POWERING

PARTNERSHIPS

Petershill Partners plc

Annual Report 2021

Strategic report

2 Performance highlights

4 About Petershill Partners

6 Chairman’s statement

8 Business model

12 Schedule of investments

15 Our markets

17 Strategy and investment objective

22 Operator team

26 Operator’s report

32 Key performance indicators

34 Section 172 statement

36 Our stakeholders

39 ESG commentary

42 Principal risks

Governance report

50 Our Board

52 Report of the Directors

55 Corporate governance report

64 Audit and risk committee report

66 Directors’ remuneration report

70 Directors’ responsibilities statement

Financial statements

72 Independent auditors’ report

82 Financial statements

118 Glossary of capitalised defined terms

120 The Petershill Partners Group’s assets

123 Glossary of key operating metrics

126 Alternative Performance Measures (“APMs”)

132 Company information

133 Cautionary statement

Visit

www.petershillpartners.com

Petershill Partners plc (the“Company” or “Petershill Partners”) and its

subsidiaries (the “Group”) is a diversified, globalalternative investment

group focused on private equity and other private capital strategies.

Through our economic interests in 23 alternative asset management firms

(“Partner-firms”), weprovide investors with exposure to the growth and

profitability of the alternative asset management industry. The Company

was incorporated on 24 March 2021 and completed its initial acquisition

of the portfolio of Partner-firms on 28 September 2021. The Company

was admitted to listing and trading on the London Stock Exchange as

a premium-listed business on 1 October 2021 (ticker: PHLL). Financial results

for the Company throughout the Annual Report are for the period from

24 March 2021 to 31 December 2021. There are no comparative results. The

Company is operated by Goldman Sachs Asset Management (“Goldman

Sachs” or the “Operator”) and is governed by a diverse and fully independent

Board of Directors (the“Board”).

Through our Partner-firms, we have exposure to $234 billion of total

assets under management (AuM), comprising a diverse set of more than

200 primarily long-term private equity and other private capital funds where

capital is typically locked in over a multi-year horizon. These underlying funds

generate recurring management fees and the opportunity for meaningful

profit participation over their typically 8+ year lifecycles

. We believe our

approach is aligned with the founders and management of our Partner-firms

and, as a result, allows the Company to participate in these income streams

in a way that provides high-margin, diversified and stable cash flows for

ourshareholders.

1. Partner fee-related earnings (Partner FRE) are derived from management fees generated by our Partner-firms. Please refer to the glossary on page 118 for additional information.

READ MORE ON PAGES 8-11: OUR BUSINESS MODEL

Shareholder

returns

Fully

independent

Board

Directing capital

allocation and

dividend policy;

oversight of Operator;

conflicts oversight

Driving organic

and acquisitive

growth; value

creation with

Partner-firms

Operated by

Goldman

Sachs Asset

Management

1 Petershill Partners | Annual Report 2021

Performance highlights

PETERSHILL PARTNERS

IN NUMBERS

Petershill Partners aims to deliver diversified, highly visible, risk-adjusted

returns from private markets to public market investors. The Company

invests in Partner-firms whose funds generate earnings, primarily in the

form of fees. The metrics below provide insight into the strength and

earnings power of the Company’s investments.

Adjusted Earnings Before Interest

and Tax (EBIT)

APM

KPI

$106m

Profit Before Tax

IFRS

$261m

Adjusted EBIT Margin

APM

87%

Net IPO Proceeds

IFRS

$720m

Investments in Partner-firms

at FairValue

IFRS

$6.0bn (gross)

$5.5bn (net)

APM

Proforma Earnings Per Share

APM

21¢

Per share metrics

Book Value Per Share

At 31 Dec 2021

APM

457.8¢

(339p equivalent)

Financial measures noted with an "APM" are defined as Alternative performance measures, or (“APMs”). Further information can be found

on page 126.

2 Petershill Partners | Annual Report 2021

Partner-firm Total AuM

At 31 Dec 2021

KPI

$234bn

Partner Distributable

Earnings

KPI

$382m

(Full year 2021)

Number of Partner-firms

At 31 Dec 2021

KPI

APM

IFRS

FY 2021 (5 January 2021 to 31 December 2021).

¢ Refers to US dollar cents.

p Refers to British pence sterling.

1. Exchange rate as at 31 December 2021: 1USD = 0.73947GBP.

Alternative performance measure

International Financial Reporting Standard

Growth

Profitability

PARTNER-FIRM HIGHLIGHTS

These metrics do not relate to Company financials.

Weighted Average Capital Duration

At 31 Dec 2021

KPI

8.1 yrs

Quality of Earnings

Diversification

The Company completed its initial acquisition of the portfolio

of Partner-firms on 28 September 2021, necessitating a focus

in this first annual report on Q4 results. In addition for

completeness and transparency this annual report provides

full-year financial information for our interests in the Partner-

firms in aggregate, which are pro forma for the period prior to the

initial acquisition and listing date.

KPI

Key performance indicator

READ MORE ON PAGES 32-33

The glossary on page 126 includes definitions of the

Alternative performance measures (APMs) and reconciliation

to relevant IFRS measures.

+57%

2021

FY growth

transactions

since IPO

+56%

2021

FY growth

3 Petershill Partners | Annual Report 2021

UNDERSTANDING

OUR BUSINESS

UNDERSTANDING OUR PARTNER-FIRMS

Through economic interests in our Partner-firms,

we participate in the fee income from more than

200 underlying funds that are diversified across

multiple factors such as asset class, investment

strategy and investment lifecycle.

The typical lifecycle and economic model of a private capital fund is illustrated below:

About Petershill Partners

1. Raise

Alternative asset

managers raise funds

from institutional and

retail investors to invest

in multiple ways,

including private equity,

private credit, venture

capital, infrastructure, real

assets and absolute return

strategies. Funds typically

have a life of 8+ years and

are raised every 2-5 years.

During the life of the fund,

asset managers typically

receive a fee based on the

capital raised and/or invested

(a “management fee”),

regardless of how a fund

performs. Some products

may be formed of

permanent capital,

meaning there is no

finite life to the fund or

resultant fee streams.

2. Invest

During the initial period of the

fund (“the investment period”),

asset managers deploy the

fund capital in opportunities

which they believe have

attractive return potential. In

private capital funds this can

range from private companies

to real estate.

3. Create Value

Following an investment,

private capital firms may

actively manage investments,

driving value creation through

hands-on expertise or may seek

to hold investments until

maturity – whether through exit

or an event.

4. Exit & Return

orRedeploy

Once the targeted return

threshold has been achieved,

alternative asset managers

typically sell a portfolio

company in the private or

public markets and return the

capital to the fund investors.

Asset managers often

participate in a share of the

profits generated by their

fund investment

(“performance fees”).

As an investor in 23

high-quality independent

firms, Petershill Partners

participates in fee streams

and profits alongside our

Partner-firms who manage

over 200 funds.

Private Capital Funds

This example illustrates the typical business model of a private capital firm’s underlying funds. Underlying funds of our absolute return Partner-firms, representing 13% of our asset class

exposure by AuM, typically offer more liquidity options for their investors and are not subject to the same lock-up period as private capital funds.

4 Petershill Partners | Annual Report 2021

WHO WE ARE

Petershill Partners is a diversified, publicly listed,

global alternatives investment group focused on

private equity and other private capital strategies

through economic interests in 23 Partner-firms.

How We Generate Earnings

• The pool of fee-earning capital at each of our Partner-firms primarily represents long-term, private capital investments

that typically offer limited liquidity for 8+ years across a diverse set of over 200 underlying funds.

• Each Partner-firm generates recurring management fees and performance fees from underlying funds throughout the

funds’ lifecycles.

• Fee-based earnings are relatively predictable and stable

What Makes Us Different

Alignment

“Win-win Partnerships”

• a collaborative approach based on

close alignment of interests with

the leadership of our independent

Partner-firms

that preserves and serves

their culture, ambition and

economic alignment

• our Partner-firms remain

incentivised through their

economic participation in their

long-term growth, thereby also

supporting their autonomy and

long-term organisational stability

• the Company is governed by a fully

independent, highly experienced,

diverse, activeBoard

Diversification andAccess

“Business Built on Resilience”

• broad diversification across

geographies, industry sectors and

strategies through our economic

interests in 23 Partner-firms

and exposure to more than

200 underlying funds

• a grouping of some of the

strongest independent

sector specialists

• affording access for public

investors to the secular growth

trends in the private markets

Growth

“23 Engines of Growth”

• focused on select established,

ambitious alternative asset

management firms capable of

further significant growth thanks

to the acceleration capital

and strategic guidance the

Company provides

• operated by Goldman Sachs Asset

Management with ability to draw

on value-adding resources of

Goldman Sachs to drive growth for

existing Partner-firms and identify

new acquisition opportunities

• our lean operating structure and

the long-term transparency of the

Operator’s charging structure

uniquely contribute to the

Company’s overall profitability and

free cash flow

1. Earnings refer to the income of the Company.

5 Petershill Partners | Annual Report 2021

Chairman’s statement

Dear Shareholders

It is a pleasure to be writing to you for the first time as part

of Petershill Partners’ maiden results. While the Company

is new, its activities have emerged from a business run by

Goldman Sachs which has had a long track record of success

in its field of partnering with independent alternative asset

management firms.

Delivering on Our Strategy

I am pleased to report to you that the performance of our

Partner-firms post the Initial Public Offering (IPO) of Petershill

Partners has continued on the growth trajectory we saw in the private

funds that incubated the Company, with strong growth in Partner

Fee-Related Earnings, investment gains, Partner Distributable

Earnings and aggregate Partner-firm assets under management.

Performance for the fourth quarter of 2021 was ahead of

expectations. The Company’s IFRS profit for the period after tax

was $248m, equating to a Proforma EPS

of 21 cents. The Company’s

Adjusted Earnings Before Interest and Tax (EBIT)

for the period

was $106m, resulting in an Adjusted EBIT margin

of 87%. The

fair value of the Company’s investments in Partner-firms at

31 December 2021 was $6 billion gross ($5.5 billion net)

, and

the Book Value per Share

was 458 cents (339 pence equivalent)

As we laid out in the prospectus at the time of the IPO, Petershill

Partners represents a diversified group of Partner-firm interests

which we expect to deliver earnings and AuM growth in excess of

the global alternatives industry.

Our strategy is to combine the organic growth of our existing

Partner-firms with acquisitions of additional Partner-firm

stakes. Acquisitions will be funded from the investment of the

primary capital raised of $720m (net proceeds) in the IPO,

the redeployment of the cash flow generated from earnings

after paying dividends and the modest use of leverage. In the

fourth quarter of 2021, five acquisitions were completed which

added four new Partner-firm interests to our portfolio and

increased our investment in one of our existing Partner-firms –

investing $458m in partnerships for the future growth and profits

of Petershill Partners. These acquisitions are expected to be

accretive to earnings and to the growth prospects of the Company.

The IPO of Petershill Partners last October was one of the largest

offerings on the London Stock Exchange in 2021 and I am pleased

to report that the Company has now been included in the relevant

major market indices. Following the IPO, just over a quarter of

our shares are publicly traded. The other three-quarters remain

held in long-dated private funds managed by Goldman Sachs

Asset Management.

Leveraging the Breadth and Expertise

of our Operator

Our activities are operated via a long-term contract with Goldman

Sachs Asset Management which we as a Board monitor and

evaluate. We believe that the Company derives significant

benefits from this arrangement as Goldman Sachs has an

outstanding track record of investing in alternative asset

managers. Petershill Partners is also able to access the breadth

of Goldman Sachs’ capabilities and relationships including access

to a proprietary stream of new investment opportunities.

WELCOME

TO PETERSHILL

PARTNERS

We believe that our structure

creates a diversified stream

of economics giving our

investors exposure to the

growing alternatives space in

a differentiated way

Naguib Kheraj

Chairman

6 Petershill Partners | Annual Report 2021

Looking Ahead

We have empathy for the loss of life and humanitarian crisis

unfolding in Ukraine and other areas of conflict in the world. We

have no direct exposure to Ukraine or Russia. Our Partner-firms,

their funds, AuM and strategies are mostly focused on North

America and so we have no material exposure to companies

or investments through our Partner-firms in either country.

We continue to monitor the impact on global markets and

macroeconomic conditions.

While the current macro environment and continued COVID

pandemic carry some uncertainty and risk, I believe we are

well-positioned to continue to deliver value for our shareholders.

Whilst there may be short-term volatility in markets, we have

good visibility into completed and anticipated fund raising by our

Partner-firms, and in turn we anticipate strong growth in fee

income, adjusted net income and cash flow over the next two years.

In addition to our differentiated and diversified earnings model,

we are supported by the longevity of our high-quality Partner-firms.

I would note that our Partner-firms have been in existence for an

average of 21 years as businesses and as such have successfully

navigated several market cycles. More broadly, prior periods of

rising interest rates have been effectively navigated with strong

growth in private equity capital funds.

Over time, Petershill Partners will continue to seek to add new

Partner-firms to its portfolio and to deliver a combination of strong,

enhanced organic growth of the existing Partner-firms as well as

inorganic growth through accretive acquisitions. The Company

expects to acquire between three to six new partner interests

annually, deploying between $100m and $300m on acquisitions,

with the upper bound not representing a cap. In 2022, we expect

Partner-firms to raise $40-45 billion of organic fee paying assets

and estimate that this will be offset by realisations and reductions

of $5-10 billion in more mature investment programmes.

Your Board believes that the fundamental prospects of our business

continue to be very attractive over the short, medium and long term.

Our maiden results indicate the resilience and growth of the

Petershill Partners business – we believe that our business

prospects make our own shares a compelling investment

opportunity – and we intend to initiate an on-market buyback

programme of up to $50m.The buyback will not significantly

reduce our capacity to commit further capital to attractive new

investment opportunities.

As demonstrated by the acquisitions completed in the fourth

quarter of 2021, our return of capital through the intended share

buyback programme and dividend, the Board will continue to focus

on capital allocation for the benefit of shareholders. We expect to

generate significant cash flow from our existing investments over

time and our goal and responsibility is to be good long-term

stewards of your capital.

Naguib Kheraj

Chairman

This sourcing capability was demonstrated in the Company’s

acquisitions of four new Partner-firm interests in the fourth

quarter of 2021, and through the General Partner (GP) services

value creation work where we saw over 240 new projects carried

out with Partner-firms across the platform over the past year by

this team. We believe that the Operator has been effective in

2021; as a fully independent Board we will continue to evaluate

their activity on behalf of our investors.

Our Governance Structure and Approach

The Company has a Board which is made up entirely of experienced

independent Non-Executive Directors. Our role is to serve the

interests of all shareholders.

The Board’s full independence puts us in a good position to

ensure the Company has arm’s length arrangements in place with

Goldman Sachs Asset Management who manage a range of

different pools of capital which invest in the alternative asset

management industry. As a leading regulated global asset

manager, Goldman Sachs Asset Management has well developed

procedures for the effective oversight and management of

conflicts of interest. Petershill Partners expects to continue to

make investments in a straightforward manner alongside other

pools of capital managed by the Operator – this has allowed

Petershill Partners to continue to grow in a diversified manner

while participating in transactions which would exceed the

capacity of Petershill Partners on a standalone basis. A clear

demonstration of the side-by-side participation framework was

demonstrated in the fourth quarter of 2021.

The Board is also responsible for overseeing the Company’s

financial reporting and disclosure as well as making decisions

about the capital management and dividend policy. We will be

proposing a final dividend of $30m representing 2.6 cents per

share, which is consistent with the indication given at the time

of the IPO for the three months of the 2021 financial year during

which the Company traded. As indicated at the time of the IPO,

we intend to adopt a progressive dividend policy.

Resilience Amidst Uncertainty

Since the IPO we have witnessed significant geopolitical turbulence,

including the war in Ukraine, the impacts of the COVID pandemic,

as well as a broader market sell-off in the alternative asset

management sector, a rotation out of higher growth stocks as

markets anticipated a rise in interest rates, supply chain issues and

higher inflation. Whilst these factors have impacted our stock market

valuation, we expect, due to the long-term nature of the funds

managed by our Partner-firms, to be able to demonstrate the

resilience of our earnings model going forward.

We believe that our structure creates a diversified stream of

economics giving our investors exposure to the growing

alternatives space in a differentiated way. Our earnings model is

driven from the simple and recurring nature of our revenues –

drawn from a set of 23 high-quality Partner-firms with

$234 billion of AuM across over 200 underlying fund products,

with approximately 65% of revenues reported to us by our

Partner-firms coming from management fees in 2021. This

capital base is also long-term and stable, with a Weighted

Average Capital Duration of 8.1 years and locked-up funds now

representing 87% of our Partner-firms Total AuM. In addition,

the Company maintains structured non-control investment

protections that allow Petershill Partners to have visibility over,

and realise stable recurring cash flows across turbulent periods.

1. Financial measure defined as Alternative performance measure, or (“APM”). Further information on page 126.

2. Exchange rate as at 31 December 2021: 1USD = 0.73947GBP.

7 Petershill Partners | Annual Report 2021

OUR BUSINESS MODEL

Who we are

Our Purpose

The Company’s purpose is to provide Shareholders with best-in-class

diversified access to the growth and profitability of the alternatives

industry, focusing on the quality of recurring earnings.

Our Values

The Company has no employees. The Directors are committed to

providing the highest standards of diligence in governance and

reporting and to maintaining a constructive and collaborative

relationship with the Operator while ensuring that the Operator

manages conflicts of interest appropriately. The Company has

delegated its operating responsibilities to the Operator and is

reassured by and supportive of the Operator’s values which are set

out below. The Operator aligns with the values outlined by its parent

company, The Goldman Sachs Group, Inc., which are published

in detail at www.goldmansachs.com/about-us/purpose-

and-values/.

Client Service

The Operator leads with a service mindset, enabling it to anticipate

and adapt to the needs of its clients and consumers by delivering

thoughtful, innovative solutions.

Excellence

The Operator aspires to nothing less than excellence, consistently

striving for exceptional performance and achieving outstanding

results for its clients, its Shareholders, and its Company.

Integrity

The Operator holds itself to the highest ethical standards, insisting

on transparency and vigilance from its people as it learns from its

experiences and makes decisions that instil a sense of purpose and

pride in the Operator’s firm.

Partnership

The Operator prioritises collaboration and values diversity, creating a

culture that fosters inclusiveness, teamwork and an entrepreneurial

mindset in the pursuit of professional and personal excellence.

Our Strategy

Petershill Partners is a publicly listed, diversified alternative

investment group that partners with leading independent alternatives

firms. We harness the power of partnership to drive value creation.

Ourstrategy is to offer high-quality Partner-firms a “win-win” solution

as a source of partnership and capital, helping them to build enduring

businesses that are responsive to the trends we expect to shape the

future, while maintaining alignment with our Shareholders, Operator,

Partner-firms, Board, and other service providers.

Governance by our Independent Board

Petershill Partners is governed by an independent, active, diverse

and deeply experienced Board. All five members are independent

of our Operator, Goldman Sachs Asset Management. The Board

oversees the Operator relationship and has control over major

capital allocation decisions, including the raising of debt or equity,

dividend policy, share buybacks and acquisitions over specified

size thresholds, and is committed to the highest standards of

corporate governance.

Business model

Guiding the

Company

Operating the

Company

Independent

oversight of operations

and performance of

the Operator

Strategic direction

and Operator oversight

Approval of Acquisition

Strategy and Investment

Policy

Conflict oversight

Fixed fee

remuneration

Strategic implementation,

portfolio construction and

risk management of

Partner-firm holdings

Sourcing and execution

of new Partner-firm

acquisitions and

follow-on investments

Ongoing value-added

engagements and

strategic advice to

Partner-firms

Operator fee aligned

to cash flow growth

Operator profit share

for new investments

Private funds managed by

Goldman Sachs Asset

Management still maintain

substantial shareholding in

the Company

OperatorBoard of

Directors

8 Petershill Partners | Annual Report 2021

~25% public

~75% held by long-dated

Petershill private funds

managed by Goldman Sachs

Asset Management

Progressive dividend policy

Petershill Partners

Stakeholder Value

Created

Shareholder

returns

These metrics represent operating metrics for FY 2021 and do not reflect the Company’s results for the period.

Shares held by Goldman Sachs Asset Management’s Private Funds

Approximately 75% of Petershill Partners shares are held by Goldman Sachs Asset Management’s long-dated private funds and

are subject to certain lock-up provisions, which apply for up to 18 months* post admission to the London Stock Exchange with no

distribution to individual investors. This means that even after the expiry of the lock-up, Goldman Sachs Asset Management is the

manager of these shares and exercises discretion over how and when they could be sold in future, on behalf of the investors in

thosefunds.

* 50% of the private funds shareholding at Admission was unlocked on 31 March 2022; 30% of the private funds shareholding at Admission remains locked up and will unlock on

2 October 2022; and 20% of the private funds shareholding at Admission remains locked up and will unlock on 31 March 2023.

Performance fees

24%

Investment income

Management fees

67%

High-quality,

diversified and

secure earnings

derived from:

Weighted Average

Capital Duration

of 8.1 years

with 87% AuM

from long-term

lock-up funds

9 Petershill Partners | Annual Report 2021

How We Generate Earnings

We receive income generated by the long-term

assets managed by the Partner-firms in which

weinvest.

Long-term, fee-generating assets

Our revenue from management and performance fees is generally

generated from assets under management and capital

commitments to the funds managed by our 23 Partner-firms and

over 200 underlying funds. The Weighted Average Capital

Duration for these underlying funds is over 8 years, and 87% of

the AuM comes from long-term lock-up funds. As Partner-firms

raise additional funds, they generate additional fees. This income

stream generates fee streams and profit for our Shareholders.

Our earnings model

The Company’s earnings model consists of three long-term,

diversified, and stable income streams generated by the

Partner-firms and their underlying funds, based on a mix of

management fees, realised performance fees and realised

investment income from balance sheet investments.

Once the Company has covered operating expenses, including Board

fees and Operator charges, interest and taxes, the remaining

profit forms our adjusted profit after tax.

Business model continued

24% 67% 9%

Performance

fees

Management

fees

Investment

income

Partner-firms

Partner-firm distributable earnings

Less Group expenses

(including Operator fee, other operating expenses, interestcosts

and taxes)

Group profit after tax

How We Are Different

The Company’s business model has several

distinctive qualities that are designed to enhance

value for our Shareholders and our Partner-firms.

Alignment

Non-control ownership to preserve Partner-firm

independence and ambition

Our strategy is to make non-control investments so that the

management teams of our Partner-firms retain the majority of

equity in their firms. This helps to preserve each firm’s distinct

culture, entrepreneurial autonomy, and critical incentive

alignment. We believe this is a beneficial structure in high-cash-

flow-generating alternatives businesses where talent is best

motivated and retained through economic alignment. Our

investments are all made with critical governance protections

that we have developed and tested over the past 15 years,

including consent rights over major changes in the business,

liquidity rights to provide for at least annual profit distributions

and economic and margin protections. This means that, unlike

ordinary equity where Shareholders receive dividends after

management, our economics participate alongside or ahead of

management – and are structured to result in better returns than

ordinary equity wouldachieve.

Diversification and Access

Diverse, stable income streams

Petershill Partners generates diversified, stable, recurring cash

flows with high margins, as well as significant opportunity for

meaningful growth. Our diversified revenue streams are

composed substantially of income from Partner-firms derived

from management fee income on contractually committed,

long-dated assets. These earnings represent the diversification of

the Partner-firms’ underlying funds across sector and geography,

as well as the various phases of each fund’s lifecycle, known as

the “vintage year” of the fund. Regular and stable revenue flows

from management, and performance fees, are paid on the same

basis to Petershill Partners as they are to the Partner-firm’s

principals. The diversity of these earnings reinforces such

stability. Inaddition, certain protections are in place, such as

margin protections or structured equity, which further enhance

the security of the revenue streams.

Access to secular growth trends in the

privatemarkets

Petershill Partners provides public market investors with a

distinct and diversified way to access the profitability of

high-growth private capital businesses. Partner-firms gain

long-term capital and continual guidance to fuel their ambitious

growth trajectories. The success and earning power of the

Partner-firms, in turn, powers the value and growing impact

of the Company.

Average Partner revenue contribution (2019-2021),

based on Petershill Partner-firm revenues.

10 Petershill Partners | Annual Report 2021

Growth

Focused on established, ambitious Partner-firms

capable of further significant growth

Petershill Partners looks to help drive growth in Partner-firms

with strong AuM momentum. The Company accelerates growth by

capital infusion and alignment with Partner-firms to accelerate

shared value creation, working to build on their proven success

and drive continued growth over the long term in the interest of

generating highly diversified earnings from top-performing firms.

Resources and expertise from external Operator

Our Operator leverages a proven model and is led by a proven

team. Goldman Sachs Asset Management built and managed the

predecessor private funds to Petershill Partners over the course

of the last 15years, leading up to the IPO of the Company in

2021. Please refer to page 23 for more information on the

Operator’s history. Thishighly aligned, credible, stable team

brings continuity of experience and commitment, and a proven

ability, demonstrated over many years, to source and evaluate

opportunities in private markets and provide private equity and

other alternative asset management firms with strategic

guidance and support.

Petershill Partners benefits from the substantial resources of

Goldman Sachs, scaled across its services to Petershill Partners

and its role as General Partner to multiple vintages of the

Goldman Sachs Asset Management Petershill private funds,

including Petershill II and Petershill III which incubated Petershill

Partners. These resources allow the Operator to both add value to

our existing Partner-firms and source highly attractive and

proprietary opportunities to invest in new ones.

Low-cost operating structure

The Company operates a differentiated and simple capital-

efficient profit model underpinned by recurring revenue streams,

specifically structured to give investors access to the growth and

profitability of a highly attractive sector based on key principles

of alignment, without taking significant concentration risk or

bearing the cost of a full corporate structure. The Company

has no employees and does not have physical operations.

Additionally, our low-cost operating structure means that a high

proportion of revenues converts into profits. This allows further

investment in incremental acquisition-led growth and the

delivery of shareholder returns through progressive dividends.

The most significant recurring cost to the Company is the

Operator charge; however, at 7.5% of revenues (capped at

15% over time with the profit charge on new investments), this is

lower than the typical team and overhead costs in comparable

alternative asset management firms. Importantly there is no

“double layer” of fees, as Petershill Partners is the beneficiary,

not the payer, of fees generated by the underlying Partner-firms.

Targeting acquisitive growth

Our proven Operator team pursues accretive acquisition-led

growth through investment in new Partner-firms. As shown on

page 18 of this report, Petershill Partners has significant

potential for additional growth through acquisitions, in addition

to the opportunity for meaningful, organic growth across the

existing various funds and strategies of the Partner-firms.

Through our Operator, the Company has access to the extensive

networks and resources of Goldman Sachs to source potential

Partner-firms.

Five transactions completed in our first

full quarter as a public company

In Q4 2021, Petershill Partners acquired

interests in the general partners of five

private equity firms, including four new

Partner-firms and a follow-on acquisition of

additional equity in one firm. This is expected

to have ~9% accretive impact on 2023

earnings. Of the US$458m in acquisitions,

US$241m was funded at close, with the

remainder deferred.

Differentiated offering as we pursue

acquisitivegrowth

The Company’s business model is distinctive, and the Board

believes it would be challenging to reproduce. There are high

barriers to entry in this space, and only three participants

(including Petershill Partners) accounted for 89% of the

non-control acquisitions involving private alternative asset

management firms, with $5 billion-plus AuM from 2008 to 2021.

The expertise and track record of our Operator, Goldman Sachs

Asset Management, is distinct andcompelling.

In approaching potential partners, Petershill Partners does not

seek control, preferring to take a non-control stake that aligns

strategically with Partner-firms’ management and preserves their

independence, ownership control and upside. The Company does

not lead with an exit strategy, but rather offers capital and a

long-term strategic relationship, focused on the long-term

success of each Partner-firm’s strategy. Meanwhile, our Operator

brings more than the continuity and depth of its skilled team;

it also brings access to the resources and wealth of expertise

of Goldman Sachs Asset Management.

Petershill Partners invests for the long term, focused on

managing, improving and adding to a highly diversified portfolio

of Partner-firms that generates predictable and stable revenues

as it supports and drives growth.

1. This ability to leverage Goldman Sachs resources is conditioned by appropriate information barriers and subject to legal, internal and regulatory restrictions.

11 Petershill Partners | Annual Report 2021

OUR PARTNER-FIRMS

Petershill Partners’ current Partner-firms are predominantly private capital firms,

and our plans for expansion, as demonstrated by our initial group of acquisitions

post IPO, are focused on this promising, attractive space within private markets.

Petershill Partners has investments in

23alternative asset management firms.

Our asset class exposure by AuM is 55%

in private equity, 13% in private credit,

19% in private real assets and 13% in

absolute return. This means that 87% of

our aggregate AuM now sits within

private market firms with lock-up capital

structures (up from 81% at the time of

ourlisting).

Our Partner-firms manage a total of

212funds, of which 197 are fee-paying.

Across our investments we have a blended

Partner Fee-Related Earnings ownership

of14.2% (refer to page 124 for

additional information).

In the fourth quarter of 2021, our first as

a public entity, the Company completed

five acquisitions of interests in private

equity firms. These included a “follow-

on” investment of additional equity in

Industry Ventures, plus four new private

equity Partner-firms: Arsenal Capital

Partners, Wind Point Partners, Arlington,

and Symphony Technology Group.

Investments are selected with a view to

diversifying risk in accordance with the

Company’s investment policy (for details

on the Company’s investment policy see

pages 19-21).

Schedule of investments

Private equity

––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

55%

Private credit

––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

13%

Private real assets

––––––––––––––––––––––––––––––––––––––––––––––

19%

Absolute return

––––––––––––––––––––––––––––

13%

AuM Asset Class Exposure

($bn)

Private markets AuM

87%

90%

10%

North America

––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

Europe

––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

Partner-firm AuM

by Geography

Partner Management Fee

(FRE) Revenue by Asset Class

($m)

2020 2021

Private equity

139

Private credit

Private real assets

Absolute return

2019

307

226

177

Private equity

––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

41%

Private credit

––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

14%

Private real assets

––––––––––––––––––––––––––––––––––––––––––––––

29%

Absolute return

––––––––––––––––––––––––––––

17%

Ownership-weighted AuM

by Asset Class

$30bn

12 Petershill Partners | Annual Report 2021

AuM by Strategy

Buyout

–––––––––––

43%

Real estate

–––––––––––––––––––––

Energy

–––––––––––

CLO

––––––––––––––––––

Growth

––––––––––

Infrastructure

––––––––––––––––

Global macro

–––––––––––––

Other

––––––––––––––

23%

0 – 3 years

––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

15%

3 – 8 years

––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

10%

8+ years

––––––––––––––––––––––––––––––––––––––––––––––

71%

Permanent

––––––––––––––––––––––––––––

AuM by Duration

AuM by Sector

Technology

––––––––––––––––

35%

Diversified

–––

27%

Real estate

–––––––––––––––––––––

11%

Credit

–––––––––––––

Energy

–––––––––––

Industrials

–––––

Healthcare

––

Infrastructure

––––––––––––––––

Aerospace &

Defence

–––––––––––––––––

AuM by Fund

Total AuM

$234bn

Largest Partner-firm fund of $10.6 bn

represents less than 5% of total Partner-firm

AuM

1. Weighted average duration of Aggregate Partner-firm total AuM.

2. Other includes Systematic, Global Macro, Credit, Multi-Strategy, Direct lending / Senior, Venture Capital, Secondaries, Distressed / Special Situations and Fixed Income Revenue.

* Totals may not add due to rounding.

13 Petershill Partners | Annual Report 2021

Schedule of investments continued

Our Partner-firms

The following table details the Company’s Partner-firms.

Partner-firm Strategy Asset Classes Founded Geography (Headquarters)

Accel-KKR Mid-market software /

techbuyout

Private equity 2000 Americas (Menlo Park, CA)

ArcLight Capital Partners Energy / infrastructure Private real assets 2001 Americas (Boston, MA)

Arlington Capital Partners Mid-market buyout Private equity 1999 Americas (Chevy Chase, MD)

Arsenal Capital Partners Healthcare / industrial Private equity 2000 Americas (New York, NY)

Caxton Associates Global macro Absolute return 1983 Global (New York, NY)

Clearlake Distressed credit, buyout Private equity / private credit 2006 Americas (Santa Monica, CA)

Fort Investment

Management

Systematic Absolute return 1993 Global (Chevy Chase, MD)

Francisco Partners Mid-market tech buyout Private equity / private credit 1999 Americas (San Francisco, CA)

General Catalyst Venture Private equity 2000 Americas (Boston, MA)

Harvest Partners Mid-market buyout Private equity 1981 Americas (New York, NY)

Industry Ventures Venture Private equity 2000 Americas (San Francisco, CA)

Kayne Anderson Real

Estate

Real estate Private credit / private real

assets

2007 Americas (Boca Raton, FL)

Knighthead Capital

Management

Event-driven, credit Private real assets /

absolutereturn

2008 Americas (New York, NY)

Lakewood Equity long / short Absolute return 2007 Americas (New York, NY)

Littlejohn & Co Mid-market buyout, credit Private equity / privatecredit 1996 Americas (Greenwich, CT)

LMR Partners Multi-strategy relative value Absolute return 2009 Global (London, Hong Kong,

New York)

Pelham Capital Equity long / short Absolute return 2007 Europe (London, UK)

Piney Lake Partners Private credit Private credit 2018 Americas (Greenwich, CT)

Riverstone Holdings LLC Energy / natural resources Private credit / private

realassets

2000 Global (New York, NY)

Slate Asset Management Real estate Private real assets 2005 Global (Toronto, Canada)

Symphony Technology

Group

Mid-market software / tech

buyout

Private equity 2002 Global (Palo Alto, CA)

Westbrook Partners Real estate Private real assets 1994 Global (Palm Beach, FL)

Wind Point Partners Mid-market buyout Private equity 1984 Americas (Chicago, IL)

14 Petershill Partners | Annual Report 2021

Increasing Institutional Capital

The growth in long-term investing has been driven mainly by the

rise of global institutional wealth, namely across pension funds,

insurance companies and sovereign wealth funds (SWFs). Global

institutional wealth has increased at a fast pace over the past 15

years, with SWFs growing at a compound annual rate above 10%.

Investor demand for alternative assets has consistently driven

AuM in our industry over the last decade with further growth

expected to result in industry AuM increasing by 70% through to

2026. This demand from these long-term horizon investors, has

been facilitated by increasing comfort with illiquidity, in the

pursuit of yield and returns.

Our Partner-firms manage in excess of $234 billion AuM, across a

host of strategies, sectors and geographies, predominantly in

longer-duration strategies, with private capital comprising 87%

of AuM. We believe that given the strength of their performance,

with over 81% of Partner-firm funds exceeding their benchmarks,

our Partner-firms are well positioned to benefit from ongoing

investor demand for alternatives.

Impact of Rising Rates

Historically, rising interest rates have been seen as a challenge for

consistent investment returns – in both public and private market

strategies, increasing risk in leveraged firms, and also increasing

benchmarks for risk-adjusted returns given rising risk-free rates.

While global growth was certainly spurred by the low interest rate

environment between 2019-2021, we also observed material

growth in demand for alternative asset management products

during a rising interest rates environment between 2016-2019.

This is partly explained by the material gap between private

capital return expectations – in the mid-to-low teens – against

rising rates in 2019 which capped out at 2.25% (USD benchmarked

interest rate capped in December 2018 through August 2019).

Given Petershill Partners’ diversification and exposure to

high-quality Partner-firms, we expect industry growth to provide

a baseline to our aggregated AuM growth, which has historically

averaged 25% CAGR (including acquisitions).

Expectations of rising rates have also historically been considered

a challenge to the leveraged capital structures of private-equity-

owned-assets; however, we saw little in terms of bankruptcy or

restructuring emanating from the demand shocks of 2020 and

2021. To put this in context, the bankruptcy rates in 2009 and

2010 were 9.9% and 3.0% for speculative debt. In comparison

bankruptcies in 2020 were 5.5% and 1.8% in 2021.

This has

partly been explained by the way covenants are now used in debt

markets, with private debt lenders replacing the more regulated

and constrained bank lenders. For this reason among others,

Our markets

while not insulated from the impact of rising rates, it is expected

that leveraged firms do not exhibit the same level of sensitivity as

in prior periods of rising interest rates.

Absent material increases in interest rates, we do not expect an

impact on the capital raising capabilities of our Partner-firms,

nor on the stability of the firms owned by the funds managed by

these firms. However, rising rates could impact returns along with

realisation multiples and private market firms that rely on some

element of multiple expansion, driven by falling interest rates,

may find that this is not available to them in the near term.

Assuch, rising interest rates could well result in reduced

Partner-firm performance-related earnings both in frequency,

asassets are held for longer, and in quantum as realisation

multiples are lower. However, this may also create attractive

“entry points” for firms acquiring new assets.

We believe this risk is mitigated in Petershill Partners through

the highly diversified nature of our Partner-firm PRE across over

200 funds, and 75 different strategies that span across numerous

vintages. In addition, credit strategies that have historically

exhibited strength in rising rates environments, represented

14% of total ownership weighted AuM.

The Impact of Inflation

In addition to credit firms, we would also expect real asset and

absolute return firms to potentially benefit from increases in rates

and inflation, as these asset classes have historically presented

a hedge to rising rates and inflation. At 31 December 2021,

real asset and absolute return firms made up 32% of our

Total Partner-firm AuM at $74bn.

For private capital firms, given the challenge of rising costs,

inflation may complicate the ability of firms to enhance operating

margins, potentially impacting profitability. We believe the

diversification of Petershill Partners may help mitigate some of

these concerns. Furthermore, recent challenges to supply chains

stemming from COVID-19, have been anticipated and met with

significant efforts to create more resilient supply chains going

forward. In addition, onshore activity has been redoubled since

the Russia-Ukraine conflict and while this may impact global

market access for certain firms, it may also create a more

attractive environment for the beneficiaries of this onshoring.

The majority of our Partner-firms’ activity is based in North America

and we believe that global challenges might present themselves

more outside the mid-market private equity landscape with

larger assets that operate across multiple markets.

We believe that the resilience of Petershill Partners, through vintage,

sector, fund and team diversification positions the Company well, by

reducing reliance on the returns of any one fund, strategy or sector.

TRENDS AND EVOLVING

OPPORTUNITY DRIVERS

The strong and sustained growth of the alternative investments industry has been

underpinned by a number of secular trends, from which the Company believes it is well

positioned to benefit. We believe the diversification of the Company and the long-duration

capital of our Partner-firms position the Company well to be resilient should challenges arise.

1. Private markets performance based on realised net IRR quartiling based on percentage of Aggregate Partner-firm AuM and absolute return by Aggregate Partner-firm AuM over

10years relative to HFRX Absolute Return Index. Private markets weighted at 87% and absolute return at 13% in line with Dec-21 Aggregate Partner-firm AuM split.

2. S&P Global, Default, Transition, and Recovery: 2020 Annual Global Corporate Default and Rating Transition Study: https://www.spglobal.com/ratings/en/research/articles/210407-

default-transition-and-recovery-2020-annual-global-corporate-default-and-rating-transition-study-11900573

15 Petershill Partners | Annual Report 2021

Increasing Demand for Alternative

Investments from Institutional Investors

Institutional investors have been increasing allocations to

alternative investments in lieu of investments such as equity

and fixed-income securities. The asset allocation to alternative

investments by pension funds has increased significantly,

from approximately 7% to 26% between 2000 and 2020,

according to the Thinking Ahead Institute.

Over 80% of institutional investors tracked by Preqin now invest

in at least one alternative asset class, and nearly 40% invest in at

least three. While competition for assets, valuations, and rising

interest rates top the list of investor concerns, more than 85%

plan to invest more or the same amount in private capital over

the next 12 months.

Increasing Demand for Alternative

Investments from Retail Investors

The same resilience and consistent returns that have driven

institutional investors to increase allocations to the private capital

asset class have driven appetite in the historically underserved

retail investor base. Lack of product availability and regulatory

challenges have historically been barriers to asset managers

raising capital from retail investors in the same manner that they

have from institutional investors. However, with certain changes in

regulation and consultations, we are beginning to see increasing

potential for retail market access to alternatives products: in the

US the Securities and Exchange Commission is consulting on

opening private equity products to retail investors, having already

widened the scope of the accredited investors definition in 2020; in

Europe the European Long Term Investment Fund (ELTIF)

introduced in 2015, which was designed to gather institutional and

retail capital for longer-term products, is being amended to expand

the scope and range of products that can be eligible.

Consistent Outperformance of Private

Markets Investments over Public Markets

Private markets investments have an established track record of

higher absolute and risk-adjusted returns in comparison to both

public equity and fixed-income markets. In addition to seeking

superior risk-adjusted returns, institutional investors have been

increasing their allocations to private markets investments to

achieve diversification, macro hedges, stable income and low

volatility relative to “traditional” public markets investments.

Companies Staying Privately-Held

for Longer, Deepening the Opportunity Set

and Capacity for Private Capital Managers

The composition of public markets is fundamentally shifting, as

more companies are choosing to stay privately held for longer or

return to being privately held. Between 2000 and 2018, the number

of US sponsor-backed companies increased more than fivefold. Over

the same period, the number of US publicly traded firms decreased

by 36%, while the number of publicly traded firms in Europe and

Central Asia decreased by 32%, according to the World Bank.

Increasing International Growth

The Company expects international markets, led by the stronger,

morestable economies, to become a source of scalable and

long-term capital for private markets fundraising. In addition,

we see our investment opportunity set also expanding as more and

more firms outside of North America also begin to recognise the

potential benefits of selling a portion of their management company

in order to gain a strategic partnership with a company like

PetershillPartners.

Increasing Demand for Sophisticated

Analytics and Transparency

Alternative asset managers are finding that big data and

analytics can provide a competitive advantage in terms of due

diligence and deal sourcing. There is now a substantial amount

of data available on prospective targets that private markets

firms can use to make better-informed investment decisions.

Alternative asset managers that have integrated digital processes

into their sourcing and due diligence frameworks are therefore

better positioned to capitalise on anticipated trends within big

data and analytics.

As a result, investors are increasingly seeking to partner with

firms that not only have a proven track record of investing

across multiple asset classes and strategies but are also highly

sophisticated in their non-investment functions such as portfolio

monitoring, reporting, accounting, legal, compliance, operations

and data analysis. According to Ernst & Young, 28% of the fund

managers surveyed reported middle- and back-office process

enhancement as one of their top three priorities.

Greater Focus on Sustainability and ESG

Sustainability is becoming increasingly important for asset

management firms in response to the challenges faced by

businesses and the world at large. These challenges include

environmental factors such as climate change and pollution,

social concerns such as diversity and inclusiveness, and

governance issues such as the need for equitable employee

compensation and transparent decision-making.

In response to these trends, asset management firms are

increasingly emphasising sustainability and are increasingly

focused on transparently communicating on the topic with all

stakeholders, including investors. Firms are seeking to move

beyond simply incorporating sustainability in their investment

approach and are looking to embed sustainability into their

cultural framework, taking a more holistic approach. According to

Preqin, 43% of private equity investors have an active ESG policy in

place, with another 19% expected to put one in place in the next

12 months. In addition, 72% of private equity investors believe

that fund managers are adopting ESG policies because of pressure

from their existing and prospective LPs where investor sentiment

towards ESG inclusion in the investment process is notably

supportive, with 78% of investors viewing the pursuit of ESG

investment initiatives as either being positive or having no impact

on overall investment returns.

Investment funds with an approach that considers ESG factors in

portfolio selection and management are growing in popularity

and size. Fundraising by GPs with formal ESG policies at the

management company level increased to $630 billion –

representing over half of capital raised, moreover funds with

specific ESG mandates have also increased in number to 73 new

funds in 2021 doubling over the prior 5 years.

For a more detailed discussion of these trends, please refer to the

Company’s Prospectus.

You can find more information on the Operator’s approach to ESG

on pages 39-41.

Our markets continued

3. Preqin Investor Outlook Alternative Assets H1 2022 Report: https://www.preqin.com/insights/research/investor-outlooks/preqin-investor-outlook-alternative-assets-h1-2022

16 Petershill Partners | Annual Report 2021

Strategy and investment objective

HOW THE OPERATOR

SOURCES AND EVALUATES

NEW PARTNER-FIRMS

Disciplined Focus

Petershill Partners targets well-established multi-billion-dollar

alternative asset managers with a track record of strong

performance and meaningful cash flow generation who are well

positioned to develop their platform across future fund and

product offerings. Target firms typically range between

US$2 billion and US$15 billion of AuM, have been operating for

more than 10 years and have more than US$50m of run-rate

income from investments in management companies derived from

management fee income and positive fee margins. Among the

favourable dynamics that the Company and Operator seek are:

• Performance — category leaders with proven track records of

generating attractive risk-adjusted returns for clients that

have performed in the top or second quartile across multiple

vintages

• Sector — firms operating in sectors benefiting from positive

sustainable tailwinds with capacity to develop over time

• Opportunity — firms with potential, an opportunity set

and the ability to develop in a sustainable way with

attractive prospects

• Culture — strong culture and cohesiveness of team and

partnership, often with a focus on generational development

and an apprenticeship culture

• Alignment — firms defined by their entrepreneurial spirit and

majority-employee ownership, and with a high degree of

alignment with Limited Partners and other stakeholders

• Stability – high-quality, stable and diversified capital bases

with an emphasis on building enduring client relationships

across the platform

• Financials – attractive recurring earnings-based businesses

with strong profitability and cash conversion

• Goals and Responsibilities – firms with a focus on building an

enduring, diverse platform and who recognise their role in

defining environmental, social and governance standards

• Leadership – highly capable management teams with

demonstrable ability to manage and develop their platforms

Increasingly, the Company’s focus is on private equity firms,

as that sector of the private markets demonstrates great

potential for accelerated growth.

Our key strategic drivers for growth are clear:

Petershill Partners offers distinct advantages to Partner-firms.

Thehighest-quality alternative asset managers typically seek

partnership and continued ownership of their business, not an exit.

Our strategy focuses on powering partnership over the long term. The

Company’s target profile for Partner-firms is consistent andprecise.

Sourcing potential

Partner-firms that meet

our target profile

Aligning with talented

management teams who

seek the acceleration capital

and strategic partnership

the Company provides

17 Petershill Partners | Annual Report 2021

Strategy and investment objective continued

Healthy Acquisition Pipeline

The total addressable market for private alternative asset management firms is significant and growing. Within this market,

PetershillPartners has already identified significant opportunity to add new Partner-firms.

Private markets expansion creates organic growth and M&A opportunity. The alternatives industry is forecasted to continue

to expand over the next five years. With the industry growing by 1.7x in that period, alternative asset managers are expected to manage

over $23.2 trillion of aggregate AuM by 2026.

Our Operator has a robust, repeatable evaluation process that leverages significant proprietary data and processes – and benefits

from the depth and rigour available in a private diligence process.

1. Source: Preqin. Assets under management as at December 2021. Figure is annualised based on data to March 2021

2. Based on the estimated opportunity set grown at Preqin’s estimated alternatives industry 2021-26 growth of 1.7x

Universe of Scaled Alternatives Firms Continues to Expand

Alternative asset managers are expected to manage ~$23.2 trillion of aggregate AuM by 2026,

which could lead to a target universe of 1,275+ firms

750+ targets

with AuM over $5bn

19 listed firms

1,275+ targets with

AuM of over $5bn

Thousands of alternatives firms with

AuM sub $5bn

Thousands of alternatives firms

with AuM sub $5bn

1.7x

industry

organic

growth

2021 E

$13.3 trillion

Aggregate AuM

2026 E

Illustrative numbers based on 1.7x

industry organic growth

$23.2 trillion

Aggregate AuM

18 Petershill Partners | Annual Report 2021

Our Dividend Policy

Petershill Partners has set a progressive dividend policy which

will reflect earnings growth over time. The Board will review the

distributable reserves periodically, including consideration of any

material changes since the most recent audited accounts, ahead

of proposing any dividend. The interim dividend is set to one-third

of the prior year annual dividend amount, and the final dividend

proposed will be set to reach the target for the year. Shareholders

will be given the opportunity to approve the final dividend for the

year at the Company’s Annual General Meeting.

Our Acquisition Strategy and

InvestmentPolicy

The Company seeks to make growth capital investments

in the general partnerships of alternative asset management

businesses (“Partner-firms”, with such stakes in Partner-firms

being referred to as “Alternative Asset Manager Stakes”).

The Company’s structured investments represent non-control

ownership positions and rights to certain revenue streams in such

Partner-firms in which the Company has an Alternative Asset

Manager Stake.

The Company seeks to invest in Alternative Asset Manager Stakes

primarily across the following four asset classes: private equity,

private real assets (including real estate, infrastructure and

natural resources), absolute return strategies invested principally

in publicly traded securities, and private credit. More information

on diversification across asset classes can be found on pages

12-13. The Company may also invest in adjacent businesses that

involve investment management, including traditional asset

management firms, wealth managers and insurance businesses.

As part of partnering with the Partner-firms, the Company may be

required, or may choose, to invest in funds and products that

are managed by Partner-firms in which it holds an Alternative

Asset Manager Stake. The amount the Company invests in the

Partner-firms’ funds and products will typically be significantly

less than the amounts the Company invests in Alternative Asset

Manager Stakes. The investment restrictions set out in this policy

support the Company’s objective of spreading investment risk by

limiting the Company’s ability to invest in individual Partner-firms

and in the funds and products that are managed by those

Partner-firms in which the Company has an Alternative Asset

Manager Stake.

The Company targets well established alternative asset managers

with a track record of strong performance and meaningful cash

flow generation which are well positioned to develop their

business across future fund and product offerings. The Company’s

portfolio comprises investments in Partner-firms globally, with a

primary focus on North America and Europe, and a lesser focus on

Asia, which is expected to evolve over time. The Company expects

to ensure that at least 30 per cent of annual Partner-firm FRE is

derived from investments in Partner-firms which primarily

manage or advise on investments in assets in North America.

TheCompany’s initial investment in any one Partner-firm will

typically range from US$10m to US$400m, although secondary

transactions involving a portfolio or number of different stakes

may cause the resulting aggregate investment to be larger

thanthis.

The Company seeks to spread Alternative Asset Manager

Stake investments across asset classes in order to ensure it has

a diverseportfolio.

The Company’s investments in Partner-firms will typically take

the form of unlisted ordinary equity and partnership interests,

representing non-control investments where the Company

receives income generated by the long-term assets managed by

the Partner-firms in which we invest (but may also take other

forms, including unlisted preferred equity and unlisted debt

investments). What form an investment takes will be determined

by the Operator and will be the form that, in its reasonable

opinion, is the most appropriate for the investment in question.

As a result of realisations from the funds managed by Partner-

firms, as well as the Partner-firms themselves, the Company may

hold shares in listed businesses, which would typically be on a

temporary basis.

From time to time, a portion of the Company’s assets may be held

in the form of cash and/or cash equivalents pending the

identification of new investment opportunities by the Operator

and the application of some or all of that cash as part of any such

investment. There is no limit on the amount of cash that the

Company may, from time to time, hold in cash or cash equivalent

investments. The Company may also invest cash held for working

capital purposes and awaiting investment in cash deposits, gilts

and money market funds. No more than 20 per cent of the

Company’s gross assets will be invested in any single money

market fund or deposited in any single bank.

The Company may from time to time (but shall not be required to)

enter into hedging or other derivative arrangements which are,

inthe reasonable opinion of the Operator, considered appropriate

for the purposes of efficient portfolio management (including

without limitation for interest rate hedging purposes) and

managing investment exposures.

The Company will not conduct trading activity which is significant

in the context of the Company and its investments asawhole.

19 Petershill Partners | Annual Report 2021

Strategy and investment objective continued

Investment Restrictions

Investments are selected with a view to diversifying risk. More

information on the diversification of investments can be found on

pages 12-13. In addition, the Company invests and manages its

assets in compliance with the restrictions set out below:

• The Company will only make an investment in a Partner-firm if

such Partner-firm will contribute no more than 20 per cent of

annual Partner FRE measured in reference to the 12-month

period ended on the latest practicable date prior to the date

of the investment. Shareholders should note that such Partner

FRE data will be unaudited. For the avoidance of doubt, the

limits in this paragraph exclude any investment in a fund or

product that is managed or advised on by such Partner-firm

and any returns from any such fund or product.

• The Company will only make an additional investment in a

Partner-firm that is already within the Company’s portfolio

if such Partner-firm will contribute no more than 20 per cent

of annual Partner FRE measured in reference to the 12-month

period ended on the latest practicable date prior to the date of

the additional investment. Shareholders should note that such

Partner FRE data will be unaudited. For the avoidance of doubt,

the limits in this paragraph exclude any investment in a fund or

product that is managed or advised on by such Partner-firm

and any returns from any such fund or product.

• The Company will ensure that no investment will be made in

a fund or product managed or advised on by a Partner-firm

unless the aggregate value of all such investments, including

the amount proposed to be invested, is no more than 20 per

cent of the Company’s gross assets, as shown in its most

recently published balance sheet.

• The Company will invest in funds or products only if they

are managed or advised on by a Partner-firm within the

Company’s portfolio.

• For so long as required by the Listing Rules, the Company will

at all times seek to ensure that the Operator invests and

manages its assets in a way which is consistent with the

Company’s object of spreading risk and in accordance with its

Acquisition Strategy and Investment Policy.

The above investment restrictions are measured at the time at

which the Company makes the relevant investment. There is no

requirement to sell any investment (in whole or in part) to the

extent subsequent changes to the Company’s gross assets

valuation result in any investment exceeding the limits set by the

above restrictions. Where the Company holds its investments

indirectly, including through one or more holding entities, the

investment restrictions are applied on a look-through basis.

About the Partnership

A venture capital and growth firm founded in 2000, General Catalyst targets early

stage venture and growth investments in technology or tech-enabled businesses,

such as Stripe, Snap, Warby Parker, Livongo and Airbnb. The firm is

based in Cambridge, MA, with additional offices in New York, Palo Alto,

San Francisco and London.

PARTNER-FIRM PROFILE

Petershill has been a great partner. We were a traditional single

fund: a very successful firm, but we had yet to go through a

generational transition or a real scaling transition. We needed

to be multi-generational, to scale capital and to scale opportunity

for leadership. Your forward thinking — looking at what our

business could be — got us there. The transfer of knowledge of

how a bigger, more platform-oriented firm works allowed us to

become a different, more impactful kind of firm, one that is highly

sustainable, will grow over time, and continues to deliver the kind

of elite returns that attracted you to us in the first place.

Joel Cutler

Co-Founder and Managing Partner, General Catalyst

20 Petershill Partners | Annual Report 2021

Partner-firm funds include provisions that may define and

prohibit certain investment areas, such as activities deemed to be

illegal; theOperator reviews these restrictions as part of its

diligenceprocess.

Unfunded further payment commitments in respect of

investments in Partner-firms or funds or products managed or

advised on by a Partner-firm will be treated as forming part of the

original investment and will not be considered an additional

investment in the relevant Partner-firm or in the relevant funds

or products for the purposes of any of the above

investmentrestrictions.

Co-investment and Co-financing

The Company may invest alongside Petershill IV, the successor

to the private funds that incubated Petershill Partners, or other

funds with a substantially similar investment policy which are

managed or advised on by the Operator or any member of the

Operator’s group at the relevant time, but for the avoidance of

doubt the Company is not limited solely to such investments.

Borrowing Policy and Gearing

The Company may incur indebtedness (less available cash)

of up to a maximum of three times the Company’s Adjusted

EBIT as published in the Company’s last financial statements,

calculated at the time of drawdown, for the purposes of financing

investments, share buybacks, general working capital purposes or

any other purpose approved by the Board. Adjusted EBIT will be

defined as earnings before interest, tax, less net gain on

investment transactions and non-recurring items.

Intra-group indebtedness will not be included for the purposes of

calculating the Company’s indebtedness. Any indebtedness of any

holding entity through which the Company makes investments

will not be included for the purposes of calculating the Company’s

indebtedness for so long as either: (a) the creditor of such

indebtedness only has recourse to the assets of the holding entity

and does not have recourse to the other assets of the Company or

any of the Company’s investments; or (b) that debt is owed to the

Company or its subsidiaries.

The Company may borrow funds for general purposes, including

to make investments, to leverage existing investments and to pay

expenses and other obligations. Any such borrowings may be

secured by the Company’s investments (as described below under

“EU AIFMD Leverage Limit”). The Company may, directly or

indirectly, through wholly or partially owned subsidiaries

of the Company (including an investment vehicle), or otherwise,

incur indebtedness or enter into guarantees, provided that the

Company complies with its Acquisition Strategy and Investment

Policy. Credit facilities may be secured by the Company’s assets.

The Company may also, subject to the overall limitations set out

in this Acquisition Strategy and Investment Policy, guarantee or

pledge its assets in support of or otherwise provide credit support

(including by giving equity commitments) for the obligations of

Partner-firms in which it is invested, which may be structured as

a guarantee in full or by providing collateral or other credit

support for the full value (and not just a pro-rata portion)

of the obligations of a Partner-firm.

EU AIFMD Leverage Limit

In accordance with its risk management function and the

investment objectives of the Company, the Operator has set a

maximum level of leverage which the Operator may employ on

behalf of the Company. For the avoidance of doubt, this maximum

level of leverage only applies at the level of the Company (including,

where applicable, financial or legal structures involving third

parties controlled by the Company and specifically set up to

directly or indirectly increase leverage at the level of the Company).

The methods used for the determination of the maximum level

of leverage of the Company, and the circumstances in which

borrowings are treated as leverage for these purposes, are

prescribed under EU AIFMD and are the gross method (as such

term is defined in article 7 of the AIFMD Delegated Regulation)

and the commitment method (as such term is defined in article

8 of the AIFMD Delegated Regulation). The Operator has

determined that leverage, for this purpose and calculated in this

manner, will not exceed 1,500 per cent (expressed as a

percentage and calculated using the gross method of calculation)

and 1,500 per cent (expressed as a percentage and calculated

using the commitment method of calculation), other than if and

to the extent that leverage for these purposes results from

borrowings under revolving credit facilities on a short-term basis

to make investments pending the drawdown of (and covered by)

capital commitments of Shareholders (“Subscription Facility

Borrowings”) which, due to the way in which such borrowings can

impact the calculation of leverage for the purposes of the EU

AIFMD, may be unlimited. Such limits should not be viewed as

indicative of the amount of leverage that will be employed on

behalf of the Company or as a target for the Company, and it may

be that such leverage will be significantly lower in practice.

Shareholders should note that in exceptional circumstances, the

Central Bank of Ireland (CBI) may impose limits on the level of

leverage (calculated in this manner) that the Operator is entitled

to employ, or other restrictions on the management of the

Operator with respect to the Company.

Shareholders should note that the level of leverage as calculated

under the gross method of calculation does not necessarily

provide any reasonable illustration of the overall risk profile of

the Company, as financial derivative instruments and borrowing

of cash or securities are used to manage risk as well as to seek

return. This is largely due to the fact that the gross method

simply aggregates the absolute sum of all long and short

financial derivative instrument positions, even if they are for

hedging or offsetting purposes, and further uses notional values

rather than measures that calculate the overall contributions to

risk, which will often explain why the leverage levels under this

method appear high. Shareholders should also note that the

incurrence of Subscription Facility Borrowings can lead to very

high reported leverage levels for the purposes of the EU AIFMD,

for reasons including the inability to include undrawn capital

commitments in determining the net asset value of the Company

for these purposes and the inability to exclude drawdowns under

revolving facility agreements as “temporary” in nature. Further

details on the average leverage level will be disclosed in the

Company’s annual financial statements for the relevant

accounting period.

Shareholders should not expect that the Operator can or will

lend money to the Petershill Partners Group for the purposes of

paying interest, financing, transaction and other costs or for any

otherpurpose.

1. Gearing represents the use of leverage as a tool to manage liquidity and cost of capital.

21 Petershill Partners | Annual Report 2021

Operator team

HIGHLY EXPERIENCED

OPERATOR TEAM

Ali Raissi

Managing Director

Robert Hamilton Kelly

Managing Director

Christian von Schimmelmann

Managing Director

Ali is global co-head of the Goldman Sachs Asset

Management Petershill Group, leading initiatives

for Petershill Partners as well as the Petershill

private funds. He is co-chair of the Goldman

Sachs Asset Management Petershill Investment

Committee, directing investing in leading

established private-market and public-market

alternative asset management companies and in

newly established private-market managers. Ali

first joined Goldman Sachs in 1999 as an analyst

in the Financial Institutions Group in the

Investment Banking Division and re-joined the

firm in Goldman Sachs Asset Management,

helping found the Existing Petershill Group in

2007 as a portfolio manager for the first

Petershill fund. Ali earned a BA in Economics

and a general honours degree from the

University of Pennsylvania, where he was a

Benjamin Franklin Scholar.

Robert is global co-head of the Goldman Sachs

Asset Management Petershill Group, leading

initiatives for Petershill Partners as well as the

Petershill private funds. He is a member of the

Goldman Sachs Asset Management Petershill

Investment Committee, directing investing in

leading established private-market and

public-market alternative asset management

companies and in newly established private-

market managers. Prior to joining Goldman

Sachs, Robert worked at Gleacher & Co./Gleacher

Shacklock in investment banking and in special

situations. Robert earned a BA (Hons) and an MA

from the University of Oxford.

Christian is global co-head of the Goldman Sachs

Asset Management Petershill Group, leading

initiatives for Petershill Partners as well as the

Petershill private funds. He is co-chair of the

Goldman Sachs Asset Management Petershill

Investment Committee, directing investing in

leading established private-market and

public-market alternative asset management

companies and in newly established private-

market managers. Prior to joining the Existing

Petershill Group, Christian was a senior member

of the research and principal investment team on

the Goldman Sachs Bank Loan Desk for four

years. Prior to that, he was a member of the

Financial Institutions Group in the Goldman

Sachs Investment Banking Division from 1999 to

2004. Earlier in his career, Christian worked at

McKinsey & Company in the Financial Services

Practice and at Salomon Brothers Inc. in the

Investment Banking Division. Christian earned a

BS in Economics from the Wharton School of the

University of Pennsylvania and an MBA from the

University of Chicago Booth School of Business.

22 Petershill Partners | Annual Report 2021

Petershill Partners is a diversified, publicly listed, global

alternatives investment group focused on private equity and

other private capital strategies through economic interests in 23

Partner-firms. Petershill Partners is operated by Goldman Sachs

Asset Management.

The Operator – and the leadership team within it focused on

Petershill Partners – has extensive experience and history in this

space. The Petershill team within the Operator was founded in

2007 to provide private equity growth capital to the alternative

asset management sector. This means that the Operator has one

of the longest track records in the industry, having launched the

first standalone vehicle dedicated to investing in non-control

stakes in alternative asset managers.

Over the past 15 years, the Operator has made 42 investments

across its private funds, having undertaken detailed due diligence

exercises on more than 300 investment opportunities and

deployed over US$7 billion of capital for its funds. The Operator

leverages direct sourcing capabilities through its broader

platform and relationship with the wider Goldman Sachs group.

In addition, Partner-firms also have access to a wide range of

support services to assist with the institutionalisation and

development of their businesses.

The Operator sources and diligences potential Partner-firms.

Forselect firms, the Operator team creates alignment with firm

management and negotiates investment terms for the

acquisitions of new interests.

The Operator provides Partner-firms with strategic guidance

and, as appropriate, leverages Goldman Sachs resources and

services to add value to and foster the growth of Partner-firms.

The Operator focuses on driving growth at Petershill Partners

through the following means:

1. Acquisitive growth for the firm – sourcing, performing diligence

on, aligning with and acquiring economic interests in new

Partner-firms

2. Organic growth strategy – providing strategic guidance to

Partner-firms in their quest for growth

3. Organic growth resources – leveraging Goldman Sachs

resources and services to improve infrastructure, performance

and earnings profile of Partner-firms

ROLE OF THE OPERATOR

GP Services Group Within the Operator

The Operator’s value-added services capabilities, offering

guidance and strategic support, have helped support our

Partner-firms and their businesses. The Operator collaborates

with our Partner-firms as they seek to scale and institutionalise

their businesses, providing guidance, best practice and analytics

through its “GP Services” team and platform within Goldman

Sachs (“Services”). Over the past half year, this platform saw

elevated levels of engagement and activity, bringing full-year

interactions to a record level, demonstrating the value that our

partners place on this aspect of the strategic partnership.

A consistent theme across these interactions today is the desire

for increasing focus on ESG and sustainability. The Services Team

at Goldman Sachs Asset Management released a module on

ESG and experienced particularly high engagement levels on the

topic. The Operator expects this to continue, helping to enhance

and help our Partner-firms navigate opportunities in the years to

come. The Company believes that the GP Services Platform

within Goldman Sachs represents a distinct value proposition

for our Partner-firms.

Support Provided to Partner-firms

Within the Operator, our dedicated GP Services group provides

alternative asset managers with a full range of performance

enhancements. Over the full year of 2021, this group performed

242 engagements for such firms.

Value-added GP Services Include:

Firm infrastructure and operations

• Legal, Tax & Regulatory Overviews

• Environmental, Social & Governance Consultancy

• Human Capital Optimisation

• Operational Consulting & Digital Transformation

Capital and production development

• Capital Formation

• Strategy, Corporate Finance and M&A Advice

• Product Development & Peer Benchmarking

Investment portfolio and reporting

• Investment Portfolio Services

• Portfolio Monitoring, Reporting & Communication

23 Petershill Partners | Annual Report 2021

Operator team continued

Q&A WITH OUR OPERATOR

What Do You Find Compelling

About Petershill Partners?

Rob

It’s a rather unique, yet proven, business model. Alternative asset

management as a category of investment has been highly

attractive for limited partners, and we see no reason for that to

change. Petershill Partners offers a unique way to provide public

market investors with access to this attractive business model.

Ali

There’s a lot of good history in how this public entity came to be.

The Petershill team within Goldman Sachs Asset Management

was founded 15 years ago to provide unique access to these

private partnerships. Over multiple market cycles we have

delivered cash returns on lucrative partnerships to our investors.

Rob

The idea of Petershill Partners, as an agile, active public entity

generating value for Shareholders over time, incubated within

private funds for many years, and culminated in the IPO.

Christian

It starts with the quality of the Partner-firms. Petershill Partners

focuses on investing in non-control interests in established,

high-quality, ambitious private alternative asset managers – in

talented management teams that are looking for smart, engaged

capital to accelerate their growth.

Ali

That engagement is key. It’s more than just capital. We deliver

differentiated, unbiased advice and partnership, embracing

our role as a growth accelerator and long-term, non-control

partner to talented, successful firms in the exciting private

alternatives space.

Christian

With discipline and focus, we identify high-quality, successful

private alternatives firms at a crucial point in their development:

on the cusp of a step-change in their evolution, given the right

capital and support.

And then we help them grow. And all the while, from this highly

diversified portfolio, the proven business model of Petershill

Partners generates stable, growing revenues.

What Are the Advantages of the

Company’s Operator Relationship?

Ali

Petershill Partners is uniquely positioned as a conduit to a

dedicated expert with a proven history of growing private

alternative asset management firms, resident within the

Operator. This also creates an ability to tap into the broader

resources of GoldmanSachs.

Rob

There’s great continuity and commitment in the Operator team.

As that team, we are expert at helping our Partner-firms to scale.

We are also practised at harnessing Goldman Sachs’ deep-domain

expertise, industry-leading capabilities and extensive client

network to source unique investments. Through this integral

relationship, we are able to bring to bear insight and coverage of

industries, geographies and opportunity to fuel both the

acquisition pipeline and the growth of the Partner-firms.

Ali Raissi

Managing Director

Goldman Sachs Asset Management

Co-Head of Goldman Sachs

Petershill Group

24 Petershill Partners | Annual Report 2021

Christian

As Rob alluded to earlier, there’s also continuity, as we have been

operating as a team for 15 years, investing on behalf of clients in

our private funds. Over that time period – several economic cycles

– we’ve been able to demonstrate a clear cash-based track record

of investment returns. This is why we were able to raise $5 billion

of capital commitments for our private fund, Petershill IV, as

recently as January 2022.

Ali

We want our partnership to be more than capital. To that end we

have worked hard to burnish our value-added services and be

impactful as a partner after our investments.

What Excites You About the

Future of Petershill Partners?

Christian

Petershill Partners was the first of its kind, but we don’t expect it to

be the last. Just like our first private fund was followed by others,

weexpect this to be an interesting mechanism of exposure for

investors looking to tap the growth of the private alternatives industry.

Christian von Schimmelmann

Managing Director

Goldman Sachs Asset Management

Co-Head of Goldman Sachs

Petershill Group

Robert Hamilton Kelly

Managing Director

Goldman Sachs Asset Management

Co-Head of Goldman Sachs

Petershill Group

Ali

In the Company’s first full quarter, Q4 of 2021, as a public entity,

Petershill Partners executed five transactions to build on the roster

of private-firm partnerships, adding four new Partner-firms.

Rob

Our highly diversified holdings – across firms, asset classes,

strategy, sector, funds and duration – deliver strong, organic AuM

growth momentum and a diversified revenue stream. This income

substantially comprises contractually committed, high-margin

and stable fees on long-dated assets.

Ali

There are numerous core themes driving the growth of this

industry. Whether it is considerable investor demands, deepening

of the private alternatives industry, extension of duration,

introduction of retail demand – all are themes that we expect to

drive growth. We are fortunate to have some of the highest-

quality investments in our group of independent Partner-firms

who we believe can capitalise on these industry trends.

25 Petershill Partners | Annual Report 2021

Operator’s report

Petershill Partners plc commenced conditional trading on the

London Stock Exchange on 28 September 2021, on which date the

initial acquisition of the portfolio of Partner-firms by the Company

was completed. The Company was incorporated in March 2021, but

did not trade prior to the end of September 2021. In addition, for

completeness and transparency, this document provides full-year

financial information for our interests in the Partner-firms in

aggregate, including operating metrics for periods prior to the

initial acquisition date, presented as if the Company’s assets as at

the time of the IPO had been owned by the Company during the

historical period presented

Throughout this section, reference is made to adjusted measures

which the Company considers to be alternative performance

measures (“APMs”) or Operating Metrics.

As part of the initial acquisition of the portfolio of Partner-firms on

28 September 2021, the Company acquired interests in several

trusts (“Issuers SPVs”), which previously issued $350m of long term

debt with a 5% coupon and a maturity date of 2039. The debt is

secured by the rights to the cash flows of certain Partner-firm

investments held by the Company and other investments held by

the Petershill Funds.

Although the Company does not have rights to the cash flows of

the collateral that is held by the Petershill Funds, under IFRS, the

Company is required to consolidate them. This consolidation

results in reflecting all of the assets and liabilities of these entities

in the consolidated statement of financial position and all of the

income, investment gain and finance cost in the consolidated

statement of comprehensive income. However, shareholder returns

are only affected by the interests that the Company owns.

The APM basis, which presents the financial information on a non

IFRS basis, excluding the impact of the assets, liabilities, income,

investment gain and finance cost which do not affect shareholder

returns, aids shareholders in assessing their investment in

theCompany.

The IFRS and APM basis numbers discussed and presented below

include significant ‘unrealised’ and non-cash items that include

unrealised change in fair value of investments and it should be

noted that while permitted, it is not the Company’s core strategy to

exit or realise these investments. Therefore, management results

are also presented excluding the unrealised change in fair value of

investments at fair value through profit and loss and related

unrealised divestment fee.

APMs are used by the Directors and the Operator to analyse the

business and financial performance, track the Company’s progress

and help develop long-term strategic plans and they also reflect

more closely the cash flow of the Company. The Directors believe

that these APMs are used by investors, analysts and other interested

parties as supplemental measures of performance and liquidity.

Definitions of alternative performance measures along with

reconciliations to the IFRS measure, where appropriate, can be

found in the glossary beginning on page 126.

The financial results and the Operating Metrics provided in this

Annual Report reflect the Company’s focus on growth and

profitability, whilst also demonstrating continued strong growth

from our Partner-firms. In addition to organic growth, the Company

also captured significant accretive acquisition-led growth through

investing in new Partner-firms. The combination of organic and

inorganic growth maintains the focus on delivering shareholder

value over time.

In the first quarter as a listed entity, the Company delivered quickly

on the strategy to pursue diversified acquisitive growth with five

investments into private equity firms, one increasing our non-

control stake in an existing Partner-firm, the remaining four in new

partnerships, bringing our total of Partner-firms to 23 at year end,

which manage a total of over 200 underlying funds.

Management Results:

Period ended

31 December

2021

Income

Partner fee related earnings

52.3

Partner realised performance revenues

62.3

Partner Realised Investment Income

7.7

Total partner distributable earnings (Total

income APM basis) 122.3

Operating costs

Board of Directors' fees and expenses (1.0)

Operator charge (9.2)

Other operating expenses

(5.7)

15.9

Adjusted Earnings before interest and tax (EBIT)

106.4

Interest expense (4.6)

Adjusted Earnings before tax (EBT)

101.8

Tax & tax related expenses

(3.4)

Adjusted profit after tax

98.4

Reconciliation of adjusted profit after tax to

IFRS Profit for the period after tax

• Adjusted profit after tax

98.4

• APM basis Movement in financial assets and

liabilities held at fair value

217.6

• Unrealised divestment fee (45.2)

• Non recurring expenses incurred in connection

with the IPO (6.9)

• Change in liability for Tax Receivables Agreement (6.8)

• Adjustment for Tax and tax related expenses (9.2)

IFRS Profit for the period after tax 247.9

Company Performance

Petershill Partners’ first quarter as a public company showed

strong financial performance.

The revenue model of the Company is comprised of income from

Partner-firms which combines three types of income: management

fee income, performance fee income and investment income.

FINANCIAL AND

OPERATING REVIEW

1. Excludes non recurring expenses incurred in connection with the IPO

2. Financial measure defined as Alternative Performance Measure, or (“APM”). Further information on page 126

3. Partner-firm key operating metrics. Refer to the glossary on page 123 for additional information.

26 Petershill Partners | Annual Report 2021

Ofthese three, management fee income in particular provides

stable recurring profits. The management fee income APM basis

for the period was $52m, performance fee income APM basis

$62m, and investment income APM basis $8m.

The IFRS Profit and total comprehensive income for the period

after tax was $248m equating to a Proforma EPS

of 21 cents.

This includes an APM basis increase in financial assets and

liabilities held at fair value of $218m, an Unrealised Divestment

Fee of $45m, non-recurring expenses incurred in connection with

the IPO of $7m, change in liability towards Tax Receivables

Agreement of $7m, an increase in deferred tax of $12m and

excludes a payment towards Tax receivable agreement of $3m.

The Company’s Adjusted Profit after tax

was $98m. The Company’s

Adjusted EBIT

for the period was $106m, resulting in an Adjusted

EBIT margin

of 87%. We believe this highlights the key characteristics

of Petershill Partners as a business with significant growth of durable

capital, delivering stable and recurring revenues with a highly efficient

EBIT margin and significant free cash flow.

Dividends

Based on the financial results for the period, the Board will

propose a dividend of $30m or 2.6 cents per share to its

shareholders at the Annual General Meeting on 31 May 2022.

Given our financials are primarily driven by USD denominated

economics (management fees and USD denominated funds, and

performance fees and balance sheet income on USD denominated

funds), our dividends are proposed and paid in USD, however,

shareholders will have the option to elect payment in GBP or EUR.

The Board expects to operate a progressive dividend policy which

will reflect earnings growth over time.

APM Basis Investments at Fair Value through

Profit and Loss

At beginning of period –

Initial acquisition at 28 September 2021 4,843

Investments (includes new, follow on, and prior

commitments) 463

Change in fair value of investments through profit

and loss APM basis

218

At end of period 5,524

About the Partnership

Accel-KKR is a technology-focused private equity firm

founded in 2000 which primarily invests in middle-market

software and technology-enabled services companies.

Accel-KKR has offices in Menlo Park, CA, Atlanta, GA,

London, England and Mexico City, Mexico.

PARTNER-FIRM PROFILE

We picked Petershill to be our first outside investor due to the long-term

partnership between our firms that developed over the previous 17 years.

Petershill really knew us and understood our business model, and they

have been very helpful and supportive as we have continued to grow our

business with new fund strategies and in new geographies. They are a

true value-added partner.

Tom Barnds

Co-Managing Partner,

Accel-KKR

Rob Palumbo

Co-Managing Partner,

Accel-KKR

1. Financial measure defined as Alternative Performance Measure, or (“APM”).

Furtherinformation on page 126.

27 Petershill Partners | Annual Report 2021

About the Partnership

Clearlake is an investment firm founded in 2006 operating

integrated businesses across private equity, credit and

related strategies. Clearlake provides patient, long-term

capital to dynamic businesses that can benefit from its

operational improvement approach, O.P.S.® Core target

sectors are technology, industrials and consumer. Clearlake

currently has over $70 billion of AuM and its senior

investment principals have led or co-led over

300investments.

PARTNER-FIRM PROFILE

Our partnership with Petershill has led to an expanded relationship

across the broader Goldman Sachs platform and has helped support

our acquisition of WhiteStar Asset Management. We have grown our

business, continue to make meaningful investments in our funds and

new strategies, and have further diversified our relationships across

the private equity ecosystem — all with the support of Petershill.

José E. Feliciano and Behdad Eghbali

Co-Founders Clearlake Capital Group, L.P.

Operator’s report continued

The fair value of the Company’s investments in Partner-firms APM

basis at 31 December 2021 was $5,524m. The fair value of the

Company’s investments in Partner-firms is determined using both

earnings multiples and discounted cash flow techniques, which

are common industry guidelines. In valuing the investments, key

assumptions include estimates of future AuM growth, expected

management and performance fee rate margins, expected

current and future underlying fund returns and timing of

realisations. Whilst an exit of an investment is possible, we do

not typically seek to exit an investment as part of our strategy.

Thechange in fair value of investments through profit and loss

APM basis was $218m for the period ended 31 December 2021.

See note 4 in the Notes to the Consolidated Financial Statements

on page 96 for additional information.

Investments in Money Market Funds

The Company had $453m invested in money market funds at

31 December 2021 with a AAA credit rating.

Deferred Payment Obligations and

NotesPayable

Certain investments in Partner-firms are purchased with deferred

payment terms. These deferred payment obligations represent

amounts payable by the Company at various dates in the future.

The Company, through its interest in the Issuer SPVs has $350m

of long term debt with a 5% coupon and a maturity date of

2039 that are secured by the rights to the cash flows of certain

Partner-firm investments. The interest expense for the period

ended 31 December 2021 was $5m. The notes payable reflects

the net of $350m of long term debt and $9m of prepaid expense.

Refer to notes 11 and 12 in the Notes to the Consolidated Financial

Statements on pages 102 and 103.

Tax Receivables Agreement

The Company entered into tax receivables agreements as part of the

Initial Acquisition on 28 September 2021. The agreements provide

for the payment of 75% of cash tax savings, if any, in U.S. federal,

state and local income tax that the Company actually realises.

Thecash tax savings is defined as the difference between the

taxes actually due compared with what the taxes due would have

been without the step-up in tax basis resulting from the Initial

Acquisition. The Company expects these payments to arise over

a period of 15 years. The value of these estimated payments is

$167m assuming a 18% discount rate and using the Company’s

most recent projections relating to the estimated timing of the

payments. There was an increase in the liability of $7m. Refer to

note 2(v) in the Notes to the Consolidated Financial Statements on

page 88 for additional information.

Operating Expenses

Operating expenses were $68m and include non-recurring charges

of $7m related to the organisation and IPO of the Company.

The Operator is entitled to a divestment fee calculated at 20% of the

realised profit on the exit of an investment. Although the Company

does not intend to exit its investments, an accrual is reflected

representing an amount that would be payable if the Company were

to exit all of its investments. An amount of $45m has been accrued

for the period and none of the amount has been vested.

28 Petershill Partners | Annual Report 2021

The Operator is entitled to a fee (“Operator charge”) of 7.5% of

Income from investments in Partner-firms APM basis. The Operator

charge for the period was $9m.

The Directors’ fees for the period were $1m, which covers the

period prior to the listing through 31 December 2021.

Interest Expense

Interest expense was $5m. The Company acquired $350m of

private placement debt with a fixed rate of 5% and a maturity of

2039 as part of the initial acquisition on 28 September 2021.

Refer to note 11 in the Notes to the Consolidated Financial

Statements on page 102 for additional information.

Tax Expense

Current tax expenses comprise obligations to tax authorities

related to current period reporting. Deferred tax expenses arise

with respect to temporary differences between carrying amounts

of assets and liabilities and their tax bases.

Analysis of tax $m

Analysis of tax on profit

Current tax –

Corporate tax –

Deferred taxation 12

Current year –

Tax expense 12

The tax expense does not include the related expected payments

under the Tax Receivables Agreement for the current year. The

expected payment under the Tax Receivable Agreement for the

period ended 31 December 2021 is $3m.

The Tax and related expenses

for the period were $3m and

the Adjusted tax and tax related expense rate

was 3.3%.

These amounts represent current taxes payable in addition to

any expected payments under the Tax Receivables Agreement for

the period and exclude deferred taxes related to the change in

fair value of the investments through profit or loss.

Cash and Money Market Investments

The Company’s balance sheet is strong and well-capitalised with

sufficient cash and money market investments to facilitate its

acquisition strategy. There was $453m invested in money market

investments and $69m of cash and cash equivalents APM basis at

31 December 2021.

The Company raised $720m of proceeds from the IPO (net of

expenses) and deployed $247m of the proceeds in Partner-firm

investments during the period. Payments related to $208m of

new investments in the period are deferred and were not funded

as of 31 December 2021. Refer to note 2 in the Notes to the

Consolidated Financial Statements on page 88 for additional

information on deferred payment obligations.

Capital

On 1 October 2021, the Company issued 156,696,028 Ordinary

Shares for cash and 1,000,000,000 Ordinary Shares in exchange for

investments in Partner-firms with a value of $4,843m, a liability for

the Tax Receivables Agreement valued at $160m and Notes payable

of $350m.

As at 31 December 2021, the Company’s issued share capital

comprised 1,156,696,029 Ordinary Shares.

Total shareholders’ equity increased by $248m from profit for the period.

Shareholders’ equity was $5,296m at 31 December 2021. Company’s

share capital is comprised of 1,156,696,029 Ordinary Shares.

Retained profits in the period were $248m.

M&A and Overview of Acquisitions made in

4Q2021

In the fourth quarter of 2021, our first as a publicly listed entity, the

Company completed five acquisitions of interests in private equity

firms. These included a “follow-on” investment of additional equity in

Industry Ventures, plus four new private equity Partner-firms that were

also acquired in the Petershill IV private fund. These combined acquisitions

contributed $20 billion to Aggregate Partner-firm AuM and $10 billion

to Aggregate Fee-paying AuM. It is expected that these acquisitions will

be 9% accretive to 2023 consensus earnings forecasts. The five

acquisitions by the Company relate to the following Partner-firms:

Industry Ventures is a venture capital investment firm that focuses

on investing into companies and venture capital partnerships

directly and via secondary transactions, from early-stage to growth

stage, and seeks to addresses inefficiencies in venture capital with

flexible solutions for entrepreneurs, venture funds, and limited

partners. Industry Ventures was founded in 1999 and is

headquartered in San Francisco, CA, with additional offices in

Washington D.C. and London. This was a follow-on investment.

Arlington Capital Partners is a North American middle-market

private equity firm focused on investing in regulated industries and

their adjacent markets. Arlington was founded in 1999 and is

headquartered in Washington DC.

Arsenal Capital Partners is a North American private equity firm

specialising in buyout and growth investments in middle-market

industrials and healthcare companies. Arsenal was founded in 2000

and is headquartered in New York, NY.

Symphony Technology Group is a North American, technology-

focused private equity buyout firm, focusing on investments in

middle market enterprise software companies. Symphony

Technology Group targets opportunities in the value-focused

enterprise software market. Symphony Technology Group was

founded in 2002 and is headquartered in Menlo Park, CA.

Wind Point Partners is a North American private equity firm focusing

on buyout investments in middle-market consumer products, industrial

products and business services companies. Wind Point was founded in

1984 and is headquartered in Chicago, IL.

Petershill Partners 4Q21 Acquisitions

Partner-firm Committed

Aggregate

Partner-firm AuM

Aggregate

Fee-paying AuM

Arlington Capital Partners $97m $3bn $2bn

Arsenal Capital Partners $230m $8bn $3bn

Industry Ventures (follow-on) $21m – –

Symphony Technology Group $60m $6bn $3bn

Wind Point Partners $50m $3bn $2bn

Total $458m $20bn $10bn

1. Financial measure defined as Alternative Performance Measure, or (“APM”). Further information on page 126

29 Petershill Partners | Annual Report 2021

Partner-firm 4Q and full year

performance

Key Operating Metrics

We provide significant detail on our Partner-firms in our Key

Operating Metrics as this gives investors insight into the revenues

and revenue model of the Company.

In 2021, fundraising momentum accelerated across the

Company’s Partner-firms with aggregate Partner-firm AuM

growing 15% over the quarter and 56% year-on-year to

$234 billion. Aggregate Fee-paying AuM rose by 9% over the

quarter and 19% year-on-year to $158 billion. Ownership

weighted AuM for the period amounted to $30 billion. Strong

aggregate Partner-firm AuM and Aggregate Fee-paying AuM

growth are the basis for future earnings development and

highlight the positive operating dynamics and pricing power of

our high-quality Partner-firms. This growth has translated into

robust, recurring and high-quality earnings from our Partner-firms,

with fourth quarter Partner Distributable Earnings of $122m,

bringing full year 2021 to $382m, up 57% from 2020 and

positioning the business well for the years ahead.

The step-up in the Company’s earnings power is driven by the

continued acceleration of Partner fee-related earnings on the

back of strong fundraising and deployment across the Company’s

Partner-firms. These earnings are generated from a wide

footprint of businesses that are growing rapidly.

Petershill Partners is not reliant on any one firm, one fundraise,

one track record, one brand. A unique and differentiated aspect of

our business model arises from the diversification benefits that

the underlying Partner Funds provide, now, to 23 high-performing

asset management firms, giving the Company a distinctive

risk-adjusted earnings growth and a high quality of earnings.

Our total AuM at year-end comprises a diverse set of

predominately locked-up, long-term private equity and other

private capital funds and has a Weighted Average Capital

Duration of 8.1 years. Over 200 funds generate recurring

management fees and the opportunity for meaningful profit

participation, or performance fees, over the typical 8+ year

lifecycles of such funds. We believe our approach provides for

enhanced alignment with the key principals at each Partner-firm

and, as a result, allows the Company to participate in these

income streams in a way that provides high-margin, diversified

and stable cash flows for our shareholders.

Partner Fee-Related Earnings (FRE)

Partner FRE, drawn from management fees, grew 9% in the

quarter and 35% year-over-year to $211m, reflecting a 69%

partner FRE margin on $307m of partner net management and

advisory fees. This was driven by the combination of growth in

partner net management and advisory fees and a strong partner

FRE margin of 69% underpinned by our expense protections.

Expense protections include revenue share economic

arrangements, restricted compensation agreements, and

limitations on nonessential business expenses appropriately

tailored to each part of helping support alignment and recurring

margins at the Company level. These margin protections provide

a higher quality of earnings, reducing the volatility and increasing

the profitability of the business. Of the over 200 funds, the

largest partner FRE contribution by fund represents

approximately 7% of the aggregate, again highlighting the

diversified nature of the Company. In 2021, the partner blended

net management fee rate was 1.54%.

Operator’s report continued

Partner Realised Performance Revenues (PRE)

Partner realised performance revenues, which represented direct

participation in the upside performance of Partner firms’ funds and

products increased significantly in the quarter and year-over-year to

$129m for 2021 on the back of an attractive realisation

environment. Overall, approximately 27% of the partner revenue

over 2021 came from partner-realised performance revenues,

highlighting the management fee–centric nature of the Company’s

financial profile. The Operator has partnered with some of the

leading alternative asset managers and assists them in developing

their businesses with our growth capital and strategic partnership.

Partner-firms manage 179 different performance fee-eligible funds

at different stages of their life cycle. Due to this diversification, the

Company anticipates that Realised Performance Revenues will be

earned regularly from a wide range of funds going forward, making

them a “quasi-recurring” source of income within a range of 20–30%

of total Partner-firm revenues over the medium term, assuming

market conditions and environment are broadly supportive. The fact

that these earnings are drawn from dozens of different strategies

significantly dampens the volatility of this fee stream.

Partner Private Markets accrued carried interest was $649m at

31 December, 2021, increasing 158% from $251m at 31 December,

2020, reflecting strong Partner-firm performance.

Partner Realised Investment Income

As an owner in the Partner-firms, the Company shares in a

percentage of the investment and balance sheet income of

the Partner-firms and realises this through a number of direct

positions in the funds of underlying Partner-firms, known as

realised investment income which totalled $42m in 2021,

increasing 16% year-over-year from $36m, reflecting the

supportive realisation environment.

General Partner (GP) Services Available to

Partner-firms

The Operator’s value-added services capabilities, offering guidance

and strategic advice, have helped support our Partner-firms and

their businesses. The Operator collaborates with our Partner-firms

as they seek to scale and institutionalise their businesses, providing

guidance, best practice, and analytics through the Operator’s

‘GPServices Team’ and Platform. In 2021, there were elevated levels

of activity, bringing year-to-date interactions to a record level at

over 200 projects and interactions with Partner-firms, and

demonstrates the value that our Partner-firms place on this aspect

of the strategic partnership.

A consistent theme across our interactions today is the desire for

increasing focus on ESG and sustainability. In 2021, GP Services

released a module on ESG and has had particularly high

engagement levels on the topic. We think that will continue to

enhance and help to ensure that Partner-firms are in line with good

practice in this area. We believe this services platform represents a

distinct value proposition for our Partner-firms.

30 Petershill Partners | Annual Report 2021

Petershill Partners Operating Metrics

as of Dec-2021

(US$m, unless otherwise indicated)

Q4 31 December 2021

2021 2020 (Δ%) 2021 2020 (Δ%)

Aggregate Partner-firm AuM ($bn) 234 150 56% 234 150 56%

Aggregate Fee-paying Partner-firm AuM ($bn) 158 133 19% 158 133 19%

Partner Blended Net Management Fee Rate (%) 1.59% 1.50% +9 bps 1.54% 1.38% +16 bps

Implied Blended Partner-firm FRE Ownership (%) 14.3% 13.7% +62 bps 14.2% 14.0% +17 bps

Partner Net Management and Advisory Fees ($m) 84 67 25% 307 226 36%

Management Fees ($m) 78 58 34% 267 211 26%

Transaction and Advisory Fees ($m) 6 9 (36%) 40 15 165%

Partner Fee-Related Expenses ($m) (32) (21) 52% (95) (70) 37%

Partner Fee-Related Earnings (FRE) ($m) 52 47 12% 211 156 35%

Partner Realised Performance Revenues (PRE) ($m) 62 26 142% 129 51 153%

Partner Realised Investment Income ($m) 8 31 (75%) 42 36 16%

Partner Distributable Earnings ($m) 122 104 18% 382 243 57%

Partner FRE Margin (%) 60% 69% -9 pts 69% 69% -0 pts

Partner Distributable Earnings Margin (%) 79% 83% -5 pts 80% 78% +2 pts

Partner Realised PRE as a percentage of

PartnerRevenue (%) 40% 21% +20 pts 27% 16% +11 pts

Partner Realised PRE over Average Performance Fee

Eligible AuM* (bps) 3.4 bps 1.9 bps +1 bps 7.7 bps 4.6 bps +3 bps

Additional metrics:

Partner Private Markets Accrued Carried Interest ($m) 649 251 158% 649 251 158%

Investment capital ($m) 369 177 108% 369 177 108%

* Realised Performance Fee Revenues for the period divided by the Aggregate Average Performance Fee AuM. The Aggregate Performance Fee AuM Represents the average of the

beginning and ending period stated

1. Numbers and %s may not tie due to rounding. Represents key operating metrics that reflect data reported to the Operator on a three-month lag.

The data presented in this table for AuM and associated data reflect data reported to the Operator on a three-month lag.

Petershill Partners Operating Metrics (Appendix)***

as of Dec-2021

(US$m, unless otherwise indicated)

Q4 Q-on-Q FY 2021**

31 Dec 2021 30 Sep 2021 30 Jun 2021 31 Mar 2021 31 Dec 2020 (Δ%) (Δ%)

Aggregate Partner-firm AuM ($bn) 234 203 187 172 150 15% 56%

Aggregate Fee-paying Partner-firm AuM ($bn) 158 145 137 138 133 9% 19%

Average Aggregate Fee-paying Partner-firm AuM* ($bn) 141 137 125 120 117 3% 20%

Aggregate Performance Fee Eligible Partner-firm AuM ($bn) 208 178 169 154 141 17% 47%

Average Aggregate Performance Fee Eligible

Partner-firm AuM* ($bn) 167 157 141 n/a n/a 7% n/a

Additional metrics:

Partner Private Markets Accrued Carried Interest ($m) 649 575 419 321 251 13% 158%

Investment capital ($m) 369 264 253 226 177 40% 108%

* Average Aggregate AuM figures represent the simple average over a twelve month period based on Beginning and End of Period AuM. For Example, 31 Dec 2021 Average AuM figures

are based on the average of the balances as at 31 Dec 2020 and 31 Dec 2021

** Percentage change relative to Dec-31-2020

*** Represents key operating metrics that reflect data reported to the Operator on a three-month lag.

2022 Guidance

Headline Guidance

• Organic AuM growth: $40-45 billion FY 2022 gross fee paying

AuM raise. The Company’s full-year estimate for realisation and

reduction in fee paying AuM from more mature investment

programmes amounts to between $5 and $10 billion.

• Acquisitions: $100-300m across 3-6 transactions

• Dividends: Progressive policy. 2021 dividend based on a

full-year figure of $120m

• Company margin: 85-90% adjusted EBIT margin

Detailed Guidance

• Partner FRE Margin: Stable on an organic basis at c. 65-70%

• Partner FRE ownership: Stable on an organic basis at 13-14%;

which incorporates the $40 to $45 billion FY 2022 gross fee

paying AuM raise at a blended FRE ownership rate of 9.5%.

• Partner Blended Net Management Fee Rate: Stable on an

organic basis at ~1.5%

• Partner Realised PRE as a percentage of Partner Revenue: c.

20%-30% of total Partner Revenues

• Tax and Tax Equivalent: c. 12-14% on a medium term basis

31 Petershill Partners | Annual Report 2021

Key performance indicators

SETTING OUR PATH

Aggregate

Partner-firm AuM

At 31 Dec 2021

$234bn

Aggregate Fee-paying

Partner-firm AuM

At 31 Dec 2021

$158bn

Q4* Acquisitions

$458m

deployed across 5

Partner-firms

Investments in

Partner-firms at

FairValue

IFRS

$6.0bn (gross)

$5.5bn (net)

Growth

Profitability

Aggregate Partner-firm AuM is a

meaningful measure of the size,

scope and composition of the

Company’s Partner-firms, as well

as of their capital-raising activities.

This is an aggregated figure across

all Partner-firms and includes

Partner-firm AuM outside of

Petershill Partners’ ownership

interest in the Partner-firms.

Adjusted EBIT is an APM and a

key measure of profitability. It is

defined as the sum of revenues

including other income and

expenses before net finance

result and before income taxes,

and excluding non-recurring

charges related to the IPO.

The profit before tax is a

measure of profitability of

the Company and a key

performance indicator.

Aggregate Fee-paying

Partner-firm AuM is a

meaningful measure of the

Partner-firms’ capital base upon

which they earn management

fees, and the measure is used

in assessing the management

fee-related performance of

the Partner-firms.

The Company’s organic

Partner-firm growth prospects

are complemented

by inorganic growth

opportunities through the

acquisitions of additional

Partner-firm interests.

2022 guidance for acquisitions

is $100-300m across

3-6 transactions.

The fair value of the investments

in Partner-firms represents the

current value of the Company’s

investments. The net value is

attributable to Shareholders.

Partner Fee-related

Earnings (FRE)

Full year 2021

$211m

Partner Distributable

Earnings

Full year 2021

$382m

Partner Fee-related Earnings

(FRE) is a meaningful measure

of the management fee-related

earnings of the Partner-firms.

Partner Distributable Earnings is

a meaningful measure of the

overall profitability of the

Partner-firms and a KPI. It is

defined as the sum of Partner FRE,

Partner Realised Performance

Revenues (PRE) and Partner

Realised Investment Income.

Adjusted EBIT

APM

$106m

Profit Before Tax

IFRS

$261m

$234bn2021

2020

2019

$150bn

$121bn

$158bn2021

2020

2019

$133bn

$101bn

$211m2021

2020

2019

$156m

$122m

KPI:

Partner Fee Related Earnings (FRE)

$382m2021

2020

2019

$243m

$217m

Petershill Partners uses several key performance indicators (KPIs) to measure the progress

and performance of the Company over time. The Operator and Company use these key

operating metrics and Alternative performance measures (APMs) to help evaluate trends and

assess the performance of our Partner-firms and theCompany. Given the Company has not

been in operation for a full financial year, KPIs have not been benchmarked to targets.

Refer to glossary for detailed definition of Adjusted EBIT on page 130.

APM

32 Petershill Partners | Annual Report 2021

Number of Partner-firms

At 31 Dec 2021

(started as 19)

Partner-firm Funds

At 31 Dec 2021

212

Partner FRE Concentration

by Largest Fund

At 31 Dec 2021

Diversification

Quality of Partner-firm Earnings

Partner-firm funds are defined as the

underlying Partner-firm funds to which

the Company is exposed.

Partner-firms are defined as the

alternative asset managers in

which Petershill Partners owns

non-control positions.

Partner FRE Concentration by

Largest Fund is calculated as FRE from

the largest fund divided by total FRE,

and highlights the diversified nature

of the Company.

Partner Realised PRE as a

Percentage of Partner Revenue

Full year 2021

27%

Weighted Average Capital Duration

is a key measure of the long-term,

locked-up capital of Aggregate

Fee-paying Partner-firm AuM.

This KPI highlights the management-

fee-centric nature of the Company’s

financial profile.

Weighted Average

Capital Duration

At 31 Dec 2021

APM

8.1 yrs

2122021

2020

2019

174

115

APM

Alternative performance measure

Operating metric

The glossary on pages 123 to 125

includes definitions of the APMs and

reconciliation to the relevant

IFRSmeasures.

FY 2021 (1 January 2021

31 December 2021)

* Q4 2021 (1 October 2021 to

31 December 2021)

¢ Refers to US dollar cents

33 Petershill Partners | Annual Report 2021

Section 172 statement

DIRECTORS’ RESPONSIBILITIES

PURSUANT TO SECTION 172 OF

THE COMPANIES ACT 2006

The Directors are responsible for acting in a way that they consider, in good faith, is

most likely to promote the success of the Company for the benefit of its members as a

whole. In doing so, they have had regard to the factors set out in section 172(1)(a)

to (f) of the UK Companies Act 2006, which includes the needs of stakeholders

and the wider society.

As required by the Companies Act 2006, the Directors of the Company have had regard to wider stakeholder needs

when performing their duties under section 172. Details of the Company’s key stakeholders are set out on page 36.

In particular, the Directors recognise the importance of acting in a way that promotes the long-term success of the

Company to the benefit of its members as a whole.

Key decisions are those that are material or of strategic importance to the Company or are significant to any of the

Company’s key stakeholders, as described on page 36. The below key decisions were made or approved by the

Directors during the period, with the overall aim of promoting the long-term success of the Company for the benefit

of its members as a whole while considering the impact on its members, stakeholders, and the wider society.

Formore information on the approach to ESG please see page 39.

Key decisions

made by the

Board in 2021

Considerations of factors set out in section

172(1) in the decision-making process Outcomes as a result of these considerations

Listing as a public

entity – Initial

Public Offering

(IPO)

On 1 October 2021, the Company was listed on the

London Stock Exchange.

In making the decision on listing, the Board considered

its long-term strategy and how the Company’s listing

would support that strategy while having regard to the

Shareholders, Operator, impact on Partner-firms,

regulators, and other service providers. Please refer to

pages 4-5 for more information about our strategy

andpurpose.

The Board was mindful of the regulatory requirements

involved in listing the Company as a public entity and

engaged advisors such as corporate brokers, external

legal counsel and other service providers to provide

advice and support throughout the listing process.

Supported by the Operator and advisors, the Board

considered the changes and benefits, including access to

capital and growth opportunities, the listing would bring

to Shareholders and Partner-firms.

The primary outcome was the successful listing of the

Company as a public company and inclusion in the

relevant major market indices, which enables

Shareholders to have access to the profitability and

growth of the alternative asset management industry.

The additional primary capital raised as part of the

listing process provided the Company with funding for

future acquisitions of additional Partner-firm stakes,

including the five acquisitions that took place post

listing during the reporting period. These acquisitions,

and future ones undertaken by the Company, are

expected to add to growth.

Please refer to pages 8-11 for more information on the

delivery of our strategy and our business model.

34 Petershill Partners | Annual Report 2021

Key decisions

made by the

Board in 2021

Considerations of factors set out in section

172(1) in the decision-making process Outcomes as a result of these considerations

Appointment of

the Operator

The Board recognised the need for an Operator to

execute the Company’s strategy, drive growth for

existing Partner-firms and identify new acquisition

opportunities for the long-term success of the Company.

In selecting the Company’s Operator, the Board

considered the interests of the Partner-firms and

sought to enhance value creation for Shareholders.

Anypotential conflicts of interest were assessed and

considered in relation to the long-term success of

theCompany and to meet high standards of

businessconduct.

The Board considered the ESG policies and initiatives of

the Operator in selecting the Company’s Operator.

Please refer to pages 39-41 for more information about

the Operator’s approach to ESG.

The Board approved the appointment of Goldman Sachs

Asset Management as the Operator. The Board believes

that Goldman Sachs has an outstanding track record in

investing in alternative asset managers and is well

placed to support the Company’s delivery on its strategy

and purpose.

The Operator provides Partner-firms with capital and

strategic guidance and, as appropriate, leverages

Goldman Sachs’ resources and services to add value to

and foster the growth of Partner-firms.

The Operator’s value-added services capabilities,

guidance and strategic support have helped support our

Partner-firms and their businesses. Additionally, the

expertise, sourcing and resources of the Operator

provide the Company with access to highly attractive

and proprietary investing opportunities.

The fees paid to the Operator are set to align its

long-term interests with those of the Company and

itsShareholders.

The Management Engagement Committee, as set out on

page 58, was established to monitor and evaluate the

performance of the Operator with a view to ensuring the

Company’s long-term success.

Acquisition

Strategy and

Investment Policy

As a newly listed Company, the Board recognised the

need to establish policies, including the Acquisition

Strategy and Investment Policy, that align with and

support the core values, purpose, and strategy of

theCompany.

The Board considered the interests of Shareholders and

Partner-firms, and recommendations of the Operator,

inreviewing and approving the Acquisition Strategy and

Investment Policy.

The Board is committed to responsible investing

practices and has encouraged the Operator to consider

ESG best practices within its own organisation, and to

actively engage with these issues with its portfolio

companies when appropriate.

You can read more on our Acquisition Strategy and

Investment Policy on pages 19-21.

The Operator adopts an investing approach which

considers the Company’s diversification and

growthstrategy.

The Operator reviews ESG considerations in

the investment lifecycle of partnering with new

Partner-firms, from pre-acquisition to ongoing

Partner-firm engagement. ESG considerations are

evaluated as one of a number of measures of the

prospects of new Partner-firms.

Dividend policy

and payments

The Board has reviewed and approved the Company’s

dividend policy during the reporting period. For more

information on the dividend policy please refer to

page19.

In determining the appropriateness of the dividend

policy, the Board considered the interests of all its

stakeholders, ensuring a balance between the

short-term expectation of returns to Shareholders

and the longer-term growth opportunities and capital

needs of the Company.

The Board adopted a progressive dividend policy which

will reflect earnings growth over time, as outlined on

page 19. The Company’s Board will propose a dividend of

2.6 cents per share to Shareholders at the Annual

General Meeting on 31 May 2022.

35 Petershill Partners | Annual Report 2021

Our stakeholders

STAKEHOLDER

ENGAGEMENT

The Company’s stakeholders are key to our long-term success. Key stakeholders, and the Board’s

engagement with them, are described below, and their importance explained. Highlights of some

of the principal decisions that have been made as a result of this engagement can be found within

the section 172 statement as outlined on page 34 and 35.. Given the Company has no employees,

it has a low-cost operating model, and the Directors have all been appointed on a Non-Executive basis.

Petershill Partners must therefore rely upon the Operator to perform certain executive functions,

and must rely on other third-party service providers, including the Administrator, to perform other

administrative and operational functions.

Stakeholder How the Board engages

Shareholders,

prospective

Shareholders and

lenders

support critical to

oursuccess

• receives investor relations updates from the Operator at every Board meeting, with a comprehensive report

delivered twice a year

• engages regularly with the corporate brokers, and receives frequent market and trading updates

• communicates with Shareholders and lenders through the Operator; financial reporting and updates

published on the Company’s website

• meets Shareholders through general meetings

• the Chairman has met Shareholders and continues to be available to Shareholders

• holds strategy meetings to ensure the Board is acting in Shareholders’ and lenders’ best interests

Goldman Sachs Asset

Management

(the Operator)

fundamental to

business model and

overall strategy

• oversees the performance of investment management services that are integral to the Company’s operations

and financial performance

• active dialogue and regular meetings with the Operator

• open, respectful, and clear communication, with constructive challenge and a strong partnership ethos

• detailed monitoring of the Partner-firms and investment process

• strategic planning with the common goal of helping the Company fulfil its purpose

• visits the Operator’s office

• requests ad-hoc meetings and updates as necessary

• works with the Operator to evolve Board reports and share insights

Community

full support of ESG as

integral to the

Company’s success

• addresses Partner-firms’ ESG policies and initiatives

• addresses service providers’ ESG policies and initiatives

• for additional information on the impact of the Company’s operations on the community and the environment

please refer to page 39-41

Partner-firms

effective relations to

facilitate growth

• maintains regular dialogue with the Operator on partnerships

• receives formal Partner-firm performance review from Operator

Administrator • relies on the Adminstrator to maintain books & records

• relies on the Administrator to provide depositary services and secretarial services

Service providers

effective relations to

foster compliant and

efficient operations

• maintains regular interaction as part of the provision of services

• receives reports from core service providers at Board meetings

• formal performance review conducted annually

• receives updates from the Operator on dialogue with lenders

Regulators • engages with regulators in a transparent manner, completing required filings and other submissions and acts

responsively and thoughtfully in relation to any inbound queries

36 Petershill Partners | Annual Report 2021

Engagement with Stakeholders

The Company reports to Shareholders in a number of formal ways,

including its annual report, interim report and regulatory news

releases, all of which are approved by the Board. The Annual

General Meeting (AGM), detailed below, is used as a forum for the

Board and Operator to communicate Company performance and

future plans and prospects. It is expected that members of the

Board will be in attendance (subject to COVID-19 guidance and

public health restrictions at the time of the AGM) and will be

available to answer any Shareholder questions. The Company’s

website contains comprehensive information for Shareholders

and provides regular market commentary.

In addition, the Chairman’s, Company Administrator’s and

Operator’s contact email addresses are also available for

Shareholders to contact outside of the AGM. The Operator and

Chairman have had a number of meetings at investor requests

since listing. The Board invites representatives from its brokers to

provide regular analysis of Shareholder movements, industry

changes and contact with investors. The Board seeks to engage

with the Operator and other service providers in an open manner,

encouraging constructive discussion. This approach enhances

service levels and strengthens relationships to deliver the highest

standard of service at a competitive cost, ensuring Shareholders’

interests are best served.

Employees, Social, Human Rights,

Environment and Community Issues

The Board recognises the requirement to provide information about

employees, social, human rights and community issues. As the

Company has no employees, all its Directors are Non-Executive

and all its functions are outsourced, there are no disclosures to be

made in respect of employees, social, human right and community

issues. Further information on the Company’s approach to

environmental, social and governance (ESG) matters is provided

on page 39. We recognise our responsibility to help protect,

preserve and promote human rights around the world. The Board

supports statements made by the Operator’s parent company,

TheGoldman Sachs Group, Inc., on human rights, modern slavery,

and human trafficking. As the Company has outsourced operations

to third parties, there are no significant greenhouse gas emissions

or other environmental matters to report in relation to the

operation of the Company. The Board encourages all service

providers associated with the Company to consider matters of

diversity and inclusion and report on progress to the Board annually.

Listing

On 1 October 2021, the Company was admitted to the premium

segment of the Official List of the FCA and was admitted to trading

on the London Stock Exchange plc’s main market for listed

securities, raising $747m in gross proceeds and net proceeds of

$720m. The Company issued a Prospectus in advance of listing, and

the Directors, Operator and the Company’s brokers engaged with

analysts and potential investors throughout the process.

About the Partnership

Kayne Anderson Real Estate (“KA Real Estate”) is a leading real estate private

equity investor in medical office, senior housing, off-campus student housing and

multifamily housing. KA Real Estate manages approximately $13 billion of real

estate AuM (as of year-end 2021) across opportunistic equity, core equity and

real estate debt, and has completed over $24 billion of gross investments across

its equity and debt strategies.

Petershill’s partnership has supported our accelerated growth,

having contributed to our new platform initiatives and the

expansion of our existing first-class base of global limited partners.

We are thankful for their ongoing support as we continue to grow

and deliver results for our investors.

Albert Rabil III

CEO, Kayne Anderson Capital Advisors

CEO and Co-Founder, KA Real Estate

PARTNER-FIRM PROFILE

37 Petershill Partners | Annual Report 2021

Investment Policy

The Company seeks to achieve its investment objective through

acquiring stakes in alternative asset managers, via direct

investments representing a non-control ownership position in

alternative asset managers. The Operator adopts a responsible

investing approach which takes into account the Company’s ESG

principles and strategy, as outlined on on pages 39-41. The Board

has reviewed and approved the Acquisition Strategy and

Investment Policy (page 19). The Company reports to the

Shareholders through regulatory news releases, using the London

Stock Exchange Regulatory News Service and interim and annual

reports. Any new investments are announced immediately, and

portfolio updates, realisations, valuation updates and distribution

announcements are all communicated in a timely manner

through these means.

Dividend Policy

The Board has reviewed and approved the Company’s dividend

policy during the period. The Company’s dividend policy can be

found on page 19. The Company’s Board will propose a dividend

of 2.6 cents per share to its Shareholders at the Annual General

Meeting on 31 May 2022.

Board Committees

The Board has formed an Audit and Risk Committee, Nomination

Committee, Remuneration Committee and Management

Engagement Committee in order to establish a good corporate

governance framework for the Company. The chairperson of each

committee will attend the AGM to answer any questions on their

committee’s activities.

Annual General Meeting

The AGM of the Company will be held at 1pm BST on 31 May 2022

at the Goldman Sachs London office (subject to COVID-19 guidance

and public health restrictions at the time of the AGM). Details of

the resolutions to be proposed at the AGM, together

with explanations, will appear in the notices of meeting to be

distributed to Shareholders in April 2022. As a matter of good

practice, all resolutions will be conducted on a poll and the results

will be announced to the market as soon as possible after the AGM.

Employees and Officers of the Company

The Company does not have any employees and therefore employee

policies are not required. Because there are no employees of the

Company it is not possible to provide a breakdown between

employees and senior managers. The Directors of the Company are

detailed on pages 50-51. As at the date of this report, the Board

comprises three men and two women, all are Non-Executive Directors

who are considered to be independent of the Operator and free from

any business or other relationship that could materially interfere

with the exercise of their independent judgement.

Our stakeholders continued

PARTNER-FIRM PROFILE

About the Partnership

Arsenal Capital Partners is a North American private equity firm specialising in

buyout and growth investments in middle-market industrials and healthcare

companies. Arsenal was founded in 2000 and is headquartered in New York, NY.

The Petershill investment supports the continued

institutionalisation of Arsenal and will facilitate growing and

strengthening our market-leading private equity firm. We

look forward to building a strategic partnership, and believe

the relationship will enhance our brand, market intelligence,

networks, resources and expertise. We are thrilled to be

partnering with the best-in-class Petershill team with whom

we have developed a genuine and quality relationship that

we look forward to building upon for decades ahead.

Terry Mullen

Managing Partner, Arsenal Capital Partners

38 Petershill Partners | Annual Report 2021

ESG commentary

ENVIRONMENTAL, SOCIAL AND

GOVERNANCE (ESG)

COMMITMENTS

Sustainability is becoming increasingly important for asset

management firms in response to the challenges faced by

businesses and the world at large. These challenges include

environmental factors such as climate change and pollution,

social concerns such as diversity and inclusiveness, and

governance issues such as the need for equitable employee

compensation and transparent governance.

The EU Sustainable Finance Disclosure Regulation (“SFDR”)

(Regulation (EU) 2019/2088) has applied since 10 March 2021

pursuant to Article 11 of SFDR (Transparency of the promotion of

environmental or social characteristics and of sustainable

investments in periodic reports). Goldman Sachs Asset

Management Fund Services Limited is required to provide a

description of the extent to which environmental or social

characteristics have been met with reference to funds providing

disclosures pursuant to Article 8 (1) of SFDR and Article 9 of

SFDR. The Company does not provide disclosures pursuant to

either of these articles.

As an investment company without employees or physical

operations, the Company does not directly engage in activities

that impact the environment or the community. Although the

Board has delegated the responsibility for making individual

investment decisions to the Operator, the Board is committed to

responsible investing practices and has encouraged the Operator

to consider ESG best practices within its own organisation, and to

actively engage on these issues with its portfolio companies when

appropriate. The Operator will report annually to the Board on

updates to ESG best practices and approach, as well as on

Partner-firm ESG updates.

Goldman Sachs as the parent company of the Operator has

established policies and procedures governing its own employees’

conduct. Please refer to its Code of Business Conduct and Ethics.

Please also refer to the Goldman Sachs Sustainability Report for

additional information about Goldman Sachs’ commitment to

sound governance and a responsible approach to environmental

and social risks.

Goldman Sachs’ and Goldman Sachs Asset

Management’s Approach to ESG

ESG is a topic of increasing importance in the world of investing.

The topic of ESG is not new to the Operator of Petershill Partners.

Goldman Sachs has a long-standing focus on advancing

sustainable finance, and the Operator considers ESG factors

in its processes for identifying investment risk and capturing

opportunity. More information about Goldman Sachs’ and

Goldman Sachs Asset Management’s approach to ESG can be

found on their websites.

39 Petershill Partners | Annual Report 2021

ESG considerations are integrated into the investment lifecycle,

from pre-acquisition research to ongoing Partner-firm

engagement. The investment team considers ESG risks and

opportunities as part of the acquisition due diligence process.

All investment proposals submitted to the Petershill Investment

Committee for consideration include an assessment of ESG as one

of many factors in the due diligence for Partner-firm acquisitions.

TheESGconsiderations are primarily focused on:

• Firm ethos — The extent to which the Partner-firm is

committed to ESG and incorporates sustainable practices into

the management of its business

• Investment philosophy — The degree to which ESG is viewed

as a material driver of risk and returns

• Team and resources — The depth, breadth and organisation of

the team incorporating ESG, and the level and use of other

external resources

• Investment process — The degree to which ESG-related

factors are formally incorporated into the investment process

with the objective of enhancing risk-adjusted returns

• Portfolio engagement — The level and type of engagement

with portfolio companies on ESG and the ability to add value

post investment and the degree to which this is reflected

inoutcomes

After the investment has been made, the GP Services team

collaborates with the Partner-firms’ management teams and

offers to engage in relevant areas to address ESG matters. The GP

Services team seeks to collaborate with the management teams

at our Partner-firms to help them embed best-practice ESG

policies, processes and systems. Theintegral relationship with

Goldman Sachs provides access to extensive resources in

addressing with this important topic.

The Company believes it is important to align with Partner-firms

which incorporate a proactive ESG strategy in their investment

process, and also believes that businesses that promote and

embrace diversity will be more successful over time. Hiring,

developing and promoting people with a broad and diverse set of

experiences and world views is central to serving clients and

being an employer of choice. In addition to investing in a number

of minority-led Partner-firms, the Operator team seeks to

leverage the learnings of Goldman Sachs, building on its Global

Inclusion and Diversity Committee structure, in sharing resources

with Partner-firms.

• ESG diligence on all new Partner-firm acquisitions

• Quantitative assessment as part of acquisition-factor framework

• Focus on firm ethos, investment philosophy/process, resources and portfolio engagement

• ESG-focused modules are produced by our General Partner Services team, which is focused on value

creation

• Sharing of industry best practices through diagnostic exercises which help identify potential

development opportunities

The Operator’s Approach to ESG at Petershill Partners

Petershill Partners focuses on sustainability throughout its business

Acquisition due

diligence

Ongoing

Partner-firm

engagement

ESG commentary continued

40 Petershill Partners | Annual Report 2021

UNPRI

Goldman Sachs Asset Management became a signatory to the

United Nations Principles for Responsible Investing (UNPRI) in

December 2011. As a signatory, the Operator has committed to

considering the investment implications of ESG issues within its

portfolio management and investment decision-making

processes where appropriate. The Operator reports annually to

the UNPRI on its ESG and impact-investing commitment and

activities, and publicly discloses the report on its website.

About the Partnership

Founded in 1981, Harvest Partners

is an established private equity firm

with a nearly-40-year history of

investing in middle-market companies

and partnering with high-quality

management teams to acquire

and build growing businesses.

PARTNER-FIRM PROFILE

While price was an important input, it was not the key determinant for Harvest in

choosing a partner. What we recognized early, and what ultimately attracted us to

Petershill, was a like-minded commitment to excellence and an emphasis on trust and

transparency as the foundation for a new relationship. Selection of Petershill was

driven by this shared philosophy around partnership, trust and culture, and our

experience with them has exceeded our expectations. Access to the vast resources of

Petershill and Goldman Sachs is invaluable, and we look forward to expanding further

our partnership and collaboration as we continue to scale and grow our business.

Mike DeFlorio

Chief Executive Officer, Harvest Partners, LP

Jay Wilkins

President, Harvest Partners, LP

41 Petershill Partners | Annual Report 2021

PRINCIPAL RISKS AND

UNCERTAINTIES

Risk Management

Our Risk Management Approach

The Board believes a good risk culture enables effective

management of risk. An open and transparent environment

which encourages the Operator and advisors to embrace risk

management is critical to the achievement of the Company’s

strategic objectives. Our cultural framework is set out on page 63.

On behalf of the Board, the Audit and Risk Committee reviews the

effectiveness of the Company’s risk management processes,

focusing on the assessment of current identified principal risks

and the process to identify emerging risks. The Audit and Risk

Committee, with support from the Operator, carries out a robust

assessment of the principal risks facing the Company by

providing a risk matrix to the Board for review and discussion,

onat least an annual basis, and also as and when it is thought

necessary by the Audit and Risk Committee and the Board.

TheOperator prepares the risk matrix, which sets out the key risks

faced by the Company, their likelihood and impact, and the

associated control procedures and mitigating measures. The

Audit and Risk Committee reviews the risk matrix, providing an

independent assessment, oversight and challenge of the risks

identified. The Audit and Risk Committee, which meets at least

four times a year, also monitors and reviews the adequacy and

effectiveness of internal control and risk management systems

and advises the Board on the Company’s overall risk appetite.

The Operator, as delegated by the Board, provides portfolio

management and risk management services to the Company.

TheOperator is accountable for the application and execution of

the Company’s investment strategy, and therefore has a key role

in managing the Company’s risk. The Operator, in its normal

course of business, faces various risks and leverages the “three

lines of defence” model employed by Goldman Sachs to delineate

the roles and responsibilities for risk-taking, risk management

and risk assurance activities for the Company.

• The first line of defence is the Goldman Sachs Asset

Management Petershill Group, which is responsible for

implementing effective internal controls and maintaining

processes for managing risks of the Operator

• The second line of defence is the independent risk oversight

and control functions of Goldman Sachs, which provide

independent assessment, oversight and challenge of the

risks taken by the first line of defence. Independent risk

oversight and control functions include Goldman Sachs’

Conflicts Resolution Group, Controllers, Global Compliance,

Legal, Risk, and Tax functions

• The third line of defence is Goldman Sachs’ Internal Audit

division, which ensures independent risk assurance to senior

management, the Board of Goldman Sachs and regulators

that the governance, risk management, and control activities

of the first and second lines of defence are effective.

Principal risks

Risk Appetite

The Audit and Risk Committee advises the Board on the

Company’s overall risk appetite, identifying the level and types

of risks the Company is willing to take in order to achieve the

Company’s strategic objectives. The Board reviews and monitors

the risk appetite as part of its review of the risk matrix.

The risk appetite for each of the Company’s principal risks during

the reporting period is indicated in the table presented on the

following pages.

Principal Risks and Uncertainties

The Company’s underlying investments are high-risk and illiquid

assets within the alternative investment industry. Its principal

risks are therefore related to revenue generated by the

alternative asset managers in which the Company invests and the

performance of the Partner-firms, their funds, and the products

they manage. The Operator seeks to mitigate these risks through

active engagement and action as outlined in the Acquisition

Strategy and Investment Policy (pages 19-21) and by carrying out

due diligence work on potential targets before entering into

anyinvestments. The Company’s business model involves the

acquisition of non-control investments in independent Partner-

firms, and although the Company has certain controls as part of

contractual rights, the Company does not control the risk

tolerance of the underlying Partner-firms.

The Board thoroughly considers the process for identifying,

evaluating and managing any significant risks faced by the

Company on an ongoing basis, and these risks are reported and

discussed at Board meetings. The Board ensures that effective

controls are in place to mitigate these risks and that a

satisfactory compliance regime exists to ensure all applicable

local and international laws and regulations are upheld.

For each material risk, the likelihood and impact are identified,

management controls and frequency of monitoring are

confirmed and results are reported to and discussed by the

Auditand Risk Committee on at least an annual basis, or more

frequently as thought necessary by the Audit and Risk Committee

and the Board. The Audit and Risk Committee has reviewed the

Company’s risk management process and has evaluated the

principal and emerging risks, which are discussed in the

pagesfollowing.

42 Petershill Partners | Annual Report 2021

The key areas of risk faced by the Company and mitigating measures are summarised below:

Description/Impact Mitigating Measures Likelihood Impact

Risk

Tolerance

Strategy / Investment Risk

1. Alternative

Assets Industry

Risk

The alternative investments industry

may not grow at the same rate as it

has in the past, in line with forecasts

or at all. If the alternative

investments industry does not grow

sufficiently, whether as a result of

evolving laws and regulation, the

effects of the COVID-19 pandemic or

any other risk, the Company’s

investments may not produce

attractive returns and the Operator

may not be able to identify additional

investment targets on suitable terms

or at all. In addition, industry

dynamics could negatively impact the

fee rates that managers in the

alternative investments industry are

able to charge, which could

negatively impact the Company’s

income from Partner-firms derived

from management fees.

The Company believes it is set up

to benefit from recent trends and

evolving opportunity drivers, including

increasing demand for alternative

investments both from institutional

investors based on increasing

allocations to alternative investments,

and from retail investors and due to

changes in regulatory permissioning

(see page 16 for more detail).

Additionally, the Company’s revenue

streams are diverse and are composed

substantially of income from Partner-

firms derived from management fee

income on contractually committed,

long-dated assets, therefore minimizing

the concentration of risk.

Low Medium Low

2. Partner-firm

Revenue Risk

The Company’s revenue is largely

dependent on the management fees

generated by the Partner-firms in

which the Company invests. The

Company’s revenue is also largely

dependent on the performance of

their funds and the products they

manage, as well as the growth and

profitability of their businesses. The

Company is therefore exposed to the

risk that the Partner-firms may not

be able to generate adequate

management fees and performance

fee-related earnings. Additionally,

the investments made by the

Partner-firms include high-risk,

illiquid assets. The Partner-firms may

not be able to sell or otherwise

dispose of investments in their funds

when they desire and therefore may

not be able to realise the full value of

such investments, resulting in impact

to performance related-fees.

The Company has exposure to the fee

income from a set of 23 Partner-firms

and 200+ underlying funds that pursue

investment opportunities that are

diversified across geographies, industry

sectors, strategies and time horizons.

Over time the Company will continue

to seek to add new Partner-firms

to its portfolio, providing further

diversification to the portfolio.

Additionally the Company’s earnings

model is based on the recurring nature

of its revenues from a capital base that

is long-term and stable, with locked-up

funds representing 87 per cent of our

Partner-firm Total AuM, and has a

Weighted Average Capital Duration of

8.1 years. In addition, the Company

maintains structured non-control

investment protections that provide for

stable recurring cash flows across

turbulent periods.

Low Medium Low

3. Investment

Diligence Risk

The due diligence process that the

Operator undertakes in connection

with investments may not reveal

all facts that may be relevant in

connection with an acquisition.

Anyshortcomings in the due

diligence process in respect of the

Company’s investments, including as

a result of fraud by the seller or

target, could result in diminished

returns or losses on the acquisitions

by the Company compared to the

financial projections used when

evaluating such partnership.

Investment decisions are underpinned

by an established and rigorous

investment due diligence process to

determine the feasibility and

attractiveness of an investment.

TheOperator has a track record of

evaluating and undertaking diligence

exercises on minority stakes in

alternative asset managers, and also

extensive expertise in negotiating and

structuring bilateral contracts which

govern the minority investor rights.

Foreach potential acquisition, the

Operator conducts due diligence of the

following types: Partner-firm diligence,

product diligence, asset-level diligence,

operational due diligence, legal

diligence, and audit and tax diligence.

Low Medium Low

43 Petershill Partners | Annual Report 2021

Description/Impact Mitigating Measures Likelihood Impact

Risk

Tolerance

Market / Regulatory Risk

4. Macroeconomic

Risk

The global financial markets and

business climate may deteriorate,

including due to volatile interest

rates or inflation, reduced

availability of credit, changes in laws

and regulation, terrorism or political

uncertainty and severe public health

events such as the COVID-19

pandemic. In addition, volatility and

disruption in the equity and credit

markets can adversely affect the

underlying earnings of the Partner-

firms and the value of their earnings,

and therefore the Company’s

balance sheet and income.

Rising interest rates may result in

reduced Partner-firm Performance-

related Earnings both in frequency

as assets are held for longer, and in

quantum as multiples of realisation

are lower. The impact of inflation on

returns may challenge the ability of

Partner-firms to enhance operating

margins given the challenges of

rising costs and may potentially

impact profitability.

The Company’s revenue streams are

diverse and are composed substantially

of contractually committed, high and

stable income derived from Partner-

firms’ management fee income on

long-dated assets. Additionally, there is

a rigorous investment due diligence

process which includes detailed

financial and valuation analysis and

stress testing to ensure investment is

resilient across varying factors

andoutcomes.

Expectations of rising rates have

historically been considered a threat to

the leverage capital structures of

private-equity-owned-assets; however

the Operator saw little in terms of

bankruptcy or restructuring emanating

from the demand shocks of 2020 and

2021 due to the COVID pandemic. While

not insulated from the impact of rising

rates, it is expected that leveraged firms

will not exhibit the same level of

sensitivity as in prior periods of rising

interest rates. Additionally, real asset,

credit and absolute return firms may

potentially benefit from increases in

rates and inflation, as these asset

classes have historically presented a

hedge to rising rates and inflation.

Medium High Medium

5. Regulatory Risk

The Company and the Operator are

subject to extensive laws and

regulation in various jurisdictions.

These laws and regulations (and the

interpretations thereof) may change,

and the imposition of stricter laws

and regulations could result in

increased compliance costs for the

Partner-firms and the Operator or

could limit their operational

flexibility and efficiency. The

Company is also subject to listing

rules and IFRS accounting.

Moreover, governmental policy

changes and regulatory or tax

reform (for example, in relation to

prevailing tax rates, the treatment of

a foreign corporation as such, or the

treatment of carried interest) could

also have a material effect on the

Operator and/or the Partner-firms

and their funds and the products

they manage.

The Operator, Board and Administrator

have established policies, procedures

and oversight functions to ensure

compliance with applicable laws and

regulations. Changes to the regulatory

framework, as well as compliance with

all reporting, notifications and filing

requirements are closely monitored.

TheOperator also leverages the

expertise of its external tax and legal

counsel and other advisors as needed to

analyse the impact of potential

governmental policy changes and

regulatory or tax reform.

Low High Low

Principal risks continued

44 Petershill Partners | Annual Report 2021

Description/Impact Mitigating Factors Likelihood Impact

Risk

Tolerance

Operational Risk

6. Key Persons

Risk

The Operator relies on highly skilled

qualified investment professionals.

Because the Operator will perform

investment management services

that are integral to the Company’s

operations and financial

performance, a failure by the

Operator to retain its senior

leadership or to recruit and retain

additional qualified investment,

sales and other professionals could

have a material adverse effect on the

Company’s investment performance

and, as a result, its business,

financial condition, results and the

value of its assets.

The Operator benefits from the global

footprint of Goldman Sachs, whose

professional employees possess a

combination of deep industry knowledge,

financial expertise and operating

capabilities. The Board believes that the

Operator has appropriate experience and

expertise to implement the Company’s

investment policy and strategies

successfully. Astrong culture of

excellence is essential to attract and

retain the best talent. The Operator’s

strategy for its human resources is

focused on attracting individuals with

drive and values aligned with its wider

team and retaining and rewarding those

individuals who make an exceptional

contribution to the team.

Medium Medium Low

7. Operator,

Administrator,

and Service

Provider

Resiliency and

Performance Risk

The Company has no employees

and relies on the Operator,

Administrator, and other service

providers. Failure by the Operator or

other third-party service providers to

the Operator, the Administrator, and

other service providers to carry out

its or their obligations could have a

material adverse effect on the

Company’s performance.

The Company has entered into detailed

agreements with the Operator,

Administrator and other service providers

and the performance of all service

providers is formally reviewed annually.

The Board believes this risk is mitigated

by the fact that the Operator and the

Administrator are well-established and

resourced companies with robust track

records. Both have robust business

continuity plans in place, which are

updated and tested on an ongoing basis,

to ensure the continued ability to service

the Company in the event there are

disruptions of normal operations.

Low High Low

45 Petershill Partners | Annual Report 2021

Description/Impact Mitigating Factors Likelihood Impact

Risk

Tolerance

Operational Risk continued

8. Partner-firm

Reporting Risk

The Operator depends on the

continuation of its relationships with

Partner-firms in order to maintain

current data on its investments and

private market activity. Restrictions

on the Operator’s ability to use the

data it obtains for its reporting and

monitoring processes could adversely

affect its ability provide the same

level of disclosure for the Company,

which could have a material adverse

effect on theCompany.

The Operator has contractual

information rights in place for all

Partner-firms, which all specify timing

in relation to communicating

information, to provide the Company

with sufficient information for its

regulatory reporting requirements.

TheOperator has implemented

processes to review certain financial

and other information reported by

the Partner-firms and assess

forreasonableness.

Low Medium Low

9. Cyber /

Information

Security Risk

Cyber and security risks could

adversely affect the Operator and

the Company. The Operator and the

Company rely on its information

technology infrastructure to conduct

daily business operations, and any

cybersecurity attacks or threats to

this infrastructure could result in

business disruption and the breach

of confidential and proprietary

information.

The Operator is committed to

implementing the highest standards of

information security to protect the

privacy and confidentiality of information

related to its activities. The Operator has

implemented processes, procedures and

internal controls designed to mitigate

cybersecurity risks and cyber intrusions,

including maintaining physical,

electronic and procedural safeguards to

protect the information against loss,

misuse, damage or modification and

unauthorised access or disclosure.

Additionally, the Operator has a

dedicated Security Incident Response

Team which handles information security

threats and incidents that may have an

impact on the confidentiality, integrity or

availability of the Operator’s information

and technology environment.

Low High Low

Principal risks continued

46 Petershill Partners | Annual Report 2021

Emerging Risks

Emerging risks are risks to which the Company is exposed and are

uncertain in terms of their impact and timelines. These risks have

the potential to become principal risks but are not yet considered

to be so.

The Company’s Audit and Risk Committee is responsible for carrying

out a robust assessment of the emerging risks, and overseeing

procedures for identifying emerging risks as well as procedures for

managing these risks. The Audit and Risk Committee will meet at

least four times a year and, as part of its responsibilities, will identify

and assess any emerging risks to be referred to the Board for review.

This process includes monitoring the external environment for

global trends or potential changes that may impact the drivers of

growth and performance of the Company. Emerging risks may also

arise from internal factors. Monitoring pressure points on

operational processes, personnel and third-party vendors is another

avenue for identifying emerging risks. The monitoring and

management of emerging risks include ongoing assessments of the

time horizon in which an emerging risk may potentially become a

principal risk and the level of impact to the Company if it were to

become a principalrisk.

Since the IPO, the Company has witnessed significant geopolitical

turbulence and the continuing effects of the COVID-Pandemic, as

well as a broader market sell-off in the alternative asset

management sector and a rotation out of higher-growth stocks as

markets anticipated a rise in interest rates.

More specifically, the Company has identified the following

emerging risks that it believes are most significant:

1. Geopolitical risk: In addition to recent challenges to supply chains

stemming from COVID, the Russia-Ukraine war has added to

inflationary pressures and may also impact the rising interest rate

environment that economists forecast over the next few years. This

can have significant impacts on global and localised growth, as well

as the profitability of underlying investments of our Partner-firms.

Petershill Partners has been built to be resilient in challenging

periods, with a long-term durable capital base and significant

diversification. A number of Partner-firms such as real asset focused

firms may also be particularly insulated. Nevertheless, these risks

are emerging and interlinked and so could present headwinds for

the business.

2. ESG/Climate risk: Sustainability is becoming increasingly

important for asset management firms in response to the

challenges faced by businesses and the world at large. These

challenges include environmental factors such as climate

change and pollution, social concerns such as diversity and

inclusiveness, and governance issues such as the need for

equitable employee compensation and transparent governance.

As the ESG landscape continues to evolve, the Company and its

Partner-firms will need to adapt to the potential impact to its

investment strategies and processes.

Viability Statement

In accordance with the UK Corporate Governance Code and the

Association of Investment Companies (AIC) Code, the Board has

assessed the viability of the Company. The Board has considered

the Group’s strategic plan as well as the Group’s principal risks in

its assessment. While the strategic plan of the Group covers a

substantially longer period, the Board has chosen a period of

three years to December 2024 for its formal assessment of

viability on the basis that assumptions made during this period

are the most reliable due to the visibility of earnings from

investments in Partner-firms. The Board is satisfied that this

forward looking assessment of the Group is sufficient to enable a

reasonable statement of viability.

The assessment reflects on the Group’s strategy as outlined on

pages 17 to 21. Key assumptions in the assessment are:

• The investments in Partner-firms are long-term investments

with no plan to exit

• The amount and timing of returns from investments in

Partner-firms comprised of management fee income,

performance fee income and investment income

• The operational costs of the Group.

The assessment of viability requires the Board to consider the

principal risks to the Group, which appear on pages 42 to 46.

While all of the risks outlined may have an impact on the Group’s

performance, there are certain risks that are more likely to have a

greater impact on the future solvency and liquidity of the Group

in the three year period considered.

Partner-firm revenue risk – the risk that Partner-firms are not

able to generate adequate fees that would result in lower than

expected revenue for the Group

Macroeconomic risks – Volatility in the markets may affect the

Partner-firms’ ability to realise investments, which could delay or

reduce the income Group is expected to earn

The Group’s investments in Partner-firms are long-term and the

Group has no exit strategy for its investments. As a result, the

Group expects long-term recurring revenues from its investments

in Partner-firms. Income from investments in Partner-firms is

derived from management fee income, performance fee income

and investment income. Management fee income is typically

based on private capital commitment funds managed by the

Partner-firms that are locked up for a period of 8 or more years.

The income from management fees is therefore stable and

recurring. Income derived from performance fee income and

investment income from Partner-firms is dependent on

underlying fund and underlying investment performance of the

Partner-firms.

The Group has a low, and relatively stable, cost structure.

TheOperator charge is variable and based on the income earned

by the Group from its investments in Partner-firms. The other

operating expenses and finance costs are considerably lower than

the income derived from management fee income.

The Group has a strong balance sheet with substantial funding

headroom in place and notes payable out to 2039 as outlined on

page 102.

The Board reviewed the key risks and considered options

available to the Group to mitigate these risks and to ensure

viability of the Group.

Stress testing has been performed, which considers the impact of

the Group’s key risks over the three year period to December

2024. A severe but plausible scenario was assessed, which

includes a 100% reduction in income from Partner-firms derived

from performance fee income and investment income as a result

of underlying fund and underlying investment performance risk

of the Partner-firms. This translates to a substantial reduction

in overall income from Partner-firms, over the three years.

This reduction may be a result of Partner-firm revenue and

macroeconomic risks.

47 Petershill Partners | Annual Report 2021

Principal risks continued

The assumptions behind the scenario includes maintaining the

Group’s dividend policy and plan to invest in additional Partner-

firms but this could be reassessed if the circumstances

determined this to be necessary. The Operator charge is based on

the amount of income from Partner-firms and therefore changes

commensurate with the change in income from Partner-firms.

The Group’s ability to pay its expenses, including the Operator

charge, can continue under the severe but plausible scenario.

The Board’s has concluded that it has reasonable expectation that

the Group will be able to continue in operation and meet its

liabilities as they fall due, for the next three years to December

2024. The Board’s assessment has been made with reference to

the Group’s current position, the Group’s outlook, its strategy and

the Group’s principal risks.

Given the above, the Board also considered it appropriate to

prepare the financial statements on the going concern basis as

set out on page 94.

Going Concern Statement

In accordance with the Companies Act 2006, the Board has a

responsibility to evaluate whether the Group has adequate

resources to continue its operational existence for the

foreseeable future and at least for the 12 months following the

issuance of the financial statements.

The Group’s business activities are set out in the Strategic Report

on pages 8 to 11. The financial position of the Group is described

in the Operator’s Report on pages 26 to 31. The Board has taken

into account the Group’s risk management process set out on

pages 42 to 48. The Board has made an assessment of going

concern, which takes into account the current performance and

the Group’s outlook, using information that is available as of the

date of these financial statement.

The Group’s business model involves earning income from

investments in Partner-firms. The Group’s investments in

Partner-firms are long-term and the Group has no exit strategy

for its investments. As a result, the Group expects long-term

recurring revenues from its investments in Partner-firms. Income

from investments in Partner-firms is derived from management

fee income, performance fee income and investment income.

Management fee income is typically based on private capital

commitment funds managed by the Partner-firms that are locked

up for a period of 8 or more years. The income from management

fees is therefore stable and recurring. Income derived from

performance fee income and investment income from Partner-

firms is dependent on underlying fund and underlying investment

performance of the Partner-firms. TheGroup has good visibility

into the income from investments inPartner-firms.

The Group has a low, and relatively predicable, cost structure.

When taken together with the visibility into the income from

investments in Partner-firms, the Group has reasonably

stableearnings.

During the year, the Group’s IPO raised $720m of net primary

capital. There was $453m invested in money market investments

and $69m of cash and cash equivalents APM basis and liabilities

related to Notes payable of $350m at 31 December 2021.

In making the assessment of going concern, the Board has

considered the scenario prepared in conjunction with the

viabilitystatement.

The Board acknowledges is responsibilities related to the

financial statements. After making an assessment of going

concern, the Board has concluded that the preparation of the

financial statements on a going concern basis for at least twelve

months from the date of the approval of the financial statements

is appropriate.

The 2021 Annual Report and Accounts for Petershill Partners

incorporates:

• The Strategic Report

• The Directors’ Report

• The Corporate Governance Statement

• The Directors’ Remuneration Report

• The Financial Statements

Each of which has been approved by the Board of Directors

ofPetershill Partners.

Naguib Kheraj

Chairman

26 April 2022

48 Petershill Partners | Annual Report 2021

Governance Report

50 Our Board

52 Report of the Directors

55 Corporate governance report

64 Audit and risk committee report

66 Directors’ remuneration report

70 Directors’ responsibilities statement

49 Petershill Partners | Annual Report 2021

Our Board

AN EXPERIENCED

AND INDEPENDENT BOARD

As at the date of this report, the Board comprises five individuals from relevant and complementary

backgrounds. The Directors are of the opinion that the Board as a whole comprises an appropriate

balance of skills, experience and diversity. The Directors of the Company who were in office during

the year and up to the date of signing the financial statements are listed below.

Naguib Kheraj

Chairman, Chairman of Nomination Committee and Chairman of Management Engagement Committee

Appointed 4 September 2021

Everard Barclay Simmons

Senior Independent Director

Appointed 4 September 2021

Mr Kheraj began his career at Salomon Brothers in 1986

and went on to hold senior positions at a number of

leading financial institutions. Over the course of 12 years

at Barclays, Mr Kheraj served as Group Finance Director

and Vice-Chair and in various business leadership

positions in wealth management, institutional asset

management and investment banking. He also served as

Chief Executive Officer of JP Morgan Cazenove.

Mr Kheraj is Chairman of Rothesay Life, a specialist

pensions insurer, and Deputy Chairman of Standard

Chartered plc, a major international bank. Mr Kheraj

spends a substantial amount of his time as a Senior

Advisor to the Aga Khan Development Network; he serves

on the boards of a number of entities within its network

and chairs its Endowment Committee. He is also a

member of the Finance Committee of the University of

Cambridge and a Member of the Board of Gavi,

TheVaccine Alliance, where he chairs the Audit and

Finance Committee.

Mr Kheraj is a former Non-Executive Director of NHS

England and served as a Senior Advisor to Her Majesty’s

Revenue and Customs and to the Financial Services

Authority in the United Kingdom. He also served as a

member of the Investment Committee of the Wellcome

Trust and the Finance Committee of Oxford

UniversityPress.

Mr Kheraj was educated at Dulwich College London and

Cambridge University where he graduated with a degree

in Economics.

Mr Simmons began his career as a commercial litigation

attorney in Bermuda in 1997 before moving to the

United States for business school and joining Goldman

Sachs as an investment banker in 2004. Returning to

Bermuda, he became Managing Partner/Chief Executive

Officer of a reinsurance law firm for 13 years. Mr

Simmons is currently Chair and Chief Executive Officer of

Rose Investment Limited, a Bermuda-based advisory

business focused on financial services and corporate

restructuring.

Mr Simmons has a vast array of Board experience. He was

Lead Director and then Chair of the Board of the Bank of

N.T. Butterfield & Son Limited, where he served from

2011 to 2017 during its ownership by private equity to

after its listing on the New York Stock Exchange, having

led a co-investment in the bank alongside Carlyle and the

Canadian Imperial Bank of Commerce. Mr Simmons

served on the Board of Bermuda’s financial services

regulator, the Bermuda Monetary Authority, for nine

years. He also previously served as a Director at FIL

Limited and currently as a Director at Eight Roads –

respectively the international public and private

investing platforms of Fidelity.

Mr Simmons also serves as a Senior Advisor at Further

Global Capital Management, a private equity firm

focused on financial services companies.

Mr Simmons is Chair of the Public Funds Investment

Committee, responsible for the investment of Bermuda’s

pension funds, where he has spent 15 years as a member

of the Board. He currently leads the Pension Fund Reform

Committee established to address the underfunded

status of Bermuda’s pension funds, serves as an advisor

to Bermuda’s Minister of Finance and sits on the Board of

Argus Group, a Bermuda multiline insurer.

Mr Simmons attended the University of Kent at

Canterbury where he graduated with a law degree, the

Inns of Court School of Law where he qualified as a

barrister, and Harvard Business School where he

graduated with a Masters in Business Administration.

50 Petershill Partners | Annual Report 2021

Mark Merson

Chair of Audit and Risk Committee

Appointed 4 September 2021

Mr Merson began his career in the financial services

division of Arthur Andersen in London in 1989, becoming

a partner in 1999. He provided audit and advisory

services to banking and investment businesses

throughout Europe before moving to Tokyo, from where

he was responsible for all Andersen’s services to

investment banks in Asia Pacific. He subsequently

returned to London to become a partner in Deloitte

Business Consulting.

In 2003, Mr Merson joined Barclays PLC as Group

Financial Controller, leading the bank in the adoption of

International Accounting Standards. In a 14-year career

at Barclays he went on to become Head of Investor

Relations, CFO for Corporate & Investment Banking and

latterly Deputy Group Finance Director, in which role he

was leader of the global finance function.

Mr Merson is a founding partner of Veritum Partners

Limited, advisors to European financial services

companies on their interaction with the equity market.

In a Non-Executive capacity, Mr Merson is Chair of Absa

Securities UK Limited and a governor of Sevenoaks

School. He was formerly an independent Non-Executive

Director of Absa Group Limited, chairing the Board

Finance Committee, the Group Risk and Capital

Management Committee and the Group Credit Risk

Committee.

Mr Merson is a chartered accountant and a graduate

of Oxford University.

Annemarie Durbin

Chair of Remuneration Committee

Appointed 4 September 2021

Ms Durbin began her career in the mid-1980s as a

qualified and practising barrister and solicitor in New

Zealand. In 1987, she moved into banking with ANZ

Banking Group and relocated to the United Kingdom in

1990. Ms Durbin has more than 30 years’ international

business and banking experience across Asia, Africa and

the Middle East. Ms Durbin joined Standard Chartered, an

international banking group, in 1995 and went on to hold

a number of senior positions including being CEO and

executive Director of a large, publicly listed banking

subsidiary in Thailand and, separately, as CEO in the

Philippines. She also served as Group Company Secretary

of Standard Chartered and as a member of the banking

Group Executive Committee with a broad portfolio of

responsibilities.

Ms Durbin has served on public company boards since

2012 and is a Non-Executive Director and Chair of the

Remuneration Committee at Persimmon Plc. She is

currently the Senior Ringfence Bank Director and

Remuneration Committee Chair on the Board of

Santander UK PLC, and Chair of Cater Allen Private Bank.

Formerly Ms Durbin held roles as Non-Executive Director

& Remuneration Committee Chair of WHSmith PLC, and

as NED of Ladbrokes Coral PLC and Fleming Family &

Partners Ltd. She was also Chair of the Listing Authority

Advisory Panel in the United Kingdom, advising the

Financial Conduct Authority on the effectiveness of

primary markets. Ms Durbin is also a provider of executive

coaching, mentoring and leadership development

services primarily through Merryck & Co. Ltd and, until

July 2021, was its Board Chair.

Ms Durbin was educated at the University of Auckland,

New Zealand where she graduated with degrees in Law

and Commerce. She has a Masters (MSc) in Executive

Coaching from Ashridge Business School. She is also a

Fellow of The Chartered Governance Institute.

Erica Handling

Director

Appointed 4 September 2021

Ms Handling began her career in 1988 at Allen & Overy

LLP before moving to Weil, Gotshal & Manges LLP to help

open their office in London. She became a partner there

in 1998 and moved a team to Ashurst LLP in 2001 where

she founded a securities and structured finance practice.

After 10 years at Ashurst she moved to take on the role of

General Counsel in Europe for Barclays Investment Bank

from 2011 to 2015, where she served on the EMEA

Executive Committee and Global Operating Committee.

She then moved to BlackRock from 2015 to 2019 as the

European General Counsel, where she served on various

boards and committees and led major regulatory

implementation projects including a two-year Brexit

preparation project.

Ms Handling left BlackRock in 2019 to take up a

Non-Executive role with the Government Legal

Department where she remains on the Board today. Since

that time she has developed a career as an executive

coach, now working with leadership advisory firm Pelham

Street.

Ms Handling also spends time working with various

charities in the criminal justice sector and is currently a

trustee with Working Chance, Deputy Chair of St Giles

Trust, and Chair of Spark Inside.

Ms Handling was educated at Wycombe High School and

Exeter University where she graduated with a degree in

Law (LLB) before attending Guildford Law School.

51 Petershill Partners | Annual Report 2021

REPORT OF THE DIRECTORS

The Directors present their annual report and audited financial

statements of the Group for the period ended 31 December 2021.

The Corporate Governance Report on pages 55-70 forms part of

this report.

Details of the Directors who held office in the period from the

date of incorporation of the Company on 24 March 2021 until

4 September 2021 can be found on page 56. From 4 September

2021, until the date of this report, the Board has comprised five

Non-Executive Directors, whose details can be found on pages 50

to 51.

Capital Structure

The Company was incorporated and registered in England and

Wales under the Companies Act as a private company limited by

shares and under the name Delta Epsilon Limited on 24 March

2021 with registered number 13289144. On 12 August 2021, the

Company was re-registered as a public limited liability company

under the name Delta Epsilon plc, and on 2 September 2021 the

Company was renamed Petershill Partners plc.

The share capital of the Company on incorporation was US$0.01,

comprising one Ordinary Share of US$0.01 which was allotted to

Mr Andres Felipe Gonzalez and was then subsequently

transferred in full to Goldman Sachs Asset Management Holdings

LLC on 3 September 2021.

On 5 August 2021, the Company allotted and issued 50,000

Redeemable Deferred Shares of £1 each.

On 28 September 2021, the Company allotted and issued

1,000,000,000 Ordinary Shares to affiliated funds of the

Company in exchange for Investments in Partner-firms,

liability for Tax Receivables Agreement and assumption of

Notes payable. On 1 October 2021, the Company allotted and

issued 156,281,744 Ordinary Shares to the public and 414,284

Ordinary Shares to certain Directors of the Company, at an offer

price of 350 p per Ordinary Share.

As at 31 December 2021, a nominal percentage of the Company’s

issued share capital comprised Redeemable Deferred Shares.

TheCompany’s issued share capital comprised 1,156,696,029

Ordinary Shares and 50,000 Redeemable Deferred Shares.

Authority to Purchase Own Shares

The Company is generally and unconditionally authorised to make

market purchases (within the meaning of section 693(4) of the

Companies Act 2006) of its Ordinary Shares of US$0.01 each in the

capital of the Company, subject to the following conditions:

i. the maximum number of Ordinary Shares authorised to be

purchased is 115,669,603;

ii. the minimum price (excluding expenses) which may be paid for

an Ordinary Share is US$0.01;

iii. the maximum price (excluding expenses) which may be paid for

each Ordinary Share is the higher of: (i) an amount equal to 105

per cent of the average of the middle-market quotations of an

Ordinary Share as derived from the London Stock Exchange Daily

Official List for the five business days immediately preceding the

day on which the Ordinary Share is contracted to be purchased;

and (ii) an amount equal to the higher of the price of the last

independent trade of an Ordinary Share and the highest current

independent bid for an Ordinary Share on the trading venue

where the purchase is carried out;

iv. the authority shall expire at the close of the annual general

meeting of the Company held in 2022 or 18 months from

27 September 2021, being the date the resolution was passed

(whichever is earlier); and

v. a contract to purchase shares under the authority may be made

before the expiry of the authority (as per paragraph iv above),

and concluded in whole or in part after the expiry of the authority

(as per paragraph iv above).

Major Interests in Shares

Significant shareholdings as at 31 December 2021 are

detailedbelow.

Ordinary Shares held %

31 December 2021

Goldman Sachs Asset Management

74.70%

Lazard Asset Management LLC Group 4.23%

1. Please refer to page 9 for more information on the shares held by Goldman Sachs Asset

Management’s private funds.

In addition, the Company also provides the same information as at

20 April 2022, being the most current information available as at

the date of this report.

Ordinary Shares held %

20 April 2022

Goldman Sachs Asset Management 74.70%

Lazard Asset Management LLC Group 3.11%

Report of the Directors

52 Petershill Partners | Annual Report 2021

Companies Act 2006 Disclosures

In accordance with Schedule 7 of the Large and Medium Sized

Companies and Groups (Accounts and Reports) Regulations 2008,

the Directors disclose the following information:

• the Company’s capital structure is detailed in Note 13 to the

Consolidated Financial Statements. As disclosed in Note 13 to

the consolidated financial statements, Ordinary Shareholders are

entitled to attend and vote at all general meetings of the

Company. On a show of hands, every holder of Ordinary Shares in

the capital of the Company who is present in person shall have

one vote and, on a poll, every holder of Ordinary Shares present

in person or by proxy shall have one vote per Ordinary Share. All

Ordinary Shares are non-redeemable;

• The Redeemable Deferred Shares confer no right on the

Redeemable Deferred Shareholders to receive notice of, or to

attend or vote at, any general meeting of the Company, but

confer on each holder thereof a right to receive notice of and to

attend and to vote at any separate class meeting of the holders

of Redeemable Deferred Shares;

• Ordinary Shareholders are entitled to all dividends paid by the

Company. Redeemable Deferred Shareholders have no right to

receive any dividend or other distribution (whether of capital or

income) other than the right to receive, upon liquidation, the

nominal amount of each such Redeemable Deferred Share held

(after the holder of each other share in the capital of the

Company has received the amount paid up or credited as paid up

on each such other share);

• there are no restrictions on voting rights and the Company

is not aware of any agreement between holders of securities

that result in restrictions on the transfer of securities or on

voting rights;

• other than as described below, there are no restrictions on the

transfer of securities of the Company, subject to applicable law

and regulation and contractual lock-ups for certain Shareholders:

The Board may, in its absolute discretion, decline to transfer,

convert or register any transfer of Ordinary Shares to any person:

(i) whose ownership of Ordinary Shares may cause the

Company’s assets to be deemed “plan assets” for the purposes of

the US Employee Retirement Income Security Act of 1974, as

amended (‘ERISA’) or the US Internal Revenue Code of 1986, as

amended (‘the US Tax Code’); (ii) whose ownership of Ordinary

Shares may cause the Company to be required to register as an

“investment company” under the US Investment Company Act of

1940, as amended (‘the US Investment Company Act’) or to lose

an exemption or a status thereunder to which it might otherwise

be entitled (including because the holder of Ordinary Shares is

not a “qualified purchaser” as defined in the US Investment

Company Act); (iii) whose ownership of Ordinary Shares may

cause the Company to be required to register under the US

Exchange Act of 1934, as amended (‘ the US Exchange Act’) or

any similar legislation; (iv) whose ownership of Ordinary Shares

may cause the Company to be a “controlled foreign corporation”

for the purposes of the US Tax Code or may cause the Company

to suffer any pecuniary disadvantage (including any excise tax,

penalties or liabilities under ERISA or the US Tax Code); (v) whose

ownership of Ordinary Shares may cause the Company to cease

to be considered a “foreign private issuer” for the purposes of

the US Securities Act of 1933, as amended or the US Exchange

Act; or (vi) whose ownership of Ordinary Shares would or might

result in the Company not being able to satisfy its obligations on

the Common Reporting Standard developed by the Organisation

for Economic Co-Operation and Development, the Foreign

Account Tax Compliance Act or such similar reporting obligations

on account of, inter alia, non-compliance by such person with any

information request made by the Company, (each person

described in (i) to (vi) above, being a “Non-Qualified Holder”).

Under the Company’s articles of association, the Directors have

the power to require the sale or transfer of Ordinary Shares, or

refuse to register a transfer of Ordinary Shares, in respect of any

Non-Qualified Holder;

• subject to consultation with the Operator and within certain

restrictions, the Directors may determine changes to the

Company’s capital structure, including any reduction of capital,

share buybacks (including the use of treasury shares) or issue of

shares or other securities (subject to the existing shareholder

authority granted on 27 September 2021 and which the

Company will seek to renew at its forthcoming AGM);

• there exist no securities carrying special rights with regard to the

control of the Company;

• the Company does not have an employees’ share scheme;

• the rules concerning the appointment and replacement of

Directors are contained in the Company’s Articles of Association

and the Companies Act 2006;

• there are no provisions in the Company’s Articles of Association

relating to amendments to the Articles;

• there exist no agreements to which the Company is party that

may affect its control following a takeover bid;

• there exist no agreements between the Company and its

Directors providing for compensation for loss of office that may

occur because of a takeover bid; and

• the Directors’ responsibilities pursuant to section 172 of the

Companies Act 2006 are as detailed in the Strategic Report.

53 Petershill Partners | Annual Report 2021

Business Review and Diversity

A business review is detailed in the Operator’s Report on pages 26

to 31, and the Company’s policy on diversity is detailed in the

Corporate Governance Report on page 58.

Directors’ Indemnity

Directors’ and Officers’ liability insurance cover is in place in

respect of the Directors. The Company’s Articles of Association

state that each Director is entitled to be indemnified out of the

assets of the Company against any liability incurred by them for

negligence, default, breach of duty or breach of trust in relation

to the affairs of the Company to the extent permitted by law

against any loss or liability incurred by them in the execution of

their duties in relation to the affairs of the Company.

Qualifying third-party indemnity provisions were in force for the

financial year and up to the date of this report.

Global Greenhouse Gas Emissions

All of the Company’s activities are outsourced to third parties.

TheCompany therefore has no greenhouse gas emissions to

report from its operations, nor does it have responsibility for any

other emissions-producing sources under the Companies Act

2006 (Strategic Report and Directors’ Reports) Regulations 2013.

For the same reasons as set out above, the Company considers

itself to be a low energy user under the SECR regulations and

therefore is not required to disclose energy and carbon information.

Risks and Risk Management

The Group is exposed to financial risks such as price risk, interest

rate risk, credit risk and liquidity risk, and the management and

monitoring of these risks are detailed in Note 17 to the

financialstatements.

Independent Auditors

The Directors will propose the reappointment of

PricewaterhouseCoopers LLP as the Company’s Auditors, and

resolutions concerning this and the remuneration of the

Company’s Auditors will be proposed at the AGM.

At the time that this report was approved, so far as each of the

Directors is aware:

• there is no relevant audit information of which the Auditors are

unaware; and

• each Director has taken all the steps they ought to have taken

to make themselves aware of any audit information and to

establish that the Auditors are aware of that information.

Annual Report

After due consideration, the Board believes that the annual report

and accounts, taken as a whole, are fair, balanced and

understandable and therefore is of the opinion that the annual

report provides the information necessary for Shareholders to

assess the position, performance, strategy and business model of

the Company.

The Board recommends that the annual report, the Report of the

Directors and the Independent Auditors’ Report for the period

ended 31 December 2021 are received and adopted by the

Shareholders and a resolution concerning this will be proposed at

the AGM.

Dividend

The Board will recommend a final dividend of $30m, equivalent

to 2.6 cents per share with respect to the period ended

31 December 2021. For more information on the Company’s

dividend policy please refer to page 19.

Subsequent Events

Significant subsequent events have been disclosed in Note 20 to

the Consolidated Financial Statements.

Strategic Report

A review of the business and future outlook, the going concern

statement and the principal risks and uncertainties of the Group

has not been included in this report as they are disclosed in the

Strategic Report on pages 1 to 48. In accordance with section

414C (11) of the UK Companies Act 2006, the Company has

chosen to include in its Strategic Report the following information,

which would otherwise be disclosed in this Directors’ Report:

• Our engagement with suppliers, customers and others in a

business relationship with the Company

• Future developments in the business of the Group

Stakeholder Engagement

The stakeholders of the Company comprise its Shareholders and

prospective Shareholders, lenders, the Operator, the

Administrator, Service Providers, Partner-firms, Regulators, and

the community, and the Board recognises and values these

stakeholders and gives regular consideration to the need to

foster the Company’s business relationships with these

stakeholders. As a public limited liability company with no

employees, trade suppliers or customers, the Company’s

relationship with its service providers is of particular importance.

The effect of this consideration upon the key decisions taken by

the Company during the reporting period is set out in further

detail in the Strategic Report on pages 34-35.

On behalf of the Board

Naguib Kheraj

Chairman

26 April 2022

Report of the Directors continued

54 Petershill Partners | Annual Report 2021

CORPORATE

GOVERNANCE REPORT

This Corporate Governance Report forms part of the Report of the

Directors as further disclosed on pages 52 to 54. The Board

operates under a framework for corporate governance which is

appropriate for closed ended investment funds. This report

describes how the Company has applied the principles identified

in the Association of Investment Companies (AIC) Code in its first

accounting period ended 31 December 2021.

The Board is committed to the highest standards of corporate

governance and has considered the principles and recommendations

of the AIC Code, which provides a framework of best practice

for listed investment companies, such as the Company. As such,

the Board intends to comply with the AIC Code unless otherwise

disclosed from time to time, as it considers that reporting against

the principles and recommendations of the AIC Code will provide

better information to Shareholders. The AIC Code addresses all

the principles set out in the UK Corporate Governance Code,

as well as setting out additional principles and recommendations

on issues that are of specific relevance to listed investment

companies. By reporting against the AIC Code, the Company

meets its obligations in relation to the UK Corporate Governance

Code. The Company will report to Shareholders on its compliance

with the AIC Code.

The Company became a member of the AIC with effect from

1 October 2021 and has therefore put in place arrangements to

comply with the AIC Code, which is endorsed by the FRC as being

appropriate for alternative asset management firms requiring

compliance with the UK Corporate Governance Code (“the UK

Code”). The AIC Code, as explained by the AIC Guide, addresses all

the principles set out in the UK Code, as well as setting out

additional principles and recommendations on issues that are of

specific relevance to alternative asset management firms such as

the Company.

The AIC Code and the related AIC Guide are available on the AIC’s

website, www.theaic.co.uk.

The UK Code is available on the Financial Reporting

Council’swebsite, www.frc.org.uk.

The Company has complied with the recommendations and

relevant principles and provisions of the AIC Code and the UK

Code, where applicable. However, due to the relatively short

period of time the Company has been in operation, there are a

number of provisions with which it has not yet complied, as

shown in the table below. The Board of Directors expects that the

Company will be in compliance with the below principles and

provisions in the coming financial year.

Corporate governance report

Principle/Provision

Principle L

AIC Code provisions 26 & 27

UK Code provisions 21 & 22

The AIC and UK Codes recommend a formal and rigorous evaluation of the performance of the Board,

its committees, the Chair and individual Directors to assess whether each Director continues to

contribute effectively. The Chair should consider having a regular (at least every three years)

externally facilitated Board evaluation. The Chair should act on the results of the evaluation by

recognising the strengths and addressing any weaknesses of the Board. Each Director should engage

with the process and take appropriate action when development needs have been identified. Due to

the recent commencement of operations of the Company and appointment of the Board, no formal

Board, committee or individual Director evaluations have been carried out as at the date of this report.

The evaluations will be completed during 2022 and the results reported in the next Annual Report.

This will enable the necessary rigour of evaluation, and consideration thereafter, as required by the AIC

and UK Codes.

AIC Code provision 18 The Board should monitor and evaluate other service providers (besides the Operator). The Board

should establish procedures by which other service providers should report back and the methods by

which these providers are monitored and evaluated. Due to the recent commencement of operations

of the Company, no formal evaluation of other service providers has been carried out as at the date of

this report. A formal evaluation will be completed during 2022, and the results of the review will be

reported in the next Annual Report.

The Company has complied with the recommendations of the AIC Code and the relevant provisions of the UK Corporate Governance Code,

except as set out below.

The UK Corporate Governance Code includes provisions relating to:

• the role of the chief executive

• executive directors’ remuneration

• the need for an internal audit function

• engagement with the workforce

• whistleblowing

55 Petershill Partners | Annual Report 2021

Corporate governance report continued

The Chairman of the Board is independent and is appointed

in accordance with the Company’s Articles of Association.

MrKheraj is considered to be independent because he, among

other criteria:

• has no current or historical employment with the Operator;

• has not provided services to the Operator within the last three

years; and

• has no current Directorships or partnerships in any other

investment fund managed by the Operator.

The Board has regular planned formal meetings at least four

times during a full year and will hold such additional ad-hoc

meetings as are necessary to fulfil its duties. Given the early stage

of the Company’s operation, the Board has held a number of

ad-hoc meetings in order to streamline and optimise the

maximisation of Shareholder value. In the period prior to the

Company’s IPO, the Board held 20 of such ad hoc meetings.

Please refer to page 60 for a full list of meetings that have taken

place since listing. Directors are given access to the information

necessary to assist them in the performance of their duties.

Anagenda and Board papers are circulated to the Directors in

advance of Board meetings to allow them an adequate

opportunity for review and preparation for Board meetings.

Theprimary focus at Board meetings is a review of investment

performance and associated matters such as asset allocation,

share price discount/premium management, investor relations,

acquisitions, acquisition policies, peer group information, industry

issues and principal risks and uncertainties – in particular those

identified in the Strategic Report on pages 42 to 46.

The Directors have overall responsibility for overseeing the

performance of the Operator and the Group’s activities.

TheCompany has entered into the Operator Agreement with

the Operator, pursuant to which the Operator is responsible

for the risk and portfolio management of the Group’s assets,

and has full discretionary authority to enter into transactions for

and on behalf of the Group provided they are permitted by the

Company’s Acquisition Strategy and InvestmentPolicy, subject to

the following:

• where the value of a proposed acquisition of an Alternative

Asset Manager Stake represents between 5 per cent and

12 per cent of the Company’s market capitalisation,

the Operator will submit such proposal to the Board

for review and consultation; and

• where the value of a proposed acquisition of an Alternative

Asset Manager Stake represents more than 12 per cent of the

Company’s market capitalisation, the Operator will submit such

proposal to the Board for approval and will publicly announce

the acquisition with such announcement also subject to

Boardapproval.

The Board considers these provisions are not relevant to the

position of the Company, being an externally managed company.

In particular, all of the Company’s day-to-day management and

administrative functions are outsourced to third parties. As a

result, the Company has no executive directors, employees or

internal operations. The Company has therefore not reported

further in respect of these provisions.

The Company has adopted, with effect from Admission, a code of

securities dealings based on the requirements of the UK Market

Abuse Regulation. The Board will be responsible for taking all

proper and reasonable steps to ensure compliance with this code

by the Directors.

The Board

The Company is led and controlled by a Board of Directors,

whichis collectively responsible for the long-term success of the

Company. It does so by creating and preserving value, and has as

its foremost principle acting in the interests of Shareholders,

stakeholders and wider society. The importance of the Board’s

role to the delivery of the Company’s purpose, values and strategy

is further outlined within the Strategic Report, in the Chairman’s

Letter (pages 6-7) and in our Business Model (pages 8-11).

The Company believes that the composition of the Board will be a

fundamental driver of its success, as the Board must provide

strong and effective leadership of the Company. The current

Board was selected, as their biographies on pages 50 to 51

illustrate, to bring a breadth of knowledge, skills and business

experience to the Company. The Non-Executive Directors provide

independent challenge and review, bringing wide experience,

specific expertise and a fresh objective perspective.

For a short period of time as the Company was preparing for

listing, Andres Gonzales, Chaim Langer and Ayesha Parra were

appointed Directors of the Company, but have since resigned.

TheCompany has no employees and all Directors have been

appointed on a Non-Executive basis. Andres Gonzales was

appointed Director on the date of formation of the Company on

24 March 2021, and resigned on 4 September 2021. Chaim Langer

was appointed Director on 5 August 2021 and resigned on

4 September 2021. Ayesha Parra was appointed Director on

1 September 2021 and resigned on 4 September 2021.

From4 September 2021 until the date of this report, the Board

has five Non-Executive Directors, who are independent of the

Company’s Operator.

The AIC Code requires that Directors be subject to an annual

election by Shareholders, and the Directors comply with this

requirement. Allof the Directors, including the Chairman, shall

offer themselves for re-election at the forthcoming AGM.

Havingconsidered their effectiveness, demonstration of

commitment to the role, length of service, attendance at

meetings and contribution to the Board’s deliberations, the Board

approves the nomination for re-election of all of the Directors.

Ateach subsequent AGM of the Company, each of the Directors,

including the Chairman, at the date of the notice convening the

AGM shall retire from office and may offer themselves for

election or re-election by the Shareholders, in accordance with

corporate governance best practice.

56 Petershill Partners | Annual Report 2021

The Company has adopted a securities dealing code for the Board

and seeks to ensure compliance by the Board and relevant

personnel of the Operator and other third-party service providers

with the terms of the securities dealing code.

The Board also considers whether the Company has inside

information and if an announcement obligation has arisen.

TheBoard reviews the scope and content of disclosures in

order to ensure that information released to the market by the

Company is appropriate. It is responsible for reviewing the

systems, procedures and controls in place to enable the Company

to comply with its legal and regulatory obligations in relation to

inside information.

The Board is also responsible for reviewing and considering any

actual or potential conflicts of interest referred to it in

accordance with the Company’s conflicts of interest policy and

approving any such conflicts. At least annually, the Board reviews

the adequacy of disclosure to Shareholders regarding potential

conflicts of interest and the effectiveness of the Company’s

conflicts of interest policy. In addition, the Board is responsible

for reviewing and approving any related party transactions. Other

key matters requiring Board approval include capital allocation

and capital structure, the Company’s dividend policy and changes

to the Acquisition Strategy and Investment Policy.

In the performance of its duties, the Board is committed to

maintaining a good understanding of the views of Shareholders

and considerable importance will be attached to communicating

with Shareholders.

Senior Independent Director

The Company has appointed Everard Barclay Simmons as Senior

Independent Director. The Senior Independent Director acts as a

sounding board for the Chairman, will serve as an intermediary

for the other Directors and Shareholders, and will lead the annual

review of the Chairman’s performance.

Board Committees

The Company has established an Audit and Risk Committee,

aRemuneration Committee, a Nomination Committee and a

Management Engagement Committee, each of which has formally

delegated duties and responsibilities and written terms of

reference that have been approved by the Board.

The Board believes that it and its committees have an appropriate

composition and blend of skills, experience, independence

and diversity of backgrounds to discharge their duties and

responsibilities effectively. The Board is of the view that no one

individual or small group dominates decision-making. The Board

keeps its membership, and that of its committees, under review

to ensure that an acceptable balance is maintained, and that the

collective skills and experience of its members continue to be

refreshed. It is satisfied that all Directors have sufficient time to

devote to their roles and that undue reliance is not placed on

anyindividual.

Each committee of the Board has written terms of reference,

approved by the Board, summarising its objectives, remit and

powers, which are available on the Company’s website and

reviewed on an annual basis. All committee members are

provided with appropriate induction on joining their respective

committees, as well as on going access to training. Minutes of all

meetings of the committees (save for the private sessions of

committee members at the end of meetings) are made available

to all Directors, and feedback from each of the committees is

provided to the Board by the respective committee Chairmen at

the next Board meeting. The Chair of each committee attends the

AGM to answer any questions on their committee’s activities.

The Board and its committees are provided information that enables

them to discharge their duties effectively. All Directors are able to

make further enquiries of the Operator whenever necessary, and

have access to the services of the Company Secretary.

Audit and Risk Committee

On 20 September 2021, the Board established an Audit and Risk

Committee which held its first meeting on 22 November 2021.

The members of the Audit and Risk Committee are Mark Merson

(Chair), Everard Barclay Simmons, Annemarie Durbin and Erica

Handling. The Audit and Risk Committee, the Operator, the

Administrator and the independent auditors, PricewaterhouseCoopers

LLP, have held discussions regarding the audit approach and

identified risks.

The independent auditors attend Audit and Risk Committee

meetings and a private meeting will be held routinely with the

independent auditors to afford them the opportunity of

discussions without the presence of the Operator and the

Administrator. The Audit and Risk Committee activities are

contained in the Report of the Audit and Risk Committee on

pages 64 to 65.

The Company’s Audit and Risk Committee, among other things,

considers the appointment, independence and remuneration of

the independent auditors and reviews the financial statements

and accounting policies. The principal duties of the Audit and Risk

Committee are to consider the appointment of the independent

auditors, to discuss and agree with the independent auditors the

nature and scope of the audit, to keep under review the scope,

results, quality and effectiveness of the audit and the

independence and objectivity of the independent auditors, and to

review the independent auditors’ letter of engagement and

management letter. The Audit and Risk Committee also monitors

and reviews the adequacy and effectiveness of internal control

and risk management systems and advises the Board on the

Company’s overall risk appetite. The Audit and Risk Committee

will meet at least four times a year.

Remuneration Committee

On 20 September 2021, the Board established a Remuneration

Committee which held its first meeting on 20 September 2021.

The members of the Remuneration Committee are Annemarie

Durbin (Chair), Naguib Kheraj, Everard Barclay Simmons,

Erica Handling and Mark Merson. Per the recommendations

of the AIC Code, all members of the Remuneration Committee

are Non-Executive Directors and the Chair of the Remuneration

Committee has the relevant experience and understanding

of the Company. Given the small size of the Company’s Board,

all members of the Company’s Board are members of the

Remuneration Committee. The Remuneration Committee meets

at least once a year pursuant to its terms of reference.

The Company’s Remuneration Committee is responsible for

determining the remuneration of the Chairman. Any remuneration

consists only of fees and expenses. The Committee is also

responsible for reviewing the ongoing appropriateness and

relevance of remuneration levels, and appointing external

remuneration consultants. The Committee is responsible for

recommending the Remuneration Policy for approval by

Shareholders, and approval of the annual disclosures in relation

to the implementation of the Remuneration Policy.

Post year-end, the Committee appointed FIT Remuneration

Consultants as advisors to the Committee on remuneration matters.

57 Petershill Partners | Annual Report 2021

Corporate governance report continued

Nomination Committee

On 20 September 2021, the Board established a Nomination

Committee which meets at least once a year pursuant to its terms

of reference. There were no meetings held during the period

ended 31 December 2021. The Board was appointed on

4 September 2021 and there has been no need for a review at this

stage. The members of the Nomination Committee are Naguib

Kheraj (Chair), Everard Barclay Simmons, Annemarie Durbin, Erica

Handling and Mark Merson.

The Company’s Nomination Committee leads the process for

Board appointments, reappointments and the succession

planning process. The Nomination Committee is responsible for

monitoring and assessing the structure, size and composition of

the Board, including the skills, knowledge, independence,

experience and diversity of its members, and making

recommendations to the Board with regard to any changes. With

regard to Board appointments, the Nomination Committee

prepares specifications of the roles and responsibilities, including

expected time commitments, and consideration is given to the

existing experience, knowledge and background of current Board

members, as well as the strategic and business objectives of the

Company. The Committee would then use open advertising and/

or an external search consultancy to facilitate recruitment. The

appointment of any new Director is made on merit and against

objective criteria with the aim of bringing complementary skills

and different perspectives to the Board, while promoting diversity

of gender, and of social and ethnic background. Any additional

external appointments are submitted for Board approval before

the appointment is accepted. The Nomination Committee is

responsible for ensuring a Board evaluation process is conducted,

detailing the nature and extent of any external evaluator’s

contact with the Board and individual Directors, the outcomes

and actions taken and how it influences Board composition. As a

result, the Nomination Committee also makes recommendations

to the Board in relation to the composition of the Audit and Risk

Committee and Remuneration Committee, and any other Board

committees as appropriate. The Nomination Committee meets at

least once a year.

Management Engagement Committee

On 20 September 2021, the Board established a Management

Engagement Committee which held its first of two meetings on

22 October 2021. The members of the Management Engagement

Committee are Naguib Kheraj (Chair), Everard Barclay Simmons,

Annemarie Durbin, Erica Handling and Mark Merson. The Management

Engagement Committee meets at least once a year pursuant to

its terms of reference.

The role of the Management Engagement Committee is to

provide a formal mechanism for the review of the performance of

the Operator and the Company’s other advisors and service

providers. It carries out this review through consideration of a

number of objective criteria and through a review of the terms

and conditions of the advisors’ appointments with the aim of

evaluating performance, identifying any weaknesses and ensuring

value for money for Shareholders. The Management Engagement

Committee specifically considers matters such as:

i. monitoring and evaluating the Operator’s investment

performance and, if necessary, providing appropriate guidance;

ii. regularly reviewing the continued retention of the Operator’s

services;

iii. considering the merit of obtaining, on a regular basis,

anindependent appraisal of the Operator’s services;

iv. reviewing the level and method of remuneration, the basis of

profit-sharing charge and the notice period.

The Management Engagement Committee is responsible for

reviewing the terms of the Operator Agreement and monitoring

and evaluating the performance of the Operator and its compliance

with the Operator Agreement. The Management Engagement

Committee is also responsible for reviewing the performance of,

and the terms of the Company’s arrangements with, other

third-party service providers (other than the independent

auditors). The Management Engagement Committee meets at

least once a year.

The Management Engagement Committee reviewed the

performance of the Operator and confirmed that performance

has been effective to date. The Operator has delivered on

strategy, as evidenced by further acquisitions in the quarter

period to 31 December 2021. The Management Engagement

Committee concluded that it considers the terms of the Operator

Agreement to be fair and that the Operator fee and termination

period are reasonable. A formal review of all key service providers

will be conducted in 2022, as this will be the Company’s first full

year of operation.

Diversity Policy

The Board monitors developments in corporate governance to

ensure it remains aligned with best practice, especially with respect

to the increased focus on diversity. The Board acknowledges the

importance of all aspects of diversity for the effective functioning

of the Board and commits to supporting diversity in the

boardroom. It is the Board’s ongoing aspiration to have a well-

diversified representation and the Board complies with gender and

ethnicity guidelines. Appointments and succession plans to the

Board are based on merit and objective criteria and within this

context promote diversity of gender, of social and ethnic

background and of cognitive and personal strengths. The Board

also values diversity of business skills and experience because

Directors with diverse skill sets, capabilities and experience gained

from different geographical backgrounds enhance the Board by

bringing a wide range of perspectives to the Company.

As at the date of this report, the Board comprises three men and

two women, all Non-Executive Directors who are considered to be

independent of the Operator and free from any business or other

relationship that could materially interfere with the exercise of

their independent judgement.

The Operator has a diverse employee base and continues to

dedicate recruiting resources to increasing diversity across all

positions and levels.

The Board recognises the importance of an inclusive and diverse

Board in facilitating a collaborative culture and enhancing the

delivery of the Company’s strategic objectives. The Board will

continue to monitor and actively work on ensuring that it maintains

and nurtures a Board that is as diverse as possible. This baseline

representation and understanding will help inform the

development of future initiatives on diversity and inclusion.

58 Petershill Partners | Annual Report 2021

Board Tenure and Re-election

As the Company was incorporated on 24 March 2021 and the

existing Directors were appointed on 4 September 2021, no

issues have arisen to be considered by the Board with respect to

long tenure. In accordance with the AIC Code, in the event that

any Director, including the Chair, shall have been in office (or on

re-election would have been in the office at the end of that term

of office) for more than nine years, the Company will consider

further whether there is a risk that such a Director might

reasonably be deemed to have lost independence through such

long service. The Board will consider its composition and

succession planning on an ongoing basis. All Directors will stand

for election at the first AGM of the Company and will stand for

annual re-election at each subsequent AGM. In accordance with

the AIC Code, the Board recognises that Directors serving nine

years or more may appear to have their independence impaired.

However, the Board may nonetheless consider Directors to remain

independent and will provide a clear explanation within future

Annual Report and Financial Statements as to its reasoning.

A Director who retires at an AGM may, if willing to continue to act,

be elected or re-elected at that meeting. If, at a general meeting

at which a Director retires, the Company neither re-elects that

Director nor appoints another person to the Board in the place of

that Director, the retiring Director shall, if willing to act, be

deemed to have been re-elected unless at the general meeting it

is resolved not to fill the vacancy or unless a resolution for the

re-election of the Director is put to the meeting and not passed.

In advance of the IPO process, the Directors were selected

through a targeted search process, with the assistance of the

Joint Global Coordinators and leading international search firm

Spencer Stuart, which was appointed to advise on Board

appointments and provide background checks and independence

reviews on the final Board members. Spencer Stuart does not

have other connections with the Company or any individual

Director. The objective was to assemble a high-quality, diverse

board, with significant experience in financial services and the

knowledge and standing to be able to oversee and manage the

relationship with the Operator. The appointment of the Directors

included consideration of the time they had available for the role.

Refer to page 58 for a description of the Board appointment process.

The Board recommends that Shareholders vote in favour of the

election of all Directors at the upcoming AGM of the Company.

Duties and Responsibilities

The Board has overall responsibility for the Company’s activities,

including reviewing its investment activity, performance, business

conduct and policy. The Directors also review and supervise the

Company’s delegates and service providers, including the Operator.

The Board has committed a considerable amount of time and effort

to establish the procedures for a newly-listed Company.

The Directors may delegate certain functions to other parties.

In particular, the Directors have delegated responsibility for

management of the Company’s portfolio of investments to

theOperator.

In the future, the Board is expected to have regularly planned

formal meetings at least four times a year and will hold such

additional ad-hoc meetings as are necessary to fulfil its duties.

Between meetings there is regular contact with the Operator and

the Administrator. The Board requires to be supplied with

information by the Operator, the Administrator and other

advisors in a form appropriate to enable it to discharge its duties.

The Board has responsibility for ensuring that the Company keeps

proper accounting records which disclose with reasonable

accuracy at any time the financial position of the Company and

which enable it to ensure that the financial statements comply

with applicable regulation. It is the Board’s responsibility to

present a fair, balanced and understandable Annual Report,

which provides the information necessary for Shareholders to

assess the position, performance, strategy and business model of

the Company. This responsibility extends to the half-year and

other price-sensitive public reports.

Other key matters requiring Board approval include capital

allocation and capital structure, the Company’s dividend policy

and changes to the Acquisition Strategy and Investment Policy.

In the performance of its duties, the Board is committed to

maintaining a good understanding of the views of Shareholders

and considerable importance will be attached to communicating

with Shareholders.

The Directors have access to the advice and services of the

Administrator, who is responsible to the Board for ensuring that

Board procedures are followed and that it complies with

applicable law and regulations of the London Stock Exchange.

Where necessary, in carrying out their duties, the Directors may

seek independent professional advice and services at the expense

of the Company. The Company maintains Directors’ and Officers’

liability insurance in respect of legal action against its Directors

on an ongoing basis.

The Board’s responsibilities for the Annual Report are set out in

the Directors’ Responsibilities Statement.

Directors’ Attendance at Board and

Committee Meetings

One of the key criteria the Company uses when selecting

Non-Executive Directors is their confirmation prior to their

appointment that they will be able to allocate sufficient time to

the Company to discharge their responsibilities in a timely and

effective manner.

The Board formally met five times during the period from

appointment on 4 September 2021 until 31 December 2021.

There were numerous meetings held and attended by the

Directors in the lead-up to the IPO, prior to their appointment on

4 September 2021.

Directors are encouraged when they are unable to attend a

meeting to give the Chairman their views and comments on

matters to be discussed, in advance. In addition to their meeting

commitments, the Non-Executive Directors also liaise with the

Operator whenever required and there is regular contact outside

the Board meeting schedule.

59 Petershill Partners | Annual Report 2021

Corporate governance report continued

The number of meetings of the full Board in the period to 31 December 2021 and attendance by each Director is set out below:

Meetings held

pre-appointment

(Total of 20)

Scheduled

Quarterly Board

Meetings

(Total of 1 )

Additional ad hoc

Board Meetings

(Total of 5)

Naguib Kheraj 20 1 5

Everard Barclay Simmons 20 1 5

Annemarie Durbin 20 1 5

Erica Handling 20 1 5

Mark Merson 20 1 5

The number of meetings of the committees of the Board in the period to 31 December 2021 and attendance by each committee member is

set outbelow:

Director

Remuneration

Committee

(min 1)

Audit and Risk

Committee

Meetings

(min 4)

Nomination

Committee

Meetings

(min 1)

Management

Engagement

Committee

Meetings

(min 1)

Tenure as at

31 December

2021

A B A B A B A B

Naguib Kheraj 1 1 – – – – 2 2 4 months

Everard Barclay Simmons 1 1 1 1 – – 2 2 4 months

Annemarie Durbin 1 1 1 1 – – 2 2 4 months

Erica Handling 1 1 1 1 – – 2 2 4 months

Mark Merson 1 1 1 1 – – 2 2 4 months

Column A: indicates the number of meetings held during the period.

Column B: indicates the number of meetings attended by the Director during the period.

A quorum comprises any two members of the Board from time to time, to perform administrative and other routine functions on behalf of

the Board, subject to such limitations as the Board may expressly impose on this committee from time to time.

Board Performance and Evaluation

In accordance with Provision 26 of the AIC Code, the Board is

required to undertake a formal and rigorous evaluation of its

performance on an annual basis. Such an evaluation of the

performance of the Board as a whole, the Audit and Risk

Committee, the Nomination Committee, the Remuneration

Committee, the Management Engagement Committee, individual

Directors and the Chairman will be carried out under the mandate

of the Nomination Committee.

The Board believes that the current mix of skills, experience,

knowledge and age of the Directors is appropriate to the

requirements of the Company.

Due to the recent commencement of operations of the Company,

no formal Board evaluation has been carried out as at the date of

this report. An overall Board evaluation will be completed during

2022 and the results of this review will be reported in the next

Annual Report. The evaluation will consider the Board’s

composition, diversity and how effectively members work together

to achieve objectives. Individual evaluations will consider whether

each Director continues to contribute effectively. The Chairman will

lead the evaluation of the Board as a whole, as well as, individual

members. He will conduct one-to-one follow-up meetings, with

assistance from the Senior Independent Director, to provide

individual feedback to each Director, with outcomes and proposed

actions reported back to the Board. TheSenior Independent

Director will lead the evaluation of the Chairman by conducting

meetings with each of the other Non-Executive Directors and then

summarise the feedback to theBoard.

This will enable the necessary rigour of evaluation, and

consideration thereafter, as anticipated by the UK Code.

Directors regularly meet with the senior management employed

by the Operator, both formally and informally, to ensure that the

Board remains regularly updated on all issues. Members of the

Board are members of professional bodies and/or serve on other

Boards, which ensures they keep abreast of the latest technical

developments in their areas of expertise.

The Board arranges for presentations from the Operator, the

Company’s brokers and other advisors on matters relevant to the

Company’s business. The Board will assess the training needs of

Directors on an annual basis as set out in the Terms of Reference

of the Nomination Committee.

Internal Control and Financial Reporting

The Directors acknowledge that they are responsible for

establishing and maintaining the Company’s system of internal

control and reviewing its effectiveness. Internal control systems are

designed to manage rather than eliminate the failure to achieve

business objectives and can only provide reasonable not absolute,

assurance against material misstatements or loss. However, the

Board’s objective is to ensure that the Company has appropriate

systems in place for the identification and management of risks.

The Directors carry out a robust assessment of the Company’s

principal and emerging risks, including events or circumstances

that might threaten its business model, future performance,

solvency or liquidity and reputation. As further explained in the

Audit and Risk Committee Report, the principal risks and

uncertainties of the Company are outlined in a risk matrix as set out

on pages 42 to 46 of the Strategic Report.

The Board continually reviews its policy-setting and updates the

risk matrix at least annually to ensure that procedures are in

place with the intention of identifying, mitigating and minimising

the impact of risks should they crystallise.

60 Petershill Partners | Annual Report 2021

The key procedures which have been established to provide

internal control are that:

• the Board has delegated the oversight of internal controls and

financial reporting to the Operator and relies on the Operator

to perform such functions;

• the Board has delegated the day-to-day operations of the

Company to the Administrator and Operator; however, it

retains accountability for all functions it delegates. Each

contract was entered into after detailed consideration of the

quality and cost of services provided;

• the Board clearly defines the duties and responsibilities of the

Company’s advisors and appointments are made by the Board

after due and careful consideration. The Board monitors the

ongoing performance of such advisors through review of quarterly

management accounts and valuation reports and will continue

to do so through the Management Engagement Committee;

• the Operator Agreement details defined duties and

responsibilities with lines of control and reporting. There is a

formal structure in place to review the Operator through the

Management Engagement Committee which then makes

recommendations to the full Board. The Committee is also

given updates on developments arising from the operations

and strategic direction of the underlying investee companies;

• the Administrator provides administration and company

secretarial services to the Company;

• the Administrator maintains a system of internal control on

which it reports to the Board; and

• the Audit and Risk Committee monitors risks, including those

of the Administrator and Operator.

The Board has reviewed the need for an internal audit function

and has decided that the systems and procedures employed by

the Administrator and Operator, including their own internal

controls and procedures, provide sufficient assurance that an

appropriate level of risk management and internal control, which

safeguards Shareholders’ investments and the Company’s assets,

is maintained. The Board has also considered that the Operator

leverages the risk management framework of Goldman Sachs,

which includes an internal audit function responsible for

independently assessing and validating the effectiveness of key

controls undertaken by the Operator. Additional information on

the risk framework of Goldman Sachs is set out on page 42.

An internal audit function specific to the Company is therefore

considered unnecessary.

Internal controls over financial reporting are designed to provide

reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external

reporting purposes. The Administrator and Operator both operate

risk-controlled frameworks on a continual ongoing basis within

a regulated environment. The Administrator formally reports

to the Board quarterly through a compliance report and holds

International Standard on Assurance Engagements (ISAE) 3402

Type 2 certification. This entails an independent rigorous

examination and testing of its controls and processes. TheOperator

formally reports to the Board quarterly and also engages with the

Board on an ad-hoc basis as required. No weaknesses or failings

within the Administrator or Operator have been identified.

The systems of control referred to above, which have been in effect

to date, are designed to ensure that the Company can effectively

identify and manages its risks as well as ensuring that is in

compliance with all applicable laws and regulations. In establishing

the systems of internal control, regard is paid to the materiality of

relevant risks, the likelihood of costs being incurred and the costs

of control. It follows therefore that the systems of internal control

can only provide reasonable, not absolute, assurance against the

risk of material misstatement or loss. The Board has reviewed the

effectiveness of the risk management and internal control

processes and is satisfied that they are in accordance with the FRC’s

internal control publication titled Guidance on Risk Management,

Internal Control and Related Financial and Business Reporting.

Operator Agreement

The Company and Goldman Sachs Asset Management Fund

Services Limited have entered into an agreement dated

28 September 2021, pursuant to which the Operator has been

appointed as the Company’s exclusive alternative investment

fund manager and is responsible for the day-to-day operation

and portfolio management of the Group’s investment portfolio.

The Operator is subject at all times to the overall supervision of

the Board in accordance with the terms of the Operator

Agreement, as well as the Company’s Acquisition Strategy and

Investment Policy (adopted by the Board in September 2021), the

Listing Rules and applicable law. The Company undertakes in the

Operator Agreement to authorise no one other than the Operator

to deal in the Company’s assets for the duration of the Operator

Agreement, except on the advice of the Operator. A summary of

the fees paid to the Operator are given in Note 5 to the financial

statements.

Authority of the Operator

Pursuant to the Operator Agreement, the Operator has discretion

to acquire, dispose of and manage the direct and indirect assets

of the Company subject to and in accordance with the Company’s

Acquisition Strategy and Investment Policy. All activities engaged

in under the Operator Agreement by the Operator are at all times

subject to the overall policies, supervision, review and control of

the Board.

The authority granted to the Operator pursuant to the Operator

Agreement is subject in particular to the Company’s Acquisition

Strategy and Investment Policy, pursuant to which the Operator is

required to notify the Board or to seek approval from the Board or

the Shareholders before undertaking acquisitions or disposals or

incurring leverage at certain thresholds established by the Board

from time to time.

The Operator may delegate certain of its functions, powers and

duties under the Operator Agreement to any affiliate of the

Operator. The Operator has exercised this power and has

delegated its portfolio management functions to Goldman Sachs

Asset Management International Ltd. which has further

delegated the provision of portfolio management services to

Goldman Sachs Asset Management International, LP as the

Investment Advisor. The Operator is liable for the acts or

omissions of any person to whom any of its functions, powers and

duties may be delegated to the extent that it would itself have

been liable for such acts or omissions.

The Operator is also entitled to consult with an investment

committee established by the Operator. Currently, the members

of the investment committee are senior executives of Goldman

Sachs selected by the Operator and serve without compensation

for their services. The investment committee will also be

responsible for monitoring the Company’s portfolio.

61 Petershill Partners | Annual Report 2021

Corporate governance report continued

Term and Termination

The Operator Agreement has an initial term of seven years,

afterwhich it will automatically renew on an annual basis until

terminated in accordance with its terms.

During the initial term of seven years (the “Initial Term”), the

Operator Agreement is terminable by the Company on three

months’ written notice if, in the opinion of the independent

members of the Board acting reasonably, the Operator is in

material breach of the Operator Agreement and such breach is

incapable of remedy or has not been remedied to the reasonable

satisfaction of the Company during this three-month notice

period. Additionally, during the Initial Term, the Operator

Agreement may be terminated on immediate written notice if (a)

in the opinion of the independent members of the Board acting

reasonably, the Operator has (i) committed an act of wilful

misconduct in relation to the Company which has resulted in

material harm to the Company’s business or (ii) committed an act

of fraud, or (b) the Operator has ceased to have the necessary

authorisations to provide the services it has agreed to provide

under the Operator Agreement and there is no suitable

replacement, in the sole judgement of Goldman Sachs, within the

Goldman Sachs group.

After the Initial Term, the Operator Agreement is terminable by

the Company if, in the opinion of the independent members of

the Board acting reasonably, (i) the Operator is in material breach

of the Operator Agreement and such breach is incapable of

remedy or has not been remedied to the reasonable satisfaction

of the Company within three months of providing written notice

to the Operator, or (ii) the Operator has committed an act of (a)

wilful misconduct in relation to the Company which has resulted

in material harm to the Company’s business or (b) fraud, or (iii)

the Operator has failed to provide the Company with services to

the standard or with the due care and attention that would be

expected of an Operator of a comparable listed company where

such failure has not been remedied to the reasonable satisfaction

of the Company within six months of the Company giving notice

to the Operator specifying such failure. Additionally, after the

Initial Term, the Operator Agreement may also be terminated

without cause with the approval of at least three-quarters of the

independent members of the Board, subject to the payment

referred to below.

The Operator may terminate the Operator Agreement at any time

(i) by giving 12 months’ notice to the Company, if the Company is

in material breach of its obligations under the Operator

Agreement, (ii) if the Company undergoes a change of control,

(iii) if the Company undertakes a material action, or declines to

act, and such action or inaction is against the advice of the

Operator and where the Operator notified the Company in writing

of its disagreement with such proposed action or inaction or (iv)

the Company materially amends its Acquisition Strategy and

Investment Policy without the prior consent of the Operator.

The Operator Agreement may also be terminated by either party

at any time if the other party is subject to a bankruptcy or other

similar insolvency event (other than in the context of a scheme

for solvent amalgamation or reconstruction).

Other than the payment required to be made in the event that the

Company terminates the Operator Agreement without cause and

described below, termination of the Operator Agreement in

accordance with its terms does not require payment of a penalty

or other additional payment from either party save that the

Company shall pay any outstanding portion of the Recurring

Operating Charge to the Operator pro-rated to the date of

termination of the Operator Agreement and the Company shall

honour any authorised transactions entered into before the date

of any such termination. In the event the Company terminates the

Operator Agreement without cause after the Initial Term, the

Operator will be entitled to receive (i) payment to the Operator of

an amount equal to the aggregate Recurring Operating Charge

for the most recent four fiscal quarters multiplied by three, and

(ii) crystallisation of the Profit Sharing Charge based on the

immediately prior fiscal quarter’s holding values.

The Board as a whole reviewed the Company’s compliance with

the UK Code, the Listing Rules, the Disclosure Guidance and

Transparency Rules and the AIC Code. In accordance with Listing

Rule 15.6.2(2)R and having formally appraised the performance

and resources of the Operator prior to the IPO, as outlined under

the roles and responsibilities of the Management Engagement

Committee on page 58, in the opinion of the Directors the

continuing appointment of the Operator on the terms agreed is in

the interests of Shareholders as a whole.

Operator Charges and Alignment

The Operator fee structure is designed to align with performance

against the strategic objectives, taking into consideration the

Company’s culture and values. The fee structure is underpinned

by the level of investments in Partner-firms, encouraging the

Operator’s focus on long-term relationships, collaboration and

the success of the Partner-firms and aligning with Company and

Shareholder interests.

As consideration for its services pursuant to the Operator

Agreement, the Company will pay the Operator a Recurring

Operating Charge in respect of the management of its assets.

TheRecurring Operating Charge is payable quarterly in arrears in

an amount equal to 7.5 per cent of the Group’s income from

investments in Partner-firms, as defined under IFRS, for the

relevant quarter.

The Company also pays the Operator a Profit Sharing Charge on a

quarterly basis. The Profit Sharing Charge comprises a profit

sharing charge of 20 per cent of total income from investments in

Partner-firms, as defined under IFRS, from new investments

made by them post Admission, in the relevant quarter (net of any

Recurring Operating Charge in respect of such new investments),

chargeable only after a two-year ownership period from the date

on which the investment closed, and subject to the relevant

investment achieving an investment return of at least 6.0 per

cent. The Profit Sharing Required Investment Return is calculated

at the end of each quarter only on the total invested capital

funded to date; in other words, it excludes any potential deferred

consideration embedded in the total investment amount, if not

yet paid. The Profit Sharing Charge is only applicable if the

average annual return, comprising income from investments in

Partner-firms and change in fair value of the investment since the

date of acquisition, as defined under IFRS, exceeds the Profit

Sharing Required Investment Return of 6.0 per cent.

62 Petershill Partners | Annual Report 2021

While the Group does not typically seek to exit its assets, in the

event that there are realisations, the Company will pay to the

Operator a divestment Profit Sharing Charge of 20 per cent of the

total profits from the divestment (in respect of any investments

which pre-date the Initial Acquisition, to be based upon the

contribution value of such asset pursuant to the Initial Acquisition).

The total profits from the divestment, which represent the capital

return of the investment, will be calculated as the sale price

minus the contribution value of such asset as defined at the Initial

Acquisition, excluding any income from investments in Partner-

firms received over the holding period (and on which the

Company has already paid Recurring Operating Charges and, in

the case of new investments made by them following Admission,

Profit Sharing Charges).

Our Culture

The Company’s purpose is to provide Shareholders with

best-in-class access to the growth and profitability of the

alternative asset management industry, focusing on the quality

of recurring earnings.

The Company has no employees. The Directors are committed to

providing the highest standards of diligence in governance and

reporting and to maintaining a constructive and collaborative

relationship with the Operator while ensuring that the Operator

manages conflicts of interest appropriately. The Company has

delegated its operating responsibilities to the Operator and is

reassured by and supportive of the Operator’s Values which are

set out on page 8.

As the Company has no employees and acts through its Operator,

its Culture is represented by the values, attitudes and behaviour

of the Board. The Board encourages a culture that is responsive to

the views of its stakeholders. This is reflected in the way in which

Board meetings are conducted. The Chairman promotes and

facilitates a strong culture of open debate on topics, encouraging

participation and input from all Directors, the Operator and other

advisors to ensure a wide exchange of views.

The Board sets the strategy for the Company to align with its

purpose. Having a strong culture of collaboration and

transparency will help the Company achieve its strategy to offer

high-quality Partner-firms a “win-win” solution as a source of

partnership and capital, helping them to build enduring

businesses that are responsive to the trends we expect to shape

the future, while maintaining alignment with our Shareholders,

Operator, Partner-firms, Board, and other service providers.

TheBoard has focused on ensuring that this culture is embedded

across the Company’s operations and monitors progress in

thatregard.

The Board undertakes continued engagement with the Operator

and other advisors to ensure that practices and behaviour

throughout the business are aligned with the Company’s purpose

and strategy. As part of this ongoing monitoring, during the

reporting period the Board held meetings and requested more

granular information on matters such as the Company’s risk

culture and ESG considerations in Partner-firms, to ensure any

concerns and inconsistencies are identified and addressed.

Relations with Shareholders

The Board welcomes Shareholders’ views and places great

importance on communication with its Shareholders. The

Company’s AGM provides a forum for Shareholders to meet and

discuss issues with the Directors of the Company. The Chairman

and other Directors are also available to meet with Shareholders

to hear their views and discuss any issues or concerns, including

in relation to Board composition, governance and strategy, or at

other times if required. The Operator and the Chairman have held

meetings at investor requests since listing.

The Company reports formally to Shareholders in a number of

ways, including regulatory news releases through the London

Stock Exchange’s Regulatory News Service, and announcements

in response to events or routine reporting obligations. Also, an

Interim Report will be published each year outlining performance

to 30 June and the Annual Report will be published each year for

the year ended 31 December, both of which will be made

available on the Company’s website. In addition, the Company’s

website contains comprehensive information, including Company

notifications, share information, financial reports, investment

objectives and policy, investor contacts and information on the

Board and corporate governance. Shareholders and other

interested parties can subscribe to email news updates by

registering on the website.

The Directors and Operator receive informal feedback from

analysts and investors, which is presented to the Board by the

Company’s Brokers. The Company Secretary also receives informal

feedback via queries submitted through the Company’s website,

and these are addressed by the Board, the Operator or the

Company Secretary, as applicable.

Engagement with Other Stakeholders

Service providers have been selected and engaged based on due

diligence and references including consideration of their internal

controls and expertise. The Company has established a

Management Engagement Committee, which will review the

performance of each service provider annually and provide

feedback as appropriate, to maintain good working relationships.

More information on stakeholder engagement may be found

on pages 36-37 of this report.

The Board recognises that relationships with suppliers are

enhanced by prompt payment and the Operator, in conjunction

with the Company’s Administrator, ensures all payments

are processed within the contractual terms agreed with the

individual suppliers.

Whistleblowing

The Board relies on the Operator’s whisteblowing policies and has

considered arrangements by which staff of the Operator may, in

confidence, raise concerns within its organisation about possible

improprieties in matters of financial reporting or other matters. It

has concluded that adequate arrangements are in place for the

proportionate and independent investigation of such matters

and, where necessary, for appropriate follow-up action to be

taken within their organisations.

By order of the Board

Naguib Kheraj

Chairman

26 April 2022

63 Petershill Partners | Annual Report 2021

The Audit and Risk Committee, chaired by Mr. Mark Merson, operates

within clearly defined terms of reference which are available from

the Company’s website, and include all matters indicated by

Disclosure Guidance and Transparency Rule 7.1, the AIC Code and the

UK Code. Its other members are Everard Barclay Simmons,

Annemarie Durbin and Erica Handling. Members of the Audit and

Risk Committee must be, and are, independent of the Company’s

independent auditors and Operator. In the future, the Audit and Risk

Committee will meet no less than four times in a year and at such

other times as the Audit and Risk Committee Chair shall require, and

will meet the independent auditors at least once a year without the

presence of the Operator and the Administrator.

The Committee members have considerable financial and business

experience and the Board has determined that the membership as

a whole has sufficient recent and relevant sector and financial

experience to discharge its responsibilities and that at least one

member has competence in accounting or auditing. The biographies

of each member of the Committee, detailing their relevant

qualifications and experience, are on pages 50 to 51.

Responsibilities

The main duties of the Audit and Risk Committee are:

• to monitor the integrity of the Company’s financial statements and

regulatory announcements relating to its financial performance,

and to review significant financial reporting judgements;

• to report to the Board on the appropriateness of the Company’s

accounting policies and practices;

• to consider the ongoing assessment of the Company as a going

concern and the assessment of longer-term viability;

• to review the valuations of the Company’s investments prepared

by the Operator, and provide a recommendation to the Board on

the valuation of the Company’s investments;

• to oversee the relationship with the independent auditors,

including agreeing their remuneration and terms of engagement,

reviewing their reporting, monitoring their independence,

objectivity and effectiveness, ensuring that any non-audit services

are appropriately considered, and making recommendations to

the Board on their appointment, reappointment or removal, for it

to put to the Shareholders in general meeting;

• to monitor and consider annually whether there is a need for the

Company to have its own internal audit function;

• to keep under review the effectiveness of the Company’s internal

controls, including financial controls and risk management

systems;

• to review and consider the UK Code, the AIC Code, and the AIC

Guidance on Audit Committees; and

• to report to the Board on how it has discharged its responsibilities.

The Audit and Risk Committee is aware that certain sections of the

Annual Report are not subject to formal statutory audit, including

the Chairman’s Statement, the Operator’s Report and certain

sections of the Directors’ Remuneration Report. Financial

information in these sections is reviewed by the Audit and Risk

Committee as part of its review of the overall Annual Report.

The Company continues to comply with the Statutory Audit Services

for Large Companies Market Investigation (Mandatory Use of

Competitive Tender Processes and Audit Committee Responsibilities)

Order 2014 for the financial year under review. The Audit and Risk

Committee is required to report its findings to the Board, identifying

any matters on which it considers that action or improvement is

needed, and making recommendations on the steps to be taken.

The independent auditors were invited to attend the Audit and Risk

Committee meetings at which the Annual Report was considered.

They will have the opportunity to meet with the Committee without

representatives of the Operator or Administrator being present at

least once per year.

Financial Reporting

The primary role of the Audit and Risk Committee in relation

to financial reporting is to review with the Administrator, theOperator

and the independent auditors, and report to the Board, on the

appropriateness of the Annual Report and financial statements and

Interim Financial Report, concentrating on, among other matters:

• the quality and acceptability of accounting policies and practices;

• the clarity of the disclosures and compliance with financial

reporting standards and relevant financial and governance

reporting requirements;

• material areas in which significant judgements have been applied or

where there has been discussion with the independent auditors,

including the going concern and viability statement;

• whether the Annual Report and financial statements, taken as a

whole, are fair, balanced and understandable and provide the

information necessary for Shareholders to assess the Company’s

performance, business model and strategy; and

• any correspondence from regulators in relation to financial reporting.

To aid its review, the Audit and Risk Committee will consider reports from

the Administrator and the Operator and also reports from the independent

auditors on the outcomes of their half-year review and annual audit.

Meetings

During the period ended 31 December 2021, the Audit and Risk

Committee met once formally, and there was ongoing liaison and

discussion between the independent auditors and the Audit and

Risk Committee Chair with regard to the audit approach and the

identified risks. The matters discussed at those meetings included:

• review of the terms of reference of the Audit and Risk Committee

for approval by the Board;

• review of the accounting policies and format of the financial statements;

• review and approval of the audit plan of the independent auditors;

• consideration of the fee for the external audit;

• governance and compliance responsibilities of the Company;

• assessment of the independence of the independent auditors;

• requirement for climate-related financial disclosures;

• assessment of the effectiveness of the external audit process as

described below; and

• review of the Company’s key risks and internal controls.

After the period ended 31 December 2021, the Audit and Risk

Committee met on 23 March 2022 to consider the significant areas of

judgment, estimates and assumptions and again on 19 April 2022 and

26 April 2022 to review the results of the audit and to consider and

approve the preliminary results announcement and the Annual Report.

AUDIT AND RISK COMMITTEE

REPORT

Audit and risk committee report

64 Petershill Partners | Annual Report 2021

Significant Areas of Judgement Considered

by the Audit and Risk Committee

The significant areas of judgement, as well as estimates and

assumptions, considered by the Audit and Risk Committee are

outlined in Note 3 to the Consolidated Financial Statements.

The revenue recognition and valuation process and methodology

were discussed and debated with the Operator and with the

independent auditors at the Audit and Risk Committee meetings

held on 22 November 2021 and 23 March 2022. Investments and

other financial assets and liabilities were transferred to the

Company in exchange for Ordinary Shares issued by the Company in

connection with the initial acquisition in connection with the IPO.

The value of these investments is determined periodically by the

Operator, with the assistance of Goldman Sachs & Co. acting as

Valuer, and is subject to review by the Valuation Committee of

theOperator.

The independent auditors have explained the results of their audit

work on valuations in the Independent Auditors’ Report on pages 72

to 81. There were no adjustments proposed and uncorrected that

were material in the context of the Annual Report and financial

statements as a whole.

Risk Management

The Board has carried out a robust assessment of the principal and

emerging risks facing the Company, including those threatening its

business model, future earnings potential, and operational

resiliency. On behalf of the Board, the Audit and Risk Committee

reviews the effectiveness of the Company’s risk management

processes. The Company’s risk assessment process and the way in

which significant business risks are managed is a key area of focus

for the Audit and Risk Committee. The Audit and Risk Committee

receives reports from the Operator and Administrator on the

Company’s risk evaluation process and reviews changes to

significant risksidentified. The work of the Audit and Risk

Committee was driven primarily by the Company’s assessment of

its principal risks and uncertainties as set out on pages 42 to 46 of

the Strategic Report.

Internal Audit

The Audit and Risk Committee shall consider at least once a year

whether or not there is a need for an internal audit function. Currently,

the Audit and Risk Committee does not consider there to be a need for

an internal audit function, given that the Operator is subject to

internal audit by the Goldman Sachs internal audit function; and there

are no employees in the Company and all outsourced functions are

with parties which have their own internal controls and procedures.

Independent Audit

PricewaterhouseCoopers LLP has been the Company’s independent

auditors since 4 August 2021. This is the first period of audit. The

independent auditors are required to rotate the audit partner every

five years. There are no contractual obligations restricting the

choice of independent auditors, and the Company will put the audit

services contract out to tender at least every 10 years. Under the

Companies Act 2006, the reappointment of the independent

auditors is subject to Shareholder approval at the AGM. The audit

partner responsible for the audit will be rotated at least every five

years in accordance with professional and regulatory standards in

order to protect independence and objectivity and to provide fresh

challenge to the business. Mr. Richard McGuire, the current audit

partner, has held this role for one year and will continue as audit

partner until the conclusion of the 2025 audit. The Audit and Risk

Committee will continue to monitor the performance of the

independent auditors on an annual basis and will consider

independence and objectivity, taking account of appropriate

guidelines. In addition, the Committee Chair will continue to

maintain regular contact with the lead audit partner outside the

formal Committee meeting schedule, not only to discuss formal

agenda items for upcoming meetings, but also to review any other

significant matters. The Audit and Risk Committee reviews the scope

and results of the audit, its cost-effectiveness and the independence

and objectivity of the independent auditors, with particular regard to

the level of any non-audit fees. Notwithstanding such services, the

Audit and Risk Committee considers PricewaterhouseCoopers LLP to

be independent of the Company and that the provision of such

non-audit services is not a threat to the objectivity and

independence of the conduct of the audit.

To further safeguard the objectivity and independence of the

independent auditors from becoming compromised, the Audit and Risk

Committee is aware of the cap on fees that may be charged by a

company’s independent auditors for non-audit services at 70 per cent

of the average statutory audit fees for the previous three years. This cap

will become applicable to the Group for the year ending 31 December

2024 and onwards. PricewaterhouseCoopers LLP will be precluded

from providing, and does not provide, certain services such as valuation

work or accounting services. There is also a presumption that

PricewaterhouseCoopers LLP should only be engaged for non-audit

services where they are best placed to provide those services; for

example engagement as reporting accounting prior to the Company’s

listing and a review of the interim report. Note 6 details services

provided by PricewaterhouseCoopers LLP during the period. Fees

payable for audit services for the period were £808k (excluding VAT).

Amounts paid for non-audit services in relation to reporting accounting

work amounted to £868k (excluding VAT).

To fulfil its responsibility regarding the independence of the

independent auditors, the Audit and Risk Committee considers:

• discussions with or reports from the independent auditors

describing their arrangements to identify, report and manage any

conflicts of interest; and

• the extent of non-audit services provided by the independent auditors.

To assess the effectiveness of the independent auditors,

theCommitteereviews:

• the independent auditors’ fulfilment of the agreed audit plan,

through review of the audit plan, including the audit approach to

significant risks and monitoring any changes in response to new

issues identified and any variations from the audit plan;

• discussions or reports highlighting the major issues that arose

during the course of the audit; and

• feedback from other service providers evaluating the

performance of the audit team.

The Audit and Risk Committee is satisfied with

PricewaterhouseCoopers LLP’s effectiveness and independence as

independent auditors having considered the degree of diligence and

professional scepticism demonstrated by them. Having carried out

the review described above, and having satisfied itself that the

independent auditors remain independent and effective, the Audit

and Risk Committee has recommended to the Board that

PricewaterhouseCoopers LLP be reappointed as independent

auditors for the year ending 31 December 2022.

The Audit and Risk Committee has provided the Board with its

recommendation to the Shareholders on the reappointment of

PricewaterhouseCoopers LLP as independent auditors for the year

ending 31 December 2022. Accordingly, a resolution proposing the

reappointment of PricewaterhouseCoopers LLP as our independent

auditors will be put to Shareholders at the AGM.

On behalf of the Audit and Risk Committee

Mark Merson

Audit and Risk Committee Chair

26 April 2022

65 Petershill Partners | Annual Report 2021

Chair’s Statement

The Directors’ Remuneration Report that follows has been

prepared in accordance with the Listing Rules, the Large and

Medium-sized Companies and Groups (Accounts and Reports)

(Amendment) Regulations 2013 and the Companies Act 2006.

Dear Shareholder

This is Petershill Partners’ first Directors’ Remuneration Report.

Itreports on remuneration from the date of the Directors’

appointment on 4 September 2021 to the end of the financial

year on 31 December 2021. As a reminder, the Company does not

have any Executive Directors, management or employees, so this

report relates solely to the Chairman and other Non-Executive

Directors (NEDs).

This Directors’ Remuneration Report consists of three parts:

• The Directors’ Remuneration Policy (the “Policy”) which sets

out the remuneration framework that applies to the Chairman

and the other Non-Executive Directors and will be subject to a

binding vote at the 2022 AGM.

• The Annual Report on Remuneration, which explains how the

Directors have been paid in the period from their appointment

to the end of the financial year and will be subject to an

advisory vote at the 2022 AGM.

• The Annual Statement, which summarises the activities of the

Remuneration Committee and our approach to remuneration,

key decisions made and the context for those decisions.

The Context of Remuneration Decisions

This is the first financial period since listing and the Board’s

remuneration remains consistent with the disclosures contained

in the Company’s Prospectus dated 28 September 2021.

The Directors were selected through a targeted search process

with the assistance of a leading international search firm. The

objective was to assemble a high-quality diverse Board with

significant experience in financial services and the knowledge and

standing to be able to oversee and manage the relationship with

the Operator. The fees set out in the remainder of this report,

which were paid from the date they commenced undertaking

significant activities for the Company, reflect the scale and

complexity of the Company and its intended growth strategy, as

well as the alternative opportunities available to the Directors

based on their skills and experience.

The original fees anticipated the time commitment which would

be expected of the Chairman and NEDs. In fact, both in

preparation for and subsequent to the Company’s IPO, the time

commitment has been higher than originally anticipated. There is

nevertheless no proposal to revisit the fees and it is hoped that

this time commitment will normalise over time.

Directors’ Remuneration Policy

As a newly listed company, the Directors’ Remuneration Policy

will be presented to Shareholders for approval at the 2022 AGM.

When designing the Policy, the Remuneration Committee was

mindful of the six factors listed in the UK Corporate Governance

Code: clarity, simplicity, risk, predictability, proportionality and

alignment to culture. The Company has no employees and,

therefore, the Policy relates solely to the fees which are payable

to the Chairman and other NEDs. No elements of the fees are

linked to financial or other performance of the Company.

Implementing the Policy for FY 2022

There are no planned changes to the fee levels for 2022.

Conclusions

We look forward to engaging with our Shareholders and

other stakeholders on an ongoing basis. I would welcome any

feedback or comments on the Directors’ Remuneration Report

more generally.

Annemarie Durbin

Chair of the Remuneration Committee

26 April 2022

Directors’ Remuneration Policy

The Directors’ Remuneration Policy will be submitted for approval

at the 2022 Annual General Meeting (AGM). The Remuneration

Committee intends that the new Policy will operate for three

years. The Policy was reviewed and approved by the

Remuneration Committee.

The proposed Directors’ Remuneration Policy, if approved, will be

effective from the date of the 2022 AGM.

It is not part of the Company’s strategy to appoint Executive

Directors (or indeed any employees). However, in the highly

unlikely event that the Company subsequently chooses to appoint

Executive Directors, it would then develop a policy which would

be subject to Shareholder approval before such Board

appointments could be made.

DIRECTORS’ REMUNERATION

REPORT

Directors’ remuneration report

66 Petershill Partners | Annual Report 2021

Fees Policy for Chairman and Non-Executive Directors

The following table summarises the fees policy for the Chairman and the NEDs.

Element of pay Purpose/ link to strategy Operation/performance Maximum

Fees

Expenses

To provide a competitive fee to

attract NEDs who have the

requisite skills and experience to

oversee the implementation of

the Company’s strategy

To facilitate the performance of

their duties

Fees for the Chairman are set by the

Committee. Fees for the other NEDs are set

by the Chairman.

Fees are reviewed, but not necessarily

increased, annually.

Fee levels are determined based on

expected time commitments for each role

and by reference to comparable fee levels in

other similar-sized companies.

Additional fees are payable to the Senior

Independent Director and Chairs of Board

Committees to reflect their additional

responsibilities.

Additional fees may be paid for other

responsibilities which include a higher time

commitment than normal.

Reasonable business expenses (including

any tax thereon) will be reimbursed.

The overall aggregate annual

limit for fees payable to the

Chairman and NEDs is £2m.

There is no provision for the payment of variable pay; Directors do

not receive bonuses or LTIP awards and, therefore, there are no

recoupment (malus or clawback) provisions relating to variable

pay. There is no minimum shareholding requirement. Actual

shareholdings are shown on page 69.

Statement of Consideration of

ShareholderViews

Prior to Admission, the views of Petershill Partners’ private

Shareholders (representing the private funds managed by

Goldman Sachs Asset Management) were carefully considered

when determining the Policy. The Committee will continue to

engage with Shareholders and to respond to Shareholder

feedback.

Material changes to the Policy will be subject to prior

consultation with major Shareholders.

The Company has no employees and, therefore, there were no

such persons with which to consult.

Recruitment Policy

The remuneration package for any new Chairman or NED will be

set in accordance with the terms of the Policy in place at the time

of appointment, including the overall cap on fees..

Non-Executive Directors’ Terms

ofAppointment

The NEDs do not have service contracts with the Company, but

instead, have letters of appointment. The date of appointment

and the most recent reappointment and length of service for each

NED are shown in the table below:

Date of appointment Length of service

Naguib Kheraj (Chairman) 4 September 2021 <1 year

Everard Barclay Simmons 4 September 2021 <1 year

Annemarie Durbin 4 September 2021 <1 year

Erica Handling 4 September 2021 <1 year

Mark Merson 4 September 2021 <1 year

Each Director is subject to annual re-election by the Company in a

general meeting. None of the Directors are appointed for a fixed

term. The appointment of the Chairman may be terminated by

either the Chairman or the Company giving six months’ notice.

The appointment of each of the other Directors may be

terminated by either that Director or the Company giving three

months’ notice. Payment may be made in lieu of providing the full

notice period.

67 Petershill Partners | Annual Report 2021

Annual Report on Remuneration

Single Total Figure of Remuneration (Audited) (for the period 4 September 2021 to

31 December 2021)

Non-Executive Directors

Fees

(£’000)

Taxable Benefits

(£’000)

Total

(£’000)

Naguib Kheraj £154 – £154

Everard Barclay Simmons £57 £29 £86

Annemarie Durbin £50 – £50

Erica Handling £49 – £49

Mark Merson £55 – £55

Total £365 £29 £394

The expenses relate to travel and accommodation expenses attending meetings together with associated taxes.

Notes to Single Total Figure of Remuneration Table

Fees are shown in the table from the date of appointment of each

Director to the Board (4 September 2021) to the end of the

financial year.

No Director received any inducement or performance-related

pay on joining the Board. In addition to fees from formal

appointment, fees were accrued from the date on which each

Director became substantively involved in the extensive work to

prepare the Company for listing. This was 1 May 2021 (in the case

of the Chairman) and 1 June 2021 (in the case of the other NEDs).

During the period to listing 20 formal meetings were held.

Therefore, in total, from the Company’s incorporation until

31 December 2021, the overall fees paid to Directors are set out

in the table below. These include the fees paid since appointment

as Directors as set out in the table above.

Non-Executive Directors

Total

(£’000)

Naguib Kheraj £317

Everard Barclay Simmons £131

Annemarie Durbin £90

Erica Handling £88

Mark Merson £99

Fees

The Chairman and NED fees remain as set out in the Prospectus:

Position

Fees

(£’000)

Chairman of the Board fee £475

NED base fee £120

Senior Independent Director fee £25

Chair of the Audit and Risk Committee £35

Chair of the Remuneration Committee £10

Member of the Audit and Risk Committee £15

Member of the Nomination, Remuneration

or Management Engagement Committees £5 per committee

There are no proposed changes for 2022.

Expenses

Expenses includes the reimbursement (including any tax payable)

of business-related costs.

There are no proposed changes for 2022.

Annual Statement on the

Role and Activities of the

Remuneration Committee

Role and responsibilities of the

RemunerationCommittee

The Company’s Remuneration Committee is responsible for

determining the remuneration of the Chairman, reviewing the

ongoing appropriateness and relevance of remuneration levels

and appointing external remuneration consultants.

The Remuneration Committee will meet at least once a year.

Themembers of the Remuneration Committee are Annemarie

Durbin (Chair), Naguib Kheraj, Everard Barclay Simmons, Erica

Handling and Mark Merson. As all of the Directors are

independent and there are no executives, the Committee’s

membership currently comprises the whole Board.

Advisors

After the year end, the Committee appointed FIT Remuneration

Consultants LLP (“FIT”) as its independent advisor. FIT is a

member of the Remuneration Consultants’ Group and complies

with its Code of Conduct which sets out guidelines to ensure that

its advice is independent and free of undue influence. It charged

no fees for time incurred in respect of FY2021. FIT has no other

connection with the Company and its only connection with its

directors is as advisor to other remuneration committees on

which they may serve.

Key activities during the period

The Committee held a meeting on 20 September 2021 in

which the setting of Chair fees wasdiscussed.

Directors’ remuneration report continued

68 Petershill Partners | Annual Report 2021

Other Statutory Requirements

Share Interests (Audited)

Directors who held office during the period and had interests in

the Ordinary Shares of the Company as at 31 December 2021 are

given in the table below. There were no changes to the interests

of each Director as at the date of this report.

There is no requirement for Directors to hold shares in the

Company. At the time of the IPO, some Directors purchased

shares at the listing price.

Shares owned

outright

Naguib Kheraj* 375,000

Everard Barclay Simmons –

Annemarie Durbin –

Erica Handling 85,714

Mark Merson 114,285

* Mr Kheraj’s shares are held through a Self Invested Personal Pension.

As Independent NEDs, none participate in any form of incentives.

The Company’s mid-market share price at the close of business on

31 December 2021 was 274.5p and the range of the mid-market

price during the year since IPO was 248.5p to352p.

TSR Performance

The following chart shows the value of £100 invested in the

Company (at the date of Admission) compared with the value of

£100 invested in the FTSE 250 Index. We have chosen the FTSE

250 Index as it provides the most appropriate and widely

recognised index for benchmarking the Company’s corporate

performance since Admission.

100

120

Petershill Partners FTSE 250 Index

Total Shareholder Return

Value of a 100 unit investment made at Admission

30/9/2021 31/10/2021 30/11/2021 31/12/2021

Relative Importance of Spend on Pay

As Petershill Partners only listed in October 2021, there is no

comparable year-on-year change to disclose. Full disclosure will

be presented in the Annual Report on Remuneration for FY 2022.

CEO Pay Ratio

The Company has no Chief Executive or any equivalent executives

and no employees, so no such ratio is required.

Percentage Change in Director Pay

As Petershill Partners only listed in October 2021, there is no

comparable year-on-year change to disclose. Full disclosure will

be presented in the Annual Report on Remuneration for FY 2022.

Payments for Loss of Office and/or

Payments to Former Directors (Audited)

No payments for loss of office, nor payments to former Directors,

were made during the period under review. Andres Gonzales,

Chaim Langer and Ayesha Parra were initially appointed as Directors

of the Company as part of its establishment, but subsequently

resigned and received no remuneration or compensation.

Statement of Shareholding Voting

This is the first Policy and Directors’ Remuneration Report

submitted to Shareholders. Disclosure of the voting results at the

2022 AGM will be shown in the Annual Report on Remuneration

for FY 2022.

On behalf of the Remuneration Committee

Annemarie Durbin

Chair of the Remuneration Committee

26 April 2022

69 Petershill Partners | Annual Report 2021

The Directors are responsible for preparing the Annual Report

2021 and the financial statements in accordance with applicable

law and regulations.

The Companies Act 2006 requires the Directors to prepare

financial statements for each financial year. Under that law the

Directors have prepared the Group’s and the Company’s financial

statements in accordance with UK-adopted international

accounting standards. Under company law the Directors must not

approve the financial statements unless they are satisfied that

they give a true and fair view of the state of affairs of the Group

and Company and of the profit or loss for the Group for

thatperiod.

In preparing these financial statements, the Directors are

required to:

• select suitable accounting policies in accordance with IAS 8,

Accounting Policies, Changes in Accounting Estimates and

Errors and then apply them consistently;

• make judgements and accounting estimates that are

reasonable and prudent;

• present information, including accounting policies, in a manner

that provides relevant, reliable, comparable and

understandable information;

• provide additional disclosures when compliance with the

specific requirements of IFRS are insufficient to enable users to

understand the impact of particular transactions, other events

and conditions on the Group and Company financial position

and performance;

• state whether applicable UK-adopted international accounting

standards have been followed, subject to any material departures

disclosed and explained in the financial statements; and

• prepare the financial statements on a going concern basis

unless it is inappropriate to presume that the Company and/or

the Group will continue in business.

The Directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the Company’s

transactions and disclose with reasonable accuracy at any time

the financial position of the Company and enable them to ensure

that the financial statements and the Directors’ Remuneration

Report comply with the Companies Act 2006. They are also

responsible for safeguarding the assets of the Company and

hence for taking reasonable steps for the prevention and

detection of fraud and other irregularities.

In the case of each Director in office at the date the Report of the

Directors is approved:

• so far as the Director is aware, there is no relevant audit

information of which the Group’s and Company’s auditors are

unaware; and

• they have taken all the steps that they ought to have taken as a

Director in order to make themselves aware of any relevant

audit information and to establish that the Group’s and

Company’s auditors are aware of that information.

Under applicable law and regulations, the Directors are also

responsible for preparing a Strategic Report, Report of the Directors,

Directors’ Remuneration Policy and Corporate Governance Report

that comply with that law and those regulations.

The Directors are also responsible under section 172 of the

Companies Act 2006 for promoting the success of the Company

for the benefit of its members as a whole and in doing so having

regard for the needs of wider society and other stakeholders.

Website Publication

The Directors are responsible for the maintenance and integrity

of the Company’s website. Legislation in the United Kingdom

governing the preparation and dissemination of financial

statements may differ from legislation in other jurisdictions.

Directors’ Responsibilities Pursuant to DTR4

The Directors confirm that to the best of their knowledge:

• the Group and Company financial statements, which have been

prepared in accordance with UK-adopted international

accounting standards, give a true and fair view of the assets,

liabilities and financial position and profit or loss of the Group

and Company, and of the profit or loss of the Group;

• the Annual Report and Accounts, including the Strategic

Report, includes a fair review of the development and

performance of the business and the position of the Company

and the undertakings included in the consolidation taken as a

whole, together with a description of the principal risks and

uncertainties that they face; and

• they consider that this Annual Report and Accounts, taken as a

whole, is fair, balanced and understandable and provides the

information necessary for Shareholders to assess the

Company’s and the Group’s performance, business model

andstrategy.

On behalf of the Board

Naguib Kheraj

Chairman

26 April 2022

DIRECTORS’ RESPONSIBILITIES

STATEMENT

Directors’ responsibilities statement

70 Petershill Partners | Annual Report 2021

Financial statements

72 Independent auditors’ report

82 Financial statements

118 Glossary of capitalised defined terms

120 The Petershill Partners Group’s assets

123 Glossary of key operating metrics

126 Alternative Performance Measures (“APMs”)

132 Company information

133 Cautionary statement

71 Petershill Partners | Annual Report 2021

Independent auditors’ report

INDEPENDENT AUDITORS’

REPORT TO THE MEMBERS OF

PETERSHILL PARTNERS PLC

Report on the audit of the

financialstatements

Opinion

In our opinion, Petershill Partners plc’s Group financial

statements and Company financial statements (the “financial

statements”):

• give a true and fair view of the state of the Group’s and of the

Company’s affairs as at 31 December 2021 and of the Group’s

profit and the Group’s and Company’s cash flows for the period

from 24 March 2021 to 31 December 2021;

• have been properly prepared in accordance with UK-adopted

international accounting standards; and

• have been prepared in accordance with the requirements of the

Companies Act 2006.

We have audited the financial statements, included within the

Annual Report 2021 (the “Annual Report”), which comprise: the

Consolidated and Company Statements of Financial Position,

asat 31 December 2021; the Consolidated Statement of

Comprehensive Income, the Consolidated and Company

Statements of Changes in Equity, and the Consolidated and

Company Statements of Cash Flows for the period then ended;

and the notes to the financial statements, which include a

description of the significant accounting policies.

Our opinion is consistent with our reporting to the Audit and

RiskCommittee.

Basis for opinion

We conducted our audit in accordance with International

Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.

Ourresponsibilities under ISAs (UK) are further described in the

Auditors’ responsibilities for the audit of the financial statements

section of our report. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for

ouropinion.

Independence

We remained independent of the Group in accordance with the

ethical requirements that are relevant to our audit of the financial

statements in the UK, which includes the FRC’s Ethical Standard,

as applicable to listed public interest entities, and we have

fulfilled our other ethical responsibilities in accordance with

these requirements.

To the best of our knowledge and belief, we declare that

non-audit services prohibited by the FRC’s Ethical Standard were

not provided.

Other than those disclosed in Note 6 to the Consolidated

Financial Statements, we have provided no non-audit services

to the Company or its controlled undertakings in the period

underaudit.

Our audit approach

Context

In planning for our first year audit of Petershill Partners plc and

its subsidiaries (the ‘Group’), we met with the Audit and Risk

Committee, the Board of Directors and the Operator to discuss

and understand significant business activities during the period,

and to understand their perspectives on associated business risks.

We used this insight when forming our own views regarding the

business, as part of developing our audit plan and when scoping

and performing our audit procedures. The Group was formed with

the objective of investing in Partner-firms to achieve capital

growth and to generate income. Given the complexity and

judgements required in determining the value of investments we

considered this a significant risk to both the Group and the

Company. The initial acquisition of the stakes in the Partner-firms

on 28 September 2021 was a complex transaction involving the

issuance of share capital and entering into a Tax Receivables

Agreement as consideration for the stakes in the Partner-firms.

We have considered both the liability for the Tax Receivables

Agreement and the Fair Value of the Share Issuance to be a

significant risk to the Group due to the subjectivity of the

estimation and the complexity of the underlying tax laws and the

subjective nature of the inputs to the consideration.

72 Petershill Partners | Annual Report 2021

Overview

Audit scope

• We audited the consolidated financial information of the Group

as a whole. As part of designing our audit, we determined

materiality and assessed the risks of material misstatement in

the financial statements. In particular, we looked at where the

Directors made significant judgements and estimates. As in all

of our audits we also addressed the risk of management

override of internal controls, including evaluating whether

there was evidence of bias by the Directors that represented a

risk of material misstatement due to fraud.

Key audit matters

• Valuation of investments at fair value through profit and

loss(Group)

• Valuation of liability for Tax Receivables Agreement (Group)

• Valuation of shares issued in exchange for transfer of assets

and liabilities (Group and Company)

• Valuation of Investments in subsidiary undertakings (Company)

Materiality

• Overall Group materiality: US$53,000,000 based on 1% of

Netassets.

• Overall Company materiality: US$50,300,000 based on 1% of

Net assets, capped at 95% of Group materiality.

• Performance materiality: US$39,700,000 (Group) and

US$37,700,000 (Company).

The scope of our audit

As part of designing our audit, we determined materiality

and assessed the risks of material misstatement in the

financialstatements.

Key audit matters

Key audit matters are those matters that, in the auditors’

professional judgement, were of most significance in the 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) identified by the auditors, including

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, and any comments we

make on the results of our procedures thereon, were addressed in

the context of our audit of the financial statements as a whole,

and in forming our opinion thereon, and we do not provide a

separate opinion on these matters.

73 Petershill Partners | Annual Report 2021

Independent auditors’ report continued

This is not a complete list of all risks identified by our audit.

Key audit matter How our audit addressed the key audit matter

Valuation of investments at fair value through profit and loss (Group)

Refer to the Audit and Risk Committee Report, Notes to the

consolidated financial statements – Note 2 (Basis of

preparation and significant accounting policies), Note 3

(Critical accounting judgements, estimates and assumptions)

and Note 4 (Investments at fair value through profit or loss).

The investments at fair value through profit or loss for the

Group were $6,023.1 million as at 31 December 2021.

As this is an initial audit our audit work included testing

the valuations of the initial acquisition of $4,843.3 million

as at 28 September 2021 as this determines the cost of the

investments but also feeds into the fair value consideration of

the shares issued in exchange for the stakes in the Partner-firms.

The investments in Partner-firms held by the Group are not

quoted or traded in an active market and as such their fair values

are determined using valuation techniques, primarily earnings

multiples, discounted cash flows and recent comparable

transactions. The fair values of certain Partner-firms may be fair

valued by a third-party valuation advisor (the 'Valuer') engaged by

the Operator.

In valuing the investments, key assumptions include estimates

around future fundraise timing and sizes, expected management

and performance fee rates, margins of the Partner-firms, expected

current and future fund returns and timing of realisations.

The inputs in the earnings multiples models include observable

data, such as earnings multiples of comparable companies to

the relevant Partner-firms, and unobservable data, such as

forecast earnings for the Partner-firms. In discounted cash flow

models, unobservable inputs are the projected cash flows of

the relevant Partner-firms and the discount rates applied.

The valuation of the Group investments at fair value through

profit and loss was identified as a key audit matter given the

valuation is inherently subjective due to, among other factors,

the individual nature of each investment and the expected

future cash flows. The significance of the estimates and

judgements involved, coupled with the fact that only a small

percentage difference in individual investment valuations,

when aggregated, could result in a material misstatement,

warranted specific audit focus in this area.

We understood and evaluated the valuation methodologies applied,

by reference to industry practice and applicable accounting

standards, and tested the techniques used by management in

determining the fair value of the investments. We performed the

following over the fair value of investments as at initial acquisition

and as at 31 December 2021:

• Discussed and challenged the Operator and Valuer’s approach to

valuations and significant estimates;

• Undertook further investigations by holding further discussions

with the Operator and Valuer and obtained evidence to support

explanations received where assumptions were outside the

expected range or showed unexpected movements based on our

knowledge;

• Observed that alternative assumptions had been considered and

evaluated by the Operator and the Valuer, including adjustments

where relevant in respect of climate change, before determining

the final valuation. Challenged management about the rationale

of any non-observable inputs or significant estimates used in

valuations and obtained corroborative evidence such as past

performance of the Partner-firms or data provided by the

Partner-firm. We concluded that the assumptions used in the

valuations were supportable in light of available and comparable

market evidence;

• Obtained confirmations directly from the Partner-firms to

corroborate ownership and other interests held;

• Performed recalculations of valuation workings to ensure

mathematical accuracy;

• Agreed data inputs in the valuation model, such as fee rates and

assets under management, to supporting documentation on a

sample basis; and

• Agreed the amounts per the valuation reports to the accounting

records and the financial statements.

In addition, given the inherent subjectivity involved in the valuation

of the investments, and therefore the need for specialised market

knowledge when determining the most appropriate assumptions

and the technicalities of valuation methodology, we engaged our

internal valuation experts to assist us in our audit of this area. The

experts performed the following procedures:

• Reviewed the appropriateness of valuation methodology and the

application of the methodology to each specific valuation;

• Reviewed certain inputs and estimates used, such as comparable

company multiples and discount rates as at the initial acquisition

date and at 31 December 2021; and

• Reported their findings and conclusions to the Group audit team

for overall consideration and conclusions.

We considered the appropriateness and adequacy of the disclosures

around the estimation uncertainty and sensitivities on the

accounting estimates.

Our testing did not identify any evidence of material misstatement.

74 Petershill Partners | Annual Report 2021

Key audit matter How our audit addressed the key audit matter

Valuation of liability for Tax Receivables Agreement (Group)

Refer to the Notes to the consolidated financial statements –

Note 2 (Basis of preparation and significant accounting

policies) and Note 3 (Critical accounting judgements,

estimates and assumptions).

The Group recognised a Liability for the Tax Receivable

Agreements (‘TRA’) on 28 September 2021 with a fair value of

$159.9 million. After the unwinding of the discount rate, the

carrying value as at 31 December 2021 was $166.7m.

The Operator, with the support of an external tax specialist, has

estimated the step-up tax basis of the acquired assets based

on tax information provided by the Partner-firms, projected the

amortisation of the step-up tax basis to occur over 15 years,

applied a discount rate of 18% and utilised the current

effective tax rate of Delta Epsilon Delaware Inc in calculating

the future tax benefits and resulting payments under the TRA.

The valuation of the liability for Tax Receivables Agreement is

identified as a key audit matter as it is inherently subjective

due the magnitude of, and unobservable nature of the

estimates involved in the valuation of the TRA and the

complexity of the applicable underlying tax laws.

We understood and evaluated the calculation and methodologies

applied, by reference to industry practice and relevant tax laws, and

tested the techniques used by management in determining the

liability for the TRA.

We obtained management’s computations and workings relating to

the amounts recognised for the liability of the TRA as at Initial

Acquisition and as at 31 December 2021. We performed the

following procedures:

• Checked the mathematical accuracy of management’s calculation;

• On a sample basis agreed the inputs used in the computations to

supporting documentation;

• Challenged management about the rationale of any non-observable

inputs or significant estimates used in the calculation,such as the

discount rate applied and amortisation period, and obtained

corroborative evidence;

• Confirmed management had appropriately reflected US federal

tax rate in the calculations; and

• Agreed the disclosures made in the financial statements back to

supporting documentation.

Given the inherent subjectivity involved in the calculation of the

liability for the TRA and complexity of tax laws, and therefore the

need for specialised market knowledge when determining the most

appropriate assumptions and the technicalities, we engaged our

internal tax and valuation experts to assist us in our audit of this area.

Our testing did not identify any evidence of material misstatement.

Valuation of shares issued in exchange for transfer of assets and liabilities (Group and Company)

Refer to the Notes to the consolidated financial statements –

Note 2 (Basis of preparation and significant accounting

policies) and Note 13 (Share capital).

The Group obtained stakes in 19 Partner-firms in exchange for

both shares in the Company and entering into the Tax

Receivables Agreement.

In order to determine the fair value of the shares issued the

Operator was required to the fair value the assets and liabilities

acquired including investments in the Partner-firms and

liability for the TRA.

The valuation of shares issued in exchange for assets and

liabilities was identified as a key audit matter as it is inherently

subjective due the magnitude of, and unobservable nature of

the estimates involved in the valuation of the investments in

the Partner-firms and the liability for the TRA and the

complexity noted in the key audit matters above.

We obtained management’s workings relating to the fair valuation

of shares issued and in addition to the considerations over the

valuation of investments and the fair value of the TRA, as discussed

in the key audit matters above, we performed the following

procedures:

• Considered management’s accounting policy and recognition

criteria in the context of the requirements of applicable

accounting standards and company law;

• Considered the results of our procedures performed over both the

valuation of the investments as part of the initial acquisition on

28 September 2021 and the valuation of the payable in respect of

the TRA;

• Performed recalculations of the amounts recorded in equity

based on the number of shares and the fair value of the assets

and liabilities acquired;

• Agreed inputs to the calculation, such as the number of shares

issued, to supporting documentation.

Our testing did not identify any evidence of material misstatement.

75 Petershill Partners | Annual Report 2021

Independent auditors’ report continued

Key audit matter How our audit addressed the key audit matter

Valuation of Investments in subsidiary undertakings (Company)

Refer to the Notes to the Company financial statements –

Note 1 of the (Basis of preparation), Note 2 (Investments in

subsidiary undertakings) and Note 5 (Investments at fair value

through profit or loss).

The investments in subsidiary undertakings relate to the direct

ownerships in Delta Epsilon Delaware Inc. and Delta Epsilon

Cayman Ltd. These entities hold either directly or indirectly

interests in portions of the stakes in Partner-firms.

The investments in subsidiary undertakings are held at fair

value which is their net asset value.

The valuation of the investments in subsidiary undertakings

was identified as a key audit matter given the components of

the underlying valuation such as investments in Partner-firms

and liability for TRA are inherently subjective as noted in the

key audit matters above.

We obtained management’s calculations of the fair value of

the investments in subsidiary undertakings. We performed the

following procedures:

• Agreed inputs to supporting documentation and other audit work

performed over areas such as the valuation of investments at fair

value through profit and loss, and the liability for TRA as noted in

the key audit matters above;

• Tested the mathematical accuracy of the calculation; and

• Agreed ownership to supporting documentation.

Our testing did not identify any evidence of material misstatement.

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a

whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry in which

they operate.

In establishing the overall approach to our audit, we assessed the risk of material misstatement, taking into account the nature, likelihood

and potential magnitude of any misstatement. Following this assessment, we applied professional judgement to determine the extent of

testing required over each balance in the financial statements. The financial statements are produced using a single consolidation

spreadsheet that takes information from a consolidated general ledger. The Group audit team performed all audit procedures over the

consolidated Group as a whole to match how management operates the Group. This allowed us to adequately address the key audit matters

for the audit and, together with procedures performed over the consolidation, gave us sufficient appropriate audit evidence for our opinion

on the Group financial statements as a whole.

In planning our audit, we made enquiries with management to understand the extent of the potential impact of climate change risk on the

Group’s financial statements. In particular, management considers the impact of climate change in the valuation of investments. We

considered how climate change risks could impact the assumptions made in the valuation of investments such as fund raising demand. We

also considered the consistency of the climate change disclosures included in the Strategic Report with the financial statements and our

knowledge from our audit.

76 Petershill Partners | Annual Report 2021

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,

together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit

procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually

and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Financial statements – Group Financial statements - Company

Overall materiality US$53,000,000. US$50,300,000.

How we determined it 1% of Net assets 1% of Net assets

Rationale for benchmark

applied

Given this is the first period of operations and the

objective of the Group is to hold stakes in Partner-

firms, which will then generate returns, the primary

focus for the first set of financial statements was

the accounting and fair value of the initial asset and

liability acquisition. Therefore we consider that the

net assets of the Group is the appropriate

benchmark for calculating overall materiality.

As with the Group, given this is the first period of

operations and the objective of the Group is to hold

stakes in Partner-firms, which will then generate

returns, the primary focus for the first set of

financial statements was the accounting and fair

value of the initial asset and liability acquisition.

Therefore we consider that the net assets of the

Company is the appropriate benchmark for

calculating overall materiality. This was restricted to

95% of the Group's total materiality.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected

misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the

nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our

performance materiality was 75% of overall materiality, amounting to US$39,700,000 for the Group financial statements and

US$37,700,000 for the Company financial statements.

In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and

aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.

In addition to overall Group materiality, a specific materiality was also applied to the Consolidated Statement of Comprehensive Income line

items that impact Adjusted EBIT, namely Income from investments in Partner-firms; Board of Directors fees and expenses; Operator charge;

and Other operating expenses. We set a specific materiality level of $5,500,000. In arriving at this judgement, we considered the fact that

Adjusted EBIT is a secondary financial indicator of the Group.

We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above $2,600,000

(Group audit) and $2,515,000 (Company audit) as well as misstatements below those amounts that, in our view, warranted reporting for

qualitative reasons.

77 Petershill Partners | Annual Report 2021

Independent auditors’ report continued

Conclusions relating to going concern

Our evaluation of the Directors’ assessment of the Group's and

the Company’s ability to continue to adopt the going concern

basis of accounting included:

• Obtained the Directors’ going concern assessment and

corroborated key assumptions to underlying documentation

and ensured this was consistent with our audit work in these

areas;

• Assessed the appropriateness of the key assumptions used

both in the base case and in the severe but plausible downside

scenario, including assessing whether we considered the

downside sensitivities to be appropriately severe;

• Tested the integrity of the underlying formulae and

calculations within the going concern and cash flow models;

• Considered the appropriateness of the mitigating actions

available to management in the event of the downside scenario

materialising. Specifically, we focused on whether these

actions are within the Group’s control and are achievable; and

• Reviewed the disclosures provided relating to the going

concern basis of preparation and found that these provided an

explanation of the Directors’ assessment that was consistent

with the evidence we obtained.

Based on the work we have performed, we have not identified any

material uncertainties relating to events or conditions that,

individually or collectively, may cast significant doubt on the

Group's and the Company’s ability to continue as a going concern

for a period of at least twelve months from when the financial

statements are authorised for issue.

In auditing the financial statements, we have concluded that the

Directors’ use of the going concern basis of accounting in the

preparation of the financial statements is appropriate.

However, because not all future events or conditions can be

predicted, this conclusion is not a guarantee as to the Group's and

the Company's ability to continue as a going concern.

In relation to the Directors’ reporting on how they have applied

the UK Corporate Governance Code, we have nothing material to

add or draw attention to in relation to the Directors’ statement in

the financial statements about whether the Directors considered

it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with

respect to going concern are described in the relevant sections of

this report.

Reporting on other information

The other information comprises all of the information in the

Annual Report other than the financial statements and our

auditors’ report thereon. The Directors are responsible for the

other information. Our opinion on the financial statements does

not cover the other information and, accordingly, we do not

express an audit opinion or, except to the extent otherwise

explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, 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

audit, or otherwise appears to be materially misstated. If we

identify an apparent material inconsistency or material

misstatement, we are required to perform procedures to conclude

whether there is a material misstatement of the financial

statements or a material misstatement of the other information.

If, based on the work we have performed, we conclude that there

is a material misstatement of this other information, we are

required to report that fact. We have nothing to report based on

these responsibilities.

With respect to the Strategic Report and Report of the Directors,

we also considered whether the disclosures required by the UK

Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the

Companies Act 2006 requires us also to report certain opinions

and matters as described below.

78 Petershill Partners | Annual Report 2021

Strategic Report and Report of the Directors

In our opinion, based on the work undertaken in the course of the

audit, the information given in the Strategic Report and Report of

the Directors for the period ended 31 December 2021 is

consistent with the financial statements and has been prepared

in accordance with applicable legal requirements.

In light of the knowledge and understanding of the Group and

Company and their environment obtained in the course of the

audit, we did not identify any material misstatements in the

Strategic Report and Report of the Directors.

Directors’ Remuneration

In our opinion, the part of the Directors’ Remuneration Report to

be audited has been properly prepared in accordance with the

Companies Act 2006.

Corporate governance statement

The Listing Rules require us to review the Directors’ statements in

relation to going concern, longer-term viability and that part of

the corporate governance statement relating to the Company’s

compliance with the provisions of the UK Corporate Governance

Code specified for our review. Our additional responsibilities with

respect to the corporate governance statement as other

information are described in the Reporting on other information

section of this report.

Based on the work undertaken as part of our audit, we have

concluded that each of the following elements of the corporate

governance statement is materially consistent with the financial

statements and our knowledge obtained during the audit, and we

have nothing material to add or draw attention to in relation to:

• The Directors’ confirmation that they have carried out a robust

assessment of the emerging and principal risks;

• The disclosures in the Annual Report that describe those

principal risks, what procedures are in place to identify

emerging risks and an explanation of how these are being

managed or mitigated;

• The Directors’ statement in the financial statements about

whether they considered it appropriate to adopt the going

concern basis of accounting in preparing them, and their

identification of any material uncertainties to the Group’s

and Company’s ability to continue to do so over a period

of at least twelve months from the date of approval of the

financial statements;

• The Directors’ explanation as to their assessment of the

Group's and Company’s prospects, the period this assessment

covers and why the period is appropriate; and

• The Directors’ statement as to whether they have a reasonable

expectation that the Company will be able to continue in

operation and meet its liabilities as they fall due over the

period of its assessment, including any related disclosures

drawing attention to any necessary qualifications or

assumptions.

Our review of the Directors’ statement regarding the longer-term

viability of the Group was substantially less in scope than an audit

and only consisted of making inquiries and considering the

Directors’ process supporting their statement; checking that the

statement is in alignment with the relevant provisions of the UK

Corporate Governance Code; and considering whether the

statement is consistent with the financial statements and our

knowledge and understanding of the Group and Company and

their environment obtained in the course of the audit.

In addition, based on the work undertaken as part of our audit,

we have concluded that each of the following elements of the

corporate governance statement is materially consistent with

the financial statements and our knowledge obtained during

the audit:

• The Directors’ statement that they consider the Annual Report,

taken as a whole, is fair, balanced and understandable, and

provides the information necessary for the members to assess

the Group’s and Company's position, performance, business

model and strategy;

• The section of the Annual Report that describes the review

of effectiveness of risk management and internal control

systems; and

• The section of the Annual Report describing the work of the

Audit and Risk Committee.

We have nothing to report in respect of our responsibility to

report when the Directors’ statement relating to the Company’s

compliance with the Code does not properly disclose a departure

from a relevant provision of the Code specified under the Listing

Rules for review by the auditors.

79 Petershill Partners | Annual Report 2021

Independent auditors’ report continued

Responsibilities for the financial statements

and the audit

Responsibilities of the Directors for the financial

statements

As explained more fully in the Directors’ Responsibilities

Statement, the Directors are responsible for the preparation of

the financial statements in accordance with the applicable

framework and for being satisfied that they give a true and fair

view. The Directors are also responsible for such internal control

as they determine is necessary to enable the preparation of

financial statements that are free from material misstatement,

whether due to fraud or error.

In preparing the financial statements, the Directors are

responsible for assessing the Group’s and the Company’s ability

to continue as a going concern, disclosing, as applicable, matters

related to going concern and using the going concern basis of

accounting unless the Directors either intend to liquidate the

Group or the Company or to cease operations, or have no realistic

alternative but to do so.

Auditors’ responsibilities for the audit of the

financial statements

Our objectives are to obtain reasonable assurance about whether

the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an

auditors’ report that includes our opinion. Reasonable assurance

is a high level of assurance, but is not a guarantee that an audit

conducted in accordance with ISAs (UK) will always detect a

material misstatement when it exists. Misstatements can arise

from fraud or error and are considered material if, individually or

in the aggregate, they could reasonably be expected to influence

the economic decisions of users taken on the basis of these

financial statements.

Irregularities, including fraud, are instances of non-compliance

with laws and regulations. We design procedures in line with our

responsibilities, outlined above, to detect material misstatements

in respect of irregularities, including fraud. The extent to which

our procedures are capable of detecting irregularities, including

fraud, is detailed below.

Based on our understanding of the Group and industry, we

identified that the principal risks of non-compliance with laws

and regulations related to UK regulatory principles, such as those

governed by the Financial Conduct Authority’s Listing Rules, and

we considered the extent to which non-compliance might have a

material effect on the financial statements. We also considered

those laws and regulations that have a direct impact on the

financial statements such as the Companies Act 2006, as well as

US State and Federal Tax rules. We evaluated management’s

incentives and opportunities for fraudulent manipulation of the

financial statements (including the risk of override of controls),

and determined that the principal risks were related to posting

inappropriate journal entries, management bias in accounting

estimates and judgemental areas of the financial statements

such as the valuation of investments, valuation of liability for the

Tax Receivables Agreements and valuation of shares issued in

exchange for transfer of assets and liabilities. Audit procedures

performed by the engagement team included:

• Discussions with the Audit and Risk Committee, the Directors,

the Administrator and the Operator, including consideration

of known or suspected instances of non-compliance with laws

and regulations and fraud, and review of the reports made

by management;

• Reviewing Board minutes as well as the relevant meeting

minutes, including those of the Audit and Risk Committee;

• Performing audit procedures over the tax computations;

• Designing audit procedures to incorporate unpredictability

around the nature, timing or extent of our testing;

• Challenging assumptions and judgements made by

management in their significant areas of estimation; and

• Identifying and testing journal entries, in particular any journal

entries posted with unusual account combinations.

There are inherent limitations in the audit procedures described

above. We are less likely to become aware of instances of

non-compliance with laws and regulations that are not closely

related to events and transactions reflected in the financial

statements. Also, 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.

80 Petershill Partners | Annual Report 2021

Our audit testing might include testing complete populations of

certain transactions and balances, possibly using data auditing

techniques. However, it typically involves selecting a limited

number of items for testing, rather than testing complete

populations. We will often seek to target particular items for

testing based on their size or risk characteristics. In other cases,

we will use audit sampling to enable us to draw a conclusion

about the population from which the sample is selected.

A further description of our responsibilities for the audit

of the financial statements is located on the FRC’s website at:

www.frc.org.uk/auditorsresponsibilities. This description forms

part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and

only for the Company’s members as a body in accordance with

Chapter 3 of Part 16 of the Companies Act 2006 and for no other

purpose. We do not, in giving these opinions, accept or assume

responsibility for any other purpose or to any other person to

whom this report is shown or into whose hands it may come save

where expressly agreed by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if,

in our opinion:

• we have not obtained all the information and explanations we

require for our audit; or

• adequate accounting records have not been kept by the

Company, or returns adequate for our audit have not been

received from branches not visited by us; or

• certain disclosures of Directors’ remuneration specified by law

are not made; or

• the Company financial statements and the part of the

Directors’ Remuneration Report to be audited are not in

agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment

We were appointed by the Directors on 4 August 2021 to audit

the financial statements for the period ended 31 December 2021

and subsequent financial periods. This is therefore our first year

of uninterrupted engagement.

Other matter

In due course, as required by the Financial Conduct Authority

Disclosure Guidance and Transparency Rule 4.1.14R, these

financial statements will form part of the ESEF-prepared annual

financial report filed on the National Storage Mechanism of the

Financial Conduct Authority in accordance with the ESEF

Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report

provides no assurance over whether the annual financial report

will be prepared using the single electronic format specified in

the ESEF RTS.

Richard McGuire (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

London

26 April 2022

81 Petershill Partners | Annual Report 2021

Financial Statements

CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

For the period from 24 March 2021 to 31 December 2021

For the period

from

24 March 2021 to

31 December 2021

Note $m

Income

Income from Investments in Partner-firms derived from: 2(x)

Performance fee income

79.3

Management fee income

49.3

Investment income

8.9

137.5

Movement in financial assets held at fair value

Change in fair value of investments at fair value through profit or loss 2(vi), 4

234.0

Expenses

Board of Directors fees and expenses 18

(1.0)

Operator charge 5

(9.2)

Other operating expenses

(12.6)

Unrealised Divestment Fee 5

(45.2)

Total expenses

(68.0)

Operating profit for the period

303.5

Finance cost

Interest expense

(4.6)

Movement in liability to Petershill Funds 12 (31.6)

Change in liability for Tax Receivables Agreement 2(v), 3

(6.8)

Total finance cost

(43.0)

Profit for the period before tax

260.5

Tax charge 7 (12.6)

Profit for the period after tax

247.9

Profit and total comprehensive income for the period

247.9

Profit and total comprehensive income attributable to:

Equity holders of the Company

247.9

Earnings per share

Basic and diluted earnings per share (cents) 8 64.12

The accompanying notes on pages 86 to 109 form an integral part of these financial statements.

82 Petershill Partners | Annual Report 2021

CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

As at 31 December 2021

31 December 2021

Note $m

Non-current assets

Investments at fair value through profit or loss 4 6,023.1

6,023.1

Current assets

Investments in money market funds at fair value through profit or loss 4

453.1

Cash and cash equivalents 2(xii)

124.8

Trade and other receivables 9

102.0

679.9

Total assets

6,703.0

Non-current liabilities

Liability to Petershill Funds 12

597.2

Notes payable 11

340.9

Deferred payment obligations 2(vi)

133.4

Liability for Tax Receivables Agreement 2(v)

166.7

Fee payable on divestment of investments 5

45.2

Deferred tax liability 7

12.6

1,296.0

Current liabilities

Trade and other payables 10

28.3

Deferred payment obligations 2(vi)

74.8

Interest payable

8.1

111.2

Total liabilities

1,407.2

Net assets

5,295.8

Equity

Share capital 13

11.6

Share premium 13

3,346.7

Other reserve 13

1,689.6

Retained earnings 14

247.9

Total Shareholders' funds

5,295.8

Number of Ordinary Shares in issue at period end

1,156,696,029

Net assets per share (cents) 15

457.84

The financial statements of the Group were approved and authorised for issue by the Board of Directors on 26 April 2022 and signed on

its behalf by:

Naguib Kheraj Mark Merson

Chairman Director

The accompanying notes on pages 86 to 109 form an integral part of these financial statements.

83 Petershill Partners | Annual Report 2021

Financial Statements continued

CONSOLIDATED STATEMENT OF

CHANGES IN EQUITY

For the period from 24 March 2021 to 31 December 2021

Share capital Share premium Other reserve

Retained

earnings Total

Note $m $m $m $m $m

Opening net assets attributable to Shareholders – – – – –

Issue of share capital 13 11.6 3,378.9 1,689.6 – 5,080.1

Share issue costs 13

– (32.2) – – (32.2)

Profit and total comprehensive income for the period

– – – 247.9 247.9

Closing net assets attributable to Shareholders

11.6 3,346.7 1,689.6 247.9 5,295.8

The accompanying notes on pages 86 to 109 form an integral part of these financial statements

84 Petershill Partners | Annual Report 2021

CONSOLIDATED STATEMENT OF CASH FLOWS

For the period from 24 March 2021 to 31 December 2021

For the period from

24 March 2021 to

31 December 2021

Note $m

Cash flows from operating activities

Operating profit for the period

303.5

–

Adjustments to reconcile operating profit for the financial period to net cash used in operating activities:

Purchase of investments in money market funds 4

(806.7)

Sale of investments in money market funds 4

353.6

Reinvestment of Income from investments in Partner-firms

(8.1)

Movement in financial assets and liabilities held at fair value through profit and loss 4

(234.0)

Movement in trade and other receivables

(56.1)

Increase in trade and other payables

22.6

Increase in liability to Petershill Funds

31.6

Movement in fee payable on divestment of investments

45.2

Net cash outflow from operating activities

(348.4)

Cash flows from investing activities

Purchase of investments at fair value through profit or loss

(247.0)

Net cash outflow from investing activities

(247.0)

Cash flows from financing activities

Issue of shares (net of Share issue costs deducted from proceeds) 13

725.0

Payment of Share issue costs

(4.8)

Net cash inflow from financing activities

720.2

Net increase in cash and cash equivalents during the period

124.8

Cash and cash equivalents at the beginning of the period

–

Cash and cash equivalents at the end of the period

124.8

Non-cash investing and financing activities

Acquisition of Partner-firms stakes by issuing 1,000,000,000 of Ordinary Shares, liability towards Tax

Receivables agreement and assumption of Notes payable 2(ix)

4,843.3

The accompanying notes on pages 86 to 109 form an integral part of these financial statements.

85 Petershill Partners | Annual Report 2021

Financial Statements continued

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS

For the period from 24 March 2021 to 31 December 2021

1. General Information

Petershill Partners plc (the “Company”) is a company limited by shares, incorporated and registered in England and Wales whose shares are

publicly traded on the main market of the London Stock Exchange. The consolidated financial statements of Petershill Partners plc for the period

from 24 March 2021 to 31 December 2021 comprise the Company, its subsidiaries and its indirect subsidiaries together referred to as the

“Group”.

The Company was incorporated and registered in England and Wales under the UK Companies Act 2006 (as amended) as a private company

limited by shares under the name Delta Epsilon Limited on 24 March 2021 with the registered number 13289144. On 12 August 2021, the

Company was re-registered as a public limited company as Delta Epsilon plc, and on 2 September 2021, the Company was renamed Petershill

Partners plc.

The Company was incorporated on 24 March 2021, so information in the financial statements covers the period from 24 March 2021 to 31

December 2021, but during that period the meaningful activities of the Company took place from the date of completion of the Initial Acquisition

on 28 September 2021 to 31 December 2021. The Company launched an initial public offering on the London Stock Exchange on 28 September

2021 and its Ordinary Shares were admitted to listing and trading on the London Stock Exchange on 1 October 2021 (ticker: PHLL).

2. Basis of preparation and significant accounting policies

i. Basis of preparation

The consolidated financial statements of the Group have been prepared and approved by the Board of Directors in accordance with UK-adopted

International Accounting Standards (“IFRS”) and with the requirements of the Companies Act 2006 as applicable to companies reporting under

those standards. The financial statements are presented to the nearest million United States Dollar ($m), the functional and reporting currency

of the Company.

The consolidated financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the

revaluation of financial assets and liabilities at fair value through profit or loss. The preparation of the financial statements requires estimates

and assumptions to be made that may affect the amounts reported in the financial statements and accompanying notes. Actual amounts could

differ from the estimates included in the financial statements herein. The preparation of the consolidated financial statements in conformity

with IFRS requires the use of certain critical accounting estimates. It also requires judgement to be exercised in the process of applying the

accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to

the consolidated financial statements, are disclosed in note 3.

Refer to note 2(xiv) for discussion on new and amended standards and interpretations that are applicable to the Company and the Group.

The principal accounting policies are set out below.

ii. Segmental reporting

The Operator serves as the Group’s alternative investment fund manager for purposes of the UK AIFMR and EU AIFMD, and pursuant to the

Operator Agreement has delegated its portfolio management functions to the Investment Manager, which has further delegated the provision of

portfolio management services to the Investment Advisor. The Investment Advisor, acting as the chief operating decision-maker, is responsible

for allocating resources and assessing performance of the operating segments. The key measure of performance used by the Investment Advisor

to assess the Group’s performance and to allocate resources is the Group’s income from investments in Partner-firms.

The Group is engaged in holding interests in and investing into Partner-firms for the purpose of generating revenues derived from the share of

management fees, performance fees and investment income. The management of the Group including assessment of performance, budgets and

liquidity is managed for the portfolio as a whole and not by discrete segments. Hence, the Investment Advisor has concluded that the Group is

organised into one main operating segment.

The Group derives 89% of its current income from North America and the remaining 11% from Europe. 89% of the Group’s non-current assets are

located in North America and the remaining 11% are located in Europe.

86 Petershill Partners | Annual Report 2021

iii. Functional currency and foreign currency transactions

The Board of Directors has determined that the functional currency of the Company and its subsidiaries is US dollars, as this is the currency of the

primary economic environment in which the Company and its subsidiaries operate and is the currency of the majority of the Group’s Investment

in Partner-firms. If indicators of the primary economic environment are mixed, then management uses its judgement to determine the functional

currency that most closely represents the economic effect of the underlying transactions, events and conditions. Although the Company is listed

in the UK, the Group’s investments are mostly held in the USA and transactions are mostly denominated in US dollars. Expenses (including the

Operator charge) are denominated and paid mostly in US dollars.

Transactions in currencies other than US Dollar during the period, including income and expenses, are translated into US Dollar at the rate of

exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in currencies other than US Dollar are

retranslated at the functional currency rate of exchange ruling at the reporting date. Non-monetary items that are measured in terms of

historical cost in a currency other than US Dollar are translated using the exchange rates as at the dates of the initial transaction. Non-monetary

items measured at fair value in a currency other than US Dollar are translated using the exchange rates at the date when the fair value

was determined.

Foreign currency translation gains and losses on financial instruments classified at fair value through profit or loss are included in the

Consolidated Statement of Comprehensive Income as part of the Change in fair value of investments at fair value through profit or loss.

Exchange differences on other financial instruments are included in the Statement of Comprehensive Income as Foreign exchange gain/(loss).

Gains and losses on foreign exchange during the period were immaterial and have been included under other operating expenses in the

Consolidated Statement of Comprehensive Income.

iv. Financial instruments

i. Classification

Financial assets are classified based on the business model for managing those financial assets and the contractual cash flow characteristics of

the financial assets. All investments have been classified as financial assets at fair value through profit or loss as they are managed and

performance is evaluated on a fair value basis. The primary focus is on fair value information and the use of that information to assess the assets’

performance and to make decisions.

Financial assets classified as receivables are carried at amortised cost less expected credit losses (“ECL”). The Group has adopted the simplified

approach to measuring the loss allowance at lifetime ECL, as permitted under IFRS 9. Trade and other receivables are recorded based on

agreements entered into with the Partner-firms with no notable history of default causing the expected ECL of these receivables to be

immaterial and therefore no ECL has been recorded.

ii. Recognition and derecognition

Financial assets and financial liabilities are initially recorded at their transaction price, (which is representative of fair value), plus transaction

costs that are directly attributable to their acquisition or issue other than those classified as at fair value through profit or loss in which case

transaction costs are recognised directly in profit or loss, and then measured at fair value subsequent to initial recognition. Gains and losses

arising from changes in the fair value of financial assets and financial liabilities at fair value through profit or loss are presented in the Statement

of Comprehensive Income in the period in which they arise. Financial assets and liabilities, other than those at fair value through profit or loss, are

measured at amortised cost.

Realised gains and losses are recognised upon sale or disposal of the investment. Unrealised gains and losses from financial assets and liabilities

at fair value through profit or loss are included in the change in fair value of investments through profit or loss in the Consolidated Statement of

Comprehensive Income.

Financial assets are derecognised when the rights to receive cash flows have expired or substantially all risks and rewards of ownership have

transferred. Financial liabilities are derecognised when the obligation specific in the contract is cancelled or expires.

At 31 December 2021, the carrying amounts of Cash and cash equivalents and Trade and other receivables are held at amortised cost. The

carrying amounts of liabilities comprised of Liability to Petershill Funds, Notes payable, Deferred payment obligations, Fee payable on

divestment of investments, Liability for Tax Receivables Agreement, Interest payable and Trade and other payables are held at amortised cost.

The carrying value of assets and liabilities listed held at amortised cost listed here approximates fair value as these do not contain any significant

financing components.

v. Significant accounting policies

i. Notes payable and interest expense

Notes payable are initially recognised at fair value. After initial recognition, these are subsequently measured at amortised cost using the

effective interest method; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the

Statement of Comprehensive Income over the period of the loans or borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of

the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent that there is no evidence that it is

probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the

period of the facility to which it relates.

Borrowing costs including interest expense are recognised in the period in which they are incurred using the effective interest method.

87 Petershill Partners | Annual Report 2021

Notes to the consolidated financial statements continued

2. Basis of preparation and significant accounting policies continued

ii. Liability for Tax Receivables Agreement

The Group’s acquisition of the Partner-firms from the Petershill Funds increased the tax basis, for US tax purposes, of the acquired assets, as

compared with their pre-acquisition tax basis. This increase in tax basis is expected to increase the amortisation of such assets in the hands of

Delta Epsilon Delaware, Inc. (“Delta Delaware”), a wholly owned subsidiary of the Company, and therefore reduce the amount of US tax that the

Group would otherwise be required to pay in the future. This increase in tax basis may also decrease a taxable gain (or increase taxable loss) on

future dispositions of certain assets to the extent this tax basis is allocated to those assets.

As part consideration for the Initial Transaction, Delta Delaware entered into a Tax Receivables Agreement (the “Tax Receivables Agreement” or

“TRA”) with certain of the Petershill Funds and their subsidiaries, which will require Delta Delaware to pay 75% of the amount of cash tax savings,

if any, in US federal, state and local income tax that Delta Delaware realises (based on the assumptions and limitations used in the calculation

thereof) as a result of the tax benefits associated with this increase in tax basis, including any such savings that Delta Delaware realises as a

result of the tax benefits associated with the increases in tax basis that arise due to payments under the Tax Receivables Agreement. The Group

expects that, as a result of the size of the increases in the tax basis of the investments described above, the payments that it will be required to

make under the Tax Receivables Agreement may be substantial. The majority of these incremental payments are expected to arise over the

next 15 years.

The Group has recorded a liability of $166.7m as of 31 December 2021, representing the Operator’s best estimate of the amounts currently

expected to be owed to certain of the Petershill Funds and certain of their subsidiaries under the Tax Receivables Agreement. The liability that is

recorded is associated with the expected future tax benefits related to the aggregate step-up in tax basis.

The liability is accounted for as a financial liability carried at amortised cost based on assumptions discussed below, and may be adjusted. These

assumptions are based on the Operator’s judgement. The Operator has estimated the step-up tax basis of the acquired assets based on tax

information provided by the Partner-firms, projected the amortisation of the step-up tax basis to occur over 15 years, applied a discount rate of

18% and utilised the current effective tax rate of Delta Delaware in calculating the future tax benefits and resulting payments under the TRA.

TRAs are initially recognised at the carrying value of the expected liability. Any changes to the carrying value of the expected liability are

recognised in the Statement of Comprehensive Income at each reporting date. Refer to note 3 for detailed discussion of the TRA.

vi. Investments held at fair value through profit or loss

Investments are designated upon initial recognition as held at fair value through profit or loss. Gains or losses resulting from the movement in

fair value are recognised in the Consolidated Statement of Comprehensive Income at each valuation point.

Financial assets are recognised/derecognised at the date of the purchase/disposal. Investments are initially recognised at cost, being the fair

value of consideration given. Transaction costs are recognised in the Consolidated Statement of Comprehensive Income as incurred.

The Group measures its investments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a

liability (i.e. the exit price) in an orderly transaction between market participants at the measurement date. In the absence of quoted market

prices, fair value is determined by the Operator. Due to the inherent uncertainties of valuation, these estimated fair values may differ significantly

from the values that would have been realised had a readily available market for these investments existed, and these differences could

be material.

The Operator is responsible for the implementation and maintenance of internal controls and procedures related to the valuation of the Group's

investments. Valuations are prepared in accordance with the Operator's valuation policy and subject to verification procedures. A third party

valuation advisor is engaged to assist in the preparation of the valuation proposals including certain market data driven assumptions. The

valuation proposals are reviewed by the Operator’s functionally independent valuation oversight group (“VOG”). Periodically, VOG presents the

valuation proposals and their independent price verification review results to the Operator’s valuation committee (“Valuation Committee”) which

convenes to approve and oversee the application of valuation policies, and review fair value estimates for the investments. Subsequently, the

Operator reports the valuation results to the Board.

Per the valuation policy, the Operator initially values the Group's investments based on their purchase price and thereafter values them using

valuation methods that it determines, in its sole discretion. The Operator uses a number of different valuation techniques, including the market

approach, which applies a multiple to current operating income of Partner-firms and the income approach, which applies discounted cash flow

techniques based upon estimated future cash flows and discount rates. Since observable prices are generally not available for such investments,

the Operator considers all available market evidence in determining fair value. Certain investments are valued at the most recent net asset value

per unit or capital account information available and the Operator considers such value to be an appropriate measure of fair value. Further

information about investments held at fair value through profit and loss is included at note 4.

Deferred payment obligations

Certain financial assets are purchased under various contracts containing deferred payment terms. These deferred payment obligations are

initially recorded on the contractual purchase date with a discount being imputed for an effective interest rate that will be the equivalent rate of

interest due on borrowings and subsequently measured and carried at amortised cost. As at 31 December 2021, the amortised cost of Deferred

payment obligations of $208.2m reported on the Consolidated Statement of Financial Position is imputed at an effective interest rate of 1.9%.

Any difference between the initially recorded deferred payment obligation and the final contractual liability payable is recognised in the

Consolidated Statement of Comprehensive Income as an interest expense over the period of the deferred payment obligation using the

effective interest method. For the period ended 31 December 2021, an amount of $0.2m relating to deferred payment obligation is included in

Interest expense on the Consolidated Statement of Comprehensive Income and as such any sensitivity in respect of the discount rate applied

is immaterial.

88 Petershill Partners | Annual Report 2021

Offsetting financial instruments

Financial assets and liabilities are offset, and the net amount is reported in the statement of financial position, when there is a legally

enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability

simultaneously. The legally enforceable right must not be contingent on future events, and it must be enforceable in the normal course of

business and in the event of default, insolvency or bankruptcy of the Group or the counterparty.

vii. Dividends

Dividends payable are recognised as distributions in the financial statements when the Group’s obligation to make payment has been established.

viii. Related parties

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party.

Enterprises and individuals that directly, or indirectly through one or more intermediary, control, or are controlled by, or under common control

with, the Company, including subsidiaries and fellow subsidiaries are related parties of the Company. Associates are individuals owning directly,

or indirectly, an interest in the voting power of the Company that gives them significant influence over the Group, key management personnel,

including Directors and officers of the Operator. In considering related party relationships, attention is directed to the substance of the

relationship and not merely the legal form.

ix. Share capital

Financial instruments issued by the Company are treated as equity if the holder has only a residual interest in the assets of the Company after the

deduction of all liabilities. The Company’s Ordinary Shares are classified as equity instruments. The Company’s Redeemable Deferred Shares,

redeemable upon request, are classified as financial liabilities.

For the issue of each Ordinary Share for cash, $0.01 has been recognised in share capital and the remaining cash amount received has been

recognised in share premium. For the issue of each Ordinary Share issued to Petershill Funds in exchange for financial assets and liabilities, $0.01 has

been recognised in share capital and the remaining amount recognised in share premium and other reserve, such that the aggregate of the amount

recognised in share capital, share premium and other reserve is equal to the fair value of the financial assets and liabilities transferred to the Group.

Under Section 612 of the Companies Act, where an issuing company has secured at least 90% equity holding of another company in return for

shares of the issuing company, then merger relief shall be applied requiring the premium, with respect to the shares issued, to be recorded to

other reserve as merger relief. The acquisition of Delta Epsilon Cayman Ltd by the Company falls under the ambit of Section 612 of the

Companies Act and hence merger relief has been applied to the excess over the nominal value of shares. Refer to note 13 for more information.

Incremental costs directly attributable to the issue of new shares (“Share issue costs”) are shown as a deduction against proceeds from share

premium. Incremental costs include those incurred in connection with the placing and admission which include fees payable under a placing

agreement, legal costs and any other applicable expenses.

x. Income from Investments in Partner-firms and interest income

Cumulative income and returns from Financial assets at fair value through profit or loss is made up of the Income from Investments in Partner-

firms which comprises the current period income (including accruals where applicable) and the changes in fair value on financial assets at fair

value through profit or loss which comprises the fair value changes of the future returns of the Investments in Partner-firms.

Income from Investments in Partner-firms is generally recognised when the rights to receive payment from the Financial assets at fair value

through profit or loss have been established, and is driven by three underlying components, as follows:

I. Income from Investments in Partner-firms derived from Management fee income (PRE) is based on the management fees earned by the

underlying Partner-firms and is reported on the Consolidated Statement of Comprehensive Income. This comprises the portion of the

income in respect of the Partner-firms’ management fees that is due to the Group for each relevant current period. This arises from the

investments held to earn a share of the underlying investee’s management fee revenue.

Typically, the investments entitle the holder to a set percentage share of the net management fee revenue earned by the underlying

Partner-firm and are recognised on an accruals basis. Depending on the nature of the operations of the underlying Partner-firm, income

arising will be accounted for on a receivables basis only when the right to receive payment has been established under the terms of the

agreement with the Partner-firms.

II. Income from Investments in Partner-firms derived from Performance fee income (FRE) is based on the realised performance fees earned

by the underlying Partner-firms and is reported on the Consolidated Statement of Comprehensive Income. This comprises the portion of the

income in respect of the Partner-firms’ performance fees. Typically, these investments entitle the holder to a set percentage share of the

performance fee revenue earned by the underlying investee and are recognised on an accruals basis. Depending on the nature of the

operations of the underlying Partner-firm, income arising will be accounted for on a receivables basis only when the right to receive

payment has been established under the terms of the agreement with the Partner-firms.

III. Income from Investments in Partner-firms derived from Investment Income is based on the investment income earned by the underlying

Partner-firms and is reported on the Consolidated Statement of Comprehensive Income. This comprises the portion of the income in respect

of the Partner-firms’ realised gains and losses or any distributed income from the investments held on Partner-firms balance sheets.

Investment income arising will be accounted for on a receivables basis only when the right to receive payment has been established under

the terms of the agreement with the Partner-firms.

89 Petershill Partners | Annual Report 2021

Notes to the consolidated financial statements continued

2. Basis of preparation and significant accounting policies continued

Interest income from money market funds is recognised on a time-proportionate basis using the effective interest method.

Gains or losses resulting from the movement in fair value of the Group’s investments held at fair value through profit or loss are recognised in the

Statement of Comprehensive Income at each valuation point.

xi. Expenses

Expenses are accounted for on an accrual basis. Share issue costs of the Company directly attributable to the issue and listing of shares are

charged to the share premium account.

Operator fees, other expenses, divestment fees and professional fees incurred are recognised on an accrual basis and expensed to the Statement

of Comprehensive Income. Certain professional fees are transaction costs incurred to structure a deal to acquire or dispose of investments

designated as financial assets at fair value through profit or loss. These transaction costs, when incurred, are immediately recognised in the

Statement of Comprehensive Income as an expense.

xii. Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term investments in an active market with

original maturities of three months or less and bank overdrafts.

xiii. Taxation

Income tax comprises current tax and deferred tax and is recognised in the Consolidated Statement of Comprehensive Income except to the

extent that it relates to items recognised directly in equity, in which case it is recognised in Equity.

Current income tax payable on profits is recognised as an expense based on the applicable tax laws in each jurisdiction in the period in which

profits arise, calculated using tax rates enacted or substantively enacted by the balance sheet date. Deferred tax is recognised on temporary

differences between the carrying amounts of assets and liabilities for accounting and tax purposes. A deferred income tax asset or liability is

recognised for each temporary difference, except for temporary differences subject to initial recognition exception and earnings related to our

subsidiaries where the temporary differences will not reverse in the foreseeable future and we have the ability to control the timing of their

reversal. Deferred tax assets and liabilities are determined based on the tax rates that are expected to be in effect in the period that the asset is

realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at period end.

Current tax assets and liabilities are offset when they are levied by the same taxation authority on either the same taxable entity or different

taxable entities within the same tax reporting group (which intends to settle on a net basis), and when there is a legal right to offset. Deferred tax

assets and liabilities are offset when the same conditions are satisfied.

Deferred income tax assets are recognised to the extent it is probable that the benefits associated with these assets will be realised.

The Group is subject to income tax laws in various jurisdictions where it operates, and the complex tax laws are potentially subject to different

interpretations by us and the relevant taxation authorities. Judgements may be required in the interpretation of the relevant tax laws and in

assessing the probability of acceptance of our tax positions. A tax reserve related to uncertainty over income taxes is recognised when a payment

to tax authorities is considered probable.

xiv. New and amended standards and interpretations

Accounting standards and interpretations have been published and will be mandatory for the Group’s and Company’s accounting periods

beginning on or after 1 January 2022 or later periods. The following are the new or amended accounting standards or interpretations applicable

to the Group:

• Amendments to IAS 1 (issued on 23 January 2020 and effective for annual periods beginning on or after 1 January 2022) - Classification of

liabilities as current or non-current.

• Amendments to IAS 1 (issued on 15 July 2020 and effective for annual periods beginning on or after 1 January 2023) - Classification of

liabilities as current or non-current, deferral of effective date.

• Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting policies (issued on 12 February 2021 and effective for annual

periods beginning on or after 1 January 2023).

• Amendments to IAS 8 – Definition of Accounting Estimates (issued on 12 February 2021 and effective for annual periods beginning on or after

1 January 2023).

• Amendments to IAS 12 (issued on 7 May 2021 and effective for annual periods beginning on or after 1 January 2023) - Deferred tax related to

assets and liabilities arising from a single transaction.

These amendments have not been early adopted and the impact of these amendments to the Company and the Group is being reviewed, but is

unlikely to be material.

90 Petershill Partners | Annual Report 2021

xv. Assessment of investment entity

The Board of Directors has determined that the Company and its Subsidiaries are not an investment entity and therefore the Company’s financial

statements have been prepared on a consolidated basis, as required by IFRS 10 ‘Consolidated Financial Statements’.

The Board of Directors has assessed if the Company and its Subsidiaries satisfy the three essential criteria to be regarded as an investment entity

as defined in IFRS 10, IFRS 12 ‘Disclosure of Interests in Other Entities’ and IAS 27 ‘Consolidated and Separate Financial Statements’. The three

essential criteria are such that the entity must:

1. Obtain funds from one or more investors for the purpose of providing these investors with professional investment

management services;

2. Commit to its investors that its business purpose is to invest its funds solely for returns from capital appreciation, investment

income or both; and

3. Measure and evaluate the performance of substantially all of its investments on a fair value basis.

Also as set out in IFRS 10, further consideration should be given to the typical characteristics of an Investment Entity, which are that:

• it should have more than one investment, to diversify the risk portfolio and maximise returns;

• it should have multiple investors, who pool their funds to maximise investment opportunities;

• it should have investors that are not related parties of the entity; and

• it should have ownership interests in the form of equity or similar interests.

B85F of IFRS 10 which deals with exit strategies, stipulates that an entity’s investment plans must also provide evidence of its business purpose.

One feature that differentiates an investment entity from other entities is that an investment entity does not plan to hold its investments

indefinitely; it holds them for a limited period. Because equity investments and non-financial asset investments have the potential to be held

indefinitely, an investment entity shall have an exit strategy documenting how the entity plans to realise capital appreciation from substantially

all of its equity investments and non-financial asset investments.

The Company and its subsidiaries hold their investments primarily for income generation purposes and do not have plans to realise capital

appreciation from substantially all of its investments in Partner-firms and non-financial assets in the normal course of operations. The Company

and its subsidiaries do not have an exit strategy as defined by IFRS 10 and does not meet one of the essential criteria to be treated as an

investment entity.

Accordingly, the Company has not applied the provisions of Para 31 of IFRS 10 that requires an investment company to measure its investment in

subsidiaries at fair value through profit or loss. Instead, the Company will consolidate its subsidiaries that it controls.

xvi. Basis of consolidation of subsidiaries

IFRS 10 requires a parent to consolidate its subsidiaries that it controls. Consolidation of the subsidiaries shall begin from the date

the parent obtains control of the subsidiaries and ceases when the parent loses control of the subsidiaries. A parent controls the subsidiaries

when the parent is exposed, or has rights, to variable returns from its involvement with the subsidiaries and has the ability to affect those returns

through its power over the subsidiaries.

The Company consolidates its subsidiaries to the extent it is exposed or has rights, to variable returns from its involvement with the Subsidiaries

and has the ability to affect those returns through its power over the subsidiaries.

91 Petershill Partners | Annual Report 2021

Notes to the consolidated financial statements continued

2. Basis of preparation and significant accounting policies continued

The consolidated financial statements of the Group include the accounts of the Company, its subsidiaries and the Special Purpose Vehicles

listed below:

Name of Subsidiary Registered office Purpose

Interest as at

31 December

2021

Held directly

Delta Epsilon Cayman Ltd

One Nexus Way Camana Bay, KY1-9005, Cayman Islands Investment holding company 100%

Delta Epsilon Delaware Inc

251 Little Falls Drive

Wilmington, DE 19808, United States of America

Investment holding company 100%

Held indirectly 100%

Delta Epsilon GP Sub (Ph II)

Series LLC

2,3

251 Little Falls Drive

Wilmington, DE 19808, United States of America

Investment holding company 100%

Delta Epsilon GP Sub (PH PE)

Series LLC

2,3

251 Little Falls Drive

Wilmington, DE 19808, United States of America

Investment holding company 100%

Delta Epsilon GP Sub (VF VII)

Series LLC

2,3

251 Little Falls Drive

Wilmington, DE 19808, United States of America

Investment holding company 100%

Delta Epsilon GP Sub

(Co-Invest) Series LLC

2,3

251 Little Falls Drive

Wilmington, DE 19808, United States of America

Investment holding company 100%

Cook Holdings Series LLC

4, 5

251 Little Falls Drive

Wilmington, DE 19808, United States of America

Investment holding company 100%

Knight Holdings Series LLC

4, 5

251 Little Falls Drive

Wilmington, DE 19808, United States of America

Investment holding company 100%

Lyndhurst Holdings LP

4, 5

One Nexus Way, Camana Bay, KY1-9005, Cayman Islands Investment holding company 100%

Plum Holdings LP

4, 5

One Nexus Way, Camana Bay, KY1-9005, Cayman Islands Investment holding company 100%

Peasy Holdings LP

4, 5

One Nexus Way, Camana Bay, KY1-9005, Cayman Islands Investment holding company 100%

PH Offshore GP Aggregator

6, 8

C/O Wilmington Trust National Association

Rodney Square North, 1100 North Market Street

Wilmington, DE 19890, United States of America

Special purpose vehicle 48%

PH Offshore IM Aggregator

6, 8

C/O Wilmington Trust National Association

Rodney Square North, 1100 North Market Street

Wilmington, DE 19890, United States of America

Special purpose vehicle 89%

PH Onshore GP Aggregator

6, 8

C/O Wilmington Trust, National Association

Rodney Square North 1100 North Market Street

Wilmington, DE 19890, United States of America

Special purpose vehicle 50%

PH Onshore IM Aggregator

6, 8

C/O Wilmington Trust, National Association

Rodney Square North 1100 North Market Street

Wilmington, DE 19890, United States of America

Special purpose vehicle 87%

PH Offshore GP Issuer

7, 8

C/O Wilmington Trust National Association

Rodney Square North, 1100 North Market Street

Wilmington, DE 19890, United States of America

Special purpose vehicle 48%

PH Offshore IM Issuer

7, 8

C/O Wilmington Trust National Association

Rodney Square North, 1100 North Market Street

Wilmington, DE 19890, United States of America

Special purpose vehicle 89%

PH Onshore GP Issuer

7, 8

C/O Wilmington Trust National Association

Rodney Square North, 1100 North Market Street

Wilmington, DE 19890, United States of America

Special purpose vehicle 50%

PH Onshore IM Issuer

7, 8

C/O Wilmington Trust National Association

Rodney Square North, 1100 North Market Street

Wilmington, DE 19890, United States of America

Special purpose vehicle 87%

1. Referred to as Delta Subsidiaries.

2. Held through Delta Epsilon Cayman Ltd.

3. Referred to as Delta Blockers.

4. Held through the Delta Blockers and Delta Epsilon Delaware Inc.

5. Referred to as Delta holding companies.

6. Referred to as Intermediary Entities and held through Delta Blockers, Delta holding companies and Delta Epsilon Delaware Inc.

7. Referred to as Issuer SPVs and held through Intermediary Entities.

8. The interest at 31 December 2021 for the Issuer SPVs and Intermediary Entities represents the fair market value of the investments, other assets and liabilities held

by the entity for which cash flows are attributable to the Group as a percent of the total fair market value of all of the investments, other assets and liabilities held by

the entity at 31 December 2021. The Issuer SPVs and Intermediary Entities have been consolidated on the basis that the Company and its subsidiaries are exposed

to 100% of the expenses and 100% of the debt related to these entities. Refer to the note III below for a detailed discussion

92 Petershill Partners | Annual Report 2021

I. Consolidation of Delta Subsidiaries and Delta Blockers

The Company wholly owns the issued interests of the Delta Subsidiaries and is able to exercise control and power over the Delta Subsidiaries.

Delta Epsilon Cayman Ltd wholly owns the shares of the Delta Blockers listed above. The financial statements of the Delta Subsidiaries and Delta

Blockers are consolidated in preparing the financial statements of the Group.

II. Consolidation of Delta holding companies

The Company has consolidated its investment in series and classes of assets that it wholly owns and controls in the Delta holding companies.

Such assets and liabilities are ring fenced from the overall legal entity and treated as a silo in line with IFRS 10. Specified assets of the series or

class are the only source of payment for specified liabilities in that series or class. Holders of other series or class do not have rights or obligations

related to the specified assets or to residual cash flows from those assets. Silos that are not directly or indirectly controlled by the Company are

not considered to be subsidiaries and are accordingly not consolidated.

III. Consolidation of Issuer SPVs and Intermediary Entities

The Issuer SPVs were formed to offer the 5% Series A Senior Guaranteed Notes due 2039 (“Notes”). The Notes were collateralised by the rights to

future cash flows (referred to as “Transferred Interest”) generated from FRE and PRE of certain existing investments in Partner-firms that were

owned by the Petershill Funds. In return for the Transferred Interest, the Petershill Funds received the proceeds from the issue of the Notes and

remainder in the form of Participation Interest in the Issuer SPVs. The Petershill Funds held its interest in the Issuer SPVs through the

Intermediary Entities.

On September 28, 2021, a majority of the Investments in Partner-firms (including Participation Interest) referred to above, were sold by the

Petershill Funds to the Company and its subsidiaries as part of the Offer in return for Ordinary Shares of the Company. This resulted in the

Company holding majority interest in the Issuer SPVs through the Intermediary Entities and subsidiaries. As part of the transfer, all the fees and

interest relating to the Notes and the expenses relating to the Issuer SPVs and the Intermediary Entities are wholly borne by the Company and its

subsidiaries. The Petershill Funds continue to have an interest in the Issuer SPVs and Intermediary Entities and hence a liability is recorded as due

to the Petershill Funds. All the distribution payments received by the Issuer SPVs as it relates to the Participation Interest owned by the Petershill

Funds is fully distributed to them without any reduction for fees, interest and expenses relating to the Notes, Issuer SPVs and the Intermediary

Entities. Thereby, the Petershill Funds do not have any economic exposure to the Issuer SPVs except in the event of default of the Notes, when

the cash flows relating to the Participation Interest owned by the Petershill Funds may be used to service the Notes and its obligations.

Pursuant to above, the Company has consolidated the accounts of the Issuer SPVs and the Intermediary Entities in preparing these consolidated

financial statements. While the Company does not have entitlement to 100% of the interest in the cash flows of the Intermediary Entities and the

Issuer SPVs, it has all the economic exposure to the Issuer SPVs and the Intermediary Entities. Hence, it is required to consolidate them under the

definition of control. This results in reflecting all of the assets and liabilities of these entities in the Consolidated Statement of Financial Position

and all of the income, investment gain and finance cost in the Consolidated Statement of Comprehensive Income. However, Shareholders’ returns

are impacted to the extent of the Company’s ownership of these entities and its 100% exposure to Notes payable. The Company’s net assets and

total Shareholders’ funds in the Consolidated Statement of Financial Position as well as its profit and total comprehensive income for the period

and earnings per share on the Consolidated Statement of Comprehensive Income are the same as if consolidation was not required under IFRS

10. Refer to note 12 for more information.

The below table summarises the assets and liabilities attributable to the Petershill Funds that have been consolidated in preparing these

financial statements due to the requirements detailed above.

31 December 2021

Assets

Investments at fair value through profit or loss 498.8

Cash and cash equivalents

56.1

Trade and other receivables

37.2

Total

592.1

Liabilities

Liability to Petershill Funds 597.2

Notes payable*

(9.1)

Interest payable

4.0

Total

592.1

* Represents the amortised debt issuance costs of $9.1m

The below table summarises the components of Consolidated Statement of Comprehensive Income attributable to the Petershill Funds that

have been consolidated in preparing these financial statements due the requirements detailed above.

93 Petershill Partners | Annual Report 2021

Notes to the consolidated financial statements continued

2. Basis of preparation and significant accounting policies continued

31 December 2021

Income

Income from investments in Partner-firms 15.2

15.2

Movement in financial assets and liabilities held at fair value

Change in fair value of investments at fair value through profit or loss 16.4

Finance cost

Movement in liability to Petershill Funds (31.6)

IV. Accounting for investment in Partner-firms

The Group’s investment in Partner-firms are in the nature of non-controlling stakes that do not give rise to control or significant influence over

the investees. The Group has assessed and concluded that the provisions contained in IAS 28 relating to joint control or accounting for associates

are not applicable.

V. Elimination of intra-group balances and transactions

Intra-group balances and any unrealised gains arising from intra-group transactions are eliminated in preparing the consolidated financial

statements. Unrealised losses are eliminated unless the costs cannot be recovered. The financial results of subsidiaries that are included in the

consolidated financial statements are included from the date that control commences until the date that control ceases.

xvii. Going Concern

These financial statements have been prepared on a going concern basis as disclosed in the Report of Directors. The Board of Directors has made

an assessment of going concern for a period of at least 12 months from the date of approval of the accounts, taking into account the Group’s

current performance, financial position and the principal and emerging risks facing the Company and the Group.

As discussed in the Strategic report (see page 48), the Group generates diversified recurring cash flows from its investments in Partner-firms.

The Group expects long-term recurring revenues from its investments in Partner-firms. Income from investments in Partner-firms is derived from

management fee income, performance fee income and investment income. Management fee income is typically based on private capital

commitment funds managed by the Partner-firms that are locked up for a period of 8 or more years. As Partner-firms raise new underlying funds,

they generate additional fees.

The Group has a low, and relatively predicable, cost structure. The Operator charges are variable and based on the income earned by the Group.

The other operating expenses and finance costs are considerably lower than the income derived from management fee income.

The Board of Directors has assessed a severe but plausible model that places stress on the Group’s earnings. The model includes estimated

impacts, primarily based on a material reduction in income from Partner-firms derived from performance fee income and investment income.

The results of the model indicate that the Group is able to meet its obligations as they fall due for a period of at least 12 months from the date of

approval of these financial statements.

Having performed the assessment on going concern, the Board of Directors consider it appropriate to prepare the financial statements of the

Company and Group on a going concern basis, having concluded that the Group has sufficient financial resources, is well placed to manage

business risks and can continue operations for a period of at least 12 months from the date of issue of these financial statements as set out

in note 2.

xviii. Climate change

The Operator takes into account climate change and other ESG-related issues into the valuation of investments and makes adjustments to both

the growth projections of the Partner-firms and, to the extent necessary to discount rates and multiples. The impacts can include items such as

fundraising demand, which may have either headwinds or tailwinds depending on the strategy of the fund. In addition, headwinds (or tailwinds)

for each strategy from a performance perspective can be impacted by ESG factors where demand for certain type of assets may be enhanced or

impaired. As an example, certain energy investments are considered to have headwinds related to climate change and ESG and thus have a lower

growth rate than technologies that are ESG friendly. The diversity of investments in Partner-firms, and related underlying funds, mitigates the

risk to the Group that climate change may have on any one underlying investment made by a Partner-firm. In preparing the financial statements,

the Board of Directors has considered the impact of climate change, insofar as they are reasonably able, on the financial reporting judgements

and estimates in the current period.

94 Petershill Partners | Annual Report 2021

3. Critical accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application

of accounting policies and the reported amounts of assets, liabilities, income and expenses.

Estimates and judgements are continually evaluated and are based on management experience and other factors, including expectations of

future events that are believed to be reasonable under the circumstances.

Judgements

Information about judgements made in applying accounting policies that have the most significant effect on the amounts recognised in the

financial statements is included below:

Assessment as an investment entity

The Board of Directors has determined that the Company and its Subsidiaries are not an investment entity and therefore the Company’s financial

statements have been prepared on a consolidated basis, as required by IFRS 10 ‘Consolidated Financial Statements’.

The Company and its subsidiaries hold their investments primarily for income generation purposes and do not have plans to realise capital

appreciation from substantially all of their investments in Partner-firms and non-financial assets in the normal course of operations.

The Company and its subsidiaries do not have an exit strategy as defined by IFRS 10 and does not meet one of the essential criteria to be

treated as an investment entity.

Accordingly, the Company has not applied the provisions of Para 31 of IFRS 10 that requires an investment company to measure its investment in

subsidiaries at fair value through profit or loss. Instead, the Company will consolidate its subsidiaries that it controls. Refer to note 2(xv) for

detailed discussion.

Estimates and assumptions

The Group makes estimates and assumptions, which are reviewed by the Board of Directors, that affect the reported amounts of assets and

liabilities in the future. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including

expectations of future events that are believed to be reasonable under the circumstances.

Fair value of investments not quoted in an active market

The Group was formed with the objective of investing in Partner-firms. The targets for Partner-firms are typically well-established multi-billion-

dollar alternative investment firms with a track record of strong performance and meaningful cash flow generation and are well-positioned to

develop their platform across future fund and product offerings.

The Group will share in the management fee income, performance fee income and investment income earned by the Partner-firms.

The investments in Partner-firms held by the Group are not quoted or traded in an active market and as such their fair values are determined

using valuation techniques, primarily earnings multiples, discounted cash flows and recent comparable transactions. The fair values of certain

Partner-firms may be fair valued by a third-party valuation advisor engaged by the Operator.

The models used to determine fair values are validated and periodically reviewed by the Operator. In valuing the investments, key assumptions

include estimates around future fundraise timing and sizes, expected management and performance fee rates and margins of the Partner-firms,

expected current and future fund returns and timing of realisations. These assumptions are driven by factors including data provided by the

Partner-firms, guidance provided by management of each Partner-firm, benchmarking analysis of related market data points, and other

qualitative and quantitative factors assessed by the Operator for each period.

The inputs in the earnings multiples models include observable data, such as earnings multiples of comparable companies to the relevant

Partner-firms, and unobservable data, such as forecast earnings for the Partner-firms. In discounted cash flow models, unobservable inputs are

the Company’s IPO transaction multiple, projected cash flows of the relevant Partner-firms and the risk premium for liquidity and credit risk that

is incorporated into the discount rate. However, the discount rates used for valuing investments are determined based on historical returns for

other entities operating in the same industry for which market returns are observable. The Operator uses models to adjust the observed returns

to reflect the actual debt/equity financing structure of the investment. Refer to note 4 for details of inputs and sensitivities.

95 Petershill Partners | Annual Report 2021

Notes to the consolidated financial statements continued

3. Critical accounting judgements, estimates and assumptions continued

Liability for Tax Receivables Agreement

This estimate assumes that Delta Delaware would have taxable income sufficient to fully utilise the deductions arising from the increase in tax

basis and any interest imputed with respect to its payment obligations under the Tax Receivables Agreement, and that there would be no future

changes to the 21% US statutory federal tax rate and the estimated combined state and local effective tax rate of 6%. The Operator has

estimated the step-up tax basis of the acquired assets, based on the latest available tax information from the Partner-firms, projected the

amortisation of the step-up tax basis to occur over 15 years, applied a discount rate of 18% and utilised the current effective tax rate of Delta

Delaware in calculating the future tax benefits and resulting payments under the TRA.

However, except in the context of a termination, change of control or other acceleration, it should be noted that Delta Delaware will

only be obligated to make payments to the extent that tax benefits are realised (based on the assumptions and limitations used in the

calculation thereof), and the size of those payments will be calculated as a percentage of the savings, which may be greater or lesser than

the amount estimated.

The Group is not aware of any issue that would cause the taxing authorities to challenge a tax basis increase. However, the applicable Petershill

Funds and their subsidiaries will not reimburse Delta Delaware for any payments previously made under the Tax Receivables Agreement if such

tax basis increase, or the tax benefits that it claims arising from such increase, are successfully challenged by the applicable taxing authorities.

As a result, in certain circumstances, payments under the Tax Receivables Agreement could be in excess of the relevant cash tax savings derived

from the Tax Receivables Agreement.

The significant unobservable inputs used in the measurement of Liability for Tax Receivables Agreement together with a quantitative sensitivity

analysis as at 31 December 2021 is as shown below:

Level 3 Instrument

As of

31 December 2021

Significant

Unobservable

Inputs by Valuation

Technique

Significant

Unobservable

Inputs as of

31 December 2021

Reasonable

Shift

Valuation Sensitivity

to carrying value

Liability for Tax Receivables Agreement $166.7 Discount Rate 18% 3%

–

$29.9m

$(23.0)m

In arriving at the Liability for Tax Receivables Agreement, the applicable US federal tax rate has been assumed to be 26%. For every increase in

tax rate by 1%, the Liability for Tax Receivables Agreement will increase by $6.5m.

4. Investments at fair value through profit or loss

Non-current investments

The Group’s non-current investments comprise of investments in Partner-firms, which manage a diversified portfolio of investments in private

equity, absolute return, private credit and private real assets.

31 December 2021

Opening balance

–

Additions

5,789.1

Unrealised movement in fair value of investments

234.0

6,023.1

As discussed in note 2(xvi), the Company has consolidated the accounts of the Issuer SPVs and the Intermediary Entities in preparing these

consolidated financial statements. While the Company does not wholly own the interests in the Intermediary Entities and the Issuer SPVs, it has

all the economic exposure to the Issuer SPVs and the Intermediary Entities. Hence, it is required to consolidate them under the definition of

control. This results in reflecting all of the assets and liabilities of these entities in the Consolidated Statement of Financial Position and all of the

income, investment gain and finance cost in the Consolidated Statement of Comprehensive Income. However, Shareholders returns are impacted

to the extent of the Company’s ownership of these entities and its 100% exposure to Notes payable. The Company’s net assets and total

Shareholders’ funds on the Consolidated Statement of Financial Position as well as its profit and total comprehensive income for the period and

earnings per share on the Consolidated Statement of Comprehensive Income are the same as if consolidation was not required under IFRS 10.

The balance of the Group’s investments above is shown gross of liability to Petershill Funds, as further described in note 12.

96 Petershill Partners | Annual Report 2021

Current investments

The Group invests its overnight cash balance in money market funds (Money Market Funds) representing a collective investment scheme

promoted by an affiliate of the Operator. The Group holds these investments for cash management purposes with the intent to manage excess

cash and ensure these can be readily liquidated to meet the Group’s investment commitments. These investments are redeemable at short

notice and have been classified as debt investments. The Group will bear its proportionate share of all fees and expenses paid by the Money

Market Funds. As at 31 December 2021, the Group held investments in Money Market Funds of $453m and during the period earned interest of

$29 thousand.

Fair value measurements

IFRS 13 requires disclosure of fair value measurement by level. The level of fair value hierarchy within the financial assets or financial liabilities is

determined on the basis of the lowest level input that is significant to the fair value measurement. Financial assets and financial liabilities are

classified in their entirety into only one of the following 3 levels:

• Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 – inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or

indirectly (i.e. derived from prices); and

• Level 3 – inputs for assets or liabilities that are not based on observable market data (unobservable inputs).

The determination of what constitutes “observable” requires significant judgement by the Group. The Board of Directors consider observable

data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by

independent sources that are actively involved in the relevant market.

The following tables analyse within the fair value hierarchy the assets and liabilities (by class) measured at fair value:

For the period from

24 March 2021 to 31 December 2021

Level 1 Level 2 Level 3 Total

$m $m $m $m

Assets

Investment in Money Market Funds – 453.1 – 453.1

Investments in Partner-firms

– – 6,023.1 6,023.1

Due to the nature of the investments in Partner-firms, they are always expected to be classified as level 3. There have been no transfers between

levels during the period. Any transfers between the levels would be accounted for on the last day of each financial period.

Quantitative information of significant unobservable inputs – Level 3 – Investments

The Board of Directors believe that it is appropriate to measure the Investments at their net asset value which has taken into account risks to fair

value, inclusive of liquidity discounts, through appropriate discount rates.

97 Petershill Partners | Annual Report 2021

Notes to the consolidated financial statements continued

4. Investments at fair value through profit or loss continued

Sensitivity analysis to significant changes in unobservable inputs within Level 3 hierarchy

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a

quantitative sensitivity analysis as at 31 December 2021 are as shown below:

Level 3

Investments

Market

Value

as of 31

December

2021 (Gross)

Significant Unobservable

Inputs by Valuation

Technique

Range of

Significant

Unobservable

Inputs as of

31 December

2021

Weighted

Average

Reasonable

Shift

Valuation Sensitivity

(Gross)

Market

Value

as of 31

December

2021

(Net)

Valuation Sensitivity

(Net)

Investments in

Partner-firms:

Private

Markets

Market Approach: -/+ - + - +

$1,623.6 Profit Multiple

– FRE

6.4x – 20.5x 16.8x 1.0x $(137.4) $55.2 $1,623.6 $(137.4) $55.2

420.6 Profit Multiple – PRE

4.3x – 17.3x 16.7x 1.0x (45.0) 9.2 367.2 (38.8) 7.9

532.3 Asset Based Multiple 1.0x – 1.1x 1.0x 10.0% (53.2) 53.2 351.5 (35.2) 35.2

Income Approach:

1,078.7 Terminal Multiple

– FRE

8.3x – 17.5x 14.9x 0.5x (29.8) 9.8 1,078.7 (29.8) 9.8

Discount Rate

– FRE

10.5% –

15.0%

12.1% 1.1% (110.9) 33.2 (110.9) 33.2

1,141.5 Terminal Multiple

– PRE

3.9x – 9.0x 7.1x 0.6x (38.2) 6.3 1,004.5 (33.6) 5.8

Discount Rate

– PRE

14.0% –

36.0%

22.1% 2.0% (178.5) 27.0 (156.5) 25.5

Recent transactions:

430.1 Calibrated Price of

Recent Investment

n/a n/a 10.0% (43.0) 43.0 430.1 (43.0) 43.0

Level 3

Investments

Market

Value

as of 31

December

2021 (Gross)

Significant Unobservable

Inputs by Valuation

Technique

Range of

Significant

Unobservable

Inputs as of

31 December

2021

Weighted

Average

Reasonable

Shift

Valuation Sensitivity

(Gross)

Market

Value

as of 31

December

2021 (Net)

Valuation Sensitivity

(Net)

Investments in

Partner-firms:

Absolute

Return

Market Approach: -/+ - + - +

$252.3 Profit Multiple

– FRE

6.4x – 10.2x 8.0x 1.9x $(51.6) $51.6 $252.3 $(51.6) $51.6

236.6 Profit Multiple – PRE

3.8x – 10.2x 7.1x 1.7x (57.9) 57.9 170.9 (41.8) 41.8

32.4 Asset Based Multiple 1.0x 1.0x 10.0% (3.2) 3.2 7.6 (0.8) 0.8

Income Approach:

141.9 Terminal Multiple

– FRE

8.3x 8.3x 1.4x (11.2) 15.6 141.9 (11.2) 15.6

Discount Rate

– FRE

12.0% 12.0% 2.0% (11.4) 15.8 (11.4) 15.8

133.1 Terminal Multiple

– PRE

4.2x – 6.4x 5.5x 0.9x (8.6) 11.9 96.1 (6.2) 8.6

Discount Rate

– PRE

15.5% –

23.7%

18.7% 3.1% (9.0) 12.6 (6.5) 9.1

1. The fair value of any one instrument is determined using multiple valuation techniques. This includes IPO transaction multiple, weighted average of market

comparable and discounted cash flows that are then weighted together to determine fair value. Therefore, the level 3 balance encompasses both of these

techniques.

2. The range consists of multiples on management fee related earnings ("FRE") and may represent historical or forward looking multiples.

3. The range consists of multiples on performance related earnings ("PRE") and may represent historical or forward looking multiples.

4. The increase or decrease in the unobservable inputs may not be shifted negatively and positively by an equal amount. For the asset categories that have different

reasonable possible shifts, the above table discloses the weighted average of the respective negative and positive shifts.

5. The table shows the sensitivity analysis for assets wholly owned by the Ordinary Shareholders of the Company. This excludes those assets owned by the Petershill

Funds which are consolidated in the financial statements of the Group due to application of IFRS 10 as discussed in note 2(xvi). The Board of Directors consider this

disclosure to be alternative performance measures (“APMs”).

As the Group’s investments are generally not publicly quoted, valuations require meaningful judgement to establish a range of values, and the

ultimate value at which an investment is realised may differ from its most recent valuation and the difference may be significant.

98 Petershill Partners | Annual Report 2021

The below is a reconciliation of Level 3 assets and liabilities held at fair value through profit or loss:

Level 3 Instrument

For the period from

24 March 2021 to

31 December 2021

Assets

Opening balance –

Additions

5,789.1

Change in fair value

234.0

Closing balance

6,023.1

1. Of the above, an amount of $234m relates unrealised gain on fair value of investments and is included under Change in fair value of investments at fair value

through profit or loss on the Consolidated Statement of Comprehensive Income.

5. Operator charges

Recurring Operating Charges

Under the Operator Agreement, the Operator is entitled to a recurring operating charge on a quarterly basis, such Recurring Operating Charges

consisting of, in aggregate, 7.5% of the Group’s relevant income from investments, as defined under IFRS, for the relevant quarter.

The Operator is entitled to Recurring Operating Charges only on income earned by the Group from assets owned by it. The income reported on

the Statement of Comprehensive Income also includes income earned from interests in the Intermediary Entities and the Issuer SPVs that the

Company does not wholly own. However, the Company is required to consolidate them under the definition of control. For the period ended

31 December 2021, the income attributable to assets owned by the Group on which Recurring Operator charge was earned amounted to $122m.

Amounts recorded as Operating Charges during the period were $9.2m, of which $9.2m was outstanding as at 31 December 2021.

These amounts will be paid in accordance with the terms of the Operator Agreement.

Profit Sharing Charge

The Operator is entitled to a profit sharing charge (the “Profit Sharing Charge”) on a quarterly basis in arrears, which in aggregate shall be an

amount equal to 20.0% of the total dividend income, from each new investment (“New Investment”) made by the Operator after the Admission in

the relevant fiscal quarter (net of any Recurring Operating Charges in respect of such New Investment), beginning in the ninth fiscal quarter from

the date on which the New Investment closed and subject to such New Investment having achieved a return of 6.0% per annum calculated using

the total invested capital funded to the pertinent date. These amounts will be paid in accordance with the terms of the Operator Agreement.

The aggregate of the Recurring Operating Charges and the Profit Sharing Charge is capped at 15% of the Group’s income from investments in

Partner-firms for the relevant quarter excluding any Divestment Fee payable for such quarter.

Amounts recorded as Profit Sharing Charges during the period were $Nil.

Divestment Fee

The Operator is entitled to a divestment fee (“Divestment Fee”) calculated at 20.0% of the total divestment profit in the relevant quarter in

relation to the Group’s investments. Divestment Profit refers to the cash flows realised from the sale or divestment of assets calculated as the

sale price minus the contribution value of such asset, excluding any dividend income received over the holding period and on which the Group

has already paid Recurring Operating Charges and, in the case of New Investments, Profit Sharing Charges.

Although the Group does not have an exit strategy for its investments, it may be subject to exits or realisations at underlying Partner-firms,

as such an accrual is reflected in the accounts representing an amount that would be payable if the Group were to exit all of its investments.

For the period ended 31 December 2021, an amount of $45.2m has been accrued towards Divestment Fee payable to the Operator and none of

the amounts have vested.

6. Audit fees

Other operating expenses include fees payable to the Company’s auditors and its affiliates, which can be analysed as follows:

For the period from

24 March 2021 to

31 December 2021

Fees to the Company’s Auditors

for audit of the statutory financial statements (£1.0m) (including VAT) 1.3

1.3

The Company’s Auditors were also paid £0.9m ($1.1m) in relation to reporting accountant work on the listing of the Company which is included in

share issue costs.

99 Petershill Partners | Annual Report 2021

Notes to the consolidated financial statements continued

100

7. Tax

The Group’s income tax expense can be analysed as follows:

a. Amounts recognised in profit and loss

For the period from

24 March 2021 to

31 December 2021

Current tax expense:

Tax charge at standard UK corporation tax rate –

Total current tax expense

–

Deferred tax expense:

Origination and reversal of temporary differences

37.5

Movements in unrecognised tax benefits

(24.9)

Total deferred tax expense

12.6

Total income tax expense 12.6

The differences between the effective tax rate for the period and the standard rate of corporation tax in the UK at 19% are as follows:

Reconciliation of effective tax rate

US UK Other

For the period

from

24 March 2021 to

31 December 2021

$m $m $m $m %

Profit/(loss) before tax 143.3 (5.0) 122.2 260.5

Tax charge at standard UK corporation tax rate 27.2 (0.9) 23.2 49.5 19.00%

Foreign rate differential

2.9 – (17.2) (14.3) -5.5%

Liability to Petershill Funds

– – (6.0) (6.0) -2.3%

State & Local taxes

7.4 – – 7.4 2.8%

Other

– 0.9 – 0.9 0.4%

Temporary differences subject to initial recognition

exception

(24.9) – – (24.9) -9.6%

Total income tax expense

12.6 – – 12.6 4.8%

The Investments in Partner-firms were a purchase of assets for income tax purposes. Due to differences in the computation of the purchase price

of the Partner-firms as well as the impact of the TRA, temporary differences arose on the acquisition. Due to initial recognition exception under

paragraphs 15 and 24 of IAS 12 - Income Taxes, no deferred tax is recognised in respect of these temporary differences.

An increase in the UK corporation tax rate from 19% to 25% (effective from 1 April 2023) was announced in the March 2020 Budget and

substantively enacted on 24 May 2021. This will increase the future rate at which the Group pays the applicable UK tax accordingly. The deferred

tax assets and liabilities in the UK as at 31 December 2021 have been calculated based on the 25% rate, with a blended rate applied where it is

known that the associated temporary difference will reverse prior to 1 April 2023. Deferred tax assets and liabilities in the US as of 31 December

2021 have been calculated based on the US federal statutory rate of 21% and estimated effective state tax rate of 4.29%.

100 Petershill Partners | Annual Report 2021

101

Deferred tax

Movement in deferred tax balances

Net balance

24 March 2021

Recognised in

profit or loss

Recognised in

OCI/equity

Foreign

exchange

Net balance

31 December

2021

Deferred tax

assets

Deferred tax

liabilities

$m $m $m $m $m $m $m

Investment in Partner-firms – (36.4) – – (36.4) – (36.4)

Tax Receivables Agreement – 12.3 – – 12.3 12.3 –

Deferred payment obligation

– (0.6) – – (0.6) – (0.6)

Other Accruals

– 6.2 – – 6.2 6.2 –

Losses

– 5.9 – – 5.9 5.9 –

– (12.6) – – (12.6) 24.4 (37.0)

After considering jurisdictional netting, the deferred tax balances shown above are presented on a net basis in the Consolidated Statement of

Financial Position.

The Investments in Partner-firms was a purchase of assets for income tax purposes. Due to differences in the computation of the purchase price

of the Investments in Partner-firms as well as the impact of the TRA, temporary differences arose on the acquisition. These temporary differences

are not recognized as a result of the Initial Recognition Exception (“IRE”) under paragraphs 15 and 23 of IAS 12. Paragraph 15 of IAS 12 provides

in part that “A deferred tax liability shall be recognised for all taxable temporary differences, except to the extent that the deferred tax liability

arises from: a. the recognition of goodwill; or b. the initial recognition of an asset or liability in a transaction which: (i) is not a business

combination; and (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). The purchase of the

Investments in Partner-firms meets the exception provided in Paragraph 15 and 24 of IAS 12, and as such no deferred tax assets or liabilities

were recorded related to the temporary difference with respect to the initial acquisition of the Investments in Partner-firms.

Unrecognised deductible temporary differences and unused tax losses

Deferred tax assets have not been recognised in respect of the following items:

As at 31 December,

2021

Deductible temporary differences (no expiry) –

Tax losses 0.6

0.6

Loss carry forwards at 31 December 2021 will expire as follows:

U.S. U.K. Total

$m $m $m

2022 – – –

2023 and onwards – – –

Unlimited 23.2 2.5 25.7

23.2 2.5 25.7

Unrecognised taxable temporary differences associated with investments and interests in subsidiaries

As at 31 December 2021, no deferred tax liability is recognised in relation to the Company’s investments and interests in subsidiaries because the

Company controls the reversal of the liability and it is expected that it will not reverse in the foreseeable future.

Uncertainty over income tax treatments

The Company has not identified any reserves related to uncertainty over income tax treatments as of 31 December 2021.

101 Petershill Partners | Annual Report 2021

Notes to the consolidated financial statements continued

102

8. Earnings per share

For the period from

24 March 2021 to

31 December 2021

Profit attributable to equity holders of the Company – $m 247.9

Weighted average number of Ordinary Shares in issue 386,629,098

Basic and diluted earnings per share from continuing operations in the period (cents)

64.12

The weighted average number of shares for the period ended 31 December 2021 is calculated on a time weighted basis based on the timing of

issue of Ordinary Shares.

Had the shares in issue at 31 December 2021 been in issue from 24 March 2021, the weighted average number of shares would have been

1,156,696,029 and the earnings per share would have been $ 21.43 cents. Refer to APMs on page 126 for additional information.

There are no dilutive shares in issue.

9. Trade and other receivables

31 December 2021

Amounts receivable from investments

102.0

10. Trade and other payables

31 December 2021

Other payables

22.6

Share issue costs payable

5.7

28.3

11. Notes payable

As part of the acquisition of investments in Partner-firms, the Petershill Funds also transferred to the Group, majority ownership in Issuer SPVs to

be held through Intermediary Entities.

On 8 October 2019 (“Close Date”), the Issuer SPVs had closed on the offering of 5.00% Series A Senior Guaranteed Notes due 2039 (“Notes”)

secured by the rights to future cash flows (the “Participation Interests”) generated from FRE and PRE from certain existing investments in

Partner-firms. In accordance with the terms of the Indenture entered into between the Issuer SPVs and the collateral trustee, the Issuer SPVs had

issued the Notes with an aggregate principal amount of $350m.

The Notes are considered non-recourse debt, with any default resulting in acceleration of repayment of outstanding amount of Notes through

existing cash flows, and no recourse to the possession of Partner-firms investments. The Notes shall bear interest from the Close Date at a rate

per annum equal to (a) 5.00% plus (b) after 15 October 2029 (referred to as the Reinvestment Period in the Indenture), 5.00% (such additional

5.00% interest accruing after the Reinvestment Period) until the date the principal has been paid in full and all obligations under the Notes are

satisfied. The interest related to the Notes is included in Interest expense in the Consolidated Statement of Comprehensive Income.

Pursuant to the terms of the Servicing Agreement entered into between the Issuer SPVs and Petershill II LP, the latter has been engaged as the

servicer for the Issuer SPVs and is responsible for performing servicing obligations pertaining to the Participations Interests, until the earlier of

the Notes being paid in full or upon termination of the Servicing Agreement.

The Issuer SPVs may be subject to pay a Make-Whole Amount (as defined in the Indenture) contingent upon certain principal repayment,

prepayment or redemption of the Notes in accordance with the provisions of the Indenture. Absent an intent by the Group to prepay the Notes,

no accrual for such Make-Whole Amount has been made as at 31 December 2021.

As at 31 December 2021, the outstanding total amount of the Notes issued by the Issuer SPVs was $350m. The carrying value of the Notes is

reported at amortised cost, and is net of amortised debt issuance costs of $9.1m in an amount of $340.9m, with associated interest payable of

$8m as of 31 December 2021. For the period ended 31 December 2021, the effective interest rate on the Notes is 4.8% per annum. An amount of

$4.6m has been recorded as Interest expense on the Consolidated Statement of Comprehensive Income which includes $4.4m in relation to

interest on the Notes and $0.2m in relation to interest on the deferred payment obligations.

102 Petershill Partners | Annual Report 2021

103

12. Liability to Petershill Funds

The Petershill Funds continue to have an interest in the Issuer SPVs and Intermediary entities. the Petershill Funds do not have any economic

exposure to the Issuer SPVs except in the event of default of the Notes, when the cash flows relating to the Participation Interest owned by the

Petershill Funds may be used to service the Notes and its obligations. All the distribution payments received by the Issuer SPVs as it relates to the

Participation Interest owned by the Petershill Funds is fully distributed to them without any reduction for fees, interest and expenses relating to

the Notes, Issuer SPVs and the Intermediary Entities.

As discussed in note 2(xvi), the Company has consolidated the accounts of the Issuer SPVs and the Intermediary Entities in preparing these

consolidated financial statements. While the Company does not have entitlement to 100% of the interest in the cash flows of the Intermediary

Entities and the Issuer SPVs, it has all the economic exposure to the Issuer SPVs and the Intermediary Entities. Hence, it is required to consolidate

them under the definition of control. This results in reflecting all of the assets and liabilities of these entities as discussed above, in the

Consolidated Statement of Financial Position and all of the income, investment gain and finance cost in the Consolidated Statement of

Comprehensive Income. However, Shareholders returns are impacted to the extent of the Company’s ownership of these entities and its 100%

exposure to Notes payable. The Company’s net assets and total Shareholders’ funds in the Consolidated Statement of Financial Position as well

as its profit and total comprehensive income for the period and earnings per share on the consolidated statement of comprehensive income are

the same as if consolidation was not required under IFRS 10.

Accordingly, the Group has recorded an amount of $597.2m being the Liability to Petershill Funds representing its proportionate ownership in

the Issuer SPVs. The interest held by the Petershill Funds has been classified as a financial liability and the corresponding expense has been

included in Movement in liability to Petershill Funds under Finance costs in the Consolidated Statement of Comprehensive Income. For the period

ended 31 December 2021, an amount of $31.6m has been included in Interest expense representing Petershill Funds’ interest in the Issuer SPVs.

13. Share capital and other reserve

Date Issued and fully paid

Number of

shares issued

Share capital Share premium Other reserve Total

$m $m $m $m

Shares at inception – – – –

24 March 2021 Incorporation – Ordinary – $0.01 1

– – – –

28 September 2021 Capital raise – Ordinary -$0.01 1,000,000,000

10.0 2,633.8 1,689.6 4,333.4

1 October 2021 Capital raise – Ordinary -$0.01 156,696,028

1.6 745.1 – 746.7

1 October 2021 Less share issue costs –

– (32.2) – (32.2)

1,156,696,029

11.6 3,346.7 1,689.6 5,047.9

1. To enable the Company to obtain a certificate to commence business and to exercise its borrowing powers under section 761 CA 2006, on 24 March 2021,

1 Ordinary Share of US$0.01 was issued.

2. Represents the Ordinary Shares issued to Petershill Funds. See table below for details.

3. Represents Ordinary Shares issued to the public as part of the IPO process.

The table below summarises the assets acquired and liabilities acquired by the Group from Petershill funds in return for issue of Ordinary Shares

of the Company.

Assets acquired $m

Fair value of investment in Partner-firms and interest in Issuer SPVs 4,843.3

Total assets 4,843.3

Liabilities incurred

Notes payable (gross) (350.0)

Liability under Tax Receivables Agreement

(159.9)

Total Liabilities

(509.9)

Net value for which Ordinary Shares were issued by the Company to Petershill Funds 4,333.4

Other payables in note 10 include an amount of $0.1m in relation to 50,000 Redeemable Deferred Shares of £1 issued by the Company on 5

August 2021. The Redeemable Deferred Shares confer no right on the Redeemable Shareholders to receive notice of, or to attend or vote at, any

general meeting of the Company, but confer on each holder thereof a right to receive notice of and to attend and to vote at any separate class

meeting of the holders of Redeemable Deferred Shares. As disclosed in note 2(ix), the Company’s Redeemable Deferred Shares are classified as

financial liabilities.

As at 31 December 2021, the Company’s issued share capital comprised 1,156,696,029 Ordinary Shares and 50,000 Redeemable Deferred

Shares of £1 each. Ordinary Shareholders are entitled to all dividends paid by the Company. Refer to note 2(ix) for more information.

103 Petershill Partners | Annual Report 2021

Notes to the consolidated financial statements continued

104

14. Retained earnings

31 December 2021

Opening balance

–

Profit and total comprehensive income in the period

247.9

Closing balance

247.9

15. Net assets per share

Net assets per share

31 December 2021

Net assets – $m

5,295.8

Number of Ordinary Shares issued 1,156,696,029

Net assets per Share (cents)

457.84

16. Dividends declared with respect to the period

Dividend

per share Total dividend

Interim dividends declared and paid after 31 December 2021 and not accrued in the period cents $m

With respect to the period ended 31 December 2021 – –

No dividends were declared or paid by the Company for the period from 24 March 2021 to 31 December 2021.

17. Financial risk management

Financial risk management objectives

The Group’s investing activities expose it to various types of risks that are associated with the Partner-firms. The Group makes the investment in

order to generate returns in accordance with its investment policy and objectives.

The most important types of financial risks to which the Group is exposed are market risk (including price, interest rate and foreign currency risk),

liquidity risk and credit risk. The Board of Directors has delegated portfolio management and risk management responsibilities to the Operator.

Accordingly, the Operator has overall responsibility for the determination of the Group’s risk management and sets policy to manage that risk at

an acceptable level to achieve those objectives. The policy and process for measuring and mitigating each of the main risks are described below.

31 December 2021

Financial assets

Investment at fair value through profit or loss:

Investment in the Partner-firms

6,023.1

Other financial assets:

Investments in money market funds at fair value through profit or loss

453.1

Cash and cash equivalents

124.8

Trade and other receivables excluding prepayments

102.0

Financial liabilities

Current liabilities:

Trade and other payables

28.3

Deferred payment obligations

74.8

Interest payable

8.1

Non-current liabilities:

Liability to Petershill Funds

597.2

Notes payable

340.9

Deferred payment obligations

133.4

Liability for Tax Receivables Agreement

166.7

Fee payable on divestment of investments

45.2

104 Petershill Partners | Annual Report 2021

105

Categories of financial instruments

Capital risk management

The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the returns to Shareholders.

The Board of Directors approves the level of dividend distributions to Shareholders. The Group may purchase its own shares within the limits

defined by the Board of Directors subject to restrictions imposed by applicable laws.

The capital structure of the Group consists of issued share capital, retained earnings as stated in the Statement of Financial Position.

Market risk

Market risk includes price risk, foreign currency risk and interest rate risk.

a) Price risk

The investments held by the Group present a potential risk of loss of capital to the Group. Price risk arises from uncertainty about future prices of

underlying financial investments held by the Group. As at 31 December 2021, the fair value of investments was $6,023.1m and a 5% per cent

increase/(decrease) in the price of investments with all other variables held constant would result in a change to the fair value of investments of

+/- $301.2m. A change in interest rates could have an impact on the price risk associated with the underlying investee companies, which is

factored into the fair value of investments. Please refer to note 4 for quantitative information about the fair value measurements of the

Company’s Level 3 investments.

The Group is exposed to a variety of risks which may have an impact on the carrying value of the Group’s investments. The Group’s risk factors are

set out below:

i. Not actively traded

The Group’s investments are not generally traded in an active market but are indirectly exposed to market price risk arising from uncertainties

about future values of the investments held. The Group investments vary as to industry sub-sector, geographic distribution of operations and

size, all of which may impact the susceptibility of their valuation to uncertainty.

Although the investments are in the same industry, this risk is managed through careful selection of investments within the specified limits of

the investment policy. The investments are monitored on a regular basis by the Operator.

ii. Concentration

The Group invests in the alternative asset sector, with a particular focus on asset classes such as private equity, private credit, private real assets

and absolute return strategies. This means that the Group is exposed to the concentration risk of only making investments in the alternative

asset sector, which concentration risk may further relate to sub-sector, geography, the relative size of an investment or other factors.

The Board of Directors and the Operator monitor the concentration of the investments on a quarterly basis to ensure compliance with the

investment policy.

iii. Liquidity

The Group’s liquidity risk lies with the amount of cash invested in the investments as it is dynamic in nature. The Group will maintain flexibility in

funding by keeping sufficient liquidity in cash and cash equivalents, which may be invested on a temporary basis in line with the cash

management policy as agreed by the Board of Directors from time to time.

As at 31 December 2021, $577.9m, or 8.6% of the Group’s financial assets, were money market fund investments and cash balances held on

deposit with several AA- or higher rated banks.

105 Petershill Partners | Annual Report 2021

Notes to the consolidated financial statements continued

106

17. Financial risk management continued

b) Foreign currency risk

The Group transacts in currencies other than United States Dollars. Consequently, the Group is exposed to risks that the exchange rate of its

currency relative to other foreign currencies may change in a manner that has an adverse effect on the value of that portion of the Group’s assets

or liabilities denominated in currencies other than the US Dollar. Any exposure to foreign currency risk at the underlying investment level is

captured within price risk.

The following table sets out, in US Dollars, the Group’s total exposure to foreign currency risk and the net exposure to foreign currencies of the

monetary assets and liabilities:

US$ CAD$ GBP£ Total

As at 31 December 2021 $m $m $m $m

Non-current assets

Investments at fair value through profit or loss 5,914.3 108.8 – 6,023.1

Total non-current assets

5,914.3 108.8 – 6,023.1

Current assets

Investments in money market funds at fair value through profit or loss

453.1 – – 453.1

Cash and cash equivalents

108.9 – 15.9 124.8

Trade and other receivables

102.0 – – 102.0

Total current assets

664.0 – – 679.9

Current liabilities

Trade and other payables

(19.0) – (9.3) (28.3)

Deferred Payment Obligations

(74.8) – – (74.8)

Interest payable

(8.1) – – (8.1)

Total current liabilities

(101.9) – (9.3) (111.2)

Non-current liabilities

Liability to Petershill Funds (597.2) – – (597.2)

Notes payable

(340.9) – – (340.9)

Deferred payment obligations

(133.4) – – (133.4)

Liability for Tax Receivables Agreement

(166.7) – – (166.7)

Fee payable on divestment of investments

(45.2) – – (45.2)

The Board of Directors do not consider that the foreign currency exchange risk at the balance sheet date is material and therefore sensitivity

analysis for the foreign currency risk has not been provided.

c) Interest rate risk

The Group’s exposure to interest rate risk relates to the Group’s cash and cash equivalents and money market investments. The Group is subject

to risk due to fluctuations in the prevailing levels of market interest rates. Any excess cash and cash equivalents are invested at short-term

market interest rates. As at the date of the Statement of Financial Position, the majority of the Group’s cash and cash equivalents were held on

interest bearing fixed deposit accounts.

The Group’s investment in money market funds is variable and is subject to fluctuations. Any exposure to interest rate risk at the underlying

investment level is captured within price risk. An increase of 100 basis points, based on the closing balance sheet position over a 12-month

period, would lead to an approximate increase in total profit before tax of $4.5m for the Group.

The Notes issued by the Issuer SPVs carry a fixed rate of interest as stipulated in the Indenture and are not subject to interest rate risk.

In addition, the Group has indirect exposure to interest rates through changes to the financial performance and the valuation of investments in

Partner-firms caused by rate fluctuations.

106 Petershill Partners | Annual Report 2021

107

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting its obligations associated with its financial liabilities that are settled by

delivering cash or another financial asset.

The Group’s policy and the Operator’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to

meet its liabilities when due, under both normal and stress conditions, including estimated redemption of shares, without incurring unacceptable

losses or risking damage to the Company’s reputation.

The Group’s financial assets include investments in Partner-firms which are generally illiquid. As a result, the Group may not be able to liquidate

its investments in time to meet its liquidity requirements.

The Operator has a liquidity management policy which is designed to enable it to monitor the liquidity risk of the Group. The systems and

procedures employed by the Operator in this regard allow it to apply various tools and arrangements necessary to respond appropriately

to liquidity concerns. As part of the policy, the Operator prepares estimates of projected cash flows of the Group from its investment in

Partner-firms, evaluates it against the projected expenses, investment opportunities and potential distributions to Shareholders, The Operator

updates the Board of Directors of its findings on a regular basis and highlights any risks from a liquidity management perspective.

The following table details the Group’s expected maturity for its financial assets (excluding equity) and liabilities together with the contractual

undiscounted cash flow amounts:

Less than 1 year 1-5 years 5+ years Total

$m $m $m $m

Assets

Investments (note 4) – – 6,023.1 6,023.1

Investments in money market (note 4)

453.1 – – 453.1

Cash and cash equivalents

124.8 – – 124.8

Trade and other receivables

102.0 – – 102.0

Liabilities

Trade and other payables (note 10)

(28.3) – – (28.3)

Deferred payment obligations

(76.3) (138.8) – (215.1)

Liability to Petershill Funds (note 12)

(98.4) – (498.8) (597.2)

Notes payable (note 11)

(16.9) (87.1) (385.5) (489.5)

Liability for Tax Receivables Agreement

(3.4) (136.0) (460.5) (599.9)

Fee payable on divestment of investments

– – (45.2) (45.2)

Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with

the Group, resulting in financial loss to the Group. It arises principally from investments in money market funds held, and also from derivative

financial assets, cash and cash equivalents and other receivables balances.

The Group’s policy over credit risk is to minimise its exposure to counterparties with perceived higher risk of default by dealing only with

counterparties that meet the credit standards set out in the Company’s prospectus.

Credit risk is monitored on an ongoing basis by the Operator in accordance with the procedures and policies in place.

The table below details the Group’s maximum exposure to credit risk:

31 December 2021

Interest bearing

Investments in money market funds (note 4) 453.1

Cash and cash equivalents

124.8

Non-interest bearing

Trade and other receivables (note 9)

102.0

107 Petershill Partners | Annual Report 2021

Notes to the consolidated financial statements continued

108

17. Financial risk management continued

The table below shows the cash balances and the credit rating for each counterparty:

31 December 2021

Location Rating $m

Counterparty

State Street Bank and Trust Company USA AA- 124.8

Financial Square

Government Fund – Institutional Shares

USA AAA 99.7

Financial Square

Treasury Instruments Fund – Institutional Shares USA AAA 353.4

The Group’s maximum exposure to loss of capital at the period end is shown below:

Carrying value

and maximum

exposure

31 December 2021

Investments at fair value through profit or loss 6,023.1

Other financial assets

679.9

18. Related party transactions

Board of Directors

The Company has five Non-Executive Directors. Directors’ fees for the period ended 31 December 2021 amounted to $1.0m, of which $0.1m was

outstanding at period end. Amounts paid to the Board of Directors as reimbursement of travel and other incidental expenses during the period

amounted to $21 thousand, none of which was outstanding at period end.

The Board of Directors held beneficial interest in 574,999 Ordinary Shares in the Company as at 31 December 2021. Refer to Directors’

Remuneration Report on pages 66 to 69.

Transactions with Goldman Sachs International

Goldman Sachs International, a wholly owned subsidiary of Goldman Sachs and Co acted as Joint Global Coordinator and Joint Bookrunner

pursuant to an underwriting agreement for the IPO transaction. The Company paid fees of $5.9m and expenses of $0.1m to Goldman Sachs

International for its services. The fees and expenses have been recorded as part of Issuance Costs.

Money market funds

During the period, the Group has invested $806.7m into money market funds that are managed by affiliates of the Operator. Amounts invested

as at 31 December 2021 were $453.1m.

Transactions with Petershill Funds

During the period, the Group acquired from the Petershill Funds, investments in Partner-firms with a fair value of $4,843.3m, Notes payable of

$350m and a liability for Tax Receivable Agreement of $159.9m netting to $4,333.4m in return for 1 billion Ordinary Shares in the Company.

Immediately following Admission until 31 December 2021, the Petershill Funds, managed by wholly owned subsidiaries of the Goldman Sachs

Group acting as the investment manager, owned approximately 74.7% of the Company.

Liability to Petershill Funds

As discussed in note 2(xvi) and note 12, the Petershill Funds continue to have beneficial ownership in the Issuer SPVs and Intermediary entities.

All the distribution payments received by the Issuer SPVs as it relates to the assets owned by the Petershill Funds is fully distributed to the

Petershill Funds without any reduction for fees, interest and expenses. Accordingly, the Group has recorded a liability of $597.2m and an Interest

expense of $31.6m representing the Petershill Funds’ proportionate ownership in the Issuer SPVs.

Tax Receivables Agreement

As discussed in note 2(v), the Group has entered into a Tax Receivables Agreement with Petershill Funds, an affiliate of the Operator and the

Goldman Sachs Group. which will require the Group to pay 75% of the amount of cash tax savings, if any, in US federal, state and local income tax

that the Group Petershill Delaware realises as a result of the tax benefits associated with this increase in tax basis. As of 31 December, 2021,

the carrying value of liability for the Tax Receivables Agreement is $166.7m.

108 Petershill Partners | Annual Report 2021

109

Operator

The Operator is an affiliate and wholly-owned subsidiary of the Goldman Sachs Group and provides advice to the Group on the origination and

completion of new investments, the management of the portfolio and on realisations, as well as on funding requirements, subject to approval by

the Board of Directors. For the provision of services under the Operator Agreement, the Operator earns a Profit Sharing Charge, Recurring

Operating Charges and Divestment Fee, as detailed in note 5.

The Operator may, in its discretion, pay certain of the Group’s fees or expenses and the Group will reimburse the Operator for the payment of any

such fee or expense. As at 31 December 2021, no amounts were owed by the Group to the Operator under this arrangement.

Investment Advisor

The Investment Advisor is an affiliate and wholly-owned subsidiary of the Goldman Sachs Group. During the period, the Company entered into a

Stock Transfer Agreement with the Investment Advisor, where the Investment Advisor transferred 100 common stock shares with a par value of

$0.01 in Delta Epsilon Delaware, Inc to the Company, for a consideration of $1.00, of which $nil was outstanding at period end.

19. Ultimate controlling party

The Board of Directors has reviewed the Shareholders of the Company and has concluded that there is no ultimate controlling party. The Company

has a very diversified investor base that does not cede control to any single investor or a group of investors. Although the Petershill Funds own

74.7% of the Company, Goldman Sachs Asset Management and its affiliates are the beneficial owner of less than 1% of the Ordinary Shares of

the Company as of 31 December 2021.

The Petershill Funds are managed by Goldman Sachs Asset Management and its affiliates acting as the investment manager of the Petershill

Funds under the supervision of the Independent Board. Goldman Sachs Asset Management and its affiliates act in in their capacity as an agent

for the Equity Shareholders of the Company and such a relationship does not give rise to controlling ownership.

20. Subsequent events

The Group has evaluated activity through 26 April 2022, the date that the audited financial statements were available to be issued.

The Group continues to monitor the impact of the ongoing conflict between Ukraine and Russia and does not have direct exposure to Ukraine or

Russia. The Partner-firms, their funds, assets under management and strategies are mostly focused on North America and the Group does not

have material exposure to companies or investments through its investments in Partner-firms in either country. The Group will continue to

monitor the impact on global markets and macroeconomic conditions.

The Group concluded that no other events took place that would require material adjustments to the amounts recognised in these consolidated

financial statements.

109 Petershill Partners | Annual Report 2021

Financial Statements continued

COMPANY STATEMENT OF FINANCIAL POSITION

As at 31 December 2021

Company Number 13289144

110

31 December 2021

Note $m

Non-current assets

Investments in Subsidiary undertakings 5 4,830.0

4,830.0

Current assets

Investments in Money Market Funds at fair value through profit or loss 5

453.1

Trade and other receivables 7

8.2

Cash and cash equivalents 3

17.9

479.2

Total assets

5,309.2

Current liabilities

Trade and other payables 8

13.4

Total liabilities

13.4

Net assets

5,295.8

Equity

Share capital 9

11.6

Share premium 9

3,346.7

Other reserve 9

1,689.6

Retained earnings

247.9

Total Shareholders' funds

5,295.8

Number of Ordinary Shares in issue at period end

1,156,696,029

Net assets per share (cents)

457.84

The Board of Directors has taken advantage of the exemption available under section 408 of the Companies Act 2006 and have not presented a

Statement of Comprehensive Income for the Company. The Company’s profit for the period ended 31 December 2021 was $247.9m.

The financial statements of the Company were approved and authorised for issue by the Board of Directors on 26 April 2022 and signed on its

behalf by:

Naguib Kheraj Mark Merson

Chairman Director

The accompanying notes on pages 113 to 117 form an integral part of these financial statements.

110 Petershill Partners | Annual Report 2021

COMPANY STATEMENT OF CHANGES IN EQUITY

For the period from 24 March 2021 to 31 December 2021

111

Share capital Share premium Other reserve

Retained

earnings Total

Note $m $m $m $m $m

Opening net assets attributable to Shareholders – – – – –

Issue of share capital 9 11.6 3,378.9 1,689.6 – 5,080.1

Share issue costs 9

– (32.2) – – (32.2)

Profit and total comprehensive income for the period

– – – 247.9 247.9

Closing net assets attributable to Shareholders

11.6 3,346.7 1,689.6 247.9 5,295.8

The accompanying notes on pages 113 to 117 form an integral part of these financial statements.

111 Petershill Partners | Annual Report 2021

Financial Statements continued

COMPANY STATEMENT OF CASH FLOWS

For the period from 24 March 2021 to 31 December 2021

112

For the period

from

24 March 2021 to

31 December 2021

Note $m

Cash flows from operating activities

Operating profit for the period

247.9

Adjustments to reconcile operating profit for the financial period to net cash used in operating activities:

Movement of investments at fair value through profit or loss 5

(253.1)

Purchase of investments in money market funds 5

(806.7)

Sale of investments in money market funds 5

353.6

Movement in trade and other receivables 7

(8.2)

Movement in trade and other payables 8

7.7

Net cash used in operating activities

(458.8)

Cash flows from investing activities

Acquisition of investments at fair value through profit or loss 5

(243.5)

Net cash flows used in investing activities

(243.5)

Cash flows from financing activities

Issue of shares (net of Share issue costs deducted from proceeds) 9

725.0

Payment of issue costs

(4.8)

Net cash flows generated from financing activities

720.2

Net movement in cash and cash equivalents during the period

17.9

Cash and cash equivalents at the beginning of the period

–

Cash and cash equivalents at the end of the period

17.9

Non-cash investing and financing activities

1,000,000,000 Ordinary Shares issued to Petershill Funds in return for Investments in Subsidiary undertakings

4,333.4

The accompanying notes on pages 113 to 117 form an integral part of these financial statements.

112 Petershill Partners | Annual Report 2021

NOTES TO THE COMPANY

FINANCIAL

STATEMENTS

For the period from 24 March 2021 to 31 December 2021

113

1. Basis of preparation

The annual financial statements of the Company have been prepared and approved by the Board of Directors in accordance with UK-adopted

International Accounting Standards (“IFRS”) and with the requirements of the Companies Act 2006 as applicable to companies reporting under

those standards. The financial statements are presented to the nearest million United States Dollar ($m), the functional and reporting currency

of the Company.

The financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation

of financial assets and liabilities at fair value through profit or loss. The preparation of the financial statements requires estimates and

assumptions to be made that may affect the amounts reported in the financial statements and accompanying notes. Actual amounts could

differ from the estimates included in the financial statements herein. It also requires judgement to be exercised in the process of applying the

accounting policies.

The significant accounting policies and basis of preparation of the annual financial statements of the Company follow those as disclosed for the

Group in note 2 of the Consolidated Financial Statements unless otherwise described below.

The Company was incorporated on 24 March 2021, so information in the financial statements covers the period from 24 March 2021 to

31 December 2021, but during that period the meaningful activities of the Company took place from date of completion of the Initial Acquisition

on 28 September 2021 to 31 December 2021.

2. Investments in subsidiary undertakings

The Company’s Investments in Subsidiary undertakings, without a readily determinable fair value, are generally valued at the most recent NAV

per unit or capital account information available from the general partners of such vehicles. For the period ended 31 December 2021, the

Investments in Subsidiary undertakings were valued at the most recent NAV per unit which represents the fair value of these investments.

Unlisted investments held by the Subsidiary undertakings are held at fair value through profit and loss, further details can be found in note 4 of

the Consolidated Financial Statements.

3. Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term investments in an active market with

original maturities of three months or less.

4. Audit fees

The Auditor’s remuneration for audit services and other audit-related services is disclosed in note 6 to the Consolidated Financial Statements.

5. Investments held at fair value through profit or loss

Non-current investments

The Company’s non-current investments comprise of investments in Subsidiaries.

31 December 2021

Opening balance

–

Additions

4,576.9

Unrealised movement in investments in Subsidiaries

253.1

4,830.0

113 Petershill Partners | Annual Report 2021

Notes to the company financial statements continued

114

5. Investments held at fair value through profit or loss continued

Current investments

The Company invests its overnight cash balance in money market funds representing a collective investment scheme promoted by an affiliate of

the Operator. The Company holds these investments for cash management purposes with the intent to manage excess cash and ensure these can

be readily liquidated to meet the Company’s investment commitments. These investments are redeemable at short notice and have been

classified as debt investments. The Company will bear its proportionate share of all fees and expenses paid by the Money Market Funds. As at 31

December 2021, the Company held investments in Money Market Funds of $453m and during the period earned interest of $29 thousand.

Fair value measurements

IFRS 13 requires disclosure of fair value measurement by level. The level of fair value hierarchy within the financial assets or financial liabilities is

determined on the basis of the lowest level input.

that is significant to the fair value measurement. Financial assets and financial liabilities are classified in their entirety into only one of the

following 3 levels:

• Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 – inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or

indirectly (i.e. derived from prices); and

• Level 3 – inputs for assets or liabilities that are not based on observable market data (unobservable inputs).

The determination of what constitutes ‘observable’ requires significant judgement by the Group. The Board of Directors consider observable data

to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent

sources that are actively involved in the relevant market.

The following tables analyse within the fair value hierarchy the assets and liabilities (by class) measured at fair value:

For the period from

24 March 2021 to 31 December 2021

Level 1 Level 2 Level 3 Total

$m $m $m $m

Assets

Investment in money market funds – 453.1 – 453.1

Investments in Subsidiaries

– – 4,830.0 4,830.0

Total

– 453.1 4,830.0 5,283.1

Due to the nature of the Company’s investments in its Subsidiaries, they are always expected to be classified as level 3. There have been no

transfers between levels during the period. Any transfers between the levels would be accounted for on the last day of each financial period.

Quantitative information of significant unobservable inputs – Level 3 – Investments

The Board of Directors believe that it is appropriate to measure the Investments at their net asset value which has taken into account risks to fair

value, inclusive of liquidity discounts, through appropriate discount rates.

Sensitivity analysis to significant changes in unobservable inputs within Level 3 hierarchy

Significant unobservable inputs are used in the fair value measurement categorised within Level 3 of the fair value hierarchy. If the fair value

of the investments in Subsidiaries was to increase or decrease by 10% then the fair value of investments would increase or decrease by

$483.0m respectively.

As the Company’s investments are generally not publicly quoted, valuations require meaningful judgement to establish a range of values,

and the ultimate value at which an investment is realised may differ from its most recent valuation and the difference may be significant.

114 Petershill Partners | Annual Report 2021

115

6. Investments in subsidiary undertakings

Name of subsidiary undertaking Activity Holding Registered Office

Held directly

Delta Epsilon Delaware Inc. Investment company 100% 251 Little Falls Drive Wilmington, DE 19808

Delta Epsilon Cayman Ltd

Investment company 100% One Nexus Way Camana Bay, KY1-9005

Cayman Islands

Refer to note 2(xvi) to the Consolidated Financial Statements for a full list of the Company’s related subsidiary undertakings.

7. Trade and other receivables

31 December 2021

Amounts receivable from investments 8.2

8.2

8. Trade and other payables

31 December 2021

Other payables 7.7

Share issue costs payable 5.7

13.4

9. Share capital and other reserve

Date Issued and fully paid

Number of shares

issued

Share capital Share premium Other reserve Total

$m $m $m $m

Shares at inception – – – – –

24 March 2021 Incorporation – Ordinary -$0.01 1

– – – –

28 September 2021 Capital raise – Ordinary -$0.01 1,000,000,000

10.0 2,633.8 1,689.6 4,333.4

1 October 2021 Capital raise – Ordinary -$0.01 156,696,028

1.6 745.1 – 746.7

1 October 2021 Less share issue costs –

– (32.2) – (32.2)

1,156,696,029

11.6 3,346.7 1,689.6 5,047.9

1. Represents the Ordinary Shares issued to Petershill Funds in return for Investments in Subsidiary undertakings.

2. Represents Ordinary Shares issued to the public as part of the IPO process

3. To enable the Company to obtain a certificate to commence business and to exercise its borrowing powers under section 761 CA 2006, on 24 March 2021,

1 Ordinary Share of US$0.01 was issued.

Other payables in note 8 include an amount of $0.1m in relation to 50,000 Redeemable Deferred Shares of £1 issued by the Company on

5 August 2021. The Redeemable Deferred Shares confer no right on the Redeemable Shareholders to receive notice of, or to attend or vote at,

any general meeting of the Company, but confer on each holder thereof a right to receive notice of and to attend and to vote at any separate

class meeting of the holders of Redeemable Deferred Shares. As disclosed in note 2 (ix) to the Consolidated Financial Statements, the Company’s

Redeemable Deferred Shares are classified as financial liabilities.

As at 31 December 2021, the Company’s issued share capital comprised 1,156,696,029 Ordinary Shares and 50,000 Redeemable Deferred

Shares of £1 each. Ordinary Shareholders are entitled to all dividends paid by the Company. Refer to note 2(ix) to the Consolidated Financial

Statements for further details.

10. Critical accounting estimates and judgements

The Board of Directors has made judgements and estimates with respect to those items that have the most significant effect on the carrying

amounts of the assets and liabilities in the financial statements. The Board of Directors has concluded that the key judgements and estimates in

the Company financial statements are in relation to the carrying value of the Company’s investments in its subsidiaries which are held at their

Net Asset Value.

115 Petershill Partners | Annual Report 2021

Notes to the company financial statements continued

116

11. Financial instruments risk

In the normal course of business, the Company uses certain financial instruments including cash, trade and other receivables and investments.

The Company is exposed to a number of risks through the performance of its normal operations. Refer to note 17 to the Consolidated Financial

Statements for further details.

31 December 2021

Financial assets

Investment at fair value through profit or loss:

Investments in Subsidiary undertakings

4,830.0

Other financial assets:

Investments in money market at fair value through profit or loss

453.1

Cash and cash equivalents

17.9

Trade and other receivables

8.2

Financial liabilities

Current liabilities:

Trade and other payables

13.4

Capital risk management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the returns to Shareholders.

The Board of Directors monitor the level of dividend distributions to Shareholders. The Company may purchase its own shares within the limits

defined by the Board of Directors subject to restrictions imposed by applicable laws.

The capital structure of the Company consists of issued share capital, retained earnings and other distributable reserves, as stated in the

Statement of Financial Position.

Market risk

Market risk includes price risk, foreign currency risk and interest rate risk.

a) Price risk

The investments held by the Company present a potential risk of loss of capital to the Company. Price risk arises from uncertainty about future

prices of underlying financial investments held by the Company. As at 31 December 2021, the fair value of Investments in Subsidiary

undertakings was $4,830.0m and a 5% increase / (decrease) in the price of investments with all other variables held constant would result in a

change to the fair value of investments of +/– $241.5m. A change in interest rates could have an impact on the price risk associated with the

underlying investee companies, which is factored into the fair value of investments. Please refer to note 5 for quantitative information about the

fair value measurements of the Company’s Level 3 investments.

The Company is exposed to a variety of risks which may have an impact on the carrying value of the Company’s investments. The Company’s risk

factors are set out in (a)(i) to (a)(iii) below.

(i) Not actively traded

The Company’s investments are not generally traded in an active market but are indirectly exposed to market price risk arising from uncertainties

about future values of the investments held. The Company investments vary as to industry sub-sector, geographic distribution of operations and

size, all of which may impact the susceptibility of their valuation to uncertainty.

Although the investments are in the same industry, this risk is managed through careful selection of investments within the specified limits of

the investment policy. The investments are monitored on a regular basis by the Operator.

(ii) Concentration

The Company invests in the alternative asset sector, with a particular focus on asset classes such as private equity, private credit, private real

assets and absolute return strategies. This means that the Company is exposed to the concentration risk of only making investments in the

alternative asset sector, which concentration risk may further relate to sub-sector, geography, and the relative size of an investment or other

factors. While the Company is subject to the investment and diversification restrictions in its investment policy, within those limits, material

concentrations of investments may arise.

The Board of Directors and the Operator monitor the concentration of the investments on a quarterly basis to ensure compliance with the

investment policy.

(iii) Liquidity

The Company’s liquidity risk lies with the amount of cash invested in the investments as it is dynamic in nature. The Company will maintain

flexibility in funding by keeping sufficient liquidity in cash and cash equivalents, which may be invested on a temporary basis in line with the cash

management policy as agreed by the Board of Directors from time to time.

As at 31 December 2021, $471.0m, or 8.9% of the Company’s financial assets, were money market fixed deposits and cash balances held on

deposit with several AA- or higher rated banks.

116 Petershill Partners | Annual Report 2021

117

b) Foreign currency risk

The Company transacts in currencies other than United States Dollars. Consequently, the Company is exposed to risks that the exchange rate of

its currency relative to other foreign currencies may change in a manner that has an adverse effect on the value of that portion of the Company’s

assets or liabilities denominated in currencies other than the US Dollar. Any exposure to foreign currency risk at the underlying investment level

is captured within price risk.

The following table sets out, in US Dollars, the Company’s total exposure to foreign currency risk and the net exposure to foreign currencies of the

monetary assets and liabilities:

US$ GBP£ Total

As at 31 December 2021 $m $m $m

Non-current assets

Investments at fair value through profit or loss 4,830.0 – 4,830.0

Total non-current assets

4,830.0 – 4,830.0

Current assets

Investments in money market at fair value through profit or loss

453.1 – 453.1

Cash and cash equivalents

2.0 15.9 17.9

Trade and other receivables

8.2 – 8.2

Total current assets

463.3 15.9 479.2

Current liabilities

Trade and other payables

(4.1) (9.3) (13.4)

Total current liabilities

(4.1) (9.3) (13.4)

Total net assets

5,289.2 6.6 5,295.8

12. Related party transactions

The details of each individual Director’s remuneration, as set out in the tables contained in the Directors’ Remuneration Report on pages 66 to 69

form part of these financial statements.

Subsidiaries

The Company entered into a consultancy agreement (“Consultancy Agreement”) with the Subsidiaries where the Company will provide services

including but not limited to acquisition advice and review, and advice on strategy setting. An amount of $8.2m was earned by the Company under

this arrangement of which $6.6m was charged to Delta Epsilon Delaware Inc. and $1.6m was charged to Delta Epsilon Cayman Ltd for the period

ended 31 December 2021 of which $8.2m was outstanding at period end.

Please refer to note 18 to the Consolidated Financial Statements for further details on related party transactions.

13. Subsequent events

The Company has evaluated activity through 26 April 2022, the date that the audited financial statements were available to be issued.

On 28 February 2022, Delta Epsilon Cayman Ltd declared a dividend of $54.6m payable to the Company.

Please refer to note 20 to the Consolidated Financial Statements for other post balance sheet events.

117 Petershill Partners | Annual Report 2021

Acquisition Strategy and Investment Policy means the

Company’s acquisition strategy and investment policy as detailed

on page 19 of the Strategic Report

Administrator means Ocorian Administration (UK) Limited

Admission means admission of all of the Ordinary Shares issued

and to be issued in connection with the Offer to the premium

listing segment of the Official List and to trading on the London

Stock Exchange’s main market for listed securities

AGM means Annual General Meeting

AIC means the Association of Investment Companies

AIC Code means the AIC’s Code of Corporate Governance, as

amended from time to time

AIFM means alternative investment fund manager, within the

meaning of the EU AIFMD and the UK AIFMR

Annual Report means the Company’s report and financial

statements for the period from incorporation on 24 March 2021

to 31 December 2021

Articles of Association means the articles of association of the

Company from time to time

Auditors means PricewaterhouseCoopers LLP or PwC and

itsaffiliates

BEIS means the Department for Business, Energy and Industrial

Strategy of the UK Government

Board of Directors means the Board of Directors of the Company

CA or Companies Act means the Companies Act 2006 which

forms the primary source of UK company law

Capital Amount means the amount of gross proceeds of the IPO,

plus the net proceeds of any future issues of Ordinary Shares, less

any amounts expended by the Company on share repurchases and

redemptions or, following a Realisation Election, attributable to

Realisation Shares

Closed-ended Investment Fund means closed-ended investment

fund as per the FCA’s definition

Company means Petershill Partners Plc

Delta Blockers means the Delta Epsilon Cayman Ltd wholly owned

subsidiaries comprising Delta Epsilon GP Sub (Ph II) Series LLC,

Delta Epsilon GP Sub (PH PE) Series LLC, Delta Epsilon GP Sub (VF

VII) Series LLC, and Delta Epsilon GP Sub (Co-Invest) Series LLC

Delta Holding Companies refers to the entities held by Delta

Blockers and Delta Epsilon Delaware Inc comprised of Cook

Holdings Series LLC, Knight Holdings Series LLC, Lyndhurst

Holdings LP, Plum Holdings LP and Peasy Holdings LP

Delta Subsidiaries means the Petershill Partners Plc’s wholly

owned subsidiaries comprising Delta Epsilon Cayman Ltd and

Delta Epsilon Delaware

Directors means the Directors of the Company

DTR means the Disclosure Guidance and Transparency Rules

sourcebook issued by the Financial Conduct Authority

ESG means Environmental, Social and Governance

EU AIFMD means Directive 2011/61/EU of the European

Parliament and of the Council of 8 June 2011 on Alternative

Investment Fund Managers and amending Directives 2003/41/EC

and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU)

No. 1095/2010 as supplemented by the AIFMD Delegated

Regulation and, where applicable, as transposed (i) in Ireland by

the European Union (Alternative Investment Fund Managers)

Regulations 2013 (as amended) and (ii) in any other European

Economic Area member state by the corresponding national

implementing measures

Existing Petershill Group means the current and historic

Petershill funds being Petershill I, Petershill II, Petershill III,

Petershill PE Seeding, Petershill IV and Vintage VII, as well as

certain co-investment vehicles and GSAM

FCA or UK FCA means the UK Financial Conduct Authority (or its

successor bodies)

Goldman Sachs or Goldman Sachs group means Goldman Sachs

Group, Inc. and its subsidiaries and subsidiary undertakings

GP means general partner

GP Services means the assistance provided to Partner-firms by

the Operator through the GP Services Team including in the

following areas: (a) Human Capital, (b) Operational Consulting

& Digital Transformation, (c) Investment Portfolio Services,

(d) Capital Formation, (e) Strategy, Corporate Finance and M&A,

(f) Product Development & Peer Benchmarking, (g) Environment,

Social & Governance, (h) Legal, Tax & Regulatory, and (i) Portfolio

Monitoring, Reporting & Communication

Group or Petershill Partners Group means the Company together

with its subsidiaries and its indirect subsidiaries

IFRS means the International Financial Reporting Standards,

being the accounting standards issued by the International

Accounting Standards Board (IASB). The Company’s consolidated

financial statements have been prepared in accordance with IFRS,

as endorsed by the UK

Initial Acquisition means the acquisition that occurred prior to

Admission, which saw the transfer of a portfolio of assets from

the Petershill Funds to the Group

Investment Advisor means Goldman Sachs Asset Management, L.P.

Glossary

GLOSSARY OF CAPITALISED

DEFINED TERMS

118 Petershill Partners | Annual Report 2021

Investment Manager means Goldman Sachs Asset Management

International

IPEV Valuation Guidelines means the International Private Equity

and Venture Capital Valuation Guidelines

Listing Rules means the listing rules made by the UK Listing

Authority under section 73A of the Financial Services and Markets

Act 2000

London Stock Exchange or LSE means London Stock Exchange plc

Main Market means the main market of the London Stock Exchange

Money Market Funds means open-ended mutual funds, that the

Operator may or may not manage, which invest in cash and

cash-equivalent securities

NAV or Net Asset Value means the value of the assets of the

Company less its liabilities as calculated in accordance with the

Company’s valuation policy and expressed in US dollars

Offer or IPO means the offer of the new Ordinary Shares

by the Company and existing Ordinary Shares by the

SellingShareholders

Official List means the official list maintained by the FCA

Operator means Goldman Sachs Asset Management Fund

Services Limited

Operator Agreement means the Operator Agreement entered

into between the Operator and the Company

Ordinary Shares means Ordinary Shares of $0.01 in the capital of

the Company issued and designated as “Ordinary Shares” and

having the rights, restrictions and entitlements set out in the

Company’s articles of incorporation

Partner-firms means the alternative asset managers in which the

Group holds, from time to time, investments representing

minority ownership positions and rights to certain revenue

streams of the alternative asset managers

Premium Listing Segment means the Premium Listing Segment

of the London Stock Exchange’s main market

Profit Sharing Charge means the profit-sharing charge payable

to the Operator pursuant to the Operator Agreement, as

described in the Notes to the Consolidated Financial Statements

Profit Sharing Required Investment Return means the

investment return required in respect of certain investments in

order for the Profit Sharing Charge to become chargeable, as

described in the Notes to the Consolidated Financial Statements

Recurring Operating Charges means the recurring operating

charges payable to the Operator pursuant to the Operator

Agreement, as described in the Notes to the Consolidated

Financial Statements

Redeemable Deferred Shares means redeemable deferred

shares having a nominal value of £1.00 each in the capital of

theCompany

Redeemable Shareholders means the holders of the Redeemable

Deferred Shares

SFDR means Regulation (EU) 2019/2088 of the European

Parliament and of the Council on sustainability-related

disclosures in the financial services sector

Shareholders means the holders of the Ordinary Shares

Subsidiary or Subsidiaries means: Delta Epsilon Cayman Ltd;

Delta Epsilon Delaware Inc; Delta Epsilon GP Sub (PH II) Series

LLC; Delta Epsilon GP Sub (PH PE) Series LLC; Delta Epsilon GP

Sub (VF VII) Series LLC; Delta Epsilon GP Sub (Co-Invest) Series

LLC; Cook Holdings Series LLC; Knight Holdings Series LLC;

Lyndhurst Holdings LP; Plum Holdings LP; Peasy Holdings LP;

PHOffshore GP Aggregator; PH Offshore GP Issuer; PH Offshore

IM Aggregator; PH Offshore IM Issuer; PH Onshore GP Aggregator;

PH Onshore GP Issuer; PH Onshore IM Aggregator; and PH Onshore

IM Issuer

Tax Receivables Agreement or TRA means the tax receivables

agreement to be entered into prior to Admission between

Delta Epsilon Delaware Inc. and various subsidiaries of the

Petershill Funds

TCFD means the Task Force on Climate-Related Financial

Disclosures issued by the Financial Stability Board to develop

consistent climate-related financial risk disclosures for use by

companies, banks and investors in providing information

tostakeholders

Transfer Vehicles means the transfer vehicles established by the

Petershill Funds to transfer a portfolio of assets to the Petershill

Partners Group pursuant to the Initial Acquisition

UK AIFMR means the Alternative Investment Fund Managers

Regulation 2013 (as amended) and supplemental measures

relating thereto, including rules contained in the FCA’s Handbook

UK Code means the UK Corporate Governance Code issued by

theFRC

United Kingdom or UK means the United Kingdom of Great

Britain and Northern Ireland

United States or US means the United States of America, its

territories and possessions, any state of the United States and the

District of Columbia

119 Petershill Partners | Annual Report 2021

Accel-KKR

Accel-KKR is a technology-focused investment firm that focuses

on middle-market software and IT-enabled companies and

provides a broad range of capital solutions including buyout

capital, minority-growth investments and credit alternatives

across its buyout, growth capital and credit investment strategies.

Accel-KKR has invested in more than 250 companies over the last

20 years. On 27 April 2017, the Existing Petershill Group acquired

an equity stake in Accel-KKR. The investment was structured as a

primary commitment and no capital was distributed to Accel-KKR

principals as part of the transaction. Theinvestment is being used

by Accel-KKR to increase its capital commitments to current

strategies and to support potential new initiatives in the future.

On 31 October 2017, the Existing Petershill Group acquired an

additional minority equity stake inAccel-KKR.

ArcLight Capital Partners

Founded in 2001, ArcLight Capital Partners (“ArcLight”) is a

Boston-based energy-and-infrastructure-focused private equity

manager that currently manages a single fund family and

primarily invests in the midstream, infrastructure and power

sectors. ArcLight helped pioneer an asset-based private equity

approach to investing in the dynamic energy sector, targeting

midstream power and production. It has invested approximately

US$23 billion in 110 transactions since inception and completed

69 exits across diverse market cycles. On 23 December 2016, the

Existing Petershill Group acquired an equity stake in ArcLight.

Theinvestment is being used by ArcLight to fund current and

future general partner commitments to ArcLight funds, as well as

to facilitate leadership succession at the firm.

Arlington Capital Partners

Arlington Capital Partners is a North American middle-market

private equity firm focused on investing in regulated industries

and their adjacent markets. Arlington was founded in 1999 and is

headquartered in Washington, DC.

Arsenal Capital Parters

Arsenal Capital Partners is a North American private equity firm

specialising in buyout and growth investments in middle-market

industrials and healthcare companies. Arsenal was founded in

2000 and is headquartered in New York, NY.

Caxton Associates

Founded in 1983, Caxton Associates is a New-York-based trading

and investment management firm specialising in global macro

hedge fund strategies across a variety of global markets and

instruments, with offices in New York, London, Princeton

and Singapore. On 30 September 2014, the Existing Petershill

Group acquired an equity stake in Caxton Associates.

Theinvestment provided secondary proceeds and

facilitated generational succession.

Clearlake

Clearlake is a Santa Monica, California-based buyout and

distressed debt investment firm founded in 2006. Clearlake’s core

sectors of focus are energy, industrials, and TMT. The firm targets

investments in private equity, special situations and credit in the

middle-market under three product platforms: Clearlake Capital

Partners, Clearlake Opportunities Partners and Clearlake Credit

Partners. On 25 May 2018, the Existing Petershill Group acquired

a passive minority equity stake in Clearlake. The primary portion

of the investment is being used by Clearlake as strategic capital

to further invest in the business and fund future development

initiatives.

Fort Investment Management

Founded in 1993, Fort Investment Management (“Fort”) is a

systematic investment management firm. Fort implements three

proprietary trading programmes in managing funds and

accounts: (i) Global Contrarian, a trend-anticipating trading

programme; (ii) Global Diversified, a combination of a managed

futures strategy and an equity-market-neutral strategy and (iii)

Equity Market Neutral, an equity-market-neutral trading

programme. On 6 January 2016, the Existing Petershill Group

closed on the acquisition of an equity stake to simplify Fort’s

capital structure.

Francisco Partners

Francisco Partners is a San Francisco, California-based middle-

market technology buyout investment firm founded in 1999.

Francisco Partners’ core sectors include healthcare, IT,

communications, security, software and fintech, with a focus on

providing transformational capital for North American, European

and Israeli technology companies under two product platforms:

Francisco Partners Private Equity and Agility. Francisco Partners

targets businesses ranging from US$20m to more than

US$3 billion across a wide range of transaction types and has

raised US$24 billion since inception and invested in more than

110 companies with more than 175 follow-on acquisitions.

On9 July 2018, the Existing Petershill Group acquired a minority

equity stake in Francisco Partners, with proceeds being used by

Francisco Partners to further increase its capital commitments to

current and future funds as well as future development initiatives.

General Catalyst

General Catalyst is a Cambridge, Massachusetts-based growth

and venture capital firm founded in 2000. General Catalyst has

additional offices in New York, Palo Alto and San Francisco and is

managed by the two founding partners as well as Hemant Taneja

and Ken Chenault. General Catalyst targets early stage venture

and growth investments in technology or tech-enabled

businesses. On 21 November 2018, the Existing Petershill Group

acquired a passive minority revenue share in General Catalyst.

Theinvestment is being used by General Catalyst to fund future

GP commitments and facilitate the continued growth of the

General Catalyst platform.

THE PETERSHILL PARTNERS

GROUP’S ASSETS

The Petershill Partners Group’s assets

120 Petershill Partners | Annual Report 2021

Harvest Partners

Harvest Partners (“Harvest”) is a New-York-based middle-market

leveraged buyout firm founded in 1981. Harvest is focused on the

industrials, business services, healthcare, manufacturing and

distribution and consumer sectors. Harvest targets control and

non-controlling investments in the middle-market under two

product platforms: Harvest Partners and the Harvest Partners

Structured Capital Fund. On 12 October 2018, the Existing

Petershill Group acquired a passive minority equity stake in

Harvest. The investment is being used by Harvest to fund future

GP commitments and facilitate the continued growth of the

Harvest platform.

Industry Ventures

Industry Ventures is a venture capital investment firm that

focuses on investing in companies and venture capital

partnerships directly and via secondary transactions, from early

stage to growth stage, and seeks to address inefficiencies in

venture capital with flexible solutions for entrepreneurs, venture

funds and limited partners. Industry Ventures was founded in

1999 and is headquartered in San Francisco, CA, with additional

offices in Washington, DC and London.

Kayne Anderson Real Estate

Kayne Anderson Real Estate (KARE) was founded in 2007 and is a

US real estate asset management platform, focusing on

opportunistic, core equity and debt investments in alternative

sectors, including medical office, senior housing, multi-family

housing, student housing and self-storage. KARE currently has

more than 60 employees across its business. KARE targets

investments ranging from US$30m to US$500m, with an aim to

enhance value through asset consolidation and the creation of

geographically diverse portfolios. On 17 January 2020, the

Existing Petershill Group acquired a minority interest in KARE.

The investment is being used by KARE to fund GP commitments

and facilitate employee retention through equalisation and

long-term commitments to the business.

Knighthead Capital Management

Founded in 2008, Knighthead Capital Management

(“Knighthead”) is a New-York-based hedge fund specialising in

long/short event-driven, distressed credit and other special

situations across a broad array of industries. On 6 January 2014,

the Existing Petershill Group acquired an equity stake in

Knighthead, with the proceeds being used by Knighthead to

simplify Knighthead’s capital structure.

Lakewood

Founded in 2007, Lakewood is a value-oriented equity long /

short investment firm. It employs a broad investment strategy

with the flexibility to capitalise on opportunities in all parts of the

capital structure and across geographies, market capitalisations

and industries. Lakewood makes investments in long equity, short

equity and fixed income. Its long equity strategy comprises a

concentrated portfolio of companies with attractive long-term

appreciation potential with a minimised risk of capital loss.

Theshort equity strategy seeks to generate profits in all market

environments through a focus on a prudently diversified portfolio

of significantly overvalued securities. The Existing Petershill

Group acquired an equity stake in Lakewood on 27 June 2017,

which provided necessary capital to transition out an existing

minority partner while also increasing the Lakewood partner’s

capital commitment to the investment fund.

Littlejohn & Co.

Founded in 1996, Littlejohn & Co. is a Greenwich, Connecticut-

based mid-market private equity manager. Littlejohn & Co.’s

flagship private equity programme is focused on investing in

middle-market companies that are undergoing a fundamental

change in capital structure, strategy, operations or growth that

can benefit from its operational and strategic approach. In

addition, Littlejohn & Co. has built out a distressed credit product

and a performing credit platform. On 8 August 2016, the Existing

Petershill Group acquired an equity stake in Littlejohn & Co. The

investment was structured as a primary capital contribution to

build a balance sheet that enables Littlejohn & Co. to grow its

private equity and credit strategies, including funding GP

commitments and CLO equity retention tranches.

LMR Partners

LMR Partners is a global multi-strategy asset manager founded in

2009 with offices in London, Hong Kong and New York. LMR

Partners predominantly focuses on relative value and event-

driven multi-manager strategies across four distinct products.

On14 August 2018, the Existing Petershill Group acquired

apassive minority equity stake in LMR Partners. Proceeds of the

investment were used partly to reorganise LMR Partners’ capital

structure and partly to reinvest in its funds.

Pelham Capital

Founded in 2007, Pelham Capital is a London-based European

equity long / short hedge fund that invests across a range of

sectors and specialises in event-driven distressed credit and

special situation opportunity funds. On 2 January 2014, the

Existing Petershill Group acquired an equity stake in Pelham

Capital. The investment was used by Pelham Capital for

investment in its business or its funds.

Piney Lake Partners

Piney Lake Partners, a Greenwich, Connecticut firm, is an

opportunistic private credit manager and focuses on lending

capital to middle-market business, primarily in North America,

that are either stressed or in a period of transition. On 21 June

2018, the Existing Petershill Group acquired a revenue share in

Piney Lake Partners, with capital provided to help fund its initial

credit portfolio.

Riverstone Holdings LLC

Riverstone Holdings LLC (“Riverstone”), founded in 2000, is one of

the world’s largest energy-focused private equity firms.

Riverstone manages a portfolio of more than 200 energy, natural

resources and renewables companies in 15 countries across a

diversified product platform including private equity funds,

private credit funds and permanent capital vehicles. On 4 May

2017, the Existing Petershill Group acquired a passive minority

revenue interest in Riverstone. The investment provides

Riverstone with strategic capital to further invest in the business,

fund business development and address certain capital

commitments. In addition, the transaction served as a catalyst to

broaden ownership across the firm.

121 Petershill Partners | Annual Report 2021

Slate Asset Management

Slate Asset Management (“Slate”), founded in 2005 with offices

in Toronto, Chicago, Frankfurt and London, is a real-estate-

focused alternative investment platform. Slate is a value-oriented

manager across private and publicly traded investment vehicles,

investing across Canada, the United States and Europe, through

multiple vehicles, including co-investments with global

institutional partners, private equity funds and publicly traded

Real Estate Investment Trusts. On 26 September 2019, the

Existing Petershill Group acquired a minority interest in Slate.

Theinvestment is being used by Slate as balance sheet capital to

simplify its capital structure and fund current and future GP

commitments to facilitate development of the Slate platform.

Symphony Technology Group

Symphony Technology Group is a North American, technology-

focused private equity buyout firm, focusing on investments in

middle-market enterprise software companies. Symphony

Technology Group targets opportunities in the value-focused

enterprise software market. Symphony Technology Group was

founded in 2002 and is headquartered in Menlo Park, CA.

Westbrook Partners

Westbrook Partners (“Westbrook”) is a value-added global real

estate investment platform with 11 global offices. Westbrook’s

strategy is focused on value-added investments in global

gateway cities, investing across property types and the capital

structure. On 5 October 2018, the Existing Petershill Group

acquired a passive minority stake in Westbrook. The investment is

being used by Westbrook to fund future GP commitments and

facilitate the further institutionalisation of the Westbrook

platform.

Wind Point Partners

Wind Point Partners is a North American private equity firm

focusing on buyout investments in middle-market consumer

products, industrial products and business services companies.

Wind Point was founded in 1984 and is headquartered in

Chicago,IL.

The Petershill Partners Group’s assets continued

122 Petershill Partners | Annual Report 2021

GLOSSARY OF KEY

OPERATING METRICS

Glossary of key operating metrics

This document contains certain key operating metrics that are not

defined or recognised under IFRS.

The Operator and the Directors use these key operating metrics to

help evaluate trends, assess the performance of the Partner-firms

and the Company, analyse and test dividends received from the

Partner- firms and inform operating, budgeting and re-

investment decisions. The Directors believe that these metrics,

which present certain operating and other information in respect

of the Partner-firms, provide an enhanced understanding of the

underlying portfolios and performance of the Partner-firms and

are therefore essential to assessing the investments and

performance of the Company.

The key operating metrics described in this section are derived

from financial and other information reported to the Operator by

the Partner-firms. The Operator, with the assistance of an

independent accounting firm, performs due diligence procedures

on the information provided by the Partner-firms. It should be

noted, however, that these due diligence procedures do not

constitute an audit.

In addition, each Partner-firm may account for and define certain

financial and other information differently from one another. For

example, each Partner-firm may calculate its fee-paying AuM

differently, the result of which being that the inputs of the

Company’s Aggregate FP AuM are not consistently calculated.

Whilst the operating metrics described in this section are similar

to those used by other alternative asset managers, there are no

generally accepted principles governing their calculation, and the

criteria upon which these metrics are based can vary from firm to

firm. These metrics, by themselves, do not provide a sufficient

basis to compare the Partner-firms’ or the Company’s

performance with that of other companies.

None of Partner Distributable Earnings, Partner FRE, Partner

Realised Performance Revenues or Partner Realised Investment

Income are measures of or provide any indication of profits

available for the purpose of a distribution by the Company within

the meaning of section 830 of the Companies Act 2006, or of any

Partner-firm in accordance with the equivalent applicable rules.

Aggregate Partner-firm AuM

Aggregate Partner-firm AuM is defined as the sum of (a) the net

asset value of the Partner-firms’ underlying funds and investment

vehicles, and in most cases includes co-investment vehicles, GP

commitments and other non-fee paying investment vehicles and

(b) uncalled commitments from these entities, as reported by the

Partner-firms to the Operator from time to time and aggregated

by the Operator without material adjustment. This is an

aggregated figure across all Partner-firms and includes

Partner-firm AuM outside of the Company’s ownership interest in

the Partner-firms.

The Operator and the Directors consider Aggregate Partner-firm

AuM to be a meaningful measure of the size, scope and

composition of the Partner-firms, as well as of their capital

raising activities. The Operator uses Aggregate Partner-firm AuM

to inform operating, budgeting and re-investment decisions.

Aggregate Fee-paying AuM

Aggregate Fee-paying AuM is defined as the portion of Aggregate

Partner-firm AuM for which Partner-firms are entitled to receive

management fees, as reported by the Partner-firms to the

Operator. The principal difference between Aggregate FP AuM

and Aggregate Partner-firm AuM is that Aggregate FP AuM

typically excludes co- investment on which Partner-firms

generally do not charge fees and, to a lesser extent, fund

commitments in Partner-firm funds (i) on which fees are only

earned on investment, rather than from the point of commitment

and (ii) where capital has been raised but fees have not yet been

activated. This may also include legacy assets where fees are no

longer being charged.

The Operator and the Directors consider Aggregate Fee-paying

AuM to be a meaningful measure of the Partner-firms’ capital

base upon which they earn management fees and use the

measure in assessing the management fee- related performance

of the Partner-firms and to inform operating, budgeting and

re-investment decisions.

Aggregate Performance Fee Eligible Partner-firm AuM

The amount of Aggregate Partner-firm AuM that is eligible for

carried interest.

Issuer SPVs

Issuer SPVs is comprised of the following entities – PH Offshore

GP Issuer, PH Offshore IM Issuer, PH Onshore GP Issuer, PH

Onshore IM Issuer

Intermediary Entities

Intermediary Entities is comprised of the following entities – PH

Offshore GP Aggregator, PH Offshore IM Aggregator, PH Onshore

GP Aggregator, PH Onshore IM Aggregator

Ownership weighted AuM

Ownership weighted AuM represents Petershill’s ownership stake

of each Partner-firms’ Aggregate Partner-firm AuM.

Partner Blended Net Management Fee Rate

Partner Blended Net Management Fee Rate is defined as Partner

Net Management and Advisory Fees for the period divided by the

average Aggregate Fee-paying AuM weighted for the Company’s

ownership interests in each Partner-firm. The average Aggregate

Fee-paying AuM is calculated as the mean of the Aggregate

Fee-paying AuM at the start and the end of the reporting period.

Excludes new acquisitions where the Company has not yet started

to receive or have only received partial period amounts of Partner

Net Management and Advisory Fees.

The Operator and the Directors consider Partner Blended Net

Management Fee Rate to be a key metric in assessing the

Company’s overall management fee-related performance.

123 Petershill Partners | Annual Report 2021

Glossary of key operating metrics continued

Implied Blended Partner-firm FRE Ownership

Implied Blended Partner-firm FRE Ownership is defined as the

weighted average of the Company’s ownership stake in the

Partner-firms’ management fee-related earnings and is

calculated based on the contribution of average Aggregate FP

AuM from Partner-firms in each period. It will therefore be

expected to change to some degree from period to period based

on the contribution to average Aggregate FP AuM of each

Partner-firm, even if the actual ownership of each underlying

Partner-firm does not change. Excludes new acquisitions where

Petershill has not yet started to receive or have only received

partial period amounts of Partner Net Management and

Advisory Fees.

The Operator and the Directors consider Implied Blended

Partner-firm FRE Ownership to be a meaningful measure of the

composition of the Company’s investments.

Partner Net Management and Advisory Fees

Partner Net Management and Advisory Fees is defined as the

Company’s aggregate proportionate share of the Partner-firms’

net management fees (as reported by the Partner-firms to the

Operator), including monitoring and advisory fees, payable by the

Partner-firms’ funds to their respective Partner-firms for the

provision of investment management and advisory services.

The Operator and the Directors consider Partner Net

Management and Advisory Fees to be a meaningful measure of

the management fee-related performance of the Partner-firms,

and the Operator uses this metric to analyse and test income

received from the Partner-firms and to inform operating,

budgeting and re-investment decisions.

Partner Fee Related Earnings (FRE) and Partner FRE Margin

Partner FRE is defined as Partner Net Management and Advisory

Fees, less the Partner-firms’ operating expenses and fixed and

bonus compensation (but not performance fee-related expenses)

allocable to the Company’s share of Partner Net Management and

Advisory Fees, as reported by the Partner-firms to the Operator,

and subject to applicable contractual margin protections in

respect of certain Partner-firms. Partner FRE Margin is defined

as Partner FRE divided by Partner Net Management and

Advisory Fees.

The Operator and the Directors consider Partner FRE and Partner

FRE Margin to be meaningful measures of the management

fee-related earnings of the Partner-firms and key performance

indicators of the Company’s income from investments in

management companies derived from management fee income.

The Operator uses this metric to analyse and test dividends

received from the Partner-firms, as well as to inform operating,

budgeting and re-investment decisions.

Partner Realised Performance Revenues

Partner Realised Performance Revenues is defined as the

Company’s aggregate proportionate share of the Partner-firms’

realised carried interest allocations and incentive fees payable

by the Partner-firms’ funds to their respective Partner-firms,

less any realised performance fee-related expenses of the

Partner-firms allocable to the Company’s share of performance

fee-related revenues, as reported by the Partner-firms to

the Operator.

The Company’s share of the Partner-firms’ performance

fee-related earnings will be lower than its share of the

Partner-firms’ management fee-related earnings because the

Company’s ownership stake in the Partner-firms’ performance

fee-related earnings is lower than its ownership stake in the

Partner-firms’ management fee-related earnings.

The Operator and the Directors consider Partner Realised

Performance Revenues to be a meaningful measure of the

performance fee-related earnings of the Partner-firms and key

performance indicator of the Company’s income from

investments in management companies derived from

performance fee income. The Operator uses this metric to analyse

and test dividends received from the Partner-firms, as well as to

inform operating, budgeting and re-investment decisions.

Partner Realised Investment Income

Partner Realised Investment Income is defined as the Company’s

aggregate proportionate share of Partner-firm earnings resulting

from the realised gains and losses or any distributed income from

the investments held on Partner-firms’ balance sheets, as

reported by the Partner-firms to the Operator. Partner Realised

Investment Income is also realised by the Company through a

limited number of direct stakes in certain Partner-firms’ funds.

Realised Investment Income includes income that has been

realised but not yet paid, as well as amounts that are realised and

either fully or partially reinvested.

The Company’s share of the Partner-firms’ investment and

balance sheet income will be lower than its share of the

Partner-firms’ management fee-related earnings because the

Company’s ownership stake in the Partner-firms’ investment and

balance sheet income is lower than its ownership stake in the

Partner-firms’ management fee-related earnings.

The Operator and the Directors consider Partner Realised

Investment Income to be a meaningful measure of the investment

performance of certain assets held by the Partner-firms and key

performance indicator of the Company’s income from

investments in management companies derived from investment

income. The Operator uses this metric to analyse and test

dividends received from the Partner-firms, as well as to inform

operating, budgeting and re-investment decisions.

124 Petershill Partners | Annual Report 2021

Partner Distributable Earnings and Partner Distributable

Earnings Margin

Partner Distributable Earnings is defined as the sum of

Partner FRE, Partner Realised Performance Revenues and Partner

Realised Investment Income. Partner Distributable Earnings

Margin is defined as Partner Distributable Earnings divided

by the sum of Partner Net Management and Advisory Fees,

Partner Realised Performance Revenues and Partner Realised

Investment Income.

The Operator and the Directors consider Partner Distributable

Earnings and Partner Distributable Earnings Margin to be

meaningful measures of the overall performance of the Partner-

firms and key performance indicators of the Company’s total

income from investments in management companies. The

Operator uses this metric to analyse and test dividends received

from the Partner-firms, as well as to inform operating, budgeting

and re-investment decisions. These measures reflect any

contractual margin protections or revenue share interests that

the Company may have with the Partner-firms, which means that

the Partner Distributable Earnings Margin may differ from the

margins achieved by other shareholders or partners of the

Partner-firms.

Partner Revenues

Partner Revenues is defined as the sum of Partner Net

Management and Advisory Fees, Partner Realised Performance

Revenues and Partner Realised Investment Income.

The Operator and the Directors consider Partner Revenues to be a

meaningful measure of the overall performance of the Partner-

firms. The Operator uses this metric to inform operating,

budgeting and re- investment decisions.

Partner Private Markets Accrued Carried Interest

Partner Private Markets Accrued Carried Interest is defined

as the Company’s proportionate share of the Partner-firms’

balance sheet accrued carry (as reported by the Partner-firms to

the Operator) and represents the Company’s proportionate share

of the accumulated balance of unrealised profits from the

Partner-firms’ funds.

The Operator and the Company consider Partner Accrued

Carried Interest to be a meaningful measure of the performance

of the private markets Partner-firms and potential future private

markets Partner Realised Performance Revenues. Absolute return

performance fees are not accrued and are instead realised

annually. The Operator uses Partner Accrued Carried Interest to

assess future expected carried interest payments and inform

operating, budgeting and re-investment decisions. This key

operating metric reflects data reported to the Operator on a

three-month lag.

Petershill Funds

The Petershill Funds refers to the following entities: - Petershill II

L.P. and Petershill II Offshore L.P., Petershill Private Equity L.P.,

Petershill Private Equity Offshore L.P., Vintage VII L.P. and related

entities and certain co-investment vehicles.

Weighted Average Capital Duration

Weighted Average Capital Duration is a key measure of the long term,

locked-up capital of Aggregate Fee-paying Partner-firm AuM. It is

defined as the average life of the underlying Partner-firm funds

weighted based on Fee-Paying AuM. Assumes permanent capital

as 20 years.

Investment Capital

Investment Capital is defined as the sum of the reported value of

the balance sheet investments from the Partner-firms. The

Operator and the Directors consider Investment Capital to be a

meaningful measure of the performance of the Partner-firms’

balance sheet investments and potential future Partner Realised

Investment Income. The Operator therefore uses Investment

Capital to assess future expected Partner Realised Investment

Income and inform operating, budgeting and re-investment

decisions.

AuM and associated data

The data presented in this document for the following key

operating metrics reflects AuM data reported to the Operator on

a three-month lag. This three-month data lag is due to the timing

of the financial information received by the Operator from the

Partner-firms, which generally require at least 90 days following

each period end to present final financial information to the

Operator. The key operating metrics reflected on a three-month

lag are:

• Aggregate Partner-firm AuM

• Aggregate FP Partner-firm AuM

• Average Aggregate FP Partner-firm AuM

• Aggregate Performance Fee Eligible Partner-firm AuM

• Average Aggregate Performance Fee Eligible Partner-firm AuM

• Partner Blended Net Management Fee Rate

• Implied Blended Partner-firm FRE Ownership

• Investment Capital

In respect of Investment Capital, the data may be adjusted for any

known valuation impacts following the reporting date of the

information received from the Partner-firms.

125 Petershill Partners | Annual Report 2021

ALTERNATIVE PERFORMANCE

MEASURES (“APMS”)

Alternative Performance Measures (“APMs”)

As part of the initial acquisition of the portfolio of Partner-firms

on 28 September 2021, the Company acquired interests in several

trusts (“Issuers”), which previously issued $350m of long term

debt with a 5% coupon and a maturity date of 2039. The debt is

secured by the rights to the cash flows of certain Partner-firm

investments held by the Company and other investments held by

the Petershill Funds.

Although the Company does not have rights to the cash flows of

the collateral that is held by the Petershill Funds, under IFRS, the

Company is required to consolidate them. This consolidation

results in reflecting all of the assets and liabilities of these

entities in the consolidated statement of financial position

and all of the income, investment gain and finance cost in the

consolidated statement of comprehensive income. However,

shareholder returns are only affected by the interests that the

Company owns.

The APM basis, which presents the financial information on a non

IFRS basis, excluding the impact of the assets, liabilities, income,

investment gain and finance cost which do not affect shareholder

returns, aids shareholders in assessing their investment in

theCompany.

The IFRS and APM basis numbers discussed and presented below

include significant ‘unrealised’ and non-cash items that include

unrealised change in fair value of investments and it should be

noted that while permitted, it is not the Company’s core strategy

to exit or realise these investments. Therefore, management

results are also presented excluding the unrealised change in fair

value of investments at fair value through profit and loss and

related unrealised divestment fee.

APMs are used by the Directors and the Operator to analyse the

business and financial performance, track the Company’s

progress and help develop long-term strategic plans and they

also reflect more closely the cash flow of the Company.

TheDirectors believe that these APMs are used by investors,

analysts and other interested parties as supplemental measures

of performance and liquidity.

126 Petershill Partners | Annual Report 2021

Consolidated Statement of Financial Position APM Basis

As at 31 December 2021

Balance Sheet

Alternative

performance

measurement basis

(APMs)

Adjustments

IFRS basis

Non-current assets

Investments at fair value through profit or loss 5,524.3 498.8 6,023.1

5,524.3 498.8 6,023.1

Current assets

Investments in money market funds at fair value through profit or loss 453.1 – 453.1

Cash and cash equivalents 68.7 56.1 124.8

Trade and other receivables 64.8 37.2 102.0

586.6 93.3 679.9

Total assets 6,110.9 592.1 6,703.0

Non-current liabilities

Liability to Petershill Funds – 597.2 597.2

Notes payable 350.0 (9.1) 340.9

Deferred Payment Obligations 133.4 – 133.4

Liability for Tax Receivables Agreement 166.7 – 166.7

Fee payable on Divestment of Investments 45.2 – 45.2

Deferred tax liability 12.6 – 12.6

707.9 588.1 1,296.0

Current liabilities

Trade and other payables 28.3 – 28.3

Deferred payment obligations 74.8 – 74.8

Interest payable 4.1 4.0 8.1

107.2 4.0 111.2

Total liabilities 815.1 592.1 1,407.2

Equity

Share capital 11.6 – 11.6

Share premium 3,346.7 – 3,346.7

Other reserve 1,689.6 – 1,689.6

Retained earnings 247.9 – 247.9

Total Shareholders’ equity 5,295.8 5,295.8

Total liabilities and Shareholders’ equity 6,110.9 592.1 6,703.0

Number of Shares in issue at period end 1,156,696,029 1,156,696,029

Net assets per share (cents) 457.84 457.84

127 Petershill Partners | Annual Report 2021

Consolidated Statement of Comprehensive Income APM Basis

For the period from 24 March 2021 to 31 December 2021

Income Statement

Alternative

performance

measurement

basis (APMs)

Adjustments

IFRS basis

Income

Income from investments in Partner-firms derived from :

Performance fee income 62.3 17.0 79.3

Management fee income 52.3 (3.0) 49.3

Investment income 7.7 1.2 8.9

Total income 122.3 15.2 137.5

Movement in financial assets and liabilities held at fair value

Change in fair value of investments at fair value through profit or loss 217.6 16.4 234.0

217.6 16.4 234.0

Expenses

Board of Directors’ fees and expenses (1.0) – (1.0)

Operator charge (9.2) – (9.2)

Other operating expenses (12.6) – (12.6)

Unrealised divestment fee (45.2) – (45.2)

Total expenses (68.0) – (68.0)

Operating profit for the period 271.9 31.6 303.5

Finance cost

Interest expense (4.6) – (4.6)

Movement in liability to Petershill Funds – (31.6) (31.6)

Change in liability for Tax Receivables Agreement (6.8) – (6.8)

Total finance cost (11.4) (31.6) (43.0)

Profit for the period before tax 260.5 – 260.5

Tax charge (12.6) – (12.6)

Profit for the period after tax 247.9 – 247.9

Profit and total comprehensive income for the period 247.9 – 247.9

Profit and total comprehensive income attributable to:

Equity holders of the Company 247.9 – 247.9

Alternative Performance Measures (“APMs”) continued

128 Petershill Partners | Annual Report 2021

Consolidated Statement of Cash Flows APM Basis

For the period from 24 March 2021 to 31 December 2021

Alternative

performance

measurement

basis (APMs)

Adjustments

IFRS basis

Cash flows from operating activities

Operating profit for the period 303.5 – 303.5

Adjustments to reconcile operating profit for the financial period to net cash

used in operatingactivities:

Purchase of investments in money market funds (806.7) – (806.7)

Sale of investments in money market funds 353.6 – 353.6

Reinvestment of Income from Investments in Partner-firms (8.1) – (8.1)

Movement in fair value of investments (217.6) (16.4) (234.0)

Movement in trade and other receivables (97.0) 40.9 (56.1)

Increase in trade and other payables 22.6 – 22.6

Increase in liability to Petershill Funds – 31.6 31.6

Movement in fee payable on divestment of investments 45.2 – 45.2

Net cash outflow from operating activities (404.5) 56.1 (348.4)

Cash flows from investing activities

Purchase of investments at fair value through profit or loss (247.0) – (247.0)

Net cash outflow from investing activities (247.0) – (247.0)

Cash flows from financing activities

Issue of shares (net of Share issue costs deducted from proceeds) 725.0 – 725.0

Payment of issue costs (4.8) – (4.8)

Net cash inflow from financing activities 720.2 – 720.2

Net increase in cash and cash equivalents during the period 68.7 56.1 124.8

Cash and cash equivalents at the beginning of the period – – –

Cash and cash equivalents at the end of the period 68.7 56.1 124.8

129 Petershill Partners | Annual Report 2021

Alternative Performance Measures (“APMs”) continued

Net Cash Position at End of Period

Cash and cash equivalents APM basis plus investments in money markets less deferred payment obligations and long term debt.

2021

Cash and cash equivalents APM basis 68.7

Investments at fair value through profit or loss (money markets) 453.1

Notes payable (gross) (350.0)

Deferred payment obligations (208.2)

Net cash position at end of year (36.4)

Book Value

Total Shareholders’ equity.

2021

Total Shareholders’ equity 5,295.8

Book Value Per Share

Total Shareholders’ equity divided by Ordinary Shares Outstanding at the end of the period.

2021

Total Shareholders’ equity ($m) 5,295.8

Number of Shares in issue at period end 1,156,696,029

Book value per share (cents) 457.84

Adjusted Earnings Before Interest and Tax (EBIT)

Sum of total income APM basis and expenses before net finance result and before income taxes, excluding expenses related to

non-recurring IPO charges and unrealised divestment fee.

2021

Total income APM basis 122.3

Board of Directors’ fees and expenses (1.0)

Operator charge (9.2)

Other operating expenses (12.6)

Non-recurring charges related to the IPO 6.9

Adjusted Earnings before interest and tax (EBIT) 106.4

Adjusted EBIT Margin

Adjusted EBIT divided by APM basis total income.

2021

Total income APM basis 122.3

Adjusted EBIT 106.4

Adjusted EBIT margin 87.0%

Adjusted Earnings Before Tax (EBT)

Sum of total income APM basis and expense excluding unrealised divestment fee, deferred income tax on unrealised gains and losses and

non-recurring charges related to the IPO.

2021

Total income APM basis 122.3

Board of Directors’ fees and expenses (1.0)

Operator charge (9.2)

Other operating expenses (12.6)

Interest expense (4.6)

Non-recurring charges related to the IPO 6.9

Adjusted Earnings before tax (EBT) 101.8

130 Petershill Partners | Annual Report 2021

Tax and Tax Related Expenses

The current tax resulting from total income APM basis plus the expected payment under the tax receivables agreement.

2021

Current tax –

Expected payment under the tax receivables agreement (3.4)

Tax and tax related expenses (3.4)

Adjusted Tax and Tax Related Expense Rate

The tax and related expenses divided by the adjusted profit less tax and tax related expense.

2021

Tax and related expenses (3.4)

Adjusted EBT and tax related expenses 101.8

Adjusted tax and tax related expense rate 3.3%

Adjusted Profit After Tax

Sum of total income APM basis and expense excluding unrealised divestment fee, deferred income tax on unrealised gains and losses and

non-recurring charges related to the IPO and including tax and related expenses under TRA.

2021

Total income APM basis 122.3

Board of Directors’ fees and expenses (1.0)

Operator charge (9.2)

Other operating expenses (12.6)

Interest expense (4.6)

Non-recurring charges related to the IPO 6.9

Tax and tax related expenses (3.4)

Adjusted profit after tax and tax related expenses 98.4

Adjusted Earnings Per Share (EPS)

Adjusted profit after tax divided by Ordinary Shares in issue at 31 December 2021.

2021

Adjusted Profit after tax 98.4

Ordinary Shares in issue at 31 December 2021 1,156,696,029

Adjusted Earnings per Share (EPS) (cents) 8.5

Proforma Earnings Per Share (EPS)

Profit attributable to equity holders of the Company divided by Ordinary Shares in issue at 31 December 2021.

2021

Profit attributable to equity holders of the Company 247.9

Ordinary Shares in issue at 31 December 2021 1,156,696,029

Proforma Earnings per Share (EPS) (cents) 21.43

131 Petershill Partners | Annual Report 2021

COMPANY

INFORMATION

Board of Directors (all Non-Executive)

Andres Gonzalez (appointed on 24 March 2021 and resigned on

4 September 2021)

Chaim Langer (appointed on 5 August 2021 and resigned on

4 September 2021)

Ayesha Parra (appointed on 1 September 2021 and resigned on

4 September 2021)

Naguib Kheraj (Chairman) (appointed 4 September 2021)

Everard Barclay Simmons (appointed 4 September 2021)

Annemarie Durbin (appointed 4 September 2021)

Erica Handling (appointed 4 September 2021)

Mark Merson (appointed 4 September 2021)

All independent and of the registered office below.

Registered Office

Floor

20 Fenchurch Street

London

EC3M 3BY

United Kingdom

Operator

Goldman Sachs Asset Management Fund Services Limited

47–49 St. Stephen’s Green

Dublin

D02 W634

Republic of Ireland

Investment Manager

Goldman Sachs Asset Management International

Plumtree Court

25 Shoe Lane

London

EC4A 4AU

United Kingdom

Investment Advisor

Goldman Sachs Asset Management, L.P.

200 West Street

New York

NY 10282

United States

Independent Auditor

PricewaterhouseCoopers LLP

7 More London Riverside

London

SE1 2RT

United Kingdom

Company Secretary and Administrator

Ocorian Administration (UK) Limited

Floor

20 Fenchurch Street

London

EC3M 3BY

United Kingdom

Registrar

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol

BS13 8AE

United Kingdom

Depositary

Ocorian Depositary (UK) Limited

Floor

20 Fenchurch Street

London

EC3M 3BY

United Kingdom

Website: www.petershillpartners.com

ISIN GB00BL9ZF303

Ticker PHLL

Sedol BL9ZF30

Registered Company Number 13289144

1. Wholly owned affiliates of the Goldman Sachs Group.

132 Petershill Partners | Annual Report 2021

Printed by Pureprint Group on FSC® certified paper.

Pureprint Group is an EMAS certified CarbonNeutral®

Company and its Environmental Management

System is certified to ISO14001.

100% of the inks used are vegetable oil-based.

This document is printed on a paper containing

virgin fibre sourced from well managed, sustainable,

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The pulp used in this product is bleached using an

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Designed and produced by Black Sun plc.

The Chairman’s Statement and Operator’s Report have been prepared solely to provide additional information for Shareholders to assess

the Group’s strategies and the potential for those strategies to succeed. These should not be relied on by any other party or for any

other purpose.

The Chairman’s Statement and Operator’s Report may include statements that are, or may be deemed to be, “forward-looking statements”.

These forward-looking statements can be identified by the use of forward-looking terminology, including the terms ‘believes’, ‘estimates’,

“anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology.

These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this

document and include statements regarding the intentions, beliefs or current expectations of the Board of Directors and the Operator,

concerning, among other things, the investment objectives and investment policy, financing strategies, investment performance, results of

operations, financial condition, liquidity, prospects, and distribution policy of the Company and the markets in which it invests.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that

may or may not occur in the future. Forward-looking statements are not guarantees of future performance.

The Group’s actual investment performance, results of operations, financial condition, liquidity, distribution policy and the development of

its financing strategies may differ materially from the impression created by the forward-looking statements contained in this document.

Subject to their legal and regulatory obligations, the Board of Directors and the Operator expressly disclaim any obligations to update or

revise any forward-looking statement contained herein to reflect any change in expectations with regard thereto or any change in events,

conditions or circumstances on which any statement is based.

CAUTIONARY STATEMENT

133 Petershill Partners | Annual Report 2021

www.petershillpartners.com

Registered Office

Floor, 20 Fenchurch Street

London EC3M 3BY

United Kingdom