 2026. after a cooling off since late 2022. DELTA FIBER CARTIER ENERGY CALPINE VANTAGE DATA CENTERS Delta Fiber’s rollout is progressing on plan and it Cartier Energy had a challenging year after facing Calpine continues to outperform its original Vantage Data Centers sees increased opportunity expects to have completed activities by mid‑2025 a number of issues including the imperfect pass‑ investment case due to materially higher short and relative to the original investment case, principally on budget. Retail fibre adoption is tracking near through of energy costs, materially lower volumes medium‑term profitability arising from sustained due to increased cloud and AI computing demands, to plan with no changes to long‑term penetration due to significant seasonality shifts, and the loss higher spark spreads in its key markets. The for which a significant additional primary equity assumptions, and the company is seeking to of a key customer due to financial challenges. company continues to mitigate its exposure to commitment was secured in Q4 2023 from both replicate a recently announced wholesale network However, the business is actively working on near‑term energy prices through proactive hedging Digital Bridge and technology focused private sharing agreement with Odido (formerly T-Mobile converting its pipeline of shorter‑term “fill‑in” activities which lock in short‑term profitability. equity investor Silver Lake. The company continues Netherlands) with other internet service providers. opportunities as well as some capex initiatives Construction also commenced on its flagship Nova to effectively navigate supply chain and grid which were identified in the original investment battery storage project, as well as additional capex capacity challenges. case. deployment into both its existing renewables fleet and new renewables opportunities. The company was also awarded federal funding support for two carbon capture and sequestration projects. 29 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INVESTMENT ## MANAGER'S REPORT CONTINUED ## PERFORMANCE CONTINUED ### Asset updates continued FUDURA NATIONAL BROADBAND IRELAND GD TOWERS GLOBALCONNECT Fudura has outperformed its original investment National Broadband Ireland remains on track with GD Towers enjoyed good progress during the GlobalConnect's management remain focused on case since entry. Higher profit margins have its rollout plan, which continues to stay on budget. year, with revenues and profits coming in largely ensuring the optimal allocation of capital given the resulted from undertaking higher complexity and Final rollout is ahead of the revised contractual on track with the original investment case. The varied markets it operates in, which has resulted in higher margin projects, and revenues from its targets that were set to address the impact of business has been focused on implementing a recent re‑emphasis back towards its core market ancillary growth initiatives, including EV charging, Covid‑19 and the main deployment is expected to several immediate and significant organisational of fibre‑to‑the‑home opportunities in the Nordics. solar and batteries, are now ramping up. be largely completed by the end of 2026. A large changes geared towards delivering process The company also reached an important milestone number of internet service providers are now efficiencies in its BTS programme. Along with with more than one million homes passed. signed up, which in turn is supporting adoption other efficiency programmes being explored, the by end users greater than foreseen in the original company anticipates several areas of potential investment case, with the resulting revenues outperformance to the investment case, but until Q1 supporting the company’s profitability and liquidity 2024 will continue to be valued at cost. during construction. ZENOBĒ Zenobē has been busy since PINT's investment was made in Q4 2023, with further project financing secured for strategically important greenfield battery projects in Scotland as part of a £750 million rollout commitment in Scotland by 2026, as well as the announcement of an all‑electric fleet replacement for Oxfordshire County Council. 30 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INVESTMENT ## MANAGER'S REPORT CONTINUED ### Outlook ## PERFORMANCE CONTINUED The Investment Manager remains confident about the ### Portfolio movement prospects of the Portfolio going forward. The tailwinds that During the year, the Portfolio generated underlying growth of £57.2 million, reflecting a 13.0% movement on the opening capital support the demand for new infrastructure, and the growth invested, adjusted for capital calls and investments, but before adjusting for distributions totalling £10.0 million. Movements in opportunities that accompany it, remain strong across all the foreign currencies resulted in a foreign exchange loss of £14.6 million (offset at a company level by a foreign exchange hedging sub‑sectors in which the Company is active. gain of £12.1 million), resulting in a closing value of £471.7 million at 31 December 2023. From a valuation perspective, the Investment Manager has 1 The Portfolio had a weighted average discount rate (WADR) of 13.6% at the year end (31 December 2022: 14.2%). seen limited evidence of any material downward trends across the core‑plus infrastructure universe. The consensus amongst Portfolio movement (£million) Sponsors that the Investment Manager works with is that 471.7 the full extent of discount rate increases attributable to the 137.7 (14.6) increased interest rate environment has now flowed through (10.0) to valuations. The volume of remaining dry‑powder in the sector, coupled with a recovery in private markets fundraising 301.4 since H1 2023, and the core plus nature of the Company's assets, continue to support a constructive valuation environment. Furthermore the Investment Manager continues to see sustained transactional evidence of realised premiums to holding valuations at exit, which adds in further long‑term headroom and potential for outperformance. Specifically, there continues to be increased appetite for assets with some 57.2 degree of inflation linkage and those that play a direct role in the energy transition. | | 2022 | | | | Asset | | | | | 2023 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Capital | | | | | Foreign | | | | | | | calls and | | | | valuation | | | | | | | | | | | | movement | exchange | movement | | | | | | | investments | Distributions | | | | | | | | Portfolio value | 31 December | | | | | | | | Portfolio value | 31 December | 1. WADR of 13.6% is based on the discount rate or implied discount rate of each completed investment at 31 December 2023, weighted on an investment fair value basis (excluding undrawn commitments). 31 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # INVESTMENT # MANAGER'S REPORT CONTINUED # PERFORMANCE CONTINUED ## Portfolio cash flows Over the medium term, the Company expects the Portfolio to generate cash flows both through distributions from its investments and from investment exits, the latter becoming realised in cash in due course through asset disposals. In turn, these cash flows are expected to support both the reinvestment of capital and a progressive dividend policy. The Company's investment approach is to invest in assets with an expected hold period that is typically, but not always, 5-7 years, after which it is expected to realise value by exiting positions according to the relevant Sponsor's time horizon. Whilst the Company does expect some of its investments to make distributions, cash generation is expected to be heavily weighted towards the receipt of sale proceeds at the point of investment exit, and in some cases no distributions are forecast. The Company maintains a long-term forecast of both sources of cash flow, which is derived from either the Investment Manager's base case expectations or Sponsor updates where available. The latest projection of the Company's cash flows from the Portfolio is summarised opposite, as at 31 December 2023. The projection is based on existing investments only and does not factor in any potential for re-investment of capital after realisations, which accordingly accounts for the downward trend of distributions after realisations occur. Whilst these projections are intended to present a plausible long-term expectation of the Portfolio's cash flow generation, there is no guarantee around the quantum or timing of distributions or realisations, which remain dependent on multiple factors including underlying asset performance, exit timing, and long-term FX rate assumptions. Accordingly they should not be considered as guidance around financial performance. Projected Portfolio cash flows (£million) ![img-1.jpeg](img-1.jpeg) 32 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # INVESTMENT # MANAGER'S REPORT CONTINUED # PERFORMANCE CONTINUED # H2 2023 dividend At IPO, the Company said it would target a NAV Total Return of 8-10% p.a. following full investment of the IPO proceeds, and an initial dividend of at least 2p per share for the first financial period ended 31 December 2022, rising to 4p per share for the year ended 31 December 2023, and a progressive dividend thereafter. In line with this, the Board recently declared the Company's second interim dividend of 2p per share in respect of the year ended 31 December 2023, which is due to be paid on 23 April 2024. This is in line with the IPO target. # Dividend cover The Company has devised a measure to assess dividend coverage by calculating the ratio of net cash flow to dividends declared in respect of a given period. This is calculated across the whole group, including the Company's subsidiary, Pantheon Infrastructure Holdings LP (PIH LP), through which the Company holds the majority of its investments. Net cash flow for this purpose is calculated as income (the sum of all income and capital distributions that are not related to asset disposals, plus deposit interest income) plus disposal profits (realised profits on disposal, or disposal proceeds less original investment cost), less operating and financing expenses incurred during the same period. On this basis, the Company's dividend cover for 2022 and 2023 was 0.2x and 0.3x respectively, as detailed opposite. As set out on the previous page, the Company expects material progression in cash flows from the Portfolio as realisations start to occur, which in turn is expected to flow through to increased dividend coverage. | £m | 2022 | 2023 | | --- | --- | --- | | Income | 6.1 | 13.1 | | Disposal profits | — | — | | Operating costs | (4.6) | (6.6) | | Financing costs | (0.0) | (1.5) | | Net cash flow for dividend cover | 1.5 | 4.9 | | Dividend declared | 9.6 | 18.9 | | Dividend cover | 0.2x | 0.3x | | Cumulative dividend cover | 0.2x | 0.2x | 33 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # INVESTMENT # MANAGER'S REPORT CONTINUED # PERFORMANCE CONTINUED ## Borrowings In June 2023, the Company agreed a £52.5 million increase to its existing £62.5 million three-year multi-currency RCF, bringing the total to £115.0 million. As part of the increase, the Company sought to diversify the lender group, with the introduction of RBS International (RBSI), alongside Lloyds Bank Corporate Markets plc ('Lloyds'). After the year end, the Company extended the term of the RCF by 15 months, effectively resetting the tenor at three years with the same pricing and terms. The enlarged and extended 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 progression. ## Share buybacks As at 31 December 2023, the Company had deployed £5.8 million in buying back 7.4 million of its own shares, and subsequent to the year end, spent a further £2.6 million in buying back 3.1 million shares. Reacquired shares are held in treasury and may be subsequently re-issued if the Company's shares return to trading at a premium to NAV. At the year end the Company continued to make allowance for the remaining £4.2 million of the £10 million originally allocated to share buybacks, as part of its liquidity management as detailed on the analysis presented opposite. The Board continues to regularly assess the Company's optimal approach to capital allocation in light of its forecast cash flows, dividend target and expectations of dividend cover, and as detailed in the Chair's statement, has allocated an additional £8.4 million for share buybacks. ## Cash and liquidity management At the year end, the Company had total available liquidity of £144.4 million (31 December 2022: £245.4 million), comprising £29.4 million of cash (31 December 2022: £182.9 million) and £115.0 million (31 December 2022: £62.5 million) of undrawn RCF. The Company maintains a policy to hold liquidity sufficient to cover all investment commitments, including for share buybacks, due in the next twelve months. At the year end, this amount totalled £20.0 million. 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 potential movements in the Company's FX hedging positions (calculated relative to notional amounts and contractual maturity). At the year end, these amounts totalled £78.9 million. The net balance after taking account of all these considerations represents the funds available to the Company for further investment. As at the year end, this stood at £44.5 million (31 December 2022: £72.0 million). | | £m^{1} | | --- | --- | | Sources | | | Cash & equivalents | 29.4 | | RCF | 115.0 | | Total (A) | 144.4 | | Commitments | | | Undrawn investment commitments | 15.7 | | Share buybacks | 4.2 | | Total (B) | 20.0 | | Buffers | | | Operating costs | 8.5 | | Dividends | 18.8 | | Co-investment buffer | 22.1 | | FX buffer on undrawn investment commitments | 2.4 | | FX hedging buffer (see next page) | 28.2 | | Total (C) | 79.9 | | Available funds (= A - B - C) | 44.5 | 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 1.35% for the year to 31 December 2023 (period to 31 December 2022: 1.02%). The ongoing charges were lower in the period to 31 December 2022 as no management fee was paid on undeployed cash until 75% of the net issue proceeds were deployed, which was achieved in the quarter to 30 September 2022. 34 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INVESTMENT ## MANAGER'S REPORT CONTINUED ## PERFORMANCE CONTINUED Foreign exchange hedging – NAV impact (price per share) ### Foreign exchange impact 4.0p In order to limit the potential impact from material movements 3.5 in major foreign exchange rates on non‑local currency 3.0p 3.0 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 2.0p 2.0 1.5 in foreign exchange rates on the Company’s NAV, and to 1.1 1.0 1.0 this end the Company has an internal policy to seek to limit 1.0p its unhedged exposure to 25% of NAV at any time. Hedging 0.0 is achieved through the execution of foreign exchange 0.0p hedging contracts relative to the ongoing non‑local currency (0.1) investment exposure. This is subject to, inter alia, market (1.0p) liquidity and pricing for hedges, foreign exchange volatilities, (1.0) (1.0) the composition of the Company’s portfolio and the (1.3) (2.0p) Company’s balance sheet. (1.9) (1.9) The Company has entered into arrangements with six hedging (2.5) (3.0p) counterparties, all on an unsecured basis and subject only to margin calls if pre‑specified credit limits are breached on an (3.7) (4.0p) individual counterparty (not aggregate) basis. Furthermore, in Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 line with the Investment Manager’s risk policies, the Company 2022 2022 2022 2022 2023 2023 2023 2023 has adopted a policy to maintain strict liquidity buffers Hedge P&L Asset FX P&L Net movement in relation to these hedging positions to protect against extreme volatility‑driven margin requirements. Details of the Company’s hedging positions and associated cash buffers are | | | EUR notional | | USD notional | | Mark‑to‑market | | Buffer | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | set out in the table opposite. | Counterparty | | (€m) | | ($m) | | (£m) | (£m) | | The depreciation of USD and EUR resulted in a negative | A — 76.1 (0.1) 8.4 | | | | | | | | foreign exchange movement in the year to 31 December 2023 B — 36.2 (0.4) 3.4 of (£14.6) million (period to 31 December 2022, gain of £9.9 million), which was partially offset by a gain on the hedging C 45.3 12.4 1.1 — programme of £12.1 million (period to 31 December 2022, loss D 23.7 8.8 0.7 2.1 of £8.5 million). E 76.4 24.5 1.4 6.6 F 53.8 55.8 1.3 7.7 Total 199.2 213.8 3.9 28.2 35 PANTHEON INFRASTRUCTURE P.C ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # INVESTMENT # MANAGER'S REPORT CONTINUED # ASSUMPTIONS AND SENSITIVITIES ## Introduction The Portfolio valuation is the largest component of the Company's NAV and is determined by valuations provided by the underlying investment Sponsors. These valuations are typically calculated on a discounted cash flow (DCF) basis, which are subject to a variety of underlying assumptions that are specific to the sector and characteristics of each Portfolio Company, and are determined by the investment Sponsors. The degree to which these long-term assumptions change or are adjusted has the potential to impact the Company's NAV. With this in mind, the Investment Manager has performed a detailed analysis across the Portfolio to determine the Company's sensitivity to changes across a range of key assumptions, which are presented on the following pages. ## Macroeconomic ### Discount rates Discount rates are a measure of the relative risk of an investment, and will typically comprise a risk-free rate component along with a sector or project-specific equity risk premium, which is determined relative to specific project risks and benchmark transactions. In some cases, Sponsors use a WACC-based discount rate to derive an enterprise valuation which is then adjusted by net debt to give an equity value. The Company does not disclose individual discount rates but reports its aggregated WADR, which at the year end was 13.6%. ### Inflation The extent to which a Portfolio Company's existing revenues and costs are expected to inflate, or escalate, also impacts valuations. The escalation of revenues and costs is often determined through contractual arrangements, with measures including direct pass-through of a local inflation measure, fixed escalators, inflation linkage subject to escalation caps and/or floors, or no indexation at all. Where revenues and/or costs are directly linked to inflation, any changes to the inflation assumptions determined by Sponsors will impact on valuations. Sponsors typically utilise external economic forecasts or central bank guidance for inflation assumptions. Where revenues or costs are not contracted, escalation will be determined by pricing power and therefore requires a greater degree of judgement. ### Interest rate Interest rate assumptions impact valuations if a Portfolio Company has an element of unhedged debt or expects to drawdown on floating rate borrowing facilities within its business plan. Where this is the case, Sponsors will usually update valuations to reflect the latest projections for long-term interbank lending, swap or risk-free rates. PINT NAV sensitivities at 31 December 2023 (Macroeconomic) ![img-2.jpeg](img-2.jpeg) 36 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # INVESTMENT # MANAGER'S REPORT CONTINUED # ASSUMPTIONS AND # SENSITIVITIES CONTINUED # Performance # Earnings growth Earnings growth assumptions represent a key valuation assumption across the Portfolio. The most common earnings measure used is EBITDA, however other variations include Towers Cash Flow (towers) and Net Operating Income (data centres). Earnings growth forecasts represent a key area of judgement for Sponsors at the underwriting stage and usually incorporate several factors, including long-term assessments of market growth, market share and the barriers to entry in the sector, details of any high conviction opportunities and the potential for customer churn. # Exit valuation The Company's stated business model is to invest in assets with a typical hold period of 5-7 years, before realising value through disposals, and recycling proceeds into new investments. Accordingly, the Company's valuations are determined by assumptions around the terminal value of a Portfolio Company at the end of this 5-7 year period. Common methods of determining exit valuations include the application of a terminal earnings (EBITDA, Towers Cash Flow, Net Operating Income etc.) multiple, or a DCF approach based on a long-term or even perpetual stream of cash flows discounted at an assumed secondary purchaser IRR. The assumptions around these methods are typically taken from comparable recent transactions. # Exit timing As with exit valuations, the assumptions around exit timing also impact the valuation of investments. The main drivers that feed in to this assumption are the duration of any capex rollout plans, the time horizon of the Sponsor's funds that are invested alongside PINT, as well as the expectations around longer-term market growth trends. # Operational expenditure ('Opex') Operating expenditure will impact the profitability of Portfolio Companies, and increases that cannot be contractually passed on to customers have the potential to impact valuations. Sponsors also expect to achieve business efficiencies and for Portfolio Companies to operate at improved margins at increased business scale, and so the extent to which such views are revised in their assumptions will also impact valuations. # Capital expenditure ('Capex') Determining capital expenditure is particularly critical for businesses with significant growth or remedial plans, and those that price offtake agreements around expected construction costs. Whilst in some cases there may be the ability to pass on increased input costs arising from capital expenditure to customers, this is not always possible, so Sponsors will usually incorporate a degree of contingency in their capital expenditure assumptions, whilst also mitigating the potential for cost increases through effective sub-contractor arrangements. PINT NAV sensitivities at 31 December 2023 (Performance) ![img-3.jpeg](img-3.jpeg) 37 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # INVESTMENT # MANAGER'S REPORT CONTINUED # ASSUMPTIONS AND # SENSITIVITIES CONTINUED # Sector specific # Energy volumes PINT is exposed to the level of energy volume consumption or generation across some of its Power & Utilities investments. Long-term assumptions in this regard are typically based on a combination of historic volumes, the ongoing availability/ efficiency of equipment and infrastructure and the presence of any minimum offtake or "take-or-pay" provisions or manufacturer availability guarantees. # Commodity prices Commodity prices impact a number of the Company's investments that have long-term exposure to wholesale energy markets, through uncontracted revenues or imperfect pass-through of costs. As with other macroeconomic factors such as inflation and interest rates, Sponsors will often utilise external consultants to provide updated forecasts for such prices for inclusion in long-term cash flow/earnings forecasts. # Fibre penetration Along with average revenue per unit (ARPU), fibre penetration is one of the key long-term inputs for a fibre business. The penetration assumption is the degree to which a Portfolio Company operating a fibre network assumes it will convert the number of homes it passes into paying customers and significantly impacts long-term earnings forecasts. The long-term assumptions in this regard are specific to the geography that the Portfolio Company operates in and the associated market dynamics (e.g. transaction structure or location, or any competitive advantage providing protections against overbuild or churn risks). # Hydrogen adoption PINT is exposed to future hydrogen policy through its Power & Utilities investment in National Gas. The degree to which hydrogen adoption is assumed in the UK as an alternative energy source for domestic and industrial heating and eventually transport and energy, impacts the valuation of the investment. A range of potential outcomes for this adoption exists, with the downside being low hydrogen adoption though an "electric future" scenario and the upside being an accelerated hydrogen adoption "green gas future" scenario. # MGA A number of the Company's investments, most notably in the towers sector, include long-term assumptions around accretive M&A activities (i.e. the ability to acquire additional towers at favourable pricing). Such assumptions are subject to extensive due diligence and reflect very specific factors to each transaction, including geographic location, current ownership of M&A targets, potential acquisition synergies and/or strategic benefits, and any relevant exclusivity agreements. PINT NAV sensitivities at 31 December 2023 (Sector specific) ![img-4.jpeg](img-4.jpeg) 38 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## ALTERNATIVE PERFORMANCE ## MEASURES (APMs) PINT assesses its performance using a variety of measures that may not specifically be 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 How has PINT performed? ### FRS 102 | NAV Total Return Total return comprises the investment return | | It is calculated as the total | The calculation uses the | Total return for the year to | | --- | --- | --- | --- | --- | | | from the Portfolio and income from any cash | return of £49.6 million (period to | total comprehensive income | 31 December 2023 was 10.4% (period to | | | balances, net of management, operating | 31 December 2022: £8.0 million), as shown | reported in the income | 31 December 2022: 2.1%). | | | and finance costs. It also includes foreign | in the Income statement, as a percentage | statement and net assets | | | | exchange movement and movement in the | of the opening NAV of £474.8 million | reported in the balance sheet, | | | | fair value of derivatives and taxes. | (31 December 2022: £392.1 million which | both being FRS 102 measures. | | was based on the net IPO proceeds). | Net asset value per | A measure of the NAV per share in the | It is calculated as the NAV divided by | The calculation uses FRS 102 | NAV per share at 31 December 2023 was | | --- | --- | --- | --- | --- | | share | Company. | the total number of shares in issue at the | measures and is set out in | 106.6p per share (31 December 2022: | | | | balance sheet date. | Note 18 to the accounts. | 98.9p per share). | | Annual distribution This measure reflects the dividends | | The dividend is measured on a pence per | The calculation uses FRS | Second interim dividend of 2p per share | | | distributed to shareholders in respect of each | share basis. | 102 measures, set out in Note | declared, to be paid on 23 April 2024, | | | year. | | 9 to the accounts. | which together with the dividend of | 2p per share paid in October 2023 totals 4p per share for the year ended 31 December 2023. The Company intends to continue paying dividends on a semi‑annual basis in line with its progressive dividend policy. | Investment value | A measure of the size of the investment | It is calculated as the Portfolio asset | The Portfolio asset value | The portfolio asset value at 31 December | | --- | --- | --- | --- | --- | | and outstanding | portfolio including the value of further | value plus the amount of contracted | uses the FRS 102 measure | 2023 was £471.7 million (31 December | | commitments | contracted future investments committed | commitments. | investments at fair value, set | 2022: £301.4 million). | | | by the Company. | | out in Note 1. The value of | | Outstanding commitments at 31 outstanding commitments December 2023 were £15.7 million (31 is set out in Note 21 to the December 2022: £57.9 million) accounts. 39 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INVESTMENT ## POLICY As stated in its prospectus, the Company invests in a The Company may also invest in other direct or single asset In addition, the Company does not invest in infrastructure diversified portfolio of high‑quality operational infrastructure investment opportunities originated by the Manager or by assets whose principal operations are in any of the following assets which provide essential physical structures, systems other third‑party asset sourcing partners. The Company does sectors (each a ‘Restricted Sector’): and/or services to allow economies and communities to not invest in private funds targeting a diversified portfolio of ### • coal (including coal‑fired generation, transportation function effectively. The Company invests in both yielding and infrastructure investments. and mining); growth infrastructure assets which the Manager believes offer ### Investment restrictions • oil (including upstream, midstream and storage); strong downside protection and typically offer strong inflation The Company invests and manages its assets with the upstream gas; ### protection. • objective of spreading risk and, in doing so, is subject to the ### • nuclear energy; and The Company invests globally, with a primary focus on following investment restrictions, which are measured at the ### • mining. developed OECD markets, with the majority of its investments time of investment: in Europe and North America. The Company’s portfolio is The Company may invest in infrastructure assets whose ### • no single portfolio investment will represent more than diversified across infrastructure sectors. principal operations are not in a Restricted Sector, but that 15% of Gross Asset Value; nonetheless have some exposure to a Restricted Sector In each case, the Manager invests where it believes it can ### • no more than 20% of Gross Asset Value will be invested in (for example, a diversified freight rail transportation asset generate the most attractive risk‑adjusted returns. investments where the underlying infrastructure asset is that has some exposure to the coal sector), provided that: The Company focuses on gaining exposure to infrastructure located in a non‑OECD country; and (i) no more than 15% of any such infrastructure asset’s total assets via co‑investments alongside leading third‑party ### • no more than 30% of Gross Asset Value will be invested revenues are derived from Restricted Sectors; (ii) no more private direct infrastructure asset investment managers who alongside funds or accounts of any single Sponsor than 5% of total revenues across the Portfolio (measured on are acting as general partner or manager of a fund in which (other than Pantheon). a look‑through basis) will be so derived. Pantheon, or any investment scheme, pooled investment vehicle or portfolio fund managed by Pantheon, has invested or may invest (‘Sponsors’). In doing so, the Company may invest on its own or alongside other institutional clients of the Manager. DIGITAL TRANSPORT & RENEWABLES & SOCIAL & OTHER POWER & INFRASTRUCTURE LOGISTICS ENERGY EFFICIENCY INFRASTRUCTURE UTILITIES (including wireless towers, data (including ports, rail, roads, (including smart infrastructure, wind, (including education, healthcare, (including transmission and distribution centres and fibre‑optic networks) airports and logistics assets) solar and sustainable waste) government and community buildings) networks, regulated utility companies and efficient conventional power assets) 40 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## Q&A WITH THE ## INVESTMENT MANAGER | Q | Q | Q | | --- | --- | --- | | How has PINT performed in the | PINT is very active in the Digital | What headwinds do you anticipate | | year, in shareholder return and NAV | Infrastructure sector, with more | for the infrastructure asset class | | terms? | than 40% of its assets invested in | over the next year, and what are you | | | the sector – why are you so heavily | doing to mitigate them? | ### invested in the sector, and is this a ### trend you expect to continue? What ### are the risks associated with this ### sector? From a NAV perspective, we are very happy to have seen PINT remains committed to a long‑term allocation of around We continue to be focused on the key risks around leverage, performance come through during the year as the exciting 35% in Digital Infrastructure, and the volume of transactions effective management of interest rate and merchant price potential of PINT's portfolio has translated into fair value done to date is a function of the high‑quality deal flow exposures, and limiting exposure to GDP or demand‑based gains. This NAV progression, in addition to the dividends paid we have seen across the fibre, towers and data centre risks. We think that speaks as much to what we consider to during the year, accounted for a NAV Total Return of 10.4%, sub‑sectors. An increasingly connected world with a great be infrastructure risk as much as it reflects an approach to which is tracking above the original IPO target of 8-10% per reliance on the sharing of data means the favourable tailwinds mitigate risks in the current environment. annum. in this sector are only likely to grow in time, which makes it an incredibly exciting space to be investing in. It is frustrating that PINT's share price return has not progressed in the same manner. The Company continues As with an investment in any specific sector, this has to be to be impacted by the wider market factors stemming done mindful of the apparent risks. Some of the factors that from the increased interest rate environment, most acutely have been considered during the process of investing in the outflows from retail and wealth managers, which PINT's digital assets include assessing prospective market have resulted in the current share price discount to NAV. share and overbuild risk (fibre), the tenor of contracts with We remain focused on maintaining the robust performance customers (data centres and towers), access to power grid of the Portfolio and retain full confidence that in time the capacity (data centres) and the ability to add additional Company's share price will reflect NAV. carriers to existing towers to increase tenancy ratios (towers). 41 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## Q&A WITH THE ## INVESTMENT MANAGER CONTINUED ### Q Q Q ### How are you going to continue to Given the interest rate and economic How will the Company grow while the ### generate returns in a higher interest environment, what new strategies or share price trades at a discount to ### rate environment? approaches are you considering to NAV? ### meet your targets in terms of income ### and total returns? By investing in operating companies with favourable growth Given the positive NAV development we are seeing and the PINT's investment approach is to deliver NAV growth through potential, there is some degree of exposure to interest rate overall Portfolio performance in what has been a challenging capital appreciation across its Portfolio. This is important risk (through capex facilities/RCFs which cannot be locked macro environment, we do not see any immediate need to because as well as being a differentiator amongst a peer down in the way the debt of a solely operating asset can be). change PINT’s approach. In fact, if anything, we think the group that has traditionally been predominantly income However, what we are seeing is that the companies PINT approach has been bolstered by the fact we are now seeing focused, it means that the vehicle will naturally grow through invests in have broadly been very effective at passing on investors place a greater emphasis on the need for capital the passage of time, providing that investment objectives are these costs through their pricing models. More simplistically, growth from their infrastructure allocations. achieved. We believe that realising this NAV growth through these companies maintain discipline through their capital investment exits, then recycling proceeds into further growth allocation and the returns for new projects or initiatives need opportunities, presents a valid basis for the Company's to make sense in the current environment. We are encouraged share price to return to a premium, providing opportunities to have seen this capital discipline maintained across the to materially increase the size of the Company through Portfolio. additional equity issuances. 42 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## OUR ## MARKET ### Key macro themes ## Infrastructure continues ## to demonstrate resilience ### 01. Rising inflation 02. Rising energy prices ### • Peak inflation appears to have passed and, in most • Energy markets have dramatically changed over the ## against a challenging developed economies, inflation rates are falling. past year or two, which has knock‑on effects for certain ## macroeconomic backdrop. types of infrastructure assets. ### • Contracted and inflation‑linked revenues can provide ### protection during periods of rising inflation. • Power generation assets with merchant price exposure ### Market growth should continue to see yield and valuation benefits. In 2023, AUM in the private infrastructure market grew to in ### • Assets with pricing power will continue, where possible, excess of $1 trillion, with a projected CAGR of ~11% between to pass on higher energy costs to customers. 1 2023 and 2027 . Against this backdrop, competition for ### • Energy‑intensive infrastructure assets may experience assets has intensified, with allocations to infrastructure headwinds as a result of higher costs. 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 ### 03. Interest rates 04. Foreign exchange with inflation linkage, led to central bank policy tightening ### • Increased bond yields have driven up risk‑free rates, • Although PINT’s foreign exchange risk is partly hedged, throughout 2023. However, Pantheon’s experience is that although transactional evidence is not showing any USD strength will continue to benefit assets with any upward pressure on discount rates for infrastructure significant increase in discount rates for core plus USD‑denominated revenue. asset valuations has largely been offset by valuation benefits assets, and yields now seem to have peaked. associated with inflation and other sector‑specific tailwinds. ### • Historic debt financing 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. 1. Source: Preqin Special Report – The Future of Alternatives in 2027. Closed‑ended funds only; October 2022. 43 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## OUR ## MARKET CONTINUED ### Infrastructure market indicators Upward trends in deal activity, recovering fundraising and improving investor sentiment provide a positive backdrop for future growth. | | | 1 | | | | | 1 | | --- | --- | --- | --- | --- | --- | --- | --- | | Deal activity by geography ($bn) | | | | | Deal activity by sector ($bn) | | | | | | | | 1,043 | | Transport Renewables Power | | | | Asia & RoW Europe | | North America | | | | | 1,043 Social & Other Telecommunications 893 893 Energy Infrastructure | | 4 +15% | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 4 +15% | | | | | CAGR | | | | 755 | | | | | | | | | | | | CAGR | | | | 755 | | 576 | | | 574 | | | | | | | | | | 553 | | | 576 | | 553 | 574 | | 429 429 371 371 351 351 2015 2016 2017 20192018 2020 2021 2022 2023 2015 2016 2017 20192018 2020 2021 2022 2023 2 3 Infrastructure fundraising ($bn) Investor sentiment for future allocations 4% 235 Pantheon opinion. There is no guarantee that these trends +8% will persist. CAGR 173 1. Source: Inframation, based | | | | 151 | on greenfield and brownfield | | --- | --- | --- | --- | --- | | | 136 | | | transactions from 2015 to 2023. | | 128 | | 129 | | | Increase or 2. Source: Preqin as of January Capital raised 103 100 maintain | 96% 2024. Infrastructure fundraising 82 based on year capital was closed, Decrease | 4% including funds which have not held a final closing. 3. Source: Preqin Infrastructure 96% Global Report 2024. 4. CAGR is calculated on an 2015 2016 2017 20192018 2020 2021 2022 2023 eight‑year period from 2015-2023. 44 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## OUR ## MARKET CONTINUED ### Key sector themes ## The way in which societies ## and economies function ## over time is changing, which ## creates new long‑term DIGITAL POWER & RENEWABLES & TRANSPORT & SOCIAL & OTHER ## tailwinds for the sectors that INFRASTRUCTURE UTILITIES ENERGY EFFICIENCY LOGISTICS INFRASTRUCTURE ## serve them. PINT has constructed a portfolio in these growing markets • Sustained increase • The role of • Governments and • Increased demand • Growth in life with favourable tailwinds which should provide sustainable in demand due hydrogen has supranational for cleaner modes sciences, medical returns to shareholders. to global trends the potential to organisations of transport services and requiring major be significant in globally are in line with research, and an increase in data/ energy transition, prioritising aforementioned ageing population ### Global changes connectivity which impacts climate change global trends. are driving demand (remote utilities such as issues and clean for infrastructure in Urbanisation working, gaming, gas transmission energy, leading to this sector. AI, streaming, and distribution tangible targets for Challenges include ### Digitalisation • videos etc.). companies. many organisations. the lack of tangible Smart cities ### • Labour and • Revenues tend to • Infrastructure current deal flow, supply chain be inflation‑linked, supporting the and limited relative Telecommunications shortages/issues which is highly development attractiveness due Work from home are impacting beneficial in the of energy to pricing, which certain build‑out current market transition is still has meant PINT Decarbonisation and development environment. under‑developed in has not made any Population growth projects. High demand and areas such as the social infrastructure ### • lack of supply in the electric grid/EVs; investments to Supply chain realignment market has driven further investment date. asset prices up. in this sector is in high demand. ### • However, the process to build/transition Pantheon opinion. There is no guarantee that these trends will persist. relevant assets is comparatively slow. 45 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## OUR ## MARKET CONTINUED Hydrogen transmission Renewables Small cells Grid battery storage Temperature sensitive Towers logistics Electric buses Fibre Data centres Smart meter EV District charger heating 46 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## SECTOR SPOTLIGHT ## HYDROGEN ### Introduction Role of hydrogen in energy transition Announced annual electrolyser manufacturing capacity 1 Hydrogen is an abundant, energy‑dense and combustible The International Energy Agency (IEA), in its latest Net (GW) – % of NZE capacity element which exists in gas form at temperatures above Zero Roadmap Update, estimates that hydrogen will be 73% -253˚C. Its properties give it the potential to displace responsible for c.4% of the emissions abatement in a fossil fuels in a range of industrial processes and power scenario where net zero emissions are achieved by 2050. generation. Emissions reduction by mitigation in the Some of its potential end uses include: 1 net zero scenario, 2021-2050 • Transport fuel – shipping, aviation, heavy vehicles Renewables | 32% • Fertiliser production Electrification | 20% • Plastics and chemical manufacturing 19% • Steel production Energy efficiency | 12% 6% 8% 5% There is also ongoing consideration of hydrogen’s role in CCUS | 8% 2021 2022 2023 2024 2030 heat and power generation, the viability of which continues Behaviour and avoided Europe India to be debated relative to the process efficiency compared demand | 12% China RoW to other low‑carbon sources, such as renewable power Hydrogen | 4% North America Unspecified generation and district heating. Gap to net zero emissions path Other fuel shifts | 12% ### Production Globally, approximately 95% of all hydrogen is produced This contribution implies an increase in demand for by the steam methane reforming (SMR) process. The SMR hydrogen from around 100 million tonnes (Mt) today to process involves reacting fossil fuels (mainly natural gas) 150Mt by 2030, increasing to 430Mt in 2050, all of which with steam at high temperatures to produce hydrogen and will need to be produced from low‑carbon sources. The carbon monoxide. Without the addition of carbon capture significant contributors to this increase are transport (main technology, carbon dioxide is released as a byproduct of impact from 2035), industry (significant current demand this process, creating what is commonly referred to as “grey expected to grow as industrial processes are decarbonised) hydrogen”. There are a variety of other methods that seek to and power generation (replacement of natural gas and reduce the carbon intensity of production, including: coal‑fired power generation). • green hydrogen – typically produced through splitting water by electrolysis using renewable power; • blue hydrogen – produced from SMR with carbon capture; and • pink hydrogen – produced through splitting water by electrolysis using power generated from nuclear power. 1. Hydrogen – Analysis – IEA. 47 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## SECTOR SPOTLIGHT CONTINUED ## HYDROGEN ### Hydrogen infrastructure PINT approach Currently, hydrogen projects in development typically have Governments around the world have set targets for green PINT’s approach to identifying investment opportunities limited visibility of long‑term offtake agreements at the hydrogen production to support the decarbonisation of in hydrogen is focused on projects that demonstrate outset, making it difficult to assess the balance of risk and industrial processes and transport. characteristics aligned with traditional infrastructure reward. Some subsidy regimes, such as the Low Carbon assets, namely with downside protection through a high Hydrogen Agreement in the UK, can help to mitigate cash The forecast increase in demand for low‑carbon proportion of contractual or regulated cash flows that flow uncertainty once a project is operational. hydrogen and associated support schemes put in place feature some explicit or implicit link to inflation. by governments has spurred investment across the value Transactions that involve the decarbonisation of an chain by corporate and infrastructure investors into existing asset can provide increased cash flow visibility electrolysis derived green hydrogen opportunities. The and downside protection if the transition to hydrogen is IEA estimates that electrolyser manufacturing investments delayed or the terms of supply/offtake agreements and announced to date will cover 73% of the total required state support are initially unknown. In this respect, PINT global capacity by 2030. has invested in National Gas, a regulated utility which owns and operates the gas transmission network in Great Britain. Its current network supplies natural gas used in power generation, industrial processes and by the 85% ### 2GW by 2025 10Mt by 2030 of UK households that use gas‑fired heating. It connects ### 10GW by 2030 50Mt by 2050 Great Britain to key gas import and export infrastructure including onshore terminals for gas fields in the North Sea, ### • Net Zero Hydrogen Fund – £240 million pathfinder • Target to produce clean hydrogen at $1/kg by 2030. LNG terminals and interconnectors with Europe. National | | funding. | | Focus on regional networks near off‑takers. | | | --- | --- | --- | --- | --- | | | | • | | Gas is working together with other key stakeholders, | | • | Low Carbon Hydrogen Agreement – Govt. backed | | H2Hubs – $7 billion of federal funding to support 3Mt | including gas distribution networks, to develop a facility | ### • Contract‑for‑Difference (CfD). p.a. capacity. from decommissioned assets which will carry out safety Supporting "no regrets" transportation and storage. and feasibility tests on hydrogen blending in existing gas ### • infrastructure. This will inform a broader project to upgrade and repurpose the transmission network to carry hydrogen from key production sites across Great Britain to industrial ### 10Mt, 40GW Up to 10% of global clusters and distribution networks. The decision on ### by 2030 supply in 2050 whether to proceed with hydrogen blending and undertake related network investment will ultimately be made in ### • REPowerEU – innovation funding and carbon CfDs. • Target to produce clean hydrogen at A$2/kg. conjunction with regulator Ofgem, the Health & Safety ### • EC regulation will require replacement of 40% grey • A$1.2 billion of investment to date, including seven Executive and the UK government. | | hydrogen with renewable hydrogen by 2025. | | clean hydrogen hubs. | | --- | --- | --- | --- | | • | €6 billion Connecting Europe Facility funding for | • | Australian mining company, Fortescue, is targeting | | | cross‑border energy projects. | | 15Mt production by 2030. | 48 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## BUSINESS ## MODEL ### What sets us apart Capturing secular growth ## Purpose ## The Company has Sponsor relationships drive strong DIGITAL INFRASTRUCTURE ## 1 ## builta global portfolio ### deal flow, allowing for highly selective • Growth in mobile data traffic Deal ## ofinvestments with investment process. • Growth in 5G connected devices selectivity DIGITAL ## blendedrisk/return INFRASTRUCTURE ## profiles,andset ## targets across deal ## types,sectorsand RENEWABLES & ENERGY EFFICIENCY ### Access to investments across sourcing • Average cost reduction for solar/wind ## 2 ## geographies for ### Sponsors, sectors and geographies. • Increasing global installed wind/ Diversification RENEWABLES ## diversification. solar capacity & ENERGY EFFICIENCY Our co‑investment strategy differentiates us in the listed infrastructure market. POWER & UTILITIES ## 3 Ability to choose deals alongside a • US/Europe transitioning grids to Sponsor with a distinct edge who may accommodate more renewable Sponsor be best placed to create value. energy specialisation POWER & ### • US coal power plant retirements UTILITIES Co‑investments typically offered with TRANSPORT & LOGISTICS ## 4 ### no ongoing management fee/carried • Increased global trade Fee efficient interest charged by the Sponsors. ### • Higher e‑commerce penetration TRANSPORT & LOGISTICS 49 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 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 ### Investment Manager, to allocate ### Shareholders ## capital and invest on its behalf 8-10% Investors in PINT can participate in a globally ### diversified portfolio of infrastructure assets alongside the Sponsors that it p.a. ### alongside other leading private asset managers and believes have a distinct edge in ### NAV Total Return institutional investors. ### aparticular infrastructure sector. ### per share ### Vehicle ### Other Pantheon Funds (private) Pantheon provides a broad sourcing network with ### PINT (public) leading private asset investment managers and has PINT has access to Pantheon’s deal sourcing platform. strong relationships with Sponsors it can leverage on behalf of PINT. Since PINT is publicly listed, any retail or institutional investor is able to benefit from any Refer to the Investment Manager’s report for ## value it creates. more details. 4p 1 per share ### second year dividend, ### Portfolio ### progressive ### thereafter ### 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 paying a dividend of 4p per share for the year ended 31 December 2023, and, thereafter, progressive. 50 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 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 Secondaries traditionally involve the purchase of an alongside Sponsors in specific Portfolio Companies. limited life fund managed by a Sponsor who will build interest in an established private fund or a portfolio of Allocating to co‑investments can provide incremental a portfolio of private investments and seek to exit funds from an existing investor. advantages to investors, including targeted deal improved businesses in the later years of the fund term selection and fee‑efficient exposure to transactions at a profit. which are often offered by Sponsors on a no‑fee and no‑carry basis. Sale process initiated Final bid submitted Deal signing PINT’s investment policy is to gain exposure to infrastructure assets via co‑investments. This can take the form of the following 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 Targeted Co‑bid due diligence on an asset. 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, who may have undertaken some early due diligence on the transaction. ### • General syndication: following the signing of a deal, General a Sponsor will offer all of its existing fund investors the syndication opportunity to gain exposure to a transaction. 51 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 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 The use of co‑investments can reduce The structure of co‑investments provides to access infrastructure assets, as the overall expense ratio and gross‑to‑net significant alignment through the infrastructure companies tend to remain performance spread of a portfolio, as incentivisation of both deal Sponsors, who private for longer periods of time. Therefore, most deals are offered with no ongoing typically provide the majority of capital investing through co‑investments provides management fee or carried interest charged through their primary fund vehicles, and access to assets not normally accessible by by the Sponsor. Portfolio Company management who are public market investors. typically tied in under long‑term incentive programmes. ### Portfolio Diversification Exposure to Sponsor ### construction nascentsectors specialisation Pantheon is able to utilise Co‑investments can provide Co‑investors have the ability Co‑investments enable a co‑investments to select access to nascent and to choose deals alongside a portfolio to be constructed individual assets to gain emerging sectors that may Sponsor with a distinct edge that is diversified across exposure to, and tilt the otherwise be underweight who may be best placed infrastructure sectors, Portfolio towards, sectors or not be available within to create value. geographies, stages and based on the Investment primary or secondary Sponsor. Manager’s view on relative investment opportunities. value. 52 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## BUSINESS ## MODEL CONTINUED Sourcing Screening Due diligence Approval Execution ## Pantheon’s investment ## 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, 2015-2023 co-investments screened ($bn): behalf of PINT. The Investment Manager’s sourcing leads to a wide array Deals screened of investment opportunities as Sponsors embrace new 18 transaction models and co‑investment appetite from investors $88bn 863 deals increases. Pantheon’s primary relationships and network of Sponsors allow it to be a preferred co‑investor, screening 22% 14 Advanced diligence | a high volume of proprietary transactions. Pantheon’s | | | CAGR | | | | | --- | --- | --- | --- | --- | --- | --- | | | | | | | 12 | 12 | | ability to work with partners to provide capital solutions | $8bn | 82 deals | | | | | | in complex scenarios is expected to continue to generate | | | | 10 | | | differentiated deal flow and allow it to acquire high‑quality 8 and difficult‑to‑access assets for the Company’s portfolio and other Pantheon clients. 5% conversion 5 5 4 Co‑investment capital makes up a sizeable portion of the rate infrastructure investment universe, and Pantheon continues to see strong deal flow, with continued signs of growth. This is driven by Sponsors continuing to see the wider franchise Closed 2015 2016 2017 20192018 2020 2021 2022 2023 benefit in offering their trusted partners co‑investment deal flow, and in particular due to such Sponsors being $4.3bn 52 deals 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. 53 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## BUSINESS ## MODEL CONTINUED Sourcing Screening Due diligence Approval Execution ## Pantheon’s investment ## process continued ### Screening Due diligence and underwriting If a deal is approved at Advanced Notice stage, it will proceed Screening is the first of three stages of the Pantheon After Screening, due diligence will be undertaken as part of to the final investment committee stage, Investment Thesis. investment due diligence and approval process. This stage the "Advanced Notice" stage, including: Transactional and due diligence work undertaken ahead of involves preliminary due diligence of the opportunity, which this includes: ### • review financial model and underlying assumptions; includes: ### • benchmark performance; ### • review internal and company databases; ### • assessing the deal fit to fund strategy; • extensive asset due diligence; ### • evaluate macro trends and sector themes/outlook and ### • review potential returns profile; review compatibility with assumptions; and • assess downside protection; ### • explore risk factors; identify risks and mitigants. • finalise financial model; ### • ### • determine manager track record; • onsite manager visits; ### • understand transaction dynamics and sponsor alignment; • ESG and climate change risk assessment; and ### • tax due diligence; ### • conduct fund/company overview. ### • conduct background checks/reference calls; and ### • complete “Investment Thesis” for submission to GIRAC. Reasons to decline Reasons to decline Reasons to decline ### • Poor‑quality assets • Asset‑related risk factors: • Legal considerations ### • Business/firm franchise issue High debt levels • Limited downside protection ### • ### • Lack of coverage High purchase price • Inconclusive references ### • ### • Overly competitive process Commodity price risk • Weak governance ### • ### • Limited Pantheon edge Concentration risk • ESG considerations ### • ### • Poor fit with portfolio strategy Quality of assets/Sponsors ### • ### • ESG considerations Lack of embedded value ### • ### • Pricing disconnect 54 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## BUSINESS ## MODEL CONTINUED Sourcing Screening Due diligence Approval Execution ## Pantheon’s investment ## process continued Due diligence and underwriting continued The base case prepared during the investment process forms The expected holding period for each co‑investment is For co‑investments, the Company is typically entering the the basis of the final Investment Thesis. The investment return typically between five to seven years, however this does not acquisition at the same time as the Sponsor who sets the targets can be attributed to several key components of a form the basis of any guaranteed exit timing or method from valuation and enters at the same price, creating alignment target business, which may include: the Sponsor. The final timing of a co‑investment exit will be a with the Company. The Sponsor provides its valuation function of business performance and economic conditions, ### • existing business: returns from the profitability of the assumptions for the target asset and the Investment Manager and accordingly this is sensitised during the underwriting target’s existing assets/contracts; will seek to verify them, and either enter the deal at the same process to ensure any delays will not materially compromise ### • organic growth: returns derived from initiatives to greater return target as the Sponsor, or take a more conservative expected returns. utilise existing infrastructure, such as leasing further view on some of the valuation assumptions which may result antennae capacity on an existing tower installation or Several key financial metrics are used for analytical purposes, in a lower base case return target. This process involves the supplying other energy products to existing clients of a including internal rate of return (IRR) and multiple on invested Investment Manager conducting its own independent review district heating business; capital (MOIC). IRR is the annual rate of growth that an of the valuation assumptions which includes, but is not limited investment is expected to generate over its life, and MOIC ### • growth capital: returns generated from capital expenditure to, the following analysis as part of the Investment Thesis: measures investment returns by comparing the total realised initiatives, taking the form of expanding and/or upgrading • review of all due diligence material available, including value of an investment at the exit date relative to the initial existing or developing new infrastructure. Such initiatives technical, market, legal, financial and tax, usually prepared investment amount. The illustrative bridge chart on the next will depend on the target company’s ability to source and by third‑party independent consultants. Assumptions for page demonstrates the contributions to expected returns of execute on a pipeline of growth opportunities; the valuation are driven from these reports; certain assumptions in a typical private market infrastructure ### • capital structure: returns generated from optimising the co‑investment transaction. ### • consult with external market contacts to verify key target’s debt structure in tandem with its growth trajectory; assumptions; ### • M&A activity: returns generated from the increased scale ### • review financial model driving the valuation; and and efficiencies achieved through bolt‑on acquisition ### • conduct downside and upside sensitivities to prepare activity; a Pantheon base case that still meets relevant return ### • operational efficiencies: increased returns generated requirements. from reduced operating costs achievable through greater business scale; and ### • multiple expansion: returns generated from delivering an exit at an increased earnings multiple relative to the initial entry valuation. An increased exit multiple would be in keeping with the expectations to both increase the scale of the target as well as reducing the risk profile over time. 55 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## BUSINESS ## MODEL CONTINUED Sourcing Screening Due diligence Approval Execution ## Pantheon’s investment ## process continued ### Due diligence and underwriting continued Approval and execution 1 Illustrative MOIC composition The final path approval of a deal includes: ### • Presentation of final Investment Thesis 0.30 2.75 ### • Approval by GIRAC 0.35 ### • Allocation between Pantheon clients in line with investment allocation policy 0.15 2.10 ### • Funding ringfenced pending completion 0.20 Once a deal has been approved, it will move to legal closing 0.15 1.75 and execution, which involves: 0.15 ### 0.10 • Optimising deal structure 0.20 ### • Review and negotiate agreements 0.15 ### • Finalise reporting requirements 0.10 0.90 ### • Negotiate preferential terms and rights ### • Execute transfer and payments ### • Implement hedging initiatives High M&A case case Capital Existing business structure potential base case Additional Additional expansion Operational Exit multiple Development Underwriting Sponsor base in construction with exclusivity Further upside Contracted and 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. 56 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## BUSINESS ## MODEL CONTINUED ## The Company invests in infrastructure assets typically ## through a co‑investment programme. Valuations In private market investing, the Sponsor is usually considered In such cases, fair value is estimated by deriving the The Company invests in infrastructure assets typically to be the best party to determine the appropriate valuation present value of the expected cash flows generated by the through a co‑investment programme. In a typical due to the following: investment through the use of reasonable assumptions such co‑investment the Company partakes in the investment as appropriate discount rates to reflect the inherent risk of the ### • intimate knowledge of the underlying infrastructure alongside a lead investor or a Sponsor. The Sponsor will assets forming the investment. asset held in the SPV and its business financials and the typically set up a co‑investment vehicle, subject to annual fundamental business environment in which it operates; Valuation governance statutory audits, that invests in the underlying infrastructure ### • knowledge of the market environment in which Pantheon operates a valuation committee, which is investment and will issue a NAV and capital accounts on a transactions of comparable companies take place; and independent of the investment and investor relations teams, quarterly basis. the Company’s economic interest in an investment as which ensures that there are robust governance, oversight ### • The Sponsor will usually own the majority of equity and have and process frameworks in place, guaranteeing compliance a co‑investor is aligned with that of the Sponsor. significant or controlling influence in the asset. Accordingly, with standards and consistent application of policy. In private market transactions, the purchase cost of the Pantheon considers the Sponsor to be the responsible party investment is an indication of its initial fair value and is The valuation committee reviews and challenges the for preparing the valuation on behalf of the co‑investment thereafter calibrated for subsequent events and changes in valuations provided by the Sponsors and reviews the vehicle, and will largely rely upon the valuations prepared by valuation inputs. Infrastructure assets often display particular accounting policies and valuations methodologies applied. the Sponsor that have been prepared in‑line with relevant characteristics allowing long‑term financial forecasts to be The valuation committee has responsibility for approving accounting standards and IPEV guidelines. prepared, which tends to result in a high prevalence of the use investment valuations which determine the fair value of of DCF methodology in the valuation. the Portfolio, with input from the investment team who are responsible for managing the Portfolio. 57 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INVESTMENT ## STRATEGY Global portfolio with exposure ## The Company seeks to regions, sectors and sourcing partners and the ability to tilt the ## to generate attractive Portfolio over time to the best risk/ ## risk‑adjusted total returns return opportunities. ## for shareholders over the ## long term, comprising ## both capital growth and Robust asset and Exposure to growth Diversification Sponsor ESG risk dynamics within ## aprogressive dividend. assessment through infrastructure sub‑sectors due diligence, ongoing including the transition Through the acquisition of equity or equity‑related asset monitoring and to a net zero carbon Strong Capturing investments, PINT offers a diversified portfolio exclusion of high‑risk economy and the ESG long‑term of infrastructure assets with a primary focus on ESG sectors from the digitalisation of social and characteristics growth developed OECD markets. strategy, including coal, economic activity. oil, gas (upstream), ## Total mining and nuclear. ## returns Resilient Emphasis on direct Inflation cash flow infrastructure assets Natural hedge protection assets with substantial against rising inflation contracted cash flows with certain assets Value‑ and conservative benefiting from creation leverage creates a inflation protection. opportunities portfolio with downside protection. Assets where added value can be created through operational optimisation, incremental expansion of a platform or industry consolidation, utilising the skill set and track record of Sponsors. 58 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## [PAGE] RESPONSIBLE ## [TITLE] INVESTING AND ESG CONTINUED An enhanced approach to Investing responsibly in infrastructure is central to PINT’s Looking ahead, the Company is aiming to improve data responsibleinvesting business model. Sound ESG practices and operating collection, resulting in increased disclosures with the aim of The Board of PINT recognises that a focus on sustainably are integral to building a resilient infrastructure improving ESG performance of investments. The focus over environmental, social and governance (ESG) is an business and creating long‑term value for our shareholders the next year will be very much on engagement with suppliers important tool for risk mitigation and can lead to value and other stakeholders. and Sponsors to develop data collection and disclosure creation across the investment portfolio. in relation to Scope 1, 2 and 3 emissions and climate risk PINT is classified as Article 8 under the European Union’s assessments. Adherence to ESG principles has been incorporated Sustainable Finance Disclosure Regulation (SFDR). To in Pantheon’s pre and post‑investment processes for As Investment Manager, Pantheon is tasked with delivering support its promoted environmental/social characteristics, many years and the Investment Manager will continue to this ESG and Sustainability Policy day‑to‑day. PINT has adopted an investment policy which restricts play an influential role in promoting ESG standards and investments in specific excluded sectors, i.e. coal Pantheon’s group‑wide Sustainability Policy can be found on diversity and inclusion in private markets. (including coal‑fired generation, transportation and Pantheon's website (www.pantheon.com). Its objective is to The Directors of PINT have full oversight of ESG matters mining), oil (including upstream, midstream and storage), ensure that material ESG considerations are appropriately within PINT’s portfolio and fully support Pantheon’s upstream gas, nuclear energy and mining. reflected in Pantheon’s pre and post‑investment processes. long‑standing commitment in this area. Pantheon is rigorous in assessing and managing PINT’s Board is ultimately responsible for its sustainability‑related risks in its managed portfolio and sustainability and established its ESG & Sustainability identifying opportunities. Pantheon believes this is crucial Committee in July 2023 to oversee and review its ESG & to harnessing the potential for value creation, as well as in Sustainability Policy, which can be found on PINT's website protecting the interests and reputations of its firm and clients. (www.pantheoninfrastructure.com). The Committee is Equally, Pantheon is experienced in actively seeking chaired by Ms Finegan, an independent Non‑Executive investments in opportunities arising from the development of Director, and consists of PINT’s Board members along with solutions to global sustainability challenges. These long‑term Pantheon’s Global Head of ESG. Full biographies of the Board trends are aligned with PINT’s strategy and investment Committee members can be found on pages 74 to 75. mandate. 59 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## RESPONSIBLE ## INVESTING AND ESG CONTINUED Pantheon has deeply embedded ESG considerations into ### Transparency Integration its investment processes, from the initial screening of opportunities, through due diligence and engagement and post‑investment monitoring. Enhanced transparency through improved Integration of ESG screening, due diligence ESG practices and monitoring Pantheon’s focus recently has been on enhancing its screening and due diligence on deals from an ESG perspective. Pantheon has introduced a new approach to ESG called TIES – which stands for Transparency, Integration, ## Engagement and Solutions – as this encapsulates the strong Pantheon ## ties between Pantheon, the Sponsors and the Portfolio TIES Companies. As part of this, Pantheon recently developed ### Engagement Solutions a proprietary ESG due diligence scorecard, incorporating a range of topics including climate risk, reputational risk, Consistent Sponsor, industry and investor Developing Pantheon’s capability to diversity, equity and inclusion (DEI) and biodiversity. engagement leads to improved ESG outcomes offer solutions that meet investors’ ESG PINT’s focus on co‑investments provides the Investment and sustainability requirements Manager with more control over ESG and enables Pantheon to undertake ESG due diligence on Portfolio Companies prior to investing. Pantheon is committed to advocating for ESG practices across the infrastructure industry through its participation in a variety of industry initiatives and by using its position on advisory boards worldwide to promote high ESG standards on behalf of PINT among Sponsors and investee companies. 60 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## RESPONSIBLE ## INVESTING AND ESG CONTINUED ### Pantheon’s enhanced ESG framework Screening Due diligence Monitoring/engagement Reporting | ESG screening process applied to all | ESG scorecard used to assess: | Monitoring: | Focusing efforts on standardised ESG | | --- | --- | --- | --- | | investment opportunities | 1. Private markets manager | 1. Private markets manager data collection | reporting templates to align with: | | | 2. Private markets fund | 2. Portfolio Company data collection | | 1. SFDR metrics 3. Single‑company deal Engagement: 2. ESG Data Convergence Initiative 4. Multi‑company deal metrics 1. Private markets manager: targeted engagement based on scorecard 3. Task Force on Climate‑related Financial 2. Industry: advocate for ESG best Disclosure requirements practice through industry trade bodies In practice In practice In practice Integrated into ESG due diligence ESG due diligence scorecard output Enhancing ESG data collection systems scorecard included in investment committee memos Signatory of: ESG committee member of: 61 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## RESPONSIBLE ## INVESTING AND ESG CONTINUED During the period, PINT’s 2022 sustainability report was released, which included detailed climate risk disclosures, guided by the recommendations of the Task Force for Climate‑related Financial Disclosures (TCFD). The sustainability report set out how climate‑related risks are integrated into PINT’s governance, strategy, risk management and metrics and targets. The Company looks forward to sharing PINT’s 2023 sustainability report, which will incorporate more detailed reporting in accordance with the TCFD recommendations. The table below illustrates the progress made to date. ### Area DIsclosures Reference Summary of progress Governance a) Describe the Board's oversight of • Corporate governance: • PINT’s Board is ultimately responsible for its sustainability, and formally climate‑related risks and opportunities. page 79 established its ESG & Sustainability Committee in July 2023 to oversee and Investment process: page 52 review these activities as set out in the ESG and Sustainability Policy. PINT is ### b) Describe management's role in assessing • committed to sustainability throughout its supply chain. The appointment ### and managing climate‑related risks and • Responsible Investing & ESG: of third parties is overseen by the PINT Board and reviewed annually at the opportunities. page 58 Management Engagement Committee. ### • ESG & Sustainability ### • Pantheon executes PINT’s strategy, makes investment decisions, monitors Committee Report: page 94 climate‑related performance and reports to the Board on progress. | Strategy | a) Describe the climate‑related risks and | | • | Chair’s statement: page 8 | • | PINT will not invest in infrastructure assets whose principal operations are in: | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | opportunities the organisation has identified | | Our market: page 42 | | | coal (including coal‑fired generation, transportation and mining); | | | | | • | | | • | | over the short, medium and long term. | | | • | Investment strategy: page 57 | • | oil (including upstream, midstream and storage); | | --- | --- | --- | --- | --- | --- | | b) Describe the impact of climate‑related risks | | | Principal risks and | | upstream gas; | | | | • | | • | | | | and opportunities on the organisation's | | uncertainties: page 68 | | | | | | | | • | nuclear energy; and | businesses, strategy and financial planning. ### • Viability statement: page 72 mining. ### • c) Describe the resilience of the organisation's ### • Following climate risk assessments in 2022, the impact of climate related strategy, taking into consideration different drivers associated with both changing climatic conditions and the transition to a climate‑related scenarios, including a 2°C or low carbon economy have been considered. Pantheon has engaged an external lower scenario. consultant to enable a more granular assessment of these risks. Risk a) Describe the organisation's processes for • Principal risks and • The Company has a comprehensive risk and governance framework to ensure management identifying and assessing climate‑related uncertainties: page 68 all risks, including ESG and climate‑related risks, are monitored and managed risks. with due care and diligence. b) Describe the organisation's processes for • The Board exercises oversight of this framework, through its Audit and Risk managing climate‑related risks. Committee, and ESG risks and opportunities are additionally considered by the ESG & Sustainability Committee. c) Describe how processes for identifying, ### • Based on the results of Pantheon’s scenario analysis assessment, 100% of assessing and managing climate‑related risks PINT’s portfolio is expected to see a neutral or positive transition impact. 87% are integrated into the organisation's overall of PINT’s portfolio present an opportunity in the transition. risk management. 62 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## RESPONSIBLE ## INVESTING AND ESG CONTINUED ### Area Disclosures Reference Summary of progress | Metrics and | a) Disclose the metrics used by the organisation | | • | Responsible investing and | • | PINT has committed to report certain climate‑related metrics, as set out on | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | targets | | to assess climate‑related risks and | | ESG: page 58 | | page 10 of its recent sustainability report, including: | | | | | | opportunities in line with its strategy and risk | | | | | GHG emissions data (tCO | e); | | | | | | | | • | | 2 | management process. | | • | year of emissions; | | | --- | --- | --- | --- | | b) Disclose Scope 1, Scope 2, and, if appropriate, | | carbon intensity (tCO | e/£m revenue); and | | | • | | 2 | Scope 3 greenhouse gas (GHG) emissions, ### • carbon footprint (tCO e/£m NAV). 2 and the related risks. ### • The Company is in the process of calculating its Scope 1, 2 and relevant Scope c) Describe the targets used by the organisation 3 emissions for the purposes of its upcoming TCFD reporting. to manage climate‑related risks and opportunities and performance against targets. Looking ahead, the Company is aiming to improve data collection resulting in better disclosures and also improved ESG performance of investments. We acknowledge that as an investment company without control of the underlying investee companies, we are heavily reliant on Pantheon and the Sponsors for the collection of data and delivery of any ESG objectives. The focus over the next year will be very much on engagement with suppliers and Sponsors to develop the communication, data collection and disclosure. In particular: 1. Data and KPIs – increasing the capture of ESG data e.g. capturing actual Scope 1, 2 and 3 emissions rather than relying on estimates through increasing engagement with Sponsors; 2. Disclosures – we will review the TCFD product report which the Investment Manager is required to publish in the course of 2024. Additionally, we will monitor and keep up to date with the development of the TNFD (“Taskforce on Nature‑related Financial Disclosures”); 3. Climate risk assessment – Pantheon is working on enhancing its transparency of climate‑related risk analysis and it assesses each individual investment and climate‑related risks 4. Supplier reporting – as a Company we are reliant on the service providers we have engaged and intend to collect more information and data on the ESG focussed policies they have in place, as well as monitoring compliance reporting, with the aim of disclosing this information in the sustainability report. 63 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## S172(1) ## STATEMENT ### Directors’ duties Stakeholders and long-term decisions ## The overarching duty of Overview PINT is an externally managed investment company the Directors is to act The Directors must take into consideration the interests of and does not have any employees or customers. Its key the various stakeholders of the Company, the impact the stakeholders are its shareholders, the Investment Manager, ## in good faith and in a Company has on the community and the environment, take Sponsors, Portfolio Companies, service providers, lenders way that is most likely a long‑term view on the consequences of the decisions they and regulators. The Board considers the feedback from, make, and aim to maintain a reputation for high standards of and views of, PINT’s stakeholders at every Board meeting, ## to promote the success business conduct and fair treatment between the members and all discussions involve careful consideration of the of the Company. Fulfilling this duty supports the Company in longer‑term consequences of any decisions and their impact ## of the Company, as set achieving its investment strategy and making decisions in a on stakeholders. Overleaf, we describe how we engage ## out in section 172 of the with our stakeholders to understand their views, how they responsible and sustainable way. are affected by the Board’s decisions, how their feedback ## Companies Act 2006 During the year, the Directors consider, in good faith, that shapes decisions, and any outcomes. We also explain how they have acted in a way that would most likely promote the ## (‘theAct’). PINT fosters business relationships with suppliers, customers long‑term success of PINT for the benefit of its members and others, and maintains a reputation for high standards of as a whole, with due regard to the likely consequences of business conduct. PINT’s impact on the environment, and how any decisions in the long term, as well as the interests of PINT and the Investment Manager approach ESG, is explained shareholders and other stakeholders, as required by the Act. in detail on pages 58 to 62. Overleaf, the Directors explain how they discharged these duties. 64 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## S172(1) ## STATEMENT CONTINUED ### Shareholders Importance Board engagement Holding PINT’s shares offers investors a The Board is committed to maintaining open channels of communication and to engaging with shareholders in a way they find most liquid investment vehicle through which meaningful, these include: they can obtain exposure to PINT’s portfolio ### • AGM of infrastructure investments, therefore, The Company will hold its second AGM on 20 June 2024 and welcomes and encourages shareholders to participate in the meeting. continued shareholder support and Shareholders will have the opportunity to meet the Directors and the Investment Manager, ask questions and provide us with feedback. engagement are critical to the business and The Board values the feedback and questions it receives and takes action or makes changes, as and when appropriate. the delivery of PINT’s long‑term strategy. ### • Publications The annual report and half‑year reports are an opportunity for PINT to provide information and updates on the Company’s business model, strategy, portfolio and financial position. Feedback and/or questions PINT receives from shareholders help the Company to evolve its reporting, aiming to render the reports and updates more transparent and understandable. ### • Shareholder meetings The Chair, the Board and Pantheon meet with shareholders throughout the year; the Investment Manager holds presentations for institutional investors and analysts, and all shareholders are invited to join PINT’s capital markets day. The Company always responds to communications from shareholders, and anyone wishing to communicate directly with the Board can contact the Company Secretary at: pintcosec@linkgroup.co.uk or by writing to PINT’s registered office. Feedback from all meetings with shareholders is shared and discussed with the Board and taken into account when taking decisions (examples are included on page 67). ### • Shareholder concerns In the event that shareholders wish to raise issues or concerns, they are welcome to do so at any time by writing to the Chair or the SID at PINT’s registered office. All Board members are also available to shareholders if they have concerns or questions. ### • Investor relations updates At every Board meeting, the Directors receive updates from the Investment Manager and the Company’s broker on the Company’s trading activity and share price performance, especially during periods when PINT’s shares are trading at a discount. 65 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## S172(1) ## STATEMENT CONTINUED ### The Investment Manager Importance Board engagement The Investment Manager’s performance Maintaining a close and constructive working relationship with the Investment Manager is crucial as the Board and the Investment Manager is critical for the Company to deliver its both aim to achieve consistent, long‑term returns in line with the Company’s investment strategy. Important components in the collaboration investment strategy successfully and meet with the Investment Manager, representative of the Company’s culture, are: its objective of providing shareholders with ### • encouraging an open discussion with the Investment Manager, including adopting a tone of constructive challenge; attractive and consistent returns over the • the interests of the Company, shareholders and the Investment Manager are, for the most part, well aligned, and recognising any instances long term. where that might change; • thorough review of the Investment Manager’s performance, including adherence to the investment policy and strategy, and considering the terms of engagement; • drawing on Directors’ individual experience and knowledge to support and challenge the Investment Manager in its monitoring of Portfolio Companies and engagement with Sponsors; and • willingness to make the Directors’ experience available to support the Investment Manager in the long‑term development of its business, recognising that the long‑term health of the Investment Manager’s business is in the interests of shareholders in the Company. ### Sponsors/Portfolio Companies Importance Board engagement PINT’s investment strategy is focused on The Board receives updates at each scheduled Board meeting from the Investment Manager on specific investments, including regular backing Sponsors who create sustainable valuation reports and detailed portfolio and returns analyses. The Board also makes an active effort to better understand the Portfolio value in the underlying Portfolio Companies. Companies, and in 2023, the Directors undertook a site visit to Alhama de Murcia, headquarters of Primafrio, a European leader in logistics and The Investment Manager has extensive transport of temperature‑controlled goods. More details of Pantheon’s engagement with Sponsors and due diligence of Portfolio Companies networks and relationships with Sponsors through the investment process and its investment strategies can be found on pages 52 to 55 and in the Investment Manager’s report. globally, which gives the Company access to Pantheon engages with Sponsors on a day‑to‑day basis. Details of how Pantheon carries out portfolio management, as well as information on attractive investment opportunities. how Sponsors consistently transform companies to create long‑term value, can be found in the Investment Manager’s report on pages 12 to 18. ### 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 reports from them, both through Board and with a premium listing on the London Stock Committee meetings, as well as outside the regular meeting cycle. Their advice, as well as their needs and views, are routinely taken into Exchange, the Company relies on a diverse account. The Board (through the Management Engagement Committee) formally assesses the performance, fees and continuing appointment range of advisers for support in meeting all its of key service providers to ensure that they continue to function at an acceptable level and are appropriately remunerated to deliver the relevant obligations. expected level of service. 66 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## S172(1) ## STATEMENT CONTINUED ### The environment and society Importance Board engagement The Board of PINT believes that sound ESG The Board (through the ESG & Sustainability Committee) works closely with Pantheon and, despite the fact that its level of control over practices and operating sustainably are investments is limited, seeks, through its Investment Manager and the Sponsors, to encourage and influence investee companies to improve integral to building a resilient infrastructure their ESG performance. business and creating long‑term value for our Full details of the Investment Manager’s approach to ESG can be found on pages 58 to 62. Details of the activities of the Company’s ESG & shareholders and other stakeholders. Investing Sustainability Committee can be found on pages 94 to 95, and PINT’s inaugural sustainability report for 2022 can be accessed on PINT’s responsibly in infrastructure is central to PINT’s website at www.pantheoninfrastructure.com. business model. ### Lenders Importance Board engagement Availability of funding is crucial to PINT’s ability During the year, the Board decided to increase the RCF and engaged regularly with the Investment Manager throughout the process. More to take advantage of investment opportunities details on the RCF increase can be found on page 33. The Company aims to demonstrate to its facility providers, Lloyds and RBSI, that it is a as they arise, as well as to meet any future well‑managed business, capable of consistently delivering long‑term returns. Regular dialogue between the Investment Manager and lenders unfunded commitments. is crucial to supporting the Company’s relationship with them. ### Regulators Importance Board engagement The Company can only operate as an The Board regularly considers how it meets various regulatory and statutory obligations and how any governance decisions it makes can have investment trust and a premium listed company an impact on its stakeholders, both in the shorter and in the longer term. The Board receives reports from its third‑party providers, including if it conducts its affairs in compliance with the Investment Manager and the Company Secretary, on the Company’s compliance and considers any inspections or reviews that are applicable rules and regulations. Regulators commissioned by regulatory bodies. such as the Financial Conduct Authority (FCA) and the Financial Reporting Council (FRC) have a legitimate interest in how PINT operates in the market and treats its shareholders. 67 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 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: ### Principal decision Long‑term impact Stakeholder considerations Outcome ### and engagement Increase in the RCF In line with its agreed approach to balance sheet Effective engagement with Lloyds and RBSI was key to Following extensive discussions management, PINT increased its multi‑currency RCF agreeing the increase to the facility. The Board considers by the Board throughout the | during the year. This provides additional flexibility to | that the additional liquidity available for working capital, and | period, on 7 June 2023 PINT | | --- | --- | --- | | manage PINT’s balance sheet to support continued NAV | to support further investments in high‑quality infrastructure | announced that it had agreed an | | growth. | assets from PINT’s near‑term investment pipeline, will help | increase to its multi‑currency RCF | | | support the Company’s growth while also maintaining a robust | of £52.5 million for an aggregate | | | balance sheet. | commitment of £115 million with | Lloyds and RBSI. | Establishing a share | When the Company’s share price trades at a material | The Directors considered a number of factors when debating | On 31 March 2023 the Company | | --- | --- | --- | --- | | buyback programme | discount to NAV, the Board considers that share price to | the introduction of a buyback programme, including the | announced the commencement of | | | undervalue PINT’s portfolio and prospects. | availability of funding; current investment opportunities; | a share buyback programme up to | | | | market conditions; and the likely impact on future NAV | a total consideration of £10 million. | The Board considers that, in some circumstances, share growth. The Board made its decision following hearing the By the end of December 2023, the buybacks can be an attractive use of capital, which can views of, and feedback from, shareholders, as well as the Company had purchased over 7 be balanced with retaining sufficient capital to access the advice of our broker and the Manager, because the Board million shares. attractive pipeline of investment opportunities. believes that seeking to address the discount is important to the Company and our investors. | Establishing an ESG & | Sub‑committees of the Board enable greater focus to | The Board recognises the importance of ESG to our | On 10 July 2023 the Board | | --- | --- | --- | --- | | Sustainability Committee | be provided to areas judged to be of importance to the | shareholders and other stakeholders. Based on feedback from | formally established an ESG & | | | long‑term success of the Company. | investors, and given the Directors’ appetite and keen focus on | Sustainability Committee of the | | | | ESG, the Board decided that a dedicated Committee would be | Company, chaired by Ms Finegan. | | | | a more suitable approach of overseeing ESG matters. | The report from the Committee | can be found on page 94. 68 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## PRINCIPAL RISKS ## AND UNCERTAINTIES The Company is exposed to a variety of risks and ## Integrity, objectivity uncertainties and the Board is ultimately responsible for the ### Risk management procedure ## and accountability risk management of the Company. It seeks to achieve an appropriate balance between mitigating risk and generating ## are embedded in the long‑term sustainable risk‑adjusted returns for shareholders. ## Company’s approach Integrity, objectivity and accountability are embedded in Risk identification the Company’s approach to risk management. The Board Risk appetite ## torisk management. and assessment exercises oversight of the risk framework, through its Audit and Risk Committee, and has undertaken a robust assessment and review of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. Monitoring and Control reporting and mitigation The Company is reliant on the risk management frameworks of the Investment Manager and other key service providers, as well as on the risk management operations of each Portfolio Company. The Board manages risks through reports ### Patrick O’Donnell Bourke from the Investment Manager and other service providers Chair of the Audit and Risk Committee and through regular updates on the operational and financial performance of Portfolio Companies. For each risk, and for emerging risks, the likelihood and consequences are identified, and the management controls and frequency of monitoring are confirmed and reviewed during Audit and Risk Committee meetings. Please see on the next page a summary of the principal risks and their mitigation. 69 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## PRINCIPAL RISKS ## AND UNCERTAINTIES CONTINUED RISK DESCRIPTION OF RISK MITIGATION Market conditions • Macroeconomic or market volatility, as the result of the Russian • The Company targets a diversified infrastructure programme with exposures across sectors and invasion of Ukraine and the conflict in the Middle East, presents geographies; historically, infrastructure sub‑sectors have exhibited low to moderate correlation of Higher a significant threat to the global economy, resulting in a potential returns relative to one another. combination of high inflation, interest rates and uncertain supply The Company monitors the impact of geopolitical trends on the overall Portfolio as well as on individual ### • chains, which flows through to pricing, valuations and Portfolio sectors and companies. performance. ### • The Company has a foreign exchange hedging programme in place. ### • Change in foreign exchange rates may affect the value of the ### • Portfolio Companies could put in place inflation protection by seeking to include inflation adjustment Company's investments. mechanisms in their contracts. ### • Recession in Europe, the US or the UK could impact the growth ### • Certain Portfolio assets already provide inflation protection via contracted revenues linked to inflation. 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 ### • Discount rates are reviewed regularly as part of quarterly valuations. costs for a Portfolio Company, which could adversely impact its profits. ### • Discount rates used in the valuation of investments may need to increase in line with the interest rate environment. Political and • Political actions and regulatory changes may adversely impact the • The Company predominantly targets investments in North America, Europe and Australasia which have operating and revenue structure of Portfolio Companies. broadly stable legal, political and regulatory regimes. ### regulatory changes • Complexity of government regulatory standards may result in • The Investment Manager conducts due diligence on the regulatory risks of a prospective Portfolio Level litigation/disputes over interpretation and enforceability. Company to ensure protections in the underlying contracts are in place. Operational • A fall in demand for the Portfolio Companies’ services or products • The Investment Manager conducts sensitivity analysis and demand stress testing in its due diligence or an increase in their input costs. A Portfolio Company’s revenue for assets. ### performance is exposed to market supply and demand forces. Falls in demand or The Company co‑invests alongside experienced Sponsors who work closely with the management ### • Level cost increases that are respectively below or above the levels used teams of each Portfolio Company. in underlying valuation assumptions could lead to adverse financial ### • The investment strategy is to target assets that have the majority of their cash flows protected through performance of the Portfolio Company. contractual structures, which limits demand risk. 70 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## PRINCIPAL RISKS ## AND UNCERTAINTIES CONTINUED 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 and investment decisions. Level dissatisfied investors. The Board reviews the investment performance of the Company on a quarterly basis to ensure ### • adherence to the investment policy. Investor sentiment • The Company's share price has fallen below its NAV, which is • Alternative forms of capital such as debt can be considered. currently preventing new equity capital raises. An inability to raise Opportunistic sale of targeted existing assets. ### • Higher new equity capital is inhibitive to scaling the Portfolio. ### • The Company has put in place a share buyback programme and has been buying back shares. ### • The Investment Manager constantly targets new shareholders. Lack of suitable • Unavailability of appropriate investments to acquire due to • The Board reviews investment guidelines and will make appropriate recommendations to shareholders unfavourable deal terms. if it believes changes are needed. ### investment opportunities • Re‑investment risk which could arise from delayed redeployment • The Investment Manager seeks to continue actively sourcing appropriate investments by engaging of any proceeds from the sale of assets. with Sponsors and negotiate co‑investment rights when committing capital to the Sponsors’ Level 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 to Liquidity availability is assessed during the allocation of new investment opportunities. ### management, • pay dividends and operating expenses or to make new or support ### including level • The Board and Investment Manager review Company debt levels and covenants, on a quarterly existing investments. ### andcost of debt basis, to ensure they stay within the leverage cap that has been established to limit exposure to ### • High levels and cost of debt within the Company and/or the special debt‑related risks. Level purpose vehicles which invest in the Portfolio Companies could ### • Debt levels within Portfolio Companies are reviewed by the Investment Manager as part of result in covenant breaches and/or increased volatility in the due diligence. Company’s NAV. Portfolio • Portfolio concentration risk in relation to exposure to individual • The Board conducts quarterly reviews of the investment portfolio against the Company’s investment assets, operators, geographies and asset types. This could impact policy and criteria. ### concentration risk NAV and ultimately affect the Company’s targeted rate of return. Investment restrictions outlined in the investment policy are designed to reduce portfolio ### • Reducing concentration risk. ### • The Company currently has a balanced portfolio of 13 investments across the infrastructure sub‑sectors it targets. 71 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## PRINCIPAL RISKS ## AND UNCERTAINTIES CONTINUED RISK DESCRIPTION OF RISK MITIGATION Investment Manager • An over‑reliance on the Investment Manager. A failure of the • The Board performs an ongoing review of the Investment Manager’s performance in addition to a formal Investment Manager to retain or recruit appropriately qualified annual review. Level personnel, or put in place an appropriate succession plan, Pantheon continues to invest in its talent and regularly considers succession planning. ### • may have a material adverse effect on the Company’s overall performance. Tax status • Failure to observe requirements to maintain investment trust tax • The Board, through the Company Secretary, ensures that the Company meets the criteria to maintain status in the UK. the current investment trust status of the Company. ### and legislation • Failure to understand tax risks when investing or divesting could • The Board has engaged a third party to provide taxation advice and Pantheon’s investment process Level lead to tax exposure or financial loss. incorporates the assessment of tax. Third‑party • Poor performance by third‑party service providers could result in • The Board reviews and signs off contractual arrangements with all key service providers. an inability to perform key functions (e.g. reporting, record keeping The Board reviews the performance of key service providers annually. ### providers • etc.) effectively. This could result in loss of Company information, Level errors in published information or damage to its reputation. Cyber security • Cyber security risk which could arise from reputational damage • The Audit and Risk Committee reviews service providers’ cyber security arrangements, controls from theft or loss of confidential data through cyber hacking. and business continuity processes to ensure any data loss is mitigated and reputational damage is Level minimised. Climate change • Climate change causing physical and transition risks could impact • The Investment Manager conducts due diligence in relation to climate change matters before making the financial performance of the Portfolio. Physical risks arising investment decisions. Level from extreme weather events could impact the operations of a The Company invests in assets with strong management teams that have a long track record of actively ### • Portfolio Company. In addition, transition risk in terms of policy, managing physical risks such as maintenance schedules. legal, technological, market and reputation risks could negatively ### • The Company has in place an ESG & Sustainability Policy, including taking account of sector exclusions. impact the operations of the assets. 72 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## VIABILITY ## STATEMENT Period of assessment Against this background, in making their assessment, the The results of stress testing showed that the Company would Pursuant to provision 31 of the UK Corporate Governance Directors reviewed the reports of the Investment Manager in be able to withstand the impact of various scenarios occurring Code 2018, and the AIC Code of Corporate Governance, relation to the resilience of the Company, taking account of over the three‑year period. The Directors also considered the Board has assessed the viability of the Company over its current position, the principal risks facing it in a downside the Company’s position with reference to its investment trust a three‑year period from 31 December 2023. The Directors scenario due to the geopolitical uncertainties as a result of structure, its business model, its business objectives, the consider that a three‑year period to December 2026 is the Russia‑Ukraine and other conflicts, including disruption to principal risks and uncertainties as detailed on pages 69 to 71 appropriate for assessing the Company’s viability. There is the supply chain and increases in the cost of living as a result, of this report and its present and projected financial position. greater predictability of the Company’s cash flows over that inflationary expectations, interest rate rises and, the impact As part of the overall assessment, the Directors took into time period and increased uncertainty surrounding economic, of climate change on the Company’s portfolio. As discussed account the Investment Manager’s culture, which emphasises political and regulatory changes over the longer term. in Note 1 to the financial statements, the effectiveness of any collaboration and accountability, the Investment Manager’s mitigating actions and the Company’s risk appetite were also conservative approach to balance sheet management, and The Company has a diverse Portfolio of infrastructure considered as part of the various downside liquidity scenario its emphasis on investing with underlying Sponsors that are investments, expected to produce cash distributions which modelling carried out, after which the Directors came to their focused on generating outperformance. cover costs, and eventually expected to cover the Company’s conclusion as to the Company’s viability over the three year dividend target as the Portfolio matures. The defensive To support their statement, the Directors also took into period. nature of the Portfolio and of the essential services that account the nature of the Company’s business, including the the businesses in which the Company invests provide to The Investment Manager considers the future cash available liquidity, the potential of its portfolio of investments their customers, are being demonstrated in the current requirements of the Company before acquiring or funding to generate future income and capital proceeds, and the climate, with infrastructure assets providing strong downside investments in Portfolio Companies. Furthermore, the Board ability of the Directors to minimise the level of cash outflows, protection across market cycles given the regulated and receives regular updates from the Investment Manager on the if necessary. Based on the above assessment, the Directors highly contracted nature of cash flows, which typically offer Company’s cash and debt position, which allows the Board to have a reasonable expectation that the Company will be able strong inflation protection. maintain its fiduciary responsibility to the shareholders and, if to continue in operation and meet its liabilities as they fall due required, limit funding for existing commitments. over the three‑year period to December 2026. The Board considered the Company’s viability over the three On behalf of the Board year period based on a working capital model prepared by the Investment Manager. The working capital model forecasts key ### cash flow drivers such as capital deployment rate, investment Vagn Sørensen Chair returns and operating expenses. In connection with the preparation of the working capital model, no capital raises 2 April 2024 were assumed to occur during the three‑year period. 73 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## GOVERNANCE ### What’s in this section Board of Directors ...................................................... 74 Management team...................................................76 Chair’s introduction to corporate governance .......79 Audit and Risk Committee report .............................85 Management Engagement Committee report.......90 Nomination Committee report .................................92 ESG & Sustainability Committee report..................94 Directors’ remuneration report ...............................96 Directors’ report ....................................................... 101 Directors’ responsibility statement ........................105 74 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # BOARD OF DIRECTORS ![img-5.jpeg](img-5.jpeg) # Vagn Sørensen Chair and Nomination Committee Chair Appointed to the Board 4 October 2021 Mr Vagn Sørensen is an experienced non-executive chair and director of listed and private companies. 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, rising through numerous positions in a 17-year career before becoming Deputy CEO with special responsibility for Denmark. Between 2001 and 2006, Mr Sørensen served as President and Chief Executive Officer for Austrian Airlines Group in Austria, a business with approximately €2.5 billion of turnover, 8,000 employees and listed on the Vienna Stock Exchange. Mr Sørensen also served as Chair of the Association of European Airlines in 2004. Since 1999, Mr Sørensen has been a Tier 1 senior industrial adviser to EGT, a private equity sponsor, and has been a non-executive director or chair of a number of their Portfolio Companies. Since 2008, Mr Sørensen has been a senior adviser to Morgan Stanley Investment Bank. Mr Sørensen is currently Chair of Air Canada (since 2017) and a non-executive director of CNH Industrial and Royal Caribbean Cruises. Previous non-executive appointments have included Chair of SSP Group (2006-2020), Chair of Scandic Hotels AB (2007-2018), Chair of TDC A/S (2006-2017) and Chair of FLSmidth & Co (2009-2022). ![img-6.jpeg](img-6.jpeg) # Anne Baldock Senior Independent Director and Chair of the Remuneration Committee 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 & Dvery 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 and Chair of the Audit and Risk Committee for East West Railway Company Limited (the Government-owned company constructing the new Oxford to Cambridge railway) and non-executive director of Electricity North West Limited. Ms Baldock also serves as the Senior Independent Director, as well as Chair of the Remuneration and Nomination Committees, of the Restoration and Renewal Delivery Authority Limited (the delivery body created by Parliament to deal with the restoration of the Houses of Parliament). Among her previous roles, Anne served as a non-executive director of Thames Tideway Tunnel, non-executive director of Hydrogen Group (AIM-listed) and a Trustee of Cancer Research UK. Audit and Risk Committee Management Engagement Committee Nomination Committee Remuneration Committee Disclosure Committee ESG & Sustainability Committee Committee Chair 75 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # BOARD # OF DIRECTORS CONTINUED ![img-7.jpeg](img-7.jpeg) # Andrea Finegan Management Engagement Committee and ESG & Sustainability 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 subsequently served as 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, then, in 2013, 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. ![img-8.jpeg](img-8.jpeg) # Patrick O'Donnell Bourke Audit and Risk Committee Chair Appointed to the Board 4 October 2021 Mr Patrick O'Donnell Bourke is an experienced board member with more than 28 years of experience in energy and infrastructure. After graduating from Cambridge University, Mr O'Donnell Bourke started his career at Peat Marwick, Chartered Accountants (now KPMG) and qualified as a Chartered Accountant. After that he held a variety of investment banking positions at Hill Samuel and Barclays de Zoete Wedd. In 1995, he joined Powergen Plc, where he was responsible for mergers and acquisitions before becoming Group Treasurer. In 2000, Mr O'Donnell Bourke joined Viridian Group Plc as Group Finance Director and later became Chief Executive, appointed by the private equity shareholder following take-over in 2008. In 2011, he joined John Laing Group, a specialist international investor in, and manager of, greenfield infrastructure assets where he served as CFO until his retirement in 2019. While at John Laing, he was part of the team which launched the John Laing Environmental Assets Fund on the London Stock Exchange in 2014. Mr O'Donnell Bourke currently serves as Chair of Ecofin US Renewables Infrastructure Trust Plc and as Chair of the Audit Committee of Harworth Group Plc (a leading UK regenerator of land and property for development and investment). Mr O'Donnell Bourke was previously Chair of the Audit and Risk Committee at Carlsen 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 ESG & Sustainability Committee Committee Chair 76 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## MANAGEMENT ## TEAM | Richard Sem | Kathryn Leaf | Andrea Echberg | Paul Barr | | --- | --- | --- | --- | | Partner, manager of PINT and GIRAC member | Partner and GIRAC member (joined 2008, | Partner and GIRAC member (joined 2012, | Partner and GIRAC member (joined 2021, | | (joined 2017, 28 years of private markets | 24 years of private markets experience) | 26 years of private markets experience) | 20 years of private markets experience) | experience) | | 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 Global | | --- | --- | --- | --- | | Richard is a Partner and Head of Europe | Assets, which includes infrastructure, real | Global Infrastructure and Real Assets Team. | Infrastructure and Real Assets | | in Pantheon’s Global Infrastructure and | estate and other real assets. Kathryn is a | Andrea is responsible for global infrastructure | Investment Team and a member of the | | Real Assets Investment Team where he | member of Pantheon’s Partnership Board, | and real assets investments covering primary, | Global Infrastructure and Real Assets | | leads its European investment activity | International Investment Committee, Global | secondary and co‑investments. Andrea is | Committee. Paul worked previously at | | and team. Richard is a member of the | Infrastructure and Real Assets Committee | a member of the International Investment | GIC, from 2012, where he was Senior Vice | | Global Infrastructure and Real Assets | and Real Estate Investment Committee. | Committee and Global Infrastructure and | President, infrastructure with a global | | Committee. Richard has 28 years of | Prior to joining Pantheon, Kathryn was with | Real Assets Committee. Andrea has an | remit focusing on primary, secondary and | | experience in infrastructure private equity, | GIC Special Investments, before which she | engineering industry background followed | co‑investment opportunities. Paul also has | | corporate finance and project finance at | was responsible for direct investments at | by 21 years’ experience in the infrastructure | expertise in infrastructure direct investing | | leading institutions including InfraRed Capital | Centre Partners, a New York‑based private | finance and investment sectors. Prior to | and infrastructure debt transactions. Prior to | | Partners, HSBC, ABN AMRO and BNP Paribas. | equity firm. Kathryn began her career in | joining Pantheon, Andrea led infrastructure | GIC, Paul worked at Challenger Infrastructure | | Richard's experience spans investing in | Morgan Stanley's Investment Banking Division | direct and co‑investment teams for Société | and Macquarie Capital. Paul studied Business | | primary, secondary, co‑investments and | where she pursued real estate investments. | Générale, Macquarie Capital and ABN AMRO, | at the University of Edinburgh. He is also a | | direct‑investments across all infrastructure | Kathryn has a bachelor’s and a master’s | delivering successful investments in both | CFA Charterholder, a Chartered Accountant, | | sub‑sectors and global OECD markets. | degree in modern languages from Oxford | brownfield operating and greenfield PPP | and a Member of the Securities Institute. | | Richard holds a BSc and MBA from Imperial | University, and is based in San Francisco. | assets. Andrea has a BEng in mechanical | Paul is based in San Francisco. | | College of Science, Technology and | | engineering from Imperial College of Science, | | | Medicine. Richard is based in London. | | Technology and Medicine. Andrea is based | | in London. 77 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## MANAGEMENT ## TEAM CONTINUED | Evan Corley | Jérôme Duthu‑Bengtzon | Dinesh Ramasamy | Eimear Palmer | | --- | --- | --- | --- | | Partner and GIRAC member (joined 2004, | Partner and GIRAC member (joined 2007, | Partner and GIRAC member (joined 2016, | Partner and Global Head of ESG (joined 2022, | | 20 years of private markets experience) | 19 years of private markets experience) | 14 years of private markets experience) | 16 years of private markets experience) | | Evan is a Partner in Pantheon’s Global | Jérôme is a member of Pantheon’s Global | Dinesh is a Partner in Pantheon’s Global | Eimear is a Partner and Global Head of | | Infrastructure and Real Assets Investment | Infrastructure and Real Assets Investment | Infrastructure and Real Assets Investment | ESG, with responsibility for overseeing | | Team and a member of Pantheon’s Global | Team where he focuses on the analysis, | Team where he focuses on the analysis, | and developing Pantheon’s ESG strategy, | | Infrastructure and Real Assets Investment | evaluation and completion of infrastructure | evaluation and completion of infrastructure | frameworks and range of initiatives. Eimear | | Committee. Prior to joining Pantheon, | and real assets transactions in Europe. | and real asset investment opportunities in | chairs Pantheon’s ESG committee and is | | Evan held positions at Polaris Venture | Jérôme is a member of Pantheon’s Global | the US. Prior to joining Pantheon, Dinesh was | a member of the International Investment | | Partners in Boston and JP Morgan in London. | Infrastructure and Real Assets Investment | a Vice President in Goldman Sachs’ Global | Committee. Prior to joining the firm, Eimear | | Evan received a BS from Boston University’s | Committee and ESG & Sustainability | Natural Resources group where he executed | worked for 14 years in private equity‑focused | | School of Management with a concentration | Committee. Jérôme joined from Paris‑based | on a variety of M&A and capital markets | ESG roles, including most recently as | | in finance and a minor in economics. | placement agent, Global Private Equity, | transactions across the infrastructure, power | Managing Director and Head of Responsible | | Evan is based in San Francisco. | where he worked for over three years. | and utilities sectors. Previously, Dinesh was in | Investment at Intermediate Capital Group. | | | Jérôme holds an MSc in telecommunications | the Power & Utilities group in the Investment | Before that she worked at the Carlyle Group. | | | from ESIGELEC engineering school and | Banking Division at RBC in New York. | | | | a Master in Business from the ESCP-EAP | Dinesh holds a BS in Electrical and Computer | | | | European School of Management. Jérôme is | Engineering from Cornell University and | | | | based in London. | MBA from NYU’s Stern School of Business. | | Dinesh is based in San Francisco. 78 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## MANAGEMENT ## TEAM CONTINUED | Ben Perkins | Farid Barekati | | --- | --- | | Principal (joined 2022, 16 years of private | Vice President (joined 2020, 13 years of | | market experience) | private market experience) | | Ben is a Principal in Pantheon’s Global | Farid is a Vice President within Pantheon’s | | Infrastructure & Real Assets team, where | Private Wealth team, where he has | | he is focused on portfolio management | operational oversight for the reporting, | | for PINT. Ben has previously worked in | valuation and external audit of Pantheon's UK | | investment management roles at Gravis | listed products including PINT. Prior to joining | | Capital Management, Hadrian's Wall | Pantheon, Farid was the Financial Controller | | Capital and John Laing. Ben holds a BEng | for John Laing Capital Management, | | (Hons) in Manufacturing and Mechanical | responsible for their listed funds. He also | | Engineering from the University of Warwick | spent time in various finance and operations | | and has completed all three levels of the CFA | roles within 3i Group plc, before moving to | | qualification. Ben 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. 79 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## CHAIR’S INTRODUCTION ## TO CORPORATE GOVERNANCE ### I am pleased to present our second corporate governance Statement of compliance ## I am pleased to present report, in which we explain how we aim to meet and maintain Throughout the year, PINT applied the principles of the AIC our second corporate high standards of corporate governance, as PINT evolves Code of Corporate Governance (the ‘AIC Code’). By reporting and matures as a listed company. As the Board, we are against the AIC Code, PINT meets the obligations of the ## governance report, as accountable to our shareholders for the governance of the FRC’s UK Corporate Governance Code (the ‘UK Code’). PINTevolves and matures Company’s affairs and effective leadership of the Company, This means that we provide additional disclosures against and we remain focused on PINT’s long‑term sustainable provisions of the AIC Code relevant to investment companies. ## asa listed company. success. The AIC Code is available on the AIC website (theaic.co.uk) and detailed explanations of how the Board During the year, the Board continued to refine PINT’s applies the principles of the AIC Code can be found governance framework. We spent time discussing a long‑term ### Vagn Sørensen throughout this report. PINT’s purpose, culture and values are succession plan, which the Board believes is important to Chair described in the strategic report on pages 63 to 67. have, even for a young company such as PINT. The succession 2 April 2024 plan is set out on page 93. We also established a dedicated Throughout the year ended 31 December 2023, the Company ESG & Sustainability Committee, chaired by Ms Finegan complied with all principles and provisions of the AIC Code. which reflects both the belief that sound ESG practices are ### The Board of Directors integral to building a resilient business, and the fact that the PINT is led by a Board of four independent non‑executive evolving regulatory and best practice guidance requires the Directors, who are responsible for promoting the long‑term additional focus a committee can bring. More on the work of success of the Company, and generating sustainable, the Committee is on page 94. On the Company’s behalf, last attractive returns over the long term. year the Investment Manager also issued PINT’s inaugural annual sustainability report for 2022, in which the Board Biographies of the Directors, including how their skills and committed to aiming to improve ESG data collection. This will, experience fit PINT’s needs and strategic direction, and details the Directors believe, in time, result in better disclosures as of their other directorships and significant commitments can well as improved ESG performance of investments. be found on pages 74 and 75. The Board seeks to ensure that it has the appropriate balance of skills, experience, ages and tenure among its members. The Directors possess a wide range of business, financial and infrastructure expertise relevant to the direction of the Company and this is shown in more detail on page 83. Further details on the Board composition and diversity can be found on page 81. 80 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## CHAIR’S INTRODUCTION ## TO CORPORATE GOVERNANCE CONTINUED ### The Board of Directors continued At each Board meeting, the Directors review the Company’s Directors’ independence During the period, the Board satisfied itself that all Directors performance against its strategy, the underlying investments In accordance with the Listing Rules that apply to did, and remain able to, commit sufficient time to discharge and their performance, asset allocation, gearing, cash closed‑ended investment entities, and applying the their responsibilities effectively, taking into account their other management, investment outlook, pipeline of new deals, peer principles of the AIC Code, the Nomination Committee significant commitments. group performance, marketing, investor relations, any relevant reviewed the Directors’ independence and concluded that governance matters, and wider market conditions and trends. all Board members remain independent in both character The terms and conditions of the appointment of the The Directors also regularly consider share price and level and judgement. non‑executive Directors are set out in letters of appointment, of premium or discount. There is an ongoing communication copies of which are available for inspection at the registered ### Chair and Director tenure/re‑appointment between the Investment Manager and the Board outside ### office of the Company and will be available at the AGM. None ofDirectors of the usual meeting cycle, and the Investment Manager of the Directors has a contract of service with the Company. Applying the principle of the AIC Code, the Board considered provides the Directors with the relevant management, setting a policy on tenure for the Chair and Directors. At ### Board responsibilities and relationship financial and regulatory information to facilitate the Board’s present, each of the Board members has only served on ### withthe Investment Manager decision making. the Board for two years, and, on page 93, we disclose our There is a clear division of responsibilities between the Chair, All of the Board’s responsibilities are set out in the schedule succession plan for the Chair, who is likely to step down at the Directors, the Investment Manager and the Company’s of Matters Reserved for the Board, and certain duties are the 2025 AGM. Led by the SID, the Chair’s performance is other third‑party service providers. The role of the Board delegated to the Board Committees. During the year, the also evaluated by the other Directors every year, and the is to promote the long‑term sustainable success of PINT, Board was supported by: the Audit and Risk Committee, results of the review inform the Directors’ recommendation generating value for our shareholders while having regard the Nomination Committee, the Management Engagement on his re‑election at PINT’s AGMs. Therefore, rather than set to the interests of our other stakeholders, PINT’s reputation, Committee, the Remuneration Committee, the ESG & specific limits on tenure, the Board believes that, at present, it and the impact PINT might have on local communities and the Sustainability Committee and the Disclosure Committee. is appropriate to apply the principle of annual re‑election to all environment. The Board is responsible for the determination Each of the Board Committees has its own terms of Directors, including the Chair, and the Directors will reconsider and implementation of the Company’s investment policy and reference, which are regularly reviewed and approved by setting a formal policy on tenure in the future. for monitoring compliance with the Company’s objectives, it the Board, and clearly define the areas of responsibility. also determines the parameters of the investment strategy In line with that, all Directors will retire and stand for The terms of reference, as well as Matters Reserved for and risk management policies. The Manager’s role is to re‑election at the Company’s AGM on 20 June 2024. The the Board, are available on the Company’s website implement the strategy, make investment decisions, and individual performance of each Board member standing for (www.pantheoninfrastructure.com). The reports on their manage the Company’s assets in line with PINT’s investment re‑election was reviewed (details of this year’s performance work are included in this report, except for the Disclosure objectives and policies and subject to certain investment review can be found on pages 82 to 84). and the Board’s Committee, which meets on an ad hoc basis, when required restrictions; the Manager can also exercise its judgement recommendation is that shareholders vote in favour of their to oversee the disclosure of information by the Company and sets the investment and risk management strategies in re‑elections at the AGM. to meet its obligations under the Market Abuse Regulation relation to currency exposure. and the FCA’s Listing Rules and the Disclosure Guidance and Transparency Rules. 81 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## CHAIR’S INTRODUCTION ## TO CORPORATE GOVERNANCE CONTINUED ### Board diversity The Listing Rules require PINT to report against set diversity targets for listed companies and Number of senior disclose whether they were met or not. The targets PINT is reporting against are as follows: positions on the Number of Percentage of Board (SID and 1. At least 40% of individuals on the Board are women; Board members the Board Chair) 2. At least one senior Board position is held by a woman; and White British or other White 3. At least one individual on the Board should be from a minority ethnic background. (including minority groups) 4 100% 2 As at 31 December 2023 and as at the latest practicable date, PINT met the first two of Mixed/multiple ethnic groups — — — these three targets; PINT’s female representation on the Board is 50%, and one of the senior Asian/Asian British — — — positions, that of the SID, is held by Ms Baldock. None of the Directors identify as an ethnic minority individual; two of our members are of White European ethnicity and two are White Black/African/Caribbean/Black British — — — British. In the Nomination Committee report on page 93, we explain how PINT approaches Other ethnic group, including Arab — — — diversity and how ethnic diversity on PINT’s Board will be addressed when we recruit for new Board members and when the Board is next refreshed, likely to be later in 2024 or in 2025. Not specified/prefer not to say — — — 1,2 ### Board composition and diversity Board and Committee meeting attendance Number of senior The Board and its Committees met on a regular basis during the year. In addition to scheduled positions on the meetings, the Board meets on an ad hoc basis, outside the usual meeting cycle, whenever Number of Percentage of Board (SID and important, urgent matters need to be reviewed, and acted on, by the Board. Directors’ Board members the Board Chair) attendance throughout 2023 is shown in the table below: Men 2 50% 1 Board and Committee meeting attendance Women 2 50% 1 Audit Management ESG & Not specified/prefer not to say — — — Scheduled and Risk Engagement Nomination Remuneration Sustainability Board Committee Committee Committee Committee Committee 1. The composition of the Board is shown at 31 December 2023. meetings meetings meetings meetings meetings meetings 2. PINT is an investment trust, therefore, additional reporting relating to executive management is not applicable to the 3 Company. Vagn Sørensen 6/6 3/3 1/1 2/2 1/1 2/2 The information presented in the following tables was collected on a self‑reporting basis. Andrea Finegan 6/6 3/3 1/1 2/2 1/1 2/2 Patrick O’Donnell Bourke 6/6 3/3 1/1 2/2 1/1 1/2 Anne Baldock 6/6 3/3 1/1 2/2 1/1 2/2 In addition to the above scheduled meetings, the Board also met five times on an ad hoc basis and convened two meetings of the Disclosure Committee. 3. The membership of the Audit and Risk Committee (ARC) changed during the year. Vagn Sørensen now attends the meetings of the ARC as an invited guest, rather than a member of the Committee. 82 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## CHAIR’S INTRODUCTION ## TO CORPORATE GOVERNANCE CONTINUED Company Secretary The results of the evaluation process indicated that the The Board also considered any areas that presented an The Board has direct access to the advice and services of Board continued to be effective and there were no particular opportunity for improvement, and agreed the following the Company Secretary, Link Company Matters Limited, concerns. Some of the conclusions the Directors reached actions: who is responsible for ensuring that Board and Committee were: ### • a number of areas of strategic importance to the Company procedures are followed and that applicable regulations • the Board has sufficient depth of infrastructure experience; will remain focus areas for the Board over the coming year, are complied with. Directors regularly receive updates and the Board is currently of an appropriate size; however, these included discount management, focus on asset ### • guidance on regulatory matters and governance best practice despite being a relatively young company, it is important valuations and risks facing the Company in the context of from the Company Secretary, and have access to other for the Directors to have a longer‑term view of the possible prevailing market conditions; independent advisers, as necessary. ### changes to the Board. Future appointments will also be an • the Board will continue to build its understanding of Board performance review opportunity to add to the diversity of the Board, which the shareholders’ views, invite questions and welcome During the year, in order to review the effectiveness of the Directors agreed was an important consideration. More meetings with investors wanting to engage with the Board; Board, its Committees and individual Directors, the Directors information on the succession plans can be found on page the Board will continue to work with the Investment ### • undertook an internal Board performance review. We first 93; Manager to refine the reporting the Board receives to used a tailored questionnaire, similar to the one used in • the Board and its Committees perform well and challenge, facilitate better monitoring and oversight, especially in the previous year, in order to better understand any areas where appropriate, the Investment Manager, refining areas of risk, compliance and reviews of third‑party service of improvement or where more work was needed. The the processes and mechanisms to monitor investment providers; evaluation considered: the Board’s composition, its size and performance; ### • the Board will continue to supplement its understanding performance, Board and Committee meetings, the existing ### • managing the share price discount to NAV, to the extent through regular training sessions and deep dives into governance framework and its effectiveness, the culture possible, continued to be an important item on the Board’s specific topics, such as updates on matters arising in and relationships at Board level and between PINT and agenda; and relevant infrastructure sectors, including wind or solar its Manager, as well as specific topics such as Directors’ Boardroom culture encouraged open and constructive power, investment allocation process of the Investment ### • independence, whether they continue to devote sufficient debate. Manager, and Pantheon’s ESG policies and how these are time to PINT’s activities, oversight of the Manager and managed in practice; and engagement with our stakeholders. Results were collated and ### • focus on working to position the Company for future analysed by the Company Secretary, considered by the Chair growth. and then discussed by the Board in a closed session, with the performance of the Board Chair and Committee Chairs reviewed by the SID and the relevant Directors. 83 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## CHAIR’S INTRODUCTION ## TO CORPORATE GOVERNANCE CONTINUED ### Board performance review continued As part of the review, the Board also considered Directors’ skills and areas of expertise, the outcome of which is set out in the skills matrix, as follows: Patrick O’Donnell Vagn Sørensen Anne Baldock Bourke Andrea Finegan (Chair) (SID & Chair of RemCo) (Chair of ARC) (Chair of MEC & ESGCo) Investment trust UK corporate governance/listed plc Fund management Private equity Infrastructure sector knowledge Sustainability/ESG Marketing, investor relations, other stakeholder management Auditing and accounting Capital markets, corporate finance Risk management Information technology and cyber security Strategy Key: Expert Strong experience Some experience 84 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## CHAIR’S INTRODUCTION ## TO CORPORATE GOVERNANCE CONTINUED ### Board performance review continued Institutional investors – use of voting rights In future years, PINT will also report on how the actions were The Company has delegated the exercise of its voting rights addressed and implemented throughout the year. in the underlying investments to the Investment Manager. Pantheon would consult with the Board should there be any Following the review, the Board concluded that all Directors corporate actions, where there either is a conflict of interest continued to contribute effectively and had the skills and between PINT and other Pantheon clients, or where, for any experience relevant to the leadership and direction of the reason, the proposed voting would be inconsistent with the Company. advice the Manager gave to its other clients. ### Conflicts of interest Pantheon itself follows a policy of active ownership, and votes The Articles of Association permit the Board to consider on all matters for which it has voting authority. and, if it sees fit, authorise situations where a Director has ### an interest that conflicts, or could conflict, with the interests Engagement with shareholders and ### of the Company. PINT has in place a formal procedure for stakeholders the Board to consider authorising any such conflicts, and Two‑way communication with shareholders is very important the Directors who have no interest in the matter would to the Board and the Investment Manager, and there decide whether to authorise the conflict and whether the are a number of ways the Directors seek feedback from authorisation should be conditional or limited in any way. The investors. Details on how PINT engages with the Company’s process in place for authorising potential conflicts of interest stakeholders, how the Board fulfils its duties and makes has operated effectively during the year. decisions guided by the views of our shareholders and wider stakeholders are on pages 63 to 67. A register of potential conflicts is maintained by the Company Secretary and is reviewed at each Board meeting, to ensure On behalf of the Board that any authorised conflicts remain appropriate. Directors always declare any change to the Board. The Directors also ### Vagn Sørensen comply with the statutory requirements regarding declarations Chair of any interest in an actual or proposed transaction or arrangement with the Company. 2 April 2024 85 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## AUDIT ## AND RISK COMMITTEE REPORT ### Chair’s introduction Role of the Audit and Risk Committee ## I am pleased to present the I am pleased to present the Audit and Risk Committee The Committee’s Terms of Reference, which set out its Audit and Risk Committee (‘the Committee’, ‘the ARC’) report for the year ended responsibilities, are reviewed on a regular basis, and were 31 December 2023. The Committee aims to serve the interests updated during the year to reflect the updated guidance of the ## report for the year ended of our shareholders and other stakeholders through its FRC’s Minimum Standard for Audit Committees. ## 31December 2023. independent oversight of the financial reporting process, The primary responsibilities of the ARC are: including the financial statements, the internal controls and ### • to monitor the integrity of the financial statements, the risk management systems, monitoring compliance, as well as financial reporting process and the accounting policies of the appointment and ongoing review of the quality of the work ### Patrick O’Donnell Bourke the Company; and independence of PINT’s external Auditor. The Committee Audit and Risk Committee Chair ### recognises that, through its interactions with the Board, • to provide advice on: whether the annual report and 2 April 2024 the Manager and the external Auditor, it plays a key role in accounts, taken as a whole, are fair, balanced and facilitating a high‑quality audit, and is therefore important to understandable; whether suitable and appropriate the Company, our investors and other stakeholders. estimates and judgements have been made in respect of areas which could have a material impact on the financial As a qualified Chartered Accountant, I have chaired the statements; and whether such statements provide the Committee throughout the year, with Ms Baldock and information necessary for shareholders to assess the Ms Finegan serving as Committee members. The constitution Company’s position and performance, business model and and performance of the ARC are reviewed on a regular basis, strategy; and, during the year, the Committee made a decision that, ### • to review the effectiveness of the internal control in line with the recommendations of the UK Code, the Chair environment of the Company, including its service of the Board would step down from the Committee and join providers, and its reporting processes and to monitor our meetings as a guest, rather than a member. This reflects adherence to best practice in corporate governance best practice, but equally, the Committee still benefits from and compliance with applicable regulatory and legal Mr Sørensen’s experience and expertise. Notwithstanding requirements; this change to the composition of the Committee, the Board considers that, individually and collectively, the Committee • to advise the Board on the Company’s overall risk appetite, members are independent and appropriately experienced to tolerance and strategy and the principal and emerging fulfil the role of the Committee, and the Committee possesses risks the Company is willing to take in order to meet its the skills it needs, and has competence relevant to the long‑term objectives; infrastructure sector. to review the Investment Manager’s compliance, ### • whistleblowing and fraud prevention procedures; 86 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## AUDIT ## AND RISK COMMITTEE REPORT CONTINUED ### Role of the Audit and Risk Committee Main activities during the year A. Valuation of assets continued The Board and Committee meeting attendance table can be The Committee reviewed the basis of valuation of each of the • to assess the Company’s emerging and principal risks found on page 81. Since our last report to shareholders, the investments at 31 December 2023 prepared by the Investment and monitor the Company’s risk management and internal ARC has: Manager from information provided by each relevant Sponsor. financial controls and to seek assurance regarding the risk This includes a review of the operational performance, recent ### • reviewed the half‑year and year‑end Portfolio valuations exposures of the Company and the effectiveness of risk developments, financial updates, and key valuation drivers and the Company’s NAV; management and internal control systems; for each asset. Questions raised by the Committee were ### • reviewed the Company’s financial statements for the half to monitor, and prepare for, any developments to the legal addressed by the Investment Manager. During the year, the ### • year and year end and made formal recommendations to or regulatory landscape affecting the Company; Committee also spent additional time understanding and the Board; challenging, where appropriate, the valuation approach taken ### • to make recommendations to the Board in relation to ### • reviewed the Company’s going concern and viability for each investment. The Committee reviewed the Auditor’s the tender process, the appointment, re‑appointment statements; reporting on its testing of investment valuations, including and removal of the external Auditor and to approve the ### • reviewed the internal controls and risk management using its specialists. As a result, the Committee satisfied itself Auditor’s remuneration and terms of engagement, including systems of the Company and its third‑party service that the Company’s portfolio was held at fair value. scope of work; providers; ### • to review and monitor the Auditor’s independence and B. Going concern and long‑term viability ### • agreed the audit plan and fees with the Auditor, its objectivity and the effectiveness of the audit process; and The Committee assessed the Company’s resources to independent review of the condensed financial statements to provide a forum through which the Company’s Auditor continue in operation for at least twelve months from the ### • for the six months ended 30 June 2023 and the audit of the reports to the Board. date of these financial statements and whether it remains financial statements for the year ended 31 December 2023; appropriate for PINT to continue to adopt the going concern The ARC has direct access to the Auditor, Ernst & Young (EY), ### • reviewed the risk matrix covering the Company’s key basis in preparing its financial statements. The Committee and representatives of EY attend the relevant ARC meetings. investment and operating risks, including how they are also advised the Board on assessing the viability of the classified and mitigated, and requested changes on Company over a three‑year period. These assessments how the risk report and matrix were reported on by the included a review of the Company’s financial position, Manager; including its commitments, available liquid resources, ability ### • reviewed the whistleblowing policy together with the data to draw on its RCF, as well as various downside cases that protection, fraud prevention and anti‑money laundering assumed varying degrees of decline in investment valuations, policies of the Investment Manager (no incidents or risk increases in operating costs, and weakening of GBP against areas were reported during the year); and the EUR and USD (which may result in increased FX hedging • reviewed compliance with the AIC Code and its own terms liabilities), and contemplated different risk factors relating of reference. to cash flows. As a result, the Committee concluded that the Company had adequate resources to continue in The significant issues relating to the Committee’s review of operation and meet its liabilities as they fell due both for the the financial statements for the year ended 31 December 2023 twelve months from the date of approval of these financial were: statements, and over the subsequent two years. Related going concern and long‑term viability disclosures are set out on pages 72, 103 and Note 1 on page 117. 87 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## AUDIT ## AND RISK COMMITTEE REPORT CONTINUED C. Maintenance of investment trust status Internal control review In arriving at its judgement as to the risks the Company faces, The Investment Manager and Administrator reported to The Directors are responsible for the Company’s risk the ARC considered the Company’s operations in light of the the Committee to confirm continuing compliance with the management and systems of internal control and for reviewing following factors: requirements for maintaining investment trust status. These their effectiveness. In an ongoing process, in accordance with ### • the nature and extent of risks which it regards as requirements were also discussed with the Auditor as part of the guidance provided by the FRC on risk management, the acceptable for the Company to bear within its overall the audit process. Committee and the Board have processes and procedures in business objective; place for identifying, evaluating and managing the risks faced ### Internal controls • the threat of such risks becoming a reality; by the Company, and for reviewing internal control systems. ### The ARC reviewed and updated, where appropriate, the • the Company’s ability to reduce the incidence and impact These processes have been in place throughout the year and Company’s risk matrix. This document is reviewed, and of risk on its performance; up to the date the financial statements were approved, and refined, by the ARC every six months and the Committee ### • the cost to the Company and benefits related to the review the Board has carried out a robust review of internal controls is satisfied with the extent, frequency and quality of the of risk and associated controls of the Company; and and risk management systems. reporting of the Investment Manager’s monitoring to enable ### • the extent to which third parties operate the relevant the ARC to assess the degree of control of the Company and The risk management process and systems of internal control controls. how effectively risk is managed and mitigated. The ARC also are designed to manage, rather than eliminate, the risk of received reports on internal controls from the Company’s Full details of the principal risks and uncertainties faced by the failure to achieve the Company’s objectives and such systems relevant service providers. Company can be found on pages 68 to 71. can only provide reasonable, rather than absolute, assurance against material misstatement or loss. Given the nature of the Company’s activities and the fact No incidents of significant control failings or weaknesses were identified during the year ended 31 December 2023, within that most functions are sub‑contracted, the Directors ### Internal control assessment process the Company or its third‑party suppliers. obtain information from key third‑party suppliers regarding Regular risk assessments and reviews of internal controls and the controls they operate. To enable the Board to make an The Company does not have an internal audit function as all of the Company’s risk appetite are undertaken by the Board in appropriate risk and control assessment, the information and its day‑to‑day operations are delegated to third parties, all of the context of the Company’s overall investment objective. assurances sought from third parties include the following: whom have their own internal control procedures. On behalf of the Board, the ARC undertook a robust ### • details of the control environment; The Audit and Risk Committee discussed whether it would be assessment and review of the emerging and principal ### • identification and evaluation of risks and control objectives; appropriate to establish an internal audit function, and agreed risks facing the Company. The review covered the key that the existing system of monitoring and reporting by third business, operational, compliance and financial risks facing • assessment of communication procedures; and parties remained appropriate and sufficient. This decision will the Company. • assessment of control procedures operated. be reviewed every year. There were no significant matters of concern identified in the Board’s review of the internal controls of its third‑party suppliers. 68 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # AUDIT # AND RISK COMMITTEE REPORT CONTINUED ## Internal control assessment process continued The key procedures which have been established to provide effective internal financial controls are as follows: - the Company uses a third-party provider of administration and accounting services, as well as company secretarial duties. Investment management is provided by Pantheon, therefore, the duties of investment management and accounting are segregated. The Company also uses a third-party Depositary. The procedures of the individual parties are designed to complement one another; - the Directors define the duties and responsibilities of the Company's service providers and advisers in the terms of their contracts. The appointment of key service providers and advisers is conducted by the Board after consideration of the quality of the parties involved; the Board, via the MEC, monitors their ongoing performance and contractual arrangements; and - the Board reviews detailed financial information produced by the Investment Manager and the Administrator on a regular basis. ## Fair, balanced and understandable As a result of the work performed, the ARC concluded that the annual report for the year ended 31 December 2023, taken as a whole, was fair, balanced and understandable and provided the information necessary for shareholders to assess the Company's position and performance, business model and strategy, and reported on these findings to the Board. ## External audit The ARC 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 £150,000 for the audit of the 2023 financial statements (£135,000 in 2022). The ARC will continue to monitor the level of audit fees closely. ## Non-audit fees/independence and objectivity of the Auditor The ARC reviews the scope and nature of all proposed non-audit services, 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 another provider is considered to have more relevant experience. Non-audit services provided during the year ended 31 December 2023 related to EY's review of the 2023 half-year report. The fee for that service was £35,000 (£35,000 in 2022), and made up 18.9% of the total fees paid to the Auditor. The ARC believes that it is appropriate for the Company's Auditor to provide such services to the Company as these services are audit related. The ARC has received assurances from the Auditor that its independence is not compromised by the supply of these services. 89 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## AUDIT ## AND RISK COMMITTEE REPORT CONTINUED ### Effectiveness of external audit process The Committee monitors the Company’s relationship with the The ARC meets at least twice a year with the Auditor. The Auditor and has discussed and considered its independence Auditor provides a planning report in advance of the annual and objectivity. The Auditor also provides confirmation that audit, a report on the annual audit and a report on its review it is independent within the meaning of all regulatory and of the half‑year financial statements. The ARC has an professional requirements and that objectivity of the audit is opportunity to question and challenge the Auditor in respect not impaired. of each of these reports. In addition, at least once a year, the The Committee is therefore satisfied that EY remains ARC has an opportunity to discuss any aspect of the Auditor’s independent and will continue to monitor this position. work with the Auditor in the absence of the Investment Taking into account the performance and effectiveness of Manager. After each audit, the ARC reviews the audit process the Auditor and the confirmation of its independence, the and considers its effectiveness. Committee has recommended to the Board that a resolution to ### Appointment of the Auditor re‑appoint EY as the external Auditor be put to shareholders The Board of PINT appointed EY as PINT’s first auditors in at the forthcoming AGM. EY has confirmed its willingness to 2021. continue in office. A competitive tender must be carried out by the Company at least every ten years. We are therefore required to carry out ### Patrick O’Donnell Bourke a tender no later than in respect of the financial year ending Audit and Risk Committee Chair 31 December 2031. Mr Matthew Price has served as the lead audit partner since the IPO in 2021. Ethical standards 2 April 2024 generally require the rotation of the lead audit partner every five years for a listed client. 90 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## MANAGEMENT ## ENGAGEMENT COMMITTEE REPORT ### The Management Engagement Committee meets at least once • where relevant, consider nominations by the Investment ## I chair the Management a year, or more often if required. Manager for replacements of key executives, if, prior to the ## Engagement Committee. termination of the agreement, such key executives should ### The role of the Committee die or otherwise become incapacitated or should retire, ## Given the size of the Board The principal duties of the Committee, set out in its terms of resign or otherwise cease to provide the relevant services reference, are to: ## and that all Directors are to the Company; ### • monitor and evaluate the Manager’s performance (and, if ### • consider and review the level and method of remuneration ## independent, all Directors necessary, provide appropriate guidance) and compliance of the Investment Manager pursuant to the terms of by the Investment Manager with the Investment ## are members of the the Investment Management Agreement, including the Management Agreement; methodology of calculation of the annual management ## Committee. ### • reasonably satisfy itself that the Investment Management fee (which shall include a comparison of fees payable as Agreement is fair and that the terms thereof comply with all compared to the Company’s peer group management regulatory requirements, conform with market and industry arrangements); ### Andrea Finegan practice, are competitive and remain in the best interests of ### • consider the merit of obtaining, on a regular basis, an Chair of the Management Engagement Committee shareholders; independent appraisal of the Investment Manager’s ### • reasonably satisfy itself that systems put in place by services; 2 April 2024 the Investment Manager in respect of the Company ### • consider the appointment or re‑appointment of the are adequate to meet relevant legal and regulatory Investment Manager and the level of fees and make requirements; recommendations to the Board thereon; ### • reasonably satisfy itself that matters of compliance are ### • review with the Investment Manager any material issues under proper review. Through the terms of the Investment arising from its work that the Investment Manager wishes to Management Agreement, the Company procures that bring to the attention of the Committee, whether privately the Committee has direct access to the Investment or otherwise; and Manager’s compliance officers, and receives a report ### • review the performance and services provided by from the Investment Manager each year confirming that the Company’s other service providers (including the it has performed its obligations under the Investment Administrator, Depositary, Registrar and Company Management Agreement and has conducted the Secretary) and consider whether the continuing Company’s affairs in compliance with the laws and appointments of such service providers under the terms of regulations applying to it; their agreements are in the interests of shareholders as a ### • regularly review the composition and performance whole, and make recommendations to the Board thereon (including skills, knowledge and experience) of the key together with a statement of the reasons for its views. personnel performing the services on behalf of the Investment Manager and consider whether the continuing appointment of the Investment Manager, on the terms of the Investment Management Agreement, is in the interests of shareholders as a whole, and make recommendations to the Board thereon together with a statement of the reasons for this view; 91 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## MANAGEMENT ## ENGAGEMENT COMMITTEE REPORT CONTINUED ### Main activities during the year Review of other third‑party service ### The Manager’s review providers When reviewing the Investment Manager’s performance The Committee reviewed the services of: Hogan Lovells, in providing investment management and other services, PINT’s legal adviser; BNP Paribas, PINT’s Depositary; Link the Committee considered a number of different factors, Alternative Fund Administrators, PINT’s Administrator; Link which included: the quality and continuity of Pantheon’s Market Services, PINT’s Registrar; Link Company Matters team; Pantheon’s succession plans; sector and geographic Limited, PINT’s Company Secretary; and Investec Bank plc, coverage; investment processes; performance and strategy. PINT’s corporate broker and bookrunner. The Committee The Committee also considered the Investment Manager’s concluded that all these appointments remained in the best culture and evaluated the way in which the Investment interests of PINT and all were recommended to the Board. Manager’s partners, executives and other members of the In 2023 the Committee also considered the performance team are remunerated and incentivised. Furthermore, the of PINT’s PR adviser, and upon a recommendation of the Committee reviewed the Investment Manager’s ESG strategy, Investment Manager, the Board agreed to appoint Lansons objectives and progress against ESG goals. Communications Holdings Limited as the Company’s new PR When reviewing the terms of the Investment Management services provider. Agreement, the Committee also considered the remuneration arrangements and the methodology underpinning the annual ### Andrea Finegan management fee. In addition, the Committee also took into Chair of the Management Engagement Committee account the Investment Manager’s ongoing commitment to promote the Company and engage with its shareholders and 2 April 2024 other key stakeholders. Following its review, the Committee concluded that the continued appointment of the Investment Manager remained in the best interests of PINT and its shareholders. 92 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## NOMINATION ## COMMITTEE REPORT ### The role of the Committee Appointments process ## I chair the Nomination The principal duties of the Committee, as set out in its terms All Board appointments are subject to a formal, rigorous ## Committee and, given of reference, are to; and transparent process. The Company will seek to ensure that any Board vacancies will be filled by the most qualified ## the size of the Board, all • review the balance, effectiveness and diversity of the candidates, based on objective criteria and merit in the Board; ## Directors are its members. context of the skills, knowledge and experience needed to ### • consider and formulate succession plans; support the Board’s longer‑term strategy and goals. Any ### • identify the skills and expertise needed to meet the appointments will be made in line with the Board’s Diversity Company’s strategic goals, future challenges and Policy. ### Vagn Sørensen opportunities; and in doing so, identify, evaluate and ### Nomination Committee Chair Main activities during the year recommend individuals for new Board appointments; Board’s Diversity Policy ### 2 April 2024 • consider and review the membership of the Board’s The Board fully supports diversity and inclusion at Board Committees; level and recognises the benefits of diversity, including that ### • consider and review the performance and external of gender, socio‑economic and ethnic background, cognitive commitments of Board members; and personal strengths. During the year, the Board reviewed ### • assess the time commitment required for each Board and updated its Diversity Policy, which highlights the Board’s appointment and ensure that the current Directors have commitment to ensuring that the Directors bring a wide sufficient time to fulfil their duties; range of skills, knowledge, experience, backgrounds and ### • make recommendations on appointments and perspectives to the Board. The Committee decided to include re‑appointments of Directors to our shareholders; and additional measurable objectives of the Policy, to specify that: ### • lead the Directors’ performance appraisal process and ### • any advertising will state that applications from suitably consider the results thereof every year; details of the last qualified candidates who would add to the Board’s diversity review are included on pages 82 to 84. would be especially welcome; ### • any recruitment agency used would be instructed to include diverse candidates who have appropriate transferable skills, identified through a search of a wide pool of potential appointees; and ### • any shortlist will include candidates who, if appointed, would add to the diversity of the Board. Consequently, implementing these objectives, any shortlist will include candidates who, if appointed, would add to the diversity of the Board. 93 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## NOMINATION ## COMMITTEE REPORT CONTINUED ### Main activities during the year continued The Committee also reviewed the time required by each Board Board diversity member to fulfil their duties, including myself as the Chair The Board welcomed the changes to the Listing Rules which of the Board. Whilst I do not have any appointments other incorporate the recommendations of the Hampton‑Alexander than those disclosed in this annual report, and am able to and Parker Reviews. In line with the Listing Rules serve PINT to the best of my ability, after reflection, and upon requirements, PINT reports on certain diversity targets, consultation with some of our shareholders, I am considering including having a least 40% female representation on the stepping down as Chair, potentially at PINT’s Annual General Board, and having at least one senior Board role held by a Meeting in 2025. I intend to allow our SID, Ms Baldock, ample woman. As at 31 December 2023, PINT met two of three time to lead a search process for my successor and allow for a targets, and more detail on this is included on page 81. thorough handover period. With that in mind, the Committee intends to use the next ### Succession planning change to the Board, likely in late 2024 or the beginning of During the year, the Committee carefully considered 2025, as an opportunity for the Board to consider a wide pool succession planning. Despite being a relatively young of candidates from diverse backgrounds. company, and applying the principles of the Governance Code, the Directors are agreed that having a longer‑term view of possible Board changes is important. Whilst the Committee ### Vagn Sørensen agreed that, currently, the structure, size and composition Nomination Committee Chair of the Board is balanced and appropriate, the Directors recognise that there is room to improve the diversity of the 2 April 2024 Board. 94 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## ESG & ## SUSTAINABILITY COMMITTEE REPORT ### The role of the Committee • review the accuracy, completeness and transparency ## I chair the ESG & PINT’s Board believes that sound ESG practices and operating of ESG reporting, adhering to recognised standards, Sustainability Committee, sustainably are integral to building a resilient infrastructure frameworks and guidelines; and ### business and creating long‑term value for our shareholders • review, and receive updates on, the Company’s ## and all Directors and and other stakeholders. Last year, we therefore took the step continued compliance with the requirements of the Pantheon’s Global Head to establish a dedicated ESG & Sustainability Committee, European Union’s Sustainable Finance Disclosure chaired by myself, to help better support the Board with its Regulation (SFDR) as it relates to the Company ## of ESG are members of the focus on ESG, and create a dedicated forum for monitoring maintaining its classification as an Article 8 fund. ## Committee. and responding to evolving regulatory and best practice ### • ESG risk management: guidance. The principal duties of the Committee, as set out in ### its terms of reference, are to: • receive regular updates from the Investment Manager on any pertinent developments on ESG‑related risks ### • Agree and monitor the Company’s ESG strategy: ### Andrea Finegan and opportunities relating to the Company’s Portfolio Chair of the ESG & Sustainability Committee guide, supervise and support the Manager in drafting ### • companies. and periodically reviewing the Company’s sustainability 2 April 2024 ### • Stakeholder engagement: and ESG strategy aligned with the Company’s business ### objectives, industry best practice, and any applicable • monitor and review the Company’s stakeholder regulations; and engagement activities, including dialogue with shareholders, investors and other relevant stakeholders; ### • oversee the implementation and monitoring of the and approved ESG strategy, ensuring it is effectively ### integrated into the Company’s operations, investments, • promote effective communication and collaboration with and decision‑making processes by the Manager. stakeholders including service providers on ESG‑related matters, addressing their concerns and feedback ### • ESG reporting and disclosure: appropriately. ### • review and approve the Company’s ESG disclosure ### • Work in conjunction with the ARC in relation to ESG documents, including the Company’s annual communications in the annual report, adherence to ESG Sustainability Report (or relevant sections of such disclosure requirements and identification and mitigation other reports as may be produced), ESG metrics, of risks relating to ESG, as well as opportunities related the Company’s ESG Policy, and other relevant to ESG. communications to stakeholders; 95 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## ESG & ## SUSTAINABILITY COMMITTEE REPORT CONTINUED ### Main activities during the year Under SFDR, PINT also needs to make certain periodic Looking ahead In July 2023, PINT’s Board formally constituted a separate disclosures, and to satisfy that requirement, the Committee As an investment company without control of the underlying ESG & Sustainability Committee, reflecting both the belief together with Pantheon worked on the Company’s first investee companies, PINT is reliant on Pantheon and the that sound ESG practices are integral to building a resilient sustainability report for 2022, which includes an assessment Sponsors of each investee company for the collection of data business and the fact that evolving regulatory and best of PINT’s investments against set sustainability indicators. and delivery of any ESG objectives. Notwithstanding, PINT practice guidance on ESG matters require the additional focus The results of PINT’s investments’ ESG performance are is aiming to improve data collection, which, in turn, should a committee brings. published in accordance with the requirements of Article result in better disclosures, as well as an overall improvement 11 of the EU’s SFDR, and in accordance with the regulatory in ESG performance of PINT’s investments. Therefore, the The Committee worked on the Company’s initial ESG and technical standards set out in Commission Delegated Committee’s and the Board’s focus in 2024 and further ahead Sustainability Policy which complements and builds on the Regulation (EU) 2022/1288). will be on the engagement with suppliers and Sponsors to Investment Manager’s ESG Policy. Work was also undertaken continue to develop the communication, data collection in identifying future focus areas around improvement in data In 2022, PINT was not required to make disclosures under the and our disclosures. In time, the Committee intends to set capture and disclosures to allow improved reporting. Task Force on Climate‑related Financial Disclosures (TCFD), meaningful targets for PINT for the years ahead. however, work commenced on this and a number of voluntary PINT is classified as Article 8 under SFDR, which means that disclosures were made. Preparations are underway towards We look forward to engaging with our stakeholders on these it is committed to enhanced reporting requirements and an reporting fully against the TCFD categories of Governance, topics, as we remain committed to keeping their interests at investment policy which restricts investments in specific Strategy, Risk Management and Metrics and Targets. the centre of our decision making. excluded sectors (coal, oil (upstream, midstream, storage), gas (upstream), nuclear energy and mining). ### Andrea Finegan Chair of the ESG & Sustainability Committee 2 April 2024 94 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # DIRECTORS' REMUNERATION REPORT This Directors' remuneration report for the year ended 31 December 2023, has been prepared in accordance with the requirements of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. Anne Baldock Remuneration Committee Chair 2 April 2024 ![img-9.jpeg](img-9.jpeg) The law requires the Auditor to audit certain disclosures contained within this report and these are indicated accordingly. The Auditor's opinion is included in its independent Auditor's report on pages 107 to 112. The Directors' Remuneration Policy ('the Policy') is required to be put to shareholders' vote at least once every three years, any change to the Policy also requires shareholders' approval. The Policy is subject to a binding vote. A resolution to approve the Policy was last proposed and approved by shareholders at the AGM of the Company held on 30 March 2023, and the Policy will apply until it is next put to shareholders for renewal of that approval at the Company's AGM in 2026, unless any variations to the policy are proposed earlier. There are no significant changes in the way that the Remuneration Policy will be implemented in the course of the next financial year. The annual remuneration report, which includes the remuneration paid to Directors each year, is brought to shareholders for approval at every Annual General Meeting, therefore, an ordinary resolution to approve this remuneration report will be put to members at the forthcoming AGM in June 2024. The vote on the Directors' remuneration Report is an advisory vote. ## Statement from the Chair I am pleased to present the Directors' remuneration report for the year ended 31 December 2023. I chair the Remuneration Committee and, given the size of the Board, all Directors are members of the Committee. ## The role of the Committee The Company has no employees or executive Directors. The Remuneration Committee determines and approves Directors' fees within an aggregate limit of £500,000 per annum, as set out in the Company's Articles of Association. No Director is involved in deciding his or her own remuneration; remuneration of the Chair of the Board is decided and approved by the Directors under the leadership of the SID. More details on how the Committee makes those decisions, and all the factors it takes into account, are set out on page 97. The principal duties of the Remuneration Committee are to: - determine, review, amend (where deemed needed) the fees of: the Chair of the Board; the SID; Chairs of each Committee; and those of the non-executive Directors; - determine, review, amend (where deemed needed), and agree the Policy and propose it to our shareholders for approval at least every three years; - obtain reliable, up-to-date information about remuneration in other companies of comparable scale and complexity and market practice generally; - when authorising remuneration outcomes, exercise independent judgement and discretion, taking account of Company and individuals' performance, and wider circumstances; - report to the Board and PINT's shareholders on the Committee's activities and decisions; - agree the Policy for authorising claims for expenses from the Directors; and - establish the selection criteria, select, appoint and set the Terms of Reference for any remuneration consultants who might advise the Committee. The Board and Committee meeting attendance table can be found on page 81. 97 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # DIRECTORS' # REMUNERATION REPORT CONTINUED ## Directors' fees The Directors' fees are reviewed annually. In its assessment, the Committee considers a wide range of factors to make sure that the Policy is aligned with PINT's long-term strategic goals and the goal of promoting long-term, sustainable success of the Company, enabling PINT to attract, retain and motivate Directors of the quality required to fulfil the responsibilities of the Board. When reviewing the fees, the Committee also has regard to the risk appetite of the Company; the time required to be devoted to PINT's affairs; whether all Directors devoted sufficient time to PINT during the year under review; whether the Board evaluation indicated that the Directors fulfilled their roles, acted effectively and in the best interests of PINT; and whether the scale and complexity of the business added to the time commitments. The Committee also reviews remuneration trends across the sector, any feedback received from shareholders, as well as the level of support for the remuneration report and Policy resolutions. In 2023, we held PINT's first AGM – shareholders cast over 98.98% of their votes in favour of the Directors' remuneration report, 0.02% of the votes were cast against and –0.008% of votes were withheld. The current Policy was approved by shareholders at the same meeting in 2023, with 99.98% of votes cast in favour, 0.02% votes against, and –0.008% of votes withheld, showing considerable shareholder support. Following a review in late 2023, the Remuneration Committee resolved to increase Directors' fees by 5% (effective from 1 January 2024) for the year ending 31 December 2024. This is the first fee increase since IPO in 2021 and since then, the average annual CPI inflation was 7.3% in 2023 (RPI 9.7%) and 9.1% in 2022 (RPI 11.6%). The fees reflect the time Directors spend on the affairs of the Company, and help PINT remain competitive and in line with the market, as we prepare to refresh the Board, and likely start to recruit in late 2024. | | Expected fees for year ending 31 December 2024 £ | Fees for year to 31 December 2023 £ | | --- | --- | --- | | Chair | 57,750 | 55,000 | | Non-Executive Director | 42,000 | 40,000 | | Audit and Risk Committee Chair | 47,250 | 45,000 | Remuneration of any new Board members would be set in line with these fees. ## The Remuneration Policy The Board's policy is that remuneration of non-executive Directors should reflect the experience of the Board as a whole and is determined with reference to comparable organisations and appointments. The level of remuneration has been set in order to attract individuals of a calibre appropriate to the future development of the Company and to reflect the specific circumstances of the Company, the duties and responsibilities of the Directors, and the value and amount of time committed to the Company's affairs. The Chair does not participate in any discussions relating to his own fee, which is determined by the other Directors and led by the SID. Directors are entitled to be reimbursed for any travel, hotel or other expenses properly incurred in connection with their attendance at Director or shareholder meetings or otherwise in connection with the discharge of their duties as Directors. There are no performance conditions of the remuneration; the Board does not believe that this is appropriate for non-executive Directors. Under the Company's Articles, PINT is permitted to provide pension or similar benefits for its Directors; however, no pension schemes or other similar arrangements have been established and none of the Directors are entitled to any pension or similar benefits, nor do they receive long-term incentive schemes or share options. PINT does not have a policy on termination payments and no past Director has been compensated for loss of office or otherwise. All Directors are subject to annual re-election and none of the Directors have a service contract with PINT. Each directorship may be terminated by either party on three months' prior written notice. The fees for the Directors are determined within the limits set out in the Company's Articles of Association, or any greater sum that may be determined by ordinary resolution of the Company. Directors' and Officers' liability insurance cover is maintained by the Company on behalf of the Directors. ## Statement of implementation of the Remuneration Policy in respect of the financial year ending 31 December 2024 The Remuneration Committee intends to review Directors' fees in late 2024, when it will determine the fees effective from 1 January 2025. In the absence of unforeseen circumstances, the Committee does not expect any other changes. 98 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## DIRECTORS’ ## REMUNERATION REPORT CONTINUED ### Annual report on Directors’ remuneration (audited) Directors’ fees for the year (audited) Single total figure for each Director: 2 | | | Fees Taxable expenses | | | | | | | | Total3 | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 2023 | | 20221 | | 2023 | | 2022 | | 2023 | | 20221 | | | Directors | | £ | | £ | | £ | | £ | | £ | | £ | Vagn Sørensen 55,000 67,128 596 — 55,596 67,128 Anne Baldock 40,000 48,821 — — 40,000 48,821 Andrea Finegan 40,000 48,821 1,352 — 41,352 48,821 Patrick O’Donnell Bourke 45,000 54,929 776 55 45,776 54,929 Total 180,000 219,693 2,724 55 182,724 219,748 1. The Company’s first annual report covered the period from 12 October 2021 to 31 December 2022, therefore, the 2022 figures also include the pro‑rated fees for the period 12 October 2021 to 31 December 2021. To date, there have been no increases in Directors’ fees since IPO. 2. The Directors’ expenses related to travel and accommodation and were partly incurred in visiting an asset and the management team at Primafrio, as part of the Board’s oversight of the activities of the Investment Manager. 3. There are no variable elements of remuneration to disclose. No sums were paid to any third parties in respect of Directors’ services and no sums were paid to any third parties in respect of advice from a remuneration adviser. ### Company performance In setting Directors’ remuneration, the Committee considers the relative size and performance of the Company. The table below sets out PINT’s total share price returns to ordinary shareholders since launch, compared with the S&P Global Infrastructure Index over the same period. The S&P Global Infrastructure Index is used as a benchmark as its constituents are comparable in asset type with the Company’s investment portfolio. For the year ended 31 December 2023, total shareholder return was (7.0)%, compared with the S&P Global Infrastructure Index return of 6.8%. IPO (Nov 21) Three months Six months One year - 31 Dec 23 Share price (TSR) 11.0% 7.6% (7.0%) (15.4%) FTSE All Share (TR) 3.2% 5.2% 7.9% 13.3% S&P Global Infrastructure Index (TR) 10.9% 2.9% 6.8% 13.7% 99 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## DIRECTORS’ ## REMUNERATION REPORT CONTINUED ### Directors’ interests (audited) The Company’s Articles of Association do not require Directors 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 2023 and 31 December 2022 were as follows: | | Number of | | | Number of | | | --- | --- | --- | --- | --- | --- | | Ordinary Shares | | | Ordinary Shares | | | | | 31 December | | | 31 December | | | | | 2023 | | | 2022 | Vagn Sørensen 146,680 120,000 Anne Baldock 50,000 30,000 Andrea Finegan 46,581 30,000 Patrick O’Donnell Bourke 60,000 60,000 There have been no changes in Directors’ interests between 31 December 2023 and the date of this report. None of the Directors or any person connected with them had a material interest in the Company’s transactions, arrangements or agreements during the year. ### Relative importance of spend on pay % change 2023 from 2022 20221 £ to 2023 £ Total Directors’ fees1 180,000 — 219,6931 Total distribution to shareholders 14,303,000 198 4,800,000 Share buybacks 5,824,000 — — 1. The Company’s first annual report covered the period between 12 October 2021 to 31 December 2022. There have been no changes to remuneration and no increases in fees between the IPO in 2021 and the year ended 31 December 2023. ‘ 100 PANTHEON INFRASTRUCTURE PLC^{}[] ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## **DIRECTORS' REMUNERATION REPORT** CONTINUED ### **Annual percentage change in Directors' fees** Directors' fees remained unchanged between the Company's IPO in November 2021 and 31 December 2023. | | 2023 £ | % change in from 2022 to 2023 | 2022 £ | | --- | --- | --- | --- | | Vagn Sørensen | 55,000 | — | 67,1281 | | Anne Baldock | 40,000 | — | 48,8211 | | Andrea Finegan | 40,000 | — | 48,821^{1} | | Patrick O'Donnell Bourke | 45,000 | — | 54,978^{1} | 1. The Company's first annual report covered the period between 12 October 2021 and 31 December 2022, therefore, the amounts for that first financial period also included the fees the Directors received between 12 October and 31 December 2021. ### **Approval** The Directors' remuneration report was approved by the Board and signed on its behalf by: **Anne Baldock** Chair 2 April 2024 101 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 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 year ended 31 December 2023. The Corporate Governance statement, including the reports of the Board Committees, the Directors' remuneration report, and the statement of Directors' responsibilities form part of this report. Some of the matters required to be included in the Directors' report have instead been included in the strategic report, as the Board considers them to be of strategic importance. Therefore, a review of the business of the Company, recent events and outlook can be found on pages 28 to 37 and information on our ESG reporting can be found on pages 58 to 62. Important events affecting the Company and that occurred after 31 December 2023 are included in Note 25 to the financial statements. ### Board of Directors As at the date of this report, PINT is led by a Board of four non-executive Directors, all of whom are considered to be independent. In line with the recommendations of the AIC Code, all Directors will stand for re-election at the forthcoming AGM. Directors' biographies can be found on pages 74 and 75. The general powers of the Directors are set out in PINT's Articles of Association, which provide that the business of PINT shall be managed by the Board, which may exercise all the powers of the Company, subject to any limitations imposed by applicable legislation, the Articles and any directions given by special resolution of the Company's shareholders. Any amendments to the Articles of Association must be made by special resolution at a general meeting of the shareholders. 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 could occur because of a takeover bid. ### Insurance and indemnity provisions The Board has formalised arrangements under which the Directors, in the furtherance of their duties, may take independent professional advice at the Company's expense. The Company has put in place a Directors' and Officers' liability insurance policy which includes cover for legal expenses. Under the terms of appointment of each Director, the Company has agreed, subject to the restrictions and limitations imposed by statute and by the Company's Articles of Association, to indemnify each Director against all costs, expenses, losses and liabilities incurred in execution of his/her office as Director or otherwise in relation to such office. Save for such indemnity provisions in the Company's Articles of Association and in the Directors' terms of appointment, there are no qualifying third-party indemnity provisions in force. ### Share capital and voting rights 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 2023 and as at the date of this report, the Company's share capital is as follows: | Share capital and voting rights | Number of shares in circulation | Voting rights attached to each share | Number of shares held in treasury | Total number of shares in issue (including shares held in treasury) | | --- | --- | --- | --- | --- | | As at 31 December 2023 | 472,615,000 | 1 | 7,385,000 | 480,000,000 | | As at 2 April 2024 | 469,550,000 | 1 | 10,450,000 | 480,000,000 | 102 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # DIRECTORS' # REPORT CONTINUED ## Share capital and voting rights continued 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 applicable US laws. The powers of the Directors are detailed in the Company's Articles and are subject to relevant legislation and, in certain circumstances (including in relation to the issuing or buying back the Company of its shares), are subject to the authority being given to the Directors by PINT's shareholders. Prior to the Company's listing on 13 October 2021, in accordance with the Articles the Directors were authorised 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, with the authority expiring on 13 October 2024. To date, no shares have been allotted under this authority, and the Directors propose to replace this authority with a general authority to allot new shares up to approximately 33.33% of the issued share capital of the Company at PINT's forthcoming AGM in June 2024. The Directors will also propose a resolution to grant the Company the authority to disapply pre-emption rights, which would enable the Board to issue Ordinary Shares for cash, without pre-emption rights applying, up to approximately 10% of the Company's issued share capital. An authority to repurchase up to 14.99% of the Company's issued share capital to be held in treasury or for cancellation was granted to the Directors on 30 March 2023. Given a challenging period for many infrastructure investment companies, and PINT's shares trading at a material discount to NAV, on 31 March 2023 the Board announced its intention to commence a share buyback programme up to a total consideration of £10 million. The Directors considered that the share price at which the Company's Shares were trading materially undervalued PINT's portfolio and prospects, and in April 2023 begun buying back shares. During 2023, the Company purchased a total of 7,385,000 Ordinary Shares of 1p each (nominal value of £73,850) at a total cost of £5.79 million (at a weighted average price of £0.78 per share), representing c. 1.5% of the Company's issued share capital. All purchased shares are kept in treasury. As at 31 December 2023, the Company had a remaining authority to purchase a further 64,567,000 shares; this authority will expire at the conclusion of the 2024 AGM, and the Board intends to propose a resolution to renew this authority at the forthcoming AGM in June 2024. ## Dividends On 21 March 2024, the Board declared a second interim dividend of 2p per share for the year ended 31 December 2023, payable on 23 April 2024. A first interim dividend of 2p per Ordinary Share was paid on 27 October 2023. ## 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 Ventures (UK), on 13 October 2021. Under this agreement Pantheon was appointed as the Company's Alternative Investment Fund Manager (AIFM), and has been approved as an AIFM by the FCA. Pantheon Ventures (UK) is part of the Pantheon Group. 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 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 Ventures (UK) is 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. 103 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # DIRECTORS' # REPORT CONTINUED ## Management continued 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 Investment Management Agreement is capable of being terminated (without penalty to the Company) by either party giving no 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 Investment 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 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. Pantheon Ventures (UK) 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. ## 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 Investment Management Agreement. A summary of that review can be found on page 91. 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, therefore, the Board is of the opinion that Pantheon's continued appointment remains in the interests of the Company and its shareholders. ## 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 2023 stood at £144.4 million, comprising £29.4 million in available cash balances and £115.0 million through the Company's RCF, which matures in March 2027. 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, anticipated 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 33. As part of the going concern review, the Directors considered different downside scenarios and their potential impact on PINT's liquidity. The scenarios modelled included varying degrees of decline in investment valuations and other key drivers such as: a slower deployment rate; lower than expected investment returns; higher than expected operating expenses; and absence of equity capital raises, realisations and distribution payments. The Company has several ways in which it could limit or mitigate the impact these possible developments could have on the balance sheet, including drawing on the 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 for the year ended 31 December 2023. For this reason, the Board considers it appropriate to continue to adopt the going concern basis in preparing the financial statements. ## Related party transactions Related party transactions for the period can be found in Note 24 to the financial statements. 104 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # DIRECTORS' # REPORT CONTINUED ## Substantial shareholdings During 2023, 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 | | --- | --- | --- | | Rathbones Investment Management Ltd | 104,038,930 | 22.01% | | Evelyn Partners Limited | 47,277,733 | 10.00% | | Quilter PLC | 41,171,287 | 8.72% | | Schroders Plc | 27,045,000 | 5.72% | | Close Asset Management Limited | 20,870,685 | 4.42% | These holdings may have changed since notified to the Company because a notification of change is not required until shareholders cross a regulatory threshold again. Since the year end, the Company has been notified of the following changes: - On 18 January 2024, Quilter Plc notified the Company that it had reduced its shareholding to 34,456,287 shares (7.28%); - On 18 January 2024, Schroders Plc notified the Company that it had increased its shareholding to 47,728,179 shares (10.12%); and - On 18 March 2024, Rathbones Investment Management Ltd notified the Company that it decreased its shareholding to 98,365,856 (20.94%). ## Greenhouse gas emissions and TCFD All of PINT's activities are outsourced to third parties. As such, the Company does not have any physical assets, property, employees or operations, nor does it generate any greenhouse gas or other emissions or consume any energy reportable under the Companies Act 2006 (strategic report and Directors' report) Regulations 2013 or the Companies (Directors' report) and Limited Liability Partnerships (energy and carbon report) Regulations 2018, implementing the UK Government's policy on Streamlined Energy and Carbon Reporting. Whilst PINT is exempt from complying with the requirements of the Companies Act 2006 to produce a Non-Financial and Sustainability Information Statement or report against the TCFD framework, the Company will soon release its second annual sustainability report, which will incorporate more detailed reporting in accordance with the TCFD recommendations. More details can be found on page 61. Further details of the Investment Manager's approach to responsible investment practices and ESG standards can be found in the strategic report on pages 58 to 62. ## Modern Slavery Act As an investment trust, PINT does not provide goods or services in the normal course of business, nor does it have employees, customers or turnover. Consequently, the Company is not in scope of the Modern Slavery Act (the 'Act') and is therefore not required to make a slavery or human trafficking statement under the Act. Notwithstanding the fact that the Company's own supply chain consists predominantly of professional advisers and service providers in the financial services industry, and is considered to present a low risk of modern slavery, the Company has a zero-tolerance approach to modern slavery and has adopted its own Modern Slavery and Human Trafficking Statement which was approved by the Board in May 2022 and is reviewed annually. The MEC also monitors (by self-assessment) the modern slavery policies of PINT's major suppliers. Pantheon's Modern Slavery Statement can be found on Pantheon's website. ## Political donations The Company made no political donations during the year to 31 December 2023. The Company has in place an Anti-Bribery and Charitable & Political Donations Policy. ## Listing Rule 9.8.4R The Company confirms that there are no items which require disclosure under Listing Rule 9.8.4R in respect of the year ended 31 December 2023. ## Annual General Meeting (AGM) The Company's AGM will be held on 20 June 2024. 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 2 April 2024 105 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 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 The UK Corporate Governance Code requires Directors and the financial statements in accordance with applicable accounting records that are sufficient to show and explain to ensure that the annual report and financial statements laws and regulations. Company law requires the Directors to the Company’s transactions and disclose with reasonable are fair, balanced and understandable. In order to reach a prepare financial statements for each financial year. Under accuracy at any time the financial position of the Company conclusion on this matter, the Board has requested that the that law they have elected to prepare the financial statements and enable them to ensure that the financial statements Audit and Risk Committee advises on whether it considers in accordance with applicable law and UK Accounting comply with the Companies Act 2006. They are also that the annual report and financial statements fulfil these Standards (United Kingdom Generally Accepted Accounting responsible for safeguarding the assets of the Company and requirements. The process by which the Audit and Risk Practice). Under company law the Directors must not approve hence for taking reasonable steps for the prevention and Committee has reached these conclusions is set out in the financial statements unless they are satisfied that they detection of fraud and other irregularities. its report on pages 85 to 89. As a result, the Board has give a true and fair view of the state of affairs of the Company concluded that the annual report and financial statements for The Directors are also responsible for preparing the strategic as at the end of each financial year and of the profit or loss of the year ended 31 December 2023, taken as a whole, are fair, report, the Directors’ report, the Directors’ remuneration the Company for that period. balanced and understandable and provide the information report, the Corporate Governance Statement and the report necessary for shareholders to assess the Company’s position In preparing these financial statements, the Directors are of the Audit and Risk Committee in accordance with the and performance, business model and strategy. required to: Companies Act 2006 and applicable regulations, including the requirements of the Listing Rules and the Disclosure Signed on behalf of the Board by ### • present a true and fair view of the financial position, Guidance and Transparency Rules. The Directors have financial performance and cash flows of the Company; delegated responsibility to the Investment Manager for the ### • select suitable accounting policies in accordance with FRS ### maintenance and integrity of the Company’s corporate and Vagn Sørensen 102 and then apply them consistently; financial information included on the Company’s website Chair ### • present information, including accounting policies, in a (www.pantheoninfrastructure.com). Legislation in the United 2 April 2024 manner that provides relevant, reliable, comparable and Kingdom governing the preparation and dissemination of understandable information; financial statements may differ from legislation in other ### • make judgements and estimates that are reasonable and jurisdictions. prudent; Each of the Directors, whose names are listed on pages 74 ### • state whether applicable UK Accounting Standards and 75, confirms that to the best of his or her knowledge: have been followed, subject to any material departures ### • the financial statements, prepared in accordance with disclosed and explained in the financial statements; and applicable accounting standards, give a true and fair view ### • prepare the financial statements on a going concern basis of the assets, liabilities, financial position and profit of the unless it is inappropriate to presume that the Company will Company; and continue in business. ### • the management report, which is incorporated in the strategic report and Directors’ report, includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces. 106 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## FINANCIAL STATEMENTS What’s in this section Independent Auditor’s report ................................. 107 Income statement .................................................... 113 Statement of changes in equity ..............................114 Balance sheet ............................................................115 Cash flow statement ................................................ 116 Notes to the financial statements ........................... 117 Vertical Bridge 107 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 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’ ## AUDITOR’S (the ‘Company’) for the year ended 31 December 2023 which comprise use of the going concern basis of accounting in the preparation of the ## REPORT the Income statement, the Statement of changes in equity, the Balance financial statements is appropriate. Our evaluation of the Directors’ to the members of Pantheon sheet, the Cash flow statement, and the related Notes 1 to 25 including assessment of the Company’s ability to continue to adopt the going Infrastructure Plc a summary of significant accounting policies. The financial reporting concern basis of accounting included: framework that has been applied in their preparation is applicable law and ### • confirming our understanding of the Company’s going concern United Kingdom Accounting Standards including FRS 102 ‘The Financial assessment process and engaging with the Directors and the Reporting Standard applicable in the UK and Republic of Ireland’ (United Investment Manager to determine if all key factors were considered Kingdom Generally Accepted Accounting Practice). in their assessment; In our opinion, the financial statements: inspecting the Directors’ assessment of going concern, including the ### • give a true and fair view of the Company’s affairs as at Portfolio cash flow forecast for the period to 2 April 2025, which is ### • 31 December 2023 and of its profit for the year then ended; at least twelve months from the date the financial statements were authorised for issue. In preparing the Portfolio cash flow forecast, the ### • have been properly prepared in accordance with United Kingdom Company has concluded that it is able to continue to meet its ongoing Generally Accepted Accounting Practice; and costs as they fall due; ### • have been prepared in accordance with the requirements of the ### • reviewing the factors and assumptions applied to the Portfolio cash Companies Act 2006. flow forecast and the liquidity assessment of the investment portfolio. ### Basis for opinion We considered the appropriateness of the methods used to calculate We conducted our audit in accordance with International Standards on the Portfolio cash flow forecast and the liquidity assessment and Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under determined, through testing of the methodology and calculations, that those standards are further described in the Auditor’s responsibilities the methods, inputs and assumptions utilised were appropriate to be for the audit of the financial statements section of our report. We believe able to make an assessment for the Company; that the audit evidence we have obtained is sufficient and appropriate to ### • inspecting the Directors’ assessment of the risk of breaching the provide a basis for our opinion. loan facility covenants as a result of a reduction in the value of the ### Independence Company’s portfolio. We recalculated the Company’s compliance with We are independent of the Company in accordance with the ethical loan facility covenants in the scenarios assessed by the Directors who requirements that are relevant to our audit of the financial statements also performed reverse stress testing in order to identify what factors in the UK, including the FRC’s Ethical Standard as applied to public would lead to the Company breaching the financial covenants; interest entities, and we have fulfilled our other ethical responsibilities in ### • considering the mitigating factors included in the Portfolio cash flow accordance with these requirements. forecasts and covenant calculations that are within the control of the The non‑audit services prohibited by the FRC’s Ethical Standard were not Company; and provided to the Company and we remain independent of the Company in reviewing the Company’s going concern disclosures included in the ### • conducting the audit. annual report in order to assess that the disclosures were appropriate and in conformity with the reporting standards. 108 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### Conclusions relating to going concern continued ## INDEPENDENT Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may ## AUDITOR’S cast significant doubt on the Company’s ability to continue as a going concern for the period to 2 April 2025. ## REPORT CONTINUED 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 members of Pantheon to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt the going concern basis of accounting. Infrastructure Plc Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company’s ability to continue as a going concern. ### Overview of our audit approach Key audit matters Risk of inaccurate valuation of investments Materiality Overall materiality of £5.0 million (2022: £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, the potential impact of climate change 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. 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 58 to 62 of the strategic report, which form part of the “Other information,” rather than the audited financial statements. Our procedures on these unaudited disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appear to be materially misstated, in line with our responsibilities on “Other information”. 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, in 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. ### Key audit matters 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 the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters. 109 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### Key audit matters continued ## INDEPENDENT ## AUDITOR’S Key observations ## REPORT CONTINUED communicated to the Risk Our response to the risk Audit and Risk Committee to the members of Pantheon Risk of inaccurate valuation of We performed the following procedures: The results of our Infrastructure Plc investments procedures identified no We obtained an understanding of the Company’s processes and controls material misstatement Refer to the Audit and Risk Committee surrounding investment valuation by performing walkthroughs to assess the in relation to the risk of report (page 86); Accounting policies design and implementation of controls in place and attended the Investment inaccurate valuation of (page 118); and Note 10 of the financial Manager’s year end valuation committee as an observer. investments. statements (page 125). We obtained the most recent audited financial statements of the fund or The investments amounted to co‑investment vehicle in which the Company’s investment portfolio is held, and £471.7 million as at 31 December 2023 reviewed the Auditor’s opinion to confirm that the underlying investment is held at (2022: £301.4 million). Investments fair value in a manner consistent with FRS 102 and that there are no audit opinion represent 94% of the net asset value modifications which would affect the fair value of the investments. (NAV) of the Company and consist of We obtained the most recent audited financial statements of the fund or unlisted investments in infrastructure co‑investment vehicle in which the Company’s investment portfolio is held and assets. compared the value of the investments to the value of the investment per the The valuation of the assets held in the capital statement in the same period, to check the retrospective accuracy of the investment portfolio is the key driver of capital statements. the Company’s net asset value and total We obtained independent confirmation from the General Partner/Manager of return. Incorrect investment valuation the fund or co‑investment vehicle in which the Company’s investment portfolio could have a significant impact on the is held of the Company’s capital committed, contributed and fair value as at the return generated for shareholders. valuation date. Investment income from the investment We agreed a sample of calls and distributions to Call and Distribution Notices, portfolio is recognised as income within tracing payment and receipt to bank statements. Pantheon Infrastructure Holdings LP We reviewed valuation analyses prepared by the Investment Manager and (“PIH”), a wholly‑owned subsidiary attended its year end valuation committee to understand the key movements of the Company. As the Company’s in the valuation models. With the assistance of our valuation specialists where investment in PIH is held at fair value, relevant, we assessed their appropriateness based on the nature of the asset and the income received by PIH from the our understanding of the markets in which they operate. underlying investment portfolio is reflected as a fair value gain in the For new investments, we reviewed the closing documents to confirm the Company’s investment in PIH. purchase price paid and the Investment Manager’s internal due diligence documents to confirm the due diligence process has been followed. We attribute a higher risk of estimation uncertainty to a portfolio of this nature For a sample of investments, we engaged our internal valuation specialists to and deem the valuation of unlisted review the inputs and major assumptions. investments at fair value to be a fraud and significant audit risk. 110 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## INDEPENDENT AUDITOR'S REPORT to the members of Pantheon Infrastructure Plc ### Our application of materiality We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in forming our audit opinion. #### Materiality The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures. We determined materiality for the Company to be £5.0 million (2022: £4.7 million), which is 1% of shareholders' funds. We believe that shareholders' funds provide us with materiality aligned to the key measure of the Company's performance. During the course of our audit, we reassessed initial materiality and made no changes to the basis of calculation from our original assessment at the planning stage. #### Performance materiality The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality. 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 75% of our planning materiality, namely £3.8 million (2022: £2.4 million). We set performance materiality at this percentage due to our understanding of the control environment that indicates a lower risk of misstatements, both corrected and uncorrected. #### 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 £0.3 million (2022: £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. ### Other information The other information comprises the information included in the annual report, other than the financial statements and our Auditor's report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact. We have nothing to report in this regard. ### Opinions on other matters prescribed by the Companies Act 2006 In our opinion, the part of the Directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in the course of the audit: - the information given in the strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and - the strategic report and Directors' reports have been prepared in accordance with applicable legal requirements. 111 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### Matters on which we are required to report by • the Directors’ statement on fair, balanced and understandable set out ## INDEPENDENT ### exception on page 105; ## AUDITOR’S In light of the knowledge and understanding of the Company and its the Board’s confirmation that it has carried out a robust assessment of ### • ## REPORT CONTINUED environment obtained in the course of the audit, we have not identified the emerging and principal risks set out on page 105; to the members of Pantheon material misstatements in the strategic report or Directors’ report. ### • the section of the annual report that describes the review of Infrastructure Plc We have nothing to report in respect of the following matters in relation effectiveness of risk management and internal control systems set out to which the Companies Act 2006 requires us to report to you if, in our on page 87; and opinion: the section describing the work of the Audit and Risk Committee set ### • out on page 85. ### • adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or ### • the financial statements and the part of the Directors’ remuneration Responsibilities of Directors report to be audited are not in agreement with the accounting records As explained more fully in the Directors’ responsibilities statement set and returns; or out on page 105, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair ### • certain disclosures of Directors’ remuneration specified by law are not view, and for such internal control as the Directors determine is necessary made; or to enable the preparation of financial statements that are free from ### • we have not received all the information and explanations we require material misstatement, whether due to fraud or error. for our audit. In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern, ### Corporate Governance Statement disclosing, as applicable, matters related to going concern and using We have reviewed the Directors’ statement in relation to going concern, the going concern basis of accounting unless the Directors either intend longer‑term viability and that part of the Corporate Governance Statement to liquidate the Company or to cease operations, or have no realistic relating to the Company’s compliance with the provisions of the UK alternative but to do so. Corporate Governance Code specified for our review by the Listing Rules. Based on the work undertaken as part of our audit, we have concluded ### Auditor’s responsibilities for the audit of the that each of the following elements of the Corporate Governance ### financial statements Statement is materially consistent with the financial statements or our Our objectives are to obtain reasonable assurance about whether the knowledge obtained during the audit: financial statements as a whole are free from material misstatement, • the Directors’ statement with regard to the appropriateness of adopting whether due to fraud or error, and to issue an Auditor’s report that the going concern basis of accounting and any material uncertainties includes our opinion. Reasonable assurance is a high level of assurance, identified set out on page 103; but is not a guarantee that an audit conducted in accordance with • the Directors’ explanation as to its assessment of the Company’s ISAs (UK) will always detect a material misstatement when it exists. prospects, the period this assessment covers and why the period is Misstatements can arise from fraud or error and are considered material appropriate set out on page 72; if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these ### • the Directors’ statement on whether it has a reasonable expectation financial statements. that the Company will be able to continue in operation and meet its liabilities set out on page 103; 112 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # INDEPENDENT AUDITOR'S REPORT to the members of Pantheon Infrastructure Plc ## Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the Company and management. - We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are United Kingdom Generally Accepted Accounting Practice, the Companies Act 2006, the Listing Rules, the UK Corporate Governance Code, the Association of Investment Companies' Code and Statement of Recommended Practice, Section 1158 of the Corporation Tax Act 2010 and The Companies (Miscellaneous Reporting) Regulations 2018. - We understood how the Company is complying with those frameworks through discussions with the Audit and Risk Committee and the Company Secretary and a review of Board minutes and the Company's documented policies and procedures. - We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur, by considering the key risks impacting the financial statements. We identified a fraud risk with respect to management override in relation to the valuation of investments. Further discussion of our approach is set out in the section on the key audit matters above. - Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved a review of the Company Secretary's reporting to the Directors with respect to the application of the documented policies and procedures and review of the financial statements to confirm compliance with the reporting requirements of the Company. A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at 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 re-appointments is two years, covering the period from 31 December 2022 to 31 December 2023. The audit opinion is consistent with the additional report to the Audit and Risk Committee. ## Use of our report This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed. ## Matthew Price (Senior Statutory Auditor) for and on behalf of Ernst & Young LLP, Statutory Auditor London 2 April 2024 113 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # INCOME STATEMENT For the year ended 31 December 2023 | | Note | For the year ended 31 December 2023 | | | 9 September 2021 to 31 December 2022 | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | | Gain on investments at fair value through profit or loss^{1} | 10 | — | 44,298 | 44,298 | — | 19,592 | 19,592 | | Gains/(losses) on financial instruments at fair value through profit or loss | 13 | — | 12,081 | 12,081 | — | (8,520) | (8,520) | | Foreign exchange gains on cash and non-portfolio assets | | — | 77 | 77 | — | 5 | 5 | | Investment management fees | 2 | (4,939) | — | (4,939) | (3,194) | — | (3,194) | | Other expenses | 3 | (1,702) | (157) | (1,859) | (1,360) | (555) | (1,915) | | (Loss)/profit before financing and taxation | | (6,841) | 56,299 | 49,658 | (4,554) | 10,522 | 5,968 | | Finance income | 5 | 3,109 | — | 3,109 | 2,096 | — | 2,096 | | Interest payable and similar expenses | 6 | (1,484) | — | (1,484) | (36) | — | (36) | | (Loss)/profit before taxation | | (5,016) | 56,299 | 51,283 | (2,494) | 10,522 | 8,028 | | Taxation | 7 | (1,697) | — | (1,697) | — | — | — | | (Loss)/profit for the period, being total comprehensive income for the period | | (6,713) | 56,299 | 49,586 | (2,494) | 10,522 | 8,028 | | Earnings per share – basic and diluted | 8 | (1.40)p | 11.79p | 10.39p | (0.58)p | 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 year, therefore the return for the year is also the total comprehensive income for the year. 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 117 to 135 form part of these financial statements. 114 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION Capital ## STATEMENT | | | Share | Share | redemption | Capital | Revenue | | | --- | --- | --- | --- | --- | --- | --- | --- | | OF CHANGES | | | | | 1 | 1 | 1 | | | Movement for the year ended | capital | premium | reserve | reserve | reserve | Total | | INEQUITY | 31 December 2023 Note | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | Balance at 1 January 2023 4,800 79,449 382,484 10,522 (2,494) 474,761 For the year ended 31 December 2023 Share issue costs — (187) — — — (187) Ordinary Shares bought back and held in treasury 16 — — (5,789) — — (5,789) Share buyback costs — — (35) — — (35) Dividends paid 9 — — (14,303) — — (14,303) Profit/(loss) for the period — — — 56,299 (6,713) 49,586 Closing equity shareholders' funds 4,800 79,262 362,357 66,821 (9,207) 504,033 Movement for the period 9 September 2021 to 31 December 2022 Balance at 9 September 2021 — — — — — — Share issue costs — (9,267) — — — (9,267) Ordinary Shares issued 16 4,800 395,200 — — — 400,000 Subscription Shares issued (subsequently converted to Ordinary Shares) 16 — 80,800 — — — 80,800 Cancellation of share premium — (387,284) 387,28 4 — — — Dividends 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 arose from the cancellation of the Company’s share premium account in 2022 and is a distributable reserve. The Company is also able to distribute realised gains from the capital reserve. As at 31 December 2023, there were £nil reserves available for distribution from this reserve. The Notes on pages 117 to 135 form part of these financial statements. 115 PANTHEON INFRASTRUCTURE PLC^{}[] ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # **BALANCE SHEET** As at 31 December 2023 | | Note | 31 December 2023 £'000 | 31 December 2022 £'000 | | --- | --- | --- | --- | | **Fixed assets** | | | | | Investments at fair value | 10 | 471,668 | 301,382 | | Debtors | 11 | 609 | 740 | | **Current assets** | | | | | Derivative financial instruments | 13 | 4,447 | — | | Debtors | 11 | 817 | 959 | | Cash and cash equivalents | 12 | 29,361 | 182,937 | | | | 34,625 | 183,896 | | **Creditors: amounts falling due within one year** | | | | | Derivative financial instruments | 13 | — | (1,983) | | Other creditors | 14 | (2,309) | (2,737) | | | | (2,309) | (4,720) | | **Net current assets** | | 32,316 | 179,176 | | **Total assets less current liabilities** | | 504,593 | 481,298 | | **Creditors: amounts falling due after one year** | | | | | Derivative financial instruments | 13 | (560) | (6,537) | | **Net assets** | | 504,033 | 474,761 | | **Capital and reserves** | | | | | Called-up share capital | 16 | 4,800 | 4,800 | | Share premium | 17 | 79,262 | 79,449 | | Capital redemption reserve | 17 | 362,357 | 382,484 | | Capital reserve | 17 | 66,821 | 10,522 | | Revenue reserve | 17 | (9,207) | (2,494) | | **Total equity shareholders' funds** | | 504,033 | 474,761 | | **NAV per Ordinary Share** | 18 | 106.6p | 98.9p | The financial statements were approved by the Board of Pantheon Infrastructure Plc on 2 April 2024 and were authorised for issue by: **Vagn Sørensen** Chair Company Number: 13611678 The Notes on pages 117 to 135 form part of these financial statements. 116 PANTHEON INFRASTRUCTURE PLC^{}[] ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # **CASH FLOW STATEMENT** For the year ended 31 December 2023 | | 31 December 2023 £'000 | 31 December 2022 £'000 | | --- | --- | --- | | Cash flow from operating activities | | | | Investment management fees paid | (4,810) | (1,994) | | Operating expenses paid | (1,403) | (1,581) | | Other cash payments | (259) | (110) | | Net cash outflow from operating activities | (6,472) | (3,685) | | Cash flow from investing activities | | | | Purchase of investments | (130,300) | (283,031) | | Return of capital | 2,615 | 1,241 | | Derivative financial instruments loss on settlements | (326) | — | | Net cash outflow from investing activities | (128,011) | (281,790) | | Cash flow from financing activities | | | | Share issue proceeds | — | 480,800 | | Share issue costs | (187) | (9,267) | | Share buyback costs | (5,619) | — | | Dividends paid | (14,303) | (4,800) | | Loan facility arrangement fee | (1,889) | — | | Loan facility commitment fee | (620) | — | | Finance costs | (2) | (1) | | Finance income | 3,450 | 1,675 | | Net cash (outflow)/inflow from financing activities | (19,170) | 468,407 | | (Decrease)/increase in cash and cash equivalents in the period | (153,653) | 182,932 | | Cash and cash equivalents at the beginning of the period | 182,937 | — | | Foreign exchange gains | 77 | 5 | | Cash and cash equivalents at the end of the period | 29,361 | 182,937 | The Notes on pages 117 to 135 form part of these financial statements. 117 PANTHEON INFRASTRUCTURE PLC^{}[] ANNUAL REPORT 2023 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 Ordinary 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 year ended 31 December 2023. They have been prepared under the historical cost basis of accounting, modified to include the revaluation of certain assets at fair value. 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 SGRP 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 two 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, the Company excludes it from consolidation. As the value of such subsidiaries to the Company is through fair value rather than as the medium through which the group carries out business, they are measured at fair value in accordance with 9.9C(a) of FRS 102. The Company was incorporated on 9 September 2021 and a set of accounts to 31 December 2022 was filed, therefore the period from 9 September 2021 to 31 December 2022 has been presented as the comparative. Thus the comparative information may not present a representative comparative. #### B. Going concern The Directors have made an assessment of going concern, taking into account the Company's current performance and financial position as at 31 December 2023. In addition, the Directors have assessed the outlook, which considers the ongoing geopolitical uncertainties including disruption to global supply chains, increases in the cost of living, 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. The Directors have also considered the impact of climate change on PINT's portfolio and have come to the conclusion that there is no significant negative impact on the Company as a result of climate change, during the going concern period. 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 diversified portfolio of infrastructure investments. 118 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### 1. Accounting policies continued The Sponsor is usually the best placed party to determine the appropriate ## NOTES TO THE D. Investments valuation. The annual and quarterly reports received from the Sponsors ## FINANCIAL The Company’s underlying assets comprise unlisted investments, are reviewed by the Investment Manager to ensure consistency and ## STATEMENTS the majority of which are held through its subsidiary, Pantheon appropriateness of approach to reported valuations. CONTINUED Infrastructure Holdings LP (PIH LP) with one investment held directly. The basis of valuation for infrastructure assets provided by the Sponsors While the Company operates a robust and consistent valuation process, depends on the nature of the underlying assets and will typically involve there is significant estimation uncertainty in the underlying asset a fair value approach in line with recognised accounting standards and valuations which are estimated at a point in time. Accordingly, while industry best practice guidelines such as IPEV. Infrastructure assets often relevant information relating to but received after the measurement date is display particular characteristics which affect the valuation approach, considered, the Directors will only consider an adjustment to the financial tending to result in a higher prevalence of discounted cash flows in the statements if it were to have a significant impact and is indicative of valuation, where the fair value is estimated by deriving the present value conditions present at the measurement date. of the expected cash flows generated by the investment through the use The Company has fully adopted sections 11 and 12 of FRS 102. All of reasonable assumptions such as appropriate discount rate(s) to reflect investments held by the Company are classified as ‘fair value through the inherent risk of the asset(s) forming the investment. profit or loss’. The Company’s business is investing in infrastructure assets The discounted cash flow basis requires assumptions to be made with a view to profiting from their total return in the form of interest, regarding future cash flows, terminal value and the discount rate to be dividends or increases in fair value. The investments are recognised at fair applied to these cash flows. There is also consideration given to the value on initial recognition represented by the cost of acquisition and the impact of wider megatrends such as the transition to a lower‑carbon Company manages and evaluates the performance of its investments on a economy and climate change. fair value basis. The fair value will generally reflect the latest valuations available from Upon initial recognition, investments held by the Company are classified the Sponsor which may not coincide with the Company’s reporting date. ‘at fair value through profit or loss’. All gains and losses are allocated to In such cases the Investment Manager performs a roll forward from the the capital column within the Income statement as ‘Gains on investments latest available valuation to the relevant reporting date. The roll forward held at fair value through profit or loss’. When a purchase or sale is made process takes consideration of the following factors: under a contract, the terms of which require delivery within the time i. transactions and foreign exchange movements in the intervening frame of the relevant market, the investments concerned are recognised period; and or derecognised on the trade date. Subsequent to initial recognition, investments are valued at fair value through profit or loss. The fair values ii. adjustments for expected performance of the investment in the for the Company’s investments are established by the Directors after intervening period. discussion with the Investment Manager using valuation techniques in The process may also include, but not be limited to, in consultation with accordance with the International Private Equity and Venture Capital the Sponsor, changes in multiples/discount rates, asset fundamentals (for (IPEV) guidelines. Valuations are based on periodic valuations provided instance operating performance) and the macroeconomic environment. by the Sponsors of the investments and recorded up to the measurement date. Such valuations are necessarily dependent upon the reasonableness of the valuations by the Sponsor of the underlying assets. In the absence of contrary information the values are assumed to be reliable. 119 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### 1. Accounting policies continued The Company uses valuation techniques that are appropriate in the ## NOTES TO THE D. Investments continued circumstances and for which sufficient data is available to measure fair ## FINANCIAL On an annual basis the Investment Manager receives annual audited value, maximising the use of relevant observable inputs and minimising ## STATEMENTS financial statements from the Sponsors of the asset. The Investment the use of unobservable inputs significant to the fair value measurement CONTINUED Manager utilises the audited accounts to gain comfort that the underlying as a whole. The Company has elected not to apply hedge accounting and infrastructure asset is fair valued in line with recognised accounting therefore changes in the fair value of forward foreign currency exchange standards and audited by a recognised auditor. This is in addition contracts are recognised within the capital column of the Income to the analysis performed by the Investment Manager to determine statement in the period in which they occur. the reasonableness of the valuation and that it is appropriate to the F. Income investment and performance thereof. Distributions receivable from investments are recognised on the If the Sponsor does not provide audited financial statements, to the appropriate ex‑dividend date. Where no ex‑dividend date is quoted, extent that the Board of the Company or the Investment Manager deem it distributions are recognised when the Company’s right to receive payment appropriate, and it is possible to do in conjunction with the Sponsor, the is established. Overseas dividends are gross of the appropriate rate of valuation of the underlying infrastructure asset is independently verified. withholding tax, with any withholding tax suffered being accounted for The scope of this verification is determined on a case‑by‑case basis and, separately. dependent on the asset, could include an independent valuation report Other income is accounted for on an accruals basis. from a valuation provider engaged by the Investment Manager. The Investment Manager then analyses the independent valuation report to G. Expenses determine the reasonableness of the valuation and that it is appropriate All expenses are accounted for on an accruals basis. Expenses, including to the investment and performance thereof before presenting to the investment management fees, are charged through the revenue account, Investment Manager’s Valuation Committee and the Board for approval. except expenses which are incidental to the acquisition or disposal of an investment. These are treated as capital costs, separately identified, and E. Financial instruments charged to the capital account of the Income statement. The Company makes investments and has commitments in currencies other than GBP, its reporting currency, and accordingly, a significant H. Finance income proportion of its investments and cash balances are in currencies Finance income comprises interest received on funds invested into other than GBP. The Company uses forward foreign currency exchange deposit accounts. Finance income is accounted for on an accruals basis. contracts to hedge foreign exchange risks associated with its underlying I. Finance costs investment activities. The contracts entered into by the Company Finance costs consist of interest and other costs that the Company incurs are denominated in the currency of the geographic area in which the in connection with bank and other borrowings. Finance costs also include Company has significant exposure against its reporting currency. the amortisation charge of arrangement fees or other costs associated Forward foreign currency exchange contracts are initially recognised and with the set‑up of borrowings; these are amortised over the period of subsequently measured at fair value. the loan. All other finance costs are expensed in the period in which they occur. 120 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### 1. Accounting policies continued M. Creditors ## NOTES TO THE J. Taxation Trade and other creditors are initially recognised at fair value and ## FINANCIAL Corporation tax is recognised in profit or loss except to the extent subsequently held at amortised cost. ## STATEMENTS that it relates to items recognised directly in equity, in which case it is CONTINUED N. Interest-bearing loans and liabilities recognised in equity. All bank borrowings are initially recognised at transaction value net of Deferred tax is provided on temporary differences between the carrying attributable transaction costs. After initial recognition, all bank borrowings amounts of assets and liabilities for financial reporting purposes and the are measured at amortised cost using the effective interest method. amounts used for taxation purposes. The amount of deferred tax that is O. Dividends payable to shareholders provided is based on the expected manner of realisation or settlement of Equity dividends are recognised when they become legally payable. the carrying amount of assets and liabilities, using tax rates enacted or Interim equity dividends are recognised when paid. Final equity substantially enacted at the period end date. dividends are recognised when approved by shareholders at an Annual Deferred tax is not provided on capital gains and losses arising on the General Meeting. revaluation or disposal of investments because the Company meets (and intends to continue for the foreseeable future to meet) the conditions for P. Share premium approval as an investment trust company, pursuant to sections 1158 and The share premium account represents the accumulated premium paid 1159 of the CTA. for shares issued above their nominal value less issue expenses. This is a reserve forming part of the non‑distributable reserves. The following Deferred tax assets are only recognised if it is considered more likely than items are taken to this reserve: not that there will be suitable profits from which the future reversal of ### timing differences can be deducted. • costs associated with the issue of equity; and ### • premium on the issue of shares. K. Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call Q. Capital redemption reserve with banks and other short‑term highly liquid investments with original The capital redemption reserve represents cancelled share premium maturities of three months or less at the date of placement, free of any less dividends paid from this reserve. This is a distributable reserve. encumbrances, which are readily convertible into known amounts of cash This reserve also includes the cost of acquiring the Company’s Ordinary and subject to insignificant risk of changes in value. Shares if the Company is in a position to buy back shares. L. Debtors R. Capital reserve Trade and other debtors are initially recognised at transaction value. The following are accounted for in this reserve: Subsequent measurement is at the initially recognised value less any cash ### • gains and losses on the realisation of investments; payments from the debtor, and less provision or write off for doubtful ### • unrealised gains and losses on investments; debts. A provision is made where there is objective evidence that the Company will not be able to recover balances in full. Any adjustment is • gains and losses on foreign exchange forward contracts; recognised in profit or loss as an impairment gain or loss. • realised foreign exchange differences of a capital nature; and ### • expenses, together with related taxation effect, charged to this reserve in accordance with the above policies. The Company is able to distribute realised gains from this reserve. 121 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # NOTES TO THE FINANCIAL STATEMENTS # 1. Accounting policies continued # 5. Revenue reserve The revenue reserve represents the surplus of accumulated profits from the revenue column of the Income statement and is distributable. # T. Foreign exchange The functional and presentational currency of the Company is GBP because it is the primary currency in the economic environment in which the Company operates and, as a UK listed company, GBP is also its capital raising currency. 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 liabilities denominated in foreign currencies at the period end are reported at the rates of foreign exchange prevailing at the period end. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as a foreign exchange gain or loss in the revenue or capital column of the Income statement depending on whether the gain or loss is of a capital or revenue nature. For non-monetary assets these are recognised as fair value adjustments. # 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. 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 Note 22. # 2. Investment management fees | | Year ended 31 December 2023 | | | Period ended 31 December 2022 | | | | --- | --- | --- | --- | --- | --- | --- | | | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | | Investment management fees | 4,939 | — | 4,939 | 3,194 | — | 3,194 | | | 4,939 | — | 4,939 | 3,194 | — | 3,194 | The Investment Manager is entitled to a quarterly management fee 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 2023, £1,329,000 (31 December 2022: £1,200,000) was owed for investment management fees. The Investment Manager does not charge a performance fee. 122 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### 3. Other expenses ## NOTES TO THE Year ended 31 December 2023 Period ended 31 December 2022 ## FINANCIAL Revenue Capital Total Revenue Capital Total ## STATEMENTS £’000 £’000 £’000 £’000 £’000 £’000 CONTINUED Secretarial and accountancy services 215 — 215 201 — 201 Depositary services 77 — 77 74 — 74 Fees payable to the Company's Auditor for audit‑ related assurance services – Initial accounts — — — 25 — 25 – Annual financial statements 150 — 150 135 — 135 Fees payable to the Company's Auditor for non‑audit 1 related assurance services 35 — 35 35 — 35 Directors' remuneration (see Note 4) 183 — 183 220 — 220 Employer's National Insurance 21 — 21 24 — 24 Legal and professional fees 102 151 253 186 534 720 VAT irrecoverable 367 — 367 9 — 9 Other fees 552 6 558 451 21 472 1,702 157 1,859 1,360 555 1,915 1. The non‑audit fees payable to the Auditor relate to the review of the Company’s June 2023 half‑yearly report. ### 4. Directors’ remuneration A breakdown of Directors’ emoluments is provided in the Directors’ remuneration report on pages 96 to 100. ### 5. Finance income | Year ended | | Period ended | | | --- | --- | --- | --- | | 31 December | | 31 December | | | | 2023 | | 2022 | | | £’000 | | £’000 | Finance income 82 73 Bank interest 3,027 2,023 Total 3,109 2,096 123 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### 6. Interest payable and similar expenses ## NOTES TO THE Year ended Period ended ## FINANCIAL | | 31 December | | 31 December | | | --- | --- | --- | --- | --- | | STATEMENTS | | 2023 | | 2022 | | | | £’000 | | £’000 | CONTINUED Commitment fees payable on borrowings 913 22 Amortisation of loan facility arrangement fee 569 13 Bank interest expense 2 1 1,484 36 ### 7. Taxation Year ended 31 December 2023 Period ended 31 December 2022 Revenue Capital Total Revenue Capital Total £’000 £’000 £’000 £’000 £’000 £’000 Withholding tax deducted from investment distributions 1,697 — 1,697 — — — Tax charge from investments The tax charge for the year differs from the standard rate of corporation tax in the UK of 19% to 31 March 2023, rising to 25% from 1 April 2023, giving a weighted average for the year of 23.5% (31 December 2022: 19%). The differences are explained below: Year ended 31 December 2023 Period ended 31 December 2022 Revenue Capital Total Revenue Capital Total £’000 £’000 £’000 £’000 £’000 £’000 Net return before tax (5,016) 56,299 51,283 (2,494) 10,522 8,028 Tax at UK corporation tax rate at 23.5% (2022: 19%) (1,179) 13,230 12,051 (474) 1,999 1,525 Non‑taxable investment, derivative and currency gains — (13,230) (13,230) — (1,999) (1,999) Carry forward management expenses 1,179 — 1,179 474 — 474 Withholding tax deducted from investment distributions 1,697 — 1,697 — — — 1,697 — 1,697 — — — 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. 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 2023, excess management expenses are estimated to be in excess of £8.22 million (2022: £3.05 million). At 31 December 2023, the Company had no unprovided deferred tax liabilities. 124 PANTHEON INFRASTRUCTURE PLC^{}[] ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## NOTES TO THE FINANCIAL STATEMENTS ### 8. Earnings per share Earnings per share (EPS) are calculated by dividing profit for the year attributable to Ordinary Shareholders of the Company by the weighted average number of Ordinary Shares in issue during the period. As there are no dilutive instruments outstanding, both basic and diluted earnings per share are shown below: | Year ended 31 December 2023 | Revenue | Capital | Total | | --- | --- | --- | --- | | Earnings for the year to 31 December 2023 (£'000) | (6,713) | 56,299 | 49,586 | | Weighted average Ordinary Shares (number) | | | 477,411,877 | | Basic and diluted earnings per share | (1.40)p | 11.79p | 10.39p | | Period 9 September 2021 to 31 December 2022 | Revenue | Capital | Total | | --- | --- | --- | --- | | Earnings for the period (£'000) | (2,494) | 10,522 | 8,028 | | Weighted average Ordinary Shares (number)^{1} | | | 428,272,575 | | Basic and 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 Amounts recognised as distributions to equity holders in the year: | | Year ended 31 December 2023 £'000 | Period ended 31 December 2022 £'000 | | --- | --- | --- | | Second interim dividend for the period ended 31 December 2022 of 1p (2022: nil) per Ordinary Share | 4,800 | — | | First interim dividend for the year ended 31 December 2023 of 2p (2022: 1p) per Ordinary Share | 9,503 | 4,800 | | | 14,303 | 4,800 | On 21 March 2024 the Company declared a second interim dividend of 2p per Ordinary Share, which will be paid on 23 April 2024. 125 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### 10. Investments 12. Cash and cash equivalents ## NOTES TO THE 31 December 31 December 31 December 31 December ## FINANCIAL | | | 2023 | 2022 | | 2023 | 2022 | | --- | --- | --- | --- | --- | --- | --- | | STATEMENTS | | £’000 | £’000 | | £’000 | £’000 | | CONTINUED | Cost brought forward 281,790 — | | | Cash 11,649 26,670 | | | | | Opening unrealised appreciation on | | | Cash equivalents 17,712 156,267 | | | investments held 29,361 182,937 – Unlisted investments 19,592 — Cash equivalents of £17,712,000 were held in a money market fund at – Listed Investments — — 31 December 2023 (31 December 2022: £156,267,000). Valuation of investments brought forward 301,382 — | Movement in period: | 13. Derivative financial instruments | | | | --- | --- | --- | --- | | Acquisitions at cost 128,603 281,790 | | Year ended | Period ended | | | | 31 December | 31 December | Capital distributions – proceeds (2,615) — 2023 2022 £’000 £’000 Appreciation on investments held 44,298 19,592 At the beginning of the period (8,520) — Valuation of investments at period end 471,668 301,382 Unrealised gains/(losses) on derivative Cost at year end 407,778 281,790 financial instruments 12,407 (8,520) Closing unrealised appreciation on At the end of the period 3,887 (8,520) investments held – Unlisted investments 63,890 19,592 Realised loss on settlement of derivative – Listed investments — — financial instruments (326) — Valuation of investments at period end 471,668 301,382 Total gain/(losses) on derivative financial instruments at fair value through profit or loss 12,081 (8,520) ### 11. Debtors 31 December 31 December 2023 2022 The Company uses forward foreign exchange contracts to minimise £’000 £’000 the effect of fluctuations in the value of the investment portfolio from | | 1 | | movements in exchange rates. | | --- | --- | --- | --- | | Other debtors – non‑current | | 609 740 | | | Other debtors – current 698 486 | | | As at 31 December 2023, there were 20 contracts due to expire in | the next twelve months with a valuation of £4,447,000 (31 December Prepayments and accrued income 119 473 2022: three contracts valued at a liability of £1,983,000). The remaining 1,426 1,699 contracts due to expire after the twelve months following the period end were valued as a liability of £560,000 (31 December 2022: £6,537,000 1. Relates to loan arrangement fees paid up front which are to be released to the Income statement until the loan maturity date of 18 December 2025. liability). 126 PANTHEON INFRASTRUCTURE PLC^{}[] ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## NOTES TO THE FINANCIAL STATEMENTS ### 13. Derivative financial instruments continued 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 2023, the notional amount of the forward foreign exchange contracts held by the Company was £340.3 million (31 December 2022: £278.9 million). ### 14. Other creditors | | 31 December 2023 £'000 | 31 December 2022 £'000 | | --- | --- | --- | | Investment management fees payable | 1,329 | 1,200 | | Other creditors and accruals | 980 | 1,537 | | | 2,309 | 2,737 | ### 15. Interest-bearing loans and borrowings | | 31 December 2023 £'000 | 31 December 2022 £'000 | | --- | --- | --- | | Interest-bearing loans and borrowings | — | — | | Loan arrangement fee brought forward | 1,087 | — | | Loan arrangement fee incurred in the period | 788 | 1,100 | | Loan arrangement fee amortised for the period | (569) | (13) | | Loan arrangement fee carried forward | 1,306 | 1,087 | | Total credit facility payable | — | — | The Company entered into a £62.5 million RCF with Lloyds Bank Corporate Markets in December 2022. In June 2023, this was increased by £52.5 million, bringing the RCF total to £115 million. As part of the increase, the Company sought to diversify the lender group through the introduction of The Royal Bank of Scotland International Limited alongside Lloyds Bank Corporate Markets. The RCF is denominated in GBP, with the option to be utilised in other major currencies. The rate of interest is the relevant currency benchmark plus an initial margin of 2.85% per annum, reducing to 2.65% 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 as at 31 December 2023 was three years from December 2022. The facility is secured against the assets held in the Company's subsidiary, Pantheon Infrastructure Holdings LP. As at 31 December 2023 the RCF was undrawn. Borrowing costs associated with the RCF are shown as interest payable and similar expenses in Note 6 to these financial statements. The loan arrangement fee of £1,306,000 carried forward at 31 December 2023 (2022: £1,087,000) is included within Debtors, Note 11 to these financial statements. The debt facility includes loan to value covenants. The Company has complied with all covenants throughout the financial period. 127 PANTHEON INFRASTRUCTURE PLC^{}[] ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION # **NOTES TO THE FINANCIAL STATEMENTS** # **16. Called-up share capital** | Allotted, called-up and fully paid: | 31 December 2023 | | 31 December 2022 | | | --- | --- | --- | --- | --- | | | Shares | £'000 | Shares | £'000 | | **Ordinary Shares of £0.01** | | | | | | Opening balance | 480,000,000 | 4,800 | — | — | | Ordinary Shares issued in the period | — | — | 400,000,000 | 4,000 | | Conversion of Subscription Shares in the period | — | — | 80,000,000 | 800 | | **Closing balance** | **480,000,000** | **4,800** | **480,000,000** | **4,800** | | **Subscription Shares of £0.01** | | | | | | Opening balance | — | — | — | — | | Subscription Shares issued in the period | — | — | 80,000,000 | 800 | | Conversion of Subscription Shares in the period | — | — | (80,000,000) | (800) | | **Closing balance** | **—** | **—** | **—** | **—** | | **Treasury shares** | | | | | | Opening balance | — | — | — | — | | Shares bought back in the year | (7,385,000) | (74) | — | — | | **Closing balance** | **(7,385,000)** | **(74)** | **—** | **—** | | **Total Ordinary Share capital excluding treasury shares** | **472,615,000** | **4,726** | **480,000,000** | **4,800** | During the year to 31 December 2023, 7,385,000 Ordinary Shares were bought back in the market, and are held in treasury (31 December 2022: nil) at a total cost, including stamp duty, of £5,824,000. 128 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### 17. Reserves ## NOTES TO THE Capital ## FINANCIAL | | | Share | redemption | Capital | Revenue | | | --- | --- | --- | --- | --- | --- | --- | | STATEMENTS | | premium | reserve | reserve | reserve | Total | | | Year ended 31 December 2023 | £’000 | £’000 | £’000 | £’000 | £’000 | CONTINUED Opening balance 79,449 382,484 10,522 (2,494) 469,961 Ordinary Shares bought back and held in treasury — (5,824) — — (5,824) Share issue costs (187) — — — (187) Gains on financial instruments at fair value through profit or loss — — 12,081 — 12,081 Gains on investments at fair value through profit or loss — — 44,298 — 44,298 Foreign exchange differences on cash and non‑portfolio assets — — 77 — 77 Legal and professional expenses charged to capital — — (151) — (151) Other fees — — (6) (6) Revenue loss for the period — — — (6,713) (6,713) Dividends in the period — (14,303) — — (14,303) Closing balance 79,262 362,357 66,821 (9,207) 499,233 129 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### 17. Reserves continued ## NOTES TO THE Capital ## FINANCIAL | | | Share | redemption | Capital | Revenue | | | --- | --- | --- | --- | --- | --- | --- | | STATEMENTS | | premium | reserve | reserve | reserve | Total | | | Period ended 31 December 2022 | £’000 | £’000 | £’000 | £’000 | £’000 | CONTINUED Opening balance — — — — — Ordinary Shares issued 395,200 — — — 395,200 Subscription Shares issued (subsequently converted to 80,800 — — — 80,800 Ordinary Shares) 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) Gains 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) 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 The Company is able to distribute realised gains from the capital reserve. As at 31 December 2023 there were £nil reserves available for distribution from this reserve (31 December 2022: £nil). ### 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 in issue less shares held in treasury 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 31 December 2023 2022 Net assets attributable (£’000) 504,033 474,761 Ordinary Shares in issue excluding shares held in treasury 472,615,000 480,000,000 NAV per Ordinary Share 106.6p 98.9p 130 PANTHEON INFRASTRUCTURE PLC^{}[] ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## NOTES TO THE FINANCIAL STATEMENTS 2.1.1.1 ### 19. Reconciliation of loss before financing costs and taxation to net cash flows from operating activities | | Year to 31 December 2023 £'000 | 9 September 2021 to 31 December 2022 £'000 | | --- | --- | --- | | Profit before financing costs and taxation | 49,658 | 5,968 | | Gains on investments | (44,298) | (19,592) | | Foreign exchange gains on cash and borrowings | (77) | (5) | | Decrease/(increase) in operating debtors | 122 | (182) | | Increase in operating creditors | 204 | 1,606 | | (Gains)/losses on financial instruments at fair value through profit or loss | (12,081) | 8,520 | | Net cash flows used in operating activities | (6,472) | (3,685) | ### 20. Subsidiaries The Company has two wholly-owned subsidiaries. The Company has ownership and control over these two entities and as such they are deemed to be subsidiaries by the Board. Pantheon Infrastructure Holdings LP (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, and is wholly owned by the Company. The Company holds an investment in PIH LP. In accordance with FRS 102, the Company is exempted from the requirement to consolidate PIH LP on the grounds that its subsidiary is held exclusively with a view to subsequent resale as it is considered part of an investment portfolio. PIH LP holds a portfolio of investments that are measured at fair value. The Company holds a 99.9% investment in PIH LP, with the remaining holding being held by Pantheon Infrastructure Holdings GP LLC (PIH GP). The General Partner for PIH LP is PIH GP. 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, and is wholly owned by the Company. PIH GP is immaterial, it is therefore excluded from consolidation. ### 21. Contingencies, guarantees and financial commitments At 31 December 2023 there were capital commitments outstanding of £15.7 million in respect of investments in infrastructure assets (2022: £57.9 million). These commitments will be funded using the Company's financial resources. The Company expects 100% of the capital commitments outstanding to be called within the next twelve months. ### 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. 131 PANTHEON INFRASTRUCTURE PLC^{}[] ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## NOTES TO THE FINANCIAL STATEMENTS ### 22. Fair value continued #### Fair value hierarchy continued 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 2023 | | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000 | | --- | --- | --- | --- | --- | | Investments | — | — | 471,668 | 471,668 | | Derivatives – financial instruments | — | 3,887 | — | 3,887 | | | — | 3,887 | 471,668 | 475,555 | #### 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 year end. There have been no transfers between Level 1 and Level 2 during the year, nor have there been any transfers between Level 2 and Level 3. 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 for each asset. The assets are held through the Company's subsidiary, PIH LP, with one investment held directly. Other significant unobservable inputs include the inflation rate assumption and the interest rate 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 £4.2 million (31 December 2022: £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 £4.6 million (31 December 2022: £11.2 million). The WADR of the Portfolio at 31 December 2023 was 13.8% (31 December 2022: 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 £2.4 million (31 December 2022: £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 £2.2 million (31 December 2022: £2.6 million). 132 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## NOTES TO THE FINANCIAL STATEMENTS ### 22. Fair value continued 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 interest rate assumption for each asset by 0.5% would reduce the value of the Portfolio by £1.7 million (31 December 2022: £5.9 million). Decreasing the interest rate assumption used in the valuation of each asset by 0.5% would increase the value of the Portfolio by £1.9 million (31 December 2022: £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. ### 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 but are made when the opportunity arises and on an international basis. The Company's financial instruments comprise securities and other investments, cash balances and debtors and creditors that arise from its operations, for example sales and purchases awaiting settlement and debtors for accrued income. The principal risks the Company faces in its portfolio management activities are: - liquidity risk; - interest rate risk; - credit risk; - market price risk; and - foreign currency risk. The Investment Manager monitors the financial risks affecting the Company on a daily basis and the Directors regularly receive financial information, which is used to identify and monitor risk. In accordance with FRS 102, an analysis of financial assets and liabilities, which identifies the risk to the Company of holding such items, is given below. #### Liquidity risk Due to the nature of the Company's investment policy, the largest proportion of the portfolio is invested in unquoted securities, many of which are less readily marketable than, for example, "blue-chip" UK equities. The Directors believe that the Company, as a closed-end listed fund with no fixed wind-up date, is ideally suited to making long-term investments in instruments with limited marketability. The investments in unquoted securities are monitored by the Board on a regular basis. 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 2023, liquidity risk was considered low given the cash available to the Company and the headroom on its undrawn RCF. | | 31 December 2023 £'000 | 31 December 2022 £'000 | | --- | --- | --- | | Cash and cash equivalents | 29,361 | 182,937 | | Current debtors | 817 | 959 | | Other creditors | (2,309) | (2,737) | | | 27,869 | 181,159 | As at 31 December 2023, capital commitments outstanding totalled £15.7 million (31 December 2022: £57.9 million), therefore liquid resources available after commitments were £12.2 million (31 December 2022: £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. Interest rate movements may affect the interest rate paid on financial liabilities. Interest on RCF drawings is payable at an initial margin of 2.85% above the relevant benchmark rate, reducing to 2.65% once certain expansion thresholds have been met. As at 31 December 2023 the RCF was fully undrawn. 133 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### 23. Analysis of financial assets and liabilities Foreign exchange risk ## NOTES TO THE ### continued The Company makes investments and has commitments in currencies ## FINANCIAL Interest rate risk continued other than GBP, its reporting currency, and, accordingly, a significant ## STATEMENTS Increases or decreases in interest rates over the medium term may also proportion of its investments and cash balances are in currencies other CONTINUED affect the discount rates at which investments are valued. than GBP. Therefore, the Company’s NAV is sensitive to movements in foreign exchange rates. Credit risk Credit risk is the risk that a counterparty will cause a financial loss to the The Investment Manager monitors the Company’s exposure to foreign Company by failing to discharge its obligations to the Company when currencies and reports to the Board on a regular basis. they fall due. The Company uses derivative financial instruments such as forward All cash deposits are placed with approved counterparties, all of whom foreign currency contracts to manage the currency risks associated have a credit rating of A- or above. with its underlying investment activities. Contracts entered into by the Company are denominated in the foreign currency of the geographic At the year end, the Company’s financial assets exposed to credit risk areas in which the Company has significant exposure against its reporting amounted to the following: currency. The contracts are used for hedging and the fair values thereof 31 December 31 December are recorded in the Balance sheet as other financial liabilities held at fair 2023 2022 value. Unrealised gains and losses are taken to capital reserves. £’000 £’000 Cash and cash equivalents 29,361 182,937 Market price risk The fair value of future cash flows of a financial instrument held by the Company may fluctuate due to changes in market prices of comparable businesses. This market risk may comprise: currency risk, interest rate risk and/or fair value risk. The Board of Directors reviews and agrees policies for managing these risks. The Investment Manager assesses the exposure to market risk when making each investment decision, and monitors the overall level of market risk across all of the Investment Manager’s investments on an ongoing basis. The nature of the Company’s investments means that they are valued by the Directors after due consideration of the most recent available information. If the Portfolio valuation at 31 December 2023 fell by 20%, with all other variables held constant, this would have led to a reduction of £94.3 million in the return before taxation. An increase of 20% would increase the return before taxation by an equal and opposite amount. 134 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### 23. Analysis of financial assets and liabilities continued ## NOTES TO THE Foreign exchange risk continued ## FINANCIAL The table below sets out the Company’s foreign exchange exposure: ## STATEMENTS 1 1 GBP USD EUR Total CONTINUED Foreign exchange risk £’000 £’000 £’000 £’000 At 31 December 2023 Cash and cash equivalents 26,588 2,490 283 29,361 Investments held at fair value through profit or loss 80,598 239,228 151,842 471,668 Other debtors 1,426 — — 1,426 Other payables (2,309) — — (2,309) Derivatives – financial assets — 2,253 1,634 3,887 106,303 243,971 153,759 504,033 | | | | 1 | | 1 | | | --- | --- | --- | --- | --- | --- | --- | | | GBP | USD | | EUR | | Total | | Foreign exchange risk | £’000 | £’000 | | £’000 | | £’000 | At 31 December 2022 Cash and cash equivalents 181,987 828 122 182,937 Investments held at fair value through profit or loss — 217,282 84,100 301,382 Other debtors 1,699 — — 1,699 Other payables (2,737) — — (2,737) Derivatives – financial liabilities (8,520) — — (8,520) 172,429 218,110 84,222 474,761 1. These values are expressed in GBP. If there had been an increase/(decrease) in the GBP/USD exchange rate of 10%, it would have the effect of (decreasing)/increasing equity shareholders’ funds by £(24.4) million/£24.4 million (2022: £(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 based on the financial assets and liabilities and the foreign exchange rate as at 31 December 2023 of 1.27479 GBP/USD (2022: 1.2029 GBP/USD). If there had been an increase/(decrease) in the GBP/EUR exchange rate of 10%, it would have the effect of (decreasing)/increasing equity shareholders’ funds by £(15.4) million/£15.4 million (2022: £3.1 million/£(3.7) million), which includes the impact of the foreign currency exchange contracts to partially offset the movement in value. The calculations are based on the financial assets and liabilities and the foreign exchange rate as at 31 December 2023 of 1.15403 GBP/EUR (2022: 1.1271 GBP/EUR). 135 PANTHEON INFRASTRUCTURE PLC^{}[] ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ## NOTES TO THE FINANCIAL STATEMENTS ### 23. Analysis of financial assets and liabilities continued #### Managing capital The Company's equity comprises Ordinary Shares as described in Note 16. Capital is managed so as to maximise the return to shareholders while maintaining a capital base that allows the Company to operate effectively and sustain future development of the business. The Company considers its capital to comprise called-up share capital and net available cash. The Company's capital requirement is reviewed regularly by the Board of Directors. ### 24. Transactions with the Investment Manager and related parties The amounts paid to the Investment Manager, together with the details of the Investment Management Agreement, are disclosed in Note 2. The fees paid to the Company's Board are disclosed in the Directors' remuneration report on pages 96 to 100. There were no outstanding amounts due for Directors' fees as at 31 December 2023 (2022: £nil). ### 25. Post balance sheet events #### Buybacks Since the year end, the Company has bought back 3.1 million Ordinary Shares at a total cost of £2.6 million. #### Revolving credit facility On 18 March 2024, the Company agreed an extension to its £115 million RCF, resetting its maturity to March 2027. 136 PANTHEON INFRASTRUCTURE PLC ANNUAL REPORT 2023 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, the Investment Manager's report (pages 20 to 37) and the financial statements (pages 106 to 135). 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 2023, including staff remunerated by affiliates of the Investment Manager, was approximately 457, of whom 23 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 year ended 31 December 2023 attributable to work relating to the Company was as follows: | £'000 | 12 months to 31 December 2023 | | | 12 months to 31 December 2022 | | | | --- | --- | --- | --- | --- | --- | --- | | | Fixed | Variable | Total | Fixed | Variable | Total | | Senior management | 73 | 109 | 182 | 70 | 96 | 166 | | Staff | 235 | 144 | 379 | 190 | 143 | 333 | | Total staff | 308 | 254 | 562 | 260 | 238 | 499 | | Identified staff | 42 | 58 | 100 | 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 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 www.pantheon.com. 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%. 137 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 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 The AIFMD requires certain information to be made available to investors ## DISCLOSURES leverage as at 31 December 2023 is shown below: in the Company before they invest and requires that material changes Commitment to this information be disclosed in the annual report of the Company. Gross method method The information required to be disclosed is contained in the document ‘Information for Investors’, which is available on the Company’s website at Leverage ratio 202% 100% www.pantheoninfrastructure.com. There have been no material changes There have been no changes to the maximum level of leverage which to this information requiring disclosure. the Investment Manager may employ on behalf of the Company during the year to 31 December 2023. There are no collateral or asset reuse arrangements in place as at the year end. ### Risk profile and risk management The principal risks to which the Company is exposed to and the approach to managing those risks are set out in the strategic report (pages 68 to 71) and also in Note 23 to the financial statements (pages 132 to 135). 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 39) and under ‘Board responsibilities and relationship with the Investment Manager’ in the Statement on Corporate Governance (page 79 to 84). 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 ‘Principal risks and uncertainties’ section of the strategic report (pages 68 to 71). These investment restrictions were not exceeded in the year to 31 December 2023. 138 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### AGM Co‑investment ## GLOSSARY Annual General Meeting. Direct shareholding in an investment by invitation alongside a Sponsor. ### AIC Commitment The Association of Investment Companies. The amount of capital that the Company agrees to contribute to an investment when and as called by the Sponsor. ### AIC Code ### The AIC Code of Corporate Governance. Company Pantheon Infrastructure Plc or ‘PINT’. ### AIFM Alternative Investment Fund Manager. ### DCF Discounted Cash Flow. ### Approved investment trust company An approved investment trust company is a corporate UK tax resident ### Exit which fulfils particular UK tax requirements and rules which include that Realisation of an investment, usually through trade sale, sale by public for the Company to undertake portfolio investment activity it must aim to offering (including IPO), or sale to a financial buyer. spread investment risk. In addition, the Company’s shares must be listed on an approved stock exchange. The ‘approved’ status for an investment ### Funds under management trust must be authorised by the UK tax authorities and its key benefit is Funds under management includes both assets under management and that a portion of the profits of the Company, principally its capital profits, assets under advisory (assets managed on a non‑discretionary basis and/ are not taxable in the UK. or advisory basis). ### AUM ### Assets under management are the total market value of investments GHG held under management by an individual or institution. When referring Greenhouse gas. to Pantheon’s AUM, this figure includes assets managed on a fully ### discretionary basis. GIRAC Pantheon’s Global Infrastructure and Real Assets Committee. ### Carbon Disclosure Project A not‑for‑profit charity that runs the global disclosure system for investors, ### IEA companies, cities, states and regions to manage their environmental impacts. International Energy Agency. ### Carried interest ### Initial public offering (IPO) Portion of realised investment gains payable to a Sponsor as a profit share. The first offering by a company of its own shares to the public on a regulated stock exchange. ### Cloud Cloud computing is the on‑demand availability of computer system ### Investment Manager resources, especially data storage (cloud storage) and computing power, Pantheon Ventures (UK) LLP. without direct active management by the user. 139 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### Investment thesis Science Based Targets ## GLOSSARY CONTINUED Pantheon’s final stage of approval for infrastructure co‑investments. Science‑based targets provide companies with a clearly‑defined path to reduce emissions in line with the Paris Agreement goals. ### IPEV ### International Private Equity and Venture Capital. Secondaries Purchase of existing private equity fund or company interests and ### IRR commitments from an investor seeking liquidity in such funds or Internal rate of return is the annual rate of growth that an investment is companies. expected to generate over its life. ### SFDR ### Multiple of invested capital (MOIC or cost multiple) Sustainable Finance Disclosure Regulation. A common measure of private equity performance, MOIC is calculated by dividing a fund’s cumulative distributions and residual value by the ### SMR paid‑in capital. Steam methane reforming. ### NAV Total Return ### Sponsor or general partner This is expressed as a percentage. It is calculated as the total return as The entity managing a private equity fund that has been established as a shown in the Income statement, as a percentage of the opening NAV. limited partnership. ### Net asset value (NAV) ### TCFD Amount by which the value of assets of a company exceeds its liabilities. Task Force for Climate‑related Financial Disclosures. ### PIH LP ### Total return Pantheon Infrastructure Holdings LP. 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 ### Portfolio or operating company weighted average basis) to take into account any equity capital raised A company that PINT invests in. These portfolio or operating companies in or capital returned in the year. The numerator is total NAV growth and turn own and operate infrastructure assets. dividends paid. ### Primaries ### Total shareholder return Commitments made to private equity funds at the time such funds. Return based on dividends paid plus share price movement in the period, are formed. divided by the opening share price. ### RBS ### WADR Royal Bank of Scotland. Weighted average discount rate based on each investment’s relative proportion of Portfolio valuation. ### RCF Revolving credit facility. 140 PAN T H EON INFRASTRUCTURE PLC ANNUAL REPORT 2023 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ### Directors Broker ## DIRECTORS Vagn Sørensen (Chair) Investec Bank plc ## AND ADVISERS | Anne Baldock | 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 | London 10 Finsbury Square NW16 6AA 4th Floor London ### EC2A 1AF Registrar Link Group Email: pint@pantheon.com 10th Floor PINT website: www.pantheoninfrastructure.com Central Square Pantheon website: www.pantheon.com 29 Wellington Street Leeds LS1 4DL ### Secretary and registered office Link Company Matters Limited | 6th Floor, 65 Gresham Street | Solicitors | | --- | --- | | London | Hogan Lovells International LLP | | EC2V 7NQ | Atlantic House | Holborn Viaduct Telephone: +44 (0)333 300 1950 London EC1A 2FG ### Auditor Ernst & Young LLP 25 Churchill Place London E14 5EY ### Communications Adviser Lansons Communications Holdings Limited 24a St John Street London EC1M 4AY Designed and produced by lyonsbennett.com ### Disclosure 1 – Investments This annual report provides information about certain investments This report is printed on Nautilus which is made from 100% FSC® recycled certified made by PINT. It should NOT be regarded as a recommendation. post‑consumer waste pulp which is PCF (Process Chlorine Free). The FSC® label Pantheon makes no representation or forecast about the on this report ensures responsible use of the world’s forest resources. Printed performance, profitability or success of such investments. sustainably in the UK by Pureprint, a CarbonNeutral® company with FSC® chain You should not assume that future investments will be of custody who recycle 100% of all dry waste. Both the mill and Pureprint are ISO profitable or will equal the performance of past recommendations. 14001 certified (environmental management system). If you have finished with The statements made reflect the views and opinions of Pantheon this document and no longer wish to retain it, please pass it on to other interested as of the date of the investment analysis. readers or dispose of it in your recycled waste.